Thursday 29 August 2013

QE And War Forever.



Baltic Dry Index. 1146 -23 

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

My fellow Americans, I'm pleased to tell you today that I've signed legislation that will outlaw Syria forever. We begin bombing in five minutes.

President Richard M. Obama, with apologies to President Reagan and Russia.

Well it’s definitely QE forever, but the war against Syria seem to have hit a bit of a snag. Russia doesn’t think it’s a good idea for the west to get involved in Syria’s civil war as Al Qaeeda’s Air Force. As with QE forever, who needs the law when they’ve got the power. Still, before we start smashing up Syria and those pesky Syrians, it might be a good idea to get the western tourists out of Egypt’s Red Sea resorts first.

"What do I care about the law ? Hain't I got the power."

President Milhous Obama, with apologies to Cornelius Vanderbilt, 1794-1877

U.S., U.K. Pressure for Action on Syria Hits UN Hurdle

By Joe Sobczyk & Terry Atlas - Aug 29, 2013 3:45 AM GMT
The rift between Russia and western nations over Syria widened as the U.S. and the U.K. said they were ready to lead a military strike against Syria without United Nations approval.

U.S. President Barack Obama and U.K. Prime Minister David Cameron confront a decision whether to attack Syria without a UN mandate amid Russian resistance, demands for consultation from lawmakers at home and domestic opposition to involvement in another conflict in the Middle East.

Obama additionally is facing declining public approval ratings and the prospect of a partisan fight with Congress in the coming weeks over funding government operations and increasing the federal debt limit.
Obama said in an interview aired last night on PBS’s “NewsHour” program that while the U.S. has concluded the Syrian government was responsible for a chemical weapons attack against civilians on Aug. 21, he hasn’t decided on a course of action. He said the U.S. won’t become ensnared in the Syrian civil war, now in its third year.

“We can take limited, tailored approaches, not getting drawn into a long conflict, not a repetition of, you know, Iraq, which I know a lot of people are worried about,” he said.

Still, the possibility that Syrian President Bashar al-Assad or his allies in Iran and Hezbollah will respond in unpredictable ways, or that an attack may go awry, also poses a challenge to Obama and U.S. allies.
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Below, UK Prime Minister “U-turn” Cameron makes another of his famous handbrake U-turns. Great Britain’s stampede to war in Syria alongside Uncle Sam Obama and Marianne Hollande, has suddenly been reduced to a crawl.  With Al Qaeeda’s air force grounded into next week, Israel took only modest precautions as a first step.

"When a President does it, that means that it is not illegal."

President Milhous Obama, with apologies to President Nixon.

Cameron backs down on urgent Syria strikes

David Cameron backed down and agreed to delay a military attack on Syria following a growing revolt over the UK's rushed response to the crisis on Wednesday night.

By Peter Dominiczak, Tim Ross and Robert Winnett 10:00PM BST 28 Aug 2013
The Prime Minister has now said he will wait for a report by United Nations weapons inspectors before seeking the approval of MPs for “direct British involvement” in the Syrian intervention.

Downing Street said the decision to wait for the UN was based on the “deep concerns” the country still harbours over the Iraq War.

MPs had been recalled to vote on a motion on Thursday expected to sanction military action. Instead, after a Labour intervention, they will debate a broader motion calling for a “humanitarian response”.

A second vote would be required before any British military involvement. This could now take place next week.

In a statement on Wednesday night Downing Street said that it only wanted to proceed on a “consensual basis” and was now wary about becoming embroiled in another divisive conflict in the Middle East in the wake of Iraq.
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Israel calls up reservists, deploys missile defenses against Syria

JERUSALEM | Wed Aug 28, 2013 1:25pm EDT
(Reuters) - Israel ordered a small-scale mobilization of reservists on Wednesday and strengthened its missile defenses as precautions against possible Syrian attack should Western powers carry out threatened strikes on Syria.

