Baltic Dry Index. 1054 +18
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers. Confessed liar.
“We’re saved,” (again) says Spain’s Prime Minister
Rajoy, unfortunately reliable reports say his lips moved. Saved or not, Euroland’s
serial dissembling Finance Ministers are assembling in Brussels today for a
meeting with the head of the IMF to try to work out another fix for Greece,
before they all get to have dinner with one of the EU’s unelected, joke of a
President, Herman Van Rompuy. A modest man with much to be modest about, to
quote Winston Churchill. The aim of the dinner is to stitch up Thursday’s
coming “Great Leaders” meeting, where several EU leaders are threatening to
enforce austerity on the Eurocrats salaries, pensions and perks. The UK Prime
Minister is actually threatening to veto the EU’s budget 2014-2020, unless it
gets seriously scaled back. Few expect U-turn Cameron to actually veto the EU
budget. The usual result is a great EU fudge, weasel words are used to give all
the big powers all that they need to give the Brussels Eurocrats most of what
they want. This week’s meetings won’t square the circle, nor release Greece and
others from the tyranny of the euro.
Below, the never ending crisis called Europe.
Sinn: We
should stop proclaiming the end of the world in the event of an exit. Instead,
we should shape the exit as an orderly process with relevant aid for the banks
of the country in question and for the purchase of sensitive imports. What we
are currently witnessing in Greece is a disaster -- and it's not a disaster
caused by an exit, but rather by remaining in the euro zone.
'Worst is over’ for euro, says Spanish PM Rajoy
The worst of the euro crisis has passed as fears over the shared currency’s future ease, according to Spain’s prime minister Mariano Rajoy.
The worst
of the euro crisis has passed as fears over the shared currency’s future ease,
according to Spain’s prime minister.
“There
are doubts about the irreversibility of the euro, it’s true that there were
more a few months ago than today,” Mariano Rajoy told a news conference in
Madrid. “I’m totally and absolutely convinced that the worst has passed.”
Mr Rajoy,
who was speaking a year after he came to power, is enacting spending cuts and
tax increases designed to save €102bn (£82bn) from the Spanish budget by 2014.
Spain is however, still expected to seek a sovereign bail-out, having already
received a rescue for its banking sector.
Bad loans
at Spanish banks reached a new record level in September, its central bank said
yesterday. More than one in ten loans were classed as being at a high risk of
not being paid, totalling more than €182bn.
---- In Italy, official figures showed that industrial orders dropped 4pc in September against the month before, leaving them down 12.8pc annually.
The
decline marked the thirteenth annual drop in a row, and was blamed on faltering
internal demand as the country reduces spending and the government imposes
austerity.
More
http://www.telegraph.co.uk/finance/financialcrisis/9688405/Worst-is-over-for-euro-says-Spanish-PM-Rajoy.html
Spain may offer residency to foreigners buying homes
MADRID |(Reuters) - Spain is considering offering rich investors from countries such as Russia and China the right to settle in return for them buying up property in the stagnant housing sector.
Spain has more than a million empty homes across the country and is setting up a bad bank to clean up toxic assets from a housing bubble which burst in 2008.
Foreigners could be offered a residency permit if they buy a property worth 160,000 euros ($200,000) or more, the country's commerce secretary said on Monday.
"We're looking at markets such as the Russian or Chinese, among which there is already a strong demand for Spanish real estate," Jaime Garcia-Legaz said during a conference.
Garcia-Legaz said his ministry was consulting the other departments about the idea and gave no figures about how many foreign individuals might be tempted to buy in Spain in order to get Spanish residency.
The government is also trying to drum up interest among foreign investors in participating in its bad bank and will meet with five banks this week, sources told Reuters.
More
http://www.reuters.com/article/2012/11/19/us-spain-houses-idUSBRE8AI0S120121119
France stripped of prized 'AAA' credit rating by Moody's
France has suffered a serious blow to its economic credentials after being stripped of its prized AAA credit rating by Moody’s.
The
rating agency said France’s long-term economic growth had been hit by its
inflexible labour market and low levels of innovation eroding its
competitiveness and industrial base.
Moody's
also flagged up the country’s exposure to the continuing eurozone crisis.
It warned
the “predictability” of France’s resilence of further shocks in the eurozone
was diminishing while the country’s exposure to the highly indebted countries
such as Spain and Greece was disproportionately high.
In a
statement Moody’s said: “Further shocks to sovereign and bank credit markets
would further undermine financial and economic stability in France as well as
in other euro area countries.
“The
impact of such shocks would be expected to be felt disproportionately by more
highly indebted governments such as France.”
The
decision to downgrade France by one notch to "Aa1" comes nine months
after Moody’s put the country on negative outlook. In July Moody’s put Germany,
Luxembourg and Netherlands’ AAA ratings on negative outlook.
Fitch,
itself a French company, is now the only major credit rating agency to maintain
a AAA rating on French Government debt.
Interview with Economist Hans-Werner Sinn 'Temporary Euro-Zone Exit Would Stabilize Greece'
By Armin Mahler and Michael Sauga 11/19/2012
Sinn: No.
