Tuesday 6 December 2016

Supremes To Sing (Eventually.)



Baltic Dry Index. 1196 -02   Brent Crude 54.51

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

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

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 UK Supremes, all 11 of them, get to sing next month, but first they have to hear the highest paid talkers in the land of Camelot, set out their cases for and against the UK Parliament, aka the longest running farce in the world, having a say in Brexit. For more on the UK Supremes scroll down to Crooks Corner.

In the aftermath of the Italian vote, below the happy spin from Bloomberg Berlin. Move along now. Nothing to see here. [Yet.] The Great Disconnect is back with a vengeance. Dress up time for year-end stocks has arrived. The hedgies, rent-seeking Great Vampire Squids, banksters and their pawns the central banksters, aren’t going to let a dose of unpleasant reality, get in the way of the year-end bonuses. We long ago left “irrational exuberance” behind as the fiat currencies start to die. Buy the rumour sell the fact. I suspect that the Trumpmania rally has further to travel until we get closer to January 20.

In any great organization it is far, far safer to be wrong with the majority than to be right alone.

John Kenneth Galbraith.

Europe suffers Italian blow but bigger tests loom

Mon Dec 5, 2016 | 7:49am EST
By Noah Barkin | BERLIN
The resounding "no" from Italian voters to Prime Minister Matteo Renzi's referendum on constitutional reform was not a rejection of the European Union and its single currency, as jubilant populists from across the bloc claimed on Monday.

But the vote, which pushes Renzi out of office, does represent a significant setback for Europe at a time when its leaders are scrambling to mount a credible response to Brexit, the election of Donald Trump in the United States and their stubborn economic woes at home.

In one fell swoop, it adds another country to the list of EU members that are likely to be pre-occupied by domestic politics in 2017, a year in which the Dutch, French, Germans, and possibly the British, will go to the polls.

And it sends a warning to other European reformers like Francois Fillon, the conservative frontrunner for the French presidency, who has promised no less than five referendums to push through his domestic agenda if he is elected next spring.

More immediately, despite the relatively calm reaction of financial markets on Monday, the vote will deepen concerns about Italy's under-funded banking sector and the economic prospects of the euro zone's third biggest member state.

That, in turn, could complicate the calculus for the European Central Bank, which meets on Thursday to decide on the future of its controversial bond purchase program.

"This won't push Italy back into crisis for now," said Marcel Fratzscher, head of the DIW economic institute in Berlin and a former top official at the European Central Bank.

"But it means lost time for a country that faces huge problems with its banks, its enormous public debt levels and high unemployment. There is a significant danger that the reform course will now slow."

Renzi, seen by his European partners as an anchor of stability in a country where political upheaval has been the norm for decades, won just over 40 percent of the vote in the referendum, a far worse result than polls had predicted.

His defeat comes only days after deeply unpopular French President Francois Hollande, also a leftist, bowed to political realities and announced he would not seek a second term.

Renzi's departure could lead to early elections in Italy next year. It increases the risks of the anti-euro 5-Star Movement gaining power, although the prospect of that remains slim.

After the Brexit vote went bad for David Cameron in June, it is the second time in half a year that the leader of a major EU member state tied his future to a referendum and lost, a development that was seized upon by the region's anti-EU firebrands.

"The Italians rejected Renzi and the EU," Marine Le Pen of France's far-right National Front said on Twitter.
"This vote looks to me to be more about the euro than constitutional change," added Nigel Farage of the UK Independence Party (UKIP).

But unlike Britain, polls show that a solid majority of Italian voters are in favor of both the EU and the euro. They were encouraged to vote "no" by all of the major parties in Italy outside of Renzi's Partito Democratico (PD).

His defeat therefore, which came on the same day that Austrian voters sent a far-right candidate to defeat in a presidential run-off, looks less like a rejection of Europe and the political establishment, and more like a serious miscalculation on the part of Renzi.

