Saturday 30 March 2019

Weekend Update 30/03/2019 A Realistic Energy Review. A Message For Don.

Baltic Dry Index. 689 -01    Brent Crude 68.39

Brexit 13 days away (maybe.) Never-ending China trade war talks, day 130.

“Dreams do come true, if only we wish hard enough. You can have anything in life if you will sacrifice everything else for it.”

J.M. Barrie, Peter Pan

This weekend something a little different. Two long, but must read, master class articles, for our future next decade.

But first this. Who knew trade wars were so easy for outsiders to win?

U.S. and China Got Into a Trade War and Mexico Won

America’s imports from Mexico surge the most in seven years as Trump’s policies shift supply chains
By Matthew Townsend and Eric Martin
27 March 2019, 10:00 GMT
The Trump Administration’s trade war with China has turned out to be a windfall for another country the president frequently berates: Mexico.

Consider Fuling Global Inc., a Chinese maker of plastic utensils that developed a lucrative business making paper cups and straws for U.S. restaurants. But President Trump upended all that with tariffs on $250 billion worth of Chinese imports, including paper products. So the company found an alternative, opening a $4 million factory in Monterrey, Mexico, that will soon begin shipping millions of paper straws across the border.

“We had to look for other ways to do business,'” said Fuling Chief Financial Officer Gilbert Lee. The move means the Wenling, China-based company will avoid the tariffs and make up for pricier Mexican labor with lower shipping costs. “Mexico is a very logical and advantageous location for us.”

Fuling isn’t alone. Mexico has seen big gains in shipments to the U.S. in categories where competing Chinese goods were hit with tariffs, everything from poster board to air conditioner parts. In all, U.S. imports of goods from Mexico surged 10 percent to almost $350 billion last year, the fastest growth in seven years. That helped widen America’s trade deficit with Mexico by 15 percent to more than $80 billion. Meanwhile, the growth in shipments from China slowed by about a third.

Mexico’s bonanza underscores the difficulty in trying to win a trade war where companies can shift production or find new sources to avoid tariffs. Despite Trump’s vow to reduce it, the U.S. trade deficit for goods globally hit a record $891 billion last year as tax cuts boosted demand for imports and retaliatory tariffs weighed on American exports. Given Trump’s early attacks on Mexico for taking U.S. jobs, it’s an ironic turn to observers such as factory consultant Alan Russell.

“It’s a case of unintended consequences,” said Russell, chief executive officer of Tecma Group, an El Paso, Texas firm that helps companies open and run factories in Mexico. Interest has never been this high in his 35 years in the industry, he says. “Any company manufacturing in China has had a wake-up call.”

Much of the shift in companies sourcing from Mexico instead of China centers on low value-added items where substitution is easier, according to Jorge Guajardo, a former Mexican ambassador to China. For example, Taskmaster Components has for almost 20 years imported large wheels and tires from China, and assembled them for companies making trailers and recreational vehicles. But tariffs on many of those products pushed the Mount Pleasant, Texas-based company to go hunting for new sourcing. That list now includes Mexico, where it wants to invest in a factory. The U.S. isn’t being considered because Taskmaster hasn’t found a willing partner among the few remaining American manufacturers.

Now back to the future. A realistic view of global energy and global finance.

“All the world is made of faith, and trust, and pixie dust.”

J.M. Barrie, Peter Pan

REPORT | March 2019


Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science, where he co-directs an Institute on Manufacturing Science and Innovation. He is also a strategic partner with Cottonwood Venture Partners (an energy-tech venture fund). Previously, Mills cofounded Digital Power Capital, a boutique venture fund, and was chairman and CTO of ICx Technologies, helping take it public in 2007. Mills is a regular contributor to and is author of Work in the Age of Robots (2018). 

He is also coauthor of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (2005). His articles have been published in the Wall Street Journal, USA Today, and Real Clear. Mills has appeared as a guest on CNN, Fox, NBC, PBS, and The Daily Show with Jon Stewart. In 2016, Mills was named “Energy Writer of the Year” by the American Energy Society.Earlier, Mills was a technology advisor for Bank of America Securities and coauthor of the Huber-Mills Digital Power Report, a tech investment newsletter. He has testified before Congress and briefed numerous state public-service commissions and legislators. Mills served in the White House Science Office under President Reagan and subsequently provided science and technology policy counsel to numerous private-sector firms, the Department of Energy, and U.S. research laboratories.Early in his career, Mills was an experimental physicist and development engineer at Bell Northern Research (Canada’s Bell Labs) and at the RCA David Sarnoff Research Center on microprocessors, fiber optics, missile guidance, earning several patents for his work. He holds a degree in physics from Queen’s University in Ontario, Canada.

