Baltic Dry Index. 468 Brent Crude 33.26
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1.
Warren Buffett.
If it wasn’t so serious it would be farcical. Chinese stockbrokers today put in a 29 minute day. Of course, China’s casinos are merely reacting to China’s stock market bubble of the first half of 2015. That’s when the Communist Party of China told everyone in China’s middle class and their dog, to go out and borrow if necessary and go long Chinese stocks. Capitalism it aint, Ponzi and Madoff come to mind. But where in the world did the CPC get the insane idea of inflating stocks to bailout a failing economy? Step forward Greenspan, Bernanke and the talking chair. Worryingly, yesterday’s close on the Dow Industrials took the monthly Dow Coppock indicator into negative territory. One of the slowest long term reliable technical indicators just gave an exit signal if not a short signal. And the commodities collapse picked up pace as Brent crude oil fell to the low 33s, while the Baltic Dry (shipping) Index reached a new all-time low. As I write, the Dow mini futures are down another 240 points from the close. We are in for an interesting day.
Below, today’s chapter in the unravelling malinvestment bubble crash landing and the renewed currency war. It ought to be interesting at Davos this year, though my invitation once again seems to be lost in the mail.
Predicting rain doesn't count.
Building arks does.
Warren
Buffett.
China trading halted early again, Asian markets slide in response
Published: Jan 6, 2016 11:03 p.m. ET
Chinese stocks dive more than 7%, as yuan further devalued
A plunge in China stocks led to their second trading halt this week, sending markets across the region sharply lower, as the yuan rapidly weakened.The CSI 300, a benchmark of blue chips in Shanghai and Shenzhen, fell 7%, which triggered a newly launched circuit breaker that froze trading for the day. That followed a 15-minute halt after falling 5% earlier in the morning. Chinese markets usually close at 3 p.m. local time.
The Shanghai Composite Index SHCOMP, -7.32% fell 7.3% when trading halted, bringing its losses over just four trading days to 12%. That’s the largest weekly loss since the week that ended Aug. 21.
Stock markets fell across the region: Hong Kong’s Hang Seng Index HSI, -2.64% was down 2.4% and the Nikkei Stock Average NIK, -2.17% was down 1.8%. Australia’s S&P/ASX 200 XJO, -2.20% fell 1.4% and South Korea’s Kospi SEU, -0.83% fell 1%.
Earlier, China’s central bank continued to fix the onshore yuan’s value lower to the U.S. dollar, at 6.5646, down 0.51% from Wednesday’s level, the biggest move since Aug. 13, after the yuan’s devaluation.
Read more: China’s central bank blames speculators for weakened yuan
The onshore Chinese yuan broke to a fresh low since 2011 of 6.5920 to one U.S. dollar. It last traded at 6.5920 compared with 6.5555 Wednesday.
The offshore Chinese yuan, which trades freely, sank to a fresh five-year low, at 6.7511 to one U.S. dollar. It was last at 6.6943 compared with 6.6927 Wednesday.
The volatility recalls last summer, when China’s stock market crash and a surprise devaluation of the yuan by Beijing sparked a global rout, and wiped out trillions of U.S. dollars in value from Chinese equities.
“It’s difficult to predict what the authorities want to do,” said Arthur Lau, managing director of Asian fixed income at Pinebridge Capital.
The losses follow declines overnight globally. U.S. crude oil slumped to its lowest level since December 2008, down 5.6% to $33.97 a barrel, and the Dow Jones Industrial Average declined 1.5%.
More
http://www.marketwatch.com/story/china-trading-halted-early-again-asian-markets-slide-in-response-2016-01-06?dist=tcountdown
China's Stock Traders Go Home After 29 Minutes: Chart
January 7, 2016 — 3:10 AM GMT
Less than half an hour. That’s how long China’s stock markets were open
before declines triggered automatic circuit breakers, shutting down trading for
the day.
China’s stock exchanges closed at 9:59 a.m. local time, just 29 minutes after markets opened, as the CSI 300 Index fell more than 7 percent. Trading was halted for half that time after a 5 percent drop triggered an earlier suspension. China’s markets are normally open from 9:30 a.m. to 3 p.m., with a 90 minute break in the middle.
