Tuesday, 27 November 2012

“The New Paradigm.”



Baltic Dry Index. 1094  +04

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 Chairman of the Euro Group of Finance Ministers. Confessed liar.

We have reached the promised land! The new paradigm. Greece has been saved again! Third time lucky perhaps? We have Jean-Claude Juncker’s word on it!

"This is not just about money. This is the promise of a better future for the Greek people and for the euro area as a whole, a break from the era of missed targets and loose implementation towards a new paradigm of steadfast reform momentum, declining debt ratios and a return to growth."

Jean-Claude Juncker. Luxembourg Prime Minister and Chairman of the Euro Group of Finance Ministers. Confessed liar.

According to Euroland’s leading liar, Luxembourg President and Eurogroup Chairman Jean-Claude Juncker, Greece has been well and truly fixed, once and for all. The can has been kicked all the way out to 2022, long after the present troop of clowns will be long gone. Europe, as usual, promises to release the Greek rescue in tranches, as the Greeks reach specific targets. The Greeks, as usual, promise to reach the specific targets at some point off in the future. All agree that Greece’s debt to GDP ratio will be “significantly below 110%” in 2022. Welcome to the asylum called Europe. Shame about Mrs Merkel’s re-election chances though.

In case no one has noticed that’s 10 years away. This is a prediction from a group that’s been serially wrong about the euro, Greece and Club Mad, as if their lives depended on it. They never saw the Greek tragedy coming, have been wrong about every attempt at a fix, and even now are in great denial that it’s the euro that’s the problem, pushing the hapless Greeks into penury and serfs of the Germanic north. The Greeks would do well to take the money on December 13th, and exit the euro on December 25th, then default, devalue, reform, and restructure, and start the whole process of getting Greece and the Greeks back to prosperity again.

“I am so clever that sometimes I don't understand a single word of what I am saying.”

Jean-Claude Juncker. Luxembourg Prime Minister and Chairman of the Euro Group of Finance Ministers. Confessed liar. With apologies to Oscar Wilde.

Euro zone, IMF reach deal to cut long-term Greek debt

Mon Nov 26, 2012 10:06pm EST
(Reuters) - Euro zone finance ministers and the International Monetary Fund clinched agreement on reducing Greece's debt on Monday in a breakthrough to release urgently needed loans to keep the near-bankrupt economy afloat.

After 12 hours of talks at their third meeting in as many weeks, Greece's international lenders agreed on a package of measures to reduce Greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020.

In a significant new pledge, ministers committed themselves to take further steps to lower Greece's debt to "significantly below 110 percent" in 2022 -- the most explicit recognition so far that some write-off of loans may be necessary from 2016, the point when Greece is forecast to reach a primary budget surplus.

----Eurogroup Chairman Jean-Claude Juncker said ministers would formally approve the release of a major aid installment needed to recapitalize Greece's teetering banks and enable the government to pay wages, pensions and suppliers on December 13.

Greece will receive up to 43.7 billion euros in stages as it fulfills the conditions. The December installment will comprise 23.8 billion for banks and 10.6 billion in budget assistance.

The IMF's share, less than a third of the total, will only be paid out once a buy-back of Greek debt has occurred in the coming weeks, but IMF Managing Director Christine Lagarde said the Fund had no intention of pulling out of the program.

To reduce Greece's debt pile, ministers agreed to cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.

They promised to hand back 11 billion euros in profits accruing to their national central banks from European Central Bank purchases of discounted Greek government bonds in the secondary market.

They also agreed to finance Greece to buy back its own bonds from private investors at what officials said was a target cost of around 35 cents in the euro.
More
Next, Gresham’s Law, 21st century style. With America’s too big to fail banks all still in reality bankrupt and on Fed life support, the US banks lobbied to stop the start in America of the Basel 3 capital rules. But that puts Europe’s equally bankrupt banks at a big disadvantage, so out go the rules in Europe too. Either the new rules were needed or they were not. On too big to fail, champagne socialism for banksters, clearly Basel 3 rules are unnecessary. Who needs capital, when the ultimate backstop is the state with a printing press, and the power to oppress the little people with taxes.

