Baltic Dry Index. 1132 -04
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"It doesn't matter if you're rich or poor, as long as
you've got money."
Joe E. Lewis
Panic! The Fedster’s final bubble is about to slam
into the wall. If the “Bernank” wants his final bubble to continue intact, he
needs the NY Fed to start buying stocks again on Tuesday. And they better have
a very large wallet. With oil prices at a 30 month high due to Messrs Obama and
Hollande’s new Middle East war due to probably commence next week, plus rising
interest rates everywhere, thanks to loose lips Bernanke and his tapering leak
to the Wall Street Journal in May, next week is likely to bring out a lot of
sellers only too happy to get back to cash. With crash season approaching,
discretion is the better part of valour.
Without massive Fed help next week, the Fedster’s
final bubble looks doomed. Everyone knows higher interest rates are coming, and
that it’s time to get out of bonds and stocks now. The buyer of last resort is
needed now. Even with Fed help, it looks terminal for the likes of India,
Brazil, South Africa and Club Med. Abandon all thoughts of a Fed taper, any
taper will suck all the hot air out of our disconnected global stock markets.
But irreparable damage may have already occurred.
The great reconnect to reality may already be underway. Stay long fully paid up
physical gold and silver. 2013 has all the makings of a 1907, 1929, 1987, and
2008, just much bigger.
"Liquidation
sometimes is orderly, but more frequently degenerates into panic as the
realization spreads that there is only so much money, not enough to enable
everyone to sell out at the top."
Charles
P. Kindleberger. Manias, Panics and
Crashes
August
30, 2013, 7:06 p.m. ET
Dow Falls 4.4% in Turbulent Month
Friday's Decline Extends Biggest Monthly Drop in More Than a Year
Turbulence
returned to stocks, bonds and other markets in August, an omen of what a
mounting number of investors and analysts expect to be a fitful autumn.
The Dow
Jones Industrial Average retreated 4.4% to 14810.31—capped by a slide of 30.64
points Friday—for its largest monthly pullback this year after vaulting to a
record high at the start of the month. Oil prices surged to a 2½-year high and
the yield on benchmark U.S. Treasury notes continued to march toward 3%,
registering 2.747%
The
tumult is likely to continue in the month ahead, investors say, as the Federal
Reserve weighs a winding down of its easy-money policies, the U.S. ponders its
next move in Syria and officials in Washington wrangle over the federal budget
and the debt ceiling.
----
U.S. stock and bond markets took big steps back in August amid concerns over
the timeline of the Fed's plan to taper down its $85 billion-a-month stimulus
program. Markets also were knocked off-kilter by some less-than-encouraging
readings on the U.S. economy, including slowing sales of new homes and downbeat
earnings from retailers. A bright spot was an upward revision of second-quarter
growth to 2.5%.
Also
spooking investors was the deepening civil war in Syria and the likelihood of
U.S. military intervention. Turmoil across the region sent oil prices surging,
with benchmark Nymex crude fetching $107.65 a barrel at settlement Friday. That
is up nearly $3 from a month ago, a gain that analysts say raises the
probability that motorists will see higher gasoline prices at a time when the
U.S. recovery is still on tentative footing.
Investors
pulled out of both stocks and bonds in droves. U.S. stock mutual funds and
exchange-traded funds were drained of $11.5 billion in August through Tuesday,
according to TrimTabs Investment Research. Investors pulled $38.3 billion from
bond funds, the third-largest outflow in records going back to 1984.
The news has been worse overseas. In recent years,
investors have flocked to emerging markets as low interest rates in the U.S.
touched off a global search for yield. Since this spring, hints of the coming
Fed pullback have reversed that trend. The Brazilian real is off 4.5%, while
the Turkish lira is down 5.4% and the Indian rupee has shed 8.6%. Stock markets
in those countries have also suffered.
