Tuesday, 29 November 2016

China Takes Advantage.

Baltic Dry Index. 1184 +3   Brent Crude 47.83

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

Eurasian Snow cover. (How bad will winter be?)

What do we need a psychiatrist for? We know the EUSSR is nuts.

Nigel Farage, with apologies to Homer Simpson

We open today with China taking full advantage of the political vacuum in Washington, where a lame duck president limps towards the door marked “exit,” while the President-elect faces a recount drive in three states, and the losing party still seems unwilling to accept the result. A testing time seems to lie ahead for America’s next President.

China paper says Singapore troop carriers should be 'melted down'

Tue Nov 29, 2016 | 1:29am EST
Armored troop carriers belonging to Singapore and currently impounded in Hong Kong should be "melted down", China's influential state-run tabloid the Global Times said on Tuesday, in its second swipe at the island nation in two days.

The nine troop carriers were impounded in Hong Kong last week en route back from Taiwan, sparking a rebuke to Singapore from China about maintaining military ties with self-ruled Taiwan, which Beijing considers a breakaway province.

Ties between China and Singapore have been strained in recent months, particularly over the disputed South China Sea, where Beijing, which claims most of the waters, suspects Singapore of siding with the United States.

Beijing has accused Washington of deliberately creating tension by sailing its ships close to China's islands.
The Global Times, published by the ruling Communist Party's official People's Daily, blasted Singapore's "carelessness" with the armored vehicles, which it said reflected a failure to take seriously China's displeasure over its military relationship with Taiwan.

"Singapore's image in China is now so rotten that ordinary Chinese people think the best thing to do with the 'confiscated' armored vehicles that 'walked right into our trap' is to send them to the steel mills to be melted down," it said.

The editorial, published in the paper's Chinese language edition, whose website attracts millions of visitors every day, adopts a similarly strident tone to a Monday commentary in its much less read English edition, accusing Singapore of "hypocrisy".

Singapore should use this "interlude" in its relations with China to find "enlightenment" rather than to provoke more resentment, it added.

"All incidents have causes - to grasp and understand them is always wise," the editorial said.

Singapore and Taiwan have a longstanding military relationship that began in the 1970s and involves Taiwan being used as grounds for Singaporean infantry training.

Beijing has grudgingly tolerated this agreement since the China and Singapore re-established diplomatic relations in the 1990s.

The Global Times has a history of writing hyperbolic editorials and is usually significantly more hawkish than the government's official line.

Singapore says seizure of vehicles by Hong Kong 'not a strategic incident'

Mon Nov 28, 2016 | 11:50pm EST
The seizure of nine Singaporean armoured vehicles by Hong Kong customs was "not a strategic incident" in the Sino-Singaporean relationship, the city-state's foreign minister Vivian Balakrishnan was quoted as saying on Tuesday.

The nine troop carriers were impounded in Hong Kong last week upon their return from Taiwan, sparking a rebuke from China's foreign ministry about maintaining military ties with the self-ruled island, which Beijing considers a breakaway province.

"I wouldn't overreact to that ... we expect commercial providers of services to strictly comply with the law," Balakrishnan was quoted as saying by Singapore's Straits Times newspaper.

"It will be a footnote on how to do things strictly, carefully and by the law. It's not a strategic incident."

Taiwan lists the times it says China blocked its diplomatic space

Thu Nov 24, 2016 | 4:16am EST
Taiwan is updating its foreign ministry website listing the times it says China blocked its international space, a move endorsed by the island's independence-leaning ruling party on Thursday.

The list, last in use when the ruling Democratic Progressive Party (DPP) was last in power from 2000-2008, comes after official communication channels between Taiwan and China ceased with Taiwan President and DPP leader Tsai Ing-wen taking office in May.

China says Taiwan is part of "one China", ruled by Beijing. It regards the island as a renegade province, ineligible for state to state relations, to be united by force if necessary.

"I don't know the details of the updates," Chinese Foreign Ministry spokesman Geng Shuang said on Wednesday in Beijing when asked about the website.

"On 'Taiwan's international space' issue, we have always stressed the 'one China' principle and its handling. This is also the general consensus in the international community."

Taiwan has only a handful of allies in the world, including the Vatican. In March, China resumed ties with the small west African state of Gambia, one of only a few African countries, along with Burkina Faso, Swaziland and São Tomé and Príncipe, to recognize Taiwan.

China's actions "will only increase a negative perception" of China by Taiwan and "adversely affects the long-term relationship" of both sides, DPP spokeswoman Chiu Li-li said in statement.

