Thursday, 5 December 2013

Bad Boys.

Baltic Dry Index. 1994 +72

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

This environment redistributes wealth from savers to debtors on a scale of over $2 trillion per annum or $55 billion per day. This must be the biggest legal robbery ever in human history. But it is always coded in arcane academic lingos spoken by respected central bankers with impeccable CVs. All that is just packaging; it is robbery nevertheless.

Andy Xie           

For more on bad boys, scroll down to Crooks Corner where the world’s finest Ali Baba’s are hard at work making money the old fashioned way, scheming, scamming and thieving in banks.

We focus today on modern Europe. Would anyone really want to remain in a wealth destroying, Bilderberger run, dying club like this?

“Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” 

Mark Twain.

Rajoy to Rescue Highway Billionaires Who Bet on Boom

By Esteban Duarte - Dec 4, 2013 11:01 PM GMT
Spanish taxpayers have bailed out banks and power companies. Next up are highway operators and their billionaire owners.

Prime Minister Mariano Rajoy’s government is considering a 5 billion-euro ($6.7 billion) plan to take over and guarantee the debt of about 364 miles (585 kilometers) of roads, according to two people familiar with the matter who declined to comment because no final decisions have been made.

“This is another repeat of ‘too big to fail’,” Jose Garcia Montalvo, an economics professor at Pompeu Fabra University in Barcelona, said in a telephone interview. “You don’t need to worry if something goes wrong, the government will come to the rescue.”

The roads are controlled by some of Spain’s biggest companies, including the Del Pino family’s Ferrovial SA (FER), the Koplowitz family’s Fomento de Construcciones & Contratas SA, Sacyr SA (SCYR) and Actividades de Construccion y Servicios SA, run by Real Madrid Chairman Florentino Perez. They’re entitled to the rescue through a law passed under General Francisco Franco in 1972, which stipulates that when a private highway goes bust, the state has to repay its owners for the cost of the land and the construction.

Job Cuts Loom at European Banks as Economy Pinches Fees

By Elisa Martinuzzi & Ambereen Choudhury - Dec 5, 2013 12:01 AM GMT
European banks, which eliminated more than 140,000 jobs in two years, are poised to keep shrinking.

Lenders in the region probably will cut at least 5 percent of trading and advisory staff next year, according to a survey of three London-based investment-bank recruiters, and the reductions could reach 15 percent, two of them said. That would be twice the 7 percent shrinkage across the industry since 2011.

European firms are lagging behind U.S. counterparts in meeting stricter limits on leverage, putting pressure on them to cut assets. At the same time, a stagnant economy is crimping fees from investment banking and merger advice, eroding returns. That may force banks to eliminate more jobs next year, dispose of whole businesses and surrender market share in fixed income.

“As European banks focus on leverage, they’re losing market share to U.S. firms,” said Philippe Bodereau, the London-based head of European credit research at Pacific Investment Management Co., the world’s largest fixed-income manager. “We’re seeing a lot of banks that are starting to cut balance sheets. Cost control will remain a big item.”

Banks in Europe with global securities businesses, including Deutsche Bank AG (DBK) and Barclays (BARC) Plc, posted a 13 percent drop in third-quarter investment-banking revenue, hurt by lower fixed-income trading, according to data compiled by Bloomberg. That exceeded a 9 percent decline at the largest U.S. firms.

Europe repeating all the errors of Japan as deflation draws closer

The whole eurozone must have a higher inflation rate to lift the South far enough above the deflation line to gain breathing room

Europe is one shock away from a deflation trap. A surprise anywhere in the world is all that it needs: an upset in China as the credit bubble pops, or a global bond shock as the US Federal Reserve winds down monetary stimulus.

Producer price inflation (PPI) fell to -1.4pc in the eurozone in October. This is how deflation becomes lodged in the price chain.

"Prices are sticky for a while as you approach zero inflation, but once you break through the ice into deflation things can move fast, as we've seen in Greece," said Julian Callow, global strategist at Barclays. "The European Central Bank needs to act before the horse has already bolted."

Mr Callow said excess industrial plant in China is exporting deflation across the world. China's fixed capital investment over the past year has been $4 trillion, compared with $3 trillion for the entire EU and $3 trillion for the US. This has grown eightfold in a decade. It is a vast new source of supply for a saturated global economy.

China itself is now in PPI deflation. Factory gate prices fell 1.5pc in October. This has the makings of an almighty profits squeeze since wages have risen 13.6pc over the same period. There is a school of thought that China's investment glut will prove very hard to manage and this will trigger the next big round of angst in the world economy, but exactly when this will happen is anybody's guess.

