Baltic Dry Index. 1086 +02
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
All within the state, nothing outside the state, nothing against the state.
Benito Mussolini.
We open
today with the Fed’s favourite hack at the Murdoch Wall Street Journal. The
Fed’s version of the NSA’s “Snowy the Terrible,” was apparently the source of
last May’s leaked “taper caper” to this hack. Of course, this being a Murdoch newspaper,
someone other than the NSA and GCHQ might have been accessing voicemails. Who
knows other that the Fed’s version of Snowy the Terrible. No one in America yet,
has suggested that the Fed’s leaker be hunted down like a dog, or subject to
assassination. With US central banksters you’re apparently dealing with a much
higher class of rat. The article opens with some truly alarming charts. Is some Fedster trying to send a message?
If the facts don't fit the theory, change the facts.
Albert Einstein.
Albert Einstein.
Turnabout on Global Outlook Darkens Investor Mood
U.S. Job Growth Estimate Friday to Provide Next Clue
By Jon Hilsenrath Updated Feb. 5,
2014 7:52 a.m. ET
A series of sudden, unfavorable
events has in just a matter of weeks changed bright optimism about the pace of
growth in the global economy this year to a deepening sense of doubt.
The warning signs are plentiful:
Tumbling stock prices around the world, disappointing economic reports in the
U.S. and China, hasty interest-rate increases in major developing countries
including Turkey, India and South Africa, and whispers of disappointment in
corporate earnings conference calls. They are combining to send a signal that
the global economy might not be on the strong footing it appeared to be at the
start of 2014.
Another closely watched indicator
will arrive Friday, when the Labor Department releases its estimate of U.S. job
growth in January. Still, that report, like other recent U.S. releases, could
offer murky guidance due to quirks related to bad winter weather, only adding
to uncertainty about the outlook.
Investors have been debating for
days what's behind the sudden downdraft in global stocks. Among the possible
culprits: The Federal Reserve's efforts to pull back on a bond-buying program
that propped up markets in 2012 and 2013. Another is worries about a crisis
building in emerging markets that could prove contagious.
Increasingly, however, it looks
like stock markets are off to a terrible start mainly because hopes for
economic growth and the profits that come with it got too high.
----"Maybe the U.S. will not have the solid year everybody had been expecting," said Kenneth Rogoff, a Harvard University economist. That doubt, he said, stands in contrast to the vibe he picked up while hobnobbing in Davos, Switzerland, with business executives and policy makers last month. There, he said, he sensed, "this incredible optimism that nothing could wrong" in the global economy.
More
Below, a Goldie bigwig sees the Muppets “rotating” from bonds to stocks in 2014. But why tell the Muppets rather than the prop desk, if it’s such a good thing? God’s work, presumably, nobly giving the profits to the Muppets rather than the Goldmanites.
"God, no, we don't club baby seals. We club babies."Goldmanite, quoted in The Times of London. November 8 2009
Goldman’s Salame Sees Fed Rates Inflicting More Pain Than Taper
Feb 6, 2014 5:00 AM GMT
Pablo Salame, co-head of Goldman Sachs Group Inc.’s trading division, said
the surprise of 2013 was that Federal
Reserve tapering of bond purchases didn’t cause the collapse of any market
participants. Some may not be so lucky when the central bank raises short-term
rates, he said. The Fed’s decision to taper wasn’t dysfunctional to markets, Salame said in a video posted yesterday on New York-based Goldman Sachs’s website. Signs the Fed could curtail its $85 billion of monthly purchases helped push the yield on 10-year Treasuries (USGG10YR) from 1.63 percent in May to about 3 percent in September.
“Some of us would have guessed that such a large move would have exposed certain players in the market’s excess leverage to those transactions that would have led to maybe some liquidations or some bankruptcies,” said Salame, 48. “The great success of 2013 can mostly be measured in the fact that there were really no such newsworthy events in the year.”
An increase in the steepness of the yield curve, or the difference between short-term and long-term rates, may make markets more turbulent when the Fed begins raising rates, he said. Carry trades, in which investors buy long-dated bonds and finance those purchases with short-term borrowing, are probably increasing with a steeper yield curve, he said.
“Once the Fed starts hiking, the market
reaction will be less stable,” Salame said. “I would assume there are a lot
more positions today in the market and the amount of leverage that you have in
this part of the curve is higher.”
More
Up next, the
ECB meets today, in a German led austerity Euroland, now dangerously flirting
with entering deflation. Add in a capital flight wracked France, plodding along
its own way to a date with the guillotine, and the EMU in its present form is a
massive wealth destruction mechanism awaiting some shock that makes it fly
apart. Euros anyone? Just make sure that
they carry the German “X”.
The
bankster in his mansion,
The
taxpayer at his gate,
Draghi
made them High or lowly,
He disordered
their estate.
With
apologies to All things bright and beautiful.
Insular ECB is playing dangerous game of chicken with deflationary world forces
An aborted recovery at this point might be more than democratic societies can tolerate
The US and China are withdrawing
stimulus on purpose. The eurozone is doing so by accident, letting market
forces drain liquidity from the financial system for month after month.