---- Executive Summary, A movement has been growing for decades to replace hydrocarbons, which collectively supply 84% of the world’s energy. It began with the fear that we were running out of oil. 
That fear has since migrated to the belief that, because of climate change and other environmental concerns, society can no longer tolerate burning oil, natural gas, and coal—all of which have turned out to be abundant.

So far, wind, solar, and batteries—the favored alternatives to hydrocarbons—provide about 2% of the world’s energy and 3% of America’s. Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of a tech-driven energy revolution that not only can, but inevitably will, rapidly replace all hydrocarbons.

This “new energy economy” rests on the belief—a centerpiece of the Green New Deal and other similar proposals both here and in Europe—that the technologies of wind and solar power and battery storage are undergoing the kind of disruption experienced in computing and communications, dramatically lowering costs and increasing efficiency. But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.

In the world of people, cars, planes, and factories, increases in consumption, speed, or carrying capacity cause hardware to expand, not shrink. The energy needed to move a ton of people, heat a ton of steel or silicon, or grow a ton of food is determined by properties of nature whose boundaries are set by laws of gravity, inertia, friction, mass, and thermodynamics—not clever software. 

This paper highlights the physics of energy to illustrate why there is no possibility that the world is undergoing—or can undergo—a near-term transition to a “new energy economy.”

More. Much, much more.


A Modest Proposal....

TO: Don @realDonaldTrumpMike @VP, Mitch @McConnellPressKevin @GOPLeaderChuck @SenSchumerNancy @SpeakerPelosi,
Steny @LeaderHoyer,  Lindsey @LindseyGrahamSCAlexndria @AOC,
Sherrod @SenSherrodBrown , Bernie @SenSanders, Rob @senrobportman
Steve @stevenmnuchin1Jay @federalreserve 

I hope you all are well.  As you of course know, after close of business on Friday, Bob finally delivered his long awaited report to our Attorney General.  I'm sure we're all looking forward to reading Bill's abbreviated "nothing to see here" presumably partisan summary of same.  Don, I'm also grateful that you've supported the idea of making the full report public, so we can all finally move on.  America is grateful.  Whether the report indicates we need wholesale regime change/resignations/indictments or a tacit understanding that there is no "there" there, I think we can all agree that we need to make whatever decisions we need to make expeditiously so we can all get this behind us as soon as is practical.

Anyway, even though this report will probably be consuming much your time, and although, I'm sure, difficult for you, I'd like you, for the moment, to set it aside and move on to a different, dare I say, much more important topic.

We have work to do.  We have to save the Western Financial System.

As always, for those of you following my work, you'll know that the really important concepts are in RED below. 
Feel free to skim past my humorous, anecdotal banter if you are pressed for time.

As you know, we Americans have been following your careers (and the careers of your predecessors) closely for quite some time now.  I think we can all agree that your collective progress, in no particular order, on Health Care, Taxation, Education, Environment, Infrastructure, 2nd Amendment issues, Drugs, Immigration, Banking/Financial/Market Reform, Trade, Monetary Policy, Consumer Protection, etc. etc. etc. has indeed been, well,  remarkable.  We appreciate your effort.

To be direct, what's also remarkable, is that in an effort to remain in office, you have all come to believe that through your collective efforts and carefully crafted public relations campaigns, you have been able to appeal to our darkest, most destructive, visceral emotions and fears, convincing roughly half of the American electorate (based on any poll of your choosing) that you and your counterparts on the other side of the aisle are all to be despised and vilified with a passion heretofore unimaginable, by roughly one half of the electorate or the other.  This is an incredible, unthinkable, yet effective achievement and quite a prolific legacy indeed.   You should all be proud.
---- At any other time in history, my reaction to your antics would have been, "Geezzz.....what a mess....but that's Ok.....we've got a strong democracy and another election on the way....American voters are good hearted and wise...we'll find some reasonable people to put in office and we'll get through this..."

