Thursday, 30 June 2016

Brexit Plus 7. A Final Review.

Baltic Dry Index. 640 +13       Brent Crude 49.97

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

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?”

Alan Greenspan. June 28, 2016

One week on from the shock Brexit result, normality of a sort has returned. The predicted World War Three hasn’t broken out. Scotland hasn’t defected to the EUSSR, and with $50 oil is highly unlikely to swap English subsidy for a German subsidy that isn’t on offer. The Berlin Broadcasting Corporation (BBC) may not yet have come to terms yet with the result, nor the Westminster Village, nor London’s rent seeking banksters, but outside of London’s bankster bubble, life goes on pretty much as before. With the end of the quarter and end of the half year upon us, the Great Vampire Squids lost no time in stabilising and dressing up stocks to minimise hedge fund redemptions in July.

But dressing up stocks aside, there’s a whole lot of reasons to think that the global economy is in trouble. From Italy’s banking crisis, to Brazil’s faltering Olympic games, to China’s mounting bad debt problem, to the USA looking like it’s on the cusp of a new recession if not actually in one, there’s little reason to think that global stocks are heralding a new boom. “Boom” of a different kind seems more likely in H2 2016, and it won’t have much to do with the minor impact of Brexit.

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 grateful thanks to the writers of the US Declaration of Independence.

Dow industrials are just about 320 points shy of pre-Brexit close

Published: June 29, 2016 6:49 p.m. ET
Don’t call it a comeback. But after stocks were thrashed following the U. K.s' decision to sever ties with the European Union, Wall Street has been steadily creeping back to its pre-Brexit levels.

The Dow Jones Industrial Average DJIA, +1.64%  is just 316 points, or less than 2%, from its close the day before results from the Brexit referendum on June 23 shocked the financial world. The S&P 500 index SPX, +1.70%  is just about 2% from its Friday finish.

Wednesday’s gains, buttressed by a sharp jump in crude-oil prices CLQ6, -0.94% mark the best two-day climb for the Dow and S&P 500 since Aug. 27. (In percentage terms, it’s the best two-day rally for the S&P 500 since Feb. 16.)

Last summer, stocks were assailed by fears that an economic malaise buffeting the world’s second-largest economy, China, would hobble the rest of the world. Combined with chaos in China’s stock market, that set the stage for a brutal plunge by global equities. But things eventually steadied and markets staged a rally. The S&P 500 and the Dow each saw a two-day rebound of around 5% on Aug. 26 and 27.

This time around, stock investors are trying to claw back from Brexit, or a British exit from the EU. The S&P 500 is up 3.5% since Tuesday, the Dow is up about 3.2%.

At the heart of the storm, the U.K.’s FTSE 100 surged 3.6% on Wednesday to erase its post-Brexit slide (though it’s still down in dollar terms after the British pound’s GBPUSD, -0.2234%  plunge to a 31-year low).

So, are investors in the clear? It’s impossible to know for sure, but Nicholas Colas, chief market strategist at Convergex, told MarketWatch that the recent rise might encourage investors to scoop up shares ahead of the end of the month and quarter on Thursday.

Colas said don’t be surprised to see “some end of month buying, since it sends a good tone about the second half of the year.”

Emerging-Market Currencies on Cusp of Wiping Out Brexit Losses

June 30, 2016 — 2:03 AM BST Updated on June 30, 2016 — 5:22 AM BST
South Korea’s won and the Malaysian ringgit led a third day of gains in developing nation currencies as markets rebounded after last week’s selloff in the wake of the U.K. vote to leave the European Union.

The MSCI Emerging Markets Currency Index was 0.3 percent away from wiping out losses from the close of trade on June 23 before the Brexit decision. Crude prices held above $50 a barrel, quelling concern about a drop in revenue for Malaysia as Asia’s only net oil exporter. The won also rose as factory output data on Thursday beat all forecasts in a Bloomberg survey, days after the government announced 20 trillion won ($17 billion) in stimulus. Equities advanced, with Philippine shares and Chinese stocks traded in Hong Kong rising the most.

“I’m looking at the rebound in risk and the firming in oil prices and those factors are very supportive,” said Stephen Innes, a senior trader at Oanda Asia Pacific Pte Ltd. in Singapore. “The global central bankers are in the background and the markets realize that the central bankers are going to stand in front of any capitulation.”

South Korea’s industrial production rose 4.3 percent in May from a year earlier, compared with the 0.3 percent median estimate in a Bloomberg survey. Output contracted a revised 2.6 percent in the previous month. Thailand reports trade data on Thursday, while Taiwan’s central bank is expected to cut its benchmark interest rate to 1.375 percent from 1.50 percent.

“Externally, risk appetite appears to have returned post Brexit,” said Christy Tan, head of markets strategy in Hong Kong at National Australia Bank Ltd. “It remains to be seen if this is sustainable as we expect at least a few more months of uncertainties so we will be cautious about the recent relief rally in Asian assets.”

