Tuesday, 13 September 2016

Yellin As Grand Old Duke of York.

Baltic Dry Index. 804  unch.     Brent Crude 47.99

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

The grand old Duke of York,
He had ten thousand men;
He marched them up to the top of the hill,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down

The bumbling Fedster’s have become like the Grand Old Duke of York, forever marching the Great Vampire Squids up to the top of the hill, then marching them down again. After Friday’s stock market rout on an interest rate hike coming at the Fed’s meeting near the end of the month, today it was time to march the back up again, on soothing news of no rate hike yet.

It may not be capitalism. Dithering may not be a sensible policy. Running the whole global economy for the benefit of a handful of rent-seeking stock speculators may not be wise either. But it’s all we’ve got left as the Great Nixonian Error of fiat money enters its death throes. When the next Lehman hits the central banksters must monetise over 40 trillion in a debt cascade crash, or let the devil take the hindmost and attempt to build a new world monetary system from the ruins. For now, all the central banksters can do is jawbone, on the one hand rates ought to be higher, on the other hand if we do that the Great Bond Bubble bursts and stock markets crash, and our friends in Squidland, those that are left anyway, won’t have jobs for us when we need them.

Meanwhile the longer QE forever, ZIRP and NIRP pervert the fiat monetary system, the more likely it is to blow up the pensions industry, the insurance industry, annuities, and anything else that requires long term planning and a degree of certainty.

U.S. Stocks Rebound While Dollar Slips as Fed Rate Odds Retreat

September 11, 2016 — 10:49 PM BST Updated on September 12, 2016 — 10:33 PM BST
U.S. stocks rallied after the biggest rout since June wiped about $500 billion from the value of equities, while the dollar weakened as the Federal Reserve’s Lael Brainard remained dovish in her approach to tighter monetary policy. Emerging-market assets slumped.

The S&P 500 Index staged its steepest reversal since January, jumping the most in two months to hold gains after Fed Governor Brainard urged “prudence” when it came to raising interest rates. The dollar fell for the first time in four days as odds on a hike at next week’s Fed meeting slid to 20 percent, while 10-year Treasury yields halted their surge. Shares in Europe and Asia paced Friday’s U.S. slump, while an index of developing-nation equities tumbled 2.2 percent. Oil rallied, rising back above $46 a barrel
Brainard counseled continued prudence in the path toward tighter Fed policy, even as she acknowledged the world’s largest economy was making gradual progress toward achieving the central bank’s goals. Her comments came after financial markets were jolted out of a period of relative calm by concern some global policy makers are questioning the ability of loose policy to ignite price growth and support economic expansion. Brainard is the last Fed official to speak before next week’s Fed Open Market Committee meeting.

Dollar nurses losses after Fed's Brainard quells September rate hike talk

Tue Sep 13, 2016 1:15am EDT
The dollar inched higher against the yen on Tuesday but remained below the previous day's high, having taken a hit after dovish comments from a Federal Reserve policymaker reduced bets that the Fed would raise interest rates this month.

Investors now see less chance of a U.S. rate hike next week after Federal Reserve Governor Lael Brainard on Monday warned against the Fed removing support for the economy too quickly.

"We can stick with our main scenario that the Fed won't raise rates in September. All the talk about a possible rate hike in September turned out to be noise," said Koichi Yoshikawa, executive director of finance at Standard Chartered Bank's Tokyo branch.

Fed Funds rate futures <0> are now pricing in only about a 15 percent chance of a rate hike at the Fed's next policy meeting on Sept 20-21, according to CME Group's FedWatch Tool.

That was down from about 35 percent in late August, when some Fed officials openly discussed the possibility of a September rate hike.


Pain may be in store for the S&P 500, says Goldman

Published: Sept 12, 2016 4:45 p.m. ET

Bullishness may be signaling that investors are too euphoric

Nagging stock-market weakness could persist on Wall Street, according to analysts at Goldman Sachs, who wrote that the trend through the rest of the year is lower.

The Goldman research analysts, led by David Kostin, chief U.S. equity strategist, expect the S&P 500 SPX, +1.47%  to end 2016 at 2,100, a target that represents a decline of 1.7% from current levels. However, that would mean the large-cap benchmark would log a meager 2.7% gain for the year. Comparatively, the 30-year Treasury bond TMUBMUSD30Y, -0.64%  is yielding 2.4% as of midday Monday.

