Could a Lithium Shortage Derail the Electric Car Boom?

We’ve gone electric, and there’s no going back at this point. Lithium is our new fuel, but like fossil fuels, the reserves we’re currently tapping into are finite – and that’s what investors can take to the bank.
You may think lithium got too popular too fast. You may suspect electric vehicles are too much buzz and not enough real future. You may, in short, be a lithium skeptic, one of many. And yet, despite this skepticism, lithium demand is rising steadily and sharply, and indications that a shortage may be looming are very real.
It won’t be a shortage in terms of ‘peak lithium’; rather, it will be a game of catch-up with the electric car boom, with miners hustling to explore and tap into new reserves.
Consider the number of battery gigafactories that are being built around the world. We have all heard about Tesla’s (NYSE: TSLA) Nevada facility that will at full capacity produce enough batteries to power 500,000 electric cars per year by 2020.
This, as the carmaker proudly notes, is more than the global total lithium ion battery production for 2013. That’s a pretty impressive rate of demand growth over just three years – but this growth also represents the culmination of a sea change in the way we think.

This post was published at FinancialSense on 08/31/2016.

Live by the Consumer, Die by the Consumer

This week’s article is a follow-up to last week’s article (which generated a lot of attention) about stressed-out, tapped-out American consumers.
The Dow Jones Industrial Average has been going sideways ever since the Commerce Department reported that retail sales in July came to a grinding halt (0.0%) in the month of July.
At the same time, the list of companies warning of disappointing sales – Starbucks, McDonald’s, Ford, Burberry, Gap, and many others – suggests trouble in shopping paradise.
Most recently, Target reported a Q2 drop of 1.1% in same-store sales and said it expects a ‘challenging environment in the back half of the year.’
There are many reasons why Americans have become reluctant shoppers, such as stagnant incomes and rising debt loads, but one of the underappreciated challenges is a distinct change in spending psychology.
According to Deutsche Bank, Americans are becoming big savers.

This post was published at Mauldin Economics on AUGUST 30, 2016.

Saudi Arabia Fires 10,000 Substitute Imams To Save Money, As Banking Crisis Looms

In the latest confirmation of Saudi Arabia’s rapidly deteriorating financial situation, having recently sacked 16,000 foreign workers, earlier today the Ministry of Islamic Affairs announced it has terminated the services of 10,000 substitute imams to save 360 million Saudi Riyals, or less than $100 million, the Saudi Gazette reported. The ministry gave the substitute imams the option to either transfer to the position of a full-time imam leading five prayers a day at a mosque or to leave their job all together.
‘Many criticized the role of substitute imams claiming they do not do anything useful. Substitute imams receive a salary of SR3,000 a month. The ministry is changing the job title and description of substitute imams to cooperative preacher. Cooperative preachers are responsible for giving sermons when needed,’ said the source. The Gazette’s source also said cooperative preachers must have a bachelor’s degree in Islamic Studies.

This post was published at Zero Hedge on Aug 31, 2016.

Gold Daily and Silver Weekly Charts – Silence of the Scams

The first chart below shows exactly what is wrong with the artifically rigged bubble economy in the US.
It has been essentially stagnant for 90% of the American people for quite a long time.
Everything else is commentary.
Deliveries for the September precious metals contracts have begun as shown below. JP Morgan was the heavy hitter in the delivery of gold, but with the usual suspects were takers on silver.
Non-Farm Payrolls on Friday.

This post was published at Jesses Crossroads Cafe on 31 AUGUST 2016.

Shocked Mexican Citizens To Protest Trump Visit – “Out With Trump. Out With Pena Nieto”

Former Mexican President Vicente Fox says Donald Trump ‘is not welcome to Mexico’ pic.twitter.com/FzuNEBWa5B
— Yahoo News (@YahooNews) August 31, 2016

At least some Mexican citizens waking up this morning to news of a Trump visit are not happy. Many have taken to various media outlets to express their “disappointment” that Trump has been invited to meet with Mexico’s President, Enrique Pena Nieto. Apparently some people south of the border are not happy with Trump’s previous references to “rapists” and “drug-traffickers” though we assume they’re still quite satisfied with all of the automotive jobs transferred from Detroit (see “Mexico’s New Auto Plants Unable To Find Enough Labor… As Detroit Still Suffers Massive Unemployment“).
Twitter is abuzz with Mexican citizens distributing flyers for an anti-Trump protest to be held at 11AM at Angel de la Independencia (the Angel of Independence Monument) in downtown Mexico City. But apparently protesters are just as unhappy with Nieto, with signs saying “Out With Trump. Out With Pena Nieto.”

