Baltic Dry Index. 384 +08 Brent Crude 40.82
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Brexit odds checker. http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result
Brexit Quote of the Day.
Cameron:
He has all of the virtues I dislike and none of the vices I admire.
With
apologies to Winston Churchill.
We open with Magic Mario Madness, to match Mad
Merkel’s Madness in inviting all the world’s economic migrants to come to
Germany to settle for free benefits, housing and eventually a job anywhere in
the EU 28, including Great Britain.
Brexit doesn’t just look better by the day, it now looks like the only
option on the table. According to the most recent polls, Mad Merkel’s Party is
about to get its comeuppance in this Sunday’s regional elections in Germany.
Up first, Emperor Magic Mario’s “new clothes.” Stay
long fully paid up physical gold and silver held outside of the dodgy and flaky
financial system.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
Draghi Defines His Era With Stimulus Measures Locked Into Next Decade
March 10, 2016 — 7:58 PM GMT Updated on March 11, 2016 — 5:01 AM GMT
Whether Mario Draghi’s latest barrage of stimulus works or not, the
European Central Bank president made one thing clear on Thursday: he won’t
be the one to clean up afterward.
Instead, ultra-low interest rates that might even pay banks to receive
loans are now potentially locked in until after the Italian retires in 2019.
The ECB’s new measures have just entrenched policies designed for crisis times
into the next decade.
In the face of a global debate on whether monetary policy has lost its
effectiveness and is even planting the seeds of the next crisis, the ECB has
delivered a solid defense of the right and power of central banks to boost
growth and inflation at will. The best that can be said for euro-area
fiscal policy is that it’s not hampering the recovery, so Draghi has underlined
that he won’t wait for others to act.
“It’s hard to see what would happen with the euro-zone economy without
the ECB being there, and obviously they could do more of the same and then even
more of the same,” said Carsten Brzeski, chief economist at ING DiBa in
Frankfurt. “The situation could be that just as Draghi became governor to
reverse Trichet’s rate increase, so it’ll be up to Draghi’s successor to unwind
all the unconventional policies and rate cuts.”
Thursday’s meeting in fact helped shape the entire span of Draghi’s term
in office, reaching from his immediate reversal of his predecessor’s two 2011
rate hikes after he took charge in November that year, through the torturous
debate leading up to quantitative easing, and now embedding bank-friendly
credit policies until beyond the end.
The president announced cuts to all three of the ECB’s rates, bringing
the deposit rate to minus 0.4 percent, and a 20 billion-euro ($22 billion)
expansion of quantitative easing that for the first time opens the door to
purchases of corporate bonds. On top of that, he announced a new four-year loan
program that potentially allows banks to be remunerated for taking the ECB’s
money if they expand credit to the real economy, in a quartet of operations
stretching to 2021.
Draghi’s policy arc has been in defiance of warnings by monetary
conservatives, including those in Germany’s Bundesbank since the beginning of
his term, up to more recent calls by the Group of 20 nations to shift the
burden of growth generation away from monetary policy and toward structural
policies or more government investment.
More
Asian markets take ECB stimulus moves in stride
Published: Mar 10, 2016 11:18 p.m. ET
Asian stocks were choppy Friday as investors brushed off a bigger than
expected stimulus package from the European Central Bank.Japan’s Nikkei Stock Average NIK, +0.49% was down 0.9%, Australia’s ASX/S&P 200 XJO, +0.32% was up about 0.2%, and Korea’s Kospi SEU, +0.24% was up 0.1%.
In China, the Shanghai Composite Index SHCOMP, -0.01% was down 0.5%. Hong Kong’s Hang Seng Index HSI, +0.70% was up 0.4%.
The reaction in Asia was largely muted on rising doubts that the ECB has enough policy tools to bolster growth and inflation in the eurozone.
“Further ECB action looks unlikely until at least the second half of the year,” said Colin Graham, chief investment officer of multi-asset solutions for BNP Paribas Investment Partners. “We believe fresh steps will depend on incoming data and might well reflect lessons learned from the market reaction to the latest measures.”
The ECB on Thursday unveiled stimulus measures that were more aggressive than economists expected. The package included expanding the scope and size of the ECB’s bond purchases each month and slashing three key interest rates.
Stocks initially rallied in Europe and the U.S. on Thursday, but retreated after ECB President Mario Draghi signaled that no further rate cuts were coming in the near future due to concerns about their impact on banks.
More
Following the maxim of why keep a dog and
bark yourself, we give the final word on Mario’s madness to a real expert,
David Stockman. Besides his bark has real clout compared to my mere yapping.
