Friday, 18 November 2016

The Future, Trump, Brexit, & Italy.

Baltic Dry Index. 1231 +86   Brent Crude 46.19

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

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

“Call it the Goldman Sachs test. If this is something Goldman would do to its clients, don't do it."

Felix Salmon.

We are a week away from the American holiday of Thanksgiving, five weeks away from Christmas, and about six weeks out from New Year. Approximately two months out from President Trump and the Republicans taking over in Washington and setting out to drain the swamp. How far off is Brexit? No one knows. Since all sides never expected Brexit to win, no one in London, Brussels, Berlin or Paris, bothered to make any plans. Brexit could be next year or next decade, if the courts of the UK and EU are involved. But we are just over two weeks away from an Italian referendum that could trump all of the above ushering in a Christmas crisis.

Below, Goldie does “God’s work” and sets out its view of the future. Caveat emptor, Goldie has been known in the past to trade against its own products.

"I'm doing 'God's Work.'

Lloyd Blankfein, CEO,Goldman Sachs, aka Mr. Goldman Sachs. 

Goldman Sachs Maps Out Its Top Ten Market Themes for 2017

They're heavily influenced by President-elect Trump.

November 17, 2016 — 7:51 PM GMT
It's not even Thanksgiving yet, but Goldman Sachs Group Inc. is already preparing for 2017. In a note to clients on Thursday, a team led by Chief Credit Strategist Charles Himmelberg released its top ten market themes for next year.

"High growth, higher risk, slightly higher returns," is how the strategists view the year ahead — and it's clear that their outlook has been heavily influenced by the pending regime change in Washington, D.C.

Here's a brief summary of each of the ten themes Goldman sees as forming the backdrop for investing in 2017.

Expected returns: only slightly higher

Relative to its 2016 forecasts, the team says owners of financial assets can reasonably able to expect more upside — but stress that these returns will still likely remain low.

"The best improvement in the opportunity in global equities is in Asia ex-Japan, where we forecast returns of 12.5 percent (versus 3.8 percent for 2016)," the strategists write. "At the other end of the equity spectrum, in Japan we are forecasting declines of -3.7 percent on the Topix (versus 5.2 percent for 2016)."

U.S. fiscal policy: a pro-growth agenda

President-elect Donald Trump's focus on infrastructure spending during his victory speech on Nov. 9 — rather than trade protectionism or immigration restrictions — catalyzed the risk-on sentiment that's pervaded markets, according to Himmelberg.

"Markets are starved for growth. This is plainly visible in the eagerness with which markets seized on Trump’s growth-focused message," he writes. "It is also visible in the speed with which the market’s narrative on the economic outlook under Trump has shifted from ‘uncertainty’ to ‘growth.'"

Fiscal stimulus in the U.S. will help reflate the economy, and stands a good chance of passing through Congress, the team reckons.

U.S. trade policy: concerns are likely overdone

Goldman doesn't see an imminent trade war on the horizon, and expects any re-negotiation of agreements currently in place (like NAFTA) to focus on attempts to improve the prospects for the U.S. manufacturing sector.

"We think the popular media narrative on the downside risk of a trade war is overstated," the strategist writes. "Our tentative view is that Trump’s use of punitive tariffs will be just as pragmatic as President Obama’s, albeit more vocal."

Japan's PM Abe meets Trump, says confident can build trust

Thu Nov 17, 2016 | 11:55pm EST
Japan's Prime Minister Shinzo Abe described Donald Trump as a "trustworthy leader" after meeting the U.S. president-elect on Thursday to get clarity on statements Trump had made while campaigning that had caused concern about the alliance.

Abe, speaking after the hastily arranged 90-minute meeting at Trump Tower in Manhattan, reporters: "The talks made me feel sure that we can build a relationship of trust." But he would not disclose specifics because the conversation was unofficial.

Japan's leadership has been nervous about the future of an alliance that is core to Tokyo's diplomacy and security.

Trump had fanned worries in Tokyo and beyond with comments on the possibility of Japan acquiring nuclear arms, demands that allies pay more for keeping U.S. forces on their soil or face their possible withdrawal, and his opposition to the U.S.-led 12-nation Trans-Pacific Partnership (TPP) free trade pact.

Abe had worked closely with President Barack Obama on the TPP trade pact, which was part of Obama's push to counter the rising strength of China and a pillar of Abe's economic reforms.

