Thursday, 21 April 2016

The Crack Up Boom Resumes.

Baltic Dry Index. 669 -02      Brent Crude 45.79

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

Brexit odds checker.

Brexit Quote of the Day.
I like work: it fascinates me. I can sit and look at it for hours.

Dodgy Dave Cameron, with apologies to Jerome K Jerome

The great disconnect is back on speed again. Stocks may be in the midst of a profits recession, global shipping in a depression reflecting a markedly slower global economy, but that means nothing to the robot algo traders in our rigged casinos. China’s fixed, oil’s fixed, and steel’s fixed, is the word out of Asia this morning. To which I can only add fixed indeed. China is about to dump a whole lot of subsidised exports on  to the rest of the world. Anyone want to buy a UK steel company with some of the highest electricity costs in the world, thanks to insane green levies to curb “man-made global warming.”

“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.

Asian Stocks Resume Rally as Brent Crude Near $46, Steel Surges

April 20, 2016 — 11:55 PM BST Updated on April 21, 2016 — 5:53 AM BST
Asian stocks rose to a four-month high as oil recovered to levels last seen in November and Chinese steel prices surged more than 5 percent.

All 10 industry groups advanced on the MSCI Asia Pacific Index. Brent crude traded near $46 a barrel after a report showed U.S. production slipped to the lowest since October 2014 and Iraq said talks to freeze output may occur next month. Steel reinforcement bars jumped to a 19-month high in Shanghai, buoyed by a strengthening Chinese property market. The euro was little changed before a European Central Bank policy meeting, after almost wiping out this week’s advance in the last session. Australia’s dollar rose toward a 10-month high.
Global shares have surged 16 percent since sinking to a three-year low in February, buoyed by oil’s recovery from below $30, signs of stabilization in China’s economy and upbeat U.S. corporate earnings. The rally also got a lift as Federal Reserve officials last month cut their forecasts for interest-rate increases in 2016 to two from four, saying global economic and financial developments continue to pose risks.

“Recovering fundamentals and the fact that the Fed is going to hold rates for a while is certainly helping sentiment,” Kirk Hartman, who helps oversee about $351 billion as Los Angeles-based chief investment officer of Wells Capital Management, said on Bloomberg TV. “People are becoming much more positive on China. People are realizing that China isn’t going to have a hard landing.”

China unveils steps to support exports to help economy

Wed Apr 20, 2016 7:40am EDT
China will take steps to boost exports, including encouraging banks to boost lending, expanding export credit insurance and raise tax rebates for some firms, the cabinet said on Wednesday, in the latest step to underpin growth.
"Foreign trade is an important part as well as a driving force of the national economy," the State Council said in a statement after a meeting chaired by Premier Li Keqiang.
Banks will be encouraged to lend to profitable trading companies that have received overseas orders, export credit insurance will be expanded and tax rebates for exporters of some machinery products will be increased, it said.
China's exports in March returned to growth for the first time in nine months, adding to further signs of stabilization in the world's second-largest economy but officials have cautioned about the trade outlook.
The government will also implement proactive import policies, supporting imports of advanced equipment and technology, the cabinet said.
The government will step up investment in roads, railways and airports in poorer regions and encourage its less developed western and central provinces to attract investment from more developed eastern provinces.
China's economic growth slowed to 6.7 percent in the first quarter, its weakest pace since early 2009, but stronger-than-anticipated activity indicators for March suggested the economy was picking up.

In other news out of China, there will be at least a six month pause in the G-20 anti-corruption drive. No need to look into President Xi’s offshore companies nor anyone else’s.

