Baltic Dry Index. 918 -24 Brent Crude 44.12
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
If we do not succeed, we run the risk of failure.
The talking chair, with apologies to Dan Quayle.
It was all rush back into the casino again yesterday, after Federal Reserve Bank of New York President William C. Dudley announced that the roulette wheel was spinning again and he was just about to roll in the ball. Place your bets quick. The Fedster’s rate hike next month is off. “Oh, and by the way, China’s fixed again.” The Punters and Muppets loved it. Whatever else it is, it isn’t capitalism.
Below, the Fed leaves the punchbowl full.
Dow, S&P 500 post largest gains since 2011
Published: Aug 26, 2015 5:08 p.m. ET
Another roller-coaster trading day for the market ended this time with the
Dow and S&P 500 posting their largest gains in nearly four years Wednesday.
The rally snapped six-day stock-market rout that drove the main indexes into correction territory—defined as a fall from a recent peak of at least 10%.
Wednesday saw stocks jump at the open with the push higher attributed to fresh stimulus measures by China’s central bank as well as better-than-expected economic data.
“You get these types of swings when volatility is high, but short-term, it’s a good sign that stocks rallied even when VIX is at 30,” said Mark Kepner, managing director of Sales & Trading at Themis Trading LLC.
Implied volatility on the S&P 500, as measured by the CBOE Volatility index VIX, -15.82% fell 15% to about 30, but still remained well above a historical average level of 20. The VIX is often referred to as a gauge of fear in the market.
The Dow Jones Industrial Average DJIA, +3.95% jumped 619.07 points, or 4%, to 16,285.51, with all 30 members of the blue-chip index closing with gains.
The S&P 500 SPX, +3.90% rose 72.90 points, or 3.9% higher at 1,940.51, with all of its 10 main sectors closing higher. The technology and health-care sectors led gains. The Nasdaq Composite COMP, +4.24% ended the day up 191.05 points, or 4.2% at 4,697.54.
The Russell 2000 index RUT, +2.54% which briefly dipped into negative territory earlier, ended up 28 points, or 2.5% to 1,132.92.
More
http://www.marketwatch.com/story/us-stocks-on-track-to-rise-as-china-tries-fresh-stimulus-2015-08-26
Fed's Dudley Says Decision on September Liftoff Less Compelling
August 26, 2015 — 3:44 PM BST Updated on August 26, 2015 — 4:56 PM BST
Global stock-market turmoil has weakened the case for raising interest
rates in September, Federal Reserve Bank of New York President William C.
Dudley said, cautioning it’s important not to overreact to short-term
developments.
“From my perspective, at this moment, the decision to begin the
normalization process at the September FOMC meeting seems less compelling to me
than it was a few weeks ago,” Dudley told a news conference Wednesday at the
New York Fed.
“Normalization could become more compelling by the time of the meeting
as we get additional information on how the U.S. economy is performing, and
more information on international and financial market developments.”
World financial markets have been convulsed by concerns over weaker
Chinese growth, just as the Fed debates its first rate increase since 2006.
About $8 trillion has been erased from the value of global equities since the
country’s surprise devaluation of the yuan on Aug. 11 as investors weighed a
darkening outlook for the world’s second-largest economy.
Morehttp://www.bloomberg.com/news/articles/2015-08-26/fed-s-dudley-says-decision-on-september-liftoff-less-compelling-idsw6y3j
Asia stocks take heart from Wall Street rally, China gains
Asian stocks extended gains on Thursday as a sharp rebound on Wall
Street and gains in battered Chinese shares eased fears of a deep and
protracted global market rout, while the dollar rallied as risk aversion eased.
Sentiment was also supported by comments from New York Fed President
William Dudley on Wednesday who said the prospect of a September rate hike
"seems less compelling" than it was only weeks ago given the threat
posed to the U.S. economy by recent market turmoil.
Still, some investors remained on edge, after European shares slid
nearly 2 percent overnight and ahead of more readings on China's factory and
services sector activity early next week.
