Baltic Dry Index. 806 -03
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
We are dead I tell you. It is hopeless now.
Bernocchio, with apologies to Bruno Iksil.
For more on the death of the London whale,
scroll down to Crooks Corner.
As if Euroland didn’t have enough problems, with
Club Med going out of business and exporting its youth and future, plus old socialist led France
engaging in a 1970s form of national suicide, now the IMF has downgraded
Germany’s growth prospects, warning of further downgrades to come if an
unlikely Eurozone recovery fails to materialise, and that takes no account of
what for many parts of Central Europe has turned into the 500 year flood.
Euroland’s growing recession, is in danger of rolling into a depression. No amount of bureaucratic fiddling in
Brussels, Berlin, or Frankfurt, makes much difference when someone upstairs
decides it’s time for a 500 year flood. Clearly God is not a central European.
I think that the EU with the Lisbon agenda, has put the right
emphasis on growth and employment.
Angela Merkel
IMF halves German 2013 growth forecast
Germany's 2013 growth prospects have been cut in half by the International Monetary Fund, as it warned that the outlook for Europe's strongest economy could worsen if a eurozone recovery fails to materialise.
The IMF
said falling business investment and the eurozone's ongoing recession, which
have hampered German growth, meant the economy would grow by just 0.3pc this
year, compared with an April estimate of 0.6pc.
"The
uncertainty, mainly surrounding prospects for the euro area and the ongoing
recession in the region, have led to declining German exports to the region as
well as a sharp pull back in business investment," the IMF said in a
report on Monday.
The Fund
also warned of further risks to Germany's growth prospects. "Should the
alleviation of uncertainty and an expected gradual recovery in the rest of the
euro area fail to materialise, growth can be expected to remain below its
potential for longer, leading to a widening of the output gap which would
eventually result in slack in the labour market," it said.
A rise in
German
household spending helped the country to eke out 0.1pc growth in the first
three months of the year, data confirmed last week, following a 0.7pc
contraction in the final quarter of 2012. The spending rise helped Germany
narrowly avoid a technical recession - defined as two consecutive quarters of
negative growth.
More
Next, more on central Europe’s 500 year flood. The last time this region experienced
disastrous flooding was 2002, 11 years ago, the approximate length of the
sunspot cycle on the sun. 2013 is expected to be the height of the current
sunspot cycle 24, probably this July. We appear to have entered the new Dalton
Minimum with a vengeance. Sadly more rain is expected though in diminishing
amounts. It’s far too early to tell what economic impact this is having on
agriculture and industry, but any such impact will be negative and large. I
suspect that this is the final straw for the Eurozone region, with many more
regions and small nations now needing to go to the bailout well for emergency
funding. Central Europe’s insurers are about to take a massive hit.
With a little luck, this ongoing tragedy, will reshape the upcoming EU “Great
Leaders” summit, refocusing it on the need to reform and modernise the bureaucratic
and spendthrift European Union. With a little luck, the summit won’t now just
become the war between the French led Latin States, versus the Berlin led axis
of the north.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
Flood waters from Czech dams bear down on Prague
4 June 2013 Last updated at 06:01
River
levels in the Czech Republic have risen sharply overnight after the authorities
were forced to open several dams in the south of the country.
In the
capital Prague, metal flood barriers are being raised to cope with the extra
water on the River Vltava.
Severe
floods caused by days of heavy rain have left at least seven people dead in the
Czech Republic, and two others in neighbouring Austria.
Germany
has drafted in the army to help reinforce flood defences in the south.
In the
Bavarian town of Passau, floodwaters have now reached a level not seen since
the 16th Century, making much of the town inaccessible.
----On Monday morning, the River Vltava was flowing at 2,800 cubic metres per second - 10 times its normal volume - through Prague's historic centre.
As a
precaution the city's metro system and central sewage treatment plant were
closed, metal flood defences were erected and sandbags built up along the banks
of the Vltava.
The
Charles Bridge - normally packed with tourists - has been closed and tigers at
the city's zoo were even tranquilised and moved out of an enclosure thought to
be at risk.
