Baltic Dry Index. 335 +03 Brent Crude 37.04
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.
There
are three kinds of lies: lies, Euro lies, and EUSSR statistics.
With
apologies to Benjamin Disraeli.
We open today with Asia and yet more sign of rising disconnect between
stock markets and a slowing global economy stumbling towards recession. In
Japan insanity rules. Japan keeps doing the same thing over and over again and
expecting a different result.
Japanese households urged to take ‘bold steps’ to help economy
Published: Mar 2, 2016 10:28 p.m. ET
TOKYO — A Bank of Japan deputy governor said he wants companies and
households to take “bold steps” to help bring the economy back to prosperity,
as the central bank continues to struggle to rejuvenate listless growth and
inflation.
“I hope that households and firms will take bold steps towards economic
prosperity, making full use of the current financial environment, which is more
accommodative than ever,” Hiroshi Nakaso said in a speech to executives in
Okinawa prefecture.
Nakaso also called on the government to move more quickly in tackling
structural impediments in the economy.
“I expect the original third arrow of Abenomics, the growth strategy, to
fly higher and faster,” Nakaso said as he referred to Prime Minister Shinzo
Abe’s “three arrow” growth-revival plan.
Monetary easing by the Bank of Japan is the first arrow, flexible fiscal
policy is the second.
S&P: Large Japan economic stimulus would raise concerns
Japan's government is unlikely to be able to launch a stimulus package
to support its struggling economy without raising concerns about the size of
its spending, ratings agency Standard & Poor's said on Wednesday.
Faced with a flagging economy, Japan is laying the groundwork for new
government spending to pre-empt any weakness in household consumption, which
would add to its already heavy debt burden.
S&P cut its rating on Japan from AA- to A+ in September, which is
four notches below its top rating of AAA, because it doubts the government can
reverse the country's economic deterioration. The agency also raised its
outlook to stable from negative.
"The size of any stimulus will have to be carefully calibrated. At
this point I don't think the government can put out a package big enough to
support the economy without triggering concerns," Kim Eng Tan, S&P's
Asia-Pacific senior director of sovereign ratings, said in an interview.
Tan said continued yen strength could remove the external support, such
as the receipts inbound tourism bring in, which Japan's budget balance enjoys.
If domestic demand and inflation are unable to make up for the loss of this
external support, the fiscal balance could again deteriorate and pose a credit
negative factor in the long run, he added.
---- Japan plans to increase its sales tax in April 2017 and that would lift government revenue and lower its outstanding debt burden. Speculation has lingered among some market players, however, that Japan could postpone hiking taxes amid worsening demand.
"It really depends on the economic situation at that time. If you
introduce a consumption tax hike when the economy is already weak or heading
downwards, you are worsening the economic trend. You may not bring in that much
revenue," Tan said.
Japanese government bond yields through the 10-year maturities have sunk
to record lows below zero percent under the Bank of Japan's negative interest
rate policy, introduced in January, potentially lightening the government's
debt-servicing cost.
"In the short term, it can definitely reduce the government's
financing cost, but whether it does so in the long term depends on people's
continued confidence in monetary policy," Tan said.
More
Singapore's PMI slips on weaker demand
Published: Mar 2, 2016 11:21 p.m. ET
SINGAPORE--An indicator of Singapore's business activity slowed down in
February from the previous month, as overseas demand weakened and output
expanded at its slowest pace since October 2013 as new orders rose only
marginally.
The Nikkei Purchasing Managers Index, which measures private-sector and
manufacturing activity, was at 51.6 in February, from 52.5 a month earlier. A
reading above 50 indicates an expansion in manufacturing activity, while a
reading below that signals contraction.
The Nikkei PMI, which is the outcome of a private survey by Nikkei and
research firm Markit, is higher than the 48.5 PMI reading for February from the
Singapore Institute of Purchasing & Materials Management.
Operating conditions faced by Singaporea's private-sector companies
improved at the slowest pace in four months in February, it added.