---- Chinese shares, the epicenter of recent financial market tremors, rose in early trading, with the CSI300 index adding 2.5 percent and the Shanghai Composite Index gaining 2.1 percent. The indexes had plunged more than 20 percent over the past week.
Tokyo's Nikkei rose 1.8 percent, adding to the previous day's 3.2
percent gain, after U.S. stocks racked up their biggest one-day gain in four
years.
Ironically, U.S. stocks rallied on Wednesday on expectations that the
Fed will hold off from hiking interest rates next month due to mounting global
uncertainties, including China - the very factors that prompted heavy selling
in the previous sessions.
---- Crude oil rebounded amid a general thaw in global risk aversion. U.S. crude futures bounced 2.3 percent to $39.50 a barrel. The contracts had slumped to a 6-1/2-year low on Monday, dogged by supply glut woes and worries of a hard landing by China's economy. Brent added 2.4 percent to $44.16.
More
http://www.reuters.com/article/2015/08/27/us-markets-global-idUSKCN0QW01620150827
Back in the real world, more of the disconnect.
US farm incomes cut by half as low grain prices bite
August 25, 2015 6:00 pm
An extended run of low grain prices will slash US farm incomes by more than
half from their peak, the government said, deflating a surge in land values and
pressuring fertiliser and equipment makers. Net income on US farms will total $58.3bn this year, the lowest since 2002 when adjusted for inflation, and down nearly 53 per cent from a record high of $123.7bn in 2013, the US Department of Agriculture said in a forecast updated on Tuesday.
The sharp decline shows how two years of mammoth harvests and easing biofuel mandates have ended what a University of Illinois expert called a “golden age in agricultural incomes”, similar to previous ones in the 1910s and 1970s.
Now, farmers, their bankers and investors in land and food production are facing a period of retrenchment.
Land in the fertile Corn Belt region encompassing Illinois, Indiana, Iowa, Missouri and Ohio is down 0.3 per cent this year to $6,350 per acre, according to USDA. Farmers are negotiating lower rents with reluctant landlords, but adjustments have been modest so far, said Gary Schnitkey, a University of Illinois professor of farm management.
Corn and soyabeans, the two most widely planted crops in the US, have plunged as another large crop is anticipated this autumn. On Tuesday CBOT December corn was $3.79 per bushel, off 0.4 per cent, while CBOT November soyabeans were at $8.81 a bushel, up 0.8 per cent. The average farm needs corn above $4.10 and soyabeans above $10 to break even at expected crop yields, Prof Schnitkey said.
Livestock prices have also begun to reverse after hitting highs in 2014, pulling down incomes for pig and dairy farmers. CME October lean hogs were 0.66775 a pound on Tuesday, off 29 per cent from a year ago.
----Last week Deere & Co, the equipment maker, forecast a 25 per cent drop in US and Canadian agricultural sales in 2015. Its shares have fallen 4.8 per cent in the past year.
More
http://www.ft.com/cms/s/0/1e9b3c14-4b41-11e5-b558-8a9722977189.html#axzz3jv3gs65c
China August official factory PMI seen shrinking to three-year low
Activity in China's manufacturing sector likely shrank at its fastest
pace in three years in August, a Reuters poll suggested, adding to signs of
deepening economic weakness which are shaking global financial markets.
The official manufacturing Purchasing Managers' Index (PMI) is forecast
to edge down to 49.7, the weakest level since August 2012, from 50 in July,
according to the median forecast of 20 economists in the poll.
A reading above 50 indicates an expansion in activity while one below
that points to a contraction on a monthly basis.
A separate private survey released last week revealed that China's
factory sector shrank at its fastest rate in almost 6-1/2 years in August, fanning
global concerns that the world's second-largest economy may be slowing more
sharply than earlier feared.
The official PMI survey is heavily weighted toward larger, state-owned
firms, while the private Caixin/Markit PMI is a gauge of smaller ones.
