St. George's Day

Baltic Dry Index. 3006 -03

LIR Gold Target by 2019: $3,000.

We open this morning saluting England and England’s patron saint St George. He may have been cashiered by the Vatican for slaughtering dragons, and may have been Turkish before the Turks knew they were Turks and emigrated to Germany, he may even have been showing off for a damsel in distress, but no matter, for England, and many other parts of the world including Newfoundland Canada, St George represents that noble English tradition of righting wrongs and standing up for the weak. There is no record of St George ever visiting England, or for that matter Newfoundland, although immigration records for the period of the decline of the Roman Empire in England are incomplete, burned during the arrival of Angles and Saxons from Germany, and Jute from India. We wish all celebrating St George this day, a most wonderful day.

"I don't see how you could be righting wrongs...because you've turned me from right to wrong, leaving me with a broken leg."

Don Quixote.

Up first, Greece goes from worse to worser. The tax and work shy Greeks say “hell no, we won’t pay!” Well they haven’t quite said that yet, but I suspect that it's not very far off. Even the dumbest Greek can see that exiting the one size fits all Euro offers the best, least damaging way out of their current predicament. With friends like the wealthy but miserly Germans, who needs enemies once in the Euro. The Greeks when they joined the Euro, were promised that this would never happen, they could party away and send the bill round to Berlin for settlement, the Greek way of life is non negotiable. Sadly, Greece is probably only the outlier of what lies ahead for the UK, USA and Japan.

An election is coming. Universal peace is declared and the foxes have a sincere interest in prolonging the lives of the poultry.

T.S. Eliot

Escalating Greek default fears rock Europe's debt markets
Greece's debt crisis has reached a dramatic crescendo after the EU revealed that the country's debt and deficit figures are even worse than feared and leading banks began to talk openly of debt-restructuring
By Ambrose Evans-Pritchard, International Business EditorPublished: 8:25PM BST 22 Apr 2010

With contagion spreading across Southern Europe, spreads on 10-year Greek bonds exploded to almost 600 basis points over German Bunds in panic trading, pushing borrowing costs close to 9pc. Rates on two-year debt rose to 10.6pc in a market gone mad.

“It is clear that the Greek situation is a very serious one,” said Dominique Strauss-Kahn, head of the International Monetary Fund. “There is no silver bullet to solve it in an easy manner.”

Credit default swaps (CDS) on Portuguese debt surged 50 basis points in a matter of hours to an all-time high of 270. Markit said the CDS on Spain reached a fresh record of 175, and Ireland jumped to 162, with jitters reaching Hungary, Bulgaria, Romania, Russia and even Argentina.
“This is now a real test of EU leadership,” said Julian Callow, of Barclays Capital. “Europe needs to act very fast to ring-fence Greece to prevent contagion. There has never been a default in Western Europe since World War Two and the whole financial system is depending on the assumption that it cannot be allowed to happen. There may need to be some sort of 'Brady bonds’ or 'Barroso bonds’,” he said, referring to the solution for Latin American debt in the 1980s.

The Parthenon was closed to visitors, a symbol of the Greece’s paralysis as public employees carried out yet another general strike, this time as EU and IMF officials were holding their second day of tense talks in Athens.

Ilias Iliopoulos, head of the Adedy union, said the protest was a warning that calls for further cuts would meet resistance. “These bloodthirsty measures won’t help Greece exit the crisis. A tragic period begins,” he said. Greece is already squeezing fiscal policy by 6pc of GDP this year – cutting the deficit by 4pc – in the most draconian cuts ever imposed on a modern developed country.

Goldman Sachs said it is expecting Greece to offer some sort of “voluntary debt-restructuring” to creditors over coming months. Erik Nielsen, the bank’s Europe economist, said the rescue formula may evolve into a mixture of loans and debt forgiveness in order to give Greece “a much longer breathing space”.

-----City bankers are bracing for a possible haircut of up to 50pc on €270bn (£235bn) of Greek sovereign debt, hoping that any losses will be split between creditors and some sort of EU resolution fund.

