Baltic Dry Index. 1093 -17
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"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.
Below, no comment needed from me. Welcome to the insane feeding trough of the German run, EUSSR.
Merkel backs Juncker for EU Commission
German chancellor pledges support for presidency
http://www.ft.com/cms/s/f1dcf9a8-8cb8-11e3-ad57-00144feab7de,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff1dcf9a8-8cb8-11e3-ad57-00144feab7de.html%3Fsiteedition%3Duk&siteedition=uk&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fuk#axzz2sH9DioQE
With China in the midst of a worrying and increasing economic wobble, the USA’s economy has started to wobble too. Hmm, what could possibly go wrong as the Fed tapers? As for the EUSSR, repeat after me, “everything’s fixed, sorted, and better than before.” Stay long fully paid up physical gold and silver. The Great Reconnect with the real economy, that isn’t part of the Fedsters’ final QE Forever bubble is just getting underway. Before it all ends, Club Med will finally break free from Germany, China and the emerging markets will “restructure,” and the Fed’s final bubble will implode unless the Fed starts to monetise the likes of Facebook, Twitter and Apple. If they do, why not monetise the poor, the disabled, the unemployed? Voodoo economics is just that. We are all Argentina now.
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."J. K. Galbraith. The Great Crash: 1929.
U.S. ISM Factory Index Declines More Than Forecast
Feb 3, 2014 3:43 PM GMT
American factories expanded in January at the weakest pace in eight months
as orders slumped, a sign manufacturing cooled at the start of the year along
with the weather. The Institute for Supply Management’s factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona-based group’s report showed today. The January figure was less than the most pessimistic forecast in a Bloomberg survey in which the median estimate was 56. Readings above 50 indicate expansion.
The group’s measure of orders declined by the most since December 1980 as “a number” of purchasing managers said adverse weather slowed business. Sustained gains in consumer purchases, improvement in the labor market and a pickup in capital spending will be needed to keep assembly lines humming in the world’s biggest economy.
More
http://www.bloomberg.com/news/2014-02-03/u-s-ism-factory-index-declines-more-than-forecast.html
U.S. sees slowdown in manufacturing growth, construction spending
NEW YORK(Reuters) - U.S. manufacturing activity slowed sharply in January on the back of the biggest drop in new orders in years, suggesting the economy had lost steam at the start of 2014.
The economic picture was also darkened by other data on Monday showing spending on construction projects barely rose in December.
The Institute for Supply Management (ISM) said its index of national factory activity fell to 51.3 last month, its lowest level since May 2013, from a recently revised 56.5 in December.
"This offers a sobering glimpse on the weakening in growth in recent months, confirming the souring tone in other important economic indicators," said Millan Mulraine, deputy chief economist at TD Securities in New York.
---- The biggest red flag in the ISM report was the huge drop in the forward-looking new orders index, which fell to 51.2 from 64.4 in December. That 13.2-point drop was the largest monthly decline in the key component since December 1980.
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Shocking US factory orders and Chinese bank woes trigger global flight to safety
“Absolutely awful” factory figures as new orders suffer worst slump since 1980 recession
Factory orders in the US suffered
their steepest fall for 33 years in January and also slowed further in China,
raising fresh concerns about the strength of the world’s two biggest economies.
The shock figures set off a
renewed flight to safety in New York, where yields on US 10-year Treasuries
fell to a three-month low of 2.60pc. The Dow Jones index tumbled 326 points,
breaking through crucial technical support levels.
The Japanese yen rallied as funds
unwound “carry trade” positions in Asia to reduce risk. Emerging market
currencies slumped to a five-year low.
America’s ISM index of supply
managers dropped from 56.5 to 51.3 in January, the biggest one-month decline
since the Lehman crisis.
Rob Carnell from ING said the
survey was “absolutely awful”, with the real worry being a slump in new orders
not seen since the recession of 1980
----Stephen Roach, from Yale University, said the robust growth in the US over recent months had been “bloated by an unsustainable surge of restocking”. The underlying rate of growth is closer to 1.6pc, if final sales to consumers and businesses are used as a guide.
Mr Roach said American households
had not yet finished the epic purge needed to bring borrowing levels back to
historic levels. The debt-to-income ratio has dropped from 135pc to 109pc since
the sub-prime bubble burst in 2007 but still has another 35 percentage points
to go, implying powerful headwinds for the US economy for years to come.
More
Feb 3, 2014
The Market’s One-Offs Are Adding Up
If you have a dozen “one-offs,” do
you have any one-offs?
