Baltic Dry Index. 834 -04 Brent Crude
47.37
Eurasian Snow cover. (How bad will
winter be?)
“Take some more tea," the Hillary said to the Donald, very
earnestly.
"I've had nothing yet," the Donald replied in an offended tone, "so I can't take more."
"You mean you can't take less," said the Hillary: "it's very easy to take more than nothing."
"Nobody asked your opinion," said the Donald.”
"I've had nothing yet," the Donald replied in an offended tone, "so I can't take more."
"You mean you can't take less," said the Hillary: "it's very easy to take more than nothing."
"Nobody asked your opinion," said the Donald.”
With apologies to Lewis Carroll, Alice in Wonderland
Up first today, German Bad Bank Deutsche Bank, who
long ago lost the plot and turned to insane levels of leveraged derivatives
gambling, now thinks that the ECB’s former guru Mario Draghi has lost the plot
and is fuelling massive moral hazard. Who am I to argue with anything in the
continental asylum run by its inmates.
“Why, sometimes I've
believed as many as six impossible things before breakfast.”
Mario Draghi, with
apologies to Lewis Carroll, Alice in Wonderland
Deutsche Bank Thinks Draghi’s Gone Over to the ‘Dark Side’
Chief economist David Folkerts-Landau says ECB has entered new dimension of moral hazard
November 2,
2016 — 11:46 AM GMT
Grim mutterings about European Central Bank policy can probably be heard
echoing around the skyscrapers of Frankfurt's financial district on any given
day: Low interest rates, tough supervision, no bonds left out there to buy,
etcetera.David Folkerts-Landau, chief economist of Deutsche Bank AG has taken those concerns to a whole new level, and has just published an excoriating attack on ECB policy. The research note is entitled “The Dark Sides of QE.” Here’s a taste:
“While European central bankers commend themselves for the scale and originality of monetary policy since 2012, this self-praise appears increasingly unwarranted,” he writes, going on to conclude that the “ECB is stuck ... between an unfavorable equilibrium of low growth, high unemployment and zero reform momentum on the one hand and growing risks to core country balance sheets on the other.”
Folkerts-Landau lists a number of the dastardly deeds of the ECB’s 80 billion-euro ($89 billion) a month asset-purchase program, which, lest we forget, has so far achieved its aim of preventing a spiral of deflation in the euro area: Bond prices have lost their signaling function; national balance sheets risk being overburdened; savers are being penalized; asset bubbles are forming. You may recognize some of these arguments.
But the point he chooses to tackle first is the assertion of a causal
link between the ECB’s easy monetary policy and a slowing of economic
reform in the euro area. This claim is based on data from the Organization of
Economic Cooperation and Development on the extent to which suggestions they’ve
made to countries in the euro area on how to boost the capacity of their
economies are actually being carried out.
The data seem
clear: “Deficit countries” – France, Estonia, Greece, Ireland, Italy,
Portugal, Slovakia and Spain – made a much greater effort in 2011 and 2012 than
they did last year. Indeed, the OECD itself says that in the early part of the
European debt crisis “reform responsiveness” was greater in countries that were
facing more difficult circumstances, though that correlation has broken down
somewhat lately. The OECD also warns against over-interpreting year-over-year
changes too much, as many types of improvements to economic frameworks take
years to complete.
But Folkerts-Landau draws a conclusion that the OECD does not, namely that the reason for this slowdown is the more favorable conditions that the deficit countries are enjoying on bond markets, in particular after the ECB announced its OMT bond-buying plan in 2012. That compressed bond yields as well as the urge to reform, he argues.
“Any incentive to reform disappeared with the guarantee to bail out countries in need via OMT,” he writes, not mentioning, for instance, the labor-market reforms that Italy has made since then or the constitutional revamp that’s scheduled for December.
And in the end Folkerts-Landau comes back to what has been the classic point of German criticism of ECB policy, namely that it creates “moral hazard.” While the presence of a central bank ready to step in in times of stress always bears the risk of encouraging even more lax behavior in the future, Folkerts-Landau sees the ECB under President Mario Draghi on a completely different scale.