The balance sheet of the European
Central Bank has fallen by €553bn over the past year as banks repay money that
they no longer want, either because ECB funds are too costly in a
near-deflationary world or because lenders are being compelled by regulators to
shrink their books.
This is "passive
tightening" or "endogenous tapering". The ECB balance sheet has
plummeted to 23pc of eurozone GDP from a peak of 32pc in July 2012.
Hardliners will be delighted to
learn that we now have synchronized G3 global tightening at last, further
compounded by enforced tightening in Brazil, India, Turkey, South Africa and a
string of emerging market states trying to defend their currencies. At least
two-thirds of the global economy is turning down the liquidity spigot.
This is causing collateral damage
everywhere. Japan's Nikkei index of equities is down 14pc this year, a victim
as ever from safe-haven flight into the yen. Julian Jessop, from Capital
Economics, said this is not yet enough to derail's Japan's recovery, but
nothing can be excluded at this point. "Investor sentiment is clearly very
negative and the risks of a downward spiral are growing," he said.
The eurozone has been growing
just enough on export growth and a burst of restocking to create the illusion
of recovery, though business investment continues to fall each month, dropping
to modern-era low of 18.9pc. (It was 21pc even during the depths of the dotcom
bust in 2003.)
Retail sales fell 1.6pc in
December, the biggest drop for two-and-a-half years. The unemployment rate has
stabilised at 12pc, but only because so many people have dropped off the rolls
or fled abroad. Italy has lost a further 425,000 jobs over the past year.
Euroland is sliding further into
Japanese deflation trap every month, whatever they claim in Frankfurt. Passive
tightening has caused private sector loans to fall by €155bn over the past
quarter.
More
Draghi as ECB Master of Suspense Keeps Investors on Edge
Feb 6,
2014 12:01 AM GMT
Mario Draghi’s habit
of springing surprises means that few can say what he’ll do when European
Central Bank officials decide on monetary policy today. Inflation at a four-year low and volatile market rates speak for further action by the Governing Council, even after it cut official rates to record lows in November. At the same time, signs of economic improvement and the central bank’s prediction that price gains will gradually return to target suggest the ECB president may prefer to hold fire. That’s the call by 62 of the 66 economists surveyed by Bloomberg News, while 4 predict a cut in the benchmark rate to 0.1 percent from 0.25 percent.
Expectations aren’t always a guide to the actions of Draghi, who has confounded investors with two rate cuts they didn’t see coming and unconventional efforts to keep the euro intact. With the currency bloc’s fragile recovery also threatened by turbulent global markets and the fallout from the U.S. Federal Reserve’s tapering, the chances are rising that he’ll announce another unprecedented measure.
More
Below, more smoke and mirrors in the extend and pretend EUSSR. When is a gift not a gift?
EU Said to Weigh Extending Greek Loans to 50 Years
Feb 5, 2014 3:44 PM GMT
The next handout to Greece may include extending the maturity on rescue loans to
50 years and cutting the interest rate on some previous aid by 50 basis points,
according to two officials with knowledge of discussions being held by European
autorities. The plan, which will be considered by policy makers by May or June, may also include a loan for a package worth between 13 billion euros ($17.6 billion) and 15 billion euros, another official said. Greece, which got 240 billion euros in two bailouts, has previously had its terms eased by the euro zone and International Monetary Fund amid a six-year recession.
“What we can do is to ease debt, which is what we have done before through offering lower interest or extending the maturity of loans,” Dutch Finance Minister Jeroen Dijsselbloem, who heads the group of euro finance chiefs, said yesterday on broadcaster RTLZ.
More
With both
the BOE and ECB meeting today, the focus is more on the BOE and any possible
tightening of interest rates later in the year, now that UK unemployment has fallen
to the BOE’s target. Adding to the BOE’s complications this year is Scotland’s
independence referendum this coming September.
Complacently
everyone in the UK thinks it a no brainer that the Scots will vote to stay with
the safety of the UK, rather than set out to become the next Iceland, Ireland
or Cyprus. Not so says a leading fund manager at Jupiter. This vote is going to
be a close run thing. Canny Scots now need some fully paid up gold to hedge
against soon getting a very dodgy, new Scots Pound. Preferably held outside of SNP
Bonnie Scotland. The rest of the Brits might want to get some gold too,
breaking up might prove very hard to do, especially if Her Majesty’s southern
Pound suddenly takes the lead in Japan’s currency war.
----for, as long as but a hundred of us remain alive, never will we on any conditions be brought under English rule.
It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom - for that alone, which no honest man gives up but with life itself.
The
Declaration of Arbroath. 6
April 1320
Top fund manager: Scotland vote already hurting investors
A leading fund manager has warned of the 'frightening' effects on markets and investors of September's independence ballot
The September referendum over an independent Scotland is "very scary" and already impacting on investors as markets take fright and companies hold back on investment, according to porftolio manager James Clunie of Jupiter.Mr Clunie, who manages Jupiter's Absolute Return fund - a portfolio which aims to deliver positive returns in any market conditions - said the Scottish Indepence was becoming "an immediate problem". He cited certain companies such as SSE and Centrica in the energy sector, where capital investment was already being delayed, he said, over anxiety about how subsidies might change if Scotland parted from the Union.
