Friday, 9 June 2017

Britain – Bleak House.

Baltic Dry Index. 821 +03     Brent Crude 47.84

I always tried to turn every disaster into an opportunity.

John D. Rockefeller

With most of the UK election results now in, Her Majesty’s Government has suffered an unexpected self-inflicted defeat.  John D, Rockefeller would have a hard time  locating opportunity in the UK’s unfolding disaster. In one of the most incompetent election campaigns I’ve ever seen, the UK Conservative Party managed to charge at the wrong guns, Light Brigade style, and far from delivering a Battle of Flodden Field result over the disorganised New Communist Labour Party, (NCLP,)  suffered a Battle of Bannockburn like defeat themselves. Like England’s King Edward II, they escape from the fray to live on, having blocked the new UK communist party for now, but the new UK communist party has been emboldened rather than crushed. 

In terms of Brexit, a much weakened HMG, must now negotiate with the rump-EU, greatly emboldened by Prime Minister May’s massive miscalculation. Except Prime Minister May’s position is untenable, and the prospect of a new Conservative Party leader emerging in the weeks ahead, looks inevitable. Mrs. May’s government can limp on in office, if it wants, but not in real power. To this old dinosaur ex-conservative from the 60s, 70s and 80s, it seems highly probable that there will now be another general election before Brexit happens in May 2019. 

But the prospect of a new global recession hitting before May 2019 and Brexit, a weakened UK government, with the UK  NCLP waiting in the wings, promising free money for all, is disastrous.  The NCLP survived by promising free money for all, especially to the young, the NHS and schools, plus an end to austerity, and an end to balancing the budget. Since that worked so well for the NCLP, at the next election they will expand that attack in Spades.  Now even the poorest of Brits need to own some physical gold and silver. Dire things come next.

Sky forecast: Hung parliament as Theresa May loses her majority

Theresa May has lost her majority and there will be a hung parliament, Sky News is forecasting.
Our projection is for the Conservatives to remain the largest party on 315 to 321 seats - with 326 required for a majority.

Labour are projected to win between 260 and 266 seats - more than under both Ed Miliband and Gordon Brown.

Such a result would throw plans for Brexit negotiations to start this month into chaos, with the parties having to enter talks over who will form a government.

Theresa May's Gamble Goes Bust

Jeremy Corbyn's Labour party shocks the world.
8:25 PM, Jun 08, 2017
British voters have just shocked Europe—and perhaps themselves—by repudiating their conservative prime minister Theresa May. May called a snap election because it seemed an easy way to bolster her slender parliamentary majority as she began negotiating Britain's exit from the European Union. That didn't happen. 
According to early poll projections she might lose her majority altogether.

May's rationale was this: Why not take advantage of the Labour party's decision to place its fate in the hands of 68-year-old Jeremy Corbyn, an unreconstructed 1970s-vintage Marxist whom the press and the public hated? Look at the guy! He made Bernie Sanders look mainstream by comparison. His platform called for investing half a trillion pounds in rebuilding Britain's industrial infrastructure, building millions of homes, making universities free, and re-nationalizing the country's railways, utilities and postal service. He proposed to pay for all that by hiking corporate tax rates from 17 to 26 percent and imposing punitive taxes on real estate and incomes over $100,000 a year.

You could tell May was in trouble when her supporters started to browbeat the public about the "Laffer curve"—the argument that raising tax rates can depress tax revenue. Yes, the media was foursquare against Corbyn, just as May's advisers had optimistically assumed, and even a majority of his own party's members of parliament opposed his leadership. But neither the press nor the politicians had a clue what the public thought. The public weren't disliking Corbyn's platform as much as they were supposed to.

Corbyn would have been a terrible candidate in a national election if this were 1974, when he entered politics, or 1983, when he first got elected to Parliament. He opposed the Falklands war and backed Fidel Castro, the IRA, and the PLO. But the Falklands War is over, Castro is dead, the IRA is disarmed, and the PLO has been superseded. And a good number of the voters who showed up for Corbyn were not born back in those days. Like Sanders, Corbyn has found a way to thrill university students and senior citizens, even while his appeal remains almost inaudible to those born between 1952 and 1992. Youth turnout on Thursday appears to have been high.

‘Worst possible outcome’ — analysts react to U.K. early election results

Published: June 8, 2017 11:19 p.m. ET
With about two-thirds of the votes counted in the U.K. election, it’s looking increasingly certain that Theresa May’s gamble to consolidate her power has failed.

An estimate from the BBC predicts May’s Conservative Party will win 318 seats, just short of the 326 seats that are needed for a majority and a far cry of the 400-plus seats that were forecast a month ago. That means the U.K. could be headed for a hung parliament, which means it may be very hard to pass legislation.

Read: U.K. election: So what is a hung parliament?

The preliminary result has taken markets by surprise, sending the pound GBPUSD, -1.5822%  to a seven-week low of $1.2747. Sterling traded around $1.2950 before the first exit polls came out.

