Baltic Dry Index. 2330 -07
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too."
Lloyd Blankfein. CEO Goldman Sachs. November 8, 2009
Not too much
to write about today, since it all pretty much comes down to the outcome of Fed’s
two day meeting starting tomorrow. If they decide to “taper” their ineffective QE
policy and ZIRP, which I think is unlikely, they reconnect our global stock and
bond markets with an ugly dose of reality, setting off a pre-Christmas rout of unprecedented
proportions. How likely is that ahead of the Fedster’s upcoming 100th
anniversary on December 23rd? I think that Bernocchio will leave the
difficult tapering decisions to his incoming successor Janet Yellen. When the
sky falls in next year, “old BS” and his predecessor fallen former guru “Bubbles”
Greenspan, can safely say nothing to do with me, blame it on the curse of “that
woman,” to misquote a fallen former US President.
In the
meantime we open with wobbly news from the far east. It won’t take much to push
our house of cards over.
The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.
Walter Bagehot.
China Manufacturing Index Unexpectedly Drops
Dec 16, 2013 5:29 AM GMT
A Chinese manufacturing index unexpectedly fell to a three-month low as
output gains eased and employment weakened, suggesting the world’s
second-largest economy is vulnerable to a slowdown. The preliminary reading of 50.5 for a Purchasing Managers’ Index (EC11CHPM) released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 50.8 in November and the 50.9 median estimate in a Bloomberg News survey of 11 analysts. A number above 50 indicates expansion.
Chinese stocks extended losses as
the manufacturing report underscored the Communist Party’s warning last week
that the economy faces “downward pressure.” Weaker manufacturing may test the
President Xi Jinping’s resolve to push through policy changes such as reducing
local-government debt and industrial overcapacity.
“The reading confirms our view
that Chinese GDP growth is already decelerating,” said Dariusz Kowalczyk,
senior economist and strategist at Credit Agricole CIB in Hong Kong. He
forecasts 7.2 percent gross domestic product expansion in 2014, compared with
7.7 percent this year.
More
Topix Falls to Lowest in Month as Yen Gains Before Fed
Dec 16, 2013 6:55 AM GMT
Japan’s Topix index closed at its lowest in a month as investors
awaited a two-day Federal Reserve policy meeting starting tomorrow and the yen
advanced for a second day against the dollar. Honda Motor Co., which gets about 80 percent of revenue outside Japan, dropped 2.8 percent. A gauge tracking consumer-finance companies fell the most among the 33 Topix industry groups. Office-equipment provider Askul Corp. tumbled 6.7 percent after profit dropped 70 percent. Tokyo Electric Power Co. rose 1 percent on a report the government plans to double interest-free loans to the utility.
The Topix slid 1.3 percent to 1,222.95 at the close in Tokyo, with all subsectors falling. The Nikkei 225 Stock Average dropped 1.6 percent to 15,152.91. Economists have increased bets the Fed will start reducing stimulus as soon as this week amid improving U.S. economic data. Japan’s Tankan survey of sentiment at large manufacturers rose to its highest since 2007, while a measure of capital expenditure slid.
“Tapering will begin, I believe, in the first quarter, but many are now saying it’s overdue,” said Stuart Beavis, head of institutional equity derivatives at Vantage Capital Markets in Hong Kong. “The Tankan headline figure reads well. The disappointing side to the data was the Large All Industry Capex. This is more proof that corporates see no evidence of sustainability and they are not showing any signs of ramping up expenditure domestically.”
More
China condemns Abe for criticizing air defense zone
BEIJING(Reuters) - China has condemned Japanese Prime Minister Shinzo Abe for "maliciously slandering" its air defense zone in an escalating war of words between the neighbors.
Abe told a news conference on Saturday that China's recent announcement of the air defense identification zone over disputed islands in the East China Sea is "unjustly violating the freedom of aviation over the high seas" and demanded Beijing rescind it.
Chinese Foreign Ministry spokesman Hong Lei defended the zone, which has triggered protests from Japan, the United States and South Korea.
"We express strong dissatisfaction with Japan's leader using an international occasion to maliciously slander China," Hong said in a statement seen on the ministry website on Sunday.
The islands are claimed by Beijing as the Diaoyus and by Tokyo as the Senkakus.
"The Diaoyus are an inherent territory of China. Japan's seizure and occupation of the islands are illegal and invalid," Hong said, adding that the zone is in line with international laws and practices, and does not affect aviation freedom.
"The Chinese side took necessary measures to safeguard its sovereignty and territorial integrity. This is totally legitimate and irreproachable," the spokesman said.
More
India Wholesale Inflation Tops Estimates, Adding Rate Pressure
Dec 16, 2013 6:51 AM GMT
India’s wholesale inflation was faster than economists estimated in
November, reaching a 14-month high and adding pressure for a further increase
in the benchmark interest rate this week to quell price pressures. The wholesale-price index rose 7.52 percent from a year earlier, compared with 7 percent in October, the Commerce Ministry said in New Delhi today. The median estimate in a Bloomberg News survey of 37 analysts was 7 percent.
Reserve Bank of India Governor Raghuram Rajan’spledge to fight inflation is also being tested by consumer prices, which are climbing 11 percent in a nation where 825 million people live on less than $2 per day.
Eleven of 19 analysts in a Bloomberg poll said he’ll raise borrowing costs 25 basis points to 8 percent on Dec. 18 even as growth moderates, in his third increase since taking charge at the RBI in September.
