Baltic Dry Index. 1103 -30
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
China’s direct contribution to global growth is
enormous, but perhaps equally as important is its role in generating growth in
developed and emerging economies.
A slowdown, whether significant or extreme, in the Chinese economy heralds
very bad news for asset prices around the world.
Kyle Bass.
Just how bad is China’s wobble? Following
today’s news from China fear the worst. While nobody believed China’s official
statistics, least of all Chinese officials, the official statistics are now so
alarming that they must be hidden away. “What happened with the missing
subcomponents is definitely not good for the credibility of the official PMI,”
said Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in
Hong Kong, who previously worked for the World Bank.
China
definitely has something to hide. Perhaps America’s super spy agency the NSA
can release the missing data. In any
event, this is not a good development for the global economy, and must strike
terror into the giant mining companies supplying China and the captive
commodity nations that depend on them. Time to remain in the bunker. Time for
high risk takers to short Aussie dollars, the Rand, and South American
currencies. A massive summer crisis is slowly developing. It’s not good news
for Europe either.
China Suspends PMI Details in New Hurdle for Analysis: Economy
By Bloomberg
News - Jul 5, 2013 3:53 AM GMT
China suspended the release
of industry-specific data from a monthly survey of manufacturing purchasing
managers, with an official saying there’s limited time to analyze the large
volume of responses. “We now have 3,000 samples in the survey, and from a technical point of view, time is very limited -- there are many industries, you know,” Cai Jin, vice president of the China Federation of Logistics & Purchasing, which compiles the data with the National Bureau of Statistics, told reporters yesterday in Beijing.
The
disappearance of data on industries including steel adds to issues hampering
analysis of the world’s second-biggest economy, after fake invoices inflated
trade numbers this year. Neither the federation’s nor the statistics bureau’s
statement on the manufacturing Purchasing Managers’ Index this week gave
readings on export orders, imports and finished-goods inventories or an
explanation for the omissions.
“Suspension
of the monthly data, without prior notice, makes the research work difficult
for us,” Xu Xiangchun, a steel researcher and chief analyst at Mysteel.com,
said by phone from Beijing. “The random absence of official data is
disorienting.”
----Cai said the suspension wasn’t permanent. He didn’t elaborate on the reason for the decision beyond rejecting the idea that it was because the data showed too much weakness.
The
statistics bureau didn’t respond to e-mailed or faxed questions seeking
comment.
----“What happened
with the missing subcomponents is definitely not good for the credibility of
the official PMI,” said Louis Kuijs, chief China economist at Royal Bank of Scotland
Group Plc in Hong Kong, who previously worked for the World Bank.
More
PBOC to Extend Cash Crunch as Zhou Discovers Flaws
By Bloomberg News - Jul 5, 2013 5:06 AM GMT
China’s finance companies predict
central bank Governor Zhou Xiaochuan will extend a cash crunch, albeit without
June’s dramatic swings, as he calls for the market to “discover and correct”
excessive lending.
----“While inflation remains controlled, the central bank may want to keep money-market rates elevated to reduce banks’ off-balance-sheet assets,” said Huang Wentao, a bond analyst at China Securities Co. in Beijing, the country’s second-biggest brokerage underwriter of bonds. “We probably won’t see a return of the extreme tightness in June, but a 4 percent repo rate is still very high.”
Shares of China’s four biggest banks plunged an average of 12 percent last month and yield premiums on their bonds soared as the cash crunch underscored concerns excessive lending to property projects and local governments will end in rising defaults. President Xi Jinping said last month that officials shouldn’t be judged solely on their record in boosting gross domestic product, signaling that the new administration is prepared to tolerate slower economic expansion.
More
China Enters Nomura Danger Zone as Fed Tapers: Cutting Research
By Simon Kennedy - Jul 5, 2013 12:00 AM GMT
China, Hong Kong and India
are in a “high-risk danger zone” because their monetary policies have stayed
too loose over the past four years, according to Nomura Holdings Inc. A June 28 report by the bank’s economists and strategists showed the average ratio of domestic private debt to gross domestic product across Asia had ballooned to 167 percent in 2012 and most of the region’s property markets are “frothy.” The debt ratio has increased by over 50 percentage points in Hong Kong and Singapore and between 30 and 40 points in Malaysia, South Korea, China and Thailand.
