Tuesday, 27 June 2017

A Coordinated Attack? Updated.

Baltic Dry Index. 884 +14     Brent Crude 45.93

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

John Kenneth Galbraith

Did the central banks cronies and helpers, just launch a coordinated attack on gold, silver and the cryptocurrencies? To this old dinosaur market watcher, it looks suspiciously like someone did. The “fat finger” error explanation seems implausible. The “error” trade wasn’t reversed.

Below, day two of our week to dress up markets for the coming end of the half year.

Asian markets mostly higher, boosted by stronger dollar

Published: June 26, 2017 11:52 p.m. ET

Australian stocks dip as metal prices fall; Nikkei recovers to 1-week high

Global shares were higher in Asia-Pacific trade Tuesday, lifted in part by a stronger U.S. dollar, though markets in Australia bucked the trend due to declines in utility and mining stocks.

Industrial and precious metals prices were down, pressuring shares of Australian-listed heavyweights like BHP Billiton BHP, -0.20%  , which was last down 0.8%, while Rio Tinto RIO, +0.07%   was off 0.7%.
Spot gold prices were recently down 0.2%, extending losses after Monday’s flash crash, which was caused by suspected human error. It plunged 1% shortly after the opening call in London on Monday and traded about 1.8 million troy ounces in a minute, “which is more than the volumes traded seen during recent global risk events,” noted ANZ Research.

Australia’s benchmark S&P/ASX 200 XJO, -0.15%   was down 0.3%, with the utilities subindex falling 1.7% to an almost two-week low, while the materials subindex was off 0.7%.

Elsewhere, the Nikkei Stock Average NIK, +0.33%   was up 0.4% to a one-week high, while Hong Kong’s Hang Seng Index HSI, +0.04%   was up 0.2%. Korea’s Kospi SEU, +0.26%   edged up 0.1%. Singapore’s Straits Times Index STI, +0.34%   was last up 0.4%, with markets there reopening after a three-day weekend.

An overnight slump in the U.S. technology sector saw similar stocks in Asia region turn lower in early trade. Taiwan’s Technology index slid 0.8% versus a 0.1% decline in the benchmark Taiex Y9999, +0.06%  . Samsung Electronics 005930, +0.08%   dipped 0.2% in Seoul.

----In Japan, a softer yen gave exporter stocks a lift by making it cheaper for them to ship their goods around the globe. The dollar JPYUSD, +0.092154%   nearly reached ¥112, hitting its highest levels in a month. Among individual stocks, Hitachi 6501, +2.38%   rose 2.3% while Murata Manufacturing 6981, +2.20%   added 1.6%.

Gold Plunges After 1.8 Million Ounces Were Traded in One Minute

By Susanne Barton and Eddie Van Der Walt
26 June 2017, 12:39 GMT+1
Gold traders shaken awake by Monday’s rapid price plunge said the move probably won’t mean an end to the sleepy pace that’s characterized the market in recent months.

Bullion sank at 9 a.m. in London on Monday after a huge spike in volume in New York futures that traders said may have been the result of a “fat finger,” or erroneous order. Trading jumped to 1.8 million ounces of gold in just a minute, an amount that’s bigger than the gold reserves of Finland.

The episode is unlikely to upend the broader trend in gold, where volatility has languished, analysts including George Gero at RBC Wealth Management said. A measure of price swings in the metal fell in April to the lowest in records going back to 2007. It’s since held near that level, even amid political discord in Europe, rising U.S. interest rates and mounting tensions between the U.S. and North Korea.

“You haven’t seen volatility when volatility was warranted,” said Gero, a New York-based managing director at RBC. “You’ve got a host of important matters that could have moved gold much more than they did. 
Whenever there’s an event-driven rally, it doesn’t seem to last.”

“No one has a clue, apart from the unfortunate individual that pressed the wrong button,” David Govett, head of precious metals trading at Marex Spectron Group in London, said of the spike in volume. Thin activity and automated trading may exacerbate such moves, he said.

Others said a trader may have made a larger order than intended, or underestimated the market’s ability to absorb so much gold.

Ethereum plunges 24% as cryptocurrencies hit by massive selloff

Published: June 26, 2017 6:43 p.m. ET

38 of the 40 top digital currencies, including bitcoin, down

Cryptocurrencies led by bitcoin and Ethereum were falling across the board on Monday as a massive run-up this spring has spurred some profit taking.

