Friday, 14 October 2016

Europe The Final Year?

Baltic Dry Index. 885 -21    Brent Crude 52.20

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

How can you govern a country which has 246 varieties of cheese?

Charles de Gaulle.

Today we take a look at the rump-EU, and it’s far from a pretty sight. After making no plans for a rump-EUSSR after John Bull walks out, the insane asylum run by its members, gets more chaotic with each passing month. How much longer can the EU survive before another major member decides to leave? As usual, in Italy and France, it’s time to stitch up the voters. In Germany that already happened last year  under Mrs Merkel’s Mad Migrant policy. With referendum’s and elections due starting in December and all across next year, continental Europe faces a year of growing instability. Who would want to be a member of a sclerotic, bureaucratic, wealth and jobs destroying club like this?

In politics it is necessary either to betray one's country or the electorate. I prefer to betray the electorate.

Charles de Gaulle.

France’s Chaotic Election Could Put the Future of Europe at Risk

It’s Marine Le Pen against the rest.

October 13, 2016 — 11:00 PM BST
France’s 2017 presidential election is set to be like no other in the modern era.

As supporters of the center-right Republican party prepare to vote in their primary next month, there are at least 12 declared candidates, with President Francois Hollande and his former Economy Minister Emmanuel Macron shaping up to join the fray. Though not all of the contenders will make it to April, the race is wide open with far-right leader Marine Le Pen making the running with her attacks on the European Union as voters’ satisfaction with the bloc plummets.

For the first time since Charles de Gaulle’s return to power in 1958 ushered in the Fifth Republic, both France’s two main political parties are holding primary contests, and Hollande is the first incumbent to reach such depths of unpopularity.

Nicolas Sarkozy is the first former head of state to try and reclaim the job. Though he faces a battle even to secure the Republican nomination against Alain Juppe, a 71-year-old moderate who is the bookmakers’ favorite to edge out Le Pen for the ultimate prize.

Polls have consistently shown that the National Front’s Le Pen is the strong favorite to win the most votes on the first ballot, as the French seek a leader to shake the country out of its economic malaise. While Le Pen’s father Jean-Marie sneaked into the second round on the National Front ticket in 2002, it’s the first time the anti-euro party has been a front-runner.

If the French center ground fails to hold out against Le Pen’s advance, the future of the European Union is potentially at stake.

The most reassuring scenario for investors would see the moderate front-runner Juppe see off Sarkozy to claim the center-right Republican nomination and then canter to a victory against Le Pen in May’s runoff as voters converge on the mainstream candidate.

Such a result would bolster the political partnership between France and Germany at the heart of the EU as it embarks on negotiations over Britain’s exit from the bloc.

But a Sarkozy victory in the primary would blow the race wide open.

It could lead to a runoff between the most extreme Republican and Le Pen, testing left-wing voters’ commitment to stopping the National Front leader. Or it could split the first round ballots enough to allow a vulnerable candidate like Hollande or the left-winger Jean-Luc Melenchon through to face the National Front leader. One Odoxa poll showed that if Hollande manages to make it to the second round, he would lose by 54 percent to 46 percent to Le Pen, who has promised a referendum on whether France should leave the EU.

France's Juppe seen winning first primary debate: poll

Thu Oct 13, 2016 | 7:26pm EDT
Former Prime Minister Alain Juppe was seen as the winner of the first debate on Thursday among candidates for the center-right's nomination in France's 2017 presidential election, a poll published immediately afterward showed.

Juppe, already the front-runner on a centrist platform of "happy identity" which he said in the televised debate meant giving voters hope, was seen as most convincing by 32 percent of those who said they would vote in the end-November primaries.

The poll was conducted as an online survey of 885 voters by polling firm Elabe commissioned by news network BFM TV.

Nicolas Sarkozy, a former president running on a law-and-order agenda meant, he said, "to ensure France once more becomes the great nation it is," convinced 27 percent of voters in the two-hour debate.

The debate showed great similarities among the seven candidates on economic proposals meant to reduce public spending and loosen or eliminate France's iconic 35-hour work week.

There were more differences on issues of security and immigration, with contenders quarrelling over whether those on intelligence services' watch lists should be systematically detained.

Sarkozy, who was France's president from 2007 to 2012 before losing to current president, Socialist Francois Hollande, was attacked by several of his former ministers and party allies. They questioned why he would be any different than in his first term and noted he faces multiple judicial investigations into alleged corruption, fraud and campaign funding irregularities.

German court rejects bid to block Canada-EU trade deal, Trudeau impatient

Thu Oct 13, 2016 | 12:05pm EDT
Germany's Constitutional Court cleared the government on Thursday to approve a free trade accord between the European Union and Canada under defined conditions, boosting the agreement's chances of passing an EU vote next week.

However, Canadian Prime Minister Justin Trudeau made clear he was losing patience with the EU over the pact, which both sides say could boost bilateral trade by 20 percent.

