Baltic Dry Index. 911 +08 Brent Crude 48.64
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Finance is the
art of passing customer segregated funds from hypothecation to hypothecation
until it finally disappears."
Stocks Tumble With Crude as China Concerns Roil Global Markets
September 1, 2015 — 12:22 AM BST Updated on September 1, 2015 — 10:28 PM
BST
U.S. stocks led a renewed rout in equities worldwide as concern that
China’s slowing economy will stymie global growth roiled financial markets.
The Standard & Poor’s 500 Index swooned into September with its
third-biggest loss of 2015 as the beating that erased $5.7 trillion from the
value of shares globally in August continued. Crude oil tumbled the most in two
months, emerging assets plunged and a measure of the risk premium on high-yield
debt jumped. Demand for haven assets surged from Treasuries to gold.
“September is the worst month of the year historically and that’s
scaring people a little bit,” Peter Tuz, who helps manage more than $430
million as president of Chase Investment Counsel Corp. in Charlottesville,
Virginia, said by phone. “The China PMI seemed to set it off but people are
deciding this morning to take some money off the table, just sitting on cash
for a while and that’s feeding on itself on top of a down day already.”
The S&P 500 was down 3 percent by 4 p.m. in New York after plunging
6.3 percent in August for its worst month since 2012. The gauge has fallen 1.1
percent on average in September going back to 1927, the most of any month
according to data compiled by Bloomberg.
Asian
shares started Tuesday’s selloff after a gauge of Chinese manufacturing fell to
a three-year low. European stocks followed as a reports pointed to weaker
growth in the region, and the slump spread to the U.S. amid data showing the
slowest factory expansion in two years.
More
Asian shares fall for third day on global growth concerns
Asian shares fell for a third straight day on Wednesday as weak
manufacturing reports from China, the United States and Europe fueled worries
about slowing global growth, while the dollar took back some ground lost in the
previous session to the safe-haven Japanese yen.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.2
percent by late morning, taking its losses to nearly 4 percent so far this week
as investors continued to dump emerging market assets.
---- China's major stock indexes extended losses on Wednesday, despite pledges by a number of brokerages to increase their stock investments to support the market.
The CSI300 index fell 2.4 percent to 3,281.92 points while the Shanghai
Composite Index lost 2.5 percent to 3,088.82 points. Both were down around 4
percent at one point.
Facing growing uncertainty over policy in the U.S. and China, all three
major U.S. equity indexes are now solidly in negative territory for the year so
far.
---- Crude oil futures continued to drop after plummeting 8 percent overnight after the weak Chinese manufacturing data raised fears of slowing demand.
U.S. crude was down 2.2 percent at $44.40 a barrel, while Brent fell 1.7
percent to $48.74.
More
‘Death cross’ patterns spread to all corners of the stock market
Published: Sept 1, 2015 1:37 p.m. ET
“Death cross” patterns continue to spread through the stock market like an
epidemic, even infecting market segments believed to be more insulated from
overseas turmoil.The Russell 2000 index RUT, -2.71% of small-capitalization stocks became the latest victim among the major market indexes. The index’s 50-day moving average fell to 1,222.95 in midday trade Tuesday, crossing below the 200-day moving average (MA), which slipped to 1,224.11, according to FactSet.
Many chart watchers believe a death cross, when the 50-day MA crosses below the 200-day MA, indicates that a shorter-term decline has developed into a longer-term downtrend.
The Russell 2000’s last death cross appeared on Sept. 22, 2014. The index fell another 7.1% in the three weeks after that before bottoming at a one-year low.
That follows the death cross that appeared in the S&P MidCap 400 Index MID, -2.83% on Monday.
Apple Inc.’s chart AAPL, -4.47% produced a death cross on Aug. 26.
Many have questioned whether a well-telegraphed moving average crossover is really a bearish signal or not. But at the end of 2008, three months before the market bottomed, all 30 Dow stocks had produced death crosses.
