Friday, 1 July 2016

H1 16 Window Dressing Complete

Baltic Dry Index. 660 +20       Brent Crude 49.68

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

The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.

Walter Bagehot.

The window dressing stock market rally over, no doubt aided by the Fed’s Plunge Protection Team in New York of stock market riggers and fixers, the market stumbles into H2 16 both shaken and stirred. Things in the slowing real global economy are now apparently so bad, that the powers that be make little attempt at hiding the market rigging. The Brexit collapse was a punishment rig that got out of hand. The Plunge Protection rally was necessary to prevent a hedge fund redemption rout later in July.  The central banksters from China to America, are now only solely about protecting their stock market asset bubbles from deflating along with just about everything else.

If everything is so good as the stock markets imply, why is more and more of the world trapped in the Kafkaesque insane world of negative interest rates. We are deep into the end game of the Great Nixonian Error of fiat money, communist money. But the benefits of fiat money were all front loaded and long ago dissipated, in wars, socialist bribes to voters and special interests, unrepayable debt, bubbles, and louche lifestyle. The baby boom generation consumed the seed corn of their children and grandchildren fooled by the Greatest Ponzi Scheme of all, China. But now even China has run out of greater fools. A British exit from the failing EUSSR will not make any difference to what happens next as the USA enters the next recession and China moves from Wobble to Topple.

But first, more on the big rig. Project Fear was wrong.

Asian Stocks Head for Best Week Since April on Stimulus Optimism

July 1, 2016 — 1:08 AM BST
Asian stocks climbed, with the regional benchmark index heading for its biggest weekly advance since April, as policy makers signaled looser monetary policies to buffer the impact of Britain’s decision to leave the European Union.

The MSCI Asia Pacific Index rose 0.3 percent to 129.23 as of 9:07 a.m. in Tokyo, heading for a 3.2 percent gain over the past five days as the region’s equities rebounded from losses caused by the U.K.’s shock decision on Europe. Governor Mark Carney signaled the Bank of England could cut interest rates within months to shield the British economy, while the European Central Bank is considering loosening the rules for its bond purchases to ensure enough debt is available to buy, according to euro-area officials familiar with the matter.

“Markets are reacting positively to the supportive interest rate environment,” Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd., said by phone. “With interest rates remaining low for longer, the concern is what policy options are left for central banks if we see an even softer patch for the global economy.”

Japan’s Topix index added 0.9 percent, tracking gains in global equities. The nation’s consumer prices continued to slide in May, putting more pressure on the Bank of Japan to expand monetary stimulus at its meeting later this month.

South Korea’s Kospi index rose 0.4 percent. Australia’s S&P/ASX 200 Index gained 0.3 percent. New Zealand’s S&P/NZX 50 Index increased 0.1 percent. Hong Kong markets are closed for a holiday, while those in China have yet to start trading.

Futures on the FTSE China A50 Index gained 0.4 percent in most recent trading. The Shanghai Composite Index fell less than 0.1 percent on Thursday, halting a three-day rally.

Futures on the S&P 500 Index lost 0.2 percent. The U.S. equity benchmark index climbed 1.4 percent on Thursday after jumping 3.5 percent in the previous two sessions. The gauge finished the quarter up 1.9 percent and erased a June decline in the final minute of trading.

Rounding out the good news, even the EUSSR is starting to come to terms with the reality of a Brexit. After a two day tantrum in Brussels, the continent discovered later in the week that the sky hadn’t fallen in London or Paris.

Freedom of movement reform 'on the table' for Brexit talks, suggests French minister as he breaks ranks with rest of EU

30 June 2016 • 7:48am
France has suggested it is prepared to reach a deal to allow Britain to limit free movement of EU migrants while retaining access to the Single Market.

Michel Sapin, France’s finance minister, said that “everything is on the table” as he appeared to break ranks with the rest of the European Union.

Until now European leaders have insisted that Britain must continue to let in EU migrants if it wants to enjoy the benefits of free trade.

But Mr Sapin told BBC Two’s Newsnight on Wednesday night: “Everything will be on the table because Britain will make proposals, and we will negotiate all these aspects with a desire to come to an agreement.

“Britain won’t be in the same position as it was beforehand. Things will change. Things have already changed. We return to zero. As we say in France, a clean slate.

“When we negotiate with a country, a third party, Norway, Switzerland to take countries that are very close, we discuss all subjects: under what conditions there is freedom of movement of people; freedom of movement of goods; of capital.

“That is something that is very important for the UK with all the questions about financial services. So we discuss everything.”

 The comments represent a significant boost to Britain. Earlier this week, Mr Cameron attempted to lay the groundwork for Brexit negotiations by warning European leaders that they will have to reform free movement if Britain is to retain close economic ties with the continent.

In his final meeting with EU leaders before standing down as Prime Minister, Mr Cameron claimed that British voters backed a Brexit because people believe the country has “no control” of its borders.
Setting out the basis for a future British deal with the EU, he said Britain would only be able to maintain access to the single market if the bloc agreed to look again at its policy of open borders.
The Prime Minister’s comments will be seen as a sign that senior Government figures believe that Britain will be able to negotiate an “exit package” with the EU over the coming months.
However, all 27 other EU leaders appeared to reject Mr Cameron’s warning on Wednesday as they insisted that free movement must be retained.