"The headline PMI indicated only a modest improvement in Singapore
private sector operating conditions during February, as the pace of output
growth weakened to 28-month low and new order books expanded only
slightly," Annabel Fiddes, Economist at Markit said.
She
said the latest data also indicated that external demand showed signs of
weakening, with new export work rising at a much slower pace than at the start
of the year.
Moody's cuts China outlook on eve of NPC, cites reform, fiscal risks
Moody's downgraded its outlook on Chinese government debt to "negative"
from "stable" on Wednesday, citing uncertainty over authorities'
capacity to implement economic reforms, rising government debt and falling
reserves.
The Moody's downgrade comes just days before the National People's
Congress (NPC) is due to vote on China's 13th five year plan, a closely held
development blueprint for the next five years, which policymakers began
formally drafting in 2015.
Analysts will closely scrutinize the NPC's final text for hints on the
likely trajectory of reform and policymakers' thinking on the appropriate
growth strategy for China - key factors highlighted by Moody's in the report
issued on Wednesday.
"Without credible and efficient reforms, China's GDP growth would
slow more markedly as a high debt burden dampens business investment and
demographics turn increasingly unfavorable. Government debt would increase more
sharply than we currently expect," Moody's said.
The agency said its rating committee had discussed China's status at a
meeting on Feb. 9, during which the country's institutional and fiscal
strength, as well as its susceptibility to event risk, were reviewed.
The agency said the downgrade was driven by expectations that China's
fiscal strength will continue to decline, as well as the fall in its foreign exchange
reserves which have shrunk by $762 billion over the last 18 months.
---- Moody's, however, retained China's
Aa3 rating, noting the country's sizeable reserves gave it time to implement
reforms and gradually address economic imbalances.
But the agency warned that it could further downgrade China's rating if
it saw slowing down of reforms needed to support sustainable growth and to
protect the government's balance sheet.
More
In EUSSR news, it’s the same old bad news story. Just don’t let on to the “stay” Muppets or the Prime Minister.
Fresh recession will cause eurozone collapse, warns French bank
Mehreen Khan2 March 2016 •
12:59pm
A new recession in Europe could lead to the collapse of the
eurozone, as the single currency would buckle under the political turmoil
unleashed by a fresh downturn, a leading investment bank has warned.
In a research note titled "Close to the edge", economists at
French bank Credit Suisse warned the fate of monetary union hangs in the
balance if Europe's policymakers are unable to ward off another global
slump and keep in check anti-euro populism.
"The viability of the euro is contingent on the current
recovery," said Peter Foley at Credit Suisse.
"If the euro area were to relapse back into recession, it is not
clear it would endure."
Although the bloc's nascent recovery was likely to persist in the coming
months, Credit Suisse said there were worrying signs of deterioration
emanating from Europe's economies. These include heightened
credit stress in the banking sector and market volatility.
"The near-term outlook for economic activity, as well as the risks
around it, has shifted materially downwards," said the seven-page
report.The eurozone's 19 member states only managed to grow by 0.3pc in the last three months of 2015, despite asset purchases from the European Central Bank and the collapsing price of oil.
More
Euro depression is 'deliberate' EU choice, says former Bank of England chief
Mehreen Khan1 March 2016 •
9:46pm
Europe's deep economic malaise is the result of "deliberate"
policy choices made by EU elites, according to the former governor of the Bank
of England.Lord Mervyn King continued his scathing assault on Europe's economic and monetary union, having predicted the beleaguered currency zone will need to be dismantled to free its weakest members from unremitting austerity and record levels of unemployment.
Speaking at the launch of his new book, Lord King said he could never have envisaged an economic collapse of the depths of the 1930s returning to Europe's shores in the modern age.
But the fate of Greece since 2009 - which has suffered a contraction eclipsing the US depression in the inter-war years - was an "appalling" example of economic policy failure, he told an audience at the London School of Economics.