16 Reasons to Celebrate Brexit’s Win

by Contributor • June 28, 2016
By Doug Bandow
Watching the Brexit campaign generated mixed feelings: it was a little like the man who saw his mother-in-law drive his new Mercedes off a cliff. In the United Kingdom, some people who hated free trade, immigration and market innovation challenged the officious, wannabe superstate headquartered in Brussels.

Who to cheer for?

We should cheer for the Brexiteers, who deserve at least a couple of hurrahs. The European Union created a common market throughout the continent, an undoubted good, but since then has focused on becoming a meddling Leviathan like Washington, DC. For Britain, the virtues of remaining appeared to pale in comparison to the likely costs of continued subservience to Brussels. In a variety of imperfect ways, Brexit promoted liberty, community, democracy and the rule of law. In short, the good guys won.

Here are sixteen reasons why the United Kingdom was better off Brexiting:

1. Average folks took on the commanding heights of politics, business, journalism and academia and triumphed. Obviously, the “little guy” isn’t always right, but the fact he can win demonstrates that a system whose pathways remain open to those the Bible refer to as “the least of these.” The wealthiest, best-organized and most publicized factions don’t always win.

2. Told to choose between economic bounty and self-governance, a majority of Britons chose the latter. It’s a false choice in this case, but people recognized that the sum of human existence is not material. The problem is not just the decisions previously taken away from those elected to govern the UK; it’s also the decisions that would have been taken away in the future had “Remain” won.

3. Those governed decided that they should make fundamental decisions about who would rule over them. The Eurocrats, a gaggle of politicians, bureaucrats, journalists, academics, lobbyists and businessmen were determined to achieve their ends no matter what the European people thought. A constitution rejected? Use a treaty. A treaty rejected? Vote again. A busted monetary union? Force a political union. And never, ever consult the public. No longer, said the British.

4. The rule of law will be respected—or at least not flagrantly flouted. Those signing up as EU members did not realize that the EU would be a transfer union. At least some countries likely would not have ratified the Lisbon Treaty, expanding Brussels’ writ, had they realized that explicit strictures against bailouts would be ostentatiously ignored. No doubt the usual suspects believed they were doing the Lord’s work by violating legal guarantees. But today no one living under the EU has any assurance that laws made, rules issued and promises offered would be kept.

5. Routine incantations of the need for “more Europe” and importance of “European solidarity” no longer will be confused with arguments. Those in charge always want more—more money to distribute, publicity to satisfy, rules to enforce and power to wield. Their vision of “more Europe” is Europe giving them more. “European solidarity” means others caring for them after they have wasted everything under their control.

6. Democracy will have triumphed over bureaucratic inertia. The EU is known for its “democratic deficit”, a Hydra-headed, unelected executive and a parliament chosen by people usually voting on domestic issues, using the polls for the European Parliament to punish errant governments at home. The Brussels bureaucracy has become the perfect means to impose policies that lack political support among member governments and peoples.

7. The pretensions of the EU as Weltmacht never looked so silly. There is a flag that no one salutes, and an anthem no one sings. There are multiple presidents: three, four or five? There is enervating duplication, including an EU foreign minister and diplomatic service along with those representing twenty-eight individual member states. Constant talk of creating a continental military while countries steadily shrink military outlays. Insistence that all which is good and decent comes from the EU as ever more people organize and vote against it.

8. The great satisfaction of watching smug smiles disappear from the faces of Eurocrats on both sides of the English Channel. The Brexit battle never was supposed to be a fair contest. It was intended to solve a Tory political problem, allowing the irreconcilables to make fools of themselves while the best and brightest led voters to the light. But it didn’t work out that way.

9. Demonstrating that other EU members can throw off the cloak of, if not tyranny, bureaucratic obsession. Most previous continental episodes of unplanned independent thinking were crushed—the French and Dutch votes against the constitution, the Irish vote against the Treaty of Lisbon, opposition to bailouts and European Central Bank abuses. The Eurocrats always seemed to win. Until now.

10. The recognition that most human decisions are not wrong but different, and need not be uniform across a continent, especially one made up of such diverse peoples. Common economic regulations, currencies, employment policies, weights and measures, farm programs and legal rights are convenient. However, convenience is not the highest good. People often value different approaches and standards and are entitled to live their lives as they wish, even if inconsistent with the continent’s most progressive thinking.

11. England, which pays most of the bills, ignored political blackmail from Scotland, which threatened to hold another independence referendum. It’s not clear why the Scots didn’t choose to leave in 2014. One suspects too many of them were hooked on subsidies from London, which raised the question why the English were so determined for the Scots to stay. Anyway, in the EU poll the English felt as free as the Scots to vote as they wished.
But window dressing aside, there’s an ugly reality arriving, and it has nothing to do with John Bull in or out of the EUSSR.