The trigger for Thursday’s wild moves was a report by Eurostat, the EU’s data agency, that Greece’s budget deficit last year was at least 13.6pc of GDP, and may be revised to over 14pc after a probe into “off-market swaps” and social security funds. Overall debt may be 5pc to 7pc of GDP higher than thought, pushing the total for 2009 to 122pc.

US rating agency Moody’s downgraded Greece’s debt one notch to A3 and warned of more to come. “The debt may stabilise only at a higher and more costly level,” it said.

Moody’s rebuked the EU’s “fractious” handling of rescue talks and said the country would in any case need more than the €45bn of aid so far ear-marked by the EU and the IMF.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7621289/Escalating-Greek-default-fears-rock-Europes-debt-markets.html

Below, more detail on the oil rig disaster in the Gulf of Mexico. I suspect that this disaster is going to shape the future of offshore drilling off America in years to come. At this point it’s far too early to know how large an environmental impact, if any, this tragedy will have, but it’s sure to be seized on by the anti-offshore drilling interests on the east and west coasts.

As oil rig sinks, hope fades
Chances of rescuing the 11 missing workers diminish by the hour, Coast Guard says
By BRETT CLANTON and MONICA HATCHERHOUSTON CHRONICLE April 22, 2010, 11:29PM
Hope faded Thursday of finding 11 missing offshore workers alive as the sun set on a second day of searching and the massive drilling rig that exploded into flames late Tuesday night sank into the Gulf of Mexico.

With the fire doused and the rig submerged, the Coast Guard launched a sweeping effort to clean up petroleum spewed into the water and seal off a well at the sea floor that may have still been leaking oil.

As it did, investigations began and questions continued to swirl about the cause of the accident at the Deepwater Horizon, a half-billion-dollar rig owned and operated by Swiss-based Transocean that was under lease to BP.

And the attention of a nation — even of the president himself — focused on an oil rig in the Gulf that few would have ever known or cared about had it not been for a tragic accident there.
Coast Guard officials said search and rescue efforts for the missing would continue but acknowledged that chances of survival diminished by the hour.

-----Transocean's Deep­water Horizon is among an elite class of deepwater drilling rigs that have been in high demand in recent years as major Western oil companies, facing access limitations onshore, extend their search for oil and gas into more difficult regions.

The semi-submersible rig, held in place by giant thrusters, entered service in 2001, can operate in 10,000 feet of water and drill to a depth of 30,000 feet.

When the rig caught fire, BP had already finished drilling an 18,000-foot exploratory well at its Macondo prospect, located 41 miles offshore Louisiana, David Rainey, the company's vice president of Gulf of Mexico exploration, said Thursday.

Production was near

The British oil giant had discovered an unspecified quantity of oil there and was taking the final steps to temporarily abandon the well so it could come back later and start production, he said.

The BP well contains commercial quantities of oil and was being prepped to tie in to BP's nearby Pompano platform, a person familiar with the plans said.

Those plans, however, could be on hold as the cleanup effort continues and officials try to get to the bottom of what happened.

Transocean is launching an internal investigation, Rose said. The Coast Guard deployed a robot submarine to take video of the sunken rig in an effort to piece together details of the accident and track potential leaks of diesel fuel and oil from the rig.

-----Transocean's Rose had earlier speculated the explosion was caused by a blowout as the crew was cementing in pipe-like casing that secures the walls of the well, though he noted it was too early to say definitively.

A blowout occurs when the pressure of hydrocarbons in a reservoir exceeds the weight of drilling fluids put on top of it to hold it in place.

Blowout called unlikely

Ted Bourgoyne, professor emeritus in petroleum engineering at Louisiana State University, said it is uncommon for a blowout to happen in such a late stage.

Further, instruments on the rig should have warned of a spike in pressure and told workers to engage the huge blowout preventer that can seal the well at the sea floor.
“I think there was probably equipment failure involved,” he said.

