Baltic Dry Index. 2212 +98
LIR Gold Target by 2019: $3,000.
One CEO lamented, “New ventures and new venture funding are basically non-existent”.
They came from all over America, they met behind closed doors far from public scrutiny, and then the most exclusive elderly white men’s club in the world sent up a cloud of white smoke. After studying the chicken entrails of the US economy for several hours, the gurus of the temple of Mammon announced QE Lite. Another new low in our disintegrating world of the Great Nixonian Blunder. After two years and 2 trillion dollars of frantic pump priming, the American patient is relapsing according to his Federal Reserve witch doctors. He never recovered, say everyone else. Below, Dr Bernanke insists QE lite will work this time, honest it will. Call me an old fashioned cynic, but if two trillion of pump priming didn’t work over 18 months, I fail to see why two to three hundred billion more of pump priming over the next 12 months will work. Stay long precious metals, from what I can see from far away London, it’s just another two to three hundred billion to add to the great vampire squid’s bonus pot. And yes, the Telegraph below, keeping up its new found tradition of amusing errors, does get its millions confused with its billions. For more on the Telegraph’s new traditions click on the link below.
http://londonirvinereport.blogspot.com/p/intraday-news.html
“In February 1777, he forged a bond for £4,200 in the name of his former pupil, Lord Chesterfield, to clear his debts. A banker accepted the bond in good faith, and lent him money on the strength of it.”
William Dodd, “the Macaroni Parson” was publicly hanged at Tyburn for it on June, 27th 1777.
US Federal Reserve starts 'QE-lite' to placate markets
America's central bank attempted to reinvigorate the country's fading economic recovery by starting what has been dubbed "Quantitative Easing-lite" by one economist.
By James Quinn, US Business Editor Published: 8:45PM BST 10 Aug 2010
The US Federal Reserve, confirming a marked slowdown in the world's largest economy in recent months, said it plans to buy long-dated US Treasuries in an attempt to keep alive growth and maintain the vast amounts of money it pumped into the US economy during the financial crisis.
But rather than allocating new funds to the effort, the central bank said it will use the proceeds from its first $1.7 trillion (£1.1 trillion) quantitative easing (QE) cycle to buy the government bonds "in order to help support the economic recovery in a context of price stability". The proceeds are estimated to be $200m to $300m over the next 12 months, allowing it to keep its balance sheet at close to its present $2.06 trillion.
Paul Ashworth, of Capital Economics, called the decision a "symbolic gesture" designed to allow the Fed to measure the exact extent of the country's economic woes while reassurring investors.
The Fed's Open Markets Committee (FOMC) – which held its base interest rate at a range of 0pc-0.25pc for the 17th meeting in a row – however cautioned that recent data showed "the pace of recovery in output and employment has slowed in recent months".
---- The 10-member FOMC committee used very bleak language to describe the US economy, calling investment in commercial property "weak" and noting employers "remain reluctant to add to payrolls".
It followed a glut of negative economic data in recent weeks, not least second-quarter growth slowing to an annualised level of 2.4pc from 3.7pc in the first quarter, and the loss of 131,000 jobs in July.
However, there was a lone voice of dissent with FOMC member Thomas Hoenig, president of the Kansas City Fed, arguing that the economy is "recovering modestly".
Nonetheless the Fed's decision was largely viewed by economists as a stop-gap measure to buy time.
"It doesn't represent a new phase of QE at this stage," said Tom Higgins, chief economist at Payden & Rygel. "It's just maintaining the size of the balance sheet.
Jeremy Cook, of World First, who described the Fed's measure as "QE-lite" said: "If the ship doesn't correct itself by the beginning of the fourth quarter, then a full-blooded period of QE will come."
More.
Below, the bad economy is all the media’s fault, says Wayne Gorel, CEO of Gorell Enterprises. My thanks to reader Ian in Toronto for sending along the article. I think Mr. Gorel needs to get out more, perhaps buy a newspaper, and give up watching CNBC.
“I just wish the media would get out of the way.”
Lloyd Blankfein, with apologies to Wayne Gorel.
CEO Confidence Index July 2010CEO Confidence Falls Dramatically |
Chief Executive magazine’s CEO Confidence Index, the nation’s only monthly CEO Confidence Index, fell one-third (33.2%) in July, to 79.8. All five components of the index fell significantly, with the Current Confidence Index showing the largest percentage decrease of 60.4% -- dropping to 52.0. One CEO stated, “Not much confidence anywhere right now... most people are in a "hunker-down" mode”. Wayne Gorel, CEO, Gorell Enterprises, blames the media for contributing to the continued economic woes, “The media is saying how terrible things are, and the consumer is starting to believe them again. Things were starting to improve until this blitz about how we may be going into a double dip recession or even a depression like one headline story [stated] this week. The economy is growing at 3-4%, not great, but much better than last year. I just wish the media would get out of the way.” The Investment Confidence Index fell by 40.8% to 79.0. Fully 24% more CEOs rated investment opportunities as “bad” in July than in June. One CEO lamented, “New ventures and new venture funding are basically non-existent”. The Business Condition Index lost 31.9%, falling to 83.5. The Employment Confidence Index dropped 26.4% to 76.6. Job creation remains a significant hurdle to economic recovery. |
We end today’s time shortened update with good news from Bolivia and Repsol. Well it’s good news for Bolivia if a new Teddy Roosevelt doesn’t pull a Panama with Rio Grande. Sadly with America buried in Iraq and Afghanistan, and readying itself to take on Iran, there’s no one home in Foggy Bottom, ready to get bold in South America. Bolivia’s gas is Marxism’s gain.
