Baltic Dry Index. 1022 -32
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
By means of glasses, hotbeds, and hotwalls, very good grapes can
be raised in Scotland, and very good wine too can be made of them at about
thirty times the expense for which at least equally good can be brought from
foreign countries. Would it be a reasonable law to prohibit the importation of
all foreign wines, merely to encourage the making of claret and burgundy in
Scotland?
Adam Smith. The Wealth of Nations.
Today, Europe at its best! We are virtually one year on from the ECB’s
first half trillion euro’s tranche of LTRO cut price 3 year landing, and very
little in Europe to show for the Free money to banksters. Today tThe ECB meets
in Frankfurt to carry on doing more of the same. More of the same means
breaking its own rules and carrying out a backdoor monetisation of Club Med.
The Bank of England meets in London to do nothing, though the outgoing “King”
will likely leave the next QE forever policy to his successor. But it is in
Brussels today, that we see the insane asylum really working at its best. Faced with a European wide glut of auto
plants, made worse with the collapse of Eurozone auto demand, Antonio Tajani, European Commissioner
for Industry has called a summit of executives from the region’s carmakers, to
try to set up some sort of EU wide fix.
In typical EU socialist fashion, the summit includes union leaders and
politicians.
But
yet another EU summit will come to nothing. France is off in left field again,
busy pouring good money after bad, in an effort to prop up its automakers and
keep their workers voting the right way. So much for European belief in the
single market, and in letting business get on with making profits.
Consumption is the sole end and purpose of all production; and
the interest of the producer ought to be attended to, only so far as it may be
necessary for promoting that of the consumer.
Adam Smith. The Wealth of Nations.
Europe Fix for Auto-Industry Woes Hit by National Aims
By Alex Webb & Tommaso Ebhardt - Dec 5, 2012 11:00 PM GMT
President Francois Hollande is intent on ensuring auto jobs stay in the
country as unemployment continues to climb, even if that stands in the way of
efforts to fix Europe’s ailing car industry. Pursuing the so-called Made in France policy, Hollande’s government is preparing 7 billion euros ($9.2 billion) in loan guarantees for PSA Peugeot Citroen’s lending unit. The financial backing is being extended in exchange for greater influence, including a seat on the board, as Europe’s second-largest carmaker considers closing a factory near Paris and cutting 8,000 jobs.
France’s activist approach to industrial policy is an example of the national objectives that undermine steps to prevent cash-draining overcapacity in the Europe Union. While the mismatch between supply and demand is hobbling carmakers, no member state wants to pay the price for helping the industry back on its feet by facilitating factory closures at home.
----The tension between EU obligations and national interests - - at the heart of the sovereign-debt crisis -- is thwarting efforts to restructure the region’s auto industry as demand tumbles for the fifth straight year, prompting losses at most carmakers in Europe.
----“My priority is ‘Made in France,”’ Arnaud Montebourg, the country’s Industry Minister, said in October. “There’s a choice that’s more important than any other and that is to preserve France’s industrial base.”
----“There is no such thing as a European motor industry,” said Garel Rhys, president of the Center for Automotive Industry Research in Cardiff, Wales. “There is a common market on the demand side, but not in terms of production, where it is still based on nationality and national companies.”
More
http://www.bloomberg.com/news/2012-12-05/europe-fix-for-auto-industry-woes-hit-by-national-aims.html
GDF Suez Says Profit Will Fall Next Year as Europe Economy Slows
By Tara Patel - Dec 5, 2012 11:01 PM GMT
GDF Suez SA (GSZ), Europe’s largest utility by market value, said earnings
will fall next year because of a “challenging” economic outlook. Recurring net income will be 3.1 billion euros ($4 billion) to 3.5 billion euros next year, compared with an expected 3.7 billion to 4.2 billion in 2012, France’s former gas monopoly said in a statement yesterday.
Profit will be “in the same range” in 2014. The company said it would cut investment, while maintaining dividend payments.
GDF Suez, which published the financial targets before an investor day in Paris tomorrow, said the worsening outlook was because of a “demand crisis” in Europe, the economic slowdown and the boom in U.S. gas production.
GDF Suez plans to cut its share of profit coming from Europe as the regional debt crisis slows demand. The utility is seeking to double sales of liquefied natural gas to emerging markets by 2020 in a push into faster-growing economies. Chief Executive Officer Gerard Mestrallet has said changing European regulations will discourage investment.
More
http://www.bloomberg.com/news/2012-12-05/gdf-suez-cuts-earnings-forecasts-on-european-economic-slowdown.html
Elsewhere in Europe, Club Mad’s rich get on with the business of squirreling away their cash. Rats and sinking ships come to mind, as the Great Bilderberger Euro experiment increasingly unravels. Great news for Switzerland, shame about life in Club Med.
Mirabaud Says Inflows From Spain, Italy, Greece Boost Assets
By Giles Broom - Dec 5, 2012 11:01 PM GMT
Mirabaud & Cie., the Geneva-based private bank established in 1819, said
inflows from wealthy Spanish, Italian and Greek clients helped boost assets by
about 4 percent this year. “We have seen some new European clients coming to Switzerland to book their assets,” Yves Mirabaud, senior partner at the firm, said in an interview in Geneva. “They worry about the situation rightly or wrongly and want to have their assets booked in what they believe is a safer place.”
----While a global crackdown on tax
evasion has pushed American and European clients to repatriate funds from some
Swiss banks, the Alpine country’s safe-haven status has lured other investors
amid political upheaval in the Middle East and the euro region’s debt crisis.
Mirabaud said the wealthy clients from southern Europe often ask to reinvest
the money booked in Switzerland in equities in their home markets.
