Baltic Dry Index. 1096 +05
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Talking
chairs! Ba humbug!
Graeme.
Later today the thoughts of Fed Chairwoman Yellen, who
apparently in the nasty modern odd American fashion has chosen to opt to be
called “Chair.” “Stool,” “Sofa,” or “Divan,”
being so low class, with “Pouffe” being too French even with French President
Laughingstock in town.
With old “BS” himself just barely out of Dodge, as the
newbie now in charge of the Fed, it is highly improbable that the Chair that
talks, will immediately set out on a course that disturbs Wall Street’s Squids and
Banksters.
I saw a peanut stand, heard a rubber band,
And seen a needle wink its eye
But I be done seen about everything
When I see an elephant fly
And seen a needle wink its eye
But I be done seen about everything
When I see an elephant fly
Dumbo. How apt.
Yellen Testimony Guide From Payrolls Report to Emerging Markets
Feb 11,
2014 5:00 AM GMT
Here’s
what to look for when Janet Yellen testifies before the House Financial
Services Committee today in her first public remarks since becoming Federal
Reserve chairman on Feb. 3. Yellen’s prepared remarks will be released at 8:30
a.m., and the hearing will begin at 10 a.m. Yellen plans to speak to the Senate
Banking Committee on Feb. 13 in a second day of semi-annual testimony.
More
Next we return today with more on the decline and fall of
the Great Bilderberger EUSSR project. As America and China both tighten credit
slightly, the failing, wealth destroying EUSSR, is now just one heartbeat away
from turning into Argentina. In May, French pilots have just decided to go out
on a month long strike. British Airways, Lufthansa, and Easyjet et al., can all
only hope that they don’t change their mind.
“We’ve got to be explicit that the road to greater economic success
does not lie in this cosy assumption that you can move from a single market
through a single currency to harmonising all your taxes and then having a
federal fiscal policy and then effectively having a federal State.”
Gordon Brown,
British Chancellor of the Exchequer, 05-11-2003
Feb. 10, 2014, 4:27 a.m. EST
Italy's industrial output drops sharply in Dec.
ROME--Italian industrial
production unexpectedly fell sharply in December, damping hopes the euro-zone's
third-largest economy will rebound strongly from its longest postwar recession.
Italy's industrial output fell
0.9% from November in seasonally adjusted terms, reversing three months of
gains, national statistics institute Istat said Monday.
Output had been expected to have
held stable, according to a poll of nine economists.
The surprise fall represented a
0.7% drop from December 2012 in workday-adjusted terms, Istat said. Economists
had expected a 0.4% gain.
In raw, unadjusted terms, Italian
industrial production rose 2.4% from a year earlier but declined 3.0% in all of
2013 from 2012, according to Istat.
The December drop means Italy's
industrial production rose 0.7% in seasonally adjusted terms in the fourth
quarter from the previous three months, Istat said.
That suggests Italy's gross
domestic product probably did expand in the fourth quarter, as the government
has repeatedly said it will, but less than expected.
More
Feb. 10, 2014, 4:28 a.m. EST
French industrial production weak at end of 2013
PARIS--French industrial
production was weaker than expected at the end of last year with steep falls in
oil refining and automotive output, Insee said Monday.
French industrial production fell
0.3% in December from November, while economists polled by Dow Jones Newswires
had forecast only a 0.1% decline.
Within the overall industrial
production figure, manufacturing output was also weak, recording zero growth in
the final month of 2013 after a 0.2% expansion in November from October.
ECB paralysed by German court decision as deflation threatens
The ‘thunderbolt’ ruling on eurozone rescue policies by Germany’s top court marks a serious escalation of Europe’s governance crisis
Last week’s ‘thunderbolt’ ruling on eurozone rescue policies by Germany’s top court marks a serious escalation of Europe’s governance crisis and may ultimately force Germany to withdraw from the euro, the country’s most influential magazine has warned.A sweeping report by Der Spiegel said the court ruling amounts to a full-blown showdown between Germany and the European Central Bank over the methods to shore up southern Europe's debt markets.
“It is nothing less than a final reckoning with the crisis-management strategy pursued by the ECB. The German justices insist that the German constitution sets limits on the ECB’s crisis strategy. In a worst-case scenario, the Court could forbid Berlin from contributing to efforts to save the euro or even force Germany to leave the currency zone entirely,” it said.
The warning came as market analysts began to see the darker implications of the ruling, which was initially seen as a green light for the ECB's bond operations.
Germany’s top institutes questioned whether quantitative easing is still possible in this political climate, leaving it unclear how the region can respond if deflation draws closer. “I think generally bond buying is now difficult territory,” said Clemens Fuest, head of the ZEW Institute.
