Baltic Dry Index. 1011 +26
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"In
the midst of international financial turmoil, China was still able to solve the
problem of feeding its 1.3 billion people, and that was already our greatest
contribution to humankind. Some
foreigners with full bellies and nothing better to do engage in finger-pointing
at us. First, China does not export revolution; second, it does not export
famine and poverty; and third, it does not mess around with you. So what else
is there to say?"
Xi
Jinping.
Stay long or add to
holdings of physical precious metals. China’s new leadership, and Japan’s
likely new leadership after next month’s Japanese general election, are on a
major collision course. Today’s mini war between “Sampson” Israel, and Hamas “David”
hell-hole Gaza, has the prospect of being matched by a new real war in the East
China Sea, if Japan’s likely next Prime Minister goes ahead with his plans to
build on the disputed uninhabited Diaoyu Islands, called the Senkaku’s by
Japan. Japan is claiming sovereignty over the islands rather than just “administration,”
which was transferred to Japan by the USA in 1972, in what now looks
increasingly like a major blunder. In today’s mini war in the Middle East, the
biblical story is turned upside down, with Sampson having might and right on
its side, and a slingless David merely having wrong.
Below, this morning’s
developments in Asia. An unrepentant Japanese right seems determined to kick
off the first new war of the 21st century. At the least, expect a
devastating collapse of Japanese sales in China. At worst, expect the USA to
get dragged in to recue Japan. In a war between China and Japan, America’s two
biggest creditors, the USA takes nearly all of the collateral damage.
China's new party chief Xi gets strong mandate for action
BEIJING |(Reuters) - China's president-in-waiting Xi Jinping won a strong mandate on Thursday to lead the world's second-biggest economy and deal with problems ranging from corruption to economic uncertainty.
Xi was appointed head of both the ruling Communist Party and its top military body as the ruling Communist Party unveiled a new leadership line-up consisting of conservatives and respected financial reformers.
In an address at the end of the party's once-in-five years congress, Xi said he understood the people's desire for a better life but warned of severe challenges going forward.
"Our party is dedicated to serving the people," he said after introducing the other six members of the standing committee at the Great Hall of the People in a carefully choreographed ceremony carried live on state television.
----Xi will be steering China for at least the next five years with a mixed team, including the urbane, English-speaking anointed next premier Li Keqiang, and North Korea-trained economist Zhang Dejiang.
That could make undertaking the kind of reforms China so desperately needs, whether financial or social, much harder. Two senior leaders with strong reform credentials -- Guangdong party boss Wang Yang and party organization head Li Yuanchao -- did not make it to the standing committee, the party's premier body.
More
China’s Bad Loans Rise for Fourth Quarter as Economy Slows
By Bloomberg News - Nov 15, 2012 5:12 AM GMT
Chinese banks’ bad loans increased for a fourth straight quarter, the
longest streak of deterioration since the data became available in 2004,
highlighting pressures on profit growth as the economy weakens. Non-performing loans rose by 22.4 billion yuan ($3.6 billion) in the three months ended Sept. 30, to 478.8 billion yuan, the China Banking Regulatory Commission said in a statement on its website today. Bad loans increased at all types of institutions, including the largest state-owned lenders, rural banks and foreign banks, the regulator said.
China’s banking system is grappling with rising defaults and weaker loan demand after economic growth decelerated for a seventh quarter. Combined net income growth at the nation’s 3,800 lenders slowed to 14 percent in the third quarter from 23 percent in the second, the regulator said today.
More
http://www.bloomberg.com/news/2012-11-15/china-banks-bad-loans-rise-for-fourth-quarter-as-economy-slows.html
Japan Prepares for Election With Noda’s DPJ Poised for Loss
By Isabel Reynolds and
Takashi Hirokawa - Nov 15, 2012 2:53 AM GMT
Japanese Prime Minister Yoshihiko Noda will dissolve parliament tomorrow,
triggering an election that polls show his party will lose three years after
ending the Liberal Democratic Party’s half-century grip on power. The ruling Democratic Party of Japan decided the national vote for the lower house will be held Dec. 16, acting party secretary-general Jun Azumi said last night. The deal to bring forward elections due in August came after LDP leader Shinzo Abe agreed to end an impasse over financing the budget and to support a plan to reduce the number of Diet seats.