"All of us are talking about getting off work early today and we are happy," Dongxing Securities Co. analyst Hou Yi said in Beijing. "This is the shortest trading day."
http://www.bloomberg.com/news/articles/2016-01-07/china-s-stock-traders-go-home-after-29-minutes-chart
Shanghai Fund Manager Dumps All Holdings in ‘Insane’ Market
January 7, 2016 — 3:58 AM GMT Updated on January 7, 2016 — 4:57 AM GMT
A Shanghai fund dumped all its holdings as Chinese shares tumbled and
triggered a circuit-breaker that halted trading in the world’s second-biggest
stock market.“This is insane,” Chen Gang, chief investment officer at Shanghai Heqi Tongyi Asset Management Co., said in an interview on Thursday. “We were forced to liquidate all our holdings this morning,” said Chen, whose firm manages about 300 million yuan ($45.5 million).
China’s CSI 300 Index plunged 7.2 percent before trading was halted by automatic circuit-breakers for the second time this week, after a weaker-than-estimated yuan fixing fueled concern that slowing economic growth is prompting authorities to guide the currency lower. Many private funds and hedge funds in China have agreements with investors spelling out mandatory liquidation levels if their holdings drop below a certain value.
Chinese regulators have imposed a limit on the amount of stock major corporate shareholders can sell as authorities move to curb the nation’s market rout. The CSRC capped the size of stakes that major investors are allowed to sell at 1 percent of a company’s shares for three months effective Jan. 9, the regulator said in a statement on Thursday. The restriction replaces an existing six-month ban on any secondary market stock sales that is due to expire Friday, it said.
Chen, who commented before the CSRC announced its new caps, said he “won’t consider getting back into the market until that overhang is gone and CSRC improves its circuit-breaker system, for instance by extending the 15-minute break to half an hour.”
The Shanghai Heqi Tongyi manager, whose fund started mid-year in 2015, regretted the timing of its launch and said it “couldn’t be worse.” Chen isn’t alone in criticizing the circuit-breaker rule introduced Monday, which many say exacerbates a liquidity squeeze as investors rush for the exits before trading halts kick in.
Under the new rule, a drop of 5 percent suspends trading for 15 minutes, while a decline of 7 percent halts the market for the rest of the day.
More
http://www.bloomberg.com/news/articles/2016-01-07/shanghai-fund-manager-dumps-all-holdings-as-market-goes-insane--ij3q4f91
George Soros Sees Crisis in Global Markets That Echoes 2008
January 7, 2016 — 5:25 AM GMT Updated on January 7, 2016 — 6:24 AM GMT
Global markets are facing a crisis and investors need to be very
cautious, billionaire George Soros told an economic forum in Sri Lanka on
Thursday.
China is struggling to find a new growth model and its currency
devaluation is transferring problems to the rest of the world, Soros said in
Colombo. A return to positive interest rates is a challenge for the developing
world, he said, adding that the current environment has similarities to 2008.
Global currency, stock and commodity markets are under fire in the first
week of the new year, with a sinking yuan adding to concern about the strength
of China’s economy as it shifts away from investment and manufacturing toward
consumption and services. Almost $2.5 trillion was wiped from the value of
global equities this year through Wednesday, and losses deepened in Asia on
Thursday as a plunge in Chinese equities halted trade for the rest of the day.
“China has a major adjustment problem,” Soros said. “I would say it
amounts to a crisis. When I look at the financial markets there is a serious
challenge which reminds me of the crisis we had in 2008.”
Soros, whose hedge-fund firm gained about 20 percent a year on average
from 1969 to 2011, has a net worth of about $27.3 billion, according to the
Bloomberg Billionaires Index. He began his career in New York City in the 1950s
and gained a reputation for his investing prowess in 1992 by netting $1 billion
with a bet that the U.K. would be forced to devalue the pound.
Measures of volatility are surging this year. The Chicago Board Options
Exchange Volatility Index, known as the fear gauge or the VIX, is up 13
percent. The Nikkei Stock Average Volatility Index, which measures the cost of
protection on Japanese shares, has climbed 43 percent in 2016 and a Merrill
Lynch index of anticipated price swings in Treasury bonds rose 5.7 percent.