The most prominent drop came in ether, the digital currency used on the Ethereum network , which recently was down 24% at $231, according to Coindesk. Meanwhile, bitcoin was down 7% at $2,424. They were not alone. Thirty-eight of the top 40 digital currencies listed on the site Crypto Market Cap were all down, including other prominent coins like ripple, down 8.6%, and litecoin, down 14%.

The selling comes after a sizable runup in the prices of these currencies. Bitcoin tripled from April 1, when it was at $1,079, through earlier this month, when it crested above $3,000. Ethereum rose more more than 4,000% earlier this year, jumping from $8 in January to $400 by June.

The gains have been so large, even the biggest crypto-bulls have been expecting a pullback. Indeed, the digital-currency market has been shaky for about two weeks now. “My gut says we are headed for a selloff in the crypto sector,” venture capitalist Fred Wilson wrote in a blog post early on Monday. His Union Square Partners has been investing in the industry for several years.

In other news, the central bankers, central bank, the Basel based BIS, is getting nervous. The next down turn is out there and getting closer with each passing week. “You’re all but out of ammo,” says the antsy BIS, “get on with normalising interest rates.” The implication being the collapse of the whole Ponzi Scheme system, if the next crash happens with interest rates at 1 to 2 percent. Perhaps that’s why someone attacked gold and silver and the cryptocurrencies yesterday, in what looked suspiciously like an orchestrated, coordinated attack.

Sun Jun 25, 2017 | 6:45am EDT

Push on with the 'great unwinding', BIS tells central banks

Major central banks should press ahead with interest rate increases, the Bank for International Settlements said on Sunday, while recognizing that some turbulence in financial markets will have to be negotiated along the way.

The BIS, an umbrella body for leading central banks, said in one of its most upbeat annual reports for years that global growth could soon be back at long-term average levels after a sharp improvement in sentiment over the past year.

Though pockets of risk remain because of high debt levels, low productivity growth and dwindling policy firepower, the BIS said policymakers should take advantage of the improving economic outlook and its surprisingly negligible effect on inflation to accelerate the "great unwinding" of quantitative easing programs and record low interest rates.

New technologies and working practices are likely to be playing a roll in suppressing inflation, it said, though normal impulses should kick in if unemployment continues to drop.

"Since we are now emerging from a very long period of very accommodative monetary policy, whatever we do, we will have to do it in a very careful way," BIS's head of research, Hyun Song Shin, told Reuters.

"If we leave it too late, it is going to be much more difficult to accomplish that unwinding. Even if there are some short-term bumps in the road it would be much more advisable to stay the course and begin that process of normalization."

Shin added that it will be "very difficult, if not impossible" to remove all those bumps.

Good communication from central bankers will be important, but even more crucial is the need for banks to be strong enough to cope with any turbulence.

The BIS identified four main risks to the global outlook in the medium-term.

A sudden flare-up of inflation which forces up interest rates and hurts growth, financial stress linked to the contraction phase of financial cycles, a rise in protectionism and weaker consumption not offset by stronger investment.

In VW dirty killer diesel news, the bad news keeps on coming. Why any of these dirty diesels should be allowed on Europe’s roads is a scandal in itself. Below, belatedly, Germany now seems ready to act.

Mon Jun 26, 2017 | 11:13am EDT

Germany demands costly recall of 12 million diesel cars: sources

Germany's Transport Ministry is pushing carmakers to update the engine management software in up to 12 million diesel vehicles in the country, people familiar with the talks told Reuters on Monday.

The move shows how German lawmakers are flexing their muscles ahead of national elections on Sept. 24, forcing carmakers to reduce polluting nitrogen oxide emissions from diesel engines.

The dangers to public health from diesel fumes became a political issue in the wake of revelations in September 2015 that Volkswagen had systematically cheated emissions tests to sell cars that produced excessive pollution.

Germany's top car manufacturers volunteered a recall of 630,000 cars in April 2016 to fix diesel emissions management software but that failed to reassure regulators and policymakers that pollution levels are under control.

Since then several European cities including Stuttgart and Munich have considered banning some diesel vehicles, blaming emissions for causing increased respiratory disease.

On Monday, lawmakers upped the pressure in closed-door talks with the auto industry. The ministry is in discussions with German auto industry associations VDA and VDIK as well as representatives from local governments to try and cut nitrogen oxide pollution by about 25 percent, the sources said.