This morning the ISM manufacturing survey fell out of bed, dropping to an eight-month low reading of 51.3, far below the Street’s consensus of 56. It follows a string of weakening data, most of which has been summarily dismissed. When the December jobs report landed with a thud last month, it was an “outlier.”
When the durable-goods report hit last week, it was “steady as she goes.”
It may be tempting to dismiss the ISM report as a one-off as well, given the lousy weather. “Despite the monthly declines,” BarclaysBARC.LN -2.50% wrote, “We expect manufacturing activity growth to pick up throughout the year.” All that’s left to figure out, they said, is just how “transitory” the January factors were.
The U.S. ISM reading has to be taken in context with the ISM readings out of China (bad) and Europe (better), as well. China’s official manufacturing PMI fell to 50.5 in January, which means the world’s two largest economies are seeing a slowdown. Granted, Germany’s PMI improved, as did the eurozone as a whole. But Europe’s “recovery” from its second recession since 2008 remains a very muted affair. In short, with the U.S. and China in questionable growth trajectories, the Fed rolling back the stimulus, and the emerging market a hot mess, it’s hard to say where the global economy’s big growth driver is, if it even exists.
----“The combination of weakening Chinese data, and the gradual turn in Fed policy, will continue to fuel negative sentiment,” Societe Generale forex strategist Kit Juckes wrote. “Flows of money into EM since 2010 have been huge. The path back towards any kind of neutral fed policy stretches ahead of us and the Chinese economic slowdown is no flash in the pan. So the drivers of the current turmoil aren’t going to go anywhere and any respite is likely to be temporary.”
More
Asia Stocks Extend Rout as Japan Plunges; Aussie Rises
Feb 4,
2014 6:33 AM GMT
Asian
stocks tumbled, extending a global selloff, with Japanese and Hong Kong
shares dragging the regional index toward its lowest close in five months. The
Australian dollar surged as the country’s central bank held rates, while
emerging-market currencies rose. The MSCI Asia Pacific Index lost 2.6 percent by 3:28 p.m. in Tokyo, the most since June. Japan’s Topix index plunged 4.8 percent, entering a correction, and the Hang Seng Index slid 2.6 percent in Hong Kong. Standard & Poor’s 500 Index (SPX) futures rose 0.2 percent after the gauge sank the most since June in New York. The so-called Aussie climbed 1.5 percent while currencies in Malaysia, Thailand and Indonesia gained at least 0.2 percent. Zinc fell 0.3 percent, declining for a 10th day and heading for the longest run of losses since January 1989
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As the Bernanke
Bubble hits the pin, the biggest loser of the lot is likely to be the wealth
destroying, Bilderberger EUSSR.
“What is sure is that any further aid
would be much less expansive than help so far.”
Wolfgang Schaeuble, German finance
minister.
Eurozone paves way for third Greek bail-out
Leaked German finance ministry paper estimates Greece needs a further €10-20bn to service its debts
The eurozone has begun preparing
a third bailout package for Greece of up to €20bn (£16.5bn) on top of existing
loans totalling €240bn.
The new bailout, which will be
decided in April, was discussed at a eurozone meeting last week and a German
finance ministry paper leaked to Der Spiegel estimates Greece needs between
€10-20bn to service its debts.
Wolfgang Schaeuble, the German
finance minister, has admitted that new loans will be
necessary for Greece as doubts continue over the sustainability of the country’s high levels
of debt.
“What is sure is that any further
aid would be much less expansive than help so far,” he told the German finance
magazine Wirtschaftswoche.
The shortfall in Greek financing
when the current bailout package ends in December has been put at €15bn as
Greece struggles with a debt level of 176pc of GDP.
More
3 February 2014 Last updated at 13:58
Corruption across EU 'breathtaking' - EU Commission
The extent of corruption in Europe is "breathtaking"
and it costs the EU economy at least 120bn euros (£99bn) annually, the European
Commission says.
EU Home Affairs Commissioner Cecilia Malmstroem has presented a full report on the problem.
She said the true cost of corruption was "probably much higher" than 120bn.
Three-quarters of Europeans surveyed for the Commission study said that corruption was widespread, and more than half said the level had increased.
"The extent of the problem in Europe is breathtaking, although Sweden is among the countries with the least problems," Ms Malmstroem wrote in Sweden's Goeteborgs-Posten daily.
The cost to the EU economy is equivalent to the bloc's annual budget.
