Tuesday, 24 September 2013

All’s Well! All’s Well!! Aw Hell!

Baltic Dry Index. 1947 +43

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

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.

There is absolutely nothing wrong in Euroland. Mario Dei Paschi Di Siena Monte says so. But even if there is, not that there is of course, you understand, Mario Frankfurt has promised to flood Euroland’s banksters with unlimited cash, provided of course Berlin approves, which it might, if Chancellor Merkel is away on holiday, unreachable in Italy next August, and far away from any access to German media. Stay long fully paid up physical precious metals. It looks like Euroland is getting ready to join in the Fed’s new round of currency wars.

A permanent Governor of the Bank of England would be one of the greatest men in England. He would be a little 'monarch' in the City; he would be far greater than the 'Lord Mayor.' He would be the personal embodiment of the Bank of England; he would be constantly clothed with an almost indefinite prestige. Everybody in business would bow down before him and try to stand well with him, for he might in a panic be able to save almost anyone he liked, and to ruin almost anyone he liked. A day might come when his favour might mean prosperity, and his distrust might mean ruin.

Walter Bagehot. Lombard Street 1873.

Mario Draghi pledges to pump more into banks if needed

Mario Draghi, president of the European Central Bank, has pledged to provide billions of more euros to banks in the single currency bloc to avert any future threat of a credit crunch.

The ECB pumped more than €1 trillion (£840bn) of liquidity into the banks through two long-term refinancing operations (LTROs) to stabilise financial markets, in December 2011 and February 2012,

The move has come to be seen as the first step towards bringing Europe’s crisis under control and was reinforced by Mr Draghi’s promise in July last year to do “whatever it takes” to save the euro.

Addressing the European Parliament on Monday, he said: “We are ready to use any instrument, including another LTRO if needed, to maintain short-term money market rates at a level which is warranted by our assessment of inflation in the medium-term.”

His fresh commitment is likely to allay any lingering concerns about the state of Europe’s banks, which face another stress test in the coming months.

His comments came amid signs of improvement in the eurozone economy. Business activity in the region picked up to a 27-month high in September, the closely-watched purchasing managers’ index (PMI) showed.

The composite PMI rose to 52.1, from 51.5 in August, where any reading above 50 indicates expansion. The biggest gain in activity was seen in the services sector, but manufacturing continued to improve as well.

However, recovery hopes were tempered by the slow pace of expansion. Chris Williamson, chief economist at Markit, which compiled the survey, said the PMIs suggested the bloc’s economy grew by 0.2pc in the three months to September, slower than the 0.3pc rebound from recession in the second quarter.

It’s the end of life as they know it for Spaniards, so it seems. Starting sometime later this year or next, those Spanish serfs  choosing to remain in doomed Spain, are going to give up being Spanish and transform themselves into model modern Germans. Mañana comes to mind. Perhaps they could apply to join Gibraltar.

Time's up for siestas, delayed meetings and late nights, Spaniards told in effort to make them work better

Spaniards should ditch their siesta culture, stop being late for meetings and get to bed earlier, MPs have been told.

By Martin Roberts in Madrid 6:40PM BST 23 Sep 2013
Their three-hour lunch breaks have long been the envy of workers in neighbouring countries, their business meetings often start late and millions of them rarely get to bed till well after midnight.

But now Spaniards face growing pressure to give up their siestas, bring their working day into line with the rest of western Europe - and switch their clocks to the same time zone as Britain.

A parliamentary commission has called for fundamental reform to traditional working hours and practices as part of Spain's effort to break out of recession and reduce the chronic unemployment that has dogged its economy for the best part of a decade.

The review, by the National Commission for the Rationalisation of Working Hours, is expected to win the backing of a panel of MPs on Thursday.

"We need more flexible working hours, to cut our lunch breaks, to streamline business meetings by setting time limits for them, and to practise and demand punctuality," says the report.

Long lunch breaks are a throwback to the time when working outdoors became unbearable in midday temperatures of 40C or more but have persisted - along with the habit of working till 9pm, then socialising until late at night - despite the advent of air conditioned factories, offices and shops.

The result is that even though Spaniards put in more hours in total than equivalent workers in Germany, they waste more time and produce far less. They also have on average one hour less sleep per night.

With the Fed and the ECB playing fast and loose with voodoo economics in the first world, in emerging markets it’s an unstable world of daily unpredictability. Something tells me that nothing good will come from our latest currency wars.

Rupiah Falls to Lowest Since April 2009 as Companies Buy Dollars

By Yudith Ho - Sep 24, 2013 3:31 AM GMT
Indonesia’s rupiah weakened to the lowest level since April 2009 on speculation local companies increased dollar purchases after the currency had its best week since November 2012. Government bonds fell.