More
Commodities Lead Gains for Third Month as Emerging Markets Drop
By Maria Kolesnikova - Sep 2, 2013 3:59 AM GMT
Commodities beat bonds, stocks and the dollar for a third month, the longest
winning streak in two years, as the prospect of military strikes in Syria
boosted oil and gold. Emerging markets declined as currencies plunged from
Brazil to Turkey to India. The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 3.4 percent in August as U.S. crude reached a two-year high and gold rallied close to a bull market. The MSCI All-Country World Index (SPX) of equities in 45 markets fell 2 percent including dividends and the U.S. Dollar Index, a measure against six trading partners, gained 0.8 percent. Bonds of all types lost 0.352 percent on average, according to Bank of America Merrill Lynch’s Global Broad Market Index of 20,000 fixed-income securities.
Raw materials erased this year’s losses after data signaled faster growth in Europe, the U.S. and China. They extended gains as western nations debated attacking Syria after accusations the government used chemical weapons against its own people, increasing concern about disruptions to Middle East oil supply
More
Asian Bonds Tumble Below Par in Capital Flight: Credit Markets
By David Yong - Sep 2, 2013 3:39 AM GMT
Asia dollar-denominated
bonds have dropped below par for the first time since 2011 as investors pull
money out of the region amid concerns that growth is slowing and as currencies
from the rupee to rupiah plunge. Average prices of company debentures in the region fell to 98.61 cents on the dollar on Aug. 22, the least since October 2011, Bank of America Merrill Lynch indexes show. Dollar bonds globally have held above 100 cents since September 2009. Both investment- and non-investment-grade debt in Asia were below par on Aug. 22. The last time that happened was in September 2008, when Lehman Brothers Holdings Inc. collapsed.
Investor sentiment toward Asia is shifting as economic growth in China slows and currencies in India and Indonesia -- the two countries with the biggest external funding needs in the region -- plunge. About $44 billion has been pulled from emerging-market stock and bond funds globally since the end of May, data provider EPFR Global said on Aug. 23.
“You risk being swept away by fund outflows even if you buy bonds from the best companies in Asia,” said Ben Bennett, a global credit strategist in London at Legal & General Investment Management, which manages $670 billion. “You’d need to be very brave to add credit risk before currencies show signs of stabilization.”
India’s
rupee fell the most in 20 years last week as the government said the nation’s
economy expanded at the weakest pace since 2009 last quarter, or 4.4 percent
from a year earlier. August was the worst month for Indonesia’s rupiah since
the global financial crisis.
Slowing
economic growth is raising concern that Asian companies will have a harder time
servicing higher levels of leverage after they boosted U.S. currency bond sales
by 94 percent in 2012 to a record $124.7 billion
More
India’s Rupee Drops on Concern Slowing Growth Will Deter Inflows
By Jeanette Rodrigues - Sep 2, 2013 6:04 AM GMT
India’s rupee fell,
snapping a two-day rally, on concern slowing growth will make it tougher for
the country to attract capital as the U.S. prepares to taper monetary stimulus.
Gross domestic product rose 4.4 percent in the three months through June from a year earlier, the slowest pace since 2009, according to an official report on Aug. 30. HSBC Holdings Plc today lowered its growth forecast following cuts by UBS AG, Standard Chartered Plc and BNP Paribas SA last week. The U.S. may trim monthly bond purchases this month and end the buying by mid-2014, according to a Bloomberg survey of economists before the Federal Open Market Committee meets Sept. 17-18.
“September will bring a lot of event risk for financial markets to absorb,” Tim Fox, chief economist at Emirates NBD in Dubai, wrote in a research report today. The rupee will stay under pressure and the role of incoming central bank Governor Raghuram Rajan, who takes charge Sept. 5, will be considered “crucial” as growth slows and inflation stays high, he wrote.