The Curse Of ‘Wealth Effects’ Central Banking

by David Stockman • June 29, 2016
The robo-machines and perma-bulls are at it again, delivering another volumeless dead-cat bounce in a market that has churned sideways for 600 days now.

That’s right. The S&P 500 first crossed the 2060 threshold around mid-November of 2014, and has made upwards of 40 attempts to rally since then—-all of which have failed to be sustained.

Nevertheless, there is a reason for the churn and there is a culprit behind the abortive rallies.

As to the former, it’s all about the cycle peak. The profits cycle peaked six quarters ago when S&P 500 reported earnings came in at $106 per share for the LTM period ended in September 2014. For the LTM ending in March 2016, by contrast, reported earnings were $87 per share.

So profits are down by 18%, and even that has been flattered by upwards of $700 billion of share repurchases in the interim.

Likewise, almost every measure of the real business economy peaked at about that time, too. For instance, non-defense CapEx orders are down 12% since September 2014, rail and trucking shipments are off by 21% and 6%, respectively, and export shipments are down by 13%.

But the most comprehensive measures of economic activity—total business sales and the inventory/sales ratio—– tell the real story. Total sales are down by nearly 5% from their August 2014 peak, and the inventory sales ratio has climbed steadily higher into what historically has been the recession zone.
Moreover, not only is the current 84 month-long simulacrum of a domestic business cycle expansion coming to an end, but so is the global super-cycle.

We are referring here to the unprecedented central bank fueled credit boom of the past two decades, which elevated the world’s debt mountain from $40 trillion to $225 trillion. Not only has that become a tremendous burden on current activity, but it also caused a massive spree of wasteful, inefficient capital spending and infrastructure building which can’t be sustained and which will eventually generate staggering losses of real capital.

The heart of this super-cycle, of course, was China’s Red Ponzi and the monumental digging, building, investing, borrowing and speculating campaign that was unleashed by the People’s Printing Press of China after 1994. But the incendiary hot house  economy which resulted is now pinned under $30 trillion of unserviceable debt and the greatest eruption of malinvestment, excess capacity and sheer investment waste in recorded economic history (the Pharaohs perhaps wasted more building the Pyramids).

It was all fueled by endless state supplied credit and a build it and they will come predicate. As noted in a nearby post, for example, it appears that China even built massive wind farms on that predicate. But, alas, the winds didn’t come.

In short, the world economy is fundamentally changing gears. A two-decade long credit-fueled crack-up boom which was centered in China and which cascaded throughout its EM supply chain and its DM base of capital equipment and luxury goods suppliers, such as Germany and the US, is coming to an end. We are now entering the crack-up phase and a long twilight era of deflation, liquidation, stagnation and payback.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Alan Schwartz, CEO Bear Stearns, March 12, 2008. Bust March 16, 2008.
At the Comex silver depositories Wednesday final figures were: Registered 22.71Moz, Eligible 128.79 Moz, Total 151.50 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, every cloud has a silver lining,  it’s an ill wind and all that for the global Anglo-American lawyers.

Britain, the lawyers of the world thank you

Drew Hasselback Tuesday, Jun. 28, 2016
A new poll came out last week with some stunning results. We used to think that lawyers were among the least loved professions. It seems to be different over in Great Britain, where at least 52 per cent of the people, really, really like lawyers.
I refer, of course, to the results of the Brexit vote. The next couple of years are manna sent from heaven for law firms that have clients with ties to Europe. No matter what the Brexit looks like, it’s going to involve a drastic overhaul of laws, regulations, directives and treaties.
“As the results came in Friday morning, I was thinking, the only people who benefit from this are lawyers,” said John Boscariol, a trade lawyer with McCarthy T├ętrault LLP in Toronto. “In any time of uncertainty, that’s often the case.”
That’s a fair point. Even if we don’t know what the relationship between the U.K. and the EU will look like in the future, we know that a big transformation is coming. Markets are not keen on the uncertainty. The pound has dropped and equity markets are volatile. But the legal future isn’t completely opaque. There are some likely scenarios for the future, and that’s what lawyers are able to discuss.

“Our advice to clients right now is stay calm,” Boscariol said. “In the short term, there is going to be disruption, and we’re going to have to figure out ways to deal with those disruptions strategically. But don’t panic.”

The British were offered two clear choices last Thursday: Leave or Remain. While the political choice on the ballot paper was binary, the legal outcome isn’t. Not every European country is in the EU, yet most of them have figured out a way to do business together. Lawyers look to those models as precedents for the future EU-U.K. relationship.

On Monday, global law firm Baker & McKenzie invited clients to a special meeting at Canada House on London’s Trafalgar Square. Kevin Coon, managing partner in Toronto, and one of the firm’s newest partners, former cabinet minister Peter MacKay, led discussions on how the Brexit vote results will impact Canada’s economic, diplomatic and trade relations with the U.K. and EU.