This post was published at Zero Hedge on Aug 31, 2016.

There Will Be A Failure In The Supply-Chain As The Global Economy Deteriorates – Episode 1063a

The following video was published by X22Report on Aug 31, 2016
Euro zone July unemployment increases to 10.1%. Canada’s GDP implodes on itself. Japan’s unemployment has a hidden problem, the unemployment numbers are fake. Someone dumped $5 billion of notional gold. 800,000 cable subscribers dump cable. Pending home sales decline since last year. Finland unleashed helicopter money. China issues its first SDR bond. The global supply chain is going to freeze up when the global economic system crashes.

Global Recession? The Canadian Economy Shrinks At The Fastest Pace Since The Last Financial Crisis

Things have not been this bad for the Canadian economy since the last global recession. During the second quarter of 2016, Canada’s GDP contracted at a 1.6 percent annualized rate. That was the worst number in seven years, and it was even worse than most analysts were projecting. This comes at a time when bad news is pouring in from all corners of the global economy. While things in the United States are still relatively stable for the moment, the same cannot be said for much of the rest of the planet. Canada in particular has been hit very hard by the collapse in oil prices, and the massive wildfire in northern Alberta back in May certainly did not help things. The following comes from the BBC…
The recent drop in GDP was larger than analysts had projected, but not far off the predicted 1.5% loss.
‘[The figure] could have been worse, given the hit from the wildfire, and clearly confirms the disappointing downward trend in exports over the last few months,’ said Sal Guatieri, senior economist at BMO Capital Markets.
In May, wildfires devastated the parts of northern Alberta where much of Canada’s oil and natural gas is produced.
For many years, high oil prices and booming exports enabled the Canadian economy to significantly outperform the U. S. economy. But now conditions have changed dramatically, and all of the economic bubbles up in Canada are starting to burst. This includes the housing bubble, as we have seen home sales in the hottest markets such as Vancouver drop through the floor late in the summer. In fact, it is being reported that home sales during the first two weeks of August in British Columbia were down a whopping 51 percent on a year over year basis.
Do you remember the housing bubble in the U. S. that helped fuel the last financial crisis? Well, a very similar bubble is now bursting up in Canada, and some investors have positioned themselves to make a tremendous amount of money when the whole thing comes violently crashing down.

This post was published at The Economic Collapse Blog on August 31st, 2016.

Deutsche Bank Refuses Delivery Of Physical Gold Upon Demand

While the trading world was focused on the latest news involving Deutsche Bank, namely that the troubled German bank had been contemplating a merger with Germany’s other mega-bank, Commerzbank as part of a strategy to sell all or part of a key business to speed up its flagging overhaul, a more troubling report emerged in a German gold analysis website, according to which Deutsche Bank was unable to satisfy a gold delivery request when asked to do so by a client of Germany’s Xetra-Gold service.
But first, what is Xetra-Gold?
According to its website, the publicly traded company “provides investors with an efficient instrument to participate in the performance of the gold market. Xetra-Gold’s combination of features – cost-efficient trading and the right for physical delivery of gold – makes it an attractive product.”
Among its highlights, Xetra-Gold lists the following:

This post was published at Zero Hedge on Aug 31, 2016.

Sinkhole City Chicago: Taxpayers Sensing Greater Slice of Flesh Being Stripped off their Bones?