More
Now for the good manufacturing news from China. Apparently
China is booming again, exporting once again to a booming USA and a “rebounding”
Europe. But everyone knows China’s statistics are only for official
consumption. In a dangerous, communist controlled largely command economy,
commanding the stats is easy, commanding reality less so.
But is America really booming and is Europe really
rebounding? How likely is the boom
and the rebound to last if the Fedster’s
start tapering this month? If Messrs
Obama and Hollande’s new Syrian war, spikes oil prices to $130 a barrel, how
likely is America’s Joe Sixpack to keep running up new debt to keep adding
bargains and knick knacks from China?
Bargain: a thing you don’t need at a
price you can afford.
China Rebound Signaled in Rising Manufacturing Gauges: Economy
By Bloomberg News - Sep 2, 2013 4:52 AM GMT
China’s manufacturing
strengthened in August, with one index posting its biggest jump in three years,
as improving demand abroad and at home underpins a recovery in the world’s
second-largest economy. An official Purchasing Managers’ Index jumped more than estimated to a 16-month high of 51.0, a government report showed yesterday in Beijing. A separate PMI released today by HSBC Holdings Plc and Markit Economics advanced to 50.1 last month from 47.7 in July, the largest gain since 2010. Readings above 50 signal expansion.
---- “Growth in China’s manufacturing sector has started to stabilize on the back of a modest rebound of new orders and output,” Qu Hongbin, HSBC’s chief China economist, said in a statement. “We expect some upside surprises to China’s growth in the coming months.”
A separate report from SouFun Holdings Ltd. showed China’s new home prices jumped in August by the most since December amid a recovery in land sales and some easing of policies by local governments.
JPMorgan Chase & Co. raised its estimate for China’s third-quarter economic growth to 7.6 percent from 7.4 percent and its projection for the final three months of the year to 7.5 percent from 7 percent, Hong Kong-based chief China economist Zhu Haibin said in a report yesterday. “Economic conditions are improving and the downside risk to economic growth has been mitigated in the near term,” Zhu said.
Deutsche Bank AG lifted its third-quarter estimate to 7.7 percent from 7.5 percent, according to an Aug. 22 note. Credit Suisse Group AG last week increased its 2013 forecast to 7.6 percent from 7.4 percent.
More
We end for the day with Egypt. While President Obama
waits for reinforcement from the US Congress to stiffen his backbone for a new
Middle East war, someone took a shot at stopping Suez canal shipping. Unfortunately
details are lacking, so it’s impossible at present know how serious the treat
was, or even if it existed at all. We are living in very uncertain times, with
the weakest western leaders of my 63 years on God’s planet.
Egypt Boosts Suez Security as Foiled Attack Shows Risks
By Tarek El-Tablawy - Sep 1, 2013 11:00 PM GMT
Egyptian authorities moved to bolster security along the Suez Canal after
a foiled attack on a ship traversing the waterway that handles about 8 percent
of world trade spotlighted new threats confronting officials after Mohamed
Mursi’s ouster. The failed Aug. 31 attack on the Panama-registered Cosco (1919) Asia didn’t damage the ship or its cargo, Suez Canal Authority head Mohab Mamish said in a statement yesterday. The military dealt “decisively” with the attempt, he said, without giving details.
The maritime incident underscored the threats in the country as the military-backed government pursues an offensive against the Muslim Brotherhood and militants following Mursi’s July 3 ouster. More than 1,000 people have died, most of them supporters of the toppled Islamist leader who were killed in a single week in August amid clashes with security forces.
“Events like this increase the confusion and cause international embarrassment,” said Adel Soliman, head of the private Strategic Dialogue Forum research institute. “You have a state of turbulence in the street under which anything can happen.”
More
"Well,
I learned a lot....I went down to (Latin America) to find out from them and
(learn) their views. You'd be surprised. They're all individual countries"
President
Ronald Reagan.
