Monday 31 March 2014

Dress Up Monday.

Baltic Dry Index. 1373 -39

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

The real interest rate is probably minus 2% in the world today. It should be in line with the per capita income growth rate or 1%. The difference is 3%.

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

It is the end of the month and quarter. Time for the Great Vampire Squids, with a nod from the Fed, to dress up the markets for valuation day. In the Fed’s final bubble, QE Forever and ZIRP are deliberately targeted at pushing up US stock prices and rewarding highly leveraged stock gambling. Eventually, the Fedster’s believe, the gamblers will drive the US real economy to escape velocity from the effects of the 2007-2009 crash. After 5 years of ZIRP, and trillion dollar a year deficits, with more to deficits come to infinity and beyond, there’s little sign that these policies accomplish much other than to steal the rightful return due to investors and savers, and give it instead to the too big to fail, leveraged gambling houses. The Great Nixonian Error of fiat money lurches on towards its final end in revulsion.

We open today with more on China’s growing bust. Below a “pretty decent guy” leaves a big mess. Plus David Stockman takes a look a modern China and doesn’t like what he sees.

"I think most people who have dealt with me think I am a pretty straight sort of guy, and I am."

Phony Tony Blair. 1997. The People’s Conman.

‘Cement Shen’ Detained Spurs Scavenging as China Developer Fails

Mar 31, 2014 12:00 AM GMT
Amid the cluster of half-built brick townhouses surrounded by budding peach groves on the outskirts of Fenghua city, south of Shanghai, workers last week could be seen taking down metal scaffolding and hauling away steel plates.

They had heard the news about “Cement Shen,” the nickname of the developer whose Zhejiang Xingrun Real Estate Co. became insolvent this month with 3.5 billion yuan ($563 million) in debt, according to an official in the eastern Chinese city of Fenghua, 120 miles (190 kilometers) from Shanghai. Authorities detained founder Shen Caixing and his son for illegal fundraising, Xu Mengting, director of the government information office, said in a March 21 interview.

“The developer owed us hundreds of thousands of yuan” for scaffolding and steel, said workers Xie and Wang, who would only give their surnames as they collected dozens of long metal plates. “We are taking these materials back for now, because there’s no work here.”

The insolvency may portend difficult times ahead for small developers. China has almost 90,000 of them nationwide, National Bureau of Statistics data show. As new-home price growth slows in China and cash-flow conditions tighten, more local builders like Xingrun will face defaults, Fitch Ratings Ltd. Hong Kong-based analyst Andy Chang wrote in a March 19 report.

China’s smaller cities have experienced a building boom. About 67 percent of housing under construction in China last year was in less-affluent cities like Fenghua, according to a Nomura Holdings Inc. report.

With Chinese characters meaning Peach Blossom Palace, the development of two-story homes, some with Tudor-style turrets, was to be sold to the wealthy of Fenghua and the nearby port city of Ningbo. The elder Shen founded Xingrun, the biggest local developer, 14 years ago and was chairman of the local Real Estate Association, according to the city government website.

Wu Xijuan, a 50-year-old property agent at Tengfei real estate agency in Fenghua, said Shen was a celebrity and seemed to be “a pretty decent guy.”

China’s Monumental Ponzi: Here’s How It Unravels

by David Stockman • March 28, 2014

China is the greatest construction boom and credit bubble in recorded history. An entire nation of 1.3 billion has gone mad building, borrowing, speculating, scheming, cheating, lying and stealing. The source of this demented outbreak is not a flaw in Chinese culture or character—nor even the kind of raw greed and gluttony that afflicts all peoples in the late stages of a financial bubble.

Instead, the cause is monetary madness with a red accent. Chairman Mao was not entirely mistaken when he proclaimed that political power flows from the end of a gun barrel-–he did subjugate a nation of one billion people based on that principle. But it was Mr. Deng’s discovery that saved Mao’s tyrannical communist party regime from the calamity of his foolish post-revolution economic experiments.

Just in the nick of time, as China reeled from the Great Leap Forward, the famine death of 40 million and the mass psychosis of the Cultural Revolution, Mr. Deng learned that power could be maintained and extended from the end of a printing press. And that’s the heart of the so-called China economic miracle. Its not about capitalism with a red accent, as the Wall Street and London gamblers have been braying for nearly two decades; its a monumental case of monetary and credit inflation that has no parallel.

