Monday, 18 April 2016

Doha Fails.

Baltic Dry Index. 635 +38      Brent Crude 41.35

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

Brexit odds checker.
Brexit Quote of the Day.
Dodgy Dave Cameron: leader of the nattering nabobs of Brexit negativism.

With apologies to Spiro Agnew.
The big news this morning is that American frackers will get no relief from low crude oil prices. Another round of bankruptcies and loan defaults lies ahead in America. In the oil patch, hopium evaporated under the Doha sun.

Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran

April 17, 2016 — 7:06 PM BST Updated on April 18, 2016 — 5:17 AM BST
Oil tumbled by the most in two months after output talks Sunday between the world’s biggest producers ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.

Futures fell as much as 6.8 percent in New York, the biggest intraday drop since Feb. 1. The summit in the Qatari capital, which dragged on for more than ten hours beyond its initially scheduled conclusion, finished with no final accord. There were significant hurdles to any deal after Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said the kingdom wouldn’t restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now.

“The weekend talks are demonstration that the Saudi government, as the deputy crown prince has clearly stated, doesn’t want to cede market share,” said Ed Morse, head of global commodity research at Citigroup Inc. by phone. “They are fearful that the world may be in a weak or bearish market for a long period of time. 

In a bear market, as they learned from the 1980s, if they cede market share it is very difficult to get it back.”
West Texas Intermediate for May delivery lost as much as $2.75 to $37.61 a barrel on the New York Mercantile Exchange and was at $38.50 at 12:14 p.m. Hong Kong time. The contract fell $1.14, or 2.8 percent, to $40.36 on Friday. Total trading volume was more than fourfold the 100-day average.
Up next, yet more sign of an ailing global economy.

China's Q1 GDP posts slowest growth on record

Published: Apr 17, 2016 9:58 p.m. ET
BEIJING-- China's economy grew 1.1% from the previous quarter on a seasonally adjusted basis, the National Bureau of Statistics said on Saturday.

It was the slowest quarterly growth on record since the government started to release the quarterly figures in early 2011.

The statistics bureau also revised the on-quarter growth of the nation's gross domestic product for the fourth quarter of last year to 1.5% from an initial estimate of 1.6%.

China on Friday said its economy expanded 6.7% in the January-March period from a year earlier, a tad lower from an on-year increase of 6.8% of the previous quarter

China Spells Misery for Luxury

By Andrea Felsted Apr 15, 2016 11:32 AM GST
In a miserable week for the world's biggest makers of luxury goods, the last thing they will want to do is reach for the champagne. 

Over the past seven days, Prada posted its lowest profit in five years, while Burberry reported weaker-than-expected sales in the fourth quarter, and warned full-year profit would be at the low end of analyst estimates.

Ferrari investors gathering for the luxury carmaker's annual general meeting on Friday aren't in a much better mood: the stock has tumbled 20 percent since its initial public offering.

Even LVMH -- the owner of Moet & Chandon and Veuve Cliquot -- wasn't immune, posting weaker-than-expected sales of handbags.

It’s all an about turn from the situation two years ago, when demand for luxury goods was holding up as global economic growth slowed. Then, sales were turbocharged by Chinese shoppers snapping up everything from Swiss watches to Burberry trench coats.

LVMH, Burberry and Prada all warned fewer tourists were coming to Europe after the recent terrorist attacks in Paris and Brussels. Burberry said this was the most significant change between its third and fourth quarter. Sales from the travelling luxury consumer, particular from China, declined sharply.

Consumer spending in China appears to holding up for now -- but there's a big question mark over whether the weakness seen outside the country comes home. If that happens, the industry can expect much additional pain.

Tastes in China are changing too. Appetite for brand-heavy handbags, and bling watches isn't as ravenous it once was as the government cracks down on ostentatious consumerism. That's bad news for Ferrari, whose cars are anything but discreet.

In Europe, Merkel’s Migrant Madness is now starting to impact continental trade.

The Trucker's Nightmare That Could Flatten Europe's Economy

Three decades of borderless travel at risk with new checks — permanent curbs could cost 470 billion euros over 10 years.

April 18, 2016 — 12:01 AM BST
Peering through his rain-lashed windshield, Zoltan Unczorg alternates edgily between the brake and the gas pedal of his 18-wheeler. "It’s very tiring," the sturdy Hungarian complains as he crawls along in a line of vehicles approaching the Austria-Germany border.

