Baltic Dry Index. 718
-08 Brent Crude 45.60
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino
They came, they saw each other, and they conquered their Brexit fears
and left again, although outside of the G-20 finance ministers’ mutual
admiration society, no one else saw much of anything accomplished. US Treasury
Secretary Jacob Lew as Julius Caesar entering
Britain it wasn’t. Nobody knew who the British Chancellor of Exchequer was, nor
much cared, despite his laying out a vague vision of a future Brexit. China’s
finance minister just wanted to keep China’s humiliating defeat over the South
China Sea law suit at the Hague off the agenda.
After assembling for the embarrassing photo-op, most were content to
leave Chengdu China, a legend in their own minds. Very little was expected from
this year’s G-20 finance ministers meeting, and the assembled G-20 finance ministers
gallantly rose to, and exceeded their task.
G20 will use 'all policy tools' to lift growth as Brexit weighs
The world's biggest economies will work to support global growth and
better share the benefits of trade, policymakers said on Sunday after a meeting
dominated by the impact of Britain's exit from Europe and fears of rising
protectionism.
Philip Hammond, Britain's new finance minister, said the uncertainty
about Brexit would begin to abate once Britain laid out a vision for a future
relationship with Europe, which could become clearer later this year.
But there could be volatility in financial markets throughout the
negotiations in the years ahead, Hammond said after the meeting of finance
ministers and central bankers from the Group of 20 (G20) major economies in
China's southwestern city of Chengdu.
"What will start to reduce uncertainty is when we are able to set
out more clearly the kind of arrangement we envisage going forward with the
European Union," Hammond told reporters.
"If our European Union partners respond to such a vision positively
- obviously it will be subject to negotiation - so that there is a sense
perhaps later this year that we are all on the same page in terms of where we
expect to be going. I think that will send a reassuring signal to the business
community and to markets."
A communique issued by the G20 ministers at the end of the two-day
meeting said Brexit, which dominated discussions, had added to uncertainty in
the global economy where growth was "weaker than desirable". It added
that members, however, were "well positioned to proactively address the
potential economic and financial consequences".
"In light of recent developments, we reiterate our determination to
use all policy tools – monetary, fiscal and structural – individually and
collectively to achieve our goal of strong, sustainable, balanced and inclusive
growth."
The International Monetary Fund this week cut its global growth
forecasts because of the Brexit vote.
Whereas monetary policy figured prominently in previous meetings of G20
financial officials, Bank of France Governor Francois Villeroy de Galhau said
there was very little debate this time and discussions focused instead on
growth.
That was echoed by others.
There was broad consensus that the global economy needed more growth,
U.S. Treasury Secretary Jack Lew told reporters, while Chinese Finance Minister
Lou Jiwei said it had been easier to forge consensus because the global
recovery remained weak.
More
In other China news, the wheels seem to have come flying off the
economy. The Great Ponzi Economy, is now operating on a new Ponzi scheme, to
prop up the old Ponzi scheme, that propped up the original Ponzi scheme. Things
are now so bad and near collapse, that the internet has just been banned in
China from reporting anything except the official line from Beijing. Little
wonder that the G-20 finance ministers scuttled out of Chengdu fast, before any
Erdogan style purge could begin.
Is a ‘crexit’ next? Global company debt will swell to $75 trillion through 2020
Published: July 20, 2016 2:50 p.m. ET
China’s opaque corporate sector and U.S. leveraged finance are particularly risky, says S&P
As companies drink at the open spigot of cheap borrowing from global central banks, company debt the world over will likely swell to $75 trillion by 2020, up from its current $51 trillion.That’s a top-heavy accumulation that leaves S&P Global Ratings analysts introducing a new risk with a familiar nickname — a “crexit” could rattle credit markets, they said Wednesday.
Central banks may be trying to reinflate their economies, but they’re doing so to the detriment of credit quality, the S&P Global Ratings team said in a report.
“Central banks remain in thrall to the idea that credit-fueled growth is healthy for the global economy,” S&P analysts said. “In fact, our research highlights that monetary policy easing has thus far contributed to increased financial risk, with the growth of corporate borrowing far outpacing that of the global economy.”
