Wednesday, 7 October 2015

Bad News – Buy More!!!



Baltic Dry Index. 869 -12        Brent Crude 52.41

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

If they think I'm going to stop at that stop sign, they're sadly mistaken!

VW, with apologies to Homer Simpson.

More bad news hit yesterday, and how. Even in the fool’s paradise of the global stock market casinos, the party goers lost some of their central bankster party going oomph. The IMF got on record warning of trouble ahead. Volkswagen got on record warning of trouble ahead for their workers too. Auto manufacture accounts for about 7 percent of the German economy, 4 percent of the Eurozone’s economy. VW’s diesel U-boat seems to have put two torpedoes straight  into the EU economy. Probably Brazil’s too, where VW is a large manufacturer.

VW is/was also a large issuer of EU corporate debt, via London. VW debt anyone?  VW’s contagion is only just starting to spread. Ominously, the Baltic Dry (shipping) Index is falling again, while the price of oil just surged. Bunker time, I think.

If you really want something in this life you have to work for it. Now quiet, they're about to announce the lottery numbers.

Draghi, with apologies to Homer Simpson.

IMF Cuts Global Outlook as Commodity Slump Hits Emerging Markets

October 6, 2015 — 3:00 PM BST
The global economy is having power problems.

A slowdown in emerging markets driven by weak commodity prices forced the International Monetary Fund to cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent. Next year the world economy will expand 3.6 percent, less than the 3.8 percent projected in July.

“The ‘holy grail’ of robust and synchronized global expansion remains elusive,” IMF chief economist Maurice Obstfeld said in a statement Tuesday accompanying the Washington-based fund’s World Economic Outlook.

Six years after the world emerged from a financial crisis and recession, the deteriorating picture showed a global recovery that’s uneven still from Australia to Germany. Brazil and Russia’s economies are contracting, Japan and the euro area are struggling to impress, and long-time growth engine China is decelerating. 
Meanwhile, the U.S. economy is nearly strong enough for central bankers to consider raising interest rates.

The IMF advised emerging markets to be ready for the U.S. to tighten monetary policy, urged advanced economies to address “crisis legacies” and suggested nations consider the “compelling” case for public infrastructure investment at a time of very low long-term interest rates.

Such calls for policy action will be on the agenda when global finance chiefs from the Group of 20 economies meet this week in Lima during the IMF’s annual meetings. They’ll also be addressing new risks that the IMF report says have risen, especially in emerging economies, many of which have seen their currencies depreciate sharply as the Fed prepares to lift rates and commodities such as oil and copper slump.
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VW to Delay, Cancel Non-Essential Investments Due to Scandal

October 6, 2015 — 11:19 AM BST Updated on October 6, 2015 — 1:26 PM BST
Volkswagen AG Chief Executive Officer Matthias Mueller said the company will delay or cancel non-essential projects as pressure mounts to slash spending in the wake of the diesel-emissions scandal. 
“We will review all planned investments, and what isn’t absolutely vital will be canceled or delayed,” Mueller told some 20,000 employees at the German company’s headquarters Tuesday, according to an e-mailed statement of his remarks. “And that’s why we will re-adjust our efficiency program. I will be completely clear: this won’t be painless.”
Fixing about 11 million rigged diesel vehicles is a costly prospect. The 6.5 billion euros ($7.29 billion) Volkswagen already set aside for repairs won’t be enough to cover fines and potential legal damages as well, Mueller said. The company is exploring options from a simple software upgrade to outright replacing some cars. Fines may reach $7.4 billion in the U.S. alone, according to analysts from Sanford C. Bernstein Ltd.
Volkswagen could put a push to gain market share in the North America on hold as long as there’s no clarity on the extent of the costs of fixing the cars and potential fines, said Jose Asumendi, a London-based analyst at JPMorgan Chase & Co. The carmaker outlined plans in March for an investment of about $1 billion to expand its vehicle assembly plant in Mexico’s Puebla state. That work could face a delay, Asumendi said.
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Concerns over Germany as manufacturing stutters

