Baltic Dry Index. 844 +07
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
To promote income equality, Wen said, the government must create equal conditions for all in terms of education, employment and starting one's own business so that all people will be able to get started from the same starting line
"We must pay close attention to the well-being of the vulnerable groups," Wen said, adding he believes if the living conditions of those people can be improved, China will improve the living standard of all people as a whole.
Though I remain deeply sceptical that the USA has really turned the corner and has entered a sustainable recovery, be careful what you wish for if it has. The Fed has pumped in about 5 trillion new dollars since the Great Calamitous Recession hit in 2007, following the Great Greenspan bust. If America has entered a sustainable recovery, all that new money will start to leave the parking lot at the Fed and start to chase up stocks, tangible assets, and commodities.
In another age, that process would begin slowly at first, pick up steam, and then go on to build into another bubble. In our new 21st century, deregulated, High Frequency Trading, risk on – risk off, casino economy, where there’s no downside to losing thanks to too big to fail, the only risk is not jumping on the train leaving the station when everyone else is. In our post disgraced fallen guru Greenspan financialised world, “if you’re not with us, you’re against us,” to use a quote from another period that went to excess.
Below, buy anything, the greater fool theory is fashionable again.
Stock markets jump on double dose of encouragement from the Fed
Wall Street roared to its highest level in over four years after the vast majority of US banks passed regulatory stress tests, clearing the way for them to start returning cash to shareholders.
The welcome boost to confidence in the financial sector was part of a double dose of good US economic news today. In addition to announcing that 15 of 19 banks had enough capital to survive a deep recession and a global financial shock, the Federal Reserve also acknowledged in its strongest language to date that the world’s largest economy is on the mend.
The releases were enough to push the Dow Jones Industrial Average up 1.7pc to 13,177.68, a level last seen in December 2007, while the Nasdaq strengthened 1.9pc to 3,039.88 – the highest it has been since 2000. The S&P 500 joined in the rally too, closing up 1.8pc at 1,395.96.
Although the Fed’s summary of the economy was far from effusive, it was enough to prompt buying in a market still relieved that Greece has avoided a disorderly revolt. In a closely-scrutinised statement released after its rate-setting meeting, the Federal Open Market Committee drew attention to the “notable” fall in the unemployment rate and a sustained increase in business investment.
“The economy is improving and the Fed isn’t necessarily needing to do anything,” said Jason Pride, director of investment strategy at Glenmede, an investment firm. “The bottom line here is that economic numbers are improving.”
More
Back on the wrong side of the Atlantic, Greek rescue bailout two or is it three, already isn’t going to work, according to a draft report to the troika of voodoo economics. With the Greek economy in terminal collapse, but no devaluation to make Greece a competitive tourist destination again, the unholy trinity now want fiscal cuts by Greece amounting to another 5.5% of GDP. Remind me again of the definition of insanity.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
Greece off course as troika paves way for bailout funds
Greece is already off course and is likely to miss the budget targets attached to the €130bn (£108bn) bailout programme, officials have warned.
Athens has probably cut spending enough to bring its primary deficit down to 1.5pc this year as agreed. But "current projections reveal large fiscal gaps in 2013-14" according to a leaked draft report by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF).
In its report, the troika said Athens will have to impose further fiscal cuts of as much as 5.5pc of GDP to meet next year's targets.
The report says that "substantial additional expenditure cuts will have to be announced and adopted by Greece in the coming months, in particular when Greece updates its medium-term budget in May 2012".
"The recovery previously announced for next year will be further delayed with, at best, a stagnation of activity in 2013," the report said.
Even so, the report, which is called "The Second Economic Adjustment Programme for Greece", paves the way for Greece to receive the first tranche of its new bail-out in the next few days. Athens needs the cash injection to repay a €14.5bn bond due on March 20.
Now even the eurozone admits it has condemned Greece to never-ending austerity
----According to Reuters, an unpublished "Compliance Report" by EU executives has concluded that Greece will have to impose a further fiscal squeeze in 2013/14 amounting to some 5.5pc of GDP in order to meet the targets that underpin the second international bailout. The chances of Greece being able to do this are about zero, though that is my conclusion, not that of the report.
