Baltic Dry Index. 1146 -14
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
Barclays Bank, with apologies to Cary Grant. To Catch A Thief.
For
more on America’s great bankster hunt just getting underway, scroll down to
Crooks Corner. Suffice to say, this is not a good time to be a bankster connected
to Liebor. How does that extradition treaty work with the USA? European Arrest
Warrant anyone? If it wasn’t so sad it would be funny.
But
first this. The best of 2012 is probably behind us. Euroland is committing
economic suicide with the last instalments coming in Spain and Italy yesterday.
More on that later. America has probably entered recession, but for confirmation
we will have to wait for the lagging revisions. A massive drought has created a
classic weather market in the grain futures markets, which will eventually show
up in food price inflation and a lower GDP. A panicky Fed seems about to
unleash another round of Quantitative Easing. A sure sign that their internal
numbers are dire. The previous rounds of QE accomplished very little, although
it’s impossible to know what would have happened without it. The extremely weak
Baltic Dry Index rally already seems to have stalled.
This
morning Asia seems to have run out of gas.
European Futures, Asian Stocks Fall on Growth Concern
By Richard Frost - Jul 12, 2012 7:09 AM GMT
European stock futures and Asian shares
(MXAP) fell as South Korea unexpectedly cut interest rates and Australia’s
jobless rate rose, underscoring concern the global economy is faltering. The
won and the Australian dollar slid.
----Australian employers unexpectedly cut payrolls in June, while a report today may show manufacturing
output in the euro region remained stagnant in May. Chinese companies from Cosco Shipping Co. to Dongfeng Automobile Co. reported slumping profit before the country releases economic data tomorrow.
The U.S. Federal Reserve signaled that a further economic slowdown would bring growing support among policy makers for additional steps to spur growth.
“The global economy is deteriorating faster than central banks can ease policy,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.3 billion. “Your best bet is to hold on to cash.”
More
Now
back to the economic suicide of austerity Euroland. Spain and Italy seem
determined to fail. Germany seems determined to make them fail. Italy is
preparing to make war on the hapless Italian peons. Spain, already suffering
from massive capital flight, yesterday took measures to speed it up. Both
countries seem headed for social instability in the rest of 2012. Stay long
physical precious metals. Asian central banks haven’t been buying gold with
increasingly dodgy fiat currency for nothing. The great Greenspan-Bernanke
bubble era is finally over. The great bankster retribution era is at hand,
brought on by the tort lawyers finally getting a Liebor manipulation issue
jurors can understand. For more on Liebor scroll down to Crooks Corner.
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
J. K. Galbraith
July 11,
2012, 7:32 p.m. ET
Italy Faces 'War' in Economic Revamp, Monti Warns
ROME—Prime
Minister Mario Monti said Italy faced a "war" at home and abroad as
his government pushes to revamp the euro-zone's third-biggest economy and
extricate it from the region's debt crisis.
The
premiere's remarks at a banking conference in Rome came as allies of the
premier's predecessor, Silvio Berlusconi, began clamoring for the controversial
billionaire to run for office in the next election. That prospect is likely to
unnerve investors and EU authorities who pushed for Mr. Berlusconi's ouster in
November.
In a
strongly-worded address to that departed from the premier's sober speaking
style, Mr. Monti sketched a stormy picture of the social and political tensions
gripping Italy. Mr. Monti's government has proposed slashing spending this year
by €4.5 billion ($xx billion), cutting public sector jobs and other public
services that have long underpinned Italian society.
Italy
"has embarked on a brutal war," Mr. Monti said. He also said the
country's struggle extended beyond Italian shores, as it fights foreign
prejudices over the Italy's ability to tackle its high debt level and carry out
long-term structural changes to its economy.
More
July 11, 2012, 7:18 p.m. ET
Madrid Austerity Plan Boosted to $80 Billion
MADRID—Spanish Prime Minister Mariano Rajoy announced new
austerity measures Wednesday that should help Madrid cut its budget deficit by
€65 billion ($80 billion) through to 2015, and warned the euro-zone's
fourth-largest economy may not grow at all next year.
In an
impassioned address to parliament, Mr. Rajoy called on all Spaniards to back
the measures, which include a value-added tax increase to 21% from 18% and cuts
to jobless benefits and public-sector wages, saying Spain's economic situation
is "extraordinarily serious."
The
government had previously said it would need to make no additional cuts this
year to meets its budgetary targets, and had rejected the VAT hike. Previously
announced measures account for most of the €65 billion target, according to a
spokeswoman for Mr. Rajoy, but the precise size of the new cuts wasn't clear as
the government's spending and revenue projections have fluctuated since it
released its annual budget in March.