Unfortunately, today, delay and "waiting" for the next election is no longer an option.  We are quickly running out of time.  Unless you folks are incredible poker players and you are somehow feverishly working together as a cohesive unit behind the scenes to implement workable versions of the policies I'm going to discuss below, the American dream as we've known it, is doomed to extinction.

That said, I feel compelled, as an American citizen, to speak up.  I'm trying to help you.  I'm trying to help you save Western Civilization.

The Threat to Western Civilization

If you have indeed been following my work, and I know some of you (or your staffs) have been (Google Analytics is a wonderful thing), you are at least suspicious that I might actually be on the right track.  I'll refer you to four recent posts (Below) which you might find informative, but if you already believe that the following thesis (in RED) may indeed be accurate, or at least merit further investigation, there's no need to rehash the concepts here.  I'd refer you to Jay, Steve and their teams, as they have a much greater/better resource/data-set than I have access to.

Dalio's Big Debt Crisis....the FSB Report and Financial War Games....  

Keeping is Simple....China has $50.1 Trillion of Brand New Financial Assets

Twas the Night Before Christmas....

When will Xi Click the "Sell Button"

I'll also cite two excellent and extremely wonkish BIS working papers, written, of course, using generally unintelligible economic jargon (Below) which also reference what we're discussing today.

Triffin: dilemma or myth?

FX swaps and forwards: missing global debt?

Again, no need to wade through these two working papers if you don't have time, I understand you folks are busy.  I'll try to sum both of them up in a sentence or two.  The "Triffin" paper discusses the history of monetary policy, debating the legitimacy of Bob Triffin's "Dilemma", that America at some point will be unable to supply enough "safe" dollar assets and reserve currency to satisfy the global demand for same.  Referenced and described in the "Missing Global Debt" paper, as of 2017 there are at least US$21.4 Trillion (both Balance Sheet and Off-Balance Sheet) of known, non-bank dollar debt lurking outside of the United States. (i.e. out of the FED's purview)  That amount is growing rapidly.  The looming question is whether the FED, when subjected to demands for Eurodollars (and now clandestinely, and more appropriately, "Chinadollars" a point of reference, I believe I'm actually coining the phrase "Chinadollars" in this post, since most economists don't believe or understand that they actually exist) could effectively backstop a dollar shortage.
More. Much, much more.


For preventing the children of poor people in Ireland, from being a burden on their parents or country, and for making them beneficial to the publick.

by Dr. Jonathan Swift 1729

The monthly Coppock Indicators finished March

DJIA: 25,929 +54 Down. NASDAQ: 7,729 +94 Down. SP500: 2,834 +53 Down. 

Normally this would suggest more correction still to come, but with President Trump wanting to be judged by the performance of the stock market and the Fed’s Plunge Protection Team now officially part of President Trump’s re-election team, probably the safest action here is fully paid up synthetic double options on most of the major indexes.

Friday 29 March 2019

Stocks – Hopium’s Back!

Baltic Dry Index. 692 +02    Brent Crude 68.14

Car Crash Brexit now reset 14 days away.  Day 119 of the never-ending China trade talks.

“One of the great things about books is sometimes there are some fantastic pictures.”

 George W. Bush

It is Brexit Day, cancelled, but not to worry, U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing. And on the strength of that full stomach, hopium’s back in Asian stock markets.  Shame about Brexit though, perhaps next month?

Below, more on what for me looks like a sucker’s rally. What could possibly go wrong?

“You work three jobs? Uniquely American, isn't it? I mean, that is fantastic that you're doing that."

To a divorced mother of three, Omaha, Nebraska, Feb. 4, 2005”

George W. Bush

Asian stocks gain on hopes of progress in U.S.-China trade talks

March 29, 2019 / 12:59 AM

TOKYO (Reuters) - Asian shares rose on Friday, led by a surge in Chinese equities, on hopes that Washington and Beijing are making progress in trade talks, while global bond yields moved higher after a prolonged slide on worries about the economic outlook.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5 percent while Japan’s Nikkei added 1 percent.

The Shanghai Composite Index climbed more than 2 percent.

The mood in the markets was brighter after U.S. officials said China has made proposals in trade talks with the United States on a range of issues that go further than it has before, including on forced technology transfer.

U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing, kicking off a day of talks aimed at resolving the bitter trade dispute between the world’s two largest economies.