Morehttp://www.bloomberg.com/news/articles/2016-01-07/global-markets-at-the-beginning-of-a-crisis-george-soros-says
3 big reasons oil’s caught in a death spiral
Published: Jan 6, 2016 5:05 p.m. ET
The bears are mauling the crude-oil market right now and they’re not
done.
Growing tensions between Saudi Arabia and Iran and the risk of
disruptions to output in the region, attacks on Libya’s oil infrastructure—and
now a huge weekly drop in U.S. crude inventories would normally be enough to
spur a rally in oil prices.
But these aren't normal circumstances and oil prices have, instead, plunged every day so far in 2016.
On Wednesday, Brent oil LCOG6, -4.00% —the international benchmark—and its U.S. counterpart West Texas Intermediate trading on the New York Mercantile Exchange CLG6, -3.68% settled at their lowest levels in more than 11 years.
Here are a few reasons why oil is cratering:
More
http://www.marketwatch.com/story/3-big-reasons-oils-caught-in-a-death-spiral-2016-01-06
Canadian crude — the world’s cheapest oil — falls to record low as slump deepens
January 6, 2016 4:54 PM ET
A deepening oil market slump is adding fresh pain for producers of the
world’s cheapest crude as the Canadian heavy grade reached a record low,
raising the prospect of more production coming offline.
Spot prices for Western Canadian Select fell to US$19.81 a barrel on
Wednesday, the lowest since tracking began in 2008, according to data compiled
by Bloomberg. The benchmark, made up of heavy conventional production and
bitumen blended with synthetic crude and condensate, fell with global grades
after U.S. gasoline inventories surged the most in 22 years and crude supplies
at the American storage hub in Oklahoma climbed to a record.
The low prices could push more of the highest-cost output offline after
producers including Baytex Energy Corp. and Canadian Natural Resources Ltd.
shut in more than 35,000 barrels a day of heavy oil and bitumen production
capacity, according to company presentations and a report published on the
Alberta government website.
“We’re below shut-in levels” with current prices, said Tim Pickering,
founder and chief investment officer of Auspice Capital Advisors Ltd. in
Calgary. There’s currently no incentive to ship Canadian crude to the U.S. Gulf
Coast and producers may take oilsands projects offline sooner than planned for
annual maintenance because of the depressed prices, he said. “We’re the last
barrel produced and we’re the first barrel shut in.”
Morehttp://business.financialpost.com/news/energy/canadian-crude-the-worlds-cheapest-oil-falls-to-record-low-as-slump-deepens?__lsa=ed78-06be
We close for the day, with the comforting news to this old trading dinosaur, that he’s not alone when it comes to smart phones being smarter than their owners. Thankfully I don’t have an iPhone. Just a HTC smart phone that costs me £9.50 a month.
New iPhone Feature Can Drive Bill Up
January 5, 2016 6:20 PM
MIAMI (CBSMiami) – Data overages can lead to big phone bills.
One family, however, was shocked when they got a bill for more than two
thousand dollars. The big bill was because of a new feature on Apple iPhones
that you may not be aware of.
Like many teens Ashton Feingold didn’t think much about the text message
from AT&T which warned that he was nearing his date limit.
“It just said maybe 65 percent of your data has been used,” said
Feingold.
Then the bill came.
“I thought my dad was going to kill me,” he said.
“It’s usually $250 a month and this was $2,000!” said Ashton’s father
Jeff.
The difference? A new feature on Ashton’s iPhone called “WiFi Assist”
which is standard with the new iOS 9.1 operating system.
“I had no idea what that was,” said Jeff Feingold.
It’s intended to make sure the user always has a good signal by
automatically switching to cellular data when a WiFi signal is weak.
Like in Ashton’s bedroom. He thought he was still connected to WiFi
while streamed and surfed the web. Instead, his phone was gobbling up data –
more than 144-thousand megabytes.
“That’s pretty high but I can see it happening,” said Mike Campbell with
“Apple Insider.”
He added that while some customers like what WiFi Assist does, many
don’t know they have it.