"When a prime minister who will always be remembered for taking office through an old-style party coup calls a national referendum in a country that's still struggling to emerge from a triple-dip recession, he can expect an unfavorable result," said Nicholas Spiro of Lauressa Advisory.
More

Asia stocks bounce as risk appetite returns after Italy vote

Mon Dec 5, 2016 | 9:06pm EST
Asian stocks posted their biggest rise in two weeks on Tuesday and the euro steadied as investors judged the selloff after Italy's referendum was overdone, with robust U.S. economic data also helping sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS bounced 0.8 percent, its biggest daily rise since Nov. 22, breaking two days of falls. Korea .KS11 climbed 1.2 percent while Japan .N225 rose 0.8 percent.

"Global risk sentiment roared back after falling prey to the initial Renzi fallout and whatever negatives Italy creates for the eurozone, yesterday was not the time for a euro implosion," said Stephen Innes, senior trader at online FX platform, OANDA.

Wall Street rose on Monday, with the Dow Jones industrials setting fresh record highs following a services sector report that showed further strength in the domestic economy.

Services sector activity hit a one-year high in November, with a surge in production boosting hiring, following on the heels of Friday's employment report that showed strong job gains last month.

The services news pushed short-dated Treasury yields higher with two-year benchmark yields stabilizing near the 1.13 percent level, not far from a six-year high of 1.17 percent tested in late November.
Interest rates futures FFZ6 implied traders saw a 93 percent chance the Fed would raise rates by a quarter point to 0.50-0.75 percent next week, CME Group's FedWatch showed.

Chinese markets were in particular focus after benchmark indices stumbled on Monday, led by large-caps, after the top securities regulator warned against "barbaric" share acquisitions. Hong Kong .HSI stocks rose.

"The Hong Kong market is being squeezed higher on short covering but there is limited upside with traders remaining cautious ahead of China trade data on Thursday," said Andrew Sullivan, managing director, sales trading at Haitong International Securities Group in Hong Kong.
More

Dow closes at all-time high as Trump rally marches on

By Sue Chang and Anora Mahmudova Published: Dec 5, 2016 4:46 p.m. ET
The Dow Jones Industrial Average finished at a record on Monday as solid economic data offset concerns about Europe’s stability in the wake of a rejection of Italy’s vote on Sunday to reform existing constitutional rules.
The broader stock market rose after a survey showed that the services side of the economy grew at its fastest pace in November in a year. The Institute of Supply Management nonmanufacturing index climbed to 57.2 last month. Any reading over 50 indicates economic expansion.

The Dow industrials DJIA, +0.24%  rose 45.82 points, or 0.2%, to end at 19,216.24, after touching an intraday record of 19,274.85. Visa Inc. V, +2.10% Nike Inc. NKE, +2.75% and Goldman Sachs Group Inc. GS, +2.32% were the top gainers on the Dow.
The S&P 500 index SPX, +0.58%  climbed 12.76 points, or 0.6%, to close at 2,204.71 with financials and technology sectors leading the index higher.
The Nasdaq Composite Index COMP, +1.01% advanced 53.24 points, or 1%, to finish at 5,308.89.
This is “a continuation of the postelection rally and there is still money that thinks the new administration will be good for the market,” said Ian Winer, director of equity trading at Wedbush Securities.
U.S. stocks jumped in November as investors bet that fiscal policies of President-elect Donald Trump’s administration, such as tax cuts and infrastructure spending, will can help to boost the economy.
More

With West Texas Intermediate crude trading back above $51 again, I suspect that many US frackers are forward hedging next year’s production, and bringing forward plans to bring on stream  already drilled wells. Thanks to OPEC, Christmas came a little early to surviving US frackers.

"In economics, hope and faith coexist with great scientific pretension."

John Kenneth Galbraith.

At the Comex silver depositories Monday final figures were: Registered 35.17 Moz, Eligible 142.58 Moz, Total 177.75 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
No crooks or scoundrels today, just the humble men and one humble woman who get to decide if the UK law trumps UK voters in 21st century Great Britain. Whichever way they decide, controversy lies. I wonder if any have read The Wealth of Nations, or Book of Proverbs?
When the righteous increase, the people rejoice, but when the wicked rule, the people groan.
Proverbs 29:2

Who Are the Supreme Court Judges That Will Decide on Brexit?

