Friday, 9 December 2016

Brexit – The Can of Worms

Baltic Dry Index. 1122 -40   Brent Crude 54.04

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

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

Freedom is the right to tell people what they do not want to hear.

George Orwell

While we may all off heard of Germany’s disgusting Diet of Worms, yesterday GB’s humble and ever so honest Supremes, were served up their very own  can of worms. Sky News went so far as to call it three cans of worms, so there’s enough to go round for everybody. Never ever involve lawyers is the logical conclusion from watching GB’s Supremes muddle along on Brexit. Not quite up to the job at hand, also comes to mind. For more on the “can of worms” including invoking Scotland’s virulently anti-Papist “Claim of Right 1689,” scroll down to Crooks, Scoundrels and Anti-Papists Corner.

We open with yesterday’s ECB meeting. Day one of its final meeting of the year of great political turmoil. Big changes lie ahead next year, Draghi warned.  Next week it’s the Fed’s turn, will they dare raise their interest rate ahead of incoming President Trump.

“All of these events, especially Brexit and the new administration in the U.S., have effects that are, by their very nature, going to develop their full dimensions in the medium- to long-term. So we’ll certainly see consequences.”

Mario Draghi.

Draghi Braces for More Upheaval as Europe Heads to Election Year

by Piotr Skolimowski and Scott Hamilton  December 8, 2016 — 11:51 AM EST
If you thought this year has already exceeded the limit for political upheavals, Mario Draghi is warning there may not be much respite in 2017.

Asked about the election of Donald Trump as U.S. president, the head of the European Central Bank offered his perspective not just on what he called the “radically new U.S. administration,” but also Brexit and the Italian referendum that cost Prime Minister Matteo Renzi his job this month. National votes in the Netherlands, France and Germany could further muddy the outlook, he said.

“Just look at the election calendar for the year to come and that is by itself a source of uncertainty,” Draghi said in Frankfurt after the ECB’s latest policy announcement on Thursday. “So there is a big uncertainty, much of which is political, and whether we can do something about that or not is an open question. I think what the central banks can do is to keep a steady hand.”

Watch more: Draghi’s news conference, fully indexed

Draghi’s comments came after the ECB said it would extend its quantitative-easing program by nine months to the end of 2017, buying at a reduced monthly pace with the caveat that it can step up or prolong purchases if needed.

‘Big Changes’

With upcoming elections in some of the region’s biggest countries potentially putting structural reforms on the back burner and a surge of populism undercutting support for European integration, the central bank may find itself tethered to non-standard measures for some time.

Draghi Says Italy Must Address Weaknesses No Matter What Happens

by Alessandro Speciale
European Central Bank President Mario Draghi said that Italy will have to undertake economic reforms, no matter what the outcome of the country’s political crisis.

“The vulnerabilities that both the banking system and Italy have, have been there for a long time,” Draghi said at a press conference in Frankfurt on Thursday. “So they ought to be coped with, and I am confident the government knows what to do, and they will be dealt with.”

The euro area’s third-largest economy is facing political turmoil after voters’ rejection of a constitutional overhaul prompted reformist Prime Minister Matteo Renzi to resign. The country’s political leaders are starting discussions that may lead to the appointment of a technocratic government and early elections.

“Countries that need reforms have to undertake them regardless of what is the general political uncertainty because the best way for countries to cope with this uncertainty is actually to restore growth and employment and job creation,” Draghi said in his press conference.

The country’s return to political crisis has rekindled pressure on its financial institutions, particularly on Banco Monte dei Paschi di Siena SpA, the only lender to fail a Europe-wide stress test this year. The ECB’s Supervisory Board discussed Monte Paschi’s request to delay its recapitalization on Thursday, the first day of a two-day meeting.

Asked about the beleaguered lender’s situation, Draghi didn’t answer, referring to the separation principle between ECB monetary-policy and supervision functions. He also declined to answer a question on press reports that Italy will ask for a 15 billion-euro ($15.9 billion) loan from the European Stability Mechanism to help Monte Paschi and other weak banks, instead citing an ESM guideline on the issue.

Even so, addressing the country’s political uncertainty he reaffirmed the central bank’s intention to act as a stabilizing presence for the euro area.
In other news adding to the political uncertainty at year end, South Korea seems about to impeach its President. With all news still being good news in global stock markets, I would add a few more purchased, highly speculative, deep-out-of-the-money stock index put options here.

South Korea's President Park faces historic impeachment vote

Fri Dec 9, 2016 | 1:12am EST
President Park Geun-hye faces an impeachment vote in parliament on Friday over an influence peddling scandal that could lead to her becoming South Korea's first democratically elected leader to be removed from office in disgrace.

There have been mass rallies every Saturday for the past six weeks calling for Park to quit, and opinion polls show overwhelming public support for her impeachment.

Parliament is expected to vote in favor of impeachment, with support from some members of Park's conservative Saenuri Party, according to opposition parties but the Constitutional Court must decide whether to uphold the motion, a process that could take up to 180 days.

