Baltic Dry Index. 1492 +09
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
There
is a special providence for drunkards, fools, and the United States of America.
Uncle Scam, the world’s largest debtor by far, is about to call China’s
bluff, it seems. The USA won’t comply with China’s new air-defence zone. All
well and good if China, America’s largest creditor, is only bluffing and doesn’t
and doesn’t mind losing face to its deadbeat debtor. But what if China isn’t
bluffing, or doesn’t want to be pushed around by the world’s biggest debtor. Sooner
or later a clash is coming, and my guess is that China’s new leaders favour
sooner. Thursday’s US Thanksgiving Day holiday might be as good a day as any.
Presumably Uncle Scam plans to test China’s new air-defence zone with an
unmanned drone, rather than an American Airlines latest Boeing.
U.S. to Continue Flights in Defense Zone Claimed by China
By David Lerman - Nov 26, 2013 5:00 AM GMT
The U.S. won’t change its flight operations to comply with China’s newly
claimed air-defense zone in the East China
Sea, a Pentagon spokesman said. “We will not in any way change how we conduct our operations,” Army Colonel Steve Warren told reporters at the Pentagon yesterday. U.S. pilots won’t register their flight plans or identify their transponder or frequency, Warren said.
China announced an air defense identification zone in the East China Sea effective Nov. 23 and said its military will take “defensive emergency measures” if aircraft enter the area without reporting flight plans or identifying themselves.
“We see it as destabilizing,” Warren said of China’s decision. He said U.S. pilots always maintain the ability to defend themselves.
China’s declared intent to protect an air zone encompassing islands contested by Japan has escalated tensions between Asia’s two largest economies. The disputed islands are known as Diaoyu in Chinese and Senkaku in Japan.
----While the U.S. has said it isn’t taking sides in the dispute over the contested islands, the U.S. is a treaty ally of Japan and in October set a road map for defense cooperation over the next 20 years.
“This unilateral action increases the risk of misunderstanding and miscalculation,” Defense Secretary Chuck Hagel said of China’s decision in a statement over the weekend.
The Foreign Affairs office of the Chinese Defense Ministry complained to the U.S. embassy’s military attache on Nov. 24 about the U.S.’s “erroneous remarks” on the air zone, according to a statement on the ministry’s website.
China didn’t specify what measures it might take if others don’t abide by its rules.
More
http://www.bloomberg.com/news/2013-11-26/u-s-to-continue-flights-in-defense-zone-claimed-by-china.html
Yuan Forwards Near One-Week Low on Air Defense Zone Tensions
By Kyoungwha Kim - Nov 26, 2013 2:16 AM GMT
Yuan forwards traded 0.04
percent off a one-week low amid rising geopolitical tensions after China imposed a new
air defense zone around disputed islands with Japan, a move that was rebuffed
by the U.S. China announced an air defense identification zone in the East China Sea effective Nov. 23 and said its military will take “defensive emergency measures” if aircraft enter the area without reporting flight plans or identifying themselves. U.S. Army Colonel Steve Warren told reporters at the Pentagon yesterday that U.S. pilots won’t comply with the order.
“While our central scenario remains for the situation to stay on the rhetorical level, the risk of actual incidents is on the rise and will make it difficult for the yuan to rise further in the offshore markets in the near term,” Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB, wrote in a research report today.
More
http://www.bloomberg.com/news/2013-11-26/yuan-forwards-near-one-week-low-on-air-defense-zone-tensions.html
China Air Move Splits Japan as Carriers Obey New Rules
By Chris Cooper & Kiyotaka Matsuda - Nov 26, 2013 4:57 AM GM
ANA
Holdings Inc. (9202) and Japan Airlines Co. (9201) have started
reporting the flight plans of aircraft traveling through a new air-defense zone
claimed by China
that the Japanese government rejects. ANA began informing China on Nov. 24 of flights to Hong Kong and Taiwan that pass through the area while JAL started giving details a day before, spokesmen at the two airlines said by phone today. Japan’s government plans to tell its airlines that the country opposes China demanding carriers submit flight plans, Akihiro Ohta, the transport minister, said in Tokyo.
----China’s move raises the risk of an accident similar to the shooting down of a Korean Air Lines Co. jumbo jet by a fighter plane when it strayed into the air space of the former Soviet Union in 1983.
“Presumably the Chinese are not going to be trigger happy,” said Ralph Costa, president of the Hawaii-based Pacific Forum CSIS. “It certainly raises the concern about regularly scheduled flights, even the Japanese are regularly reporting on their flights to be on the safe side.”
