Friday, 24 March 2017

A Dying EU Celebrates.



Baltic Dry Index. 1196 +06   Brent Crude 50.67

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

The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.

Walter Bagehot

We open today with yet another sign that the dying, unreformed, EUSSR isn’t working for its members anymore. Just Germany, Brussels, and Washington. The EUSSR’s Russian sanctions, imposed after the American War Party’s botched coup in Kiev allowed Russia to take back the Crimea, does very little damage to Russia, but a whole lot of damage to the EUSSR members.  Now Bulgaria is about to swing east. Germany about to swing to the SDP?

Thu Mar 23, 2017 | 3:25pm EDT

London fog over Rome as EU gropes for Brexit unity

European leaders hope to paper over simmering disputes when they meet in Rome on Saturday to celebrate 60 years of union, but with Britain filing for divorce next week, the mood will be somber and unity under strain.

Theresa May, who next Wednesday will launch a two-year countdown to Brexit, will be conspicuous by her absence in Rome, as the other 27 EU leaders try to put aside differences for fear the British prime minister could exploit their disunity to cut a sweet deal they fear would encourage others to quit.

At the very moment the Islamic State attack on cosmopolitan London was again highlighting risks Europeans face in common, EU Brexit negotiator Michel Barnier was warning Britain not to try to barter security cooperation for better trade terms nor divide the 27, whose joint approval it will need to forge a new treaty.

"Unity is the first condition for reaching an agreement in the negotiations," the former French foreign minister said in a speech in Brussels on Wednesday after Monday's confirmation that negotiations will finally begin following June's Brexit vote.

---- Frictions among those remaining have been on show this week as Italians, stepping up security in the wake of the Westminster attack, prepare a largely ceremonial summit on Saturday in the Campidoglio palace, where France, West Germany, Italy and the three Benelux countries signed the founding Treaty of Rome on March 25, 1957.

The text of a 60th anniversary Rome Declaration was agreed on Monday by the 27 leaders' aides. It reads: "Europe is our common future." Yet Polish Prime Minister Beata Szydlo said on Thursday she might raise objections and Greece was holding up formal agreement on the brief text while it wrangles with euro zone creditors over its bailout terms.

Diplomats dismissed any threat to Saturday's agreement and insisted the text was already approved by all. But the wrangling drew attention again to long-running divisions, notably between east and west and, in the euro zone, between north and south.
More

The Under-the-Radar EU Vote That's Opening the Door for Russia

by Elizabeth Konstantinova and Slav Okov
23 March 2017, 22:01 GMT
  • Biggest parties vow warmer Putin ties; one opposes sanctions
  • Tensions with Turkey escalate before Sunday’s snap election
With eyes fixed on populist threats in other European Union elections, one vote has escaped the glare. And this one promises to strengthen Russia’s foothold in the region.

While affirming their commitment to the EU, Bulgaria’s two biggest parties say they’ll revive economic ties with Russia to benefit voters who feel let down by the bloc a decade after membership. The Socialists, neck and neck with Gerb before Sunday’s snap parliamentary ballot, vow to go further, by sinking sanctions against President Vladimir Putin’s government. A Russia-friendly Socialist won the presidency in 2016.

Accused of meddling in elections from the U.S. to France, Russia is getting a warmer reception in Bulgaria, a NATO member of 7 million people that was dubbed the “16th Soviet republic” during the Cold War for its affinity to Moscow. Still the EU’s poorest member, talk of an alternative economic path resonates in the Black Sea nation, which remains dogged by graft, a worker exodus and migration worries. The vote is also stoking tensions with Turkey, which Bulgaria accuses of interfering to boost its influence.
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Merkel Plays Anti-Terror Card in Bid to Blunt Election Opponents

by Patrick Donahue
23 March 2017, 17:54 GMT
  • German regional vote Sunday to test SPD challenger’s momentum
  • Saarland state in play six months before national vote
German Chancellor Angela Merkel portrayed her political opponents as weak on fighting terror and crime as she campaigned for a state election this weekend that will test her Social Democratic challenger’s surge in the polls.

Three days before the vote in the western region of Saarland, Merkel warned against opening the door to a left-leaning government in a state her Christian Democratic Union has governed for 18 years. That dominance is at risk regionally and nationwide this year as polls suggest the SPD has caught up with the CDU after naming Martin Schulz to run against Merkel.