“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.
Draghi’s Deadly Derangement
by David Stockman •
Yes, the man is totally deranged, and so is the entire eurozone policy
apparatus. Like much of officialdom elsewhere in the world, the ECB is
attempting to fight low growth and low inflation with monetary nitroglycerin.
Its only a matter of time before they blow the whole financial works sky high.
Low real GDP growth in the eurozone has absolutely nothing to do with
the difference between –0.3% on the ECB deposit rate versus the
new -0.4% dictate announced this morning; nor does QE bond purchases of
EUR 80 billion per month compared to the prior EUR 60 billion rate have
anything to do with it, either. The only purpose of such heavy
handed financial intrusion is to make borrowing cheaper for households and
businesses.
But here’s what the moronic Mario doesn’t get. The European private
sector don’t want no more stinkin’ debt; they are up to their eyeballs in
it already, and have been for the better part of a decade.
The growth problem in Europe is due to too much socialist welfare and
too much statist taxation and regulation, not too little private borrowing.
These are issues for fiscal policy and elected politicians, not central bank
apparatchiks.
As shown in the chart below, the eurozone private sector had its
final borrowing binge during the initial decade of the single
currency regime through 2008; debts outstanding grew at
the unsustainable rate of 7.5% annually. But since then the
eurozone private sector has self-evidently been stranded on the shoals of
Peak Debt.
Outstandings have flat-lined for the past eight years—-not
withstanding increasingly heavy doses of ECB interest rate repression that
have finally taken money market rates into the netherworld of subzero.
Nor
has the approximate EUR $700 billion of bond purchases since QE’s
inception last March made one wit of difference. Bank loans outstanding to
the private sector were EUR 10.24 trillion at the end of January or
exactly where they stood in March 2015 when Draghi and his merry
band of money printers went all in.
By the same token, it is damn obvious that low inflation is not a
problem, and that, in any event, it is not caused by lack of money printing and
insufficient interest rate repression by the goofballs assembled at the
ECB’s swell new headquarters in Frankfurt. The eurozone’s respite from its
normal 1-2% annual dose of headline inflation is entirely imported via the
global tide of plunging oil, commodities, steel and other industrial prices.
That welcome tide of imported deflation,
in turn, is actually improving the eurozone’s terms of trade and
raising consumer living standards; and it is not remotely connected to
anything the ECB has done or not done in the last year or even four years.
Instead, the global deflation is a consequence of the massive
malinvestment in mining, energy, industry, transportation and distribution
which has resulted from the 20-year global credit binge enabled by the world’s
convoy of money printing central banks. Incremental debt of $185 trillion or
nearly 4X GDP growth during that period has crushed the world’s capacity
for investment and production led growth.
The overhang of excess capacity everywhere on the planet is also
drastically compressing prices, margins and profits, but the major impact
is in the Red Ponzi and its EM supply chain; and the secondary impact is on
engineered machinery, high tech and luxury goods exporters, including Germany
and other eurozone export strongholds.
It goes without saying, however, that today’s new round of monetary
quackery by the ECB will have no impact whatsoever on eurozone export
demand from China and the EM. Not only did Draghi fail to send the Euro
careening lower, but it wouldn’t matter anyway. The barrier is not FX; the
problem is investment saturation in foreign markets that have run out
of borrowing capacity.
More.
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.
At
the Comex silver depositories Thursday final figures were: Registered 28.71 Moz, Eligible 126.37 Moz, Total 155.08 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today SOS shipping. Nothing that the ECB announced
yesterday is going to help save the shipping industry unless shipping companies
can somehow turn themselves into thieving banksters.
Too Many Boats for Too Little Cargo Leaves Shippers High and Dry
March
10, 2016 — 12:00 AM GM
Shippers
of commodities are in the midst of an unprecedented crisis as waning
Chinese growth and a surge in supply push earnings to new lows. These
charts show how it happened, how commodity shipping is collapsing and how
there’s one glimmer of hope for owners to turn things around.
In
the mid-to-late 2000s ship owners gambled that China’s economy would continue
to grow at about 10 percent a year. The result: the number of the largest
commodity carriers, called Capesizes, has almost doubled since 2008. The fleet
hit a record 1,655 vessels in early 2015 -- the same year in which the Chinese
economy grew at the slowest pace in 25 years.
Owners are now fighting for whatever market share they can get.
