Wednesday, 11 May 2016

British Independence.

Baltic Dry Index. 594 -22      Brent Crude 45.31

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

Brexit odds checker.

Brexit Quote of the Day.
“When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self evident: that all men are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, and the pursuit of happiness outside of the EUSSR.”

With apologies to the writers of the US Declaration of Independence.

This morning, compare and contrast stock market hype with global reality. Don’t tell the hypesters about the Baltic Dry Index sinking again, after the recent mothballing of ships caused a temporary rally.

U.S. Stocks Cap Biggest Rally in 2 Months as Commodities Rebound

May 10, 2016 — 11:22 AM BST Updated on May 10, 2016 — 9:43 PM BST
The bearish sentiment that hit traders in the past two weeks eased amid a bounce in commodities, with U.S. stocks rising the most in two months to join in equity market gains from Japan to Europe.

Energy producers, industrial shares, banks and Inc. were among the strongest contributors to a rally that jolted equities out of a recent torpor. The online retail giant climbed 3.4 percent to an all-time high after an analyst boosted their price target on the shares to $1,000. The Bloomberg Commodity Index rebounded from the biggest drop in six weeks, bolstering sentiment toward raw-material companies. After the markets closed, Walt Disney Co. fell as its earnings missed estimates.

The S&P 500 jumped 1.3 percent to 2,084.39 at 4 p.m. in New York, the most since March 11. The gauge ended an 18-session streak without a 1 percent move in either direction, the longest period of calm since 2014. It was a third day of gains in a recovery from the first back-to-back weekly drop since February. The Dow Jones Industrial Average added 222.44 points, or 1.3 percent, to 17,928.35, the biggest increase in eight weeks. The Nasdaq Composite Index also advanced 1.3 percent.

“Some of the same factors driving commodities are driving global growth and equities in general,” said Greg Woodard, a senior analyst and strategist at Fairport, New York-based Manning & Napier Inc., which oversees about $46 billion. “If they feel better about growth in China, in emerging markets and global growth, they feel more positive about equities and commodities. The commodity space is really a barometer as opposed to driving equities.”

After sliding 2.5 percent from its April high through last Thursday, the S&P 500 began a rebound on Friday as worse-than-estimated payrolls data spurred speculation the Federal Reserve will adopt a slower pace in tightening monetary policy.

Mega-container ship too big for shrinking trans-Pacific route

Published: May 9, 2016 5:31 p.m. ET
It was fun while it lasted.
French shipping line CMA CGM SA will no longer run the vessel Benjamin Franklin — the largest container ship to ever call at U.S. ports — between Asia and the West Coast. The ship was replaced with a smaller vessel, the Leo, less than five months into its service on the trans-Pacific route, according to BlueWater Reporting, which tracks ocean sailing schedules.
Representatives for CMA CGM didn’t respond to messages Monday. According to documents on CMA CGM’s website, the Benjamin Franklin is now running a route between Asia and Europe, where larger ships are more commonly used.
The Benjamin Franklin can carry nearly 18,000 20-foot ontainers, or TEUs, marking a capacity record when it docked at the Port of Los Angeles late last year. On a second trip to neighboring Long Beach in February, CMA CGM held inaugural festivities.
At the time, CMA CGM founder and Chief Executive Jacques Saadé told the crowd that the company was so confident in the U.S. economy and the demand for freight capacity that the carrier planned to launch six more vessels of the same size on its trans-Pacific “Pearl River Express” route.
It soon became clear the extra capacity wasn’t needed on the trans-Pacific lane, where a glut of shipping capacity has driven freight rates to record lows

Big Oil Abandons $2.5 Billion in U.S. Arctic Drilling Rights

May 10, 2016 — 3:00 AM BST Updated on May 10, 2016 — 11:07 PM BST
After plunking down more than $2.5 billion for drilling rights in U.S. Arctic waters, Royal Dutch Shell Plc, ConocoPhillips and other companies have quietly relinquished claims they once hoped would net the next big oil discovery.

The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to cut spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalized just before a May 1 due date to pay the U.S. government millions of dollars in rent to keep holdings in the Chukchi Sea north of Alaska.

The U.S. Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas, but energy companies have struggled to tap resources buried below icy waters at the top of the globe.

