Baltic Dry Index. 1480 +06
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Though Mr. Tourre was a more junior member of the Goldman team, the S.E.C. case against him was bolstered by colorful e-mails he wrote, calling mortgage securities like those he created monstrosities and joking that he sold them to “widows and orphans.”
Once upon a time in a happy, mythical land called Europe…. But first this. It was the last day of the month, and yet another Fed inspired dress up the stock market ending. And they all lived happily ever after. If only generating real prosperity was so easy. While the central banksters are busy creating ever more Potemkin villages, behind the false façade reality is getting uglier by the day. Up first China starts to wobble. Stay long physical gold and silver, the house of cards called fiat money gets shakier by the day.
"In the long run, the gold price has to go up in relation to paper money. There is no other way”.
Nicholas L. Deak
May 31, 2011, 11:59 p.m. EDT
China manufacturing growth slows further
HONG KONG (MarketWatch) — China’s manufacturing activity expanded in May at its weakest pace in three quarters, as the economy faced headwinds of high inflation and government efforts to rein in prices, according to rival surveys of companies released Wednesday.
The official China Federation of Logistics & Purchasing Managers’ Index eased to 52.0 from 52.9 in April, marking the slowest pace of growth in nine months.
The result was below the median forecast of 52.2 in a Reuters survey of economists.
Meanwhile, a separate PMI published by HSBC and compiled by U.K. group Markit, showed headline activity at 51.6, easing from 51.8 in April, the slowest pace of growth in 10 months.
Analysts at Credit Suisse said that the Federation’s PMI showed new orders declining at a faster pace than the slowdown in the overall reading, a sign that manufacturing activity may have already peaked in the current economic cycle.
http://www.marketwatch.com/story/china-manufacturing-growth-slows-further-2011-05-31
Next, move over Spain, Portugal, Ireland and Greece, make way for the A team in serial tax deferment. Step up Berlusconi’s bunga bunga land of Club Mad fantasy. From London, you have to ask yourself do you really want to join a club that lets in Silvio Berlusconi? Unfortunately we already did. Not yet forced to be a member of the disintegrating European Monetary Union, from London it looks like yet another bailout job for the hardworking taxpaying Germans. From London it doesn’t get much better than this. Stay long gold and silver, for that inevitable moment all the German cash runs out, and they wise up being played the patsy of Europe. Italy adopting painful budget policies, this must have them rolling in aisles in the Vatican.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
MAY 31, 2011, 11:08 P.M. ET
Draghi Warns Italy to Trim Public Spending
ROME—Mario Draghi, on his way out of Italy to take the helm of the European Central Bank, urged his nation's government to adopt painful budget policies to boost growth and comply with the euro zone's fiscal rules.
Italy will have to cut public spending by 5% by 2014, and can't afford to raise taxes or reduce investments, said Mr. Draghi, governor of the Bank of Italy, in a speech before the elite of Italian business and finance in Rome.
At the same time, he warned, continuing current fiscal austerity with uniform, across-the-board spending cuts would knock Italy's economic growth back by two percentage points in the next three years, he said.
Italy needs to "return to growth," Mr. Draghi said, reiterating a common theme of his six-year stint at the country's central bank.
Tight fiscal policy since the global financial crisis began has muted the Italian recovery, but also has allowed the country to keep investors interested in its government bonds, despite government debt at 120% of gross domestic product, the euro zone's second-highest level after Greece. However, on May 20 Standard & Poor's said it had cut its outlook on Italy's sovereign debt to negative, warning of downside risks to the country's already modest growth potential.
Now Mr. Draghi, in his new role at the helm of the ECB, will be a key player, with other European governments, in trying to curb the Continent's continuing debt crisis. His comments Tuesday are one of the last chances he will have to give his recipe specifically for Italy.
More.
Today a wakeup call to another of the dangers of modern life. Alongside fast food, convenience food, and an over indulgence in alcoholic drink, our addiction to the convenience of mobile phone technology may be very detrimental to our health. I am a dinosaur when it comes to mobile phone technology. Mine is mostly turned off, used for emergencies or when I actually need to make a call. I feel no need to be constantly available to every Tom, Dick or Harry, let alone my family. Unlike CIA though, I do not disconnect the battery so as to be untraceable to the police and other lawful authorities. On second thoughts nor did they as their Italian job team found out as they partied their way around Italy’s 5 start hotels. Should I suddenly turn into an ax murderer, the police will know exactly where I was when I murdered that ax.
Mobile phones 'possibly carcinogenic' say World Health Organisation experts
Mobile phones may increase the risk of developing brain cancer, an influential health organisation has said admitted for the first time.
7:00PM BST 30 May 2011
The International Agency for Research on Cancer, part of the World Health Organisation, has classified the radiation emitted by handsets as “possibly carcinogenic” although it did not find evidence of a clear link.
Its decision - putting mobiles in the same risk category as lead, the pesticide DDT and petrol exhausts - will put governments under pressure to update their advice to the public on the potential dangers of talking on mobiles for long periods of time.
Christopher Wild, the director of IARC, said that while more research is carried out “it is important to take pragmatic measures to reduce exposure such as hands-free devices or texting”.
It has long been known that the radiofrequency electromagnetic fields emitted by mobile phones are absorbed by the body, much of it by the head when the handset is held to the ear.
But research into the possible health consequences of frequent mobile use has proved inconclusive because the technology has only been widely used for a few years while it can take decades for tumours to develop.