----“The biggest upset in British politics, since last June. Betting markets now make Jeremy Corbyn the favourite to become the next prime minister — a situation few investors had really contemplated. Indeed it’s fair to say markets had been a little complacent about this result. Even if the Tories squeak a majority, it looks like Theresa May is toast, adding yet more uncertainty. As previously stated, we now have the rather absurd scenario where May could be ousted for winning the most seats and Jeremy Corbyn’s position strengthened by coming second again.” — Neil Wilson, senior market analyst at ETX Capital

In other news, corporate tax cheats Luxembourg, Malta, and Ireland are about to get closed down. But in the EUSSR fantasy land run by ex-Luxembourg Prime Minister Juncker,  will any new rules ever get enforced.

Wed Jun 7, 2017 | 2:42pm EDT

New international pact launched to end tax 'treaty shopping'

About 70 countries launched a new international tax convention on Wednesday to prevent multinational companies from "treaty shopping" for jurisdictions most favorable to their tax bills.

Ministers from major economies signed the new tax pact at the Organization for Economic Cooperation and Development (OECD) in Paris, which said more countries were likely to join in the coming weeks.

The new agreement will replace more than 1,100 bilateral tax treaties, or about a third of the treaties signed by countries over the last century to avoid double taxation.

In the age of globalization, multinational countries have increasingly sent cross-border transactions through third countries to take advantage of their low taxes in what has come to be called treaty shopping.

The new treaty sets minimum standards to avoid abuses and defines a company's taxable presence in a country, while also lays out plans for settling double taxation disputes between governments.

"It's going to kill treaty shopping," OECD tax policy director Pascal Saint-Amans told journalists.

Under the new pact, countries have to state which provisions they sign up to and which they do not. In the coming weeks, governments will have to match their positions with others'.

"This is something that companies are going to need to pay close attention to because the decisions countries make when they sign up to the MLI (multilateral instrument) will have very significant tax consequences," said Jesse Eggert, principal in the international tax group of KPMG's Washington National Tax practice.

Signatories include most major economies and countries known as treaty shopping hubs - such as the Netherlands, Belgium, the Seychelles and Singapore.

Mauritius, which is often used to route transactions with India because of its low tax, has also signalled that it will sign in the coming months, Saint-Amans said.

One notable absence is the United States. Saint-Amans said that was not a concern because its bilateral treaties were already of high quality.

The new pact is part of a broader OECD-led drive to prevent companies from taking advantages of differences between tax systems to cut their tax bills without outright breaking the law.

Thu Jun 8, 2017 | 9:32am EDT

EU bill foresees sanctions for accountants, banks helping dodge tax

Tax advisers in the European Union will be penalized for helping companies to set up schemes to cut their tax bills excessively by shifting profits to low-tax countries, under a draft law seen by Reuters.

The measure, prepared by the EU executive, the European Commission, and still subject to changes, would force accounting firms such as PricewaterhouseCoopers(PwC), KPMG, Ernst & Young and Deloitte, banks and other tax advisers to inform authorities about "potentially aggressive tax planning arrangements" set up for their clients.

The move is part of a set of measures adopted by the European Union after last year's Panama Papers and other revelations of widespread tax avoidance by wealthy individuals and big firms through carefully constructed plans.

The draft law, expected to be published in June, dictates "effective, proportionate and dissuasive penalties" for non-compliance, but leaves EU states free to decide sanctions or fines at national level.

Tax advisers will have to disclose cross-border tax schemes deemed to be too "aggressive" to tax authorities in the countries where they operate. The information should then be "automatically" shared among EU countries' administrations.

We end for the day with more on the arrival of our incoming increasingly jobless world, as automation and artificial intelligence replace workers skilled and unskilled.

Below, Boeing dreams of a flying world without pilots. I think of a world without passengers.

Thu Jun 8, 2017 | 8:55am EDT

Boeing studies pilotless planes as it ponders next jetliner

Boeing Co is looking ahead to a brave new world where jetliners fly without pilots and aims to test some of the technology next year, the world's biggest plane maker said in a briefing ahead of the Paris Airshow.

The idea may seem far-fetched but with self-flying drones available for less than $1,000, "the basic building blocks of the technology clearly are available," said Mike Sinnett, Boeing's vice president of product development.

Jetliners can already take off, cruise and land using their onboard flight computers and the number of pilots on a standard passenger plane has dropped to two from three over the years.

Sinnett, a pilot himself, plans to test the technology in a cockpit simulator this summer and "fly on an airplane next year some artificial intelligence that makes decisions that pilots would make", he said.

Self-flying aircraft would need to meet the safety standards of air travel, which had its safest year in 2016, according to the Aviation Safety Network. They would also need to convince regulators who don't yet know how to certify such planes.

"I have no idea how we're going to do that," Sinnett said. "But we're studying it right now and we're developing those algorithms."

Airlines are among those backing the idea, in part to deal with a projected need for 1.5 million pilots over the next 20 years as global demand for air travel continues to grow.

