Baltic Dry Index. 862 -01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
The bankster in his mansion,
The taxpayer at his gate,
Draghi made them High or lowly,
He disordered their estate.
With apologies to All things bright and beautiful.
It is deliberation day at the peripatetic
European Central Bank, which meets later today in Bratislava to determine how
to save the euro yet again, reverse the Euroland slide into recession,
depression in much of Club Med, and get Eurolander’s back into employment
again, especially those aged between 18-24. Without getting the youth component
back into employment again and soon, much of Club Med’s state pension plans
will unravel, as aging populations retire with too few workers left in employment
to fully fund the plans. My guess is that the ECB will duck most of that,
settling for some minor tinkering, some very brave words, and a fast train out
of town.
Below the Borneo Post covers the beat.
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.
Club Med, with apologies to Cary Grant. To Catch A Thief.
Eurozone rate cut eyed as ECB set to meet in Bratislava
Posted on May 2, 2013, Thursday
BRATISLAVA: The European Central Bank (ECB), set to meet in the Slovakian
capital of Bratislava today, can cut its interest rates from current record
lows and also unveil new measures to kick-start stymied bank lending, analysts
say.Many ECB watchers agreed that a further reduction in the bank’s ‘refi’ refinancing rate – held at an historic low of 0.75 per cent since July 2012 – might not actually prove very effective.
But the central bank had few other weapons at its disposal for the time being, analysts argued.
“The latest deterioration of sentiment indicators has clearly increased the chances for more ECB action this week. Indeed, the majority of financial market participants even seem to be expecting a rate cut,” said ING DiBa economist Carsten Brzeski.
But the expert said the case for such a move was not quite so clear-cut.
“A rate cut without additional efforts to repair the transmission mechanism would quickly go up in smoke and could even be regarded as an act of desperation,” Brzeski said.
“It is hard to believe that the ECB would first cut rates and come up with a broader SME (small and medium-sized enterprises) funding scheme later.”
ECB board member Joerg Asmussen cautioned last week that additional monetary easing might not actually prove very effective, since it would not reach the countries, or the areas of the economy, that would need it most.
Elsewhere on the Costa EUSSR, big trouble has
come to Holland, that’s the country with drugs, not the man running France down
the drain. Last month Holland jumped off Germany’s austerity train, but it
seems that they waited too long to jump. Without control over its own currency,
will Holland’s banks be the first of the major league banks to get Cyprussed?
Stay long physical gold and silver as we wait to find out this year and next.
Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.
H. L. Mencken.
Debt-crippled Holland falls victim to EMU blunders as property slump deepens
The eurozone’s slow suffocation is going Dutch. Each extra month of slump caused by Europe’s negligent authorities is pushing Holland closer to a debt-deflation trap.
The
coalition of Mark Rutte has belatedly woken up to the danger. Last month it
retreated from pro-cyclical tightening, delaying €4.3bn in budget austerity. By
then Mr Rutte’s totemic worship of EU deficit targets had invited the ridicule
of the official Bureau for Economic Policy Analysis (CPB), which said Dutch
leaders did not seem to understand how private credit busts interact with
fiscal cuts to create havoc.
“The
Dutch government’s inability to acknowledge the damage done by austerity
despite mounting evidence is a case of 'cognitive dissonance’,” it told the
Financial Times.
Yet this
is not at root a case of botched fiscal policy. It is a case of misaligned
monetary policy. The Netherlands offers a salutary lesson of what can happen to
a rich sophisticated economy caught in a post-bubble crunch once it has lost
control of its currency, central bank and monetary levers. This would have
happened to Britain without the Bank of England, and the US without the Fed.
The Dutch
crisis has crept up quietly, though hedge funds have been nibbling for months.
Most people lump the Netherlands together with Germany, Finland and Austria,
the hardline AAA fist-thumpers who dictate terms to others.
Unemployment
was very low until the dam broke. It is now soaring as fast as in Cyprus. The
rate has doubled over the past two years, jumping from 7.7pc to 8.1pc in the
single month of March. The economy has been in recession since early 2011.