The list includes working-level international meetings Taiwan delegations were barred from attending, sometimes due to their Taiwan passports, the ministry said.

It also includes a snub by a UN aviation agency from inviting Taiwan to a meeting in September. Taiwan is not a member of the United Nations, which recognizes China.

In EUSSR news, everyone’s back peddling from Brexit Armageddon.

Brexit Impact Will Be Less Harsh Than Anticipated, OECD Says

November 28, 2016 — 10:00 AM GMT Updated on November 28, 2016 — 10:51 AM GMT
Brexit is going to cause the British economy to slow less than originally thought, according to the OECD.
The Paris-based Organization for Economic Cooperation and Development revised up its U.K. growth forecasts to 2 percent from 1.8 percent this year, and to 1.2 percent from 1 percent in 2017, according to its November Economic Outlook. An inflation-induced pinch on consumer spending and lower investment are likely to drive the slowdown, it said, and those threats could prove more troublesome than expected.
“The unpredictability of the exit process from the European Union is a major downside risk,” the organization said Monday. “Uncertainty could hamper domestic and foreign investment more than projected and the pass-through of currency depreciation to prices could be larger, deepening the extent of stagflation.”

While the forecasts assume the U.K. obtains “most favored nation” status under World Trade Organization rules after quitting the EU in 2019, they underscore the uncertainty surrounding the outcome of negotiations. The debate over the shape of Brexit gained further steam over the weekend, with Bank of England Governor Mark Carney reportedly telling bankers there should be a “buffer” period to give companies time to adjust to the U.K. leaving the bloc.

The BOE and OECD have been among the institutions criticized by pro-Brexit politicians for over-exaggerating the economic impact of the referendum. Even after revising up its growth outlook, the OECD is gloomier about next year than the central bank and the Office for Budget Responsibility, the independent fiscal watchdog that published forecasts last week.

Norway to Start a Trade ‘Dialogue’ With the U.K. Next Month

November 28, 2016 — 1:38 PM GMT
Norway will start a trade dialogue with the U.K. next month to ensure its biggest trading partner meets its interests as Britain embarks on exiting the European Union.
“We are, of course, following developments in the U.K. and in the EU but it’s still quite unclear how the parties will negotiate,” Norwegian Industry Minister Monica Maeland said in an interview after a speech in Oslo. “Our concern is to ensure our interests, both versus the EU and the U.K.”
Norway, which has access to the single market through the European Economic Area, finds itself somewhat on the outside as the U.K. seeks to extricate itself from the EU. That will also sever its ties to the EEA, meaning Norway and the U.K. will need to come up with a new arrangement. Norway is the U.K.’s largest supplier of natural gas.
Maeland said the two countries haven’t discussed any type of deal yet, since it depends on how the U.K. proceeds. The two will now start an “administrative dialogue” next month, she said. She stressed that Norway is not a third party in the the talks, but tied to the EU through the EEA.
“It’s important that we are active,” she said. “But we have respect for the U.K, although it must now decide what processes it should have and also need to agreed with the EU on how to take this further.”
Up next, how do you solve a problem like Italy, in or out of the one German size fits all, wealth and jobs destroying euro? EC President Juncker bans referendums. In any EU democracy, the inmates will vote to leave, he thinks. A variant on “how ya goin to keep ‘em down the EU salt mine, after they’ve seen Brexit.” It looks like it’s over for old Three Card Monte di Siena.

"There can be no democratic choice against the European treaties..."
Jean-Claude Juncker, La Figaro, 28 January 2015.

Divided Italians agree on one thing: scrapping 'elephant graveyard'

