Wednesday, 1 March 2017

The Aspirational, Fickle, President.



Baltic Dry Index. 859 -19   Brent Crude 56.40

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

“The beauty of me is that I’m very rich.”

Donald Trump.

President Trump: he came, he saw, and he morphed into the aspirational, middle of the road, fickle president. President Trump addressed a joint session of Congress yesterday and laid out his aspirations for a renewed America. Though it wasn’t a budget speech, completely lacking was how all these aspirations were to be paid for, or when President Trump will lay out in detail how he wants the Congress to pay for his current aspirations. Back in favour was NATO, though for how long seems to depend on NATO’s deadbeat members paying their fair share of NATO’s bills. A middle class tax cutis coming, though not exactly when. The Great Wall of Mexico is coming, though not exactly when, where, or how.

From faraway London, though the glass was both half full and half empty, it played out better than the laughing stock, PwC Oscars. But as we enter the 91st month of the weakest US economic “recovery” in history, how much longer President Trump can keep Trumpmania running without details and costings is an open question. Attention now shifts to the Fed’s talking chair, due to talk next on Friday. Will the Fedster’s dare pull the trigger mid-month on another baby step interest rate hike? And what of President Trump’s aspirations, if interest rate normalise?

“I have never seen a thin person drinking Diet Coke.”

Donald Trump.

Below, the USA, Ash Wednesday, March 1, 2017. The Emperor’s new clothes, comes to mind.

Wed Mar 1, 2017 | 1:30am EST

In speech, Trump tries to turn from divisive to deal-maker

U.S. President Donald Trump showed a different side in his first address to Congress. This Trump was part deal-maker, part salesman, asking for unity and trying to repackage his populist message in more palatable terms.

He was less combative, less thin-skinned and more inclusive.

And where five weeks ago at his inauguration, he slammed Washington's politicians as out-of-touch elitists who prospered at the expense of the public, his message on Tuesday night was different: I need you, Republicans and Democrats alike.

Always a showman, the TV reality star-turned-politician laid out plenty of promises: A massive infrastructure and public works program; tax cuts for the middle class; immigration reform; a healthcare overhaul; an education bill.

All of it will require congressional action, likely by different coalitions of conservatives, moderates and Democrats.

“This is our vision. This is our mission,” Trump said. “But we can only get there together.”

Trump, a Republican who has taunted Democrats over his 2016 election victory and publicly fumed as they held up his Cabinet nominees, did not criticize them this time. Repeatedly, he asked for their help, arguing the country’s problems demanded bipartisan solutions.

After weeks of attacks on the media, political rivals and the judges who ruled against his executive order to ban travel from seven Muslim-majority countries, Trump finally eased off, although his proposals were short on specifics.
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Tue Feb 28, 2017 | 11:46pm EST

Trump recommits to U.S. allies but says must pay 'fair share'

President Donald Trump on Tuesday reaffirmed support for the United States' longstanding security alliances around the world but insisted that friends and partners from Europe to the Middle East to the Pacific must “pay their fair share of the cost.”

In his first nationally televised speech to Congress since taking office on Jan. 20, Trump sought to reassure allies still uneasy over doubts he raised during the 2016 presidential campaign about his commitment to their defense and to maintaining a U.S. global leadership role.

But he also made clear that he expects those countries to shoulder more of the burden of their own security needs, echoing a campaign message that some allies had taken advantage of Washington’s generosity in providing them a security umbrella.

“Our foreign policy calls for a direct, robust and meaningful engagement with the world,” Trump told a joint session of Congress. “It is American leadership based on vital security interests that we share with our allies across the globe.”

He specifically assured NATO allies of his new administration’s continued commitment to the decades-old alliance. However, he made no mention of one of the main sources of European concern: his friendly overtures during the campaign toward Russian President Vladimir Putin.

   “We strongly support NATO, an alliance forged through the bonds of two World Wars that dethroned fascism and a Cold War that defeated communism,” Trump said.

    “But our partners must meet their financial obligations,” he said. “And now, based on our very strong and frank discussions, they are beginning to do just that.”
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U.S. Economy Grew 1.9% in Quarter, Unchanged From Early Estimate

by Sho Chandra
28 February 2017, 13:30 GMT 28 February 2017, 13:44 GMT
  • Consumer spending rose at faster pace than initially reported
  • Business and government spending contributed less to growth
The U.S. economy grew in the fourth quarter at a 1.9 percent pace, unchanged from an initial estimate, as slower investment by businesses and state and local agencies offset stronger household purchases.

