Baltic Dry Index. 878 -22 Brent Crude 50.31
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.
Prime Minister May, with apologies to Benjamin
Disraeli
We open with a new
diktat from Berlin Germany, the new Rome of the rump-EU’s new German Empire.
There will be NO euro-zone debt after Brexit, (as in Ne, Nee, Nein, Nei, Nem,
Non, Nuddu, Nie, Noe, Na, Nej, Ei, Ochi, for the continentals,) no matter what
Juncker and the European Commission think. Germany is not going on the hook for
Europe’s multiple deadbeats and wastrels. Juncker shot down yet again, by his
“friends” in Berlin.
But after Mrs Merkel
all but declared war on America in a Munich beer tent on Sunday, by Wednesday
this didn’t seem to be a very good idea to Germany’s Foreign Minister, all too
aware of what happened the last time the unwise misadventure was tried. However
Martin Schulz, the SDP man who would like to
be the next Mrs Merkel come September, remained fully signed up to Chancellor
Merkel’s declaring war on Donald Trump’s America.
“In Rome,
Italian Prime Minister Paolo Gentiloni said he agreed with Merkel that Europe
needed to forge its own path.” Solid
support indeed from an old, if unreliable, German ally. From London, what is it
with Italy’s love of forgery?
Below, Germany flexes
its muscle and back peddles furiously at the same time.
“When it becomes serious, you have to lie.”
Jean-Claude Juncker. Failed former Luxembourg P.M.,
serial liar, president of the European Commission. Scotch
connoisseur.
Germany rejects common euro zone debt after Commission paper
Germany said on Wednesday it opposed any plans for the euro zone to
issue collective debt, when asked about a European Commission paper aimed at
triggering debate on a joint budget and debt and deeper EU integration around
the single currency after Brexit.
"For us, at time of Brexit, it is important that the questions
about developments in the currency union are seen in the framework of
developments in the EU as a whole," said a finance ministry spokeswoman
when asked about the paper.
"We want no divisions between 'ins' and 'outs' - that is the euro
members and other states," she said, adding Germany is working with France
on questions of the future of EU.
She said Germany would look at the Commission's proposals and it was too
early to go into individual points but Germany's view was that Europe had to
implement existing rules to boost credibility before embarking on further
integration.
"Member states must ... create stability and growth in the euro
zone through structural reforms and cut debt," she said, adding
diminishing risk in the financial market sector was needed "before we talk
about further sharing of responsibility".
"On the question of the mutualization of debt, it will not surprise
you that the German government's view of rejecting euro bonds, common debt, has
not changed."
More
Merkel, minister stress U.S. ties after critical Trump tweet
U.S. President Donald Trump called Germany's trade and spending policies
"very bad" on Tuesday, intensifying a row between the longtime allies
and immediately earning himself the moniker "destroyer of Western
values" from a leading German politician.
As the war of words threatened to spin out of control, Merkel and other
senior German politicians stressed the importance of Germany's Atlantic ties,
with Foreign Minister Sigmar Gabriel suggesting the spat was just a rough
patch.
Trump took to Twitter early in the day in the United States to attack
Germany, a day after Chancellor Angela Merkel ramped up her doubts about the
reliability of Washington as an ally.
"We have a MASSIVE trade deficit with Germany, plus they pay FAR
LESS than they should on NATO & military. Very bad for U.S. This will
change," Trump tweeted.
The tit-for-tat dispute escalated rapidly after Trump, at back-to-back
summits last week, criticized major NATO allies over their military spending
and refused to endorse a global climate change accord.
---- Those comments, which caused shock in Washington, vented Europe's frustration with Trump on climate policy in particular. And while German politicians sided with Merkel, Foreign Minister Sigmar Gabriel signaled that it was time for cooler heads to prevail.
"The United States are older and bigger than the current
conflict," he said, adding that relations would improve. "It is
inappropriate that we are now communicating with each other between a beer tent
and Twitter," he said in Berlin.
---- But Martin Schulz, leader of Gabriel's center-left Social Democrats, was less emollient earlier in the day when he told reporters Trump was "the destroyer of all Western values". He added that the U.S. president was undermining the peaceful cooperation of nations based on mutual respect and tolerance.
More
Meanwhile in
President Trump’s America, the economy is doing just fine, says Morgan Stanley’s
CEO. The Fed’s San Francisco President thinks its doing even better than that,
as in four interest rate hikes this year rather than three, with the next hike
expected this month.
