Tuesday, 27 September 2016

Two Tens For A Five.

Baltic Dry Index. 934 -07    Brent Crude 47.15

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.
It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.
H. L. Mencken.

Well it wasn’t Nixon v Kennedy, it wasn’t Lincoln v Douglas, it wasn’t even Benson v Quayle, it was more Abbott v Costello, but it was entertaining. Not quite as entertaining as the original though. https://www.youtube.com/watch?v=f7pMYHn-1yA
The British Broadcasting Clinton Campaign declared its neutrality and Clinton the winner. From the selected edited clips I heard via BBC radio, there wasn’t really a winner just a car crash with the many injured called voters, and among them the Fed.

Financial markets say Clinton beat Trump in the debate

Published: Sept 26, 2016 11:29 p.m. ET
The American people get the last word, but in rapid-fire financial markets, traders Monday night delivered a quick verdict for Hillary Clinton.

U.S. stock futures ESZ6, +0.58%  climbed, and the Mexican peso USDMXN, -1.7566%  also gained ground in wake of the clash between the Democratic and Republican presidential candidates.

The peso has taken the brunt of Trump’s ascent in polls, on the theory that a victory for the real-estate tycoon will at the very least result in a lessening of trade, if not an erection of a large barrier on the southern border.

On the British betting site Betfair, Clinton’s chances were seen as improving. The likelihood of her winning improved to 70% from 64%. The site lets traders bet against each other.

Another real-time indicator moved in the direction of the former secretary of state. Google Trends showed that, after the debate, Clinton was the more searched term over Trump in every single state. Political scientists put some credence on Google searches as a proxy for voter interest.

Trump Slams Yellen’s Fed Again, This Time on a Much Bigger Stage

September 27, 2016 — 4:47 AM BST
Donald Trump took aim at the Federal Reserve in front of millions of viewers during the first 2016 presidential debate, accusing the U.S. central bank of playing politics in a challenge to its legitimacy that could have lasting consequences.

Public anger over Wall Street bailouts turned the Fed into a political lightning rod during the 2008 crisis, but the Republican nominee is taking that to a new level, especially by criticizing the institution during what was expected to be one of the most-watched television events in U.S. history.

“The Fed is being more political than Secretary Clinton,” Trump said during Monday night’s debate with Democratic candidate Hillary Clinton in Hempstead, New York, repeating his allegation that the central bank is leaving rates low to make President Barack Obama look good. “This Janet Yellen of the Fed” is being “political by keeping the interest rates at this level.”
Now back to something important. Global distress seems to be rising with each passing day. For now all news is still treated as good news, though less convincingly with each passing day. China and Japan probe each other’s air readiness. Is something bigger in the works?

Banking selloff sends Asian markets down

Published: Sept 26, 2016 11:06 p.m. ET

Japan’s bank index drops sharply

Declines in financial and commodities stocks sent Asian share markets broadly lower Tuesday, as markets eyed the first U.S. presidential debate for hints of future economic policy.

The Nikkei Stock Average NIK, +0.47%   slipped 0.4%, the S&P/ASX 200 XJO, -0.55%   was down 0.7%, and Korea’s Kospi SEU, +0.66%   was down 0.1%.

Banks, insurers and other financial stocks in Japan opened lower, following a global fall in the  sector overnight as concerns intensified over the health of Deutsche Bank AG DB1, -1.12%   , after its shares slid 7.5% Monday to their lowest in decades.

At the center of concerns about Deutsche Bank, a linchpin of Europe’s financial system, is the question of whether the lender will need to raise capital to fortify its increasingly precarious finances, though the bank said Monday it was “fundamentally strong.”

“It’s the banking sector in Europe that triggered all this movement and selloff in equities ... then you saw [a shift to] risk-off mode,” said Tareck Horchani, deputy head of Asian Pacific sales trading at Saxo Capital Markets Pte.

Like their European peers, Japanese financial firms are struggling with the ultra-low interest rate environment.
Japan’s Topix bank index was recently down 3.8%. Among individual stocks, Mitsubishi UFJ Financial Group 8306, -1.72%   lost 3.3% and Sumitomo Mitsui Financial Group 8316, -1.12%   declined 2.8%.

The release of the minutes of the Bank of Japan’s most recent meeting also provoked investor jitters, as the board’s caution about expanding the BOJ’s stock-fund buying could add to speculation that the central bank is now more hesitant to dramatically ease policy.

Japan Scrambles Jets After China Makes Show of Force in Key Strait

September 26, 2016 — 3:58 AM BST Updated on September 26, 2016 — 8:42 AM BST
Japan scrambled jets Sunday after a fleet of Chinese aircraft flew into a strategically important strait near disputed islands in the East China Sea.

Japan sent out the jets after eight of the Chinese planes crossed back and forth over waters between Okinawa’s main island and Miyako-jima island near Taiwan, the Defense Ministry in Tokyo said in a statement. Two of the planes may have been fighter jets, the ministry said.

