Baltic Dry Index. 1499 -28
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith
While the Fed’s final bubble continues to grow like Topsy, the risk of a
crash continues to grow the moment they try to scale back QE with a taper.
Scratch India from the BRIC when/if the Fedsters’ try. The Fed is over a barrel
of Bernocchio’s making, and don’t the speculators in US stocks know it. The
Fedsters’ will never dare to taper lest they set off the calamity QE was
started to prevent. QE Forever really is forever, until like “deficits don’t
matter” one day events force “forever” to end.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
Indian Banks’ Rising Bad Debt Is ‘Major Challenge,’ RBI Says
By Darren Boey & Kartik Goyal - Nov 22, 2013 5:34 AM GMT
Rising bad loans at Indian lenders remain “a major challenge” amid a
slowdown in Asia’s
third-largest economy, the nation’s central bank said. Nonperforming loans rose to 986 billion rupees ($15.7 billion) at the end of March from 652 billion rupees a year earlier, the Reserve Bank of India said in a report yesterday on the country’s banking industry. The ratio of sour debt to total lending swelled to 3.6 percent from 3.1 percent.
More debtors are finding it harder to pay off loans in a $1.8 trillion economy that is projected to grow in the year ending March 2014 at the weakest pace in more than a decade. Rising bad loans contributed to a 35 percent slump in State Bank of India (SBIN)’s net income for the quarter ended Sept. 30.
“Macro stress tests indicate that if the current macroeconomic conditions persist, the credit quality of commercial banks could deteriorate further,” the Mumbai-based RBI said. “In the short term, the stress on banks’ asset quality remains a major challenge.”
More
Nov. 21, 2013, 4:29 p.m. EST
Dow ends above 16,000 for first time as stocks jump
NEW YORK (MarketWatch) — The Dow
Jones Industrial Average achieved its first-ever close above 16,000 on Thursday
as U.S. stocks rallied, boosted by better-than-expected data on weekly jobless
claims and as investors reconsidered their concerns about the Federal Reserve’s
potential reduction in its bond-buying program.
“The market is becoming more and
more comfortable with the tapering talk,” said Andrew Zimmerman, chief
investment strategist at DT Investment Partners, in an interview.
----On Wednesday, stocks slumped after minutes from the last Fed meeting
showed the central bank was on track to slow its bond-buying program that has
helped power stocks to record levels.
But
the main indexes bounced back Thursday. Andrew Wilkinson, chief economic
strategist at Miller Tabak & Co., pointed out in a note Thursday that “any
reduction in the flow of purchases by the Fed inherently smacks of economic
recovery.”
The
market also took in tame inflation data, a weaker-than-expected manufacturing
report and speeches by Federal Reserve officials
More
In Europe, it’s a tale of two very different realities. Germany and Great Britain boom, but for two very different reasons. The rest of continental Europe are back flirting with Japanese style deflation. Scratch continental Europe when/if the Fed tapers, though France is going all out to do it in anyway. Thanks to the Great Nixonian Error of fiat money and our new lawless age, if Europe goes boom, America (and Great Britain) goes bust.
"The
sources of deflation are not a mystery. Deflation is in almost all cases a side
effect of a collapse of aggregate demand - a drop in spending so severe that
producers must cut prices on an ongoing basis in order to find buyers.
Likewise, the economic effects of a deflationary episode, for the most part,
are similar to those of any other sharp decline in aggregate spending - namely,
recession, rising unemployment, and financial stress."
Dr.
B. S. Bernanke.
Mario Draghi: ECB needs "safety margin" against deflation
European Central Bank President defends cutting rates to near-zero levels amid criticism from Germany
The European Central Bank has
fought back against harsh German criticism, insisting that it had to cut rates
to near zero to head off deflation risks and stabilize debt burdens in the
crisis states.
Mario Draghi, the ECB’s
president, said the eurozone’s inflation rate has been in “slow motion” decline
for several months. This has spread to all major components of the price index
since the summer, pushing the inflation rate down to 0.7pc. Prices have
actually fallen over the last three months.