Clarkson
Research forecasts that this year will see a second consecutive drop in the
amount of coal and iron ore shipped around the world. Not since data going
back to 1990 has the world seen two consecutive declines in the trade of those
two key commodities. Coupled with near-record numbers of ships, that’s leading
to enormous losses for the world’s owners. Golden Ocean Group Ltd. said last
month it lost $69 million in the final quarter of 2015, versus net income of
$5.2 million a year earlier.
Slowing
demand for ships and a glut of supply can only mean one thing: record low costs
to lease them. Capesize carrier fees have been breaking new lows almost every
day this year, and now don’t even cover a third of the daily cost of their
crew. When other operating costs and financing costs are included, owners stand
to lose around $14,000 a day per ship.
When
you’re making a loss on every transaction, it might seem like a good idea to
sell some ships to raise capital. But in the Capesize market, carrier prices
have plunged. A ship that would have cost $65 million in 2014 would now cost
just $35 million. That leaves owners, some of whom borrowed to buy, with an
even trickier predicament when trying to stabilize their finances.
The
five largest publicly traded shipping companies with fleets dominated by
dry-bulk carriers, according to Clarkson data, are almost all down in the past
six months, a $1.3 billion decline in total market value. Only Taiwan’s Wisdom
Marine Lines Co. matches the performance of the MSCI All Country World Index, a
result of buying energy-saving Japanese-made vessels that can get a better leasing
contract price, according to Yukai Tsai, an analyst at
Jih Sun Securities Investment Consulting.
More
There is no means of avoiding the final collapse of a boom brought
about by credit expansion. The alternative is only whether the crisis should
come sooner as the result of a voluntary abandonment of further credit
expansion, or later as a final and total catastrophe of the currency system
involved.
Ludwig
von Mises.
Brexit
Quote of the week.
Cameron:
He knows nothing and thinks he knows everything. That points clearly to a
political career.
With
apologies to George Bernard Shaw
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?
Red wonder: Chemists pave way for phosphorus revolution
Date:
March 9, 2016
Source:
Florida State University
Summary:
Researchers have discovered a way to safely activate red phosphorus, an element
that will be critical in the creation of new electronics and the materials of
the future.
Florida State University researchers have discovered a way to safely
activate red phosphorus, an element that will be critical in the creation of
new electronics and the materials of the future.
The discovery, which details the process to activate red phosphorus
using inexpensive and widely available potassium ethoxide dissolved in ethanol,
was achieved by FSU Professor of Chemistry and Biochemistry Michael Shatruk,
FSU postdoctoral researcher Alina Dragulescu-Andrasi, former FSU Professor of
Chemistry Tyler McQuade, and Zane Miller, who recently earned his doctorate
from the FSU Department of Chemistry. The research team's findings were
published in the top chemistry journal Angewante Chemie.
This research is significant because current exploration of the uses and
benefits of phosphorus are hampered by the volatile and highly flammable nature
of the white form of the element, which has been generally used as the entry to
the chemistry of phosphorus compounds in solutions.
"Activation of phosphorus is an important process for the
preparation of semiconductors and low-dimensional electronic materials,"
Shatruk said. "But industries currently have to choose between using white
phosphorus, which is very hazardous, or red phosphorus, which until now has
been considered difficult to activate at low temperatures or in large
quantities. Our new methodology removes the barriers to using red phosphorus as
the starting material and opens up a world of opportunity."
The research team was able to activate red phosphorus using inexpensive
potassium ethoxide in ethanol. The reaction can be performed with mild heating
and provides access to soluble polyphosphide compounds. Those compounds can be
used to explore the chemistry of phosphorus without the need to use flammable
white phosphorus.
Phosphorus is most commonly used in fertilizers, incendiary devices and
the production of steel, but its unique electrical properties make it a
superior rival to graphene, the current go-to element for next generation
electronics. Graphene, a single layer of graphite, is able to conduct
electricity in remarkable ways, but has properties that make it difficult to
regulate the flow of electricity and turn it on and off at will. Phosphorene, a
single layer of phosphorus that was discovered only three years ago, is also an
excellent conductor of electricity, but it allows the flow of electricity to be
controlled, making it ideal for use in future electronics.
More
Another weekend and
in my part of planet earth signs of spring are appearing everywhere. From
Bluebells now starting to shoot up in the woods, to wild primroses in full
flower, to the emerging Pussy Willow catkins. God’s sanity to mankind in our
world full of financial insanity. Have a great weekend everyone. Hopefully the
weekend that does for Germany’ Mad Merkel.
Freedom
is the right to tell people what they do not want to hear.
George
Orwell.
The monthly Coppock Indicators finished February
DJIA: 16517 -23 Down. NASDAQ: 4558 +45 Down. SP500: 1932 -17 Down.
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