Wednesday 17 July 2013

Hell



Baltic Dry Index. 1152 +01

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

“Yes we can and we do! Remember that, and be very afraid. We know where you live, what you said and what you’re thinking. It’s not your father’s NSA.”

King Barry Hussein I.

Today’s big event is likely to be Ben Bernocchio’s testimony later today on “to taper or not to taper, that is the question.” My money’s on QE forever, to infinity and beyond, but poor Bernocchio is no longer in charge of much of anything. China, Brazil, India and a dying EUSSR, now control what happens next in the global economy. Bernocchio is simply irrelevant now, in the rest of the world, although spouting more QE ending heresy again today, will likely do more than frighten the ladies and panic the horses. Wall Street has Bernocchio over a barrel and both know it.  The Fed’s final bubble will eventually burst, but not today by Bernocchio. Stay long physical gold and silver for the ending.

All is not well in Germania.  Chancellor Merkel, though still far in the lead in the polls, America’s European spying scandal has now broken into the coming September German general election. With a long experience of the Gestapo and the Stassi still imprinted in their minds, German voters are gun shy when it comes to someone spying on them. All the more so when it comes to modern Americans, following the scandals of Guantanamo, Abu Ghraib, Bagram rendering prison, waterboarding, and other forms of US torture.

With a new anti-euro party also likely to enter the coming election, German politics is entering a new more unpredictable phase. My guess is that Chancellor Merkel will move domestically to counter the spy scandal by taking a tougher stance on Europe and ECB bailouts. Using a bigger hammer to hammer Club Med. Club Med is about to get Snowed on. As if that’s not bad enough, soon EUSSR serfs must be protected from buying a new Merc.  Or only buying one that lights up like a Dreamliner in a crash. It’s a funny old world on fiat money in our new lawless age.

But first yet another two faced warning of China.

“Give me a one-handed economist! All my economists say, On the one hand on the other.”

Harry Truman.

China’s Structural Shift in Economy Poses Risks, Jain Says

By Sanat Vallikappen & Nicholas Comfort - Jul 17, 2013 7:01 AM GMT
Deutsche Bank AG (DBK) co-Chief Executive Officer Anshu Jain said Chinese policy makers’ efforts to bolster domestic consumption and reduce dependence on the government’s infrastructure spending pose some risks.

“It’s the right strategy for them in the long run,” Jain said in an interview with Bloomberg Television’s Haslinda Amin today in Singapore. Still, “if there is something to watch closely in China, it would be the implications of that shift from infrastructure spending.”

Chinese Premier Li Keqiang yesterday signaled that he won’t let economic expansion stall too much even as he keeps it within limits and avoids “wide fluctuations.” Growth slowed for a second quarter in the three months ended in June as factory output and fixed-asset investment weakened, adding to risks that the government will miss its expansion target.

“Clearly they see signs which are concerning them, which is why they are making the adjustments they are,” Jain said. “From our vantage point, we remain optimistic that in the end, this will be engineered into a smooth outcome.”

Deutsche Bank, continental Europe’s biggest bank by assets, remains “very constructive” about growth in Asia despite the slowdown in China and India (INGDPY), Jain said.
More

Now back to the Obama gulag, aka Germania.

“Someone must have slandered Josef K., for one morning, without having done anything truly wrong, he was arrested.”

Franz Kafka. The Trial.

The Chancellor and the NSA: Merkel Has Abandoned the Germans

Incredible revelations are coming to light in the biggest spying scandal in history. And what is the German government doing? Chancellor Merkel kept silent for weeks, and then she said nothing. Her challenger in the September election, Peer Steinbrück, is correct when he says she violated her oath of office.

"I swear that I will dedicate my efforts to the well-being of the German people, promote their welfare, protect them from harm, uphold and defend the Basic Law and the laws of the Federation, perform my duties conscientiously, and do justice to all. So help me God."

The oath of office of the German president or chancellor isn't something to be taken lightly. It is anchored as Article 56 in Germany's constitution, the Basic Law. Merkel has sworn it. Over the weekend, her challenger to become the next chancellor, Peer Steinbrück of the center-left Social Democratic Party, said, "My understanding of protecting the German people from harm is a different one." He was right.

Once you get past all the rhetoric, what is the actual issue we're dealing with here? The United States has massively and systematically violated the civil rights of people who have no possbility of voting against its practices in elections. After all, the NSA and CIA and whatever the other organizations are called aren't operating under German laws when they're supposedly protecting the security of the free world.

And this about our loyalty to America. Or international terrorism. Or even the role of intelligence services. Everyone has their own opinion about that. This is about our rights being violated without us being able to resist it. We stop being citizens and turn into subjects.

It's a fundamental experience in German history that we never want to repeat. So who do we turn to now? Who is going to help us?

