Baltic Dry Index. 739 -06
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Before a man speaks it is always safe to assume that he is a
fool. After he speaks, it is seldom necessary to assume it.
H. L. Mencken.
Today, as China’s rising wealth goes for gold,
France’s President Hollande makes a plea for the ECB to enter the new Japanese currency
war. In the mind of old socialist, hate the rich, Mr. Hollande, we will all get
rich and prosperous by beggaring our neighbours, in a fiat currency race to the
bottom! Such is the lunacy of continental Europe. Stay long physical gold and
silver. Europe’s “Great Leaders” are about to meet yet again, to yet again save
the euro, Euroland, and prepare the EU budget for 2014-2020. Few are likely to
pay much attention to the suicidal currency policy call of the “Hammer of Mali.”
Perhaps he got too much sun during his one day triumphal visit to Timbuktu.
Last time the Great Leaders met to agree the budget
back in November, the UK demanded some budget cuts, setting off bureaucratic apoplexy,
stalling the whole thing. It will be interesting to see what happens this time
round. Under the normal EU fudge, A few nominal cuts off in the future will be
agreed, never to actually happen, while the bureaucrats budget will then get
adopted and turn out to have been hopelessly under estimated. The EU’s books
haven’t been honest in almost two decades.
"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."
Gerald M. Loeb
China Gold Imports From Hong Kong Climb to Record on Wealth
By Bloomberg
News - Feb 6, 2013 3:09 AM GMT
Gold imports into mainland China from Hong Kong surged 94 percent to an
all-time high last year as rising incomes in the world’s second-largest economy
underpinned increased demand and helped the metal to post a 12th annual gain. Mainland China imported 834,502 kilograms (834.5 metric tons), including scrap and coins, compared with about 431,215 kilograms in 2011, according to Bloomberg calculations based on data from Hong Kong’s
Census and Statistics Department. Imports in December rose to a monthly record of 114,405 kilograms, according to data from the department yesterday.
China was expected to displace India as the world’s biggest gold consumer last year, according to a forecast in November from the producer-funded World Gold Council. Rising consumption in the country may help to offset concern that the metal’s bull run may be coming to an end as the global economy recovers. Spot gold is little changed so far this year, while the Standard & Poor’s GSCI Index of raw materials has risen 4.4 percent.
The increase in gold imports last year “was largely a result of income growth,” Jiang Shu, a senior analyst at Industrial Bank Co. Ltd., said from Shanghai before the data was released. “The Chinese are becoming more wealthy.”
Economic growth in China, the world’s largest gold producer, has boosted the country’s consumption of everything from copper to energy and farm commodities. The nation, which snapped a seven-quarter slowdown in the final quarter of last year, is the world’s largest base-metals user, the biggest importer of soybeans and the top crude-oil consumer after the U.S.
More
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino
February 5, 2013, 12:52 p.m. ET
Hollande Calls for Policy on Foreign Exchange
French President François Hollande on Tuesday urged
euro-zone governments to consider ways to fulfill a mission the European
Central Bank isn't mandated to carry out: run a foreign-exchange policy.
In a
speech to the European Parliament, Mr. Hollande said a monetary zone
"should have a foreign-exchange policy, otherwise it has an exchange rate
imposed on it that does not correspond to the real state of the economy."
He said
the euro can't be left fluctuating "depending on the mood of markets"
and voiced concerns that its current high level was undermining efforts by
European governments to shore up their public finances and improve the
productivity of their economies.
"There's
a paradox in asking some countries for a competitiveness effort and at the same
time making their exports more expensive," said Mr. Hollande.
"Otherwise we are asking countries to make efforts on competitiveness that
are annihilated by the value of the euro."
French
policy makers have long complained that with the ECB mandated solely to keep
inflation in check, Europeans are left with little influence to fight in the
global currency arena, where many countries are pursuing weak foreign-exchange
policies to boost their performance on export markets.
----"I don't think François Hollande can honestly believe he has some prospect of bringing in a working exchange-rate policy," said Alastair Newton, senior political analyst at Nomura in London. "These sorts of comments are perhaps inevitable at a time when the U.S. has generated a fair amount of dollar weakness and the Japanese have managed to talk down the yen—it's almost inevitable to see European politicians chipping in."
He said
France should be thinking about "a lack of competitiveness of the economy
rather than the euro."
More
Next, more on the tragedy of Greece. Was staying in the euro at any cost, really
worth it? When France blows up, taking the euro with it, Greece exits anyway,
making all the pain futile. Euros anyone?
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
Institute forecast says Greek economy to drop 23 pct from 2008
VIENNA,
Feb. 5 (Xinhua) -- Greece's economic output in 2013 is expected to slide 23
percent from the high recorded in 2008, the Austrian Institute of Economic
Research (WIFO) said Tuesday.
The grim
outlook defied the comments made by George Provopolous, Bank of Greece
Governor, in January that the "worst is over."
The
forecast means Greece's recovery will not only come to a stillstand, but also
going to the opposite, said the WIFO Director Karl Aiginger, adding that the
nation could not solve the issue without strategic adjustment and aids from
European partners.
Per-capita
income in Greece has dropped to 28 percent below the average of EU-15, the
countries that joined the European Union prior to the accession of 10
candidates in 2004.
The
unemployment rate in Greece has rose to 19.7 percent, Austrian media reported,
adding that it might continue to rise through 2013.
More
In non EU news, it’s boom times in Iraq for Gazprom
and Samsung. Two companies from countries that didn’t bother invading Iraq.
Samsung Engineering wins US$879 mln order from Gazprom unit
SEOUL,
Feb. 6 (Yonhap) -- Samsung Engineering Co., South Korea's largest industrial
plant builder, said Wednesday that it has secured a US$879 million order to
build a gas separation plant (GSP) in Iraq.
