"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"
Romano Prodi, former President of the European Commission, former Italy Prime Minister.
They’re back, the Greeks that is. Not that the debt problem of Greece ever really went away.
But first this from America. Lame duck President Obama has vetoed the bill that would allow Americans to sue Saudi Arabia for financing the atrocity of 9/11. The Saudis have already said that if it becomes law, they will have to dump their holdings of US Treasuries and cease buying more. Without the veto, the bill would have become US law in ten days. As things stand the veto is likely to be overturned, setting the stage for a showdown with the Saudis next month ahead of the US election. Nothing good will come from this new fight.
Obama vetoes Sept. 11 Saudi bill, sets up showdown with Congress
President
Barack Obama on Friday vetoed legislation allowing families of victims of the Sept.
11 attacks to sue Saudi Arabia, which could prompt Congress to overturn his
decision with a rare veto override, the first of his presidency.
Obama
said the Justice Against Sponsors of Terrorism Act would hurt U.S. national
security and harm important alliances, while shifting crucial terrorism-related
issues from policy officials into the hands of the courts.
The bill
passed the Senate and House of Representatives in reaction to long-running
suspicions, denied by Saudi Arabia, that hijackers of the four U.S. jetliners
that attacked the United States in 2001 were backed by the Saudi government.
Fifteen
of the 19 hijackers were Saudi nationals.
Obama
said other countries could use the law, known as JASTA, as an excuse to sue
U.S. diplomats, members of the military or companies - even for actions of
foreign organizations that had received U.S. aid, equipment or training.
"Removing
sovereign immunity in U.S. courts from foreign governments that are not
designated as state sponsors of terrorism, based solely on allegations that
such foreign governments' actions abroad had a connection to terrorism-related
injuries on U.S. soil, threatens to undermine these longstanding principles
that protect the United States, our forces, and our personnel," Obama said
in a statement.
Senator
Chuck Schumer, who co-wrote the legislation and has championed it, immediately
made clear how difficult it will be for Obama to sustain the veto.
Schumer,
the No. 3 Democrat in the Senate, issued a statement within moments of
receiving the veto, promising that it would be “swiftly and soundly
overturned.” He represents New York, home of most of the Sept. 11 victims.
Both the
Democratic and Republican candidates for president, Hillary Clinton and Donald
Trump, said they would have signed the bill into law if they were in the White
House.
More
Now
back to Greece, and the dying EUSSR.
Greece needs substantial debt relief, surplus targets unrealistic: IMF
Greece
needs substantial relief to render its debt load sustainable and help set its
ailing economy on a recovery path, the International Monetary Fund said in an
annual review on Friday.
The
review, which is separated from current bailout programme talks, said the debt
relief must be calibrated on credible fiscal and growth targets and noted that
current primary budget goals of 3.5 percent of economic output beyond 2018 are
unlikely to be reached.
"The
authorities' current targets remain unrealistic, in that they still assume that
Greece will attain and sustain primary surpluses of 3.5 percent of GDP for many
decades despite double-digit unemployment rates," the IMF review said.
"It
cannot be assumed that Greece can simply grow out of its debt problem. Further
debt relief will be required to restore sustainability."
The IMF
said that Greek banks must reduce their load of non-performing loans rapidly to
set the stage for credit growth in the economy and that structural reforms need
to be accelerated to boost productivity and growth.
Euro zone business growth near two-year low in September: PMI
Euro zone
business activity has expanded at its weakest rate since the start of 2015 this
month as growth paths diverged and firms stopped discounting for the first time
in a year, surveys showed on Friday.
Markit's
composite survey showed a big split between buoyant manufacturers and a
struggling service sector, and a similar divide in growth rates among members
of the currency union: French business activity hit a 15-month high, while
Germany's private sector growth slowed to a 16-month low.
The euro
zone flash composite Purchasing Managers' Index, seen as a good overall growth
indicator, fell to 52.6 from August's 52.9. Readings above 50 indicate growth,
but it was still the lowest figure since January 2015.
A Reuters
poll of economists had predicted only a slight dip to 52.8.
"They
(PMIs) rather confirmed the expectations that moderate but stable growth in the
euro area has continued in the autumn," said Tuuli Koivu at Nordea.
Markit
said the PMI pointed to the bloc's GDP expanding around 0.3 percent this
quarter, in line with a Reuters poll earlier this month that suggested
economies stuck in low gear need fiscal policies rather than more monetary
easing. [ECILT/EU]
More
But it was not all bad news in Europe
yesterday. Britain’s Brexit vote and
weaker Sterling seems to have set off a tourist boom in the UK. The exact
opposite of what Dodgy Dave Cameron’s Project Fear Remainiac campaign
predicted.