For clients globally, Baker has put together a nifty chart that explores five model scenarios, each based on a current relationship.  The most extreme model is a clear break, though WTO rules would still provide a minimum framework for trade rules. The “Norway” and “Swiss” models would involve high degrees of market access, though the U.K. would have no say in the EU formulation of group-wide trading policies.

Gowling WLG, which just last year merged with a British law firm, has set up a website called “Brexit Untangled” ( to help its clients through the changes ahead. The site provides links to lawyers with expertise in no fewer than 21 legal areas that will be impacted by the transition. The firm also has a link to the webinar in conducted Friday.

None of this ignores what a boon the entire EU project has to have been for lawyers to begin with. There’s been a rush to accuse every Leave voter of being motivated by immigration, and that’s just nuts.

The EU has generated more than its share of ridiculous examples of red tape. Some of last Thursday’s vote has to be chalked up to British frustrations with some regulations that are so silly, only lawyers could love them.

Perhaps the most famous of these is the so-called “Bendy Banana” regulation, which sets rules for the shapes of classes of bananas. Eurocrats are annoyed that anyone would dare question their wisdom on the banana front, and they say it is a “myth to end all myths” that Europe is trying to ban “straight and bendy” bananas. They say the banana rule, Commission Regulation 2257/94, merely states that bananas must be “free from malformation or abnormal curvature.” And Europe is not a classless society when it comes to bananas. According to the regulation, Class 1 bananas can have “slight defects of shape” and Class 2 bananas full-on “defects of shape.” So stop smirking, all you Euro-sceptic banana doubters.

Still, interpreting ridiculous regulations for clients is one thing. Advising clients on how to prepare for the legal unknown is entirely different.

There is a lot of advice to come, and it will likely involve a lot more creativity and analysis than studying the curvature of bananas.

Britain, the lawyers of the world thank you.

Cameron: I'm innocent till I'm proved guilty. This is a free country. The law is impartial.
Juncker: Who's been filling your head with that rubbish?
Cameron: I can't be had for anything. You've no proof.
Juncker: When I make out my report I shall say you've given me a confession. It could prejudice your case if I have to forge one.
With apologies to Joe Orton and Loot.

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this 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?

Researchers discover a new method to boost oil recovery

Nanofluid performance is comparable to more expensive methods

Date: June 27, 2016

Source: University of Houston

Summary: As oil producers struggle to adapt to lower prices, getting as much oil as possible out of every well has become even more important, despite concerns from nearby residents that some chemicals used to boost production may pollute underground water resources. Researchers have reported the discovery of a nanotechnology-based solution that could address both issues -- achieving 15 percent tertiary oil recovery at low cost, without the large volume of chemicals used in most commercial fluids.
Researchers from the University of Houston have reported the discovery of a nanotechnology-based solution that could address both issues -- achieving 15 percent tertiary oil recovery at low cost, without the large volume of chemicals used in most commercial fluids.
The solution -- graphene-based Janus amphiphilic nanosheets -- is effective at a concentration of just 0.01 percent, meeting or exceeding the performance of both conventional and other nanotechnology-based fluids, said Zhifeng Ren, MD Anderson Chair professor of physics. Janus nanoparticles have at least two physical properties, allowing different chemical reactions on the same particle.
The low concentration and the high efficiency in boosting tertiary oil recovery make the nanofluid both more environmentally friendly and less expensive than options now on the market, said Ren, who also is a principal investigator at the Texas Center for Superconductivity at UH. He is lead author on a paper describing the work, published June 27 in the Proceedings of the National Academy of Sciences.
"Our results provide a novel nanofluid flooding method for tertiary oil recovery that is comparable to the sophisticated chemical methods," they wrote. "We anticipate that this work will bring simple nanofluid flooding at low concentration to the stage of oilfield practice, which could result in oil being recovered in a more environmentally friendly and cost-effective manner."
In addition to Ren, researchers involved with the project include Ching-Wu "Paul" Chu, chief scientist at the Texas Center for Superconductivity at UH; graduate students Dan Luo and Yuan Liu; researchers Feng Wang and Feng Cao; Richard C. Willson, professor of chemical and biomolecular engineering; and Jingyi Zhu, Xiaogang Li and Zhaozhong Yang, all of Southwest Petroleum University in Chengdu, China.
The U.S. Department of Energy estimates as much as 75 percent of recoverable reserves may be left after producers capture hydrocarbons that naturally rise to the surface or are pumped out mechanically, followed by a secondary recovery process using water or gas injection.
Traditional "tertiary" recovery involves injecting a chemical mix into the well and can recover between 10 percent and 20 percent, according to the authors.
But the large volume of chemicals used in tertiary oil recovery has raised concerns about potential environmental damage.
"Obviously simple nanofluid flooding (containing only nanoparticles) at low concentration (0.01 wt% or less) shows the greatest potential from the environmental and economic perspective," the researchers wrote.
Previously developed simple nanofluids recover less than 5 percent of the oil when used at a 0.01 percent concentration, they reported. That leaves oil producers forced to choose between a higher nanoparticle concentration -- adding to the cost -- or mixing with polymers or surfactants.
In contrast, they describe recovering 15.2 percent of the oil using their new and simple nanofluid at that concentration -- comparable to chemical methods and about three times more efficient than other nanofluids.
Dan Luo, a UH graduate student and first author on the paper, said when the graphene-based fluid meets with the brine/oil mixture in the reservoir, the nanosheets in the fluid spontaneously go to the interface, reducing interfacial tension and helping the oil flow toward the production well.
Ren said the solution works in a completely new way.
"When it is injected, the solution helps detach the oil from the rock surface," he said. Under certain hydrodynamic conditions, the graphene-based fluid forms a strong elastic and recoverable film at the oil and water interface, instead of forming an emulsion, he said.

