Wednesday, 19 April 2017

The Owl And The Pussycat

Baltic Dry Index. 1294 -02.      Brent Crude 54.77

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

There was an Old Man in a tree,
Who was horribly bored by a bee.
When they said "Does it buzz?"
He replied "Yes, it does!
It's a regular brute of a bee!"

Edward Lear, nonsense poems. US Naval Strategist. Buzz Off.

For more On President Trump’s pussycat, scroll down to the end of this section. Grand Admiral Trump's "armada," seems to be under the control of Rear Admiral "wrong way" Corrigan. But is it real or fake news?

Up first today, real news from Asia, where yesterday’s surprise General Election news from Great Britain was largely a big yawn. Politician seeks electoral advantage from large lead in the polls, what a surprise. 

If in fact HMG’s hand is strengthened in the Brexit horse trading, so be it, but this old dinosaur commodities trader, doesn’t expect much from glacial talks between GB’s HMG, and a sclerotic grand committee of five preening EU presidents, (all earning more than President Trump,) a rump-EUSSR of 27 squabling  members, Belgium’s Walloonatics, plus a European “Parliament” that eventually has to approve the final deal. There’s probably more chance of a Brit winning Wimbledon, and Tony Blair and G. W. Bush turning themselves in at the international court in The Hague, than anything meaningful coming out of the EUSSR Grand Committee.

China leads broad declines in Asian markets

Published: Apr 18, 2017 11:36 p.m. ET

Shanghai Composite hits 2-month low

Equities investors in Asia tempered their risk appetite on Wednesday, tracking declines in the U.S., as geopolitical concerns continued to weigh on markets.
British Prime Minister Theresa May’s announcement of a general election in June, aimed at shoring up her mandate to take Britain out of the EU, added to already simmering market worries around North Korea, Syria and Russia.

Declines in the region were led by China, with the Shanghai Composite Index SHCOMP, -1.04%   down 1% at a two-month low, and putting the decline since Friday at more than 3%.

Elsewhere, Australia’s S&P/ASX 200 XJO, -0.70%   was down 0.5% in morning trade, while the Nikkei Stock Average NIK, +0.00%   slipped between gains and losses, and was last down 0.1%, despite a softer yen. Korea’s Kospi SEU, -0.53%   was off 0.6%.

“It’s a little bit of risk-off [sentiment] and geopolitical concerns are still on investors’ minds,” said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets.

Hong Kong’s Hang Seng Index HSI, -0.60%   continued declines after staging its biggest daily percentage drop in four months the previous session.

The index, which was last down 0.7%, has also been hurt by weaker market liquidity: the southbound flow on the Stock Connect program, which allows investors in Shanghai and Shenzhen to buy Hong Kong-listed stocks, was at just 113 million Hong Kong dollars (US$14.5 million) on Tuesday, the lowest since the launch of the Shenzhen-Hong Kong portion of the link late last year.

In France the pollsters are confused, what a surprise! For now Sunday’s French election trumps Britain’s election. I think I’ll put a tenner on the character assassinated Francois Fillon.

French Election Shocker: Pollsters Baffled by Four-Way Contest

by Gregory Viscusi and Mark Deen
19 April 2017, 04:00 BST
The four-candidate battle to reach the runoff in France’s presidential election is putting pollsters to the test as never before.

With just a few days to go before Sunday’s first round of voting, every poll for the past month has shown independent Emmanuel Macron and the National Front’s Marine Le Pen taking the top two spots. Macron would then easily win the May 7 runoff, polls show. Yet both front-runners have been steadily slipping over the past two weeks, and Republican Francois Fillon and Communist-backed Jean-Luc Melenchon are now within striking distance.

It’s a challenge for French pollsters, who have a near-perfect record in forecasting the vote share for the top five finishers in the first rounds in 2007 and 2012 and the subsequent runoffs. Until recently, the expectation was that France wouldn’t have an electoral shock like Britain did with Brexit and the U.S. went through with the election of Donald Trump. 

“This situation is totally unprecedented,” said Emmanuel Riviere, managing director of Kantar Public France. “The fact that there are four potential finalists makes the situation very complex.”

Up next, yet another sign that the German government, among others, still doesn’t get Brexit.  What part of leaving needs “clarifying?” After leaving, someone’s left, as in no longer there. How they leave is quite a different question. Most people not on United Airlines, leave a plane in a civilised way. Leaving United in Chicago, involves the “Friendly Skies Chicago method,” including a broken nose, missing teeth and a pool of blood.
Junker and his Brexit lackey Michel Barnier, favour the UA Chicago method for Brexit, even if it means that Ireland, Denmark, Holland, Germany, Spain and Sweden, among others,  get some missing teeth,  broken noses, and a pool of blood. Everyone else in Europe seems to favour the Air France, British Airways, Alitalia, more civilised, more European, less wild west way of brexiting a plane. In just under two years we all get to find out who’s right and how much blood was shed by whom.