Hit by a property downturn, factory overcapacity, weak exports and high
local government debt, China's economy is headed for its slowest growth this
year in a quarter of a century.
Some analysts believe current growth levels are already well below the
government's official 2015 target of 7 percent.
Morehttp://www.reuters.com/article/2015/08/26/us-china-economy-pmi-idUSKCN0QV1DE20150826
COLUMN-Worried about China? Ask a metals trader: Andy Home
Aug 26 (Reuters) - Everyone's worried about China.
Collective concern about what exactly is happening in the world's
second-largest economy is roiling all parts of the financial universe.
Industrial metal markets have not been immune and the price of copper,
viewed by many investors as a proxy for industrial activity, hit a fresh
six-year low of $4,855 per tonne on Monday.
But while the rest of the world seems shocked that all is not as it
should be in the industrial powerhouse that is China, metal traders have been
grappling all year with the implications of a Chinese slowdown.
The omens were there as early as January, when London copper prices fell
almost 12 percent in two days after a bear attack led by Chinese funds. They
were expressing what with hindsight looks a good call on the impact on Chinese
demand of weakness in key metallic parts of the economy such as construction,
automotive and manufacturing.
While other markets now fret about the potential for a "hard
landing" in the Chinese economy, industrial metal markets have arguably
been living with just such a scenario for many months.
---- Few saw the January bear raid on copper coming.
Sure, copper prices had been trending lower for four years from their peak
above $10,000 per tonne in early 2011.
But the narrative was all about supply, as the world's copper miners
gradually lifted output after years of collective underperformance and lack of
investment in new capacity.
The story was the same in iron ore .IO62-CNI=SI with slumping prices
attributed to a wall of new supply being brought on by both majors such as Rio
Tinto and BHP Billiton and a host of new players.
No one was that worried about actual demand, first and foremost in
China. A mild slowdown was expected. How could it not be, given Beijing's
mantra of steering the economy away from fixed asset investment to a more
sustainable consumer model?
But most commentators, and crucially most producers, took a sanguine
view that China would continue sucking up ever greater quantities of raw
materials, just at a slightly slower pace.
It took a while for the narrative to catch up with what those Chinese
funds were betting on back in January, namely that the slowdown was going to be
a lot harder than most expected.
---- Consider, for example, a market such as stainless steel, a high-end alloy that sits much closer to the end-user than the producer on the supply chain. Like copper, stainless has a multi-faceted usage profile across a broad spectrum of industrial and manufacturing applications.
Chinese production of stainless fell by 1.4 percent year-on-year in the
first quarter of 2015.
That may not sound much but Chinese output had been growing at
double-digit rates over the preceding five years. The last quarter in which the
country's output actually fell was back at the start of 2009, when global
manufacturing was still spiralling downwards in the wake of the global
financial crisis.
In that context, a contraction of "only" 1.4 percent feels
very hard.
And since China's share of global stainless production had grown
steadily from 29 percent at the end of 2008 to 55 percent at the end of 2014,
the shockwaves have travelled far beyond China's own borders.
Morehttp://www.reuters.com/article/2015/08/26/china-metals-ahome-idUSL5N11134S20150826
Be prepared for more wild down legs in global stocks, although London’s City Slicker’s will try hard to dress up tomorrow’s month end close, Monday’s a bank holiday, while America’s Great Vampire Squids will try the same on Monday.
Glory is fleeting but obscurity is forever.
Napoleon, European Unifier.
At the Comex silver depositories
Wednesday final figures were: Registered 54.89 Moz, Eligible 116.63 Moz, Total
171.52 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today China. “Did you sell?” “Have we got a
re-education program for you!” Coming next, the order to 1.4 billion people to
buy 10 shares each of anything. I suspect that China is probably in far worse
shape than we pessimists currently think.