According to the report, the austerity measures already adopted by Athens should be enough to bring the primary deficit down to the agreed 1.5pc this year. However, "current projections reveal large fiscal gaps in 2013-14". The projected shortfall is reckoned to be about 5.5pc of GDP. All this, of course, assumes that Greece achieves the output levels forecast by the Troika, the chances of which are again about zero. So infact, the required squeeze will be even larger, further undermining growth and digging an even deeper hole.
Unabashed, the report states that "substantial additional expenditure cuts will have to be announced and adopted by Greece in the coming months, in particular when Greece updates its medium-term budget in May 2012".
Where is Greece expected to find these cuts? Further savings in welfare payments, pharmaceutical spending, defense and restructuring of central and local administration are said to be under discussion. Has anyone told the Greek electorate, which is due to go the polls next month, about this? Apparently not.
Menacingly, the report adds that continuation of international financial assistance can only be expected if policy implementation improves.
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
March 14, 2012, 12:01 a.m. EDT
China ups dollar parity, making yuan a 2-way trade
Yuan weakness so far in March broadly in line with U.S. dollar’s rise
HONG KONG (MarketWatch) — China raised the dollar-yuan parity on Wednesday, further weakening the local currency against the greenback, amid easing inflationary pressures and after posting a big trade deficit in February.
The dollar exchange rate USDCN was set at 6.3328 on Wednesday, compared with 6.3259 on Tuesday. The People’s Bank of China allows the dollar to move 0.5% in either direction from the parity level on a given day.
Data released over the weekend showed China posted a trade deficit of $31.5 billion in February, its biggest monthly negative trade balance in at least 12 years, amid weak exports growth and a jump in imports.
The deficit more than offset January’s trade surplus of $27.28 billion. In 2011, China’s trade surplus stood at $155.14 billion, the smallest figure since 2005
A trade deficit usually helps to put downward pressure on a country’s currency.
The rate of increase in China’s consumer prices, meanwhile, softened in February. Monthly consumer price index rose 3.2% — the slowest pace in 20 months — sending inflation below the country’s benchmark one-year deposit rate of 3.5% for the first time in more than 2 years.
PBOC Gov. Zhou Xiaochuan told reporters in Beijing this week that market forces were playing a bigger role in determining the exchange rate, in line with the central bank’s long-term policy objective. He added that the PBOC will gradually pare back its intervention in the foreign exchange market as the yuan approaches an equilibrium exchange rate.
After allowing the yuan — also known as the renminbi, or people's currency — to rise against the dollar in 2011, Chinese authorities have effectively rolled back some of those gains so far this year.
More
http://www.marketwatch.com/story/china-ups-dollar-parity-making-yuan-a-2-way-trade-2012-03-14
Wen says China needs political reform, warns of another Cultural Revolution if without |
| English.news.cn 2012-03-14 11:49:22 |
BEIJING, March 14 (Xinhua) -- Premier Wen Jiabao said Wednesday that China needs not only economic reform but also political structural reform, especially the reform of the leadership system of the Party and the government.
Wen warned at a press conference after the conclusion of the annual parliamentary session that historical tragedies like the Cultural Revolution may happen in China again should the country fail to push forward political reform to uproot problems occurring in the society.
"Now reforms in China have come to a critical stage," Wen said, warning: "without a successful political reform, it's impossible for China to fully institute economic reform and the gains we have made in these areas may be lost, and new problems that popped up in the Chinese society will not be fundamentally resolved, and such historical tragedies as the Cultural Revolution may happen again in China."
He noted although after the crackdown on the Gang of Four, the Party adopted resolutions on many historical matters, and decided to conduct reforms and opening-up, the mistake of the Cultural Revolution and feudalism have yet to be fully eliminated.
"The reform can only go forward and must not stand still, less go backwards because that offers no way out."
Wen said he had addressed the topic of political structural reform in China on many occasions in recent years, giving his views on the topic in full and in details.
He said his long interest in political reforms comes from "a strong sense of responsibility."
As the economy continues to develop, Wen said, such problems as income disparity, lack of credibility and corruption, have occurred.
More
http://news.xinhuanet.com/english/china/2012-03/14/c_131466552.htm
The monthly Coppock Indicators finished February:
DJIA: +106 Down. NASDAQ: +108 Down. SP500: +78 Down. If I didn’t know better, I’d say the stock market was rigged. Old indicators no longer reflect the actuality in the market. High frequency front running perhaps? Ebenezer Squid taking candy from babies?
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