“Whether on home break-ins, the fight against Islamist terrorism or making sure people conform with our laws,” a potential governing coalition of Social Democrats, Greens and the anti-capitalist Left party “would be the complete opposite of what you see today,” Merkel said Thursday in the town of St. Wendel, a CDU stronghold in the state of 1 million people on the French and Luxembourg borders.
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Greek Deposits Bleeding Drama Resumes Amid Bailout Uncertainty

by Nikos Chrysoloras and Alessandro Speciale
23 March 2017, 10:43 GMT
Greek deposit outflows resumed, prompting the country’s central bank to raise the ceiling of emergency liquidity available to lenders, as a deadlock in bailout talks sparked fears among savers of reliving the 2015 drama that pushed the country to the edge of economic collapse.

The Governing Council of the European Central Bank didn’t object to a Bank of Greece request to raise the ceiling of Emergency Liquidity Assistance available to Greek lenders to 46.6 billion euros ($50 billion), according to a statement on Thursday. The 400 million-euro increase “reflects developments in the liquidity situation of Greek banks, taking into account private-sector deposits flows,” the Athens-based central bank said.

Outflows this year through last Thursday totaled about 3.6 billion euros, a person familiar with the matter said. They reflect a diminishing stock of banknotes as people pay taxes and an orderly flow of funds toward foreign bank accounts, said the person who asked not to be identified because the information isn’t publicly available.

It is the first time since the Bank of Greece started releasing ELA ceiling data in September 2015 that an increase was deemed necessary, and the first time the central bank omitted a reference to a “stabilization” or “improvement” of deposit flows in its statement. Greece’s financial sector saw net inflows in 2016, when savers’ confidence in banks’ health was gradually returning.

The Bank of Greece had lowered the ELA ceiling by 100 million euros only two weeks ago. A spokesperson for the central bank wasn’t immediately available for comment.

Negotiations between Greek bailout auditors and Finance Minister Euclid Tsakalotos over the terms of the country’s emergency loans have so far failed to reach a successful conclusion, prolonging a standoff that risks leaving the country unable to service debt payments this summer. Uncertainty has been weighing on economic activity, threatening to derail hopes for a recovery this year.
More

In China news, another reason to worry. China’s Great Ponzi Scheme needs another bailout it seems. But don’t worry, it’s all under official control, no really, Beijing says so.  Yuan anyone?

China Likely to See More Bond Defaults, Fitch's McCormack Says

Bloomberg News 23 March 2017, 03:46 GMT
More corporate defaults in China wouldn’t be a surprise as debt levels are unsustainable and the economy is slowing, says James McCormack, global head of sovereign ratings at Fitch Ratings Ltd.

While he doesn’t expect a major credit event in China, the corporate debt problem is getting bigger in the medium-term, McCormack said in a Bloomberg Television interview Thursday from the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. Shorter-term issues around wealth management products and leverage inside the financial system are worrying, and a coordinated regulatory response to the problems would be “good news,” he said.

“It opens the system up to contagion because if there’s just a small securities firm that runs into trouble and then it feeds into a local bank and then that feeds into another bank, that’s the problem that China potentially faces,” McCormack said. “Not knowing who the parties are is part of the problem at the outset, and getting the liquidity to where it’s needed could be challenging” for the People’s Bank of China, he said.

China’s banking regulator this month outlined wide-ranging efforts to rein in financial risks, including clamping down on shadow lending and curbing funding for property speculation. Guo Shuqing, days into the job as China Banking Regulatory Commission chairman, said he will coordinate with other financial authorities, including the PBOC, to plug loopholes in regulations for cross-market financial products and update outdated risk management rules.
More

Fri Mar 24, 2017 | 2:12am EDT

China debt risk 'very much under control': vice fin min

China's debt risk is "very much under control", Vice Finance Minister Liu Wei said at the Boao Forum for Asia in southern Hainan province.

Liu was appointed the vice finance minister post in late February.

Chinese leaders have pledged to contain debt risks after years of credit-fueled expansion. Corporate debt has soared to 169 percent of gross domestic product, data from the Bank for International Settlements shows.

Never believe anything in politics until it has been officially denied.

Otto von Bismarck.

