More On God's Work

Baltic Dry Index. 2981 -10

LIR Gold Target by 2019: $3,000.

“There is no example of a nation become rich by paying its debts. There are dozens of examples of nations becoming rich by defaulting or renegotiating.”

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.

We open today with the rise of the just default camp, in the world of sovereign debt. Since much of the debt was accumulated corruptly, between brain dead or venal politicians on the take, and great vampire squids aiding and abetting a crime on the public, just default, and let the great vampire squids take the heat and most of the loss. Kings and countries have been doing it since time immemorial, this time it’s not different after all. Why pay off the money lenders 100 pennies on the Pound, and at 6-7% interest in the case of the tax and work shy Greeks. It’s not real money after all, just meaningless fiat money pyramided off the currency of the world’s largest debtor that also can’t repay its debts. The great vampire squids will be back, begging to work out some sort of deal to return a restructured debt to the performing ledger.

The IMF Flag reads: ECONOMIC SLAVERY
By Nikos Katzilaki

“The IMF will not have a restricted role” in the recently decided support plan for Greece, because “it wants to insure the control of valuable Greek infrastructures”, alleges economic analyst Max Keiser on international television networks such as the BBC, Al Jazeera and Russia Today.

Often also called an activist, Mr. Keiser created quite a stir a few days ago when, on an Al Jazeera program, he claimed that Greece, for the past decade, has fallen victim to the “economic terrorists” of the Wall Street banking systems and the IMF. In the interview which followed, he claimed “if the Greeks want to be protected from the IMF, then they should nationalize their banks thus establishing government owned institutions so as to revive the banking system”, while at the same time “ceasing to pay back the loans which were issued illegally” via “cooking the books” of the Greek economy by Goldman Sachs. He proposed the expulsion from the country of American banks as well as the IMF. The consequence will be “two or three years of heavy recession”, during which time Greece will be able “to rebuild its economy”, ensuring its economic independence.

Mr. Keiser, what is your opinion concerning the EU decision to support Greece while also including the IMF?

“It is problematic solution, because the IMF isn’t a desirable institution of control for your finances as it will bring with it budget austerity measures which serve the interests of the Wall Street and not the Greek population. Greece has fallen victim to the Wall Street bankers since 2000. The first thing that needs to done is an assessment of the relationships between the Wall Street banks, Greek banks and the Greek government. If the Greeks want to be protected from the IMF, they should immediately nationalize all the banks thereby reviving the banking system and exempting themselves from the unfair austerity measures which are being imposed on them . The people are not the cause of the problem. Why is the Greek population being forced to pay for the actions of corrupt bankers and politicians? This is absurd”.More.
http://maxkeiser.com/2010/04/05/the-imf-flag-reads-economic-slavery/

I suspect that we will see far more of this sort of argument as the decade advances, possibly as early as next year if the west’s leading economies drop into a double dip recession. At some point ahead, the USA’s unfunded entitlements and trillion dollar a year new debts, make it a virtual certainty that the US must default or hyper-inflate away its 50 to 100 trillion dollar problem. For now, as with the banks operating on mark to the fantasy model accounting, we all go about pretending that solvency still exists. Just to set the record above straight, “The [Greek] people are not the cause of the problem” is not entirely true. While their politicians dodged and conned their way into fraud and massive debt, the tax and work shy Greeks got the free ride they were only too happy to take. Unlike the Icelanders who got unwittingly mugged by their own corrupt gambling banksters, the Greeks knowingly expected others to pick up the bill. That said, I suspect that the just default camp will grow and grow in the months ahead, the more so the deeper the austerity misery hits.

