Baltic Dry Index. 790 -22
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“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.”
For more on a Tale of Two Cities, scroll down
to Crooks Corner, where we compare American justice in action against New York
based Goldman Sachs, with American justice in action against London based
Standard Chartered.
We open today with more bad news from China.
Is China already in an industrial recession? If Lombard Street Research is
correct and China’s GDP has slowed to a 1% growth rate, China and the rest of
the world, but especially austerity wracked Euroland are about to have a fast
motion train wreck replacing the existing slow motion one. Stay long physical
precious metals. At the central banks, only the nuke option remains. Club Med
has nowhere to go but out of the disastrous Euro.
Hard landing for China as factory prices fall and deflation looms
Factory gate prices in China fell at an accelerating rate of 2.9pc in July as the economy flirted with industrial recession, prompting calls for further stimulus to head off Japanese-style deflation.
“Severe
deflation pressures are rippling across the country,” said Alistair Thornton
and Xianfeng Ren from IHS Global Insight. “Deflation, not inflation, is the
greatest short-term threat to the Chinese economy.”
“The hard
landing has happened,” said Charles Dumas from Lombard Street Research. “We don’t
believe offical data. We think GDP slowed to a 1pc rate in the second quarter.”
A
blizzard of weak data has caught policy-makers off guard, though shares rallied
in Shanghai on hopes for monetary loosening from China’s central bank
after consumer price inflation (CPI) fell to 1.8pc.
New
property starts fell 27pc in July. Industrial output growth fell to 9.2pc for a
year ago but has been flat over recent months.
----Premier Wen Jiabao is loathe to turn the credit spigot on again. He was warned repeatedly that the economy is badly out of kilter and needs to wean itself off exports and investment, a world record 49pc of GDP.
Yet
reformers are locked in a struggle with military hawks and Mao revivalists
linked to Chonqing chief Bo Xilai. They know that China’s post-Lehman credit
spree in 2008 went too far but keeping growth alive has become a political
imperative. Chinese exporters are now in serious difficulty. Caixin
magazine reports that China’s entire solar industry is “on the verge of
bankruptcy” as it struggles with debts built up during its world conquest over
the past four years
Up next, the Euro simply isn’t working for most Europeans. Sooner or later, even the dumbest Greek politician can see the proper course of action. To bailout Europe’s brain dead banksters who lent money to Europe’s crooked countries under casino capitalism, Europe’s largely defenceless children are now in the frontline. To “save” the Bilderberger imposed, Frankenstein Euro, Europe’s poorest children are to be crucified on a cross of austerity. Where is the European William Bryan? On fiat money it seems, we can create trillions for banksters without consequences, for the poor that’s quite another thing.
"I want us to do even more
to encourage the risk takers"
Gordon Brown. 2004.
Gordon Brown. 2004.
More Abandoned Children as Europe Austerity Wears On
Published:
Thursday, 9 Aug 2012 | 10:20 AM ET
The rise
in the abandonment of infants across Europe is most visible in the spread of “baby
hatches” or
“boxes” across Europe, where unwanted infants are left anonymously.
The
phenomenon was previously more prevalent among immigrants, but it is becoming
more widespread among financially desperate
members of the local population.
The
hatches are sensor-activated so when a baby is placed, an alarm is activated
and a carer comes to collect the child. Despite the practice being widely
viewed as contravening the 1953 European Convention on Human Rights, of the 27
EU member countries, 11 countries still have "baby hatches" in
operation, including Germany, Italy and Portugal.
In those
countries where hatches are illegal, the number of infants abandoned in
hospitals, clinics and churches has also risen, raising concerns among European
charities, the UN and the European Commission that austerity
measures and increasing social deprivation are the catalyst for the rise in child
abandonment.
According
to SOS Villages, a European charity that attempts to help families in financial
hardship before abandonment occurs, in the last year alone 1,200 children in
Greece and 750 in Italy have been abandoned. That is almost double the 400
children abandoned in Italy a year ago, and up from 114 children abandoned in
Greece in 2003.
Gross to Investors: Stay Away From Europe
Published:
Tuesday, 7 Aug 2012 | 12:35 AM ET
Bill Gross’ latest message to investors - don’t put your
money into Europe because they are not going to get out of their debt crisis
any time soon.
Gross,
Founder and Co-Chief Investment Officer of Pimco, manager of the world’s
largest bond fund, wrote in an editorial in the Financial Times on Monday that
the ultimate aim of European leaders is to get their hands on private-sector
money because they know they will need it to fund the European economy. The
current public-spending program is not sustainable and efforts to fix the debt crisis
have been, and will be, futile, he said.
Policymakers
in Europe now face an unprecedented expansion of risk spreads and credit
agency downgrades which “almost guarantee that sickbed countries can
never be discharged from intensive care,” he added. He warned investors not to
part with their money.