Stem CTO: Lithium-Ion Battery Prices Fell 70% in the Last 18 Months

“There are new markets opening up because of what we’ve seen in battery pricing.”

by Stephen Lacey  June 28, 2016
Tesla's battery factory gets a lot of attention. When completed, the so-called Gigafactory will manufacture more lithium-ion batteries each year than were produced globally in 2013.

That will help push prices further downward. But a few other large producers -- LG Chem, Panasonic and Samsung -- are already making batteries at unprecedented scale. There are numerous giga-scale factories producing cells and battery packs for electric cars and stationary applications throughout Asia. And the recent wave of capacity is already impacting pricing in a big way.

According to Larsh Johnson, the chief technology officer of Stem, the company is paying 70 percent less for lithium-ion batteries than it was 18 months ago.

"It’s happening. The capacity is out there," said Johnson in an interview. "The momentum continues."

Stem has installed 68 megawatt-hours of batteries for commercial and industrial applications, mostly to shave demand charges for customers that consume a lot of power in the middle of the day. Johnson said the improvement in pricing is allowing Stem to think beyond traditional demand charge management.

"There are new markets opening up because of what we've seen in battery pricing," he said.

Traditional demand management typically requires systems that discharge for 1-2 hours. Stem is now getting customer requests for systems that can provide 4 or more hours of storage to support grid management services, such as frequency regulation or load shifting to support renewable energy integration. The company is also looking at a broader geographic range, which includes Texas, Germany and Ontario.

The energy density of lithium-ion batteries continues to improve as well, helping vendors improve performance without adding new costs. "Double density batteries are important," said Johnson.

As battery costs go down, more hours of storage can be packed into the same battery.

"I'm not surprised that customers are asking for 4-hour duration systems," said Ravi Manghani, director of GTM Research's storage practice. "As soon as you start using storage for something beyond demand charge management, you're looking at a multi-hour project."

Many utilities looking to aggregate behind-the-meter storage services in New York and California are requiring more than 4 hours of discharge. And it's getting cheaper to provide that level of service every month.

There are a couple reasons for the 70 percent drop in pricing. Expansion of worldwide production capacity played a role. Since much of the new capacity was designed for electric vehicle demand that never materialized, stationary storage vendors are getting a better deal.

The monthly Coppock Indicators finished May

DJIA: 17787  -20 Up NASDAQ:  4946 +04 Down. SP500: 2097 -18 Up.

Wednesday, 29 June 2016

Brexit Plus 6. EUSSR Brexit Integrals.

Baltic Dry Index. 627 +11       Brent Crude 48.85

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

An integral is a mathematical object that can be interpreted as an area or a generalization of area. Integrals, together with derivatives, are the fundamental objects of calculus. Other words for integral include antiderivative and primitive. The Riemann integral is the simplest integral definition and the only one usually encountered in physics and elementary calculus. In fact, according to Jeffreys and Jeffreys (1988, p. 29), "it appears that cases where these methods [i.e., generalizations of the Riemann integral] are applicable and Riemann's [definition of the integral] is not are too rare in physics to repay the extra difficulty."

 “Solving Brexit! It’s all Greek to me. Can we go back to solving integrals.”

Comrade Juncker.

After two market trading days of Brexit turmoil and panic, stability of a kind returned to markets yesterday as shorts began taking profits, the margin call  selling ended, and the very brave tried their luck at bottom fishing. But I doubt we have seen the last of the Brexit bombshell. We are merely two days away from the end of quarter and end of half year, with a long weekend coming up in America as well. Money managers likely still have a lot of portfolio adjusting to do, to dress up the portfolios to match to the half year indexes. After that will come redemptions, as the gun shy exit the market for at least the summer.

