Wednesday, 14 December 2016

Fed Day.



Baltic Dry Index. 1052 -17   Brent Crude 55.12

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

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


The professors who taught Efficient Market Theory said that someone throwing darts at the stock tables could select stock portfolio having prospects just as good as one selected by the brightest, most hard-working securities analyst. Observing correctly that the market was frequently efficient, they went on to conclude incorrectly that it was always efficient.


Warren Buffett.

In better news for the US economy, Qatar, backer of the losing side in Syria’s civil war, is attempting to curry favour with President-elect Trump. It remains unclear if this is just a re-announcement of their earlier 35 billion investment package, or a genuine new bribe to the incoming new administration.

Qatar sovereign fund tells Washington will invest $10 billion in U.S. infrastructure: sources

Tue Dec 13, 2016 | 7:55am EST
The head of Qatar's sovereign wealth fund has told U.S. officials it will invest $10 billion in infrastructure projects inside the United States, sources said, in an apparent boost to the economic plans of president-elect Donald Trump.
Sheikh Abdullah bin Mohamed bin Saud al-Thani, chief executive of the Qatar Investment Authority (QIA), delivered the message to officials including Charles Rivkin, U.S. assistant secretary of state for economic and business affairs, in Doha on Monday, a Qatari official and another source close to the QIA told Reuters.
No time frame was given for the investment. Both the QIA, one of the world's largest sovereign funds, and a spokesman for the U.S. embassy in Qatar declined to comment.
The QIA had previously said it intended to invest $35 billion in unspecified projects in the United States between 2016 and 2021, and it was not clear if the $10 billion would form part of that larger amount, the official said.
Trump has said his economic plans include a major boost to infrastructure investment. In one of the presidential debates against Hillary Clinton, Trump contrasted the gleaming airports of Qatar and Dubai with more shabby U.S. facilities such as LaGuardia and Newark.
The investment by Qatar, which hosts the largest U.S. air base in the Middle East, could help to cement ties with the Trump administration at a time of uncertainty in the Gulf, where Arab states fear any retreat of U.S. power could benefit regional foe Iran.
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Next, after President-elect Trump rattled the bars of China’s cage on Sunday, threatening to set off a trade war or worse, US companies that are vulnerable to China’s retaliation, rattled the bars of the President-elects cage via Reuters, though anonymously lest the President-elect rattle their cage bars back. With some 5 weeks still to go till a President Trump, it’s shaping up to be an interesting next 4 years.

Trump's tough trade talk makes U.S. firms fear China retribution

Tue Dec 13, 2016 | 8:34am EST
U.S. President-elect Donald Trump's challenges to China on trade and Taiwan are rattling American companies who have long benefited from stable relations between the two countries but now fear retaliation by Beijing if Trump were to act.
Trump jarred Chinese officials on Sunday by saying the United States did not necessarily have to stick to its long-standing position that Taiwan is part of "one China." Beijing expressed "serious concern" about Trump’s remarks.
Four U.S. industry sources who follow China policy closely said they were unsettled by any suggestion of abandoning the "one China" policy, which they said had served the business community well for several decades.
The sources, who spoke on condition of anonymity because of the sensitivity of the issue, stressed the importance of stability for businesses. They said Beijing could retaliate against U.S. companies that do business in China if Trump takes his tougher line too far.
"The Chinese are deeply concerned and we hear now from reliable sources in Beijing who suggest the Chinese government, the Communist Party, are developing lists of U.S. interests against which they could retaliate, commercial interests, and obviously one merely has to look at top U.S. exports to China to get a quick sense of whose heads may be on the chopping block," said one China trade policy expert who interacts closely with U.S. business.
The expert pointed out that more than 30 states have over $1 billion in exports to China and that there is over $500 billion in commercial engagements by U.S. companies in China. All of that would be at risk if China retaliated.
"That commercial engagement supports American jobs, many American jobs here in the United States," the expert said.
Another source said there had been "quiet outreach" by the U.S. business community to Trump's advisers but companies were wary of discussing their concerns about the China policy publicly for fear of becoming a target for the president-elect, who has singled out companies such as Carrier and Boeing.
From Detroit's car makers to Silicon Valley's technology champions, China is both a critical source of revenue and profits, and a vital link in global supply chains.
More than four decades after President Richard Nixon upset the status quo of his time with a surprise visit to Beijing, what's good for U.S.-China relations is good for General Motors and Starbucks and Apple and Wal-Mart Stores Inc.
China has hit U.S. goods with retaliatory tariffs in the past when disputes flared. China in 2011 slapped duties on U.S.-made large cars and sport utilities as part of a trade dispute.
The stakes are higher now.
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Nothing is so admirable in politics as a short memory.
John Kenneth Galbraith.
At the Comex silver depositories Tuesday final figures were: Registered 37.92 Moz, Eligible 141.84 Moz, Total 179.76 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, nothing is solved in Italy, where Italy’s new unelected Prime Minister is viewed as a placeman for Italy’s last unelected Prime Minister. I suspect that Italy’s voters will remain unimpressed. Premier Gentiloni is expected to take the fall for the coming bail-in of Italy’s bankrupt bank Three Card Monte di Siena, and quickly move on, possibly as early as the week between Christmas and New Year.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt

Italy’s Next PM Might Not Keep the Job Very Long

by John Follain
11 December 2016, 23:00 GMT 12 December 2016, 07:37 GMT
Italy’s premier-designate Paolo Gentiloni may end up just keeping the seat warm for his former boss, Matteo Renzi.
Gentiloni, 62, was given a mandate to lead a new government by President Sergio Mattarella after Renzi formally resigned following his defeat in a Dec. 4 referendum. Gentiloni, who was foreign minister in the Renzi government, is expected to report back to Mattarella as soon as Monday. None of this has stopped Renzi from planning a comeback.
While Renzi is Gentiloni’s chief sponsor, the newcomer is likely to face pressure to step aside in the first half of next year because Renzi wants early elections. The two-edged relationship prompted Luigi Di Maio, a leader of the anti-establishment Five Star Movement, to call Gentiloni a Renzi “avatar.”
“A Gentiloni government would be an ambiguous one,” Giovanni Orsina, a professor of government at Rome’s Luiss-Guido Carli University, said in a phone interview. “It’s born as a caretaker government because Renzi wants early elections next year. Gentiloni is very close to Renzi but who knows what power could do -- Gentiloni might stay on until 2018.” The next scheduled elections are due in early 2018.
If he succeeds in drawing up a list of ministers, Gentiloni will be Italy’s fourth unelected premier -- after Mario Monti, Enrico Letta and Renzi himself. As leader of the country’s 64th government since World War II, he would make his international debut at the European Union summit in Brussels on Thursday.

Top priorities

Gentiloni’s priorities will be to change the electoral law, seek to boost weak economic growth, and tackle the troubled banking sector, Orsina said. “Gentiloni will be a competent premier, he is not flamboyant like Renzi but he has a lot of political experience,” Orsina said.
Gentiloni is expected to keep several ministers at their posts including Finance Minister Pier Carlo Padoan, whose priority now is Banca Monte dei Paschi di Siena SpA after the European Central Bank decided on Friday not to allow the lender to extend a deadline on a 5 billion-euro capital increase, triggering fears that the government crisis could hurt the troubled banking sector.
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The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do.
Warren Buffett.

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?

Uganda and UK sign solar power access agreement, 10 MW solar farm brought online

12. December 2016
The Energy Africa Compact signed by the U.K.'s Department for International Development with the Ugandan government aims to improve access to, and innovation in, solar energy in the country.

The U.K.’s Department for International Development (DFID) in Uganda has signed an Energy Africa Compact agreement with Ugandan officials that will work towards improving access to solar energy to the estimated 30 million people in the country without access to electricity.

According to the DFID, four out of every five Ugandans do not have access to a reliable source of power, and so the agreement’s chief aim will be to reduce this number by documenting strategic areas where the adoption of solar home power and lighting systems can be installed quickly and cheaply.

The aim of the Compact is to electrify the entire country by 2030, and the Ugandan Ministry for Energy and Mineral Development has created a conducive environment to enable solar to thrive, including a VAT exemption on major solar components, financial support for private sector companies, provision of solar end-user subsidies, capacity building through the training of technicians, as well as the establishment of innovative solar financing models.

The U.K.’s involvement will be largely as a facilitator, removing market barriers and enabling companies and Uganda’s government to come together and see through their aims. According to Jennie Barugh, head of the DFID Uganda office, the aim is to expedite Uganda’s path towards becoming a more modern and inclusive economy, with a particular focus on eradicating poverty.

"Energy poverty undermines productivity, job creation and livelihoods, reduces the ability of the state to provide basic services, and directly affects health and education outcomes – with disproportionate impacts on women and girls," said Barugh. “"This Compact will improve access and innovation in the solar energy market, increasing energy access for all. Access to solar power will save people and businesses money on expensive forms of energy and reduce the time women and girls spend gathering fuel to burn."

The DFID’s calculations reveal that Uganda’s lack of energy access limits annual GDP by around 1-2%, while 50% of businesses in Sub-Saharan Africa view a lack of reliable electricity access as a major constraint to doing business.
More.

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

John Kenneth Galbraith

The monthly Coppock Indicators finished November

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

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