Baltic Dry Index. 749 +09
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Talks began acrimoniously on Thursday afternoon
when President Hollande snubbed a meeting with Mr Cameron and the German
Chancellor.
The French president failed to attend a scheduled
meeting in Brussels with the Prime Minister and Angela Merkel of Germany, who
are trying to overcome French resistance to cuts in EU spending.
----Before the formal summit talks, Mr Cameron had
been due to meet Mr Hollande, Mrs Merkel and Mr Van Rompuy. However, the French
leader did not attend the hour-long meeting, refusing to answer frantic
telephone calls from the EU president.
The Telegraph.
For more on the “Great Leader’s” Summit in Brussels, scroll down to “EU Nears Cuts in Budget in Bow to Cameron’s Thrift Demand.”
“The exchange rate
is not a policy target, but it is important for growth and price stability,”
said ECB President Mario Draghi, well aware that this denial immediately made
the euro exchange rate an implied policy target. ECB message to the market,
with Japan just kicking off a new currency race to the bottom, we will not
leave the euro out of the race since we need to protect Eurozone
exporters. It’s official, we are all
going to devalue our way back to prosperity. Stay long physical precious
metals.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers. Confessed liar.
Draghi Signals Euro Strength May Hurt ECB’s Recovery Efforts
By Matthew Brockett & Stefan Riecher - Feb 7, 2013 3:55 PM GMT
European
Central Bank President Mario Draghi signaled policy makers are concerned that
the euro’s strength will hamper their efforts to pull the economy out of
recession.
“The exchange rate is not a policy target, but it is important for growth and price stability,” Draghi said at a press conference in Frankfurt today after the ECB kept its benchmark rate at a record low of 0.75 percent.
“We want to see if the appreciation is sustained, and if it alters our assessment of the risks to price stability.”
The comments pushed the currency down more than a cent against the dollar.
While latest data show the 17-nation euro economy is starting to stabilize after the sovereign debt crisis drove it into recession last year, the euro’s gains could stymie a recovery before it has begun by curbing exports and pushing inflation too low. Draghi noted that the ECB will publish new economic projections next month and stressed that officials will “maintain our accommodative monetary stance.”
“This was a verbal intervention,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “Draghi reinforced multiple times that the ECB will keep up its accommodative policy stance and he indirectly suggested that the ECB may revise its inflation projections downward next month.”
---- Draghi said economic weakness will prevail only “in the early part” of this year and “later in 2013, economic activity should gradually recover, supported by our accommodative policy stance.” Still, risks to the economic outlook remain on the downside, he said.
“Draghi subtly talked down expectations of higher interest rates and the euro,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam.
More
Not to be outdone, the UK’s BOE slipped in a little
currency manipulation itself.
"I want us to do even more to encourage the risk
takers"
Gordon Brown. 2004.
Gordon Brown. 2004.
The Bank steals Carney's thunder
Two hours into Mark Carney’s grilling by MPs yesterday – ahead of his arrival in July as Governor of the Bank of England – the Old Lady of Threadneedle St dropped a quiet little bombshell.
At first
glance, it looked innocuous enough – interest rates and quantitative easing
would be left unchanged this month. But the Bank had also taken the unusual
step of publishing a statement alongside the decision.
Inflation was likely to
“remain above the 2pc target for the next two years”, it said, but the Bank’s
rate-setters would turn a blind eye. Bringing inflation back to target by
raising rates would “risk derailing the recovery”.
Back in
Parliament, Mr Carney was unveiling his big pitch for growth at almost exactly
the same time – to move the Bank to a more “flexible” inflation targeting
regime that would tolerate overshoots of longer than two years. You could
practically hear the chuckles of laughter from the Bank as they stole his
thunder.
Mr Carney
may be promising a revolution but we’re delivering it already, was the unspoken
message. The MPC might as well have added a chart showing its track record for
the past five years. Inflation has been about a percentage point above target
for most of the period. Now it’ll be above 2pc for a further two. That’s one
mandate that is nothing if not flexible.
The MPC
may have legitimately been sending a message to the markets to ignore its
inflation forecasts when they are published next week, but the timing was
telling.
The
centrepiece of Mr Carney’s plan is to make a monetary virtue out of missing his
target. For the past few years, the Bank has been pilloried for doing exactly
the same – so why not piggyback on his attempt to reframe the debate and remind
everyone that it may not have been so misguided all along?
More
Up next, news from the Great Leader’s summit in
Brussels. Score it a tiny, tiny victory for Cameron and Merkel. A minor
Waterloo over the French. In its latest form, the new budget knocks off £30
billion from an £830 billion budget over 7 years. Pathetic.
Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.
