Wednesday, 12 July 2017

Fed Day One of Two.

Baltic Dry Index. 830 +10     Brent Crude 48.21

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

It is day one of Fed Chairwoman Yellen’s Congressional testimony in Washington. But don’t expect much in the way of truthfulness and honesty. She isn’t about to say that the “next Lehman gets closer by the day,” nor that the root problem the global financial system faces is that the Great Nixonian Error of fiat money, communist money, August 15, 1971, has far outlived its usefulness, and has long ago perverted capitalism into massive reckless financial speculation, insane derivatives leveraged gambling, theft, fraud, and too big to fail banksterism by the friends of the central banks, especially the Fed.

Instead expect to hear rose tinted platitudes about the future, and at worst, an everything’s under control, no recession in sight, don’t panic the glass is still half full, outpouring of obfuscation and economic nonsense.

Below Asia largely marks time ahead of the Great Washington Game of See no evil, Hear no evil, Speak no evil.

“Give me a one-handed economist, All my economists say, ‘on the one hand...on the other'”

President Harry Truman.

Asian-market gains take a timeout as currencies rise

Published: July 11, 2017 10:30 p.m. ET
Equity markets in Asia largely paused Wednesday after a strong start to the week, with stocks in Japan and Australia underperforming as their countries’ currencies made gains.

In a development in claims that Russia might have meddled in the 2016 U.S. election, Donald Trump’s eldest son released correspondence on Tuesday that showed communication with a Russian government attorney.

“The market is looking for any sign of risk events that can trigger the selloff that they are more positioned for,” said Tareck Horchani, head of Asia-Pacific sales trading at Saxo Capital Markets. “So the dollar sold off on this news.”

But not in a big way. The WSJ Dollar index eased 0.2% Tuesday, giving up a bit of its recent gains, and declined a further 0.1% in Asia on Wednesday.

----U.S. stocks rebounded strongly from intraday lows to finish little changed on Tuesday.
Meanwhile, Hong Kong’s Hang Seng Index HSI, +0.82%   jumped an additional 0.6% amid gains in China-based banks.

Beyond the White House, there is another reason for investors to focus on Washington on Wednesday. Federal Reserve chief Janet Yellen will kick off two days of semiannual testimony on Capitol Hill.

Her testimony will be closely watched for hints about whether a third rate increase of 2017 might come before the central bank is expected to start reducing its $4.5 trillion balance sheet.

Oil was among the other bright spots in Asia on Wednesday. After logging a 1.4% gain overnight, oil futures were up 1.5% more as the American Petroleum Institute said U.S. oil supplies fell by 8.1 million barrels last week. That is nearly triple what analysts expect the government’s reading to say later Wednesday.

Below, yet another leading bankster gets on the record as warning of trouble ahead. When the roof falls in, and the Great Nixonian Error blows up, don’t blame me, I told you so.

“The market can stay irrational longer than you can stay solvent.”

John Maynard Keynes.

Dimon Says QE Unwind May Be More Disruptive Than You Think

By Cindy Roberts
11 July 2017, 12:31 GMT+1 11 July 2017, 14:41 GMT+1
JPMorgan Chase & Co. Chairman Jamie Dimon said the unwinding of central bank bond-buying programs is an unprecedented challenge that may be more disruptive than people think.

“We’ve never have had QE like this before, we’ve never had unwinding like this before,” Dimon said at a conference in Paris Tuesday. “Obviously that should say something to you about the risk that might mean, because we’ve never lived with it before.”

Central banks led by the U.S. Federal Reserve are preparing to reverse massive asset purchases made after the financial crisis as their economies recover and interest rates rise. The Fed alone has seen its bond portfolio swell to $4.5 trillion, an amount its want to reduce without roiling longer-term interest rates. Minutes of the Fed’s June 13-14 meeting indicate policy makers want to begin the balance-sheet process this year.

“When that happens of size or substance, it could be a little more disruptive than people think,” Dimon said. “We act like we know exactly how it’s going to happen and we don’t.”

Cumulatively, the Fed, the European Central Bank and the Bank of Japan bulked up their balance sheets to almost $14 trillion. The unwind of such a large amount of assets has the potential to influence a slew of markets, from stocks and bonds to currencies and even real estate.

In oil news, the great summer churn, churns on, but crude oil prices, despite OPEC’s rig, still seem likely to head lower from excess supply, despite yesterday’s short covering rally.

July 12, 2017 / 3:14 AM / 18 minutes ago

Oil prices jump on falling U.S. fuel inventories, lower production outlook

SINGAPORE (Reuters) - Oil prices rose more than 1.5 percent on Wednesday, extending gains from the previous day as the U.S. government cut its crude production outlook for next year and as fuel inventories plunged.