SPIEGEL: Excuse me? Economists have
completely different ideas about how the euro can be saved. You suggest, for
example, that countries should temporarily leave the euro zone until they have
re-established their competitiveness. Others, by contrast, recommend
collectivizing debt across the euro zone. How should politicians deal with such
contradictory advice?
Sinn: There are differences in the
recommended therapies, but fewer divergences in the analysis. There is
considerable agreement today on the euro's defects.
SPIEGEL: But not on how the euro can be
saved, or even whether it should be.
Sinn: I hope that it can be fixed. The
euro crisis proceeds in phases, and we are always told that there is no
alternative to the next phase, because otherwise the euro would crumble. So
there was supposedly no alternative when the European Central Bank (ECB)
granted its TARGET loans, when it forced the German central bank, the
Bundesbank, to purchase sovereign bonds from Southern European countries against
its will, and when increasingly larger rescue funds were approved. Now, they
are planning to create a banking union to socialize the debts of banks in
Southern Europe. The next step will be the introduction of euro bonds …
SPIEGEL: … which the German government
vehemently rejects.
Sinn: By the time France is hit by the
crisis, as everyone fears will happen, the German government will no longer be
able to refuse this demand. This development will ultimately lead to a system
that has little in common with a market economy. The ECB and the European
Stability Mechanism (ESM), the permanent successor to the current rescue fund,
will then direct the flow of capital -- with the approval of euro-zone
governments -- into countries where it no longer wants to go. This will result
in growth losses throughout Europe, and money will continue to be thrown out
the window in Southern Europe. Furthermore, it will create considerable discord
because it makes closely allied countries into creditors and debtors.
"We are not discussing the exit of Greece from the euro area. This is a stupid idea and an avenue we would never take."
Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers.
At the Comex silver depositories Monday final figures were: Registered 35.86
Moz, Eligible 106.74 Moz, Total 14.60 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Bloomberg on
yet more signs of distress in China. China’s shadow banking property trusts are
in trouble and the “Trusts have
become too large to fail,” says Lian
Ping, an economist at Shanghai-based Bank of Communications Co. They may have
become too big to fail, but they are starting to fail nevertheless. Will China’s
incoming newbies bail the trusts out? Even if they do, will it be in time? Stay
long physical gold and silver, 2013 is shaping up to be one hell of a year.
"The secret of life is
honesty and fair dealing. If you can fake that, you've got it made."
Groucho Marx
Groucho Marx
Purple Palace Abandoned Shows China Shadow-Banking Risk
By
Bloomberg News - Nov 19, 2012 10:01 PM GMT
Niu Dianqing stopped his motorbike at a
construction site in China’s Inner Mongolia one morning last month. The front
door was locked.
“They said they will pay me this month,
but it seems I’m fooled again,” said Niu, who supplied nets for protecting
workers from falling off bamboo scaffolding at the half- completed Purple
Palace, a development including a luxury hotel and three residential buildings
in the city of Ordos. “The doorman was still here last week, but now even he’s
gone.”
The developer, Ordos Jin’ao Property Development Co., owes a lot more than the 10,000 yuan ($1,604) Niu is trying to collect, and it isn’t only suppliers who are out of the money. Dozens of investors nationwide have put 445 million yuan of savings into funding Purple Palace’s construction.
The two-year investment vehicles they purchased, called trusts, promised an annual interest rate of at least 10 percent and return of principal in March 2013. With at least 1,000 similar projects having ground to a halt this year in Ordos, where over-investment has resulted in a building boom gone bust, tens of thousands of investors risk default.
“The risks are significant there, and something must be done by the government to stop potential defaults of property trusts from spreading nationwide,” said Lian Ping, an economist at Shanghai-based Bank of Communications Co. “Trusts have become too large to fail.”
Trusts, targeting people with at least 1 million yuan to invest in alternatives to low-yielding bank accounts, are the fastest-growing segment of China’s nebulous world of shadow banking. They make up more than a quarter of the country’s estimated $3.35 trillion in non-bank lending, according to an Oct. 16 report by UBS AG chief China economist Tao Wang, or about 45 percent of the country’s gross domestic product.
Shadow banking worldwide is a $67 trillion industry whose size “can create systemic risks,” the Financial Stability Board said in a Nov. 18 report. The business in China, which includes banks’ off-balance-sheet vehicles such as commercial bills and entrusted loans, as well as underground lending by individuals, flourishes because more than 90 percent of the nation’s 42 million small companies can’t get bank loans.
China’s 64 trust firms, with sales offices in major cities, combine characteristics of commercial and investment banking, private equity and wealth management. They pool household savings to offer loans and invest in real estate, stocks, bonds, commodities, even bottles of sorghum liquor. No other financial firms operate across all these asset classes.
More
http://www.bloomberg.com/news/2012-11-19/purple-palace-abandoned-shows-china-shadow-banking-risk.html
All within the state, nothing outside the state, nothing against the state.
Benito Mussolini.
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.
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