Europe 'to push for Basel III delay as it lobbies US'

Europe is preparing to follow the United States in delaying the introduction of stricter rules on bank capital, while it lobbies for a rethink of the US stance, according to reports.

6:11AM GMT 27 Nov 2012
The delay could push back the start of global rules in Europe, known as Basel III, by about six months, and that could be even longer if diplomats and lawmakers fail to break a deadlock on a law meant to be phased in from the start of 2013.

On the surface, the postponement would be good news for small banks in particular, because it would give them a chance to adapt to a complex new law still being finalised by EU member countries and the European Parliament.

But any hold-up would compound uncertainty following a US decision to abandon the January 1, 2013 target, undermining the global Basel accord and promised capital reforms to prevent a re-run of the financial crisis.

"Whatever happens, the new law cannot become effective on January 1," said one unnamed EU official, according to Reuters. "The middle of the year would be a realistic assessment."

Brussels is also worried that the decision in Washington to ignore the deadline, which was set by the Basel committee of regulators for the capital regime they designed, will put EU banks at a disadvantage to US rivals allowed to put off applying its strict standards.
More

Next up America, where time is starting to run out on doing the right thing for the nation in Washington. Will the Washington Grinch’s steal the Santa Claus rally?

"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

Alan Greenspan, 1966. Before he fell-off the wagon.

With "fiscal cliff" deadline nearing, parties still at odds

(Reuters) - Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country's fiscal crisis, while holding firm against the income tax rate increases for the wealthy that Democrats seek.

In a further sign of tense relations between negotiators who are trying to avert a year-end "fiscal cliff" of steep tax increases and spending cuts, the White House expressed doubts that "balanced" deficit reductions can be achieved merely by limiting tax breaks and cutting spending, as Republicans propose.

The White House is already on record threatening to veto any bill that does not include income tax rate increases on the wealthy that are opposed by Republicans.

While Congress returned from its Thanksgiving holiday break amid increasing talk about long-term tax reform plans and a need to compromise, the two parties showed no signs yet of having found a way around the short-term tax obstacle necessary to head off the fiscal cliff on December 31.

"We remain at an impasse," Senate Republican Leader Mitch McConnell of Kentucky said during a floor speech.

The lack of progress helped push financial markets down slightly, as fiscal cliff worries made investors less willing to buy stocks.

"My fear is that the can gets kicked down the road for at least a six-month period" to search for a long-term fiscal deal, said Bonnie Baha of DoubleLine Capital, an asset management firm. "The market is going to hate it, especially the stock market.”
More

We close for today in China, where a billionaire company founder suddenly quits “to devote more time to his personal endeavors,” according to his PR spin meisters.  To this dinosaur trader that’s never a good sign. Call me old fashioned but I smell yet another Chinese shadow finance scandal coming along. Lawrence Li, a Shanghai-based analyst at UOB-Kay Hian Holdings Ltd., is a master of understatement.

“The pure and simple truth is rarely pure and never simple.”

Oscar Wilde.

Zhang Companies Tumble as Billionaire Resigns

By Bloomberg News - Nov 27, 2012 2:14 AM GMT
China Rongsheng Heavy Industries Group Holdings Ltd. (1101) and Glorious (845) Property Holdings Ltd. both fell the most in almost four months in Hong Kong trading after billionaire Zhang Zhirong quit as chairman of the companies.

Shipbuilder Rongsheng plunged as much as 9.3 percent and real estate developer Glorious declined as much as 5.7 percent. That was the biggest drop on a closing basis since July 30 for both companies.