But Folkerts-Landau draws a conclusion that the OECD does not, namely that the reason for this slowdown is the more favorable conditions that the deficit countries are enjoying on bond markets, in particular after the ECB announced its OMT bond-buying plan in 2012. That compressed bond yields as well as the urge to reform, he argues.
“Any incentive to reform disappeared with the guarantee to bail out countries in need via OMT,” he writes, not mentioning, for instance, the labor-market reforms that Italy has made since then or the constitutional revamp that’s scheduled for December.
And in the end Folkerts-Landau comes back to what has been the classic point of German criticism of ECB policy, namely that it creates “moral hazard.” While the presence of a central bank ready to step in in times of stress always bears the risk of encouraging even more lax behavior in the future, Folkerts-Landau sees the ECB under President Mario Draghi on a completely different scale.
“With
Mr Draghi’s promise of ‘whatever it takes,’ the implied moral hazard was pushed
into a much larger dimension,” he writes. “It remains to be seen how it will
escape from this dilemma of its own making.”
German financial watchdog says Basel IV draft bank rules unacceptable for Germany
A new draft of proposed international
bank regulation is unacceptable for Germany because the rules might restrict
lending by the country's banks, the head of Germany's financial regulatory
agency said.
The Basel Committee of bank supervisors from nearly 30 countries intends
to deliver the new Basel IV rules by the end of this year. The rules aim to
avoid repeats of the financial crisis of 2008-09, when taxpayers had to bail
out under-capitalized lenders.
The plan, however, has drawn criticism in Europe. The European Union's
financial services commissioner said several weeks ago that the reform risks
hurting European banks and needs to be changed.
Felix Hufeld, the president of Germany's regulatory agency, Bafin,
weighed in late on Tuesday.
"Discussions are not over the finish line yet," Hufeld said.
"From a German perspective, what we have on the table so far is not
acceptable."
Germany and France, especially, are worried that the proposals presented
so far could discourage their banks from lending to consumers and companies.
They say that the new rules demand a significant increase in the capital banks
must hold against their risks.
One bone of contention is the level of discretion over how much capital
banks must hold against loans turning sour.
Regulators want to cut complexity and inconsistency in capital
requirements among big banks that use their own models, rather than methods set
out by regulators, to calculate credit risks.
Models typically indicate lower capital requirements, a big advantage,
since credit risk accounts for 70 percent of a bank's capital buffer.
Regulators suspect that the big banks use models to make capital ratios appear
stronger than they are.
But the switch to standards defined by regulators hits banks in
different countries to a different extent.
European banks argue that the new rules favor U.S. banks because the
U.S. economy depends less on bank loans for financing than on capital markets.
In addition, European banks usually keep mortgage loans on their own
books, while U.S. banks can offload them to state agencies such as the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation,
commonly known as Fannie Mae and Freddie Mac.
More
Elsewhere in Europe the slowdown
continues.
Irish October services sector growth slowest since May 2013: PMI
Nov 3 - Growth in Ireland's services sector fell to a fresh 3-1/2-year
low in October as Britain's decision to leave the European Union continued to
weigh on new orders, a survey showed on
Thursday.
The Investec Purchasing Managers' Index (PMI) of activity in services
fell to 54.6 in October from 56.2 in September, the lowest reading since May
2013, when Dublin was still working its way through an international bailout.
The index, which covers companies from banks to hotels, has fallen from
a 10-year high of 64.0 in January as new business has steadily declined.
Investec Ireland chief economist Philip O'Sullivan said the fact new
business had fallen for five consecutive months was a "particular
concern", with a number of panelists citing the Brexit vote and related
sterling weakness as a factor.
Ireland is widely considered the European Union economy to have the most
to lose from the June referendum vote in its key trading partner.
More
In US news, with HillBilly on the ropes
in the countdown to the US election, dollar holders are getting nervous.
Dollar skids on U.S. election jitters, with jobs data ahead
The dollar shed its early modest gains and skidded against the yen with markets in Japan closed for a public holiday.