Then we go on watch for sign of the next Lehman surfacing. Europe’s dodgy banks are just that, very dodgy. Under the EU rules currently in effect, if Italian, French, Spanish or German banks need a bailout, the bondholders and depositors get hit first before any taxpayer money becomes available. All of them having just bet wrongly on the Brexit outcome, are now even more dodgy than a week ago, not that they were healthy then. Italy has already called on the EU to drop the bail-in rules for bondholders and depositors. Something very bad is at hand in Italy’s banks it seems.

Global markets steady after Brexit-related rout

Published: June 28, 2016 11:34 p.m. ET
Investors reversed course on some of the most popular bets over the previous two sessions, as traders described a sense of calm returning to a market shaken by the U.K.’s vote last week to leave the European Union.

Stocks rose around the globe, led by the sectors that recently have been beaten down the most, such as banks. Demand for havens eased after two sessions of heady gains. The dollar pared its rise against the British pound GBP, +0.88%  . The price of oil, which had posted its biggest two-day percentage decline since February, recovered slightly.

“After you see two drastic days as you did, people start saying it’s time to buy,” said Frank Ingarra, head trader at NorthCoast Asset Management.

Next, the growing media and bankster campaign to undo Brexit and put the genie back in the bottle. I doubt that the genie will easily comply, even were there a willingness among UK lawmakers to try. After yesterday’s meeting in Brussels, the EU27 seem to have closed off that option, though it’s unclear whether they actually have to power to force out a dithering member that’s only half in. But UK MPs know that thwarting 17 million voters will likely make the UK Independence Party one of the largest in Parliament at the next general election, doing nothing at all for now is their easiest option. Dither, dally and delay, works just fine as a policy for the UK, but leaves the EU27 just twisting in the wind in growing uncertainty and frustration.

The EUSSR is just now slowly coming to terms with the aftermath of having sold Dodgy Dave Cameron a pup that he couldn’t sell to UK voters. They now  have no one to blame but themselves, if UK lawmakers opt for leaving them slowly twisting in the wind for months and months to come. My guess is that this is exactly what will happen as a sort of war of attrition gets underway between the UK and EUSSR. Eventually as at the battle of the Somme which started one hundred years ago on Friday, each side will come to realise the war of attrition is futile. For now though, Merkel and Juncker are still pouring petrol on to the fire.

Dodgy Dave Cameron: "Juncker, I haven't tasted food for 3 days."           
Juncker: "Well, I wouldn't worry about it... it still tastes the same."

How the EU helps out. With apologies to Curly, Moe, and Larry

Opinion: After Brexit, get ready for a Breturn as Britain reverses course

Published: June 28, 2016 11:28 a.m. ET
----There are at least two years until the U.K. finally goes through the exit door, and the political mood is so febrile, it can hardly be guaranteed that step will ever be taken.

The markets have yet to take this into account. While traders have been furiously pricing in the impact of Brexit on both the British and the global economy, there is another possibility they have not even begun to consider: The U.K. may not leave the EU at all, or it may do so in such a tepid way that it hardly counts as quitting. Let’s call it a “Breturn,” as the country returns to the status quo. And since the currency GBPUSD, -0.0974%   and the stock market UKX, +2.64%   plunged on quitting, presumably they should soar should a Breturn take place.

The markets did not see a Brexit majority coming, and nor did the political establishment. The polls always said it was going to be close, but most people chose not to believe them. The decision, when it came, took most investors by surprise, and there was a frenzied wave of panic selling that drove asset prices down right across Europe and, indeed, the world.

In the U.K., however, you would expect the mood to be one of jubilation. After all, this is what the majority of people voted for. There is very little evidence of it, however. A few die-hard Leavers aside, the mood of the past week has been one of anxiety and remorse. There is growing evidence that many people want to fight back against the decision to leave, and their voice is growing in strength.

An online petition demanding that a decision to leave the EU should mean that a majority of 60% on a 75% turnout be required has garnered huge support. It has put on 20,000 votes since I started writing this column and has now passed four million. A poll for the Independent found that 1.1 million of the 17 million Leave voters now regret their decision. On Tuesday, Health Minister Jeremy Hunt argued that there should be a second vote before the U.K. actually left. Expect to hear a lot more of that as the implications of the vote to leave sink in.

Could that actually happen? The answer is surely yes. In fact, there are three scenarios in which it is perfectly plausible that Britain might stay in the EU after all.

The most obvious is a second vote. Leaving the EU is not going to be a simple task for whoever takes over from David Cameron as prime minister. The process takes two years and will require long negotiations about a new trading relationship between Britain and the rest of Europe. A huge amount of legislation will have to be unwound and replaced. After 40 years as part of an increasingly powerful EU, getting out of the web of different treaties and responsibilities will take a huge effort. At the end of that process, a compromise will inevitably be reached, even if it might be messy and won’t please everyone. It would be perfectly sensible for the prime minister to then put that to the vote in another referendum, in which the option of remaining would be on the ballot.

