Baltic Dry Index. 2773 -88
LIR Gold Target by 2019: $3,000.
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Ali Baba, 2002. Deflation: Making Sure "It" Doesn't Happen Here.
Yes it’s that time of year again when Ali Baba and the 40 thieves head off to Wyoming to compare how much they got away with in the year past, and the trade their latest ideas on how to rip of the rest of the world in the coming year. If only there were only 40 thieves. Bankster-in-Chief Ben Bernanke stars tomorrow, when according to the script the 4,000 thieves are waiting to hear when his helicopter drops resume over Wall Street. Things could turn very ugly fast, if the Big Man of the Fed goes off script. Shame about Main Street though, and all those pension funds stuffed to the gills with “triple-A” MBS. Below MarketWatch covers the air show. Stay long precious metals, but far away from where Ali Baba’s thieves can steal it.
Running to the window, he opened it, and put out his head. No fog, no mist; clear, bright, jovial, stirring, cold; cold, piping for the blood to dance to; Golden sunlight; Heavenly sky; sweet fresh air; merry bells. Oh, glorious. Glorious!
"What's to-day?" cried Bernanke, calling downward to a distressed financier in bespoke clothes, who perhaps had loitered in to look about what might be asset stripped.
"Eh?" returned the Bilderberger, with all his might of wonder.
"What's to-day, my fine fellow?" said Bernanke.
"To-day?" replied the Wall Street fraudster. "Why, Christmas Day."
With apologies to Charles Dickens.
Bernanke's helicopter could move to new altitude
Key Jackson Hole question: What more can, and will, the Fed do?
Aug. 25, 2010, 6:00 a.m. EDT
WASHINGTON (MarketWatch) -- In an all-out effort to get the economy moving again, Federal Reserve Chairman Ben Bernanke may be getting ready to take his money-creating helicopter to a new altitude.
Bernanke earned the moniker "Helicopter Ben" after the then-Fed governor referenced Milton Friedman's famed "helicopter drop" favorably in a 2002 speech outlining how the Fed could defeat deflation.
(Friedman had argued hypothetically that a central bank could drop currency from a helicopter to stimulate spending.)
Nearly eight years on from that speech, Alan Greenspan's successor is due Friday at 10 a.m. Eastern to deliver another vital keynote at the Kansas City Fed's annual symposium in Jackson Hole, Wyo., with the straightforward title, "The Economic Outlook and the Federal Reserve's Policy Response."
In many ways, Bernanke's tenure as head of the world's most important central bank has followed the playbook outlined in that 2002 speech -- that to combat deflation, or a sustained negative inflation rate, the Fed would first take nominal interest rates to virtually zero and then take extraordinary action, such as buying government bonds and mortgage-backed securities.
Interest rates have been set between zero and 0.25% since December 2008, and the Fed has purchased $1.4 trillion worth of mortgage and $300 billion worth of Treasury securities. In early August, the Federal Open Market Committee took a baby step toward further quantitative easing by deciding to hold the size of the Fed's balance sheet constant through reinvesting principal repayments from mortgage securities into Treasurys
http://www.marketwatch.com/story/bernankes-helicopter-could-move-to-new-altitude-2010-08-25
In other US news, gloom follows gloom in the economy. If Ali Baba stays on script tomorrow, it’s Christmas bonus time early on Wall Street.
“Someday, we’ll look back on this, laugh nervously and change the subject.”
US economy: Sales of new homes down 12.4 per cent in July
By Stephen Foley</AUTHOR itxtvisited="1"> Thursday, 26 August 2010
A sharp drop in sales of new homes last month has confirmed the bleak picture of the US housing market, a day after existing home sales data also plunged to the lowest level since records began in the 1960s. Sales of single-family homes fell 12.4 per cent to an annualised rate of 276,000, from a downwardly-revised 315,000 in June.
Economists had forecast a rise to 333,000 but were braced for disappointment amid mounting evidence that the withdrawal of government tax credits to first-time buyers had stalled the recovery. The median price of a new house was down 4.8 per cent.
There was also weak data from the manufacturing sector. Orders for durable goods, including "big-ticket" items like kitchen appliances, or business investment in factory equipment and computers, rose by less than was anticipated.
