Baltic Dry Index. 748 -03
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
There is something about the outside of a horse that is good for
the inside of a man.
Winston Churchill
More on “horse day” later, aka EU Equine Beef Day.
We open with Europe’s continued economic decline.
Under the one size fits all European Monetary regime, Europe isn’t working very
well anymore. No one outside of Germany is getting rich, and even that might be
coming to an end as impoverished southern Latin consumers look to get even by
avoiding northern goods. As the G-20 finance ministers begin their coven in
Moscow, two different countries are claiming to speak for the Eurozone. Germany
speaks for the still prosperous but slowing northern league, France speaks for
the impoverished, German austerity plagued, wretched rest.
Officially, since the arrival of the Davos Spring
last month, we are all supposed to be optimistic that the Great Recession has
past. America is steaming ahead to full recovery. China is booming again. The
worst is over in Europe. The ECB’s “whatever it takes” has worked. While to
some extent all the above is slightly true in the financial sector, in the real
world very little of it is true. Everywhere is still on central bank life
support.
Everywhere banks are still on pretend accounting. No one trusts each
other not to be the next Lehman. In Europe, modern Europeans are very visibly
downwardly mobile.
According to the WSJ earlier in the week, the new
Club Med serf society only still clings to the euro out of a belief that a
return to their own national currencies, only returns their economies to the
thieving politicians they joined the euro to get away from. With loyalty like
that, stay long physical precious metals, though for now I would leave silver
alone or be hedged in it, due to a perplexing build up in the Comex silver
inventory. I suspect another bout of manipulation is underway.
He who cannot eat horsemeat need not do so. Let him eat pork.
But he who cannot eat pork, let him eat horsemeat. It's simply a question of
taste.
Nikita
Krushchev
February 14, 2013, 7:25 p.m. ET
Europe Woes Deepen as Economies Contract
Slump in Euro Zone's South Infects Germany and France, Jarring Hopes for a Return to Growth; 'So Many False Dawns'
FRANKFURT—The
euro zone's economy shrank last quarter at the fastest pace since the height of
the world recession in early 2009, as a worsening slump in Italy and other
southern European countries infected the bloc's core economies of Germany and
France.
The 2.3%
drop in euro-zone gross domestic product in the fourth quarter, at an
annualized pace, suggests that Europe's economic and financial crisis is far
from over. The region's deepening malaise challenges European authorities'
insistence that fiscal austerity will lead to growth by boosting business
confidence, economists say.
----Yet as the latest data show, more-stable markets haven't led to signs of stronger business activity so far. "The GDP numbers fly in the face of the improvement in sentiment and suggest that [financial] market prices, particularly in the case of southern Europe, have become dangerously detached from fundamentals," said Nicholas Spiro, head of consulting firm Spiro Sovereign Strategy in London.
Though
financial-market turmoil has abated, the euro zone is in a "race against
time" to keep economic recessions from sparking social and political
unrest in Spain and Italy, destabilizing the 17-country bloc, Mr. Spiro said.
More
Eurozone crisis: today’s dismal growth figures hide future tensions between Germany and France
Last updated: February 14th, 2013
The euro has started the year on a relatively positive note. But today saw a
whole
raft of negative stats and abysmal growth figures coming out of the
eurozone. This was a reminder of the bloc’s greatest challenge: how to reverse
the trend of slow, grinding economic decline. According to Eurostat, Q4 2012
saw the eurozone economy shrink by a massive 0.6 per cent. Germany hit the
average, posting a contraction of 0.6 per cent, Italy 0.9 per cent and Portugal
1.8 per cent. Adding to the pain, the Italian statistics agency confirmed the country’s
growth for 2012 as a whole at -2.2 per cent – giving extra ammunition
to anti-austerity parties (hello Berlusconi!) ahead of the Italian elections in
two weeks.Greek statistics agency Elstat also released its unemployment figures for November 2012, and the results are shocking: overall unemployment in Greece reached 27 per cent (far outstripping the EU/IMF/ECB troika estimate – which Open Europe predicted) and Greek youth unemployment topped a whopping 61.7 per cent. This is compared to “only” 28 per cent three years ago.
----Most economists expect Germany to bounce back, and the poor state of the Italian and Spanish economies isn’t exactly news – while Greece is in a league of its own (though Portugal’s unexpectedly large contraction is worrying). The big question is France. The country’s contraction of 0.3 per cent looked relatively mild. But the French economy also saw zero growth in 2012 – as in literally zero growth – meaning that the French government will certainly not hit its projected growth target for 2013, and therefore also miss its deficit target. “Beinvenue au Club Med” as today’s Le Figaro front page put it.