Mr Draghi told an audience in
Berlin that the bank acted to secure a “safety margin against deflationary
risks”, acknowledging that last week’s rate cut to 0.25pc had set off a
political storm and raised fears over an erosion of savings.
Both German members of the ECB’s
council opposed the cut. The German media has described it as a Latin coup to
seize control of the ECB’s policy machinery. Hans Werner Sinn, head of Munich's
IFO institute, accused Mr Draghi of misusing the ECB to bail out Italian
debtors
----Mr Draghi’s plea came as the eurozone’s PMI surveys for November came in weaker than expected, with the added twist that Germany is vastly outperforming France. “It is extremely disappointing and worrying. Recovery will remain tortuously slow,” said Howard Archer from IHS Global Insight.
France’s manufacturing index fell
to a six-month low of 47.2pc. The private economy as a whole has slipped back
into contraction. Dominique Barbet from BNP Paribas said the the data showed
France was “well into the theoretical recession territory” after GDP declined
in the third quarter.
More
Eurozone slows as 'sick man' France hits recovery
Disappointing eurozone PMI survey signals slowing growth for second month in November with activity in France shrinking and the bloc's service sector weakening
By Telegraph Staff 11:14AM GMT 21
Nov 2013
Business actitivity in the
eurozone slowed again in November raising worries of softening growth as the
bloc struggles out of recession.
Markit Economics said its
Eurozone Composite Purchasing Managers Index (PMI) for November - published on
Thurday - fell to a three-month low of 51.5 points from 51.9 points in October.
Although November output remained
above the 50-points line indicating growth or contraction, this was the second
month in a row for which the closely-watched leading indicator had fallen,
after October's reading slipped to 51.9 points from 52.2 in September.
Despite resurgent growth in
Germany, activity in France - the second-biggest economy in the eurozone -
shrank in November for the first time for three months.
Chris Williamson, Markit chief
economist, said: “Some encouragement must be gleaned from the PMI signalling
expansion of the eurozone economy for a fifth successive month in November, but
the average reading over the fourth quarter so far is signalling a very modest
0.2pc expansion of GDP across the region, and it looks like momentum is being lost
again.
More
UK factory orders hit highest level in 18 years
British factory orders jumped unexpectedly in October to their strongest level since March 1995
By Telegraph Staff 11:43AM GMT 21
Nov 2013
British industrial output jumped
to an 18-year high in October, as order books swelled and manufacturers
signalled that a broad-based recovery was bedding in.
Rising domestic and overseas
demand helped total orders grow to the highest level since March 1995, the
Confederation of British Industry said yesterday.
Orders in mechanical engineering,
Britain’s fourth largest industrial sector, were at their highest since records
began in 1978, while 13 of the 15 industrial sub-sectors reported a rise.
The CBI’s survey of 350
manufacturers also showed output volumes in the three months to November rose
at their fastest rate since January 1995. Growth was widespread, with
electrical engineering the only sector to see a decline
----Separate Society of Motor Manufacturers and Traders data yesterday showed the number of cars built in October rose at the fastest pace this year, up 17pc on an annual basis to 160,854.
We end for the week on Europe on an up note, with Barroso’s Eurocrats’
finally getting what they deserved. Can Merkel and Cameron reform the EU before
Hollande crashes the whole rotten system down?
European court overturns austerity-busting pay rise for EU officials
EU court denies Brussels officials three years of backdated auutomatic pay increase, telling them economic times have changed' in a landmark ruling
Brussels officials have been
denied an expected Christmas bonus worth thousands of euros each after the European Union's
highest court said they were not entitled to three years of backdated pay
rises.
National governments blocked the
automatically calculated annual 1.7 per cent pay rise for EU bureaucrats back
in 2011 - a time when Europe faced its worst recession in a generation.
The European Commission then
attempted to challenge this move, fighting a case in the Europe's highest court
in an attempt to secure the pay rise for all EU staff.
