Baltic Dry Index. 1600 +48
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“There is no distinctly native American criminal class except
Congress."
Mark Twain
For more on JP Morgan’s perfect trading record,
scroll down to Crooks Corner and more on our new lawless age. In yesterday’s US
elections, the politicians won once again. US voters voted for more of the
same.
In the insane asylum aka the EUSSR, it’s turning
more and more into all against Germany. As Croatia becomes the newest EU member
to need a bailout from someone, anyone, and the hapless Greek serfs go on
strike again, at least thos few still left with jobs, Germany gets a warning
from the toothless European Commission. Germany as paymaster of Europe
including the EC, what are the chances of dog bites Master? Before France and
Italy bust the whole thing, Chancellor Merkel needs to urgently partner with
Her Majesty’s hopelessly coalition weakened, “U-turn” Cameron, and get on with
serious reform of the dying EU. Without serious EU reform, the UK will likely
leave the EU before the end of this decade.
"It's
easier to fool people than to convince them that they have been fooled."
Mark
Twain
EU opens door to showdown with Germany on trade surplus
EC report said Germany’s surplus will narrow slightly from 7pc of GDP this year to 6.6pc in 2014 and 6.4pc in 2015, but this still breaches “macro-imbalances” rules
The
European Commission has warned Germany it could face disciplinary action for
running excess trade surpluses at the expense of EU partners, joining the US
Treasury in criticising Berlin for doing too little to help lift Europe out of
its slump.
“We will
discuss this question next week,” said EU economics chief Olli Rehn after
releasing the commission’s Autumn report. The text said Germany’s current
account surplus will remain far above tolerable levels into the middle of the
decade.
Mr Rehn
said Berlin had been told by EU leaders at a summit in June that Germany has a
duty to help boost demand and “create sustained conditions” for German wage
rises. This would help rebalance the EMU system and lift pressure off the
crisis states in the South
----While a
confrontation is unlikely, the tougher talk from Brussels raises the political
temperature in Europe. An attempt to indict Germany would prompt fury in
Berlin, where politicians rejected US criticism last week that the country was
acting as a free-rider on scarce global demand and creating a “deflationary
bias” for the whole world. Berlin has called such attacks “incomprehensible”,
insisting that export success helps the whole of Europe and should be prized.
The
Commission's report cut the eurozone growth forecast for next year from 1.2pc
to 1.1pc, and said a “sudden stop” in emerging markets is now the biggest
potential threat to recovery.
----Mr Rehn brushed aside warnings that Europe is sliding into a Japan-style deflation trap, insisting that inflation will rebound after sliding over recent months and stabilise near 1.5pc next year. “Although there is a lot of slack in the economy, the risk of deflation seems remote at the current juncture,” he said.
Lars
Christensen from Danske Bank said the EU authorities are repeating mistakes
made in Japan in the early 1990s when deflation became lodged in the system.
“Several eurozone countries are already in outright deflation, and that is
making it even harder to deal with banking problems and the debt trajectory.
There is no growth in the money supply, so this is going to get worse, not
better.
More
Greek Labor Unions to Strike Today After Troika Talks Resume
By Eleni Chrepa - Nov 5, 2013 11:01 PM GMT
Greek labor unions will hold their fourth general strike of the year today
as representatives from the European Commission, the International
Monetary Fund and the European
Central Bank continue their inspection of the country’s progress in meeting
the terms of its bailout. Government services will be shut and transportation will be disrupted after ADEDY, Greece’s biggest public sector union, and GSEE, the country’s biggest private sector union, called a 24-hour strike to protest austerity measures tied to Greece’s 240 billion euros ($324 billion) in bailouts.
The country’s two biggest unions plan to demonstrate in central Athens at 11 a.m. and then march in front of parliament to protest “the dead end of memorandum politics,” according to a statement from GSEE dated Nov. 4.