Shell last year ended a nearly $8 billion, mishap-marred quest for Arctic crude after disappointing results from a test well in the Chukchi Sea. Shell decided the risk is not worth it for now, and other companies have likely come to the same conclusion, said Peter Kiernan, the lead energy analyst at The Economist Intelligence Unit.

"Arctic exploration has been put back several years, given the low oil price environment, the significant cost involved in exploration and the environmental risks that it entails," he said.

In other oil news, Alberta’s tar sands start the process of resuming some production.

Repair crews assess Canada wildfire damage, oil firms plan restart

Tue May 10, 2016 5:08am EDT
Repair crews were expected to assess wildfire damage to the Canadian energy boomtown of Fort McMurray on Tuesday as the oil sands companies surrounding the ravaged city looked at bringing production back on line.
Political leaders got their first glimpse of the city on Monday since wildfire forced 88,000 residents to flee for safety. Alberta Premier Rachel Notley said they were encouraged by how much of it escaped destruction, estimating almost 90 percent of its buildings were saved.
But the tour also revealed scenes of utter devastation, with blocks of homes reduced to blackened foundations, front steps and metal barbecues.
Notley said 2,400 structures had burned within the city while almost 25,000 were saved.
The fire, expected to grow further on Tuesday, ravaged some 204,000 hectares (504,000 acres) of Alberta. But it also moved far enough away from the evacuated town to allow an official delegation to visit on Monday.
Officials warned it was not safe for residents to return, with parts still smoldering and large areas without power, water and gas. Notley said repair crews will have weeks of work ahead of them to make the city safe.
The assessment by officials came a few hours after insurance experts revised sharply downward their estimates of the cost of damage from the blaze, which began on May 1.
---- Fort McMurray is the center of Canada's oil sands region. About half of its crude output, or 1 million barrels per day, has been taken offline, according to a Reuters estimate.
Oil sands companies, which have high fixed costs, are expected to work as quickly as possible to get production back online, but face the challenge of many staff and suppliers being displaced by the evacuation.
In one encouraging sign for industry, Royal Dutch Shell Plc said on Monday it restarted production at a reduced rate at its Albian oil sands mining operation in Alberta, adding it plans to fly staff in and out.
But Imperial Oil said late on Monday it completed a controlled shutdown of its Kearl oil sands mining project, blaming the uncertainties associated with logistics.

In Goldie news, yet another disaster for the Muppets.

“Call it the Goldman Sachs test. If this is something Goldman would do to its clients, don't do it."

Felix Salmon.

Goldman Closes "Short Gold" Recommendation With 4.5% Loss; Will Continue Buying Gold From Its Clients

Back on February 15, just as the USD was about to plunge unleashing a global risk-on rally as a result of "Yuan stability", Goldman triumphantly announcecd its latest trading recommendation: short gold (at $1,205) with a target of $1000 and a 7% stop loss.

This being Goldman - the one hedge fund whose prop traders immediately take the other side of all trades pitches to clients - said clients were immediately and brutally taken to the cleaners as the consequence of a tumbling dollar (another trade that Goldman got disastrously wrong) was soaring gold. And that is precisely what happened. After that, unofficially, it took just two and a half months for Goldman to get stopped out of its short gold recommendation, which as we first noted, happened on April 29, when its the price soared above $1,300 breaching Goldman's stop. Officially, Goldman's Jeff Currie decided to take his time, although he too finally threw in the towel today admitting Goldman was wrong yet again with one more trading recommendation (recall that Goldman had earlier been stopped out and lost money on 5 of its Top 6 trades for 2016 in just over a month).

We close for the day with Japan explicitly warning it’s about to start manipulating the Yen lower. Officially Finance Minister Aso, says he has no plans to manipulate the currency. But after central bankster Kuroda brought in NIRP one week after publicly stating he wouldn’t, Japan has form in the area of probity. Then again, all central banksters lie, due 
to the dire mess that they’ve turned the Great Nixonian Error of fiat money into.

"When it becomes serious, you have to lie"

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President.

Japan's Aso repeats explicit threat of yen-selling intervention

Tue May 10, 2016 3:39am EDT
Japan will intervene in the currency market if "one-sided" yen rises last long enough to hurt its economy, Finance Minister Taro Aso said, issuing the strongest threat of action since the yen started its rapid ascent in the past few weeks.