But an Israeli official briefed on a meeting of Prime Minister Benjamin Netanyahu's security cabinet said the Jewish state believed the probability of it be targeted by Syria, its northern neighbor and long-time foe, was low.
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Below, more bad news from the oil front. A long cold, expensive winter might be ahead for us hapless northern hemisphere serfs.

Why oil could rise even without Syria tensions

August 28, 2013, 11:18 AM
Oil markets got a bit of a shocker Wednesday from a SocGen prediction that Brent UK:LCOV3 -1.09%  could reach $125 a barrel in the coming days in connection with a U.S.-led retaliation against Syria. And if there’s a big regional spillover from this, SocGen says $150 Brent could be not far off.

But the investment bank isn’t the first to the game on a bullish oil call.

Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics, set a new price target of $140 for WTI crude CLV3 -1.06%  about two weeks ago. Unlike SocGen, his call has little to do with the Syrian conflict.

Lamoureux backs up his oil call with these three reasons:
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Yesterday, the BOE’s newbie Goldmanite from Canada and the great white wilderness to the north of New York, joined America’s Fedsters in desperately trying to talk back down interest rates following old “loose lips” Bernanke’s tapering gaff to the Wall Street Journal. In this latest iteration of Moses descending from Mount Sinai to lay down the law, the man best known for playing Ed Norton alongside Ralph Kramden, is going to micro manage the UK economy, central planning style. Sort of like Mikhail Gorbachev tried in the USSR back in the late 80s. Remind me again how well that turned out.

The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

Adam Smith. The Wealth of Nations. 1776.

BoE Governor Mark Carney is ready to pop any housing bubble and warns traders' bets on rate rises are way off

Mark Carney, Governor of the Bank of England, signalled he is ready to pop any looming housing bubble as he gave his first speech in the role.

 "The Bank is acutely aware of the risk of unsustainable credit and house price growth and will be monitoring it closely," he said in Nottingham on Wednesday.

"The important thing to recognise is that we now have tools other than interest rates that can be used to contain risks in the property and financial sectors. We are now fully prepared to deploy them if that were needed."

The Bank could, he said, use its newer tools to recommend that banks and building societies "restrict the terms on which new credit is provided, or even to raise capital requirements on mortgage or other types of lending".

This would allow the Bank to avoid raising wider interest rates across the economy even as it acted to put the brakes on specific areas.
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We end for today with yet another version of QE forever by the Old Lady of Threadneedle Street. While the BOE expects the new heroin to flow into £90 billion of extra lending to the UK’s metal bashers and bricklayers, I think that most of the new pixie dust will fall in the trading rooms of the banksters market riggers and casino derivatives gamblers. After all, if they screw up again, it’s all back to the Old Lady again for more socialist bailouts by UK taxpayers. Is the Great Nixonian Error of fiat money great or what?

“Call it the Goldman Sachs test. If this is something Goldman would do to its clients, don't do it."

Felix Salmon.

Bank of England opens way to £90bn of new bank lending

Banks deemed to be the safest will be allowed by the Bank of England to cut their holdings of liquid investments to support up to £90bn of new lending to the economy.

Mark Carney, Governor of the Bank of England, said lenders that passed a minimum capital threshold would be given permission to reduce their liquidity buffers in an effort to encourage banks to lend more.

Only banks with a capital base equal to 7pc of their risk-weighted assets will be eligible to take advantage of the new scheme, which the Bank of England reckons could eventually unlock £90bn of lending.

"Every pound in liquid assets is one that can be used in the economy," he said in a speech in Nottingham.
Mr Carney said the decision to “relax” the Bank’s strict liquidity requirements came as a result of the repair work done on banks’ balance sheets.

“With that market funding assured, banks can safely hold fewer liquid assets, such as government bonds, that act as a cushion to be sold in the event that investors withdraw their funding,” said the Governor.

He added: “The effect will be to lower total required holdings by £90bn, once all eight major banks and building societies meet the capital threshold. That will help underpin the supply of credit, since every pound currently held in liquid assets is a pound that could be lent to the real economy.”

