Baltic Dry Index. 487 +16 Brent Crude 38.57
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.
You
will find as you grow older that courage is the rarest of all qualities to be
found in public life.
Benjamin
Disraeli.
Up first, reasons to fret over the EUSSR. A
slowing, wobbling China is impacting Germany. But with paymaster Germany’s
exports slowing, why would any of the others want to remain in a dying German
currency union? America finally gets it. Globally the real world is a
continuing car crash. Finland pays the
price for joining the Germanic euro and following EUSSR orders to start a trade
war with next door Russia, following Uncle Scam’s disastrous botched coup in
Kiev. Everyone everywhere has a reason to fret over the iron and steel
industry. Another unintended consequence of the Great Nixonian Error of fiat
money, and all the malinvestment bubbles it triggered. Just don’t let on to
Main Stream Media, nor our gormless, out of their depth, Keynesian, Goldmanite,
central banksters.
Stay long fully paid up physical gold and silver,
held outside of the financial system, as insurance against the coming tempest.
"The gold standard sooner or later will return with
the force and inevitability of natural law, for it is the money of freedom and
honesty."
Hans F. Sennholz
German Factory Orders Unexpectedly Fall on Exports Slowdown
April 5,
2016 — 7:00 AM BST Updated on April 5, 2016 — 7:32 AM BST
German factory orders unexpectedly fell in February in a sign that a global
trade slowdown is weighing on Europe’s largest economy.
Orders, adjusted for seasonal swings and inflation, dropped 1.2 percent
from the prior month, when they rose a revised 0.5 percent, data from the
Economy Ministry in Berlin showed on Tuesday. The reading, which is typically
volatile, compares with a median estimate for an increase of 0.3 percent in a
Bloomberg survey. Orders climbed 0.5 percent from a year earlier.
While Germany corporate confidence improved last month because of robust
domestic demand, exporters are struggling with a China-led slowdown in emerging
markets. Bundesbank warned last month that the nation’s growth momentum could
slow in the second quarter as weakening exports prompt companies to curb output
and hiring.
“Against the background of potential new uncertainties, the outlook for
the German industry remains anything but rosy,” said Carsten Brzeski,
chief economist at ING Diba AG in Frankfurt. “Today’s new orders were another
piece of evidence that the German industry is treading water, as it is
suffering from a cooling of global activity.”
More
U.S. Stocks Retreat as Rally Falters Amid Global Growth Concerns
April 5, 2016 — 10:57 AM BST Updated on April 5, 2016 — 9:32 PM BST
U.S. stocks fell, with the Standard & Poor’s 500 Index posting the
steepest loss in four weeks, amid simmering concerns that weakness in global
growth will deepen.Banks paced the retreat, sinking along with Treasury yields as bonds rallied on haven demand. Bank of America Corp. slid 2.4 percent. Health-care companies fell for the first time in three days, dragged lower by Allergan Plc’s 15 percent tumble after the government took steps to limit so-called inversion deals, threatening its merger with Pfizer Inc.
The S&P 500 dropped 1 percent to 2,045.17 at 4 p.m. in New York, leaving it little changed for the year and ending the longest streak of calmness in 13 months. The index’s move had been capped within 1 percent in either direction in the last 15 days, something not seen since March 2015. The Dow Jones Industrial Average fell 133.68 points, or 0.8 percent, to 17,603.32. The Nasdaq Composite Index lost 1 percent. About 7.3 billion shares traded hands on U.S. exchanges, 13 percent below the 2016 average.
“We’re stalling out,” said Michael Block, chief strategist at Rhino Trading Partners LLC in New York. “That’s part of it, and it’s being exacerbated by this continued rally in the Japanese yen and the release from the Treasury that’s causing a lot of pain in Allergan. We have Fed minutes tomorrow and the expectation is for it to be super dovish, and if it’s not then people might get confused.”
