Baltic Dry Index. 942 -26 Brent Crude 43.35
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Markets can remain irrational longer than you can remain solvent.”
J. M. Keynes.Everywhere in Europe the stock market Plunge Protection Teams came, they saw, they conquered, aided and abetted by the peanut brained talking heads on radio and TV, who almost unanimously parroted the line “buy the dip,” stock are getting cheaper and are good value. In America, the PPT came, they saw, and they got conquered. When this crash began, margin finance was in near record territory. Astronomical real losses have occurred and are spreading out everywhere. It will take more than an illegal ploy by Apple’s CEO in an email to CNBC’s Jim Cramer, to pretend that massive damage isn’t occurring, and that the Great Reconnect with Main Street reality isn’t underway.
For one thing, China has spun out of control. The Communist Party of China is no longer living up to its part of the job of running a one party state. In America the central bank is out of ammo and its final bubble is meeting its pin. Among the one percent, it’s now every man for himself. With Europe dead in the water and still deep in an existential crisis, the hard landing in China and collapse of the emerging market commodity nations, will overwhelm any ploys of the increasingly irrelevant US central bank. The Fed’s PPT may puff up Apple again, but how does that turn around China, the EU, and the rest of the BRICs? Greenspan and Bernocchio got lucky. They got out of Dodge just in time. The final bubble broke on Mrs Yellen’s watch. The first woman to head up the Washington Bubble Machine. The Great Nixonian Error of fiat money has met its match. The Great China Ponzi Scheme it unleashed has run out of Greater Fool investors. The next few years won’t be pretty in stocks and commodities.
Today, the Europeans get their comeuppance. Getting out last, so to speak, after their error yesterday.
“There is no harm in being sometimes wrong — especially if one is promptly found out.”
J. M. Keynes.
U.S. stock rally unravels as Dow, S&P 500 end sharply lower
Published: Aug 25, 2015 6:48 p.m. ET
In
a dramatic reversal to a morning rally, U.S. stocks relinquished all of their
opening gains, and then some, to finish with sharp losses. The main indexes
began trimming gains in afternoon trade, falling into negative territory ahead
of the closing bell as selling accelerated in the final hour.
“We would have preferred stocks open flat and rally into the close. Today’s action is not a good news for those who were expecting a V-shaped recovery,” said Michael Antonelli, equity sales trader at R.W Baird & Co.
“Unlike the pullback last October, this correction has a serious tone to it — there are serious global growth issues that are not going to be resolved any time soon. We expect the correction to last longer,” Antonelli added.
Trading on Wall Street remained volatile, with the CBOE Volatility index VIX, -11.59% otherwise known as the Wall Street’s fear gauge, trading at 36, the highest level since 2011.
The S&P 500 SPX, -1.35% turned big gains into losses and closed down 25.59 points, or 1.4%, at 1,867.61. Utilities and telecoms saw the biggest losses. The benchmark index is firmly in correction territory, having fallen 12% from its peak reached on May 21. On a percentage basis, Tuesday’s move marked the largest swing in the index, before closing negative, since October 2008 during the financial crisis.
The Dow Jones Industrial Average DJIA, -1.29% which at session highs was up more than 400 points, ended with a loss of 204.91 points, or 1.3%, at 15,666.44.
The Nasdaq Composite COMP, -0.44% ended the day down 19.76 points, or 0.4% at 4,506.49.
More
China cuts rates to stem crisis, but doubts grow on foreign reserve buffer
'There are reasons to question the robustness of China’s reserves,' said Citigroup. Contrary to general belief, China has one of the lowest reserve ratios among emerging markets
China has injected $100bn of liquidity into the country’s financial system and cut interest rates to records lows in a "shock-and-awe" bid to restore confidence, but worries persist that even this may not be enough to avert a crunch as capital flight surges.The move came as the authorities abandoned their futile efforts to shore up the stock market, allowing the Shanghai Composite index of equities to plummet by a further 7.6pc on Tuesday. It has tumbled by 22pc in the past four trading days.
Mark Williams from Capital Economics said Beijing has made a strategic decision to let the stock market find its own level after the fiasco of recent weeks, switching stimulus instead to the broader economy.
The central bank (PBOC) cut the reserve requirement ratio (RRR) for lenders by 50 basis points to 18pc, freeing up roughly $100bn of fresh funds. It also cut the one-year lending rate by 25 points to 4.6pc.
Mr Williams said the combined cuts are rare and amount to a dose of “shock and awe” in Chinese policy language. “It is a statement that policymakers mean business,” he said.