It could cost 1.5 billion to 2.5 billion euros ($1.7 billion to $2.8 billion) to update cars and the ministry is demanding that vehicles with engines conforming to the euro-4, euro-5 and euro-6 standards be part of the recall, government sources said.

The government has demanded that the auto industry shoulder the costs and is pushing for a solution to be presented before the elections in September.

We close today with Brexit options updated from a Project Fear SocGen perspective. Mostly talking up the fear probably hoping to drum up fees from British businesses. 

I seriously doubt that any meaningful deal can be made at all, with 5 competing, jealous, EU Presidents, Juncker’s catspaw Barnier, a rump-EU of 27 fractious nations, each with a veto, plus Belgium’s Walloonatics and the EU Parliament, both with a veto.  Just leave, offer tit-for-tat, policies on residents, trade, and most other issues. Offer Ireland an open border with the North, and trans-shipment rights across the rest of the UK to Europe. EU goods going the other way will depend on tit-for-tat.

Below, SocGen remains deep in the swamp of Project Fear.

Brexit one year later: 5 ways the U.K. could now leave the EU

Published: June 26, 2017 4:04 a.m. ET

A ‘hard Brexit’ is still the most likely outcome, SocGen says

A full year after the U.K.’s Brexit referendum, the divorce talks between Brussels and Britain finally kicked off last week, but the outcome of the final agreement remains extremely uncertain.

The government will be working against the clock to hammer out a deal before the deadline of March 29, 2019, two years after U.K. Prime Minister Theresa May triggered the so-called Article 50 that officially set off the Brexit process.

Little progress has been made in the three months since the Brexit clock started ticking, however. That’s partly because of the out-of-cycle or “snap election” held on June 8, which produced a so-called hung government where the ruling Conservative Party lost its majority. That is seen as making it more difficult for May to push any “hard Brexit” plans through parliament.

“The shock 8 June U.K. election result has raised hopes of a reassessment by the U.K. government of its negotiating priorities that could have a major impact on the likely outcome of those talks,” Brian Hilliard, chief U.K. economist at Société Générale, said in a note.

“We examine five possible Brexit scenarios, but, sadly, our conclusion remains that the U.K. is likely to face a significant reduction of access to EU markets after Brexit,” he added.

Here are SocGen’s five scenarios:
1. A hard Brexit — 70% probability
Under this scenario, the government agrees to take full control of immigration, which almost certainly means the U.K. will lose access to the EU’s Single Market. Brussels has made it clear Britain can’t have the Single Market benefits without signing up for free movement of people.

Société Générale points out that the Conservatives and Labour — which both offered immigration control in their manifestos — jointly won 82% of the votes in the general election, making it very likely government will prioritize this in the negotiations. Hilliard says this is the most likely scenario.
2. A soft Brexit — 15% probability
However, there are also rising calls to secure access to the Single Market to help businesses sell their services and products seamlessly and tariff-free to the rest of the EU — which is now the U.K.’s biggest export market.

That could result in a Norway-style model, where the U.K. gets membership of the European Economic Area and retains its trading ties with the EU.

“This would be a difficult model to sell to the U.K. parliament and voters because it requires adherence to the EU’s four freedoms (which prevent limits on immigration) and the payment of large contributions to the EU budget,” Hilliard said.
3. Cliff edge — 10% probability
May has repeatedly said “no deal for Britain is better than a bad deal.” This leaves open the possibility that the U.K. leaves the EU on March 29, 2019, with no agreement on trade, movement of people or security and defense, if the two sides remain too wide apart.

The rhetoric has calmed a little after the snap election, but the “no deal” scenario remains a real risk, according to Société Générale.

“Even now, we still do not think that the U.K. government fully appreciates how weak its negotiating position is and thus how unpalatable the shape of the mooted deal might be. That is why, even with the reality check from the election, there is some risk of the U.K. negotiators walking out of the talks when the true awfulness of the likely outcome is fully understood,” Hilliard said.
If all else fails, immortality can always be assured by spectacular error.

John Kenneth Galbraith.

Crooks and Scoundrels Corner

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

Today, more on who watches the watchers of the deep state? Just how clean was Mueller and Comey’s FBI? Is it all back to Hooversville  again?

Justice is incidental to law and order.

