Baltic Dry Index. 712 +03
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
''If you fly into the ash and
your engines stop, you crash.''
Peter Purcell, of the Natural
Environment Research Council. 16 April 2010.
Has the global economy just flown into the ash
cloud? From London this morning, it rather looks like it has. Forget for today,
the never ending round of European meetings designed to save Europe’s bankers
from the lying, cheating, stealing states of Mediterranean Europe, if the
global economy has hit the ash cloud, nothing Europe does will save the
Bilderberger euro. Stay long physical precious metals. This morning, China’s
headed for a hard landing; America’s headed for another massive bout of
quantitative easing, before the economy falls of a cliff at year end. Euroland
is headed for an acrimonious breakup, possibly as early as next month. And
don’t even get started on the Middle East on the verge of commencing an all
against all sectarian war.
Aug. 23,
2012, 12:36 a.m. EDT
China’s weak factory data prompt calls for easing
HONG KONG
(MarketWatch) — Weak Chinese manufacturing data released Thursday raised calls
for Beijing to add to stimulus efforts, with a poor reading on shipments
suggesting little improvement in global demand.
HSBC said
its preliminary or “flash” reading of its China manufacturing Purchasing
Managers’ Index (PMI) for August fell to a nine-month low of 47.8 on a
100-point scale, dropping from July’s final print of 49.3.
The result
suffered a drag from weakness in new orders and shipments, and marked the 10th
straight month that Chinese manufacturing conditions have remained below the
50-point level, which separates contraction from expansion.
In
comments accompanying the PMI release, HSBC economist Hongbin Qu said China
“must step up” policy easing to help kick start new investment projects.
“Falling
orders dragged down the August flash PMI ... suggesting Chinese producers are
still struggling with strong global headwinds,” Qu said.
Subcomponents
in the PMI showed output now in contraction, reversing from expansion in July.
Further deterioration was seen in the new orders and new
export orders subindexes, with both measures indicating contraction at an
accelerating rate.
More
Qantas Cancels 787 Order After Posting Annual Net Loss
By David Fickling - Aug 23, 2012
Qantas Airways Ltd. (QAN) canceled an order for 35 Boeing Co. (BA) 787-9s
after posting its first annual loss in at least 17 years because of higher fuel
costs, labor disputes and rising competition on international routes.The order, worth $8.5 billion at list prices, was scrapped because of “lower growth requirements in this uncertain global context,” Chief Executive Officer Alan Joyce told reporters in Sydney. The airline, Australia’s biggest, reported a loss of A$245 million ($258 million) for the year ended June 30.
----“Qantas is working within the constraints they have to deal with,” said Peter Esho, chief market analyst at City Index in Sydney. “The alternative would have been to raise equity and that wouldn’t have been doable.
More
http://www.bloomberg.com/news/2012-08-22/qantas-airways-has-first-annual-loss-as-fuel-costs-rise.html
Aug. 22, 2012, 7:12 p.m. EDT
DRAM chip prices reported falling faster in August
LOS ANGELES (MarketWatch) -- Prices for DRAM chips are
falling at a faster rate amid a lack of recovery for personal-computer sales,
with Japan's Nikkei business daily Thursday quoting an unnamed official at a
major DRAM maker as saying buyers drastically cut their procurement plans this
month. Prices for mainline 2-gigabit DRAMs hit a five-month low in the first
half of August, dropping 9% from their recent late-June high, the report said.
While DRAM demand usually picks up in September ahead of the year-end shopping
season, some major PC makers are apparently holding back on their purchases due
to large inventory levels, prompting the price cuts, the report said.
Link
US Fed hints strongly at fresh round of stimulus
The Federal Reserve has delivered its strongest hint yet that it will unleash a fresh round of stimulus to help the flagging US economy.
In a
surprisingly strong signal, many of the rate setters at the Fed have decided
that further stimulus is needed "fairly soon", according to the minutes of
their meeting this month.
Many of
those on the Federal Open Market Committee (FOMC) - the equivalent of the Bank
of England's Monetary Policy Committee - also judged that more quantitative
easing could offer "additional support" for the economy.
Economists
said the minutes showed that after a summer watching the recovery lose
momentum, top officials at the central bank have decided that the potential
benefits of further action outweigh the risk of fueling inflation.
