Friday, 22 April 2016

Yankee Doodle Comes To London.

Baltic Dry Index. 670 +01      Brent Crude 45.08

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

Brexit odds checker.

Brexit Quote of the Day.
“Dodgy Dave Cameron: He was a great man in an era of small events.”

With apologies to Winston Churchill.

For more on Yankee Doodle in his armour plated London limo, on his way to a trade fair in Germany, and his appalling sense of timing, scroll down to Crooks Corner.

Definition of "pension": "An allowance made to any one without an equivalent. In England it is generally understood to mean pay given to a state hireling for treason to his country."

Samuel Johnson
We open today with George Soros on China yet again. I guess his China short’s not really working out yet. But I suspect that it’s only a matter of time.

Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08

April 21, 2016 — 12:43 AM BST Updated on April 21, 2016 — 4:06 AM BST
Billionaire investor George Soros said China’s debt-fueled economy resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession.
China’s March credit-growth figures should be viewed as a warning sign, Soros said at an Asia Society event in New York on Wednesday. The broadest measure of new credit in the world’s second-biggest economy was 2.34 trillion yuan ($362 billion) last month, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey and signaling the government is prioritizing growth over reining in debt.
What’s happening in China "eerily resembles what happened during the financial crisis in the U.S. in 2007-08, which was similarly fueled by credit growth," Soros said. "Most of money that banks are supplying is needed to keep bad debts and loss-making enterprises alive."

Soros, who built a $24 billion fortune through savvy wagers on markets, has recently been involved in a war of words with the Chinese government. He said at the World Economic Forum in Davos that he’s been betting against Asian currencies because a hard landing in China is “practically unavoidable.” China’s state-run Xinhua news agency rebutted his assertion in an editorial, saying that he has made the same prediction several times in the past.

China’s economy gathered pace in March as the surge in new credit helped the property sector rebound. Housing values in first-tier cities have soared, with new-home prices in Shenzhen rising 62 percent in a year. While China’s real estate is in a bubble, it may be able to feed itself for some time, similar to the U.S. in 2005 and 2006, Soros said.

“Most of the damage occurred in later years," Soros said. “It’s a parabolic cycle."

Andrew Colquhoun, the head of Asia Pacific sovereigns at Fitch Ratings, is also concerned about China’s resurgence in borrowing. Eventually, the very thing that has been driving the economic recovery could end up derailing it, because China is adding to a debt burden that’s already unsustainable, he said in an interview in New York. Fitch rates the nation’s sovereign debt at A+, the fifth-highest grade and a step lower than Standard & Poor’s and Moody’s Investors Service, which both cut their outlooks on China since March.

Apple suffers another iPhone blow

Published: Apr 21, 2016 4:02 p.m. ET
Apple Inc.’s iPhone estimates have been lowered yet again ahead of its quarterly earnings, this time triggered by a weak chip outlook by supplier Qualcomm Inc.

A number of reports from Apple AAPL, -1.08%  suppliers in recent weeks have set off alarms that Apple could be headed for its first ever year-over-year decline in iPhone sales when it reports fiscal second-quarter earnings after the market’s close on Tuesday.

This week, Qualcomm QCOM, -0.81% which supplies chips to the iPhone 6 and Samsung Electronics’ 005930, -1.08%  Galaxy 7 phone, reported a 19% decrease in chip shipments to 189 million and gave a weak chip segment outlook of between 175 million and 196 million, which implies a 13% to 22% year-over-year decrease.

The weak outlook supports the thesis that the iPhone 6 and iPhone 6s family of phones are still suffering through a “hangover period” following strong initial sales, and that the new four-inch iPhone 5SE isn’t selling as well as expected, said Raymond James analyst Tavis McCourt.

“Although some of this is likely the result of low end 4G share loss in China, we suspect continued weakness in iPhone builds is to blame as well despite the launch of the 5SE (Qualcomm sells into this model as well),” McCourt said in a note to clients. “Our previous estimates had assumed the 5SE would create some noticeable incremental demand, but mounting supply chain evidence suggests otherwise.”

Alphabet, Microsoft struggle with big shifts

Published: Apr 21, 2016 8:22 p.m. ET
Alphabet Inc. and Microsoft Corp. both disappointed Wall Street with their financial results Thursday, as profits were hit by spending meant to remain competitive in a cutthroat tech sector.

Alphabet’s GOOGL, +0.66% GOOG, +0.86%  Google search business may not be experiencing as big a shift as Microsoft MSFT, +0.34%  —which saw its overall revenue decline 5.5%—but it is experiencing ongoing impact from a move to less profitable mobile ads from desktop. While Alphabet execs crowed about the company’s Chrome Web browser surpassing 1 billion monthly active users on mobile devices, Chief Financial Officer Ruth Porat acknowledged that higher traffic-acquisition costs on mobile result in smaller profit.

“The obvious result is more revenue and gross margin dollars, but at a lower margin,” Porat said.