At the turn of the century credit market debt outstanding in the US was about $27 trillion, and we’ve not been slouches attempting to borrow our way to prosperity. Total credit market debt is now $59 trillion—-so America has been burying itself in debt at nearly a 7% annual rate.

But move over America!  As the 21st century dawned, China had about $1 trillion of credit market debt outstanding, but after a blistering pace of “borrow and build” for 14 years it now carries nearly $25 trillion.  But here’s the thing: this stupendous 25X growth of debt occurred in the context of an economic system designed and run by elderly party apparatchiks who had learned their economics from Mao’s Little Red Book!

That means there was no legitimate banking system in China—just giant state bureaus which were run by  party operatives and a modus operandi of parceling out quotas for national credit growth from the top, and then water-falling them down a vast chain of command to the counties, townships and villages.  There have never been any legitimate financial prices in China—all interest rates and FX rates have been pegged and regulated to the decimal point; nor has there ever been any honest accounting either—-loans have been perpetual options to extend and pretend.

Exclusive: China seizes $14.5 billion assets from family, associates of ex-security chief: sources

By Benjamin Kang Lim and Ben Blanchard BEIJING Sun Mar 30, 2014 8:31am EDT
(Reuters) - Chinese authorities have seized assets worth at least 90 billion yuan ($14.5 billion) from family members and associates of retired domestic security tsar Zhou Yongkang, who is at the centre of China's biggest corruption scandal in more than six decades, two sources said.

More than 300 of Zhou's relatives, political allies, proteges and staff have also been taken into custody or questioned in the past four months, the sources, who have been briefed on the investigation, told Reuters.

The sheer size of the asset seizures and the scale of the investigations into the people around Zhou - both unreported until now - make the corruption probe unprecedented in modern China and would appear to show that President Xi Jinping is tackling graft at the highest levels.

But it may also be driven partly by political payback after Zhou angered leaders such as Xi by opposing the ouster of former high-flying politician Bo Xilai, who was jailed for life in September for corruption and abuse of power.

Zhou, 71, has been under virtual house arrest since authorities began formally investigating him late last year. He is the most senior Chinese politician to be ensnared in a corruption investigation since the Communist Party swept to power in 1949.

Elsewhere in Asia it was more a case of dress down Monday. Tomorrow, Japan raises its sales tax from 5 percent to 8 percent. The last time Japan did this the Nikkei Index collapsed and Japan entered a lost decade.  Does history repeat?

Abe Bliss Broken as Foreigners Flee Topix in Biggest Drop

Mar 31, 2014 5:11 AM GMT
In just one quarter, the developed world’s biggest stock rally has given way to its worst slump.

Japan’s Topix index, up 51 percent last year, fell 8.9 percent this quarter through March 28, almost twice as much as the next-worst market, Hong Kong. The retreat is emboldening short sellers, whose trades made up as much as 36 percent of daily Tokyo Stock Exchange volume this month. Foreign investors sold 975 billion yen ($9.5 billion) of Japanese shares in one week in March, the most since the crash of 1987.

While equities struggled around the world in the first quarter, declines were worse in Japan, where the euphoria created by Prime Minister Shinzo Abe and the central bank’s steps to beat deflation showed signs of wearing off. An appreciating yen and concern about tomorrow’s sales-tax increase punished shares more than the rest of the world at a time when China’s slowdown, Russia’s annexation of Crimea and worry that the U.S. will raise interest rates sooner than anticipated made gains harder to come by.

Japan Industrial Output Unexpectedly Drops as Tax Hike Looms

Mar 31, 2014 4:03 AM GMT
Japan’s industrial production fell in February, undershooting all forecasts by economists surveyed by Bloomberg News, as the first sales-tax increase since 1997 risks stalling recovery in the world’s third-biggest economy.

Output fell 2.3 percent from the previous month, the steepest drop in eight months, the trade ministry said in Tokyo today. The median estimate of 28 economists was for a 0.3 percent gain. A separate gauge of manufacturing fell in March for a second straight month.

While the weakness partly reflected disruptions from heavy snowfall, the data showed manufacturers are bracing for a slump in demand following tomorrow’s sales-tax increase. Inventories fell for a seventh straight month, lessening the likelihood of even sharper output cuts as the higher consumption levy pushes the economy into a one-quarter contraction in April-June.


Back on the other side of the Great EurAsian landmass, still mostly controlled by Russia and China, rather than Washington or Brussels, the EUSSR continues on with its never ending car crash. With China’s ruling elite turning on each other, there’s great instability abroad in the EurAsian landmass.

