Monday, 18 January 2016

Wealth Envy.

Baltic Dry Index. 373 -10        Brent Crude 28.59

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

The richest 62 people in the world now own more wealth than the bottom 50 percent of the world. 3.6 billion people.

BBC (Radio) World Service. January 18, 2016.

I have no idea if the statistic quoted above is true, but I would hope the once respected BBC would have checked it, before just putting it out to the public, Soviet Union style. I suspect that it isn’t true, but what do I know. The 2 richest people on the planet, now own more wealth than the bottom 20 percent of the planet. I just made that up, but you get the socialist wealth envy idea. If the above BBC statement is true, they should name the 62, and explain the methodology behind their assertion. If untrue, the BBC needs to apologise, fire and reform.

Below, the likely source of the BBC’s “news” assertion. If true, another unintended consequence of the Great Nixonian Error of fiat money, communist money, and why our global monetary system and central banks, need root an branch reform. If untrue, Oxfam just discredited itself yet again, with its BBC aided socialist political agenda.

Richest 1% Now Wealthier Than the Rest of the World, Oxfam Says

January 18, 2016 — 12:01 AM GMT
The richest 1 percent is now wealthier than the rest of humanity combined, according to Oxfam, which called on governments to intensify efforts to reduce such inequality.

In a report published on the eve of the World Economic Forum’s annual meeting in Davos, Switzerland, the anti-poverty charity cited data from Credit Suisse Group AG in declaring the most affluent controlled most of the world’s wealth in 2015. That’s a year earlier than it had anticipated.

Oxfam also calculated that 62 individuals had the same wealth as 3.5 billion people, the bottom half of the global population, compared with 388 individuals five years earlier. The wealth of the most affluent rose 44 percent since 2010 to $1.76 trillion, while the wealth of the bottom half fell 41 percent or just over $1 trillion.

The charity used the statistics to argue that growing inequality poses a threat to economic expansion and social cohesion. Those risks have already been noted in countries from the U.S. to Spain, where voters are increasingly backing populist political candidates, while it’s sown tensions on the streets of Latin America and the Middle East.

“It is simply unacceptable that the poorest half of the world’s population owns no more than a few dozen super-rich people who could fit onto one bus,” said Winnie Byanima, executive director of Oxfam International. “World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action.”

Oxfam said governments should take steps to reduce the polarization, estimating tax havens help the rich to hide $7.6 trillion. Politicians should agree on a global approach to ending the practice of using offshore accounts, it said.

World's Richest Down $305 Billion as Markets Extend Global Rout

January 15, 2016 — 10:33 PM GMT
Plunging stock markets are exacting a toll on the world’s biggest fortunes.

The 400 richest people have lost $305 billion from their combined net worth this month as global equities tumbled for the worst start to a year on record on mounting concern that worldwide growth is faltering.

The billionaires lost more than $115 billion this week, with 76 taking hits of at least $1 billion in January, according to the Bloomberg Billionaires Index. Seven shed more than $1 billion on Friday alone as the Dow Jones Industrial Average sank 391 points, European stocks fell into a bear market and the Shanghai Composite Index wiped out gains from an unprecedented state-rescue campaign.

Next how low can the sinking Baltic Dry Index go? I have no idea either, but it and other shipping indexes like Harpex, (
seem to be signalling that the next global recession has arrived. In which case a great Armada of corporate ships will sink under accumulated corporate debt, much of it malinvested in the Commodity Supercycle bubble, and in buying back  stock to doctor the now collapsing share price.

Mideast Stocks Plummet as Iran Plans to Boost Crude Exports

January 17, 2016 — 5:56 AM GMT Updated on January 17, 2016 — 2:43 PM GMT
Stocks across the Middle East tumbled as the easing of sanctions against Iran raised the prospect of a surge in oil supplies to a market already reeling from the lowest prices in more than a decade. Shares in Tehran gained.