More
In Euroland
it seems, if it wasn’t for bad news there’d be no news at all! It wasn’t
supposed to be this way of course. The euro was supposed to usher in the new
age land of milk and honey. Europeans would all get rich and fat, work less,
retire earlier, and embark on the life of Riley, thanks to the euro. Well many
got fat, Club Med worked less and retired earlier and embarked on the lifestyle
of Riley for the best part of ten years. Then the roof fell in when America’s
phony “triple-A” securities bubble blew up in 2007-2008. Now Club Med is
relying on German charity, doled out via the Italian running the ever more
dodgy ECB. Like the thousand year Reich before it, this version of the
Bilderberger euro already has one foot in the grave.
Now
even the Germans have started questioning it’s utility. Denied a vote on abandoning
the D-Mark, they largely went along to get reunification past a very worried rest
of Europe. With unification long since in place, it’s a no brainer for most
thinking Germans to opt out of the work and tax shy Club Mad euro. Let the ECB
move permanently to Bratislava or Barcelona, if that’s what they want.
"We are not discussing the exit of Germany from the euro area. This is a stupid idea and an avenue we would never take."
Jean-Claude Juncker. Luxembourg Prime Minister and former president of the Euro Group of Finance Ministers. Greece surely!!!
BMW First-Quarter Profit Falls as Europe Drop Hits Prices
By Dorothee Tschampa - May 2, 2013 6:37 AM GMT
Bayerische
Motoren Werke AG (BMW), the world’s biggest maker of luxury cars, reported
a 4.5 percent drop in first-quarter profit as the plunging European market
pushed car prices lower. Earnings before interest and taxes fell to 2.04 billion euros ($2.69 billion) from 2.13 billion euros a year earlier, the Munich-based company said in a statement today. The figure beat the 1.82 billion-euro average of 12 analyst estimates compiled by Bloomberg. Sales declined 4.1 percent to 17.5 billion euros
The maker of BMW, Mini and Rolls-Royce
brand vehicles maintained its target for 2013 pretax profit on the same level
as last year as rising demand in China and the U.S. help shield the automaker from the impact
of the sovereign-debt crisis on Europe’s car market, which is sliding to a
20-year low. BMW is also working to defend its No. 1 position in luxury car
sales, which both Volkswagen AG (VOW)’s Audi and Daimler
AG (DAI)’s Mercedes-Benz have vowed to seize by the end of the decade.
---- BMW will roll out 25 new models by
the end of next year, with 10 of them having no predecessor, in a bid to keep
rivals at bay. Mercedes is bringing out 13 all-new models by the end of the
decade. Audi plans to double its SUV lineup to six by 2020, a person familiar
with the matter said in February
More
For Germans There Is No Alternative to the Euro
By Jan F. Kallmorgen May 1, 2013 11:00 PM GMT
Nobody asked the German people if they wanted the euro. Now, almost 15 years
after Europe
introduced its common currency, a new political party has emerged to campaign
for a return to the deutschmark. Judging by an opinion poll last month, Alternative for Germany has hit a nerve. The party has existed for less than a month, yet the poll by Infratest Dimap found that 24 percent of Germans would consider voting for it in September’s federal elections. Are Germans on their way to rejecting the euro?
The answer isn’t simple or well understood, which is surprising given Germany’s centrality to the euro’s survival and how much the global economy depends on a healthy resolution to the currency’s troubles. It starts, however, with the choice that Germans were never given: whether to abolish their own currency.
In the 1990s, as preparations were underway to create the euro, Chancellor Helmut Kohl counted himself lucky that the German Constitution didn’t allow for referendums. Kohl accepted the currency union because he saw it as the only way to make the reunification of East and West Germany palatable to the rest of Europe. The French, in particular, feared the new German state would be too powerful. The price they demanded was the euro, which they saw as a great leap forward in the European Union’s integration.
Had the German people been asked if they wanted the new currency, they probably would have said no, because it would have meant giving up the deutschmark. Such a rejection would have upset the deal Europe’s political elite had made on German reunification, throwing the EU into disarray.
More
We
close for today, as we await news from the ECB meeting, with yet another
confirmation of rising trouble in China. Rear view mirror stuff certainly, but
no one, least of all the Chinese, believe in China’s figures. Has China already
slipped into mild contraction?
All within the state, nothing outside the state, nothing against the state.
