Tuesday, 29 December 2015

2015 – “Nothing Worked.”



Baltic Dry Index. 478       Brent Crude 36.66

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

You will find that the State is the kind of organization which, though it does big things badly, does small things badly, too.

J. K. Galbraith.

It’s the week between Christmas and New Year, and trading is usually thin and volatile. No one wants to blow up in the last week of the year. And so we get to the year’s final mini silly season.  We open with “climate change” on steroids. The rebranded product launch of the earlier failed “man made global warming from carbon dioxide” scam.  But first this.

The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere

December 28, 2015 — 5:00 AM GMT Updated on December 28, 2015 — 3:32 PM GMT
The idea behind asset allocation is simple: when one market struggles, it’s OK because an investor can jump into another that is thriving. Not so in 2015.

In fact, if you judge the past year by which U.S. investment class generated the largest return, a case can be made it was the worst for asset-allocating bulls in almost 80 years, according to data compiled by Bianco Research LLC and Bloomberg. With three days left in 2015, the Standard & Poor’s 500 Index gained 2.2 percent with dividends, cash is up less, while bonds and commodities show losses.

----After embracing everything from Treasuries to high-yield bonds and technology shares amid seven years of zero-percent interest rates, investors found themselves with nowhere to run at a time when the Federal Reserve’s campaign of stimulus drew to an end. Normally it isn’t like this. Since 1995, practically every year has seen some asset deliver returns exceeding 10 percent.

“It’s been challenging from the point of view that the equity market and bond market are probably more joined at the hip than normal,” said Hayes Miller, the Boston-based head of multi-asset North America who helps oversee $35.8 billion for Baring Asset Management LLC. “We’ve had high cash exposure relative to norm because we felt cash provides one of the only good diversifiers against the risk-off trade.”

Bianco Research keeps track of the S&P 500, 30-year U.S. Treasury bonds, 3-month Treasury bills and the Thomson Reuters/CoreCommodity CRB Commodity Index to gauge performance in stocks, bonds, cash and commodities. The four are the most common asset classes considered by investors when an allocation strategy is designed, according to Jim Bianco, the founder.

While the depth of losses in equities and commodities is nowhere near as bad as in 2008, the correlation of declines highlights the challenge for money managers who seek to amplify returns by rotating among assets. Among other things it’s a recipe for pain among hedge funds, according to Bianco. The industry is heading for its worst annual performance since 2011, with closures rising, data compiled by Bloomberg and Hedge Fund Research Inc. show.
More
http://www.bloomberg.com/news/articles/2015-12-28/the-year-nothing-worked-stocks-bonds-cash-go-nowhere-in-2015

European Stocks Fall in Low Trading Volume During Holiday Week

December 28, 2015 — 8:13 AM GMT Updated on December 28, 2015 — 5:20 PM GMT
European stocks dropped for a second day, as low trading persisted in the holiday-shortened week.

The Stoxx Europe 600 Index slipped 0.5 percent at the close of trading in London, with energy companies leading losses as oil resumed its retreat, while miners fell after data showed Chinese industrial company profits dropped. With the U.K. market closed for the Boxing Day holiday, the volume of Stoxx 600 shares changing hands was more than two-thirds below the 30-day average.

“Oil and gas companies are under pressure because of the Chinese statistic over the weekend,” said John Plassard, a senior equity-sales trader at Mirabaud Securities LLP in Geneva. “Essential drivers for the European market next year will be expansive monetary policy, the weakness of the euro, a sustainable valuation of European companies, a strong domestic demand and nice profit growth.”
More
http://www.bloomberg.com/news/articles/2015-12-28/european-stocks-little-changed-in-low-volume-during-holiday-week

U.S. Stocks Slip With Crude Weighing on Energy as Year-End Looms

December 28, 2015 — 10:53 AM GMT Updated on December 28, 2015 — 9:42 PM GMT
Gains in Amazon.com Inc. and Walt Disney Co. helped U.S. stocks mute declines led by energy shares, as the Standard & Poor’s 500 Index struggled to advance for the year entering the final trading days of 2015.