Prime Minister Antonis Samaras’s government presented a draft budget last month forecasting a surplus before interest costs of 344 million euros this year and one of 2.8 billion euros in 2014, or 1.6 percent of gross domestic product, that would qualify Greece for additional debt relief. The government and Greece’s creditors disagree with the extent of fiscal measures needed for the country to achieve these projections.
More
Croatia May Turn to IMF as Debt Costs Rise, Linic Tells Globus
By Jasmina Kuzmanovic - Nov 5, 2013 11:00 PM GMT
Croatia may seek
assistance from the International
Monetary Fund as next year’s borrowing needs become “enormous and very
risky,” Finance Minister Slavko Linic said in an interview with Globus
magazine. The European Union’s newest member needs to borrow 44 billion kuna ($7.7 billion) next year to refinance debt and service a 2014 budget gap of 16 billion kuna, Linic said in an interview with the Zagreb-based weekly that the magazine e-mailed to Bloomberg News before publication today.
“At a high interest rate of 5 to 7 percent, depending on whether we will borrow at home or abroad, for us this is an enormous and very risky level of debt,” Linic told Globus. “In cooperation with the IMF, borrowing conditions would be much more favorable. And we will need any help we can get.” He said IMF aid was a “possibility that we cannot dismiss.”
Croatia, whose $63 billion economy hasn’t grown since 2008, has been hobbled by rising interest payments, debt held by state companies, a bloated public sector and unemployment approaching 20 percent. Prime Minister Zoran Milanovic’s 22-month-old government cut its 2013 growth forecast on Sept. 26 to 0.2 percent as the country will fail to benefit from its first year in the world’s largest trading bloc
More
We end for today with rising uncertainty and
volatility in commodities. Are the commodity markets getting set for a return
to the explosive 1970s? A titanic clash in the South African Platinum mines is
just about to get underway. A clash that will all too likely turn violent and
spread to the gold mines. With the western central banksters rigging downwards
the price of gold to support the dying Great Nixonian Error of fiat currency
and the fiat dollar reserve standard, it puts downward pressure on all the
other precious metals prices, especially when the great commodity mega banks
extend the rigging into gold’s little cousin, silver. The unintended
consequence is the impoverishment of black South African miners, but they don’t
get to vote in US elections.
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster.
Platinum Giants Ready to Stare Down Union Over Pay Demand
By Andre Janse van Vuuren
- Nov 6, 2013 5:20 AM GMT
Rising costs and falling prices may prompt South Africa’s
largest platinum mines to stare down a union threat to halt 70 percent of
global production over pay demands, pushing the industry toward a prolonged strike.
The Association of Mineworkers and Construction Union, the largest at the platinum mines, has rejected pay offers exceeding South Africa’s 6 percent inflation rate. An AMCU-led strike would halt operations at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. and Lonmin (LMI) Plc, which together employ about 150,000 workers and contractors on the world’s richest deposits of the precious metal.
“The health of the industry is already in question,” Tyler Broda, an analyst at Nomura International Plc in London, said by phone. “It is going to be very difficult to give much more. The companies are unfortunately heading toward a path where they will take their chances with a protracted strike.”
The three companies have all in the last year either turned to investors for funds, set plans to shut mines or cut production and scaled back on capital spending to confront a slump in the price of platinum, down 16 percent from its highest level in 2013.
The AMCU is demanding that pay be more than doubled for some miners and has voted for a strike at Impala (IMP), operator of the biggest platinum mine, without setting a date. It will next week start last-ditch arbitration talks with Anglo Platinum, the largest producer, the company said yesterday. Negotiations with Lonmin are in deadlock after the union last week rejected a pay offer.
More
In corn news, bad weather in China and a bumper
crop in the USA, has led to grain price inflation in China which feeds on into
the price of pork, chicken and fowl. The price of landed US corn in China is
already 18% below China’s domestic price, with more to come I suspect. Will the
coming Communist Party of China meeting address increasing imports?