Wei Yao from Societe Generale said the RRR cut was “absolutely necessary” to stop liquidity drying up and to reverse the passive tightening over recent weeks caused by capital outflows.
It may not be enough to add any net stimulus to the economy. “Liquidity conditions are still under immense pressure,” she said.
The PBOC has intervened heavily on the exchange markets to defend the
yuan, drawing down reserves at a blistering pace. The unwanted side-effect is
to tighten monetary policy. It is a textbook case of why it can be so difficult
for a country to deploy foreign reserves – however large on paper - in a
recessionary downturn.
The great unknown is exactly how much money has been leaving the country
since the PBOC stunned markets by ditching its dollar exchange peg on August
11, and in doing so set off a global crash.
More
The War for Crude Dominance
Further Negative Outlooks/Downgrades Likely
Downgrading ECACN, ETP, DVN, RDC, WFT in More Challenging Environment
When there is momentum, there is momentum, and currently it is down. As
inventories continue to rise, the Chinese economy continues to weaken and
global production begrudgingly pushes forward, the bears are out and in force.
Although U.S. production is poised to move down to help with the supply
situation, Iran has entered the fray and will likely take on the growth in
production that the U.S. used to provide. Its OPEC peers do not appear ready to
give up production to make room for Iran, and Iran’s near-term 500,000 bpd of
exports and another
1 mmbpd in the intermediate term (not to mention future growth
expectations of doubling production from a low in 2014 to 5.7 mmbpd) is
weighing heavily on sentiment. Last year, it looked like a concentrated fight
between the U.S. shale producers (whose production was growing by 1 mmbpd) and
Saudi Arabia, which got tired of being the swing producer. Saudi Arabia made it
clear it does not intend to lose more market share, be it to the U.S., Russia,
or now Iran. From our perspective, it looks like it is getting ready to be a
brawl between all the heavyweights (Saudi Arabia, the U.S., Russia, Iran and
Iraq) with no one wanting to give ground. Clearly, no one will go unscathed, in
our opinion. Absent the Iranian resolution not passing or another crisis in the
Middle East, it looks inevitable that the fight is going to continue. Given the
more challenging environment, we are making further downgrades to several
credits noted below.
More
“When
the capital development of a country becomes a by-product of the activities of
a casino, the job is likely to be ill-done.”
J. M. Keynes.
At the Comex silver depositories
Tuesday final figures were: Registered 54.89 Moz, Eligible 116.19 Moz, Total
171.08 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more cutbacks in Brazil amid a crisis from
falling demand and prices for commodities. More commodity trouble in China.
Inquiring minds at CNBC and their ilk, will want to know, why aren’t the
respective central banks bailing these commodities out? After all, in The Great
Nixonian Error of fiat money, central bankster’s can do anything, right? Especially
levitate stocks. Why not commodities too?
Rousseff Plans to Shut Down 10 Ministries Amid Brazil Crisis
August 24,
2015 — 3:59 PM BST Updated on August 24, 2015 — 6:23 PM BST
Brazilian President Dilma Rousseff plans to reduce the size of her government
as part of a plan to shore up support from key allies.
The goal is to shut down as many as 10 ministries, sell properties and
reduce the number of posts filled by the government, Planning Minister Nelson
Barbosa told reporters Monday in Brasilia.
The move follows calls by members of her ruling coalition for the
government to go beyond unpopular tax increases and welfare spending cuts by
trimming the size of the government, which has 39 ministries and appoints about
22,000 officials.
The decision “is a response to the opposition and part of her allies to
show the government is willing to bear part of the burden,” said Joao Paulo
Peixoto, a political science professor at the University of Brasilia.
Brazil has more ministries than any of the world’s 50 largest economies,
according to Augusto Franco, director of consulting firm Casasemquina
Assessoria e Consultoria. Brazil is trailed by South Africa, Indonesia and
Egypt, which have 35, 34 and 33 ministries, respectively. Franco is former
director of Rio de Janeiro-based industry group Firjan.
While the move is symbolic of the willingness to shoulder its share of
national austerity measures, the impact in the budget will actually be small,
Peixoto said. The budget gap in June widened to 8.1 percent of gross domestic
product, the largest since November 1998, as an economic slowdown eroded tax
revenue.
More
Angry investors give Chinese metals exchange head taste of market forces
Chinese investors are getting pissed off and this should be a wake up call to the government regulators.Over the weekend, angry Chinese investors tackled and captured the head of a minor Chinese metals exchange, before turning him into the Shanghai police, reported the Financial Times.