The rally that lifted the S&P 500 as much as 13 percent from a 22-month low in February has started to lose momentum, with sentiment shifting as investors assess whether central banks can fend off weakness in the global economy. Worries that a slowdown in China would spread, intensified by tumbling crude prices had sent stocks to their worst-ever start to a year.
More
Struggling Finland Is Trying to Cut Wages Without Causing a Riot
April 4, 2016 — 11:01 PM BST
At the height of the European sovereign debt crisis, internal devaluation --
economists’ jargon for "cutting wages" -- was the recipe of choice
for addressing the woes of the euro zone’s periphery.Several years on, governments with a view of the Mediterranean or the Atlantic have tried to boost competitiveness with mixed results. Crucially, those efforts have come at a high political price. Just ask the leaders of mainstream parties in Greece, Spain Portugal or Italy.
Now, Finland is having a go.
After three years of recession, and with little scope for maneuver on the spending front (the government is holding talks Tuesday on how to find extra savings worth 400 million euros, or 456 million dollars), the ruling coalition says Finland must lower labor costs or face more credit rating downgrades.
So, how do you cut your workers’ salaries without stoking anti-EU sentiments, provoking massive unrest or suffering the ultimate punishment -- being ousted from power?
4-point plan
Here’s how it’s being done in Finland by the center-right coalition government of former businessman Juha Sipila and his Brussels-savvy finance and economic ministers, Alexander Stubb and Olli Rehn:- Persuade unions that an overall cut in labor costs of around 5 percent is in their best interest, since it will eventually fuel growth by boosting exports, then gently bash their heads together with those of employers until they agree on a plan and a deadline -- in this case June 2016
- Threaten to impose measures by law if they don’t come up with a solution, but brace yourself for compromises. The Labor Pact now being completed involves shifting the onus of some social contributions to workers from employers; persuading people to work an extra 24 hours a year at the same pay; and cutting the public sector’s holiday bonuses by 30 percent
There’s a very concrete risk that reluctant unions may eventually water down and even sink the deal. Moreover, even if labor costs are actually cut by 5 percent (the current calculations point to around 4 percent), there’s no guarantee that reducing labor costs will translate into greater exports, as the demise of Nokia’s consumer electronics business has shown.
Antti Rinne of the opposition Social Democratic Party points out that "Finland’s biggest problem is that we lack companies that have products and services that are demanded in international markets."
More
240 jobs at risk in Finland as Outokumpu announces planned cuts
The stainless steel giant says it will axe up to 600 posts worldwide in a bid to become a market leader by 2020 and tackle the company’s debt burden.
5.4.2016 10:35 | updated 5.4.2016 10:37
The stainless steel giant Outokumpu has announced plans to cut up to 600
jobs, of which up to 240 are in Finland.In a statement released at the start of talks between employers and unions, the firm said it intends to axe up to 140 jobs from its Finnish operations, and outsource a further 100 posts from its production support operations in Tornio, northern Finland.
Outokumpu also said on Tuesday that it aims to become the best-value stainless steel producer by 2020, vying to increase turnover to half a billion euros and a debt-equity ratio of under 35 percent. In the interim, this means cutting net debt to 1.2 billion euros by the end of 2017.
The company’s CEO Roeland Baan said that Outokumpu is not currently performing as profitably as it should be. “While we now have a world-class industrial foundation and a robust financial position, the true profitability potential of the company is far higher than the current financial performance shows. To bridge that gap, we must significantly improve our competitiveness.”
The announcement comes after a turbulent few years for the Finnish company, which has shed thousands of jobs worldwide in a bid to tackle debts of around 3 billion euros. In 2014 Outokumpu also emerged from a decade-long series of fines and legal settlements over its part in a cartel to fix the prices of copper sanitary piping.
http://yle.fi/uutiset/240_jobs_at_risk_in_finland_as_outokumpu_announces_planned_cuts/8787793
Japan sees April-June crude steel output sinking to 7-yr low
That would come as the latest in a series of signals of economic slowdown, clouding the outlook for Prime Minister Shinzo Abe's drive to reflate the economy and spurring calls for more monetary stimulus.