Better Credit Ratings and Bond Prices Don’t Signal Better Finances
In recent weeks, Chicago municipal bond prices have firmed up a bit. And today, wire services are reporting stories along the lines that signs of progress in pension funding have stabilized the outlook for the city’s credit ratings.
Does this mean that things are heading in the right direction? Not necessarily.
If the financial crisis of 2007-2009 taught us anything, it taught us to be careful of taking market prices at face value. Let alone credit rating agency opinions.
But let’s give the market and the rating agencies the benefit of the doubt, for a moment. What else might these recent developments imply?
What’s good for GM isn’t necessarily what’s good for America, and what is good for the Chicago Teachers Union and Chicago bondholders isn’t necessarily what is good for Chicago.
A better outlook for pension funding doesn’t appear out of nowhere. More money flowing into pensions, and supporting promises to bondholders, is coming from somewhere else.
Is this somewhere taxpayers, and people paying fees to the city of Chicago? How durable will recent developments prove to be? Will they survive the response of taxpayers sensing a greater slice of their flesh being stripped off their bones?

This post was published at Wolf Street by Bill Bergman ‘ August 31, 2016.

“Dear Fed, Please STFU!”

Dear Fed,
We have come to a point in time where you are causing more harm than good. For decades, your role as not only the central bank to the US, but to the entire financial world helped ensure confidence in a fiat economy. Central control of a nation’s monetary system is undoubtedly an incredibly important role. You know this. After all, you were created in 1913 in response to systemic banking crises and failures in the years prior. You were created to prevent crises from happening.
Damage control was always key to your central mission from the very start, achieved through the ‘dual mandate’ of maximizing employment and stabilizing prices. However, in time you became much more than the organization which was tasked with controlling monetary policy. Rather than respond to shocks, you actually became the reason for shocks by believing you had so much power that you could control boom and bust cycles. More importantly, you believed you could predict the future by creating it.
It doesn’t take much analysis to prove that you have no control over the future. While your former Chairman, Bernanke, claimed to have the ‘courage to act,’ somehow all of the tomes of economic research and analysis, and all of that belief that you had control caused you to completely miss the housing bubble and conditions that led up to one of the greatest economic crises since your very founding. While you can deny this all you want, video interviews by Ben Bernanke clearly prove otherwise (click here to jog your memory). Words matter.

This post was published at Zero Hedge on Aug 31, 2016.

And The Next President According To Dennis Gartman Is…

Having constantly demonstrated his uncanny ability to “predict” the market, Dennis Gartman has decided to branch out into the realm of forecasting presidential elections. In an interview with Kitco, this is what Gartman said:
Now that the likelihood of a Trump presidency has dropped, gold prices have also moved lower, falling to two-month lows this week.

This post was published at Zero Hedge on Aug 31, 2016.

AUGUST 31

Gold:1306.90 down $4.80
Silver 18.62 up 4 cents
In the access market 5:15 pm
Gold: 1309.10
Silver: 18.66
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 2 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds within 15 minutes of London’s fix.
And now the fix recordings:
First the Shanghai fix August 31
Shanghai morning fix (10:15 pm est last night)
$1319.72 (price in NY on access at the exact same time: $1310.94)
Shanghai afternoon fix: 2: 15 am est (second fix/early this morning)
$1315.99 (New York price at the same time: $1313.30)
The two London fixes:
Aug 31 2016 am:$1314.45 (2 am est)
pm:$1309.25 (10 am est)
Take a look at the Shanghai fix. Their early morning fix (our late at night time zone) saw the fix at $1319.72. The exact NY price at the time was 1310.94 for a difference of almost 9 dollars.

This post was published at Harvey Organ Blog on August 31, 2016.

The End Of The Rope

Read between the lines…
Mired in a world of low growth, low inflation and low interest rates, officials from the Federal Reserve, Bank of Japan and the European Central Bank said their efforts to bolster the economy through monetary policy may falter unless elected leaders stepped forward with bold measures. These would range from immigration reform in Japan to structural changes to boost productivity and growth in the U. S. and Europe.
And what are we talking about here? Something like this:
In a lunch address by Princeton University economist Christopher Sims, policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future.
Understand this folks:

This post was published at Market-Ticker on 2016-08-31.