Merkel Says No Way Back From Brexit as Cameron Regrets Loss

June 28, 2016 — 11:31 PM BST Updated on June 29, 2016 — 5:23 AM BST
European Union leaders said there could be no turning back for the U.K. after Prime Minister David Cameron used his last EU summit to express disappointment at his failure to win the referendum he called on Britain’s membership.

 “As of this evening, I see no way back from the Brexit vote,” German Chancellor Angela Merkel told reporters after the meeting in Brussels on Tuesday. “This is no time for wishful thinking, but rather to grasp reality.”

Fellow government chiefs lined up to warn Cameron that delaying the period before the U.K formally activates the EU’s exit mechanism will prevent the start of negotiations over any future relationship. The prime minister repeated the message he’d given back home: despite the uncertainty it’s causing, that will be the job for his successor.

During a debrief over dinner, Cameron told his 27 counterparts that their refusal to give him a deal that reduced immigration to the U.K. had cost him the referendum and his job, according to a British government official. He warned them that if they want a close economic relationship with the U.K. in the future, they will have to shift ground and find a way to tackle immigration, the official said.

----As well as dashing lingering hopes among some in the U.K. that the referendum result can be somehow overturned, leaders rebutted claims from pro-Brexit campaigners about the nation’s future relationship with the bloc. Several government chiefs insisted the U.K. cannot expect generous treatment from the EU once it’s no longer a member.

French Election

“The U.K. won’t be able to access the single market without applying the rules of freedom of movement,” French President Francois Hollande said. “This isn’t to punish the British people,” but following the referendum “they will have to face the consequences for some time.”

With Cameron the most high-ranking of a raft of political victims of the referendum in Britain, Hollande signaled that the pros and cons of EU membership are also likely to influence the outcome of the French presidential elections next year.

Leaders expressed a growing frustration across Europe that the June 23 referendum has left a power vacuum in the U.K. and the whole EU in a state of limbo. European Central Bank President Mario Draghi told the closed-door session that growth in the euro area could decline by as much as 0.5 percentage point for the next three years cumulatively, according to a European official with knowledge of the meeting.

----Juncker said the EU would put a time limit on the U.K.’s triggering of the exit mechanism -- even though legally there is no obligation on Britain to do it at all.

“If someone from the Remain camp will become British prime minister, this has to be done in two weeks after his appointment,” Juncker told reporters as the meeting ended. “If the next British PM is coming from the Leave campaign, it should be done the day after his appointment.”

EU President Donald Tusk, who co-ordinates summits, said the 27 leaders minus Cameron would meanwhile meet Wednesday to undertake “deeper reflection” on a “new impulse for Europe.” He said he plans to call another meeting of the 27 in September.

"On the whole the EU27 want to be good, but not too good, and not quite all the time.”

With apologies to George Orwell.
At the Comex silver depositories Tuesday final figures were: Registered 23.36Moz, Eligible 127.90 Moz, Total 151.26 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Not the usual suspects today. Today, Brazil “where the nuts come from,” and the coming Olympic games, now about five weeks away. “Lausanne, we have a problem!”  If the Olympics turn into a gigantic financial flop, the world will soon have another financial crisis in play alongside the EUSSR.

“When it becomes serious, you have to lie.”

Jean-Claude Juncker. Failed former Luxembourg P.M., serial liar, president of the European Commission.

Amid crisis, Rio gov. warns Olympics could be 'big failure'