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.

A deflationary future beckons for much of Europe, but still the ECB won’t listen

The eurozone has been in paralysis a long time, first in the face of financial crisis and now the clear and present danger of deflation

Your starter for 10. When is a deflationary threat not a deflationary threat? Answer: when you see the world through the eyes of the European Central Bank.

For some reason, there is a general expectation in financial markets that the ECB is about to see the light and take some form of action against sub-1pc inflation in the eurozone when its governing council meets next week, as indeed there was at last month’s meeting, and the one before that. They should prepare to be disappointed.

In February, eurozone inflation stood at 0.7pc, and even two years out, the ECB forecasts that it will still be no higher than 1.5pc.

Admittedly, this is not “deflation” in the accepted sense of the word, but it is well below the ECB’s target rate of “close to 2pc”, never mind that there are some eurozone countries that very plainly are experiencing outright deflation.

Inflation in Spain, it was announced on Friday, is running at -0.2pc, and even “boom boom” Germany is at 0.9pc. As the International Monetary Fund has warned, it wouldn’t take much to tip the entire region into a downward spiral in demand and prices.

----Yet hope springs eternal, and many market pundits predict otherwise. One reason is remarks this week from Jens Weidmann, the generally uber-hawkish president of the German Bundesbank. To almost universal astonishment, he said he had no particular objection to quantitative easing (QE), though when it comes to using “unconventional measures”, he would prefer negative interest rates.

For Mr Weidmann, there is a distinction to be made between quantitative easing, which would be applied pro rata across all eurozone countries according to share of GDP, and the already announced promise of “outright monetary transactions” (OMTs), a commitment to buy bonds without limit in distressed sovereigns. In Mr Weidmann’s view, the targeted nature of OMT purchases would amount to monetary financing, and would therefore be banned by treaties. But broadly-based QE would not.

This is odd, because only last January Mario Draghi, president of the ECB, seemed to suggest that QE would indeed be illegal because it could be considered monetary financing. OMT purchases, on the other hand, were all about making monetary transmission systems more effective, and were therefore perfectly OK.

Since, then, however, he has cited QE as one of three options for “unconventional measures”. Confused? Not half as much as the ECB.

All this serves to highlight the almost impossibly obstructive constraints under which the ECB operates. It can’t act like a proper central bank, not just because it is answerable to so many masters – which means that any consensus will always fall short of what’s required – but also because the eurozone is not a single economic region, but rather a collection of individual sovereigns.

Staying with Germany for now, the realisation is growing that America’s Ukraine sanctions policy, will sink Germany along with Russia and the Ukraine. Sinking Germany also sinks Club Med and the EUSSR.  Who gains from such an inept policy? Unsurprisingly, it’s mostly Uncle Scam.

March 28, 2014, 6:31 a.m. EDT

Ex-German chancellor warns of overreaction to Ukraine

Opinion: Schmidt mirrors German ambivalence

WASHINGTON (MarketWatch) — Former German Chancellor Helmut Schmidt has become the latest German politician to express understanding for Moscow’s position on Ukraine as he warned that overreaction by the West could spur Russian President Vladimir Putin to further aggression.

The 95-year-old Social Democrat sharply criticized the sanctions imposed against Russian individuals as “nonsense” and cautioned that serious economic sanctions could hurt the West, especially Germany, as much as Russia.

He said it was a mistake to exclude Russia from the Group of Eight leading nations just when it was important to maintain a dialogue, but felt the G-20 would be a better forum for resolving the issue in any case.

Schmidt’s remarks in the weekly Die Zeit come as a new poll out this week shows a majority of Germans accept Russia’s annexation of Crimea as a fait accompli and believe Moscow views Ukraine as part of its zone of influence.

While a majority polled believe the West’s response has been appropriate, fully a third consider even the weak sanctions imposed so far as excessive.

----The Left party in Germany, which has also criticized the Western response to Ukraine and accused the new government in Kiev of being fascist and antisemitic, quickly seized on Schmidt’s remarks as echoing their own.

German ambivalence regarding Russia and Ukraine has to be an important part of any calculation about a U.S. response, since the EU’s biggest country will steer the entire bloc in the direction it wants to go.
Schmidt said Putin’s action in Crimea was “fully understandable.” Yes, it violated international law and territorial integrity, but so did Western action in Libya. Schroeder has compared it to the war in Kosovo during his chancellorship, which he says was also technically a violation of the U.N. charter.