----The German court
in Karlsruhe said there were grounds for concluding that the ECB’s back-stop
plan for Italy and Spain - known as the OMT - breaches the ECB’s mandate and
violates the treaty prohibition on “monetary financing” of budgets. It did not
address QE as such, but that distinction is becoming irrelevant in Germany.
----“Finally, a court has found that the ECB’s bond-buying program is a clear violation of European law,” said professor Bernd Lücke, head of the AfD anti-euro party. Bavarian politician Peter Gaulweiler, a plaintiff in the case, said “Karlsruhe has shown ECB president Mario Draghi what a bazooka really is.”
While the court referred the case
to the European Court (ECJ) for a preliminary ruling, it did so in such a way
as to pre-judge the matter and fire a warning shot across the bows of EU
institutions. Retired judge Udo di Fabio said it was intended to bind the hands
of the ECJ in advance.
----Hans Werner Sinn, head of the IFO institute, said the German government cannot ignore the judgement by Karlsruhe “whatever the ECJ says”, and warned that markets were likely to react badly once they grasp that “German resistance” to eurozone rescues is hardening.
The German court said the ECB’s
actions are probably “Ultra Vires”. If so, German institutions such as the
Bundesbank are prohibited from taking part.
The ECB can in theory carry out
rescue policies without the Bundesbank. Whether this would have any market
credibility in a crisis is doubtful.
More
Europe or Democracy? What German Court Ruling Means for the Euro
By SPIEGEL Staff
Germany's
Constitutional Court ruling last Friday marks a significant escalation in
efforts to rein in the European Central Bank. The ruling's message? Either the
European Court of Justice has to stop bond purchases or German justices will.
More
We end for
talking Chair day, with yet another red flag from China. Strike up Westminster Abbey’s
bells.
Chinese Coal Firms’ Debt Concerns Sink Shares: Chart of the Day
Feb 10,
2014 9:00 PM GMT
Shares of China’s biggest
listed coal producers have dropped to their lowest valuations on record as
falling fuel prices make it harder to repay debt.
---- Slowing economic growth and efforts to boost use of alternative fuels have dragged down coal prices in China, the world’s biggest producer and consumer of the fuel. The nation’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, two people with knowledge of the matter said last month, signaling government concern about possible defaults.
China’s coal industry is “dead,” said Laban Yu, a Jefferies Group LLC analyst in Hong Kong with an underperform rating on all three stocks. “There are 10,000 producers in China. A lot of them are taking on debt. It gets harder and harder to service debts when coal prices keep falling.”
China Coal warned Jan. 24 that 2013 net income will probably drop as much as 65 percent from a year earlier. The second-largest producer had 50 billion yuan ($8.3 billion) of net debt at the end of last year, from net cash of 6 billion yuan in 2011, according to a Barclays Plc note last month. The stock has tumbled 82 percent from its 2008 peak.
Declines in Shenhua, the listed unit of China’s No. 1 coal producer, have erased $178 billion of market value since the stock peaked in 2007 -- equivalent to the value of Bank of America Corp. Yanzhou Coal, the fourth largest, has dropped 80 percent from its 2011 high.
More
“One basic formula for understanding the Community is this: ‘Take five
broken empires, add the sixth one later, and make one big neo-colonial empire
out of it all.’”
Professor Johan Galtung, Norwegian sociologist, “The European Community, a Superpower in the
Making”, 1973.
At the Comex
silver depositories Monday
final figures were: Registered 50.73 Moz, Eligible 131.56 Moz, Total 182.29 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, who’s minding the store? No one apparently
at the US based International Financial Reporting Standards Foundation (IFRS). Is the
Boeing Dreamliner the new Comet?
'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
Reporting watchdog breaks own rules
The IFRS, whose job is to set 'high quality, understandable, enforceable and globally accepted' financial reporting rules, has for more than a decade delivered late and inaccurate filings
The authority in charge of
policing UK company reporting standards has itself a chaotic and potentially
illegal filing record that includes registering directors who have died or long
since retired.
The International Financial
Reporting Standards Foundation (IFRS), whose job is to set “high quality,
understandable, enforceable and globally accepted” financial reporting rules,
has for more than a decade delivered late and inaccurate filings at Companies
House, The Telegraph can reveal.
The watchdog, which is
headquartered in America and oversees global accounting standards, once
registered its legal address in the UK as a private flat in Wapping.
Under the Companies Act 2006, all
UK firms have to notify Companies House within 21 days when directors are
appointed or have their positions terminated.
Paul Volcker, the heavyweight
American economist, stepped down as chairman of the IFRS Foundation trustees on
December 31, 2005. But the IFRS foundation did not notify Companies House until
seven years later, on August 9, 2012.