Alphabet’s mobile success is squeezing its margins, but its also putting the squeeze on an important competitor. Microsoft, already hurting from the secular decline in the PC industry, saw revenue for its Lumia smartphones fall 47% to $662 million as consumers opted for smartphones with Google’s Android operating system instead. Microsoft’s patents give them a cut of every Android smartphone sold, but the increasing prevalence of cheaper Android phones is hurting the company’s margins in that regard.

Both companies hope to challenge Inc. AMZN, -0.31%  and its Amazon Web Services for cloud-computing dollars from large companies, but growth in that area also came with tighter margins for Microsoft as Google pays up in an effort to compete. In the quarter, Microsoft saw its “intelligent cloud” revenue grow slightly to $6.09 billion from $5.9 billion, but its operating profit tumbled to $2.1 billion from $2.5 billion a year ago.

At the Comex silver depositories Thursday 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.
Today, one day after Her Majesty Queen Elizabeth turned 90, becoming the UK’s longest reigning monarch, and one day before St George’s Day, England’s patron Saint’s day, Yankee Doodle came to London, in the shape of Barry Kenya, on his way to a trade fair in Germany, to  order UK’s voters to put America first, and vote for Dodgy Dave’s EUSSR deal. Shamelessly invoking America’s military heroes from two world wars, a military in which he never sought to serve, Barry urged on free born Brits, a course of immersion in a wealth and jobs destroying, failing International Union, of a kind that no right thinking non-communist American would ever think of joining. It shows just how out of touch the modern political class has become from the voter hoi polloi class. With friends like Dodgy Dave and Barry, we poor Brits don’t need any enemies.

Patriotism is the last refuge of a scoundrel.

Samuel Johnson.

Obama Praises EU in London Op-Ed Aimed at Swaying Brexit Vote

President Barack Obama intervened as expected in U.K. politics, urging Britons in an op-ed article to reject a so-called Brexit from the European Union on the eve of his meeting with Prime Minister David Cameron.

“The European Union doesn’t moderate British influence –- it magnifies it,” Obama said in the op-ed, published by the Daily Telegraph shortly after the president arrived in London on Thursday to meet with Cameron and the royal family. “A strong Europe is not a threat to Britain’s global leadership; it enhances Britain’s global leadership.”

Cameron has called a June 23 referendum on exiting the EU, a vote that also amounts to a test of public confidence in his leadership. Cameron’s government supports remaining in the union and is hoping that Obama’s intervention can sway British voters.

In the op-ed, Obama drew on the long history of U.S.-U.K. relations, evoking President Franklin D. Roosevelt to make the point that the two countries have long shared common interests.

“I will say, with the candour of a friend, that the outcome of your decision is a matter of deep interest to the United States,” Obama wrote. “The tens of thousands of Americans who rest in Europe’s cemeteries are a silent testament to just how intertwined our prosperity and security truly are.”

Obama said that while the U.K. faces many of the same challenges as the U.S., including migration, economic inequality and terrorism, the best way to address them is through collective action.

The president will have lunch with Queen Elizabeth II and dinner with Prince William and the Duchess of Cambridge on Friday, during a visit sandwiched between a summit of Persian Gulf countries in Saudi Arabia and an international trade fair in Germany.

As your friend, let me say that the EU makes Britain even greater

21 April 2016 • 10:30pm

In 1939, President Franklin D Roosevelt offered a toast to King George VI in the White House. “I am persuaded that the greatest single contribution our two countries have been enabled to make to civilisation, and to the welfare of peoples throughout the world,” he said, “is the example we have jointly set by our manner of conducting relations between our two nations.”

Nearly 80 years later, the United Kingdom remains a friend and ally to the United States like no other. Our special relationship was forged as we spilt blood together on the battlefield. It was fortified as we built and sustained the architecture for advancing stability and prosperity in Europe, and our democratic values around the globe. From the ashes of war, those who came before us had the foresight to create the international institutions and initiatives to sustain a prosperous peace: the United Nations and Nato; Bretton Woods, the Marshall Plan, and the European Union. Their efforts provided a foundation for democracy, open markets, and the rule of law, while underwriting more than seven decades of relative peace and prosperity in Europe.

Today, we face tests to this order – terrorism and aggression; migration and economic headwinds – challenges that can only be met if the United States and the United Kingdom can rely on one another, on our special relationship, and on the partnerships that lead to progress.

During my visit to London, Prime Minister Cameron and I will take on the full array of these challenges. We must be resolute and adaptive in our efforts to prevent terrorist attacks against our people, and to continue the progress we are making to roll back the threat posed by Islamic State (Isil) until it is destroyed. We must work to resolve political conflicts in the Middle East – from Yemen to Syria to Libya – so that there is a prospect for increased stability. We must continue to invest in Nato – so that we can meet our overseas commitments from Afghanistan to the Aegean, and reassure allies who are rightly concerned about Russian aggression. And we must continue to promote global growth, so that our young people can achieve greater opportunity and prosperity.

Below the reality of the EUSSR that Barry Kenya and Dodgy Dave want us to Remain in.

Super Mario doing “God’s work” following the Goldmanite plan.

