Monday, 2 January 2017

Bah Humbug! Orthodox Christmas Cancelled – DC.

Baltic Dry Index. 961 Dec 23.   Brent Crude 56.82

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

It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.

H. L. Mencken.

We open with America, where bizarrely lame duck President Obama kicked out one of the Russian consulate’s chefs, accusing him of being a spy. He was probably engaged in counter espionage down at the local supermarkets and food halls. He also closed the Russians recreation and relaxation compounds in Maryland and Long Island, just as Russian diplomats and their children were getting ready to celebrate New Year and the Orthodox Christmas on January 6th. Picking on the children at Christmas is a cruel and low thing to do, unworthy of a Nobel Prize recipient. The District of Crooks seems to have gone mad as we enter 2017, unable to recognise its own agitprop from the truth.

Below, will investors cash-out ahead of the Trump inauguration, to take advantage of expected lower tax rates under President Trump? Some “strategists” think that they will. Sort of buy the Trump rumour, sell the fact.  Can the Washington Post be trusted?

A newspaper is a device for making the ignorant more ignorant and the crazy crazier.

H. L. Mencken. 

Investors brace for 2017 shocks after surprise 2016 run

Sat Dec 31, 2016 | 6:08am EST
After a late-year rally fueled by the U.S. election pushed stocks to surprising new peaks, investors are wary that the market could be primed for a spill to start 2017.

---- But investors see several warning signs for 2017, including stocks at traditionally expensive valuations; investors registering particularly bullish sentiment; and the Federal Reserve primed to raise interest rates several times this year.
Meanwhile, a market lifted in part by hopes for Trump's policy agenda could be deflated should any of those hopes be dented once he begins in office. The S&P has rallied by more than 5 percent since Election Day, while the Dow has climbed by more than 8 percent.
"If anything, we head into the new year with the likelihood we will probably see some near-term weakness in equities primarily because of the move we’ve seen higher," said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York. "You will see some winning trades being taken off the table and, in general, a reset."
January has proven to be a difficult month for equities in recent years, with the S&P 500 falling at least 3 percent in each January of 2014, 2015 and 2016. The beginning of 2016 was marked by the worst 10-day start ever for the S&P, plagued by worries about a rout in commodities, a China slowdown and a potentially over-aggressive Fed after it hiked interest rates for the first time since 2008.
A year later, a test for the market could come as soon as next week. Investors may have been holding off on selling their winners until 2017 with hopes that any profits will be taxed at a lower rate under a Trump administration.

Washington Post Caught Spreading More Fake News About "Russian Hackers"

Dec 31, 2016 8:20PM
Readers of the Washington Post received some alarming news yesterday when the paper published a story alleging that those pesky "Russian hackers" were up to their no good tricks again and had managed to "penetrate the U.S. electricity grid through a utility in Vermont."  The full headline read as follows:

-----The opening paragraph of WaPo's story directly linked the "hack" of the Vermont utility to the same "Russian hacking operation dubbed Grizzly Steppe" that the Obama administration has blamed for the DNC and John Podesta email hacks.  Vermont's Governor, Peter Shumlin, told WaPo that "Americans should be both alarmed and outraged" by these actions perpetrated by "one of the world’s leading thugs, Vladimir Putin," before seemingly calling for further retaliatory actions from the Obama administration.
----- Of course, it didn't take long for the New York Times and ABC to latch on to the story since it fits their "2016 election hacking" narrative so perfectly.

---- Alas, there was just one minor problem, namely that the entire article was completely fabricated.  Apparently the esteemed "journalists" of the Washington Post didn't even bother to contact the Burlington Electric Department to confirm their bogus story...and why should fit the "Russian hacking" narrative so perfectly therefore it must be true, right?
Well, apparently not.  The quick spread of WaPo's "fake news" story forced the Burlington Electric Department to issue a clarifying statement assuring worried residents that, indeed, their electricity grid had not been hacked, but rather a single "laptop not connected" to the grid had been found to have a malware virus.
Which forced the embarrassed Washington Post to quickly tone down their provocative headline...

...and supplement their original article with the following "Editor's Note" admitting the entire premise of their original story was nothing more than "fake news."
Editor’s Note: An earlier version of this story incorrectly said that Russian hackers had penetrated the U.S. electric grid. Authorities say there is no indication of that so far. The computer at Burlington Electric that was hacked was not attached to the grid.

In China news, get ready for a slower growth rate for the Chinese economy. That’s bad news for the commodity economies, bad news for a sinking Yuan and capital flight, bad news for any Trump trade war. In response to Trumps anti-China incoming trade team, China’s about to copy the success of the English language TV news service Russia Today and take on western fake news about China. China’s President Xi gets ready to take on Trump and Taiwan.