The parliamentary session for the vote was scheduled to begin at 3 p.m. (0600 GMT), with the secret balloting expected to take about one hour, according to media reports.

"If parliament is unable to bring the situation to a resolution according to the will of the people, there will be a crisis that is beyond our imagination," the leader of the main opposition Democratic Party, Choo Mi-ae told a party meeting.

Parliament was closed to the public on Friday on orders of the speaker, and hours ahead of the scheduled vote, anti-Park activists scuffled with police as they tried to drive two tractors up to the main gate, where more than a 1,000 protesters were gathered.

Police subsequently shut down traffic on a 10-lane highway in front of the parliament's grounds and blockaded a bridge leading to the area.
We end for the week asking are there any honest German auto makers? Where’s that ancient Greek with his lamp when you really need him. Apart from planning to defraud the purchaser of the vehicle “with malice aforethought,” these vehicle’s dirty emissions harm humans and the environment in cities. Will anyone in Germany go to jail?
“The world is a place that’s gone from being flat to round to crooked.”

Mad Magazine.

German Car Emissions Probe Widens to Volkswagen’s Porsche

by Birgit Jennen and Dalia Fahmy
December 8, 2016 — 5:39 AM EST December 8, 2016 — 6:18 AM EST
German regulators are investigating whether Porsche illegally manipulated fuel economy data on its vehicles, potentially opening a new front in parent Volkswagen AG’s emissions-cheating scandal.

Germany’s Transport Ministry and Federal Motor Transport Authority are examining whether Porsche installed devices allowing its cars to sense whether they were being tested for fuel consumption and carbon-dioxide emissions, representatives at both agencies said on Thursday. That type of technology allows manufacturers to falsify results by making cars appear more energy efficient during tests.

A Porsche spokesman said by phone the company’s cars complied with fuel consumption and emissions laws that were in place at the time the vehicles were registered.

Volkswagen has so far set aside 18.2 billion euros ($19.7 billion) for fines and related expenses after acknowledging last year that it rigged 11 million diesel vehicles to cheat on emissions tests. The revelations have increased scrutiny of auto emissions with regulators around the world stepping up investigations.
German magazine WirtschaftsWoche reported earlier that unidentified people close to Porsche tipped off the Transportation Ministry to the alleged cheating. According to the report, some Porsche cars can detect whether they’re on a test bed based on the lack of steering wheel movement during operation. German authorities started a similar investigation targeting Audi in November, the magazine said.
Volkswagen stock was little changed at 127.15 euros at 12:17 p.m. in Frankfurt trading. The shares have lost about 25 percent since the scandal broke in September 2015, bringing the company’s valuation to 66 billion euros.

At the Comex silver depositories Thursday final figures were: Registered 38.71 Moz, Eligible 143.38 Moz, Total 180.09 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, the can of worms, yesterday’s weird invoking of Scotland’s virulently “anti-Papist”  “Claim of Right 1689” by Scotland’s Lord Advocate in the Brexit case before the Supremes sitting in London, to claim a Scottish veto over an English Brexit. If upheld, this case is headed to the misnamed European Court of Justice in Luxembourg to decide how GB may exit the EU, or even perhaps if it may exit at all over the Scottish Parliament’s  objection.  I’m not sure that Scotland’s “Claim of Right” complies with European Law at all, but what do I know. The EU may yet get the worst of all worlds, a sulking, angry, trapped GB in the EU unable to get out, but working from within to wreck it. If the Diet of Worms was disgusting, three Cans of Scottish Worms might prove fatal.

Can of worms opened on day three of Brexit Supreme Court case

A seemingly innocuous question raised the prospect of a development that would scupper the Government's Brexit timetable

"Is it for us?" A four word question on the third day of the Supreme Court hearing.

As innocuous as the question posed by Supreme Court Justice Lord Mance to Scotland's Lord Advocate sounded, it belied something potentially far more significant.
The context was the Scottish Government's representative claiming that abiding by the Sewel Convention (that legislation affecting Scotland must have Holyrood's consent) is a "constitutional requirement" for the purposes of Article 50.
Lord Mance interjected: "It is a question of European law, isn't it?" The Lord Advocate replied: "It is ultimately".
So the four word question, was one of the 11 Justices publicly pondering whether defining the phrase "constitutional requirement" was for "us" the Supreme Court, or for them, the European Court of Justice in Luxembourg. 
In theory, if the point is relevant to the case, the Court has an obligation to refer to Luxembourg. 
----The President of the Court, Lord Neuberger, tested Duncan Chambers QC, saying repeatedly that "it seemed a bit odd" that a referendum and a simple motion of Parliament might be insufficient legal backing for the Government trigger of Article 50. 
The Acts of Union were mentioned, as was the Bill of Rights, and the Claim of Right 1689.


The Claim of Right 1689.