They went to sea in a Sieve, they did,
In a Sieve they went to sea:
In spite of all their friends could say,
On a winter's morn, on a stormy day,
In a Sieve they went to sea!

---- The water it soon came in, it did,
The water it soon came in;
So to keep them dry, they wrapped their feet
In a pinky paper all folded neat,
And they fastened it down with a pin.
And they passed the night in a crockery-jar,
And each of them said, `How wise we are!
Though the sky be dark, and the voyage be long,
Yet we never can think we were rash or wrong,
While round in our Sieve we spin!'

Edward Lear, nonsense poems. EUSSR Brexit Strategist.

Tue Apr 18, 2017 | 10:26am EDT

Germany hopes Britain's early election leads to more Brexit clarity

German Foreign Minister Sigmar Gabriel said he hoped early elections called by Britain's prime minister would bring more "clarity and accountability" in its negotiations to leave the European Union.
Prime Minister Theresa May called on Tuesday for an early election on June 8, saying she needed to strengthen her hand in divorce talks with the EU by shoring up support for her Brexit plan.
"Accountability and reliability are more important than ever after the Brexit vote of the Britons," Gabriel told the Funke Mediengruppe newspaper chain in an interview, noting that periods of uncertainty were not helpful for EU-British ties.
"Hopefully the new elections announced today ... can lead to more clarity and accountability in the negotiations with the European Union," said Gabriel, a member of the Social Democrats, junior members in the ruling centre-right coalition.
Norbert Roettgen, a member of Chancellor Angela Merkel's conservatives and head of the foreign affairs committee, said May's surprise decision marked a 180-degree turn from her previous statements and reflected Britain's "increasing consciousness of its own weakness".
"May's desire for new elections shows that the British government is not prepared for Brexit. It also reflects the insight that negotiations will be very difficult and their outcome is not certain," Roettgen told the RND newspaper group.
He said that the election would reduce the chances of any reversal of Britain's decision to leave the EU.

Tue Apr 18, 2017 | 8:19am EDT

May's vote call a 'Hitchcock' twist to Brexit story: EU's Tusk

Theresa's May's call for a snap election is a Brexit plot twist worthy of master of suspense Alfred Hitchcock, the EU official running negotiations on Britain's withdrawal said on Tuesday.
"It was Hitchcock, who directed Brexit: first an earthquake and the tension rises," tweeted European Council President Donald Tusk, the former Polish premier who chairs summits of EU leaders and is overseeing plans for talks with London.
He was referring to remark widely attributed to the British-born Hollywood film-maker that a good movie "should start with an earthquake and be followed by rising tension".
May called for parliamentary election on June 8, just about the time Brussels has expected formal negotiations to start on the terms on which Britain will leave the EU in March 2019.
May said there was "no going back" on last year's referendum vote to quit - a result which many in the EU compared to an earthquake - but she wanted to strengthen her own position.

The difference between a misfortune and a calamity is this: If Juncker fell into the Thames, it would be a misfortune. But if someone dragged him out again, that would be a calamity.
Theresa May, with apologies to Benjamin Disraeli and Gladstone.
In other real news, China is getting on with trade, with or without the USA or EU.

Tue Apr 18, 2017 | 6:16am EDT

China to gather friends for biggest summit of year on New Silk Road

China will gather its friends and allies together for its biggest diplomatic event of the year in May, a summit on its New Silk Road plan, with most Asian leaders due to attend but only one from a G7 nation, the Italian prime minister.

President Xi Jinping has championed what China formally calls the "One Belt, One Road" or OBOR, initiative to build a new Silk Road linking Asia, Africa and Europe, a landmark program to invest billions of dollars in infrastructure projects including railways, ports and power grids.

China has dedicated $40 billion to a Silk Road Fund and the idea was the driving force behind the establishment of the $50 billion China-backed Asian Infrastructure Investment Bank.

Foreign Minister Wang Yi announced on Tuesday a list of those attending the conference, including some of China's most reliable allies - Russian President Vladimir Putin, Pakistani Prime Minister Nawaz Sharif and Cambodian Prime Minister Hun Sen.

