Baltic Dry Index. 597 +03 Brent Crude 55.09
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
Is the Fed about to end its dither over interest rates? From London yesterday it certainly seemed that way. Damn the torpedoes, full speed ahead for a rate hike. Well a rate hike in June, at least seems to be back on the table. But does the talking chair approve. Is it all just a American War Party plan to take out China through global turmoil? Who benefits from generating a violent reaction in global financial markets? Certainly not China, the emerging market economies, nor the dying EUSSR. America, the world’s largest debtor by far? Possibly, though in a very Machiavellian way.
Below, two of the Fed’s canaries sing.
Bullard: Worried about ‘violent’ reaction to Fed rate hike
Published: Mar 24, 2015 9:53 a.m. ET
LONDON (MarketWatch) — St. Louis Federal Reserve President James Bullard is
concerned about the mismatch between the market’s and the central bank’s
expectations for the first interest-rate increase, warning it could end with a
“violent” reaction in the financial market.Speaking to reporters after a panel discussion at CityWeek in London on Tuesday, Bullard, one of the Fed’s most hawkish members, stressed that the central bank’s zero-rate interest policy is no longer appropriate and that a rate hike this summer wouldn’t strangle the U.S. economic recovery.
“We’re talking so much about it that I hope it’d be anticlimactic when we get there. But there is this issue about the market expectations of a rate path being different from the committee’s expectations,” he said.
“So if we get all the way to the day we actually make a decision and we end up surprising the markets that day, there’s going to be reconciliation on that day and that could be violent.”
And what is “violent” to the St. Louis Fed chief?
“The taper tantrum in the summer of 2013 was a violent reaction in the market. It came from a misalignment between what the market was thinking the committee was going to do with its QE program and what the committee was thinking it was going to do.”
More
http://www.marketwatch.com/story/bullard-worried-about-violent-reaction-to-fed-rate-hike-2015-03-24?dist=tcountdown
Fed’s Williams makes case for not delaying rate hike
Published: Mar 24, 2015 9:38 a.m. ET
WASHINGTON (MarketWatch) — In a
sign that the core of the Federal Reserve is turning hawkish, San Francisco Fed
President John Williams laid out the case for the U.S. central bank moving
sooner rather than later to hike rates.
Although Williams has been
careful over the past few weeks to stress that he only wants to begin a
discussion of rate hikes at the June meeting, he laid out the case for moving
sooner rather than waiting for inflation to push up close to the central bank’s
2% target.
The Fed should not keep its foot
on the accelerator, he said.
“When you’re driving towards a
stoplight, you don’t keep your foot on the accelerator; you ease off so you’re
ready to stop at your target. Otherwise you slam on the brakes—and probably
wind up in the middle of the intersection,” Williams said.
Williams said the Fed should move
despite the strengthening dollar.
Morehttp://www.marketwatch.com/story/feds-williams-makes-case-for-not-delaying-rate-hike-2015-03-24?dist=tcountdown
China Wants to Buy Europe
Mar 23, 2015 4:17 PM EDT By Leonid Bershidsky
Chinese investors have a powerful attraction to companies in the European
Union, and their targets are increasingly high-profile. In recent days, they've
shown interest in an 18-building
compound on Berlin's Potsdamer Platz and in the Italian tire-maker Pirelli.
For some unfathomable reason, Europe considers Chinese investors, even
state-owned ones, more benign than, say, Russian ones.Until 2011, China was mostly a receiver of European investment, but then the debt crisis drove down asset prices. Some governments became desperate to privatize, and venerable corporations got less picky about potential investors. Chinese buyers acquired Volvo in Sweden, a large stake in Peugeot Citroen and fashion house Sonya Rykiel in France, the Piraeus Port in Greece, Pizza Express restaurants and the upscale clothing maker Aquascutum in the U.K. Chinese investment increased exponentially:
Last year -- when the Peugeot and Pizza Express deals were made -- Chinese merger and acquisition activity in Europe set a new record. Although Chinese investment in the U.S. has also grown, outstripping U.S. flows into China, Europe has proved more welcoming (data in millions of U.S. dollars):
----China holds only about 1 percent of the European foreign direct investment stock -- not enough to worry about. But this doesn't include local booms in private Chinese investment, like those in Portuguese or Latvian real estate under those countries "golden visa" programs. Europe is relatively cheap, it's open, and it's got things that Chinese companies are after: technology and household names.
