Baltic Dry Index. 804 -05 Brent Crude 49.26
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Call
it the Volkswagen test. If this is something Volkswagen would do to its
clients, don't do it."
With
apologies to Felix Salmon and the Goldmanites.
Since the Chinese stock markets collapsed back in
June-July, we have been deafened by a vast host of bells clanging away in our
global stock markets. If it wasn’t for bad news there hasn’t been any news at
all. In our central bank rigged financialised casinos, all news is now treated
as good news. The worse news the better, goes this bizarre line of gambling reasoning.
The worse the news gets, the more the
Fedster’s talking chair must rush in with QE Forever, and press on with ZIRP or
even try European NIRP. As market bubbles go, we probably haven’t seen anything
like this since tulip mania March 1637.
As in Amsterdam
way back then, this new “this time it’s different” stock market bubble will
also end badly. My guess is that cause
will be laid at the door of Germany’s Volkswagen, and their September 18th
admission of criminality in deliberately polluting the planet and harming
people’s health via the fraud of their dirty diesels. In an instant they trashed globally the “Made
in Germany” brand. My guess is it will go down in history as the straw that
broke the poor camel’s back. Ominously, both oil and the Baltic Dry Index are
falling again. Global trade is in retreat.
Below, rising fear and foreboding on Wall Street. Suppose
the corporate socialists at the Fed pull their put?
Traders Brace for Worst as U.S. Banks Kick Off Earnings Season
October 13, 2015 — 5:00 AM BST Updated on October 13, 2015 — 9:15 PM BST
Options traders are showing caution ahead of earnings for the nation’s
biggest banks -- trepidation that holds ominous signs for the broader market.
JPMorgan Chase & Co. kicks off a string of results from the biggest
banks this week, with economists forecasting that profits for the group will
contract 5.4 percent in the third quarter. Financial firms wield the
second-most earnings influence out of 10 major groups in the Standard &
Poor’s 500 Index, and a poor showing may challenge U.S. stocks’ rebound from
their biggest selloff in four years.
----“These are big and important components,” said Michael Antonelli, an institutional equity sales trader at Robert W. Baird & Co. in Milwaukee. “They come early in the season, which puts some sentiment into the market and sets the tone. Financials is definitely one sector the market needs behind it if it’s going to keep going.”
Financial companies make up just 16 percent of the S&P 500 on a
market capitalization-weighted basis, a distant second to technology among the
10 industries. Yet they account for 21 percent of earnings in the benchmark
gauge, trailing slightly behind the tech group. The five percentage-point
difference in banks’ influence is the biggest between the two measures by a
factor of five for any S&P 500 group.
----Earnings for all S&P 500 companies are expected to decline 7.2 percent for the quarter. Financial-services firms in the index are forecast to see profit fall by 5.4 percent, with diversified financial companies estimated to deliver a 6.6 percent decline.
The biggest banks by market weighting -- including Goldman Sachs Group
Inc., Morgan Stanley, JPMorgan and Bank of America Corp. -- are particularly
vulnerable due to their heightened exposure to capital markets in a volatile
trading environment, Keith Horowitz, a bank analyst at Citigroup Inc., wrote in
a client note on Monday.
More
This unusual options trade signals that Wall Street is bracing for a black swan
Published: Oct 13, 2015 5:45 p.m. ET
Blame it on a looming interest rate hike, sluggish global growth or conflict
in the Middle East, but investors are girding for the worst! That is apparently what Ryan Detrick, head strategist at Kimble Charting Solutions, thinks. He points out that unusual options buying on Monday signaled that Wall Street investors are fretting about the possibility that the market could be whacked by a stock-market crisis.
Detrick said that the so-called CBOE SKEW Index—a measure of fear in the market hit an all-time high on Monday. The options contracts are used to make a bet on the direction of the S&P 500 SPX, -0.68% Essentially, the SKEW measures what investors are willing to pay for put options compared with call options on the S&P 500.
A put option confers the right to sell an underlying security, in this case the S&P 500, at predetermined strike price at a predetermined time. Think of it as buying insurance, if you own the underlying asset. And a call option grants the right to buy.
Detrick said on Monday the CBOE SKEW saw demand for buyers of protection spike above levels not seen in more than 20 years.
“That action [in the CBOE SKEW] showed that [investors] are on edge and are worried about some unknown event that could push equity prices lower,” he told MarketWatch.
Here’s a look at Detrick’s chart, which appeared on Kimble Charting Solutions Tuesday, illustrating the spike:
More
Below, more on the Volkswagen impact on Germany. Next
comes the impact from no diesel sales and shutting down production lines.