UK sees record visitor numbers in July after EU exit vote
Britain
saw a record number of foreign visitors in July while spending by British
tourists abroad fell for the first time in more than a year, according to the
first figures since the country voted to leave the European Union.
With
their spending power helped by a slump in the pound after the Brexit
referendum, some 3.8 million foreigners visited Britain in July, the Office for
National Statistics said. It was the highest monthly total on record and 2
percent more than a year earlier.
Sterling's
sharp fall against the dollar, euro and other currencies since the June 23
referendum is expected to boost the UK's appeal as a tourist destination and
encourage more Britons to holiday at home.
---- London's West End shopping district has reported increased spending by shoppers from around the world since the referendum.
Visit
Britain said 2015 had been a record year for tourism to Britain with 36.1
million visits, 5 percent up on 2014, and spending 1 percent higher at 22.1
billion pounds.
July and
August are the busiest months for tourism to Britain and July's 3.8 million
foreign visitors spent 2.53 billion pounds ($3.28 billion), 4 percent more than
in 2015.
Britons
made 7.0 million trips abroad in July, 3 percent more than a year earlier. But
on a seasonally adjusted basis, spending was down by 1 percent, the first
year-on-year decline since February 2015.
More
Up next, news from
the oil patch. Below, when oil goes wrong. Out
of sight, out of mind.
Oil slumps 4 percent as no output deal expected for OPEC
Also weighing on sentiment was data showing the United States was on track to add the most number of oil rigs in a quarter since the crude price crash began two years ago. Lower equity prices on Wall Street and other world stock markets was another bearish factor.
Brent crude futures LCOc1 settled down $1.76, or 3.7 percent, at $45.89 a barrel. For the week, it rose 0.3 percent, accounting for gains in the past two sessions.
U.S. West Texas Intermediate (WTI) crude futures CLc1 fell $1.84, or 4 percent, to settle at $44.48. On the week, WTI gained 3 percent.
Crude futures slumped after sources said Saudi Arabia did not expect a decision in Algeria where the Organization of the Petroleum Exporting Countries and other big oil producers were to convene for Sept 26-28 talks.
"The Algeria meeting is not a decision making meeting. It is for consultations," a source familiar with Saudi oil officials' thinking told Reuters.
More
Oil bet gone wrong: rusting tankers and rigs clog up Asian waters
The 340-metre (1,115 ft) "FPSO Opportunity", a hulking so-called Floating Production, Storage and Offloading (FPSO) vessel capable of drilling for oil in deep waters, is currently surplus to requirements along with scores of other rigs, tankers and support vessels in an era of cheap oil.
The fleet of mothballed giant vessels anchored around Southeast Asian waters is the physical fallout of an oil downturn heading into its third year, and a stark reminder of how badly the industry miscalculated market conditions.
"There was a misguided focus on scarcity in the supply side from the early 2000s," said David Fyfe, head of research at oil and commodity trading firm Gunvor.
"As an industry, they were complacent. They thought because cost was high, prices will remain high ... (but) then there was the advent of shale. Since that period, there is a realization that there is no scarcity of oil."
The shale revolution turned the United States into one of the world's biggest oil producers, at a time when exporters in the Middle East and Russia were also pumping out record volumes, causing oil prices LCOc1 to more than halve since mid-2014 to under $50 per barrel.
The FPSO Opportunity, which has been laid up for over two years, was built in 1972 and operated by Chevron CV.N and Australia's Woodside Petroleum (WPL.AX) before being taken over by a Bermuda-registered FPSO Opportunity Inc in 2011. The newest owner could not be reached for comment.
NEW LANDSCAPE
The growing number of vessels anchored in the Johor river estuary is changing the landscape for the locals.
"I've been coming here to fish every day for 10 years, and never have there been more ships parked," said an angler named Aiman, sitting on an unused pipeline lying on the beach.
"It is quite intimidating to come here before dawn and to find, with the first rays of sun, another big ship has been parked here," he added, with his line dangling in the river.
And it's
not just Malaysia that has become the dumping ground for idled oil equipment.
Across
the Singapore Strait, in the bays of Indonesia's Batam island, over a hundred
oil drilling and support vessels have been sitting idle for months, or even
years.
While
laying up ships is legal and even provides profit to specialist mothballing
companies, environmental groups say the growing number adds to the risk to
flora and fauna.
"The
idling oil tankers risk polluting the marine environment, which a sizable
population of the riverine fishermen rely on for their living," said
Vincent Chow, chairman of the Malaysian Nature Society in Johor, citing the
threat of dissolving paint and potential leakage of heavy metals and fuel into
the sea.
COST OF
DOING NOTHING
The
armada of laid-up vessels shows how the shale boom caught the oil industry off
guard and scuppered plans to drill for new fields.