Benito Mussolini
China’s Manufacturing Expands at Slower Pace, Survey Shows
By Bloomberg News - May 2, 2013 3:16 AM GMT
A private gauge of Chinese manufacturing declined last month, adding to
signs that growth in the world’s second-biggest economy
will cool for a second straight quarter. The final April reading of 50.4 for a Purchasing Managers’ Index (EC11CHPM) released today by HSBC Holdings Plc and Markit Economics compares with 51.6 for March and the preliminary reading of 50.5 given April 23. A reading above 50 indicates expansion.
A private gauge of Chinese manufacturing declined last month, adding to signs that growth in the world’s second-biggest economy will cool for a second straight quarter.
The final April reading of 50.4 for a Purchasing Managers’ Index (EC11CHPM) released today by HSBC Holdings Plc and Markit Economics compares with 51.6 for March and the preliminary reading of 50.5 given April 23. A reading above 50 indicates expansion.
More
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
At the Comex silver depositories Tuesday final figures were: Registered 45.93
Moz, Eligible 120.51 Moz, Total 166.44 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, China’s crooked cyberspying gets some mainstream
coverage. But why now? Will the Diaoyu
Island dispute turn into payback time for Uncle Sam? Will America try to pounce
on China’s wobble? With a sickly global economy, and a new currency war
underway on three continents, pouncing on China’s wobble probably isn’t an
option.
China Cyberspies Outwit U.S. Stealing Military Secrets
By Michael Riley & Ben Elgin - May 1, 2013 11:00 PM GMT
Among defense
contractors, QinetiQ North America (QQ/) is known for spy-world connections
and an eye- popping product line. Its contributions to national security
include secret satellites, drones, and software used by U.S. special forces in Afghanistan
and the Middle East.
Former CIA Director George Tenet was a director of the company from 2006 to 2008 and former Pentagon spy chief Stephen Cambone heads a major division. Its U.K. parent was created as a spinoff of a government weapons laboratory that inspired Q’s lab in Ian Fleming’s James Bond thrillers, a connection QinetiQ (pronounced kin-EH-tic) still touts.
QinetiQ’s espionage expertise didn’t keep Chinese cyber- spies from outwitting the company. In a three-year operation, hackers linked to China’s military infiltrated QinetiQ’s computers and compromised most if not all of the company’s research. At one point, they logged into the company’s network by taking advantage of a security flaw identified months earlier and never fixed.
“We found traces of the intruders in many of their divisions and across most of their product lines,” said Christopher Day, until February a senior vice president for Verizon Communications Inc. (VZ)’s Terremark security division, which was hired twice by QinetiQ to investigate the break-ins. “There was virtually no place we looked where we didn’t find them.”
QinetiQ was only one target in a broader cyber pillage. Beginning at least as early as 2007, Chinese computer spies raided the databanks of almost every major U.S. defense contractor and made off with some of the country’s most closely guarded technological secrets, according to two former Pentagon officials who asked not to be named because damage assessments of the incidents remain classified.
As the White House moves to confront China over its theft of U.S. technology through hacking, policy makers are faced with the question of how much damage has already been done. During their multiyear assault on defense contractors, the spies stole several terabytes -- equal to hundreds of millions of pages --of documents and data on weapons programs, dwarfing in sheer quantity any theft of Cold War secrets. The QinetiQ hack may have compromised information vital to national security, such as the deployment and capabilities of the combat helicopter fleet.
“The line forms to the left when it comes to defense contractors that have been hacked,” said James Lewis, a senior fellow in cyber security at the Center for Strategic and International Studies in Washington. “The damage has been significant.”
Systems Hacked
A few of the attacks have become public, including the 2007 theft from Lockheed Martin Corp. (LMT) of technology related to the F- 35, the most advanced U.S. fighter jet. Intelligence officials say the damage is far more extensive than the limited public accounting suggests, and that China-based hackers have acquired data on a large number of major weapons systems and many minor ones. One former intelligence official described internal Pentagon discussions over whether another Lockheed Martin fighter jet, the F-22 Raptor, could safely be deployed in combat, because several subcontractors had been hacked.
More
"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."
Oakley R. Bramble
The monthly Coppock Indicators finished April:
DJIA: +133 Up. NASDAQ: +139 Up. SP500: +170 Up. Another Fed bubble underway. But how high is
high enough?
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