Below, the WSJ reports more bad news in commercial real estate, specifically in the retail sector. Despite the bad news, “The International Council of Shopping Centers trade group forecasts a 5.1% increase in retail sales in the first quarter over the same period a year earlier.” Perhaps, but I have my doubts it is a help. Unemployment and under-employment is stubbornly high, credit still contracting or nonexistent, home values are still falling, and the average hourly wage is stagnant or falling. Taxes are set to rise. Crude oil is back at $87 again, with many import prices likely to rise. Any increase in retail sales is likely founded on hapless Americans stuck with paying higher prices for gasoline and imported goods. The wrong sort of retail sales increase, I suspect.

APRIL 7, 2010
Shopping-Center Malaise
Vacancies Rise as Lease Rates Fall Again; Is Bottom Near?
Retail landlords continued to lower lease rates to attract tenants during the first quarter, revealing that optimism about a recovery in retail sales has yet to translate into gains for shopping-center owners.

Average lease rates at shopping malls during the first quarter were $38.79 a square foot annually, down 3% from a year earlier, according to real-estate research company Reis Inc. That was the sixth consecutive quarterly decline.

Lease rates at shopping centers, which are smaller than malls, declined to $16.62 in the first quarter, down 1% from the prior quarter and down 3.4% from a year earlier. It marked the seventh consecutive quarter in which shopping-center lease rates have declined.

Vacancy rates, meanwhile, continued to rise. Vacancy rates at malls in the top 77 U.S. markets rose to 8.9% in the January-to-March period, up one tenth of a percent from the previous quarter, according to Reis.

Still, the first-quarter increase was slight in comparison to earlier increases, suggesting that a bottom could be near.

"The stress might be lessening and rent declines might be moderating," said Reis director of research Victor Calanog. "But we don't see positive rent growth resuming until the middle of next year at the earliest, just because of the typical lag."

One reason why rising vacancies have started to slow is because discount stores are rapidly expanding, including Dollar General, as well as electronics chains like Hhgregg Inc. and apparel stores like Forever 21 Inc. That is offsetting some of the vacancies left by the failure of big-box retailers such as Linen N' Things and Circuit City.

Still, analysts believe it will be a couple of years before landlords can raise rents.

"Retailers have all the leverage in the lease negotiation, which makes it very hard for landlords to command higher rents," said Jim Sullivan, an analyst at Green Street Advisors. He added that landlords are signing new tenants at rents 25% to 40% below the rents paid by previous tenants.
Despite the pain for landlords, economists and others expect a recovery for retail sales beginning this year. The International Council of Shopping Centers trade group forecasts a 5.1% increase in retail sales in the first quarter over the same period a year earlier.
http://online.wsj.com/article/SB10001424052702304172404575168252332715066.html

Below, more sign of a spent out US consumer, or simply a wiser consumer awaiting for iPad II with all the bells and whistles and all the kinks worked out? I have no idea, and I’d bet that Apple doesn’t either. Still after all the months of hype and reviews, I suspect that if truth were known, Apple is pretty shocked at the relatively poor opening day response. Though I am very much in a small minority, I’m still not convinced that the iPad isn’t going to turn into an Edsel.

APRIL 6, 2010
First-Day Sales of Apple's iPad Fall Short of Sky-High Hopes

Apple Inc. said it sold more than 300,000 iPads in the U.S. on the first day the device went on sale Saturday, tempering Wall Street's highflying expectations for the much-hyped multimedia tablet computer.

While Apple didn't provide any iPad forecasts, expectations had been building steadily for blowout sales since Chief Executive Steve Jobs unveiled the product in late January. Last month, people familiar with the matter said Apple was seeing strong preorders of the iPad that even exceeded initial sales of the company's previous big hit, the iPhone.

Analysts on average had expected first-day iPad sales of 400,000 to 500,000 units. Some analysts, such as Piper Jaffray analyst Gene Munster, had even higher sales projections of 600,000 to 700,000 units. Estimates for global iPad sales this year ranged from 2.5 million by financial-services firm Kaufman Bros. to as high as 7.1 million by research firm iSuppli Corp.
But though buyers flocked to Apple stores on Saturday in the first hours after the device went on sale, the long lines petered out at many stores by midafternoon. On Monday, some Apple stores reported robust activity. An Apple store in San Francisco said it sold out of its first shipment of iPads on Monday morning, and a small line formed to buy the second shipment that had just arrived.