Tommaso Padoa-Schioppa was
appointed chairman of the IFRS Foundation trustees in January 2006, but stepped
down when he became Italy’s finance minister in May 2006.
Mr Padoa-Schioppa, who is
considered one of the founding fathers of the European single currency, died in
December 2010. But IFRS Foundation filings at Companies House say that he was
appointed to its board nearly two years later, on September 5, 2012. The
termination of his appointment was not registered until February 8, 2013.
Meanwhile, Mr Padoa-Schioppa’s
replacement, Philip Laskawy, a former chief executive of Ernst & Young, is
not recorded as either arriving at or leaving the foundation. Similarly, Gerrit
Zalm, former finance minister of the Netherlands, was chairman of the
foundation trustees from October 2007, but Companies House has never been
notified.
A foundation spokesman said: “In
2012 we introduced new procedures with regard to company filings and we believe
that since being implemented, the filings are provided on a timely basis.”
Pressed about the continued
filing errors, the spokesman added: “If there were inaccuracies in our historic
filings with Companies House as you state, then we will rectify them
accordingly.”
The chaotic state of the
foundation’s filings dates back over 10 years. At Companies House, the
foundation’s headquarters is listed in Wilmington, Delaware. But, to comply
with UK company law, it nominated a director, Kurt Ramin, and his flat in
Wapping, East London, for the official receipt of documents.
The spokesman said the foundation
changed the nominated person soon afterwards and its business address to its
offices at 30 Cannon Street in the Square Mile.
The filing irregularities have
emerged as the foundation and its IFRS accounting standards are under intense
scrutiny around the world. Politicians and investors have argued that the
rules, introduced in the UK in 2005, have allowed the build-up of risks within
European banks.
They have accused the IFRS
Foundation of presiding over a long-running “fiasco” at the heart of global financial
regulation. A year ago, the Bank of England blamed accounting rules for a £50bn
black hole in British banks.
European politicians are due to
vote on around €60m (£50m) of funding for the International Accounting
Standards Board (IASB), the standard-setting body of the foundation responsible
for the IFRS rules. MEPs have threatened to withdraw funding unless the IASB
bows to investor demands to overhaul its accounting standards.
More
Boeing Says Air India Unhappy With 787 Dreamliner’s Reliability
Feb 11, 2014 5:15 AM GMT
Boeing Co. (BA) said Air India Ltd. is
unhappy with the performance of its 787s Dreamliners after some of the planes
suffered glitches in recent months. “Yes, they are not happy with the reliability portion, neither are we,” said Dinesh Keskar, a senior vice president at the Chicago-based planemaker, said in an interview at the Singapore Airshow today. “Over the last few months, we understood which are the components that were causing issues, which software needs to be upgraded.”
The Dreamliner has experienced a series of malfunctions since its debut in 2011, including a three-month grounding of the global fleet last year after battery meltdowns on two planes. The plane’s fuel efficiency is key to cutting costs at Air India, which hasn’t made an annual profit since 2007.
Earlier this month, Air India diverted one of its 787s to Kuala Lumpur as a precaution after the plane developed a software fault on a flight to New Delhi from Melbourne. Boeing is upgrading software and changing some components on Air India 787s whenever the planes can be taken out of service, Keskar said, adding that a 13th Dreamliner will be delivered to the carrier this month.
Air India is planning to seek compensation from Boeing after the carrier found that its 787s aren’t’ as fuel efficient as the planemaker had claimed while selling them, The Times of India reported today, citing officials it didn’t identify. Fuel efficiency of the Dreamliner is improving after earlier models didn’t “quite make the mark” on this count, Keskar said.
----Last year’s grounding added to a history of setbacks for the Dreamliner, whose entry into commercial service in 2011 for Tokyo-based ANA Holdings Inc. was more than 3 1/2 years late because of production snags and other delays. Mumbai-based Air India has sparred with Boeing over compensation for tardy deliveries.
The 787 is the first jetliner
built chiefly of composite materials rather than traditional aluminum. It also
relies to a greater degree than other jets on electricity to run the plane’s
systems, putting a spotlight on the lithium-ion batteries. Last year, an Air
India 787 developed windshield cracks during landing.
More
De Havilland Comet
The
de Havilland DH 106 Comet was the first production commercial jetliner.[N 2]
Developed and manufactured by de
Havilland at its Hatfield, Hertfordshire,
United Kingdom headquarters, the Comet 1 prototype first flew on 27 July
1949. It featured an aerodynamically clean design with four de Havilland Ghost turbojet
engines buried in the wings, a pressurised fuselage, and
large square windows. For the era, it offered a relatively quiet, comfortable
passenger cabin and showed signs of being a commercial success at its 1952
debut.
More
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek
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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