More
S&P cuts world's oldest bank to junk status
Standard & Poor's has cut its credit rating for troubled Italian bank Monte dei Paschi di Siena - the world's oldest surviving lender - to speculative-grade status of BB+ from BBB-.
7:42PM
GMT 05 Dec 2012
The
ratings agency said it was also placing the bank on negative outlook, AFP
reported.
"Deteriorating
trends in Banca Monte dei Paschi di Siena's financial position make it unlikely
that the bank would restore profitability and improve its capital and funding
position in line with our previous expectations.
"The
difficult economic and operating environment we anticipate in the Italian
market will compound the challenges for MPS to implement successfully its
business plan," the agency said in a statement.
The
ratings agency said the bank's profitability could continue to be under
pressure through 2013 despite its efforts to reduce costs.
It said
that there was now a risk that the bank might not be able to proceed with its
planned €1bn capital increase in 2014.
More
We end on basket case Europe today, with ratings agency S&P shutting the stable door on Greece. Meaningless springs to mind, who would willingly lend new money to Club Med, let alone the tax and work shy Greeks. It’s why the ECB is so busy breaking all its own rules.
There is no art which one government sooner learns of another
than that of draining money from the pockets of the people.
Adam Smith. The Wealth of Nations.
Greek Bond Buyback Leads S&P to Cut to Selective Default
By John Detrixhe & Wes Goodman - Dec 6, 2012 1:18 AM GMT
Greece’s credit grade was reduced to SD, or selective default, by Standard
& Poor’s from CCC after the government began buying its bonds back from
investors, a statement on the rating company’s website said yesterday. The nation has offered 10 billion euros ($13.1 billion) to purchase debt issued earlier this year as the bailed-out country attempts to cut a debt load that may threaten future international aid. The rating was lifted to CCC from SD in May after undergoing the largest sovereign restructuring in history earlier this year.
More
http://www.bloomberg.com/news/2012-12-06/greek-bond-buyback-leads-s-p-to-cut-to-selective-default.html
We end today with bad news too, from a far-away fiat currency dreamland, built up with mountains of unrepayable debt. While the consequences of “going over” the fiscal cliff are probably greatly over hyped, does the US Treasury Secretary really want to put it to the test? Stay long physical precious metals, America and Europe seem to have lost all common sense.
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.
Adam Smith.
Dec. 5, 2012, 4:42 p.m. EST
Geithner willing to go over cliff over taxes
WASHINGTON (MarketWatch) - Treasury Secretary Timothy Geithner said Wednesday that the Obama administration was willing to allow the economy to go over the fiscal cliff if Republicans did not agree to raise tax rates on the wealthy. In an interview with CNBC, Geithner drew a harder line in the sand than the White House previously has articulated. "There is no prospect of an agreement that doesn't involve those rates going up on the top 2%," he said. The Treasury Secretary repeated President Barack Obama's tough line that he would not negotiate with Republicans if they held the economy "hostage" to threats that the debt ceiling would not be lifted. At the same time, Geithner tried to sound optimistic that the two sides would reach a deficit-reduction framework. "I think you see the broad outlines of aframework now look more inevitable," he added. Reports to the contrary were "orchestrated drama."
http://www.marketwatch.com/story/geithner-willing-to-go-over-cliff-over-taxes-2012-12-05
It is
the highest impertinence and presumption… in kings and ministers, to pretend to
watch over the economy of private people, and to restrain their expense... They
are themselves always, and without any exception, the greatest spendthrifts in
the society. Let them look well after their own expense, and they may safely
trust private people with theirs. If their own extravagance does not ruin the
state, that of their subjects never will.
Adam
Smith. The Wealth of Nations.
At the Comex silver depositories Wednesday final figures were: Registered 39.19
Moz, Eligible 105.94 Moz, Total 145.13 Moz.
Silver continues to flow into America, is a default coming in Europe?
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on the
reasons today’s banksters won’t lend to each other. They can’t trust
each
others balance sheets.
It
is hard to believe a man is telling the truth, when you know that you would lie
if you were in his place.
H.
L. Mencken.
Deutsche Bank Whistleblowers Claimed Crisis Coverup, FT Says
By Zeke
Faux - Dec 6, 2012 12:27 AM GMT
Three former Deutsche Bank AG (DBK) employees told U.S. regulators that the
German lender covered up paper losses during the financial crisis, the
Financial Times reported. The company disputed the allegation. The employees -- a trader and two risk managers -- told the Securities and Exchange Commission that the Frankfurt-based bank inflated the value of credit derivatives to avoid recognizing as much as $12 billion in losses, the newspaper reported, citing people it didn’t identify. The portfolio had a notional value of $130 billion, the FT said.
The valuations and financial reporting were proper, and a significant portion of these positions were subsequently unwound in an orderly sale,” Renee Calabro, a spokeswoman for Deutsche Bank in New York, said in a statement. She said the bank will continue to cooperate with the SEC’s investigation and that it looked into the matter itself and found the claims to be false.
Two of the ex-employees allege that the bank mismarked the value of insurance provided in 2009 by Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), led by billionaire Chairman and Chief Executive Officer Warren Buffett, according to the FT. Carrie Sova, an assistant to Buffett, didn’t return a phone message left after regular business hours.
Matthew Simpson, the trader, settled a whistle-blower lawsuit against the bank last year for $900,000, Reuters reported in June 2011. Eric Ben-Artzi, one of the risk managers, claims he was fired after alerting the SEC to the pricing issue, according to the FT, which didn’t identify the third person.
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F.A. von Hayek
The monthly
Coppock Indicators finished November:
DJIA: +103 Up. NASDAQ: +123 Up. SP500: +125 Up. Time running out for
the Santa Clause rally?
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