Tuesday, 22 March 2016

Project Fear And Smear.

Baltic Dry Index. 398 +03        Brent Crude 41.66

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: Not a gentleman. Dresses too well.

With apologies to Bertrand Russell on Anthony Eden.

We open today with Brexit with Project Fear and Smear going into overdrive. Project fear and smear were out in full force this weekend and especially Monday. Nearly a million jobs will be lost in the UK. Brexit will split Europe and revive old hatreds, USA, China, Japan, all want the UK in the EU, etc. Plus over the weekend, it would take a decade or more to work out new trade arrangements if ever!

It gets sillier as REMAIN gets more desperate and the migrant situation in continental Europe keeps getting worse.  The good news, spring seems to be arriving with each day. Pussy willow catkins are starting to turn bright yellow. Early Bluebells in the warmest locations are now appearing in the woods, the rest still about 3 weeks away. Blackthorn brilliant white blossom is out in towns, and just starting to appear in rural areas, along with the early cherry blossom. Wild primroses are passing their peak, daffodils just approaching their peak. Leaves reappearing on deciduous trees. The Sun getting noticeably warmer.  Of course, all this will stop when we leave the EUSSR, never to happen again for a decade, if ever!

Ireland's Biggest Companies Begin to Feel Chill Wind of `Brexit'

March 22, 2016 — 12:01 AM GMT
Ireland’s largest companies are beginning to feel the effect of Britain’s division over whether to remain in the European Union, and it may be a taste of what’s to come for the rest of the nation.

Concern about the outcome of the U.K. referendum in June has helped push the pound down 10 percent against the euro since November. About 60 percent of Irish companies selling goods overseas are already affected, according to a national trade association.

“Sterling has deteriorated and that’s tough for Irish exporters,” Richard Pym, the English-born chairman of Allied Irish Banks Plc, said in an interview in Dublin this month. “Upon Britain leaving EU, one would anticipate that sterling would come under pressure again. ”

Almost 100 years after the rebellion that eventually led to Ireland’s breaking from the U.K. in 1922, Britain remains its biggest trading partner. A London School of Economics study last week showed Ireland would be hit the most by a U.K. exit from the EU.

With European Central Bank President Mario Draghi acting as the backstop, 10-year Irish bond yields have plunged to 0.82 percent, below those of the U.K., Spain and Italy. What’s become known as “Brexit,” though, is probably the single biggest risk facing the economy, the fastest growing in the euro region.

The question is over the EU’s integrity, according to Guillermo Hermida, who oversees 41 billion euros ($45 billion) at CaixaBank Asset Management in Madrid. Cracks in the bloc would undermine investor confidence in its weakest members, the so-called peripheral nations, he said in an interview in the Spanish capital. They include Ireland.

Below closer to reality.

EU referendum: Moody's predicts 'small' UK economic hit from EU exit

The UK economy would be hit by leaving the EU, but the impact would be "small" and unlikely to lead to big job losses, according to credit agency Moody's.

The UK could also be allowed to keep many of its trade terms with the EU so as to avoid disruption, Moody's said.

The report shows economic warnings from pro-EU groups have been "baseless scaremongering", Vote Leave said.

But the Britain Stronger in Europe group said it was further evidence that leaving would damage the economy.

The Moody's report comes after the CBI warned a British exit from the EU - known as a "Brexit" - could cost the UK economy £100bn and nearly one million jobs.

A vote to leave in the 23 June referendum would create significant uncertainty that would hamper economic growth, according to Moody's.

But the ratings agency said this would be partly offset by a decline in the pound - making UK exports more competitive - and by companies having time to adjust during UK-EU negotiations that it expects to last for at least two years.

"Our central view is that the negative economic impact of Brexit would be relatively small," the credit agency said.

As a result, Moody's would "not expect to see significant increases in unemployment or [interest] rates, or substantial declines in property prices across the UK as a whole".
Meanwhile in America, more sign of a failed lift-off. Houston we have a problem.

Existing home sales plunge 7.1% to a 3-month low in February

Published: Mar 21, 2016 10:00 a.m. ET
Existing-home sales plummeted 7.1% in February, pointing to ongoing rockiness in a housing market struggling to find its footing.

Sales ran at a seasonally adjusted annual rate of 5.08 million, the National Association of Realtors said Monday, well below the 5.3 million rate forecast by economists surveyed by MarketWatch.

February’s decline followed a strong two months. Sales surged by the most ever in December, and followed with a sturdy reading in January when most economists had expected some giveback.

Sales were 2.2% higher in February than a year ago, but the month had an extra day this year, Lawrence Yun, NAR’s chief economist, pointed out. Yun called last month’s decline “meaningful.”

At the current slow pace of sales, it would take 4.4 months to exhaust the inventory of available homes. That’s up a bit from four months in January, but still well below the six months considered to signal a healthy market.
In the currency wars, everyone’s still in denial. No one, officially, is trying to manipulate their currency to beggar their neighbour. No really.

ECB, BOJ Seeking to Push Down Exchange Rates, Mervyn King Says

March 21, 2016 — 6:59 PM GMT Updated on March 21, 2016 — 8:45 PM GMT
The European Central Bank and the Bank of Japan are essentially trying to push down the values of their respective currencies with the use of negative interest rates, former Bank of England Governor Mervyn King said.

“There are clearly limits” to the effectiveness of negative rates, King said Monday in a Bloomberg Television interview in New York with David Gura. “I think you can see with Japan and the euro area, that in essence, the central banks are trying to push down the exchange rate. Most countries in the world could say now, ‘If only the rest of the world was growing normally, we’d be fine. But since it isn’t, we aren’t. What’s left? Push down the exchange rate.’”