Brent crude futures LCOc1 were up 76 cents, or 1.6 percent, at $48.28 per barrel by 0429 GMT (5.29 a.m. BST), while U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $45.82 per barrel, up 78 cents, or 1.7 percent.

Both settled about 1.4 percent higher on Tuesday.

"The oil price... climbed sharply overnight as the Energy Information Agency cut its forecast for U.S. production in 2018 and API data showed another large inventory drawdown," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

U.S. crude oil inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, according to the American Petroleum Institute (API), in an indictor that a long-standing fuel supply overhang is starting to draw down.

"Brent and WTI spot staged an impressive... rally... as the American Petroleum Institute reported a massive 8.1 million barrel drawdown in inventories," said Jeffrey Halley, senior market analyst futures brokerage OANDA in Singapore.

"All eyes will now turn to the official U.S. crude inventories number this evening," he added.

Also, the U.S. Energy Information Administration said late on Tuesday that it expected 2018 crude oil output to rise to 9.9 million barrels per day (bpd) from 9.3 million bpd this year, a 570,000 bpd increase. This was down from last month's forecast 680,000 bpd year-over-year increase.

We close for the day with more of the double standards of the west’s reporting on the Middle East and Donald Trump. Anything Russia and the Syrians can do in Aleppo, we can do too in Mosul, says America and the Iraqis. But compare and contrast the west’s reporting of the battles of Aleppo and Mosul. If I didn’t know better, of course, I might erroneously think, someone had an anti-Russian double standard in reporting the Middle East.

On “the Donald,” are the Democrats guilty of what they charge the Republican with, Russian collusion to bring down a President. Politics in America as usual. Where it all ends no one knows, but I bet that it doesn’t end well for anyone.

Tue Jul 11, 2017 | 1:26am EDT

Amnesty says Iraq and allies violated international law in Mosul battle

Amnesty International said on Tuesday it had identified a pattern of attacks by Iraqi forces and the U.S.-led military coalition backing them in the battle for Mosul that violated international humanitarian law and may amount to war crimes.

The rights group said in a report that the Islamic State militant group had flagrantly violated that same law by deliberately putting civilians in harm's way to shield their fighters and impede the advance of Iraqi and coalition forces.

Iraqi Prime Minister Haider al-Abadi declared victory in Mosul on Monday, three years after Islamic State seized the city and made it the stronghold of a "caliphate" they said would take over the world.

A 100,000-strong alliance of Iraqi government units, Kurdish peshmerga fighters and Shi'ite militias had launched the offensive in October, with key air and ground support from the international coalition.

Much of Mosul has been destroyed in grinding street-to-street fighting, thousands of civilians have been killed and nearly a million people fled their homes, according to the United Nations.

Amnesty said Iraqi forces and the coalition carried out a series of unlawful attacks in west Mosul since 
January, relying heavily on Improvised Rocket Assisted Munitions (IRAMs), explosive weapons with crude targeting capabilities that wreaked havoc in densely populated areas.

"Even in attacks that seem to have struck their intended military target, the use of unsuitable weapons or failure to take other necessary precautions resulted in needless loss of civilian lives and in some cases appears to have constituted disproportionate attacks," the report said.

Neither the Iraqi defense ministry nor coalition officials were immediately available to comment on the Amnesty report.

Amnesty also slammed Islamic State for a host of crimes that have been documented previously.

The militants rounded up residents in contested villages and neighborhoods and forced them to move into conflict zones in west Mosul for use as human shields, it said. As clashes neared, they trapped the civilians inside houses without access to food or medical care, it said.

Democrats intentionally used disinformation from Russia to attack Trump, campaign aides

- The Washington Times - Tuesday, July 11, 2017
While the liberal news media hunts for evidence of Trump-Russia collusion, the public record shows that Democrats have willfully used Moscow disinformation to influence the presidential election against Donald Trump and attack his administration.

The disinformation came in the form of a Russian-fed dossier written by former British intelligence agent Christopher Steele. It contains a series of unverified criminal charges against Mr. Trump’s campaign aides, such as coordinating Moscow’s hacking of Democratic Party computers.

Some Democrats have widely circulated the discredited information. Mr. Steele was paid by the Democrat-funded opposition research firm Fusion GPS with money from a Hillary Clinton backer. Fusion GPS distributed the dossier among Democrats and journalists. The information fell into the hands of the FBI, which used it in part to investigate Mr. Trump’s campaign aides.

Mr. Steele makes clear that his unproven charges came almost exclusively from sources linked to the
Kremlin and Russian President Vladimir Putin. He identified his sources as “a senior Russian Foreign Ministry figure,” a former “top level Russian intelligence officer active inside the Kremlin,” a “senior Kremlin official” and a “senior Russian government official.”

