Monday, 2 May 2016

Nothing Seems To Work Anymore.

Baltic Dry Index. 703 -07      Brent Crude 46.78

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

Brexit odds checker.
Brexit Quote of the Day.
“An empty cab pulled up to Downing Street. Dodgy Dave Cameron got out.”

With apologies to Winston Churchill.

In the increasingly dysfunctional end game of the Great Nixonian Error of fiat money, communist money, nothing seems to be working anymore. Or at least not working as our increasingly inept central banksters expected it to.  Stay long fully paid up physical gold and silver, especially now that our giant mega banks led by Deutsche Bank have admitted to rigging the gold and silver prices with DB agreeing to turn snitch on all the others. Several decades of pent up demand will come into the physical gold market in the months and years ahead.
Despite the recent rally in crude oil prices, largely driven by China taking advantage of the low prices to fill its strategic petroleum reserve, nearly every oil producing nation continues on with record production. Over the weekend, another American fracker went bust, even as it carried on producing gas and oil.
“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.

Iraq Oil Exports Near Record Even as Protests Threaten Paralysis

May 1, 2016 — 12:03 PM BST Updated on May 1, 2016 — 9:00 PM BST
Iraq’s oil exports approached a record high in April, adding barrels to a worldwide supply glut even as protests against public corruption threatened to paralyze the government of OPEC’s second-largest producer.

Shipments rose to 3.36 million barrels a day, or 100.92 million barrels for the month, Asim Jihad, an Oil Ministry spokesman, said by text message Sunday. The figures don’t include sales by the Kurdistan Regional Government. Exports rose from 3.29 million barrels a day in March and were close to the November all-time high of 3.365 million a day, according to ministry figures.

Oil shipments and production weren’t affected Sunday after protesters stormed the parliament in Baghdad, Falah Al-Amri, chairman of Iraq’s State Oil Marketing Organization, said by Facebook message. The demonstrators have accused the government of putting off necessary reforms as it struggles in the fight against Islamic State militants and sees its finances battered by collapsing oil prices.

“Politically, things have worsened dramatically in Iraq,” Richard Mallinson, an analyst at Energy Aspects Ltd., said Sunday by phone from London. “It’s a negative for the country’s oil industry over the medium term. We’re going to see production plateau and start to decline later this year” as government turmoil and spending cuts affect projects needed to maintain output.

Iraq produced 4.3 million barrels a day in April, data compiled by Bloomberg show. Output has increased from 3.25 million barrels a day two years ago, with companies including BP Plc and Lukoil PJSC boosting production at fields they operate in the south of the country.

Ultra Petroleum Files for Bankruptcy, Citing $3.9 Billion Debt

May 1, 2016 — 8:37 PM BST
Ultra Petroleum Corp. filed for bankruptcy protection, the latest oil and gas explorer to fall victim to the prolonged slump in energy prices.

Ultra listed $1.3 billion in assets and $3.9 billion in debt in court papers filed in Houston on Friday. The Houston-based company has 159 employees and its main assets are gas-producing properties in Wyoming, as well as some assets in Pennsylvania and crude oil properties in Utah, according to court papers.

“The low commodity prices, and especially the low natural gas prices that prevailed throughout 2015 and have continued through the first four months of 2016 have had a devastating impact,” Chief Financial Officer Garland Shaw said in a filing explaining events that led to the bankruptcy.

Among its first requests to the court will be for permission to continue a surety bonding program that had $12.6 million outstanding as of the bankruptcy date, and that secures its obligations on environmental, road damage, and plugging of wells, according to court records.

Between March and early April, Ultra missed a series of principal and interest payments owed to lenders and bondholders. And on April 14, the company was sued by pipeline operator Sempra Rockies Marketing LLC for failing to pay transport fees.

The oil market is suffering its worst slump in decades, brought on by a glut of production. Crude inventories are at their highest levels since 1930 in the U.S., according to data from the Energy Information Administration.

Much of the problem can be traced to a record-breaking surge in U.S. oil production that wouldn’t have been possible without a tremendous amount of debt. Many independent drillers, the small producers that drove the shale boom, outspent cash flow even when oil was $100 a barrel, and made up the difference with bank loans and high-yield bonds.
Next China. Despite an unprecedented credit bubble in Q1 16, nothing seems to be following the Beijing script anymore.

