Baltic Dry Index. 1761 +29
LIR Gold Target by 2019: $3,000.
"When people look back on this period in five or ten years from now, they'll say that this was something approaching a turning point for the American economy."
Robert A. Rubin, Chairman National Economic Council, 1994.
We open with the reaction to Dr. Bernanke’s gloomy outlook yesterday on the state of the US economy. If we didn’t know better, the Fed’s chief bankster sounded like he’s switched sides to join David Rosenberg and Dr. Roubini. When the Fed’s chief spin-meister gets depressed, it’s way past time to run for cover, the Fed’s super-model must be predicting a very bad outcome some months ahead. A “somewhat weaker outlook” is Fed speak for run for the lifeboats now! Roughly the Merrill Lynch equivalent of screaming sell GE now, which come to think of it might not be a bad idea. The equivalent of old Ebenezer Squid coming out and saying “don’t buy this rubbish we’re peddling, it’s the worst toxic trash that we’ve packaged in years.”
"Blessed are the young, for they shall inherit the national debt."
Herbert Hoover.
Bernanke's bearish outlook rattles US investors
Ben Bernanke, the chairman of the US Federal Reserve, warned of “unusually uncertain” prospects and a “somewhat weaker outlook” for the US economy in comments that sent American investors running for cover
By James Quinn, US Business Editor Published: 11:16PM BST 21 Jul 2010
-----In his semi-annual testimony to the US Congress on the state of the US economy, Mr Bernanke did reiterate earlier comments that growth continues at a “moderate pace,” and reaffirmed the Fed’s predictions that US gross domestic product will grow between 3pc and 3.5pc this year.
However, although he spent considerable time focussing on what will happen after the Fed eventually raises rates from its current 0-0.25pc range, it was his focus on what might happen should the economy take a turn for the worse that interested investors.
“If the recovery seems to be faltering, then we will at least need to review our options,” he said.
Economists appeared to largely discount market hopes of further quantitative easing, however, with Capital Economics saying in an unattributed research note: “Anyone hoping for a signal that the Fed was preparing to provide some further monetary stimulus to boost the flagging US recovery would have been sorely disappointed. He devoted more time to reiterating the Fed’s plans for an eventual exit strategy.”
Far across the American Ocean, “downbeat Ben’s” words shocked the toxic Topix, which promptly fell to its lowest level since last November. Traders there though should have known better, the BDI has been in a major retreat since the end of May.
"There are two times in a man's life when he should not speculate: when he can't afford it and when he can."
Mark Twain
Japanese Stocks Decline for Fifth Day After Bernanke Comments
July 22 (Bloomberg) -- Japanese stocks fell for a fifth straight day, dragging down the Topix index to its lowest level since November, after Federal Reserve Chairman Ben S. Bernanke said the U.S. economic outlook remains “unusually uncertain.”
-----The Nikkei 225 Stock Average fell 1 percent to 9,184.49 as of 12:43 p.m. in Tokyo. The broader Topix sank 0.8 percent to 822.54, heading to its lowest close since Nov. 27. More than two shares declined for every one that advanced.
“People in the market are anxious about the future of the global economy, making them unwilling to take on risk,” said Hisakazu Amano, who helps oversee about $18 billion in Tokyo at T&D Asset Management Co. “There’s uncertainty in the whole market because of Europe’s financial issues, concern about the U.S. economy and the sustainability of growth in China and emerging countries.”
The Topix has slumped 18 percent from its high this year on April 15 as Europe’s debt crisis and China’s steps to curb property prices fueled concern global economic growth will slow. That has cut the average price of stocks in the gauge to 16.1 times estimated earnings, the lowest level since November 2008.
http://noir.bloomberg.com/apps/news?pid=20601101&sid=aPze7fWIAm2w
Elsewhere in America the news wasn’t good either, unless you’re long term unemployed, where there is a promise of jam tomorrow. Jam tomorrow doesn’t feed the unemployed today, rather like “let them eat cake” didn’t work out too well for Marie Antoinette. Below, the days of googol bankster bonuses look to be over. Below that, the Senate passes “let them eat cake.”
"If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too."
Lloyd Blankfein. CEO Goldman Sachs. November 8, 2009
US banks point to Wall Street slowdown
US bank results point to a dramatic slowdown in the investment banking industry, writes Harry Wilson
By Harry Wilson Published: 5:45AM BST 21 Jul 2010
------Take Goldman Sachs' results on Tuesday. Even the world's biggest and best investment bank has proved far from immune to the currents buffeting global finance as it reported a near 40pc fall year-on-year in second-quarter trading and principal investment revenues, while total revenues were down 7pc for the first half at a still impressive $21.6bn (£14.2bn).
