Baltic Dry Index. 786 +06 Brent Crude 48.36
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
J. K. Galbraith. The Great Crash: 1929.
We open today with more on the insanity spawned by a world running on the Great Nixonian Error of fiat money in its end game. On unsound money, irredeemable money, everything becomes gambling, why work for a living knocking out cars, or foodstuffs, or oil and coal, when betting in the casino can make you a King’s ransom in a heartbeat. All the more so, if you’re a crony of Janet, Mario, or Mark. Stay long fully paid up physical gold and silver. The ECB just kicked off a new assault in the fiat currency wars to the bottom. Europe takes the lead in the international race to Reykjavik. With the Fedster’s still talking about rate hikes, the fiat dollar is set up for an exporter’s nightmare rally.
Below, yesterday’s action in the gambling dens.
In central banking as in diplomacy,
style, conservative tailoring, and an easy association with the affluent count
greatly and results far much less.
J. K. Galbraith.
Dow posts biggest gain since Sept. 8 as Draghi hints at more QE
Published: Oct 22, 2015 5:28 p.m. ET
U.S. stocks ended sharply higher Thursday, rallying on economic data,
better-than-expected earnings and dovish comments from European Central Bank
President Mario Draghi. Draghi indicated the central bank could move next month to expand stimulus measures in the face of sluggish global growth that is exacerbating worries about persistently low inflation in the eurozone. Those remarks were enough to help the Dow Jones Industrial Average register its biggest point and percentage gain since Sept. 8.
After Draghi said the door is open to more quantitative easing, the euro EURUSD, +0.0090% moved below $1.12, consequently lifting the U.S. dollar.
Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research, said the market’s rally might have been fueled by the idea that the Federal Reserve will be forced to keep rates lower for longer as central bankers around the world adopt a more dovish stance.
“If they are going to implement additional easing in Europe that puts that much more pressure on the Fed to not hike in December,” Frederick said.
More
http://www.marketwatch.com/story/us-stocks-may-break-losing-run-with-mcdonalds-caterpillar-in-focus-2015-10-22
Amazon now worth $300 billion, Alphabet $500 billion after earnings explosions
Published: Oct 22, 2015 7:22 p.m. ET
A big day for tech earnings set up a day of records on Wall Street for three
of the biggest tech companies in the world.Alphabet Inc. GOOG, +1.43% GOOGL, +1.39% Microsoft Corp. MSFT, +1.76% and Amazon.com Inc. AMZN, +1.46% spiked after their respective earnings reports Thursday afternoon, and all are headed for some fancy round numbers. Alphabet, which demolished expectations in the final quarter before changing its name from Google, easily topped record highs with a 9% gain in after-hours trading. That gain would make Alphabet one of only two companies on Wall Street worth more than $500 billion -- the other being Apple Inc. AAPL, +1.53%
Amazon shocked observers with profits for a second consecutive quarter, and jumped more than 10% in late trading. With shares likely to top $600 for the first time, Amazon’s market cap appears ready to surpass $300 billion, which would make Amazon more valuable than Facebook Inc. FB, +2.64% The after-hours gains will also be huge for founder and Chief Executive Jeff Bezos, who stands to gain enough to become the third richest man in the U.S., passing the Koch brothers.
One of the men still ahead of Bezos on the list of richest Americans is Bill Gates, founder of Microsoft, but Bezos may not have closed the gap with Gates much. Microsoft stock topped $50 after releasing earnings, the first time it has passed that mark since not long after Gates stepped down as CEO in January 2000. The company’s market cap appears likely to top $400 billion if those gains hold, the highest the company has seen since the dot-com bubble popped.
More
http://www.marketwatch.com/story/amazon-now-worth-300-billion-alphabet-500-billion-after-earnings-explosions-2015-10-22
Draghi Signals ECB May Add Stimulus This Year on Weak Growth
October 22, 2015 — 1:49 PM BST Updated on October 22, 2015 — 3:53 PM BST
Mario Draghi said the European Central Bank will investigate fresh
stimulus measures to boost the economy and that options include a further
reduction in the deposit rate.
The euro slid as the ECB president said the Governing Council has tasked
the central bank’s committees with examining the pros and cons of different
monetary-policy action. He told reporters at a press conference after the
meeting in Malta on Thursday that there was a “rich discussion” about the
instruments that might be used, while hinting fresh stimulus may be added
before the end of the year.
The degree of monetary-policy accommodation will need to be reviewed at
our December meeting when new macroeconomic projections will be available,”
Draghi said. “We want to be vigilant, as people used to say in the old
times.”
Draghi’s predecessor Jean-Claude Trichet used the phrase “vigilant” to
warn of upcoming changes in policy.
The 19-nation region’s woes include a global economic slowdown that is
weighing on overseas sales, and a currency appreciation that’s putting downward
pressure on inflation. Consumer prices fell in September and while that is
largely due to a drop in energy costs, there’s concern that the declines may
become entrenched.
The euro slid as much as 1.6 percent percent against the dollar and was
down 1.4 percent at $1.1177 at 4:21 p.m. Frankfurt time. Policy makers seem to
have drawn a $1.14 line in the sand for the single currency, according to
Bloomberg strategist Vassilis Karamanis, who points to verbal interventions
whenever the common currency closed higher.
