Baltic Dry Index. 3733 -111
LIR Gold Target by 2019: $3,000.
On July 1, 2005, Bernanke stated with great confidence that the U.S. was not experiencing a housing bubble, saying: “I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit.”
We open with the man who never saw a financial crisis coming, who thought Freddie and Fannie were paragons of thrift, who thought there wouldn’t be any problems in major US banks, who handed out over 700 billion to families and friends but won’t release where it went. Poor Chief bankster Bernanke now doesn’t see a double-dip recession. With a track record like this, it’s a dead cert, I think.
"I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system."
Dr. Bernanke. February 29th, 2008
Bernanke doesn't expect U.S. double-dip recession
Fed chief: consumer spending, business investment will pull economy forward
June 7, 2010, 10:37 p.m. EDT
WASHINGTON (MarketWatch) -- Federal Reserve board chairman Ben Bernanke said Tuesday he didn't think that the U.S. economy would slip back in to recession, saying that consumer spending and business investment seem strong enough to keep the economy growing, albeit at a relatively subdued rate.
"My best guess is we'll have a continued recovery [but] it won't feel terrific," he said.
Fears of a double-dip recession have multiplied in recent weeks. The weak May employment report released Friday, which showed just 41,000 private-sector jobs were created last month, was only the latest signal that the U.S. economy may be softening again.
Bernanke was interviewed by ABC News reporter Sam Donaldson at a dinner sponsored by the Woodrow Wilson International Center for Scholars.
Coming into 2010, the big question was whether the economy would "get its own legs" and not have to rely on government fiscal medicine and inventory behavior, Bernanke said.
"So far the news is pretty good," Bernanke said.
http://www.marketwatch.com/story/feds-bernanke-doesnt-see-double-dip-recession-2010-06-07
In European news, abandon hope all ye who party here. Germany uber alles, uber alles in der Welt. The slackers and slouchers of Club Med and Great Britain take note, we know where you live, your days are numbered! Vee haf vays ov making u vork! Europe goes on a starvation diet. In Paris being small is the new big thing.
Germany unveils $80B in spending cuts
By Quentin Peel, FT.com June 8, 2010 -- Updated 0250 GMT
(FT) -- Drastic public spending cuts totalling more than €80bn ($96bn, £66bn) were unveiled by Angela Merkel, German chancellor, on Monday, combined with up to 15,000 job cuts in the public sector, as part of a sweeping austerity package.
New taxes will also be imposed on air travel and the nuclear power industry, and some form of financial transactions tax is planned, in addition to a banking levy already agreed by the German government.
Ms Merkel said Germany would be pushing for an as yet unspecified form of Europe-wide financial transaction tax to ensure the financial sector contributes to the cost of the economic crisis. She admitted, however, that the chances of agreeing such a measure at global level in the G20 were slim.
The four-year savings plan was approved after two days of intense negotiations between the partners in the ruling centre-right coalition. It is intended to curb the country's soaring budget deficit, set to exceed 5 per cent of gross domestic product this year, and to set an example to other members of the European Union, Ms Merkel said.
http://edition.cnn.com/2010/BUSINESS/06/07/merkel.germany.spend.cuts.ft/index.html?hpt=T2
Spanish public workers strike against government cuts
MADRID — Spain's civil servants went on strike Tuesday to protest government cuts to their salaries as part of a plan to rein in a ballooning public deficit that has rattled global financial markets.
Unions representing the country's nearly three million public workers, ranging from doctors to street cleaners, called the strike last month after the government unveiled another 15 billion euros (18 billion dollars) in spending cuts over two years.
The austerity measures -- intended to ease worries the country will need an international rescue package like the one provided to Greece earlier this year -- include average cuts this year to public workers' salaries of five percent.
They are on top of a 50-billion-euro package of spending cuts announced in January designed to slash the public deficit to the eurozone limit of three percent of gross domestic product by 2013 from 11.2 percent last year, the third largest in the eurozone behind Greece and Ireland.