In fact, S&P considers a correction in the credit markets to be
“inevitable.” The only question is degree of that unwinding. An unexpected
sharp economic slowdown and an aggressive reversal of ultra-low interest rates
pose big risks to what otherwise could be an orderly drawdown of the global
pile of IOUs.
Already, the highest-risk debt has seen an uptick in defaults. Global
corporate bond defaults reached a milestone 100 so far in 2016 in mid-July.
That puts the current tally — a number led by U.S. companies — up more than 50%
from the same time last year. In fact, the last time the global count was
higher at this point in the year was in 2009, during the financial crisis, when
it reached 177.
----“A
worst-case scenario would be a series of major negative surprises sparking a
crisis of confidence around the globe,” S&P said in the report. “These
unforeseen events could quickly destabilize the market, pushing investors and
lenders to exit riskier positions (a ’crexit’ scenario). If mishandled, this
could result in credit growth collapsing as it did during the global financial
crisis.”
More
China Slaps Ban on Internet News Reporting as Crackdown Tightens
July 25, 2016 — 5:25 AM BST
China’s top internet regulator ordered major online companies including
Sina Corp. and Tencent Holdings Ltd. to stop original news reporting, the
latest effort by the government to tighten its grip over the country’s web and
information industries.
The Cyberspace Administration of China imposed the ban on several
major news portals, including Sohu.com Inc. and NetEase Inc., Chinese media
reported in identically worded articles citing an unidentified official from
the agency’s Beijing office. The companies have “seriously violated” internet
regulations by carrying plenty of news content obtained through original
reporting, causing “huge negative effects,” according to a report that appeared
in The Paper on Sunday.
The agency instructed the operators of mobile and online news services
to dismantle “current-affairs news” operations on Friday, after earlier calling
a halt to such activity at Tencent, according to people familiar with the
situation. Like its peers, Asia’s largest internet company had developed a
news operation and grown its team. Henceforth, they and other services can only
carry reports provided by government-controlled print or online media, the
people said, asking not to be identified because the issue is politically
sensitive.
The sweeping ban gives authorities near-absolute control over online
news and political discourse, in keeping with a broader crackdown on information
increasingly distributed over the web and mobile devices. President Xi Jinping
has stressed that Chinese media must serve the interests of the ruling
Communist Party.
The
regulator will slap financial penalties on such sites, the Paper cited
the official as saying. A representative of Sohu declined to comment on the
report. Tencent, Sina and NetEase didn’t respond to messages and phone calls
seeking comment. The cyberspace administration has yet to respond to a faxed
request for comment.
More
Vanke battle peers into shadows of China banks' risky lending
The takeover tussle embroiling top Chinese developer China Vanke has
unveiled how local banks are increasingly exposed to highly volatile domestic
stock markets through risky shadow lending products that mask their worsening
asset quality.
In their hunt for higher investment returns in a slowing economy and to
offset the impact of rising bad loans, Chinese banks are putting their
depositors' money into so-called asset management plans (AMPs), products set up
for the purpose of lending to companies and backed by shares as collateral.
Baoneng Group, which is attempting a hostile takeover of Vanke, used 26
billion yuan ($3.9 billion) of such instruments from about half a dozen banks –
including traditionally cautious China Construction Bank Corp (CCB) - to partly
finance buying 25 percent of the property developer.
CCB declined to comment.
While there is no official data on banks' overall exposure to shares
through shadow lending channels, JPMorgan estimated that AMP funds stood at 32
trillion yuan at the end of March, double a year earlier.
Although not illegal, banks growing use of such shadow-lending
techniques, which often make use of opaque instruments known in China as wealth
management products (WMPs), could be sacrificing proper risk management in the
pursuit of profit.
"The whole nature of WMPs and AMPs is that it's a murky area. There
is a degree of regulatory arbitrage there and it's clearly a way for (the
banks) to get around the prudential rules," said Jack Yuan, associate
director at Fitch Ratings.