Mon Nov 28, 2016 | 9:27am EST
Italians are fiercely divided over Prime Minister Matteo Renzi's constitutional reform, but there is one aspect of the plan everyone agrees on - scrapping a public body that even its own members refuse to defend.
Few Italians had heard of the National Council for Work and the Economy (CNEL) until Renzi said he wanted to abolish it as one of 47 constitutional changes being put to the vote at a do-or-die Dec. 4. referendum.
The council, housed in an imposing Rome villa, is in Renzi's cross-hairs as a symbol of public sector waste and inefficiency.
"The government is right," said CNEL vice president Gian Paolo Gualaccini, speaking at Villa Lubin, which overlooks a picturesque park. "CNEL in its current form is useless."
Set up in 1957 and enshrined in the constitution, the council was meant to advise the state on social and economic issues. But over the years, its army of well-paid officials have produced just 14 draft law plans, all of which were rejected.
Its abolition has been included in a list of constitutional changes proposed by Renzi alongside shrinking the upper house Senate and bringing power back to Rome from the regions.
The prime minister, who has promised to resign if the reform does not pass, lambasts CNEL at every campaign speech, holding it up as a target to show his desire for change.
"How can anyone defend the CNEL?" Renzi asked on state television this month, looking to depict opponents of his reform as conservatives eager to protect old privileges.
In a frescoed meeting room known as the "Little Parliament" a long-standing member of the council's administrative staff said it had been abused by politicians and trade organizations, who were meant to work together to draw up their proposals.
"They sent us bunglers, old people and unknowns," said the employee, who asked not to be named as he will move to a job elsewhere in the public sector if CNEL is abolished.
"They call us an elephant graveyard," he added, ruefully surveying the gleaming pews.
Renzi has said scrapping CNEL would save 20 million euros ($21 million) a year, but it is not clear how.
What was once a 120-member council has been shrunk to just 24, who as of 2015 work for free. The 61 support staff, whose salaries take up most of CNEL's 8.7-million-euro budget, are guaranteed a job elsewhere in the public sector if it closes.

European president Jean-Claude Juncker pleads with EU leaders not to hold 'in-out' referendums - because voters will choose to LEAVE 

Austrian leadership candidate Norbert Hofer promised referendum 

Juncker said giving people a vote would be 'unwise' after Brexit

He fears that attempts to leave could destabilise the European Union 

He claimed the EU's weakness was a 'lack of love' between nations 

Jean-Claude Juncker has urged EU leaders not to hold referendums on their membership of the bloc because he fears their voters will also choose to leave.

The European Commission president said giving people a vote would be 'unwise' as they could seek to replicate Brexit.

His remarks come as one of the contenders to become Austrian president has threatened to hold a referendum if the EU integrates further.

Norbert Hofer, who will become Europe's first far-right head of state since the Second World War if elected on Sunday, has promised a ballot if the EU becomes more centralised following Brexit.

Asked about the Freedom Party candidate's pledge, Mr Juncker told Euronews: 'We can't deny or take away the people of Europe's right to express their views.

'Regarding referenda on EU membership, I think it is not wise to organise this kind of debate, not only because I might be concerned about the final result but because this will pile more controversy onto the huge number already present at the heart of the EU.

'Besides, I don't think the next president of Austria, whoever it will be, will launch themselves into this kind of escapade.

'I have learned to tell the difference, between campaign promises and concrete policies.

Mr Juncker, who has faced blame for the Brexit vote, insisted 'the existence of the EU is not in doubt'.

He claimed the EU's weakness was a 'lack of love' rather than because of the actions of Brussels.

'We do not know a great deal about each other,' he said. 'What do the people in Lapland know about Sicily?
'What do the Italians in the south know about the depths of Poland? Nothing. We need to take more of an interest in each other.'

Italy's Monte dei Paschi lists multiple threats to rescue plan

Mon Nov 28, 2016 | 11:49am EST
More than 8 billion euros of legal claims against Monte dei Paschi di Siena (BMPS.MI), its weakening liquidity and the potential for more bad loan writedowns are among risks the bank says could scupper its 5-billion-euro rescue plan.

In a 146-page prospectus for a debt swap offer that is a key plank of the rescue scheme aimed at keeping the bank in business, Monte dei Paschi warned on Monday of "considerable uncertainty" surrounding the whole plan.

The bank, the world's oldest still in business, made its disclosure to markets fearful that a Dec. 4 constitutional referendum could unseat the government of Prime Minister Matteo Renzi.

It mentioned the risk of a bail-in, under European rules that would impose losses on its bondholders, 30 times. The Tuscan lender fared the worst in European bank stress tests in July.

The bank seeks to raise 5 billion euros by converting subordinated bonds into equity, a private placement to one or more anchor investors and a share sale on the market. It has so far failed to secure a firm commitment by potential cornerstone investors ahead of the vote.

"In light of the considerable uncertainty surrounding completion of the different parts of the overall deal, there is a risk that the deal itself may not succeed and cannot be concluded," it said.

At the Comex silver depositories Monday final figures were: Registered 30.91 Moz, Eligible 147.93 Moz, Total 178.84 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, yet another doubter of the euro’s longevity. Without major root and branch reform, the wealth and jobs destroying, EU Bilderberger vanity project itself is doomed. But there seems to be no appetite in Brussels or Berlin for any reform.
The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.

Walter Bagehot.