The rupiah advanced 0.5 percent last week as the Federal Reserve refrained from reducing the stimulus that has spurred demand for emerging-market assets. Indonesia’s trade shortfall surged to a record $2.3 billion in July, weighing on the current account that has remained in deficit for a seventh straight quarter through June.
The government will release trade data for August on Oct. 1.

“Corporates and importers are taking advantage of the rupiah’s rally last week to fulfill their dollar demand,” said Mika Martumpal, head of treasury research and strategy at PT Bank CIMB Niaga in Jakarta. “The rupiah will trade in a range and remain under pressure until we see more data in October.”

The currency slid 0.7 percent to 11,525 per dollar as of 9:26 a.m. in Jakarta, after reaching 11,553 earlier, the weakest level since April 2, 2009, prices from local banks show.

Rupee Drops for a Third Day After State Bank of India Downgrade

By Jeanette Rodrigues - Sep 24, 2013 5:48 AM GMT
India’s rupee fell for a third day, the longest losing streak in almost a month, after Moody’s Investors Service downgraded the nation’s largest lender.

State Bank of India’s debt rating was cut to Baa3 from Baa2 yesterday by Moody’s, which also changed the outlook on the D+ financial strength ranking to negative from stable, citing a slowdown in the economy and the need for a capital injection from the government. Credit-default swaps insuring SBI bonds against non-payment for five years climbed 20 basis points yesterday, the most since Aug. 19, to 282, CMA prices show.

“The SBI downgrade may affect India through the equity channel as outflows will affect the rupee,” said Vishnu Varathan, an economist at Mizuho Bank Ltd. in Singapore. “Some investors also perceive porous linkages between SBI and the sovereign,” renewing concern that India’s credit rating may be downgraded, he said.

---- The central bank unexpectedly raised benchmark interest rates on Sept. 20 and scaled back earlier measures meant to support the currency, which plunged 12 percent this year, Asia’s second-worst performance after the Indonesian rupiah. The rupee reached a record low of 68.845 per dollar on Aug. 28.

Blame it on “the decider” in Washington, says the head of the Federal Reserve Bank of Dallas. The “it” being that everyone and their dog, is now tossing their two cents in to the question of who should succeed Bernocchio next February. It was all so much better when these things were decided in secret by a handful of New York fat cat crony banksters.

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

J. K. Galbraith

Fisher Says White House Botched Fed Chairman Succession

By Aki Ito & David Mildenberg - Sep 23, 2013 11:57 PM GMT
Richard Fisher, president of the Federal Reserve Bank of Dallas, said the White House botched the nomination for Chairman Ben S. Bernanke’s successor by allowing an unprecedented public debate over who would be the best choice.

“The White House has mishandled this terribly,” Fisher said today in response to a question from the audience after giving a speech in San Antonio, Texas. “This should not be a public debate,” he said, adding that the Fed “must never be a political instrument.”

Former Treasury Secretary Lawrence Summers, citing a possible “acrimonious” confirmation process, withdrew his name from consideration for the post this month in the face of opposition from several members of the Senate Banking Committee. President Barack Obama has no plans to name a nominee this week, according to a person familiar with administration deliberations.

Fed Vice Chairman Janet Yellen is the leading candidate to replace Bernanke when his term expires on Jan. 31, according to people familiar with White House discussions. She has been picking up support from Democratic senators and party leaders including former President Bill Clinton.

Yellen would be an “excellent choice,” Senator Charles Schumer, the chamber’s No. 3 Democrat and a senior member of the Banking Committee, said this month. “Now that Summers has pulled out, I think the president should choose Yellen.”

Asian shares drift lower, Fed gets the blame

SYDNEY | Tue Sep 24, 2013 1:43am EDT
(Reuters) - Asian share markets were mostly under water on Tuesday while currencies dithered in tight ranges as a dearth of major economic news left investors to fret on the outlook for monetary policy in the United States and Europe.

Taking its cue from a softer Wall Street, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.6 percent. Shanghai .SSEC shed 0.8 percent, and Seoul .KS11 0.2 percent.

Returning from holiday, Tokyo's Nikkei .N225 slipped 0.1 percent. One bright spot was stocks in iPhone suppliers, burnished by news Apple Inc (AAPL.O) had sold 9 million new iPhones during their first three days in stores.

European shares were seen falling for a third straight day. Financial spreadbetters expect Britain's FTSE 100 .FTSE to open down 0.15 percent, Germany's DAX .GDAXI down 0.16 percent, and France's CAC 40 .FCHI down 0.1 percent.

U.S. stock futures also pointed to further weakness on Wall Street later in the day.