China suspends G20 anti-corruption task force: sources

Wed Apr 20, 2016 4:50am EDT
China suspended an international anti-corruption task force earlier this year after taking over the G20 presidency, according to six individuals in the group, who called it a setback to global efforts to crack down on shell companies used to conceal assets.
The so-called "Business 20" Anti-Corruption Taskforce, comprising businesses and civil society groups, had been drawing up G20 policies for increasing transparency of offshore financial structures, among other work, but the body was scrapped in late January because Chinese companies declined to participate, according to the sources.
China is one of several countries under pressure to share data on paper companies after the "Panama Papers", documents from Panamanian law firm Mossack Fonseca, revealed how the rich and powerful use such structures to avoid taxes and in some cases conceal ill-gotten gains. They were published by German newspaper Sueddeutsche Zeitung and more than 100 other international news outlets.
The B20, the G20's business outreach arm, and its various task forces are by convention led by companies from the nation holding the presidency.
The state-run China Council for the Promotion of International Trade (CCPIT), this year's head of the B20, did not provide an explanation for suspending the anti-corruption task force and did not respond to several emails, faxes and phone calls requesting comment.
But three people who had worked on the task force, who represented international, U.S. and European institutions, said the trade group could not persuade a Chinese company to take on the role of leading the task force, even though around 150,000 Chinese businesses are effectively state-run.
The sources cited the CCPIT as saying a one-off anti-corruption convention to be held later this month would be a sufficient substitute, despite strong counter-lobbying from international businesses and NGOs.
"It's a disappointing indictment on the environment in China that no company was willing to step forward," said one of the sources. "This is a critical agenda and we had built up momentum, and this decision has taken the wind out of the sails."
Chinese Foreign Ministry spokeswoman Hua Chunying did not answer directly when asked why China had suspended the task force, but said China attached a lot of importance to G20 anti-corruption cooperation and had held meetings on this.
"At the same time, China will, at the G20 business summit, which is under the framework of the B20 you mention, hold an anti-corruption forum, to promote and create a sound and clean business environment," she told a daily news briefing, without elaborating.
The forum is scheduled to be held on April 27 in Beijing.
China has been trying to get increased international cooperation to hunt down suspected corrupt officials who have fled overseas since President Xi Jinping began a war against deeply-rooted graft more than three years ago.
But Western countries have been reluctant to help, not wanting to send people back to a country where rights groups say mistreatment of criminal suspects remains a problem, and also complaining China is unwilling to provide proof of their crimes.
Some of the participants on the task force however said they believed the Chinese government wanted to sharpen its focus this year, and remained committed to clamping down on corruption.
"We are very happy with the functioning of the anti-corruption work-stream within the B20 process," said Andrew Wilson, global communications director at the International Chamber of Commerce (ICC), which had several executives on the task force.
According to the B20 2016 official web site, anti-corruption efforts would comprise the forum, which would "continue previous efforts toward enhancing anti-corruption international cooperation, assisting anti-corruption efforts at enterprises and increasing anti-corruption dialogue between G20 and B20."
A section on the page called "Taskforce Structure" was left blank.

In real world news, VW’s killer dirty diesel fraud just keeps growing and growing. Buy more! Mitsubishi fesses up.

VW 'Dieselgate' software developed at Audi in 1999: report

Tue Apr 19, 2016 1:37pm EDT
German carmaker Audi created so-called defeat devices which cut emissions in 1999, years before parent company Volkswagen (VW)(VOWG_p.DE) used them to cheat diesel emissions tests, German newspaper Handelsblatt reported on Tuesday.

VW, Europe's largest automaker, admitted in September it had manipulated the engines of around 11 million diesel cars, including its VW, Audi, Porsche, Skoda and Seat brands.

Engineers at Audi developed software capable of turning off certain engine functions in 1999, but it was never used by the VW luxury division, the newspaper said in an advance release of an article due to be published on Wednesday, which cited industry and company sources.

Six years later, when VW engineers at the firm's Wolfsburg headquarters were unable to bring nitrogen oxide emissions below legal thresholds, they started to install the software developed by Audi, Handelsblatt said.

VW and Audi both declined to comment on the report, citing ongoing investigations by U.S. law firm Jones Day into the diesel emissions scandal. VW has said Jones Day will publish a "substantial report" on its findings by the end of April.

VW's supervisory board is due to discuss the potential costs of the emissions scandal and approve 2015 earnings on April 22, a day after a deadline for VW and U.S. regulators to agree a solution for U.S. cars fitted with the software.

Exclusive: VW to offer to buy back nearly 500,000 U.S. diesel cars - sources

Wed Apr 20, 2016 11:55pm EDT
Volkswagen AG (VOWG_p.DE) and U.S. officials have reached a framework deal under which the automaker would offer to buy back almost 500,000 diesel cars that used sophisticated software to evade U.S. emission rules, two people briefed on the matter said on Wednesday.

The German automaker is expected to tell a federal judge in San Francisco Thursday that it has agreed to offer to buy back up to 500,000 2.0-liter diesel vehicles sold in the United States that exceeded legally allowable emission levels, the people said.

That would include versions of the Jetta sedan, the Golf compact and the Audi A3 sold since 2009. The buyback offer does not apply to the bigger, 80,000 3.0-liter diesel vehicles also found to have exceeded U.S. pollution limits, including Audi and Porsche SUV models, the people said.

U.S.-listed shares of Volkswagen rose nearly 6 percent to $30.95 following the news.