China's factories grow less than expected, raising recovery doubts

Economists had expected stronger growth in the manufacturing sector after recent stimulus measures by the Beijing regime
Sunday 1 May 2016
China’s manufacturing sector expanded less than expected in April, raising doubts about the sustainability of a recent pick-up in the world’s second-largest economy.

The official purchasing managers’ index (PMI) was 50.1 in April, easing from March’s 50.2 and barely above the 50-point mark that separates expansion in activity from contraction.

Analysts polled by Reuters had predicted the reading would improve to 50.4, after upbeat March data fuelled hopes that the country’s prolonged economic slowdown was easing.

The findings were “a little bit disappointing”, Zhou Hao, senior emerging market economist at Commerzbank in Singapore, said.

“To some extent, this hints that recent China enthusiasm has been a bit overpriced and the data improvement in March is short-lived.”

Activity in China’s services industry remained strong but also grew at a slightly slower pace, with the official reading at 53.5 in April, compared with 53.8 in March.
While industrial production expanded modestly (52.2) and at nearly the same pace as in March, growth in domestic and export orders faded slightly, though remaining in positive territory.
In a sign of caution over the outlook, factories continued to draw down heavily on inventories of finished goods.
Factories also appeared to be stockpiling fewer raw materials, possibly due to recent price increases for products such as steel, which have been linked in part to a recovery in the property market.
Indeed, South Korea reported April demand from China was the worst in three months, with exports to its biggest market tumbling 18.4% on-year.
And China’s factories continued to shed workers, with staff cuts quickening from the previous month. The official PMI survey, which tends to focus on larger, state firms, has shown persistent declines in employment for the last three years.
March data had spurred hopes that the long suffering manufacturing sector was bottoming out, with growth in industrial output and profits improving

In EUSSR news, the banking crisis never went away.

Atlante Set to Take Over Popolare Vicenza as IPO Investors Balk

May 1, 2016 — 8:09 AM BST
Italy’s government-orchestrated banking rescue fund will buy most of the shares in Banca Popolare di Vicenza SpA’s 1.5 billion-euro ($1.7 billion) capital increase through an initial public offering after institutional investors showed little interest.

Investors offered to buy 7.7 percent of shares on sale, leaving the Atlante fund with 1.39 billion euros of stock offered in the IPO, Popolare Vicenza said in a statement late Saturday. Ten institutional investors subscribed for a 5.1 percent stake, according to the Vicenza, Italy-based bank. Investment bank Mediobanca subscribed for about 5 percent of the initial public offering, a person with knowledge of the matter said on Saturday.

The shares were sold at 10 cents apiece, at the bottom of the range set by the bank. On April 19 Popolare Vicenza set a symbolic price of 10 cents to 3 euros a share after saying few investors had expressed interest in the sale.

Popolare di Vicenza sought investor funds to comply with a request from the European Central Bank, which warned that the lender could face bankruptcy proceedings without a capital increase. The government and financial institutions last month set up Atlante to act as a backstop to bank fundraising efforts, to replace UniCredit SpA as guarantor for Pop. Vicenza and to mitigate risks of a so-called bail-in for bank bondholders.

Investor offers are conditional on the Italian stock exchange allowing the bank’s listing. If the exchange does not give its authorization, Atlante will buy all 1.5 billion euros of stock on sale, Pop. Vicenza said in the statement.

On Monday, the exchange will decide whether there’s sufficient free float for a listing, and if so the stock will start trading Wednesday, according to terms seen by Bloomberg.

Popolare di Vicenza has recorded more than 700 million euros in outflows this year as clients withdrew deposits on concern their holdings exceeded the threshold for compensation if the bank is wound down.
Italian banking shares fell in Milan trading Friday, led by UniCredit, which dropped 5.3 percent.

May 1, 2016 6:01 pm

Deutsche Bank continues to be plagued by legal uncertainty

Try as it might, Deutsche Bank is struggling to outrun its past.
It is a year since Germany’s biggest lender paid out $2.5bn to authorities in the US and the UK to settle allegations that it manipulated the Libor benchmark.

Yet the aftershocks from that event are still rippling through the lender: last week, veteran lawyer Georg Thoma resigned from Deutsche’s supervisory board after coming under fire from other board members for his investigations into how the bank’s senior figures dealt with past scandals, including Libor.