Morehttp://www.bloomberg.com/news/articles/2015-10-22/draghi-signals-new-stimulus-may-come-this-year-as-growth-falters
Asia joins global stocks rally after ECB signals more stimulus
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.6 percent, and set for a gain of 0.8 percent for the week.
Japan's Nikkei stock index .N225 was up 2.3 percent, poised for a weekly increase of 3.2 percent. The Shanghai Composite index .SSEC added 0.3 percent, on track for a weekly decline of 0.4 percent.
After the ECB held policy steady at its meeting on Thursday as widely expected, central bank chief Mario Draghi told a news conference that ECB policymakers were "open to the full menu of monetary policy" to stoke the euro zone economy as needed.
The euro marked its largest one-day percentage drop against the dollar in nine months on Thursday.
The common currency gained 0.1 percent to $1.1116 on Friday, after earlier falling to a two-month nadir of $1.1072 EUR=.
"When (ECB executive board member Benoit) Coeure said in May that the ECB could expand its QE, the euro fell below $1.10. But what's different now from that time is the U.S. monetary policy outlook," said Minori Uchida, chief currency strategist at the Bank of Tokyo-Mitsubishi UFJ.
"While Fed officials are talking about the possibility of a rate hike in December, whether it is really possible will be a focus next week," he said.
The Fed will meet on Tuesday and Wednesday next week, after its policymakers opted to hold interest rates steady last month, amid concerns that a slowing global economy, particularly in China, could pose risks to the U.S. economic outlook.
More
http://www.reuters.com/article/2015/10/23/us-global-markets-idUSKCN0SH01I20151023
In commodities news, the dark clouds just keep getting darker. Bloomberg “Intelligence” thinks we are about to repeat the 1980s lost decade. In yet more bad news for wounded Glencore and the rest of the sinking commodities flotilla, “Raw materials may be in the fourth year of a 20-year “bear super-cycle,” according to the Ned Davis Research Group, which has studied commodities busts dating to the 18th century.” Is Japan already back in recession?
Oil's Big Slump Looks Like the 1980s 'Lost Decade'
October 22, 2015 — 3:28 PM BST
Crude oil’s collapse is bringing back memories of the decade of low
prices that started in 1985 when Saudi Arabia began targeting market share.
Oil has dropped by almost half since last October when crude entered a
bear market as the U.S. pumped near record rates and China’s economic growth
slowed. Despite the longest decline in decades, some including Royal Dutch
Shell Plc’s Chief Executive Officer Ben Van Beurden and Morgan Stanley
Investment Management Inc.’s Head of Emerging Markets Ruchir Sharma think
there’s more pain to come.
The current downturn resembles that of 1985 and 1986, Bloomberg
Intelligence analysts Peter Pulikkan and Michael Kay wrote in a report on
Thursday. Just as price gains in the 1970s saw new technology open up
fields in the North Sea and Alaska, Chinese-led demand in the first decade of
this century helped unlock oil and gas from shale rocks in the U.S. Now,
companies such as BP Plc are predicting crude will stay “lower for longer.”
“The lower-for-longer scenario will likely be even lower and even
longer,” Pulikkan said in an e-mail. “In 1985, Saudi Arabia changed policy to
raise its market share, ushering in a lost decade for oil. There’s a
possibility there’s another lost decade.”
West Texas Intermediate dropped below $10 a barrel in June 1986. The benchmark averaged $20.83 a barrel in 1985 and 1986, about 30 percent lower than the previous two years. As prices dropped, the Saudis refused to cut production, opting to defend market share instead, Pulikkan said. Oil averaged less than $20 in the 12 years from 1987.
----A 200-year history of commodity prices shows they typically move between a decade of a bull market and two decades of a bear market, Sharma, who helps manage $25 billion at Morgan Stanley Investment, said last month. It takes years to clear the additional capacity that a bull market generates, meaning a “long winter in commodities” lies ahead, he said.
Raw materials may be in the fourth year of a 20-year “bear super-cycle,” according to the Ned Davis Research Group, which has studied commodities busts dating to the 18th century.
http://www.bloomberg.com/news/articles/2015-10-22/oil-slump-resembles-lost-decade-as-saudi-targets-market-share
Japan export growth slows sharply, raising fears of recession
Japan's annual export growth slowed to a crawl in September as shrinking
sales to China hurt the volume of shipments, raising fears that weak overseas
demand may have pushed the economy into recession.
Ministry of Finance data showed exports rose just 0.6 percent in the
year to September, against a 3.4 percent gain expected by economists in a
Reuters poll.
That was the slowest growth since August last year, following the prior
month's 3.1 percent gain. The weak yen helped increase the value of exports,
but volume fell 3.9 percent, the third straight month recording an annual
decline.
Wednesday's data was the first major indicator for September and is part
of the calculation of third quarter gross domestic product. A third quarter
contraction would put Japan into recession, following the second quarter's
negative GDP result, and could force policy makers to offer further stimulus.
