Baltic Dry Index. 2601 -93
LIR Gold Target by 2019: $3,000.
“Those who made the laws have apparently supposed that every deficiency of payment is the crime of the debtor. But the truth is, that the creditor always shares the act, and often more than shares the guilt, of improper trust.”
Samuel Johnson. 1758.
On Sunday China announced that they will allow the Yuan to float in a little wider band than before. The markets took it as a sign that sooner or later, but mostly sooner, that the Yuan will revalue against the dollar, and that sooner or later but mostly sooner, that the Yuan will join the dollar and shaky Euro and become a reserve currency for use in settling international debts. Below, this morning’s instalment of the Yuan’s rise to international acceptance. If I didn’t know better, I’d say that poor Mr Geithner is about to get his wish on the Yuan. Somehow, I doubt that it is going to solve America’s problem of profligate debt.
China expands pilot program of yuan settlement in foreign trade to 20 regions
BEIJING, June 22 (Xinhua) -- China's central bank said on Tuesday that the pilot program of yuan settlement in foreign trade has been expanded to 20 province-level regions to facilitate trade and investment.
The newcomers are Beijing, Tianjin, Inner Mongolia, Liaoning, Jiangsu, Zhejiang, Fujian, Shandong, Hubei, Guangxi Zhuang Autonomous Region, Hainan, Chongqing, Yunnan, Sichuan, Jilin, Heilongjiang, Tibet and Xinjiang Uygur Autonomous Region.
China introduced the pilot program in July 2009. Exporters in Shanghai, and several cities in the manufacturing base of Guangdong Province were the first batch that could settle foreign trade in yuan.
http://news.xinhuanet.com/english2010/china/2010-06/22/c_13362811.htm
In European news, Fitch issued a warning yesterday on Alice in Euroland debt. Better late than never, I suppose, though the whole Euroland funny money project had already managed to stagger up to death’s door and is hammering away to be let in. My guess is that door will not remain barred for much longer.
Battered eurozone left vulnerable to crisis, warns Fitch
The global crisis has revealed weaknesses in the eurozone's economic framework which left it particularly vulnerable to the downturn, Fitch has warned.
By Angela Monaghan, Economics Reporter Published: 9:04PM BST 21 Jun 2010
The ratings agency said that although the risk of a eurozone break-up was low over the short to medium term, further episodes of "extreme market volatility" were likely to persist until the recovery and deficit reduction were secured in the region.
A report by Fitch said the crisis in the eurozone and investor concerns over the sustainability of the region had arisen because of the existence of the following:
• Economic imbalances.
• Scepticism over the ability of economies within the eurozone to adjust in the absence of monetary and exchange rate flexibility.
• Concerns about fiscal solvency given large fiscal deficits and weak economic growth prospects.
• Doubts over the political commitment to the eurozone in the aftermath of the hesitant and reluctant support given to Greece.
The report came as came as Juergen Stark, executive member of the European Central Bank, said that markets and ratings agencies had behaved irresponsibly in response to the debt problems faced by Greece.
On the other side of the Atlantic, worry is rising that this summer will see another “flash crash.” My own work with the WIN volume tracking system backs up those fretting over another flash crash. Email me if you would like a spreadsheet with the detail. Below, CNBC covers how high frequency trading programs have killed off public participation in the market. Portfolio insurance anyone, and don’t get me started on AIG’s CDS.
It is impossible to imagine the universe run by a wise, just and omnipotent God, but it is quite easy to imagine it run by a board of gods.
H. L. Mencken.
Another 'Flash Crash' Coming? Some Market Pros Think So
Published: Monday, 21 Jun 2010 | 2:09 PM ET
The May 6 "flash crash" may be history, but its after-effects—and threat to the stock market—continue to loom large after two recent mini-crashes in individual stocks.
Regulators have characterized the initial flash crash, which saw the Dow lose nearly 1,000 points in a matter of minutes, as a one-off occurrence possibly attributable to a "fat finger" trade or some other market anomaly.
But a growing chorus of traders and legislators believe the flash crash is symptomatic of a larger problem with high-frequency trading and a market that lacks visibility and is susceptible to similar events in the future.
"We have a global economy and a global trading system, but we don't have a global framework to deal with it yet," says Doug Roberts, chief investment strategist at Channel Capital Research. "Until you do, you're going to be prone to this. With the average investor, they're going to want to be a little bit more conservative."
The problem could be even more serious when it comes to investor confidence.
While market volume always thins out in the summer, some think the flash-crash also is playing a role and could be a long-term deterrent to participation if regulators don't come up with preventive measures soon.
"People are voting with their feet," says Sen. Ted Kaufman (D-Del.), who has been pressing the Securities and Exchange Commission and Congress to address the underlying causes that led to the flash crash. "Why would they not be concerned? We are playing with dynamite here."