More
http://www.bloombergview.com/articles/2015-03-23/china-wants-to-buy-europe
Some Folks At The Fed Are Lost——No Juice To The Macros, Part 1
by David Stockman •
Yesterday we demonstrated that stock market valuations are not merely “on
the high side” as Janet Yellen averred last week. Instead, they are positively
in the nose-bleed section of history.You don’t get the Russell 2000 trading at 90X honest-to-goodness GAAP earnings or 125 biotechs with aggregate LTM losses of $10 billion sporting a combined market cap of $280 billion unless you are deep into bubble land. In fact, the chart on the median PE multiple for all NYSE stocks bears repeating.
Recall this graph is based on trailing GAAP earnings for all companies with positive income. But that was for the LTM period ending in June 2014. Since then the market is up by 7%, yet reported earnings have basically flat-lined. S&P 500 earnings for the June 2014 LTM period, for example, were $103 per share——-a level that has now dropped to $102 per share for the December LTM period.
In short, the median NYSE valuation multiple is now at upwards of 22X—a level far above even the dotcom and housing bubble peaks. It is no wonder, therefore, that even a certified Cool-Aid drinker like St Louis Fed head, James Bullard, has now confessed that he fears a “violent” Wall Street sell-off when the Fed finally ends an 80 month streak of ZIRP sometime this fall.
More
http://davidstockmanscontracorner.com/some-folks-at-the-fed-are-lost-no-juice-to-the-macros-part-1/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+AM+Tuesday
We end for today with Greece. Baring a miracle it’s all over it seems to me. For more on a German miracle scroll down to Crooks Corner. But does Germany have any sense of shame?
European Central Bank to ban embattled Greek banks from holding government bonds
ECB's move to break toxic link between the country's banks and its cash-strapped government will anger Athens
The European Central Bank is set to tighten the noose on Greece a day after the president of the Bank denied the institution was “blackmailing” Athens into agreeing to bail-out conditions.According to reports, the ECB will move to officially ban Greek banks from increasing their holdings of the country’s short-term sovereign debt, in a bid to break a potentially toxic link between lenders and the stricken sovereign.
The restriction will place a further squeeze on the cash-strapped Greek government, which could run out of money to pay wages and pensions by the end of next month.
The ECB has emerged as the chief disciplinarian among Greece’s three main creditors.
The central bank has so far rebuffed pleas to increase the issuance of treasury bills or to resume its ordinary lending to the country.
This toughened stance led to criticism from Athens who accuse the institution of “asphyxiating” the country.
In a letter addressed to the German Chancellor and Mr Draghi, Alexis Tsipras warned the Bank’s stance could turn a “small cash flow issue” into a “large problem for Greece and for Europe.”
Athens is also due to request a return of €1.2bn which was erroneously handed to creditors from a European rescue fund, as it races to avoid bankruptcy and make its debt obligations of €450m to the IMF over the next few weeks.
But the ECB’s fresh curb comes as depositors have rushed to withdraw their money from Greek banks.
Capital flight amounted to an estimated €1.5bn (£1.1bn) in the last week alone. To plug the hole, lenders have been reliant on an expensive form of emergency liquidity assistance (ELA) to keep them afloat.
A review of ELA funding from the ECB's governing council is due on Wednesday. The ECB has been drip feeding small increments of cash to the banks, much to the frustration of the Greek government.
Capital flight is due to be stemmed for one day at least, as Wednesday is a bank holiday celebrating the Greek independence from the yoke of 19th century Ottoman rule.
More
http://www.telegraph.co.uk/finance/economics/11493101/European-Central-Bank-edges-closer-to-pulling-the-trigger-on-Greece.html
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
At the Comex silver
depositories Tuesday final figures were: Registered 70.57 Moz, Eligible 104.77
Moz, Total 175.34 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
"The paper standard is self-destructive."
Hans F. Sennholz
Nazi Extortion: Study Sheds New Light on Forced Greek Loans
By Manfred
Ertel, Katrin Kuntz and Walter Mayr March 21, 2015 – 02:18 PM
Is Germany liable to Athens for loans the Nazis forced the Greek central bank to provide during World War II? A new study in Greece could increase the pressure on Berlin to pay up.
Loukas Zisis, the deputy mayor of
Distomo, a village nestled in the hills about a two hour drive from Athens,
says he thinks about the Germans every day. On June 10, 1944, the Germans
massacred 218 people in Distomo, including dozens of children. Zisis, who is
just 48 years old, wasn't yet born at the time of the attack.
"We can't forget the
Germans," Zisis says. They came to Distomo 71 years ago with their guns.
"Today they are exerting power over our village with their banks and
policies," he adds. He's standing in the wind on a rocky ledge, a small
man in a leather jacket, and looking out over the town. Two-thousand people
live here.
The massacre, which continues to
shape the place today, was one of the most brutal crimes committed by the Nazis
in Greece, with the carnage lasting several hours. For decades, a trial over
the massacre wound its way through the courts at all levels in Greece and
Germany. Greece's highest court, the Areopag, ruled in 2000 that Germany must
pay damages to Distomo's bereaved.
