Baltic Dry Index. 1356 -35 Brent Crude 56.53
'You
just never know. That unpredictability is the great thing about life. You
change. The world changes. You live in a country where we are still blessed
with enormous opportunity. Leave yourself open to the world of possibility. You
have the ambition, you have the smarts and you have the toughness. So, turn the
page on your biography - you have just started a new chapter in your lives.'
Lloyd
Blankfein, “Mr. Goldman Sacks,” CEO of
Goldman Sachs unintentionally backs Catalunya in a US speech to graduates, mid
2016.
On Sunday, amid
scenes of incredible Spanish ineptitude and violence, Catalans turned out and
voted to declare independence from Spain. After the Spanish government’s attack
on Catalonia’s voters and population, it’s almost impossible to see any way for
either of the parties to row back from what just happened. Spain’s already
wobbly economy and failing budget, will likely now suffer a serious economic
hit. For a country that’s already “borrowed” and spent Spain’s accumulated pensions
surplus leading pensions into deficit, Sunday’s vote was dire indeed.
But how will the EU
apparatchiks and bureaucrats deal with this new entirely Spanish made crisis?
Will they back the principle of democracy, or Spanish repression? Who knows? Is
that what Juncker’s proposed European Army is for, suppression? If Catalonia
leaves Spain will it be treated in a similar way to when Slovakia and the Czech
Republic split? Who knows. What happens to Spanish bonds? Are they still eligible
for ECB support? Who knows? How safe is Spain after losing 20 percent of its
GDP and taxes? Who knows. Does the EUSSR even have a plan or is it like Brexit clueless?
After Catalonia, who’s
next? This is a European story with many more chapters yet to run. Euros
anyone?
October 1, 2017 / 5:02 AM /
Updated an hour ago
Catalan leader opens door to secession from Spain after vote
BARCELONA (Reuters) - Catalonia’s regional leader opened the door to a
unilateral declaration of independence from Spain on Sunday after voters defied
a violent police crackdown and, according to regional officials, voted 90
percent in favour of breaking away.
Despite Spanish police using batons and rubber bullets to disrupt the
banned referendum, which was declared unconstitutional by Madrid, the Catalan
government said 2.26 million people had cast ballots, a turnout of about 42
percent.
Carles Puigdemont’s comments followed a television address by Spanish
Prime Minister Mariano Rajoy who ruled out independence and accused separatists
of trying to “blackmail ... the whole nation”. He offered all-party talks on
the region’s future.
Catalan officials say more than 800 people were injured in clashes with
Spanish riot police during the referendum, which has pitched the country into
its deepest constitutional crisis in decades and deepened a rift between Madrid
and Barcelona.
“On this day of hope and suffering, Catalonia’s citizens have earned the
right to have an independent state in the form of a republic,” Puigdemont said
in a televised address.
“My government, in the next few days will send the results of today’s
vote to the Catalan Parliament, where the sovereignty of our people lies, so
that it can act in accordance with the law of the referendum,” he said.
The law of the referendum, deemed unconstitutional by Madrid, foresees a
unilateral declaration of independence by the Catalan parliament if the
majority votes to leave Spain. The law does not set a minimum turnout for the
outcome to be valid.
The results announced early on Monday were not a surprise, given that
many unionists were not expected to turn out to vote.
Puigdemont announces that will declare independence in the coming days
90% of voters with more than 2.2 million votes, according to the Government
Sánchez calls on the Government to open a negotiation with the Generalitat
Catalonia
In other “better”news,
Asia geared up in September for the coming Christmas retailing season. But with
all that’s now going on politically, will it be retailing as usual this year?
Probably might be getting replaced with possibly.
October 2, 2017 / 6:21 AM /
Updated 9 minutes ago
Asian factories rev up in September ahead of year-end spending spree
SINGAPORE (Reuters) - Factories in Asia’s largest economies cranked up
activity in September as a synchronized upswing in growth globally pointed to
solid consumption of manufactured goods heading into the lucrative end-of-year
shopping season.
However, pockets of weakness in regional economies are likely to keep
Asian central banks slanted toward more accommodative monetary policy, even as
their Western counterparts move to scale back stimulus.
China’s central bank on Saturday cut the amount of cash that some banks
must hold as reserves for the first time since February 2016 in a bid to
encourage more lending to struggling smaller firms and energize its lackluster
private sector.
The world’s second-largest economy has defied expectations for a
slowdown this year, growing at a strong clip in the first half thanks to a
construction boom. Beijing’s latest easing comes ahead of a key party gathering
this month.