Why Mario’s Got A Bee In His Bonnet

by David Stockman • 
Mario had a bee in his bonnet this morning. Apparently, the chorus of German voices pointing to the obvious—- that his policies are killing savers, insurance companies, pension funds and banks—-got his dander up:

“We have a mandate to preserve price stability for the whole of the euro zone, not only for Germany,” he said. “We obey the law, not the politicians, because we are independent.”

There you have in brief the whole rationalization for the monetary madness that Draghi and his kindred central bankers have unleashed on the world. They claim that their rubbery statutory mandates to pursue the equivalent of economic apple pie, such as ‘price stability’, leads in a straight, unbreakable line of logic and monetary science to the lunacy of negative 0.4% money market rates and $90 billion per month of bond-buying.

No it doesn’t.  There is no scientific linkage whatsoever—–just an ideological leap based on a Keynesian demand model that conveniently delegates all power to the central bankers’ soviets.

Just as in the case of the Humphrey-Hawkins Act in the US, the ECB’s enabling statute does not define price stability in quantitative terms—-nor does it specify the inflation index to be used or the duration to be measured. Even when the ECB’s Governing Council attempted to formulate a quantitative definition of ‘price stability’, it only got slightly more specific in defining it as something between zero and 2% over the course of a year.

“Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.”

By its own definition, therefore, the eurozone does not have a “deflation” problem or even a “lowflation” threat. For the last 16 years, the core HICP has averaged 1.5%, and during the last year when allegedly the deflationary sky was falling, the core consumer inflation index has risen by 1.0%.

So all of Draghi’s arm-waving about the “law” is just risible obfuscation. Surely “Mario and the NIRPs” are not suggesting that monetary policies so radical that they were not even conceivable a decade ago are warranted because core inflation is temporarily tracking at a mere 50 bps below its long-term trend; or that it should be measured in weeks and months, not a year; or that the ECB should be fighting the huge blessing to EU consumers of the globally originated collapse in imported oil and materials inflation.

Indeed, the truth is real simple. Virtually all of the sub-trend performance of the consumer price index during the last year is due to the nearly 3% drop in import prices. And that has been an unequivocal benefit to the European economy!

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?

Light source for quicker computer chips

Date: April 19, 2016

Source: Karlsruhe Institute of Technology

Summary: Worldwide growing data volumes make conventional electronic processing reach its limits. Future information technology is therefore expected to use light as a medium for quick data transmission also within computer chips. Researchers have now demonstrated that carbon nanotubes are suited for use as on-chip light source for tomorrow's information technology, when nanostructured waveguides are applied to obtain the desired light properties.
On the large scale, data transmission by light has long become a matter of routine: Glass fiber cables as light waveguides transmit telephone and internet signals, for instance. For using the advantages of light, i.e. speed and energy efficiency, also on the small scale of computer chips, researchers of KIT have made an important step from fundamental research towards application. By the integration of smallest carbon nanotubes into a nanostructured waveguide, they have developed a compact miniaturized switching element that converts electric signals into clearly defined optical signals.
"The nanostructures act like a photonic crystal and allow for customizing the properties of light from the carbon nanotube," Felix Pyatkov and Valentin Fütterling, the first authors of the study of KIT's Institute of Nanotechnology, explain. "In this way, we can generate narrow-band light in the desired color on the chip." 
Processing of the waveguide precisely defines the wavelength at which the light is transmitted. By engravings using electron beam lithography, the waveguides of several micrometers in length are provided with finest cavities of a few nanometers in size. They determine the waveguide's optical properties. The resulting photonic crystals reflect the light in certain colors, a phenomenon observed in nature on apparently colorful butterfly wings.
As novel light sources, carbon nanotubes of about 1 micrometer in length and 1 nanometer in diameter are positioned on metal contacts in transverse direction to the waveguide. At KIT, a process was developed, by means of which the nanotubes can be integrated specifically into highly complex structures. The researchers applied the method of dielectrophoresis for deposition of carbon nanotubes from the solution and their arrangement vertically to the waveguide. This way of separating particles using inhomogeneous electric fields was originally used in biology and is highly suited to deposit nanoscaled objects on carrier materials. The carbon nanotubes integrated into the waveguide act as a small light source. When electric voltage is applied, they produce photons.
The compact electricity/light signal converter presented now meets the requirements of the next generation of computers that combine electronic components with nanophotonic waveguides. The signal converter bundles the light about as strongly as a laser and responds to variable signals with high speed. Already now, the optoelectronic components developed by the researchers can be used to produce light signals in the gigahertz frequency range from electric signals.

Another of God’s marvellous Spring weekends.  Time to enjoy the reawakening countryside with its vivid bright greens of the emerging leafs, and the brilliant white and pink blossoms now in full bloom. And yes with Barry Kenya headed off to lecture the hapless Huns, time to put up a Brexit poster if I can find one. Have a great weekend everyone.

"When a man is tired of London, he is tired of life; for there is in London all that life can afford."

Samuel Johnson.

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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