Now back to the bad news reality. It doesn’t look so good for China and irrelevant minnow Scotland.

This economist thinks China is headed for a 1929-style depression

Published: June 30, 2016 2:23 p.m. ET
Andy Xie isn’t known for tepid opinions.

The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.

Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U.S. financial meltdown of 2008.

In a recent interview with MarketWatch, Xie said China’s trajectory instead resembles the one that led to the Great Depression, when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash.
China in 2016 looks much the same, according to Xie, with half of the country’s debt propping up real-estate prices and heavy leverage in the stock market — indicating that conditions are ripe for a correction.

“The government is allowing speculation by providing cheap financing,” Xie told MarketWatch. China “is riding a tiger and is terrified of a crash. So it keeps pumping cash into the economy. It is difficult to see how China can avoid a crisis.”

Xie’s viewpoints have at times attracted unwelcome attention. In 2006, when he was a star Asia economist at Morgan Stanley MS, +2.97% a leaked email to colleagues in which he said money laundering was bolstering growth in Singapore led to his abrupt departure from the bank.

In early 2007, he termed China’s surging markets a “bubble” that could lead to a banking crisis,” and in 2009 he likened them to a “Ponzi scheme.”

Xie, who is from China but was educated at — and earned a Ph.D. from — Massachusetts Institute of Technology, has said Chinese authorities have tried to characterize him as an American spy sent to disrupt their markets after his 2007 prediction. China’s consulate general in San Francisco and its embassy in Washington did not reply to requests for comment.

While he now works independently, Xie’s opinions on Asian affairs remain influential. He writes regularly for the South China Morning Post, among other publications, in May saying China is running a “gigantic monetary bubble that has corrupted virtually every corner of the economy.”

Xie “is a respected economist,” said Huawei Ling, managing editor of Caixin Weekly and a John S. Knight Journalism Fellow at Stanford University. “I appreciate his consistency and his analysis on China’s economic issues,” she said.

His 2007 forecast, meanwhile, turned out correct. Soon after his prediction, the Shanghai Composite Index SHCOMP, +0.19%  started plunging. After hitting a peak of 6,092 on Oct. 19, 2007, it fell below 2,000 over the next 12 months.

Below that harsh reality facing tiny Scotland. If Scotland goes bravely into the night on its own on $50 oil, there won’t be a fast track entry into the EU and euro. And no one in the EUSSR is rushing to replace Westminster’s Scottish subsidies with EU ones. The anti-English racist SNP, seems to have managed to shoot Scotland in both feet. The UK one and the EU one.

Nicola Sturgeon's hopes of keeping Scotland in EU hit by Francois Hollande and Spanish PM Rajoy

29 June 2016 • 3:07pm
Nicola Sturgeon’s hopes of negotiating a deal to keep Scotland in the EU has suffered a major setback after Francois Hollande ruled out talks and the Spanish Prime Minister said it has to leave with the rest of the United Kingdom.
Mariano Rajoy told a news conference following the European Council meeting in Brussels that the Scottish Government “does not have the competence” to negotiate with the European Union. He concluded: “If the United Kingdom leaves... Scotland leaves too.”
He was echoed by Mr Hollande, the French President, who insisted the EU will make no advance deal with Scotland. He said: "The negotiations will be conducted with the United Kingdom, not with a part of the United Kingdom.”
During a chastening visit to Brussels yesterday for Ms Sturgeon, Jean-Claude Juncker, the European Commission president, also made clear that neither he nor European Council president Donald Tusk would “interfere in the British process” by negotiating with Scotland.
A series of other member states, including Germany, also said they would not get involved in “internal” British politics.
Mr Rajoy’s uncompromising stance appears to make a second independence referendum more likely, as Ms Sturgeon has said that she will propose one if that is the “best or only way to protect Scotland’s place in the EU.”
But his statement also suggests that a separate Scotland would start life outside the EU and have to negotiate entry, a process that could take years and involve adoption of the euro, a hard border with England and tight public spending controls.

From the Orwellian thoughts of Comrade Sturgeon:

“All Brits are equal, but the Scots are more equal than others.”

At the Comex silver depositories Thursday final figures were: Registered 23.57Moz, Eligible 127.91 Moz, Total 151.48 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, Italy’s banking crisis just turned a whole lot nastier. The Germans have told Prime Minister Renzi to stick to the EU rules and bail-in the bondholders and large depositors, before attempting any kind of state bailout. Those bondholders and depositors may get hammered as early as this weekend or next week, in an attempt to stop capital flight from Italy’s dangerous banks.