Among other notable indexes in which the bearish pattern has appeared, the Dow Jones Total Stock Market Index DWCF, -2.90% also produced a death cross on Tuesday, the Dow Jones Transportation Average DJT, -2.14% produced one on May 26 and the Dow Jones Utility Average DJU, -2.68% produced one on May 7.
In EUSSR news, France continued on
its unhappy socialist way to becoming the new Greece. Euros anyone?
France 'stuck in the doldrums' with second worst factory sector in the eurozone
Manufacturers in the euro's second largest economy record another torrid August, topped only by crisis-hit Greece
France's beleaguered factories deteriorated again in August, with output tumbling to a four-month low, confirming the country's position as the eurozone's manufacturing laggard.An influential survey of the country's producers (PMI) came in below analyst expectations at 48.3 last month from 49.6 in July. Any number below 50 indicates contraction.
Despite a moderate expansion across the rest of the eurozone, French factories reported their sharpest decline in production since April, suffering from fewer new orders and job losses.
"The French industrial sector remains in the doldrums and is likely to continue to act as a drag on the broader French economy," said Rob Dobson, senior economist at Markit, which carries out the survey.
The rate of contraction was only topped by crisis-hit Greece, where factories saw moderate improvement having collapsed to an all-time low in July. Greece's PMI reading came in at 39.1, still one of the worst figures in the survey's history as the country remains saddled with capital controls that restrict the movement of cash around the economy.
More
http://www.telegraph.co.uk/finance/economics/11836164/France-stuck-in-the-doldrums-with-second-worst-factories-in-the-eurozone.html
Meanwhile, if it wasn’t for bad news….
American Factories Expand at Slowest Pace Since May 2013
September 1, 2015 — 3:00 PM BST Updated on September 1, 2015 — 8:44 PM
BST
Manufacturing in the U.S. expanded in August at the slowest pace since
May 2013 as anemic demand from emerging markets such as China translated into
leaner factory order books.
The Institute for Supply Management’s index fell to 51.1, lower than the
Bloomberg survey median, from 52.7 in July, a report from the Tempe,
Arizona-based group showed Tuesday. A measure of exports matched the weakest
reading since April 2009.
The dollar’s ascent, which has accelerated since the middle of last
year, is making it tougher for U.S. producers to drum up overseas sales,
prompting plants to slow hiring and production. While factories are finding
some relief with robust car sales and a recent rebound in investment in new
equipment, record inventory building in the first half of 2015 is an added
hurdle.
“It raises a warning flag about the outlook,” said Joshua Shapiro, chief
U.S. economist at Maria Fiorini Ramirez Inc. in New York. “We’re going to have
an inventory adjustment and, on top of that, weak exports are going to remain a
weight. We’ll see a period of time when manufacturing is soft.”
More
Dubai Property Prices Fall Most in the World, Knight Frank Says
September 1,
2015 — 11:41 AM BST
Dubai property prices fell by 12.2 percent during the past year, the
largest drop in the world, according to real estate consultancy Knight Frank.
The decline in the twelve months through June was the biggest in 56
mainstream residential markets and larger than the 12 percent fall in real
estate prices in Ukraine, which has been hit by almost two years of protests, a
separatist insurgency, and political upheaval, Knight Frank said Tuesday in a
report. Prices in Dubai fell 2.8 percent in the second quarter. Hong Kong was
the best performing residential market, with prices up by 20.7 percent.
Over the past decade, Dubai’s property market has swung from boom to
bust and back again. Price gains in the two years through 2014 recouped much of
the losses incurred in a 2008 collapse that pushed the city to the brink of
bankruptcy. Then, prices started falling again this year amid oil’s slump and
weaker currencies in Russia and Europe. Regulators also introduced caps on the
size of mortgages and doubled transaction fees to deter speculation.
“Weaker demand, a strong U.S. dollar and ongoing cooling measures have
dampened sales volumes in the mainstream sector,” Knight Frank said.