After an
encouraging first quarter of the year, the world's biggest economy expanded at
an annual pace of just 1.5pc in the second as employment growth weakened and
consumers retrenched. With Europe's debt crisis far from over, and the US
presidential election a matter of weeks away, few private forecasters expect
growth to pick up in the second half of the year.
The
Congressional Budget Office warned today that the US could plunge back into
recession if a series of tax increases and spending cuts are allowed to take
effect at the start of the year.
Greek Crisis Evasion to Fore as Merkel Hosts Hollande
By Mark Deen and Tony Czuczka
- Aug 22, 2012 11:00 PM GMT
Chancellor Angela Merkel hosts President Francois Hollande today as
officials look for ways to stave off an immediate crisis after a report due
next month from Greece’s international creditors on the health of its finances.
Options raised in Germany in recent days include front- loading aid payments to Greece to help it over liquidity hurdles; lowering the interest rate or extending maturities on loans; and pushing for a second debt writedown, this time focusing on bonds held by public institutions, notably the European Central Bank.
With the leaders of Europe’s two biggest
economies still at the confidence-building stage, Merkel and Hollande are
seeking common ground on Greece and the wider euro-area debt crisis almost
three years after its inception. While Merkel publicly stresses meeting
targets, France sees them as too harsh given the state of the Greek economy, a
French government official said on condition of anonymity because the talks are
private. Merkel and Hollande will give statements at 7 p.m. in Berlin.
----“We won’t find solutions on Friday,”
Merkel said in the Moldovan capital Chisinau, reiterating that leaders must
await a report on Greek progress being drawn up by the so-called troika of the
European Central Bank, the European Commission and the International Monetary
Fund. “We will wait for the troika’s report and then we’ll take decisions,” she
told reporters.
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
Ludwig von Mises
At the Comex silver depositories Wednesday final figures were: Registered 35.48
Moz, Eligible 104.59 Moz, Total 140.07 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today, how
to make a small fortune on Wall Street, start with a large fortune. The sad
tale of a scion of one of Wall Street’s most respected commodities trading
family, gone wrong. As black sheep go, only the Madoff family were a shade
blacker.
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
The Awesome, Mind-Boggling Tale of Sam Israel and the Shadow Markets
Submitted by Tim
Knight from Slope of Hope on 08/22/2012
I just finished reading Octopus by Guy
Lawson, and it's one of those rare books that fit the "I Couldn't Put It Down"
category, much like Den of Thieves, published in 1992. It is the tale of Sam
Israel, whom you may remember in 2006 was on the lam from his failed hedge
fund/Ponzi scheme. He faked his suicide, was captured, and is now hanging out
for the next couple of decades (with none other than Bernie Madoff) in a state
prison named, of all things, Valhalla.
Israel was born into a very wealthy family that made its fortune in commodities trading. Even as a young man, he wanted to be a successful trader on Wall Street and impress his hard-to-please father that he could truly make it in the brutal world of trading.
He began
work in the 1980s, working at the bottom of the totem pole at the New York
Stock Exchange. He did whatever menial tasks were available, serving as a "runner"
and gopher, and the book details his climb up through the trading ranks - - by
1987, serving as a trader for a relatively prominent firm (which was badly
damaged in the 1987 crash). Israel actually did quite well during the crash,
and after working for a couple of other funds in the ensuing years, he decided
to create a fund of his own with two other men - - one of them, Jimmy Marquez,
who himself had launched a fund whose losses were so severe that he had to shut
it down, and another, Dan Marino, a chubby, almost-deaf accountant who was
there to keep (and, later, cook) the books.
Israel
was, in a way, ahead of the curve since he wanted to base his orders on a very
primitive (and today what would be considered ungodly slow) version of
high-speed trading. His "Forward Propogation" program would predict
the next move of the market with 86% accuracy, he claimed, and for virtually
the entire history of the newly-christened Bayou fund, Forward Propogation was
the centerpiece of their technological edge in the markets.
At first,
the fund was off to a good start. In a few months, Bayou had a nice profit to
show to their partners (who, at the time, were just a few friends and family,
thus yielding a tiny fund of not even a million dollars). Marquez believed a
major bull market in gold was forthcoming, so he went heavily long into
precious metals. Although Marquez was absolutely right, he was far too early,
and what had been a gain turned into a loss. The fund was off to a terrible
start, and the three partners were certain their investors would simply leave,
thus snuffing out their new business.
more
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008
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.
http://www.proedgenet.com/Subscribe/Subscription.php?id=LIR2
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