Some consumers such as Hans Van Der Weive, a property developer from the Netherlands, bought the iPad, which starts at $499, on impulse. "I just arrived here on holiday, I saw the shop and decided to buy one," said Mr. Van Der Weive, adding that he planned to use the device mainly for reading digital books.

How well the iPad will sell in the long term will likely stay unclear for at least another few quarters. Some of Apple's biggest products have previously had relatively slow starts. The iPhone, which has sold a total of more than 42.5 million units, sold 270,000 units in the first 30 hours of sales when it was launched three years ago. That was almost half of analysts' expectations at the time.

-----Apple also said on Monday that it would hold a special event on Thursday for "a sneak peak" of the next-generation iPhone operating system, which runs on the iPhone, iPod touch and iPad. Apple watchers expect the new operating system to offer new features and more closely integrate iPad functions.
http://online.wsj.com/article/SB10001424052702304017404575165621713345324.html?mod=WSJ_hp_mostpop_read

We end for today, with the great vampire squid giving its side of doing “God’s work” on earth. God, apparently wanted them to bankrupt Greece and put millions of Americans out of work and in upside down homes until the eviction posse shows up. “God made me do it” makes an interesting change from “the devil made me do it,” I suppose. Even for a shameless Wall Street cowed by nothing, taking on God seems a little rash even for Goldman.

“Goldman countered by announcing that it was giving $500 million away to 10,000 small businesses while a number of Congressmen called for Geithner’s resignation.

The response was again not positive. Mark Gilbert, the London bureau chief for Bloomberg, wrote:

“Here’s another way of looking at this sudden burst of supposed generosity. Goldman has $16.7 billion stashed in its bonus pot from the record profit earned in the first nine months of the year, which works out at $527,192 per staffer.”

“That means those 10,000 small businesses the securities firm says it wants to help are worth the equivalent of about 1,000 Goldman employees. Alternatively, a Goldmanite’s average contribution to society is pitched at the equivalent of 10 small enterprises, based on that bonus-versus-charity calculation.”

“Even at the Stakhanovite work rates the firm legendarily squeezes out of its staff, that’s quite a stretch. The idea that one banker is worth 10 businesses is the kind of math that got us into this mess, with finance falsely elevated until it became an end in itself, rather than a means to providing services to the real economy.”
http://solari.com/blog/?p=5143

APRIL 6, 2010
Goldman Tells Its Side of '09

Shareholder Letter—Firm's Longest—Defends Client Commitment, AIG Dealings
The year 2009 was one that some Goldman Sachs Group Inc. executives would like to forget. Yet the firm is reliving some of its biggest controversies in its longest-ever annual letter to shareholders.

The eight-page note, released Wednesday, presents Goldman's point of view directly to shareholders ahead of the firm's May 7 annual meeting. For example, criticized for putting the bank's own interests ahead of customers, Goldman Chairman and Chief Executive Lloyd Blankfein and President Gary Cohn say in the letter that clients are at the top of the pecking order.

The two executives used the words "client" or "clients" a total of 56 times, up from 17 in their 2008 shareholder letter.

"The firm's focus on staying close to our clients and helping them to navigate uncertainty and achieve their objectives is largely responsible for what proved to be a year of resiliency across our businesses, and by extension, a strong performance for Goldman Sachs," the executives wrote.

Goldman reiterated that it didn't "bet against" clients using short positions it took on before the residential real-estate market crashed. Goldman was one of the first Wall Street firms to reduce its real-estate exposure, even as some clients were sticking with their bullish bets. The short positions "served to offset our long positions," Messrs. Blankfein and Cohn wrote in the letter.