Lacking an obvious culprit, dealers tended to blame uncertainty about when the Federal Reserve will start trimming its asset buying following last week's shock decision to maintain the program at $85 billion a month.

"I do think that there was a sense of complacency before, about the Fed being able to drive the market higher simply through doing whatever it was doing," said Damien Boey, equity strategist at Credit Suisse.
"But, now there's been a reflection on that and the market's come off and I think that will continue."

We end for the day with the logical outcome of all the fiat currency wars. Who would be a Southeast Asian  industrialist or entrepreneur planning expansion.

Gold Halts Two-Day Retreat on Signs of Increased Physical Demand

By Glenys Sim - Sep 24, 2013 7:19 AM GMT
Gold snapped a two-day decline on speculation that demand may strengthen before China’s Golden Week holiday as lower prices lure buyers. Silver, platinum and palladium increased.

Gold for immediate delivery rose as much as 0.5 percent to $1,329.38 an ounce and traded at $1,325.28 at 2:16 p.m. in Singapore. Bullion fell for a fourth week last week, the longest losing streak since April, even after the U.S. Federal Reserve refrained from slowing its $85 billion-a-month of bond buying that helped the metal cap a 12-year bull run in 2012.

The Golden Week break in the world’s largest consumer after India begins Oct. 1, when consumers typically increase bullion purchases. Volumes for spot gold of 99.99 percent purity, the benchmark contract, climbed to a one-week high of 13,952 kilograms yesterday, Shanghai Gold Exchange data show. Prices are heading for the first monthly loss since June.

“While most jewelers have already stocked up in anticipation of higher demand during the Golden Week, physical purchases are steady when prices fall,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Gold’s main direction will continue to come from cues on what the Fed may do with stimulus.”

Sales of the U.S. Mint’s American Eagle gold coins have reached 12,000 ounces so far this month, exceeding total sales of 11,500 ounces in August, according to the Mint’s website. The Fed’s decision last week to maintain its stimulus program was counter to many investors’ expectations.

At the Comex silver depositories Monday final figures were: Registered 43.38 Moz, Eligible 119.57 Moz, Total 162.95 Moz.  

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

Today, problems continue to pile up at the former home London’s amazing singing and walking Whale. This time it’s the New York and Californian franchises that seem to have sinned. What would old JPM say?

"Anybody has the right to evade taxes if he can get away with it. No citizen has a moral obligation to assist in maintaining the government.”

J. P. Morgan.

JPMorgan Said to Face U.S. Mortgage Securities Charges

By Karen Gullo - Sep 24, 2013 5:01 AM GMT
Charges related to JPMorgan Chase & Co.’s sales of mortgage-backed securities could be filed as early as today by U.S. prosecutors in California who have been investigating the bank, a person familiar with the matter said.

The bank said last month in a regulatory filing that the U.S. Attorney’s office in Sacramento had parallel civil and criminal investigations under way. Investigators already have concluded that it broke civil laws and were examining whether criminal laws were broken, according to the filing.

“In May 2013, the firm received a notice from Civil Division stating that it has preliminarily concluded that the firm violated certain federal securities laws in connection with its subprime and Alt-A residential MBS offerings during 2005 to 2007,” the bank said in the filing.

JPMorgan last week admitted to violating federal securities laws and agreed to pay about $920 million in connection with more than $6.2 billion in trading losses at its London offices. The U.S. Securities and Exchange Commission said senior managers at the bank knew in April 2012 that the bank’s chief investment office in London was using aggressive valuations that hid losses.

The U.S. Justice Department is still investigating the trading loss. Alt-A refers to home loans that typically didn’t require documentation such as proof of income.

----The bank also faces lawsuits by the Federal Housing Finance Agency, the Federal Home Loan Bank of Pittsburgh and other buyers of the mortgage-backed securities it sold.

The person who said prosecutors will file charges asked not to be identified because the matter isn’t public. 
The U.S. is investigating JPMorgan under the Financial Institutions Reform, Recovery and Enforcement Act, according to another person. FIRREA allows the Justice Department to pursue civil remedies.

The California probe is focused on loans and mortgage-backed securities put together by JPMorgan itself, not the ones acquired when the company bought Bear Stearns Cos. and Washington Mutual Inc.’s banking operations in 2008, according to a person briefed on the matter.

A large Bank is exactly the place where a vain and shallow person in authority, if he be a man of gravity and method, as such men often are, may do infinite evil in no long time, and before he is detected. If he is lucky enough to begin at a time of expansion in trade, he is nearly sure not to be found out till the time of contraction has arrived, and then very large figures will be required to reckon the evil he has done.

Walter Bagehot. Lombard Street. 1873

The monthly Coppock Indicators finished August:
DJIA: +162 Down. NASDAQ: +189 Up. SP500: +194 Down.

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