“It’s a solid backdrop for manufacturing in the region as we head toward
the big shopping season,” said Rob Carnell, Asia’s head of research at ING.
That sentiment was backed by an official Purchasing Managers’ Index from
China’s vast manufacturing sector, which showed activity last month grew at the
fastest clip since 2012 on solid demand.
But cost pressures from high raw materials prices and continued
underperformance of smaller firms mean some manufacturers are still struggling,
which was reflected in a separate private survey of Chinese factories showing
growth slowed in September.
In Japan, factory activity grew the fastest in four months, thanks to
robust exports growth and underpinned improving economic momentum even though
inflation remained tepid. Meanwhile, a closely watched Bank of Japan survey
showed big manufacturers have more confidence in business conditions than they
have had for a decade, thanks to a weaker yen and robust global demand.
In South Korea, manufacturing activity expanded at the fastest pace in
almost two years.
More
In other “worse”
news, President Trump’s proposal to cut American “Danegeld,” starts yet another
panic in Europe. Below, the EUSSR shows itself up for just what a paper tiger
it is. Christos Stylianides, the European Union
commissioner for crisis management, proudly states just how the EU helped America
after all the hurricanes. The best the EUSSR could do was to share some damage
pictures. How the EUSSR helps out.
Dodgy Dave Cameron: "Juncker, I
haven't tasted food for 3 days."
Juncker: "Well, I wouldn't worry about it... it still tastes the
same."
How the EU helps out. With apologies to
Curly, Moe, and Larry.
Trump Push to Cut U.S. Aid Prompts EU Geopolitical-Risk Warning
By Nikos Chrysoloras and Jonathan Stearns
Europe’s disaster-relief chief leans back in a chair in his Brussels
office and fires off a warning: President Donald Trump’s plan to slash U.S.
international aid could undermine global geopolitical stability -- and threaten
America’s interests.
The admonition by Christos Stylianides, the European Union
commissioner for crisis management, highlights the extent to which Europe is
grappling with Trump’s “America First” policy. Trump has already shaken the
trans-Atlantic security order, international trade relations and the worldwide
fight against climate change.
For Stylianides, the biggest challenge is development in Africa.
Without America’s active involvement, he says, Europe risks having a
neighboring continent wracked by political instability, economic shocks and
migratory flows, with dire consequences for all, including the U.S.
“A global response is needed, ” Stylianides, a Cypriot who bears more than a passing resemblance to the late Egyptian film actor Omar Sharif, said in the interview in his 11th-floor office. “We can’t do it alone. Geopolitically, when Europe confronts a problem that’s beyond its abilities, the U.S. has an interest.”
To highlight an increasingly interdependent world, he points to how the EU assisted the U.S. during the devastating hurricanes that hit Texas and Florida by sharing images from a European earth-observation program. The satellite service, known as Copernicus, helped the U.S. Federal Emergency Management Agency map the hurricanes’ destruction.
“This is tangible European solidarity,” Stylianides said. “Nobody can manage these kinds of crises alone. Everywhere we need to act together.”
More
Every
generation imagines itself to be more intelligent than the one that went before
it, and wiser than the one that comes after it.
George
Orwell.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today the coming global retirement crisis in the
west. Sadly for all western countries,
there is no magic money-tree solution, no matter how hard populist and
communist parties try to sell that lie to the voters. We have reached the
downside of the Great Nixonian Error of fiat money, where the benefits of fiat
money were all front loaded everywhere, and long ago dissipated in louche
lifestyle, bribes to the voters and special interests, wars, and chronic
underfunding of public and private pensions.
Below, John Mauldin, one of America’s best analysts
covers the looming pensions disaster in Europe. The whole article is well worth
the read.
Jean-Claude
Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of
Finance Ministers. Confessed liar. European Commission President. Scotch
connoisseur.
Global Retirement Reality
By John Mauldin
September 30, 2017
Today
we’ll continue to size up the bull market in governmental promises. As we do
so, keep an old trader’s slogan in mind: “That which cannot go on forever,
won’t.” Or we could say it differently: An unsustainable trend must eventually
stop.
Lately I have focused on the trend in US public pension funds, many of which
are woefully underfunded and will never be able to pay workers the promised
benefits, at least without dumping a huge and unwelcome bill on taxpayers. And
since taxpayers are generally voters, it’s not at all clear they will pay that
bill.Readers outside the US might have felt smug and safe reading those stories. There go those Americans again, spending wildly beyond their means. You are correct that, generally speaking, we are not exactly the thriftiest people on Earth. However, if you live outside the US, your country may be more like ours than you think. Today we’ll look at some data that will show you what I mean. This week the spotlight will be on Europe.
