Saturday, 18 June 2016

Weekend Update 18/06/2016 – B-Day Minus 5. The Banksters Go Mental!

Brexit Quote of the Day.
Dodgy Dave Cameron: One could drive a schooner through any part of his argument and never scrape against a Brexit fact. 

With apologies to David Houston on William Jennings Bryan.

We open with open warfare between the Old Lady of Threadneedle Street and the Brexit campaign. F**k you was the desperate Old Nasty Lady of Threadneedle Street’s reply to the Vote Leave campaign. After the vote, there’s going to be a whole lot of scores to settle, I think. It’s just starting to get interesting. Below, the Battle of Britain and global banksters. Never has so much money been owed by so many to so few.

Below the massed ranks of banksters, to a man are adamant that Brexit threatens their lifestyle. Just who do those Brit voters think they are? Normally you can’t get the truth out of a bankster on pain of death. This time I believe them when they say their rent seeking lifestyle might get taken down a notch or two. And no bad thing for the rest of us either.

Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Ebenezer Squid, with apologies to Cary Grant. To Catch A Thief.

Pound could fall 'sharply' on Brexit, says BoE, as Mark Carney accuses Vote Leave of 'fundamental misunderstanding'

6 June 2016 • 12:26pm

The value of the pound could fall "sharply" if the UK votes to leave the European Union, the Bank of England has warned.

A decision to withdraw from the political bloc "appears increasingly likely... [to mean] sterling's exchange rate would fall further, perhaps sharply", the Bank's monetary policy committee (MPC), which decides on interest rates, said.

In the minutes of its latest meeting, at which the MPC decided to leave interest rates at their record lows of 0.5pc, the committee also cautioned that there was "growing evidence that uncertainty about the referendum is leading to delays to major economic decisions that are costly to reverse".

Bank officials said that this could include the postponement of "commercial and residential real estate transactions, car purchases, and business investment".

The MPC repeated its concern that the referendum had made "economic data releases more difficult to interpret", and said that it was being "more cautious in drawing inferences from them than would normally be the case".

It came as the Bank's Governor claimed that the Vote Leave campaign had displayed a "fundamental misunderstanding" of the Bank's role.

Mark Carney made the comments in a letter to Bernard Jenkin MP, a director of the anti-EU campaign. Mr Jenkin had written to the Governor earlier in the week arguing that the Bank would overstep its legal limits by mentioning the impacts of Brexit ahead of the referendum in its minutes.

Mr Jenkin wrote: “You are prohibited from making any public comment, or doing anything which could be construed as taking part in the referendum debate.

“I have taken legal advice from Speakers' Counsel… [and] wanted to take the opportunity to stress the importance of this matter.”

In a letter replying to the MP, first reported by the BBC, Mr Carney said: “All the public comments that I, or other Bank officials, have made regarding issues related to the referendum have been limited to factors that affect the Bank’s statutory responsibilities and have been entirely consistent with our remits."

Banks ING, SG warn of difficult trading conditions around Brexit vote: sources

Fri Jun 17, 2016 5:08am EDT

Dutch bank ING and France's Societe Generale have sent letters to clients warning them of difficult trading conditions in financial markets and large gaps in pricing of assets around Britain's referendum next week on EU membership,

Such formal warnings have become commonplace since the shocking moves in the Swiss franc in January of last year, which led to conflicts between banks and their clients due to the absence of market prices for several minutes.

A spokesman for ING confirmed the bank had sent a communication to clients warning them of the likelihood of difficult trading circumstances around the vote on June 23.

A source who had seen the letter, declining to be named, said it urged clients to be patient as pricing circumstances would be difficult and warned that there could be gaps in pricing, especially if Britain votes to leave the bloc. ING declined to comment on the content of the letter.

SG's sales and trading arm has also sent a letter to clients warning them about volatility and gaps in liquidity, said a source with knowledge of the issue, declining to be named.

Reuters has not seen a copy of either letter.

A spokesman for the bank declined to comment.

JPMorgan, Goldman Likely Most Exposed to Brexit Shocks, KBW Says

June 16, 2016 — 5:29 PM BST

JPMorgan Chase & Co. and Goldman Sachs Group Inc. are likely to be hardest hit among America’s biggest banks by a possible British disavowal of the European Union this month, according to analysts at Keefe, Bruyette & Woods Inc.

The two U.S.-based lenders are “most exposed to the potential negative fallout” from a so-called Brexit because they generate a large amount of their income from the U.K. compared with peers, the analysts led by Brian Kleinhanzl wrote in a research note dated June 15. JPMorgan’s and Goldman Sachs’s U.K.-based units generated a total of $14 billion in operating income in 2014, exceeding that of their three main U.S. rivals combined, according to the note.

----If an exit occurs, banks could lose the ability to use their U.K. subsidiaries for so-called passporting privileges that allow the firms to conduct business in other European economic area countries. That means banks will probably need to move jobs in the U.K. to other European countries.

As many as 4,000 of JPMorgan’s U.K. employees could be affected, more than any other U.S. lender, according to KBW. On a percentage basis, Goldman Sachs employees would suffer the most, with 4.4 percent of all employees or 1,600, impacted.

Estimates for 2017 earnings per share for JPMorgan would drop by 6.7 percent to $5.96 in the event of a Brexit and by 7.9 percent to $16.76 for Goldman Sachs, KBW said.

Spokesmen for Goldman Sachs and JPMorgan declined to comment.

This is why Warren Buffett, Jamie Dimon think the ‘Brexit’ vote matters

Published: June 17, 2016 12:45 p.m. ET

As the June 23 referendum on whether the U.K. will leave the European Union has grown closer, market watchers and participants have watched closely for signs of the effect the decision will have on markets and economic policy in the near and long terms. We’ve collected a number of statements from Warren Buffett, Jamie Dimon, Janet Yellen and others here.