The public sector strike is seen as a test of the minority government's resolve to push ahead with the austerity measures as well as a way for unions to gauge the level of support for a possible general strike for all workers.
Prime Minister Jose Luis Rodriguez Zapatero has vowed to push ahead with with the austerity measures despite the opposition from the unions, which are traditionally close to his Socialist Party.
http://www.google.com/hostednews/afp/article/ALeqM5hOgQah_KKyi6meABVLq3nDZiPsYQ
Nicolas Sarkozy bans tall bodyguards
Tall security agents have been discreetly advised not to apply for a job guarding Nicolas Sarkozy, police sources have claimed.
By Henry Samuel in Paris Published: 2:23PM BST 07 Jun 2010
The vertically challenged French president is said to have banned statuesque bodyguards despite their added value of being able to spot potential attackers in a crowd.
A police source told Le Parisien that "there's no point recruiting supermen" as "large-sized" candidates stood little chance of being taken on.
The presidential guard, known by its acronym GSPR, has been beefed up from 50 to 80 men since 2002, when a mentally disturbed man managed to take a potshot at Jacques Chirac, Mr Sarkozy's predecessor, with his hunting rifle before being overpowered.
President Sarkozy is notoriously sensitive and secretive about his diminutive height of around 5ft 5 ins – making him shorter than Napoleon.
He has gone out of his way not to stand small on the world stage or when next to his 5ft 10 ins former model wife, Carla Bruni-Sarkozy, who mostly wears flat pumps.
Besides wearing specially-designed stacked shoes, Mr Sarkozy has been caught standing on tiptoes in global leader group shots and stood on a box to remain shoulder to shoulder with Barack Obama, the US President, when the pair gave speeches to commemorate the Normandy landings last year.
But his most controversial move to date on the height front was when his aides bussed in a group of factory workers last September who claimed they had been picked to appear alongside the French leader because they were short.
The Elysée dismissed as "grotesque and absurd" reports that it had stage managed the visit to the Faurecia auto parts company in Normandy, despite the fact that staff confirmed they had been selected because they were "no bigger than the President".
But it only added fuel to the fire of satirists and cartoonists, who often depict Mr Sarkozy as a dwarf.
In April, the Elysée cried foul after a German car hire firm launched a poster campaign urging customers to rent a small Citroen C3 hatchback, with the slogan, "Be like Madame Bruni, take a small French model".
In BP news it’s more of the same. Another day and another unknown quantity of crude oil spewed into the Gulf of Mexico. Meanwhile President Obama continues to try to catch up with the BP lynch mob. With 8,000 dead at Bhopal, India in 1984, Union Carbide can only pray that he doesn’t set off a trend.
Mr Obama also launched a salvo at Tony Hayward, BP's CEO, over some of his past comments, including saying at one point that "I want my life back" and that the Gulf was "a big ocean" and that "the environmental impact of this disaster is likely to be very, very modest."
"He wouldn't be working for me after any of those statements," Mr Obama said, according to excerpts released by NBC.
Gulf oil disaster cleanup to take years, Allen says
By the CNN Wire Staff June 8, 2010 -- Updated 0154 GMT (0954 HKT)
(CNN) -- Workers scraped oil off beaches and skimmed it out of waterways from Louisiana to the Florida Panhandle on Monday, but the impact of the Gulf oil disaster will be felt for years, authorities said.
"My concern is after everything is cleaned up, if they can clean it all up, and they leave, what is our business going to be like?" said Dudley Gaspard, owner of the Sand Dollar Marina and Hotel on hard-hit Grand Isle, Louisiana. "Oil's coming in pretty heavy, into the marsh area now, and we're not sure -- we're kind of in the dark."
Restoring wetlands and wildlife habitats along the Gulf Coast will take far beyond the time needed to cap the ruptured undersea well at the heart of the disaster, Coast Guard Adm. Thad Allen, the head of the federal government's response effort, told reporters at the White House.