The future does not look entirely bright either: a probe by at least three authorities around the world is looking at $10bn of suspicious trades in Deutsche’s Russian business.

So the UK financial watchdog’s findings of “serious” and “systemic” failings in relation to financial crime after a review of Deutsche’s UK unit last year could not have come at a worse time for the bank, which has agreed to submit to an independent probe of its efforts to improve anti-money laundering controls.

In a letter to Deutsche dated March 2 and seen by the Financial Times, the Financial Conduct Authority acknowledged that John Cryan, the bank’s co-chief executive who took office last July, was “determined” to improve Deutsche’s risk controls. But it said that until recently, “DB UK lacked a clear strategy and effective leadership in tackling the systemic AML failures that had occurred”.

Banks’ controls against financial crime have come under particular scrutiny in recent years, following high-profile cases in which they did not work. In late 2012, HSBC was penalised $1.9bn to settle accusations it allowed itself to be used by money launderers in Mexico and terrorist financiers in the Middle East. Other banks, including Standard Chartered and Commerzbank have also paid out for lax controls by US authorities.

The FCA has become tougher recently too: it hit Barclays with a record £72m penalty in November for sloppy anti-financial crime controls involving wealthy Qatari clients.
We close with the ever worsening financial crisis in Uncle Scam’s Puerto Rico.

Puerto Rico to default on debt payment due Monday

Published: May 1, 2016 10:35 p.m. ET

Commonwealth quickly running out of cash

Puerto Rico’s Government Development Bank doesn’t plan to make most of a $422 million debt payment due Monday, a step that could move the island’s financial crisis to a new level.

“Faced with the inability to meet the demands of our creditors and the needs of our people, I had to make a choice,” Gov. Alejandro Garcia Padilla said in a speech Sunday night, according to an English translation of the remarks. He said making the payment would divert money needed for crucial health and public-safety services.

A law enacted by Puerto Rico’s government in April empowers Garcia Padilla to suspend debt payments to pay for essential services as the U.S. commonwealth awaits help from Congress. Some of Puerto Rico’s creditors have criticized the law, saying the government won’t commit to necessary financial changes and hasn’t made a good-faith effort at a consensual restructuring.

Expectations of a GDB default were already high ahead of the governor’s speech. The GDB had $562 million available for paying debt as of April 1, according to the government.

A GDB default will likely spark lawsuits from creditors. Last month, a group of hedge funds that own GDB bonds filed a complaint in federal court asking that the GDB be barred from allowing the withdrawal of funds.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard
At the Comex silver depositories Friday final figures were: Registered 31.96 Moz, Eligible 119.82 Moz, Total 151.78 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
All is not well in the increasingly scandal hit world of art collecting. After the Panama Papers, the art world is coming under increased scrutiny for money laundering and tax evasion. They wouldn’t do that would they? Below the peculiar world of the dodgy dealers. Ever wonder why modern "art" is so bad? Just look at who was sponsoring it.
"If that's art, then I'm a Hottentot.
President Harry S. Truman.

Art Collectors Quit Scandal-Hit Geneva

April 29, 2016 — 4:00 AM BST Updated on April 29, 2016 — 1:48 PM BST
Art collectors have begun to pull their paintings and sculptures out of Geneva’s secretive free port storage facility as the site once again finds itself under scrutiny following the identification of a $20 million Amedeo Modigliani painting in its tax-free vaults that was allegedly stolen by the Nazis.

“A few” customers over the past six months have transferred their collections to newer rival Delaware Freeport near Philadelphia and similar warehouses in London, David Hiler, president of the Geneva Free Ports, said in an interview.

Facing criticism that the 127-year-old facilities’ lack of transparency fosters money laundering and tax dodging, Geneva authorities hired Hiler a year ago to overhaul how the sites are run. The reforms he’s undertaking, including a biometric system to identify and track visitors, combined with stepped-up customs inspections and recent art scandals are forcing clients to either accept the heightened scrutiny or get out.

Hiler, who was previously Geneva’s finance minister, acknowledges the free port’s international reputation needs improving but that he will need the help of Swiss regulators and governments around the world to help things change for the better.

“Today, the image is still deteriorating,” the 61-year-old said. “I don’t expect that things will improve quickly: this will take time.”

Losing a few nervous clients, however, may be the price to pay to improve that image, he said.