He said the likelihood of a "yes" vote was increasing, with the Scottish electorate disinclined to consider some of the practical - but "technical" - potential disadvantages.
"Many people remain undecided and the argument that the people of Scotland are as wealthy as those elsewhere in the UK, on the grounds of GDP per capita, is very convincing," he said. "The technical arguments about details over financial and banking regulation are less engaging."
Mr Clunie, who is Scottish himself and previously worked at SWIP, the asset management arm owned by Lloyds Banking Group, based in Edinburgh, expected the ballot to go against independence but that the outcome would be closer than many anticipated. "It will be scary," he said. "I would expect something close, a narrow margin, such as 48/52 in favour of remaining."
----Almost a half a trillion pounds is managed by Scotland-based investment firms including SWIP (part of Lloyds Banking Group), Alliance Trust, Standard Life, Kame, Aberdeen and others - but the vast majority of these firm's customers live in England.
One possible consequence of a breakaway Scotland would be new regulatory and tax authorities established north of the border, imposing an extra layer of cost on investments managed there.
More
Carney Seeks to Maintain Low-Rate Outlook as U.K. Economy Gains
Feb 6, 2014 12:01 AM GMT
Bank of England Governor Mark Carney and his colleagues are debating how they can
reflect the strength of the U.K. economy in their forecasts without suggesting
that interest
rates are about to go up. Officials are compiling a new quarterly economic outlook, due to be published next week, and reviewing how to guide expectations after unemployment plunged to within a whisker of the threshold for considering an interest-rate increase. Carney says he’s in no rush to end emergency stimulus, and economists expect the Monetary Policy Committee to keep the benchmark rate at 0.5 percent at its monthly decision today.
Carney faces the biggest test of his credibility since unveiling the flagship policy six months ago as he seeks to convince households and businesses that the economy has enough slack to extend almost five years of record-low borrowing costs. Officials stress that Britain faces risks from a euro-area economy struggling to gain traction and emerging-market turmoil.
“The big picture is the tightening labor market and that means an interest rate hike has to come sooner than they previously said,” said Rob Wood, an economist at Berenberg Bank in London and a former BOE official. “The difficulty is, because they have made quite a large forecast error, it requires a bit of an ‘about-face’ in terms of what they may have been planning.”
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 Wednesday
final figures were: Registered 51.23 Moz, Eligible 127.92 Moz, Total 179.15 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No banksters or Wall Street gangsters today, just more on America’s NSA peculiar way of fighting against terrorism by tapping into German Chancellors mobile phones. Was Gerhard Schroeder really a lackey for bin Laden? Is Angela Merkel really a threat to world peace? Something tells me Berlin is just a little miffed.
Iraq War Critic: NSA Targeted Gerhard Schröder's Mobile Phone
February 05, 2014 – 12:03 PM
It wasn't only Chancellor
Angela Merkel's mobile phone that was on the NSA's target list. New German
media reports claim the US spy agency also tapped Gerhard Schröder's phone
calls in the run-up to the 2003 Iraq war.
Edward
Snowden appeared to come very close to announcing the news himself. During his
recent interview with
German public broadcaster NDR, he said: "I would suggest it seems
unreasonable that if anyone was concerned about the intentions of German
leadership that they would only watch Merkel and not her aides, not other
prominent officials, not heads of ministries or even local government
officials."
Now it appears that, in addition
to eavesdropping German Chancellor Angela Merkel's mobile communications, the
National Security Agency was also eavesdropping on Gerhard Schröder's phone
while he was still chancellor. On Tuesday night, the Süddeutsche Zeitung
newspaper and NDR reported that Schröder had appeared on the so-called National
Sigint Requirement List, a list of people and institutions named for targetting
by the intelligence agency whose telephone communications should be monitored.
Schröder was reportedly assigned the number "388" in 2002, if not
sooner.
The reports cite unnamed US
government and NSA insider sources claiming that Schröder was declared a target
for monitoring because of his critical position on US preparations for a war in
Iraq. A person with knowledge of the action is quoted as saying that the US had
reason to believe that Schröder would not help lead the alliance toward
success.
In Germany, the revelations
appeared to create new tensions in German-American relations. Speaking to
SPIEGEL ONLINE, German Justice Minister Heiko Maas, of Schröder's center-left
Social Democratic Party, accused the NSA of conducting indiscriminate mass
surveillance. "Protecting safety appears to be a guise for the NSA to
collect unlimited data," he said. "Eavesdropping on a chancellor's mobile
phone in no way contributes to protecting against terrorist attacks."
----In their reports, Süddeutsche and NDR claim the NSA was tasked not only with collecting metadata, but also information about when and with whom each target was speaking. The contents of telephone calls and SMS messages were also captured. And this appears to have applied to both Merkel and Schröder.
The method the NSA uses to tap mobile phone calls is already publicly known. A mobile phone base station tricks a mobile phone into thinking it is a real mobile phone mast and intercepts the data before transmitting it on to the real one. Any communication intercepted by one of these base stations can be captured.
More
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
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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