"Dealing with the oil spill on the surface is going to go on for a couple of months. After that it'll be taken care of," Allen said. "Long-term issues of restoring the environment and the habitats and stuff will be years."
------On Day 49 of the spill, heavy oil was spotted off Louisiana's Barataria Bay, near the mouth of Wilkinson Bay and in nearby Four Bayou Pass, the state Office of Homeland Security and Emergency Preparedness reported. Mississippi state agencies reported tar balls hitting the Mississippi coast at several points, while more tar balls ranging in size from less than an inch to about four inches across hit the Florida Panhandle, the Escambia County Commission said.
Dead wildlife has now been reported in the region, and Allen said Monday that patches of shoreline totaling roughly 120 miles long have been affected by the spill. The spill has broken up into a series of pools, ranging from 20 to 100 yards to several miles long.
http://edition.cnn.com/2010/US/06/07/gulf.oil.spill/index.html?hpt=T2
New oil plume evidence uncovered
By John Couwels, CNN June 7, 2010 -- Updated 0650 GMT (1450 HKT)
St. Petersburg, Florida (CNN) -- As if the pictures of birds, fish and animals killed by floating oil in the Gulf of Mexico is not disturbing enough, scientists now say they have found evidence of another danger lurking underwater.
The University of South Florida recently discovered a second oil plume in the northeastern gulf. The first plume was found by Mississippi universities in early May.
USF has concluded microscopic oil droplets are forming deep water oil plumes. After a weeklong analysis of water samples, USF scientists found more oil in deeper water.
"These hydrocarbons are from depth and not associated with sinking degraded oil but associated with the source of the Deep Horizon well head," said USF Chemical Oceanographer David Hollander.
Through isotopic or microscopic fingerprinting, Hollander and his USF crew were able to show the oil in the plume came from BP's blown out oil well. The surface oil's so-called fingerprint matched the tiny underwater droplet's fingerprint.
"We've taken molecular isotopic approaches which is like a fingerprint on a smoking gun," Hollander said.
BP has not commented on the latest development but in the past denied underwater oil plumes exist.
"The oil is on the surface," said BP's Chief Executive Officer Tony Hayward. "There aren't any plumes."
-----"There are indications this is fairly wide spread," said the USF oceanographer. "There is probably more than one leg of this plume."
Scientist are concerned what effect the oil, not to mention the dissolvents used to break up the oil, will have on marine life.
Laboratory tests show bacteria has begun eating some elements of the dissolved hydrocarbons. But the effect on fish "is what needs to be understood," said Hollander. "We are in unchartered territory."
Water samples collected by USF were sent to the National Oceanic and Atmospheric Administration labs. NOAA has yet to comment on their conclusions.
NOAA and USF will hold a joint press conference Tuesday morning at the university's S.t Petersburg's campus to release their final findings.
http://edition.cnn.com/2010/US/06/07/gulf.oil.plume/index.html?hpt=T2
BP oil spill: Barack Obama seeking 'ass to kick' over disaster
Barack Obama, who has been criticized for reacting too slowly to the Gulf of Mexico oil spill, has said that he is talking to experts because he wants to know "whose ass to kick."
Published: 7:00AM BST 08 Jun 2010
Using his strongest language yet to discuss the unfolding environmental disaster, Mr Obama said he was urgently working on a solution. Though he has been to the Gulf three times since the April 20 rig explosion, some critics charge he has been slow to lead.
"I don't sit around just talking to experts because this is a college seminar. We talk to these folks because they potentially have the best answer so I know whose ass to kick," Mr Obama said in an NBC News' "Today" interview.
Mentioning BP's high dividends, Mr Obama said that instead the British energy giant should pay compensation.
"We also have to make sure that every single person that has been affected by this is properly compensated and made whole," he said.
BP is under political pressure to suspend dividend payments - which total $10.5 billion a year - after two US Senators called on it not to pay out to shareholders until the full costs for cleaning up the massive spill are known.