By JENNY BARCHFIELD Associated Press Jun 27, 2:46 PM EDT
RIO DE JANEIRO (AP) -- Rio de Janeiro's acting governor warned Monday that the Olympic Games could be a "big failure," because of budget shortfalls that threaten to compromise security and mobility during the games.
In an interview with Rio's O Globo daily, Francisco Dornelles said the state is still awaiting a 2.9 billion Brazilian real ($860 million) payout from the federal government aimed at shoring up state coffers ahead of the Aug. 5-21 event. The funds were allocated last week but have not yet reached the state, and Dornelles warned that without them, police patrols may grind to a halt by the end of the week, for lack of gas money.
"How are people going to feel protected in a city without security," Dornelles was quoted as asking.
"I'm optimistic about the games, but I have to show reality," he said. "We can have a great Olympics, but if some steps aren't taken, it can be a big failure."
Rio has been particularly hard-hit by the recession besetting Brazil, which saw the economy shrink by around 4 percent last year and joblessness spike. The state is highly reliant on sinking oil royalties, and prior governments awarded billions in tax exemptions that resulted in near-empty coffers.
Another worrying issue for Dornelles is the metro line that was meant to ferry tourists to the main Olympic venue in the far-western Rio area of Barra da Tijuca. Promised for late last year, the metro is still not ready. A nearly 1 billion real ($290 million) federal loan aimed at finishing the project has also not yet been released.
"I've said that without security and without the metro there will be difficulties," Dornelles was quoted as saying.
He also called the situation in the state's health care system "calamitous," and said the policy of deferring or paying state workers' salaries in installments "is a form of slave labor."
Formerly Rio's vice governor, 81-year-old Dornelles was thrust into the hot seat after Rio Governor Luiz Fernando Pezao was diagnosed with non-Hodgkin's lymphoma and took medical leave earlier this year.
Asked how it's been to deal with the state's financial crisis, Dornelles responded, "for me, it's been a mess."
"I'd already decided to end my political career," he said, adding he'd only accepted the offer to become Pezao's running mate because he thought he'd only have to take over "from time to time."
"And suddenly this bomb fell into my hands," he said.
-----Dornelles' comments came on the heels of another bloody weekend in Rio, which saw a police officer who had been serving as a bodyguard for Paes and a 34-year-old doctor killed in muggings-gone-wrong. Officer Denilson Theodoro de Souza, 48, was shot in the northern Rio neighborhood of Pavuna on Sunday. He was the 49th Rio officer killed since the start of the year, according to O Globo.
A day earlier, Gisele Palhares Gouvea was shot in the head in her car as she entered one of Rio's main expressways on her way to her home in the Barra da Tijuca neighborhood.
Asked about Gouvea's slaying, Dornelles responded, "What a disaster. The security crisis is very serious."
Finality is not the language of politics.
Benjamin Disraeli.

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this 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?

Synthesized microporous 3D graphene-like carbons

June 28, 2016
Zeolites' nanoporous systems are an ideal template for the synthesis of three-dimensional (3D) graphene architecture, but the high temperatures required for their synthesis cause the reactions to occur non-selectively. The team from the IBS Center for Nanomaterials and Carbon Materials lowered the temperature required for the carbonization by embedding lanthanum ions (La3+), a silvery-white metal element, in zeolite pores.

---- On paper, these nanoporous systems are an ideal template for the synthesis of three-dimensional (3D) graphene architecture but the zeolite pores are too small to accommodate bulky molecular compounds like polyaromatic and furfuryl alcohol that are often used in carbon synthesis. Small molecules like ethylene and acetylene can be used as a carbon source to achieve successful carbonization within the zeolite pores, but it comes at a great cost. The high temperatures required for the synthesis cause the reactions to occur non-selectively on the external surfaces of the zeolite as well as the internal pore walls, resulting in coke deposition and consequently causing serious diffusion limitations in the zeolite pores.

----- The team from the IBS Center for Nanomaterials and Carbon Materials solved this conundrum with a novel approach. First author Dr. KIM Kyoungsoo explains: "Zeolite-template carbon synthesis has existed for a long time but the problem with temperatures has foiled many scientists from extracting their full potential. Here, our team sought to find the answer by embedding lanthanum ions (La3+), a silvery-white metal element, in zeolite pores. This lowers the temperature required for the carbonization of ethylene or acetylene. Graphene-like sp2 carbon structure can be selectively formed inside the zeolite template, without carbon deposition at the external surfaces. After the zeolite template is removed, the carbon framework exhibits the electrical conductivity two orders of magnitude higher than amorphous mesoporous carbon, which is a pretty astonishing result. This highly efficient synthesis strategy based on the lanthanum ions renders the carbon framework formation in pores with less than 1 nm diameter as easily reproducible as in mesoporous templates, and thus provides a general method to synthesize carbon nanostructures with various topologies corresponding to the zeolite pore topologies, such as FAU, EMT, beta, LTL, MFI and LTA. Also, all the synthesis can be readily scaled up which is important for practical applications - batteries, fuel storage and other zeolite-like catalyst supports."

The IBS team began their experiment by utilizing La3+ ions. Dr. KIM elucidates why this silvery-white element proved so beneficial to the team, "La3+ ions are unreducible under carbonization process condition, so they can stay inside the zeolite pores instead of moving to the outer zeolite surface in the form of reduced metal particle. Within the pores, they can stabilize ethylene and the pyrocondensation intermediately to form a carbon framework in zeolite."

To test this hypothesis the team compared the amount of carbon deposited in La3+-containing form of Y zeolite (LaY) sample against a host of other samples such as NaY and HY. The experimental results indicate that all the LaY, NaY and HY zeolite samples show rapid carbon deposition at 800°C. However, as the temperature decreases, there appears to be a dramatic difference between the different ionic forms of zeolite. At 600°C, the LaY zeolite is still active as a carbon deposition template. In contrast, both NaY and HY lose their carbon deposition functions almost completely.
Read more at:

The monthly Coppock Indicators finished May

DJIA: 17787  -20 Up NASDAQ:  4946 +04 Down. SP500: 2097 -18 Up.