And this is where today’s figures meet politics. France could well be on course to breaching the EU’s various deficit rules and targets laid out for it, including those enshrined in the much-hyped “Fiscal Treaty”.
More
http://blogs.telegraph.co.uk/finance/matspersson/100022826/eurozone-crisis-dismal-growth-leads-to-tension-germany-france/
And so while we await the outcome of the Great Moscow Conclave, we return to the arrival of the UK’s “Horse Day.” The day all the UK’s supermarket chains are supposed to tell us what’s actually in all those fast food products that supposedly were claimed to be “beef.” With the result of all the “beef” testing due out later today, we present the state of European and North American beef. The 21st century catches up with 20th century meat practices.
“Food shortages in the United States are so
acute that in some states we are already eating horse meat, and in Oklahoma a
state official urges that we eat crows, which he says, taste like roast duck.”
Clarence Birdseye, American Magazine (July 1943)
We can't find all the meat from suspect companies, minister admits
Food inspectors have no idea where some suspect meat has gone from two raided food suppliers, ministers have admitted.
Food
inspectors have no idea where suspect meat has gone from two raided food
suppliers, ministers have admitted.
David
Heath, the farming minister, said inspectors have found that some of the meat
found was “unlabelled” and so marked “destination unknown”.
The news
raises the fear that meat from the plants might never be traced and could have
entered the human food chain.
Mr Heath
was pressed in the Commons whether the Food Standards Agency had contacted “all
business and customers” from the plants.
He
replied that inspectors from the FSA were “examining the paperwork from those
companies”.
----So far the FSA has raided an abbatoir in West Yorkshire and a meat processor in Wales to try to ascertain how horsemeat sold as beef for kebabs and burgers.
On
Tuesday officers entered Peter Boddy Licensed Slaughterhouse in Todmorden, West
Yorkshire, and Farmbox Meats Ltd near Aberystwyth in Wales, to investigate
circumstances in which horsemeat was sold as beef “for kebabs and burgers”.
The Food
Standards Agency said in a statement it believed Peter Boddy Licensed
Slaughterhouse supplied horse carcasses to Farmbox Meats.
Earlier
Mr Heath disclosed that infected British horse meat could be being sold in
French butchers.
Horsemeat scandal: Dutch meat trader could be central figure
Jan Fasen confirmed he bought a consignment of horsemeat from two Romanian abattoirs and sold it to French companies
A Dutch meat trader has emerged as a key suspect in Europe's spiralling horse meat scandal following allegations that he was convicted as recently as last year for passing off horse as beef.Speaking exclusively to the Guardian, Jan Fasen, a director of Draap Trading Ltd, confirmed he bought a consignment of horsemeat from two Romanian abattoirs and sold it to French food processors. He insisted he had clearly labelled it as horse.
But on Wednesday Dutch broadcaster NOS reported that Fasen was sentenced in January 2012 for deliberately marketing South American horsemeat as halal-slaughtered Dutch beef and falsifying documents.
Draap Trading Ltd is a Cypriot-registered company, run from the Antwerp area of Belgium, and owned by an offshore vehicle based in the British Virgin Islands. Draap spelled backwards is the Dutch word for horse.
Horse meat scandal could create new battleground for supermarkets
The battleground for supermarkets in 21st-century Britain has been price. Vouchers, discount own-label brands, and “three for two” promotions have become a staple of the food industry as supermarket chains have battled for market share across the UK.
----The discovery of horse meat in burgers and lasagnes has prompted shoppers to question to what degree they can trust what is in their supermarket food.
While the
blame for the crisis may lie with suppliers and fraud, the scandal has
nonetheless shone an unflattering light on the supply chains used by
supermarkets. As a result, shoppers are now asking whether the cheaper
alternative is really an alternative at all.
----According to research by Retail Week and ICM, 45pc of consumers say they will avoid buying meat from supermarkets affected by the horse meat scandal, despite the fact that almost three quarters believe the responsibility lies with suppliers.
Of
course, it remains to be seen whether the impact on customer perceptions is
lasting, or whether it passes as the reality of Britain’s stuttering economy
weighs on consumer spending.