Mitsubishi Motors shares set to slump to record low on mileage cheating scandal

Thu Apr 21, 2016 12:43am EDT
Mitsubishi Motors Corp's (7211.T) shares were untraded on Thursday as they were swamped with sell orders, and were poised to hit a record low after the Japanese automaker admitted to manipulating fuel-economy data.

Japan's sixth-biggest automaker said on Wednesday it had manipulated test data to overstate the fuel economy of 625,000 cars, a situation the government called "extremely serious".

Mitsubishi Motors had said it stopped making and selling its eK mini-wagons for the domestic market after Nissan Motor Co (7201.T), which markets a similar model made by Mitsubishi Motors, found a discrepancy in fuel efficiency test data.

JPMorgan auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen ($450 million), including payments to consumers, the costs of replacing parts, and compensation to Nissan.

And while Mitsubishi said the cars were sold only in Japan, the impact could be felt wider.

We end for today, back in the land of the free, between the shining seas. Coming soon to a pension fund near you. What America does today, the rest of the world does tomorrow. Below, another unintended consequence of the now unravelling Great Nixonian Error of fiat money. Come May 7, from faraway London it looks like another quarter of a million votes for Donald Trump.

One of the nation’s largest pension funds could soon cut benefits for retirees

April 20 at 7:04 AM
More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money.

Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans.

The potential cuts are possible under legislation passed by Congress in 2014 that for the first time allowed financially distressed multi-employer plans to reduce benefits for retirees if it would improve the solvency of the fund. The law weakened federal protections that for more than 40 years shielded one of the last remaining pillars that workers could rely on for financial security in retirement.

For many workers, the promise of a guaranteed income stream for life — a benefit now nearly extinct for younger generations — was at times strong enough to convince them to sacrifice pay raises or other job opportunities. But after decades of challenges that left many pension funds in tough financial straits, some people are learning in retirement that the promises made to them may have to be broken.

The Central States Pension Fund, which handles the retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York and Minnesota, was the first plan to apply for reductions under the new law.

Consumer advocates watching the case say the move could encourage dozens of other pension plans across the country that are facing financial struggles to make similar cuts

“This is going to be a national crisis for hundreds of thousands, and eventually millions, of retirees and their families,” said Karen Friedman, executive vice president of the Pension Rights Center.

----If Treasury approves the fund’s proposal, then retirees could see their paychecks shrink by July 1. The move would give the fund at least a 50 percent chance of lasting for another 30 years as opposed to running out of cash in 10 years if no changes are made, Nyhan said. A decision is expected by May 7.

In a time of universal deceit, telling the truth is a revolutionary act.

George Orwell.
At the Comex silver depositories Wednesday final figures were: Registered 31.19 Moz, Eligible 120.85 Moz, Total 151.80 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
So you thought that there was honour among thieves on Wall Street? Whatever gave you that impression? Nor in Boston too, it turns out.  Where’s that ancient Greek with his lamp?
Some of the queries Quakers are asked to consider, are: "Do you maintain strict integrity in your business transactions and in your relations with individuals and organizations? Are you personally scrupulous and responsible in the use of money entrusted to you, and are you careful not to defraud the public revenue?"

Probably why there a no Quakers on Wall Street or in Boston.

Did Fidelity Cheat Its Own Client Out of Millions of Dollars?

Peter Deutsch hit it big bringing affordable Australian wine to the U.S. Then he poured a fortune into a troubled Chinese stock. And when his brokerage stood in his way, he fought back.

April 20, 2016 Neil Weinberg
As Peter Deutsch sat in his spacious lakeside getaway in upstate New York one steamy July morning, the last thing on his mind was relaxing. The wealthy wine merchant was on a risky mission. He’d decided to buy control of a troubled Chinese company and then float a rescue plan. To do that, he’d have to snap up at least 5 million shares of its thinly traded stock in a matter of days. It was either that or kiss goodbye the $40 million he’d already invested.

With the waters of Lake George gently lapping onto his property, Deutsch turned to his iPad, opened his brokerage account, and tapped “buy.” Bingo. He picked up a few thousand shares. He tapped “buy” again. Nothing. Figuring it was a glitch, he reached for the phone. “What’s going on, guys?” he recalls asking one of his reps at Fidelity Investments. “I’m putting through important trades here.” The rep, he says, didn’t have a clue.

Deutsch says his unease turned to shock later that day when he fielded a call from a Fidelity employee he’d never spoken with before. Deutsch remembers the man informing him that Fidelity was “uncomfortable” with his purchases of China Medical Technologies, a Beijing-based maker of cancer-treatment devices. Effective immediately, the man told Deutsch, he could no longer buy the stock.