The 11 members of the top U.K. court face unprecedented public and political pressure over Brexit.
by Kit Chellel and Patrick Gower
December 4, 2016 — 7:03 PM EST
Britain’s exit from the European Union is now in the hands of a golf enthusiast, a bellringer and ex-banker, among others, who sit as judges on the U.K. Supreme Court.
Starting Dec. 5, these 10 men – and one woman – will decide whether Prime Minister Theresa May needs to hold a vote in Parliament before formally notifying the EU. It’s by far the biggest case in the seven-year history of the court, and is the first where all 11 will sit together to hear arguments. The case brings with it a level of scrutiny that’s rarely experienced by British judges, even those at the top of the profession.
Unlike in the U.S., judges on the U.K. Supreme Court aren’t household names. In fact, outside of legal circles, it’s hard to find someone who can name one.

Also unlike their American equivalents, the judges aren’t seen in political terms. Lawmakers are not involved in their selection, which is done by an independent commission. British judges almost never express personal views and pride themselves on an ability to apply cold reason in defiance of popular or political pressure.

That doesn’t mean they don’t have opinions. As Lady Brenda Hale has already discovered, even the most careful speech can (and will) be picked through for clues about how they might interpret the Brexit challenge.

Here’s a brief guide to the 11 judges of the U.K. Supreme Court:
More
The Wealth Of Nations, Book II, Chapter III, p.346, para. 36.
The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

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?

Flying start for world's first graphene-enhanced aircraft

Date: November 28, 2016

Source: Graphene Flagship

Summary: Prospero, the first model aircraft to incorporate a graphene skinned wing, was successfully flown at the Farnborough International Air Show in the UK earlier this year. The flight sets an example of how graphene might be used within the aerospace sector

Prospero, the first model aircraft to incorporate a graphene skinned wing, was successfully flown at the Farnborough International Air Show in the UK earlier this year. The flight sets an example of how graphene might be used within the aerospace sector. Prospero will be exhibited at Composites Europe in Düsseldorf, Germany, 29 November until 1 December 2016.
Graphene exhibits impressive mechanical, thermal, electrical and barrier properties which are important features within the aerospace and automotive sector. It can be used as a nano-additive within thermoplastics and thermosets to improve the mechanical properties of the base material and also reduce weight. Upon further optimisation, thermal, electrical and barrier properties can also be imparted into a material, opening opportunities for multifunctional performance.
The test flight of Prospero represents a new stage in a research partnership which is investigating the effects of graphene in drag reduction, thermal management and ultimately the ability to achieve lightning strike protection for aerospace and other related sectors. This research is a joint collaboration between The University of Manchester and the University of Central Lancashire and several SMEs, including Haydale Composite Solutions.
The University of Manchester is a partner of the Graphene Flagship, EU's largest ever research initiative. During Composites Europe the Graphene Connect Workshop will highlight the wide range of applications for graphene in the aerospace sector.
James Baker, Graphene Business Director at the National Graphene Institute, said: "This collaboration between academia and industry is a great example of how graphene might be used as a potentially disruptive technology in a market like aerospace and help maintain Europe's position in the market. At Composite Europe 2016 we will also launch a drone with graphene- polypropylene propeller blades that shows improvement in both mechanical and thermal properties. Graphene as a material is still relatively new but already we are seeing a range of applications not only for aerospace but also in many other markets."
Billy Beggs, Engineering Innovation Manager at the University of Central Lancashire, said: "The tests were very encouraging and proved to us that graphene has huge potential for aerospace; it is very strong, yet lightweight and flexible at the same time. Through the data collected from those initial flights our research has now moved on to the next level by developing processes of infusing graphene into composite structures. This newly skinned wing, produced by our industrial partner, Haydale Composite Solutions, is enabling us to test the structural and weight saving benefits of graphene. The research team is still in the early stages of flight testing with the new remotely piloted aircraft but initial test data is already very encouraging. In terms of impact resistance, the new wing is showing increased levels of impact resistance of up to 60% over a conventionally-skinned carbon fibre wing."
https://www.sciencedaily.com/releases/2016/11/161128084523.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29

The monthly Coppock Indicators finished November

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

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