The same Democrats who have condemned Russia’s election interference via plying fake news and hacking email servers have quoted freely from the Steele anti-Trump memos derived from creatures of the Kremlin.

In other words, there is public evidence of significant, indirect collusion between Democrats and Russian disinformation, a Trump supporter said.

“If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.”

John Maynard Keynes.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, more on that infamous, unnecessary, deadly London tower block fire. So who really is to blame?
July 11, 2017 Updated 11 hours ago

Investigation into deadly fire may extend to third cladding product

An investigation into the deadly fire at a London public housing apartment tower could last for years and is already the largest ever carried out by London's Metropolitan Police outside of cases involving terrorism.
So far, police have only confirmed 79 deaths at Grenfell Tower from the June 14 fire, but police blamed the lack of clarification on the number of victims due to the severity of damage.

----Beneath these sheets, and fixed to the outside of the walls of the flat, was Celotex RS5000 PIR thermal insulation, from Celotex, a Saint-Gobain company. The investigation is looking at whether the renovation used panels not properly rated for fire resistance on a high rise tower.

British television's Channel 4 aired a report July 10 showing that another product, Kingspan Group plc's Koolterm K15 phenolic panel, was used in some areas of the tower, although the maker of the paneling said it did not know the material was on the building.

Remnants of the material can be seen on damaged parts of the tower, according to the report.

Kingspan told Channel 4 that the non-compliant use of Kooltherm would "never be acceptable to Kingspan. Kingspan is very confident that properly installed and specified our products deliver safe, reliable and energy efficient insulation solutions."

How Many Died in London Fire? Anger Rises as Police Won’t Say for Sure

LONDON — How many people died in the Grenfell Tower blaze?
On Monday, after weeks of criticism, the police for the first time offered an estimate of the number of people who should have been in the building that night — 350 — and said that of that figure, 255 had survived and 14 were not at home, which would imply that 81 people had died.

But the official death toll in London’s deadliest fire since World War II has been repeatedly challenged by survivors and their advocates.

Skeptics, including three volunteer researchers, have been trying to fill the information vacuum: an Iranian biomedical engineering student who lived on the third floor (he estimated at least 123 dead), a demographer who came out of retirement to bring professional techniques to bear and a software engineer in Brussels whose website has emerged as the most credible source (both the demographer and the engineer place the toll in the 90s).

The tragedy, for many, has come to symbolize not only official negligence but also rising inequality, particularly given that the fire occurred in a London borough, Kensington and Chelsea, that is one of the wealthiest localities in Britain.
---- “We are many months from being able to provide a number that we believe accurately represents the total loss of life inside Grenfell Tower,” Detective Chief Superintendent Fiona McCormack said on June 28. “Only after we have completed the search and recovery operation — which will take until the end of the year — and then months afterwards, when experts have carried out the identification process, will we be in a position to tell you who has died.”
---- The London police said they had not heard from anyone who lived in or was inside 23 apartments — nearly a fifth of the total, all on the upper floors, where the fire became much more intense.
Based on the latest census, from 2011, the tower had an average occupancy of 2.35 people per household. The tower had 129 apartments, and it is not known how many were vacant.

The Grenfell Tower fire would not have happened without the EU and global warming

Christopher Booker8 July 2017 • 7:00pm
hen, amid all the millions of words uttered about Grenfell, are we finally going to focus on the real cause of that fire? A comment on my column last week said that “only Booker could get a link between Grenfell, the EU and global warming into a single article”. But that is precisely the point. Without those two factors, the fire could never have happened.

As I had written, all this talk about “cladding” has been looking in wholly the wrong direction. The cause of the conflagration was less to do with the “rainscreen” cladding: it was the combination of 6in of combustible Celotex insulation foam behind it with a void creating a “chimney” effect, sending the flames roaring up the building.

In 1989, after a fire in an 11-storey block in Knowsley, the Building Research Establishment was asked to devise a means that could have prevented it.

Would This London High-Rise Pass Muster in New York? Short Answer: No

Hundreds of families were evacuated this week from Dorney Tower, a 23-story London apartment building, after the authorities found unsafe features in it and nearly a hundred other buildings after the deadly Grenfell Tower blaze.

Would the building’s construction have passed safety regulations in New York City? Not even close.

Here are the shortfalls in Dorney Tower that never would have passed muster in New York, which has much more stringent building codes and safety checks, according to city safety officials.

Dorney Tower, completed in 1967 and refurbished in 2008, shares several problematic features with Grenfell Tower, which was encased in a flammable exterior covering, known as cladding, that contributed to the fire’s rapid spread. The cladding on the tower, which was added in 2008, failed safety tests this week.