More
In better news from the far east, Morgan Stanley predicts
that Australia will become an energy exporting super-power in 2017. Anything
that halts or lowers energy prices has to be a good thing for the rest of the
world. With Iraq expanding oil exports again, and Iran possibly getting freed
from sanctions in the middle of 2014, plus Libya coming back on-stream, just
possibly 2014 will bring in the era of cheaper energy. If it does, the Fed’s
Yellen gets an early walk on an eventual taper. Still there’s many a slip twixt
cup and lip, so we won’t count our
blessings before they’re hatched, to mangle metaphors.
Australia 'to be an energy superpower’ by mid 2017
Morgan Stanley report predicts that gas exports will help country eliminate its current account deficit for the first time in four decades
Australia is to become a global
gas superpower by the middle of the decade and eliminate its current account
deficit for the first time in almost 40 years, according to Morgan Stanley.
“Liquefied natural gas (LNG)
exports from Australia could be the next big thing,” said the bank in a new
report.
It predicted a “huge ramp-up” in
LNG output that could transform the country’s economy, claiming that Australia
could overtake Qatar by to become the world’s biggest exporter of LNG as soon
as 2017 rather that 2030 as widely assumed.
By then Australia would be a
major force in global energy production, with LNG and coal exports together
matching the country’s vast iron ore shipments.
Two-thirds of the world’s entire
increase in traded LNG capacity is currently from Australia. While the US has a
glut of natural gas from shale sources, it will be five to 10 years before it
has the export terminals and infrastructure to sell large amounts on the global
market.
This gives Australia a window of
opportunity. It can benefit from the shortage of LNG supplies in Asia,
especially in Japan where closure of nuclear reactors after the Fukushima
disaster has left the country heavily dependent on gas imports. Gas is selling
in Japan at almost $19 per British thermal units (BTU), compared to just $4.3
in the US.
Once dismissed as a pipe-dream,
LNG has come of age with new technology since the 1990s. The breakthrough came
with gas turbine technology and advances making it cheaper and safer to
transport the fuel in refrigerated hulls made of molybdenum alloy at minus 116
degrees
More
"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
At the Comex
silver depositories Friday
final figures were: Registered 52.34 Moz, Eligible 118.66 Moz, Total 171.00 Moz. Someone seems to be expecting a massive
December delivery.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Not the usual suspects today, just more on the “21st
century version of the “great game” of blocking Russia. In place of British run
India, is the snake-bit European Union. Allied to Czar Putin’s modern day
Russia, an increasingly confident and willing to use its muscle, China. Hapless
pawns in this game of power politics, the Ukrainians. Likely losers whatever
the final outcome.
"Thank God For Bank Bailouts"
Proper Charlie Munger. Berkshire Hathaway.
Kiev protesters gather, EU dangles aid promise
By Richard Balmforth KIEV
(Reuters) - Thousands of anti-government protesters gathered in central
Kiev, rebuilding barricades torn down by police, on Thursday as the European
Union held out a promise of increased aid for Ukraine if it signed a trade and
cooperation pact.Ukraine's first deputy prime minister Serhiy Arbuzov flew to Brussels with a high-level delegation seeking billions of euros of aid from the EU in return for signing the agreement, which Kiev suddenly backed away from last month.
He said Ukraine, which is on the brink of bankruptcy, would "soon sign" the accord, but declined to provide any date.
EU enlargement chief Stefan Fuele pledged more aid to Kiev if it signed the agreement, and to help it negotiate a loan from the IMF, but gave no figures.
After hours of talks with Arbuzov, Fuele warned that Ukraine faced looming financial crisis.
"We need to help Ukraine to restore rapidly the confidence not only of its citizens, but also that of international investors and creditors as a stable and predictable economy," he told reporters.
Ukraine's Prime Minister Mykola Azarov was quoted as saying on Wednesday he had asked the EU for 20 billion euros ($27 billion) in aid to offset the cost of signing the EU deal.
A sudden decision by President Viktor Yanukovich on November 21 to walk away from a trade-and-political agreement with the EU and revive trade with Ukraine's old Soviet master has brought hundreds of thousands on to the streets in a chain of weekend rallies, each one larger than the one before it.
----After his talks with Arbuzov, Fuele said that, if Ukraine gave a clear commitment to sign the deal, the EU would prepare a roadmap for implementing the accord.
If Ukraine signed, the EU was
ready to help it by topping up IMF loans and stepping up financial aid, Fuele
said.
EU aid to Ukraine would only get
"bigger and bigger" if it signed the agreement, he said without
giving figures.
More
China's Xinhua says West must stop 'meddling' in Ukraine's affairs
BEIJING(Reuters) - Western powers should stop meddling in Ukraine's affairs and manipulating the "opinions of the people" about a trade pact with the European Union, China's official government newswire said on Friday.
The commentary, which came days after a visit to China by Ukrainian President Viktor Yanukovich, criticized western leaders for voicing support for the thousands of protesters who have rallied in Kiev's Independence Square for three weeks.
"The West must keep its hands off the domestic affairs of a sovereign nation," the commentary said.
"Showing support for the anti-government protesters is a serious blow to Ukrainian democracy, not to mention that it could complicate regional affairs."
The commentary accused the West of "stoking confrontation" and turmoil in the region by pushing Ukraine towards the European Union "in a direct challenge to Moscow".
"Western meddling has aborted independent dialogue between the government and opposition, planting the seeds of future social and political division in the nation," it said.
Xinhua commentaries are not official policy statements, but can be read as reflections of Chinese government thinking.
More
http://www.reuters.com/article/2013/12/13/us-ukraine-china-idUSBRE9BC0C420131213“There’s danger in just shovelling out money to people who say, ‘My life is a little harder than it used to be, at a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.’”
Proper Charlie Munger. Berkshire Hathaway.
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.
No comments:
Post a Comment