Bunker Time!!!

Baltic Dry Index. 1046 -17   Brent Crude 48.60

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

Operator get me the number for 911.

The Talking Chair, with apologies to Homer Simpson.

Run do not walk to the bunker! The world’s second largest economy seems headed for a crash landing rather than a hard landing. China’s Plunge Protection Team has gone Missing In Action. Make that Missing In Inaction. The next Lehman is out there and highly likely to be in China and the rest of the BRICs. Getting out early always beats getting carried out late. We appear to be in the earliest stage of the Great Reconnect. The next stage is when the western bubble stock markets hit the vacuum of no public participation, and all the HFT algo thieves try to sell out to each other.  China contagion has only just started and is picking up speed.

Below, commodities and Chinese stocks lead the way. Does anyone really think that the Fed will raise its key interest rate next month?

"There is no cause to worry. The high tide of prosperity will continue."

Secretary of the Treasury, Andrew Mellon, September 1929.

Asian shares struggle as China stocks extend fall

Tue Aug 18, 2015 11:16pm EDT

Asian shares on Wednesday struggled at two-year lows after Chinese stocks extended their fall, stoking fears about the stability of China's economy.

The Shanghai Composite Index .SSEC retreated 3.9 percent, a day after worries that the central bank could be in no hurry to ease policy further pushed it down 6.1 percent. The plunge dented hopes of Chinese share markets stabilizing after Beijing effectively pulled out all the stops to stem the rout.

Japan's Nikkei .N225 fell 0.5 percent and South Korea's Kospi .KS11 lost 1.3 percent.

"Investors care about these two things - China's economy and the timing of a U.S. rate hike. These two concerns dominate their minds now," said Masaru Hamasaki, head of market & investment information department at Amundi Japan.

---- MSCI's emerging market index .MSCIEF fell to its lowest level since October 2011. It has dropped more than 20 percent from the year's peak it hit in April.

Wall Street shares also retreated overnight, with the S&P 500 .SPX sliding 0.26 percent, pressured by weak earnings from retail giant Wal-Mart (WMT.N).

Concerns about slowing demand from China for commodities also hit copper prices CMCU3, which slid to a six-year low of $4,983 a tonne, breaking the psychological $5,000 level. It last stood at $5,025.00 a tonne.

That in turn knocked copper exporters, with the Chilean peso sinking to 12-year lows CLP=.

Ripples were also felt in other emerging currencies following China's surprise move to weaken the yuan last week. Vietnam widened the dollar/dong VND=VN trading band to 3 percent from 2 percent, the second move in a week, in an effort to protect its exports.
More
http://www.reuters.com/article/2015/08/19/us-markets-global-idUSKCN0QO01I20150819

China’s Richest Traders Flee Stocks as the Masses Pile In

August 18, 2015 — 1:37 PM BST Updated on August 19, 2015 — 3:36 AM BST

Two months into China’s stock rout, the dynamics of the declines are becoming clearer: The wealthiest investors have been the quickest to bail out of the market.

The number of traders with more than 10 million yuan ($1.6 million) of shares in their accounts shrank by 28 percent in July, even as those with less than 100,000 yuan rose by 8 percent, according to the nation’s clearing agency. While some of the drop is explained by falling market values, CLSA Ltd. says China’s rich have taken advantage of state buying to cash out after the nation’s record-long bull market peaked in June.

Investors with the most at stake are finding fewer reasons to own Chinese shares amid weak corporate earnings and some of the world’s highest valuations. With this month’s tumble in the yuan adding to outflow pressures, bulls have started to question whether there’s enough buying power to prop up prices once the government pares back its unprecedented rescue effort -- a concern that contributed to the Shanghai Composite Index’s 6 percent plunge on Tuesday.

“The high net worth clients are the ones who moved the market,” Francis Cheung, the head of China and Hong Kong strategy at CLSA, wrote in an e-mail. “They tend to be more savvy.”

More
http://www.bloomberg.com/news/articles/2015-08-18/china-s-richest-traders-are-fleeing-stocks-as-the-masses-pile-in

China’s Stocks Sink Most in Three Weeks on State Support Concern

August 18, 2015 — 2:24 AM BST Updated on August 18, 2015 — 11:05 AM BST

Chinese stocks tumbled the most in three weeks as traders reduced stimulus bets and speculated the government will pare back efforts to prop up equities.