It appears that Germans can't rely on their own government to do the job. Chancellor Angela Merkel first remained silent for weeks about the biggest espionage scandal in history. When she finally did speak out, she said very little.

In the interview she gave the weekly Die Zeit last week, it was clear what she thought of the matter -- she was uninterested, indifferent. It was almost surreal. Edward Snowden had revealed to the public that our "allies" tap some 500 million data connections in Germany each month and, in doing so, violate a host of German laws -- not to mention trust among political friends -- and all the chancellor can do is offer a few stanzas that clearly betray her boredom with the issue, acting as if this all has nothing to do with her.

----In the current issue of SPIEGEL, deputy editor-in-chief Klaus Brinkbäumer describes the United States as a country that is sick, wounded and unsettled. "Since 2005, an average of 23 Americans per year have been killed through terrorism, mostly outside of the US." "More Americans die of falling televisions and other appliances than from terrorism," Nicholas Kristof recently wrote in the New York Times, and "15 times as many die by falling off ladders." Those figures haven't stopped the US military from spending $8 trillion on the military and homeland security since 2001.

It is kind of Brinkbäumer to diagnose the American data totalitarianism as a symptom of paranoid delusions. Hunger for power would be another explanation.

----It was the kind of uncomfortable feeling of powerlessness one knows from surreal dreams. The German interior minister travels to Washington to complain about spying by US agencies against Germans and he is then told that the activities of US intelligence services cannot be discussed because they are classified.

But Hans Peter Friedrich didn't feel humiliated in Washington. He was pleased to have been received at all. He also had a few statistics that he could take back home with him. Back in Germany, Friedrich announced that 45 terrorist attacks had been prevented around the world thanks to information supplied by US intelligence services. Some 25 were in Europe, including five in Germany.

But there was one question that remained unanswered. What was the bigger insult to the German people -- that the Americans didn't even think it was necessary to justify their spying to the Germans? Or the Mickey Mouse numbers they gave our interior minister for which there is no proof and which may or may not be true?
More
http://www.spiegel.de/international/germany/editorial-merkel-has-left-germans-high-and-dry-a-911425.html#ref=nl-international


The Juncker Scandal: Luxembourg's Dirty Secrets

By Romain Leick
Luxembourg's secret services may be tiny, but their misdeeds were enough to bring down one of Europe's most powerful politicians.

Big fish rarely look upon little fish without condescension. How else do you explain the fact that German media organizations and commentators -- like Marietta Slomka, host of the TV news program "heute journal" -- refer to the recent events in neighboring Luxembourg as "droll?" The Grand Duchy has an intelligence service? With 60 employees? Or should we say, agents? It's too funny for words.

---- Luxembourg Prime Minister Jean-Claude Juncker has been brought down by a scandal handed to him by the country's intelligence service, the Service de Renseignement de l'Etat luxembourgeois (SREL). The service, which is supposed to address external security and terrorist threats, reports directly to the head of the government. That's why a 141-page report by a parliamentary investigation committee found that Juncker holds political responsibility for the illegal operations that SREL officers have conducted for years. The extensive use of Luxembourgish in the mainly French document means that, even without further encryption, it is poorly accessible to outsiders.

The report makes clear that Juncker simply did not treat the intelligence service seriously enough. Most of the time, he didn't even want to know precisely what was going on. He was satisfied with intimations and preferred to give advice rather than instructions.

A conversation between Juncker and the then director of the SREL, Marco Mille, on Jan. 31, 2007, illustrates how this worked. Unbeknownst to the premier, Mille recorded the conversation with a special wristwatch. The two men were concerned that rumors about illegal wiretapping operations could stir up public unrest.

"We are very vulnerable to people," Mille said, in Luxembourgish, "who say that the intelligence service does as it pleases, goes over the heads of the premier, the palace [of the Grand Duke], and God knows who else. That's important to us."

---- Mille: "And even when you look at the way people thought at the time … Anyone who wasn't strictly conservative was considered a threat to the state… We have 300,000 index cards in the basement."
Luxembourg has a population of 525,000.
More
 

Ban on selling new Mercedes in EU moves closer

Some new vehicles produced by German carmaker Daimler cannot be sold or registered in the European Union because they contain a banned coolant, the European Commission has said.

5:31PM BST 16 Jul 2013
"Currently, in the European market there are vehicles produced by this manufacturer that, according to the preliminary Commission analysis, are not in conformity with their type-approval," EU industry chief Antonio Tajani said in a statement.

As a result, France's decision to block registrations of most new Mercedes models within its borders could be justified under existing EU rules, the Commission said.

The latest models of Mercedes cars cannot be sold in France as they still use an air conditioning refrigerant the EU says emits excessive greenhouse gases and should be replaced, the German auto company said last week.

----Since January 1, European Union norms demand that car makers use a cleaner R1234yf refrigerant, deemed less polluting than older products.