China Authorities Escalate Blame Game as Stock Slide Worsens
August 25,
2015 — 2:22 PM BST Updated on August 26, 2015 — 11:01 AM BST
Faced with a renewed
stock market slide that has wiped out $5 trillion in trading value, China
is again on the prowl for scapegoats.Authorities announced a probe of allegations of market malpractice involving the stocks regulator on Tuesday, while the official Xinhua News Agency called for efforts to “purify” the capital markets. The news service also carried remarks by a central bank researcher attributing the global rout to an expected Federal Reserve rate increase.
The Shanghai Composite Index has plunged more than 40 percent from its peak, after concerns over the Chinese economy helped snap a months-long rally encouraged by state-run media. Authorities have repeatedly blamed market manipulators and foreign forces since the sell off began in June and led officials to launch an unprecedented stocks-support program.
Now, after suspending that program, the administration has embarked on a new round of allegations and fault-finding.
“The authorities have been too involved in the stock market and now they’re trying to pass the responsibilities to others,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology.
“In fact, they have to be responsible for the market crisis. It’s the authorities trying to act like a referee and a player at the same time.”
Police are investigating people connected to the China Securities Regulatory Commission, Citic Securities Co. and Caijing magazine on suspicion of offenses including illegal securities trading and spreading false information, Xinhua reported.
They’re probing suspects linked to the CSRC, including a former employee, over insider trading and forging official document stamps, Xinhua said. Eight people at Citic Securities are suspected of illegal securities trading and the Caijing employees are under investigation for allegedly fabricating and spreading fake stock and futures trading information.
Citic Securities said Wednesday in a statement posted to the Shanghai stock exchange that it hasn’t received notice related to the report and said the company’s operating as normal. Caijing in a statement Wednesday confirmed a reporter had been summoned by police. The magazine said it didn’t know the reason and would cooperate with authorities. Calls and a fax to the CSRC went unanswered.
Meanwhile, Xinhua published a commentary urging stricter enforcement to
cleanse the markets.
“We have reason to believe that more criminals and their hidden crimes
will be exposed,” it said. “We also believe judicial departments will
investigate thoroughly and impose punishments no matter who is involved in
crimes.”
More
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz
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?
Hybrid artificial photosynthesis technique produces hydrogen and methane
Not content with using hybrid artificial photosynthesis to turn CO2 emissions into plastics and biofuel, researchers at the Lawrence Berkeley National Laboratory (Berkeley Lab) now claim to have produced an enhanced system that uses water and solar energy to generate hydrogen, which is in turn used to produce methane, the main element of natural gas, from carbon dioxide. Generating such gases from a renewable resource may one day help bolster, or even replace, fossil fuel resources extracted from dwindling sub-surface deposits.Simply put, the process of photosynthesis turns light energy into chemical energy. In plants and certain types of algae, energy from incoming sunlight is used as the power source to synthesize simple carbohydrates from carbon dioxide and water. In the original Berkeley Lab hybrid system, a membrane arrangement of nanowires created from silicon and titanium oxide harvested solar energy and transported electrons to microbes where they used that energy to transform carbon dioxide into a range of chemical compounds.
In the latest iteration of the artificial photosynthesis system, solar energy was captured via a similar membrane (but this time consisting of indium phosphide photocathodes and titanium dioxide photoanodes), which was employed to supply power for the splitting of water molecules into oxygen and hydrogen. The hydrogen was then conveyed to a collection of microbes that used it to convert carbon dioxide into methane. Hence the hybrid system collected light energy and produced both hydrogen and methane.
"This
study represents another key breakthrough in solar-to-chemical energy
conversion efficiency and artificial photosynthesis," said Professor
Peidong Yang, a chemist with Berkeley Lab’s Materials Sciences Division.
"By generating renewable hydrogen and feeding it to microbes for the
production of methane, we can now expect an electrical-to-chemical efficiency
of better than 50 percent and a solar-to-chemical energy conversion efficiency
of 10-percent if our system is coupled with state-of-art solar panel and
electrolyzer."
More
The monthly Coppock Indicators finished July
DJIA: +88 Down. NASDAQ:
+189 Down. SP500: +116 Down.
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