Baltic Dry Index. 925 +25
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
The fact that an opinion has been widely held is no evidence
whatever that it is not utterly absurd.
Bertrand Russell
With the great, the not so great, and the
downright awful, all assembled on the banks of Lough Erne outside Enniskillen not
far from Irvinestown Northern Ireland, “the G-7 plus one,” said Canadian Prime
Minister Harper, with the “one” being the evil Russia, or the irrelevant Canada
or Italy depending on one’s point of view, the great debate at this year’s
inconsequential G-8 meeting centred on whether the G-7 should arm Al Qaeeda-in-Syria
over the objections of Russia and the Mayor of London. With no good options in
the middle east since the disastrous invasion of Iraq all went so wrong last
decade, requiring us to spy on everyone friend or foe, there is a high
probability Al Qaeeda’s new allies in the west will soon be their new
quartermasters in the rapidly widening Sunni v Shia religious war in the Middle
East.
Stay long physical precious metals held
outside of the western banking system. Whatever the outcome of this new
religious war, just like the Great War of 1914-1918, it is highly unlikely to be
what we expect, or to be of benefit most of the G-7.
Putin faces isolation over Syria as G8 ratchets up pressure
ENNISKILLEN, Northern Ireland |(Reuters) - Russian President Vladimir Putin faced further isolation on the second day of a G8 summit on Tuesday as world leaders lined up to pressure him into toning down his support for Syrian President Bashar al-Assad.
Following an icy encounter between the Kremlin chief and U.S. President Barack Obama late on Monday, the G8 leaders will seek to find resolution to a war that has prompted powers across the Middle East to square off on sectarian lines.
The sticking point again will be Putin, who faced a barrage of criticism from Western leaders for supporting Assad and the Syrian's president's attempt to crush a 2-year-old uprising in which at least 93,000 people have been killed.
"It's a clarifying moment to see what kind of commitments the Russians are willing to make in a leading world forum," a British official said before the leaders met for dinner at a remote, heavily guarded golf course outside of Enniskillen.
An official close to one of the delegations said the talks over dinner had gone better than expected and that a joint communiqué with Russia on Syria now seemed more likely. However, the official declined to speculate on what Russia might be willing to sign up for.
But if consensus could not be reached, it was possible a final statement at the end of the two-day summit might be released without Russia's input and in the name of the G7 rather than the G8.
Divisions over Syria dominated the atmosphere as global leaders met in Northern Ireland, a place once rocked by decades of violence but which Britain now wants to showcase as a model of conflict resolution.
Putin and Obama appeared tense as they addressed reporters late on Monday after about two hours of talks, with Putin mostly staring at the floor as he spoke about Syria and Obama only glancing occasionally at the Russian leader.
Stung by recent victories for Assad's forces and their support from Hezbollah guerrillas, the United States said last week it would step up military aid to the rebels, including automatic weapons, light mortars and rocket-propelled grenades.
Putin said Moscow and Washington had different views on Syria but agreed the bloodshed must stop and that the warring parties should be brought to the negotiating table.
More
In other G-8 earth shattering news, Japan claims full support for its new trade war against all comers, but especially America, Germany, and South Korea. It’s a funny old world when the great and the good meet in the back of beyond.
Japan says G8 stance is sign of approval for 'Abenomics'
TOKYO |(Reuters) - Japanese cabinet ministers welcomed the Group of Eight summit's stance on Tokyo's sweeping stimulus policies as a vote of confidence in the government's strategy to end 15 years of entrenched deflation and revive a lackluster economy.
Japan's economics minister also moved to parry any suggestion that Prime Minister Shinzo Abe's policies, known as "Abenomics", are aimed at intentionally weakening the yen to benefit the country's exports .
"Abenomics" combines fiscal stimulus, expanded debt purchases by the Bank of Japan and economic reforms, but some argue the policy mix could worsen Japan's debt burden, devalue the yen and disrupt global capital flows.
"Japan hasn't been in the spotlight at a G8 meeting for quite some time," Finance Minister Taro Aso said.
"More countries are starting to appreciate that our policies will contribute to the development of the global economy."
In a statement which will form part of a final communiqué at a summit in Northern Ireland, the G8 leaders said Japan needed to address the challenge of defining a credible medium-term fiscal plan.
More
Not
invited to the Irish golf outing of the non-golfing G-8, there was worrying
news out of China this morning, that seems to have escaped the agenda of the
assembled Lords of the Universe. China’s economic wobble continues to grow as
their economy’s rate of growth continues to slow. Our Great Disconnect, final
Fed bubble in stock markets continues edging towards its pin.
Most China Stocks Drop as FDI, Money Rates Boost Economy Concern
By Weiyi Lim - Jun 18, 2013 6:25 AM GMT
Most Chinese stocks fell as money-market rates jumped and foreign
investment data boosted concern that growth is slowing in the world’s
second-biggest economy. PetroChina Co. and Jiangxi Copper Co. led declines for energy and material producers after a report showed inbound investment growth slowed last month.