The agitated reaction of the West is dangerous, Schmidt said, because it will lead to a corresponding agitation of Russian public opinion.

As to whether Russia might now invade other areas of eastern Ukraine, Schmidt said: “I think it is conceivable, but I think it is a mistake for the West to act as if it was inevitably the next step. That could possibly result in fueling the appetite on the Russian side.”

Schmidt had praise for the “caution” shown in the crisis by the current chancellor, Angela Merkel. He criticized those in the U.S. like Sen. John McCain who are calling for more forceful intervention, reminding his German audience that “at the end of the 21st century, Russia will still be a big neighbor.”

"The paper standard is self-destructive."

Hans F. Sennholz

At the Comex silver depositories Friday final figures were: Registered 53.18 Moz, Eligible 126.50 Moz, Total 179.68 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Before we entered our new lawless age, front running the client’s orders used to be a crime commonly called theft. Not anymore. It’s now bread and butter business to Wall Street’s Great Vampire Squids. It’s like taking candy from a Muppet, to update the old saying.

“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers.
“They saw the writing on the wall in this market as early as 2005.”

High-Speed Traders Rip Investors Off, Michael Lewis Says

Mar 31, 2014 5:01 AM GMT
The U.S. stock market is a rigged game where high-frequency traders with advanced computers make tens of billions of dollars by jumping in front of investors, according to author Michael Lewis, who spent the past year researching the topic for his new book “Flash Boys.”

While speed traders’ strategies, developed over the past decade with help from exchanges, are legal, “it’s just nuts” that they’re allowed, Lewis said during an interview televised yesterday on CBS Corp.’s “60 Minutes.” The tactics are too complicated for individual investors to understand, he said.

“The United States stock market, the most iconic market in global capitalism, is rigged,” Lewis, whose books “Liar’s Poker” and “The Big Short” highlighted Wall Street excesses, said during the interview. The new book comes out today. “It’s crazy that it’s legal for some people to get advance news on prices and what investors are doing,” he said.

Everyone who owns equities is victimized by the practices, in which the fastest traders figure out which stocks investors plan to buy, purchase them first and then sell them back at a higher price, said Lewis, a columnist for Bloomberg View. To show how lucrative the tactics are, Lewis said a technology firm spent $300 million to build a line that would shave three milliseconds off the time it takes to communicate between New Jersey and Chicago, then leased it out to securities companies for $10 million each.

The author’s comments follow New York Attorney General Eric Schneiderman’s decision to investigate privileges marketed to professional traders that allow them to place their computers within feet of exchanges and buy access to faster data streams. Officials at the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission have also said market rules may need to be examined.

----His latest target, high-frequency trading, comprises a diverse set of software-driven strategies that have spread from U.S. equity markets to most developed countries as computer power grew and regulators tried to break the grip of centralized exchanges. While the tactics vary, they usually employ super-fast computers to post and cancel orders at rates measured in thousandths or even millionths of a second to capture price discrepancies on more than 50 public and private venues that make up the American equities market.

High-frequency traders account for about half of share volume in the U.S., a statistic that shows their pervasiveness and hints at the obstacles faced by proposals to rein them in. Exchanges rely on HFTs for profits as well as liquidity, with electronic market makers all but eliminating the old system of human floor traders who oversaw the buying and selling of equities. While critics such as Lewis see a Wall Street plot, proponents say the new system is faster and cheaper.


"God, no, we don't club baby seals. We club babies."

Goldmanite, quoted in The Times of London. November 8 2009.

The monthly Coppock Indicators finished February.

DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up. The new Fed bubble continues, what could possibly go wrong?

Friday 28 March 2014

Europe Saved Again - By Spain!!!

Baltic Dry Index. 1412 -84

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

Isn’t Manual Labour a Spanish waiter? And Hertz van Rental a Dutch artist?

Anon. How to get kicked out of the EU.

We’re saved! Saved once again! Saved by those devilishly clever Iberian oilmen, the “European Texans” with the European “Californian coast.” Champagne corks were popping all across Euroland on Wednesday, when man-made global warming, looney leftist,  UK Guardian newspaper, reported that newly discovered oil off Spain might generate 250,000 jobs by 2065. Reporting on the manna from heaven report published by auditor Deloitte, the Guardian gushed that Spain could become a gas exporter, just like President Putin’s doghouse Russia, though we might have to wait until 2031. By then, if it’s God’s will, I will be 81 or 82, and unlikely to care much if Spain replaces Russia in holding the EUSSR to ransom.

