Thursday, 16 December 2010

Euro Decision Day.

Baltic Dry Index. 2047 -22

LIR Gold Target by 2019: $30,000. Revised due to QE.

“Right now we have a common enemy, those who are in government, the IMF and the EU,” said Klapsis [a stationmaster at a suburban bus depot in the capital Athens for 31 years.] The IMF “wherever they pass through is scorched earth, the same as fire. They leave nothing behind,” he said.

Today, Europe assembles yet again in Brussels, in one last ditch effort to save the dying Euro. From London it appears that Germany is ready to turn off the life support machine. Not that the UK has any influence in the European Monetary Union. The only thing that ex Prime Minister Gordon Brown got right during his disastrous spell as UK Chancellor, under the equally disastrous vainglorious Prime Minister Blair, was to block Blair from taking Britain into the Euro in return for Blair becoming President of the European Union. Today, while Europe recovers from riots in Greece and Italy, Europe’s Lords of the Universe aka riff raff meet in Brussels for a last gasp effort to convince Germany that they must join in a financial/political union, in addition to the monetary union. The Germans would be mad to join any such political union. Below, the latest on the zombie Euro heading towards its date with destiny and disappearance. Stay long precious metals.

Belgium: A country invented by the British to annoy the French.

Charles de Gaulle

Europe Staggers as Critical Summit Looms

By MICHAEL SLACKMAN Published: December 15, 2010

BERLIN — Europe’s smoldering financial crisis flared up on Wednesday, with riots over austerity spending in Greece, new signs of troubles in Spain and little indication that European leaders were moving any closer to agreement on a systemic approach to long-term stability.

The day’s events emphasized the complex social, political and economic challenges facing government leaders at a European Union summit meeting on Thursday and Friday in Brussels. The meeting is expected to focus on the financial crisis, but there was no sign of the emergence of the sort of comprehensive plan that financial experts say is needed to beat back the unfolding turmoil.


Foreign minister Guido Westerwelle issued a veiled threat that Germany may walk away from the project if the rest of the EU tries to bounce the country into a debt union. “Anyone who talks about entering a union of financial transfers is putting support for Europe at risk, especially in the countries that must bear most of the burden,” he said.

Germany defiant as Europe suffers

Germany has refused to give any ground on Europe's rescue machinery despite the escalating political and economic crisis across much of the eurozone periphery, guaranteeing a bitter clash with EU partners at a crucial summit in Brussels on Thursday.

By Ambrose Evans-Pritchard 6:38AM GMT 16 Dec 2010

Chancellor Angela Merkel pledged that no euro member would be "left on their own", but dug in her heels against the creation of eurobonds and demands to boost the EU's €440bn (£372bn) bail-out fund. "We must not make the mistake of thinking that collectivising risk is the answer," she told a stormy session of the Bundestag.

The defiant stand came as Moody's issued a downgrade warning on Spain owing to "high refinancing needs in 2011" and the risk of further bank bail-outs. It said central and regional governments must finance €200bn next year. Spanish lenders have to roll over a further €90bn.

"These needs are now rendered more challenging by the fragile confidence of international capital markets. Foreign investors have typically funded around 5pc of Spain's funding requirements. They may be less willing to do so in the immediate future given recent speculation about the treatment of bondholders should Spain be pushed to seek support from the EU/IMF," it said.

Moody's said Spain may need to inject €80bn of fresh capital into the banks under a "stressed scenario". The agency said Madrid seems unable to control the debts of regional juntas. There appear to be “no policy initiatives” to discipline health and education spending.

Yields on 10-year Spanish bonds rose briefly to 5.6pc on Wednesday.

Bond traders say the country may have trouble raising funds until it becomes clear whether the European Central Bank will buy Spanish debt.

In continued tension across the eurozone periphery, rioters in Athens set fire to cars and beat a former minister with clubs outside the parliament building.

The violence follows ugly scenes in Rome the day before when protests over education cuts erupted into street battles, leaving 100 injured in Italy’s worst riots for 30 years.

One police officer was nearly dragged to his death. Italy’s press said urban guerrillas had infiltrated the protest, prompting fears of a return to the 1970s terrorism of Left and Right.

---- More peacefully, Ireland’s Dail approved the country’s €85bn rescue deal by six votes but anger is building over the terms. Investors fear that the next government will repudiate the deal after fresh elections.

Michael Noonan, finance chief of opposition Fine Gael, said Ireland should walk away from the senior debt of rescued banks.

“You have the obscene situation where the poorest of the poor, through their taxes and welfare cuts, are being asked to guarantee the speculation of investors in hedge funds. Ireland has no moral or legal obligation to cover this debt,” he said.

Germans are flummoxed by humor, the Swiss have no concept of fun, the Spanish think there is nothing at all ridiculous about eating dinner at midnight, and the Italians should never, ever have been let in on the invention of the motor car.

Bill Bryson

Berlusconi government 'will fall by Easter'

By Michael Day in Milan Thursday, 16 December 2010

Despite a dramatic victory on Tuesday for Italian premier Silvio Berlusconi in a make-or-break confidence vote, one of his ministerial colleagues was yesterday predicting that his government would fall by Easter.

Mr Berlusconi showed his swaggering side following his latest political Houdini act, where he won despite accusations of vote-rigging: "I told you, I knew FLI (the party of centre-right rival Gianfranco Fini) would split," he said, adding: "I am serene now, just as I have always been."

In reality the 74-year-old is scrambling for votes to prop up his lower house majority which has been slashed from 100 to just three since the 2008 election. The weakness of Mr Berlusconi's coalition was underlined by one cabinet colleague. Minister without Portfolio Roberto Caderoli, said: "The government is eating panettone [a traditional Christmas treat] but I don't think it will eat colomba [Easter cake]."