The trend is the same for the other big beasts of the US investment banking business.
Citigroup, Bank of America and JP Morgan have all reported double-digit percentage falls in revenues from their investment banking divisions, which just a year ago were at the heart of their recovery from the financial crisis that left each bank nursing large losses and looking for ways to quickly earn enough money to pay back the US authorities for the support funds they had accepted.
Finding the culprit for the slowdown in the investment banking business is not hard and at US most banks is found listed on the results under the acronym FICC, standing for fixed-income, currencies and commodities.
FICC, a term popularised by Goldman Sachs, but now widely copied, refers to the large trading divisions that have been at the heart of the profits made by investment banks for the last decade.
While there may be those who still quaintly believe that investment banking is about advising on mergers and acquisitions and all the other activities that fall under the term corporate finance, this is largely a side-show compared to the trading business.
-----Analysts at Nomura in a presentation yesterday, drew attention to the poor performance of US investment banks, which they said was largely due to a combination of fears surrounding European government debt and up-coming regulation, that led to a decline in the businesses' profitability.
The question now is whether this speaks to a longer-term trend or whether it is the inevitable result of comparing a boom year like 2009 to its weaker successor.
Judging by the reactions of some of the US banks' chief executives to the results there is more to this slowdown than a lopsided comparison.
http://www.telegraph.co.uk/finance/7901286/US-banks-point-to-Wall-Street-slowdown.html
July 21, 2010, 7:26 p.m. EDT
Senate approves extending unemployment benefits
Bill now heads to the House; if approved, retroactive payments may take weeks
WASHINGTON (MarketWatch) -- More than 2 million long-term jobless workers are one step closer to reclaiming federal unemployment-insurance benefits, following a Wednesday evening vote in the U.S. Senate.
Senators voted 59 to 39 in favor of the bill to retroactively pay for extended federal benefits through November at a cost of about $34 billion. The House of Representatives is expected to vote Thursday to approve the bill, and President Barack Obama is expected to sign it into law soon afterwards.
More than 2 million people have lost benefits after federal unemployment-insurance extensions started to phase out at the end of May, according to a U.S. Labor Department estimate. If Washington doesn't pass the bill, that number will rise to about 2.86 million by Saturday, and to about 3.23 million by July 31.
-----But even if a final bill is approved soon, it could take weeks for workers to collect benefits that they have missed since the extensions started phasing out, said Judy Conti, federal advocacy coordinator with the National Employment Law Project, a New York-based advocate for workers' rights.
"Even the best states will probably have a week or so of lag time, and it wouldn't surprise me if in some states the lag time were a month," Conti said.
http://www.marketwatch.com/story/senate-approves-extending-unemployment-benefits-2010-07-21-192600
Next, the results of the Swiss National Bank’s King Canute policy are in. Down 14 billion francs in the first half of 2010 and counting. Not to worry, the franc is only fiat money just like the Pound, dollar and euro. There’s plenty more where they come from. The SNB can carry on trying to weaken the franc until the cows come home. Shame about the value of franc savings though. Stay long precious metals. None of the fiat currencies are safe from dissembling central banksters and our crop of bent politicians. The benefits of fiat currency are all front loaded, and were long ago dissipated by politicians bribing the baby boom voters. Now as they enter retirement, they and future generations have to pay the bill with a downwardly mobile lifestyle.
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise."
Jerome F. Smith
Swiss endure safe-haven agony from euro flight
Switzerland is fighting a losing battle to stop massive inflows of funds from investors fleeing sovereign risk in the euro area and the rest of the world, raising the risk of a violent spike in Swiss franc if global debt jitters return.
By Ambrose Evans-Pritchard Published: 10:13PM BST 21 Jul 2010
The Swiss National Bank (SNB) said it lost over 14bn francs (£8.8bn) in the first half of the year in a forlorn attempt to hold down the currency against the euro.
"If we have a US slowdown with a fresh financial crisis, everybody is going to want to buy the Swiss franc, along with bottled water, tins hats, and a shotgun," said David Bloom, currency chief at HSBC. "Now that Japan’s debt is around 200pc of GDP the franc has displaced the yen as the ultimate safe haven."
The franc has appreciated dramatically against the euro since the debt crisis surfaced in Greece and set off a broader worries about the viability of EMU. It strengthened from CHF 1.52 at the end of last year to a record CHF 1.31 earlier this month.
The SNB spent CHF80bn in one month alone trying to prevent the Swiss economy being pulled into a deflation spiral, but each attempt to buy euros has failed to secure any lasting effect. "They are betting against the fundamental trend, which never really works," said Neil Mellor from the Bank of New York Mellon.