Next, a must read article in the Journal on BP’s last day on Transocean’s Deepwater Horizon oilrig. Can the TV movie be far behind?
AUGUST 26, 2010
On Doomed Rig's Last Day, a Divisive Change of Plan
On April 20 at 10:43 a.m., a young BP PLC engineer sent a 173-word email to colleagues aboard the Deepwater Horizon drilling rig. The email spelled out a recent change to a key safety test that sparked confusion and debate aboard the rig.
Less than 12 hours later, the rig was engulfed in flames so hot they melted steel. Eleven workers were dead.
The worst offshore oil spill in U.S. history had begun.
The Deepwater Horizon blowout has become one of the most scrutinized maritime disasters ever. Congressional investigators and outside experts have identified a series of decisions in the weeks beforehand that made the blowout more likely.
But a central uncertainty remained: Why didn't the crew recognize the warning signs in the final hours and bring the well under control while there was still time to prevent a lethal eruption?
The Wall Street Journal has reviewed BP internal documents along with hours of public testimony before a joint Coast Guard and Interior Department panel. The Journal also interviewed dozens of witnesses to the disaster. What emerges is a startling picture of the last day of the Deepwater Horizon—a day filled with disruption and disagreement.
More
Back in the United States of Europe, honesty and playing by the rules doesn’t pay for the hapless, austerity bound Irish.
"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."
Mikhail Gorbachev
It Pays to Riot in Europe
By Ambrose Evans-Pritchard Last updated: August 25th, 2010.
Ireland must now pay more than Greece to borrow.
Dublin has played by the book. It has taken pre-emptive steps to please the markets and the EU. It has done an IMF job without the IMF. Indeed, is has gone further than the IMF would have dared to go.
It has imposed draconian austerity measures. The solidarity of the country has been remarkable. There have no riots, and no terrorist threats.
Yet as of today it is paying 5.48pc to borrow for ten years, or near 8pc in real terms once deflation is factored in. This is crippling and puts the country on an unsustainable debt trajectory if it lasts for long.
Yet Greece is able to borrow from the EU at 5pc and from the IMF at a staggered rate far below that (still too high for the policy to work, but that is another matter). These were the terms of the €110bn joint bail-out.
To add insult to injury Ireland is having SUBSIDIZE Greece to meet its share of the rescue fund.
I am sure you can all see the absurdity of this. It has moral hazard written all over it, and shows what happens once a dysfunctional system twists itself into ever greater knots rather confronting the core issue.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100007444/it-pays-to-riot-in-europe/
While we await the great bankster’s speech tomorrow, we end for the week, and the UK’s last bank holiday of summer, with the Japanese now setting out to offend more than just the Chinese. Proof positive that politicians are universally stupid and that ignorance isn’t just a monopoly of the west.
“ I see you’ve set aside this special time to humiliate yourself in public.”
Japanese politician launches attack on 'River Kwai' Britons
A politician tipped as a future Japanese prime minister has said the British are not very likeable, but admitted the way British prisoners marched in The Bridge on the River Kwai demonstrated their best qualities.
By Chris Irvine Published: 6:45AM BST 26 Aug 2010
Ichiro Ozawa, the former secretary-general of Japan’s ruling Democratic Party, also said he values US democracy but dismissed the American people as “simple-minded”.
The 68-year-old veteran politician, who resigned as the second most important official in the ruling party in June after coming under fire for campaign finance scandals, reportedly said: “I don’t like British people,” before praising British democracy and their discipline, citing the 1957 Second World War II film, The Bridge on the River Kwai, in which British prisoners of war march in orderly ranks.
Veterans of the Second World War who fought against Japan said Mr Ozawa’s comments about Britain were insensitive but they would “not get into a sweat about it”.
--- --As well as the British, Mr Ozawa criticised the Americans, questioning their intelligence.
“Why is the United States so simple? I like Americans, but they are somewhat like single-cell (organisms),” Mr Ozawa told a political seminar in Tokyo, according to Japanese media reports.
Despite his opinion of the American people, he praised US democracy, in particular the achievement of Barack Obama becoming president.
“A black president was born in the United States where having a black president seemed impossible,” he said.
“There are rumours that a black (leader) will surely be assassinated, but they chose Obama, who emphasised change.”
