Baltic Dry Index. 806 +05
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“Someone
must have slandered Josef K., for one morning, without having done anything
truly wrong, he was arrested.”
Franz
Kafka. The Trial.
For more on our new lawless age scroll down to “NSA taps in to internet giants' systems to mine user data, secret files reveal,” and to Crooks Corner. The big brother state and the return of torture. Where the USA goes today, the rest of the world usually follows, and the USA is becoming the new USSR.
We open though, with Japan and Abenomics already
misfiring badly. Now the largest buyer of Japan’s sovereign debt by far, is to
scale back its JGB weighting in favour of foreign and domestic stocks. Unless
the BOJ picks up the gap, JGB interest rates must rise blowing up Japanese
stocks in the process. But if the BOJ does fill the gap by massive money
printing, the Yen will competitively devalue against all comers.
One way or another,
Kyle Bass’s bearishness on Japan is about to pay off. Whether the hapless
Japanese realise it or not, they’ve just joined the list of nations needing
physical gold to protect them from their government. From London it looks
rather like the BOJ has lost control.
"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
Japan public pension cuts JGB weighting, lifts allocation to stocks
TOKYO, June 7 |(Reuters) - Japan's Government Pension Investment Fund (GPIF), the world's largest public pension fund with more than $1 trillion of assets, said on Friday it would lift its weighting in foreign and domestic stocks while cutting its target allocation for Japanese government bonds.
GPIF, which has been reviewing its investment model, said it would raise its target allocation for Japanese stocks to 12 percent from 11 percent previously, while lowering its yen bond weighting to 60 percent from 67 percent.
Asian Stocks Drop as Yen Surge Weighs on Japanese Shares
By Yoshiaki Nohara - Jun 7, 2013 5:27 AM GMT
Asian
equities fell, with the regional benchmark index poised for the largest
weekly drop in a year, as the yen’s biggest surge in three years weighed on
Japanese shares and investors awaited a U.S. jobs report. Japan’s Topix index slid 2.9 percent with all but two of the 33 industry groups on the gauge falling. Newcrest
Mining Ltd. slumped 7.9 percent as Australia’s biggest gold producer said it will write down the value of its mines by as much as A$6 billion ($5.7 billion). Honda Motor Co., a Japanese carmaker that gets 47 percent of its revenue in North America, dropped 4.5 percent.
The MSCI
Asia Pacific Index fell 0.7 percent to 130.36 as of 1:19 p.m. in Tokyo, with
five stocks declining for every two that rose. Japanese shares have slumped
this week after Prime Minister Shinzo Abe failed to impress investors in a
speech outlining his growth strategy.
----Hong Kong’s Hang Seng Index (HSI) lost 1.3 percent and China’s Shanghai Composite Index fell 0.8 percent. Taiwan’s Taiex Index slid less than 0.2 percent and Singapore’s Straits Times Index dropped 0.3 percent.
The Topix has fallen 8.5 percent this week and about 18 percent from its May 22 high. It’s still up about 21 percent this year amid unprecedented monetary easing by the Bank of Japan. The central bank is to announce its next policy decision on June 11.
More
Pimco Not Ready to Buy JGBs as Japan Inflation Expectations Rise
By Mariko Ishikawa & Shigeki Nozawa - Jun 7, 2013 6:06 AM GMT
Pacific Investment Management Co. isn’t ready to increase holdings of Japanese
government bonds as the nation’s policy makers seek to overcome deflation. “There’s no need to be in a hurry to buy JGBs at the moment,” with 10-year yields around 0.8 to 0.9 percent, Tomoya Masanao, head of portfolio management for Japan at Pimco, the operator of the world’s biggest bond fund, said in an interview in Tokyo. “I used to think the chance of 2 percent inflation in Japan was close to zero, but now, while the likelihood of that is not high, it’s certainly higher than before.
More
Aso Says Japan Won’t Intervene in Market After Surge in Yen
By Mayumi Otsuma - Jun 7, 2013 4:00 AM GMT
Japanese Finance Minister Taro Aso said that the government won’t intervene
in the currency
market for now after the yen strengthened by the most in three years
against the dollar. “We are carefully watching, but we don’t have any immediate intention of taking any action, such as intervention,” the finance minister told reporters in Tokyo today. The yen jumped 0.5 percent to 96.49 per dollar as of 11:38 a.m. local time.