Saudi Arabia’s Tadawul All Share Index dropped 5.4 percent to its lowest level since March 2011. Abu Dhabi’s ADX General Index fell into a so-called bear market. The Bloomberg GCC 200 Index, which tracks 200 of the six-nation Gulf Cooperation Council’s biggest companies, traded at 9.5 times estimated 12-month earnings, the lowest in almost seven years. Iran’s TEDPIX Index climbed 0.9 percent, according to data on the bourse’s website, extending Saturday’s 2.1 percent advance.

Iran, home to almost 10 percent of the world’s proven oil reserves, is starting preparations to boost exports after the United Nation’s nuclear agency on Saturday said the country has complied with the terms of an international agreement to curb its nuclear program. That threatens to put further pressure on prices, hurting the oil-dependent economies of the GCC.

"Iranian oil supply will come to the market as early as today or tomorrow," said Nayal Khan, the Riyadh-based head of institutional equities sales trading at Saudi Fransi Capital. "The market’s recovery will depend on whether we can get oil back above $30."

Iran is targeting an immediate increase in shipments of 500,000 barrels a day, Amir Hossein Zamaninia, deputy oil minister for commerce and international affairs, said on Sunday. It plans to add another half million barrels within months.

Asian shares drop to 2011 levels as oil slump intensifies

Mon Jan 18, 2016 12:49am EST
Asian shares slid to their lowest levels since 2011 on Monday after weak U.S. economic data and a massive fall in oil prices stoked further worries about a global economic downturn.

Spreadbetters expected a subdued open for European shares, forecasting London's FTSE .FTSE to open modestly higher while seeing Germany's DAX .GDAXI and France's CAC .FCHI to start flat-to-slightly-weaker.

Crude prices faced fresh pressure after international sanctions against Iran were lifted over the weekend, allowing Tehran to return to an already over-supplied oil market. [O/R]

Brent oil futures LCOc1 fell below $28 per barrel LCOc1, touching their lowest level since 2003.

"Iran is now free to sell as much oil as it wants to whomever it likes at whatever price it can get," said Richard Nephew, program director for Economic Statecraft, Sanctions and Energy Markets at Columbia University's Center on Global Energy Policy.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell to its lowest since October 2011 and was last down 0.5 percent.

Japan's Nikkei .N225 tumbled as much as 2.8 percent to a one-year low. It has lost 20 percent from its peak hit in June, meeting a common definition of a bear market.

Storm clouds gather again as Obama prepares to leave

American commentators relentlessly push a ‘China-led slowdown’ narrative, but the US is a relatively insulated economy

‘The United States of America, right now, has the strongest, most durable economy in the world.” So said Barack Obama last week, in his final State of the Union address.

With elections this coming November, this two-term president is now in his last year in office. So what is Obama’s economic legacy? And just how strong is the US economy today?

Obama entered the White House in January 2009, in the midst of America’s worst financial crisis in decades. As his presidency starts to draw to a close, the economic storm clouds are gathering once more.

The US stock market, like its British, European and Chinese counterparts, has endured some stomach-churning drops so far this year. The latest was on Friday, when the Dow Jones Industrial Average, having rallied the day before, plunged 300 points soon after opening, on a slew of bad economic data.

On the surface, as James Dimon said last week, the US economy “still looks OK”. The boss of JP Morgan Chase cited average GDP growth of 2pc to 2.5pc over the last five years and strong job creation. “Obviously it’s going to get worse, though,” he added, almost as an afterthought. It appears, after years of soaring stock prices, that even the tub-thumping titans of Wall Street are now losing faith in the biggest economy on earth.

America’s mighty consumers are curbing their spending, despite months of falling oil prices helping to cut the cost of motoring and heating their homes. Retail sales fell 0.1pc in December, we learnt at the end of last week, as Department of Commerce data showed sales up just 2.1pc during 2015 as a whole, the weakest increase in six years.

Consumption, of course, is a key driver of the US economy. Accounting for over two thirds of GDP, it has helped the economy to keep growing in recent quarters, despite the impact of a stronger dollar on US exports.

Industrial production, meanwhile, was down 0.4pc in December, having dropped 0.9pc the month before, according to the Federal Reserve. Over the fourth quarter as a whole, this vital indicator fell at an annual rate of no less than 3.4pc.