The court in Karlsruhe rejected emergency appeals by activists to prevent Berlin from endorsing the Comprehensive Economic and Trade Agreement (CETA) before it has been ratified by national parliaments.
Economy Minister Sigmar Gabriel, who has championed the pact as Europe's best chance to shape the changing rules of global trade, said the ruling paved the way towards ratification.

"I am very pleased that we have made a first big step, because if Europe were not able to deal with Canada, this would send a difficult signal in the world," he said.

EU trade ministers are due to vote on the accord next week and Brussels and Ottawa then hope to sign it on Oct. 27.

But its final approval is far from certain, as the ministers have signaled they want unanimous support from the 28 member states to allow it to enter force.

Trudeau, in by far his most outspoken criticism of the EU, said on Thursday CETA was a turning point for the bloc.

"If we find in a week or two that Europe is incapable of signing a progressive trade deal with a country like Canada, then who does Europe think it can do business with in the years to come?" he said in forceful remarks to reporters in Ottawa.

Don't trust Italian growth forecasts, experience suggests

Thu Oct 13, 2016 | 8:50pm EDT
Italy has a chronic problem with official economic forecasts, and its habit of making overambitious growth assumptions suggests that either its forecasting models are hopelessly outdated or it does not want to face up to the need for radical reform.

This pattern of building optimistic projections into each year's budget, only to cut them later as reality dawns, is nothing new - and neither is this exclusive to Italy, although it is by far the worst offender among major European economies.

But a consequence of the missed growth targets is that successive governments in Rome have failed to cure a much more profound problem, Italy's vast public debt as a proportion of its economy. Now this issue will take center stage as Prime Minister Matteo Renzi goes into tough negotiations with the European Commission over his 2017 budget plans.

The omens are not good. In an unprecedented step, Italy's independent public finance watchdog refused last week to sign off on the government's latest economic planning document, describing the growth forecasts as too optimistic.

Politics may be at work. Renzi is anxious to avoid belt-tightening before a referendum on constitutional reform in December that could decide his future. Like last year, he has appealed to Brussels for "flexibility" under EU budget rules.

By forecasting higher growth, projections of tax income can also be raised, allowing a more generous budget.

We close with an update on Samsung. Reputedly responsible alone for 20 percent of South Korea’s GDP.

Samsung flags $5.3 billion profit hit from Note 7 failure

Thu Oct 13, 2016 | 11:08pm EDT
Samsung Electronics Co Ltd on Friday said it expected to take a hit to its operating profit of about $3 billion over the next two quarters due to the discontinuation of its fire-prone Galaxy Note 7 smartphone.

The outlook brings to about $5.3 billion the total losses the global smartphone leader has forecast as a result of the overheating issues, after it said on Wednesday it would suffer a $2.3 billion hit to third-quarter profit.
The premium device that was meant to compete with Apple Inc's latest iPhones at the top end of the smartphone market had to be scrapped earlier this week, less than two months after its launch, due to safety fears.

The South Korean tech giant said in a statement on Friday it expected the blow to profit to be in the mid-3 trillion won over the next two quarters - in the mid-2 trillion won range in the October-December period and about 1 trillion won ($900 million) for the first quarter of 2017.

---- To make up for the lost revenue, Samsung said it would expand sales of gadgets like the Galaxy S7 and S7 edge phones, and make "significant changes" in its quality assurance processes to improve product safety.

Investors and analysts said that while the company had to move quickly to reassure the market about the potential financial costs, deeper losses from one of the tech industry's most spectacular product failures could not be ruled out.

Reputational damage remained the great unknown and potentially more harmful than recall costs, with rivals in the cut-throat industry eager to pounce on any sign of weakness in the market leader's standing among consumers.

"The sales impact on other models remains unclear," said Kim Sung-soo, a fund manager at LS Asset Management, which owns Samsung Electronics shares.

"The end of the premium model will damage Samsung's brand, and hurt demand for its other models. It is difficult to measure such impact."

Samsung posted earnings of $7.2 billion in the second quarter, with mobile profits - its biggest earner - soaring 57 percent.

I have not failed. I've just found 10,000 ways that won't work.

Thomas Edison.

At the Comex silver depositories Thursday final figures were: Registered 29.29 Moz, Eligible 144.35 Moz, Total 173.64 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
No crooks today, just more worrying signs that the US so called recovery may have already peaked out. More signs that the US consumer, the alleged driver of 70 percent of the US economy, may already be tapped out. If so, lookout below, the Fed’s out of ammo, ideas and talent.

More retailers, malls plan to stay closed on Thanksgiving Day

Published: Oct 13, 2016 10:08 p.m. ET
It turns out that opening stores on Thanksgiving Day wasn’t just bad for family dinners. It was bad for business, too.

A growing number of retailers and shopping malls are reversing course, including mall operator CBL & Associates Properties Inc. CBL, -1.01%  , the Mall of America, electronics chain Hhgregg Inc. HGG, -0.56%   and Office Depot Inc. ODP, -3.83%  , all of which said they would close on Thanksgiving this year.