See also: The ‘Brexit’ vote: Everything you need to know about the referendum

Warren Buffett
“It wouldn’t change anything I did,” Buffett, chairman of the board and CEO of Berkshire Hathaway BRK.A, -0.85% BRK.B, -0.89% told CNBC on April 29. “I wouldn’t sell the farm I own. I wouldn’t sell the real estate I own. I wouldn’t sell my house. I wouldn’t buy a different kind of car. And I certainly wouldn’t change my investment in businesses. But -- I hope they don’t do it.”

“Anytime you put something together that required all the political will and all the different countries there’s going to be a great attempt to make it work but I think it has flaws in it,” he told the channel on May 2. “That doesn’t mean they are fatal flaws, but they’ll have to be addressed in some way or another in future years.”

Elsewhere, the great SS United States seems to be settling lower in the water. What could possibly be wrong? The Fed’s talking chair hasn’t a clue.

We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.

Alexander Solzhenitsyn

15 Facts About The Imploding US Economy That The MSM Missed

by Michael Snyder • June 16, 2016

You are about to see undeniable evidence that the U.S. economy has been slowing down for quite some time.  And it is vital that we focus on the facts, because all over the Internet you are going to find lots and lots of people that have opinions about what is going on with the economy.  And of course the mainstream media is always trying to spin things to make Barack Obama and Hillary Clinton look good, because those that work in the mainstream media are far more liberal than the American population as a whole.  It is true that I also have my own opinions, but as an attorney I learned that opinions are not any good unless you have facts to back them up.  So please allow me a few moments to share with you evidence that clearly demonstrates that we have already entered a major economic slowdown.  The following are 15 facts about the imploding U.S. economy that the mainstream media doesn’t want you to see…

1. Industrial production has now declined for nine months in a row.  We havenever seen this happen outside of a recession in all of U.S. history.

2. U.S. commercial bankruptcies have risen on a year over year basis for seven months in a row and are now up 51 percent since September.

3. The delinquency rate on commercial and industrial loans has been rising since January 2015.

4. Total business sales in the United States have been steadily dropping since the middle of 2014.  No, I did not say 2015.  Total business sales have been in declinefor nearly two years now, and we just found out that they dropped again

Total business sales in the US did in April what they’ve been doing since July 2014: they dropped: -2.9% from a year ago, to $1.28 trillion (not adjusted for seasonal differences and price changes), the Censuses Bureau reported on Tuesday. That’s where sales had been in April 2013!

5. U.S. factory orders have been dropping for 18 months in a row.

6. The Cass Shipping Index has been falling on a year over year basis for 14 consecutive months.

7. U.S. coal production has dropped to the lowest level in 35 years.

8. Goldman Sachs has its own internal tracker of the U.S. economy, and it has fallen to the lowest level since the last recession.

9. JPMorgan’s “recession indicators” have risen to the highest level that we have seensince the last recession.

10. Federal tax receipts and state tax receipts usually both start to fall as we enter a new recession, and that is precisely what is taking place right now.

11. The Federal Reserve’s Labor Market Conditions Index has been falling for five months in a row.

12. The employment numbers that the government released for last month were the worst that we have seen in six years.

We end for the weekend with a renewable energy update from Jason in California. America too has jumped on the renewable energy band waggon.

U.S. Renewable Energy Generation Grows 14.6 % in Q1 2016, Sets New Records
N. Jason Jencka June 17, 2016 2:07 p.m. ET

Data released by the U.S. Energy Information Administration in its Electric Power Monthly shows that 2016 has been a banner year for renewable energy generation in the Aggregate U.S. Utility scale renewable generation (which excludes the rooftop solar market) rose by 14.6 % as non-hydro renewable energy grew by 22.9%. This strong growth was enabled in part by a strong pipeline of new projects that were fast-tracked for completion when there was industry uncertainty revolving around the potential expiration of the major tax credits available to wind and solar projects. As it happens the main solar production tax credit was extended at its present 30 percent rate through 2019 while wind subsidy is to be continued at a stepped-down rate through 2020. Nonetheless, the policy uncertainty that is inherent to a generally gridlocked Congress provided an impetus for rapid project completion that resulted in 8.6 GW of additional wind capacity and 7.3 GW of utility-scale solar. Given that U.S. wind projects have a capacity factor of near 33% while that of solar is near 27% these new additions alone are sufficient to power in excess of 3 million homes.

Returning to the power generation developments of Q1 2016, improved weather conditions played a critical role. California possesses 21 GW of hydroelectric capacity that is highly dependent on runoff from the Sierra Nevada mountain range, which in the 2015-2016 seasons hosted a near-average snowpack for the first time since 2012.  Hydroelectric generation had previously plunged by 60% from 2011 through 2014 as a result of prolonged drought. Given that in-state hydroelectric plants produce 10-15% of California’s electricity and that the snowpack is the source of roughly 30% of the states. Fresh water the magnitude of impact from improved snowpack is difficult to overstate.  While it is notoriously difficult to predict weather or policy, positive developments on both fronts have resulted in quite a first quarter of 2016 for American renewable energy.
National Resources Defense Council: California Snowpack and the Drought

U.S. Energy Information Administration “Electric Power Monthly”

Brexit Thought of the Week.

“The old grey donkey, Cameron stood by himself in a thistly corner of the Forest, his feet well apart, his head on one side, and thought about things. Sometimes he thought sadly to himself, "Why?" and sometimes he thought, "Wherefore?" and sometimes he thought, "Inasmuch as which?" and sometimes he didn't quite know what he was thinking about.”

Dodgy Dave Cameron, with apologies to A.A. Milne, and Winnie-the-Pooh

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