The Rout.

Baltic Dry Index. 943 Unch.       Brent Crude 47.34

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

True, governments can reduce the rate of interest in the short run, issue additional paper currency, open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression. 

Ludwig von Mises.

Yesterday brought more of the Great Reconnect.  The central banksters malinvestment bubble 2009-2014 has finally run out of steam as China buckles from an excess of just about everything, The Commodity Supercycle long ago peaked in a one off Chinese version of the Great Nixonian Error of fiat money malinvestment. 

Under the FED’s lead on ZIRP and QE Forever, companies have piled into debt, to buy back stock, to take over each other, to drill unprofitable oil and gas wells, to build mines for a Chinese experiment that’s gone off the rails, to pursue folly on the grandest scale. Suddenly from Alcoa, to Glencore, to Volkswagen it’s all going massively wrong. The Great Malinvestment Bubble is finally bursting.  We are entering the final phase of the Great Nixonian Error of fiat money.

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

With Glencore, Commodity Rout Beginning to Look Like a Crisis

September 28, 2015 — 8:28 PM BST Updated on September 29, 2015 — 4:08 AM BST

The 15-month commodities free-fall is starting to resemble a full-blown crisis.

Investors are reacting to diminished demand from China and an end to the cheap-money era provided by the Federal Reserve. A Bloomberg index of commodity futures has fallen 50 percent since a 2011 high, and eight of the 10 worst performers in the Standard & Poor’s 500 Index this year are commodities-related businesses.

Now it all seems to be coming apart at once. Alcoa Inc., the biggest U.S. aluminum producer, said it would break itself into two companies amid a glut stemming from booming production. Royal Dutch Shell Plc announced it would abandon its drilling campaign in U.S. Arctic waters after spending $7 billion. And the carnage culminated Monday with Glencore Plc, the commodities powerhouse that came to symbolize the era with its initial public offering in 2011 and bold acquisition of a rival in 2013, falling by as much as 31 percent in London trading.

“With China slowing down and a lot of uncertainty, fears in the market have intensified, and the reduction in the pace of demand growth for all commodities has seemed to send everybody off the cliff,” said Ed Hirs, managing director of a small oil producer who teaches energy economics at the University of Houston.

----It’s about to get worse, according to analysts John LaForge and Warren Pies of Venice, Florida-based Ned Davis Research Group. Commodities may be in the fourth year of a 20-year “bear super-cycle,” according to an Aug. 14 research note. The analysts looked at commodity busts dating to the 18th century and found them driven by factors such as market momentum rather than fundamentals, LaForge said Monday in an interview.

The good news: most of the damage is done in the first six years, LaForge said.

“In commodities you’re going to get a lot of failures, companies closing up,” he said. “This needs to happen to bring down supply.”

More

http://www.bloomberg.com/news/articles/2015-09-28/with-glencore-commodity-rout-beginning-to-look-like-a-crisis

Nasdaq Composite completes the ‘death cross’ grand slam

Published: Sept 28, 2015 12:19 p.m. ET

Nasdaq, Dow, S&P 500 and Russell 2000 all under ‘death cross’ spell for 13th time since 1979

The Nasdaq Composite has produced a “death cross” chart pattern on Monday, joining the other three major market indexes, which have produced similar bearish chart patterns over the past couple months.

History suggests this occurrence could weigh on the broader stock market over the shorter term, but it’s not quite the death knell for the market over the longer term that the pattern’s name might suggest, according to data provided by Sundial Capital.

A death cross appears when the 50-day moving average crosses below the 200-day moving average, an event that many chart watchers view as marking the spot a shorter-term correction morphs into a longer-term downtrend.

----The Nasdaq’s death cross completes the cycle, as the pattern has appeared in the charts of the Dow Jones Industrial Average DJIA, -1.92%  on Aug. 11, for the S&P 500 index SPX, -2.57%  on Aug. 28 and for the Russell 2000 Index RUT, -2.87%  on Sept. 2. Read more about the spread of the death cross.
Since their death crosses appeared, the Dow has slumped 7.5%, the S&P 500 has shed 4.6% and the Russell 2000 has lost 3.8%.