Energy companies resumed their familiar role as the market’s worst performers, with Chevron Corp. dropping 1.8 percent. Copper producer Freeport-McMoRan Inc. sank 9.5 percent after climbing 24 percent in the prior five sessions. Amazon rose 1.9 percent, helping equities trim losses as investors assessed holiday sales. Disney gained 1.3 percent after “Star Wars: The Force Awakens” surged past $1 billion in worldwide sales.

The S&P 500 slipped 0.2 percent to 2,056.50 at 4 p.m. in New York, as the gauge whittled an earlier 0.8 percent decline. The Dow Jones Industrial Average lost 23.90 points, or 0.1 percent, to 17,528.27, halting an afternoon rebound near its average price during the past 200 days. The Nasdaq Composite Index fell 0.2 percent. This week is shortened, with markets closed for the New Year’s Day holiday on Friday.
More
http://www.bloomberg.com/news/articles/2015-12-28/s-p-500-futures-inch-lower-after-weekly-gain-amid-holiday-season

Now back to silly season. Below, we’re all going to starve. Just because he writes climate change, doesn’t make it true. The recent weather events of North and South America and the UK, are far more likely to be related to the strong/strongest Pacific El Nino event underway, disrupting the Pacific Jetstream with follow on effects around the planet.

10 Foods That May Disappear Thanks to Climate Change

By Reynard Loki, AlterNet’s environment and food editor. Follow him on Twitter @reynardloki. Email him at reynard@alternet.org. Originally published at Alternet
Climate change is making the world a different place. There are more floods, droughts, wildfires, heat waves and other extreme weather events. Animal species around the world are either shifting habitat locations or simply dying off. Even humans are migrating due to a warmer world.

But there is one effect that will hit many of us right in the gut: Certain foods could disappear thanks to our changing climate. Brace yourself: here are 10 foods you’ll probably be sad to see go.

1. Guacamole
Around 8 million pounds of guacamole are consumed during the Super Bowl, but football fans might soon have to find something else to dip their tortilla chips into. Scientists from the Lawrence Livermore National Laboratory predict as much as a 40 percent decrease in avocado production over the next 30 years due to increasing temperatures brought on by climate change. As a result, the fast food chain Chipotle, which goes through 97,000 pounds of avocados a day — 35 million pounds every year — has warned that if climate change worsens, it may be forced to stop serving guacamole. The company says it “may choose to temporarily suspend serving menu items, such as guacamole or one or more of our salsas, rather than paying the increased cost for the ingredients.”

2. Apples
“Even if I knew that tomorrow the world would go to pieces,” the German theologian Martin Luther said, “I would still plant my apple tree.” He didn’t figure that there might be a tomorrow in which apple trees can’t properly grow. In 2011, an international team of scientists published a study which found just that: Temperate fruit and nut trees like the apple tree, which need a certain period of winter chill to produce economically practical yields, could be affected by global warming as winter temperatures rise. They said farmers should prepare for a warmer future by breeding cultivars with lower chilling requirements. Such apples will likely taste different from the ones we have today, according to a Japanese study which found that rising temperatures are causing apple trees to bear fruit sooner, making them softer and sweeter. “If you could eat an average apple harvested 30 years before and an average apple harvested recently at the same time, you would really taste the difference,” said Toshihiko Sugiura of the National Agriculture and Food Research Organization in Tsukuba, Japan, the study’s lead author.

3. Beer
It’s sad, but true. Beer is already a victim of a changing climate, with brewers increasingly finding it more difficult to secure stable water supplies. According to a 2010 report commissioned by the National Resources Defense Council, about a third of counties in the United States “will face higher risks of water shortages by mid-century as the result of global warming.” Between 2030 and 2050, the difficulty in accessing freshwater is “anticipated to be significant in the major agricultural and urban areas throughout the nation.”

Some specialty hops used by craft brewers have already become harder to source, since warming winters are producing earlier and smaller yields. “This is not a problem that’s going to happen someday,” said Jenn Orgolini of Colorado’s New Belgium Brewery. “If you drink beer now, the issue of climate change is impacting you right now.” She said that in 2011, the hops her brewery normally uses weren’t available due to Pacific Northwest weather conditions.

4. Rice and Beans
The late comedian/philosopher Bill Hicks once said, “The American dream is a crock. Stop wanting everything. Everyone should wear jeans and have three T-shirts, eat rice and beans.” He didn’t live long enough to find out that climate change could threaten the ability to follow his wise suggestion. It’s hard to overstate the importance of rice to world. It is a food staple for almost half of the world’s population. But climate change could significantly impact rice yields in this century.