Scott Amann, a spokesman for Cameron, the Houston firm that built the blowout preventer used by the Deepwater Horizon, said it is too early to speculate on the cause of the accident but is speaking with BP and Transocean about the situation.
http://www.chron.com/disp/story.mpl/metropolitan/6968685.html

In Goldman scandal news this Friday, Bloomberg’s experts below think the great vampire squid should cut and run. Reading between the lines, that sounds like a coded way for saying Goldie and the banksters have more to lose by fighting and opening up to the searchlight of disclosure than they lose by reaching a pre-trial settlement. “God’s work” on Wall Street, apparently doesn’t come with a guaranteed iron clad defence in court. “The devil made me do it. Let’s make a deal.” Next week, the Chief Squid and “the Fab” get to sing for their supper at the Senate hearing into Wall Street bankster reform. This promises to be the best viewing since last century’s O.J. Simpson trial.

"God, no, we don't club baby seals. We club babies."

Goldmanite, quoted in The Times of London. November 8 2009.

Goldman Sachs Should Cut Losses in SEC Standoff, Lawyers Say
By Joshua Gallu and David Scheer
April 23 (Bloomberg) -- Goldman Sachs Group Inc. may be better off cutting its losses instead of fighting what it terms “unfounded” fraud claims, say professors of securities law who have examined the U.S. Securities and Exchange Commission’s lawsuit against the bank.

The most profitable firm in Wall Street history will probably lose what is typically the first hurdle in court, a motion to throw out the April 16 suit because it lacks legal merit, the professors said in interviews this week. After that, Goldman Sachs’s risks will mount and its negotiating position will weaken, they said.

“There’s a very low probability that Goldman could get the case dismissed,” said Thomas Hazen of the University of North Carolina at Chapel Hill, whose books include a two-volume treatise on broker-dealer law. “Every pretrial motion the SEC wins, Goldman gets one step closer to losing.”
Goldman Sachs is the first major Wall Street firm accused by regulators of fraud connected to the collapse of the subprime mortgage market. The SEC’s allegation that Goldman Sachs defrauded investors sparked a 13 percent, one-day decline in its shares. The New York-based firm, led by Chief Executive Officer Lloyd Blankfein, 55, said it will vigorously contest the claims. It must weigh the risks of a drawn-out legal battle against the benefits of a more immediate resolution.

------Blankfein and other executives at the bank are scheduled to testify at a Senate hearing next week along with Fabrice Tourre, the Goldman Sachs banker who was also sued by the SEC. The Permanent Subcommittee on Investigations will explore investment banks’ role in the financial crisis at the April 27 hearing.

Blankfein yesterday attended a speech by President Obama in New York City pushing for financial regulatory reform, as Congress weighs legislation that could crimp profits for Goldman Sachs and the biggest U.S. banks. The legislation may come to the Senate floor as early as next week.

Even if top managers are certain they’re right on the merits of the case, Goldman Sachs should probably settle, said senior executives at three of the firm’s rivals. The executives, speaking anonymously because they wouldn’t comment publicly on a competitor, said Goldman Sachs would be better off by deciding to settle the suit, cut its losses, and focus on repairing the damage to the firm’s reputation.

Paulson’s Pick

Two of the executives said they also believe Goldman Sachs may have to change senior management to give the appearance that the firm is changing the way it does business.

-----If the SEC’s case survives a dismissal motion, the case would probably proceed to discovery, when the agency may seek additional testimony or information from the firm. That process could provide fodder for private lawsuits, additional allegations from regulators, or media attention that would further tarnish the firm’s image, according to George Cohen, a corporate law professor at the University of Virginia School of Law, and Lisa Casey, who teaches securities law at the University of Notre Dame in Indiana.

“The evidence and rumors would be difficult to contain,” Casey said. “The market could react any time more information leaks out to the press.”

