Monday, 1 August 2016

The Fed’s Kaleidoscope.

Baltic Dry Index. 656 -09     Brent Crude 43.73

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

Things are seldom what they seem,
Skim milk masquerades as cream;
Highlows pass as patent leathers;
Jackdaws strut in peacock's feathers.

HMS Pinafore.

Despite all the QE money-from-nothing programs since 2008, ZIRP and NIRP, and the Fed expanding its balance sheet from about 900 billion to about 4 trillion, the present “recovery” from the Great Recession, is already long in the tooth and “the weakest of the Post-World War Two Era,” according to the Wall Street Journal. President Obama and the Democrats scuttled out of Philadelphia just in time to miss the devastating news to their “don’t worry, be happy” election charade. Not to worry though, the talking Chair’s Fedster’s have their Wall Street  stock casino gamblers covered.  But for how much longer? The Fedster’s need to keep the rig running until at least November 9th if Mrs Clinton is to join Frau Merkel and Mrs May in running the G-7.

Below, how Barry and Hillary dodged a bullet.

Q2 GDP: A Big Swing And A Miss

by Anthony B. Sanders • July 29, 2016
The Democrat National Convention finally wrapped up in Philadelphia, and fortunately for the incumbent Democrats the Q2 GDP numbers were released AFTER the convention wrapped up. And the Q2 economic numbers were abysmal.

Q2 GDP clocked in at a measly 1.2%, after a downward revision of Q1 GDP from 1.1% to 0.9%. Core PCE growth fell a revised 2.1% in Q1 to a sub-2% print of 1.7% in Q2.

The culprit? A decline in Gross Private Domestic Investment of -9.7% in Q2. Residential investment was down by the most since 2012.
Yes, residential gross private domestic investment fell -6.1% in Q2.
And on the employment cost front, the QoQ index rose only 0.60% and remains stagnant since the end of 2008
Not exactly an economic report that thrills people prior to a Presidential election.

Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era

Despite longevity, total growth during this economic expansion is lower than for much shorter business cycles

Jul 29, 2016 10:39 am ET
Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.
The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.
Total growth this expansion ranks just 8th of the past 11 cycles. The U.S. economy, at the end of June, was 15.5% larger than it was when the recession ended in 2009.
The current expansion remains smaller than the one during Richard Nixon‘s administration. And that 16% expansion lasted just three years. The economy grew 18% from 2001 through 2007. It grew 52% from 1961 through 1969.

Despite the current expansion’s lack of intensity—or perhaps because of it—it is now one of the longest.
There have only been three longer expansions in the past seven decades.

So far, it has occurred entirely during Barack Obama‘s time in the Oval Office, making it the longest expansion under a single president. The growth streak would need to extend just a little more than halfway through the next president’s term to achieve a modern record.

The average economic expansion since 1949 has lasted just more than five years. Only the expansion during the 1990s made it 10 years.

In other news this morning, global stock markets fuelled by the central banksters, have never been more divorced from the harsh global reality.  Can the Fed keep the global stock bubble alive and growing past Tuesday November 8th and the US presidential election? Who knows, but the Fed is now a big player on Team Hillary. Although how keeping a stock bubble inflating for another 100 days will actually help generate real jobs and new wealth in the US Main Street economy remains an unexplained mystery at the Fed.

Global Earnings Tumble as Companies Dig Deeper for Cost Savings

August 1, 2016 — 12:01 AM BST
Corporate earnings are heading for a fifth straight quarter of declines, dragged down mostly by energy companies’ struggles with low oil prices and a tepid global economy that threatens to throttle sales growth in many industries.

U.S. companies as varied as hamburger chain McDonald’s Corp. and Honeywell International Inc., a maker of gas-processing equipment and cockpit controls, have slashed costs and bought back shares to help earnings. Amid a worldwide sales slog, European pay-TV operator Sky Plc and South Korea’s Hyundai Heavy Industries Co. are crimping expenses to boost profit.

John Carey, a Boston-based fund manager at Pioneer Investment Management Inc., calls it earnings engineering, and he’s seen it before. Companies have grappled with a lackluster economy for several years as the U.S. manufacturing recovery sputtered, the world economy slowed and oil prices fell to $50 a barrel from more than $100 in 2014.

“There hasn’t been a lot of what you might call real, honest earnings growth through sales and business improvement and expansion of operations,” said Carey, whose firm oversees about $240 billion of equities and fixed income worldwide. “They just keep digging deeper into the hat and finding hidden rabbits and new ways to generate earnings.”