Published: Oct 6, 2015 5:32 a.m. ET
FRANKFURT--Germany's economics ministry Tuesday revealed a steep fall in manufacturing orders over the summer months, fanning concerns that slower growth in China and recessions in other key developing markets are starting to damage Europe's largest economy.
German manufacturing orders slumped 1.8% in August from the previous month, pulled down by a 3.7% drop in demand from outside the eurozone, the economics ministry said. Economists had predicted a monthly gain of 0.3%.
The ministry said that August's sharp reduction was caused by the late summer vacation, but lowered its manufacturing orders results for July to show a monthly drop of 2.2%, compared with the 1.4% fall previously reported.
"It looks like German companies are increasingly feeling the pinch from the emerging markets slowdown," said Ralph Solveen, an economist at Commerzbank in Frankfurt.
"The upward trend in orders from outside the eurozone appears to have come to an end, which should weigh on industrial production and economic growth in the months ahead," he said.
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In better news for Volkswagen, Fiat Chrysler is about to try to boost their US auto sales. No one seems happy this decade. Still I doubt it will do much to boost dirty diesel sales.

UAW threatens strike at Fiat Chrysler U.S. operations

DETROIT |
Tue Oct 6, 2015 7:02pm EDT
United Auto Workers members are planning to strike at Fiat Chrysler Automobiles NV (FCAU.N) (FCHA.MI) U.S. plants as soon as Wednesday evening, the first work stoppage since 2007, threatening to bring manufacturing to a halt.

A strike at its U.S. operations could cost the automaker $40 million a week in operating profit, said Sean McAlinden, chief economist with the Center for Automotive Research.

Workers at several plants in Kokomo, Indiana, and at least one in Michigan received notices to be ready to strike but it was not clear whether all Fiat Chrysler plants would be involved.

Kristin Dziczek, labor analyst with the Center for Automotive Research, said the last time the UAW took the company, then known as Chrysler, out on strike it was a “Hollywood strike,” as in “just for show” in 2007. That strike, in the second week of October, lasted six hours.

The strike weapon was not available to the UAW until this year for Fiat Chrysler or General Motors Co (GM.N) as part of the 2009 government-sponsored bankruptcies at those companies.

The UAW must balance the need to make a forceful statement to Fiat Chrysler with concerns it could substantially hurt the company, the weakest of the Big Three, which would be bad for its own members and hopes of growth.

Arthur Schwartz, a labor consultant and former negotiator with GM, said, "This is the union's play now. It is up to them what happens."

Schwartz said UAW President Dennis Williams would not want a lengthy strike because of the pain it could inflict on his members and the harm to Fiat Chrysler.

"Chrysler is not in great financial shape, no matter what the UAW members may think. The company is the weakest of the (Detroit Three) so a long strike would hurt them."

We end for the day with China. Sum Ting Wong, as they were duped into calling it last year on American TV news.

Operator! Give me the number for 911!

President Xi, with apologies to Homer Simpson.

China forex reserves fall to $3.51 trillion

Published: Oct 7, 2015 12:49 a.m. ET
BEIJING--China's foreign-exchange reserves fell to $3.514 trillion at the end of September, after the reserves recorded its biggest monthly drop in August, the People's Bank of China said on Wednesday.

The foreign-exchange reserves was down by $43.26 billion in September from the holdings a month earlier as the nation's central bank intervened in the currency market to shore up the yuan.

The data came after China's foreign-exchange reserves fell by a record of $93.9 billion in August after the PBOC surprised the market on Aug. 11 with its decision to devalue the yuan by around 2%.

China reported $3.557 trillion worth of foreign-exchange reserves at the end of August, official data showed.

I'm normally not a praying man, but if you're up there, please save me Superman.

Obama, Cameron, Hollande, Merkel, Juncker, with apologies to Superman.

At the Comex silver depositories Tuesday final figures were: Registered 43.52 Moz, Eligible 119.63 Moz, Total 163.15 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Tired of crooked German car makers, bent central banksters, and totally doubled over politicians, today we focus on the ever changing power generating industry.

Solar and Wind Just Passed Another Big Turning Point

October 6, 2015 — 11:00 AM BST
Wind power is now the cheapest electricity to produce in both Germany and the U.K., even without government subsidies, according to a new analysis by Bloomberg New Energy Finance (BNEF). It's the first time that threshold has been crossed by a G7 economy.1

But that's less interesting than what just happened in the U.S.