-----If Goldman Sachs settles or loses at trial, “people are going to ask, ‘Am I one of the clients who Goldman does deals for, or am I one of the clients Goldman does deals against?’” Dombalagian said. “There’s the saying that if you don’t know who the mark at the table is, you’re probably the mark.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVTs5FgBoCVg&pos=2

A politician looks forward only to the next election. A statesman looks forward to the next generation.

Thomas Jefferson.

At the Comex silver depositories Thursday, final figures were: Registered 50.80 Moz, Eligible 64.53 Moz, Total 115.33 Moz.


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Crooks & Scoundrels Corner.

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

Today, round two is over in the UK general election, as the UK’s 3 dwarfs compete for the honour of leading the UK into a Greek like austerity existence. In our dumbed down, media trivialized, US style presidential election, honesty gets checked in at the studio cloakroom, as two neophytes compete with a grumpy old Scot’s class war socialist, for the prize of raising taxes and cutting spending, in a desperate attempt to undo 13 disastrous years of Blair-Brown mismanagement and incompetence. Of course all 3 deny any such thing will happen, setting up the stage for an unprepared and very likely angry public to go ballistic at some point ahead, when the truth is suddenly sprung on them later in the year. Stay long precious metals, preferably far away from H.M.G.’s reach. As things stand at present, polls suggest that in a hung Parliament, Scotland’s gift to the English will likely cling on to power in some form of temporary coalition regime. Under the grossly unfair system of rotten boroughs that greatly exaggerate the socialist vote, the loony new age global warming, lets disarm and sign up to the Euro Liberal Democrats, have an outside chance of winning the popular vote, while only getting about a third of the seats as the other parties.

The trouble with free elections is, you never know who is going to win.

Leonid Brezhnev.

Cameron Failure to Top Clegg in Debate Signals Hung Parliament
April 23 (Bloomberg) -- Conservative David Cameron failed to derail Nick Clegg in the U.K. campaign’s second debate, four instant polls showed, pointing to a hung parliament with Prime Minister Gordon Brown’s Labour Party as the largest bloc.

In a 90-minute televised debate, Brown, 59, compared his 43-year-old opponents to children “squabbling at bathtime.” Cameron, who led polls until Clegg’s surge after last week’s debate, said a government without a majority would prevent “decisive action” to narrow a record budget deficit. Clegg dismissed such warnings as “ludicrous scare stories.”

Of four surveys released immediately after the event, two showed Clegg won and a pair favored Cameron. That suggests the debate will produce little change in polls on the overall race in coming days. Most since last week show Labour winning a plurality of seats in the May 6 election.

-----A YouGov Plc daily poll before last night’s debate put the Conservatives at 34 percent and Labour at 29 percent, with the Liberal Democrats at 28 percent. That would leave Labour with 278 seats to 251 for the Conservatives and 88 for the Liberal Democrats, according to the standard calculations used by academics and pollsters.

-----Such a result may roil markets because a divided government would be too weak to fix Britain’s finances, some economists say. The pound slumped 1 percent in the two days after the debate last week and weakened in early Asian trading, dropping 0.2 percent at 8:16 a.m. in Tokyo. It has lost 5.1 percent against the dollar this year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRrgY9cLEIfU&pos=8

Why A UK Hung Parliament is Likely. Stay long precious Metals.
http://www.ukpollingreport.co.uk/blog/

Each candidate behaved well in the hope of being judged worthy of election. However, this system was disastrous when the city had become corrupt. For then it was not the most virtuous but the most powerful who stood for election, and the weak, even if virtuous, were too frightened to run for office.

Niccolo Machiavelli.

Another weekend, and Iceland is now sending its ash to Reykjavik and Canada. If there ever was any Icelandic ash over Europe, it certainly isn’t affecting commercial airplanes judging by our heavily contrailed skies. In the biggest bureaucratic blunder probably ever, in our dumbed down modern world, it looks like no one is going to be held to account for disrupting the lives and wealth of millions. Have a great weekend everyone.

Below, in response to a few requests last week, another link to the villages of the River Pang Anglo-Saxon region.

http://www.tidmarshwithsulham.co.uk/default.htm


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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