It was last down 0.7 percent at 102.57 yen JPY=, wallowing at its lowest levels since Oct. 4 and well off its Oct. 28 high of 105.53.
"The Fed didn't really tell us too much that we didn't already
know. The focus in FX is still on the narrowing lead that Clinton has over
Trump," said Sue Trinh, head of Asia FX strategy at Royal Bank of Canada in
Hong Kong.
"And that's seeing a conventional risk-off move in markets in thin
liquidity, with Tokyo out," she said.
While Democratic candidate Hillary Clinton, seen as the status quo
candidate for markets, remained ahead in many polls before Tuesday's vote, some
investors have begun pricing in the possibility of victory for her Republican
rival Donald Trump.
More
We close for the day with the UK’s
highest court meddling in politics and about to set a historic precedent. A decision against Her Majesty’s Government
will pile uncertainty upon uncertainty, and go over like a lead balloon in the
rest of the EUSSR. Imagine a reluctant giant member of the EU trapped in a club
it wants to leave. Veto, after veto, after veto, Wallunatic style. Pounds or
euros anyone? And the verdict is M’lud?
What’s at Stake in the Brexit Court Ruling: QuickTake Q&A
November 2, 2016 — 2:23 PM GMT
On Thursday at 10 a.m., three senior judges in London will publish their
decision on whether Prime Minister Theresa May can begin Britain’s exit from
the European Union without permission from Parliament. Defeat for May would
mean her fellow lawmakers, who were overwhelmingly pro-EU before the June 23
referendum, get to vote on her plan before she triggers Article 50 of the
Lisbon Treaty by the end of March. With a slim majority in the House of Commons
and none in the House of Lords, the process could be delayed by more than a
year as lawmakers squabble over the details.1. What were the key issues during the trial?
At the heart of the challenge is who has the power to execute the will of the people; Parliament or the prime minister. Rarely have British judges been asked to resolve such a politically charged question. David Pannick, the attorney leading the challenge, argued the referendum wasn’t legally binding because it was "advisory," so Parliament must authorize any departure from the EU.2. What did the government argue?
May’s most senior legal adviser, Attorney General Jeremy Wright, told the panel the lawsuit was merely an attempt by unhappy “Remain” voters to "invalidate" the referendum. Triggering Article 50 would not have any immediate impact on domestic law and wouldn’t require an Act of Parliament, said government lawyer James Eadie. Whatever happens Parliament will likely get a vote on any new treaty, Eadie said. However, once Article 50 is invoked a two-year countdown begins and there is no going back, Wright told the court. The government plans a bill that will enshrine all existing EU law in U.K. law to ensure a smooth transition.3. What is the ruling likely to say?
During the three-day hearing, judges John Thomas, Terence Etherton and Philip Sales gave very little away beyond their irritation at attorneys taking too long to make their cases. Though the contents of the ruling remains a mystery, it will be "absolutely crystal clear," says Dominic Chambers, a lawyer advising one of the challengers. "It is a binary question. The answer is going to be a simple yes or no."
More
“Off with their heads!”
Nigel Farage, with apologies to Lewis Carroll, Alice in
Wonderland
At the Comex silver depositories
Wednesday final figures were: Registered 30.46 Moz, Eligible 143.11 Moz,
Total 173.57 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
After the near fiasco of the Canada
– EU trade agreement, today what lessons Canada holds for Brexit Great Britain.
What Canada Can Teach Post-Brexit Britain
Nov 2, 2016 12:52 PM EST
---- The Economist
just celebrated
Canada's distinctive achievements with a cover and supporting articles. The
magazine was full of admiration for Canada's liberal, outward-looking centrism.
Yet what struck me most in these excellent pieces was an observation made in
passing: "Brexiteers might justifiably claim that they voted for exactly
what Canada already has: control of immigration and the freedom to negotiate
trade deals with any country willing to reciprocate."Indeed they might. They might also wonder why respectable opinion, not least in the pages of The Economist, has refused to take claims of this sort seriously.
