Baltic Dry Index. 916 -31
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“We
must uphold the leadership of the party"
President
Hu Jintao. November 8th,
2012.
The more things change, the more they stay the same in China. More on that later.
Forgive your enemies, but never forget their names.
John F. Kennedy.
We
open with the aftermath of the US election, that altered nothing. After a
polarised electorate essentially voted back the status quo, Wall Street’s
squids went into panic mode. They had after all just spent most of the past
year trying to get President Obama and the Democrats tossed out. Now come payback
time they fear. No more President Nice-guy. Also weighing on the stock market, a looming
deadline for automatic spending cuts and tax breaks. Unless some bipartisan
civility and sanity returns to American politics, a bodged interim fix is
deemed likely, one that merely kicks the problem from the start of 2013 deeper into
2013, passing the buck to the next Congress to try to sort out. Few companies
hire and invest in such circumstances, having to wait on the outcome of next
year’s fix.
While
peace and brotherly love might break out in the fag end Congress, putting the
nation’s interest foremost, it’s not really the American way. Scroll down to
Crooks Corner for the final word on the US election. Stay long physical
precious metals.
Don’t get mad, get even.
Robert F. Kennedy.
Angst returns on German recession fears and US fiscal cliff
Stock markets skidded across the world and investors retreated to safe-haven assets on fears that Europe’s festering crisis has spread to Germany and a bitterly-divided Washington may struggle to avert a fiscal crisis.
Mario
Draghi, the European Central Bank’s president, warned that Germany is no longer
insulated from the slump in southern Europe. "The latest data suggest that
these developments are now starting to affect the German economy," he
said, triggering an immediate sell-off on Europe’s bourses and pushing the euro
down to almost $1.27 against the dollar.
Germany’s
industrial output dropped 1.8pc in September and orders fell 3.3pc, far worse
than expected. Spanish industrial output fell 7pc. Annalisa Piazza from Newedge
said it was a shocking upset and implies that Germany may be in recession
already.
Flight to
safety pushed down yields on two-year German debt to -0.06pc, nearing the
all-time low seen during the last eurozone debt spasm in July. Yields on
10-year US Treasuries fell 11 basis points to 1.63pc.
The
jitters came as American voters delivere split government yet again, with the Republicans
still in charge of the House of Representatives and the Democrats still shy of
a 60-seat super-majority in the Senate.
Alan
Greenspan, ex-chairman of the US Federal Reserve, said it is unclear whether
President Barack Obama can reach a deal with Congress to head off the
"fiscal cliff" in the few working days before recess in mid December.
Unless the two sides agree there will be automatic tax rises and spending cuts
worth $600bn or 4pc GDP at the end of the year.
"I’m
concerned that the election per se has really not changed the balance. The
solution to this going to be far more difficult than I think we believe,"
he told Bloomberg Television. The International Monetary Fund has warned that a
fiscal shock of this scale would abort America’s fragile recovery and risk a
full-fledged global recession.
----David Bloom from HSBC said the defeat of Republican challenger Mitt Romney does at least alay two worries on global markets, since he had threatened to replace Fed chairman Ben Bernanke with a monetary hawk and label China as "currency manipulator" from day one.
Mr
Obama’s re-election ensures that quantitative easing will run its course,
averting the danger of combined monetary and fiscal tightening. The risk of a
trade war with China has abated.
More
We are deep into the final act of the Greek tragedy.
In a suicide move that surprised all, Greek ship owners just took a direct hit below
the waterline. Most will probably now relocate (again) to safer waters. Stay
long physical precious metals, the end is not long away.
“Our Greek friends have no options or choice, they have to do
it.”
Jean
Claude Juncker, chairman of the Eurogroup.
Debt crisis: Greek shipowners face being levied for first time in crucial austerity bill
Greek shipowners are set to be levied for the first time as part of the latest make-or-break austerity Bill narrowly passed by politicians in Athens on Wednesday night.
The
country’s best-known tycoons, who remarkably have retained their fiscal
privileges throughout the crisis, will be forced to “contribute” at least €140m
(£112m) to the stricken national coffers after the Bill was passed by only two
votes. Following an evening of high drama, which saw seven politicians expelled
from the ruling coalition, the Bill received 153 “Yes” votes, only two more
than the 151 required.
Antonis
Samaras, the Greek prime minister, pleaded with politicians to approve the
€13.5bn package of tax rises, public sector and pension cuts, needed to secure
the next €31bn tranche of international aid and avoid national bankruptcy.
---There
was another shock mass resignation at Greece’s central bank as workers realised
their pay would be cut by a third as part of the measures – the fourth round of
cuts in three years.
Forty
employees announced their retirement from the bank after caps of €5,000 a month
were announced on monthly salaries across the public sector.
Salary
and pension cuts account for €5.8bn out of €9.4bn proposed spending cuts for
the 2013 budget. Other measures include raising the retirement age to 67 and
scrapping Christmas payments for pensioners.
---- The inclusion of the shipowners levy is a radical move on Greece’s business elite. The shipowners comprise about 900 families that control the biggest fleet in the world of about 15pc of the world’s merchant freight.
After
many years of being based abroad, mostly in London, the advent of the euro drew
many back, on the proviso that they would not be taxed.
An
estimated €175bn of tax-free income is thought to have been brought back to
Greece over the past decade.