Myanmar's Aung San Suu Kyi, Kazakh President Nursultan Nazarbayev, Malaysian Prime Minister Najib Razak and Indonesian President Joko Widodo are coming too, all generally good partners of China.

----While China says the New Silk Road is not political, it has run into opposition from India due to a section of it in Pakistan, known as the China-Pakistan Economic Corridor, where some projects run through the disputed Kashmir region.

Wang dismissed those concerns, saying the Pakistan project had no direct connection to the dispute and India was welcome to participate in the New Silk Road.

"Indian friends have said to us that One Belt, One Road is a very good suggestion," he said.

Nevertheless, India Prime Minister Narendra Modi was not on the list of leaders attending.

----The list included only one leader from the Group of Seven (G7) industrialised nations, Italian Prime Minister Paolo Gentiloni.

Diplomatic sources in Beijing said China had hoped for at least some senior Western leaders to attend, including British Prime Minister Theresa May, to burnish the plan's credentials and make it less China-centric.
British finance minister Philip Hammond will come as May's representative, while Germany and France are having elections at the time and will send high-level representatives, Wang said.

We end for today with the BBC reporting real or fake news, you be the judge. President Trump’s “armada” heading to North Korea, has turned tail and sailed south, the UK propaganda arm of the EUSSR reports. If true, the Grand Old Duke of New York didn’t even march his men up the hill, before they sailed away to the safety of Australia, to mangle something or other.

US 'armada' was not sailing to N Korea

1 hour ago
A US aircraft carrier and other warships did not sail towards North Korea - but went in the opposite direction, it has emerged.

The US Navy said on 8 April that Carl Vinson strike group was headed towards the Korean peninsula, as a deterrence measure.

Last week President Trump said an "armada" was being sent.

But the group was actually farther away over the weekend, moving through the Sunda Strait into the Indian Ocean.

The US now says it first had to complete training with Australian forces. The strike group was now "proceeding to the Western Pacific as ordered", the US military's Pacific Command said on Tuesday.

It is not clear whether the failure to arrive was a deliberate deception, perhaps designed to frighten North Korea's leader Kim Jong-un, a change of plan or simple miscommunication, the BBC's Korea correspondent Stephen Evans says.

The Owl and the Pussy-cat went to sea
    In a beautiful pea green boat,
They took some honey, and plenty of money,
    Wrapped up in a five pound note.
The Owl looked up to the stars above,
    And sang to a small guitar,
'O lovely Pussy! O Pussy my love,
      What a beautiful Pussy you are,
          You are,
          You are!
What a beautiful Pussy you are!

Edward Lear, nonsense poems. US Naval Strategist.

At the Comex silver depositories Tuesay final figures were: Registered 29.09 Moz, Eligible 164.19 Moz, Total 193.28 Moz.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, and you thought US pink sheet” stocks were dodgy. In Hong Kong, be very careful who you take a cheque from. Below, what could possibly go wrong? For our Canadian readers, what could possibly go wrong, eh?

A 9,800% Stock Increase Exposes Hong Kong's Billionaires on Paper

by Robert Olsen and Benjamin Robertson
17 April 2017, 22:00 BST 18 April 2017, 10:19 BST
They are classic Hong Kong stories: people who, in a blink, became stock-market billionaires.
But exactly what’s behind much of this wealth is something of a mystery.

Take Wong Wing-wah, who used to be a fishmonger before starting a civil engineering firm. He took his company public last year -- and its stock then soared 9,800 percent. Wong and a partner, who together own nearly all of the stock, are each now worth roughly $1 billion. Their company, Luen Wong Group Holdings Ltd., reported just $1 million in profit last year.

What’s going on? The answer lies in one of the murkiest corners of Hong Kong finance: small-cap stocks.
The Hong Kong Stock Exchange and its sibling, the Growth Enterprise Market, have become a breeding ground for paper billionaires.

In the past three years alone, perhaps as many as a dozen executives, many from mainland China, have amassed billion-plus wealth as their companies’ share prices soared, usually for no apparent reason.

The executives and their companies haven’t been accused of wrongdoing. But the phenomenon has raised flags for Hong Kong regulators, who warn that the stocks can be susceptible to manipulation, particularly when few of the shares are in the public’s hands.

Wild Swings

In some cases, the public float of these companies is effectively less than 1 percent, leading to wild price swings and gaping differences between the prices at which investors are willing to buy and sell. In the case of Luen Wong, the bid-offer spread recently hit 68 percent.