Throughout this debate, the core of the supposedly enlightened case against Brexit has been that, in the modern world, sovereignty is a myth. Economies are too interdependent: No country, least of all one with a much larger neighbor, is free to choose. You exercise influence by pooling sovereignty, not by trying vainly to preserve or reclaim it. And so forth.
This position spared its advocates the nuisance of having to weigh the likely costs of leaving the EU (which might indeed be substantial) against the benefits. If the benefits of "resuming control" were but a delusion, there was no real choice to make. That's why, according to papers like The Economist and the Financial Times, you were either a smart Remainer with an up-to-date understanding of the world, or a moron.
Canada proves otherwise. For sure, it's a good international citizen in many respects, a willing pooler of sovereignty in various policy areas -- but it's also a recognizably self-governing nation. It's a middle-sized country with a much larger, more powerful and more assertive neighbor. Yet, as The Economist says, it's different. Its choices are constrained at every turn by forces beyond its control, but evidently they aren't reduced to nothing. Canada has choices to make, and makes them for itself. It's a whole other country.
I fail to see why this model should be dismissed as unviable for the U.K., or irrelevant to Brexit.
Undeniably, getting to a friendly, productive and fully inter-governmental relationship with the EU -- much like the one Canada has with the U.S. -- won't be easy. Brexit is undoubtedly driven in large part by anti-liberal sentiment. This sentiment may lead Britain to turn away from the wider world rather than toward it. And the EU's response is unlikely, at least in the first instance, to be cooperative: Europe won't want Brexit to be judged a success. Because of these risks, I've been a Remainer, albeit a reluctant one.
Yet Canada shows that there's a strong case to be made on the other side. And now that Britain has in fact voted to leave, it shows that there are valuable opportunities to pursue.
More
“My dear, here we must
run as fast as we can, just to stay in place. And if you wish to go anywhere
you must run twice as fast as that.”
The EUSSR, with
apologies to Lewis Carroll, Alice in Wonderland
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?
Global Graphene Battery Market Worth USD 115 Million by 2022 - Analysis, Technologies & Forecasts Report 2014-2022 - Vendors: Cabot, NanoXplore, Graphene 3D Labs - Research and Markets
November 01, 2016 09:00 AM Eastern Daylight Time
DUBLIN--(BUSINESS WIRE)--Research
and Markets has announced the addition of the "Graphene
Battery Market by Type and Industry - Global Opportunity Analysis and Industry
Forecast, 2014 - 2022" report to their offering.
A new report titled, Graphene Battery Market - Global Opportunity
Analysis and Industry Forecast, 2014 -2022, projects that the world graphene
battery market is expected to reach $115 million by 2022, growing at a CAGR of
38.4% during the forecast period. The automotive industry is estimated to
dominate the market throughout the analysis period. Geographically, Europe is
expected to be the leading market in 2016, with a revenue contribution of
around 38%.
The graphene battery market is driven by the benefits of quick charging
capacity, increased charge cycles, effectiveness in high temperatures, and
extended duration to hold charge. The rising number of prospective application
areas for graphene batteries, coupled with their increasing adoption in
automotive industry, is expected to boost the market growth. However, lack of
awareness about the technological potential and high cost of graphene electrode
material are the limitations that would restrict the market growth.
Graphene is an excellent substrate for anchoring lithium battery anode
and cathode materials to generate high energy & density, flexible,
stretchable, quick charging, and long-lasting batteries. The lithium-ion
batteries segment would account for over 70% of the overall market revenue in
2016, as these would be the most suited graphene-based batteries for electric
vehicles, industrial robots, and portable electronics.
Companies Mentioned:
- Cabot Corporation
- NanoXplore Inc.
- Graphene 3D Lab Inc.
- Graphenano s.l,
- SiNode Systems Inc.
- Graphene NanoChem PLC
- XG Sciences Inc.
- Cambridge Nanosystems Ltd.
- Graphenea S.A.
- Vorbeck Materials
http://www.businesswire.com/news/home/20161101006012/en/Global-Graphene-Battery-Market-Worth-USD-115
The monthly Coppock Indicators finished October
DJIA: 18142
+32 Up NASDAQ: 5189 +31 Up. SP500: 2126 +46 Up.
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