The declaration of the estates of this kingdom, containing the Claim of Right and the offer of the crown to their majesties William and Mary king and queen of England, being prepared and brought in by the committee for settling the government, was read several times and, after diverse amendments made therein, was put to the vote and approved, whereof the tenor follows:
The declaration of the estates containing the Claim of Right and the offer of the crown to the king and queen of England
Whereas King James VII, being a professed papist, did assume the regal power and acted as king without ever taking the oath required by law, whereby the king, at his access to the government, is obliged to swear to maintain the Protestant religion, and to rule the people according to the laudable laws; and did, by the advice of wicked and evil counsellors, invade the fundamental constitution of this kingdom and altered it from a legal limited monarchy, to an arbitrary despotic power; and in a public proclamation asserted an absolute power, to cass, annul and disable all the laws, particularly arraigning the laws establishing the Protestant religion, and did exercise that power to the subversion of the Protestant religion, and to the violation of the laws and liberties of the kingdom.
By erecting public schools and societies of the Jesuits and not only allowing mass to be publicly said but also inverting Protestant chapels and churches to public mass houses, contrary to the express laws against saying and hearing of mass.
By allowing popish books to be printed and dispersed by a gift to a popish printer, designing him 'printer to his majesty's household, college and chapel' contrary to the laws.
By taking the children of Protestant noblemen and gentlemen, sending and keeping them abroad, to be bred papists, making great funds and endowments to popish schools and colleges abroad, bestowing pensions upon priests and perverting Protestants from their religion by offers of places, preferments and pensions.
By disarming Protestants while at the same time he employed papists in the places of greatest trust, civil and military, such as chancellor, secretaries, privy councillors and lords of session, and thrusting out Protestants to make room for papists, and entrusting the forts and magazines of the kingdom in their hands.
By imposing oaths contrary to law.
By giving gifts and grants for exacting money, without consent of parliament or convention of estates.
...for, as long as but a hundred of us remain alive, never will we on any conditions remain under EUSSR rule. It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom – for that alone, which no honest man gives up but with life itself.

Declaration of Westminster June 24th 2016, with apologies to the Declaration of Arbroath April 6th 1320.

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? 

Solar power is changing the world.

As solar power expands the work day, incomes rise in eastern Kenya

by Kagondu Njagi | @DavidNjagi | Thomson Reuters Foundation
Thursday, 8 December 2016 10:46 GMT
EMBU, Kenya, Dec 8 (Thomson Reuters Foundation) - Violet Karimi spends her days as she always has, attending to household chores and working on her farm.
But when the sun goes down, she now has a second job, thanks to the arrival of solar lights in this town in eastern Kenya.
Each evening the widow leaves her three children studying at home by the light of a solar lantern and takes fruit and vegetables harvested on her farm to sell in Embu's open air market.
"I collect my stock and head to the market where I trade until late in the evening," said the 36-year-old. "This is possible because the solar lights in the market and the rest of Embu town are switched on the whole night."
On a good day, she said, she can bring home as much as $30 - at least three times as much as she could sell in a shorter evening, before the lights made longer trading hours possible.
"Customers want to shop in the evening because that is when they leave work," she said. "The solar lighting has encouraged them to stay and buy as long as they like."
Solar energy - for lighting and to power businesses - is gaining a foothold across rural Kenya. In towns like Embu it is opening the way for new businesses, or new business hours, and giving families a chance to boost their incomes.
Karimi says the solar lights that shine over the Embu market each evening have other benefits as well. Even after working late into the evening at the market, she feels comfortable hiring a motorbike taxi to take her home.
"The streets are well lit with solar energy and so I am not afraid of traveling at night because there is security," she said.
Others in Embu County have seen benefits for their businesses from the installation of the small solar grids, which collect solar energy, store some of it in batteries for use at night, and distribute it to customers.
Joe Njiru pays $10 a month to the Embu County solar micro grid, but makes five times as much from his bar business, he said.
The bar's eight light bulbs and satellite TV help keep customers chatting, debating local politics, and buying his beer past midnight.
Two years ago, few customers would stay past 8 pm, he said. The bar had a power connection to the national grid, but was often beset by power outages.
"Every day there were blackouts in the evening because that is when people with illegal connections would interfere with electricity as they tried to switch on," said Njiru. "Customers could not stay long because they feared to be mugged on their way home."
Energy company officials also sometimes visited to disconnect his power, saying he had not paid his monthly bill, Njiru said.
Now he uses a mobile phone banking system, M-Pesa, to top up his monthly credit.
"For us, investing in the solar project is a double win," said Embu County Governor Martin Wambora. "Solar energy is cheaper to maintain in the long term and puts us in solidarity with the world's push for a global green economy."

Another weekend, and Trumpmania and Christmas shopping madness roll along, unstoppable. According to believers in Trumpmania, we haven’t seen anything yet. The price of tulips is about to go through the roof. Have a great weekend everyone.

Richard Wittington, an honest dreamer, travels to London “where the streets are paved with gold”. Fairy Bow Bells realises his destiny, and supplies him with an introduction to leading global derivatives gambler, Deutsche Bank….

With apologies.

The monthly Coppock Indicators finished November

DJIA: 19124  +53 Up NASDAQ:  5324 +41 Up. SP500: 2198 +58 Up

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