Monday, 10 October 2016

Crash Season Arrives.



Baltic Dry Index. 915 +46    Brent Crude 51.93
LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Europe – situation critical but not serious.

Anon.

While America and the rest of the world reels from the unseemly Punch and Judy Show, also known as the American presidential election, in Germany it was damage control time following yesterday’s news article in Bild, reporting that Deutsche Bank CEO John Cryan had failed in his trip to Washington to get the scale of DB’s mortgage fine reduced from $14 billion. Officially this morning’s spin is that he didn’t fail he just didn’t succeed, in that the talks between miscreant DB and the U.S. Justice Department are “continuing.” Between DB and Volkswagen, Germany’s business reputation lies in the gutter, but will either company suffer any further damage to their share price this week?

Below, all hands on deck to man the pumps. DB puts out positive spin.

Deutsche Bank Talks With Justice Department Said to Continue

October 9, 2016 — 6:54 PM BST Updated on October 9, 2016 — 10:34 PM BST
Deutsche Bank AG’s negotiations with the U.S. Justice Department to resolve a years-long investigation into the lender’s handling of mortgage-backed securities are continuing, according to people familiar with the matter.

Germany’s Bild newspaper reported in its Sunday edition that Chief Executive Officer John Cryan wasn’t able to reach an agreement with the Justice Department during a meeting in Washington. He was there to help negotiate potential multibillion-dollar penalties, according to the report.

The German lender and U.S. authorities haven’t broken off their talks, said the people, who asked not to be identified because discussions are private. Concerns about the bank’s ability to pay a $14 billion opening settlement bid from the Justice Department sent the company’s stock to a record low last month. Cryan has said he expects U.S. authorities to scale back the initial request.

A Deutsche Bank spokesman declined to comment on the status of talks and on Bild’s article. A representative for the Justice Department declined to comment when contacted after the newspaper report.

----Cryan, a Briton who speaks fluent German, has sought for the past three weeks to reassure investors that Deutsche Bank can weather the formidable obstacles to its financial health. The bank is holding informal talks with Wall Street firms about options to deal with legal costs, including a stock sale that could raise 5 billion euros, people with knowledge of the matter said last week.

Qatar’s royal family is also considering increasing its stake in Deutsche Bank to as much as 25 percent, according to people with knowledge of the matter.
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Staying with the jobs and wealth destroying rump-EUSSR, now fight has broken out between France and Poland.

France angry with Poland after it scraps Airbus deal

Fri Oct 7, 2016 | 1:04pm EDT
France reacted angrily on Friday after Poland scrapped a multi-billion-dollar helicopter deal with Airbus, warning it would review defense cooperation with its NATO ally and cancelling a presidential visit to Warsaw.

Poland had agreed to buy 50 Airbus utility helicopters in April 2015 for 13.5 billion zlotys ($3.5 billion) as part of efforts to modernize its military at a time of tensions with Russia.

Its previous centrist government, beaten by the Law and Justice (PiS) party in elections last October, had agreed the provisional deal, but on Oct. 4 the new authorities said they were scrapping the contract altogether.

Members of the new euroskeptic government have said they would rather see the deal awarded to a company that could build the helicopters locally.

"The Franco-Polish bilateral relationship will undeniably be extremely affected by this decision," a French source close to the matter said.

"The contract's cancellation will force us to review all the defense cooperation that we have with Poland and see what can be maintained and sadly what can't in the current context."

Without indicating which investments, the source added that the French government, which holds roughly 11 percent in Airbus, would advise the firm to review its strategy in the country, including investments that had already been made.

A source in the French presidency had earlier said President Francois Hollande had decided to cancel a visit to Warsaw next week for intergovernmental consultations, in protest.

In a speech on Friday, Prime Minister Manuel Valls took a swipe at Poland at a time when the European Union is trying to reinforce its common defense policy in the face of growing concerns over Russian foreign policy, Islamic militancy and the refugee crisis.

"Poland is a big country, but questions need to be asked of Poland, notably its defense industry, after the choices that have just been made," Valls said.

"As far as France is concerned, we're worried because negotiations had started, but also for the very concept of European defense."

Polish media has reported that Warsaw has already begun negotiations with U.S. firm Lockheed Martin's Sikorsky, manufacturer of locally-produced Black Hawk helicopters that could be purchased by the Polish army as soon as this year.
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Elsewhere, is Samsung the next Lehman? Unlikely, but in this increasingly crooked age, you just never know.

Samsung recall crisis deepens; Yonhap reports Note 7 production halt

Mon Oct 10, 2016 | 12:26am EDT
Samsung Electronics Co Ltd has suspended production of its Galaxy Note 7 smartphones following reports of fires in replacement devices, South Korean media said on Monday, a further setback for the tech giant in the midst of its worst ever phone recall crisis.

Samsung's decision to temporarily halt Note 7 production was done in cooperation with authorities in China and the United States, as two U.S. carriers have stopped exchanging or selling new Note 7 phones, Yonhap News Agency cited an unnamed source at a Samsung partner firm as saying.