Noda’s DPJ has seen its public approval slump below 20 percent after three prime ministers in as many years failed to revive growth, end deflation or enact campaign promises on social spending. An LDP win would reinstate Abe, who advocates a tougher policy toward China and greater central bank monetary stimulus, to the premiership he quit in 2007 after 12 months.
“The likely result is a bloodbath for the DPJ,” said Jeff Kingston, professor of Japanese politics at Temple University’s Tokyo campus.
----An election means three of Asia’s four largest economies will have new governments in 2013. South Korea’s vote for president is Dec. 19, with the winner taking office in February.
----Abe this week met with the Dalai Lama and called for democracy in Tibet, sparking a fresh protest from China. He advocates building on islands, known as Senkaku in Japan and Diaoyu in China, at the heart of a sovereignty fight between the two sides over an area rich in fish, oil and natural gas.
The LDP leader’s China stance contrasts with his actions when he became prime minister in September 2006. He made Beijing his first overseas trip to strengthen ties, apologizing for Japanese aggression in Asia in the first half of the 20th century.
More
http://www.bloomberg.com/news/2012-11-14/noda-to-dissolve-diet-nov-16-paving-way-for-japan-election-1-.html
We end for today, with Europe, and a massive U-turn by Brussels. No more austerity for Spain, says Brussels “Mr. Austerity.” Spain can now apply for a Euro bailout on its own terms. Coming just days after the EU clashed with the IMF over granting Greece another two years to meet yet another impossible budget target, despite their words, Brussels is now in full retreat on austerity. The coming EU “leader’s” on November 22nd, gets more interesting by the day. France now seems to have lined up Rome, Madrid, Lisbon, and Brussels, in Camp Anti-Austerity, supported at the margin by Cyprus and Greece. In France, the seasonal bounce is about to come to its end as socialist policies kick in.
Rajoy’s Path to Bailout Clears as EU Endorses Austerity
By Ben Sills - Nov 15, 2012 7:56 AM GMT
European Union budget enforcer Olli Rehn removed an obstacle blocking
Spanish Prime Minister Mariano Rajoy’s path to a sovereign bailout when he
endorsed the country’s efforts to reduce its budget deficit. The spending cuts and tax increases Rajoy has introduced for this year and next are enough to satisfy the EU, Rehn, the economic and monetary affairs commissioner, said yesterday in Brussels. Rajoy may still need to introduce more austerity for 2014, the economy chief added.
“Spain has taken effective action in restoring the sustainability of public finances,” Rehn said. “The box is ticked, as long as the implementation is solid and convincing.”
The announcement follows concessions to Greece, Portugal and earlier leniency granted to Spain itself, in a further shift away from the fiscal retrenchment that critics say has spread recession across southern Europe and exacerbated the fiscal crisis. Millions of workers across Europe logged off yesterday to protest against austerity.
----The government today will pass a decree today aimed at sparing families who default on their mortgages from eviction, a government spokesman, who asked not to be named in line with official policy, said late yesterday. Rajoy is pressing on with his mortgage measures alone after talks with the opposition Socialist Party fell apart last night as police and protestors clashed near the parliament building in Madrid.
More
http://www.bloomberg.com/news/2012-11-14/rajoy-s-path-to-bailout-clears-as-eu-endorses-austerity.html
French Economy Barely Grows as Hollande Faces Jobless Surge
By Mark Deen - Nov 15, 2012 8:09 AM GMT
France’s economy barely expanded in the third quarter, underlining the
challenge President Francois Hollande faces in addressing the stagnation that
is extending into its second year. Gross domestic product rose 0.2 percent in the quarter from the previous three months when it fell a revised 0.1 percent, national statistics office Insee in Paris said today in an e- mailed statement. Economists had forecast no change, according to the median of 25 estimates in a Bloomberg News survey. GDP rose 0.2 percent from a year earlier.