----ANA began informing China on Nov. 24 of flights to Hong Kong and Taiwan that pass through the area, Ryosei Nomura, a spokesman for the Tokyo-based carrier said by phone today. JAL started informing China of its plans on Nov. 23, spokesman Takuya Shimoguchi said by phone.
The carrier is giving information including the airplane number, route and cruising altitude of the plane and the flight time to the Chinese authorities when flying over the disputed islands, said spokesman Nomura.
The information is the same they give when they fly over other countries. The carrier had about 16 flights serving Hong Kong, Taiwan and other destinations that flew over the area that they informed China on Nov. 24, Nomura said.
“We got an order from the Chinese authorities to submit plans,” said ANA’s Nomura. “As part of normal procedure, we comply with that.”
More
http://www.bloomberg.com/news/2013-11-26/ana-jal-reporting-flight-plans-over-china-s-new-zone.html
Today, as I head off to celebrate turning an unlikely 64, political conditions are decidedly icy. The Lion in the shape of America, has laid down with the Lamb in the shape of Iran, for the next six months anyway, or perhaps it’s the other way round. Many in the US Congress want to derail the deal and bomb Iarn back to the stone age. Saudi Arabia and Israel have gone off into a big sulk.
In Euroland, the trifecta of France, Italy and Spain, looks about to become the winning ticket in the deflation and capital flight stakes.
Paris Office Market Wilts to 10-Year Low as Taxes Crimp Spending
By Francois de Beaupuy
- Nov 25, 2013 11:01 PM GMT
In the heart of Paris’s swanky 7th arrondissement, the 17th-century Laennec hospital is being refurbished to house Gucci-owner
Kering SA’s new headquarters. For Olivier Wigniolle, the chief executive officer of Allianz Real Estate France, which owns the site, the Kering project is a bright spot in an otherwise gloomy Paris office market. Allianz bought the establishment with its two historic buildings and a chapel in 2002 for 82 million euros ($111 million) and is now spending 95 million euros to fix it up
----The office take-up in and around Paris is set to fall by 30 percent this year to a 10-year low of 1.8 million square meters, according to broker DTZ. That’s less than in 2009, when the French economy contracted the most since World War II. A tax burden that’s reached a record high under President Francois Hollande and an economy in its second year of stagnation amid the European debt crisis are weighing on spending decisions.
France’s production outlook slid to minus 16 in November from minus six the month before, numbers released yesterday by national statistics office Insee showed.
“Because of the economic crisis, companies are hesitating to move, are hiring less or even cutting jobs, so demand is much weaker,” Philippe Depoux, CEO of Gecina SA (GFC), Paris’s largest publicly traded office landlord, said in an interview. “In 2014, vacancy rates will continue to edge up, demand won’t improve, and rents will continue to trend lower.”
More
http://www.bloomberg.com/news/2013-11-25/paris-office-market-wilts-to-10-year-low-as-taxes-crimp-spending.html
In Asia, Abenomics seems to have gone off the rails in Japan, while India and Indonesia seem to have started a race to get to the bottom of the Asian table.
India Growth Seen Below 5% for Longest Spell Since 2005: Economy
By Unni Krishnan - Nov 26, 2013 5:23 AM GMT
India’s economic growth
probably held below 5 percent for a fourth straight quarter, the longest
stretch in data going back to 2005, as Prime Minister Manmohan
Singh struggles to boost investment and tame elevated inflation. Gross domestic product rose 4.6 percent in July through September from a year earlier, compared with 4.4 percent in the prior quarter, according to the median of 25 estimates in a Bloomberg News survey ahead of a report due on Nov. 29.
Expansion may continue to struggle, with Goldman Sachs Group Inc. predicting last week the central bank would further raise interest rates and the government facing pressure to curb spending and pare the budget deficit. Exports have provided a bright spot following a drop in the rupee, cushioning industry from moderating demand among India’s 1.2 billion people.
“Growth will remain in a low gear,” said Radhika Rao, an economist at DBS Bank Ltd. in Singapore, referring to the second half of the fiscal year ending in March. “The odds of expenditure restraint are high as India has to prevent a credit-rating downgrade that would disrupt foreign investment.”