By Monday
evening, the people of Prague had thought the worst was behind them, reports
the BBC's Rob Cameron in the capital.
But then
Prime Minister Petr Necas announced unexpectedly that a system of nine dams
called the Vltava Cascade was dangerously full, and the pressure would have to
be relieved.
At 20:00
local time (18:00 GMT) the floodgates on several dams were opened.
----Main roads in many areas of central Europe have been closed and rail services cut. Thousands of homes are without power.
In
Austria, the meteorological service said two months of rain had fallen in just
two days.
----More than 300 people were moved from their homes in Salzburg and the neighbouring Tyrol as the army worked with the civil authorities to clear landslides and make roads passable. Parts of the Pinzgau region, which includes Taxenbach, have been declared a disaster zone.
----The
Bavarian towns of Passau and Rosenheim declared states of emergency, as
forecasters warned of continuing heavy rain and a high risk of flooding from
several rivers, including the Danube.
Water
levels in Passau, which the Danube is joined by the Inn and Ilz rivers, were at
their highest since 1501 and might rise further, the DPA news agency said.
----Shipping was halted on parts of the Danube and Rhine rivers in Germany, and the entire length of the Danube in Austria. The rivers are used heavily to transport commodities such as grain and coal.
An
emergency taskforce has been set up by the federal government, and Chancellor
Angela Merkel plans to visit affected areas on Tuesday.
More
In more of the Great Disconnect between the Fed
fuelled stock market bubbles and the new reality, the Great China wobble has
Australia’s “canary in the coal mine gasping for air,” according to Bloomberg. At
some point ahead the Fed’s final bubble and reality meet. Probably, thanks to
high frequency trading programs trying to steal everyone else’s dollar, in one
almighty unstoppable “flash crash.”
Don't worry about the world coming to an end today. It is
already tomorrow in Australia.
Anon.
Canary in Coal Mine Gasps as Australia Resource Jobs Fall
By Michael Heath - Jun 4, 2013 6:14 AM GMT
After Mark McGrath lost his job in Sydney in November, he tried to follow
the thousands of Australians who headed to the nation’s mines, which have
mopped up surplus workers and fueled growth for a decade. Not
anymore. Fired by Royal Dutch Shell Plc (RDSA) after 26 years when the oil company shut its Sydney refinery, McGrath put his home in the suburb of Liverpool up for sale to seek a job in the coal mines of the Hunter Valley, 210 kilometers (130 miles) to the north. He couldn’t find work because the boom in demand for coal, iron ore, gold and oil that supported the economy is waning, adding to unemployment swelled by an ailing manufacturing base.
----A drop in hiring of support staff by resources companies is one of the first indicators of a broader downturn because each mining position creates four to five contract jobs in related services, said Martin Whetton, an interest-rate strategist at Nomura Holdings Inc. in Sydney.
“Mining service companies are the canary in the coal mine,” said Whetton. “We’re likely to see higher unemployment over the course of the year.”
The Reserve Bank of Australia predicts the labor market will “remain somewhat subdued” and the government, in its May budget, projected unemployment would rise to 5.75 percent by June 30, 2014, from the current 5.5 percent. That compares with a U.S. jobless rate of 7.5 percent and an average of 8.1 percent for the Organization for Economic Cooperation and Development.
The deteriorating job outlook and a slowdown in China, the biggest buyer of the nation’s minerals, have sparked a reappraisal of Australia’s economic prospects, driving the currency 6.8 percent lower in the past month.
More
Mini flash crashes strike again — this time at Williams-Sonoma, Hyatt
June 3, 2013, 2:15 PM
Two high-profile companies – Williams-Sonoma Inc. WSM -0.42% and
Hyatt Hotels Corp. H -0.03% – experienced mini flash crashes
Monday.The hotel chain’s shares jumped from roughly $40.96 a share to $43.00 a share in 100 milliseconds at 11:19:57 a.m., according to Eric Hunsader, chief executive of Nanex, a provider of real-time data to traders. The shares traded down to $41.18 a share a second later.
