Baltic Dry Index. 751 - +08
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"monetise labor, monetise stocks, monetise farmers, monetise real estate… it will put the rottenness into the system. High costs of living and high living will be maintained (for some.) People will work easier, live a more immoral life. Values will be adjusted, and enterprising people will subsidise less competent people."
With apologies to Andrew Mellon.
What’s good for America is good for Japan,
apparently, at least according to the Gospel of Japanese Prime Minister Shinzo
Abe. No matter that it’s been tried before since 1990 without any obvious
success. Below Japan’s latest plan to borrow and spend its way back to
prosperity. Back to Zimbabwe is more likely, which is why Japan’s “plan B”
seems to be to engineer a war with next door China over some residual islands
it stole after the first Sino-Japan war.
Japan’s Abe Unveils 10.3 Trillion Yen Fiscal Stimulus: Economy
By Keiko Ujikane & Mayumi Otsuma - Jan 11, 2013 6:06 AM GMT
The Japanese government will spend 10.3 trillion yen ($116
billion) to drive a recovery from a recession in Prime Minister Shinzo Abe’s
first major policy initiative to end deflation and boost growth.
About 3.8 trillion yen will be for disaster prevention and
reconstruction, with 3.1 trillion yen directed to stimulating private
investment and other measures, according to a statement released today by the
Cabinet Office. Extra spending will increase gross domestic product by about 2
percentage points and create about 600,000 jobs, the government said.
----The stimulus may heighten concern that the government’s commitment to fiscal reform is slipping, adding to the risk that a public debt more than twice the size of the economy may trigger a surge in bond yields.
“Abe will probably give the economy more shots in the arm and turn a blind eye to fiscal discipline until the elections,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.
“There’s a risk that long-term bond yields will rise unless the government takes measures to restore fiscal health.”
----Japan’s GDP shrank at an annualized 3.5 percent pace in the third quarter after contracting in the three months through June, meeting the textbook definition of a recession. The median estimate of economists surveyed by Bloomberg News is for a 0.6 percent contraction in the three months through December 2012, with growth in the three months to March seen at 1.6 percent.
The government said that most of the economic impact of today’s stimulus will come in the fiscal year that starts in April. It did not give further details on job creation.
More
Staying with Asia for now, horribly corrupt China
might also have a pressing need for a foreign escapade this year. While
Australia struggles though its hottest summer since records began, China is
battling its worst winter in almost 30 years. The price of food and fuel is
soaring. What better time than 2013 to teach aging Japan to know its place?
China’s Inflation Accelerates as Chill Boosts Food Prices
By Bloomberg
News - Jan 11, 2013 6:19 AM GMT
China’s inflation accelerated more than forecast to a seven-month high as
the nation’s coldest winter in 28 years pushed up vegetable prices, a pickup
that may limit room for easing to support an economic recovery. The consumer price index rose 2.5 percent in December from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.3 percent median estimate in a Bloomberg News survey of 42 economists and a 2 percent gain in November. The decline in the producer-price index eased to 1.9 percent.
----“With growth momentum firming up and inflation picking up, the likelihood of any further easing has disappeared and the next interest-rate move will probably be an increase,” which could come as early as the fourth quarter, Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong, said in a telephone interview.
More
http://www.bloomberg.com/news/2013-01-11/china-dec-inflation-2-5-exceeding-economists-est-.html
Back in the continent made for tanks, it’s yet another summit time for some of Europe’s great leaders. Time to rescue Europe one more time. This mini summit, it’s time for Germany to rescue Russia’s oligarchs who made unwise dubious deposits into Cypriot banks. This is all getting funnier with each passing summit. The only problem with this new round of “German Dane geld,” the constitutional court has ruled that Chancellor Merkel must get the German parliament’s agreement to bailout anyone else. There’s likely not much stomach there, for bailing out Russian gangsters, so it will be interesting to see what smoke and mirrors typical European crooked fudge is cobbled together at the mini great leaders meeting in Limasol. Bailing out European banksters when they’re French, German, British and Spanish is one thing. Bailing out the Med’s riff-raff is quite another. Still Germans stiffing Russian oligarchs, might end in cups of polonium tea.
Bondholders in Crosshairs as Merkel Travels to Cyprus
By Rebecca Christie - Jan 10, 2013 11:00 PM GMT
Bondholders are in the crosshairs as conservative European leaders gather in
Cyprus amid talks over a bailout that may be as big as the nation’s entire
economy. German Chancellor Angela Merkel said this week Cyprus won’t get “special” treatment as it negotiates the rescue it requested in June. She, Ireland’s Enda Kenny and other leaders of the European People’s Party descend on the city of Limassol to discuss the next European Union budget as they back Nicos Anastasiades, head of the DISY opposition, as successor to Communist President Demetris Christofias in February elections.
Aid for the third-smallest euro nation will test policy makers’ commitments to hold the 17-member currency bloc together and avoid more sovereign-debt writedowns after they called Greece’s restructuring a one-off.
The workarounds may put most of the burden on bank bondholders and possibly depositors.
Shared losses will be essential to win approval from German lawmakers, even at the cost of sending financial markets “a very bad message,” said Guntram Wolff of Bruegel, a Brussels- based research organization. “It will be impossible to get funding from the Bundestag to bail out depositors of Cypriot banks.”
More
We end for today in Switzerland, home of the Greek
shipping industry cash, and home of the banks that are above other people’s
laws, especially America and Germany’s. It’s not often we get the words “Swiss
national,” “shocked” and “ashamed,” in the same sentence, although it does seem
to be becoming more common in the land of the gnomes who held on to Europe’s
murdered Jews monies. Read on and enjoy the fairy tale of Liebor.
It’s 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.