“It comes by default, it is switched on,” said Campbell. “That’s why
there’s an uproar.”
Apple had no comment.
To turn off WiFi Assist, go to settings, then cellular, then down at the
bottom users can switch off the feature.
http://miami.cbslocal.com/2016/01/05/new-iphone-feature-can-drive-bill-up/
Only when the tide goes out do you
discover who's been swimming naked.
Warren
Buffett
At the Comex silver depositories Wednesday final figures were: Registered 36.50 Moz, Eligible 125.27 Moz, Total 161.77 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Presented without comment. It’s an ill wind and all that.Meet the Two Brothers Making Millions Off the Refugee Crisis in Scandinavia
Hero Norway’s for-profit model offers lodging for asylum
seekers.
----Are they happy to be here?
“It is calm and peaceful,” says Bilal, 15, in Pashto.
“It is nice,” says Ahmad, also 15, “but why isn’t there a cricket
pitch?”
Their middle-aged teachers—a Syrian and an Eritrean, both onetime
refugees themselves—hover over them, benevolent, smiling, as a commuter train
rattles in the distance. This, arguably, is the Scandinavia that the
self-proclaimed socialist presidential candidate Bernie Sanders was referring
to in October when he suggested that Americans “should look to countries like
Denmark, like Sweden and Norway, and learn from what they have
accomplished”—particularly when it comes to government programs that assist
those in need.
Except there’s this other guy in the room, standing off to the side,
almost invisible as he handles incoming e-mail on his smartphone. Kristian
Adolfsen, 55, wears a V-neck sweater, a striped button-down, and glasses. This
is his first visit to this refugee center in Hvalstad, but he owns the operation
with his brother, Roger, 51, and they run 90 such centers in Norway and 10 more
in Sweden. Refugees represent a huge opportunity for them; the Adolfsens’
Oslo-based company, Hero Norway, is the leader of a burgeoning Scandinavian
industry that charges the Norwegian and Swedish governments a fixed fee—$31 to
$75 per person per night in Norway—to house and feed refugees.
In Norway, Hero operates several different kinds of refugee lodging,
among them short-stay dormitories where asylum seekers sleep a few nights,
waiting to be screened by police after crossing the border; a second phalanx of
facilities where refugees wait a couple of weeks to be interviewed by
immigration officials, taking their meals in a cafeteria; and longer-term camps
where they live more independently, in detached houses, cooking their own
meals, as they wait, often for years, to be settled in Norway with protected
refugee status.
For 2015, Hero Norway expects revenue of $63 million, with profits of
3.5 percent. In the rest of Europe, where asylum seekers typically are
cared for by nongovernmental organizations such as the Red Cross, only one
for-profit is larger than the Adolfsens’ operation, ORS Services, a Swiss
company that in 2014 generated $99 million in profit caring for refugees
in Switzerland, Austria, and Germany. (ORS won’t disclose its 2015 profits.)
The Adolfsens have succeeded in part because they have a background in
hospitality. In the three decades since they founded Adolfsen Group, Kristian
and Roger have built an $800 million-a-year network of businesses that
includes preschools and nursing homes, as well as hotels, apartment buildings,
cruise lines, and ski resorts. The two entered the refugee sector in
May 2014, when they paid a Danish company, ISS Facility Services,
$22 million for Hero Norway, a 27-year-old company that ran 32 refugee
centers.
At first the Adolfsens set their sights on Sweden. Almost immediately,
though, refugee arrivals in Norway exploded, and they’ve kept arriving since. A
country of 5 million people—a relatively sleepy, snow-clad,
1,600-mile-long, lutefish-eating kingdom that had never seen more than 17,000
refugees in a single year—received more than 31,500 asylum seekers in 2015 as
Syria continued to fall apart and wars in Afghanistan, Iraq, and Eritrea drove
refugees to Europe. The Norwegian Directorate of Immigration (UDI) can’t cope
with the influx, so it’s turning to entrepreneurs, desperately, lest more
refugees sleep in the streets. “UDI calls for capitalists,” blared a recent
headline in Oslo’s Aftenposten newspaper.