Global Shortfall
I wrote a letter last June titled “Can You Afford to Reach 100?” Your answer may well be “Yes;” but, if so, you are one of the few. The World Economic Forum study I cited in that letter looked at six developed countries (the US, UK, Netherlands, Japan, Australia, and Canada) and two emerging markets (China and India) and found that by 2050 these countries will face a total savings shortfall of $400 trillion. That’s how much more is needed to ensure that future retirees will receive 70% of their working income. This staggering figure doesn’t even include most of Europe.
This problem exists in large part because of the projected enormous
increase in median life expectancies. Reaching age 100 is already less remarkable
than it used to be. That trend will continue. Better yet, I think we will also
be healthier at advanced ages than people are now. Could 80 be the new 50? We’d
better hope so, because the math is pretty bleak if we assume people will stop
working at age 65–70 and then live another quarter-century or more.
That said, I think we’ll see a great deal of national variation in these
trends. The $400 trillion gap is the shortfall in government, employer, and
individual savings. The proportions among the three vary a great deal. Some
countries have robust government-provided retirement plans; others depend more
on employer and individual contributions. In the aggregate, though, the money
just isn’t there. Nor will it magically appear just when it’s needed.
----This problem exists in large part because of the projected enormous increase in median life expectancies. Reaching age 100 is already less remarkable than it used to be. That trend will continue. Better yet, I think we will also be healthier at advanced ages than people are now. Could 80 be the new 50? We’d better hope so, because the math is pretty bleak if we assume people will stop working at age 65–70 and then live another quarter-century or more.
That said, I think we’ll see a great deal of national variation in these
trends. The $400 trillion gap is the shortfall in government, employer, and
individual savings. The proportions among the three vary a great deal. Some
countries have robust government-provided retirement plans; others depend more
on employer and individual contributions. In the aggregate, though, the money
just isn’t there. Nor will it magically appear just when it’s needed.
----Let’s look at a few other countries that are not much better off.
UK Time Bomb
The WEF study shows that the United Kingdom presently has a $4 trillion retirement savings shortfall, which is projected to rise 4% a year and reach $33 trillion by 2050. This in a country whose total GDP is $3 trillion. That means the shortfall is already bigger than the entire economy, and even if inflation is modest, the situation is going to get worse. Further, these figures are based mostly on calculations made before the UK decided to leave the European Union. Brexit is a major economic realignment that could certainly change the retirement outlook. Whether it would change it for better or worse, we don’t yet know.
A 2015 OECD study (mentioned here) found that across the developed world, workers could, on average, expect governmental programs to replace 63% of their working-age incomes. Not so bad. But in the UK that figure is only 38%, the lowest in all OECD countries. This means UK workers must either build larger personal savings or severely tighten their belts when they retire. Working past retirement age is another choice, but it has broader economic effects – freezing younger workers out of the job market, for instance.
UK employer-based savings plans aren’t on particularly sound footing, either. According to the government’s Pension Protection Fund, some 72.2% of the country’s private-sector defined-benefit plans are in deficit, and the shortfalls total £257.9 billion. Government liabilities for pensions went from being well-funded in 2007 to having a shortfall 10 years later of £384 billion (~$500 billion). Of course, that figure is now out of date because, just a few months later, it’s now £408 billion – that’s how fast these unfunded liabilities are growing. Again, that’s a rather tidy sum for a $3 trillion economy to handle.
----Turning next to the Green Isle, 80% of
the Irish who have pensions don’t think they will have sufficient income in
retirement, and 47% don’t even have pensions. I think you would find similar statistics
throughout much of Europe.
A report this summer from the International Longevity Centre suggested that younger workers in the UK need to save 18% of their annual earnings in order to have an “adequate” retirement income – which it defines as less than today’s retirees enjoy. But no such thing will happen, so the UK is heading toward a retirement implosion that could be at least as damaging as the US’s.
----Switzerland and the UK have mandatory retirement pre-funding with private management and modest public safety nets, as do Denmark, the Netherlands, Sweden, Poland, and Hungary. Not that all of these countries don’t have problems, but even with their problems, these European nations are far better off than some others.
----The European nations noted above have nowhere near the crisis potential that the next group does: France, Belgium, Germany, Austria, and Spain are all pay-as-you-go countries (PAYG). That means they have nothing saved in the public coffers for future pension obligations, and the money has to come out of the general budget each year. The crisis for these countries is quite predictable, because the number of retirees is growing even as the number of workers paying into the national coffers is falling. There is a sad shortfall of babies being born in these countries, making the demographic reality even more difficult. Let’s look at some details.