----The Shanghai measure
has slumped 12 percent from this year’s high on Feb. 6 amid concern the economy
is slowing after reports showed industrial production and exports trailed
estimates and higher money-market rates signaled tighter liquidity. The index
trades at 8.9 times 12-month estimated earnings, compared with the three-year
average of 10.8, data compiled by Bloomberg showed. Its
30-day volatility was at 15.9, compared with this year’s average of
19.1. Trading volumes were 26 percent below the 30-day moving average today.
More
China Foreign-Investment Gains Ease as Economic Slowdown Deepens
By Bloomberg News - Jun 18, 2013 3:04 AM GMT
Foreign
direct investment in China rose in May by the least in four months, a sign of
concern that growth is slowing in the world’s second-biggest economy. Inbound non-financial investment increased 0.3 percent from a year earlier to $9.26 billion, the Ministry of
Commerce said today in a statement in Beijing, after a 0.4 percent gain in April. China’s outbound investment rose 20 percent in the first five months of the year to $34.3 billion, compared with a 27.4 percent pace in January-April.
The report follows data indicating capital inflows slowed
last month while growth decelerated in exports, industrial production and lending. Confidence is fading in an
economic rebound this quarter, with investment banks from Morgan Stanley to
Barclays Plc cutting their 2013 expansion forecasts.
More
There was bad news too, this morning, from the continent made for tanks. In the bureaucratic lunatic asylum aka the European Union, car sales have fallen off a cliff to a 20 year low. This despite car sales booming in the UK. The Great Global Wobble is continuing to worsen. This is no time for the Fed to be feeding their favourite hack at the WSJ disinformation about ending or tapering quantitative easing. Meanwhile at the Italian run European Central Bank, its panic time again, as fallen super star Draghi prepares for another round of voodoo economics and pixie dust.
“I have nothing but respect for you -- and not much of that.”
Groucho Marx
EU Car Sales Fall to 20-Year Low as Joblessness at Record
By Mathieu Rosemain - Jun 18, 2013 7:00 AM GMT
European Union car sales in May fell to a 20-year low as rising joblessness
caused by a recession in the euro region contributed to falling demand at PSA Peugeot Citroen (UG), Renault SA and General Motors Co. (GM) Registrations in the 27-member EU dropped 5.9 percent to 1.04 million vehicles from 1.11 million cars a year earlier, reaching the lowest level for the month since 1993, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement. The drop contrasts with 1.7 percent growth in April that was the first gain in the market in 19 months. Including figures from Switzerland, Norway and Iceland, sales in May fell 5.9 percent to 1.08 million cars.
The unemployment rate reached a record 12.2 percent in April in the 17 countries using the euro, and manufacturing output in the area contracted in May, extending a decline to almost two years. Auto-industry executives are forecasting that the European car market will shrink a sixth consecutive year in 2013, with a possible recovery starting by the final quarter.
“Nobody’s buying cars,” and there’s “no
reason to be optimistic,” as the sales increase the previous month was because
of a calendar effect, Jens Schattner, a Frankfurt-based analyst at Macquarie
Group Ltd., said before the ACEA released figures. Any revival in deliveries
won’t start until the end of the third quarter at the earliest, he said.
More
Draghi Says ECB Has ‘Open Mind’ on Non-Standard Monetary Policy
By Jeff Black - Jun 18, 2013 7:15 AM GMT
European Central Bank President Mario Draghi
said the central bank is considering further non-standard monetary policy tools
and will deploy them if circumstances warrant. “We will look with an open mind at these measures that are especially effective in our institutional setup and that fall within our mandate,” Draghi said today in a speech in Jerusalem. “Some of those measures may have unintended consequences. This does not mean that they should not be used, but it does mean that we need to be aware of those consequences and manage them appropriately.”
Draghi
has in recent months held out the possibility of charging lenders to hold cash
at the Frankfurt-based central bank by introducing a negative deposit rate. The
rate has been at zero since July. That’s one of a range of tools, including
further long-term lending operations and adjusting the collateral framework,
that the ECB is mulling as the 17-member euro area remains stuck in its
longest-ever recession
More
And so we await today’s final outcome from
the Great Leaders meeting in the Land of the Leprechauns. Only the NSA and the
UK’s GCHQ will really know if the final communique really reflects what
actually went on or what they actually intend to do.
We end for the day with America’s top whistle-blower,
Edward Snowden, getting some unexpected unlikely support from New York City’s
top spymaster. In the “land of the free”
freedom is so last century.
While the State exists, there can be no freedom. When there is
freedom there will be no State.
Lenin
'NSA should come clean about domestic spying': Ray Kelly
By JENNIFER BAIN Last Updated: 6:18 PM, June 17, 2013
Police
Commissioner Ray Kelly launched a stinging rebuke to the federal government’s
secret phone and Internet monitoring campaign — and suggested leaker Edward
Snowden was right about privacy “abuse.”