Banking Standards Commission accuses former UBS bosses accused of 'staggering ignorance' over Libor rigging
Former UBS executives who presided over the bank during years of Libor-fixing were reprimanded for levels of ignorance "staggering to the point of incredulity" on Thursday.
The
quartet of former executives - including ex-group chief executive Marcel Rohner
and Huw Jenkins, former head of UBS's investment arm - came under fire as they
appeared before parliamentarians to give evidence over failings at the Swiss
bank which allowed Libor-rigging to
continue unnoticed for several years.
They were
grilled on how they missed what regulators described as an "epic"
scandal at UBS, which saw the bank hand $1.5bn (£940m) to regulators in fines last month.
Swiss
national Dr Rohner said he was "shocked" and "ashamed" when
he read about the rigging of Libor interest rates but said during his period as
chief executive he was trying to save the bank from collapse and was unaware of
the misconduct.
He and
his colleagues denied knowledge of early alarm bells over Libor fixing at the
bank, including a Wall Street Journal story in April 2008 and a Bloomberg
report months earlier.
The
48-year-old, who was group CEO for 20 tumultuous months between 2007 and 2009
when the bank suffered more than $50bn in mortgage write-downs, insisted he was
unaware of these media reports as his focus at the time was on raising cash
from investors.
More
"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
At the Comex silver depositories Thursday final figures were: Registered 39.53
Moz, Eligible 111.24 Moz, Total 150.77 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on America at war with itself, a house divided,
determined to fight until the last American job. While the Fed sets out to
monetise forever starting at a trillion dollars a year, and President Obama
flirts with minting a platinum coin with a blatantly false face value of one
trillion dollars, to be deposited in the US Treasury’s account at the Fed to
get around America’s debt ceiling, no serious effort is underway to prevent the
US economy dropping back into recession again.
But if a trillion dollar platinum coin is good for America, why
not a trillion euro platinum coin to bailout Club Med? A trillion Pound sterling
coin to bailout the UK? A quadrillion yen coin to bailout Japan? You get the
idea. But for the other nations why use platinum at all. The USA is only
committed to platinum by a piece of existing legislation. The others might just
as well mint up a coloured steel coin with a face value of a trillion. The
fraud wouldn’t be any grater by even using a plastic “coin.” We are getting pretty close to the end of the
fiat currency error that started under President Nixon. Stay long physical
precious metals.
"The more corrupt the state, the more numerous the
laws."
Tacitus, 55-130 BC
Jan. 11, 2013, 12:02 a.m. EST
Washington ‘clown’ set up 42% stock-market drop
Commentary: 3 more fiscal cliffs, with bigger risks, are coming
By
Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — One fiscal cliff
down. Three more to go: The $16.4 trillion Federal Debt Limit cliff, the $1
trillion Sequestration Cuts from defense and discretionary spending and the
$2.5 trillion Congressional Budget cliff.
No
wonder investors are being warned of a 42% market drop by Gary Shilling,
long-time Forbes columnist and one of the world’s top economists, author of
“The Age of Deleveraging.”
----Bloomberg’s
cover is a classic: You see a shot inside the Congressional building, with
“Babies” in huge bold cap letters. Subtext: “The politics of the fiscal cliff
deal are outrageous. The economic thinking even worse.” You look closely. No
senators. No representatives. All you see are hundreds of babies, whining,
throwing temper tantrums, balling and generally raising hell just because
that’s what crybabies do. Get it: 435 representatives and 100 senators, all
acting like immature children.
----Bloomberg columnist Peter Coy concludes his
commentary with this: “As Sen. Joe Manchin III, a freshman Democrat from West
Virginia, put it shortly before the new year: Something has gone terribly wrong
when the biggest threat to our American economy is the American Congress.”
So yes,
folks, it really is easy to see why economist Gary Shilling is warning of a 42%
market collapse. With hundreds of crybabies running Washington, our economy
will just sink deeper in 2013.
Shilling
concludes with his dark summary of the coming crash: “With a global recession
depressing corporate revenues, unsustainable profit margins and currency
translation losses spawned by a robust dollar, I see S&P 500 operating
earnings of $80 per share next year. That’s a quarter below Wall Street
consensus. Throw in a bear market P/E low of 10 and the S&P 500 Index drops
to 800, a 42% decline.”
Yes,
Shilling does not see any reason for optimism now. But he does have a great
track record as a forecaster. So believe him when he says: “Beyond the fiscal
cliff, the economic outlook for 2013 is negative. Most forecasters are paid to
be bullish. I try to be realistic,” says Shilling.
----The American economy should be in a strong
recovery. But that won’t happen. It’s held hostage by an out-of-control bunch
of crybabies and clowns, dogmatic no-compromise ideologues who see government
as an enemy and welcome an opportunity to shut it down. That’s even though most
experts warn that failure to resolve the three upcoming cliffs guarantees
serious adverse consequences — lower GDP growth, a recession, another credit
rating crash and a loss of international credibility.
Shilling’s
sees “Big Trouble Dead Ahead.” Yes, “Big trouble.” Yes, “dead ahead.” He sees
nine major reasons that explain why the future of both the U.S. and global
economies and markets are “so grim.”
Here are
the crucial nine macro trends, all made worse by America’s dysfunctional
government, which won’t correct itself for several years:
More
DOLLAR
Noun. The chief U.S. monetary unit,
buck, greenback, simoleon. See Wampum.
WAMPUM
Noun. Beads used as money by extinct
N. American Indians. Had a value of whatever the Chief said.
Have a great weekend everyone.
The monthly Coppock Indicators finished December:
DJIA: +100 Down. NASDAQ: +123 Unch. SP500: +129 Up.
All three indexes are giving different
signals. A time for caution.
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