Since the
recession, customers have snapped up own-label and discount food ranges as they
have traded down from branded foods
In the
run-up to Christmas, sales for Tesco’s Everyday Value range grew faster than
the rest of the business while J Sainsbury said its By Sainsbury’s range grew
at almost 5pc year-on-year.
The
latest market share data from Nielsen also shows how Aldi and Lidl are still
gaining market share. In the 12 weeks to February 2, Aldi sales grew by 45pc
compared to a year ago and its market share has risen from 2pc to 2.8pc.
So, will
consumers suddenly now be prepared to pay more to guarantee quality?
According
to Tim Froggett, a brand expert at Anglia Ruskin University, the discovery of
horse meat in food “fundamentally undermines” the relationship between
supermarkets and customers.
Hidden Inflation Everywhere, From Watered-Down Bourbon To Horse-Meat Chili
02/14/2013
We’ve had an endless series of products whose ingredients have been
cheapened in order to maintain the price. Consumers won’t be able to taste the
difference, the theory goes. So, as the horse-meat lasagna scandal in Europe is
spiraling beautifully out of control, we’re now getting hit where it hurts:
Maker’s Mark is watering down its bourbon.Unlike the horse-meat folks, Maker’s Mark announced it. They even had an official reason. “Fact is, demand for our bourbon is exceeding our ability to make it, which means we’re running very low on supply,” said the missive that COO Rob Samuels sent to his customers. They’d add water to the remaining batch—it would lower alcohol content from 45% to 42%—so that there’d be enough for everybody.
----So why not just run out and play on scarcity? Knob Creek, my personal favorite and also a Beam subsidiary, had done that successfully in 2009. Samuels did not provide an answer. Or why not raise the price to lower demand instead of watering down their bourbon? Well, he wrote, “We don’t want to price Maker’s Mark out of reach.”
Fighting inflation by watering down bourbon. But there was nothing to worry about. He and Rob personally tested batches of watered-down bourbon, and they all had “the same taste profile that we’ve always had.” Their Tasting Panel and “structured consumer research” agreed: “there’s no difference in the taste.”
Nobody noticed a difference in the taste either when horse meat replaced beef in frozen lasagna. It was found out through testing. Turns out, there was a vast trading scheme that involved slaughter houses in Romania, traders in Cyprus and the Netherlands, and companies in France, including a subcontractor of the brand Findus, which shipped the meat to tax haven Luxembourg where it was manufactured into frozen dishes that then spread to freezers across Europe.
At first it was just lasagna in Britain. Then lasagna in France and elsewhere. Now they’re finding horse meat in other frozen foods. In France, for example, cannelloni, spaghetti bolognese, moussaka, and hachis parmentier were hastily yanked off the shelves at six supermarket chains. On Wednesday, another French brand, Picard, found horse meat in its frozen lasagna and chili con carne. It suspended the sale of all products containing “beef” that had been supplied by one of the parties in the Findus web.
----“Industrial
terrorism,” it was called in France. Findus and every company in the
trading web claim to have been victimized, much like consumers. But if they’d wanted
to know what that cheap meat was and where it had come from, they could have
found out. Or they could have refused to buy meat of shady origin. But they
didn’t want to. What mattered was the cost of the meat. It would keep
profit margins high and avoid price increases.
More
The Beef Industry’s Deadly Secret: “Blading” and “Needling”
Friday, December 14, 2012 at 5:32PM
I love steaks. Rare. So I’m biased. But now there is the report of a
year-long investigation by The
Kansas City Star into the industry practice of mechanical tenderization.
Meat packers take certain cuts and run them through a mechanical tenderizer
where dozens of needles or double-edged blades perforate them. The result is a
“bladed” or “needled” steak. It’s tenderer, and perceived to be of higher
quality, so it can be sold for a higher price. And more profit. The perfect
alignment of American values. The process can do something else, however: push
potentially deadly E. coli into the core of the steak.It’s been going on for decades. By 2008, according to a USDA survey, over 90% of the beef producers were blading or needling certain cuts. But nothing on the label said so. Turns out, steak lovers have been deluding themselves into assuming that any E. coli bacteria would remain on the surface and would be killed by the heat.
----Though the incidence of E. coli illnesses has declined over the years as industry standards have improved (we hope), they still occur at an alarming rate. The Star writes:
Just this
fall, an estimated 2.5 million pounds of E. coli-contaminated meat, including
mechanically tenderized cuts, quietly crossed the Canadian border into the United
States before it was caught by inspectors.