The slump in Dubai real estate looks set to continue, according
to a separate report released today by Cluttons. Villa prices will fall by
a further 5 percent to 7 percent in the second half of the year, it said.
Rental prices are also weak and are expected to drop another 1.5 percent to 2
percent in the second half, Cluttons said, although apartments continue to be
“viewed favorably” by some investors.
http://www.bloomberg.com/news/articles/2015-09-01/dubai-property-prices-fall-most-in-the-world-knight-frank-saysSouth Korea exports plunge 14.7%
By Simon Mundy and Song Jung-a in Seoul September
1, 2015 4:36 am
South Korea has suffered
its heaviest fall in exports for six years, bolstering expectations that the
central bank will cut rates next week to tackle a rapidly darkening outlook.
Exports fell 14.7 per cent last month from a year before, the trade ministry said on Tuesday — the biggest decline since August 2009. Domestic consumption also slumped, pulling imports down 18.3 per cent in their biggest drop since February. The trade surplus fell to $4.35bn from $7.72bn in July.
South
Korea has been hit hard by the economic slowdown in China, which accounts
for about a quarter of its exports, with the value of shipments to the country falling
8.8 per cent in the period. Total exports were dragged down further by a still
sharper decline in exports to Europe and Japan, both of which declined by more
than a fifth.
The
latest trade data were much worse than expected. Exports of petroleum products
and ships led the way, with respective declines of 40.3 per cent and 51.5 per
cent amid a slide in oil prices. Demand for Korean cars also cooled, although
shipments of smartphones and semiconductors rose.
Raymond
Yeung, an economist at ANZ, said the continuing weakness would probably prompt
the Bank of Korea to cut its policy interest rate next week by 25 basis points
to a new record low of 1.25 per cent. The coming months could bring further
sharp declines in exports, he added, with the recent devaluation of the Chinese
renminbi set to reduce the dollar value of South Korean sales to the country.
More
We close for the day with an article that says all that is wrong with
the collapsing China Ponzi Bubble. Deflation is likely to be with us for several
years.
Zombie cement factories of China
Aug, 31 2015
Lucheng
Zhuoyue Cement Plant loses money on each ton of cement it produces. But
stopping production is not an option, the New York Times reports.
When the plant opened in 2011 to supply the real estate and infrastructure industries in the northern Chinese city of Changzhi, the company raised most of the initial money from banks. Now, Miao Leijie, the factory’s general director, needs to keep churning out cement simply so the company can pay the interest on its loans.
It will be tough for the business, Lucheng Zhuoyue Cement Plant, to get out of the hole. Customers and investments are drying up, and the company is borrowing even more money to stay afloat.
“If we ceased production, the losses would be crushing,” Miao said, as he chain-smoked in the company’s quiet, spartan office. “We are working for the bank.”
Changzhi and its environs are littered with half-dead cement factories and silent, mothballed plants, an eerie backdrop to the struggling Chinese economy.
Like many industrial cities across China, Changzhi, which expanded aggressively during the country’s long investment boom, has too many factories and too little demand. That excess capacity, many economists indicate, will have to be eliminated for the Chinese economy to return to healthy growth.
But rather than shut down, Lucheng Zhuoyue and other Changzhi companies are limping along in a kind of march of the undead.
To protect jobs and plants, the government and its state-owned banks sometimes keep money-losing businesses on life support by rolling over or restructuring loans, providing fresh credit or offering other aid. While this may seem like an odd business tactic, it is part of a broader strategy to help maintain social stability, a major goal of China’s leadership. Authorities in China’s provinces and cities also back struggling factories just because they are deemed important to the local economy.
Similar strategies have been tried before, with little success. In Japan, such businesses, known as “zombie companies,” are blamed for contributing to that country’s two decades of economic stagnation.
Some industries are plummeting, wreaking havoc in less economically diverse cities and towns. Empty apartments built during the boom are now weighing down the property sector. Businessmen in Changzhi complain that construction projects supported by the local government have also been scaled back.