Thus far, the main reaction has been the implementation of circuit breakers that stop trading on individual stocks should they rise or fall more than 10 percent in a five-minute span.
The rule, implemented for a six-month test period, got its first workout last week when Washington Post shares doubled inside of a second Wednesday, from nearly $460 to $929.18.
The circuit breakers essentially did their job, halting trading in the company after the surge. But the mystery remains over why such events happen in the first place.
The WaPo jump was the second flash-crash since the initial event. Tech services company Diebold saw its shares plunge 35 percent then recover in a period of a few minutes on June 2, before the circuit-breakers kicked in.
The non-transparency that stems from high-frequency trades, which can happen in milliseconds, makes tracking the trades virtually impossible. Some estimates have high-frequency trading accounting for about 70 percent of all market activity.
A congressional panel looking into the issue has made little headway.
-----Defenders of high-frequency trading say it pumps liquidity into the markets and makes fair trading possible.
But perhaps the most stunning characteristic of the flash crash was that liquidity actually evaporated from the market, sending shares of some big-name companies momentarily to a penny when they couldn't find a bid.
http://www.cnbc.com/id/37780974
We end for today, while we wait for the UK’s emergency austerity budget, with more on America’s “Victim culture.” More on the UK’s austerity package tomorrow. The latest to achieve victimhood in the US, at least in his own mind according to media reports, is convicted mega fraudster Bernard Madoff. Below, is Bernie just bragging or did the Great Fraudster really get away with $9 billion for use later in retirement after serving out his 150 years?
Bernard Madoff 'hid $9bn from prosecutors'
Bernard Madoff is said to have told fellow inmates that he squirreled away a secret $9bn (£6bn) which prosecutors do not know about from his $65bn ponzi scheme fraud.
By James Quinn, US Business Editor in New York Published: 7:45PM BST 21 Jun 2010
Madoff, who was jailed last year for 150 years after admitting to orchestrating the historic fraud, is reported to have channelled the funds to three individuals – whose identities remain unknown – shortly before he confessed to his crimes in December 2008. "I think it was personal friends," one inmate is reported to have said.
The claims, made in the New York Post, are based on conversations with an inmate who spent time in prison with Madoff. It is the first time since Madoff's crimes came to light some 19 months ago that there has been any formal suggestion – in spite of numerous rumours – that the former fund manager attempted to hide significant amounts of money from prosecutors and the police.
If true, it could prove to be a significant development for Irving Picard, the court-appointed trustee charged with uncovering Madoff's secret assets, who is now likely to want to interview Madoff to find out where the money is.
The fellow prisoner also claimed that Madoff told him that the only other person to know of the identities of the three is Frank DiPascali, his former right-hand man, though it is not clear whether he knew money had been passed to them.
Mr DiPascali has pleaded guilty to 10 separate counts relating to the Madoff fraud and is currently working with federal prosecutors from jail to help them widen the case.
Madoff allegedly told the inmate – who is not named by the paper – that he suspects Mr DiPascali may be using information relating to the secret $9bn as leverage to shorten his own sentence. He has yet to be sentenced. Mr DiPascali's lawyer declined to comment.
The New York Post account also provides an insight into Madoff's alleged life behind bars, suggesting he sought the aid of a counsellor ahead of the release of Sheryl Weinstein's book last year, in which it was revealed he had had an affair with the former investor.
"He was having problems with his wife [Ruth]" over the book's revelations, the inmate is reported to have said. Madoff is alleged to have been prescribed anti-depressants as a result.
Madoff is said to have now taken a job in the prison shop at Butner, North Carolina, where he is serving his sentence, and has still yet to be visited by sons Andrew and Mark, who worked in Madoff's securities business.
However, the inmate's account of Madoff's attitude to his victims does not tally with other recent accounts.
According to the New York Post's description, Madoff "feels a lot of pain for what he did to" his thousands of victims, running contrary to a recent account in New York Magazine in which the fraudster is alleged to have said: "**** my victims. I carried them for 20 years, and now I'm doing 150 years."
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken.
At the Comex silver depositories Monday, final figures were: Registered 52.08 Moz, Eligible 65.09 Moz, Total 117.18 Moz.
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Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, AFP on an article that neatly sums up the decline in the west. Below that, Investors.com covers the new reality in America. Forget rule of law, and responsible media leading to informed electorates, do as I say not as I do. Below that, India says me too.
A good politician is quite as unthinkable as an honest burglar.
H. L. Mencken.
White House mocks BP CEO's yacht race, defends Obama golf
(AFP) WASHINGTON — A White House spokesman mocked BP's chief executive Monday for attending a luxury yacht race despite the oil spill disaster in the Gulf of Mexico, but then defended President Barack Obama's own weekend golf game.