Monday marks the first time since Aug. 24, 2011, that all four indexes fell under the death cross spell at the same time, and just the 13th time since 1979, according to Sundial.
More

http://www.marketwatch.com/story/nasdaq-composite-completes-the-death-cross-grand-slam-2015-09-28

Wall Street drops as anxious investors eye China

Mon Sep 28, 2015 6:46pm EDT

U.S. stocks finished sharply lower on Monday and were on track for their worst quarter in four years as investors worried about the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.

The Nasdaq composite .IXIC lost 3 percent and S&P 500 .SPX dropped more than 2 percent.

Much of the damage came from pharmaceutical and biotech stocks after Democratic lawmakers on Monday attacked "massive" price increases of two heart drugs from Canada's Valeant Pharmaceuticals International Inc(VRX.TO), which tumbled 16.5 percent.

The Nasdaq biotechnology index .NBI fell 6 percent, its worst one-day drop since 2011, adding to losses from last week when Democratic presidential candidate Hillary Clinton criticized drug pricing.

Among the S&P sectors, the health care index .SPXHC was the deepest decliner, down 3.84 percent.

"The broad healthcare sector and China are hurting the market. It's time for risk-off and there's no place to hide," said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.

Profits at Chinese industrial companies fell 8.8 percent, fresh data showed, pushing down shares of raw material producers and energy companies. Oil prices fell more than 2 percent.

U.S. consumer spending rose more than expected in August, according to another report, appearing to add to the case for an interest rate increase this year.
More

http://www.reuters.com/article/2015/09/28/us-markets-stocks-idUSKCN0RS19U20150928

Asia shares skid to three-and-a-half-year lows on China anxiety

Mon Sep 28, 2015 11:36pm EDT

Asian shares skidded to 3-1/2-year lows and the dollar sagged on Tuesday, pulled down by a sharp losses on Wall Street after weak Chinese data rekindled worries about its fragile economy.

Commodities struggled after fears of weaker demand pushed them to multi-year lows overnight. Adding to the gloom, commodity trader Glencore's (0805.HK) Hong Kong-listed shares were around 28-percent lower on Tuesday, after its London-listed stock plunged on debt worries a day earlier..

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slumped 2.2 percent, touching its lowest levels since June 2012 and extending early declines after Chinese shares opened lower.

China's blue-chip CSI300 index .CSI300 and the Shanghai Composite Index .SSEC were both down 1.8 percent.

Japan's Nikkei stock index .N225 tumbled 2.8 percent to 8-month lows.

"There is a lot of red in Asian equity markets at the moment," said Martin King, co-managing director at Tyton Capital Advisors.

"Disappointing industrial profits in China continue to bolster concerns about growth and many investors are taking profits from the Nikkei and sitting in cash and alternatives, or repatriating capital to western markets in a perceived flight to quality."

Chinese industrial companies' profits fell at their fastest rate in four years, official data showed on Monday, sparking fresh fears about the strength of that country's economy ahead the final reading of China's Caixin Purchasing Managers' Index on Thursday.
More

http://www.reuters.com/article/2015/09/29/us-markets-global-idUSKCN0RT01Y20150929

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

J. K. Galbraith.

At the Comex silver depositories Monday final figures were: Registered 46.22 Moz, Eligible 120.09 Moz, Total 166.31 Moz. 

Crooks and Scoundrels Corner

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

Volkswagen suffers as buyers abandon its debt

The European Central Bank has joined investors who do not want to invest in VW, driving up the car firm’s borrowing costs

By Tim Wallace 6:56PM BST 27 Sep 2015

Volkswagen is already paying the price of its emissions scandal even before any fines are levied, as investors flee its bonds, driving up the cost of borrowing for the manufacturing titan.

The European Central Bank is believed to have stopped buying VW bonds from the firm which are backed by car loans, which it had been buying as part of its quantitative easing package. Private investors are also dropping out of the market, in a sign that they fear for VW’s financial health.

It comes as reports emerged that VW’s supervisory board had been told by engineering staff and by suppliers as far back as 2011 about the so-called defeat devices which lied to regulators about the cars’ emissions. Bosses initially denied there was any problem when US regulators accused VW of deliberately giving false numbers to environmental officials.

----Earlier in the year, VW could borrow long-term funds for as little as 0.7pc. Now the yield on those bonds is up to the 2.3pc mark, indicating that investors believe the company is now a riskier bet. The price of credit default swaps – a type of insurance against VW getting into financial difficulty and failing to repay its debts – has also rocketed. Five-year CDS spreads have more than tripled to 227.4 basis points in the past week, indicating the scale of investors’ concern over the company.