Kudlow Says U.S. Ready to Extend China Talks by Weeks or Months

By Sarah McGregor and Kevin Cirilli
Updated on 29 March 2019, 02:43 GMT
The Trump administration is prepared to keep negotiating with China for weeks or even months to reach a trade deal that will ensure the world’s second-largest economy improves market access and intellectual-property policies for U.S. companies, a senior American official said.

“This is not time-dependent. This is policy- and enforcement-dependent,” White House economic adviser Larry Kudlow said in a speech in Washington on Thursday. “If it takes a few more weeks, or if it takes months, so be it. We have to get a great deal, as the president says, that works for the United States. That’s our principal interest.”

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with Chinese negotiators in Beijing for a working dinner on Thursday. Mnuchin called the meeting “very productive” before heading out for a full day of talks on Friday.

Mnuchin, Lighthizer and China’s trade czar, Vice Premier Liu He exchanged pleasantries in front of reporters before commencing meetings at the Diaoyutai state guesthouse.

The discussions will continue next week when Liu will travel to Washington to meet with U.S. negotiators as well as President Donald Trump, according to Kudlow.


This time, an inverted yield curve suggests the stock market has already peaked, some analysts say

By Chris Matthews  Published: Mar 28, 2019 3:34 p.m. ET

3 of past 7 recessions have seen stocks peak before recession takes hold

Slowing economic growth and an inverted yield curve has many investors worried about a potential recession in the next year or two, but also has them excited for the heady stock-market returns that have often been sandwiched between an inverted yield curve and the subsequent economic downturn.

But some analysts and economists are warning that statistical averages can be misleading, and that there is reason to believe that the latest yield curve inversion signals returns for the rest of year will be tepid at best and that the stock-market top may already be in.

Oliver Jones, market economist for Capital Economics told MarketWatch that while it is sometimes the case that stocks continue to deliver strong returns for many months after a yield curve inversion—as they did in the lead-up to the 2007 stock-market peak—it is by no means the rule, and already weakening economic data suggests that equity investors won’t be so lucky this time around.

“We already see evidence of payroll growth slowing, retail stales beginning to weaken and less U.S. demand for imports, at the same time that we’re seeing signs of a corporate earnings slowdown,” Jones said, arguing that these weren’t traits the economy displayed at the time of the 2006 yield curve inversion.

An inverted yield curve is a situation where short-term interest rates sit at or above long-term rates, a dynamic in the government-debt market that can be a precursor to an impending recession, as it indicates investors believe that growth will be weak.

Former Morgan Stanley Asia chairman: Be prepared to dump stocks ‘very quickly’

By Shawn Langlois  Published: Mar 28, 2019 11:24 a.m. ET

When the dust settles, there will be some realization that this is not a fundamental breakthrough — that the conflict will be enduring. Take profits very quickly, which would be my sense.’

That’s Stephen Roach, Yale University senior fellow and former Morgan Stanley MS, +1.35%  Asia chairman, talking on CNBC’s “Trading Nation” this week about the fallout from a U.S.-China trade deal.

A critic of the White House’s tariff strategy, Roach said he doesn’t see a resolution having any kind of meaningful impact on trade between the two countries. While China would likely agree to multiyear purchases for agriculture, soybeans and energy, he said doesn’t believe that will be enough to satisfy investors.

“The bulk of the progress will be on the bilateral trade front, which, quite frankly, as an economist I find the least appealing because that’s really a reflection of our own macroeconomic imbalances,” Roach said. “If we can squeeze the Chinese piece, that’ll just send those goods to another higher cost producer. So this is sort of a cosmetic deal, at best. But it’s a deal, and it’s better than nothing.”

The tariffs aren’t the cause of China’s economic issues, he explained, adding that he believes the country’s officials are injecting enough fiscal stimulus to deal with the slowdown. So, while Roach does see a deal getting hammered out next month, it won’t be because China feels it has to.

“I don’t think they’re in desperate shape,” he said. “The downside pressures are transitory; they’ll be able to stabilize and then show some gradual improvement.”

In commodities news, a bubble, is a bubble, is a bubble, until it bursts. It’s what makes commodities trading on leverage so lucrative (or not,) and such fun. Bring back the mid to late 70s!