Morehttp://www.reuters.com/article/2015/10/21/us-japan-economy-trade-idUSKCN0SE30T20151021
“But it [the boom] could not last forever
even if inflation and credit expansion were to go on endlessly. It would then
encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole
monetary system.”
Ludwig
von Mises.
At the Comex silver depositories
Thursday final figures were: Registered 43.54 Moz, Eligible 118.83 Moz, Total
162.37 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the original Volkswagen scandal, nearly a
decade late, gets its day in court. More on the fun and games fiat money
enables.
Ex-Porsche CEO: VW Trial Prosecutors Are ‘Helping Hedge Funds’
October 22, 2015 — 12:37 PM BST Updated on October 22, 2015 — 2:48 PM
BST
The effort, which later collapsed amid the credit crunch of the financial
crisis, initially burned hedge funds by driving up the cost of Volkswagen
shares, as short sellers increased their positions to repay borrowed stock in
bets that VW would fall. Wiedeking said the charges were only designed to help
investor lawsuits seeking as much as 5 billion euros ($5.7 billion).“With these charges, prosecutors are obviously trying to help hedge funds to turn the tides in their unsuccessful civil suits," Wiedeking said. "The idea that there was a hidden plan to take over VW all along is absurd."
Prosecutors claim Wiedeking and Haerter lied when Porsche denied five times in 2008 that it was seeking to acquire VW. They also deceived markets in their surprise Oct. 26, 2008 statement which disclosed that Porsche held 74.1 percent of VW and had now decided to acquire a 75 percent stake and control of the company under German law.
The two men had decided already seven months earlier to go ahead with the plan to acquire 75 percent of VW, prosecutor Aniello Ambrosio told the court. As early as 2005, Porsche had deals with Maple Bank GmbH to hedge against VW share price movements. In the months after March 2008, Haerter negotiated with several banks about financing the acquisition of a dominant stake in VW, he said.
“The company’s communication strategy was aimed at veiling the intention to acquire VW,”’ Ambrosio said.
Both Wiedeking and Haerter said all five denials mirrored what had been decided at the time. While part of the reason to issue the Oct. 26, 2008, statement was to inform short sellers about the holdings, it was only on that Sunday that the management board, consisting of only the two men, decided to go for the full 75 percent controlling stake.
More
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino
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?
Today, when it
comes to tax cheating and solar power, you’ve got to hand it to the Dutch.
Dutch solar-racing powerhouse takes out thrilling World Solar Challenge
Nick Lavars October
21, 2015
Five
wearying days after setting off from Darwin, the Nuon Solar Team has beaten
Dutch compatriot Solar Team Twente to claim its sixth World Solar Challenge.
The two teams have been neck-and-neck over the mammoth solar-powered journey,
and remarkably finished less than ten minutes apart after covering some 3,000
km (1,864 mi) through the Australian outback.
The two teams from the Netherlands were fast out of the blocks on Sunday, as a record 47 teams from 25 different countries set off from the top of Australia in the 2015 World Solar Challenge. With a healthy tail wind of around 24 km/h (15 mph), Team Twente in its Red One solar car led the reigning champions Nuon Solar for much of the first leg. But with the University of Michigan's Aurum car breathing down their necks, the pair slipped to third and fourth place respectively by the end of day one of racing.
It wouldn't take long for them to reign in Aurum, however, with the Dutch duo arriving first and second after day two and 1,400 km (870 mi) in total of solar-powered racing, separated by less than five minutes. Nuon would cut the margin to just 10 seconds during day three of racing, traveling hot on the heels of Red One over some 700 km (435 mi). Meanwhile, the University of Michigan team, which has come equipped with advanced solar forecasting technology, kept itself within striking distance finishing the day 11 minutes behind the leaders.
Having trailed Team Twente for the majority of the race, Nuon made its
move on day four just outside of Pimba, around 500 km (310 mi) from Adelaide.
It finished the day at Port Augusta, around 300 km (186 mi) from the finish
line, with a narrow lead of two minutes. With the University of Michigan team
fading in the distance around forty minutes behind, the 2015 World Solar Challenge
became a two horse race. Could Nuon hold its nerve through the final stretch
into Adelaide?
The Nuon team managed to keep Team Twente at arms length for most of the
morning, reaching speeds of close to 100 km/h (62 mph) as it descended on
Adelaide's Victoria Square. Incredibly, after 2,998 km just two minutes and 35
seconds separated the pair. But Nuon surged ahead to claim its second
successive World Solar Challenge and its sixth in the event's history, with a
total time of 37 hours, 56 minutes and 12 seconds, eight minutes and 20 seconds
ahead of Team Twente.
In the meantime, the team from Tokai University overtook the University
of Michigan on approach to Adelaide to claim third place. The rest of the field
will continue to roll into Adelaide over the remainder of the day.
Another weekend,
and our clock go back an hour here in the UK on Sunday. Bah humbug, winter is
almost here. Have a great weekend everyone. Still time to harvest God’s free
sweet edible chestnuts.
The monthly Coppock Indicators finished September
DJIA: +41 Down. NASDAQ:
+138 Down. SP500: +65 Down.
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