"In the euro area, the countries in the periphery have nothing at
all to offset austerity. They are simply being asked to cut total spending
without any form of demand to compensate. I think that is a serious problem.
"I never imagined that we would ever again in an industrialised
country have a depression deeper than the United States
experienced in the 1930s and that's what's happened in Greece.
"It is appalling and it has happened almost as a deliberate act of
policy which makes it even worse".
Lord King - who spent a decade fighting the worst financial crisis in
history at the Bank of England - has said the weakest eurozone members face
little choice but to return to their national currencies as "the only way
to plot a route back to economic growth and full employment".
"The long-term benefits outweigh the short-term costs," he
writes in The End of Alchemy.
The former Bank governor has said popular disillusion with
EU economic policies are likely to lead to disintegration of the single
currency rather than a move towards "completing"
monetary union.
Two of the eurozone's debtor nations - Ireland and Spain - are currently locked
in electoral stalemate after their pro-bail-out governments failed to win
the backing of voters.
More
Cameron: I'm innocent till I'm proved guilty.
This is a free country. The law is impartial.
Juncker: Who's been filling your head with that rubbish?
Cameron: I can't be had for anything. You've no proof.
Juncker: When I make out my report I shall say you've given me a
confession. It could prejudice your case if I have to forge one.
With apologies to Joe Orton
and Loot.
At
the Comex silver depositories Wednesday final figures were: Registered 24.79 Moz, Eligible 127.77 Moz, Total 152.56 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, China 2016.
Overcapacity in China: An Impediment to the Party’s Reform Agenda
The European Chamber of Commerce in China has released a new major report that addresses the problems arising from increased overcapacity in China’s industrial economy. Overcapacity in China: An Impediment to the Party’s Reform Agenda provides a detailed examination of the causes and consequences of overcapacity in eight key industries and analyses the developments that have taken place since the European Chamber published its original report on this topic in 2009.The new report explains how central government efforts to address excessive production capacity have been ineffectual due to regional protectionism, weak regulatory enforcement, low resource pricing, misdirected investment, inadequate protection of intellectual property rights and an emphasis on market share.
The report provides 30 recommendations that should be taken to address this deep-rooted problem. The European Chamber hopes that they will also contribute to a strengthening of the government’s resolve to implement the core tenet of the Third Plenum’s Decision – establishing the market as the decisive force in China’s economy.
Please click here to view English press release or click here to view the Chinese version.
---- Overcapacity has
been a blight on China’s industrial landscape for many years now, affecting
dozens of industries and wreaking far-reaching damage on the global economy in
general, and China’s economic growth in particular. Yet when the European
Chamber released its first report on this topic in 2009, it was a
seldom-examined phenomenon. Unfortunately, during the last six years,
overcapacity in China has only continued to worsen.
The
scale of overcapacity in China’s steel, aluminium and cement industries
highlights the severity of the problem: steel production has become completely
untethered from real market demand, and is now more than double the combined
production of the four next leading producers: Japan, India, the United States
(US) and Russia;2 in China’s aluminium industry, 60 per cent of production
capacity has negative cash flow;3 and according to data from China’s National
Bureau of Statistics and the US Geological Survey, in just two years—2011 and
2012—China produced as much cement as the US did during the entire 20th
century.
Due
to the effect of overcapacity on industry profits, and in conjunction with weak
commodity and energy prices, during the 45 months up to December 2015, China
saw its producer price index continually decline.4 This trend has seriously
influenced the profitability of China’s industrial producers.
More
China's National People's Congress: What You Need to Know
March 2, 2016 — 10:00 PM GMT
Each year, some 3,000 of China’s most powerful officials descend on
Beijing for about 10 days of parliamentary pageantry known as the National
People’s Congress.
While the country’s top legislature is constitutionally charged with
vast powers, the mechanics of one-party rule ensure most important decisions
are hashed out in closed-door Communist Party meetings long before reaching the
floor. That said, the public proceedings at the Great Hall of the People
represent the one time each year that many of the people who run the world’s
second-largest economy face the press, providing rare insight into their
thinking and policy plans.