Samsung did not immediately comment on the Yonhap report.

Problems with replacements for the Note 7 model would create a new and potentially costly chapter to a global scandal which has hurt the reputation of the world's biggest smartphone maker. It also could add new dangers for consumers.

AT&T Inc, the No.2 U.S. wireless carrier, said it will stop issuing new Note 7s to replace recalled phones due to reports of fires from replacement devices that Samsung has said used safe batteries. It will let customers with a recalled Note 7 exchange that device for another Samsung smartphone or other smartphone of their choice.

No.3 wireless carrier T-Mobile US Inc said it was temporarily halting sales of new Note 7s as well as exchanges while Samsung investigated "multiple reports of issues" with its flagship device.
T-Mobile offered customers who brought in their Note 7s a $25 credit on their phone bill.

Australia's largest carrier, Telstra Corp, said Samsung had paused supply of new Note 7s.

"Samsung says it is confident in the replacement Note 7 and advises it has no reason to believe it’s unsafe," Telstra said in a statement on its website on Monday.

But major airlines and airport authorities urged passengers to stop using the phone on board.
"In light of recent incidents and concerns raised about Samsung Galaxy Note 7 devices, passengers are strongly advised not to turn on or charge these devices on board aircraft and not to stow them in any checked baggage," Hong Kong International Airport said on its website on Monday.

Singapore Airlines also said on Monday the powering up and charging of Note 7s is prohibited on all its flights.

On Sept. 2, Samsung announced a global recall of 2.5 million Note 7s in 10 markets including the United States due to faulty batteries causing some of the phones to catch fire.

A Southwest Airline flight was evacuated last week after a replacement model Note 7 smartphone began smoking inside the plane, according to the family who owns the phone.

Samsung said on Monday it was investigating reports of "heat damage issues" and would share its findings when the investigation was complete.
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We close for the day with Bloomberg raising troubling issues over last week’s flash crash in Sterling, the world’s fourth most traded international currency. After eight years on central bankster emergency measures are we all the way back to 2007-2008s lack of liquidity issues again? If we are, our 21st century gambling casinos are in for a very wild time. “Capitalism’s broken” famously wailed fallen former guru Greenspan back in the late 90s. But it’s been broken since the Great Nixonian Error of fiat money, August 15, 1971. Today’s increasing dysfunction in the markets is merely a symptom of how fiat money drove great multi-decade malinvestment bubble.

Illusion of Liquidity Burns Traders Blindsided by Pound’s Crash

October 9, 2016 — 11:00 PM BST
The inexplicable volatility that roiled the British pound last week came as no surprise to Bank of America Corp., which just days earlier warned that liquidity in the $5.1 trillion-per-day global currency market was far worse than anyone imagined.

Sterling sank 6.1 percent in a span of minutes in early Asian trading Oct. 7, following at least three other bouts of puzzling foreign-exchange turbulence in the past two years. The latest episode involved the fourth-most-traded currency, serving up a stark reminder of the pitfalls that investors face in the world’s biggest financial market as banks -- the traditional middlemen -- step back amid post-crisis regulations.

The currency market is growing more fragile because “phantom liquidity” is undermining investors’ ability to buy and sell when they need to, Bank of America analysts wrote in an Oct. 5 note. Their research found that with trading volumes in decline, transactions have a 60 percent greater impact on prices than just two years ago.

The size of last week’s move “in the deepest and biggest market in the world scares the hell out of everyone,” said Bob Savage, chief executive officer of hedge fund CCTrack Solutions LLC in New York. “The larger story is whether there’s anything to do about it.”

The lifeblood of the global economy, the currency market has been blighted by staff reductions and a rate-fixing scandal that’s ensnared some of the world’s biggest banks. Stricter regulation enacted since the financial crisis has prompted dealers to step back, opening the door for automated market makers to expand, though the new entrants haven’t stemmed a drop in volumes. Daily trading in global currencies has shrunk almost 6 percent since 2013, Bank for International Settlements data show.
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China's yuan sinks to six-year low, then erases losses

Mon Oct 10, 2016 | 1:27am EDT
China's yuan fell to its lowest level in six years early Monday, breaching a key psychological threshold, before erasing the losses on the first day of trading after a week-long holiday.

Traders said the weakening of the yuan CNY=CFXS reflected strength in the dollar last week, and they did not see any signs of intervention by state banks to support the yuan after it fell.

In mid-July, when the yuan last breached the 6.7 mark, state banks intervened heavily.

Some China watchers have wondered if any signs of yuan weakness following the holiday would signal that Beijing was putting the currency back on a slow depreciation path after holding it steady through September. The currency fell after the People's Bank of China set the midpoint CNY=PBOC at 6.7008 yuan per dollar, its weakest fix since September 2010 and about 0.3 percent weaker than the setting on Sept. 30, before a one-week National Day holiday.

The spot market opened at 6.6904 per dollar, quickly fell below the key 6.7 level for the first time since July and traded as low as 6.7051, the weakest rate since September 2010.