As a result, Changzhi’s cement plants are saddled by excess capacity. Companies in the province can produce three times as much cement as what was actually needed in 2014, according to the Shanxi Provincial Association of Building Material Industries. Two-thirds of them lost money in that year.
more
When the plant opened in 2011 to supply the real estate and infrastructure industries in the northern Chinese city of Changzhi, the company raised most of the initial money from banks. Now, Miao Leijie, the factory’s general director, needs to keep churning out cement simply so the company can pay the interest on its loans.
It will be tough for the business, Lucheng Zhuoyue Cement Plant, to get out of the hole. Customers and investments are drying up, and the company is borrowing even more money to stay afloat.
“If we ceased production, the losses would be crushing,” Miao said, as he chain-smoked in the company’s quiet, spartan office. “We are working for the bank.”
Changzhi and its environs are littered with half-dead cement factories and silent, mothballed plants, an eerie backdrop to the struggling Chinese economy.
Like many industrial cities across China, Changzhi, which expanded aggressively during the country’s long investment boom, has too many factories and too little demand. That excess capacity, many economists indicate, will have to be eliminated for the Chinese economy to return to healthy growth.
But rather than shut down, Lucheng Zhuoyue and other Changzhi companies are limping along in a kind of march of the undead.
To protect jobs and plants, the government and its state-owned banks sometimes keep money-losing businesses on life support by rolling over or restructuring loans, providing fresh credit or offering other aid. While this may seem like an odd business tactic, it is part of a broader strategy to help maintain social stability, a major goal of China’s leadership. Authorities in China’s provinces and cities also back struggling factories just because they are deemed important to the local economy.
Similar strategies have been tried before, with little success. In Japan, such businesses, known as “zombie companies,” are blamed for contributing to that country’s two decades of economic stagnation.
Some industries are plummeting, wreaking havoc in less economically diverse cities and towns. Empty apartments built during the boom are now weighing down the property sector. Businessmen in Changzhi complain that construction projects supported by the local government have also been scaled back.
As a result, Changzhi’s cement plants are saddled by excess capacity. Companies in the province can produce three times as much cement as what was actually needed in 2014, according to the Shanxi Provincial Association of Building Material Industries. Two-thirds of them lost money in that year.
more
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
At the Comex silver depositories
Tuesday final figures were: Registered 53.54 Moz, Eligible 115.07 Moz, Total
168.61 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the next big thing. At least what the Great
Vampire Squids think is coming next. To this old trading dinosaur, it looks to
be just another, faster way to “Corzine” the Muppets from their cash. Does
anyone seriously think that the NSA and GCHQ and the 3 other “five eyes”
haven’t back-doored it?
“Call it the Goldman
Sachs test. If this is something Goldman would do to its clients, don't do
it."
Felix Salmon.
Blythe Masters Tells Banks the Blockchain Changes Everything
The banker who helped give the world credit-default swaps wants to upend finance again—this time with the code that powers bitcoin.
September 1, 2015
The penthouse meeting room in Le Parker Meridien hotel in midtown
Manhattan is humming with chatter on this June afternoon. About a hundred
money managers are networking at the end of the day at a Sandler O’Neill &
Partners investor conference as the green rectangle of Central Park stretches
into the distance 42 floors below. With neckties loosened and icy drinks in
hand, the attendees largely ignore the founder of a fintech startup who’s
presenting a PowerPoint about his investing smartphone app. But when the next
guest takes the floor, the room falls silent.
These Wall Street veterans all know who Blythe Masters is. She’s the
wunderkind who made managing director at JPMorgan Chase at age 28, the
financial engineer who helped develop the credit-default swap and bring to life
a market that peaked at $58 trillion, in notional terms, in 2007. She’s the
banker later vilified by pundits, unfairly some say, after those instruments
compounded the damage wrought by the subprime mortgage crash in 2008. Now, one
year after quitting JPMorgan amid another controversy, Blythe Masters is back.