"Alliances cannot function without trust. I am now confident that President-elect Trump is a trustworthy leader," said Abe, describing the talks as "candid" and held in a "warm atmosphere".

Abe gave Trump a golf driver and received golf-wear in return, Japanese officials said.

Photographs taken inside the ornate meeting room at Trump Tower showed Abe accompanied only by an interpreter and Trump by his daughter Ivanka, her husband and Trump adviser Jared Kushner, and Retired Lieutenant General Michael Flynn whom a senior Trump official said on Thursday had been offered the national security adviser position.

Abe said he had agreed to meet again with Trump "at a convenient time to cover a wider area in greater depth."

It was unclear if that would happen before Trump's inauguration on Jan. 20. Trump official Kellyanne Conway told CBS earlier on Thursday that "any deeper conversations about policy and the relationship between Japan and the United States will have to wait until after the inauguration."

While it’s anyone’s guess what happens next in Brexit, China and the Rest of the World (ROW) are moving on. The wealth and jobs destroying EUSSR may be tottering, but the ROW is making plans to exploit the new freedoms and opportunities that Brexit will bring.

Chinese Plan New Asian Financial District in London

November 17, 2016 — 9:00 PM GMT
With Britain trying to hammer out the terms of its exit from the European Union and banks considering their options on the continent, is this the best time to start building a new financial district in London?

China thinks so.

Four of the country’s biggest banks this month agreed to finance the first stage of a 1.7 billion-pound ($2.12 billion) transformation of an old East End dock into a hub for Asian businesses. To the west of the site near London City Airport, the towers of Canary Wharf stand as a reminder of how ambitious projects in the U.K. capital can remain white elephants for years before turning into cash cows.

Chinese companies are on track to invest 4 billion pounds in London property this year, beating the 2015 record by a third, according to data compiled by CBRE Group Inc. Though the U.K.’s vote to leave the European Union lowered prices for Chinese by depressing the pound against the yuan, any longer-term payoff depends partly on whether Brexit will drive down rents and values by diminishing the city’s role as Europe’s finance hub.

“Chinese investors are betting that the U.K. will do well in the Brexit talks, and if it doesn’t, companies will still choose London as their base,” said Michael Marx, former chief executive officer of developer U & I Group Plc. “London didn’t become the financial capital of the world overnight and it certainly won’t lose that status so quickly.”

----Since the Brexit vote, buyers from the world’s most populous country have spent 600 million pounds in the U.K., according to CBRE data that excludes purchases by individuals. China Minsheng Investment Corp. bought Societe Generale SA’s London headquarters for 84.5 million pounds. China Vanke Co. bought Ryder Court, an office building in Mayfair, for 115 million pounds and Kingboard Chemical Holdings Ltd. acquired Moor Place in the City of London financial district last month for 271 million pounds.

“We’re now getting inquiries from investors who have sat on the sidelines for years,” said Rasheed Hassan, a director of cross-border investment at Savills Plc who advised Kingboard Chemical on its purchase. “They’re jumping in all of the sudden. Even though there is a small discount on the yield, there is now a big discount on currency.”

Deloitte chairman says will continue to invest 'hugely' in UK

Thu Nov 17, 2016 | 9:12pm EST
Deloitte will continue to invest in Britain and has no plans to withdraw, its global chairman told Reuters on Thursday, following media reports that the consultancy firm might move work if the post-Brexit stance on immigration were too tough.

"We still have a very big base in the UK and we're very proud of our UK heritage," said David Cruickshank, talking on the sidelines of the annual APEC forum of Pacific Rim economies in Peru.

"(Brexit) just says the UK has to be very good at trading internationally, doing things internationally and that's where all our efforts are. So we continue to invest hugely in the UK."

Deloitte sparked government criticism this week after an internal memo written by its consultants was leaked that said Britain has no overall strategy for leaving the European Union, or Brexit.

Cruickshank, who was formerly chairman of Deloitte UK, said he had not yet read the memo.

On Thursday, Deloitte UK Chief Executive David Sproul told Sky News that the company would be prepared to move work outside Britain if restrictions were placed on immigration. Prime Minister Theresa May has argued that she must implement the wishes of the British people and increase controls.