----But
analysts said the moves would hurt Spain's recovery from recession and might
not save the country from needing a full-fledged financial bailout on top of a
plan to support its struggling banks with up to €100 billion in EU loans.
More
Just another scary Spanish capital flight chart
Paul Murphy
How long can this go on? (Click to enlarge.)
For
Spain’s balance of payments, Credit Suisse has pulled the numbers together
through to the end of April for the semi-detailed breakdown of investor type
and to end-May for the Target2 figure.
The
result is not very pretty. Since the middle of last year, this has been a
one-way show, with capital leaving Spain apace. Capital inflows have been
almost non-existent. Indeed, Yiagos Alexopoulos at CS reckons outlflows are
currently running at an annualised rate of 50 per cent of GDP
More
The Euro
as we know it has passed its sell by date. Coming next a rush to get out.
“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers.
“They saw the writing on the wall in this market as early as 2005.”
At the Comex silver depositories Wednesday final figures were: Registered 38.69
Moz, Eligible 105.77 Moz, Total 144.46 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today, more
on the start of the great American bankster hunt. America’s tort bar, finally
has a bankster wrongdoing issue American jurors can understand. By the time America’s
great bankster hunt is over, banksters will be hanging from lampposts all over
America. The UK’s banksters are especially vulnerable, due to a lopsided
extradition treaty with America, and a European Arrest Warrant that leaves
little old ladies rotting in Europe’s jails for jaywalking. Welcome to the 18th
century, 21st century style.
As usual,
America revels in excess. Besides, it’s probably easier to bang up Europe’s
banksters than Wall Street ones, where the banksters and squids might have
something on the tort bar.
“Are
you now, or have you ever been a member of the bankster class.”
With
apologies to Senator Joseph McCarthy.
Almost everyone goes mental about Libor
FT Alphaville
As last week was dominated by holidays and the Supreme Court’s healthcare
ruling in the US, it’s taken a little longer than usual for some of the
econoblogopunditsphere there to get really fired up about the Libor scandal.
But it’s well and truly happening now.First up Nouriel Roubini, who says things have become worse since then financial crisis: the TBTF banks are bigger, along with their conflicts of interest. Our (rough) transcript of one part follows:
Q: Do you think some criminal sanctions should be – should happen against those banks?
A: They should occur because no-one has gone in jail since the global financial crisis, for any of these things, the banks do things that are illegal, at best a slap on them, a fine. (If) some people end up in jail maybe that will teach a lesson to somebody, yeah – or somebody hang in the streets.
----Understandably, the US writers have tended to focus on the role of Wall Street banks in fixing Libor — and by extension, the systemic problems that it reveals. The problem in tackling it from that angle is that it’s not yet completely clear which other banks were engaged in the same activity and to what degree there was collusion.
Yves Smith takes aim at The Economist — despite its dramatic “Banksters” cover, she says the newspaper’s prescription is too mild:
The dangers of this are obvious. Popular fury and class- action suits are seldom a good starting point for new rules. Yet despite the risks of banker-bashing, a clean-up is in order, for the banking industry’s credibility is shot, and without trust neither the business nor the clients it serves can prosper….
To which Smith responds:
Translation: don’t do too much while tempers are hot. Yet this stance also happens to be the one used again and again by incumbents and lobbyists: drag out discussions of what to do until the public’s attention has moved elsewhere.
She adds that the outrage in the UK is partly spurred on by the regularity and casualness of the deceit; and also the pervasiveness:
It correctly points to the way it has become normal for bankers to cheat every way possible to pad their wallets. Bid rigging and collusion are appallingly widespread.
Robert Reich also picks up on that collusion theme, writing on Business Insider that this is the “Wall Street Scandal Of All Scandals” and is “insider trading on a gigantic scale”:
There are really two different Libor scandals. One has to do with a period just before the financial crisis, around 2007, when Barclays and other banks submitted fake Libor rates lower than the banks’ actual borrowing costs in order to disguise how much trouble they were in. This was bad enough. Had the world known then, action might have been taken earlier to diminish the impact of the near financial meltdown of 2008.
But the other scandal is even worse. It involves a more general practice, starting around 2005 and continuing until – who knows? it might still be going on — to rig the Libor in whatever way necessary to assure the banks’ bets on derivatives would be profitable.
This is insider trading on a gigantic scale. It makes the bankers winners and the rest of us – whose money they’ve used for to make their bets – losers and chumps.
More
“The penalty for laughing in a courtroom is six months in jail; if it were not for this penalty, the jury would never hear the evidence.”
H.
L. Mencken.
The monthly
Coppock Indicators finished June:
DJIA: +63 Down. NASDAQ: +71 Down. SP500: +41 Down. All
three indicators remain down but downward momentum seems stalled.
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