To appreciate what's going on there, you need to understand the capacity factor. That's the percentage of a power plant's maximum potential that's actually achieved over time.

Consider a solar project. The sun doesn't shine at night and, even during the day, varies in brightness with the weather and the seasons. So a project that can crank out 100 megawatt hours of electricity during the sunniest part of the day might produce just 20 percent of that when averaged out over a year. That gives it a 20 percent capacity factor.

One of the major strengths of fossil fuel power plants is that they can command very high and predictable capacity factors. The average U.S. natural gas plant, for example, might produce about 70 percent of its potential (falling short of 100 percent because of seasonal demand and maintenance). But that's what's changing, and it's a big deal.

For the first time, widespread adoption of renewables is effectively lowering the capacity factor for fossil fuels. That's because once a solar or wind project is built, the marginal cost of the electricity it produces is pretty much zero—free electricity—while coal and gas plants require more fuel for every new watt produced. If you're a power company with a choice, you choose the free stuff every time.

It’s a self-reinforcing cycle. As more renewables are installed, coal and natural gas plants are used less. As coal and gas are used less, the cost of using them to generate electricity goes up. As the cost of coal and gas power rises, more renewables will be installed.

Wind and solar have long made up a small fraction of U.S. electricity—about 5 percent in 2014. But production has been rising at an exponential rate, and those two energy sources are now big enough to influence when coal and natural gas plants are kept running, according to BNEF.2

There are two reasons this shift in capacity factors is important. First, it's yet another sign of the rising disruptive force of renewable energy in power markets. It's impossible to brush aside renewables in the U.S. in the same way it might have been just a few years ago.  "Renewables are really becoming cost-competitive, and they're competing more directly with fossil fuels," said BNEF analyst Luke Mills. "We're seeing the utilization rate of fossil fuels wear away."
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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?

Molecular nanoribbons as electronic highways

Date: October 5, 2015

Source: Umeå University

Summary: Physicists have developed a method to synthesize a unique and novel type of material which resembles a graphene nanoribbon but in molecular form. This material could be important for the further development of organic solar cells.

Physicists at Umeå University have, together with researchers at UC Berkeley, USA, developed a method to synthesise a unique and novel type of material which resembles a graphene nanoribbon but in molecular form. This material could be important for the further development of organic solar cells. The results have been published in the scientific journal ACS Nano.
The nanoribbons are composed of molecules with the chemical formula [6,6]-phenyl-C61-butyric acid methyl ester. For short it is denoted PCBM, and in practice it is a fullerene molecule (a football-shaped carbon molecule) with an attached side arm to increase its solubility. PCBM molecules are commonly used in organic solar cells since they have a very good ability to transport free electrons that are "generated" by solar light.
The researchers at Umeå University and UC Berkeley have now developed a method to arrange such molecules into thin, crystalline nanoribbons that are only four nanometres wide. The nanoribbons are grown in a solution process with quite high efficiency and all nanoribbons have a unique morphology with edges in a zigzag.
"It is a very intriguing material and the method is quite simple. The material resembles the more commonly known graphene nanoribbons, but in our material each carbon atom is 'replaced' by a molecule," says Thomas Wågberg, associate professor at the Department of Physics, who has led the study.
The findings are interesting for several reasons; it is the first time that structures with so small dimensions have been produced with this type of molecule, and the dimensions of the nanoribbons suggest that they should be ideal as "electronic highways" in organic solar cells. An organic solar cell usually consists of two types of material, one that conducts the electrons and one that conducts the "holes" that are left behind when the electron gets an energy boost from the incoming solar light (you can see the transport of "hole" as an empty space in traffic moving backwards in a traffic queue moving forwards).
An electron conductor in organic solar cells should ideally form long pathways to the electrode but concurrently be thinner than 10-15 nanometres (approximately 10,000 times thinner than a normal hair). The newly developed PCBM nanoribbons fulfil all these requirements.
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The monthly Coppock Indicators finished September

DJIA: +41 Down. NASDAQ: +138 Down. SP500: +65 Down. 

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