HSBC, Standard Chartered and Santander UK are expected to be the first lenders allowed to draw down their holdings of liquid securities, as they are all reckoned to have already met the Bank’s capital requirement.

----However, although the Bank would like to see the money go back into the economy in the form of new lending, banks will not be required to do so, meaning they could use the assets released to fund increased trading by their investment banking arms.
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“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”

“Adam Smith” aka George Goodman.

At the Comex silver depositories Wednesday final figures were: Registered 39.32 Moz, Eligible 124.42 Moz, Total 163.74 Moz.  


Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.

Yes it’s the banksters again. They can resist anything except breaking the law, lying, cheating and stealing, bribery, and rigging markets. Other than that, they’re really a nice bunch of regular Ali Babas. Below from the banksters who brought us the London signing and walking Whale. Once upon a time in a long distant lawful age, one had to be fit and proper to hold a banking licence, after the scandals of the free for all lawless banking age that preceded it. In our still early 21st century, we have returned to the bankster code of the 18th century, with the exception of bankster socialism under the false doctrine of too big to fail.

“This is an example of the difficulties foreign firms face in doing business in China,” David Marshall, a Singapore-based banking analyst at CreditSights Inc., wrote in an e-mailed response to questions today. “The problem for the foreign firms is that local practices may be different from -- and at times in conflict with -- the legal and ethical rules under which they are required to operate.”

JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found

By Dawn Kopecki - Aug 29, 2013 4:51 AM GMT
A probe of JPMorgan Chase & Co.’s (JPM) hiring practices in China has uncovered red flags across Asia, including an internal spreadsheet that linked appointments to specific deals pursued by the bank, people with knowledge of the matter said.

The Justice Department has joined the Securities and Exchange Commission in examining whether JPMorgan hired people so that their family members in government and elsewhere would steer business to the firm, possibly violating bribery laws, said one of the people, all of whom asked to not be named because the inquiry isn’t public. The bank has opened an internal investigation that has flagged more than 200 hires for review, said two people with knowledge of the examination, results of which JPMorgan is sharing with regulators

The scrutiny began in Hong Kong and has now expanded to countries across Asia, looking at interns as well as full-time workers, two people said. The employees include influential politicians’ family members who worked in JPMorgan’s investment bank, as well as relatives of asset-management clients, the people said. Wall Street firms have long enlisted people whose pedigree and connections can win business, a practice that doesn’t necessarily violate the law.

The SEC will hunt for evidence showing “these weren’t real jobs, that they were only there because their father or mother were important public officials,” said Dan Hurson, a former U.S. prosecutor and SEC lawyer who runs his own Washington practice. “If the public official requested the job for the child, that would be a strong indication to the company that the official was seeking and receiving something of value.”

The government hasn’t accused JPMorgan or its executives of wrongdoing in connection with the hiring inquiry.

----“This is an example of the difficulties foreign firms face in doing business in China,” David Marshall, a Singapore-based banking analyst at CreditSights Inc., wrote in an e-mailed response to questions today. “The problem for the foreign firms is that local practices may be different from -- and at times in conflict with -- the legal and ethical rules under which they are required to operate.”

JPMorgan, which has been in the Asia-Pacific region for about 140 years, has a presence in 16 countries in the region including Australia, Japan, South Korea, China, Singapore, Thailand, Bangladesh and India.

The spreadsheet, which links some hiring decisions to specific transactions pursued by the bank, may be viewed by regulators as evidence that JPMorgan added people in exchange for business, according to one person with knowledge of the review.
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One of the queries Quakers are asked to consider, is: "Do you maintain strict integrity in your business transactions and in your relations with individuals and organizations? Are you personally scrupulous and responsible in the use of money entrusted to you, and are you careful not to defraud the public revenue?"

Probably why there a no Quakers on Wall Street.

The monthly Coppock Indicators finished July:
DJIA: +164 Up. NASDAQ: +167 Up. SP500: +195 Up. The Fed’s final bubble still inflates but for how much longer?  

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