At the Comex silver depositories Thursday final figures were: Registered 40.52 Moz, Eligible 149.76 Moz, Total 190.28 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, rising tension in the Far East. China scolds Japan. Tells Uncle Sam to keep off the grass.
Thu Mar 23, 2017 | 7:02am EDT

China says hopes new Japanese carrier doesn't mark return to militarism

China said on Thursday that it hoped the entry into service of Japan's second big helicopter carrier, the Kaga, did not mean a return to the country's past militaristic history.
The ship, along with its sister the Izumo, gives Japan's military greater ability to deploy beyond its shores as it pushes back against China's growing influence in Asia.
Chinese Foreign Ministry spokeswoman Hua Chunying said that in recent years Japan had exaggerated the "China threat" as an excuse to expand its military.
"I also want to say that the Kaga was sunk by the U.S. military in World War Two. Japan should learn the lessons of history," Hua told a daily news briefing.
"We hope the return of the Kaga is not trying to be the start of the ashes of Japanese militarism burning once more."
Japan's two biggest warships since World War Two are potent symbols of Prime Minister Shinzo Abe's push to give the military a bigger international role. They are designated as helicopter destroyers to keep within the bounds of a war-renouncing constitution that forbids possession of offensive weapons.
Ties between China and Japan, the world's second- and third-largest economies, have been plagued with a territorial dispute over a group of tiny East China Sea islets and the legacy of Japan's wartime aggression.
http://www.reuters.com/article/us-japan-defence-carrier-china-idUSKBN16U19T

Thu Mar 23, 2017 | 5:02am EDT

China says U.S. should respect China's air defense zone

China said on Thursday the United States should respect its air defense identification zone (ADIZ), after CNN reported China had warned a U.S. bomber it was illegally flying inside China's self-declared zone in the East China Sea.
China declared the zone, in which aircraft are supposed to identify themselves to Chinese authorities, in the East China Sea in 2013, which the United States and Japan have refused to recognize.
CNN, citing the U.S. Pacific Air Forces, said the B-1 bomber was flying near South Korea on Sunday, and that its pilots responded to Chinese air traffic controllers saying they were carrying out routine operations in international airspace, and that the aircraft did not deviate from its flight path.
Chinese Foreign Ministry spokeswoman Hua Chunying said she had not heard of the matter, and referred questions to the Defense Ministry, which did not immediately respond to requests for comment.
"But, generally speaking, I hope that in this region all countries' actions consider the security concerns of relevant countries and be beneficial for mutual trust, peace and stability between countries," Hua told a daily news briefing.
"The United States has its own ADIZs. I think if this matter is true, they should respect China's relevant ADIZ rights," she added, without elaborating.
http://www.reuters.com/article/us-china-usa-defence-idUSKBN16U0SB

Technology 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?

Record-breaking solar panel converts more than a quarter of sunlight into electricity

Leaves can convert as little as three per cent of sunlight into energy
Ian Johnston Science Correspondent Tuesday 21 March 2017 12:08 GMT

A record-breaking solar panel that can convert more than a quarter of the sunlight it receives into electricity has been developed by researchers in Japan.

The silicon solar cell is so efficient that it turns 26.3 per cent of the energy from the sun into renewable power.

In contrast, nature’s ‘solar panels’ – leaves – have a “photosynthetic efficiency” of between three and six per cent.

The scientists behind the new panel also said they believed they had found a way to create a one with the maximum level of efficiency considered to be theoretically possible – 29.1 per cent.

Writing in the journal Nature Energy, the team from the Kaneka Corporation in Osaka, said: “Improving the photo-conversion efficiency of silicon solar cells is crucial to further the deployment of renewable electricity.

“Essential device properties such as lifetime, series resistance and optical properties must be improved simultaneously to reduce recombination, resistive and optical losses.

“Here, we use industrially compatible processes to fabricate large-area silicon solar cells … the photo-conversion efficiency is over 26 per cent.”

The previous record for solar cell efficiency was 25.6 per cent.

Further analysis, the researchers, said “pinpoints a path to approach the theoretical conversion efficiency limit of Si solar cells, 29.1 per cent”.

However a statement on the Nature website said the panels were not yet ready to be sold commercially.
“Although the study represents a record-breaking efficiency for a silicon solar cell, further work is required before the individual cells can be assembled into a commercially available solar panel,” it said.

Another weekend and sad weekend in London, and in the many places around the world, so many of the injured in the Islamist atrocity come from. Spring is finally here, time this weekend to advance our clocks by an hour.  Have a great weekend everyone.

All the best stories in the world are but one story in reality - the story of escape. It is the only thing which interests us all and at all times, how to escape.

Walter Bagehot. 

The monthly Coppock Indicators finished February

DJIA: 20,812  +133 Up. NASDAQ:  5,825 +120 Up. SP500: 2,364 +115 Up.

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