"Our goal was, and is, to be in a position to make markets for our clients while managing our risk within prescribed limits."

"We thought it was important to discuss our business, the opportunities we see through our work with our clients and various issues that merit broader discussion and a presentation of the facts, particularly in the last year," said Goldman spokesman Samuel Robinson.

Few shareholder letters get much attention, other than Warren Buffett's yearly note to Berkshire Hathaway Inc. investors. But as this year's annual-meeting season approaches, some analysts and investors are paying close attention to shareholder letters. Some financial-company CEOs are using the letters to clear the air about controversies that erupted during the financial crisis, from compensation to their responsibilities in return for receiving government aid.
Earlier this month, J.P. Morgan Chase & Co. Chairman and CEO James Dimon wrote a 36-page letter to shareholders of the New York bank, blasting the "demonization" of big firms. Mr. Dimon added that "some businesses require size in order to make necessary investments, take extraordinary risks and provide vital support globally." J.P. Morgan's letter last year was 28 pages long; Goldman's 2008 letter was just four pages.

Goldman's letter includes explanations of its payouts to employees and trading relationship with insurer American International Group Inc. More than one page is devoted to AIG. Goldman is under the public microscope for receiving nearly $13 billion from AIG after the insurance giant was bailed out by the government in 2008. In the case of the $13 billion, Goldman says it didn't retain much of the money, using it instead to meet various AIG-related obligations
Messrs. Blankfein and Cohn wrote that the firm's "direct economic exposure" to AIG was minimal, though Goldman and other companies benefited from the rescue because a failure of AIG would have been "extremely disruptive to the world's already turbulent financial markets."
http://online.wsj.com/article/SB10001424052702304172404575168382387679158.html

“As all businessman know, contracts are to be respected whenever possible. When not possible, regulations exist to aid default or renegotiation. Businessmen regularly do both and happily walk away.”

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.

At the Comex silver depositories Tuesday, final figures were: Registered 53.78 Moz, Eligible 62.67 Moz, Total 116.45 Moz.


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Crooks & Scoundrels Corner.

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

Today it’s the odds on the crooks and scoundrels running for the UK’s House of Crooks. Below, the UK’s serfs get put in their proper place by the Kingdom of Fife’s, Stalin MacBroon.

‘I want to renew the contract between the people and those THEY are sworn to serve’?

Prime Minister Gordon Brown. April 6, 2010.

General Election 2010: Bookmakers expect record £25m of election bets
Bookmakers are expecting a record £25m of bets on the tightest election for a generation – though that will still only be one tenth of the sum gambled on Saturday's Grand National.
By Alistair Osborne, Business Editor (Leisure) Published: 6:00AM BST 07 Apr 2010

As the tapes rose on Tuesday on the race to Number 10, bookies unveiled a wide field of wagers ranging from most seats and winners of all 649 constituencies to the next chancellor and the date for Gordon Brown's resignation.

Much betting interest so far has focused on a hung Parliament – though the odds have lengthened in recent days on both betting exchange Betfair and with traditional bookies, such as William Hill and Ladbrokes. Betfair has no overall majority at 2-1 and Ladbrokes at 15/8, though Hills is only 6/4.

William Hill spokesman Graham Sharpe said the bookie's biggest election bet so far was a £9,000 wager, but added: "Like in football, the high-rollers don't usually come in until a minute before kick-off. If you're betting in six figures, you want to make sure no-one says anything really stupid on a televised debate."

Ciaran O'Brien, Ladbrokes' spokesman, said "the betting is as volatile as the opinion polls" boosted this time by being "a genuine contest".