The Ministry of Economy, Trade and Industry (METI) estimated crude steel output would sink to 25.24 million tonnes in April-June, the lowest output for the quarter since 2009 when steel demand was hit hard by the global financial crisis. Against the previous quarter, output is seen falling 3.1 percent, it said, citing an industry survey.
Demand for steel from the construction sector is forecast to slide 3.1 percent from a year earlier, while demand from manufacturing is seen dropping 1.7 percent for the quarter.
"Construction demand for distribution warehouses is fairly solid, but demand for civil engineering and new shops is sluggish," Takanari Yamashita, director of METI's iron and steel division, told a news conference.
"Automobile and electronics segments are likely to see a pick up in demand, but industrial machinery is expected to stay under pressure," he said.
Slack steel demand elsewhere in Asia and anti-dumping steps taken by many countries will drag on exports, while slow demand for energy-related steel products such as drilling pipes in the wake of plunging oil prices will add to pressure, he said.
Demand for steel products, including those for export, is forecast to sink 3.8 percent to 22.91 million tonnes in April-June compared with a year earlier. Steel product exports are expected to decline 6.3 percent.
More
Next, the IMF frets over China. It’s late in the day for this “recovery” from the Great Recession, and the wheels are now starting to fall of practically everything in China.
China jitters could trigger global market bloodbath, IMF warns
Szu Ping Chan4 April 2016 •
2:55pm
Jitters over the health of the Chinese economy could trigger a
bloodbath on financial markets if a hard landing materialises, the
International Monetary Fund has warned.
The IMF said policy choices in the world's second largest economy
would also have "increasing implications for global financial
stability" in the coming years as the country opens up its bond and equity
markets.
The fund said emerging market economies such as China, India, Brazil
and Russia had driven more than half of global growth over the past
15 years.
Stronger trade ties and financial
linkages meant spillovers from these countries had become "the norm,
not the exception", increasing the risk that future shocks could send
powerful reverberations around the globe.The IMF calculated that emerging market spillovers now accounted for a third of the fluctuations seen in equity and currency markets in advanced nations.
Highlighting last summer's massive stock market sell-off after China devalued its currency, the IMF noted that Chinese growth had an "increasing" and "significant" impact on global equity prices.
"The impact of shocks to China's fundamentals on global financial markets is expected to grow stronger and wider over time," the Fund said in a pre-released chapter of its Financial Stability report.
"Clear and timely communication of its policy decisions, transparency about its policy goals, and strategies consistent with achieving them will, therefore, be essential to ensure against volatile market reactions, which may have broader repercussions."
The IMF also
urged policymakers to do more to rein in corporate debt, which it has
previously said could see a wave
of defaults as the US hikes interest rates.
More
Up next the troubled iron and steel sector in
general. Based on iron ore shipments from Australia to China, there’s no sign of
any cutback coming in China’s steel production. The Great China Steel dump
looks set to continue wreaking continuing havoc in the rest of the world’s
steel sector.
Iron Ore Exports From Australia's Port Hedland Expand to Record
April 5,
2016 — 7:27 AM BST
Iron ore exports from Australia’s Port Hedland surged to a record in
March, according to a monthly summary from the world’s biggest bulk-export
terminal which handles cargoes from miners including BHP Billiton Ltd. and
entrant Roy Hill Holdings Pty.
Total shipments increased to 39.53 million metric tons last month from
36.63 million in February and 36.61 million a year earlier, according to data
from the port authority on Tuesday. The figure eclipses the previous high of
39.4 million tons set in September. Exports to China gained to 32.6 million
tons compared with 29.14 million tons in February and 31.2 million in the same
month in 2015.