Then it began to pare losses, and at 0403 GMT was changing hands at 6.6991, or 246 pips weaker than the Sept. 30 late session close and 0.03 percent firmer than that day's midpoint.

A trader at a foreign bank in Shanghai said the market "is actually quite calm now as the willingness to purchase the dollar is not strong. And the yuan has been pulled back to around 6.7 level after some investors sold the greenback after the yuan hit 6.7050 as they were afraid the central bank would soon step into the market to stabilize."

"The market is holding a wait-and-see approach towards the central bank attitude," he added.
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"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F. A. von Hayek
At the Comex silver depositories Friday final figures were: Registered 29.28 Moz, Eligible 145.55 Moz, Total 174.83 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, the US election as seen from Communist China. Do the Americans vote for the war mongering, paid shill of Wall Street, who openly brags about her part in the murder of Libya’s Gadhafi , or a foul mouthed, self-centred, lewd loose cannon, serial golf course owner?

I want the Iranians to know that if I’m president, we will attack Iran.”

Hillary Clinton.

Commentary: U.S. presidential election chaos exposes flawed political system

By Zhong Sheng (People's Daily Online)    17:24, October 08, 2016
As the presidential candidates of the Democratic and Republican parties begin the last sprint toward the general election, U.S. citizens are becoming more and more frustrated by the political campaign.
WikiLeaks recently promised “significant” disclosures on the U.S. election, war, arms and oil in the coming weeks. It is widely believed that these revelations will add more flames to the already chaotic political show.
Scandals have dogged the two main candidates throughout the 2016 election, which has further increased dissatisfaction among U.S. citizens. According to a recent Gallup poll, 60 percent of registered voters view Donald Trump as the least favorable candidates in 25 years, and Hillary Clinton as the second least favorable.
The tax-related questions for Trump, as well as worries over Clinton’s health and her use of a private email server, have all led to the current state of the election. In their first presidential debate, the two candidates focused more on personal attacks than policies. The Times commented in an editorial that the candidates have neglected the widening gap between the American dream and social reality.
A recent survey showed that voters now perceive the government and congress as the biggest problems needing to be addressed in American society. These concerns come ahead of issues like the economy, employment and immigration. Of course, that doesn’t mean voters don’t care about economic and social issues, but it does show the great and growing concerns that U.S. citizens have about their political system.
Despite protests against money-oriented politics and election scandals, Trump still plans to drop another $140 million on campaign ads. Anticipated to cost as much as $5 billion, most of which comes from special interest groups, the 2016 election is likely to be the most expensive one in history.
People are very clear about the sour fruits of money-oriented politics, and the new U.S. president is unlikely to end political confrontation or even do much to ease discontent toward the government. As British economist Martin Wolf said, growing inequality and slowing productivity have made democracy intolerant and capitalism illegitimate.
For a long time, the U.S. has boasted that its lively election is a sign of its system’s superiority. However, the essential purpose of the election is to provide a driving force for development. The most important task for presidential nominees is not to win the election, but to eventually govern the country.
It's time for the U.S. to take a close, honest look at its arrogant democracy and flawed politics. 

“I'm not going to have some reporters pawing through our papers. We are the president.”

Hillary Clinton.

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?

Simulations show how to turn graphene's defects into assets

Date: October 4, 2016

Source: Penn State Materials Research Institute

Summary: Controlling defects in two-dimensional materials, such as graphene, may lead to improved membranes for water desalination, energy storage, sensing or advanced protective coatings.
Researchers at Penn State, the Department of Energy's Oak Ridge National Laboratory and Lockheed Martin Space Systems Company have developed methods to control defects in two-dimensional materials, such as graphene, that may lead to improved membranes for water desalination, energy storage, sensing or advanced protective coatings.
For a two-dimensional, one-atom-thick material like graphene, defects such as small cracks or holes can make a big difference in performance. Usually, these defects are considered undesirable. But if the defects can be controlled, they can be used to engineer new, desirable properties into the material.
"As long as you can control defects, you might be able to synthesize into graphene whatever kinds of response the material will give you," says Adri van Duin, corresponding author on a recent paper in the American Chemical Society's journal ACS Nano. "But that does require that you have very good control over defect structure and defect behavior. What we have done here is a pretty strong step towards that."
van Duin is the co-inventor and main developer of a mathematical modeling and simulation technique called ReaxFF, which is capable of predicting the interactions of thousands of atoms when they are perturbed by an external force, in this case the bombardment of graphene by atoms of a noble gas.
The noble gases, which include helium, neon, argon, krypton and xenon, are frequently used to create defects in graphene for the purpose of enhancing its properties. By knocking one or more carbon atoms out of graphene's chicken wire-shaped structure, the resulting hole can be filled by atoms of another material or by specific molecules in a process called doping. Doping can change the chemical or electrical properties of the graphene, to, for example, allow water molecules to flow through a membrane while rejecting salt particles.
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The monthly Coppock Indicators finished September

DJIA: 18308  +28 Up NASDAQ:  5312 +21 Up. SP500: 2168 +32 Up.

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