For the report the Commission studied corruption in all 28 EU member states. The Commission says it is the first time it has done such a survey
In the UK only five people out of 1,115
- less than 1% - said they had been expected to pay a bribe. It was "the
best result in all Europe", the report said.
But 64% of British respondents said they
believed corruption to be widespread in the UK, while the EU average was 74% on
that question.
---- Ms Malmstroem said corruption was eroding trust in democracy and draining resources from the legal economy.
"The political commitment to
really root out corruption seems to be missing," she complained.
National governments, rather than
EU institutions, are chiefly responsible for fighting corruption in the EU.
But Ms Malmstroem said national
governments and the European Parliament had asked the Commission to carry out
the EU-wide study. The Commission drafts EU laws and enforces compliance with
EU treaties.
The EU has an anti-fraud agency,
Olaf, which focuses on fraud and corruption affecting the EU budget, but it has
limited resources. In 2011 its budget was just 23.5m euros.
The Commission highlighted that:
More
We end with
a glimpse of our Greenspan-Bernanke, Argentine future. The ending of the Great
Nixonian Error of fiat money.
Dad Can’t Buy Daughter Shoes as Argentine Currency Falls
Feb 4,
2014 3:00 AM GMT
Jorge Contrera checked a pair of soiled shoes from top to bottom, tried to
buff them with his shirt sleeve, then paid 40 pesos ($5) for his 8-year-old
daughter’s present. Before Argentina’s devaluation last month, he planned to surprise
her with a new pair. “Do you know how I feel buying my daughter used shoes?” said 29-year-old Contrera, a welder who’s currently working as a delivery man. “The new shoes just went up and I don’t have the cash.”
Like Contrera, many Argentines see their standard of living falling as the fastest pace of inflation in a decade erodes their purchasing power and confidence in President Cristina Fernandez de Kirchner’s economic policies. Last month’s 19 percent devaluation of the peso, which drove up prices on products from cars to refrigerators, highlights Fernandez’s dilemma. If she adopts unpopular belt-tightening measures, she could face social unrest, said Mariel Fornoni, director of polling firm Management & Fit.
“It’s a critical moment for the government and there’s no reason to believe things will get better,” Fornoni said in an interview. “There’s a real risk of growing protests in coming months.”
Since Jan. 27 the government eased some currency restrictions and raised interest rates by more than six percentage points in an effort to reduce dollar demand that has drained central bank reserves by 34 percent to $28 billion over the past year.
Real interest rates remain negative and
unless the government cuts spending, including energy subsidies, Argentina’s
vicious cycle of inflation, capital flight and devaluation will continue, Mark Mobius,
chairman of San
Mateo, California-based Templeton Emerging
Markets Group, wrote in a note to clients on Jan. 30.
More
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig
von Mises.
At the Comex
silver depositories Monday
final figures were: Registered 50.73 Moz, Eligible 128.56 Moz, Total 179.29 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, how the world’s squids and banksters are betting on the Chief Scoundrel at the Old Lady of Threadneedle Street to jump first.
“The boom can last only as long as the
credit expansion progresses at an ever-accelerated pace. The boom comes to an
end as soon as additional quantities of fiduciary media are no longer thrown
upon the loan market.”
Ludwig
von Mises.
Carney Seen Raising Rates Before Yellen, Draghi
Feb 3, 2014 12:54 PM GMT
Investors are betting Bank of England Governor Mark Carney will lead the
charge out of record-low interest
rates as central banks pivot from fighting stagnation to managing
expansions. Economists at Citigroup Inc. and Nomura International Plc say the strongest growth since 2007 will prompt the U.K. to lift its benchmark from 0.5 percent as soon as this year. Money-market futures show an increase in early 2015. That’s at least three months before the contracts indicate Federal Reserve Chairman Janet Yellen will raise the target for the federal funds rate. European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda are forecast to maintain or even ease monetary policy.
“Carney and BOE officials will be looking at the domestic recovery, and if that is strong enough, then they will feel comfortable increasing rates before the Fed,” said Jonathan Ashworth, an economist at Morgan Stanley in London and former U.K. Treasury official. “Tightening by the major developed central banks will be gradual, and they will be aware of what everyone else is doing.”
The BOE will lift rates in the second quarter of 2015 and the Fed will increase in 2016, Morgan Stanley predicts.
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
The monthly Coppock Indicators finished January.
DJIA: +202 Down. NASDAQ: +330 Up. SP500: +249 Up. The new Fed bubble continues, but seems to be running out
of momentum. Does the Final Fed Bubble end in an emerging market crash?
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