German Investor Confidence Drops as Volkswagen Woes Damp Outlook
October 13,
2015 — 10:07 AM BST Updated on October 13, 2015 — 10:38 AM BST
German investor confidence fell to the lowest level in a year as
Europe’s largest economy faces the fallout of Volkswagen AG’s emissions scandal
and weaker growth in emerging markets.
The ZEW Center for European Economic Research in Mannheim said its index
of investor and analyst expectations, which aims to predict economic
developments six months ahead, slid to 1.9 in October from 12.1 in September.
That’s the seventh consecutive decline and compares with an estimated drop
to 6.5 in a Bloomberg survey of economists.
Volkswagen’s admission on Sept. 18 that it fixed emissions tests in 11
million of its diesel-engine cars cost the company as much as $33 billion in
market value and sent Germany’s benchmark DAX Index down 3.5 percent in the two
trading days that followed. The news broke as Germany’s trade-focused economy
struggled to adapt to receding demand in emerging markets.Exports fell 5.2 percent in August, the most since the height of the 2009 recession. Factory orders and industrial output unexpectedly declined, and the country’s leading economic research institutes lowered their 2015 growth forecast. At the same time, domestic consumption, investment and a recovery in the neighboring euro region are still lending support to the German economy. Business confidence as measured by the Ifo research institute unexpectedly improved in September.
“The exhaust-gas scandal of Volkswagen and the weak growth of emerging markets has dampened economic outlook for Germany,” ZEW President Clemens Fuest said in a statement on the institute’s website. “However, the performance of the domestic economy is still good and the euro-area economy continues to recover.”
ZEW’s gauge for current conditions in Germany fell to 55.2 in October from 67.5. A measure for business expectations in the 19-nation euro region fell to 30.1 from 33.3.
More
We end for the day in deflating commodities. Add RioTinto to the
flotilla led by Glencore. Though the sum isn’t that large, sometimes bad news
keeps coming in spades.
Billionaire Rinehart Wins Royalty Court Battle With Rio Tinto
October 14, 2015 — 2:02 AM BST
Billionaire
mining magnate Gina Rinehart won an appeal in Australia’s High Court requiring
Rio Tinto Group to pay royalties from two iron ore mines in the nation’s
ore-rich Pilbara region.
Rio’s Mount Bruce Mining Pty unit is liable to make payments to Rinehart’s Hancock Prospecting Pty and Wright Prospecting Pty from both the Eastern Range and Channar mines, the court said Wednesday in a judgment summary.
Hancock and Wright are owed royalties under a 1970 agreement in which Rio agreed to pay 2.5 percent on iron ore sales from the two areas, according to earlier hearings. At hearings in March 2013, New South Wales Supreme Court Justice David Hammerschlag was told that about $200 million was at stake.
Rio had argued that Eastern Range and Channar lay outside the area on which royalties were due under the deal negotiated with Rinehart’s father Lang Hancock and his partner at the time Peter Wright, who had founded Wright Prospecting. An earlier appeal judgment from the Supreme Court found royalties were payable from Eastern Range, but not Channar.
Ben Mitchell, a Melbourne-based spokesman for Rio Tinto, declined to comment immediately on the judgment.
More
With October the traditional crash season in stock markets, October 2015
is a good one to sit it out in cash.
"Finance
is the art of passing customer segregated funds from hypothecation to hypothecation
until it finally disappears."
At the Comex silver depositories
Tuesday final figures were: Registered 43.07 Moz, Eligible 119.50 Moz, Total
162.67 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on Germany’s killer diesels. “I was
only following orders” becomes “I am not an engineer,” call Wolfsburg. Unaddressed so far, is how the modifications
will affect miles per gallon and overall performance. What happens to the tax
breaks for the “clean” but dirty diesels? Who eats the loss for the fall in
resale value? How does VW propose to mitigate the damage done to UK health and
our UK environment? Volkswagen going cheap, put, put, clatter, clatter, Clank, anyone?
Since the scandal broke, I now notice loads of
dirty diesels on the UK’s roads. Yesterday I was following a Jeep CRD spewing
out black smoke at every gear change, and start.
400,000 VW cars in UK need engine modification
12 October 2015
About 400,000 Volkswagen cars in the UK will need fuel injectors altered
as well as a software fix, its UK boss said.
Paul Willis, UK managing director, said that cars fitted with the 1.6L
diesel engine would need the physical remedy.