“The third quarter is probably the result of a temporary rebound at the European level,” said Michel Martinez, an economist at Societe Generale in Paris. Business sentiment suggests the French “economy is heading to a moderate recession or at best remaining flat.”
With unemployment climbing and his popularity sliding, Hollande is seeking to revive the competitiveness of Europe’s second-largest economy by offering companies a 20 billion-euro ($25.5 billion) tax cut starting next year and pressing unions to offer more labor flexibility.
----“This resilience is unlikely to be sustained in the fourth quarter, when we see France’s GDP growth going negative as headwinds build,” said Thomas Costerg, an economist at Standard Chartered (STAN) in London. “The continued labor-market deterioration is likely to dampen consumption, while decelerating European trade affects exports.”
----Manufacturers including PSA Peugeot Citroen SA (UG) and Alcatel- Lucent (ALU) have announced thousands of job cuts in recent months, driving up unemployment to its highest since 1999.
More
http://www.bloomberg.com/news/2012-11-15/french-economy-barely-grows-as-hollande-grapples-with-job-cuts.html
Speculators Find Loopholes in French Transaction Tax
By Helene Fouquet and Adria
Cimino - Nov 14, 2012 11:01 PM GMT
As France begins collecting its financial-transactions tax this month, it is
becoming evident that President Francois Hollande’s levy is hitting all but the
people it was aimed at: speculators. Hollande, who called finance his “main adversary” during his election campaign, pushed through in August a 0.2 percent transaction tax on share purchases, making France the first and only country so far in Europe to have such a levy. Many investors have been escaping the tax using so-called contracts for difference, or CFDs, offered by prime brokers that let them bet on a stock’s gain or loss without owning the shares.
“The
target was supposed to be finance with a capital F, which is sort of a black
box,” said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in
Paris. “Instead, we are punishing small investors who aren’t to blame and
already are frightened off by losses in the market.”
On Nov.
1, the state started collecting the levy on the purchase of 109 French stocks
with market values of more than 1 billion euros ($1.2 billion)
----His other plan to fight “speculators” includes splitting French banks’ retail and investment activities and increasing taxes on lenders’ salaries and speculative operations. A bank bill will be unveiled on Dec. 19, Hollande said last week.
The French finance ministry official charged with crafting the transaction-tax bill said it was impossible to impose a levy on CFDs, or on any derivative not related to a territory. He cannot be named according to government ground rules.
More
http://www.bloomberg.com/news/2012-11-14/french-transaction-tax-misses-mark-as-speculators-find-loopholes.html
“The European single currency is bound to fail, economically, politically and indeed socially, though the timing, occasion and full consequences are all necessarily still unclear.”
Margaret Thatcher.
At the Comex silver depositories Wednesday final figures were: Registered 35.78
Moz, Eligible 107.73 Moz, Total 143.51 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Ever
wonder why income tax is so high for ordinary taxpayers while giant
corporations seem to pay almost no tax at all? Well so did Der Spiegel, who
detail some of the legal games played by the corporate tax avoiders. While
suicidal German imposed austerity sweeps millions of southern Europeans into
penury, it’s the life of Riley for the officers and shareholders of the giant
multinationals. Tumbrils and guillotines come next. Below that, a grovelling Tory hating BBC, pays
up. Time to sell-off the BBC.
Tango with the Tax Man
Multinationals Find Loopholes Galore in Europe
Large multinationals, many of them based in the
United States, are masters at avoiding taxes on profits made abroad. Apple, for
example, paid just $100 million in taxes in 2010 on overseas profits of $13
billion. But Germany would like to put a stop to the practice, and is finding
some influential support. By SPIEGEL Staff 11/14/2012
----Corporations like Pepsi, Starbucks and Intel sell their products around the world, and seek to establish reputations for being environmentally conscious, progressive and socially responsible. But when it comes to allowing the government to collect a suitable portion of their corporate profits, the icons of global capitalism prove to be antisocial in the extreme.