There could yet be a re-run too. Hills offers 3/1 on two elections this year – though you can get twice those odds on Betfair.
http://www.telegraph.co.uk/news/election-2010/7560832/General-Election-2010-Bookmakers-expect-record-25m-of-election-bets.html

Odds Checker. UK General Election Betting.
http://www.oddschecker.com/specials/politics-and-election/next-uk-general-election/most-seats

General Election 2010: Markets nervous after opening political shots
Britain's business leaders have warned of a month of market volatility ahead of the General Election unless the political parties offer more coherent plans on cutting the £167bn deficit.
By Louise Armitstead, Chief City Correspondent Published: 9:55PM BST 06 Apr 2010

The pound fell against the dollar and the euro on Tuesday as the opening election moves failed to convince traders that there will be a clear winner. Analysts also warned that sterling could come under further pressure over the next month unless the polls start to discount the possibility of a hung Parliament.

The pound, which has fallen 10pc against the dollar so far this year, was down 0.71 cents to $1.5201. Despite fears over the Greek debt crisis, the euro rose 0.2pc against the pound to 88.35p.

-----One trader said: "It's been a phoney war for months and the markets are all over the place. We just need some details to work from, not just this wish-list stuff, or it's just going to get worse over the next few weeks."

Ratings agencies have already warned that the UK's prized top AAA credit rating is under threat unless a credible fiscal plan is put forward soon after the election.

-----Meanwhile, the Bank of England seemed alone in being inconvenienced by the election date. The Monetary Policy Committee said it would postpone its May 6 interest rate decision to May 10.
http://www.telegraph.co.uk/news/election-2010/7561085/General-Election-2010-Markets-nervous-after-opening-political-shots.html

National debts are treated today as if they were unforgiving gods with the power to control, alter and if necessary destroy a country. This financial trap is usually presented as if it were peculiar to our time, as well as being a profound comment on the profligate [adj 1 shamelessly immoral 2 recklessly extravagant] habits of the population. The reality may be less disturbing.

1. The building up of unsustainable debt loads is a commonplace in history. There are several standard means of resolving he problem: execute the lenders, exile them, default outright or simply renegotiate to achieve partial default and low interest rates.

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.


The monthly Coppock Indicators finished March:

DJIA: +168 UP. NASDAQ: +370 UP. SP500: +196 UP. The great Bull market goes on with the all three continuing higher in positive numbers.

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Help the LIR fight Banksterism, the EU, and for sound money.
If you can, help the LIR stay around and make a difference. Please make a donation at the PayPal link on the website or better still become a sponsor for what looks like an exciting 2010. Capitalism not banksterism.

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Sunspots – A 22 year colder world? (From 2004?)

Spotless Days April 06
Current Stretch: 0 days
2010 total: 6 days (6%)
2009 total: 260 days (71%)
Since 2004: 776 daysTypical Solar Min: 485 days
http://www.spaceweather.com/

The long minimum seems to have ended.

New Solar Cycle Prediction
http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm

Is the Sun Missing Its Spots?
http://www.nytimes.com/2009/07/21/science/space/21sunspot.html?8dpc

Are Sunspots Different During This Solar Minimum?

-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.

----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.

----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.http://www.leif.org/EOS/2009EO300001.pdf

Big freeze could signal global warming 'pause'
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html


Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new “Dalton Minimum?” Twenty Nine months now with low sunspots numbers, and counting. March was the 29th month of yet another low number of 15.4 http://en.wikipedia.org/wiki/Dalton_Minimum

Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.

Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6 Mar 15.4.

Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml

The count. http://sidc.oma.be/products/ri_hemispheric/

Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf

The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm

Current Space Weather.
http://www.swpc.noaa.gov/

What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st

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This week’s featured links: Silver & Gold Miners + Rare Metals.

With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:
Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.

Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp

Semafo TSX: SMF http://www.semafo.com/home_company_intro.php

ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/

US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp

Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/

First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp

New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html

Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp

Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp

Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/
ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp
Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/

Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/

The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.

Avalon Rare Metals Inc. TSX: AVL. http://www.avalonraremetals.com/

We will be adding more REEs as appropriate.

Warning.

Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.

The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.

As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.

Graeme Irvine

London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com