The global economy is forecast to expand 2.9 percent this year, according to the average estimates of economists surveyed by Bloomberg. That’s the lowest rate since 2009, with the U.S., European Union, China and Mexico all expected to post slower growth this year from 2015.

With about two-thirds of Standard & Poor’s 500 Index members having reported, earnings have declined 3.3 percent from a year earlier and sales have slumped 0.5 percent. Excluding results from energy companies, earnings have risen 1.1 percent and sales have gained 3 percent.

Asia and Europe have fared worse. With 294 companies on the MSCI AC Asia Pacific Index having announced results, earnings have plummeted 19 percent. In Europe, profits have dropped 14 percent with results in from almost two-thirds of companies on the Stoxx Europe 600 Index.

We close for the start of August and high summer with the inferno of Europe. Abandon hope all ye who enter the dying EUSSR.

Europe in Crisis: The Elections to Watch for Political Risk

Voters across Europe will determine the destiny of a continent in turmoil.

July 31, 2016 — 11:00 PM BST
Brexit. The largest influx of refugees since World War II. A spate of terrorist attacks. A populist insurgency. Another banking meltdown.

The crises buffeting the European Union show no signs of letting up. The U.S., Europe’s strongest ally, is embroiled in the most tumultuous election in living memory, Turkey is in turmoil and Russian President Vladimir Putin is watching from the sidelines.

Europe’s response to its multiple challenges will be shaped by a rash of elections over the coming year. Countries accounting for about 40 percent of the EU economy are going to the polls in 2017, when Chancellor Angela Merkel could be running for a fourth term in Germany.

Here is a list of the votes that could have the most impact.

German state elections
Mecklenburg-Western Pomerania and Berlin

September 4 and 18
So what: The two state contests will offer clues on whether populist anti-immigrant Alternative for Germany is managing to capitalize on recent attacks to build opposition to Merkel’s handling of the refugee crisis.
Outlook: The AfD’s prospects are best in the Baltic coast state of Mecklenburg-Western Pomerania, which includes Merkel’s home constituency. Another eastern state, Saxony-Anhalt, gave the party more than 24 percent of the vote in March. The AfD may also gain support in the state of Berlin, long a Social Democratic stronghold.

Croatian parliamentary election

September  11
So what: Croatians will vote for the second time in less than a year after the wobbly coalition formed after November’s election collapsed in June.
Outlook: With the Social Democrats ahead in the polls, the next administration will seek to cut the deficit for a second year and steer a recovery from record recession.

Regional elections, Spain’s Basque Country

September 25
So what: After the election, the Basque nationalists will likely return to Madrid with requests for more money and local empowerment, adding to the strain on a constitutional model that’s struggling to handle national divisions and a separatist push in Catalonia.
Outlook: Polls suggest the Basque Nationalists will remain the biggest party, while anti-austerity party Podemos will claim third spot, taking votes from both the separatist left and the Socialists.

Italian referendum

Probably October
So what: Italian Prime Minister Matteo Renzi’s job is on the line. Italians will vote on his Democratic Party’s plan to enact the most ambitious government overhaul in decades: a bid to end unstable coalition building by stripping the upper house of parliament of the ability to bring down governments. The number of senators would be cut by two-thirds.
Outlook: A July Euromedia poll showed 35 percent of Italians opposing the plan and 29 percent supporting it -- with 18 percent undecided. Renzi pledged to quit if he loses, a move that could benefit the anti-establishment Five Star Movement. Five Star, which supports a referendum on Italy’s euro membership, has already overtaken Renzi’s Democratic Party in at least one poll.

Bavaria leader rejects Merkel's 'we can do this' refugee mantra

Sat Jul 30, 2016 10:58am EDT
Bavaria's premier, whose state bore the brunt of recent attacks in Germany, took aim at Chancellor Angela Merkel's open-door refugee policy on Saturday by rejecting her "we can do this" mantra.
The comments from Horst Seehofer, whose Christian Social Union is the Bavarian sister party of Merkel's conservatives, exacerbate the chancellor's difficulty in standing by a policy that her critics have blamed for the attacks and which risks undermining her popularity before federal elections next year.
"'We can do this' - I cannot, with the best will, adopt this phrase as my own," Seehofer told reporters after a meeting of his party.
Five attacks in Germany since July 18 have left 15 people dead, including four assailants, and dozens injured. Two of the attackers had links to Islamist militancy, officials say. Germany is wrestling with how to respond.
Jens Spahn, deputy finance minister and a senior member of Merkel's conservatives, said that integrating the refugees was a Herculean task but the government needed to put more pressure on those new arrivals unwilling to make an effort to fit in.
"A ban on the full body veil - that is the niqab and the burka - is overdue," he told daily Die Welt. "My impression is that we all underestimated a year ago what would come upon us with this big refugee and migration movement."
Over a million migrants have entered Germany in the past year, many fleeing war in Afghanistan, Syria and Iraq.