After more than eight hours carrying fan parts, Unczorg has no more patience for delays. And this day was better than usual. He’s had to endure waits of about four hours at this checkpoint, set up last September to hunt for migrants on the A3 highway near the German city of Passau. It’s a route he plies daily for electric-motor maker EBM-Papst Group.

"The worst was last summer, when migrants were walking on the highway heading for Germany,” he says. “It was too dangerous to drive quickly, you could hit them by accident."

What infuriates Unczorg may herald a sea change for Europe’s economy, business and even society: the erosion of a decades-old system that has allowed borderless travel across 26 countries. Bringing back widespread controls would be a blow for the most visible - or invisible - victory in the 60-year quest for a united Europe, conceived in the rubble of World War II. Free movement in what is called the Schengen area, for the town in Luxembourg where the treaty was signed, took over where bunkers and artillery stood on the Franco-German border and guard towers and barbed wire defined the Iron Curtain between eastern and western Europe.

Now, Germany, Austria, France and Sweden, among others, have reintroduced border checkpoints in some places. They are pressured by Europe’s biggest refugee crisis since World War II - about 1 million migrants arrived in Greece and Italy in 2015 - terrorist attacks, and the growth of anti-immigration movements. But the economic cost of dumping Schengen, at a time when growth across the continent is still weak, would be massive.

A permanent return to border controls could lop 470 billion euros ($530 billion) of gross domestic product growth from the European economy over the next 10 years, based on a relatively conservative assumption of costs, according to research published by Germany’s Bertelsmann Foundation. That’s like losing a company almost the size of BMW AG every year for a decade.

The open borders power an economy of more than 400 million people, with 24 million business trips and 57 million cross-border freight transfers happening every year, the European Parliament says. Firms in Germany’s industrial heartland rely on elaborate, just-in-time supply chains that take advantage of lower costs in Hungary and Poland. French supermarket chains are supplied with fresh produce that speeds north from Spain and Portugal. And trans-national commutes have become commonplace since Europeans can easily choose to, say, live in Belgium and work in France.
We close for the day with collapsing Brazil. In its worst recession in over 100 years, with unsold Olympics tickets becoming a real concern, a health scare, a never ending growing corruption scandal, and now a likely Presidential impeachment trial in the Senate, what else could possibly go wrong for Brazil?

Rousseff Hangs by a Thread After Losing Impeachment Vote

April 18, 2016 — 3:08 AM BST Updated on April 18, 2016 — 5:10 AM BST
Dilma Rousseff’s presidency is hanging by a thread after Brazil’s lower house of Congress voted in favor of her impeachment, a decision that’s likely to cheer investors just as it threatens to bring down the curtain on 13 years of leftist rule.

The opposition garnered 367 votes, 25 more than the two-thirds majority it needed to send the impeachment motion to the Senate.

"The commencement of the impeachment process is authorized," lower house speaker Eduardo Cunha said at the end of the session that was broadcast live on public screens across the nation.

Most analysts agree it will be difficult for Rousseff to muster the votes needed in the Senate to stave off her ouster. A simple majority in the Senate is enough for her to have to step down temporarily and make way for Vice President Michel Temer. That could happen within 15 days, said Senator Romero Juca, the head of Temer’s PMDB party, the largest in the country.
Opposition legislators and a quarter of a million people on Sao Paulo’s main avenue broke into cheers, waving yellow and green flags as the panel in the lower house showed the impeachment motion had been approved.
----Two years of scandal, recession and political infighting have deeply divided Latin America’s largest nation. Markets have cheered the prospect of a more business-friendly Temer administration, prompting a 23 percent rally in the country’s benchmark stock index since the start of the year. An exchange-traded fund of Brazilian stocks jumped 4.5 percent in early Tokyo trading as the opposition extended its lead.

Yet room for stimulus measures is limited, distrust of politicians deep-seated, and the corruption scandal that rocked Brazil’s political elites far from over. Around 150 legislators in the lower house are under investigation for alleged wrongdoing, according to Congresso em Foco, a Brasilia-based publication specializing in legislative affairs. All that raises questions whether the crisis will produce a leader with the mandate needed to put Brazil back on track.