The gain in gross domestic product, the value of all goods and services produced, was smaller than the median forecast in a Bloomberg survey for a 2.1 percent annualized rate. Consumer spending, the biggest part of the economy, rose 3 percent, more than projected, Commerce Department data showed Tuesday in Washington.

The results reinforce the leading role that consumers continue to play in the current expansion, helped by a tight job market, low borrowing costs and rising confidence. Optimism that President Donald Trump will lower taxes, reduce regulation and rebuild infrastructure may also encourage businesses to step up investment this year, contributing to growth.
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What a Fed Rate Hike in March Would Imply

Feb 28, 2017 2:00 AM EST By Mohamed A. El-Erian
On Monday, a combination of domestic and international factors contributed to a significant reassessment by market participants of the probability of a Federal Reserve interest rate hike in March. Now the markets are pricing in a more realistic probability of 52 percent, up from less than 40 percent last week. Where this probability assessment goes next increasingly depends on a single data point, which could also fuel a gradual reorientation of the Fed’s approach to monetary policy and how the U.S. central bank interacts with markets.

Market expectations of a March rate hike were boosted by a clarification by Robert Kaplan, the president of the Federal Reserve of Dallas and a voting member of the policy-making Open Market Committee. In referring to previous signals from Fed officials that the central bank would likely raise rates “sooner rather than later,” Kaplan said this would imply a hike in the “near future” -- this on the basis of stronger economic growth in 2017 and the need to lower the risk of monetary policy falling behind the curve on inflation.

Rate sentiment was further influenced by signals from the White House that President Donald Trump’s first budget would include a substantial and “historic” increase in defense spending of $54 billion.

Global conditions also played a role in the market re-evaluation. After a string of record negative interest rates in Germany last week, 2-year German government bonds found their footing, at least for now. This alleviated the considerable downward pressures on U.S. yields.

Nonetheless, the higher probability of a Fed hike still doesn’t make it a done deal, and rightly so; and this is not primarily due to heightened political risk in Europe.

Judging from the insights of Fed Chair Janet Yellen and some of her colleagues, the FOMC would need stronger wage-growth data to feel comfortable raising rates for what would be only the third time in 10 years. As a result, the jobs report for February, which will released March 10, will have an important, if not deterministic, influence on what the Fed does when its top policy-making committee next meets on March 14-15.

A green light from the wage data would do more than significantly increase the probability of a March rate hike. It also would allow the Fed to slowly evolve away from its tactical posture and toward one that involves more strategic consideration.
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U.S.-China Tensions May Force Nations to Choose, Singapore Says

by Rosalind Mathieson and Sterling Wong 1 March 2017, 05:58 GMT
Singapore risks being “coerced” into choosing between the U.S. or China as the two powers jostle for influence in Asia, according to Prime Minister Lee Hsien Loong.

"If America-China relations become very difficult our position becomes tougher because then we will be coerced to choose between being friends with America and friends with China," Lee said in an interview with BBC’s “HARDtalk” that aired on Wednesday. “And that’s a real worry.”

“Right now we are friends with both, not that we don’t have issues with either, but we are generally friends with both and the relationships are in good working order.”

For decades Singapore, an open economy reliant on trade and investment, has walked a careful line between the U.S. and China, seeking to build economic ties with both while supporting a greater U.S. military presence in the region as a buffer to China’s expansionism, especially in the South China Sea.

Lee has warned previously that smaller countries in Southeast Asia do not want to have to pick a side, even as he said competition between major powers is unavoidable.
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We close for the day with yet more bad news for Europe. Is there ever any other kind of European news?

Millionaires can’t seem to flee this European country fast enough

By Quentin Fottrell  Published: Feb 28, 2017 10:46 a.m. ET
There’s been a surge in the number of millionaires around the world who are moving countries.
Some 82,000 high-net-worth individuals, defined as those who have assets over $1 million, left their home countries last year, versus 64,000 in 2015, according to the “Global Health Review: Worldwide Wealth and Wealth Migration Trends.” For the second consecutive year, Australia was the No. 1 country welcoming millionaire migrants, beating even the U.S. There was a 38% jump in millionaire migrants to Australia (11,000 last year versus 8,000 in 2015) and a 43% increase in those migrants to the U.S. over the same period (10,000 in 2016 versus 7,000).

High-net-worth individuals, however, fled France last year in greater numbers than any other country. Some 12,000 millionaires left France last year, versus 10,000 in 2015, a gain of 20%, even though economic growth accelerated in the fourth quarter of last year. There have been several terror attacks in France in recent years. And there are winds of political change blowing: Earlier this month, far-right candidate Marine Le Pen launched her presidential campaign with a hardline speech on immigration and globalization, leading some commentators to say Le Pen, if she won, could pull France out of the European Union in a “Frexit.”