Floods to Drought Curbing China Corn Harvest: Commodities
By Bloomberg News - Nov 6, 2013 5:19 AM GMT
China’s corn harvest is
poised to decline for the first time in four years after flooding in its
biggest-producing province and drought in its fifth largest cut yields, easing
a global glut as the U.S. reaps a record crop. Output by the world’s second-biggest corn grower fell 3.2 percent to 199.1 million metric tons, according to SGS SA, which carried out 302 interviews in the seven largest growing areas during the harvest in September and October for Bloomberg. The state-owned China National Grain & Oils Information Center expects a 4.6 percent advance to 215 million tons and a unit of the U.S. Department of Agriculture projects a 2.1 percent gain to 210 million tons.
----Even a smaller-than-expected Chinese harvest won’t be enough to erase the global surplus that the International Grains Council in London says will swell stockpiles by 26 million tons in the 2013-14 crop year. China has been a net importer of corn every year since 2010, data from its customs agency shows.
Hedge funds and other large speculators have bet on lower corn prices in Chicago since July, U.S. Commodity Futures Trading Commission data show. They held a record net-short position of 159,242 futures and options in the week ending Oct. 22, according to the data, which was disrupted by the U.S. government shutdown.
U.S. farmers will reap a record 14.03 billion bushels (356 million tons) this year, 30 percent more than in 2012, according to the average of estimates from 36 analysts and trading firms compiled by Bloomberg. Output is rebounding from the country’s most severe drought since the 1930s.
More
Finally, I note with some concern the rise and rise
of Comex silver inventories. Where is all the silver coming from I ask? My guess, and it is only a guess, is that it’s
coming from London. I suspect that the London Bullion Market Association is
being drained, willingly or unwillingly, of its supply of physical “allocated”
silver. If so, that will leave London dangerously exposed to a run on its “unallocated”
paper silver deposits, if unallocated owners decide to switch over to allocated physical silver. Lacking sufficient
physical silver in London to match demand, would the LBMA go into a default via
a force majeure and forced cash settlement? Why would physical silver move from
London to New York? Well one possibility is to keep it out of the EU’s grasping
hands during a breakup of the euro as we know it. It’s highly unlikely that Mr
Putin’s Cossacks are about to storm London.
"Facts are stubborn things, but statistics are more
pliable."
Mark Twain.
At the Comex silver depositories Tuesday final figures were: Registered 44.24 Moz,
Eligible 125.97 Moz, Total 170.21 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
More on our new lawless age. In the era of too big to fail or jail, is
there anything under the sun that the banksters and mega corporations can’t
rig?
"There's one way to find out if a man is honest: ask him;
if he says yes, you know he's crooked."
Mark Twain.
Brent Crude Traders Claim Proof BFOE Boys Rigged Market
By Bob Van Voris, Lananh
Nguyen & Bradley Olson - Nov 6, 2013 5:00 AM GMT
Four longtime traders in the global oil market claim in a lawsuit that the
prices for buying and selling crude are fixed -- and that they can prove it. Some of the world’s biggest oil companies including BP Plc (BP/), Statoil ASA (STL), and Royal Dutch Shell Plc conspired with Morgan Stanley (MS) and energy traders including Vitol Group to manipulate the closely watched spot prices for Brent crude oil for more than a decade, they allege. The North Sea Brent benchmark is used to price the majority of the world’s crude and helps determine where costs are headed for fuels including gasoline and heating oil.
The case, which follows at least six other U.S. lawsuits alleging price-fixing in the Brent market, provides what appears to be the most detailed description yet of the alleged manipulations and lays out a possible road map for investigators.
The traders who brought it -- who include a former director of the New York Mercantile Exchange, or Nymex, one of the markets where contracts for future Brent deliveries are traded - - allege they paid “artificial and anticompetitive prices” for Brent futures. They also outline attempts to manipulate prices for Russian Urals crude and cite instances when the spread between Brent and Dubai grades of crude may have been rigged.
The oil companies and energy-trading houses, which include Trafigura Beheer BV and Phibro Trading LLC, submitted false and misleading information to Platts, an energy news and price publisher whose quotes are used by traders worldwide, according to the proposed class action filed Oct. 4 in Manhattan federal court.