The prime minister's task appeared harder when the centrist UDC party leader Pier Ferdinando Casino, a former Berlusconi ally, appeared to close the door to new dealings with the billionaire media mogul. Stronger links with the UDC would, anyway, anger Mr Berlusconi's right-wing Northern League allies. Mr Berlusconi is also trying to lure back more wavering Fini supporters, as well as non-aligned MPs. "I'm not looking at an agreement with political groups but I'm looking at individual deputies who feel betrayed by Fini, who took them into opposition with the left," Mr Berlusconi said.

It is not yet clear who, or how many people, he will succeed in tempting into his centre-right government, which has been rocked by months of scandal surrounding, in the main, the premier himself. Mr Berlusconi's supporters yesterday called on Fini to quit his post as House Speaker, following his defeat in the no-confidence vote, after three members of his breakaway centre-right FLI party deserted at the last moment.

Mr Fini said: "Berlusconi's numerical victory is as clear as our defeat, made even more painful by the 'Road to Damascus' conversion of three of Fli's members." But he added that his party would "have fun" at the government's expense – a promise that it would impede government legislation.

"It will be clear in a few weeks that Berlusconi won't be able to say he won in political terms," he said.

Italy is not technically part of the Third World, but no one has told the Italians.

PJ O'Rourke. "Holidays in Hell"

In other news, the US came out yesterday with a statement of the obvious. The USA like everywhere else is dependent on China for rare metals aka rare earth elements, and for the most part for the manufactured products made from them. Sadly a situation irredeemable for most of our new decade.

U.S. Called Vulnerable to Rare Earth Shortages

By KEITH BRADSHER Published: December 15, 2010

HONG KONG — The United States is too reliant on China for minerals crucial to new clean energy technologies, making the American economy vulnerable to shortages of materials needed for a range of green products — from compact fluorescent light bulbs to electric cars to giant wind turbines.

So warns a detailed report to be released on Wednesday morning by the United States Energy Department. The report, which predicts that it could take 15 years to break American dependence on Chinese supplies, calls for the nation to increase research and expand diplomatic contacts to find alternative sources, and to develop ways to recycle the minerals or replace them with other materials.

At least 96 percent of the most crucial types of the so-called rare earth minerals are now produced in China, and Beijing has wielded various export controls to limit the minerals’ supply to other countries while favoring its own manufacturers that use them.

“The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions and lack of suitable substitutes,” the report says, which also mentions some concerns about a few other minerals imported from elsewhere, such as cobalt from the Congo.


You can always reason with a German. You can always reason with a barnyard animal, too, for all the good it does... The larger the German body, the smaller the German bathing suit and the louder the German voice issuing German demands and German orders to everybody who doesn't speak German. For this, and several other reasons, Germany is known as 'the land where Israelis learned their manners'.

P.J. O’Rourke

At the Comex silver depositories Wednesday, final figures were: Registered 47.75 Moz, Eligible 57.99 Moz, Total 105.54 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No banksters today, just a case of old fashioned New York City alleged fraud. It kind of restores one’s faith in humanity. Unlike the casino banksters who almost crashed the whole global financial system back in 2008, and the central banksters who never saw it coming despite aiding and abetting them, these old fashioned criminals are expected to face the full application of the law. Is the rule of law great or what?

"It's strange that men should take up crime when there are so many legal ways to be dishonest. “

Al Capone

Charges of Fraud in City’s Effort to Overhaul Payroll

By JOHN ELIGON Published: December 15, 2010

Of all the city programs that have ever gone wrong in New York, few could compare to CityTime, an automated system meant to streamline employee timekeeping.

Mayor Michael R. Bloomberg has called the project a “disaster,” and perhaps with good reason: the project’s cost has exceeded $600 million, nearly 10 times over budget, and is six months past its due date. Meanwhile, consultants who were hired to oversee putting the project into effect have been paid nearly $50 million — $46 million more than they were initially supposed to receive.

And on Wednesday, federal prosecutors in Manhattan charged several of the consultants with an $80 million fraud scheme that began in 2005, accusing them of manipulating the city into paying out expensive contracts to businesses that they controlled, and then redirecting some of that money to enrich themselves. They even submitted false time sheets, the authorities said.

“The issue is that here we had somebody that we trusted, or one of our contractors trusted, and that trust was misplaced,” Mr. Bloomberg told reporters. “And we just have no tolerance for this whatsoever.”

Prosecutors said the scheme originated with Mark Mazer, a consultant who was hired by the city to oversee quality assurance on the project. Instead, he awarded contracts to people he had ties to and took nearly $25 million in kickbacks, prosecutors charged.

Mr. Mazer, his colleague Scott Berger, and the men whose companies he steered business toward, Dmitry Aronshtein and Victor Natanzon, also submitted false time sheets for consulting work, the authorities said.

Mr. Mazer’s wife, Svetlana, and his mother, Larisa Medzon, were also arrested and charged with money laundering for funneling the kickbacks through a series of shell companies, prosecutors said.

The indictment raises questions of the city’s oversight of the CityTime project, and how the Office of Payroll Administration, a hybrid agency of the mayor’s and comptroller’s offices, lost control of the project under the office’s executive director, Joel Bondy.


"Let's make sure that there is certainty during uncertain times in our economy."

President George W. Bush

The monthly Coppock Indicators finished November:

DJIA: +178 Down. NASDAQ: +247 Down. SP500: +167 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. November is the sixth down month in a row.

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