And with that, a hefty slice of his family’s net worth was toast.

The impasse with Fidelity in the summer of 2012 took Deutsch by surprise. The previous year, Fidelity Family Office Services, a unit of the second-largest mutual fund group in the U.S., had sent a sales team to woo Deutsch with tales of the bespoke services FFOS lavished on its ultrawealthy clients. Here he was, less than a year later, and he couldn’t even make a trade.

For Deutsch, 53, discovering the real reasons behind Fidelity’s change of heart has become a consuming passion, along with fighting to be made whole again. The battle—details of which emerge in part from internal company e-mails and sworn testimony, which were all filed in federal court—has stretched from industry arbitration to the U.S. Department of the Treasury.

Among the things Deutsch learned, according to papers he filed in the U.S. District Court for the Southern District of New York: While he was trying to gain control of China Medical, he had a formidable rival—Fidelity, the very firm whose family office he says had promised him seamless trade execution and conflict-free service. Fidelity, he alleges, was secretly buying the stock so aggressively that it drove up the price of China Medical’s shares at a time when the brokerage was supposed to be helping him build his stake. What’s more, he says, even as FFOS was making nice, another part of Fidelity was using his shares against his wishes for its benefit—and then it stopped him from trading to cover up its own misdeeds.

Deutsch is seeking as much as $400 million to $500 million in damages from Fidelity in arbitration before the Financial Industry Regulatory Authority. The amount is what Deutsch claims he could have earned if Fidelity hadn’t prevented him from reaching his goal of a 66 percent stake in a company he’d already poured tens of millions of dollars into.

Fidelity is contesting the claims. The firm says it prevented Deutsch from trading out of concern he was trying to illegally manipulate China Medical shares, according to documents entered into court and people familiar with the company’s views. Fidelity took the case to federal court last year in an attempt to hold onto documents it said were protected by the Bank Secrecy Act; Deutsch had sought the paperwork to use in the Finra arbitration. The court battle ended last September after the judge ordered Fidelity to turn most of the documents over to Deutsch. As of early April, the arbitration is ongoing.
Brexit Quote of the week.

"On the whole Dodgy Dave wants 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?

Metamaterial paves way for thermophotovoltaic cells that generate electricity in the dark

Colin Jeffrey April 20, 2016
Using a new optical magnetic metamaterial claimed to have revolutionary properties, physicists from the Australian National University (ANU) and the University of California Berkeley (UC Berkeley) have produced a prototype device that could be used in super-efficient thermophotovoltaic cells. These cells do not need direct sunlight to generate electricity, but instead absorb infrared radiation to convert to electric current and, unlike conventional photovoltaic cells, can do so even in the dark.

To create this new material, the researchers stacked twenty alternating nanomaterial sheets of gold and magnesium fluoride (with thicknesses of 30 nm and 45 nm, respectively), one on top of the other and sat them all on a 50-nm-thin silicon nitride base. Using focused ion milling, the researchers then cut a series of elongated holes in the material to produce cavities.

All of this work endowed the material with properties designed to exploit a phenomenon known as "magnetic hyperbolic dispersion." Simple dispersion dictates how light behaves with various materials and is often seen as the a three-dimensional propagation of electromagnetic radiation in different directions. For example, a ground glass convex lens would have a spherical or ellipsoid shape to its dispersion.

With the new metamaterial, on the other hand, the incredibly strong interactions of the material with the magnetic component of light means that the dispersion characteristics take on a hyperbolic form – that is, a much more intense distribution pattern – and results in a directional, coherent and polarized thermal emission. In other words, it glows brightly and unusually when heated by infrared radiation.
The result of all this nanoscale topological manipulation means that the magnetic hyperbolic dispersion occurring in the metamaterial can be tuned to specific frequencies and intensities so that it may aid in vastly increasing thermal transfer efficiencies when paired as an emitter with thermophotovoltaic cells.
"Thermophotovoltaic cells have the potential to be much more efficient than solar cells," says Dr Sergey Kruk from the ANU Research School of Physics and Engineering. "Our metamaterial overcomes several obstacles and could help to unlock the potential of thermophotovoltaic cells."
The metamaterial devices were specifically created by scientists at UC Berkeley to Dr Kruk's specifications, and needed the expertise of UC Berkeley in producing such lilliputian structures and then precisely milling them to shape.
"The size of individual building block of the metamaterial is so small that we could fit more than twelve thousand of them on the cross-section of a human hair," says Dr Kruk.

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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