J. Edgar Hoover.

Did the FBI retaliate against Michael Flynn by launching Russia probe?

by John Solomon and Sara Carter
The FBI launched a criminal probe against former Trump National Security Adviser Michael Flynn two years after the retired Army general roiled the bureau’s leadership by intervening on behalf of a decorated counterterrorism agent who accused now-Deputy FBI Director Andrew McCabe and other top officials of sexual discrimination, according to documents and interviews.
Flynn’s intervention on behalf of Supervisory Special Agent Robyn Gritz was highly unusual, and included a letter in 2014 on his official Pentagon stationary, a public interview in 2015 supporting Gritz’s case and an offer to testify on her behalf. His offer put him as a hostile witness in a case against McCabe, who was soaring through the bureau’s leadership ranks.
The FBI sought to block Flynn’s support for the agent, asking a federal administrative law judge in May 2014 to keep Flynn and others from becoming a witness in her Equal Employment Opportunity Commission (EEOC) case, memos obtained by Circa show. Two years later, the FBI opened its inquiry of Flynn.
The EEOC case, which is still pending, was serious enough to require McCabe to submit to a sworn statement to investigators, the documents show.

The deputy director’s testimony provided some of the strongest evidence in the case of possible retaliation, because he admitted the FBI opened an internal investigation into Gritz’s personal conduct after learning the agent “had filed or intended to file” a sex discrimination complaint against her supervisors.

McCabe eventually became the bureau’s No. 2 executive and emerged as a central player in the FBI’s Russia election tampering investigation, putting him in a position to impact the criminal inquiry against Flynn.

Three FBI employees told Circa they personally witnessed McCabe make disparaging remarks about Flynn before and during the time the retired Army general emerged as a figure in the Russia case.
The bureau employees, who spoke only on condition of anonymity for fear of retribution, said they did not know the reason for McCabe’s displeasure with Flynn, but that it made them uncomfortable as the Russia probe began to unfold and pressure built to investigate Flynn. One employee even consulted a private lawyer.
“As far as the troops in the field, the vast-majority were disgusted with the Russia decision, but that was McCabe driving the result that eventually led [former FBI Director James] Comey to make the decision,” said a senior federal law enforcement official, with direct knowledge of the investigation.
FBI agents’ concerns became more pronounced when a highly-classified piece of evidence -- an intercepted conversation between Flynn and Russian ambassador Sergey Kislyak -- suddenly leaked to the news media and prompted Flynn’s resignation as Trump’s top security adviser.
“The Flynn leaks were nothing short of political,” one FBI employee said, noting the specific contents of the conversation were known by only a handful of government officials when they leaked. “The leaks appeared to be targeted to take Flynn out.” 
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?

2-D material's traits could send electronics R&D spinning in new directions

X-ray technique provides a new window into exotic properties of an atomically thin material

Date: June 26, 2017

Source: DOE/Lawrence Berkeley National Laboratory

Summary: Researchers created an atomically thin material and used X-rays to measure its exotic and durable properties that make it a promising candidate for a budding branch of electronics known as 'spintronics.'

An international team of researchers, working at the Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab) and UC Berkeley, fabricated an atomically thin material and measured its exotic and durable properties that make it a promising candidate for a budding branch of electronics known as "spintronics."

The material -- known as 1T'-WTe2 -- bridges two flourishing fields of research: that of so-called 2-D materials, which include monolayer materials such as graphene that behave in different ways than their thicker forms; and topological materials, in which electrons can zip around in predictable ways with next to no resistance and regardless of defects that would ordinarily impede their movement.

At the edges of this material, the spin of electrons -- a particle property that functions a bit like a compass needle pointing either north or south -- and their momentum are closely tied and predictable.

This latest experimental evidence could elevate the material's use as a test subject for next-gen applications, such as a new breed of electronic devices that manipulate its spin property to carry and store data more efficiently than present-day devices. These traits are fundamental to spintronics.

The material is called a topological insulator because its interior surface does not conduct electricity, and its electrical conductivity (the flow of electrons) is restricted to its edges.

"This material should be very useful for spintronics studies," said Sung-Kwan Mo, a physicist and staff scientist at Berkeley Lab's Advanced Light Source (ALS) who co-led the study, published in Nature Physics.

"The flow of electrons is completely linked with the direction of their spins, and is limited only to the edges of the material," Mo said. "The electrons will travel in one direction, and with one type of spin, which is a useful quality for spintronics devices." Such devices could conceivably carry data more fluidly, with lesser power demands and heat buildup than is typical for present-day electronic devices.

The monthly Coppock Indicators finished May

DJIA: 21,009 +157 Up. NASDAQ:  6,199 +219 Up. SP500: 2,412 +161 Up.

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