While iron ore has staged a surprise rally in 2016 as Chinese policy
makers signaled their willingness to bolster growth in the largest user, prices
have sagged in the past two weeks as holdings at ports in China expanded to the
highest level in almost a year. Port Hedland is a maritime gateway to low-cost
supply from the Pilbara, the world’s largest production center. Billionaire
Gina Rinehart’s Roy Hill venture has been ramping up operations this year, and
last month dispatched its inaugural cargo to China.
Ore with 62 percent content in Qingdao was at $54.80 a dry ton on Monday
after losing 2.8 percent last week and 2 percent the week before, according to
Metal Bulletin Ltd. The price surged 23 percent in the first quarter as some
supplies from Port Hedland were disrupted in January, mills in China ramped up
output ahead of the peak-construction season and the country’s leaders pledged
to back growth.
In scammy tax evasion news, it’s Apple’s turn in
the spotlight. How to make billions yet pay no taxes. Caught squarely in the EU
headlights, Apple somehow got the US Treasury Secretary involved. Presumably a
service offered to all humble Americans caught up in disputes over taxes. Mr
Lew looks set to become very busy. For the sake of Apple, Mr Lew threatened to
take America’s inward investment ball away from the EUSSR. Mr Lew, apparently,
is a closet supporter of Brexit.
Apple’s tax affairs spark a transatlantic face-off
April 4, 2016 7:48 pm
Washington
calls foul over the EU inquiry — amid anger over a $1tn offshore cash pile
To remind
herself that she will always upset someone with her rulings, Margrethe Vestager
keeps a ceramic hand with a raised middle finger on her desk. It was sent to
her by an angry trade union during her time as economy minister of Denmark.
Since she became
the EU’s competition enforcer in late 2014, those irate adversaries have only
become more powerful. She is now facing a showdown with the world’s richest
company and most powerful government.
On January 21,
Apple’s chief executive, Tim Cook, made a personal appeal to Ms Vestager in
Brussels. His aim was to deflect her from issuing a ruling against the
technology company’s tax arrangements in Ireland, suspected of saving the
company billions in international tax payments. If Apple is found to have
benefited from a sweetheart deal, in contravention of EU competition rules, it
could have to pay back billions of euros of underpaid tax to Dublin.
According to
those briefed on the meeting, it was a heated, testy encounter. Mr Cook took
aim at the “fairness” with which Ms Vestager conducts her cases — a point of
pride for her — and argued that Brussels was pursuing a legally baseless raid
on Apple’s $200bn international cash pile. Mr Cook complained that the EU’s
probe into Apple undermined the very principles that Europe claimed to stand
for.
The impassioned
executive from Alabama seemed frustrated by the cool imperturbability of the
Dane. She, in turn, resented his interruptions.
Only days after
Mr Cook’s visit, Jack Lew, the US Treasury secretary, and his team turned their
ire on Ms Vestager. They accused the EU of conducting a crusade against tax
avoidance that would set “disturbing international tax policy precedents” and
argued that its methodology raised “serious concerns about fundamental
fairness”.
The thrust of the
US allegation was that European probes into Apple, Amazon, Starbucks and
McDonald’s unfairly singled out American companies. They also accused Ms
Vestager of applying laws retroactively and of improperly targeting funds that
were owed to the US Treasury. There was a danger that the EU’s tax campaign
could deter US investment in Europe, they warned.
Ms Vestager has
already publicly rejected Mr Lew’s accusations, but the two are likely to clash
again when they meet in Washington later this week in what will probably be the
last big diplomatic set piece before the European Commission makes its decision
on Apple. A ruling is expected this spring.
More
We end with war resuming in the Middle East, where
the USA is allied to Al Qaeeda. The enemy of my enemy is my friend, and all
that perpetual war rubbish.
Syria truce in shambles as government warplane shot down
Published: Apr 5, 2016 8:48 p.m. ET
BEIRUT — Syria’s five-week truce was left in tatters as Islamist rebels
shot down a government warplane and captured its pilot near Aleppo while the
regime and its allies vowed to launch a new offensive to drive all opposition
fighters from the northern city.