Below, the news that stopped President Putin dead in his tracks, Wednesday. Now will he give back the Crimea and swear fealty to Washington and its King Barry Obama the Good, and his bag carrying, Pantomime underboss, U-turn Cameron the Bad?

Q: How many Spaniards does it take to change a light bulb.
A: Just Juan

Spain's oil deposits and fracking sites trigger energy gold rush
Major offshore oil discoveries and prospects for shale gas extraction are generating excitement – and resistance

Wednesday 26 March 2014 16.02 GMT

Spain is already the world's largest olive oil producer but now it's looking to a very different kind of oil to pull it out of economic decline: petroleum.

The discovery of two significant offshore deposits, and prospects for fracking in many areas, have triggered a black-gold rush, with demand for exploration permits up 35% since 2012.

A report published this week by Deloitte says the oil industry could create 250,000 jobs and constitute 4.3% of GDP by 2065. The report is based on an estimate of 2bn barrels of oil and 2.5bn cubic metres of gas.

The oil companies estimate that the deposits in a series of oilfields off the Canaries, the latest of which was confirmed last week, amount to 500m barrels of crude.

Deloitte predicts that Spain could become a gas exporter by 2031 while producing 20% of the oil it consumes.

With 6 million people unemployed and an economy that shows only feeble signs of recovery, the Spanish government seems ready to brush aside environmental concerns and give the green light to the oil companies.
These are led by the Aberdeen-based oil and gas exploration company Cairn Energy and the Anglo-Turkish firm Genel Energy, headed by the former BP boss Tony Hayward. So far, 70 licences have been granted to explore both shale gas and conventional resources.

The main offshore deposits lie between Lanzarote, in the Canary Islands, and Morocco, and in the Bay of Valencia, close to Ibiza. As both the Canaries and Ibiza are places of great natural beauty whose principal industry is tourism, there is intense opposition to the plans.

Opposition is so fierce in Ibiza that the Eivissa diu no (Ibiza says no) movement has succeeded in creating a united front across the entire political spectrum, taking in environmental groups and hoteliers, and has won the support of celebrities such as Kate Moss, Sienna Miller, Fatboy Slim and Paris Hilton, who wrote on Instagram: "Don't let them ruin one of the most beautiful islands in the world." The record producer and rapper Puff Daddy described the plans as "a disaster on every level".


Next up, Japan. Does history repeat? On Tuesday next, Japan is about to find out when their sales tax jumps from 5 percent to 8 percent. One last weekend of manic shopping ahead to beat the coming sales tax hike.

March 28, 2014, 2:01 a.m. EDT

Japan steps off the tax cliff Tuesday — Can it survive?

LOS ANGELES (MarketWatch) — The year was 1996. Japan had gone from a rising economic superpower to a nation in decline, mired in what would be known as “The Lost Decade.”

And yet a recovery seemed just around the corner, as most economic indicators were popping back up to levels last seen during the heyday of the 1980s boom.

The late Ryutaro Hashimoto was prime minister at the time, and with an eye to shoring up Japan’s finances, he decided to raise the consumption tax — a sort of national sales tax that covers almost all goods and services — by two percentage points to 5% at the start of the new fiscal year in April 1997.

The result was unmitigated recession, dashing any hope that Japan would quickly return to its rapid growth of the previous decade. And while some of this was likely due to the Asian financial crisis that broke out several months later, the tax hike has taken much of the blame. Until recently, the idea of another consumption-tax increase was inextricably linked to the idea of economic retreat.

Unfortunately, Japan is also facing a huge public-debt load, at around 225% of annual GDP in 2013. Also, the nation could really use a corporate-tax cut — the Nikkei Asian Review cites data showing Japan’s effective corporate-tax rate is well above that in the U.S., U.K. and France, and is more than double what Germany charges.

To cut the debt and to pay for a possible easing of the corporate tax at some point down the road, Prime Minister Shinzo Abe is set to raise the consumption tax for the second time in Japanese history.

And not just one hike either: While the rate will go to 8% from its current 5% on Tuesday, the government is planning another hike to 10% in October 2015 if all goes well with the April increase.

But will Japan’s economy survive the shock?