She isn’t pitching a newly minted derivative or trading stratagem to this room.
She’s promoting something wilder: It’s called the blockchain, and it’s the
digital ledger software code that powers bitcoin.
Masters is the CEO of Digital Asset Holdings, a New York tech startup.
She says her firm is designing software that will enable banks, investors, and
other market players to use blockchain technology to change the way they trade
loans, bonds, and other assets. If she’s right, she’ll be at the center of yet
another whirlwind that will change the markets.
“You should be taking this technology as seriously as you should have
been taking the development of the Internet in the early 1990s,” Masters, a
lithe 46-year-old Englishwoman with auburn hair and the proper diction of the
Home Counties, explains to the rapt audience. “It’s analogous to e-mail for
money.”
That’s a bold statement, but Masters isn’t the only voice heralding the
coming of the blockchain. The Bank of England, in a report earlier this year,
calls it the “first attempt at an Internet of finance,” while the Federal
Reserve Bank of St. Louis hails it as a “stroke of genius.” In a June white
paper, the World Economic Forum says, “The blockchain protocol threatens to
disintermediate almost every process in financial services.”
More. Much more.
One
of the queries Quakers are asked to consider, is: "Do you maintain strict
integrity in your business transactions and in your relations with individuals
and organizations? Are you personally scrupulous and responsible in the use of
money entrusted to you, and are you careful not to defraud the public
revenue?"
Probably
why there a no Quakers on Wall Street or in the City.
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?
Concentrator Photovoltaics: The Next Step Towards Better Solar Power
By Lauren J. Young Posted 31 Aug 2015 | 13:00 GMT
Today’s concentrator photovoltaic (CPV) technologies have shown promising
potential
for more efficient solar power. The latest systems are said to be
capable of handling the
power of a hundred suns. Yet prototypes have failed to compete with cheaper
flat panel solar systems that dominate the market. The U.S. Department of
Energy’s Advanced Research Projects Agency
(ARPA-E) is determined to push CPV to the next level. On 24 August, at the Clean Energy Summit, U.S.
President Barack Obama and Energy Secretary Ernest Moniz
announced a program called MOSAIC that will
invest $24 million into CPV solar technology development.Why can’t today’s CPV systems compete? The concentrators can only convert direct sunlight into energy, missing out on the large fraction of sunlight diffracted by clouds and the atmosphere. Manufacturing costs of concentrator apparatuses have also prevented CPV from reaching mass production.
That’s where the MOSAIC initiative comes in. The 11 new CPV programs under MOSAIC’s umbrella are investigating an array of system designs to address cost-efficiency and performance challenges. The list of projects include economical micro-PV cell construction, waveguiding solar concentrators, and single-junction cells that will maximize concentration under indirect and diffuse sunlight.
“ARPA-E is supporting new technology that can help the industry progress even more, but even where it is today is quite exciting,” says Sarah Kurtz, a research fellow working on CPV technology (separately from the MOSAIC effort) at the U.S. National Renewable Energy Laboratory (NREL) in Colorado.
For a large-scale commercial flat plate solar panel system, efficiency is approximately 16 to 20 percent, while a typical CPV system is 25 to 30 percent. In engineering labs, efficiency test results show that the gap between CPV technology and flat planel photovoltaics is even greater. Research groups have created CPV cells that convert more than 40 percent of the light that strikes them to electric current—the highest marks received in testing environments. Three of these groups’ systems have even passed the 46 percent mark.
“This means that these results are very repeatable,” says Keith Emery, a principal scientist who measures solar cell efficiency at the National Center for Photovoltaics at NREL. “I wouldn’t be surprised that by the next two or three years, an individual research group will reach 50 percent efficiency. Fifty percent is a realistic goal that people have on the drawing board.”
More
The monthly Coppock Indicators finished August
DJIA: +65 Down. NASDAQ:
+168 Down. SP500: +92 Down.
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