"It's concerning that the scale of this sort of activity is
widening, and there is no effective regulation around this."
In almost all cases, shadow lending is kept off the banks' balance
sheets, making it difficult to gauge the true extent of the banks' exposure to
this form of fund raising or lending - which is of particular concern as
Chinese commercial banks' loan defaults are at their highest since the global
financial crisis in 2009.
More broadly, debt levels in the country are mounting, with the overall
level of private, corporate and government debt reaching 250 percent of the
country's economic output last year.
People familiar with the matter said the banks involved in the Baoneng
AMPs have been promised a return of as high as 7.5 percent, compared with
China's 10-year treasury bond yield of 2.8 percent.
Most of the AMPs that invest in shares have some risk-control provisions
in the contract that triggers liquidation of the stocks if they fall below a
pre-agreed threshold, industry analysts said.
However, what makes it risky for the banks is that in most cases they
don't have a clear understanding of the financial health and existing leverage
of the borrower company behind the AMPs.
The China Banking Regulatory Commission did not immediately respond to a
request for comment.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
At the Comex silver depositories Friday final figures were: Registered
28.97 Moz,
Eligible 126.40 Moz, Total 155.37 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, debunking the man-made global warming nutters again. The
normally sane Reuters news agency gets taken in hook-line-and-sinker.Is the Reuters “news” agency committing fraud?
Yet another screaming Reuters headline, this time Earth on track for hottest year ever as warming speeds up, precedes yet another screaming, inaccurate, prejudiced Reuters “news” article about the totalitarians’ current hot topic.http://sustainability.thomsonreuters.com/2016/07/21/earth-on-track-for-hottest-year-ever-as-warming-speeds-up/, written from Geneva, cites the World Meteorological Disorganization as saying the Earth is warming at “a faster rate than expected”.
Um, no, it isn’t.
The Global Warming Speedometer for January 2001 to June 2016 shows observed
warming on the HadCRUT4 and NCEI surface tamperature datasets as below IPCC’s
least prediction in 1990 and somewhat on the low side of its 1995 and 2001
predictions, while the satellite datasets show less warming than all IPCC
predictions from 1990 to 2001. Later IPCC predictions are too recent to be
reliably testable.
All of the observations have been much affected by the recent el Niño
spike, which may yet be followed by a correcting la Niña, in which event it is
possible that the Pause may resume, though don’t bet on it yet. Theory would
lead us to expect some warming over the medium to long term, though on balance
not very much.
Now, was it really too much work for Reuters, which prides itself on its
numerical data, to check IPCC predictions against observations, rather than
rebarbatively regurgitating a handout that any of its customers could have
downloaded from WMD all by their little selves?
“June,” says Reuters’ gripping work of fiction, “marked the 14th
straight month of record heat.” Now, let me see, when Ted Cruz displayed WUWT’s
Pause graph in the Senate last November, at which time there had been no global
warming for 18 years 19 months, was there not a great deal of whining about how
a mere 19 years was too short a period to draw any conclusions?
Yet Reuters, the supposedly bankable financial/statistical news agency,
unquestioningly recycles self-serving WMD propaganda to the effect that 14
months is enough to confirm what Private Fraser in Dad’s Army had long
told us: that “We’re a’ doomed!”
Next, Reuters unquestioningly reports a WMD spokesman as saying: “What
we’ve seen so far for the first six months of 2016 is really quite alarming.
This year suggests that the planet can warm up faster than we expected in a
much shorter time … We don’t have as much time as we thought.”
Er, no. Just look at the predictions and then look at the measured
reality, even after all the data tampering. It ought to be plain even to the
meanest journalistic “intelligence” at Reuters that the planet is actually
warming up far more slowly than They had expected.
Next, Reuters unquestioningly repeats that “The average temperature in
the first six months of 2016 was 1.3° Celsius (2.4° Fahrenheit) warmer than the
pre-industrial era of the late 19th Century, according to space agency NASA”.
Unh, no. Even if one relies upon the most tampered-with and prejudiced
of all the global temperature datasets, that of “space agency NASA”, the rate
of global warming since the dataset began in January 1880 has been less than 1
degree, equivalent to a mere 0.7 degrees per century. Not exactly scary. It’s
well within natural variability.