More
India Office Boom Turns Glut With Vacancies: Real Estate
By Pooja Thakur - Nov 26, 2013 1:47 AM GMT
ndia’s slowing economy has left its big cities with a glut of office space,
pushing up vacancy rates, freezing development and prompting some builders to
convert commercial projects into housing. Vacancy rates in the financial center of Mumbai and capital New Delhi topped 20 percent in the third quarter, the highest in Asia after Chengdu, China, where 32 percent of offices are empty, according to broker Cushman & Wakefield Inc. Six Indian cities are among the 10 office markets with the worst vacancies in the region, according to Cushman.
Demand for offices in India has been declining as Asia’s third-largest economy -- labeled a “dream market” by Warren Buffett two years ago -- faces the slowest expansion in 11 years, the fastest inflation rate among large emerging markets, and the risk of its debt ratings being cut to junk
More
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz
At the Comex silver
depositories Monday final figures were: Registered 44.30 Moz, Eligible 126.67
Moz, Total 170.97 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Chinese crooked banksters today. If China
implements the new drafted rules, money will get tighter in China next year. Poor
Euroland, add in an unlikely but possible Fed taper, and 2014 gets rockier with
each passing week. All the austerity packages in the world, won’t be enough to
save Club Med from a euro exit if the world’s number one and number two
economies tighten at the same time next year. The Fed’s final bubble, the Great
Disconnect, looks likely to stagger on into 2014, but barring a return to the
days of cheap oil, a spectacular stock and bond bust looks likely for Spring.
For now though, there’s still easy money in the Middle Kingdom.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
China Said to Plan Crackdown on Banks’ Loan Limit Evasion
By Bloomberg News - Nov 26, 2013 5:23 AM GMT
China has drafted rules
banning banks from evading lending limits by structuring loans to other
financial institutions so that they can be recorded as asset sales, two people
with knowledge of the matter said. The rules drafted by the China Banking Regulatory Commission impose restrictions on lenders’ interbank business by banning borrowers from using resale or repurchase agreements to move assets off their balance sheets, said the people, who asked not to be identified because they aren’t authorized to discuss the rules publicly. Banks are also required to take provision charges on such assets before their maturity
The agreements entail one bank buying an asset from another and selling it back at a higher price after an agreed period. Chinese banks are expanding transactions with other financial institutions, known as FI business, which have lower risk-capital requirements, Australia & New Zealand Banking Group Ltd. (ANZ) economist Li-Gang Liu wrote in a report today.
“Many banks started to build up their FI business to escape the internal risk controls and the yet-to-catchup regulations,” Liu wrote. “The CBRC is likely to issue regulations requiring banks to put high capital reserves on banks’ FI business.”
The rules would add to measures this year tightening oversight of lending, such as limits on investments by wealth management products and an audit of local government debt, on concerns that bad loans will mount.
The deputy head of the Communist Party’s main finance and economic policy body warned last week that one or two small banks may fail next year because of their reliance on short-term interbank borrowing.
More
China Money Rate Drops for Third Day as Central Bank Adds Cash
By Bloomberg News - Nov 26, 2013 3:19 AM GMT
China’s benchmark
money-market rate declined for a third day as the central bank continued
pumping cash into the financial system. The People’s Bank of China added 32 billion yuan ($5.3 billion) today by issuing seven-day reverse-repurchase agreements at 4.1 percent, according to a statement on the website. That compared with a similar injection of 35 billion yuan via the same operation a week ago, part of a net addition of 59 billion yuan last week, the most since September. The PBOC didn’t announce the rollover of 1 billion yuan of three-year notes that matured yesterday.
The seven-day repurchase rate, a gauge of funding availability in the banking system, dropped 18 basis points, or 0.18 percentage point, to 4.67 percent as of 10:57 a.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center.
“To calm the market, we expect the PBOC to continue a net injection this week,” said Chen Long, a bond analyst at Bank of Dongguan Co., in the city of Dongguan in Guangdong province. “The PBOC understands that to achieve their reform target, they need a relatively stable environment.”
The PBOC should loosen the money supply “slightly” to ease tight conditions as rising money-market rates will increase the debt burden for the economy, according to a front-page commentary in the China Securities Journal today, written by reporter Ren Xiao. The central bank should adopt a “mild” approach in pushing deleveraging, the official Economic Information Daily said in an editorial today.
More
"Every individual is a potential gold buyer,
although he may not need the gold. It may be added to the store of personal
wealth, and passed from generation to generation as an object of family wealth.
There is no other economic good as marketable as gold."
Hans F. Sennholz
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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