Hans Redeker, head of currencies at BNP Paribas, said the surging franc had been driven by capital flight from the eurozone. "If there is any further tension in the EMU banking system, the franc will immediately rise further."
Handelsblatt reported that German citizens in Bavaria are crossing the border to open franc accunts in Zurich as a precaution, repeating a time-honoured tradition in times of stress. The Swiss economy is too small to absorb large inflows without causing huge disruption.
"Without intervention by the SNB, the franc might be on its way to parity against the euro," said Jürgen Büscher, founder of Büscher Private Asset Management in Zurich.
"What’s causing all the trouble is a `carry trade’ unwind by real estate companies and people in Eastern Europe who borrowed in francs to buy houses. They are in effect being bailed out at the cost of the Swiss taxpayer.
-----Data from the Bank for International Settlements shows that external lending in Swiss francs reached $643bn in 2007 as borrowers from the Baltics to Poland, Hungary, and the Balkans, and even Austria tapped into Europe’s lowest interest rates, often pushed by their own banks. In Hungary it became difficult to obtain a loan in local forints. The SNB warned then that this carry trade was hazardous.
We end for today with a Bank of England inflation hawk, going off message, with a blunt assessment of what lies ahead for the recently duped UK voters. “Don’t worry, be happy,” becomes “start worrying you’re going to be very unhappy,” in the months and years ahead. Shame he couldn’t quite get out the words “buy gold,” but then again, he’d probably like to hold on to incredibly generous civil service pension pot.
One must have some sort of occupation nowadays. If I hadn't my debts I shouldn't have anything to think about.
Oscar Wilde.
Economy set for 'triple whammy', admits Bank chief
Senior economist warns of deteriorating outlook
Growth prospects hit hard by Osborne Budget
Unemployment and inflation likely to soar
By Sean O'Grady, Economics Editor Thursday, 22 July 2010
The British economy faces a triple whammy of higher inflation, lower growth and rising unemployment, according to one of the Bank of England's most senior policy makers. Living standards over the next few years will rise only "minimally".
In an interview with The Independent, the Bank's chief economist, Spencer Dale, said that he did not expect inflation to return to its 2 per cent official target before the end of next year, about a year later than previously hoped, partly because of the hike in VAT to 20 per cent from January announced in the Budget.
And, although Mr Dale acknowledged that the emergency Budget had done much to avoid the risk of a UK sovereign debt crisis and a rise in interest rates, he also acknowledged that the Budget would mean lower growth. Mr Dale agreed that he would not be surprised if unemployment went higher in the next few months. For the next "three, four, five years, demand in the economy will be "incredibly anaemic" relative to previous recoveries.
-----Meanwhile the European banking system faces a potential crisis tomorrow when the "stress tests" undertaken by European regulators on 91 leading institutions will be published. Banks that fail the tests – designed to determine their ability to withstand a financial shock – will have to be rescued or allowed to fail.
Over the next few years living standards, said Mr Dale, will be "less good than they would otherwise be" and will show only a "modest", "minimal" improvement. Tax hikes, muted pay rises, unemployment and public spending cuts will mean that things "won't feel good" for many families. Rising unemployment will also restrain house prices. The extent of the fall in public sector employment will depend on how public sector wage demands react to the pressure on budgets, said Mr Dale.
It is only by not paying one's bills that one can hope to live in the memory of the commercial classes.
Oscar Wilde.
At the Comex silver depositories Wednesday, final figures were: Registered 52.80 Moz, Eligible 57.94 Moz, Total 110.74 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, Google. Is Google just a front for the US alphabet soup spooks? Who else gets to share the illegal data? By nature, not all spooks are trustworthy! Some have even been known to work for the other side. “Are you now or have you ever been a member of the CIA?” Is this where the missing emails end up? Below Google, BP! What can one say. Time to exit this stock if anyone’s still unfortunate enough to be in it.
Google's Wi-Spying and Intelligence Ties Prompt Call for Congressional Hearing
SANTA MONICA, Calif., July 19 /PRNewswire-USNewswire/ -- Citing new information about Google's classified government contracts and the Internet giant's admitted Wi-Spying activity, Consumer Watchdog today said it is more imperative than ever for the Energy and Commerce Committee to conduct hearings into possible privacy violations by Google.
In a letter to Committee Chairman Henry Waxman and Ranking Member Joe Barton, the nonpartisan, nonprofit public interest group's John M. Simpson wrote:
"Based on today's Washington Post, it appears that Google holds classified U.S. government contracts to supply search and geospatial information to the U.S. government. In addition, White House records show that Google executives have been holding meetings with U.S. national security officials for undisclosed reasons. Finally, it also appears that Google's widely criticized efforts to collect wireless network data on American citizens were not inadvertent, contrary to the company's claims."