Fears of a retreat from the trend in recent years toward freer flow of trade and people across borders are dominating discussions at the APEC meet in Lima. Leaders are trying to pick up the pieces after Donald Trump's election as president of the United States threw cold water on trade deals, particularly the Trans Pacific Partnership.

Meanwhile back in the still unreformed EUSSR, the house of cards gets closer to collapse.

“We all know what to do, but we don’t know how to get re-elected once we have done it.”

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President.

Europe at risk of collapse; France, Germany must lead - French PM

Thu Nov 17, 2016 | 7:52am EST
The European Union is in danger of breaking apart unless France and Germany, in particular, work harder to stimulate growth and employment and heed citizens' concerns, French Prime Minister Manuel Valls said in the German capital on Thursday.

Valls said the two countries, for decades the axis around which the EU revolved, had to help refocus the bloc to tackle an immigration crisis, a lack of solidarity between member states, Britain's looming exit, and terrorism.

"Europe is in danger of falling apart," Valls said at an event organized by the Sueddeutsche Zeitung newspaper. "So Germany and France have a huge responsibility."

He said France must continue to open up its economy, not least by cutting corporate taxation, while Germany and the EU as a whole must increase investment that would stimulate growth and job creation, as well as boosting defense.

As Britain seeks to negotiate its post-Brexit relationship with the EU, hoping to restrict immigration from the EU while maintaining as much access as possible to the EU single market, Valls said it must be prevented from cherry-picking.

"If they are able to have all the advantages of Europe without the inconveniences, then we are opening a window for others to leave the European Union," Valls said.

Immigration was one of the main drivers of Britons' vote to leave the EU, and Valls said the bloc, which more than a million migrants entered last year, had to regain control of its borders.

He said the Brexit vote and Donald Trump's election victory showed how important it was to listen to angry citizens, and that politicians scared of making decisions were opening the door to populists and demagogues.

In France, opinion polls suggest that the far-right, anti-EU, anti-immigration National Front leader Marine Le Pen will win the first round of the presidential election next April, before losing the runoff.

"It's strange that men should take up crime when there are so many legal ways to be dishonest. “

Al Capone

At the Comex silver depositories Thursday final figures were: Registered 30.90 Moz, Eligible 147.06 Moz, Total 177.96 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, the changed face of America. Obama and Clinton’s legacy. Continental EUSSR bureaucrats are in shock at what’s coming to them.

Republicans Now Control Record Number of State Legislative Chambers

By Barbara Hollingsworth | November 16, 2016 | 4:47 PM EST
Republicans added to their historic 2014 gains in the nation’s state legislatures with the addition of five state House chambers and two state Senate chambers in last week’s election, while Democratic control was reduced to levels not seen since the Civil War.

Republicans are now in control of a record 67 (68 percent) of the 98 partisan state legislative chambers in the nation, more than twice the number (31) in which Democrats have a majority, according to the bipartisan National Conference of State Legislatures (NCSL).

“That’s more than at any other time in the history of the Republican Party,” according to NCSL. “They also hold more total seats, well over 4,100 of the 7,383, than they have since 1920.”

Next year, the GOP will control both legislative chambers in 32 states - an all-time high, according to NCSL - while Democrats will have total control of just 13 state legislatures.

In 24 of the 32 states with Republican-controlled legislatures, voters have also elected Republican governors. In contrast, Democrats have a “political trifecta” in just six states.

Since 2009, when President Obama took office, his party has lost a total of 919 seats in state legislatures nationwide, according to NCSL data.

In 2009, Democrats had total control of 27 state legislatures, and held a majority in at least one chamber in eight more states where power was divided. In contrast, Republicans controlled just 14 state legislatures.

During Obama’s first year in office, Democrats held 1,024 of the 1,971 total state Senate seats in the nation, compared to 889 in Republican hands. They also held 3,058 of the total 5,411 state House seats, compared to 2,334 for Republicans.

In addition, there were 28 Democratic governors, compared to 22 Republican governors.

However, near the end of Obama’s two terms in office, the partisan balance in the nation's state legislatures has been completely reversed.

As of Nov. 7, 2016, there are just 823 Democratic state senators out of a total of 1,972 seats nationwide, according to NCSL data. Meanwile, Republicans have increased their ranks to 1,089.

Likewise, of the 5,411 state House seats, there are now 3,029 Republicans compared to 2,340 Democrats – a mirror image of both parties’ status in 2009.