According to a 2005 report by the Food and Agriculture Organization of the United Nations, “temperature increases, rising seas and changes in rainfall patterns and distribution expected as a result of global climate change could lead to substantial modifications in land and water resources for rice production as well as in the productivity of rice crops grown in different parts of the world.” A 2005 report by the United States Department of Agriculture found that the viability of rice-growing land in tropical areas could decline by more than 50 percent during the next century.

Beans feed the majority of the human population in Latin America and much of Africa and are a part of the daily diet of more than 400 million people across the developing world. But beans may also experience declines due to a warming world. According to a report the International Center for Tropical Agriculture (CIAT), higher temperatures could reduce bean yields by as much as 25 percent. “Beans are highly sensitive to heat, and the varieties that farmers currently grow do not yield well under night temperatures over 18 or 19 degrees Centigrade,” writes Nathan Russell of CIAT. “Higher temperatures drastically reduce seed fertility, leading to lower grain yields and quality.” Thankfully, CIAT scientists have identified about 30 “elite” bean lines that have demonstrated tolerance to temperatures 4°C higher than the crop’s normal “comfort zone.”
More
http://www.nakedcapitalism.com/2015/12/10-foods-that-may-disappear-thanks-to-climate-change.html

Meanwhile back with the Wall Street High Frequency Trading thieves who front run customer order stream for gargantuan profit, things are advancing again. Those using  very latest new technology, can now front run the slower older HFT thieves. Proof positive that on Wall Street there’s no honour among the Great Vampire Squid thieves.

Meanwhile, Over At The "New York" Stock Exchange: Towers With Frickin' Laserbeams Attached To Their Heads

Tyler Durden
Back in March, when looking at the main antenna array at the real "New York" Stock Exchange located off Route 17 and MacArthur Boulevard in Mahwah, New Jersey, we noticed something peculiar: instead of just housing various now traditional microwave dishes.
... a new device had quietly appeared.
The "device", as Extremetech explained in early 2014, was the AOptix IntelliMax laser (used in various US defense programs), and now generously provided by Anova to various very wealthy HFT clients - in exchange for a very generous installation and recurring monthly fee - who desired to eliminate the 0.18 millisecond microwave latency between the NYSE and Nasdaq, by going straight to laser.

High-frequency trading — the practice of making thousands of algorithmic stock trades per minute — is about to get a big boost in the USA. Anova, a company that specializes in deploying low-latency networks for stock trading, is completing an ultra-high-speed laser network between the New York Stock Exchange (NYSE) and the NASDAQ. The link will be just a few nanoseconds faster than the current microwave and fiber-optic links — but in the world of high-frequency trading (HFT), those nanoseconds could result in millions of dollars in profits for the trading companies. Such is the insanity of the stock markets; such is the unbelievable capacity of HFT to create money out of almost nothing.

 If you want to get a signal quickly from point A to point B, you basically have three options: fiber-optic cables, a network of microwave dishes, or laser links. Electrical (copper wire) networks are feasible over short runs, but their reduced functionality and bandwidth over longer runs makes them less desirable than fiber. Microwave (and even higher-frequency millimeter wave) networks also aren’t very high-bandwidth, but because they’re purpose-built, they can take a very direct route, significantly undercutting the latency of an oft-congested and round-about fiber network. Laser networks have all the advantages of microwave/millimeter wave networks, but they have higher bandwidth, and some very clever adaptive optics means they’re not impacted by bad weather. (Microwaves really hate inclement weather.)

---- Nine months ago we concluded by saying that everyone who splurged millions on the "brand-new" - as recently as 2013 - microwave technologies to give their HFT system a leg up... is now obsolete.

Welcome to lasers: where you are either part of the very expensive club, or are being frontrun. Which also means that if Michael Lewis is indeed writing a sequel to Flash Boys focusing on microwave signals and towers as the "next big thing", he may just want to burn the manuscript.