Those with the larger 2L engine would only need a software fix, he told
the Commons Transport select committee.
Mr Willis apologised "sincerely and unreservedly" for letting
down customers.
----He told the MPs it was in 2008 that VW first sold cars in the UK
with engines that could cheat emissions testing.
A total of 1.2 million UK vehicles had been affected, but the remaining
two thirds would only need software altered, Mr Willis explained.
The total included 583,000 Volkswagens, 393,000 Audis, 132,000 Skodas
and 77,000 Seats. Only Germany had more vehicles affected by the problem than
the UK.
Mr Willis said that recalls of UK vehicles would start in the first
quarter of 2016.
Owners who might be inconvenienced by not having a vehicle during the
recall process would be given a loan car, the VW boss added.
Asked
more technical questions about the emissions scandal, Mr Willis explained that
his role involved responsibility for sales, marketing and finance, and that
engineering was handled by the firm's team in Wolfsburg. "I'm not an
engineer," he said several times.
Transport secretary Patrick McLoughlin told the MPs on the committee
that the scandal would cause VW "very substantial damage".
He said a move to on-the-road testing of vehicle emissions - as opposed
to laboratory testing - would render any defeat devices useless: "We have
been right to press for real-world testing ... and we will see changes across
Europe on that front."
Asked whether any other car makers had used similar software to evade
emissions regulations, Mr McLoughlin said he was satisfied they had not on the
basis of their responses. However, some had yet to answer his queries, he
added.
More
VW emissions scandal: three-point plan to fix all recalled UK vehicles
13 Oct, 2015
12:44pm
Everything you need to know about the VW emissions scandal: models affected, EA 189 engine recalls and compensation
All 1.2 million UK vehicles affected by the VW diesel emissions scandal will be recalled and fixed by the end of 2016 under the VW Group's new three-stage plan.UK Volkswagen owners can expect a permanent fix to the problems that came to light as a result of the emissions scandal to be approved by the German Motor Industry Federation, which the VW Group is currently cooperating with, by the end of 2015.
The permanent fix will then allow the VW Group to initially recall all UK vehicles with the affected EA 189 2.0-litre TDI engines, while the third phase aims to have all of the 60 models from the five affected brands fixed by the end of 2016.
• Exclusive: car makers 'can't meet' Euro6 emissions targets
VW's UK boss Paul Willis has confirmed the 1.2-litre and 2.0-litre diesel engines will require a software fix, while vehicles with a 1.6-litre diesel will also need new injectors fitted. This means around 400,000 UK cars would require mechanical changes. Speaking before the House of Commons' select committee, Willis failed to answer questions relating to whether or not UK owners would be compensated.
----While UK vehicles look to get by with software tweaks and injector swaps, vehicles in the US may be in need of physical changes to the catalytic converters and/or the Selective Catalytic Reduction (SCR) AdBlue urea injection systems. VW's US boss, Michael Horn, admitted these changes may be needed to pass the strict US emissions tests. Horn also added that any fix will likely affect the performance of the cars, and that customer compensation is currently being looked into.
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, or Wolfsburg.
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?Solar industry to challenge policy upheaval at SEUK 2015
By Liam Stoker 13 October 2015, 9:29
Updated: 13 October 2015, 10:01
Solar Energy UK 2015 starts today at Birmingham’s NEC, and the
government’s clean energy cuts – or more importantly how best to challenge them
– is taking centre stage.
The show is now in its sixth year and more than 5,000 attendees are
expected to pour through the gates on opening day. Today’s keynote brings
together the likes of Lightsource CEO Nick Boyle, British Solar Renewables
chief executive Angus MacDonald and Belectric UK’s Toddington Harper to discuss
what’s next for the British solar industry.
This year’s exhibition will also address opportunities that lie outside
of the solar landscape, including potential diversification into energy
efficiency technologies at the energy+ stage.
Tim Mann, managing director at Solar Media, revealed that a record
number of total registrations had been recorded for SEUK 2015, defying policy
uncertainty.
“We also have more exhibitors than ever from complementary technologies
such as storage attending to show what’s coming for
2016. Tuesday night’s Solar Power Portal Awards will sell out
by tomorrow as market participants want the opportunity to meet and
update, in more informal surroundings, on the direction others are taking.
More
http://www.solarpowerportal.co.uk/news/solar_industry_to_challenge_policy_upheaval_at_seuk_2015_3482
The monthly Coppock Indicators finished September
DJIA: +41 Down. NASDAQ:
+138 Down. SP500: +65 Down.
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