Tuesday’s events were the latest in a series that have rendered the
internationally-brokered cease-fire largely ineffective and cast a shadow over
another round of United Nations-mediated peace talks set to resume in Geneva
next week.
The warplane was downed in an area south of Aleppo where Nusra Front and
allied Islamist rebel groups launched a new military campaign on Friday to recapture
territory from the regime of President Bashar al-Assad and its Iran-backed
allies.
Al Qaeda-linked Nusra, which along with Islamic State has been excluded
from the truce engineered by the U.S. and Russia, is now at the center of
events undermining it. Several rebel groups fighting with Nusra in the campaign
that started Friday had signed on to the partial cease-fire.
“We all knew the Nusra Front’s interest in sabotaging the cease-fire but
even we, the other rebel factions, were not convinced the cease-fire was going
to work because we have tested the regime so many times before,” said Ahmed
Alwan, a cleric in northwest Syria close to several of the Islamist rebel
factions allied with Nusra. “I can say that the cease-fire is effectively
finished.”
http://www.marketwatch.com/story/syria-truce-in-shambles-as-government-warplane-shot-down-2016-04-05
“The problem with fiat money is that it rewards the minority that
can handle money, but fools the generation that has worked and saved money.”“Adam Smith” aka George Goodman.
At
the Comex silver depositories Tuesday final figures were: Registered 32.91 Moz, Eligible 121.95 Moz, Total 154.86 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Asia frets over the fate of Euroland
irrespective of the outcome of Brexit.
Eurozone won’t find a happy ending, worldly Asians fear
Published: Apr 4, 2016 8:01 p.m. ET
VIENTIANE, Laos (MarketWatch) — During a panel discussion on April 3 in
Vientiane on growth in the Asian economy, I asked Tarisa Watanagase, a former
governor of the Bank of Thailand, what she thought of the future of Europe’s
economic and monetary union. Watanagase, who was governor in 2006-10 and
previously helped clear up the 1997-98 Asian financial crisis in Thailand,
answered without demur. “It will not be a happy ending.”Three decades ago in Asia, she said, countries like Thailand were able to emerge from turmoil within a year, with currency devaluation a major part of the adjustment — an option not available in Europe’s fixed exchange-rate system. “That’s very unfortunate when you’re in a crisis.”
Watanagase, has also spent time as an economist at the International Monetary Fund, said she foresees EMU breaking down into a smaller, more homogenous arrangement of like-minded countries.
Watanagase’s words reflect what serving Asian policy makers are saying behind closed doors. They are reminiscent, too, of the latest thoughts of Mervyn King, former governor of the Bank of England, who as a retiree is freer to speak his mind on the euro EURUSD, -0.3950%
Watanagase’s
views are relevant because of two events in the last few days: the death of
Hans-Dietrich Genscher, the former German foreign minister who was a legendary
figure behind his county’s reunification in 1990, and renewed signs of severe
problems in the eternal struggle between Greece and its creditors.
---- Less well known was Genscher’s role, before the 1991-92 Maastricht treaty, in blocking progress towards a much-mooted European political union as part of the move to EMU. Many leading Germans, including Kohl, had said monetary union without political union was unsustainable. Yet Genscher was highly skeptical about pooling political power, memorably saying that if all European countries had had a vote on German unification, it would never have happened.
All this comes to mind when Germany is grappling with an impossible task
in Greece. If Europe were a political union, the Germans would have bailed out
the Greeks long ago. But then Germany would never have entered a union with a
country as politically and economically disparate (some might say wayward) as
Greece.
As leaked transcripts over the weekend show, the IMF appears to be
asking Germany to grant much-needed Greek debt relief or to accept that the
Fund will pull out of the latest bailout program — both politically ruinous
options for Chancellor Angela Merkel.