As for what comes next, the WSJ suggested the following: "Some dream of a replacement for the fiber-optic cables across the Atlantic and Pacific. The idea: Turbocharge intercontinental trading by floating balloons carrying microwave dishes over the ocean."
More
http://www.zerohedge.com/news/2015-12-27/meanwhile-over-new-york-stock-exchange-lots-lasers

Shale's Running Out of Survival Tricks as OPEC Ramps Up Pressure

December 28, 2015 — 12:01 AM GMT Updated on December 28, 2015 — 10:10 AM GMT
In 2015, the fracking outfits that dot America’s oil-rich plains threw everything they had at $50-a-barrel crude. To cope with the 50 percent price plunge, they laid off thousands of roughnecks, focused their rigs on the biggest gushers only and used cutting-edge technology to squeeze all the oil they could out of every well.
Those efforts, to the surprise of many observers, largely succeeded. As of this month, U.S. oil output remained within 4 percent of a 43-year high.

The problem? Oil’s no longer at $50. It now trades near $35.

For an industry that already was pushing its cost-cutting efforts to the limits, the new declines are a devastating blow. These drillers are “not set up to survive oil in the $30s,” said R.T. Dukes, a senior upstream analyst for Wood Mackenzie Ltd. in Houston.

The Energy Information Administration now predicts that companies operating in U.S. shale formations will cut production by a record 570,000 barrels a day in 2016. That’s precisely the kind of capitulation that OPEC is seeking as it floods the world with oil, depressing prices and pressuring the world’s high-cost producers. It’s a high-risk strategy, one whose success will ultimately hinge on whether shale drillers drop out before the financial pain within OPEC nations themselves becomes too great.

Drillers including Samson Resources Corp. and Magnum Hunter Resources Corp. have already filed for bankruptcy. About $99 billion in face value of high-yield energy bonds are trading at distressed prices, according to Bloomberg Intelligence analyst Spencer Cutter. The BofA Merrill Lynch U.S. High Yield Energy Index has given up almost all of its outperformance since 2001, with the yield reaching its highest level relative to the broader market in at least 10 years.

“You are going to see a pickup in bankruptcy filings, a pickup in distressed asset sales and a pickup in distressed debt exchanges,” said Jeff Jones, managing director at Blackhill Partners, a Dallas-based investment banking firm. “And $35 oil will clearly accelerate the distress.”
More
http://www.bloomberg.com/news/articles/2015-12-28/shale-s-running-out-of-survival-tricks-as-opec-ramps-up-pressure

If all else fails, immortality can always be assured by spectacular error.

J. K. Galbraith.

At the Comex silver depositories Monday final figures were: Registered 40.20 Moz, Eligible 120.19 Moz, Total 160.39 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Not the usual suspects today. Today we give bent banksters, and crooked politicians, are there any other kind, a pass. Today as a service to the LIR readers we cover the opportunity of a lifetime for one of you. But hurry, the sale is supposed to close by year end. Personally, it’s a little small for my taste.

For $725 Million, You Can Buy a Texas Ranch That's the Size of a Small Nation

By Bryan Gruley Photographs by Jesse Chehak
July 21, 2015
“It takes days to see it all,” says Bernard Uechtritz. The real estate broker is steering his black Ford F-350 pickup over one of the hundreds of miles of roads ribboning the W.T. Waggoner Estate Ranch 175 miles (280 kilometers) northwest of Dallas. Squinting into the sun, Uechtritz gestures to the sky on his right.
“Everything you can see, as far as the eye can see, is the ranch,” he says. He points straight ahead, then behind him, then left. “Each horizon is this ranch.”