The ECB and BOJ contend they’re not intentionally aiming for weaker currencies with easing policies aimed at boosting growth and inflation. ECB President Mario Draghi said earlier this month that while “it is true that some of the measures have obviously a spillover on the foreign-exchange market,” the measures introduced “are entirely addressed to our economy” and that the ECB is “not in this war at all.” The BOJ has denied it’s seeking to manipulate the yen’s exchange rate.

How well GB does, whether inside or outside the EUSSR, largely depends on what happens outside the UK in the global economy. The UK is a well educated, entrepreneurial, innovative, inventive, hard working, economy, with little likely to change if the GB voters pull GB out of the EU.  But if China has a hard landing, the USA slips back into a new recession, or if the chaotic EU migrant policy drops the EU back into a recession, GB will suffer a new recession too. By some measures the UK economy may be the 5th largest in the world, but in today’s global world, that’s still not large enough by itself to be unaffected by outside events.

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

J. K. Galbraith.
At the Comex silver depositories Monday final figures were: Registered 31.70 Moz, Eligible 123.67 Moz, Total 155.37 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
In the oil patch, the bad news just keeps on coming. Even a modest bounce into the low 40s, is enough to get some USA shale oil back in production again. Just wait until Iran ramps up, Iraq hits its target and Libya returns to the market.

Dreaded 'stealth' supply becomes reality as U.S. drillers turn on 'ducks'

Mon Mar 21, 2016 6:11am EDT
A dreaded scenario for U.S. oil bulls might just be becoming a reality.

Some U.S. shale oil producers, including Oasis Petroleum (OAS.N) and Pioneer Natural Resources Co (PXD.N), are activating drilled but uncompleted wells (DUCs) in a reversal in strategy that threatens to bring more crude to a saturated market and dampen any sustained rebound in prices.

When oil prices started their long slide in mid-2014, many producers kept drilling wells, but halted expensive fracking work that brings them online, waiting for prices to bounce back.

But now, with crude futures hovering near multi-year lows and many doubting recent modest gains that brought oil prices near $40 a barrel CLc1 can hold, the backlog of DUCs is already shrinking in some areas. In key shale areas such as Eagle Ford or Wolfcamp and Bone Spring in Texas such backlog has fallen by as much as a third over the past six months, according to data compiled by Alex Beeker, a researcher at Wood Mackenzie.

"If the number of DUCs brought online is surprising to the upside, that means U.S. production won't decline as quickly as people expect," said Michael Wittner, global head of oil research at Societe Generale. "More output is bearish.”

In the Wolfcamp, Bone Spring and Eagle Ford, the combined backlog of excessive wells remains around 600, Beeker estimates.

About 660 wells could be the equivalent of between 100,000 and 300,000 barrels per day of potential new supply, according to Ed Longanecker, president of Texas Independent Producers and Royalty Owners Association (TIPRO).

For now, most of the wells are activated in Texas, where proximity to refiners allows producers to sell their crude closer to benchmark prices, and by well-hedged companies that have locked in higher prices.

Still, the pace of fracking of the uncompleted wells may quicken if cash-strapped producers facing debt repayments can no longer afford to store their oil in the ground.

While the potential additional supply is a fraction of total U.S. production of around 9 million bpd, the fresh flow would reinforce concerns about a growing global glut just as Iran ramps up output and inventories in domestic storage tanks from the Gulf to Cushing, Oklahoma, test new highs on a weekly basis.

Brexit Quote of the week.
Damn your principles! Stick to your party.

D. Cameron, with apologies to Benjamin Disraeli. 

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?

Dyson to invest £1bn into making batteries better

Alan Tovey20 March 2016 • 11:19pm
will invest £1bn in developing new battery technology by 2020 as the business best known for its vacuum cleaners branches out into new areas.

Revealing strong annual sales and profit growth, chief executive Max Conze hinted at the company’s ambitious plans.

“We have invested £100m looking at batteries in the past five years,” said Mr Conze, referring to Dyson’s research on “energy density” that hopes to deliver more powerful batteries.  “We are now stepping up that work and will spend £1bn by 2020. Solving energy density is the greatest engineering challenge in the 211st century.”

Although the fruits of the research are most likely to find early uses in making the company’s cordless products such as handheld vacuum cleaners more effective, developments could have much more significant applications.

Developing batteries that would give electric cars the same range as petrol engines is seen as the holy grail of the automotive industry, and if the company made a breakthrough that would achieve this is, it could put Dyson in pole position to dominate a massive market.

“Batteries that give two times the energy density and storage would be great for mobility of the future,” the chief executive said.

In 20014, Dyson made its first external investment, taking a stake in US group Sakti3 which is developing batteries that are lighter and more powerful than best currently available.
Mr Conze added that Dyson - which was founded by entrepreneur Sir James Dyson - had more than 50 active research projects in areas including aerodynamics, thermodynamics, sensors, robotics and artificial intelligence.
The company is preparing for the global rollout of the 360 Eye robotic vacuum cleaner which can see obstructions around it, meaning it does not bump into walls and furniture, which Dyson believes will be major seller.
Mr Conze said the advances in the new product, combined with the company’s research products, hinted at areas Dyson is considering moving into to.
“Helping robots see and understand the world around them is one of the toughest tasks around,” the chief executive said. “Our possible movements in the future might include more robots. Floors are a starting point for us and our ideas are about making that work better.”

The monthly Coppock Indicators finished February

DJIA: 16517 -23 Down. NASDAQ:  4558 +45 Down. SP500: 1932 -17 Down. 

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