This was followed by China (9,000 millionaires left, unchanged from 2015) and Brazil (8,000 millionaire migrants leaving the country last year, an increase of 300%, followed by India (a 50% increase to 6,000) and Turkey (6,000 millionaires left that country, a 500% increase). Ivan Martchev, an investment specialist with institutional money manager Navellier and Associates, recently wrote on MarketWatch that China’s foreign-exchange reserves fell by $12.3 billion to $2.998 trillion. Turkey, meanwhile, recently experienced terrorist attacks, political unrest and a failed coup.
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“My IQ is one of the highest — and you all know it! Please don’t feel so stupid or insecure; it’s not your fault.”

Donald Trump.

At the Comex silver depositories Tuesday final figures were: Registered 30.62 Moz, Eligible 155.98 Moz, Total 186.60 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
In Brexit news, the reality of negotiating with 5 EUSSR presidents, a committee of a rump-27 nations, plus the Belgian Walloonatics, has set in.

No Brexit Deal Is a Scenario U.K. Must Prepare for, Davis Warns

by Thomas Penny 28 February 2017, 13:43 GMT
U.K. Brexit Secretary David Davis told cabinet colleagues to prepare for the possibility of Prime Minister Theresa May failing to reach a divorce deal with her European counterparts in the two years allowed by European Union rules.
Describing talks to quit the bloc as the “most important peacetime operation,” Davis called on government departments to “support a smooth exit from the EU” at the weekly cabinet meeting on Tuesday, May’s spokesman Greg Swift told reporters in London.
The Brexit secretary underlined “the need to prepare not just for a negotiated settlement but also for the unlikely scenario in which no mutually satisfactory agreement can be reached,” Swift said. “It’s important departments understand the challenges ahead.”
There was also a plea for optimism from May.
“She reiterated the need for an orderly process but stressed we must be optimistic, that our message is we’re not going to fail,” Swift said.
Separately, Foreign Secretary Boris Johnson told delegates at the British Chambers of Commerce annual conference that a deal can be done within the two-year window allowed by Article 50 of the Lisbon Treaty. May has pledged to trigger the process by the end of March.
There’s “every reason” the U.K can go “full tilt and get this done within two years,” Johnson said. “‘We have an unrivaled opportunity. It’s unlike any other free trade deal that the EU has ever done in that we are already exactly flush with our partners in terms of standards and tariffs.”
Trade Secretary Liam Fox also updated ministers on preparations for deals around the world after Brexit and trying to establish the U.K. as a “champion” for free trade.
https://www.bloomberg.com/politics/articles/2017-02-28/no-brexit-deal-is-a-scenario-u-k-must-prepare-for-davis-warns

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?

Nano 'sandwich' offers unique properties

Rice University researchers simulate two-dimensional hybrids for optoelectronics
Date: February 27, 2017

Source: Rice University

Summary: Nanoclusters of magnesium oxide sandwiched between layers of graphene make a compound with unique electronic and optical properties, according to researchers who built computer simulations of the material.

Rice University researchers have modeled a nanoscale sandwich, the first in what they hope will become a molecular deli for materials scientists.
Their recipe puts two slices of atom-thick graphene around nanoclusters of magnesium oxide that give the super-strong, conductive material expanded optoelectronic properties.
Rice materials scientist Rouzbeh Shahsavari and his colleagues built computer simulations of the compound and found it would offer features suitable for sensitive molecular sensing, catalysis and bio-imaging. Their work could help researchers design a range of customizable hybrids of two- and three-dimensional structures with encapsulated molecules, Shahsavari said.
The research appears this month in the Royal Society of Chemistry journal Nanoscale.
The scientists were inspired by experiments elsewhere in which various molecules were encapsulated using van der Waals forces to draw components together. The Rice-led study was the first to take a theoretical approach to defining the electronic and optical properties of one of those "made" samples, two-dimensional magnesium oxide in bilayer graphene, Shahsavari said.
"We knew if there was an experiment already performed, we would have a great reference point that would make it easier to verify our computations, thus allowing more reliable expansion of our computational results to identify performance trends beyond the reach of experiments," Shahsavari said.
Graphene on its own has no band gap -- the characteristic that makes a material a semiconductor. But the hybrid does, and this band gap could be tunable, depending on the components, Shahsavari said. The enhanced optical properties are also tunable and useful, he said.
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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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