"As history has repeatedly shown, alliances between the U.S. intelligence community and giant corporations that collect data on American citizens can be a toxic combination where the U.S. Constitution is concerned," the letter said.
In a June 9 letter to the Energy and Commerce Committee, Google director for public policy Pablo Chavez asserted that Google "mistakenly included code in our software that collected samples of 'payload data'" from private WiFi networks. But review of a patent application from Google covering the gathering of WiFi data published Jan. 28 shows that the data collection program was a very deliberate effort to assemble as much information as possible about U.S. residential and business WiFi networks.
The letter continued:
"...what the patent does show is that Google's recent claims about how the Street View program was designed are not accurate, and that the company always intended to collect and store the 'packets' of wireless data that contain so-called payload information.
"The patent makes repeated reference to 'capturing' packets, including paragraph [0055], which states that the system will enable geolocations so long as the equipment being used 'is able to capture and properly decode a packet...'
"This raises serious questions about whether Google has engaged in a reckless effort to amass private data without giving any thought to the possible misuse of that information, and whether it can be trusted to safeguard the information it collects from the prying eyes of the U.S. government."
Read the patent here: http://insidegoogle.com/wp-content/uploads/2010/07/US20100020776.pdf
Read the letter here: http://insidegoogle.com/wp-content/uploads/2010/07/LtrWaxman071910.pdf
In addition, White House visitor logs show that Alan Davidson, Google's Director of Public Policy and Government Affairs, has had at least three meetings with officials of the National Security Council since the beginning of last year. One of the meetings was with White House senior director for Russian affairs Mike McFaul, while another was with Middle East advisor Daniel Shapiro.
It has also been widely reported that Google has been working in "partnership" with the National Security Agency, the very same government body that illegally intercepted the private communications of millions of Americans during the Bush administration.
Monday, July 19, 2010
BP photoshops fake photo of crisis command center, posts on main BP site
by John Aravosis (DC) on 7/19/2010 10:37:00 PM
UPDATE 12:08PM Eastern 7/20/10: BP has faked yet another oil crisis response photo on its Web site.
UPDATE: 11:14PM Eastern: BP has now posted the "original" photo, they claim. Except - surprise - they are refusing to post the high-resolution version of the new "original" photo (update: they've now posted the original photo). They posted the high-res version of the altered photo earlier, and in fact, that version is still live via a link below the new photo. Why not post the high-res version of the new "original" photo? Afraid someone is going to enlarge it and find out it's fake too?
UPDATE 10:37PM Eastern: The Washington Post has the story now. Oddly, BP is now claiming that the photo is real - but it showed blank screens, and rather than show blank screens at AP's crisis center, they instead put fake content-filled screens in the photo. Uh, a few questions.
1) Why were the screens in the crisis center blank in the middle of the crisis? Coffee break?
2) The BP spokesman claims that the photographer photoshopped the changes. Really? A professional photographer hired by BP Photoshops so poorly that a 12 year old kid could do a better job. Really? Let me show you what BP said exactly, and then the photo that supposedly this "professional" edited
----Anyone who has ever used Photoshop knows that this is an incredibly amateur job. I can do far better than this, and I tend to play with Photoshop for fun. We're to believe that a professional photographer did this poor a job, for pay, for a huge corporate client? Really? No one would hire this photographer again if this is true. Oh, and the photographer added the fake screens to the photo, what, without BP's permission? That's what they're implying, "the photographer did it."
3) Why does the meta data show that the photo was actually taken on March 6, 2001? Or is BP next going to tell us that their professional photographer has never set the time and date stamp on his multi-thousand dollar camera? Because then all of his photos for all of his clients will be screwed up. Really?
UPDATE: The photo contains data suggesting it was taken in 2001, not July of 2010 as claimed on BP's Web site. That would suggest, at least one possibility is, that BP took an old photo and Photoshopped new pictures of the oil spill over it, to make it look "new." More on this at the end of the post.
I guess if you're doing fake crisis response, you might as well fake a photo of the crisis response center. Why do they need a fake photo at all? Don't they have a real crisis response center they could have used?
Original BP Photo that is linked off of this page, with a snippet of the photo:
----Note the bad Photoshop job on the parts I cropped and blew up - click on each photo to see the larger version, which makes it painfully clear that they faked the photo (poorly, at that):
http://www.americablog.com/2010/07/bp-photoshops-fake-photo-of-command.html
The monthly Coppock Indicators finished June:
DJIA: +269 Down. NASDAQ: +460 Down. SP500: +290 Down.
The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators.
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