While the Chinese planes didn’t cross into Japanese airspace, it was the first time that Japan saw Chinese fighter jets in the Miyako Strait, Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo on Monday.

He said that Japan rejected China’s Air Defense Identification Zone that encompasses islands known as Senkaku in Japan and Diaoyu in China. “We cannot accept the implication that the airspace over the Senkaku islands, which are part of our territory, belongs to China," Suga said.

Prime Minister Shinzo Abe told parliament Monday that he’s looking to improve relations with China, but any unilateral attempts to change the status quo must not be tolerated in the East China Sea, South China Sea or anywhere else.

The People’s Liberation Army Air Force sent a fleet of 40 aircraft -- comprising H-6K bombers, Su-30 fighters and air tankers -- on what it called a "routine" drill through the Miyako Strait on route to the West Pacific for exercises, a Chinese defense ministry statement said. It quoted Air Force spokesman Shen Jinke speaking from "a certain airport in East China."

The fleet performed surveillance, sudden assault and aerial refueling exercises, as well as "routine warning patrols" in China’s Air Defense Identification Zone in the East China Sea, according to Shen. The exercises stemmed from the need "to safeguard national sovereignty, protect national security and maintain peaceful development," Shen said.

Richard Perry to shut hedge fund as losses pile up

Published: Sept 26, 2016 6:36 p.m. ET

Fund has lost 60% of its assets since 2014

Richard Perry will shutter his hedge-fund firm after billions of dollars in investment losses and client defections.

The longtime hedge-fund manager told clients in a letter Monday “the industry and market headwinds against us have been strong, and the timing for success in our positions too unpredictable.”

Perry’s eponymous firm has lost more than 60% of its assets under management since November 2014, when it managed $10.4 billion. Its main fund lost more than 12% last year, much of it from a bad bet on Fannie Mae and Freddie Mac, and was down 1.3% this year through August, said a person familiar with the matter.

Perry won’t give back all of the remaining money immediately. He committed in the letter only to returning “a substantial amount of the fund’s capital” starting next month. Some of the remainder won’t be cashed out for more than a year, the letter said. Bloomberg News earlier reported Perry’s shutdown plans.
In European news, Germany is about to reopen its war with the ECB, though Allianz is betting on a Merkel U-turn on bailing out Deutsche Bank. There’s hope for a bailout of Old Three Card Monte di Sienna yet. But is it worth a punt on old Monte’s bonds?

Cracks showing in Germany's fragile truce with the ECB

Sun Sep 25, 2016 | 7:10am EDT
Michael Stuebgen, a conservative member of the German parliament, was speaking with the head of a local savings bank recently about the European Central Bank's quantitative easing (QE) program.
"He told me the bond market was being emptied out," Stuebgen recalled. "He likened it to going into a supermarket where everything has been bought up. You might find a shriveled old carrot or potato. Pretty soon you're starving."
Stuebgen, a spokesman on European affairs for Chancellor Angela Merkel's party in the Bundestag, credits the ECB and its President Mario Draghi with saving the euro zone from collapse four years ago.
But conversations like the one with the banker have convinced him that its policies, in particular the massive bond-buying program known as QE, have gone too far. He is not alone.
Stuebgen and his colleagues plan to send Draghi a message when he makes a rare appearance in the Bundestag on Wednesday to explain his policies and answer questions from lawmakers.
"It is time for the ECB to change course," Stuebgen said.
Last spring German criticism of the ECB reached new heights (some would say lows) when Finance Minister Wolfgang Schaeuble blamed Draghi's policies for fuelling the rise of the far-right Alternative for Germany (AfD), which was founded in 2013 in opposition to euro zone bailouts and has since morphed into an anti-immigration party.
Schaeuble's attack was unusual for two reasons. First, it was coming from Germany, where central bank independence has long been sacrosanct. Second, it was personal. Schaeuble was not only expressing concerns about ECB policies, which he had done off and on for years, but he was singling out Draghi.
A storm ensued, eventually forcing the two men to sit down over lunch in Washington in late April and agree a fragile truce.
It has held for five months, but there are signs it could be on the verge of collapse.

Germany Will Rescue Deutsche Bank If Necessary, Allianz Says

September 26, 2016 — 1:04 PM BST
The German government will have to bail out Deutsche Bank AG if its financial situation gets bad enough, Allianz Global Investors AG Chief Investment Officer Andreas Utermann said.
“I don’t buy at all what’s coming out of Germany in terms of Germany not wanting to step in ultimately if Deutsche Bank was really in trouble ,” Utermann said Monday in a Bloomberg Television interview with Francine Lacqua and Tom Keene. “It’s too important for the German economy.”
German officials have tried to shut down talk of a potential rescue for the country’s biggest bank, with Chancellor Angela Merkel’s spokesman Steffen Seibert saying Monday there are “no grounds” for speculation over state funding for the $2 trillion-asset lender. Focus magazine reported Sunday that Merkel has ruled out any state assistance for Deutsche Bank AG as she considers whether to run for a fourth term next year.