H. L. Mencken.
EU Nears Cuts in Budget in Bow to Cameron’s Thrift Demand
By James G. Neuger & Stephanie Bodoni - Feb 8, 2013 6:48 AM GMT
European Union leaders prepared the first-ever cuts in the bloc’s budget,
bowing to U.K. Prime Minister David Cameron’s insistence on thrift at the EU
level. After an all-night bargaining session interspersed with catnaps on couches at EU headquarters in Brussels, the leaders reassembled at 6:30 a.m. to consider a 2014-2020 spending ceiling of 960 billion euros ($1.3 trillion), down from an original proposal of 1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle.
At the center
of the controversy was Cameron, making his first EU summit appearance since
announcing plans for a referendum that could result in Britain leaving the
27-nation bloc as early as 2017. Britain’s demands for savings ran into
opposition from France, Italy and eastern and southern European economies keen
to tap EU subsidies.
----Insisting that the unprecedented threat
to quit the EU didn’t leave Britain isolated, Cameron forged an alliance of
convenience with Germany, the biggest net contributor, along with the
Netherlands and Nordic countries to press for spending cuts.
----The sum now up for discussion is equal to about 1 percent of EU-wide gross domestic product. It is dwarfed by public spending at the national level, which averages 50 percent of each country’s GDP.
“It’s ridiculous sometimes when you look at the kinds of differences we’re negotiating: a few billion over seven years,” Luxembourg Prime Minister Jean-Claude Juncker said as the talks got under way.
An accord would shift the scene to the European Parliament, which has threatened to veto any package it sees as too stingy.
----“The more you set priorities like today, the greater the probability of a no in the European Parliament,” Schulz said. The parliament’s vote later this year will probably be by secret ballot, making its members less likely to succumb to pressure from national capitals, he said.
Schulz
said an agreement is made trickier by quirks in EU accounting that distill the
budget into two sets of numbers, one for spending commitments, the other for
what is actually spent. Commitments that aren’t backed up by transfers from
national capitals would throw the EU into deficit.
Morehttp://www.bloomberg.com/news/2013-02-08/eu-nears-cuts-in-budget-in-bow-to-cameron-s-demand-for-thrift.html
Now back to the reality of modern Europe. Euroland is doomed to an eventual breakup anyway, thinks George Soros. It only depends on the timetable and how far down the road of the failed USSR Europe’s politicians are willing to go.
Soros: The euro is "bound to break up the European Union"
Thursday,
7 February 2013 - 17:17
In an interview with Dutch TV programme Nieuwsuur (about 28
minutes in), prominent investor George Soros has warned that, "I am
terribly concerned about the euro potentially destroying the EU. There is a
real danger that the solution to the financial problem creates a really
profound political problem."
Asked what kind of change is needed, he said, that "Germany needs to realise that the policy it impose on the euroarea - the austerity programme - is counter-productive. It cannot actually succeed. At the moment they [the South] is being pushed - unwittingly, not with bad intentions, but the effect is that they are being pushed into a long lasting depression and that is what is happening to Europe. And it may last more than a decade, in fact it could become permanent, until the pain is so big that eventually there may be a rebellion, a rejection of the EU, and that would then be the destruction of the EU, which is a terribly heavy price to maintain to preserve the euro, which is meant to be just a servant of the EU."
On whether the euro will survive, he said, "It could last quite a long time, the same way as the Soviet Union, which was a very bad arrangement, lasted for 70 years. However, I think that eventually, it is bound to break up the European Union. The longer it will take, and it may take generations, those will be lost in terms of political freedom and economic prosperity. The solution is to me a terrible tragedy for the EU. And it΄s happening to the most developed open society in the world. To me it΄s a terrible tragedy. It doesn΄t have villains, because I don΄t think that Germany is doing it with bad intentions but its happening out of a lack of understanding of very complex problems."
Asked what kind of change is needed, he said, that "Germany needs to realise that the policy it impose on the euroarea - the austerity programme - is counter-productive. It cannot actually succeed. At the moment they [the South] is being pushed - unwittingly, not with bad intentions, but the effect is that they are being pushed into a long lasting depression and that is what is happening to Europe. And it may last more than a decade, in fact it could become permanent, until the pain is so big that eventually there may be a rebellion, a rejection of the EU, and that would then be the destruction of the EU, which is a terribly heavy price to maintain to preserve the euro, which is meant to be just a servant of the EU."
On whether the euro will survive, he said, "It could last quite a long time, the same way as the Soviet Union, which was a very bad arrangement, lasted for 70 years. However, I think that eventually, it is bound to break up the European Union. The longer it will take, and it may take generations, those will be lost in terms of political freedom and economic prosperity. The solution is to me a terrible tragedy for the EU. And it΄s happening to the most developed open society in the world. To me it΄s a terrible tragedy. It doesn΄t have villains, because I don΄t think that Germany is doing it with bad intentions but its happening out of a lack of understanding of very complex problems."
We end with the curious case of poor old Japan. Now
everyone is invading their airspace, it seems. For the record, Russia says its
planes didn’t invade Hokkaido airspace, while China denied that its ships used
fire-control radar to lock onto Japanese naval forces in the East China Sea,
last month. From London it’s impossible to know who is right and who is wrong.