Japan’s currency surged 2.2
percent yesterday, adding to the headwinds of a slide in stocks and volatility
in bonds as Prime Minister Shinzo Abe campaigns to revive the world’s
third-biggest economy. As attention turns to a Bank of Japan meeting on June
10-11, Governor Haruhiko Kuroda’s actions may be limited by his pledge to avoid
“incremental” steps after announcing a plan to double the monetary base over
two years
More
In Europe, the German economy wobbles even though
exports are soaring, and the China Panda gets ready to savage “haughty”
Europeans. We Brits know exactly how the Chinese feel. Still best not to bring
up Hong Kong and the opium wars. With
the 500 year flood ravaging much of Germany and Central Europe, and the Chinese
Panda about to ravage European exports, Germany’s wobble looks likely to get much
more complicated. And then there’s Japan setting out to steal everyone’s export
markets. Euros anyone, even if marked
with the German “X”.
"In the long run, the gold price has to go up in
relation to paper money. There is no other way.”
Nicholas L. Deak
German Factory Orders Fall; Economy Struggles to Recover
By Jeff
Black - Jun 6, 2013 11:48 AM GMT
German factory orders (GRIORTMM) fell more than economists predicted in
April as Europe’s largest
economy struggled to gain strength. Orders, adjusted for seasonal swings and inflation, decreased 2.3 percent from March, when they increased a revised 2.3 percent, the Economy Ministry in Berlin said today. Economists forecast a 1 percent drop, according to the median of 39 estimates in a Bloomberg News survey. In the year, workday-adjusted orders fell 0.4 percent.
----The German
economy grew only 0.1 percent in the first three months of the year, less than
economists anticipated. The Bundesbank will release new forecasts tomorrow. In
December, the Frankfurt-based central bank predicted growth of 0.4 percent this
year and 1.9 percent for 2014.
More
China fuels trade row with attack on 'haughty' Europeans
The official mouthpiece of the Chinese Communist Party has attacked the European Union, lashing out at the “haughty attitudes of certain Europeans” and warning that China still had “plenty of cards” to play in an increasingly acrimonious trade dispute.
“China
does not want a trade war, but trade protectionism cannot but bring about a
counter-attack,” warned an editorial in the People’s Daily newspaper, whose
opinion pages often reflect government thinking.
The
newspaper’s attack came two days after the EU Commission announced it would
begin charging duties on solar panels imported from China.
Hefty
tariffs of up to 48 per cent will be placed on subsidised Chinese solar panels,
Karel De Gucht, the EU’s trade commissioner, announced on Tuesday.
“The ball
is now in China's court,” Mr De Gucht told reporters, claiming that the Chinese
imports threated as many as 25,000 European jobs.
Chinese
trade officials hit back almost immediately, threatening on Wednesday to
introduce “anti-dumping” levies on wine imports from the EU.
A
spokesperson for China’s Ministry of Commerce told the China Daily the
investigation into EU wine imports was not a “retaliatory measure" and
insisted the dispute could “be solved through negotiation.”
China’s
state-run media took a less diplomatic line. “We have set the table for talks,
[but] there are still plenty of cards we can play,” warned the People’s Daily.
“Times
change and power rises and falls. Still this has not changed the deep-rooted,
haughty attitudes of certain Europeans,” it added.
The EU
also took a bashing in the state-run English language China Daily newspaper. It
warned that China would act to “safeguard its major economic interests – and it
has ample cards in hand to do so”.
More
We end for the week with more on our new lawless
era. While banksters and great vampire squids run amok and have crashed the casino,
the US government runs amok, trashing centuries of hard won freedoms. Be very
afraid. In our new lawless age, no one is safe from big brother. Even Senators
and Congressmen are fair game. Link the NSA to the IRS and tap the phones of
journalists in the not so free press, in the land of the increasingly unfree, and pretty soon it’s starting to look like a
US clone of the old “evil empire,” the USSR. Who’s on the government’s enemies list
to be rounded up at the first sign of discontent? Christians objecting to
homosexual marriage and abortion? Gun owners? Those that oppose GM foods? Those sceptical of global warning? Those who contribute
to opposition political parties? [Your
choice here.]
"The information acquired does not include the
content of any communications or the name of any subscriber. It relates
exclusively to call details, such as a telephone number or the length of a
telephone call."
But such metadata can provide authorities with vast
knowledge about a caller's identity. Particularly when cross-checked against
other public records, the metadata can reveal someone's name, address, driver's
licence, credit history, social security number and more. Government analysts
would be able to work out whether the relationship between two people was
ongoing, occasional or a one-off.
NSA taps in to internet giants' systems to mine user data, secret files reveal
• Top secret PRISM program claims
direct access to servers of firms including Google, Facebook and Apple
• Companies deny any knowledge of program in operation since 2007
• Companies deny any knowledge of program in operation since 2007
The National Security Agency has obtained direct access to the systems of Google, Facebook, Apple and other US internet giants, according to a top secret document obtained by the Guardian.
The NSA access is part of a previously undisclosed program called PRISM, which allows officials to collect material including search history, the content of emails, file transfers and live chats, the document says.