Rout Hammers Palladium After Slew of Bubble Warnings

By Ranjeetha Pakiam

Palladium is heading for the biggest weekly decline in more than three years as investors’ focus turned to demand amid concerns over slowing global growth, with the slump following repeated warnings that the metal’s recent surge to record highs had propelled it into bubble territory.

The metal used in auto catalysts to curb emissions sank 12 percent this week after hitting an all-time high on supply woes on March 21. The massive rally, which saw prices almost double since August, spurred predictions a reversal was inevitable, and hedge funds had cut bullish bets for a fourth week.

With the palladium market expected to be in deficit for an eighth year, manufacturers of gasoline vehicles have scrambled to get hold of supplies to meet stricter standards for pollution control. Still, analysts surveyed by Bloomberg last week saw the metal ending the year in the $1,300s an ounce, partly as shortages are priced in and as car sales in key markets slow. As prices scaled new highs in the first quarter, Saxo Bank A/S, Commerzbank AG and UBS Group AG were among banks warning of the potential for substantial pullbacks.

“Much of palladium’s doubling in price over the last eight months was driven by supply concerns, and these are well-explored,” Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty, said in an email. “Naturally the momentum attracted speculative as well as trade support. The ongoing contraction in China car manufacturing and a recent string of weaker macro data has shifted focus to the demand side of palladium markets, and at the moment selling is begetting selling.”

Spot palladium traded at $1,363.20 an ounce at 10:18 a.m. in Singapore, after dropping 7.3 percent Thursday and more than 5 percent the day before. It’s down 12 percent in March, but still heading for a fourth quarterly gain after prices hit an all-time high of $1,614.88 last week.

Finally today, shipping.  Brexit or Brino, a great change is about to hit international shipping next year.

Column: Oil traders wait to assess impact of IMO regulations

March 27, 2019 / 3:09 PM
LONDON (Reuters) - If oil traders and consumers are worried about the impact of new maritime fuel regulations from the start of next year, they have not yet started to mark up prices for low-sulphur middle distillate fuels.

Under new rules agreed by the International Maritime Organization (IMO), ships will be forced to switch to using low-sulphur fuels rather than high-sulphur residual fuel oil, or fit scrubbers to remove sulphur dioxide emissions.

Refiners have been gearing up to increase the production of IMO-compliant shipping fuels, and many ship owners have installed or plan to fit scrubber units to enable them to continue using cheaper residual fuel oil.

There is considerable uncertainty about exactly how vessel owners will comply with the new regulations and how much extra low-sulphur fuel the refiners will manage to produce.

But the forthcoming regulations are expected to increase consumption of middle distillates and cause that segment of the oil market to tighten significantly.

Ships will be competing for the same low-sulphur middle distillates used as diesel, jet fuel and heating oil by road hauliers, railroads, airlines and farmers as well as many homes, offices and factories.

As a result, some analysts are forecasting a severe shortage of middle distillates, causing prices to spike, while others see a more limited impact.

The effect of the IMO regulations even merited its own section in the U.S. government’s annual “Economic Report of the President” prepared by the Council of Economic Advisors (CEA) and published earlier this month.

“Global bunker fuel represents about 5 percent of total oil demand” and the report warned “fuel switching by ships in 2020 may cause significant disruptions in specific product markets.”

The CEA predicted a shortage of 200,000-600,000 barrels per day in compliant fuels which “will likely trigger higher prices, though estimates of price shocks to fuels including diesel, gasoline and jet fuel vary substantially”.

So far, the forthcoming switch has had little impact on either hedge fund positioning or prices in the middle distillates markets.

“I'll be long gone before some smart person ever figures out what happened inside this Oval Office."
George W. Bush Washington DC, 12 May, 2008

Crooks and Scoundrels Corner

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

Today, has Trump declared economic war on NATO member Turkey. From London, anyway, it looks like they have. How it all ends is anyone’s guess, but it won’t end well for Asia Minor. Just what would NATO do if Turkey left, leaving a giant hole in the Russia-China containment plan?

But is it only economic war on Turkey? Sweden? Deutsche Bank? Europe?

On The Edge Of Collapse: Turkish Lira Plummets As Central Bank Burns Through A Third Of Reserves

by Tyler Durden  Thu, 03/28/2019 - 07:22

The Turkish lira resumed its plunge on Thursday following a sharp rebound on Tuesday when Turkish authorities unleashed an unprecedented assault on lira shorts, helping push the TRY briefly higher ahead of regional elections, after a disappointing reading on the central bank's net FX reserves stoked fears that the country was even closer to a full-blown currency crisis than investors had feared, while local accounts continued to accumulate foreign currency after overnight swaps on the Turkish Lira collapsed to just 40% from a historic high around 1,338% on Tuesday.