"This vote is a stinging rebuke of Rousseff and 13 years of her party’s rule," said Michael Shifter, head of the Washington-based think tank Inter-American Dialogue. "But anybody who thinks this is going to be resolved by simply ousting Rousseff is naive -- there will be social tension."

----Behind the charges of having masked budget deficits with illegal loans from state banks, opposition parties accuse Rousseff of having run the country’s public finances into the ground. Brazil’s budget deficit more than tripled since 2014 to 11 percent of gross domestic product, near a record.

Temer is not entirely untarnished either. While 61 percent of Brazilians want Rousseff to be ousted, 58 percent say the same about Temer, according to a Datafolha poll published early this month. The sweeping Carwash probe into graft has ensnared leading members of his Brazilian Democratic Movement Party, including lower house speaker Cunha, who is being investigated for accepting bribes in offshore accounts. He has denied any wrongdoing.
True, governments can reduce the rate of interest in the short run, issue additional paper currency, open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression. 
Ludwig von Mises.
At the Comex silver depositories Friday final figures were: Registered 32.68 Moz, Eligible 121.43 Moz, Total 154.11 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today Wall Street. Why do these firms still have licences?
“Call it the Goldman Sachs test. If this is something Goldman would do to its clients, don't do it."
Felix Salmon.

After Goldman’s Settlement, The Wall Street Fraud Of The Week Club Is At $200 Billion And Counting

by Contributor • April 15, 2016
In April 2006, while Goldman was preparing an RMBS backed by Countrywide loans for securitization, a Goldman mortgage department manager circulated a “very bullish” equity research report that recommended the purchase of Countrywide stock. Goldman’s head of due diligence, who had just overseen the due diligence on six Countrywide pools, responded “If they only knew …”
– Annex 1, “Statement of Facts,” Goldman Sachs/U.S. Department of Justice, April 11 2016

“In his capacity as Vice President of Credit-Risk — Quality Assurance at Wells Fargo, Lofrano executed on Wells Fargo’s behalf the annual certifications required by HUD … Moreover, Lofrano received Wells Fargo quality assurance reports identifying thousands of FHA loans with material findings — very few of which Wells Fargo reported to HUD.”
– Department of Justice press release, April 8 2016

A $5.1 billion fraud settlement from Goldman Sachs, a $1.2 billion fraud agreement with Wells Fargo – and that’s just from the past week. Over the last several years banks have paid an estimated $200 billion in fraud fines and settlements. How many settlements, how many billions, will it take to convince some fact-resistant pundits and politicians that there is an epidemic of fraud on Wall Street?

When a gullible equity research outfit recommended that investors buy into Countrywide, a Goldman executive who knew what was being kept secret wrote: “If they only knew.”

No matter how hard some politicians and press try to persuade us otherwise, the evidence shows that the banking community is rife with unpunished fraudsters. Its political influence, however, apparently remains undiminished.

The latest Goldman Sachs settlement is a case in point. While the settlement documents are somewhat obscure and difficult to read (as is typical in agreements of this kind), the facts are incontestable.

Simply put, the people at Goldman Sachs lied – a lot – to investors. The settlement included “a statement of facts to which Goldman has agreed,” meaning that its high-priced lawyers aggressively negotiated each and every word. Despite those efforts, at least some of the ugly truth comes through loud and clear. Some excerpts:

“Between December 2005 and 2007, Goldman, Sachs & Co … securitized thousands of prime, Alt-A, and subprime mortgage loans and sold the resulting residential mortgage-backed securities (“RMBS”) for tens of billions of dollars to investors nationwide … Goldman … made representations to investors in offering documents about the characteristics of the underlying loans and Goldman’s process for reviewing and approving loan originators …

“As described below, in the due diligence process, Goldman received information indicating that, for certain loan pools, significant percentages of the loans reviewed did not conform to the representations made to investors about the pools of loans to be securitized, and Goldman also received certain negative information regarding the originators’ business practices …

“Between September 2006 and 2007, certain Goldman-sponsored RMBS included a number of loans purchased from conduit originators that, at the time of securitization, had been “suspended” by Goldman. Goldman’s offering documents for those RMBS transactions did not inform investors that loans purchased from suspended conduit originators had been included in the RMBS.”