Growth in China's factories, services slows in December: official PMI

Sat Dec 31, 2016 | 10:58pm EST
China's manufacturing sector expanded for a fifth month in December, but growth slowed a touch more than expected in a sign that government measures to rein in soaring asset prices are starting to have a knock-on effect on the broader economy.
The official Purchasing Managers' Index (PMI) stood at 51.4 in December compared with 51.7 in November. A reading above 50 indicates an expansion on a monthly basis while one below 50 suggests a contraction.
December's reading was slightly below the forecast in a Reuters poll for 51.5.
A housing boom in the second half of 2016 and a government spending spree on infrastructure have helped boost prices for commodities from cement to steel, giving the manufacturing sector a much-needed lift.
But the government is cracking down on speculative property buying, and signals from policymakers that more will be done to contain asset bubbles and rising debt - even at the expense of slower growth - means extra stimulus measures could be limited.
"Today's PMI figures suggest that the change of policy tone has taken its toll, as the authorities are seriously concerned about the asset bubbles," said Zhou Hao, senior economist at Commerzbank.
Factory output slowed in December, with the sub-index hitting 53.3 compared with 53.9 the previous month.
Total new orders were flat at 53.2, logging the same as in November, while new export orders fell to 50.1 from 50.3.
Jobs were again lost, with the employment sub-index sitting at 48.9, compared to 49.2 in November, as the country pledged to cut excess capacity over a range of industries.
A sub-index for smaller firms fell, and performance for larger companies also worsened.

China Central Bank Adviser Calls for 6%-7% Growth Target Range

Bloomberg News
China should set a more flexible 2017 economic growth target to give policy makers more room to enact reform, according to Huang Yiping, an adviser to the People’s Bank of China.

He proposed a range of 6 percent to 7 percent for this year, compared with the 6.5 percent to 7 percent objective in 2016, the official Xinhua News Agency reported. Last year’s target, the first range in two decades, was down from 7 percent for 2015.

The country’s leaders also have a longer-term objective. President Xi Jinping has said he wants expansion to average at least 6.5 percent in the five years through 2020 to achieve the Communist Party promise of building a “moderately prosperous society” by that year with gross domestic product and income levels double those of 2010.

"The 6.5 percent target is just an average rate," Huang, an economics professor at Peking University, told Xinhua in an interview published late Sunday. "As long as employment is stable, a slightly wider growth target range in the short term will reduce the need for pro-growth efforts and give policy makers more room to focus on reforms."

Huang said a large number of "zombie companies" remain economically inviable yet still manage to survive on government and bank assistance, bringing down the overall efficiency of resource allocation in the economy.

China's CCTV launches global 'soft power' media network to extend influence

Dec 31, 2016 | 6:15am EST
China Central Television (CCTV), Beijing's largest TV network, said it would launch a new global media platform on New Year's Day to help re-brand China overseas.
The new multilingual operation will have six TV channels and a new media agency, the network said on its website on Friday night. Its CCTV News channel will be rebranded the China Global Television Network, it added.
China has launched a number of "soft power" initiatives to expand its influence abroad, including other English-language media outlets.
Chinese President Xi Jinping urged the new network to "tell China stories well," the official Xinhua news agency reported on Saturday.

China's Xi says won't let anyone make 'fuss' about its territory

Sat Dec 31, 2016 | 8:44pm EST
China will never allow anyone to "make a great fuss" about its territorial sovereignty and maritime rights, President Xi Jinping said in his New Year's address, while China's top official in charge of Taiwan ties warned of risk ahead in 2017.
China's increasingly assertive moves to push its territorial claims in the disputed South China Sea, including building artificial islands, has unnerved its neighbors.
"We adhere to peaceful development, and resolutely safeguard our territorial sovereignty and maritime rights and interests," Xi said, in comments carried by state media late on Saturday.
"Chinese people will never allow anyone to get away with making a great fuss about it," he said, without elaborating.
China claims most of the South China Sea. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.
While Xi made no direct mention of self-ruled Taiwan, aside from extending New Year's greetings to them, the head of China's policy-making Taiwan Affairs Office in his New Year's message said that 2017 would see uncertainty.
"Looking ahead to 2017, the situation in the Taiwan Strait is complex and serious, and the development of relations are facing many uncertain factors and risk," Zhang Zhijun said, according to the official Xinhua news agency.
China hopes that people on both sides can show resolve and courage, to ensure the "correct direction" of the peaceful development of ties and work to maintain peace and stability across the Taiwan Strait, he added.

We end for today with the dying, wealth and jobs destroying  EUSSR news. It doesn’t look good for Italy says paymaster Germany. This being the one size fits all German run monetary union, what Germany wants Germany usually gets. Italy back on the Lira by Christmas?

German Ifo think tank chief says Italy risks quitting euro zone

Sun Jan 1, 2017 | 1:28pm EST
The head of Germany's Ifo economic institute believes Italians will eventually want to quit the euro currency area if their standard of living does not improve, he told German daily Tagesspiegel.

"The standard of living in Italy is at the same level as in 2000. If that does not change, the Italians will at some stage say: 'We don't want this euro zone any more'," Ifo chief Clemens Fuest told the newspaper.

