Tuesday, 15 November 2016

The Trump Effect Rolls On.

Baltic Dry Index. 1065 +20   Brent Crude 45.19

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

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

Every day, in every way, I'm getting better and better"

Hillary Clinton, with apologies to Émile Coué de la Châtaigneraie.

The Trump effect continues to roil the markets. Will he bring boom or bust, or perhaps a little of both? To this old dinosaur commodities trader, it’s impossible to say with any certainty. Loose cannons are just that, loose cannons. Without a team in place to help refine a judgement. My take still remains that the speculators are putting the cart before the horse. If stocks are right in anticipating a spending boom and lower taxes in 2017, we are all in for a world of rising interest rates. Few corporate balance sheets will withstand that shock, unless we get another outside break, like another oil and commodities collapse. But for now, the chances of that look poor.

Asia stocks under pressure as dollar stays near 14-year high

Tue Nov 15, 2016 | 12:40am EST
The U.S. dollar held near a 14-year high on Tuesday and Treasury yields extended their rise as investors braced for stronger inflation in the United States amid expectations of expansionary fiscal polices under Donald Trump's presidency.

The combination of the two have derailed Asian currencies and equities, particularly in South Korea, Taiwan and Indonesia, which have seen big inflows this year, especially after the shock referendum vote by Britain to exit the European Union in June.

MSCI's broadest index of Asia-Pacific shares outside Japan was broadly flat after falling nearly 5 percent since Trump's shock victory at the U.S. presidential elections last week. European markets were expected to open steady.

Indian stocks and Australian shares led regional losers with declines of 1.4 and 0.4 percent respectively. Hong Kong stocks rose 0.5 percent, boosted by expectations of strong earnings from index heavyweight Tencent.

"People are already pricing in the Trump presidency and the repercussions on their own economies," said Joseph Roxas, an analyst at Manila-based Eagle Equities.

"The (regional) currencies are recovering, so the markets are recovering as well after quite a long down period. We should expect a little rally after such a big drop."

On a trade-weighted basis, the dollar index on Monday vaulted above its January peak to hit 100.22, its highest since early December 2015.

On Tuesday, it was steady at 99.922.

Dollar strength and rising U.S. yields have fueled capital outflows from emerging markets. Foreign investors pulled out 950 billion won ($812.52 million) from Korean stocks and pumped in 397.4 billion won ($339.89 million) into bonds between Nov. 9-14.

Analysts expect more gains for the greenback in the short term, resulting in further headwinds for Asia.

Goldman Sees the Possibility of Stagflation Under Trump Presidency

Higher inflation and unemployment.

November 14, 2016 — 9:05 AM GMT
Short-term gain for long-term pain?

That's the view of economists at Goldman Sachs Group Inc., who argue that while some of President-elect Donald Trump's proposals could boost U.S. economic growth in the near future, his other policies would offset those positive impacts over the long-run.

Trump's surprise victory in the presidential elections has spurred a rally in stocks and upped market-based expectations of inflation as the President-elect is expected to enact a host of tax cuts and boost infrastructure and defense spending that he says will jump start growth by 3.5 percent per year, on average. Still, the prospect of tighter trade and lower immigration under Trump's presidency could raise the thorny prospect of "stagflation," a scenario in which prices rise alongside unemployment while the economy slows.

"The positive fiscal impulse from his tax reform and infrastructure proposals could provide a near-term boost to growth and, depending on the specifics, could have positive longer-run supply side effects," the Goldman team, led by economists Alec Phillips and Sven Jari Stehn, write. "However, other proposals could lead to new restrictions on foreign trade and immigration, which could have negative implications for growth, particularly over the longer term."

Faced with lingering uncertainty over Trump's policy proposals, the Goldman economists run through three different scenarios for the U.S. economy. The first is a "full" enactment of Trump's campaign promises with everything from increased fiscal spending to trade restrictions included. The second is a "benign scenario" in which only Trump's fiscal proposals are enacted. Lastly, there's an "adverse scenario" in which trade and immigration are curbed while the Federal Reserve grows more hawkish.

We close for the day with China offering the President Elect an olive branch and a stick. Work with us not against us, is Beijing’s message. But no one anywhere yet knows which it is to be, least of all in silicon valley.

U.S. should consider Beijing-backed Asia-Pacific trade deal: China paper

Mon Nov 14, 2016 | 11:42pm EST
U.S. President-elect Donald Trump's administration should consider supporting a Beijing-backed free trade deal in the Asia-Pacific, state media said on Tuesday, adding that China would be relieved to see a rival U.S.-led trade deal wither under Trump.

During his election campaign, Trump took a protectionist stance on trade issues and labeled the Trans-Pacific Partnership (TPP) championed by President Barack Obama a "disaster". There is now little chance of it coming up for vote in Washington before his inauguration in January.

Obama had framed the TPP, which excludes China, as part of his "pivot to Asia" and as an effort to write Asia's trade rules before Beijing could.

China had feared the United States would use the TPP to either force it to open markets by signing up or else to isolate it from other regional economies.

"Of course, Beijing is understandably relieved that the exclusive, economically inefficient, politically antagonizing TPP is looking ever less likely to materialize by the day," the official English-language China Daily newspaper said in an editorial.

The Regional Comprehensive Economic Partnership (RCEP) trade talks, which are supported by Beijing but to which the United States is not party, are viewed by some observers as a competitor to U.S. economic leadership in the region.