Mr Ozawa, 68, an old-school backroom fixer sometimes described as the “Shadow Shogun”, resigned from his DPJ post of the DPJ in June as Yukio Hatoyama resigned as prime minister amid sagging approval ratings.
Naoto Kan, who distanced himself from Mr Ozawa, replaced Mr Hatoyama as premier but is now struggling to stay in office after his party suffered losses in upper house elections in July.
At the Comex silver depositories Wednesday, final figures were: Registered 51.35 Moz, Eligible 60.05 Moz, Total 111.40 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today. more on the world’s leading non-government Ponzi scamster. Poor Bernie Madoff must be wondering why he’s doing a hard 150, while Ebenezer Squid and all the other Squids, live the life of Riley on Wall Street, robbing the rest of the world blind. He only stole a measly 50 billion or so, and in no way threatened to crash the whole world’s financial system. The Squids got bailed out to pay themselves more telephone number bonuses, and resume their casino capitalist ways. Bernie got to stamp out license plates for the rest of his life, alternating with sewing mailbags on Wednesday’s and Friday’s.
Below that, a must read primer for every CEO, CFO, COO of any company likely to face the third degree from America and the EU’s growing Gestapo charged with investigating alleged corporate crime. Those unfortunate to reside in former Prime Minister Stalin Brown’s Great Britain, face further jeopardy from an outrageous one sided extradition treaty with America, designed to fast track terrorists to their just rewards but only ever used against alleged white collar crime and a deluded hacker looking for info on UFO’s, plus the even more ridiculous and infamous European Arrest Warrant, where once free born Britons or residents, are now slaves to the caprice and whim foreign courts and are delivered up to rot in a foreign jail while, the overseas tyrants rig the trial. Yet more reason for the UK to withdraw from the United States of Europe.
“There's a difference between criminals and crooks. Crooks steal. Criminals blow some guy's brains out. I'm a crook.”
Ronnie Biggs. Great Train Robber.
AUGUST 25, 2010, 11:29 A.M. ET
Judge Asks Gibraltar Court to Release Funds to Madoff Victims
RESPONDING TO U.S. SEARCHAND SEIZURE WARRANTS AND EU DAWN RAIDS
REPRINTED FROM: JULY 2010 ISSUE
© 2010 Financier Worldwide Limited.
Permission to use this reprint has been granted by the publisher.
BY DAN GOLDFINE
Twenty years ago, searches/seizures and dawn raids to investigate business crimes, fraud and wrongdoing were largely unheard of.
Investigators at that time asked businesses for the records and voluntary cooperation; on occasion, grand juries and other investigatory bodies served subpoenas and compelled oral testimony. A new era of EU cartel enforcement and, in the US, the collection of billions of dollars in criminal fines and forfeitures and controversies surrounding Enron, Madoff, Goldman Sachs, private bribery cases, and devastating oil spills over the last 20 years have changed that. Wrongful business conduct has been thoroughly ‘criminalised’, and investigators now use tactics previously reserved for investigating organised crime and drug dealers, including searches/seizures and raids. The use of these investigatory tactics has become more frequent and visible. This means that company executives and in-house counsel should take steps to plan for their possibility.
Unfortunately, few in-house counsel or company executives have been trained on how to handle searches/seizures or dawn raids or have personally experienced such tactics. These tactics are extremely intimidating to executives, employees, and in-house counsel – as they are intended to be. Investigators use them to gather physical evidence, documents and electronic documents, data and metadata, but also to create an environment of fear, distrust, intimidation and compulsion – hoping to create circumstances and an environment whereby executives and employees make statements that they would not otherwise make.
More often than not, these statements are made outside the presence of company counsel or a witness to ensure accuracy and completeness as well as simply knowing what has been said to investigators, giving investigators tactical advantages relative to the company’s and executives’ defences.
Know what to expect
More.
http://www.swlaw.com/assets/pdf/news/2010/07/01/RespondingtoUSSearchandSeizureWarrants_Goldfine.pdf
Email for a copy of the PDF. Have a great weekend everyone. Check with the weekend blog for updates.
The monthly Coppock Indicators finished July:
DJIA: +264 Down. NASDAQ: +427 Down. SP500: +275 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. July seems to have confirmed June’s reversal and end of the bull market.
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