Europe's slide towards deflation is replicating what happened in Japan in the 1990s at the onset of its lost decade, when trouble crept up on the country unawares. Near zero inflation seemed harmless until world events suddenly intruded: the Russian default and the East Asian crisis of 1998, the dotcom bust in 2001-2002.

About to make matters very much worse for Europe next year, the wheels seem to have come off the BRIC.

"When it becomes serious, you have to lie"

Jean-Claude Juncker. Ex-Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar.

Worst Raw-Material Slump Since ’08 Seen Deepening

By Elizabeth Campbell - Dec 2, 2013 8:12 PM GMT
The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell in December 83 percent of the time since 1971 when the benchmark gauge was posting losses for the year through November, data compiled by Bloomberg show. The average December loss was 3.9 percent, which if it happened this time would mean a 7.8 percent drop for the year.

Investors pulled a record $34.1 billion from commodity funds since the end of December, according to EPFR Global, which started tracking the flows in 2000. Ample rains boosted global crops, increased mine output spurred supply gluts in metals and the U.S. is extracting the most crude oil since 1989. Economic growth in China, the biggest user of everything from soybeans to zinc to cotton, is poised to slow for a third year in 2013, according to economist estimates compiled by Bloomberg.

We end on the economy for today with the promise of jam tomorrow. At least jam tomorrow for China, the UK, Europe and Japan. If Uncle Scam and Iran don’t blow it in the next six months and if Israel doesn’t attack Iran, the price of oil and natural gas looks set to fall in 2014. If all goes well in 2014, the USA will lose some of its energy advantage over the rest of the world from fracking. The global economy really might get back to sustainable real growth instead of central bank voodoo growth.

BP and Shell among oil firms Iran wants back in country

Iranian Oil Minister seeks talks with oil giants to return Iran to help tap world's fourth-largest oil reserves after sanctions are lifted

By Reuters 2:25PM GMT 04 Dec 2013
Iran on Wednesday named seven Western oil companies it wants back in its vast oil and gas fields once international sanctions are lifted and said it would offer contract terms in April next year.

Iranian Oil Minister Bijan Zanganeh named the seven in order: BP, Royal Dutch Shell, Total of France, Italy's ENI, Norway's Statoil, and US companies Exxon Mobil and ConocoPhillips.

Iran has the world's fourth-largest proved national reserves of oil - most of it cheap to produce - and is also home to the biggest proved reserves of natural gas, some 18pc of the global total.

With nationalisation in the Islamic revolution of 1979, the oil companies were thrown out. Iran's share of world oil production fell to below 40pc by 1997 from 55pc in the 1970s. Its gas output remained negligible.

Oil companies from around the world drifted back in the 1990s, and Zanganeh oversaw their return as minister under the reformist government of 1997-2005.

Total returned to onshore fields in 1997 and Shell in 1999, both while Zanganeh was minister and both in defiance of the US sanctions of the time, even though President Bill Clinton had blocked a Conoco project in 1995.

However, Iran's production stagnated through the 2000s amid growing international tensions over its nuclear programme. The more effective sanctions instituted in 2012 have choked out foreign investment and sent output down to 2.65 million barrels a day in November from an average of 4.3 million in 2011.

Iran last month reached an interim deal with six western powers to limit its nuclear programme, under which sanctions on oil investment and trade with Iran may be lifted next year.

Speaking to reporters at an OPEC meeting where the cartel agreed to maintain oil production at 30m barrels a day, Mr Zanganeh said he was already talking with some companies, although so far not those from the United States

----He is due to meet senior executives from Western oil companies including Eni and Shell on Thursday, an Iranian oil official said.

Mr Zanganeh made no mention of Russian, Chinese or Japanese companies or those of other nationalities. 
Asked whether he would like to see Asian, Indian, Chinese companies coming to Iran as well, he said: "Yes, but now we are discussing with European (firms)."

We end with more news on “climate change.” Global warming seems to have gone into reverse.

Cold snap felt across western half of nation

By MATT VOLZ 21 hours ago
HELENA, Mont. (AP) — A wintry storm pushing through the western half of the country is bringing bitterly cold temperatures that prompted safety warnings for residents in the Rockies and threatened crops as far south as California.

The jet stream is much farther south than normal, allowing the cold air to push in from the Arctic and drop temperatures by 20 to 40 degrees below normal levels, AccuWeather meteorologist Tom Kines said Tuesday.

Areas of Montana and the Dakotas were forecast to reach lows in the minus-20s, while parts of California could see the thermometer drop to the 20s. The icy arctic blast was expected to be followed by another one later in the week, creating an extended period of cold weather that hasn't been seen since the late 1990s, meteorologists said.

Officials warned residents to protect themselves against frostbite if they are going to be outside for any length of time.