A measure
of monetary policy based on output gaps and inflation shows that interest rates
have also been persistently below what economic models suggest, and even more
so if the financial cycle is accounted for, the report said.
----The risk is
Asian policy makers are falling into the same trap as their U.S. and European
counterparts did prior to the global financial crisis and as Asia did in the
1990s: “That is, keeping policies too loose by focusing too much on the
standard business cycle and low inflation and not enough on the financial
cycle,” said Nomura.
China’s problems couldn’t come at a worse time for
faltering Europe. Club Med is in a never
ending, generation crushing train wreck. A death spiral economy with no good
options, with the least worst option leaving the German euro. Meanwhile
yesterday the ECB’s boss called Bernocchio’s bluff. Low interest rates are
Europe’s future forever, he suggested, only to be raised in some off in the
future never-never time. A promised land of central bank Pixie dust, two
chickens in every pot, full employment for every youth, a double pension for
every old timer, an electronic dollar [your currency here] that increases in
value each year, a thousand times safer than gold. With dreamland promised to
continental Europeans, Draghi’s message to Bernanke was a variant of Maggie Thatcher’s “You turn
if you want to” on QE forever, “this bankster’s not for turning,” being fully
aware of the consequence of ending QE forever and ZIRP.
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.
Spain, France debt costs rise on new euro crisis fears
MADRID |(Reuters) - Spanish and French borrowing costs rose on Thursday as political turmoil in Portugal fanned fears the euro zone crisis will reignite, although the higher returns offered drew good demand for both bond sales.
A rift within Portugal's governing coalition following the resignations of two ministers this week has pushed up yields on bonds of more indebted euro zone countries and favoured safe-haven paper. Portugal's own 10-year yields shot above 8 percent for a time on Wednesday but have since fallen back a bit.
----"While yesterday's dramatic sell-off in Portugal shows peripheral bond markets retain their capacity for brutal price action, the market reaction in Spain and, in particular, Italy has been relatively muted," said Nicholas Spiro, managing director at Spiro Sovereign Strategy.
"The rally in peripheral debt went into reverse some time ago. This is a much more volatile, and a much less forgiving, market environment for Spanish bond sales."
Spain sold 3 billion euros of a new five-year bond and 1 billion euros of an existing three-year bond, while France sold 10- and 15-year bonds. Both auctions raised all or nearly all their maximum targeted amounts.
Spain paid between 17 and 20 basis points more than it had to sell similarly-dated debt last month, and the 3.792 percent yield on the five-year bond was the highest since February.
France saw its debt costs rise by 26-28 basis points from auctions last month, to 2.32 percent for the 10-year OAT, although its secondary market yields have fallen this week as investors sought out highly rated debt.
More
July 4, 2013, 11:24 a.m. EDT
Draghi: Low rates aren’t going away anytime soon
LONDON (MarketWatch) — European Central Bank President Mario
Draghi goosed markets around the world Thursday when he said interest rates
will remain low or go even lower for “an extended period of time.”
Traders
across Europe, particularly in London, were in the buying mood even before
Draghi’s dovish stance, thanks to a
statement from the Bank of England that also served to ease fears of a
reduction in stimulus.
Market
reaction was swift and pronounced. The euro EURUSD
-0.16% turned
lower against the dollar, hitting its lowest level since May, while equity
markets across Europe XX:SXXP
+2.34% soared.
---- Draghi said the decision to give
forward guidance was “a very significant step” for the central bank.
The ECB
kept its main lending rate at a record low 0.5%, as expected, That’s the same
level it’s been at since it was cut from 0.75% back in May, which marked the
first reduction in 10 months.
Draghi’s
job got trickier last month after U.S. Federal Reserve Chairman Ben Bernanke
signaled that the U.S. central bank could start tapping the brakes on monetary
stimulus as soon as this year. Fears that tapering in the U.S. could further
rattle the financially-stressed euro-zone countries were fanned this week by
political upheaval in Lisbon that crushed Portuguese government bonds.
Robert
Brusca, chief economist for FAO Economics, said there are ways in which he’d
like the world to emulate the U.S., but economic policy, in this case, is not
one of them.