He also said that if Germany's parliament were to approve a European rescue program for Italy, it would impose on German taxpayers risks "the size of which it does not know and cannot control." He said German lawmakers should not agree to do this.

Italy is not seeking such a rescue program. The government in Rome is focusing on underwriting the stability of its banking sector, starting with a bailout of Monte dei Paschi di Siena (BMPS.MI).

At the Comex silver depositories Friday final figures were: Registered 26.93 Moz, Eligible 156.53 Moz, Total 183.46 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Did Big Media Run Fake Headlines on the Deutsche Bank “Settlement” ?

By Pam Martens and Russ Martens: December 29, 2016
Typically, it takes two to settle bank fraud charges – the bank committing the fraud and the law enforcement agency bringing the charges. But in the case of the announcement late last Thursday evening that Deutsche Bank and the U.S. Justice Department had reached an agreement to settle claims against the bank for allegedly swindling investors in the sale of toxic residential mortgage backed securities, all that could be heard was the sound of one hand clapping in a press release issued by the defendant, Deutsche Bank. Nowhere to be found was a statement of particulars on what the bank was admitting to or a man behind a podium bearing the seal of the U.S. Justice Department in a press briefing room, as typically occurs in a real settlement.
The lack of substantive details to this “settlement” and no confirmation from the Justice Department that an agreement actually existed did not hamper expensive media real estate from running with the story. The New York Times plopped the story on the front page of its business section on Friday, December 23 – the last trading day before Christmas – under the decidedly declarative headline: “Deutsche Bank to Settle U.S. Inquiry Into Mortgages for $7.2 Billion.” The Times article said the bank’s statement “came ahead of a formal announcement in the case.” It’s now a week later and as of this writing there is still no formal announcement from the Justice Department.
The timeline for this potentially fake news spreading like wildfire at major media outlets went like this:
---- Just 37 minutes after this Justice Department fireball was dropped on Barclays and its red-faced legal team, Reuters was running this headline: “Deutsche Bank says it has reached settlement with U.S. DoJ on mortgages case.” The headline correctly indicates that Reuters is getting its information strictly on the basis of what the bank “says.”

Deutsche Bank’s legal team had simply released a 255-word press release to garner major headlines across big media’s digital and print platforms. In actuality, it was the Seinfeld version of a settlement agreement – it was about nothing concrete. The first clue should have been the words that ran above the title of the Deutsche Bank press release: “Ad-hoc.” According to the American Heritage Idioms Dictionary, used in that context, it means “improvised or impromptu.” Indeed, Deutsche Bank notes in the second paragraph of its 255-word missive that “The settlement is subject to the negotiation of definitive documentation, and there can be no assurance that the U.S. Department of Justice and the bank will agree on the final documentation.”
If there can be “no assurance” of a future agreement between the only two parties that can settle this case, how can this legitimately be called a settlement in headlines.

Adding to the potential for a deceptive public relations tactic on the part of Deutsche Bank, in September of this year the Wall Street Journal reported that the Justice Department was seeking $14 billion from Deutsche Bank to settle the case – almost twice what the bank now says it has reached an agreement on. The $14 billion initial tab suggests that the Justice Department has strong evidence of wrongdoing against the bank and could, as it did with Barclays, drop all that sordid laundry in a detailed complaint in Federal Court if Deutsche refuses to admit to its wrongdoing.

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 Panels Now So Cheap Manufacturers Probably Selling at Loss

by Chris Martin 30 December 2016, 17:52 GMT
Solar manufacturers led by China’s Trina Solar Ltd. are probably selling at a loss after prices fell to a record low this week.

The global spot market price for solar panels fell 2.4 percent to an average of 36 cents a watt on Dec. 28, according to PVinsights.

That’s the bottom end of the cost range for most producers in the third quarter, according to Jeffrey Osborne, an analyst at Cowen & Co. Suppliers are expanding capacity this year while demand is expected to slow in 2017, helping to push prices down.

“Certainly it would be a challenge for anyone to make money at that price,” Osborne said in an e-mail. “The blended cost for most last quarter was about 36 cents to 38 cents.”
The current price is also lower than cost estimates from Trina. The biggest supplier of 2015 expected to reduce costs to about 40 cents a watt by the end of the year, from 45 cents in the second quarter, Chief Financial Officer Merry Xu said in an August conference call. The Changzhou, China-based company’s shareholders on Dec. 16 agreed to a $1.1 billion deal to take the company private. A spokesman declined to comment Friday.
Some companies’ cost structures remain competitive, even with prices this low.
Canadian Solar Inc., the second-biggest supplier, reported costs of 37 cents in the third quarter, down from 39 cents in the second quarter. The company has said its costs are among the lowest in the industry, and it expects to reach 29 cents a watt by the fourth quarter of 2017. Many of its competitors expect costs in the low 30s by then, Osborne said.

The monthly Coppock Indicators finished December

DJIA: 19763  +74 Up NASDAQ:  5383 +70 Up. SP500: 2239 +75 Up

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