The Shanghai Composite Index sank 6.2 percent to 3,748.16 at the close, the biggest loss since an 8.5 percent rout on July 27. About 35 stocks fell for each that rose, while more than 600 companies plunged by the daily 10 percent limit. The Hang Seng China Enterprises Index slid 1.75 percent to its lowest level in nine months in Hong Kong.

Chinese investors lowered expectations for further monetary stimulus after data Tuesday showed home-price gains are spreading. Odds of an imminent cut to lenders’ reserve requirements dropped after the central bank injected cash into the financial system through its weekly open-market operations. The securities regulator said Friday that China Securities Finance Corp., the state agency tasked with supporting share prices, will reduce buying as volatility falls.

“Investors ran for the exit when the government failed to step in to support the market,” said Steve Wang, the chief China economist at Reorient Financial Markets Ltd. in Hong Kong. “The CSF has become a main player in this market so everyone is watching it. People panic when it stops buying.”

More

http://www.bloomberg.com/news/articles/2015-08-18/china-s-stock-futures-gain-after-index-rises-to-three-week-high

Copper ends at more than 6-year low on China-demand concerns

Published: Aug 18, 2015 2:44 p.m. ET

Copper futures finished at a more than six-year low Tuesday, as concerns over demand from China pushed much of the metals sector, including gold, lower.

High-grade copper for September delivery HGU5, -0.28%  lost 3.4 cents, or 1.5%, to settle at $2.287 a pound on Comex, marking the lowest settlement price for a most-active contract since July 13, 2009.

“Concerns that China’s stock market rout could destabilize its economy in transition and impact resource demand continues to drag on commodities…particularly copper which has broken down to its lowest level since 2009,” said Colin Cieszynski, chief market strategist at CMC Markets, in a note.

Many investors view troubles in China’s stock market as a proxy for broader economic woes in one of the largest importers of metals in the world. The Shanghai Composite Index SHCOMP, -3.12%  tumbled 6.2% Tuesday, despite signals of a housing recovery and the Chinese central bank’s steps to stem capital outflow.

----“While speculation continues regarding the timing, rationale, and prognosis for further depreciation, macroeconomic data out of China are weak and will continue the pressure towards yuan devaluation,” analysts from Barclays said in a note on Monday.

----“However, the deterioration in the Chinese economy may continue, and the risk of a Chinese hard landing appears to be growing, not declining, which would undermine our assumption [for copper],” they added.

More

http://www.marketwatch.com/story/copper-slumps-to-six-year-low-on-china-demand-woes-2015-08-18

"Stock prices have reached what looks like a permanently high plateau".

Yale Economist Irving Fisher, October 16th 1929.

At the Comex silver depositories Tuesday final figures were: Registered 55.87 Moz, Eligible 115.21 Moz, Total 171.08 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, how the 0.01 percent live. “Slumin it” in Paris for a mere 18,000 euros a week until the Hotel de l’Orangerie gets built at Versailles. My last hotel in Paris was the Hotel Meurice, and very good it was way back then too. The German General who didn’t destroy Paris in 1944, liked it so much, he made it his Paris H.Q. Well it certainly beat the Russian front. I suspect he got a bigger room though, and unlike me, all expenses paid.

Maybe they should list it on AirBnB? Due to lack of funding, the Palace of Versailles might become a hotel

David Chazan, The Telegraph Monday, Aug. 17, 2015

PARIS — It was a gilded symbol of monarchical opulence in pre-revolutionary France, but the Palace of Versailles has fallen upon hard times, now forcing it to open a hotel to raise revenue.

More than seven million people visit the state-owned palace and its celebrated Hall of Mirrors each year. But while visitor numbers have more than doubled in a decade, successive governments have slashed funding. To make up the shortfall, the palace is inviting bids from private companies to create and run the hotel in three 17th-century mansions around 100 yards from the main building.

Some rooms will have a view of the Orangerie, the gallery that sheltered Louis XIV’s 3,000 orange trees in winter.

“There will be no other hotel in the world like this one,” said a palace spokesman. “This is an emblem of French history and a cultural landmark. It will be an authentically royal experience.” Until the Revolution, one of the mansions was occupied by the comptroller-general of finances. More recently they served as an officers’ mess, but they have stood empty for seven years.