---- Meanwhile, Williams-Sonoma dropped from $53.50 a share to $51.27 a share in less than a second at 9:31 a.m., before recovering to $53.25 a share in the next four seconds. The NYSE cancelled trades in Williams-Sonoma executed at or below $51.96 a share between 9:31 a.m. and 9:32 a.m.
The two mini-flash crashes come as the Securities and Exchange Commission has been grappling with market structure issues. The agency has implemented a series of new rules responding to the “flash crash” that rattled the markets on May 6, 2010.
The fast Williams-Sonoma dive and the Hyatt bump weren’t as extreme as what happened to the price of Anadarko Petroleum last month. The $45 billion company’s stock price was temporarily wiped out in seconds late in the trading day on May 20, before recovering.
Nevertheless, the Hyatt and Williams-Sonoma mini-crashes are worth noting. Hunsader contends that the trades were poorly executed large market orders that were overwhelmed by today’s computerized market environment.
“Ten years ago this would not have happened,” Hunsader said. “When there are a bunch of computers executing trades with no obligations you can get rapid dips or rises like this. A NYSE specialist would not have let it fall like that.”
http://blogs.marketwatch.com/election/2013/06/03/mini-flash-crashes-strike-again-this-time-at-williams-sonoma-hyatt/
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.
High Frequency Trader, with apologies to Cary Grant. To Catch A Thief.
At the Comex silver depositories Monday final figures were: Registered 42.03 Moz,
Eligible 122.48 Moz, Total 164.51 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, more of what passes for in-house hedging in today’s too big to
fail banks. In reality it’s just more of the same old derivatives casino
gambling. The next Lehman is out there, and getting closer by the day. Stay
long physical precious metals for the aftermath.
Everything is funny as long as it is happening to somebody else.
Will Rogers.
Whale of a Trade Revealed at Biggest U.S. Bank With Best Control
By Dawn Kopecki & Michael J. Moore - Jun 4, 2013 12:00 AM GMT
“We are dead I tell
you,” Bruno Iksil, a London-based trader at JPMorgan
Chase & Co. (JPM), messaged an associate on March 23, 2012. “It is
hopeless now.”
Iksil, a
Frenchman who would soon become known as the London Whale because of the size
of his trades, had lost $44 million on corporate-credit bets three days earlier
and was down more than $500 million for the year, Bloomberg Markets will report
in its July issue. He and junior trader Julien Grout, under pressure from their
manager, had tried to hide the extent of losses that would swell to more than
$6.2 billion, the bank’s biggest trading blunder ever.
“They are going to destroy us,” Iksil wrote to Grout that Friday in one of hundreds of e-mails, instant messages, transcripts of recorded conversations and other documents released in March by the U.S. Senate’s Permanent Subcommittee on Investigations after a nine-month probe.
In a 301-page report and at a hearing, the panel accused the largest and most profitable U.S. bank of hiding losses, deceiving regulators and misinforming investors.
The report, the bank’s own 129-page account and interviews with traders and current and former executives offer evidence of a widening spiral of panic as the losses became known beyond a small circle of traders and the extent of the damage reached top management, including Chief Executive Officer Jamie Dimon.
---- What the documents show is that Dimon presided over a company whose traders amassed growing positions in complex derivatives and whose executives offered rosy forecasts, withheld information from regulators and ignored risk limits that were breached 330 times in the first four months of 2012.
The
records reveal how little has changed to prevent even the best-managed banks
from speculating their way into trouble five years after the collapse of Lehman
Brothers Holdings Inc. and three years after passage of the Dodd-Frank Act.
More
Banks are an almost irresistible attraction for that element of our society which seeks unearned money.
J. Edgar Hoover
The monthly Coppock Indicators finished May:
DJIA: +142 Up. NASDAQ: +144 Up. SP500: +177 Up. The Fed’s
Final Bubble continues. But hurricanes and tornadoes appear. Getting out first
beats getting out last.
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