The IMF seems to be hoping that Greece will be forced, through debt
repayments scheduled in coming months, to agree fresh austerity that Athens
itself finds unacceptable. None of this high-stakes squabbling is really new.
The IMF’s board was told as long ago as July 2015 that Greece’s unsustainably
high debt and shortcomings in realizing reforms preclude a further IMF bailout
unless Berlin and other European creditors agreed on debt relief.
More
"Were we to be directed from Washington [Brussels] when to sow and when to reap, we should soon want bread."
Thomas Jefferson
Brexit
Quote of the week.
Cameron:
The gods too are fond of a joke.
With
apologies to Aristotle
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?
Today, the other side of Apple,
Microsoft, Samsung, Sony, Daimler and Volkswagen, among others. Since they’re
only exploited black African children, no one seems to care in China and the
west how their vanity technology product is made using cobalt. More 19th
century Dickens, than 21st century Obama, Cameron, Merkel, and Xi.
Exposed: Child labour behind smart phone and electric car batteries
19 January 2016, 13:57 UTC
Major electronics brands, including Apple, Samsung and Sony,
are failing to do basic checks to ensure that cobalt mined by child labourers
has not been used in their products, said Amnesty International and Afrewatch
in a report published today.
The report, This is what we
die for: Human rights abuses in the Democratic Republic of the Congo power the
global trade in cobalt, traces the sale of cobalt, used in lithium-ion
batteries, from mines where children as young as seven and adults work in
perilous conditions.
“The glamourous shop displays and marketing of state of the art
technologies are a stark contrast to the children carrying bags of rocks, and
miners in narrow manmade tunnels risking permanent lung damage,” said Mark
Dummett, Business & Human Rights Researcher at Amnesty International.
“Millions of people enjoy the benefits of new technologies but rarely
ask how they are made. It is high time the big brands took some responsibility
for the mining of the raw materials that make their lucrative products.”
The report documents how traders buy cobalt from areas where child
labour is rife and sell it to Congo Dongfang Mining (CDM), a wholly-owned
subsidiary of Chinese mineral giant Zhejiang Huayou Cobalt Ltd (Huayou Cobalt).
Amnesty International’s investigation uses investor documents to show how
Huayou Cobalt and its subsidiary CDM process the cobalt before selling it to
three battery component manufacturers in China and South Korea. In turn, they
sell to battery makers who claim to supply technology and car companies,
including Apple, Microsoft, Samsung, Sony, Daimler and Volkswagen.
Amnesty International contacted 16 multinationals who were listed as
customers of the battery manufacturers listed as sourcing processed ore from
Huayou Cobalt. One company admitted the connection, while four were unable to
say for certain whether they were buying cobalt from the DRC or Huayou Cobalt.
Six said they were investigating the claims. Five denied sourcing cobalt from
via Huayou Cobalt, though they are listed as customers in the company documents
of battery manufacturers. Two multinationals denied sourcing cobalt from DRC.
Crucially, none provided enough details to independently verify where
the cobalt in their products came from.
More
Democratic Republic of Congo: "This is what we die for": Human rights abuses in the Democratic Republic of the Congo power the global trade in cobalt
By Amnesty International, 19 January 2016,
Index number: AFR 62/3183/2016
This report documents the hazardous conditions in which
artisanal miners, including thousands of children, mine cobalt in the Democratic
Republic of the Congo. It goes on to trace how this cobalt is used to power
mobile phones, laptop computers, and other portable electronic devices. Using
basic hand tools, miners dig out rocks from tunnels deep underground, and
accidents are common. Despite the potentially fatal health effects of prolonged
exposure to cobalt, adult and child miners work without even the most basic
protective equipment. This report is the first comprehensive account of how
cobalt enters the supply chain of many of the world’s leading brands. Company
responses sought in the production of this report can be found in document AFR
62/3412/2016 available on this website.
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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