“A lot of these guys are very rich on paper, but if they were to sell their shares, there’s no way they would be able to realize any of the consideration of the share price,” said Philippe Espinasse, the Hong Kong-based former head of Asia equity capital markets at Nomura Holdings Inc. and author of “IPO: A Global Guide.”

Again and again -- 124 times since 2009 -- the Securities and Futures Commission has warned about what it calls "high shareholding concentration," where most of a company’s stock is held in few hands, and where low trading volumes and triple-digit gains signal investors to be cautious. The companies’ market value totaled $79.6 billion as of the dates of each of the notices.

In April 2016, after Luen Wong began trading, the SFC recommended “extreme caution” in buying its shares because 96 percent of them were held by its two founders and 19 other investors. Yet shares are currently trading more than 7,500 percent higher than their IPO price. The PE, or price-to-earnings ratio, is now an extraordinarily high 2,450 in a city where the benchmark index median for small-cap stocks is 13.

Luen Wong didn’t respond to multiple emails, phone calls or a hand-delivered letter to its office seeking comment.

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?

Today, when not all progress is progress. Today a warning from America.  When artificial intelligence is artificial but not intelligent. When “progress” is actually “regress.”Was mankind made for the law, or the laws made for mankind?  Coming next in America, trial by combat, water or fire.

As America does today, Europe does tomorrow, the rest of the world the day after.

Jason Tashea Security Date of Publication: 04.17.17. 04.17.17

Courts Are Using AI to Sentence Criminals. That Must Stop Now

There is a stretch of highway through the Ozark Mountains where being data-driven is a hazard.
Heading from Springfield, Missouri, to Clarksville, Arkansas, navigation apps recommend the Arkansas 43. While this can be the fastest route, the GPS’s algorithm does not concern itself with factors important to truckers carrying a heavy load, such as the 43’s 1,300-foot elevation drop over four miles with two sharp turns. The road once hosted few 18-wheelers, but the last two and half years have seen a noticeable increase in truck traffic—and wrecks. Locals who have watched accidents increase think it is only a matter of time before someone is seriously hurt, or worse.

Truckers familiar with the region know that Highway 7 is a safer route. However, the algorithm creating the route recommendation does not. Lacking broader insight, the GPS only considers factors programmed to be important. Ultimately, the algorithm paints an incomplete or distorted picture that can cause unsuspecting drivers to lose control of their vehicles.

Algorithms pervade our lives today, from music recommendations to credit scores to now, bail and sentencing decisions. But there is little oversight and transparency regarding how they work. Nowhere is this lack of oversight more stark than in the criminal justice system. Without proper safeguards, these tools risk eroding the rule of law and diminishing individual rights.

Currently, courts and corrections departments around the US use algorithms to determine a defendant’s “risk”, which ranges from the probability that an individual will commit another crime to the likelihood a defendant will appear for his or her court date. These algorithmic outputs inform decisions about bail, sentencing, and parole. Each tool aspires to improve on the accuracy of human decision-making that allows for a better allocation of finite resources.

Typically, government agencies do not write their own algorithms; they buy them from private businesses. This often means the algorithm is proprietary or “black boxed”, meaning only the owners, and to a limited degree the purchaser, can see how the software makes decisions. Currently, there is no federal law that sets standards or requires the inspection of these tools, the way the FDA does with new drugs.

----By keeping the algorithm hidden, Loomis leaves these tools unchecked. This is a worrisome precedent as risk assessments evolve from algorithms that are possible to assess, like Compas, to opaque neural networks. Neural networks, a deep learning algorithm meant to act like the human brain, cannot be transparent because of their very nature. Rather than being explicitly programmed, a neural network creates connections on its own. This process is hidden and always changing, which runs the risk of limiting a judge’s ability to render a fully informed decision and defense counsel’s ability to zealously defend their clients.
Consider a scenario in which the defense attorney calls a developer of a neural-network-based risk assessment tool to the witness stand to challenge the “high risk” score that could affect her client’s sentence. On the stand, the engineer could tell the court how the neural network was designed, what inputs were entered, and what outputs were created in a specific case. However, the engineer could not explain the software’s decision-making process.
With these facts, or lack thereof, how does a judge weigh the validity of a risk-assessment tool if she cannot understand its decision-making process? How could an appeals court know if the tool decided that socioeconomic factors, a constitutionally dubious input, determined a defendant’s risk to society? Following the reasoning in Loomis, the court would have no choice but to abdicate a part of its responsibility to a hidden decision-making process.

The monthly Coppock Indicators finished March

DJIA: 20,663  +131 Up. NASDAQ:  5,912 +165 Up. SP500: 2,363 +135 Up.

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