It was the second straight day Aso explicitly used the word "intervention" in warning investors against pushing up the yen too much, a language the finance minister had avoided using even when the yen was surging at a pace of 5 yen in two days late last month.

Aso told parliament on Tuesday that Japan has no plans to manipulate currency moves on a long-term basis to give its exports a competitive trade advantage.

But he added that it was a shared understanding among G7 and G20 nations that excessive currency volatility was undesirable.

"Japan obviously will intervene if one-sided moves persist," he said, adding that the yen's appreciation before and during Japan's Golden Week holidays last week has been "quite rapid."

"We're determined to prevent such one-sided moves from accelerating," Aso said.

BOJ's Kuroda says no plan to adopt negative rates now

Thu Jan 21, 2016 12:05am EST
Bank of Japan Governor Haruhiko Kuroda said he is not thinking of adopting a negative interest rate policy now, signalling that any further monetary easing will likely take the form of an expansion of its current massive asset-buying programme.

"There are pros and cons of adopting negative interest rates ... The Federal Reserve didn't adopt negative interest rates and yet, its policy succeeded in stimulating the U.S. economy," he told parliament on Thursday.
Speculation is growing in markets that the BOJ may expand stimulus as early as its rate review next week, as slumping oil costs push inflation further away from its 2 percent target and global stock market falls dampen business confidence.

However, Kuroda has maintained his optimism on Japan's economy, saying that it continues to recover moderately and is helping keep inflation on a broad uptrend.

Bank of Japan adopts negative interest rate policy

|  Friday, 29 Jan 2016 | 12:17 AM ET
The Bank of Japan blindsided global financial markets Friday by adopting negative interest rates for the first time ever, buckling under pressure to revive growth in the world's third-largest economy.

In a move that was signaled by the Nikkei business daily minutes ahead of the decision, the BOJ said it will apply a rate of negative 0.1 percent to excess reserves that financial institutional place at the bank, effective February 16.

"Finance is the art of passing customer segregated funds from hypothecation to hypothecation until it finally disappears."

Jon Corzine, with apologies to Robert  Sarnoff

At the Comex silver depositories Tuesday final figures were: Registered 29.69 Moz, Eligible 123.16 Moz, Total 152.85 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
With the Rio Olympics less than three months away, Brazil itself is turning into a non-stop running soap opera. Below the latest developments in a country now starting to tear itself apart.

Dead-of-Night Reversal Puts Brazil Impeachment Back on Track

May 9, 2016 — 9:03 PM BST Updated on May 10, 2016 — 11:27 AM BST
The drive to oust President Dilma Rousseff is back on track after the head of the lower house reversed a decision that had earlier threatened to throw the entire impeachment process into chaos.

Lawmaker Waldir Maranhao released a statement in the dead of night revoking his own call to annul impeachment sessions in the lower house. That puts the Senate back in the spotlight, with a vote on whether to put the unpopular president on trial still slated for Wednesday. If successful, it would temporarily remove her from office. Rousseff is charged with illegally using state banks to plug a hole in the budget.

Yesterday’s wrangling jolted investors and underscored the intensity of a power struggle that is sure to heat up even further in coming days. Since proceedings began in Congress late last year, legislators have engaged in shoving matches over procedural debates and Rousseff has accused her vice president of plotting a coup against her. The Supreme Court has also been forced to step in on several occasions to clarify legal questions and further involvement by the highest court can’t be ruled out.

----The unrest comes as Brazilians suffer from an outbreak of the Zika virus, nearly double-digit inflation, rising unemployment, the worst recession in a quarter century and a ballooning graft scandal involving the state oil company. The downturn is draining government coffers and making it increasingly difficult for state and city governments to provide basic services. Authorities in Rio de Janeiro warned that with less than 100 days to go before they host the Summer Olympic Games, they are running out of money to pay public servants, fuel police cars and maintain hospitals.

Brazil impeachment: Dilma Rousseff supporters take to streets

7 hours ago
Supporters of Brazil's President Dilma Rousseff have set up burning barricades and blocked roads across the country in protest against moves to impeach her.

The roadblocks have caused widespread disruption in all Brazilian states.