More

http://www.telegraph.co.uk/finance/newsbysector/industry/11894667/Volkswagen-suffers-as-buyers-abandon-its-debt.html 

German Prosecutors Open Investigation Into VW's Winterkorn

September 28, 2015 — 11:49 AM BST Updated on September 28, 2015 — 12:55 PM BST

Prosecutors in Germany have opened a criminal probe into former Volkswagen AG Chief Executive Officer Martin Winterkorn after the manufacturer admitted it cheated emissions tests in some of its diesel cars.

The investigation targets accusations of fraud tied to the sale of vehicles, and will try to determine who was responsible for seeking to circumvent emissions regulations, prosecutors in Braunschweig, Germany, said in an e-mailed statement on Monday. Volkswagen has also filed a criminal complaint in the case with the same authorities to assist with its own investigation.

The probe comes five days after Winterkorn stepped down as CEO amid a scandal that wiped 23 billion euros ($25.7 billion) from Volkswagen’s market value. Switzerland on Friday banned sales of affected VW models, while German regulators said Volkswagen needs to provide a solution for some 2.8 million cars in Germany by Oct. 7 or risk them being pulled off the road.

The German government is “working hard to contain the damage,” Peter Altmaier, chief of staff to Chancellor Angela Merkel, said in an interview with Bloomberg Television in Berlin. The government is keen to ensure that the reputation of German cars in general is “not damaged.”

Winterkorn was replaced on Friday by Matthias Mueller, the head of the Porsche car brand. A VW spokesman didn’t immediately respond to a phone call and email seeking comment about the criminal probe.

Volkswagen tumbled as much as 8.2 percent on Monday in Frankfurt, taking its drop since the diesel cheating became public on Sept. 18 to 39 percent.

http://www.bloomberg.com/news/articles/2015-09-28/german-prosecutor-opens-investigation-into-former-volkswagen-ceo

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

An ancient Japanese art is transforming solar power

Anmar Frangoul | Special to CNBC.com

September 28, 2015

Solar power is becoming an increasingly significant part of our planet's energy mix.

According to the International Energy Agency, by 2050 the sun could become the world's biggest source of electricity.

At the University of Michigan a team of experts has come up with a solar cell concept -- using an ancient Japanese craft -- that they say can track the sun in a highly effective way.

Using kirigami – a type of Japanese paper art similar to origami – the team, which includes engineers and an artist, have developed what the university describes as, "an array of small solar cells that can tilt within a larger panel." It is this ability to tilt that enables the cells to follow the sun's rays.

"I have done research in the area of solar cells previously and was aware of the different problems there, including the need to do solar tracking more effectively," Max Shtein, associate professor of materials science and engineering at the university, told CNBC over email.

Shtein added that he had been thinking "for some time" about miniaturizing structures and mechanisms that are currently being used on a bigger scale. After talking with artist Matthew Shlian, who presented him with new paper forms he'd been working with, Shtein said he saw "a connection."

"The design in its current form relies on solar cells being distributed over a large sheet," he said.

Shtein went on to explain that these cells can be segmented and mounted or bonded to a flexible substrate – an underlying layer – or can be flexible themselves.

"The sheet itself has parallel cuts made in it, with some offset between the neighbouring rows of cuts," Shtein added.

"When stretched, the entire structure deforms to make individual elements of the surface tilt in a way that's very uniform throughout the sheet, and with a tilt angle that's proportional to how much you stretch it. That's where the control comes from."

In terms of efficiency, Shtein told CNBC that, "On the basis of any given surface area of semiconductor material used," his team's design could capture more than 35 percent electricity over the course of "a typical day, compared to a design where the photovoltaic is stationary."

One of the main questions surrounding the design is ensuring reliability, which could involve more testing or structural modification, or what Shtein described as "a deeper look at the materials and structures involved."

In a press release at the beginning of September, the University said it was in the process of seeking patent protection for the intellectual property as well as "seeking commercialization partners to help bring the technology to market."

http://www.cnbc.com/2015/09/28/this-is-transforming-solar-power.html

The monthly Coppock Indicators finished August

DJIA: +65 Down. NASDAQ: +168 Down. SP500: +92 Down.