Goldman cited recent economic data, which has indicated slowing job growth and weakness in U.S. manufacturing, along with downside risk to corporate-earnings forecasts and the valuation of stocks, which it said “remains extended.” In other words, the Goldman team, similar to many pundits, believes that underlying fundamentals for stocks don’t support their current prices.

The analysts also make the point that investors might be getting too exuberant about the stock market. Goldman’s sentiment indicator “shows an extreme bullish reading of 95 which suggests the [S&P 500] index will decline during the next four weeks.” Bullish markets can be an indication that stocks are headed for a downturn, hewing to the old John Templeton maxim that bull markets are “born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”

Kostin & Co. also cite political uncertainty, as the U.S. presidential election is in full swing, as a factor that could add to market volatility in the coming weeks and months.

In other news, “The Donald” gets closer to the White House. Maybe if he wins, he can connect the two with a tunnel.

Trump luxury hotel opens just blocks from the White House

Tue Sep 13, 2016 12:23am EDT
Republican presidential nominee Donald Trump opened the latest outpost in his real estate empire on Monday, a luxury hotel in a historic building five blocks from the White House that underwent a two-year, $200 million renovation.

While staff members at the 263-room Trump International Hotel planned little hoopla for what they described as a "soft opening," about 40 protesters opposed to the New York real estate developer's presidential run gathered outside. The opening came eight weeks before the Nov. 8 election.

"It kind of fits his personality that he finds a way to be on Pennsylvania Avenue, one way or another," said protester Judy Byron, 70, a Washington artist.

The hotel, which includes a $20,000-a-night suite, is less than a mile (km) down Pennsylvania Avenue from the White House. The hotel is housed in Washington's third-tallest building, the 1899 Old Post Office, built in the Romanesque Revival architectural style.

Trump said on Twitter he had stopped by the property "to thank all of the tremendous men & women for their hard work!"

Dozens of people filtered in and out on Monday afternoon, some to gawk and others pausing for a drink at the hotel's bar.

On his way in, Ric Hedlund, who works in port development, said he had been impressed by the renovations of a building that he said was previously "a dump."

"I'm going in to drink Trump wine," said Hedlund, who added he also supported Trump as a candidate.

Trump's daughter Ivanka, who helped negotiate the 60-year lease with the U.S. government and oversaw the building's revamp and design, said the project had come in a year ahead of schedule and under budget.
"We have really positioned this hotel to not only be the finest hotel in D.C. but in the country," she said in a telephone interview.
A grand-opening ceremony is planned for next month

At the Comex silver depositories Monday final figures were: Registered 30.04 Moz, Eligible 135.41 Moz, Total 165.45 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today a subject we touched on before when the Senate voted on the same bill. If it goes on to become law, the Saudis have already said it will force them to dump US treasuries and not be a buyer of new issues, due to the risk of US securities getting seized in lawsuits. This is bad news for the world’s greatest bond bubble.

House unanimously passes bill to allow 9/11 lawsuits against Saudi Arabia

9/09/16 11:46 AM EDT
The House on Friday passed legislation allowing the families of 9/11 victims to sue Saudi Arabia in U.S. courts, days before the 15th anniversary of the terrorist attacks.
The legislation passed unanimously by voice vote, to thunderous applause.
The bill, which passed the Senate unanimously in May, now heads to President Obama’s desk, where its future is uncertain.

The White House has hinted strongly it will veto the measure. Obama has lobbied fiercely against it, arguing it could both strain relations with Saudi Arabia and lead to retaliatory legislation overseas against U.S. citizens.

But lingering suspicion over Saudi Arabia’s role in the 9/11 attacks and pressure from victims’ families made the bill a popular bipartisan offering on Capitol Hill.

The bill’s popularity puts the president in a delicate position. Supporters are hoping Obama will be leery of expending political capital he desperately needs during the lame-duck session.

The president is hoping lawmakers will pass the Trans-Pacific Partnership trade agreement and a criminal justice reform measure and confirm Supreme Court nominee Merrick Garland.

If Obama does choose to veto the Justice Against Sponsors of Terrorism Act, supporters believe that they have the two-thirds majority needed to override him — a first during his presidency.