They say closing will allow employees to celebrate the holiday, but also help refocus sales on the day after Thanksgiving, known as Black Friday. Once the busiest shopping day of the year, Black Friday lost that ranking in recent years as shoppers turned to the web and store visits were increasingly spread across the weekend — and even the entire month of November.

“The more and more we encroached on that holiday, I don’t know that we got a lot of benefit out of it,” said Robert Riesbeck, Hhgregg’s chief executive, who decided to close all of the company’s 220 stores on Thanksgiving. “You look back a few years, I think it lifted sales. The last two, three, four years, it has shifted sales.”

An expanded version of this report appears on

Treaties are like roses and young girls. They last while they last.

Charles de Gaulle.

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?

New kind of supercapacitor made without carbon

Energy storage device could produce more power than current versions of this technology

Date: October 10, 2016

Source: Massachusetts Institute of Technology

Summary: Energy storage devices called supercapacitors have become a hot area of research, in part because they can be charged rapidly and deliver intense bursts of power. However, all supercapacitors currently use components made of carbon, which require high temperatures and harsh chemicals to produce. 
Now researchers have for the first time developed a supercapacitor that uses no conductive carbon at all, and that could potentially produce more power than existing versions of this technology.
Now researchers at MIT and elsewhere have for the first time developed a supercapacitor that uses no conductive carbon at all, and that could potentially produce more power than existing versions of this technology.
The team's findings are being reported in the journal Nature Materials, in a paper by Mircea Dinca, an MIT associate professor of chemistry; Yang Shao-Horn, the W.M. Keck Professor of Energy; and four others.
"We've found an entirely new class of materials for supercapacitors," Dinca says.
Dinca and his team have been exploring for years a class of materials called metal-organic frameworks, or MOFs, which are extremely porous, sponge-like structures. These materials have an extraordinarily large surface area for their size, much greater than the carbon materials do. That is an essential characteristic for supercapacitors, whose performance depends on their surface area. But MOFs have a major drawback for such applications: They are not very electrically conductive, which is also an essential property for a material used in a capacitor.
"One of our long-term goals was to make these materials electrically conductive," Dinca says, even though doing so "was thought to be extremely difficult, if not impossible." But the material did exhibit another needed characteristic for such electrodes, which is that it conducts ions (atoms or molecules that carry a net electric charge) very well.
"All double-layer supercapacitors today are made from carbon," Dinca says. "They use carbon nanotubes, graphene, activated carbon, all shapes and forms, but nothing else besides carbon. So this is the first noncarbon, electrical double-layer supercapacitor."
One advantage of the material used in these experiments, technically known as Ni3(hexaiminotriphenylene)2, is that it can be made under much less harsh conditions than those needed for the carbon-based materials, which require very high temperatures above 800 degrees Celsius and strong reagent chemicals for pretreatment.
The team says supercapacitors, with their ability to store relatively large amounts of power, could play an important role in making renewable energy sources practical for widespread deployment. They could provide grid-scale storage that could help match usage times with generation times, for example, or be used in electric vehicles and other applications.

Another weekend, and an uncertain weekend at that. In America, the Wall Street – American War Party - Hollywood campaign to stop Donald Trump at all costs has now reached overdrive, fully supported by the British Broadcasting Campaign for Clinton. In Europe, dodgy banks are surfacing everywhere though no one on the continent seems to have the faintest idea about what to do about them. If we all look away, perhaps the problem itself will go away. In Asia, South Korea is reeling from the Samsung flammable smart phone disaster and still reeling from the Hanjin Shipping bankruptcy. Taiwan is sparring with Big Brother China, which itself is sparring with Japan over the Diaoyu Islands, though in the South China Seas island dispute, the Philippines seems to be in the process of switching sides to China.

In the UK v EUSSR dispute, neither side ever prepared contingency plans for a Brexit victory, so smugly were both so confident that John Bull would never dare vote to leave. Both now bumble and fumble towards a botched divorce.  Have a great weekend everyone. On the upside, in my part of the Thames Valley, we have just hit the peak of the edible chestnut season. Walking the dog in the woods now has added appeal.

Modern money is inherently worthless, but everybody accepts it as real. Paul Seabright, a professor of economics, identified two traits that underpin systems of trust including money: the capacity to weigh up the costs and benefits of trusting others and the instinct to return favors in kind or seek revenge when trust is betrayed. When it is working well, the system enables strangers to deal with each other safely. When the fragile trust fails, people withdraw their money from banks, and they seek the refuge of cash. Ironi-
cally, in times of crisis, people seek paper money that has no intrinsic worth, illustrating the power of the monetary illusion.

Satyajit Das. Extreme Money. Masters of the Universe and the Cult of Risk

The monthly Coppock Indicators finished September

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

No comments:

Post a Comment