Spain was hit hard in the financial crisis but has bounced back more vigorously than some of its Mediterranean peers did, such as Greece. That’s also true of its national pension plan, which actually had a surplus until recently. Unfortunately, the government chose to “borrow” some of that surplus for other purposes, and it will soon turn into a sizable deficit.
Just as in the US, Spain’s program is called Social Security, but in fact it is neither social nor secure. Both the US and Spanish governments have raided supposedly sacrosanct retirement schemes, and both allow their governments to use those savings for whatever the political winds favor.
The Spanish reserve fund at one time had €66 billion and is now estimated to be completely depleted by the end of this year or early in 2018. The cause? There are 1.1 million more pensioners than there were just 10 years ago. And as the Baby Boom generation retires, there will be even more pensioners and fewer workers to support them. A 25% unemployment rate among younger workers doesn’t help contributions to the system, either.
More
http://www.mauldineconomics.com/frontlinethoughts/global-retirement-reality
"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"
Romano Prodi, former President of the European Commission, former Italy Prime Minister.
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?
Perovskite solar cells reach record long-term stability, efficiency over 20 percent
Date:
September 28, 2017
Source:
Ecole Polytechnique Fédérale de Lausanne
Summary:
Scientists have greatly improved the operational stability of perovskite solar
cells by introducing cuprous thiocyanate protected by a thin layer of reduced
graphene oxide. Devices lost less than 5 percent performance when subjected to
a crucial accelerated aging test during which they were exposed for more than
1,000 hours to full sunlight at 60°C.
Perovskite solar cells (PSCs) can offer high light-conversion efficiency
with low manufacturing costs. But to be commercially viable, perovskite films
must also be durable and not degrade under solar light over time. EPFL scientists
have now greatly improved the operational stability of PSCs, retaining more
than 95% of their initial efficiencies of over 20 % under full sunlight
illumination at 60oC for more than 1000 hours. The breakthrough, which marks
the highest stability for perovskite solar cells, is published in Science.
Challenges of stability
Conventional silicon solar cells have reached a point of maturation,
with efficiencies plateauing around 25% and problems of high-cost
manufacturing, heavyweight, and rigidity has remained largely unresolved. On
the contrary, a relatively new photovoltaic technology based on perovskite
solar cells has already achieved more than 22% efficiency.
Given the vast chemical versatility, and the low-cost processability of
perovskite materials, the PSCs hold the promise to lead the future of
photovoltaic technology by offering cheap, light weight and highly efficient
solar cells. But until now, only highly expensive, prototype organic
hole-transporting materials (HTMs,selectively transporting positive charges in
a solar cell) have been able to achieve power-conversion efficiencies over 20%.
And by virtue of their ingredients, these hole-transporting materials adversely
affect the long-term operational stability of the PSC.
Therefore, investigating cheap and stable hole transporters that produce
equally high efficiencies is in great demand to enable large-scale deployment
of perovskite solar cells. Among various inorganic HTMs, cuprous thiocyanate
(CuSCN) stands out as a stable, efficient and cheap candidate ($0.5/gr versus
$500 /gr for the commonly used spiro-OMeTAD). But previous attempts to use
CuSCN as a hole transporter in perovskite solar cells have yielded only
moderately stabilized efficiencies and poor device stability, due to problems associated
with depositing a high-quality CuSCN layer atop of the perovskite film, as
wells as the chemical instability of the CuSCN layer when integrated into a
perovskite solar cell.
Now, researchers at Michael Grätzel's lab at EPFL, in a project led by postdocs
Neha Arora and M. Ibrahim Dar, have introduced two new concepts that overcome
the major shortcomings of CuSCN-based perovskite solar cells. First, they
developed a simple dynamic solution-based method for depositing highly
conformal, 60-nm thick CuSCN layers that allows the fabrication of perovskite
solar cells with stabilized power-conversion efficiencies exceeding 20%. This
is comparable to the efficiencies of the best performing, state-of-the-art
spiro-OMeTAD-based perovskite solar cells.
Second, the scientists introduced a thin spacer layer of reduced
graphene oxide between the CuSCN and a gold layer. This innovation allowed the
perovskite solar cells to achieve excellent operational stability, retaining
over 95% of their initial efficiency while operating at a maximum power point
for 1000 hours under full-sun illumination at 60 °C. This surpasses even the
stability of organic HTM-based perovskite solar cells that are heavily
researched and have recently dominated the field.
More
The monthly Coppock Indicators finished September
DJIA: 22,405 +223 Up. NASDAQ: 6,496 +274 Up. SP500: 2,519 +179 Up.
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