Gorman Says Dirty Little Secret Is U.S. Economy Doing Fine
Enda Curran and Tom Mackenzie
Morgan Stanley Chief Executive Officer James Gorman said he’s very encouraged
by the performance of the U.S. economy, even amid the need for progress on
some of the Trump administration’s legislative proposals.
"The dirty little secret here is the U.S. economy is doing just
fine," Gorman said in an interview with Bloomberg Television in Beijing.
He pointed to falling unemployment, a recovery in house prices, stabilizing
local and state government deficits and some signs of quickening inflation.
Gorman
made the remarks as Federal Reserve Bank of San Francisco President John
Williams told reporters in Seoul that the U.S. economy is doing very well and
remains on a very good growth track. While the base case remains for three
interest rate hikes this year, there’s scope for the Fed to raise four times in 2017 if the economy
strengthens, Williams said.
----"If you look at it objectively, the U.S. economy is doing fine, not great, but fine," Gorman said.
He described President Donald Trump’s policy agenda as "very
bold" and said it wasn’t surprising that the administration had been
experiencing "tough sledding." Still, as markets adopt a wait-and-see
approach, the administration will need to deliver on some of its agenda, Gorman
said.
"We need progress on some of these legislative programs," he
said.
Williams played down expectations for any major fiscal stimulus in 2017:
“I don’t expect any changes in fiscal policy to come that will affect the U.S.
economy this year in any meaningful way.” The next big step for the Fed will be
to bring down the size of its balance sheet, he said, with that process
expected to start later this year.
More
We close out the day
with struggling commodities. Oil’s in trouble again.
Once Costly Deep-Sea Oil Turns Cheap, to OPEC's Dismay
by Serene Cheong, Sharon Cho, and Dan Murtaugh
30 May 2017, 22:00 GMT+1 31 May 2017, 11:20 GMT+1
Reports of deep-sea drilling’s demise in a world of sub-$100 oil may
have been greatly exaggerated, much to OPEC’s dismay.
Pumping crude from seabeds thousands of feet below water is turning
cheaper as producers streamline operations and prioritize drilling in core
wells, according to Wood Mackenzie Ltd. That means oil at $50 a barrel
could sustain some of these projects by next year, down from an average
break-even price of about $62 in the first quarter and $75 in 2014, the energy
consultancy estimates.
The tumbling costs present another challenge for the Organization of
Petroleum Exporting Countries, which is currently curbing output to shrink a
glut. In 2014, when the U.S. shale boom sparked oil’s crash from above $100 a
barrel, the group embarked on a different strategy of pumping at will to defend
market share and throttle high-cost projects. Ali Al-Naimi, the former
energy minister of OPEC member Saudi Arabia, said in February 2016 that
such producers need to either “lower costs, borrow cash or liquidate.”
“There is life in deep-water yet,” said Angus Rodger, director of
upstream Asia-Pacific research at Wood Mackenzie in Singapore. “When oil prices
fell, many projects were deferred, but the ones that were deferred first were
deep-water because the overall break-evens were highest. Now in 2017, we’re
seeing signs that the best ones are coming back.”
----Warnings
from OPEC of a looming shortage are “overstated and misleading,” Citigroup Inc.
said in a report earlier this
month. The revolution in unconventional supplies like shale is “unstoppable”
unless prices fall below $40 a barrel, and deep-water output could grow by more
than 1 million barrels a day by 2022, according to the bank.
This Is What the Demise of Oil Looks Like
By Jessica Shankleman and Hayley Warren
May 31, 2017
From giant companies like Exxon Mobil Corp. to OPEC members such as Saudi
Arabia, oil producers say their industry will enjoy decades of growth as they
feed the energy needs of the world’s expanding middle classes. But what if
they’re wrong? There’s a host of reasons to think they might be. Here’s what
happens when you test their central assumptions.The International Energy Agency sees oil demand rising more than 10 percent, to 103.5 million barrels a day by 2040, while companies predict even faster growth.
But forecasters don’t always anticipate seismic shifts in technology and policy that could slow demand growth, or even eliminate it altogether in some parts of the economy. Even small changes could add up. Advances in vehicle efficiency, a rise in electric cars, tighter emissions standards and shifts to other fuel sources would result in oil demand much lower than the industry is banking on.