“Today, in terms of customers, the greater risk lies in not doing anything,” he explained.

The Geneva business has two sites close to the city center, with one at the airport and another 10 minutes away at La Praille in the city’s southwest. They have more than 150,000 square meters (1.6 million square feet) of storage. The free ports allow clients to store goods in transit, postponing some taxes and customs duties.

Though money-laundering experts have been calling for years for reform of the Geneva Free Ports and Warehouses, as they’re officially known, Hiler’s task recently took on greater urgency.

Geneva prosecutors earlier this month opened a criminal probe into the ownership of Modigliani’s “Seated Man With a Cane” identified in storage at the site. That came on the heels of a feud that began last year after Russian billionaire collector Dmitry Rybolovlev accused Geneva-based art dealer Yves Bouvier of overcharging him for $2 billion worth of canvases by Pablo Picasso, Mark Rothko and others.

Until that case exploded with Bouvier’s arrest in Monaco 14 months ago, the Swiss businessman was better known as the head of Natural Le Coultre SA, an art storage and shipment company that is the free port’s largest tenant. Bouvier was released on bail, saying he did no wrong and only charged Rybolovlev market prices that the Russian was willing to pay.

Modern art was CIA 'weapon'

Revealed: how the spy agency used unwitting artists such as Pollock and de Kooning in a cultural Cold War
By Frances Stonor Saunders Saturday 21 October 1995

For decades in art circles it was either a rumour or a joke, but now it is confirmed as a fact. The Central Intelligence Agency used American modern art - including the works of such artists as Jackson Pollock, Robert Motherwell, Willem de Kooning and Mark Rothko - as a weapon in the Cold War. In the manner of a Renaissance prince - except that it acted secretly - the CIA fostered and promoted American Abstract Expressionist painting around the world for more than 20 years.

The connection is improbable. This was a period, in the 1950s and 1960s, when the great majority of Americans disliked or even despised modern art - President Truman summed up the popular view when he said: "If that's art, then I'm a Hottentot." As for the artists themselves, many were ex- communists barely acceptable in the America of the McCarthyite era, and certainly not the sort of people normally likely to receive US government backing.

Why did the CIA support them? Because in the propaganda war with the Soviet Union, this new artistic movement could be held up as proof of the creativity, the intellectual freedom, and the cultural power of the US. Russian art, strapped into the communist ideological straitjacket, could not compete.

Brexit Quote of the week.

Dodgy Dave Cameron: leader of the nattering nabobs of Brexit negativism.

With apologies to Spiro Agnew

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?

Cooling graphene-based film close to pilot-scale production

Date: April 29, 2016

Source: Chalmers University of Technology

Summary: Heat dissipation in electronics and optoelectronics is a severe bottleneck in the further development of systems in these fields. To come to grips with this serious issue, researchers have developed an efficient way of cooling electronics by using functionalized graphene nanoflakes.
"Essentially, we have found a golden key with which to achieve efficient heat transport in electronics and other power devices by using graphene nanoflake-based film. This can open up potential uses of this kind of film in broad areas, and we are getting closer to pilot-scale production based on this discovery," says Johan Liu, Professor of Electronics Production at Chalmers University of Technology in Sweden.
The researchers studied the heat transfer enhancement of the film with different functionalized amino-based and azide-based silane molecules, and found that the heat transfer efficiency of the film can be improved by over 76 percent by introducing functionalization molecules, compared to a reference system without the functional layer. This is mainly because the contact resistance was drastically reduced by introducing the functionalization molecules.
Meanwhile, molecular dynamic simulations and ab initio calculations reveal that the functional layer constrains the cross-plane scattering of low-frequency phonons, which in turn enhances in-plane heat-conduction of the bonded film by recovering the long flexural phonon lifetime. The results suggested potential thermal management solutions for electronic devices.
In the research, scientists studied a number of molecules that were immobilized at the interfaces and at the edge of graphene nanoflake-based sheets forming covalent bonds. They also probed interface thermal resistance by using a photo-thermal reflectance measurement technique to demonstrate an improved thermal coupling due to functionalization.
"This is the first time that such systematic research has been done. The present work is much more extensive than previously published results from several involved partners, and it covers more functionalization molecules and also more extensive direct evidence of the thermal contact resistance measurement," says Johan Liu.

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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