Is there no longer anyone at Reuters with enough elementary mathematical
knowledge to know that in statistics one should not make arbitrary comparisons
between periods of months and periods of decades?
-----Next, Reuters unquestioningly cites
an “expert”: “There’s almost no plausible scenario at this point that is going
to get us anything other than an extraordinary year in terms of ice (melt), CO2,
temperature – all the things that we track.”
Ooof, no, no and thrice no.
As for ice melt, yet another totalitarian propaganda expedition intended
to “raise awareness” of climate “catastrophe” by trying to sail around the
Arctic in the summer has just come a cropper owing to – er – too much ice.
Neither the North-East Passage nor the North-West Passage is open, so the
expedition is holed up in – of all ghastly places – Murmansk. That’ll teach
Them.
More
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?
Borrowing from pastry chefs, engineers create nanolayered composites
Method to stack hundreds of nanoscale layers could open new vistas in materials science
Date:
July 21, 2016
Source:
Massachusetts Institute of Technology
Summary:
Researchers have found a way to efficiently create composite materials
containing hundreds of layers that are just atoms thick but span the full width
of the material. The discovery could lead to easy-to-manufacture composites for
optical devices, electronic systems, and high-tech materials.
Adapting an old trick used for centuries by both metalsmiths and pastry
makers, a team of researchers at MIT has found a way to efficiently create
composite materials containing hundreds of layers that are just atoms thick but
span the full width of the material. The discovery could open up wide-ranging
possibilities for designing new, easy-to-manufacture composites for optical
devices, electronic systems, and high-tech materials.
The work is described this week in a paper in Science by Michael
Strano, the Carbon P. Dubbs Professor in Chemical Engineering; postdoc Pingwei
Liu; and 11 other MIT students, postdocs, and professors.
Materials such as graphene, a two-dimensional form of pure carbon, and
carbon nanotubes, tiny cylinders that are essentially rolled-up graphene, are
"some of the strongest, hardest materials we have available," says
Strano, because their atoms are held together entirely by carbon-carbon bonds,
which are "the strongest nature gives us" for chemical bonds to work
with. So, researchers have been searching for ways of using these nanomaterials
to add great strength to composite materials, much the way steel bars are used
to reinforce concrete.
The biggest obstacle has been finding ways to embed these materials
within a matrix of another material in an orderly way. These tiny sheets and
tubes have a strong tendency to clump together, so just stirring them into a
batch of liquid resin before it sets doesn't work at all. The MIT team's
insight was in finding a way to create large numbers of layers, stacked in a perfectly
orderly way, without having to stack each layer individually.
Although the process is more complex than it sounds, at the heart of it
is a technique similar to that used to make ultrastrong steel sword blades, as
well as the puff pastry that's in baklava and napoleons. A layer of material --
be it steel, dough, or graphene -- is spread out flat. Then, the material is
doubled over on itself, pounded or rolled out, and then doubled over again, and
again, and again.
With each fold, the number of layers doubles, thus producing an
exponential increase in the layering. Just 20 simple folds would produce more
than a million perfectly aligned layers.
Now, it doesn't work out exactly that way on the nanoscale. In this
research, rather than folding the material, the team cut the whole block --
itself consisting of alternating layers of graphene and the composite material
-- into quarters, and then slid one quarter on top of another, quadrupling the
number of layers, and then repeating the process. But the result was the same:
a uniform stack of layers, quickly produced, and already embedded in the matrix
material, in this case polycarbonate, to form a composite.
In their proof-of-concept tests, the MIT team produced composites with
up to 320 layers of graphene embedded in them. They were able to demonstrate
that even though the total amount of the graphene added to the material was
minuscule -- less than 1/10 of a percent by weight -- it led to a clear-cut
improvement in overall strength.
MoreThe monthly Coppock Indicators finished June
DJIA: 17930
-14 Up NASDAQ: 4843 -08 Down. SP500: 2099 -10 Up.
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