Foreign policy: “the exercise of intelligent forethought and of decisive action sufficiently far in advance of any likely crisis"
Theodore Roosevelt.
Repsol find 1 trillion cubic feet of natural gas in Bolivia
LISBON Petroleumworld.com, Aug 10, 2010
Repsol YPF SA , Spain's biggest oil company, found a new deposit in Bolivia's Rio Grande area that it estimates has 1 trillion cubic feet of natural gas.
The discovery was made in the RGD 22 well and production tests indicate a flow of 6 million cubic feet of gas a day, Repsol said. The Madrid-based company made the discovery as a partner in the YPFB Andina venture, in which it owns a 49 percent stake while the Bolivian government holds 50 percent. This field has been in production since 1968, Repsol said.
“As the Rio Grande area already has the necessary infrastructure, these resources can be put into production in a short period of time,” Repsol said in an e-mailed statement. “With this discovery, YPFB Andina consolidates its position as the largest hydrocarbon producer in Bolivia.”
The Spanish company is investing in exploration in Brazil 's offshore Santos Basin, Bolivia and elsewhere to increase reserves and output, while trying to reduce exposure to mature fields in Argentina . Bolivia has the second-biggest natural-gas reserves in South America.
-----Repsol on April 29 said it forecasts annual production growth of as much as 4 percent through 2014 as projects in Brazil and Peru come on stream. The company plans to invest 28.5 billion euros in the period. It will develop projects such as the Guara and Piracuca fields in Brazil, Kinteroni in Peru, Cardon IV in Venezuela and Margarita-Huacaya in Bolivia.
http://www.petroleumworld.com/storyt10081002.htm
“I want to share something with you: The three little sentences that will get you through life. Number 1: Cover for me. Number 2: Oh, good idea, Boss! Number 3: It was like that when I got here.”
Homer Simpson.
At the Comex silver depositories Tuesday, final figures were: Registered 51.30 Moz, Eligible 58.66 Moz, Total 109.96 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, an ex Goldman Sachs VP writes that the banksters have already gamed the new clearing system of exchange cleared derivatives. The only game in town is derivatives casino gambling, also known as “prop trading.” Commerce, manufacturing, mining, and agriculture be dammed, if you want to make millions or hundreds of millions in bonuses, gigantic gambling is it. Don’t worry, if it all goes wrong the taxpayer and central bank covers the loss. Way too complicated for the masses to understand, sadly the next Lehman already exists, like a LNG tanker with a hidden fire beneath the decks, hiding losses, using every accounting dodge in the book, and already fatally impaired. Our impaired, dying, fiat currency bankster system is still heading full speed for the rocks, the banksters know it, which is why they pay out telephone number bonuses as fast as they can before the whole rotten system crashes down with the next Lehman. Stay long precious metals. The great vampire squids are still cashing out via obscene bankster bonuses, if they thought our gambling system would survive they’d be acting very differently. God’s work, apparently, consists of grab it and run.
Facts are meaningless. You could use facts to prove anything that’s even remotely true!
Homer Simpson.
The Murky Realm of (Derivatives) Clearing
Monday, 08/9/2010 - 10:32 am by Wallace C. Turbeville
For clearinghouses to work, we must have regulation that challenges the way we think about them.
Matt Taibbi’s latest article in Rolling Stone appropriately characterized the financial reform act as neither an “FDR-style, paradigm-shifting reform, nor a historic assault on free enterprise.” While generally describing the act as a “cop out,” he identified the Fed audit requirement and the Consumer Finance Protection Bureau as positive developments. But he viewed the requirement that many derivatives be cleared as “the biggest win of all.” Alas, Matt may have been too generous, or at least premature.
Mandating clearing was a convenient and simple approach for Congress. The idea was to shift the basic derivatives trading risks in an appreciable percentage of the market away from the banks to reduce systemic risk. The problem is that very few people are equipped to understand just how the mandate might work in practice.
How much of the market? What are the consequences? I have not seen evidence that anyone on the government’s side can answer these questions effectively.
---- Clearing theory is complicated and arcane. It was always a backwater of finance and was taken care of by people at the clearinghouses and in the back offices of the banks. Clearinghouses were largely allowed to regulate themselves through a process of self certification. This limited the Commodity Future’s Trading Commmison’s practical involvement with the markets.
Then clearing became the centerpiece of derivatives reform. We decided to concentrate the most dangerous financial risks in the galaxy in a couple of organizations.
As fate would have it, I am one of the few people around who knows something about the clearing business and theory and is not employed by an investment bank or clearinghouse. At the end of my career on Wall Street, I was hired to perform a financial autopsy of the special purpose derivatives clearinghouse set up by California as part of an innovative power market structure. It had failed in the state’s power crisis of 2001-02. Observing the tremendous systemic risk generated by using conventional clearing techniques for all but straightforward derivatives, I embarked on a seven year quest. I formed a company that designed a mathematical, IT and legal structure to provide a transparent and orderly system to manage the risks of those derivatives which shouldn’t be cleared conventionally.
Imagine my surprise when the banks decided against using the system. They preferred taking advantage of the opaque and chaotic bi-lateral derivatives market. The profit potential of the shadowy chaos outweighed efficiency, transparency and sensible risk management. At least I can claim to have been ahead of the times.
There are two dangerous forces at work in the endeavor to push derivatives into clearinghouses:
More.
http://www.newdeal20.org/2010/08/09/the-murky-realm-of-derivatives-clearing-16862/#respond
"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
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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