A Chinese “Mystery” Has Become The Biggest Wildcard For The Price Of Oil

At the end of July, we wrote an article titled “Oil Bulls Beware: Crude Demand Is About To Slide As China’s SPR Is “Close To Capacity“” which explained why what until recently had been a record hoarding of oil by China, was starting to fade. The reason: according to JPM China’s Strategic Petroleum Reserve was filling up.
As we said then, “as many speculated, a big source of China’s demand in the past 5 months was Beijing’s decision to stockpile oil for its SPR. However, that is now over as China is likely close to filling its strategic petroleum reserves after doubling purchases for it this year as prices plunged. JPM estimates that China’s SPR demand was equivalent to approximately 1mm bpd. More importantly, stopping shipments for the reserve would wipe out about 15 percent of the country’s imports, according to the bank.”

This post was published at Zero Hedge on Aug 31, 2016.

Worst Plunge in Canada’s GDP since 2009

This time, you can’t blame the dollar or oil prices.
In the second quarter, Canada’s economic activity, as measured by inflation-adjusted GDP, fell 0.4% from the first quarter, or 1.6% annualized, ‘the largest decline in quarterly GDP since the second quarter of 2009,’ as Statistics Canada put it in its data release.
It was a brutal reversal of the first quarter, when GDP had jumped an upwardly revised 2.5% annualized.
Canada’s economy is to a considerable extent dependent on its resource sector, particularly oil and gas. But since mid-February, prices of crude oil, a crucial export product, soared (with the US benchmark grade WTI up over 80%!).
Given the soaring oil prices in the quarter, it’s even more unnerving that exports, which add to GDP, plunged 4.5% (nearly 20% annualized!), the worst plunge since Q2 2009. While exports of services edged up 0.6%, exports of good plunged 5.5%.

This post was published at Wolf Street by Wolf Richter ‘ August 31, 2016.

Leftist President Dilma Rousseff Removed from Office

Now it is official: Dilma Rousseff is no longer Brazil’s president. After almost two years of waiting, the country’s senate approved her impeachment. I will try to make here a brief summary of what happened, and write down some of my expectations for Brazil’s near political future.
The details of Brazilian law and Rousseff’s trial can get somewhat complicated, but the basics are that she spent public money she was legally not supposed to, most likely with electoral purposes.
But there are larger policy-based reasons for the opposition she faces, as well. Rousseff has basically a Keynesian economic mentality (I wonder if Brazilian socialists realize how far from Marx they really are), and she publicly claims that her stimulus-based policies were the right answer to the 2008 economic crisis. Rousseff’s time in office has been about spending money, and lots of it.
The problem with that is that since Fernando Henrique Cardoso’s government (1995-2002), Brazilian law limits governors in how they can spend taxpayer funds. Rousseff’s party opposed these limitations and voted against these laws, believing them to be “undemocratic.”
In the wake of so much spending, senators opposed to Rousseff have claimed her overspending is responsible for Brazil’s present crisis. Her defense was that she cannot predict the future. This fact did not stop her from attempting to plan the economy, however.

This post was published at Ludwig von Mises Institute on Aug 31, 2016.

And The Best Performing World Stock Market In August Was…

China…

3 of the top 10 best performing world equity indices in August are from China with HSCEI the best overall, gaining 6.5% in local currency terms. We find this move in China interesting as officials start to sound the alarm over the real estate market and need an outlet for that hot money flow… back into stocks – to avoid major currency weakness.

This post was published at Zero Hedge on Aug 31, 2016.

SP 500 and NDX Futures Daily Charts – Phony Baloney

Stocks were still in drifting mode with a sideways chop, albeit with a little histrionic action in the morning.
Chicago PMI missed by quite a bit.
Pending home sales were ‘better than expected.’ However, the prior month was adjusted from slightly positive to more negative, and the year-over-year home sales declined by a little more than 2 percent.
There is so little real volume on the exchanges that the algos have pretty much a free hand in shoving prices around.
This is a market not worth trading for the non-insider.

This post was published at Jesses Crossroads Cafe on 31 AUGUST 2016.