In New York City, cladding must be tested and found to be fire resistant before it can ever be put on a building, said Thomas Fariello, first deputy commissioner for the city’s Department of Buildings, which enforces building codes.

The requirement dates to 1968, and has been made more stringent since. Though retrofitted buildings may be held to different standards, new buildings are inspected upon completion to make sure that cladding was installed properly and that it matches the material that was tested. Facades on buildings taller than 75 feet are inspected every five years.
“The siding material in this city, with that fire testing, is not going to be able to go up in flames like that,” Mr. Fariello said.
---- Dorney Tower, like Grenfell Tower, has only one flight of stairs available for residents if they have to evacuate the building.

In New York, any building taller than 75 feet must have at least two stairwells encased in concrete to provide a safe escape route.

“It’s a basic thing of being able to get people out of the building,” said Gus Sirakis, an assistant commissioner at the building department. A backup route is needed in case one of the stairways is inaccessible or being used by firefighters, he said.

New York buildings over 420 feet must have a third flight of stairs.

The single escape route out of Dorney Tower has long worried residents.

---- London fire officials found that Dorney Tower and other buildings in the same complex lacked working fire doors, and in some cases were missing them altogether. Without working fire doors to block a fire, flames can spread quickly from one part of a building to another.

New York City officials said that fire doors in all high rises must be self-closing and self-latching, and noted that they were regularly assessed.

“If our inspectors are called to the building for any reason, that is something we will inspect for,” Mr. Fariello said.

Experts say at least part of the reason Britain has less-strict fire codes is because business-friendly governments have pared back regulations.

A 2005 measure ended a requirement for government inspectors to certify that buildings had met fire codes and shifted to a system of self-policing.
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?

Siemens and AES Join Forces to Create Fluence, a New Global Energy Storage Technology Company

Jul 11, 2017
MUNICH & ARLINGTON, Va. --(BUSINESS WIRE)-- Siemens AG (“Siemens”) and The AES Corporation (NYSE: AES , “AES”) announced today their agreement to form a new global energy storage technology and services company under the name Fluence. The joint venture will bring together AES’ ten years of industry-defining experience deploying energy storage in seven countries with over a century of Siemens’ energy technology leadership and its global sales presence in more than 160 countries. Combining the proven AES Advancion and Siemens Siestorage energy storage platforms with expanded services, Fluence will offer customers a wider variety of options to meet the challenges of a rapidly transforming energy landscape. The company will empower customers around the world to better navigate the fragmented but rapidly growing energy storage sector and meet their pressing needs for scalable, flexible, and cost-competitive energy storage solutions.

Siemens and AES will have joint control of the company with each holding a 50 percent stake. Fluence’s global headquarters will be located in the Washington, DC area with additional offices located in Erlangen, Germany and select cities worldwide. The transaction is expected to close in the fourth quarter of calendar year 2017, subject to regulatory and other approvals.

Fluence will operate independently of its parent companies, combining the robust capabilities and expertise from Siemens’ battery-based energy storage solutions group under the Energy Management division with AES’ subsidiary, AES Energy Storage. AES and Siemens are currently ranked among the leading energy storage integrators worldwide by Navigant Research . Together, the two companies have deployed or have been awarded 48 projects totaling 463 MW of battery-based energy storage across 13 countries, including the world’s largest lithium-ion battery-based energy storage project near San Diego, California .

“As the energy storage market expands, customers face the challenge of finding a trusted technology partner with an appropriate portfolio and a profound knowledge of the power sector. Fluence will fill this major gap in the market. With the global reach of an experienced international sales force as well as Siemens’ leading technology platform Siestorage at its disposal, Fluence will be perfectly equipped to serve this very interesting market,” said Ralf Christian , CEO of Siemens’ Energy Management Division .

“Over the past ten years, AES has become a global leader in utility-scale, battery-based energy storage. Today AES’ Advancion platform is present in seven countries with more than 200 MW of energy storage deployed, including the largest installed system of its kind in the world,” said Andrés Gluski, AES President and CEO. “Partnering with Siemens to form Fluence will offer both large and small customers the full gamut of proven, state-of-the-art energy storage solutions in over 160 countries. This will accelerate the integration of renewables into the energy network of tomorrow.”

The grid-connected energy storage sector is expected to expand from a total installed capacity of three gigawatts (GW) at the end of 2016 to 28 GW by 2022 according to IHS Markit , which is equivalent to the power used by 18.6 million households. By incorporating energy storage across the electric power network, utilities and communities around the world will optimize their infrastructure investments, increase network flexibility and resiliency, and accelerate cost-effective integration of renewable electricity generation.

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

The monthly Coppock Indicators finished June

DJIA: 21,350 +196 Up. NASDAQ:  6,140 +235 Up. SP500: 2,423 +166 Up.

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