At the Comex silver depositories Friday final figures were: Registered 42.67 Moz,
Eligible 121.10 Moz, Total 163.77 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on why mankind is not yet ready to play
God with nuclear power. Time to send for Homer Simpson and Ronald Reagan. What
do you mean, “they already have?”
All
the waste in a year from a nuclear power plant can be stored under a desk.
President
Ronald Reagan.
1 September 2013 Last updated at 10:09
Fukushima radiation levels '18 times higher' than thought
Radiation
levels around Japan's Fukushima nuclear plant are 18 times higher than
previously thought, Japanese authorities have warned.
Last week
the plant's operator reported radioactive water had leaked from a storage tank
into the ground.
It now
says readings taken near the leaking tank on Saturday showed radiation was high
enough to prove lethal within four hours of exposure.
The plant
was crippled by the 2011 earthquake and tsunami.
The Tokyo
Electric Power Company (Tepco) had originally said the radiation emitted by the
leaking water was around 100 millisieverts an hour.
However,
the company said the equipment used to make that recording could only read
measurements of up to 100 millisieverts.
The new
recording, using a more sensitive device, showed a level of 1,800 millisieverts
an hour.
The new
reading will have direct implications for radiation doses received by workers
who spent several days trying to stop the leak last week, the BBC's Rupert
Wingfield-Hayes reports from Tokyo.
In
addition, Tepco says it has discovered a leak on another pipe emitting
radiation levels of 230 millisieverts an hour.
More
Japan reiterates may consider discharging radiated Fukushima water into ocean
TOKYO |(Reuters) - Japan's nuclear regulator reiterated on Monday that it may have to consider discharging into the ocean water from the wrecked Fukushima nuclear plant that contains radiation below regulatory thresholds.
Nuclear Regulation Authority (NRA) Chairman Shunichi Tanaka told reporters there was no evidence of new water leaks at Japan's crippled Fukushima nuclear power plant, following the discovery of high radiation levels in recent days.
Tokyo Electric Power Co, the Fukushima plant's operator, is rushing to contain a radioactive water crisis from the steady accumulation of water used to cool melted fuel rods.
Fukushima's radioactive ocean plume due to reach US waters in 2014
Aug. 31, 2013 at 1:49 PM ET
A radioactive plume of water in the Pacific Ocean from Japan's Fukushima
nuclear plant, which was crippled in the 2011 earthquake and tsunami, will
likely reach U.S. coastal waters starting in 2014, according to a new study.
The long journey of the radioactive particles could help researchers better
understand how the ocean’s currents circulate around the world.Ocean simulations showed that the plume of radioactive cesium-137 released by the Fukushima disaster in 2011 could begin flowing into U.S. coastal waters starting in early 2014 and peak in 2016. Luckily, two ocean currents off the eastern coast of Japan — the Kuroshio Current and the Kuroshio Extension — has diluted the radioactive material so much that its concentration fell well below the World Health Organization’s safety levels within four months of the Fukushima incident. But it could have been a different story if nuclear disaster struck on the other side of Japan.
“The environmental impact could have been worse if the contaminated water would have been released in another oceanic environment in which the circulation was less energetic and turbulent,” said Vincent Rossi, an oceanographer and postdoctoral research fellow at the Institute for Cross-Disciplinary Physics and Complex Systems in Spain.
Fukushima’s radioactive water release has taken its time journeying across the Pacific. By comparison, atmospheric radiation from the Fukushima plant began reaching the U.S. West Coast within just days of the disaster back in 2011.
More
"Approximately
80 percent of our air pollution stems from hydrocarbons released by vegetation,
so let's not go overboard in setting and enforcing tough emission standards
from man-made sources."
President
Ronald Reagan.
The monthly Coppock Indicators finished August:
DJIA: +162 Down.
NASDAQ: +189 Up. SP500: +194 Down. The Fed’s last bubble gets two red flags. Still one swallow doesn’t make
a summer. Two? An exit signal for crash season. The BDI seems to have stalled
too, despite China’s recovery.
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