But Daimler is sticking to R134a, an older coolant, as it claims studies have shown that the new gas catches fire more easily and puts cars at a greater risk of explosion in case of a crash.

The makers of R1234yf reject Daimler's claims but in Germany, the auto giant was given special permission to keep using the older gas.

Paul Sanders, managing director for Honeywell fluorine products, which makes R1234yf, said: “Commissioner Tajani plays a significant role in enforcing the EU Mobile Air Conditioning Directive (MAC), and his involvement in this issue is very welcome.
More

Elsewhere in the dying EUSSR, France and Club Med stumbled on for yet another tortuous wealth destroying day. Up first, is there nothing a model modern bankster wouldn’t sell short?

Let them drink Romanée Conti

Ebenezer Squid, with apologies to Marie Antonette.

Mouton-Rothschild ’06 Bordeaux Drops to $5,875 Three-Month Low

By Guy Collins - Jul 17, 2013 6:31 AM GMT
A case of 2006 Chateau Mouton-Rothschild, a Medoc first-growth wine estate, sold for 3,875 pounds ($5,875) on the Liv-ex market, a three-month low and down 9 percent from its high for this year as demand weakened.

The transaction on July 16 was 35 percent below the record 5,935 pounds a case at which it traded in April 2011 at the height of the bull market for Bordeaux.

The Liv-ex Fine Wine 50 Index, a benchmark for top Bordeaux wines, fell 2 percent in the second quarter after gaining 7 percent in the first three months, and has slipped further during July to trade just 4 percent up on the year. A muted investor response to the Bordeaux 2012 sales campaign of the past three months has also sapped appetite for older vintages.

“My view is the first growths are going to find it increasingly difficult to maintain their price differential,” Stephen Williams, founder of the London-based Antique Wine Company, said by phone this week. “The market is much more value-sensitive.”
More

Czech Early Election Bid Set to Fail as Parties Battle President

By Peter Laca - Jul 16, 2013 11:01 PM GMT
An attempt to initiate early Czech elections is poised to fail as a split parliament argues how to counter President Milos Zeman’s moves to shape the government.

Lawmakers will start a special session today to debate dissolving the assembly, a step needed to call a snap ballot. The Social Democrats, the chamber’s largest party, lack the 120 votes needed to carry the motion and the three members of the pro-austerity former ruling coalition oppose it.

The struggle is set to prolong the political turmoil that began last month after Prime Minister Petr Necas’s government fell amid an illegal-spying and graft scandal and risks extending a record-long recession. Zeman, the Czech Republic’s first directly elected head of state, picked a technocrat, Jiri Rusnok, for premier, snubbing the Social Democrats’ call for fresh elections and the former coalition’s attempt to continue in government backed by a majority in parliament.

“It’s very unlikely that the proposal will get the required support,” Vaclav France, an analyst at Raiffeisenbank AS said July 15 by e-mail. “Therefore the political crisis will probably continue.”
More

Italian PM warns of 'huge risk' that Britain leaves EU

LONDON | Tue Jul 16, 2013 3:20pm EDT
(Reuters) - Italy's prime minister said on Tuesday that there was a "huge risk" that Britain would leave the European Union in the next few years and he urged other countries to work to reduce the prospect of an exit.

"We are convinced that in the European Union countries, we are (underestimating) the risk of having the UK out of Europe. In my view, it's a huge risk," Enrico Letta told an audience in London after making a speech.

"We have to be very cautious ... and we have to prepare a discussion on trying to prevent this risk," he said in response to a question.

British Prime Minister David Cameron, who is due to meet Letta on Wednesday in London, has promised to hold a referendum on Britain's continued membership of the EU by the end of 2017, if his Conservative party returns to power at elections in 2015 and he can win concessions on Britain's relationship with the EU.

Surveys suggest Britons are divided on staying in the EU, with slightly more favoring an exit, but many remain undecided.

Letta said that an EU without Britain would be less committed to free markets and less of a global player.
Italy is due to hold the 28-nation bloc's presidency in the second half of 2014.

In his speech, Letta said moves towards more integration in the euro zone should not threaten the EU's single market or leave countries outside the single currency area less comfortable with their membership of the bigger union.
More

Ebenezer Squid was sent to Hell for his sins. As he was being processed, he passed a room where fallen guru Greenspan was having an intimate conversation with a beautiful woman.

"What a lousy deal!" Ebenezer complained. "I have to burn for all eternity and that crummy economist spends it with that gorgeous woman."

The escorting demon jabed the Great Squid with his trident and screamed, "Who are you to question that woman's punishment?"

At the Comex silver depositories Tuesday final figures were: Registered 49.30 Moz, Eligible 117.74 Moz, Total 167.04 Moz.  


Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

No Snow today, just the banksters again, allegedly doing what banksters do best. It’s really not their fault. When it comes to doing “God’s work” they can resist everything except temptation.