Under the deal with Gazprom Neft, a subsidiary of Russia's top natural gas producer Gazprom, Samsung Engineering will build a central processing facility, including the GSP, utilities and off-site facility in the Badra oil field in Wasit province, about 160 kilometers southeast of Baghdad.
The South Korean company said it expects to complete the turnkey project 35 months after starting construction.
"We are thrilled to be a partner of Gazprom for the first time and to be a part of this ambitious oil project of the Iraqi government," said Steve Fludder, senior executive vice president of marketing at Samsung Engineering, according to Samsung Engineering.
Under the deal with Gazprom Neft, a subsidiary of Russia's top natural gas producer Gazprom, Samsung Engineering will build a central processing facility, including the GSP, utilities and off-site facility in the Badra oil field in Wasit province, about 160 kilometers southeast of Baghdad.
The South Korean company said it expects to complete the turnkey project 35 months after starting construction.
"We are thrilled to be a partner of Gazprom for the first time and to be a part of this ambitious oil project of the Iraqi government," said Steve Fludder, senior executive vice president of marketing at Samsung Engineering, according to Samsung Engineering.
More
We end for the day with global cooling. Well it makes as much sense
as labling everything else global warming.
Heaviest Snowfall in a Century Hits Moscow
05 February 2013 |
The heaviest snowfall in a century brought Moscow and the
surrounding region to a near standstill and left hundreds
of people without power, officials said Tuesday. And with snowfall set to continue at least until the end of the week, the authorities are bracing for more chaos on the roads.
"There hasn't been such a winter in 100 years," Pyotr Biryukov, deputy mayor for residential issues, said Tuesday in comments carried by Interfax. "The snow this year has already reached one and a half times the climatic norm," he said.
The capital has seen 216 centimeters of snow fall since the beginning of winter, Biryukov said.
Average snowfall in Moscow is 152 centimeters a year. Biryukov said the city saw 26 centimeters in the 24 hours preceding his Tuesday afternoon news conference and has seen 36 centimeters since the beginning of February.
The heavy snowfall that struck the city Monday quickly led to chaos on the roads. The Yandex Probki traffic monitoring service reached a full 10 points, and on Monday evening it issued the seldom-seen warning that "it's quicker to walk."
Moscow traffic police said Tuesday that they had counted more than 3,000 minor traffic accidents in the previous 24 hours, far exceeding the daily average for the city.
"There were 3,160 small traffic accidents in Moscow over the past day," a police spokesman said.
The average number of traffic accidents in the city is between 1,500 and 2,500 per day, he said.
Monday's unprecedented number of fender benders stems from traffic violations by drivers due to difficult conditions.
Snowfall is set to continue for the rest of the week but should slowly ease off, with forecasters predicting just 2 centimeters a day until Friday.
More
If a politician found he had cannibals among his constituents,
he would promise them missionaries for dinner.
H. L. Mencken.
At the Comex silver depositories Tuesday final figures were: Registered 37.20
Moz, Eligible 121.49 Moz, Total 158.69 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Wall Street
at its best.
It’s
morally wrong to let a sucker keep hold of his money.
Ebenezer
Squid, with apologies to W. C. Fields.
S&P Analyst Joked of Bringing Down the House Before Crash
By David McLaughlin - Feb 6, 2013 5:01 AM GMT
Standard
& Poor’s employees sang and danced to a mock song inspired by “Burning Down
the House” and joked about the company’s willingness to rate deals “structured
by cows” before the 2008 global financial collapse, according to a U.S.
government lawsuit.
Two
S&P analysts in April 2007 discussed the company’s model for collateralized
debt obligations, with one messaging that a deal was “ridiculous” and that
S&P “should not be rating it,” according to the complaint filed Feb. 4 in
federal court in Los Angeles.
“We rate every deal,” the other replied, prosecutors said. “It could be structured by cows and we would rate it.”
The analysts’ messages are among internal communications cited in the Justice Department’s complaint against S&P and its parent, New York-based McGraw-Hill Cos.
The U.S. claims S&P, driven by a desire to increase revenue and market share, defrauded investors as it issued ratings on mortgage products while ignoring market risks. It rated more than $2.8 trillion of residential mortgage-backed securities and about $1.2 trillion of collateralized-debt obligations from September 2004 to October 2007, the government said.
A 2008 investigation into credit rating companies by the U.S. Securities and Exchange Commission found that that the firms improperly managed conflicts and weighed the risk of losing market share based on their ratings.
The
report on Moody’s Investors Service, S&P and Fitch Ratings cited the
discussion about the deal structured by “cows” and quoted an analyst who wrote
in an e-mail: “Let’s hope we are all wealthy and retired by the time this house
of cards falters.”
According
to the U.S. lawsuit, S&P in 2004 was considering a process for changing its
rating criteria and reached out to investors and issuers of mortgage securities
for their feedback. One executive questioned this practice, saying, “[W]e NEVER
poll them as to content or acceptability!”
Employees
meanwhile were raising concerns about losing deals to competitors, according to
the complaint.
One analyst in May 2004 wrote that the company was losing a
“huge” deal to a competitor because S&P was more conservative than others,
the government said.
“This is so significant that it could have an impact on future deals,” the analyst wrote, according to the complaint. “There’s no way we can get back on this one, but we need to address this now in preparation for future deals.”
In 2007, one CDO analyst wrote to a former co-worker: “Does company care about deal volume or sound credit standards?”
More
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
S&P, with apologies to Cary Grant. To Catch A Thief.
The monthly Coppock Indicators finished January:
DJIA: +106 Up. NASDAQ: +126 Up. SP500: +140 Up. All three indexes are giving the same signal,
up.
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