The Senate is due to vote on the impeachment on Wednesday. A simple majority in favour of a full trial will suspend Ms Rousseff for up to 180 days.

The government has asked the Supreme Court to suspend the impeachment process for alleged irregularities.

However, similar attempts have been rejected by the court.

Protesters blocked the main access roads to Brazil's largest city, Sao Paulo, causing huge traffic jams during the morning rush-hour.

The protests spread to cities and towns across the country.

Police said there were barricades on 14 highways in Brazil's 26 states and the Federal District, home to the capital Brasilia.

In Rio de Janeiro, which will host the Olympics in August and September, protesters set up barricades at a major road linking the city to the state of Sao Paulo.

In the north-eastern city of Natal, buses did not run in the morning and the road next to the main university was blocked. Classes were suspended.

The anti-impeachment protests were organised by a left-wing umbrella organisation, the Popular Brazil Front, which promised to carry on with its direct action tactics.

"We will fight everywhere to defend democracy. Brazil says no to the coup!" it said in a Facebook message.
President Rousseff has vowed to keep fighting until the end against her impeachment.

Rousseff Mounts New Effort to Halt Impeachment in Court Appeal

May 10, 2016 — 8:34 PM BST
Brazil’s government is making a last-minute effort to salvage President Dilma Rousseff’s mandate by asking the Supreme Court to annul the impeachment process on the eve of a Senate vote that’s expected to result in her ouster.

Attorney General Jose Eduardo Cardozo filed the request on Tuesday, saying that Eduardo Cunha shouldn’t have been able to open impeachment proceedings last year because he was unfit to serve as lower house speaker. The attorney general cited the high court’s decision last week to suspend Cunha as speaker and legislator on grounds that he may have used his position of power to intimidate legislators and defendants in a corruption probe against him. Cunha has repeatedly denied any wrongdoing.

Cardozo’s motion is the latest in a series of government efforts to derail the impeachment process. He lost a Supreme Court appeal to halt proceedings last month, just days before the lower house voted by an overwhelming majority to send the motion to the Senate. In an 8-2 vote, the justices rejected the administration’s argument that Congress’s efforts to oust Rousseff were flawed and the administration hadn’t received the right to a proper defense.

Brexit The Animated Movie.

Brexit Quote of the week.

"When it becomes serious, you have to lie"

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President.

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?

Beyond oil: How solar power use could explode

Tue, May 10, 2016, 7:49AM EDT
The United States is celebrating a major milestone that has been 40 years in the making: one million solar installations nationwide.
Thanks to the more than 200,000 Americans working in the solar industry, and the innovations that have driven down the cost per watt for residential solar by two-thirds in 20 years, we can look forward to marking the next million solar installations just two years from now.
The solar revolution is well underway and clean energy is abundant, but it has been slow to reach low- and moderate-income neighborhoods. Families bringing home $40,000 or less per year make up 40 percent of the U.S. population, but only account for less than 5 percent of rooftop solar installations.
And according to the National Renewable Energy Laboratory (NREL), nearly half of Americans can't use rooftop solar because they don't own their roof, aren't in the right location, or don't have the financial status to qualify for financing programs. As we look ahead to the next million solar installations, how do we give all Americans—regardless of how much money they make—a seat at the table?
Community solar can be the game-changer we need because it will vastly expand access to solar, allowing people to purchase solar energy produced close to home without installing any new equipment. While there are only about 100 community solar installations generating 102 MW of power nationwide today, NREL projects that community solar is on its way to becoming the single largest source of distributed renewable energy in America—outpacing rooftop solar and providing as much as 8 gigawatts of clean power within the next five years, enough to power over five million homes
A community solar array is built in a location with good sun exposure and access to the power grid. Anyone who pays their own power bill, including renters, can buy subscriptions for a portion of the energy produced by the system, which is credited against their power bill. Because community solar is local, it creates local investment and jobs while strengthening community resilience. In states like Maryland and New York that already have community solar legislation in place, you could power your apartment with affordable clean energy from a solar array down the street that helps employ people in your neighbourhood.

The monthly Coppock Indicators finished April

DJIA: 17773.64-19 Down. NASDAQ:  4775.36 +11 Down. SP500: 2065.30 -21 Down. 

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