More
We
close for the week pondering on a world running out of cash. Not that the
central banksters aren’t flooding the casinos with freshly minted electronic money
from nothing but electrons. It just seems to me in faraway, soon to be free
London, fewer and fewer people have debt free ready money. In the “art” world,
it seems like they just ran out of greater fools.
From
Tuesday’s LIR update.
“We close for the day with yet more sign of rising distress, this
time in the “art” world, if modern art is art at all. Now even the nouveau riche have run out of
money.” That $100,000 Painting Bought to Flip Is Now Worth About $20,000
Art dealer and collector Niels Kantor paid $100,000 two years ago for an
abstract canvas by Hugh Scott-Douglas with the idea of quickly reselling it for
a tidy profit. Instead, he is returning the 28-year-old artist’s work to the
market this week at an 80 percent discount.
Such is the new art season. At auction houses in London and New York,
sellers are preparing to bail on their investments after the emerging-art
bubble burst and the resale market for once sought-after artists dried up.
“I’d rather take a loss,” said Kantor, who is offering the
Scott-Douglas work at the Phillips auction in New York on Sept. 20. “I feel
like it can go to zero. It’s like a stock that crashed.”
Young artists such as Scott-Douglas and Lucien Smith soared
with the auction market in 2014, sometimes reaching hundreds of thousands of
dollars, when they were traded like bull-market tech stocks. But since auction
sales began to drop in late 2015, the emerging names have been hit especially
hard. Sales by some artists are down 90 percent or more as the glut of work and
nosebleed prices scare away buyers.That’s because speculators purchase art to resell it, not to keep it.
“When those speculators realize that there is no end user at a higher price, then they scramble to sell the work before they lose everything,” said Todd Levin, director of Levin Art Group, who advises collectors. “The demand is driven by greed, the selloff by fear. It’s Economics 101.”
More
"We
are in a world of irredeemable paper money - a state of affairs unprecedented
in history." John Exter
Finally,
our regular weekly update from Jason in California. Electric power generation
and transmission will greatly alter across the rest if this century.
Remarkable Decline in Solar Costs Challenges Traditional
Cost/Benefit Assumptions about Renewable Energy
N. Jason
Jencka September 24th 2016 2:15 am ET
The
financial & economic considerations surrounding energy policy have for many
years been based on the premise that solar (and wind) energy are more expensive
than traditional alternatives, namely coal, natural gas and oil. Accordingly,
the debate surrounding renewable energy has been one of (summarily paraphrased)
“How much in additional cost can be tolerated in pursuit of conservationist and
environmentalist objectives”. This calculation became a politically charged
value judgment wherein fossil-fuel advocates have positioned themselves as
protectors of low energy bills for households and businesses while
environmentalist have had to argue that emissions reductions brought on by
renewables are “worth the cost”. From this norm sprung a near-global patchwork
of public research and tax incentives to spur development in nontraditional
energy. Recent developments in pricing of solar energy suggest that these norms
and assumptions have become outdated and that we are on the cusp of a new era
where the decision to shift toward solar is as prudent economically as it is
environmentally.
As a
potent example to put figures to this representation, a utility in Abu Dhabi
received a bid to build a solar plant at the cost of $.024 per kilowatt-hour.
This compares with publications from 2013 that show solar power-purchase
agreements in the U.S. at 6.9 cents per kilowatt-hour as being a price that was
considered astoundingly low at the time. For comparative reference, the
operating expenses alone of U.S. coal plants averaged 4.55 cents per
kilowatt-hour in 2014. Though individual solar firms have struggled in the face
of the declining price environment brought on by aggressive competition from
Chinese companies, the industry as a whole is poised to grow. It could be said
that solar (and wind) had lost many battles in the marketplace as they’ve
developed but are now wining the “war” to determine the present and future
composition of electric grids globally. It is clearly evident that the energy
marketplace globally is fundamentally shifting to one where the economic case
for solar and wind is finally as robust as the environmental.
U.S. Energy Information
Administration http://www.eia.gov/electricity/annual/html/epa_08_04.html
Anthony Diapaola Bloomberg http://www.bloomberg.com/news/articles/2016-09-19/cheapest-solar-on-record-said-to-be-offered-for-abu-dhabi
N. Jason Jencka is presently studying Finance and
Economics at Sierra Nevada College, located near the shores of Lake Tahoe on
the border of California and Nevada.His interests include the interplay between
world markets and the global political sphere, with a focus on developments of
both sides of the Atlantic in North America and Europe.In his leisure time he
enjoys connecting with those people that have an interesting story to tell and
a genuine desire to make an impact in the world.
No comments:
Post a Comment