----The crisis in Spain and Italy looks unlikely to
be resolved soon and investors focusing on the 7 percent yields in their sovereign bonds
may be missing the point, Gross wrote. Europe may not be able to bring yields
down to 4 percent, and even if they could, it wouldn’t be enough to get Spain
and Italy out of financial trouble, he said.
----If GDP growth remains close to flat, the two nations
will still drown in debt even if they have to borrow at 4 percent. And without
the private sector’s participation, all efforts such as the European Financial
Stability Facility and ultimately the European Stability Mechanism, will be
futile, he said.
Gross added that European
policymakers have lost trust among investors with half-baked policies, and
credit rating agencies’ downgrades are also forcing them to seek safer returns
elsewhere.
More
"Too bad ninety percent of
the politicians give the other ten percent a bad reputation."
Henry Kissinger
Henry Kissinger
At the Comex silver depositories Thursday final figures were: Registered 35.36
Moz, Eligible 102.22 Moz, Total 137.58 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today, compare and
contrast. A tale of two cities.
“Call
it the Goldman Sachs test. If this is something Goldman would do to its
clients, don't do it."
Felix
Salmon.
August 9, 2012, 10:10 p.m. ET
U.S. Not Seeking Goldman Charges
After a
yearlong investigation, the Justice Department said Thursday that it won't
bring charges against Goldman Sachs Group Inc. or any of its employees for
financial fraud related to the mortgage crisis.
In a
statement, the Justice Department said "the burden of proof" couldn't
be met to prosecute Goldman criminally based on claims made in an extensive
report prepared by a U.S. Senate panel that investigated the financial crisis.
"Based
on the law and evidence as they exist at this time, there is not a viable basis
to bring a criminal prosecution with respect to Goldman Sachs or its employees
.
More
August 9, 2012, 5:03 p.m. ET
When Regulators Go Rogue
Benjamin Lawsky made one of the most exciting entrances to the regulatory game since a young attorney general by the name of Eliot Spitzer burst onto the scene in 1998. And like Mr. Spitzer before him, Mr. Lawsky's independence has the potential to upend the way Wall Street is policed.On Monday, Mr. Lawsky, head of the nine-month-old New York State Department of Financial Services, made his big splash. His agency blistered Standard Chartered STAN.LN +3.61% PLC with incendiary accusations. The bank systematically laundered $250 billion for Iran for most of the last decade, he alleged.
The charges went beyond the usual hyperbole. Mr. Lawsky said Standard Chartered may have exposed the West's financial system to terrorists and "indisputably helped sustain a global threat to peace and stability."
The evidence included 60,000 transactions and thousands of documents.
Mr. Lawsky's bombshell rattled investors, who subtracted $17 billion in stock-market value from Standard Chartered after the news broke.
More
http://online.wsj.com/article/writing_on_the_wall.html
So, Goldman is a serial arsonist that has turned betting against its clients' interests into a science. The Times article makes it clear that shorting subprime and luring gullible investors into the trap, was standard operating procedure. Goldman's CEO Lloyd Blankfein dismisses the criticism with a wave of the hand saying, "They were sophisticated investors," which is the same as saying "buyer beware". It's worth noting that shorting subprimes exacerbated the pain in housing by creating incentives for originators to issue more mortgages to people with poor credit. This prolonged the housing boom and deepened the recession when the bubble finally burst. The eventual downturn was largely engineered by Wall Street.
more
http://www.counterpunch.org/whitney04192010.html
Another weekend, and the end of the Corporate London Games. A good time was had by visiting politicians, corporate sponsors, visiting media stars, acres of TV commentators, and the handful of competitors who won medals and cash. Sadly for jealous Der Spiegel and German media, they didn’t turn into the fiasco games after all. North of the English border, the gelatinous Scottish First Minister drew well deserved ridicule and opprobrium on himself, hailing his “Scolympians,” in Team GB. Hopefully killing off his ludicrous plan to turn Scotland and the “Athens of the North,” Edinburgh, into the real thing. With Greece busy monetising Euro, with ECB approval, to meet their August 20th repayment date, Greece has no incentive to leave the euro until a little later in the year. A few more Greek children will thus be made orphans to save French and German banksters. Have a great weekend everyone. Blackberry season is almost here.
Insanity: doing the same thing over and over again and expecting
different results.
Albert
Einstein.
The monthly
Coppock Indicators finished July:
DJIA: +65 Up. NASDAQ: +75 Up. SP500: +48 Up. All
three indicators have reversed from down to up, though only marginally. Last
week’s ECB relief rally probably made the difference.
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continue reading subscribe to the LIR at Currency Countdown.
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