State funding for the palace has been cut from  47.4 million euros (US$53 million)  in 2013 to euros 40.5 million (US$45 million) this year, and some of the royal apartments are overdue for renovation. Versailles was transformed by King Louis XIV, the “Sun King,” in the 17th century from a hunting lodge into the dazzling heart of an absolutist state. Tenders for a 60-year hotel concession on the Grand Controle, Petit Controle and Pavillon buildings will close on Sept 14.

When the Hotel de l’Orangerie, as it has tentatively been named, is completed, it will let overnight guests eat cake, drink champagne and stroll in the royal gardens for the first time in 300 years.

http://www.nationalpost.com/m/wp/news/blog.html?b=news.nationalpost.com/news/world/maybe-they-should-list-it-on-airbnb-due-to-lack-of-funding-the-palace-of-versailles-might-become-a-hotel&pubdate=2015-08-18

Paris's most prestigious luxury hotels are counting the cost of the Airbnb revolution

Monday 17 August 2015

Well-to-do holidaymakers are streaming out of Paris’s grandest suites and in to luxury flats: or so say France’s oldest and most prestigious hoteliers.

They have declared war on Airbnb for taking their customers in the world’s most visited city and say the flat-sharing site is not playing by the same rules. “It’s an unfair competition,” Didier le Calvez, head of UMIH Prestige, the luxury arm of the hotel union UMIH and managing director of the Five-star Le Bristol hotel, tells The Independent.

Paris has become Airbnb’s top home-sharing destination, with more than 50,000 apartments on offer. But a new breed of luxury lettings has been luring in well-heeled customers, with up to 400 hosts demanding more than €500 (£55) a night. Under French law, homeowners are allowed to sub-let their main residence for four months of the year without facing the same tax and social charges as registered hotels.

At more than €18,000 a week, no expense is spared for guests staying in Achraf el Jirari’s sprawling Parisian apartment, which is a stone’s throw away from the glamorous Avenue Foch. Its five bedrooms are furnished with Italian antiques and contemporary art while a team of chefs, drivers and babysitters stand at the ready for an extra cost.

More

http://www.independent.co.uk/news/world/europe/pariss-most-prestigious-luxury-hotels-are-counting-the-cost-of-the-airbnb-revolution-10459656.html

"We will not have any more crashes in our time."

John Maynard Keynes. 1927

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 21^st century onwards? DC? A quantum computer next?

Google Project Sunroof shows how much solar juice is on your roof, no math needed

By Drew Prindle — August 17, 2015

Setting up a solar-power system in your home is a fairly complicated endeavor. Before you even start installing solar panels, you’ve got to figure out how much they’ll cost, how many you need, and how much money (if any) your investment will save you over time — not to mention whether or not your house gets enough sunlight to make solar power a viable option in the first place.

As the world’s most popular search engine, Google knows exactly how tricky this process is. Users enter zillions of solar-related questions into the engine on a daily basis, so the company decided to build a tool that makes going solar easier than ever. Project Sunroof, as it’s called, is a brilliant new program that leverages Google Maps data to answer all of your complicated solar energy questions in one place.

Here’s how it works. Over the years, Google has been collecting satellite imagery of every property in the world. These images contain a treasure trove of useful data — including the total area of your roof and how much sunlight it gets over the course of a normal day. Project Sunroof basically takes this data and makes it easier to digest. Simply enter in your address, and the program will calculate how much usable solar energy your house could generate if it were equipped with X number of solar panels.

And it doesn’t stop there, either. Google also knows roughly how much energy costs in your area, and can use that information to estimate how much you could potentially save by installing solar panels. It even breaks down financial plans and provides links to solar installation companies in your area.

Unfortunately the service isn’t available everywhere quite yet. For the time being, Project Sunroof will only work for houses and buildings located in Boston, Fresno, and San Francisco. Google plans to expand the service to other cities in the future, but the initial rollout is limited to just a select few.  If your area isn’t covered yet, try it out on Digital Trends’ San Francisco office address to get a feel for how it works!

Read more: http://www.digitaltrends.com/home/google-project-sunroof-announced-2015/#ixzz3jAMDJBfc

The monthly Coppock Indicators finished July

DJIA: +88 Down. NASDAQ: +189 Down. SP500: +116 Down.