“I think we easily get the two-thirds override if the president should veto,” Sen. Charles Schumer (D-N.Y.), who introduced the bill in the Senate, said when the bill cleared the upper chamber in the spring.

But many on Capitol Hill do not believe that the veto is a done deal. The White House has not issued an official position on the bill and spokesmen have been careful with their language, stopping short of issuing a full veto threat.

“We have serious concerns with the bill as written,” a White House official said Wednesday.

“We believe there needs to be more careful consideration of the potential unintended consequences of its enactment before the House considers the legislation,” the official said. “We would welcome opportunities to further engage with the Congress on that discussion.”

The president has 10 days to either sign or reject the legislation before it becomes law.

A Homerun For The Donald—-Attack The Fed’s War On Savers, Workers And The Unborn (Taxpayers)

by David Stockman • 
---- The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:

By keeping interest rates low, the Fed has created a “false stock market,” Donald Trump argued in a wide-ranging CNBC interview, exclaiming that Fed Chair Janet Yellen and central bank policymakers are very political, and should be “ashamed” of what they’re doing to the country…

He’s completely correct. After all, they are crushing real wages with their 2% inflation targeting; destroying savers with NIRP and sub-zero rates; and burying unborn taxpayers in monumental debts that today’s politicians are pleased to issue with reckless abandon because the short-run carry cost is nil.

Interest on the Uncle Sam’s $19.4 trillion of debt, for example, is easily $500 billion lower than its true economic cost based on a normal yield after inflation and taxes and elimination of the phony $100 billion per year in so-called Fed “profits” that are booked by the treasury as negative interest expense.

Alas, when interest rates eventually normalize, the Treasury’s debt service costs will soar by hundreds of billions. At the same time, the entirety of the Fed’s “profits”, which are conjured from thin air because it buys interest-yielding government and GSE debt with printing press liabilities which cost virtually nothing, will disappear. That’s because it will be forced to take reserve charges for giant principal losses on the falling prices of its $4.5 billion portfolio of government and GSE bonds.

At that moment, the long-abused citizens of Flyover America, who have already been clobbered as savers and wage earners, will get hit with the triple whammy of soaring Federal tax bills. And this is not a matter of if or even when; it’s really just a question of how soon.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

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?

Future of Energy: Rent-to-Own Solar Power the Answer to Free Electricity?

By Joyce Marucot Sep 11, 2016 05:16 AM EDT
A Canadian entrepreneur and his company made an innovative yet less expensive solar power system that might be an answer to free electricity. In some places in India, enterprenuer Paul Needham's "rent-to-own solar" from Simpa Networks are already being used, and so far, with good results.

According to Smithsonian, Needham's version of solar power system composes of a 40 watt solar panel, a 26 amp-hour battery, two LED lights, a 15-watt outlet for appliances and two ports to charge or power two LED lights.

All of these will be operated using direct current (DC). A meter, which looks like a car battery, has an e-ink readout that illustrates the remaining balance or days left for the power to work. It also has special LED tube lights that's the same size of a freestanding electric fan as well as a card table-sized blue rooftop panel that is positioned toward the sun.

The entire system costs $270 and can be bought one time. However, some customers prefer to do a "pay-as-you-go" contract, where they pay small payments over two to three years, with the end result of them owning the equipment. According to Needham, there are about 20 percent who buys the system outright after six months and it seems like everyone is attracted to the idea that their payments will eventually lead to purchase.

"What we found was that most people wanted to own the equipment themselves; they didn't just want to keep paying to use it," Needham said.

According to a case study conducted by Simpa, there are over 1 billion people worldwide that lack access to electricity. And it's possible that even a billion more has undependable connections, getting only four to 12 hours of power per day but spending 20 percent or more of their incomes to meet this need.

Solar power is a kind of energy that comes from the sun and can be transformed to thermal or electric energy. This kind of energy is widely proven to be the cleanest and plentiful renewable energy as it can help reduce greenhouse gas emissions. Thus, creating a solar power system will be a big help to the environment. However, there are debates that say that creating a solar power system in your home is expensive as solar panels don't come cheap.

Needham believes that apart from helping India to reduce its greenhouse gas emissions and relieve its citizens from relying on its overburdened power grid, his business could play an important in reducing poverty.

The monthly Coppock Indicators finished August.

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

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