Over 85 pages, the plaintiffs describe how the market allegedly showed that the Brent spot price was artificially driven up or down by the defendants, depending on what would profit them most in swap, futures or spot markets. They allege the defendants used methods including “spoofing” -- placing orders that move markets with the intention of canceling them later.
Platts’ methodology “can be easily gamed by market participants that make false, inaccurate or misleading trades,” the plaintiff traders alleged.
The suit provides an insight into one of the less-transparent corners of global trading -- the $5.7 trillion-a-year market in physical commodities, including metals and agricultural products as well as fuel, where spot trading is largely private. By contrast, stocks and futures transactions are conducted on regulated exchanges with prices visible to all.
----Several companies named in the suit have been the focus of previous suspicions of price manipulation. In May, European Union antitrust authorities raided the offices of companies including Platts, BP and Shell based on allegations of collusion in setting prices of crude, refined products and biofuels. The authorities haven’t announced their findings or charged anyone.
More
JPMorgan Chase Traders Extend Perfect Record Into Third Quarter
By Dawn Kopecki & Hugh Son - Nov 1, 2013 11:42 AM GMT
JPMorgan
Chase & Co. (JPM) traders generated profits every day in the third
quarter, extending their perfect record for 2013 as the Federal
Reserve backed off plans to curtail a bond-purchase program. Traders made more than $200 million on three days this year, JPMorgan said today in a regulatory filing. The New York-based company is the biggest U.S. lender by assets.
Wall Street has been whipsawed as the Federal Reserve debates whether the economy is strong enough to justify reducing monthly bond purchases of about $85 billion that have kept borrowing costs low. Ten-year Treasury yields, which are used to set rates for some consumer and corporate loans, rose from this year’s low of 1.63 percent on May 2 to 3 percent on Sept. 5.
Trading revenue at JPMorgan’s corporate and investment bank, run by Daniel Pinto and Michael Cavanagh, fell 2 percent to $4.69 billion in the third quarter, the bank said when it reported earnings on Oct. 11. Fixed-income trading revenue declined 8 percent to $3.44 billion from a year earlier while equity-trading revenue rose 20 percent to $1.25 billion.
Cohen’s Dream of Soros Status Dies as SAC Pleads Guilty
By Saijel Kishan & Katherine Burton - Nov 5, 2013 10:45 PM GMT
In the hedge fund
record books, there will always be doubts about how Steven A. Cohen
outperformed rivals for more than 20 years.
Cohen, the billionaire founder of SAC Capital Advisors LP, is arguably the best stock trader of all time, a renowned “tape reader” with an uncanny ability to predict where prices are headed. The Stamford, Connecticut-based firm’s investment returns for clients averaged 25 percent over the past two decades, and Cohen never posted a losing year in the portfolio he personally oversees.
Yesterday, SAC agreed to plead guilty to securities and wire fraud, pay $1.8 billion in fines and forfeitures, and stop managing money for outside investors. The firm had denied wrongdoing since being indicted in July. Like Barry Bonds, the professional baseball player whose home-run records have been tainted by allegations of illegal steroid use, Cohen won’t be able to escape this question: did he excel by cheating?
----Cohen’s goal has always been to be acknowledged as something greater than a masterful trader, say the friends and colleagues, who asked not to be identified to avoid hurting their relationship with him. Rather, he wants to be included in the pantheon of world-class money managers such as Warren Buffett and George Soros, whose savvy investing history and prescient market calls draw a following on Wall Street, these people say.
Now he’ll be infamous for his firm’s record fine for insider trading.
More
"If you don't read the newspaper, you're uninformed. If you
read the newspaper, you're mis-informed."
Mark Twain.
The monthly Coppock Indicators finished October:
DJIA: +178 Up. NASDAQ: +238 Up. SP500: +217 Up. The
Fed’s final bubble continues to grow, until QE Forever isn’t forever.
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