The
shipowners, who have avoided austerity measures by threatening to move
offshore, reportedly agreed to a “voluntary” levy outlined in the austerity
Bill. But the word was removed by finance minister Yannis Stournaras at the
last minute.
China's Hu says graft threatens state, party must stay in charge
BEIJING |
Thu Nov 8, 2012 12:46am EST
(Reuters)
- Outgoing Chinese President Hu Jintao warned on Thursday that corruption
threatens the ruling Communist Party and the state, but said the party must
stay in charge as it battles growing social unrest.
He also
promised political reform, but offered no dramatic changes and ruled out
copying a Western style of government.
In a
"state of the nation" address to more than 2,000 hand-picked party
delegates before he hands over
power, Hu acknowledged growing public anger over
graft and issues like environmental degradation had undermined the party's support
and led to surging numbers of protests.
"Combating
corruption and promoting political integrity, which is a major political issue
of great concern to the people, is a clear-cut and long-term political
commitment of the party," Hu warned. He was opening a week-long congress
at Beijing's Great Hall of the People that will usher in a once-in-a-decade
leadership change in the world's second-largest economy.
---- "If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state. We must thus make unremitting efforts to combat corruption," Hu said in a nearly two-hour speech.
The
run-up to the carefully choreographed meeting, at which Hu will hand over his
post as party chief to anointed successor Vice President Xi Jinping, has been
overshadowed by a corruption scandal involving one-time high-flying politician
Bo Xilai.
The party
has accused him taking bribes and abusing his power to cover up his wife's
murder of a British businessman in the southwestern city of Chongqing, which he
used to run.
---- "All those who violate party discipline and state laws, whoever they are and whatever power or official positions they have, must be brought to justice without mercy," Hu told delegates, one of whom was his predecessor, Jiang Zemin.
"Leading
officials, especially high-ranking officials, must ... exercise strict
self-discipline and strengthen education and supervision over their families
and their staff; and they should never seek any privilege."
The New
York Times said last month that the family of Premier Wen Jiabao had
accumulated at least $2.7 billion in "hidden riches", a report the
Chinese government labeled a smear.
---- Hu entered the venue accompanied by Jiang, signaling the former president still wields considerable influence in the party and in the secretive deliberations to decide on the new leaders. As Hu delivered his speech under a massive, golden hammer and sickle, a healthy-looking Jiang sat flanked by senior members, party elders such as Li Peng and incoming leaders such as Xi.
The
congress ends on November 14, when the party's new Standing Committee, at the
apex of power, will be unveiled. Only Xi and his deputy Li Keqiang are certain
to be on what is likely to be a seven-member committee, and about eight other
candidates are vying for the other places.
More
http://www.reuters.com/article/2012/11/08/us-china-congress-idUSBRE8A62LZ20121108
“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”
George Orwell. Animal Farm.
At the Comex silver depositories Wednesday final figures were: Registered 36.26
Moz, Eligible 106.67 Moz, Total 142.93 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today we
give the last word on the world’s most expensive election by far, to the USA’s
always amusing The Onion.
Millions Without Power Following Election
WASHINGTON—According
to widespread reports, roughly 314 million Americans across the country have
been left without any power following Tuesday’s devastating presidential
election.
As many
struggle to cope amidst the continued outage, experts have predicted that due
to the severity of the presidential contest, which cut a wide swath of carnage
throughout the entire United States, it’s very possible that power won’t be
fully restored to the general public for at least another four years, if ever.
“By our
estimates, power is out in roughly 150 million homes throughout the country,
and many residents—especially the poor, the middle class, and ethnic
minorities—will have no power for a long, long time,” said Cornell University
political scientist Dr. Paul Kucharski, adding that the power infrastructure,
which was originally put in place in 1789, has become increasingly problematic
and unreliable over the past 200 years.
“Given that we have an outdated system
that is so prone to failure, an outage of this magnitude was inevitable.”
“At this
point,” he continued, “with the number of citizens whose lives have been
completely devastated by this election, I think it’s fairly clear that the
whole system needs a complete overhaul.”
---- By approximately 11 p.m., power had reportedly been cut off to all states, including Alaska and Hawaii.
“I was
watching the returns on television, they called a winner in my state, and then
I was just totally without power,” said 35-year-old Dalton, GA resident Chris
Orloff, adding that the election has left him totally in the dark and with no
one to turn to. “Even though we were warned the election was going to happen on
Nov. 6, there was just no way to avoid this thing.”
“I
thought it would be bad, but I honestly didn’t think it would be this bad.”
Orloff added. “Best thing to do now is hunker down with my family and get used
to not having power for a while.”
According
to sources, the power outage has left millions without access to proper health
care, adequate shelter, and basic goods and services. Moreover, public school
officials said that if the power loss continues—as it is expected to for the
foreseeable future—it will be impossible to continue educating students.
---- “Unfortunately, we lose power around
here all the time,” said Florida-based marketing consultant Erika Lloyd,
explaining that she endured a much more crippling power failure in 2000. “Any
time an election happens, even if it’s a small, statewide one, our power goes
out immediately after the ballots are counted
---- At press time, the roughly 5,000
Americans who maintained their power after the election, and remained untouched
by its effects, were reportedly sitting comfortably in their fully furnished,
15-room homes.
More
When
we got into office, the thing that surprised me the most was that things were
as bad as we'd been saying they were.
John
F. Kennedy.
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.
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