The US manufacturing sector is now officially in recession, with the ISM manufacturing index dropping to 48.2 in December, pointing to a countrywide contraction. The bellwether New York manufacturing index, released on Friday, showed activity plunging more sharply than at any time since 2009 – the epicentre of the financial crisis.

We end for the day looking to China. But how many inside or outside China will believe the Chinese statistics?

Beyond the Headlines: Five Things to Watch in China's GDP Report

January 17, 2016 — 4:01 PM GMT
While Chinese stocks have whipsawed investors, growth in the world’s second-largest economy is still forecast to come in just under the government’s 7 percent target.

The nation’s fourth quarter and full-year gross domestic product report will be released Tuesday at 10 a.m. in Beijing, or 9 p.m. Monday on Wall Street. Economic growth for the quarter and year were both 6.9 percent, according to a Bloomberg survey of economists as of late Friday.

The stakes are high, and not just for policy makers’ credibility: Data showing a sharper slowdown may spur more fiscal and monetary stimulus, while a stronger reading may provide a tonic for jittery global markets concerned about China’s outlook. Policy makers have signaled they’ll allow some slowness as they tackle painful tasks like reducing excess capacity, but nothing that could threaten President Xi Jinping’s goal of at least 6.5 percent growth through 2020.

Aside from the headline growth rates, a closer examination of the report will help gauge the health of various facets of the economy.

By calculating the difference between nominal growth (not adjusted for inflation or deflation), and real growth (which is adjusted), we’ll be able to see the latest on the GDP deflator, which was negative in the first nine months of last year.

Deepening deflation, stemming from a record stretch of more than three years of producer-price declines, would be a negative sign for an economy grappling with slowing profits and rising debts -- both of which are also priced in nominal terms.

Rapid income growth over the last decade has made Chinese consumers an increasingly powerful force, snapping up Apple iPhones, Tiffany diamonds and Toyota sedans. Fresh evidence of that ascent will be revealed this week in a section of the GDP report on per capita disposable income.

"In economics, hope and faith coexist with great scientific pretension."

J. K. Galbraith

At the Comex silver depositories Friday final figures were: Registered 36.19 Moz, Eligible 122.86 Moz, Total 159.06 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
In the failing USA oil patch, the non-performing loan cover up has started, led apparently by none other than the Dallas Fed. Beijing would be proud. Coming next, executive disappearances in Houston? In the Fed’s casino, not all gamblers are equal. Presumably the Fed is relying on the Patriot Acts which allow among many other horrors, in time of national crisis, false accounting.  Just how bad are America’s frackers and the banks and hedge funds that funded them? The dollar is now as sound as a euro or yuan. In the City of London, things never change.

“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.

Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears

Tyler Durden
----We can now make it official, because moments ago we got confirmation from a second source who reports that according to an energy analyst who had recently met Houston funds to give his 1H16e update, one of his clients indicated that his firm was invited to a lunch attended by the Dallas Fed, which had previously instructed lenders to open up their entire loan books for Fed oversight; the Fed was shocked by with it had found in the non-public facing records. The lunch was also confirmed by employees at a reputable Swiss investment bank operating in Houston.

This is what took place: the Dallas Fed met with the banks a week ago and effectively suspended mark-to-market on energy debts and as a result no impairments are being written down.
Furthermore, as we reported earlier this week, the Fed indicated "under the table" that banks were to work with the energy companies on delivering without a markdown on worry that a backstop, or bail-in, was needed after reviewing loan losses which would exceed the current tier 1 capital tranches.

In other words, the Fed has advised banks to cover up major energy-related losses.

 Why the reason for such unprecedented measures by the Dallas Fed? Our source notes that having run the numbers, it looks like at least 18% of some banks commercial loan book are impaired, and that’s based on just applying the 3Q marks for public debt to their syndicate sums.

In other words, the ridiculously low increase in loss provisions by the likes of Wells and JPM suggest two things: i) the real losses are vastly higher, and ii) it is the Fed's involvement that is pressuring banks to not disclose the true state of their energy "books."