"But we are still
waiting," says Zisis. "There has been no compensation."
Last week in Greek parliament,
Greek Prime Minister Alexis Tsipras demanded German reparations payments,
indirectly linking them to the current situation in Greece. "After the
reunification of Germany in 1990, the legal and political conditions were
created for this issue to be solved," Tsipras said. "But since then,
German governments chose silence, legal tricks and delay. And I wonder, because
there is a lot of talk at the European level these days about moral issues: Is
this stance moral?"
Tspiras was essentially
countering German allegations that Greece lives beyond its means with the
biggest counteraccusation possible: German guilt. Leaving aside the connection
drawn by Tsipras, which many consider to be inappropriate, there are many
arguments to support the Greek view. SPIEGEL itself reported in February that
former Chancellor Helmut Kohl used tricks in 1990 in order to avoid having to
pay reparations.
A study conducted by the Greek
Finance Ministry, commissioned way back in 2012 by a previous government, has
now been completed and contains new facts. The 194-page document has been
obtained by SPIEGEL.
Outstanding German Debt
The central question in the
report is that of forced loans the Nazi occupiers extorted from the Greek
central bank beginning in 1941. Should requests for repayment of those loans be
classified as reparation demands -- demands that may have been forfeited with
the Two-Plus-Four Treaty of 1990?
Or is it a genuine loan that must be paid
back? The expert commission analyzed contracts and agreements from the time of
the occupation as well as receipts, remittance slips and bank statements.
They found that the forced loans
do not fit into the category of classical war reparations. The commission
calculated the outstanding German "debt" to the Greek central bank
and came to a total sum of $12.8 billion as of December 2014, which would
amount to about €11 billion.
As such, at issue between Germany
and Greece is no longer just the question as to whether the 115 million
deutsche marks paid to the Greek government from 1961 onwards for its peoples'
suffering during the occupation sufficed as legal compensation for the
massacres like those in the villages of Distomo and Kalavrita. Now the key
issue is whether the successor to the German Reich, the Federal Republic of
Germany, is responsible for paying back loans extorted by the Nazi occupiers.
There's some evidence to indicate that this may be the case.
In terms of the amount of the
loan debt, the Greek auditors have come to almost the same findings as those of
the Nazis' bookkeepers shortly before the end of the war. Hitler's auditors
estimated 26 days before the war's end that the "outstanding debt"
the Reich owed to Greece at 476 million Reichsmarks.
Auditors in Athens calculated an
"open credit line" for the same period of time of around $213
million. They assumed a dollar exchange rate to the Reichsmark of 2:1 and
applied an interest escalation clause accepted by the German occupiers that
would result in a value of more than €11 billion today.
Morehttp://www.spiegel.de/international/germany/greek-study-provides-evidence-of-forced-loans-to-nazis-a-1024762.html#ref=nl-international
Distomo massacre
On June 10, 1944, for over two hours, Waffen-SS troops of the 4th SS Polizei Panzergrenadier Division under the command of SS-Hauptsturmführer Fritz Lautenbach went door to door and massacred Greek civilians as part of a 'retaliation measure' for a partisan attack upon the unit. A total of 214 men, women and children were killed in Distomo,[1] a small village near Delphi.[2] According to survivors, SS forces "bayoneted babies in their cribs, stabbed pregnant women, and beheaded the village priest."[2]Following the massacre, a Secret Field Police agent accompanying the German forces informed the authorities that, contrary to Lautenbach's official report, the German troops had come under attack several miles from Distomo and had not been fired upon "with mortars, machine-guns and rifles from the direction of Distomo". An inquiry was convened. Lautenbach admitted that he had gone beyond standing orders, but the tribunal found in his favour, holding that he had been motivated, not by negligence or ignorance, but by a sense of responsibility towards his men.[3]
More
http://en.wikipedia.org/wiki/Distomo_massacre
Massacre of Kalavryta
The Massacre of Kalavryta (Greek: Σφαγή των Καλαβρύτων), or the Holocaust of Kalavryta (Ολοκαύτωμα των Καλαβρύτων), refers to the extermination of the male population and the total destruction of the town of Kalavryta, in Greece, by German occupying forces during World War II, on 13 December 1943. Aside from the deportation and murder of over 80% of Greece's Jewish population, it is the most serious case of war crimes committed during the Axis occupation of Greece during World War II.
Morehttp://en.wikipedia.org/wiki/Massacre_of_Kalavryta
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek
The monthly Coppock Indicators finished February
DJIA: +120 Down. NASDAQ: +213 Down. SP500: +169 Down.
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