"When it gets this cold, you don't need 30, 40 mile-per-hour winds to get that wind chill down to dangerous levels. All it takes is a little breeze," Kines said.

"The secret of life is honesty and fair dealing. If you can fake that, you've got it made."

Groucho Marx

At the Comex silver depositories Wednesday final figures were: Registered 48.64 Moz, Eligible 121.15 Moz, Total 169.79 Moz.  

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

Yes it’s the banksters again. Why do any of these criminal banks still hold banking licences?

Bad boys, bad boys whatcha gonna do, whatcha gonna do?
When they come for you?

The trouble is, in our new lawless age,  “they” never come.

Deutsche Bank Tokyo Employee Arrested for Suspected Bribes

By Takahiko Hyuga - Dec 5, 2013 5:40 AM GMT
An employee of Deutsche Bank AG’s Japanese brokerage unit was arrested today on suspicion of bribery, as the securities watchdog prepares to recommend penalties against the firm for excessive entertainment spending.

Shigeru Echigo, a director of Deutsche Securities Inc.’s pension solution sales department, is suspected of entertaining a client at Mitsui & Co. in exchange for purchases of investment products, a Tokyo Metropolitan Police official said, asking not to be named in accordance with its policy. A former Mitsui pension fund executive was also detained, the official said.

Japan’s Securities and Exchange Surveillance Commission will brief the press at 3 p.m. in Tokyo on proposed action against Deutsche Securities, three people with knowledge of the matter said. The punishment would add to the bank’s regulatory woes as legal costs mount amid global probes into interbank rate rigging and lawsuits relating to the U.S. housing market.

The former Mitsui pension executive who was arrested is Yutaka Tsurisawa, 60, the police official said. Echigo, 36, allegedly spent about 900,000 yen ($8,800) entertaining him with trips abroad, rounds of golf, and wine and meals from late April to late August 2012, according to the official.

Tsurisawa bought 1 billion yen of financial products from Deutsche Securities for the pension fund and probably understood that Echigo was seeking preferential treatment for future purchases, the official said. Tokyo-based Mitsui is Japan’s second-biggest trading company by market value.

----The SESC, Japan’s securities watchdog, will propose that the nation’s Financial Services Agency take administrative action against Deutsche Securities, a person said yesterday, asking not to be identified because the matter is confidential. The FSA may order the brokerage to improve compliance and internal controls, the people said.

Deutsche Bank to RBS Fined by EU for Rate Rigging

By Gaspard Sebag & Aoife White - Dec 4, 2013 4:10 PM GMT
Deutsche Bank AG (DBK) and Royal Bank of Scotland Group Plc are among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union for rigging interest rates linked to Libor.

Deutsche Bank was fined 725 million euros, the biggest single penalty. Societe Generale SA (GLE) was fined 446 million euros and RBS must pay 391 million euros, the EU said in a statement in Brussels. The combined fines for manipulating the yen London interbank offered rate and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.

While global fines for rate-rigging reached $6 billion today, the cost to banks may climb as they face more investigations and lawsuits worldwide. EU Competition Commissioner Joaquin Almunia said the penalties won’t be “the end of the story” as regulators continue to probe additional cases linked to Libor and currency trading.

----Citigroup Inc. (C) has a 70 million-euro penalty and RP Martin Holdings Ltd. was fined 247,000 euros.

----Almunia said transcripts of Internet conversations between traders showed “appalling” evidence of collusion. Such chats are now targeted by regulators in benchmark rigging probes. Deutsche Bank this week barred multi-party chat rooms at its fixed-income and currency trading businesses.

Goldman’s South Korea Unit Set to Be Punished by Regulator

By Seonjin Cha - Dec 5, 2013 4:03 AM GMT
South Korea’s financial regulator plans to punish Goldman Sachs (GS) Group Inc.’s local unit and employees for breaking rules on sales of financial products.

The Financial Supervisory Service informed Goldman Sachs of its plans and will determine the penalty after hearing an explanation from the Wall Street firm, Cho Gook Hwan, director-general at the regulator, said by phone today. The penalty and the number of employees to be sanctioned will be decided later in a committee meeting, Cho said.

Three foreign brokerages have been under investigation as part of a review of derivative sales and other operations for compliance with local rules, the FSS said in September. A month later, it said it completed its investigation of Goldman Sachs. Credit Suisse Group AG (CSGN) and Royal Bank of Scotland Group Plc (RBS) were also being inspected, MoneyToday reported in September.

It’s morally wrong to let a sucker keep his money.

Ebenezer Squid, with apologies to W. C. Fields.

The monthly Coppock Indicators finished November:
DJIA: +190 Up. NASDAQ: +281 Up. SP500: +232 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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