Naturally, once this becomes public, the Fed risks a stampeded out of energy exposure because for the Fed to intervene in such a dramatic fashion it suggests that the US energy industry is on the verge of a subprime-like blow up.

Putting this all together, a source who wishes to remain anonymous, adds that equity has been levitating only because energy funds are confident the syndicates will remain in size to meet net working capital deficits.
Which is a big gamble considering that as we firsst showed ten days ago, over the past several weeks banks have already quietly reduced their credit facility exposure to at least 25 deeply distressed (and soon to be even deeper distressed) names.

Biggest Banks Rue Millions Lost on Trader Who Failed Before

January 18, 2016 — 1:00 AM GMT
BNP Paribas SA and Nomura Holdings Inc. are among five banks nursing losses of about 120 million pounds ($171 million) on the demise of an obscure bond-trading firm called Invexstar Capital Management Ltd. They shouldn’t be surprised.

Alberto Statti, 49, Invexstar’s manager and sole employee, helped run two firms before the London-based brokerage foundered last year. One ceased trading in 2008 with losses of 54 million pounds, while the other collapsed in 2013, owing about 12 million pounds to creditors including JPMorgan Chase & Co., according to filings with the U.K.’s Companies House.

While the losses on Invexstar represent just a sliver of the banks’ multi-billion dollar trading operations, the episode raises questions over how they manage risk. The banks built up exposure to the company, which began trading bonds in 2014 and went under last May, at a time when record-low interest rates were curbing activity in the debt markets.

“I’m blown away by the whole thing,” said Christopher Wheeler, a banking analyst with Atlantic Equities LLP in London. “The desire to boost revenues and turnover in the fixed-income business perhaps blurred and clouded judgments.”

The officials winding down Invexstar estimated the banks’ combined losses at 97.6 million pounds in July, a figure that swelled to about 120 million pounds in October, according to filings with Companies House. BNP Paribas, based in Paris, was owed 49 million pounds in July and Tokyo-based Nomura 28 million pounds, while New York-based Morgan Stanley, ING Groep NV of the Netherlands and Japan’s Mizuho Financial Group Inc. also faced losses, the filings show.

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

J. K. Galbraith.

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?

Fast, accurate DNA sequencing through graphene nanopore

Date: January 15, 2016

Source: National Institute of Standards and Technology (NIST)

Summary: A new concept has been developed for rapid, accurate gene sequencing by pulling a DNA molecule through a tiny, chemically activated hole in graphene -- an ultrathin sheet of carbon atoms -- and detecting changes in electrical current.
Researchers at the National Institute of Standards and Technology (NIST) have simulated a new concept for rapid, accurate gene sequencing by pulling a DNA molecule through a tiny, chemically activated hole in graphene--an ultrathin sheet of carbon atoms--and detecting changes in electrical current.
The NIST study suggests the method could identify about 66 billion bases--the smallest units of genetic information--per second with 90 percent accuracy and no false positives. If demonstrated experimentally, the NIST method might ultimately be faster and cheaper than conventional DNA sequencing, meeting a critical need for applications such as forensics.
Conventional sequencing, developed in the 1970s, involves separating, copying, labeling and reassembling pieces of DNA to read the genetic information. The new NIST proposal is a twist on the more recent "nanopore sequencing" idea of pulling DNA through a hole in specific materials, originally a protein. This concept--pioneered 20 years ago at NIST--is based on the passage of electrically charged particles (ions) through the pore. The idea remains popular but poses challenges such as unwanted electrical noise, or interference, and inadequate selectivity.
By contrast, NIST's new proposal is to create temporary chemical bonds and rely on graphene's capability to convert the mechanical strains from breaking those bonds into measurable blips in electrical current.
"This is essentially a tiny strain sensor," says NIST theorist Alex Smolyanitsky, who came up with the idea and led the project. "We did not invent a complete technology. We outlined a new physical principle that can potentially be far superior to anything else out there."

The monthly Coppock Indicators finished December

DJIA: +18 Down. NASDAQ: +110 Down. SP500: +36 Down. 

No comments:

Post a Comment