"The incoming administration should realize that the more open, inclusive Regional Comprehensive Economic Partnership will turn out to be a far more efficient vehicle for advancing U.S. interests," the China Daily said.
"Washington may want to take advantage of the nascent, evolving platform and become involved from the rule-making stage. U.S. influence in the Asia-Pacific will not abate if the Trump administration chooses to engage with the region constructively," the paper said.

Such editorials in state-run media do not represent Chinese government policy but they are indicative of official thinking.

RCEP groups the 10 members of the Association of South East Asian Nations plus China, Japan, South Korea, India, Australia and New Zealand, but currently does not offer the same high level of free trade openings as the TPP.

China warns iPhone sales could be hurt if Trump begins trade war

Sales of iPhones in China could be impacted if President-elect Donald Trump initiates a trade war with China, a Chinese state-run publication is warning.

The publication, the Global Times, also warned that the country could start buying Airbus aircraft instead of Boeing, and that in addition to iPhone sales, American car sales in China will “suffer a setback.” It added that “U.S. soybean and maize imports will be halted.”

Donald Trump has said that he will declare China a “currency manipulator,” and Judy Shelton, an economic advisor to Trump, said on Friday to Bloomberg that she thought he’d follow through on the issue. “I think that he’s someone who is going to carry through on what he has said— he’s always very straightforward and honest, and I expect him to be consistent,” she said.

The Global Times also cautioned:  “If he does list China as a currency manipulator and slap steep tariffs on Chinese imports, China will take countermeasures.”

It added that such a move would make the US-Sino trade relationship “more tense” and that in response to a trade tariff of 45 percent on Chinese imports in the U.S., China would take a “tit-for-tat approach” that could affect iPhone sales in that country.

According to Apple’s latest financial results, Greater China is the company’s third-largest market, measured by revenue, although sales there have fallen around 30 percent year-over-year in the past two quarters.

“Can’t we just drone that guy.”

Hillary Clinton.

At the Comex silver depositories Monday final figures were: Registered 30.35 Moz, Eligible 146.82 Moz, Total 177.17 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, President Obama’s overseas farewell victory tour, Trumped.

Trump’s Election Upends Agenda for Obama’s Last Foreign Trip

November 14, 2016 — 10:00 AM GMT
Donald Trump’s election has changed the nature of President Barack Obama’s final foreign trip as commander in chief, a two-continent journey that he expected to be an amicable farewell to the leaders of more than two dozen countries.

Obama leaves this evening for Greece, Germany and Peru, a trip that would once have served as a tidy narrative symbolizing the handover of U.S. power to a like-minded fellow Democrat, Hillary Clinton.

Instead, after Trump’s victory on Nov. 8, Obama must reassure the world of something he may not quite believe himself: that the billionaire real estate developer and reality TV star will be ready to lead the free world by his Jan. 20 inauguration, and that America will continue to lead the way on using diplomacy to defuse international crises and on the protection of the environment.

All that Obama has accomplished in foreign affairs hangs in the balance. Trump has threatened to unravel a multi-nation deal to curtail Iran’s nuclear weapons programs, and may favor reversing sanctions on Russia intended to deter its aggression toward neighbors.

Trump has also said he would abandon the Paris accord on climate change and look to renegotiate or scrap various international trade deals. He’s also vowed new approaches to the fight against Islamic State and the refugee crisis in the Middle East and Africa. Obama is sure to face pointed questions about a man he once promised them would never be president.

“The election will be the primary topic on people’s minds everywhere we go,” said Ben Rhodes, Obama’s deputy national security adviser -- especially “given the direction the election took.”

In Peru, Obama will attend the Asia-Pacific Economic Cooperation summit, a meeting of 21 Pacific Rim governments. Obama once hoped he would arrive at the event able to boast of congressional ratification of the Trans-Pacific Partnership, a 12-nation free trade agreement involving many of the group’s members. Trump dashed those dreams, campaigning in adamant opposition to the TPP, and Republican congressional leaders have all but ruled out ratifying it before the president-elect’s inauguration.

Now, Obama will meet with a series of nervous world leaders demanding answers about how Trump’s victory may affect their relations with the U.S., said Meredith Miller, vice president of Albright Stonebridge Group and a former official at the State Department’s Bureau of East Asia and Pacific Affairs.

Where are they working now? Where will they be working next year?

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?

Energy secretary admits solar intermittency fears were ‘overblown’

Published: 14 Nov 2016,
Energy secretary Greg Clark has admitted that fears over solar PV’s intermittent generation and the impact it would have on the grid were “overblown”.

Clark was speaking at the Energy UK conference last week just as his department published its smart power call for evidence, requesting insight from industry as to how the UK can best transition to a more advanced generation and distribution system.

Addressing delegates, Clark lauded solar and other renewables’ potential to “challenge” the traditional energy model comprising large, centralised generation assets.

“These technologies create opportunities for new businesses and business models, new consumer offerings and new markets. All of these are good news for consumers, for our energy system and for the economy,” he said.

But solar and other intermittent generators – particularly onshore wind – have faced repeated criticism by detractors for the purported additional costs associated with their generation portfolio and alleged disruption to the grid.

But Clark has now said that this criticism was exaggerated.

“Many of the fears about their impact were overblown. It was said our power system could not cope with a significant percentage of our power coming from renewables.

“The doubters have been proven wrong. We now get 14% of our electricity from intermittent sources and our electricity supply remains the most reliable in Europe,” he said.

Clark added that the impetus was now on government to design an energy system that can “better manage intermittency” and harness the advantages of supplementary technologies such as storage, demand-side response and innovative IT systems.

“We want decentralised energy to compete with large-scale new generation. Why? Because the competitive tension is best for consumers,” Clark added.

The monthly Coppock Indicators finished October

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

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