The Fanya Metal Exchange, based in the southwestern city of Kunming, trades minor metals such as indium and bismuth. It also offers high interest, highly-liquid investment products. In addition to trading metals, Fanya “also functioned as a shadow banking conduit — not only leveraging metal deposited with the exchange as collateral for loans, but offering high interest investment products to retail investors,” according to Zero Hedge.
One of the characteristics of the products was supposed to be liquid. Well, in the spring, Fanya ran into some liquidity problems. Then in July, it not only ceased making payments on the products, but also froze all the funds, so investors can’t cash out.
Investors had been protesting to get their money back. But when that didn’t help, they flew to Shanghai from around the country to confront Fanya founder Shan Jiuliang.
In a dawn raid Saturday morning, they staked out Shan’s hotel, waited until he checked out, captured him, then threw him to the floor, before putting him in a car and taking him to the local police station.
The police took Shan into custody, but released him without charges, reported the FT. Among other businesses he heads are the Hong Kong-listed animation studio Imagi International Holdings, said the FT.
More
Oil Traders Race for Cover as Light at End of Tunnel Grows Dim
August 24,
2015 — 10:16 PM BST Updated on August 25, 2015 — 5:01 AM BST
What a difference a few days make.
Investors are willing to pay the most since mid-July to protect from a
drop in U.S. crude prices by the end of the year, according to a measure of
options values. That’s a reversal from Aug. 20, when the premium for puts over
calls was the smallest in nine months. Puts give holders the right to sell
futures at a certain price within a period, allowing them to potentially profit
from a decline.
West Texas Intermediate futures tumbled Monday to the lowest level since
2009 on concern that Chinese demand is slowing just as Iran threatens to expand
a global glut. Prices had risen on Aug. 20 as the outlook for a weaker U.S.
dollar lured investors to oil, but the recovery was short-lived.
“There was some debate over whether prices could push lower,” John
Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by
phone. “The last couple days have made it clear that there’s lower to go.”
The most active WTI options Monday were October $35 puts, which surged
38 cents to 66 cents a barrel on volume of 14,240 lots. It was the highest
price since April. The second-most active were November $30 puts, with 8,138
contracts trading.
The so-called skew, measuring the premium for December 25-delta put
options versus 25-delta calls, almost doubled in the past two trading sessions.
More
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? DC? A quantum
computer next?
Super-low loss quantum energy transport could revolutionize sunlight to energy conversion
The use of sunlight as an energy source is achieved in a number of ways, from conversion to electricity via photovoltaic (PV) panels, concentrated heat to drive steam turbines, and even hydrogen generation via artificial photosynthesis. Unfortunately, much of the light energy in PV and photosynthesis systems is lost as heat due to the thermodynamic inefficiencies inherent in the process of converting the incoming energy from one form to another. Now scientists working at the University of Bayreuth claim to have created a super-efficient light-energy transport conduit that exhibits almost zero loss, and shows promise as the missing link in the sunlight to energy conversion process.Using specifically-generated nanofibers at its core, this is reported to be the very first time a directed energy transport system has been exhibited that effectively moves intact light energy over a distance of several micrometers, and at room temperature. And, according to the researchers, the transference of energy from block to block in the nanofibers is only adequately explained at the quantum level with coherence effects driving the energy along the individual fibers.
Quantum coherence is the phenomenon where subatomic waves are closely interlinked via shared electromagnetic fields. As they travel in phase together, these quantum coherent waves start to act as one very large synchronous wave propagating across a medium. In the case of the University of Bayreuth device, these coherent waves of energy travel across the molecular building blocks from which the nanofibers are made, passing from block to block and moving as one continuous energy wave would in unbound free space.
It is this effect that the scientists say is driving the super-low energy loss capabilities of their device, and have confirmed this observation using a variety of microscopy techniques to visualize the conveyance of excitation energy along the nanofibers.
----"These highly promising nanostructures demonstrate that carefully tailoring materials for the efficient transport of light energy is an emerging research area," said Dr. Richard Hildner, an experimental physicist at the University of Bayreuth.
The results of this research were recently published in the journal Nature.
http://www.gizmag.com/supramolecular-quantum-nanofibers-light-energy/39057/?utm_source=Gizmag+Subscribers&utm_campaign=1abc943d12-UA-2235360-4&utm_medium=email&utm_term=0_65b67362bd-1abc943d12-90625829
The monthly Coppock Indicators finished July
DJIA: +88 Down. NASDAQ:
+189 Down. SP500: +116 Down.
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