But a self-flying plane would need to be able land safely as Captain Chesley Sullenberger did in the "Miracle on the Hudson," Sinnett said. "If it can't, then we can't go there."

A U.S. Airways plane hit a flock of geese shortly after taking off from New York in 2009 knocking out its engines but Sullenberger managed to glide the Airbus A320 to a safe landing on the Hudson River, saving all 150 passengers on board.

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F. A. von Hayek

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
No crooks, bent banksters nor corrupt politicians today. Today an update on solar cycle 24. A cooler climate ahead, seems likely.

Solar Update June 2017–the sun is slumping and headed even lower

Solar cycle 24 has seen very low solar activity thus far, likely the lowest in 100 years.
Guest essay by David Archibald

Figure 1: F10.7 Flux 2014 – 2017
The F10.7 flux shows that over the last three and a half years the Sun has gone from solar maximum through a bounded decline to the current stage of the trail to minimum. Solar minimum is likely to be still three years away.

Figure 2: F10.7 Flux of Solar Cycles 19 to 24 aligned on month of minimum
Solar Cycle 24 is sitting at the lower bound of activity for solar cycles back to 1964, the start of Solar Cycle 19. From here to minimum though, it looks like Solar Cycle 24 will have much lower volatility than the solar cycles that preceded it.

Figure 3: Oulu Neutron Count 1964 – 2017
According to Svensmark’s theory, the neutron flux, with its effect on cloud cover and thus the Earth’s albedo, is one of the bigger climate drivers. For Solar Cycle 24, the neutron flux duly turned around and starting rising again in 2015, one year after solar maximum. It is a safe bet that the neutron flux is heading for a record high at solar minimum (+ one year) relative to the instrumental record.

Figure 4: Oulu Neutron Count aligned on month of solar minimum
The last weak solar cycle was Solar Cycle 20 which caused the 1970s Cooling Period. From the same stage in that cycle the neutron count flattened out to minimum. That could happen for Solar Cycle 24 but it is more likely to keep rising to minimum as 23 did and thus we can expect a count, at the end, of over 7,000.

Figure 5: F10.7 Flux and Oulu Neutron Count 1964 – 2017
If we conflate the F10.7 flux and the Oulu neutron count inverted, that shows they tracked each other closely up to 2004. Something changed in 2004 and since then the neutron count has been higher relative to its previously established correlation with the F10.7 flux.

---- Figure 8: Solar Polar Field Strength aligned on minimum strength at solar maximum
Solar Cycle 25 started from the blocks looking like it was going to be very weak and fulfill the prophecies of those predicting a Maunder-like experience for the 2020s. Then after a couple of years it caught up with Solar Cycle 24. Looking back over the previous three cycles, the solar polar field strength at this stage, three years before minimum, has been close to the value at minimum. On that assumption, Solar Cycle 25’s amplitude is likely to be two thirds of that of Solar Cycle 24, and thus 60. Further climatic cooling is therefore in store.
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?

Scientists discover a 2-D magnet

Date: June 7, 2017

Source: University of Washington

Summary: For the first time, scientists have discovered magnetism in the 2-D world of monolayers, or materials that are formed by a single atomic layer. The findings demonstrate that magnetic properties can exist even in the 2-D realm -- opening a world of potential applications.

Magnetic materials form the basis of technologies that play increasingly pivotal roles in our lives today, including sensing and hard-disk data storage. But as our innovative dreams conjure wishes for ever-smaller and faster devices, researchers are seeking new magnetic materials that are more compact, more efficient and can be controlled using precise, reliable methods.

A team led by the University of Washington and the Massachusetts Institute of Technology has for the first time discovered magnetism in the 2-D world of monolayers, or materials that are formed by a single atomic layer. The findings, published June 8 in the journal Nature, demonstrate that magnetic properties can exist even in the 2-D realm -- opening a world of potential applications.

"What we have discovered here is an isolated 2-D material with intrinsic magnetism, and the magnetism in the system is highly robust," said Xiaodong Xu, a UW professor of physics and of materials science and engineering, and member of the UW's Clean Energy Institute. "We envision that new information technologies may emerge based on these new 2-D magnets."

Xu and MIT physics professor Pablo Jarillo-Herrero led the international team of scientists who proved that the material -- chromium triiodide, or CrI3 -- has magnetic properties in its monolayer form.

Other groups, including co-author Michael McGuire at the Oak Ridge National Laboratory, had previously shown that CrI3 -- in its multilayered, 3-D, bulk crystal form -- is ferromagnetic. In ferromagnetic materials, the "spins" of constituent electrons, analogous to tiny, subatomic magnets, align in the same direction even without an external magnetic field.

But no 3-D magnetic substance had previously retained its magnetic properties when thinned down to a single atomic sheet. In fact, monolayer materials can demonstrate unique properties not seen in their multilayered, 3-D forms.

Another weekend and one of great uncertainty in GB and probably the EUSSR. In the UK at least, we seem to have returned to the politics of the terrible 1960s. Have a great weekend everyone.

"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."

Antony C. Sutton

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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