BP is due to announce its second quarter dividend and results on July 27.
Mr Obama also launched a salvo at Tony Hayward, BP's CEO, over some of his past comments, including saying at one point that "I want my life back" and that the Gulf was "a big ocean" and that "the environmental impact of this disaster is likely to be very, very modest."
"He wouldn't be working for me after any of those statements," Mr Obama said, according to excerpts released by NBC.
We end for the day with China. The age of cheap profits from slave labour is over, it seems. Apple, HP and Dell, among others, are about to get a reality check to their profits. The west’s free lunch from Chinese labour is about to end. Stay long precious metals, the age of the big inflation just took a big step closer.
Labor unrest in China reflects changing demographics, more awareness of rights
By Keith B. Richburg
Monday, June 7, 2010
BEIJING -- China has been hit with a recent wave of labor unrest, including strikes and partial shutdowns of factories, underscoring what experts call one of the most dramatic effects of three decades of startling growth: A seemingly endless supply of cheap labor is drying up, and workers are no longer willing to endure sweatshop-like conditions.
China's export-driven growth has long been linked to its abundance of workers -- mostly migrants from the impoverished countryside who jumped at the chance to escape a hardscrabble rural life to toil long hours in factories for meager wages.
If they were unhappy, they rarely expressed it through action, and if they did, they were quickly fired and replaced from among the hundreds of others waiting outside the factory gates.
Now all of that has started to change.
Shifting demographics, including years of effective population control through the government's "one child" policy, have left China short of younger workers, particularly in the crucial 15-25 age group that many factories rely on most. These young workers don't have to travel far from home like their parents did to find work. They are more aware of their rights. And having grown up in a more prosperous China, they are demanding a fairer share.
"The first generation of migrant workers made a lot of money compared with their poor life before," said Cai He, dean of sociology at Sun Yat-sen University. "But right now the majority of migrant workers are in their 20s. They were born in the 1980s. Most of them have no farming experience" and "are more sensitive to the disparity between the wealth of the city and their own poverty."
Cai added: "The younger people received a better education. They surf the Internet, use mobile phones and watch TV. Their awareness of their rights is much stronger than the older migrant workers."
These young workers are asserting those rights in the form of work stoppages, slowdowns and demands for higher wages and shorter hours. The unrest was highlighted by a strike that began May 17 at Honda's transmission factory in the city of Foshan, where hundreds of workers walked off the job. The Japanese carmaker had to shut its four assembly plants in China.
Around the same time, the Taiwanese-owned Foxconn electronics plant in Shenzhen, which assembles Apple iPhones and iPads, was struck by 10 suicides among its workers and three suicide attempts, which labor activists blamed on the stress of long overtime hours.
Bus and taxi drivers also have staged strikes this year, affecting tens of thousands of passengers.
The recent cases -- particularly the Honda strike -- are also noteworthy for receiving extensive coverage in the Chinese media. While labor unrest has become increasingly common across China in the past two years, experts said, most incidents typically go unreported.
"We're having major problems with labor unrest right now," said Sunil Balani, a Hong Kong-based businessman who exports garments to Europe from Chinese factories. "Some of our factories are running 30, maybe 40 percent empty at times."
Although the Honda and Foxconn plants are in southern China, Balani said that most of the five plants he subcontracts are in the north and that "they're still facing the same problem," indicating widespread unrest .
Foxconn 'suicide factory' raises pay 70pc
Chinese workers at Foxconn, the China-based assembler of Apple’s iPad and other leading consumer electronics brands, are to receive a dramatic 70pc wage rise, raising the prospect of Western customers paying more for their electronic goods.
By Peter Foster in Beijing Published: 10:52AM BST 07 Jun 2010
The move, which follows a spate of worker suicides this year at Foxconn’s factory in Shenzhen, southern China, could also increase industry-wide pressure for higher wages among China’s factory workers, analysts said.