Investor Who Backed Brexit Sees Euro Breaking Up Within 5 Years

Stefania Spezzati November 28, 2016 — 2:09 AM EST
Jim Mellon stood out among investors in 2016 as a rare, public backer of Britain’s exit from the European Union. Now, the chairman of the Burnbrae Group is forecasting another breakup.
Mellon, who was cited as a supporter of the “Leave” campaign by pro-Brexit lawmaker Michael Gove, predicts the euro will become a future casualty of a rising anti-establishment tide, causing the currency union to splinter within the next five years.
“Brexit is going to be a sideshow to the problems of Europe that are becoming more and more evident,” Mellon said. “The euro as it stands at the moment is just a very inappropriate mechanism -- I give the euro between one and five years of life.”

The U.K.’s referendum, and Donald Trump’s victory in U.S. election this month, signaled the gathering pace of populism across the world. Now there’s growing speculation Italy’s referendum in December, and the elections in France in 2017, might result in more political upsets in Europe, causing some investors to question the future of the euro. That said, predicting the demise of the single currency is hardly a new phenomenon -- in 2014 Citigroup Inc. said there was a 90 percent chance of Greece leaving the bloc, a call it abandoned this year.

----That means, with the Italian referendum approaching on Dec. 4, Mellon is instead selling the country’s government bonds. The Italian 10-year yield climbed to 2.23 percent on Nov. 14, the highest since July 2015, but still remains below its five-year average of 3.24 percent. As well as the looming referendum, the bonds have been hurt by a global sell-off in fixed income assets which has seen yields across the world climb from record-low levels.
“I have been a very big seller of any government bonds this year, anywhere basically, but my favorite are the Italian bonds,” Mellon said. “Everyone who participates in this stupid bonds market should know that there is a serious duration risk. If you buy something for a very long period with no interest rates, you are going to get your head handed to you at some point.”

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?

South Pacific island ditches fossil fuels to run entirely on solar power

Ta’u island in American Samoa will rely on solar panels and Tesla batteries as it does away with diesel generators
Monday 28 November 2016

A remote tropical island has catapulted itself headlong into the future by ditching diesel and powering all homes and businesses with the scorching South Pacific sun.

Using more than 5,000 solar panels and 60 Tesla power packs the tiny island of Ta’u in American Samoa is now entirely self-sufficient for its electricity supply – though the process of converting has been tough and pitted with delays.

Located 4,000 miles from the west coast of the United States, Ta’u has depended on over 100,000 gallons of diesel shipped in from the main island of Tutuila to survive, using it to power homes, government buildings and – crucially – water pumps.

When bad weather or rough seas prevented the ferry docking, which was often, the island came to a virtual stand-still, leaving Ta’u’s 600 residents unable to work efficiently, go to school or leave their usually idyllic paradise.

Utu Abe Malae, executive director of the American Samoa Power Authority, said Tutuila has subsidized Ta’u diesel shipments for decades to the tune of US$400,000 a year – and continually ran the risk of a serious environmental disaster if the delivery ships capsized during the notoriously treacherous journey.

“Shipping diesel has been a long-standing environmental risk, and an inefficient use of taxpayers money,” said Malae.

“We want all of American Samoa to be solar-powered by 2040 – but Ta’u has been the priority and test-run.”
Construction of Ta’u 1.4 megawatt micro-grid began two years ago, and was immediately bogged down by poor weather, transport delays and technical difficulties.
“It has been really hard,” laughs Malae, light-hearted now the biggest hurdles are over.
“The ferries to the island would often break down, so then we’d have to flag down nearby fishing boats to transport the solar panels, and then they’d have to pass the panels to row-boats to reach the island. Nothing about this project went smoothly at all.”
Solar engineers from contractors Tesla and SolarCity flew out from California to help oversee construction of the micro-grid, and 15 local men were employed in the construction process.
Five of those fifteen locals – previously low skilled, odd-job men on the island – have now transitioned to full-time jobs as solar power technicians managing the grid.
Associate Professor Ashton Patridge from the faculty of engineering at Auckland University said “off-the-grid, small communities” like Ta’u were “ideally suited” to harnessing solar power.
“It is fantastic what they have done, and they should provide a working model for other Pacific island countries to study, as most get 6 to 8 sunshine hours a day, 1,000 watts per square metre – which is a resource that is otherwise wasted.

The monthly Coppock Indicators finished October

DJIA: 18142  +32 Up NASDAQ:  5189 +31 Up. SP500: 2126 +46 Up.

No comments:

Post a Comment