---- “Republicans grabbed more of America’s statehouses and governors' mansions during the Obama administration than at any time in the modern era,” the Washington Post’s Amber Phillips reported.

Last week’s historic flip of the Kentucky House - the last Democrat-controlled legislative chamber in the South - to Republican hands for the first time in nearly 100 years underscores the point.

In 2010, Democrats in the Kentucky House held a solid 65-35 majority.  Six years later, the GOP now has a supermajority, and will control 62 of the chamber’s 100 seats.

“Democrats are now basically extinct in the South,” Phillips noted.

“Republicans bested expectations,” said Dan Diorio, a policy expert at NCSL. “Having already reached the peak of control in party history, Republicans will maintain a similar level of control in a year when many expected Democrats to net seats and chambers.”

”Anyone who said that Donald Trump was going to be a drag on down-ticket races is certainly eating their words right now,” Lisa Nelson, CEO of the American Legislative Exchange Council (ALEC) told

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?


The NSA’s Spy Hub in New York, Hidden in Plain Sight

November 16 2016, 7:40 p.m.
They called it Project X. It was an unusually audacious, highly sensitive assignment: to build a massive skyscraper, capable of withstanding an atomic blast, in the middle of New York City. It would have no windows, 29 floors with three basement levels, and enough food to last 1,500 people two weeks in the event of a catastrophe.
But the building’s primary purpose would not be to protect humans from toxic radiation amid nuclear war. Rather, the fortified skyscraper would safeguard powerful computers, cables, and switchboards. It would house one of the most important telecommunications hubs in the United States — the world’s largest center for processing long-distance phone calls, operated by the New York Telephone Company, a subsidiary of AT&T.
The building was designed by the architectural firm John Carl Warnecke & Associates, whose grand vision was to create a communication nerve center like a “20th century fortress, with spears and arrows replaced by protons and neutrons laying quiet siege to an army of machines within.”
Construction began in 1969, and by 1974, the skyscraper was completed. Today, it can be found in the heart of lower Manhattan at 33 Thomas Street, a vast gray tower of concrete and granite that soars 550 feet into the New York skyline. The brutalist structure, still used by AT&T and, according to the New York Department of Finance, owned by the company, is like no other in the vicinity. Unlike the many neighboring residential and office buildings, it is impossible to get a glimpse inside 33 Thomas Street. True to the designers’ original plans, there are no windows and the building is not illuminated. At night it becomes a giant shadow, blending into the darkness, its large square vents emitting a distinct, dull hum that is frequently drowned out by the sound of passing traffic and wailing sirens.
For many New Yorkers, 33 Thomas Street — known as the “Long Lines Building” — has been a source of mystery for years. It has been labeled one of the city’s weirdest and most iconic skyscrapers, but little information has ever been published about its purpose.
It is not uncommon to keep the public in the dark about a site containing vital telecommunications equipment. But 33 Thomas Street is different: An investigation by The Intercept indicates that the skyscraper is more than a mere nerve center for long-distance phone calls. It also appears to be one of the most important National Security Agency surveillance sites on U.S. soil — a covert monitoring hub that is used to tap into phone calls, faxes, and internet data.
---- Inside 33 Thomas Street there is a major international “gateway switch,” according to a former AT&T engineer, which routes phone calls between the United States and countries across the world. A series of top-secret NSA memos suggest that the agency has tapped into these calls from a secure facility within the AT&T building. The Manhattan skyscraper appears to be a core location used for a controversial NSA surveillance program that has targeted the communications of the United Nations, the International Monetary Fund, the World Bank, and at least 38 countries, including close U.S. allies such as Germany, Japan, and France.
It has long been known that AT&T has cooperated with the NSA on surveillance, but few details have emerged about the role of specific facilities in carrying out the top-secret programs. The Snowden documents provide new information about how NSA equipment has been integrated as part of AT&T’s network in New York City, revealing in unprecedented detail the methods and technology the agency uses to vacuum up communications from the company’s systems.

Another weekend, and we are beginning to get a better picture of what a President Trump presidency might bring. As with Brexit, that picture is full of clouds and uncertainty. As with Brexit, no one seems to have planned ahead for victory. Have a great weekend everyone.

"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.

The monthly Coppock Indicators finished October

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

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