After nearly a week of chaos that one trader described as unprecedented in his two decades in the market ("I've never seen a move like this in the 21 years I've been watching the market"), it appears President Erdogan has relented, and following a vocal outcry from the international community which was effectively trapped in lira positions, both long and short, after overnight swaps hit rates well above 1,000%, on Tuesday the swap plunged as low as 18.5%, in line with recent historical prints, and an indication that after doing everything in its power to squeeze shorts (and longs) the central bank appears to have capitulated.

As we reported previously, bankers and analysts at large international banks reported that Turkish lenders appeared unable or unwilling to provide lira in exchange for currency this week, in an attempt to prevent short selling. While Turkey’s banking association (TBB) on Wednesday night denied claims that the country’s lenders had been limiting or halting sales of lira to foreign banks, one London-based analyst told the FT on Tuesday that Turkish banks told him they had been ordered “not to lend even a single lira to foreign counterparties” That squeeze sent the cost of borrowing lira soaring for foreign banks and hedge funds, although as shown above, it has since tumbled.

Meanwhile, the underlying pressures facing Turkey accelerated, and on Thursday data showed another dizzying drop in Turkey's foreign exchange reserves brought the total decline for the first three weeks of March to 45.1 billion lira, or about $10 billion. According to FT calculations, Turkey has now burnt through at least a third of its foreign reserves this month in an effort to stem a plunge in the lira ahead of local elections at the weekend, putting the country on path to a full-blown currency and funding crisis. According to the central bank, reserves now stood at about $24.7 billion, down from $28.5 billion a week earlier, a 13% drop in one week.

---- What is even more concerning than the collapse in reserves, however, is that even locals now appear to have lost faith in a currency which the government is forced to defend at any cost - literally - and on Thursday the Lira fell 5% to 5.5914 per dollar amid a sell-off that’s roiling the nation’s markets, as the very same measures designed to deter short-sellers from selling the currency before municipal elections on Sunday achieved the opposite outcome and spooked investors, both foreign and domestic.

According to a trader quoted by Bloomberg, Turkish investors bought an estimated $3.5 billion worth so far this week as locals have bought at least $1 billion a day. As a result, the latest central bank data reveals that Turkish investors now hold a record $176 billion worth of hard currency after buying around $25 billion since early September.

Meanwhile, as Erdogan has focused on the currency, other market indicators are screaming full-blown crisis and on Thursday, Turkey’s five-year credit default swaps widened for an eighth day to 462, the highest since September, while the yield on the nation’s benchmark 10-year lira bond jumped 91bps to over 19%. As Bloomberg notes, the cost of protection on Turkish sovereign notes has jumped above that for Iraq, Greece, Angola and Pakistan. Governments with costlier CDS include Ukraine, Argentina and Lebanon... for now. The turnaround in market perceptions for Turkey was especially striking because its CDS had been calmly declining even as the economy sank into recession. It wasn't until recent fears about the plunge in reserves, that the CDS rout accelerated. If only assumes the historical correlation holds, the Turkish Lira will soon tumble to about 6.00 vs the dollar.

Swedbank Fires CEO Minutes Before Start Of Annual Investor Meeting; Shares Halted

Thu, 03/28/2019 - 06:15

Talk about bad timing.

Shares of troubled Swedish lender Swedbank were halted in Stockholm a little over an hour before the bank's annual shareholder meeting was set to begin after sliding another 4% and dragging down the broader European banking sector, which led markets lower on Thursday.

Following initial reports that shareholders had been planning to confront CEO Birgitte Bonnesen at Thursday's meeting, the bank's board acquiesced to mounting investor fury and fired the CEO just minutes before the meeting was set to start over a snowballing €135 billion ($152 billion) money laundering scandal with ties to felonious former Trump campaign manager Paul Manafort and former Ukrainian President Viktor Yanukovich. The latest in a series of increasingly incriminating reports had been published by  a Swedish news channel on Wednesday.

Before becoming CEO, Bonnesen had been in charge of the bank's operations in the Baltics, where many of the suspicious transactions, many of which involved the bank's dealings with Danske Bank's Estonian branch, occurred.