The latest wage increase comes just a week after Foxconn, which is the world’s biggest manufacturer of computer products – including iPhones, iPods and iPads for Apple, as well as goods for HP, Dell, Sony, Nokia and Nintendo – and employs 800,000 workers in China, increased pay for its Chinese assembly line staff by 30pc with immediate effect.
Following the latest rise, which will take full effect from October 1, the basic salary for production-line workers at Foxconn’s will have risen from 900 renminbi (£91.30) per month two weeks ago to 2,000 renminbi (£203).
“This wage increase has been instituted to safeguard the dignity of workers, accelerate economic transformation…and to rally and sustain the best of our workforce,” Foxconn’s founder and Chairman Terry Gou said in a statement.
“We are working diligently to ensure that our workplace standards and remuneration not only continue to meet the rapidly changing needs of our employees, but that they are best in class.”
Foxconn’s wage increases fit a growing trend in China where the country’s coastal manufacturing zone are being hit by labour shortages as more factories move inland, spurred by government policies aimed at driving Chinese factories up the value-chain.
This year local governments across southern China have announced minimum wage increases averaging 20pc in a bid to retain workers and mitigate the impact of inflation on food and house prices caused by China’s massive monetary stimulus in the last 18 months.
"It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions."
Dr. Bernanke. October 15th, 2007
At the Comex silver depositories Monday, final figures were: Registered 52.19 Moz, Eligible 66.19 Moz, Total 118.38 Moz.
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Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today Bloomberg reports on Ebenezer Squid’s Wall Street dump truck. What is the Great Vampire Squid trying to hide? Still, you have to wonder, who sat around to count “more than a billion pages of documents.” Counted at the rate of one a second, that’s about 31.7 years.
“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”
Dr. Bernanke. November 2005.
Goldman Subpoenaed After FCIC Says Firm Slowed Probe
June 7 (Bloomberg) -- Goldman Sachs Group Inc. was subpoenaed by the Financial Crisis Inquiry Commission after panel members said the most profitable firm in Wall Street history engaged in a document “dump” to hinder a probe.
Goldman Sachs sent more than a billion pages of documents, FCIC Vice Chairman Bill Thomas said on a conference call with reporters today. Not all of the information is what the panel requested, and Goldman Sachs didn’t cooperate with requests to interview Chief Executive Officer Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar, FCIC Chairman Phil Angelides said.
“We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,” said Angelides, 56, who previously served as California’s treasurer. “This has been a very deliberate effort over time to run out the clock.”
The FCIC, which Congress appointed last year to investigate the causes of the worst economic slump since the Great Depression, issued the subpoena June 4. The request adds to government scrutiny of New York-based Goldman Sachs, as regulators and lawmakers examine how it packaged mortgages into securities that fueled investor losses when the housing market collapsed in 2007.
-----Thomas said the panel’s requests to Goldman Sachs go back “several months.” Information the firm turned over didn’t comply with what was asked for and has put FCIC investigators in the position of “searching through the haystack for the needle,” he said.
“We expect them to provide us with the needle,” he said.
Goldman Sachs agreed to schedule interviews with Blankfein, 55, and other executives after the FCIC issued the subpoena, Angelides said.
The FCIC wants details on sales of collateralized debt obligations, assistance in determining the names of Goldman Sachs clients and a list of documents the firm provided to the Senate Permanent Subcommittee on Investigations, according to a statement posted on the panel’s website today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=al.7k3fL70P8&pos=3
Despite a recent spike in the nation's unemployment rate, the danger that the economy has fallen into a "substantial downturn" appears to have waned.
Dr. Bernanke. June 9th, 2008
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.
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. Many thanks to all who have helped.
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Sunspots – A 22 year colder world? (From 2004?)
Spotless Days June 07
Current Stretch:0 days
2010 total: 33 days (21%)
2009 total: 260 days (71%)
Since 2004: 802 days
Typical Solar Min: 485 days
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