According
to data compiled by independent tax experts, US technology giant Apple paid a
paltry $130 million (€102 million) in taxes on foreign earnings of about $13
billion in 2010. Microsoft paid only $1.7 billion on $15 billion in foreign
earnings, while software giant Cisco paid a tax bill of $400 million on foreign
earnings of more than $8 billion.
The
operations corporations launch to optimize their tax bill go by various names,
including "Double Irish" and "Dutch Sandwich," but the
principle is always the same. In a confusing network of parent companies and
subsidiaries, foreign branches and holding companies, sales, earnings and costs
are shifted back and forth so many times that the companies end up looking poor
wherever tax rates are high. The remaining earnings are generated primarily in
low-tax countries.
Years
ago, the Organization for Economic Cooperation and Development (OECD) estimated
that 60 percent of all international trade happens within multi-national
corporations. Following the letter of the law, they do business with
themselves, taking advantage of tax laws in different countries to minimize
their burdens.
This has
disastrous consequences for governments, whose financial clout is compromised
by the corporations' fiscal tricks. Government budgets become tighter as a
result and pressure on those companies and employees who are unable to
circumvent taxation is increased.
----According to its annual report, Google paid less than $2.6 billion in taxes on income of $12.3 billion in 2011. There is nothing illegal about this. The earnings from its US business are taxed according to the law. Rather, the company's low overall tax burden is the result of its earnings being taxed at much lower rates abroad.
This is
how the Google system works:
More
Lord McAlpine to reach settlement with BBC after child sex smears
Lord McAlpine, the former senior Conservative politician wrongly implicated in a child sex abuse scandal, will reach a settlement with the BBC over their Newsnight investigation, his solicitor has disclosed.
6:22AM GMT 15 Nov 2012
----The BBC is in the process of agreeing a settlement package with the former Tory Party treasurer.
Lord
McAlpine said the Newsnight investigation, which began a crisis at the
corporation and led to the resignation of BBC director-general George
Entwistle, had left him "devastated" and "got into his
soul".
He added
the entire matter could have been avoided if investigators had contacted him to
offer a right of reply to the allegations before the report was aired.
His
solicitor added he hoped to reach a settlement today, with any financial
compensation being negotiated on the understanding it would be ultimately be
paid by taxpayers.
----Lord McAlpine's solicitor Andrew Reid told Radio 4 he was hoping to agree a settlement with the BBC today.
He said:
"Lord McAlpine is more than aware that the ultimate people who will paying
for any monies that he may receive are in fact the licence payers, the people
who really own the BBC, and he is very much aware of this and hence any
agreement that is reached is tempered in the light of that."
He also
advised those who named the peer on Twitter to come forward and apologise
warning them: "We know who you are."
Specialist
firms have recorded every Tweet which named the peer, he said.
----Those who have already apologised include Guardian journalist George Monbiot and Sally Bercow, the wife of Speaker John Bercow.
In a
statement released this morning, the BBC today said it shared the view of Lord
McAlpine regarding a potential settlement, and also hoped to "reach a
conclusion today".
Although
the November 2 Newsnight programme did not name the peer, it referred to a
senior Conservative politician from the Thatcher era.
The
report quickly resulted in Lord McAlpine being identified on internet blogs and
social media sites.
The
current affairs show later carried a full, on air apology for the broadcast.
More
http://www.telegraph.co.uk/culture/tvandradio/bbc/9679542/Lord-McAlpine-to-reach-settlement-with-BBC-after-child-sex-smears.html
The
freedom of peoples depends fundamentally on the rule of law, a fair legal
system. The place to have trials or accusations is a court of law, the Common
Law that has come right up from Magna Carta, which has come right up through
the British courts—a court of law is the place where you deal with these
matters. If you ever get trial by
television or guilt by accusation, that day freedom dies because you
have not had it done with all of the careful rules that have developed in a
court of law. Press and television rely on freedom. Those who rely on freedom
must uphold the rule of law and have a duty and a responsibility to do so and
not try to substitute their own system for it.
Margaret
Thatcher.
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.
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