“We cannot even begin to comprehend the transformation in the mobility arena that is coming at us,” Jules Kortenhorst, chief executive officer of the Rocky Mountain Institute, based in Boulder, Colorado, said in an interview. “It’s not a question if it will come, it’s only a question of what the timing of the arrival will be.”
Technological Change
About 60 percent of oil is used in transportation, which is also where the biggest technological changes are emerging.All over the world, governments concerned about climate change or air pollution are pushing tighter fuel-efficiency standards, or creating low-emission zones for cars and even ships. The exposure of cheating on diesel-emissions test by Volkswagen AG, and similar accusations against other automakers has added to the pressure on regulators to toughen standards.
The proliferation of big data analysis is set to dramatically curb fuel waste, according to the Rocky Mountain Institute. Aircraft being produced today by companies like General Electric Co. can already detect small changes in engine performance, meaning engineers can be sent out to fix any issues and keep them operating at peak efficiency. Smarter navigation technologies allow truck drivers to reduce the distances they travel, while improvements to aerodynamics will enable vehicles to travel farther on less fuel.
These and many other technologies would reduce emissions, while also save money, especially in a world where the International Energy Agency sees oil prices rising from about $50 a barrel now to $80 at the end of the decade, and to above $100 by 2030.
All told, efficiency improvements could eliminate the need for about 11.6 million barrels a day of supply, according to the IEA. That’s about six supertankers of oil every day. Here’s what the future looks like with efficiency gains:
Probably the most noticeable shift in transport will be the electric car. This won’t just be about cars with batteries, but part of the wider trend led by companies including Uber Technologies Inc. and Lyft Inc. toward transportation as an on-demand service in driverless vehicles summoned from your smartphone, according to RethinkX, a think tank based in San Fransisco.
A move away from the current norm of individual ownership of traditional petroleum-powered vehicles toward the sharing of high-tech, possibly driverless cars would have far-reaching economic and social consequences, particularly because they’re being pushed hardest in the fastest-growing major economies. China’s latest auto industry plan sees all new vehicle growth coming from electrics. India plans to sell only electric cars by the end of the next decade.
“In a nutshell, the industry is going to evolve more in the next 10 years than in the last century,” said Gilles Normand, head of electric vehicles for Renault SA, in an interview.
More
“We all
know what to do, but we don’t know how to get re-elected once we have done it.”
Jean-Claude Juncker. Failed Luxembourg Prime Minister and
ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission
President. Scotch connoisseur.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, it’s only by the grace of God that most of
us are still here.
If anything can go
wrong, it will
Murphy’s Law.
A Nuclear Disaster Could Unfold Like That Oscars Fiasco
Remember that epic
screw-up at the Academy Awards in February? Nuclear commanders might easily
make the same mistakes. Uh-oh.
by Faye Flam
30 May 2017, 19:00 GMT+1
Talk with experts on North Korea’s nuclear arsenal, and it soon becomes clear
that the biggest threat Americans face isn’t an intentional act of evil,
but a confluence of stupidity and error. After all, the most frightening close
calls during the Cold War started with trivial mistakes -- a dropped socket
from a socket wrench, for example, or a training tape put in the wrong
computer.With nine missile tests just this year, North Korea is quickly advancing the range of its nuclear weapons. The distance record goes to a missile called Hwasong-12, which was launched on May 14. It traveled about 500 miles, but on a steep trajectory that demonstrated the power to have gone more than 2,400 miles.
Some experts, such as Jeffrey Lewis of the James Martin Center for Nonproliferation Studies in Monterey, California, say that missile had an innovative design and showed evidence of real engineering competence, while others, such as German aerospace engineer Markus Schiller, aren’t so sure. Experts also disagree about how close North Korea is to being able to strike San Francisco or Washington, or whether the United States should negotiate a deal to prevent this from happening. But they do tend to agree that the country’s leader, Kim Jong-un, is unlikely to launch an unprovoked attack, since the retaliation would obliterate his country.
The situation is, nevertheless, dangerous, given the possibility of error and misjudgment. “I cannot imagine any circumstance that would lead Kim Jong-un to launch an unprovoked nuclear attack on anyone,” Stanford physicist Siegfried Hecker said in a recent interview published in the Bulletin of Atomic Scientists. But, he went on, “We can’t rule out a miscalculation or a desperate response to a crisis.”