Italian Bank-Rescue Push Falters as Merkel Sticks to the Rules

June 29, 2016 — 12:17 PM BST Updated on June 29, 2016 — 3:16 PM BST
Prime Minister Matteo Renzi’s efforts to shore up Italy’s struggling banks ran into a roadblock, as German Chancellor Angela Merkel insisted on sticking to the rules put in place since the financial crisis to prevent taxpayer bailouts.
“We can’t do everything all over again every other year,” Merkel told reporters after a European Union summit in Brussels on Wednesday. The bloc’s laws on the resolution and recapitalization of banks “offer enough leeway for the specific conditions in individual member states.”
“We know what we have to do on the banks and we’ll do it knowing it serves the country and respects European rules,” Renzi shot back shortly after Merkel had spoken. “We are not here to be given a lesson by the schoolteacher.”
The Italian government, which failed to gain EU backing for a bad bank earlier this year, has been sounding out other countries and the European Commission, the bloc’s executive arm, on ways to help its banks after their shares were hammered following the U.K.’s vote to secede from the bloc. 
Renzi’s government is considering measures that may inject as much as 40 billion euros ($44 billion) into banks, possibly by providing capital or pledging guarantees, according to a person with knowledge of the planning. Bank of Italy Governor Ignazio Visco told Il Sole 24 Ore that all available tools will be used to boost the country’s lenders.
Italian media have reported that the government in Rome is pursuing a six-month waiver of EU state-aid rules, allowing it to shore up banks without forcing investors to share losses.
The German government insists that EU rules on handling struggling banks should apply in any rescue effort, including forcing losses on shareholders and some creditors before public money can be injected, according to a person with knowledge of the government’s stance.
----Any waiver of the rules would be complicated, as Germany insists that the EU’s Bank Recovery and Resolution Directive be applied, the person said. That will mean Italy must first avoid triggering a wind-down procedure. The assumption in BRRD is that the need for “extraordinary public financial support” for a bank indicates that a bank is “failing or is likely to fail, and therefore triggers the need for resolution,” according to the European Banking Authority.

Germany isn’t pushing for banks to be wound down, according to the person. The government does, however, want to ensure that private investors are tapped before any public money is put into the banks. EU state-aid rules normally require shareholders and junior creditors to share losses.

The government in Berlin rejects the argument that the U.K. vote to leave the EU constitutes an “exceptional circumstance” which, under EU basic law, can allow a national government to grant aid to a company outside of the state-aid rules.

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?

IBM Researchers Develop New Plastics Recycling Process

June 29, 2016
IBM researchers say they have discovered a recycling process that converts BPA-leaching plastics into environmentally safe material for water purification and medical devices — a technological advance that could lead to less plastic waste and cheaper recycled materials manufacturers can use to produce a wide range of products.

Globally, about 2.7 million tons of polycarbonate plastic is produced annually and used to make CDs, baby bottles, eyeglass lenses and smartphones, among other items. Over time, polycarbonates decompose and leach BPA, a chemical that, in 2008, caused retailers to pull plastic baby bottles from store shelves due to concerns about the potential effects of BPA on the brain. Four years later, the EPA banned BPA in baby bottles and children’s cups.

Yesterday, IBM Research said scientists at its Almaden lab in San Jose, California said they have discovered a new, one-step chemical process that converts polycarbonates into plastics safe for water purification, fiber optics and medical equipment.

In the study, IBM Researchers added a fluoride reactant, a base (similar to baking powder) and heat to old CDs to produce a new plastic with temperature and chemical resistance superior to the original substance. When the powder is reconstructed into new forms, its strength prevents the decomposition process that causes BPA leaching, IBM says.

“Polycarbonates are common plastics in our society — especially in consumer electronics in the form of LED screens, smartphones and Blu-rays, as well as everyday eyeglass lenses, kitchen utensils and household storage gear,” said Gavin O. Jones, PhD, research staff member, IBM Research – Almaden in a statement. “We now have a new way of recycling to improve how this prominent substance impacts the world’s health and environment.”

Another IBM researcher Jeanette Garcia called it “an environmental win on many fronts.” The new process prevents plastics from entering landfills, recycles the substance into a new, safe and strong plastic, and provides business benefits as well, Garcia told Environmental Leader.

“Economic benefits arise from the use of waste as starting materials to make new plastics,” said Garcia, PhD, research staff member, IBM Research – Almaden. “Often times, materials derived from waste ends up costing less in the end because of energy that is saved. For example, materials from waste can cost up to 85 percent less in some cases, depending on the plastic.”

Commercialization of this process, however, is likely years away.

“Since IBM is not a chemical company, and therefore we do not produce chemicals at industrial scale, we would need partners to help with scaling up the process in the recycling and chemical industries. Although it is difficult to pinpoint an exact timeline, this scaling-up process can take some time — likely on the order of years — before it becomes commercially viable,” Garcia said.
Another weekend and a holiday weekend in the USA as they celebrate their freedom from Great Britain. A fine weekend too, to celebrate GB’s great escape  from the dying EUSSR Bilderberger prison. Have a great weekend everyone.

“Hello, Juncker,' Dodgy Dave Cameron said, 'is that you?'
'Let's pretend it isn't,' growled Juncker, 'and see what happens.”

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

The monthly Coppock Indicators finished June

DJIA: 17930  -14 Up NASDAQ:  4843 -08 Down. SP500: 2099 -10 Up.

No comments:

Post a Comment