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker
At the Comex silver depositories Friday final figures were: Registered 26.83 Moz, Eligible 127.26 Moz, Total 154.09 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today “Brazil, where the nuts come from,” with apologies to “Charley’s Aunt,” 1892.

Brazil’s Former President Lula, BTG’s Esteves Formally Charged

July 29, 2016 — 9:48 PM BST
Brazil’s former President Luiz Inacio Lula da Silva and six other people, including Andre Esteves of BTG Pactual, were formally charged by a federal judge for allegedly interfering in the country’s largest-ever corruption investigation.

Lula, Esteves and the others are accused of trying to obstruct the graft probe known as Carwash that has rocked Brazil’s political establishment and led to the arrest of some of the country’s top business leaders. Extensive corruption in Brazilian public companies has been unveiled by police investigations with the help of dozens of plea bargain deals.

Former Senator Delcidio Amaral and other associates of Lula were also charged, according to the text of the decision, signed by a federal judge from Brasilia. The defendants have 20 days to present their preliminary defense, the decision says.

Lawyers representing Lula said the former president has never interfered or tried to interfere with investigations. A lawyer responsible for Esteves’s defense reaffirmed that he didn’t commit any wrongdoing.
Lula on Thursday petitioned the United Nations over alleged human rights violations by Judge Sergio Moro, who has spearheaded the Carwash probe in the federal court of Parana state. He requested that Moro be removed from the case for overstepping his legal authority.
Esteves stepped down as Chief Executive Officer of BTG Pactual after being jailed in November and put under house arrest the following month. The investigation led some investors to pull their assets from the bank, forcing it to tap a 6 billion-real ($1.8 billion) credit line with the nation’s privately-backed deposit-guarantee fund. BTG also sold units, including its distressed asset management firm Recovery do Brasil, to boost liquidity.
In April, Esteves was freed from house arrest and returned to the bank as a senior partner. Last week, prosecutors accused him of trying to obstruct the Carwash investigation.

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?

Boron boosts graphene's sensitivity to noxious gases

Date: July 29, 2016

Source: Department of Energy, Office of Science

Summary: Researchers have discovered a way to significantly improve graphene's performance in detecting noxious gases. They peppered high-quality sheets with boron impurities.
Detecting noxious gases, such as those released from power plants and other sources that can harm the environment, is something graphene does well, but it could be even better. Researchers discovered a way to significantly improve its performance by peppering high-quality graphene sheets with boron impurities. 
Compared to pristine graphene, these modified sheets, a.k.a. boron-doped graphene, were 27 times more sensitive at detecting nitrogen dioxide and 105 times more sensitive at detecting ammonia.
Ultrasensitive gas detectors based on this proof-of-principle experiment could monitor environmental health and safety. Sheets of doped graphene with useful electronic and magnetic properties could also find application in field-effect transistors, hydrogen storage, and lithium-ion batteries.
Theory predicts that graphene could be much better at detecting noxious gases if impurities, or dopants, were incorporated into its rigid framework of one-atom-thick carbon. Experimental progress, however, has been limited by a lack of high-quality boron-doped graphene. Here, scientists grew highly ordered, centimeter-wide sheets of boron-doped graphene and observed, for the first time, boomerang-shaped features corresponding to dopant atoms embedded within graphene's hexagonal matrix. They characterized the material's electronic properties, which depend on how impurity atoms incorporate into graphene's honeycomb lattice and create defects that change the way gases chemically interact with graphene, which in turn alters current flow. To discover the atomic-level details of how boron doping changes graphene's properties, the researchers went to the Center for Nanophase Materials Sciences, a DOE Office of Science 
User Facility at Oak Ridge National Laboratory, for advanced instrumentation and expertise in low-voltage electron microscopy and scanning tunneling microscopy. Results showed that, compared with pristine graphene, boron doping increases the gas sensing capability of graphene to parts per billion for nitrogen dioxide and parts per million for ammonia.

The monthly Coppock Indicators finished July

DJIA: 18432  +03 Up NASDAQ:  5162 +10 Up. SP500: 2173 +01 Up.

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