“None of
these central banks can see into the future. How can they give us guidance?” he
asked. “The expression ‘the blind (mis) leading the blind’ comes to mind. The
ECB and BOE are misled to follow the Fed down this rabbit hole.”
more
“The
boom can last only as long as the credit expansion progresses at an
ever-accelerated pace. The boom comes to an end as soon as additional
quantities of fiduciary media are no longer thrown upon the loan market...”
“But
it (the boom) could not last forever even if inflation and credit expansion
were to go on endlessly. It would then encounter the barriers which prevent the
boundless expansion of circulation credit. It would lead to the crack-up boom
and the breakdown of the whole monetary system.”
Ludwig Von Mises
At the Comex silver depositories Wednesday final figures were: Registered 46.43
Moz, Eligible 119.88 Moz, Total 166.31 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Having bent the knee and doffed the lock before King
Barry Hussein the First of America, Russia’s President Putin got even by
conning America’s alphabet soup fraternity, that the fugitive Snowy was being
smuggled by Bolivian President Evo Morales on his presidential plane, back to freedom
of a sort in Bolivia. As the unfortunate Morales plane hit western European
airspace, where with the NSA goods on European leaders, Uncle Sam found it easy
to get even more obsequious compliance than from President Putin, over-flight
to a refuelling stop in the Balearic islands, was denied and the Morales plane
forced down to refuel, and searched in Vienna Austria. Had poor Snowy been on
the plane it would have been a breath-taking display of American might and intelligence.
A real scoop for the Sheriff of Nottingham in the service of bad King Barry.
Unfortunately sold a pup by Putin’s FSB, the
resultant debacle traduced King Barry’s limited reputation on two continents,
and exposed yet again the limited intelligence of America’s alphabet soup. GWB
having lost South America through indifference, King Barry just kicked them in
the nether region without justification. Having gained their unexpected outraged attention,
King Barry has just set up a continent of new William Tells, to mangle European
history. “I Spy” and tennis it ain’t.
“Freedom
is not worth having if it does not include the freedom to make mistakes.”
King Barry Hussein I, with apologies to
Mahatma Ghandi.
Bolivia Threatens U.S. Embassy Closure After Search for Snowden
By Nathan Gill - Jul 5, 2013 5:50 AM GMT
Bolivia threatened to close the U.S. embassy as presidents from across the
region met to show solidarity with President Evo Morales
after the global manhunt for fugitive leaker Edward Snowden diverted his
flight. “We don’t need them, we’ve got other allies,” Morales said yesterday at an emergency summit of Latin American leaders in the highland Bolivian town of Cochabamba. “We don’t need the pretext of cooperation and diplomatic relations so that they can come and spy on us.”
Presidents from Argentina, Ecuador, Suriname, Uruguay and Venezuela met with Morales to demand Spain, France, Portugal and Italy apologize and explain why they denied the Bolivian leader’s presidential jet permission to fly through their airspace June 2. The incident led the plane to make an emergency landing in Vienna after a fuel gauge stopped working correctly, Morales said.
The group called for a new meeting of South American presidents on July 12 in Montevideo, Uruguay to discuss further retaliation against the European countries for the “flagrant violation” of international law, according to a statement read aloud by Bolivia’s Foreign Minister David Choquehuanca at the end of the meeting yesterday. Brazilian President Dilma Rousseff, Chile’s Sebastian Pinera, Colombian President Jose Manuel Santos and Peru’s Ollanta Humala skipped the summit.
More
Germany's Merkel hopes for U.S. answers on spying
BERLIN/WASHINGTON |(Reuters) - German Chancellor Angela Merkel said after a phone call with Barack Obama on Wednesday night that she believed the U.S. president took Germany's concern over reported U.S. spying very seriously, and she hoped coming talks would bring answers.
Obama sought to allay the anger in Germany and other European allies in his call with Merkel, during which the chancellor said she made clear to him spying was not what she expected from countries considered friends.
They agreed to high level bilateral talks, in
addition to planned talks between the European Union and the United States, to
investigate reports that Washington spied on European allies.
German
Interior Minister Hans-Peter Friedrich will travel to the United States at the
end of next week, a spokesman said.
The
reports came to light amid the imbroglio over former U.S. spy agency contractor
Edward Snowden, who leaked details of surveillance activities by Washington. He
is currently in limbo in a transit area of Moscow's airport as the United
States pressures Moscow to expel him home.