Banks are an almost irresistible attraction for that element of our society which seeks unearned money.

J. Edgar Hoover

Bankers 'tried to manipulate QE', says BoE's Paul Fisher

Traders are being investigated for attempting to rip off taxpayers by manipulating quantitative easing as the Bank of England desperately tried to rescue the economy two years ago.

Paul Fisher, the Bank’s executive director for markets, told MPs on the Treasury Select Committee (TSC) that a QE programme may have been “manipulated” by gilt edged market makers (GEMMs) in October 2011. He passed the information onto the financial regulator, which is still investigating the case.

If evidence of attempted manipulation is found, he said: “It would be thoroughly reprehensible and appropriate actions would follow.” The claims follow the Libor rate-rigging scandal, which shamed the banking industry and saw several lenders fined hundreds of millions of pounds. Three bankers have been charged with fraud in the UK.

The latest allegations relate to a “reverse auction” of gilts conducted by the Bank on October 10, 2011, shortly after QE2 started. On that day, one lender tried to sell gilts to the Bank at an inflated price. Officials spotted the sudden spike and pulled out of the deal.

The Bank then reprimanded the lender and passed the information to the Financial Services Authority, now the Financial Conduct Authority (FCA), to investigate whether there had been market abuse. The subject was raised in Parliament later that month, when David Cameron said bankers caught trying to rig gilt prices should face the “full force of the law”.

Asked whether there had been manipulation, Mr Fisher said: “There was that risk. I did not have the information to conclude that.” He said the FCA had still to report back to the Bank on its findings.

Former R P Martin brokers charged over Libor fixing

Two former R P Martin brokers have been charged in connection with the Serious Fraud Office investigation into the manipulation of Libor.

The two men, Terry Farr and Jim Gilmour, were charged this morning by City of London Police with conspiracy to defraud.

They were charged at Bishopsgate police station in London, and are due to appear before Westminster Magistrates’ Court at a later date.

Messrs Farr and Gilmour are the first bankers to be charged in connection with Libor mainpulation allegations who worked within the Square Mile.

Their charges come a month after those against Tom Hayes, a former Tokyo-based UBS trader, who was also charged by the SFO.

Today's charges are understood to relate to alleged fixing of Yen Libor, the benchmark Japanese inter-bank rate.

R P Martin is a UK-based wholesale broker, dealing in a variety of products from bonds to foreign exchange to interest rate swaps.

The SFO began investigating the Libor-fixing scandal a year ago, in the wake of Barclays’ £290m settlement with regulators in the UK and the US.

Five months later, in December 2012, three residential premises were searched, with the three men arrested, interviewed and released on police bail.

The trio were Messrs Hayes, Farr and Gilmour.

Their arrests - and subsequent charges - were the first of bank staff in connection with Libor fixing allegations.
More

Barclays, Traders Fined $487.9 Million by U.S. Regulator

By Brian Wingfield - Jul 17, 2013 2:34 AM GMT
Barclays Plc (BARC) and four former traders must pay a combined $487.9 million in fines and penalties, the U.S. Federal Energy Regulatory Commission said in an order tied to an investigation of alleged manipulation of energy markets.

The agency directed the company and traders to pay $453 million in civil penalties to the U.S. Treasury within 30 days, according to the order issued yesterday. The London-based bank also must surrender $34.9 million in profits, to be distributed to programs that help low-income homeowners pay energy bills in California, Arizona, Oregon and Washington, the FERC said.

---- The penalties, which the agency first proposed Oct. 31, stem from an investigation in the FERC’s crackdown on market manipulation. Since the beginning of 2011, the agency has made public at least 13 probes of energy-market gaming, including investigations of trading units at Deutsche Bank AG (DBK) and JPMorgan Chase & Co. (JPM)

“We believe that our trading was legitimate and in compliance with applicable law,” Marc Hazelton, a Barclays spokesman, said yesterday in a statement. “We intend to vigorously defend this matter.”

---- “We believe that our trading was legitimate and in compliance with applicable law,” Marc Hazelton, a Barclays spokesman, said yesterday in a statement. “We intend to vigorously defend this matter.”

He said the bank believes the penalty is without basis and that the FERC order is a “one-sided document, and does not reflect a balanced and full description of the facts or the applicable legal standard.”

The FERC determined that the Barclays traders manipulated markets in the Western U.S. from November 2006 to December 2008. The employees made transactions in fixed-price products -- often at a loss -- with the intent of moving an index to benefit the bank’s other bets on swaps, according to the FERC.
More
http://www.bloomberg.com/news/2013-07-16/barclays-traders-fined-487-9-million-by-u-s-regulator.html

It’s morally wrong to let a sucker keep his money.

Ebenezer Squid, with apologies to W. C. Fields.

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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