However, EU judges on Tuesday
defied expectations - and the legal advice given by the court's advocate
general in September - to decree that the governments were right to cite
'serious and sudden deterioration in the economic and social situation' when
blocking the automatic pay increase.
Britain has welcomed the ruling
after the Government, along with France, Germany, Spain, Latvia, the
Netherlands, Ireland, the Czech Republic and Denmark, went to the EU court to
overturn the pay rise.
----The judgment means that European Commissioners, EU officials and MEPs will not get the three years of the back paid pay increase that most had expected to receive in salary payments over Christmas.
The back pay would have worth
£12,000 for Baroness Ashton, the EU foreign minister, and up to £4,000 each for
MEPs in payments that were eagerly awaited by officials.
"There are an awful of lot
of very disappointed officials today. I know a lot of people who banked on the
extra cash for their holiday plans," said one EU staffer.
The judgement reverses a
September legal opinion by Yves Bot, the European Court of Justices legal, who
ruled that automatic pay rises for officials could only be rejected in
"exceptional economic circumstances", which had not applied in 2011.
----Following a major victory for Britain over cuts to EU spending between 2014 to 2020, which was signed off by MEPs on Tuesday, pay and pensions for officials will remain frozen for this year and next.
Public sector posts and salaries
have been cut across Europe, especially in the eurozone but not a single EU official
has lost their job, with increases on spending and jobs the norm until a slight
dip in administrative budget planned for next year.
More
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
At the Comex silver
depositories Thursday final figures were: Registered 44.30 Moz, Eligible 123.69
Moz, Total 167.99 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks,
bent banksters or totally doubled over politicians this Friday, just a case of
spectacular error. After a long tiring
flight from Italy, all Kansas airports look the same. Did someone have too much
Chianti in the New York stopover?
If
all else fails, immortality can always be assured by spectacular error.
J. K. Galbraith.
Uh-Oh: Boeing’s Huge Cargo Plane Lands at Tiny Airport by Mistake
At least they
found Kansas. A heavily modified 747 used by Boeing
(BA) to transport parts of its 787 Dreamliner landed
at the wrong airport in Wichita, an embarrassing mistake that led to a flurry
of technical calculations to determine whether the gigantic cargo plane could
depart.
The 747 Dreamlifter, operated by Atlas Air (AAWW), was on a regular shuttle flight yesterday from Grottaglie, Italy, where a Boeing partner makes 787 fuselage sections. The cargo plane had stopped in New York for three hours before continuing to Wichita and landing on Wednesday night. Unfortunately, the flight crew chose Colonel James Jabara Airport, a small airport with a 6,100-foot runway that’s not designed for large aircraft. There are three airports on the east side of Wichita, including the plane’s intended destination, McConnell Air Force Base.
Boeing assembles the front sections of the 787 in Wichita and has a fleet of four Dreamlifters to ferry sections of the new plane. Atlas Air has filed a flight plan for an eight-minute flight across Wichita on Thursday afternoon, according to FlightAware, which tracks air traffic.
“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.
Another
weekend, and Christmas is another week closer, although our US readers have to
cope with next week’s Thanksgiving Day holiday first. While the is stuck in the
one way street of QE Forever, the unearned money gang will press ahead with Dow
20,000 or bust. The Great Disconnect keeps continuing to get wider. But if the
USA economy really has turned the corner, QE Forever can’t be forever, not unless
the Fed wants to set of inflation Weimar style. The prudent will use the
current lull in precious metals prices to take out insurance against our
explosive future. Have a great weekend everyone.
"'Deflation' is usually defined as generally
falling prices, yet it can also be defined as a decline in the money supply
which, of course, will also tend to lower prices. It is particularly important
to distinguish between changes in prices or the money supply that arise from
voluntary changes in people's values or actions on the free market; as against
deliberate changes in the money supply imposed by governmental coercion."
Murray N. Rothbard
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. Up will remain up, until one
fine day out of the blue the Fed finally loses control, or the next Lehman
hits.
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