But Japan seems to have an agenda to escalate the tension. Coming soon a misstep
seems all too likely to me.
Japan Pledges Foreign-Policy Response to Territorial Incursions
By John Brinsley - Feb 8, 2013 3:23 AM GMT
Japanese Prime Minister Shinzo Abe signaled his administration will take
fresh steps to address territorial disputes with neighbors, underscoring his
government's push to boost defense spending. Japan yesterday said two Russian fighter jets intruded on its airspace, which Russia’s Defense Ministry denied. The alleged incursion followed accusations that Chinese ships used weapons-targeting radar on a Japanese destroyer and helicopter last month near islands claimed by both countries. China today issued a denial.
“When our sovereignty and national interests are threatened we must change our foreign policy to firmly express our point of view,” Abe told parliament today.
An escalating of tensions with Russia may distract Abe as he copes with a dispute with China that has prolonged Japan’s recession and brought U.S. calls for a diplomatic solution. Abe is proposing the first increase in Japan’s defense budget in 11 years to cope with mounting incursions by Chinese ships and planes into Japanese-administered waters.
Two Russian Su-27s flew over Japan’s northern island of Hokkaido yesterday for more than a minute, the Ministry of Foreign Affairs said. Russia’s Defense Ministry said in a statement on its website that while jets were in the area as part of an exercise, they didn’t violate Japanese airspace.
Japanese Defense Minister Itsunori Onodera called the incident “extremely regrettable,” and Chief Cabinet Secretary Yoshihide Suga said the government had protested to Russia and called on its government to acknowledge the incursion.
China Denial
China today said its ships didn’t use fire-control radar on Japan naval forces in the East China Sea last month, and called Japanese statements on the issue “irresponsible.” Radar was used simply to monitor a helicopter on Jan. 19 and to track the Japanese destroyer Yudachi on Jan. 30, the Ministry of Defense said in a statement posted on its website.
More
“But
it (the boom) could not last forever even if inflation and credit expansion
were to go on endlessly. It would then encounter the barriers which prevent the
boundless expansion of circulation credit. It would lead to the crack-up boom
and the breakdown of
the whole monetary system.”
Ludwig Von Mises
At the Comex silver depositories Thursday final figures were: Registered 36.26
Moz, Eligible 121.13 Moz, Total 157.39 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Every year many
thousands of wealthy Europeans consider buying a retirement or vacation property
in Florida, for the use of their family and friends. Thanks to a decision by
the Florida Supreme Court, opting in to a Florida property just got a lot more
risky. In the great 21st century Florida property crash the banks
resorted to filing fraudulent documents in bankruptcies. The Florida Supremes
just said that it’s OK, as long as they just voluntarily move to dismiss the
case. Then simply refile with other documents.
With a fast and loose court like Florida’s Supremes, getting or proving
valid title to Florida property just became a lottery.
"The secret of life is
honesty and fair dealing. If you can fake that, you've got it made."
Groucho Marx
Groucho Marx
Homeowners lose in landmark foreclosure decision, attorneys say
by Kim Miller
A Florida
Supreme Court ruling involving a Greenacres foreclosure allows banks to get
away with fraud, as long as they voluntarily dismiss the case, attorneys said
today.
The case,
Roman Pino v. the Bank of New York, was the first significant foreclosure
complaint heard by the high court since the state’s legendary housing collapse.
At issue
was whether a bank can escape punishment for filing flawed or fraudulent
documents in a case by voluntarily dismissing it. A voluntary dismissal allows
the bank to refile at a later date.
Royal
Palm Beach-based foreclosure defense attorney Tom Ice, who represented Pino,
had challenged a document created by the former Law Offices of David J. Stern
and sought to question employees about its veracity. On the eve of those
depositions, the bank moved to dismiss the case, blocking the court’s ability
to address any sanctions.
“I would
say the Supreme Court has spoken loud and clear that it doesn’t care about
litigants that abuse the court system and that fraud is OK,” Ice said about the
ruling. “There are no ramifications if you get caught defrauding the court.
Just take a voluntary dismissal and start over.”
The case
was unusual because the Supreme Court decided to pass judgment on the case even
after Ice had negotiated a settlement with the bank that allowed his client to
keep his house.
Florida
law professors said the case, which was heard by the Supreme Court in May, was
significant because it speaks to the integrity of Florida’s judiciary.
The 4th
District Court of Appeal had previously agreed that a voluntary dismissal
couldn’t be reversed, but said it wanted the high court to weigh in because
“many, many mortgage foreclosures appear tainted with suspect documents.”
Banks
warned of a “widespread financial crisis” if the Supreme Court rules in favor
of Pino.
They
argued banks will cut back on awarding home loans and be discouraged from
filing legitimate claims if, when they find a paperwork error, they can’t
voluntarily dismiss the case, correct the error and refile.
More
Have a great weekend everyone. For those in America about to get snow,
enjoy.
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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