Zhang, the founder and biggest shareholder in both businesses, quit their boards about five weeks after another company he controlled agreed to pay $14 million to resolve U.S. inside-trading claims. His departure is unrelated to that, iPR Ogilvy in Hong Kong, which handles his public relations, said in an e-mailed reply to questions from Bloomberg News.

The executive was leaving “to devote more time to his personal endeavors” and there were no disagreements with the boards, the two companies said in statements yesterday. Zhang told investors he won’t sell any Glorious shares for at least a year and later declined to comment on Rongsheng stock, according to iPR Ogilvy.

“Zhang’s resignation came as a surprise to the market,” said Lawrence Li, a Shanghai-based analyst at UOB-Kay Hian Holdings Ltd., who rates Rongsheng sell. “This may add concerns about the listed companies’ outlook in short term.”
More

“The world is a place that’s gone from being flat to round to crooked.”

Mad Magazine.

At the Comex silver depositories Monday final figures were: Registered 35.05 Moz, Eligible 106.79 Moz, Total 141.84 Moz.  


Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over. 

No crooks or scoundrels today, just poor Breton onion growers desperate to earn an honest Pound in the UK. Brittany is to ship their famous pink onion to Britain again, in an attempt to break free of the decline and fall of old socialist France. While admirable and no doubt very enjoyable, and probably fairly priced, I can’t help but feel that shipping in illegals, would make them more money faster, in our 21st century world, and cut out all the messy business fooling around in muddy Breton fields. I wonder if London’s banksters have figured out yet how to make money on pink onion CFDs?

“Indeed I have always been of the opinion that hard work is simply the refuge of people who have nothing to do.”

Oscar Wilde.

Onion Johnnies return to England as French market dries up

Onion Johnnies, the travelling salesmen whose berets and bicycles inspired Britain and much of the world's classic image of the archetypal Frenchman, are setting sail for England once more.

5:55PM GMT 26 Nov 2012

Beset by tough market conditions at home, the producers of Brittany's celebrated pink onions have decided it is time to seduce a new generation of British housewives with their Gallic charm and strings of eye-watering produce.

The Etoile du Roi (Star of the King), a replica of an 18th-century sailing ship, set off from the Breton port of Roscoff on Monday, weighed down by a hefty cargo of onions that it will deliver to London on December 6 after stopovers on the Channel island of Jersey and at Portsmouth.

It was from Roscoff in 1828 that the first French onion salesman to try his luck in England set sail, the trip across the Channel being far shorter and less hazardous than an overland journey to the markets of Paris, AFP reported.

Having returned with tales of how quickly he had sold his cargo, he established a tradition that was to continue well into the 20th century, according to Francois Seite, a former salesman himself who is now the president of the local "Johnnies" association and Chamberlain of the Confraternity of the Onions of Roscoff.

"From Roscoff to Plymouth, it is the same as Roscoff to Rennes [in southern Brittany], except that there is the Channel in between them," explains the 72-year-old former farmer who, like his father and grandfather, spent years on the highways and byways of England, first by bicycle then with a little van.

In the 1920s and 1930s there were as many as 1,500 French onion pedlars who regularly travelled from Brittany to England, Wales and even Scotland, selling their merchandise door-to-door.

So many of them had the Breton first name Yann, they quickly became known as "Johnnies", and the image they created of a Frenchman with a string of onions around his neck, sporting a beret and a traditional stripey top has proved indelible.

As well as the four tonnes of onions on board the Etoile du Roi, another 20 tonnes of Roscoff Onions are being dispatched to England by Brittany Ferries, a company established in 1972 by Breton farmers precisely in order to provide the remote region on the western edges of France with access to the British market.

"Our geographical isolation from the rest of France and Europe makes it hard for us and in these tough times, not trying to find alternative outlets for our produce would be suicidal," said Jean-Frangois Jacob, the secretary general of the local agricultural cooperative.

“I think God, in creating man, somewhat overestimated his ability.”

Oscar Wilde.

The monthly Coppock Indicators finished October:

DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.  Still time for the Santa Clause rally?

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