This year’s NPC consists of 2,943 party chiefs, government officials,
company executives and military commanders hailing from 35 constituencies,
including provinces, regions, municipalities and the semi-autonomous former
colonies of Hong Kong and Macau. Members include everyone from so-called
model workers to President Xi Jinping.
Delegates have even been assigned to represent Taiwan, which China still
considers a province even though it’s been ruled independently for almost seven
decades. The party officially holds 72 percent of the seats, with the remainder
occupied by eight authorized "non-Communist" parties and people with
no affiliation. In reality, only one party picks the delegates.
More
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?
Stanford Researchers Build Solar-Powered Battery Using Simple Metal Oxides
Published on February 26, 2016 at 11:10 AM
An economy that depends solely on fossil fuels seems unsustainable in the current global scenario. Oil prices are crashing, and supplies of coal, oil, and similar fuels are limited.
The situation is complicated further with the rising issues related to
global warming. The leading solution is limitless solar power, however there is
the issue of storing and supplying solar energy when sunlight is not available.
According to energy experts solar power has to be made
"dispatchable" by engineers, meaning the it requires the ability to
increase or decrease power output based on demand. Recently a team of researchers
headed by William Chueh, an assistant professor of materials science and
engineering, and Nicholas Melosh, an associate professor in the same
department, have made a breakthrough which may make large-scale storage of
solar power a reality.
The team discovered that common metal oxides, such as rust, can be used
to form solar cells that can split water into oxygen and hydrogen. Using solar
cells to split H2O by day is one method to store energy to use at
night. The photons trapped by the cell are converted into the electrons, which
supply the energy to split water.
Energy can be reclaimed by recombining oxygen and hydrogen at night.
Then it can be "dispatched" back into the electrical grid. No fossil
fuels need to be burnt and no excess carbon is released into the atmosphere.
The concept of metal oxides possessing solar power potential was already
known However compared to silicon solar cells, metal oxide solar cells were
also identified as being less efficient at converting photons to electrons.
A report in the Energy & Environmental Science journal stated that
metal oxide solar cells were a better option for energy storage. The Stanford
team illustrated that when the metal oxide solar cells grew hotter, they tend
to convert photons into electrons in a more efficient manner. It is exactly the
opposite with silicon solar cells, which tend to lose efficiency as the heat
increases.
This unanticipated breakthrough may pave the way for a radical change in
the way energy is produced, stored, and consumed.
We've shown that inexpensive,
abundant and readily processed metal oxides could become better producers of
electricity than was previously supposed. By combining heat and light, solar
water-splitting cells based on metal oxides become significantly more efficient
at storing the inexhaustible power of the sun for use on demand.
Until now it has been unfeasible to utilize water-splitting as a method
to store solar energy, as cost was an issue. Silicon-based solar cells, which
are used in rooftop solar arrays, are suitable to convert visible and UV light
into electricity. The downside is that silicon cells waste the infrared light,
which bears the heat, falling upon it.
Standard cells utilize a
relatively small portion of the spectrum, and the rest is lost as heat.
Until the Stanford discovery, metal oxides were thought to be less
efficient when they became hotter. Another reason it was not considered was due
to the fact that they were less efficient compared to silicon, which made them
unappealing as a water-splitting technology.
This misconception was rectified by the experiments conducted by the
Stanford team. They worked with three metal oxides- titanium oxide, iron oxide
(which is generally known as rust), and bismuth vanadium oxide. They tested the
efficiencies of these oxides to convert photons to electrons, and splitting
water into oxygen and hydrogen at varying temperatures.
More
The monthly Coppock Indicators finished February
DJIA: 16517 -23 Down. NASDAQ: 4558 +45 Down. SP500: 1932 -17 Down.
You'll likely fall under the occasional sales tax exemption, because most states don't require you to collect or remit sales tax if you're just trying to get rid of old items you don't want.
ReplyDeleteIssacureshi London tax specialist