For-profits now care for about 90 percent of Norway’s refugees. A
gold rush has commenced, and it’s also a bit of a circus. Just outside Oslo, a
savvy entrepreneur named Ola Moe recently rented a vacant hospital for $10,000 a
month, did minimal upgrades, and began charging the government $460,000 a month
to house and feed 200 refugees. At a refugee center in Southern Norway,
50 resident asylum seekers went on a two-hour march in November to protest
the poor food, prompting one politician, an Iranian Norwegian named Mazyar
Keshvari, to proclaim, “These ungrateful people should immediately leave the
country.”
More
I never attempt to make money on the
stock market. I buy on the assumption that they could close the market the next
day and not reopen it for five years.
Warren
Buffett.
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?
Promising new approach for controlled fabrication of carbon nanostructures
Date: January 5, 2016
Source: Institut national de la recherche scientifique -
INRS
Summary: A new strategy for fabricating atomically
controlled carbon nanostructures used in molecular carbon-based electronics has
been created by a group of researchers. The complete electronic structure of a
conjugated organic polymer, and the influence of the substrate on its
electronic properties are outlined in a new article.
An international team of researchers including Professor Federico Rosei
and members of his group at INRS has developed a new strategy for fabricating
atomically controlled carbon nanostructures used in molecular carbon-based
electronics. An article just published in the prestigious journal Nature
Communications presents their findings: the complete electronic structure
of a conjugated organic polymer, and the influence of the substrate on its
electronic properties.
The researchers combined two procedures previously developed in
Professor Rosei's lab--molecular self-assembly and chain polymerization--to
produce a network of long-range poly(para-phenylene) (PPP) nanowires on a
copper (Cu) surface. Using advanced technologies such as scanning tunneling
microscopy and photoelectron spectroscopy as well as theoretical models, they
were able to describe the morphology and electronic structure of these
nanostructures.
"We provide a complete description of the band structure and also
highlight the strong interaction between the polymer and the substrate, which
explains both the decreased bandgap and the metallic nature of the new chains.
Even with this hybridization, the PPP bands display a quasi one-dimensional
dispersion in conductive polymeric nanowires," said Professor Federico
Rosei, one of the authors of the study.
Although further research is needed to fully describe the electronic
properties of these nanostructures, the polymer's dispersion provides a
spectroscopic record of the polymerization process of certain types of
molecules on gold, silver, copper, and other surfaces. It's a promising
approach for similar semiconductor studies--an essential step in the
development of actual devices.
The results of the study could be used in designing organic nanostructures,
with significant potential applications in nanoelectronics, including
photovoltaic devices, field-effect transistors, light-emitting diodes, and
sensors.
http://www.sciencedaily.com/releases/2016/01/160105132738.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
Battery-powered train enters service
After a gap of more than 50 years, battery-powered train technology has
returned to Britain’s rail network.
Between now and the middle of February the new vehicle, known as the
Independently Powered Electric Multiple Unit (IPEMU), will run in a
weekday timetable service between Harwich International and Manningtree
stations in Essex.
Jointly developed by industry partners including train manufacturer
Bombardier, train operating company Abellio Greater Anglia, and Network Rail
the vehicle is effectively a modified version of the 379 Electrostar, the train
type currently being used on a number of routes including the Stanstead
Express.As previously reported by The Engineer the train was adapted by Bombardier and fitted with lithium (iron magnesium) phosphate and hot sodium nickel salt batteries that underwent a series of lab tests before being fitted to the train. The train’s public debut follows trials in 2014 at test tracks in Derby and Leicestershire
According to Network Rail – which has pledged to reduce the network’s running costs by 20 per cent over the next five years – the project could ultimately lead to the development of a whole fleet of battery powered-trains that could help make Britain’s rail network quieter and more efficient.
Any future IPEMU would most likely be designed as a new train and not an adapted unit, to minimise energy consumption, but this project will also provide useful information for retrofit.
The network operator has also claimed that the technology could be used to bridge gaps between electrified parts of the network and branch line where installing overhead electrification is considered to be too expensive.
The monthly Coppock Indicators finished December
DJIA: +18 Down. NASDAQ:
+110 Down. SP500: +36 Down.
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