Physicist David Wright, co-director of the Global Security Program at the Union of Concerned Scientists, has made a similar point: “The biggest threat here seems to be to that you’d get to the point where you’d have a crisis -- where people do things and other people misunderstand their intentions.”
Former Rand Corporation nuclear strategist Daniel Ellsberg has spent years thinking about how to avoid this sort of situation. While he’s best-known for leaking the Vietnam War documents known as the Pentagon Papers, he says his current focus is preventing nuclear war. His book “The Doomsday Machine: Confessions of a Nuclear War Planner” will be released in December.
---- Similarly, the odds were low back in 1980 that an airman working at a missile base in Damascus, Arkansas, would drop a socket from a wrench at just the wrong time so that it fell 80 feet and pierced the engine of a Titan II nuclear missile. A subsequent explosion killed another airman and hurled a nuclear warhead out of its underground bunker; it landed on a nearby roadside. Fortunately, it didn’t detonate.
That close call formed the centerpiece of Eric Schlosser’s book “Command and Control,” recently made into a documentary. Schlosser summarized other close calls and present dangers in a New Yorker story appearing earlier this year. We’re still here because people with limited time and information made good decisions, but, as Ellsberg observed, the Academy Awards fiasco shows how easily it could go otherwise.
---- The Oscars mix-up
also highlighted the element of time, he said. The problem wasn’t just
that the wrong movie was announced for best picture, but that it took the
people who screwed up so long to do anything about it. The second producer
for the wrong movie, “La La Land,” was already starting his celebratory speech
before anyone onstage was alerted that something was wrong.
People aren’t necessarily good at doing the right thing in short windows of
time. But the U.S. and Russian nuclear arsenals are set up so that world
leaders may have as little as six minutes to decide whether a threat is real
and launch a retaliatory strike. And false alarms are a real threat. In 1979,
for example, someone put a training tape simulating a Soviet attack in the
wrong computer at the U.S. Strategic Air Command’s headquarters in Colorado.
Missile crews in the Midwest were alerted of a massive Soviet attack, and had
minutes to decide whether to assume it was real and attempt to minimize the
damage with retaliatory strikes.Similarly, in 1983, the Soviets got a signal from their satellites that the U.S. had aimed five nuclear missiles their way. It turned out to be the result of sun reflecting off clouds. And in 1995, the Russian early-detection system was mistakenly triggered again -- this time by a science experiment launched from an island off Norway.
More
It is impossible to make
anything foolproof because fools are so ingenious.
Murphy’s Theorum.
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?
New method of characterizing graphene
Date:
May 30, 2017
Source:
University of Basel
Summary:
Scientists have developed a new method of characterizing graphene's properties
without applying disruptive electrical contacts, allowing them to investigate
both the resistance and quantum capacitance of graphene and other
two-dimensional materials
Scientists have developed a new method of characterizing graphene's
properties without applying disruptive electrical contacts, allowing them to
investigate both the resistance and quantum capacitance of graphene and other
two-dimensional materials. Researchers from the Swiss Nanoscience Institute and
the University of Basel's Department of Physics reported their findings in the
journal Physical Review Applied.
Graphene consists of a single layer of carbon atoms. It is transparent,
harder than diamond and stronger than steel, yet flexible, and a significantly
better conductor of electricity than copper. Since graphene was first isolated
in 2004, scientists across the world have been researching its properties and
the possible applications for the ultrathin material. Other two-dimensional
materials with similarly promising fields of application also exist; however,
little research has been carried out into their electronic structures.
No need for electrical contacts
Electrical contacts are usually used to characterize the electronic
properties of graphene and other two-dimensional materials. However, these can
significantly alter the materials' properties. Professor Christian
Schönenberger's team from the Swiss Nanoscience Institute and the University of
Basel's Department of Physics has now developed a new method of investigating
these properties without applying contacts.
To do this, the scientists embedded graphene in the isolator boron
nitride, placed it on a superconductor and coupled it with a microwave resonator.
Both the electrical resistance and the quantum capacitance of the graphene
affect the quality factor and resonance frequency of the resonator. Although
these signals are very weak, they can be captured using superconducting
resonators.
By comparing the microwave characteristics of resonators with and
without encapsulated graphene, the scientists can determine both the electrical
resistance and quantum capacitance. "These parameters are important in the
determination of graphene's exact properties and in the identification of
limiting factors for its application," explains Simon Zihlmann, a PhD
student in Schönenberger's group.
More
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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