The board said Bonnesen was fired as several of the bank's major shareholders made clear that they would likely vote against her. CFO Anders Karlsson will temporarily fill in for Bonnesen, the board said. On Wednesday, Swedish police raided Swedbank over allegations of aggravated fraud. 
Following reports that the bank may have lied to US authorities over money laundering tied to the Panama Papers scandal, the FT reported that the US is investigating the bank over "a number of money laundering issues", suggesting that Swedbank, Sweden's oldest lender, could face potentially hundreds of millions of dollars in fines.

Deutsche Shares Plunge As Bank Discusses Raising Up To 10 Billion For Commerzbank Deal

Thu, 03/28/2019 - 07:48

Deutsche Bank shares sank on Thursday after the Financial Times reported that the troubled German lender had been discussing tapping equity markets to raise as much as €10 billion ($11.2 billion) in what would be the bank's fifth return to the equity well in under a decade. At the higher end of the range, the raise - which would help facilitated a "merger of weakquals" with fellow struggling German lender Commerzbank - would be equivalent to roughly two-thirds of Deutsche's €16 billion market cap, and about 40% of the combined market value of Deutsche and Commerzbank.

The news sent Deutsche's shares spiraling lower toward fresh all-time lows.

“To those of you who received honors, awards , and distinctions, I say, well done. And to the C students I say, you, too, can be president of the United States.”

George W. Bush

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?

New record low solar power price? 2.175¢/kWh in Idaho

Idaho Power has agreed to pay $21.75/MWh for 120 MW of solar power in a 20-year power purchase agreement with Jackpot Holdings. The solar facility will offset a soon-to-close coal plant in Nevada starting in 2022.

March 27, 2019 John Weaver

In a press release yesterday, Idaho Power announced that it has signed a 20-year power purchase agreement with Jackpot Holdings for a price of $2.175/MWh. The agreement allows for Idaho Power to purchase the solar plant at a later date, as well as to obtain electricity from a proposed expansion of the facility at a later date. The electricity is described as being a replacement for a soon-to-retire coal plant in Nevada.

The utility says that it will submit the proposal to the state’s Public Utilities Commission for approval in the coming days. It is then that we will learn whether this plant includes an escalator in the pricing, much like the the Sempra Renewables 250 MW Copper Mountain Project that put in an even lower starting bid — 2.155¢/kWh.

The current publicly known lowest prices for solar PPAs are 2.375¢/kWh by 8minutenergy in Nevada and 2.49¢/kWh for a project in Arizona, as well as a project in Austin that is stated as being below 2.5¢/kWh — but without publicly releasing all the details of the contract.

Concurrent with this announcement was that Idaho Power is aiming for 100% clean electricity by 2045. The company gets more than 46% of its electricity from hydroelectric sources already, and has entered into agreements to end participation in two coal plants and is exploring exiting a third, and final, coal plant.

Six years ago, more than 40% of the utility’s electricity came from coal.

One theory for how a group in a region with a lower solar irradiation value can set a record low price versus the likes of 8minutenergy and NextEra in Nevada, was hinted at in a recent pv magazine USA interview with 8minutenergy.

The project is being installed in a location with an existing transmission line that today is delivering electricity from the aforementioned closing coal fired plant in Nevada. Additionally, it was noted that the solar power plant could be expanded in the future, with Idaho Power having an option to purchase that electricity at a higher price. This suggests transmission or substation upgrades will be necessary to expand the facility
Another weekend, and what should have been Brexit weekend, freedom weekend, the start of John Bull’s next great big adventure. Instead we will have to content ourselves with what is starting to look like the opening round of trade war team Trump’s attack on European and Turkish banking. Have a great weekend everyone. With the clocks springing forwards one hour, GB gets one hour closer to freedom.
“You can fool some of the people all the time, and those are the ones you want to concentrate on.”
George W. Bush

The monthly Coppock Indicators finished February

DJIA: 25,916 +68 Down. NASDAQ: 7,533 +109 Down. SP500: 2,784 +62 Down. 
Normally this would suggest more correction still to come, but with President Trump wanting to be judged by the performance of the stock market and the Fed’s Plunge Protection Team now officially part of President Trump’s re-election team, probably the safest action here is fully paid up synthetic double options on most of the major indexes.