Uechtritz (YOO-tridge) is one of two brokers entrusted with the singular task of selling the Waggoner ranch and everything attached to it, from the 29 tractors, to the cut-rock polo barn, to the emptied bottles of Old Taylor bourbon in an abandoned hunting lodge. At 510,527 acres (207,000 hectares), or 800 square miles (2,072 square kilometers), the Waggoner sprawls over six counties and is bigger than Los Angeles and New York City combined. At almost three-quarters of a billion dollars, the asking price is more than quadruple the biggest publicly known sum fetched by a U.S. ranch, $175 million for a Colorado spread in 2007. The Waggoner is one of the 20 largest cattle ranches in the U.S. and is known worldwide for its quarter horses.
It’s been owned by the same family almost as long as Texas has been a state. Last year, a judge in Vernon—a town of about 11,000, 13 miles north of the ranch—ordered a sale of the property and appointed Uechtritz and a co-broker to market it worldwide. The ruling of District Judge Dan Mike Bird ended more than 20 years of litigation between opposing branches of the Waggoner family who couldn’t agree whether to liquidate the property or split it up among themselves.
“It’s history,” says Uechtritz, a blue-eyed, square-jawed 50-year-old who can pass for the Marlboro Man—until he greets you with “G’day” in his Australian accent. “What we’re doing here never happened before and will never happen again.”
As Uechtritz drives the ranch on this warm June afternoon, he takes a call from an oilman in Europe. Over speakerphone, the guy says his company tried to bid for the Waggoner years ago, “but all we got was bullshit.” Uechtritz tells him, “That’s not going to happen, mate.”
He wends his pickup past an old rodeo corral, a truck scale, and a cook shack where cowboys still gobble pre-dawn biscuits and gravy, as they have for more than a century. Uechtritz says the European caller is among more than 600 people who’ve expressed interest in the ranch, “ranging from the really real to the really not.” He says he’s confident a sale will close by year’s end. His co-broker on the deal is Sam Middleton, of Chas. S. Middleton & Son of Lubbock, Texas. That firm and Uechtritz’s employer, Briggs Freeman Sotheby’s International Realty of Dallas, each will collect a commission of $7.625 million if the ranch commands its asking price.
More
http://www.bloomberg.com/graphics/2015-famous-texas-waggoner-ranch-for-sale/

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 or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Mixing modern materials? Math app helps you manage your mashup

Date: December 22, 2015

Source: National Institute of Standards and Technology (NIST)

Summary: Polymers play a vast number of roles in daily life, but they lack many properties that would make them even more useful. As in cooking, a way around these limitations is to mix in other ingredients that have the right properties. Scientists have just made recipe development a more palatable job.
Imagine you're baking a special cake, one in which the shape of each mote of spice mixed into the batter can have a profound effect on your dessert's color, its taste, its texture on the tongue. That's a rough description of creating new lightweight materials for aircraft, cars and windmills that use tiny nanoparticles as ingredients, and scientists at the National Institute of Standards and Technology (NIST) have made recipe development a more palatable job.
Polymers--a large class of materials that includes plastics--play a vast number of roles in daily life, but they lack many properties that would make them even more useful. As in cooking, a way around these limitations is to mix in other ingredients that have the right properties. Polymers conduct electricity poorly, for example, but adding carbon nanotubes (CNTs) or graphene sheets forms a strong, lightweight "nanocomposite" whose electrical conductivity can be more than a million times higher.
But the variety of options can confound designers. If they can find the right combination of polymer and particles, manufacturers can mix up a nanocomposite that has just the right properties for a job--be it strength, flexibility, conductivity, or a host of others. But with so many polymers and nanoparticles to choose from, devising the best recipe is often a matter of trial and error. That's largely because there has been no way to predict the resulting mix's capabilities based on what each ingredient can do. Why not? In a word, math.
The effect the added particles have on the polymer is profoundly influenced by their shape. But it's hard to account for the complex shapes of the particles mathematically; in fact, it's a famously difficult math problem. So it's tough to create models that account for this essential design variable. Materials designers have been forced to model their mixtures using the assumption that all particles were shaped like spheres--an unrealistic picture, to say the least.
"It's been called the 'spherical cow' approach," says NIST materials scientist Jack Douglas. "It isn't too helpful when your particle is shaped like a bush or a dust-bunny or crumpled paper, which are what nanoparticles can look like in a mixture. CNTs, for example, aren't the idealized tubes you often see in magazines; their complicated shape depends sensitively on the exact conditions under which the particles are made."
The team dealt with this issue by exploiting a kernel idea from a seven-decade-old math paper by Shizuo Kakutani, who suggested a way of more realistically modeling particle shapes in material property calculations. Using his ideas for practical materials science would have required far more number-crunching power than was available in Kakutani's day, but modern computers make this class of problems easier to handle. The team first created virtual nanoparticles that have the same physical shape as the real-world particles they want to analyze, and they then calculated the relevant properties using a publicly available software package (ZENO) developed partly at NIST.
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The monthly Coppock Indicators finished November

DJIA: +25 Down. NASDAQ: +121 Down. SP500: +45 Down. 

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