It
triggered a massive recall in Canada, where 17 people fell sick, five of whom
had eaten mechanically tenderized steaks. But in the US, the beef wasn’t
recalled. Instead, the FDA issued a “Public Health Alert,” and the beef ended
up on the shelves.
Mechanically
tenderized steaks are two to four times riskier than regular steaks, according
to a study cited by The Star. Risks that have been known “for quite some time,”
said Carlota Medus, principal epidemiologist at Minnesota’s health department.
Mechanically tenderized steaks have been identified “as a vehicle for outbreaks
since 2003,” she said. “It’s not as risky as ground beef, but it is definitely
riskier than an intact steak.”
More
I
bless the hoss from hoof to head -
From head to hoof, and tale to mane! -
I bless the hoss, as I have said,
From head to hoof, and back again!
From head to hoof, and tale to mane! -
I bless the hoss, as I have said,
From head to hoof, and back again!
James
Whitcomb Riley
At the Comex silver depositories Thursday final figures were: Registered 37.52
Moz, Eligible 123.07 Moz, Total 160.59 Moz.
Crooks and Scoundrels
Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Italy proves
to America’s Justice Department, that too big to fail banksters can be arrested
after all.
Monte Paschi former finance chief held in Italy
SIENA/MILAN |(Reuters) - Italian police arrested on Thursday the former head of Monte dei Paschi's finance department, who is at the center of a probe into alleged fraud and bribery at Italy's third largest bank, prosecutors said.
Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked the world's oldest bank and triggered a financial and political storm ahead of Feb 24-25 national elections.
Prosecutors in the Tuscan city of Siena, where the 540-year-old bank is based, said Baldassarri was accused of helping mislead regulators over the true nature of a secret derivative contract that was found in a safe by the bank's new management in October 2012.
In a statement, the prosecutors said Baldassarri was detained in Italy's financial capital Milan because they feared he might leave the country. His home in Milan was being searched, the statement added.
Contacted by Reuters, Baldassarri's lawyer, Filippo Dinacci, declined to comment.
Baldassari left Monte dei Paschi shortly after the arrival of new chief executive Fabrizio Viola in January 2012.
Prosecutors in Siena are investigating accusations of corruption in Monte dei Paschi's costly acquisition of smaller rival Antonveneta in 2007, as well as a series of loss-making derivative and structured finance trades dating back to 2006-09, which the bank says it discovered only last October.
The bank's former managers, who are being questioned by magistrates, have declined to comment. Current managers who took office last year have said they have found no evidence of wrongdoing in the Antonveneta deal, but believe the loss-making derivatives trades were wrongly hidden.
HIDDEN IN A SAFE
Italian prosecutors seized some 40 million euros ($54 million) last week as part of their investigation. The prosecution seizure order, seen by Reuters, said the funds belonged to Baldassarri and four other people suspected of criminal conspiracy to commit fraud.
Baldassarri has never commented publicly on the allegations and his lawyers, repeatedly contacted by Reuters, have said he did not want to comment.
The scandal has raised questions over the future of the bank, which last month won final approval for a 3.9 billion euro state bailout.
The finance department headed by Baldassarri, who worked at Monte dei Paschi from 2001-2012, is at the heart of the probe.
Internal documents obtained by Reuters show an audit of the department in August and September 2009 had uncovered a "systematic overshooting of risk limits" in the management of the group's 24-billion euro proprietary portfolio.
Last week, the lender put losses stemming from three derivatives trades at 730 million euros and said it may have to restate previous accounts.
One of the structured finance transactions under scrutiny is a complex 2009 trade between Monte dei Paschi and Japanese bank Nomura, known as "Alexandria".
The bank's new management says Monte dei Paschi's board never reviewed the trade for approval, and its true nature only came to light in October last year after a secret contract was found in a safe.
Nomura has said the transaction was approved at the highest level by Monte dei Paschi's then management.
"Nomura acted fairly and responsibly with the client at all times, and strongly refutes any suggestion to the contrary," the Japanese bank said in a January 22 statement. It has declined to comment further since that statement.
More
For want of a nail the shoe was lost; for want of a shoe the horse
was lost; and for want of a horse the rider was lost; being overtaken and slain
by the enemy, all for want of care about a horse-shoe nail.
Benjamin Franklin, Poor Richard's Almanack, June 1758
Have a great weekend everyone.
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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