"I
want to see the facts established," Merkel said on Thursday during a press
conference in Berlin. "I hope to gain information and draw important
conclusions."
She
added: "I made clear spying on institutions within the European Union is
not how we would expect those we consider friends to treat us. We are no longer
in the Cold War."
Her
comments come at the same time as a poll, published by ARD-DeutschlandTrend,
showing only 49 percent of Germans consider the Americans trustworthy partners
in the wake of the row - a low not seen since the presidency of George W. Bush
- and down from a previous level of 65 percent.
----Sigmar Gabriel,
leader of the SPD, said German authorities should quickly contact Snowden and
consider giving him witness protection, German news magazine Spiegel said on
Thursday.
----"The
first step must be that the federal prosecutors office travels to Moscow to
examine him as a witness," Gabriel was quoted as saying, adding if he was reliable
Germany should consider whether to put him into a witness
protection program.
More
“Never
interrupt your enemy when he is making a mistake.”
President
Putin, with apologies to Napoleon
Bonaparte
Another summer weekend, and more snow to come from
Snowden I suppose. Inside King Barry’s realm the story has been turned into
kill the messenger, ignore the message. Outside King Barry’s realm, in the
lands of the vassal states, the messenger is still on song, and now starting to
impact the coming election in Germania. In reality, it’s all just a summer diversion
from our never ending train wreck from 2007. On the Great Nixonian Error of
fiat currency it took 36 years of ever increasing greed and excess to blow up
the system. We are only six years into it collapse and destruction, but already
there is a massive unstoppable gold drain from west to east. More and more of
the world is becoming anarchic. Stay long physical precious metals held outside
of the banking system for the long run. Our central bankster have one foot in
the grave and the other on a banana skin.
Have a great weekend everyone. Time to enjoy the wonders of God’s
incredible northern hemisphere summer.
For those with the time and inclination, I offer a
little light reading about UK spying for an earlier age. Follow some of the
links on the main players. Up first a real rouge and probable murderer.
Arthur Maundy Gregory, the second of three sons of Francis Maundy Gregory (1849–1899), clergyman, and his wife, Elizabeth Ursula Mayow (1847–1936), was born at 9 Portland Terrace, Southampton on 1st July, 1877. After attending Banister Court School he passed the Oxford University entrance examination and went into residence there as a non-collegiate student in 1895.
Gregory originally intended to become a clergyman but left university shortly before his finals and began appearing on the stage. In 1900 he acted in the theatrical company of Ben Greet. In 1902 he took the role of the butler in The Brixton Burglary. He then became manager of the theatre company run by Frank Benson, but was dismissed for fraud in 1906.
According to his biographer, Richard Davenport-Hines: "In 1908 he (Gregory) made his earliest known attempt at blackmail. Harold Davidson, afterwards notorious as the vicar of Stiffkey, who had been his boyhood friend, induced Lord Howard de Walden and other rich men to finance Maundy-Gregory (as he then called himself) in the Combine Attractions Syndicate which crashed in 1909. Gregory next edited a gossip sheet, Mayfair (1910–14). As a sideline he ran a detective agency specializing in credit rating based on information supplied by hoteliers and restaurateurs."
Gregory became friends with Vernon Kell, Director of the Home Section of the Secret Service Bureau with responsibility for investigating espionage, sabotage and subversion in Britain. Kell employed Gregory to compile dossiers of possible foreign spies living in London. Later, Gregory was recruited by Sidney Riley, the top agent the recently formed MI6. He also did work for Basil Thomson, the head of Special Branch.
According to Brian Marriner: "Gregory, a man of diverse talents, had various other sidelines. One of them was compiling dossiers on the sexual habits of people in high positions, even Cabinet members, especially those who were homosexual. Gregory himself was probably a latent homosexual, and hung around homosexual haunts in the West End, picking up information.... There is a strong suggestion that he may well have used this sort of material for purposes of blackmail."
More
The monthly Coppock Indicators finished June:
DJIA: +145 Up. NASDAQ: +146 Up. SP500: +177 Unch The Fed’s
Final Bubble continues, but is struggling. The S&P500 moved sideways. The Dow and Nasdaq
both barely eked out a gain. In current highly volatile conditions and
controversial uncertain policy indecision at the Fed, Speculators would stay
long, investors would exit stocks for now or get fully hedged.
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