The Guardian has verified the authenticity of the document, a 41-slide PowerPoint presentation – classified as top secret with no distribution to foreign allies – which was apparently used to train intelligence operatives on the capabilities of the program. The document claims "collection directly from the servers" of major US service providers.
Although the presentation claims the program is run with the assistance of the companies, all those who responded to a Guardian request for comment on Thursday denied knowledge of any such program.
In a statement, Google said: "Google cares deeply about the security of our users' data. We disclose user data to government in accordance with the law, and we review all such requests carefully. From time to time, people allege that we have created a government 'back door' into our systems, but Google does not have a back door for the government to access private user data."
Several senior tech executives insisted that they had no knowledge of PRISM or of any similar scheme. They said they would never have been involved in such a program. "If they are doing this, they are doing it without our knowledge," one said.
An Apple spokesman said it had "never heard" of PRISM.
The NSA access was enabled by changes to US surveillance law introduced under President Bush and renewed under Obama in December 2012.
The program facilitates extensive, in-depth surveillance on live communications and stored information. The law allows for the targeting of any customers of participating firms who live outside the US, or those Americans whose communications include people outside the US.
It also opens the possibility of communications made entirely within the US being collected without warrants.
Disclosure of the PRISM program follows a leak to the Guardian on Wednesday of a top-secret court order compelling telecoms provider Verizon to turn over the telephone records of millions of US customers.
The participation of the internet companies in PRISM will add to the debate, ignited by the Verizon revelation, about the scale of surveillance by the intelligence services. Unlike the collection of those call records, this surveillance can include the content of communications and not just the metadata.
Some of the world's largest internet brands are claimed to be part of the information-sharing program since its introduction in 2007. Microsoft – which is currently running an advertising campaign with the slogan "Your privacy is our priority" – was the first, with collection beginning in December 2007.
More
First they came for the communists,
and I didn't speak out because I wasn't a communist.
Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.
Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.
Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.
Then they came for the Catholics,
and I didn't speak out because I wasn't a Catholic.
Then they came for me,
and there was no one left to speak for me.
Pastor Martin Niemöller
At the Comex silver depositories Thursday final figures were: Registered 42.03
Moz, Eligible 121.41 Moz, Total 163.44 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, the EUSSR. More on our lawless age. How the
tax and work shy Greeks were sacrificed to save the euro, and German and French
banksters holding Greek debt. And all for nought unless France reforms its economy,
for unreformed, France will take down the European Monetary Union anyway.
Olli Rehn should resign for crimes against Greece and against economics
Economics Last updated: June 6th, 2013Nobody has taken responsibility for the disastrous errors made by the EU-IMF Troika in Greece, where youth unemployment has just reached 58.3pc.
Nobody has resigned, or missed a day’s pay, or faced any kind of censure from an elected body, despite the withering indictment just issued by the IMF.
Worse yet, the basic conceptual policy errors that led to this tragic episode have not been fully corrected.
With a little trimming here and there, the eurozone is sticking to the same mix of self-defeating contractionary policies that have tipped the region back into a double-dip recession, with seven quarters in a row of falling GDP, soaring unemployment, and an ever starker divergence with the United States.
Just to recap what our man Bruno Waterfield reported from Brussels, the IMF’s mea culpa admits that the Troika sacrificed Greece to save the euro.
----The Troika recoiled from the standard IMF policy of debt restructuring for Greece in 2010 because it was “politically difficult” for countries (France? Germany?) whose banks held Greek bonds.
The
report said the terms of the rescue violated three of the IMF’s four key rules
for lending to insolvent countries, no small matter given that it was the
biggest loan the Fund has ever made in proportion to a member’s quota, and
given that staff were “unable to vouch that public debt was sustainable”.
It
admitted that the 2010 package was a “holding operation” that “gave the euro
area time to build a firewall to protect other vulnerable members and averted
potentially severe effects on the global economy”.
The
European Commission defended itself yesterday, saying a debt restructuring in
2010 would have caused havoc in the bond markets and virulent contagion. This
is true, but what kind of a defence is that?
Yes,
everybody feared a chain-reaction of sovereign defaults reaching Italy and
Spain, but this was entirely because the ECB was recklessly refusing to carry
out its responsibility as a lender of last resort, the ultimate purpose of any
central bank. In doing so, it was endangering the entire global financial
system.
More
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
Another weekend, and depending on later today’s US employment figures,
what might turn in to an exciting one too. If the employment numbers are good,
the Fed’s “taper” and QE exit is back on, and that sets up the risk of a Black
Monday. On the other hand, if the unemployment number of bad, suggesting that
the US economy is stagnating or worse, the FED’s QE forever is back on, blowing
the Fed’s final bubble ever higher and higher until disaster. Have a great weekend
everyone. Remember, be careful of whom you call and what you say. Someone is
listening in with bad intent.
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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