Tony Hayward, the British energy giant's embattled chief, drew fire from the White House over the weekend for having gone to the yacht race Saturday off the Isle of Wight.
White House spokesman Bill Burton took him to task again on Monday, suggesting that Hayward take part in the cleanup operations in the Gulf of Mexico with the 300,000 euro yacht he co-owns.
"You know, look, if Tony Hayward wants to put a skimmer on that yacht and bring it down to the Gulf, we'd be happy to have his help," Burton said to laughter in the White House briefing room.
"But what's important isn't what Tony Hayward's doing in his free time; it's what BP is doing to take... responsibility for the mess that they've made," he said.
His comments echoed those of White House Chief of Staff Rahm Emanuel who called Hawyard's decision to go to the yacht race "part of a long line of PR gaffes and mistakes."
But when asked about Obama's day Saturday, in particular his four hour golf game at a course near Washington, Burton said the president had the right to decompress a bit after a hard week.
"I don't think that there's a person in this country that doesn't think that their president ought to have a little time to clear his mind," Burton said.
"I think that a little time to himself on Father's Day weekend probably does us all good as American citizens," he said.
http://www.google.com/hostednews/afp/article/ALeqM5hfQ62qTEIbRH__q_rUMpzykNDtkQ
Is U.S. Now On Slippery Slope To Tyranny?
By THOMAS SOWELL Posted 06:13 PM ET
------Just where in the Constitution of the United States does it say that a president has the authority to extract vast sums of money from a private enterprise and distribute it as he sees fit to whomever he deems worthy of compensation? Nowhere.
And yet that is precisely what is happening with a $20 billion fund to be provided by BP to compensate people harmed by their oil spill in the Gulf of Mexico.
Many among the public and in the media may think that the issue is simply whether BP's oil spill has damaged many people, who ought to be compensated.
But our government is supposed to be "a government of laws and not of men."
If our laws and our institutions determine that BP ought to pay $20 billion — or $50 billion or $100 billion — then so be it.
But the Constitution says that private property is not to be confiscated by the government without "due process of law."
Technically, it has not been confiscated by Barack Obama, but that is a distinction without a difference.
With vastly expanded powers of government available at the discretion of politicians and bureaucrats, private individuals and organizations can be forced into accepting the imposition of powers that were never granted to the government by the Constitution.
If you believe that the end justifies the means, then you don't believe in constitutional government.
And, without constitutional government, freedom cannot endure. There will always be a "crisis" — which, as the president's chief of staff has said, cannot be allowed to "go to waste" as an opportunity to expand the government's power.
India to push US for extradition of Bhopal gas boss
By Ravi Nessman, Associated Press, in Delhi. Tuesday, 22 June 2010
India will pressure the US to extradite a former boss of the American chemical company Union Carbide over the 1984 Bhopal gas disaster.
The move follows public anger after seven former managers of the group's subsidiary, Union Carbide India Ltd, were convicted over the world's worst industrial accident. The gas leak at the Bhopal plant in central India killed 3,500 people within days and an estimated 15,000 in the years since.
Earlier this month, an Indian court sentenced seven executives of Union Carbide India to two years in prison for causing death by negligence and issued an arrest warrant for Warren Anderson, the former chairman of Union Carbide Corporation. "India will make vigorous efforts to get Anderson repatriated," the minister for urban development, Jaipal Reddy, said yesterday.
Mr Reddy is part of a nine-member panel set up this month to look into previous governments' handling of the accident and issues such as compensation for victims and the continuing pollution at the now abandoned plant.
India has made repeated, unsuccessful requests for Mr Anderson's extradition. Yesterday, the panel urged federal officials to use new evidence in support of an extradition plea, such as testimony that Union Carbide Corporation knew of defects in the plant. The federal cabinet will consider the panel's recommenations on Friday.
Union Carbide, now a subsidiary of Dow Chemical, paid a $470m settlement to India in 1989. It claims the issue has been resolved, Dow bears no responsibility for the leak and neither the parent company nor its officials are subject to Indian jurisdiction.
A spokesman for Dow said: "If there is any shortfall in compensation, it is to be borne by the government of India."
If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner.
H. L. Mencken.
The monthly Coppock Indicators finished May:
DJIA: +276 UP. NASDAQ: +499 UP. SP500: +304 UP. The great Bull market goes on with the all three continuing higher in positive numbers, but is now under serious pressure.
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Sunspots – A 22 year colder world? (From 2004?)
Spotless Days June 21
Current Stretch:0 days
2010 total: 35 days (21%)
2009 total: 260 days (71%)
Since 2004: 803 days
Typical Solar Min: 485 days
HOW MANY TIMES DID OBAMA PLAY GOLF? OBAMA OR TRUMP?lumen sports
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