Last year a landmark IARC study, known as Interphone, disclosed that making calls for more than half an hour a day over 10 years could increase users’ risk of developing gliomas - a type of tumor that starts in the brain or spine - by 40 per cent.
Over the past eight days, a working group of 31 scientists from 14 countries reviewed the Interphone data and other studies, including a Swedish report that also found evidence of increased brain tumour risk among mobile users.
They concluded that there was “limited” evidence that wireless phones are linked to brain cancer – meaning that it could be down to chance rather than causation – and “inadequate” proof that mobiles cause other types of cancer.
Dr Jonathan Samet, chairman of the group, admitted the evidence is “still accumulating” but insisted: “The conclusion means that there could be some risk, and therefore we need to keep a close watch for a link between cell phones and cancer risk”.
By classifying mobiles as “possibly carcinogenic”, the IARC has placed them alongside DDT, chloroform, coffee, lead and working as a firefighter in a list of more than 900 agents it has analysed. However this is only the third-highest rating, below “carcinogenic to humans”, which includes cigarettes, and “probably carcinogenic”, which includes diesel exhausts and creosote.
Oh, what times! Oh, what standards!
Cicero
At the Comex silver depositories Tuesday, final figures were: Registered 31.10 Moz, Eligible 70.61 Moz, Total 101.71 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Goldie again, what else! Once upon a time, in the land of the free sacked by Goldie….. How a 28 year old fiendish French devil got into “God’s work” on Broad Street. How the Frenchie “fabulous Fab” fooled everyone including Ebenezer Squid, and single handedly nearly wiped out the western financial system. Aesop’s fables updated 21st century style. I wonder if “the Fab” knows DSK? More importantly, who is leaking this stuff to the NY Times and why? Is someone in Goldie cutting a deal? Who’s wired up and who’s being set up? Ebenezer Squid? What else can be found in dumpsters in lower Manhattan? Once upon a time in the land of the free, lived a clan of great vampire squids busy doing God’s work for billions a year…..
“I believe there is something out there watching us. Unfortunately, it's the government.”
Woody Allen.
S.E.C. Case Stands Out Because It Stands Alone
By LOUISE STORY and GRETCHEN MORGENSON Published: May 31, 2011
At the height of the housing boom, the 26th floor of Goldman Sachs’s former headquarters on Broad Street in Lower Manhattan was the nerve center of Goldman’s fast-growing mortgage trading business.
Hundreds of employees worked closely in teams, devising mortgage-based securities — billions of dollars’ worth — that were examined by lawyers, approved by management, then sold to investors like hedge funds, commercial banks and insurance companies.
At one trading desk sat Fabrice Tourre, a midlevel 28-year-old Frenchman who was little known not just outside Goldman but even inside the firm. That changed three years later, in 2010, when he achieved the dubious distinction of becoming the only individual at Goldman and across Wall Street sued by the Securities and Exchange Commission for helping to sell a mortgage-securities investment, in one of the hundreds of mortgage deals created during the bubble years.
How Mr. Tourre alone came to be the face of mortgage-securities fraud has raised questions among former prosecutors and Congressional officials about how aggressive and thorough the government’s investigations have been into Wall Street’s role in the mortgage crisis.
Across the industry, “it’s impossible that only one person was involved with fraudulent activities in connection to the sales of these mortgage securities,” said G. Oliver Koppell, a New York attorney general in the 1990s and now a New York City councilman.
In the fall of 2009, when Mr. Tourre learned that he had become a target of investigators for helping to sell a mortgage security called Abacus, he protested that he had not acted alone.
That fall, his lawyers drafted private responses to the S.E.C., maintaining that Mr. Tourre was part of a “collaborative effort” at Goldman, according to documents obtained by The New York Times. The lawyer added that the commission’s view of his role “would have Mr. Tourre engaged in a grand deception of practically everyone” involved in the mortgage deal.
Indeed, numerous other colleagues also worked on that mortgage security. And that deal was just one of nearly two dozen similar deals totaling $10.9 billion that Goldman devised from 2004 to 2007 — which in turn were similar to more than $100 billion of such securities deals created by other Wall Street firms during that period.
While Goldman paid $550 million last year to settle accusations that it had misled investors who bought the Abacus mortgage security, no other individuals at the bank have been named. Now, however, as criticism has grown about the lack of cases brought by regulators, the scope of the inquiries appears to be widening. The United States attorney general, Eric H. Holder Jr., has said publicly that his lawyers were reviewing possible charges against other Goldman officials in the wake of a Senate investigation that produced reams of documents detailing other questionable decisions that were made in the firm’s mortgage unit.
More.
http://www.nytimes.com/2011/06/01/business/01prosecute.html?_r=1&hp
“Overheard at Goldman Sachs”:
“We assume that you know what you’re doing,
In this ill-advised trade you’re pursuing,
But the opposite bet
That we place on your debt
May eventually hasten your ruin.”
The monthly Coppock Indicators finished May:
DJIA: +196 Up. NASDAQ: +249 Up. SP500: +200 Up.
The Dow and SP 500 and NASDAQ have all reversed from down to up. The Fed’s rigging of the indicators seems to have worked. Note: like all indicators, they were devised for normal markets not markets where the central bank is flooding the economy with new cash. In current conditions where risk is suspended by too big to fail, I doubt any indicators are showing more that where the Fed’s new cash is flowing in our world of casino capitalism. But the Fed’s QE program is supposed to end this month!!!
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