Deutsche Bank shares dropped to a record low on Monday amid concerns that mounting legal bills may force the lender to raise capital. Investors are reducing exposure to Deutsche Bank as the Basel Committee on Banking Supervision discusses new restrictions on how lenders measure risk that could force some to set aside more funds against losses.
It is inaccurate to say that I hate everything. I am strongly in favor of common sense, common honesty, and common decency. This makes me forever ineligible for public office.
H. L. Mencken.
At the Comex silver depositories Monday final figures were: Registered 30.92 Moz, Eligible 139.39 Moz, Total 170.31 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Ever think that the US stock market is rigged against the little guy orders? Well it is!  US stock casinos are no place to invest money.

Exchanges defeat appeal of U.S. high-frequency trading lawsuits

Fri Sep 23, 2016 | 3:40pm EDT
A federal appeals court on Friday rejected an investor's attempt to revive lawsuits accusing major U.S. exchanges of selling early access to market data to high-frequency traders, the subject of Michael Lewis' 2014 best-seller "Flash Boys."
The 2nd U.S. Circuit Court of Appeals in Manhattan agreed with the New York Stock Exchange, The Nasdaq Stock Market, BATS Exchange, the Chicago Board Options Exchange and others that it is for the U.S. Securities and Exchange Commission rather than courts to regulate how market data is disseminated.
Harold Lanier, a Fairhope, Alabama investor leading the three proposed group lawsuits, or class actions, complained that the exchanges let preferred traders pay premiums to receive market data up to 1,499 microseconds earlier than less fortunate investors.
He said this was done by giving data to the traders before feeding the information through a processor for wider distribution, violating his contractual rights and leaving him and other ordinary investors with stale data.
Writing for a 3-0 appeals court panel, Circuit Judge Gerard Lynch said the lower court judge who dismissed Lanier's lawsuits in April 2015, U.S. District Judge Katherine Forrest in Manhattan, erred in concluding she lacked jurisdiction.
Lynch nonetheless said Lanier's interpretation of relevant SEC regulations was preempted because it conflicted with the regulator's, and "would undermine Congress's intent to create uniform rules for governing the national market system."
He also said it was "wholly conclusory" for Lanier to say the exchanges had promised that the processor would be the "single source" for market data.
In a footnote, Lynch rejected Lanier's contention that Forrest's reference to "Flash Boys" in her ruling may have tainted the outcome. "Our own analysis of Lanier's claim has nothing to do with the book," Lynch said.
Lanier's lawyer Michael Lewis, who is not related to the author, said in a phone interview: "We are disappointed for our client, and also disappointed professionally."
Douglas Cox, a partner at Gibson, Dunn & Crutcher who represents Nasdaq and argued the case on behalf of the exchanges, did not immediately respond to requests for comment.
“A good politician is quite as unthinkable as an honest burglar.”
H. L. Mencken.

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?

Hmmm. To this old dinosaur commodities trader, just because somebody says it’s so, doesn’t make it so.

This Cheap, Portable Solar Panel Will Be the iPad of Renewables

Sep 24, 2016
A California-based startup unveiled a product this week that aims to disrupt solar power production, much like the iPhone changed communications.

SunCulture Solar Inc. is calling its wire-free SolPad, which resembles a large iPad, the “world’s first integrated solar energy solution.”

It combines batteries, software, inverters and solar panels into one device. Typically, a solar system involves installation of separate parts, increasing costs.

SolPad can be used off grid or tied to the grid, and uses batteries that the company says are safer than traditional lithium-ion ones.

”If the grid goes down, SolPad can keep delivering electricity,” the company said in a video unveiling the device in California this week.

“We’ve transformed solar — much like the smartphone revolutionized the personal computer sector, combining numerous components into a single device that’s significantly less expensive, more powerful and easier to use than conventional systems,” said CEO Christopher Estes.

The company plans to bring the product to market in the second half of next year.

Even though SolPad is just one of many similar products and could be one of many to fail, it is getting more attention because of its sleek design and an array of promises, including the potential to act as a microgrid and internet hot spot.

The product also highlights potential options under consideration for the “next phase” of solar design, according to analysts.

“In addition to the integration of the ‘three S’s’ — solar, storage and software — SolPad has also focused on aesthetics and ‘cool factor’ aspects of these technologies,” said Barry Cinnamon, CEO of Spice Solar and a longtime solar industry installer.

 “As solar moves to the millennial mainstream, more people will be motivated by these lifestyle benefits, which are buying factors that many solar and storage companies completely ignore,” he wrote in an email.
In an online review, PV Tech called it “potentially game-changing” as the only photovoltaic system that fully integrates energy management, storage and solar cells.

SunCulture’s goal is to circumvent some existing challenges for solar, such as the need for complicated wiring and access to a roof.

The company plans to give consumers a choice of building a portfolio of panels of different sizes and portability that can either be installed on a roof or placed around the house, without the usual wiring.

Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, and are right.

H. L. Mencken.

The monthly Coppock Indicators finished August.

DJIA: 18401  +18 Up NASDAQ:  5213 +16 Up. SP500: 2171 +18 Up.

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