“I don’t
think it ever should have been made secret,” Kelly said today, breaking ranks
with US law-enforcement officials.
His blast
came days after the Obama administration and Attorney General Eric Holder
outraged New York officials by endorsing a federal monitor for the NYPD.
Kelly
appeared to firmly reject Holder’s claim that disclosure of the monitoring
campaign seriously damaged efforts to fight terrorism.
“I think
the American public can accept the fact if you tell them that every time you
pick up the phone it’s going to be recorded and it goes to the government,”
Kelly said. “I think the public can understand that. I see no reason why that
program was placed in the secret category.”
“Secondly,
I think if you listen to Snowden, he indicates that there’s some sort of
malfeasance, people . . . sitting around and watching the data. So I think the
question is: What sort of oversight is there inside the [National Security
Agency] NSA to prevent that abuse, if it’s taking place?”
Kelly has
been on the receiving side of this kind of criticism.
The NYPD
secretly spied on Muslim organizations, infiltrated Muslim student group and
videotaped mosque-goers in New Jersey for years, it was revealed in 2012. The
NYPD said its actions were lawful and necessary to keep the city safe.
More
There is nothing so absurd that some philosopher has not already
said it.
Marcus
Tullius Cicero
At the Comex silver depositories Monday final figures were: Registered 41.77 Moz,
Eligible 122.80 Moz, Total 164.57 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, it’s the Goldmanites again, struggling
religiously to do “God’s work” of cheating the wretched holders of the
preferred shares in Equity Inns out of their value. You really can’t make this
sort of rent seeking up. But with a
track record almost unique on Wall Street, why do the Muppets keep trading with
the Great Vampire Squids at all?
"God, no, we don't club baby seals. We club babies."
Goldmanite, quoted in The Times of London. November 8 2009
HIGH
& LOW FINANCE
Going Dark, and Putting Blindfolds on Investors
By FLOYD NORRIS
June 13, 2013
What happens to investors who buy securities issued under the protection of United States securities laws and continue to hold them after many of the protections are removed? Sometimes it is not pretty.That is happening more and more often as companies avail themselves of the right to “go dark” because they do not have very many public shareholders. They no longer have to file financial information with the Securities and Exchange Commission, but the securities are still publicly traded.
These days, such investors seem to have few friends. Congress is much more interested in making it easier for companies — or “job creators” in the current jargon — than it is in protecting unfortunate investors. The so-called JOBS Act, enacted last year with widespread bipartisan support, included a provision making it much easier for small banks to go dark, and hundreds have done so.
Going dark, it should be noted, is not the same thing as going private. When that happens, securities are purchased from the public investors. They may not like being forced out, but they are out.
Not so when a company goes dark. The investors are in, but they may or may not be told what is going on. Companies that go dark sometimes make audited financial statements public, and sometimes they do not.
There is no better example of the perils of going dark — as well as proof that “preferred” can be a misnomer when it comes to stock — than the former Equity Inns, an owner of hotels, whose common shares were acquired by Goldman Sachs in 2007.
Although the common shares went away, preferred shares remained — or actually, new issues of preferreds replaced old ones. What has happened since then “smells like insider trading,” says James J. Angel, a finance professor at Georgetown University and an investor in the preferred stock. Goldman says that is nonsense.
While Goldman acquired the common stock, for $23 a share, or $1.9 billion, it did not acquire the $146 million of preferred shares in public hands. Those shares were in par values of $25 and had been sold primarily to individual investors interested in collecting a reasonably safe income stream. One series paid 8.75 percent a year, and the other 9 percent.
Before the takeover, those shares had been trading above par, and Goldman could have called them at par value. Instead, it took the preferred shares into the dark. The company assured the S.E.C. that there were fewer than 300 shareholders of record for each series of preferred, giving the company the right to go dark.
The securities continued to trade over the counter in what Wall Street calls the “gray market.”
Goldman soon halted the dividend payments, and the share prices fell to as little as a penny.
How was the company doing? The financial statements were confidential, but Goldman did agree to let preferred shareholders see them — for a fee — as long as they signed confidentiality agreements that would prevent them from sharing the statements with anyone else, including prospective buyers of the shares.
Someone has, however, violated that confidentiality agreement. After I began calling around for this column, a set of financial statements arrived in an envelope with no return address. Assuming they are accurate, they show that over the three years through 2012, the company had net losses of $315 million on revenue of $1.2 billion. But most of those losses came from $251 million in depreciation. Operating cash flow was a positive $174 million. Told of some of the numbers in the statement, a Goldman spokeswoman did not dispute them.
Those numbers, however, are for the entire company. The preferred shares seem to have an interest in only 1 percent of the assets. If Goldman could find a way to put the 1 percent owner in bankruptcy, while keeping the other 99 percent out, it might be able to largely eliminate the preferred.
More
We fight not to enslave, but to set a country free, and to make
room upon the earth for honest men to live in.
Thomas Paine
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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