Translation: Goldman Sachs repeatedly sold mortgage risk to investors by claiming that it was making sure these mortgages were being written according to strict rules – even when it knew that they weren’t, and that a lot of the mortgages were in fact not what they claimed.

That’s fraud, plain and simple. And it gets worse. In the case of Fremont Investment & Loan, a loan originator, Goldman Sachs didn’t just fail to disclose Fremont’s bad underwriting to investors. When it learned there was a problem, Goldman “undertook a significant marketing effort” to tell investors exactly the opposite – that Fremont had a “commitment to loan quality over volume.”

A lot of people must have colluded in that fraud, but no executives have been indicted at Goldman Sachs. Nor have its leaders exhibited any shame. They have participated in charity events (including the Clinton Global Initiative), and Goldman has a strong presence in the presidential race. One candidate was paid six-figure sums to give speeches at Goldman Sachs. Another received a Goldman Sachs loan for his Senate campaign and is married to one of its executives.

Apparently fraud doesn’t carry as heavy a stigma as it once did.

Goldman Sachs still seems to have political clout, too, because that reported $5.1 billion settlement isn’t all it’s cracked up to be. As the New York Times reports, that figure is overstated by an estimated $1 billion. The watchdog group Better Markets estimates that as much as half of this settlement will be tax-deductible – meaning that taxpayers will once again foot the bill for Goldman Sachs fraud. And, as Alan Pyke reports in Think Progress, some of the actions called for by this agreement will actually benefit the bank.

As Better Markets’ Dennis Kelleher noted, “a $5 billion settlement is meaningless unless it is publicly disclosed how much money was made from the illegal conduct and the total amount of investor losses.” Kelleher also points out that the statement of facts is incomplete, that the settlement amount is trivial when compared to Goldman’s net revenue, and that “every single individual at Goldman who received a bonus from this illegal conduct not only keeps the entire bonus, but suffers no penalty at all.”
Brexit Quote of the week.

"On the whole Dodgy Dave want to be good, but not too good, and not quite all the time.”

With apologies to George Orwell.

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?

Atomically thin sensor detects harmful air pollution in the home

Date: April 16, 2016

Source: University of Southampton

Summary: Scientists have developed a graphene-based sensor and switch that can detect harmful air pollution in the home with very low power consumption.
Scientists from the University of Southampton, in partnership with the Japan Advanced Institute of Science and Technology (JAIST), have developed a graphene-based sensor and switch that can detect harmful air pollution in the home with very low power consumption.
The sensor detects individual CO2 molecules and volatile organic compound (VOC) gas molecules found in building and interior materials, furniture and even household goods, which adversely affect our living in modern houses with good insulation.
These harmful chemical gases have low concentrations of ppb (parts per billion) levels and are extremely difficult to detect with current environmental sensor technology, which can only detect concentrations of parts per million (ppm).
In recent years, there has been an increase in health problems due to air pollution in personal living spaces, known as sick building syndrome (SBS), along with other conditions such as sick car and sick school syndromes.
The research group, led by Professor Hiroshi Mizuta, who holds a joint appointment at the University of Southampton and JAIST, and Dr Jian Sun and Assistant Professor Manoharan Muruganathan of JAIST, developed the sensor to detect individual CO2 molecules adsorbed (the bond of molecules from a gas to a surface) onto the suspended graphene (single atomic sheet of carbon atoms arranged in a honeycomb-like hexagonal crystal lattice structure) one by one by applying an electric field across the structure.
By monitoring the electrical resistance of the graphene beam, the adsorption and desorption (whereby a substance is released from or through a surface) processes of individual CO2 molecules onto the graphene were detected as 'quantised' changes in resistance (step-wise increase or decrease in resistance). In the study, published today in Science Advances, the journal of the American Association for the Advancement of Science (AAAS), a small volume of CO2 gas (equivalent to a concentration of approximately 30 ppb) was released and the detection time was only a few minutes.
Professor Mizuta said: "In contrast to the commercially available environmental monitoring tools, this extreme sensing technology enables us to realise significant miniaturisation, resulting in weight and cost reduction in addition to the remarkable improvement in the detection limit from the ppm levels to the ppb levels."

The monthly Coppock Indicators finished March

DJIA: 17685.09 -18 Down. NASDAQ:  4869.85 +33 Down. SP500: 2059.74 -22 Down. 

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