While we wait for Spain’s “Texans” to get on with saving the EUSSR and the world with a new era of cheap oil and gas by 2065, we close for the week noticing that America is about to run out of soybeans, thanks to rising demand for pork in China, while this year’s Spring planting season in America looks likely to get off to less than a stellar start in much of the northern grain belt. Not to worry though, we can always rely on the Ukraine, Brazil, and Argentina for wheat and soybeans, right? Plus QE Forever and ZIRP to put meat and potatoes on our plates, a chicken in every pot.

Below, a food inflation crisis is brewing. Will McDonald’s have to put steak on the menu?

“He [your candidate here]  had just about enough intelligence to open his mouth when he wanted to eat, but certainly no more.”

With apologies to P. G. Wodehouse.

Chinese Pigs Eating Soybeans Cut U.S. Supply to 1965 Low

By Jeff Wilson Mar 27, 2014 2:49 AM GMT
In the 60 years that Ursa Farmers Cooperative has been loading Midwest soybeans onto boats along the Mississippi River, business has never been this good.

Barge convoys are heading south along the world’s busiest inland waterway to New Orleans export depots at a record pace as demand surges from pig farmers in China, the largest pork-eating country. Soy stockpiles in the U.S., where farmers harvested the third-largest crop ever just six months ago, are the lowest relative to demand in at least five decades, fueling the second-biggest rally in prices to start the year since 2005.

“Our soybean supplies will be empty by the end of April,” said Scott Meyer, grain department manager at the Ursa, Illinois-based terminal owner, which loads about 35 million bushels of crops annually. “Chinese demand for soybeans was a lot stronger than everyone expected this year.”

---- Stockpiles of soybeans on March 1 probably dropped to 987 million bushels (26.9 million metric tons), the smallest for this time of year in a decade, according to the average of 30 analyst estimates compiled by Bloomberg. Reserves will be equal to 30 percent of estimated annual use and exports of 3.319 billion bushels, the lowest ratio for this time of year since at least 1965, U.S. Department of Agriculture data show.
The agency will update its quarterly crop-inventory estimates on March 31.

Since Sept. 1, shipments of U.S. soybeans jumped to 39.7 million tons, up 22 percent from a year earlier and almost reaching the government forecast for 41.64 million tons for the entire 12 months ending Aug. 31, according to the USDA. Two thirds of those shipments ended up in China, the biggest buyer, with exports reaching 26.494 million tons, topping the previous record of 24.464 million tons three years earlier.

Pork production has surged 38 percent in China since 2000, now accounting for more than half of global output, as the nation’s expanding economy boosted incomes and people were able to afford to eat more protein. To feed the world’s largest hog herd, livestock producers import U.S. soybeans that were as much as $7 a bushel cheaper than Chinese supplies in January, based on cash prices in the Gulf of Mexico.

“Chinese demand for U.S. beans was so strong, so early that it simply depleted supply,” said Randy Mittelstaedt, the director of research for R.J. O’Brien & Associates in Chicago. Compounding the inventory drain was better-than-expected demand from Europe, hoarding of supply by Argentine farmers and a smaller crop in India, he said.

---- The outlook for Brazil’s crop has been reduced after hot, dry weather in the east and too much rain in the central growing region in February. After predicting a 90 million-ton harvest in February, Brazil’s government forecaster, Conab, said March 12 output will be 85.4 million.

Farmers in Argentina, the biggest shipper of soybean meal and soybean oil, withheld supplies until last month, waiting for a devaluation of the peso against the dollar. Many store soybeans to hedge against inflation as they are paid in pesos at a dollar value by exporters and processors. Chicago soybean-meal futures are up 13 percent this year.

Corn, soybeans look to extend gains as weather threatens planting season

March 26, 2014, 12:44 PM predicts that lingering effects of the winter will cause planting delays. That may mean further price gains for corn and soybeans, which are already among the bigger gainers in the commodities market — up around 12% each this year.

“While the South will be right on schedule weather-wise for prime planting with looming frost concerns, delays will become more and more likely with every mile heading north,” AccuWeather said in its Spring 2014 Planting Forecast report issued Wednesday.

“Damp soil leftover from winter, melting snow and lagging temperatures mean a lot of places are going to have a slow planting period across the Midwest, northern Plains and the Great Lakes,” AccuWeather Senior Meteorologist Dale Mohler said.

With corn CK4 -0.26% and soybeans SK4 -0.21% being the largest crops in the Midwest and the Plains, which are planted typically in April and May, one of the most influential factors in when to plant is soil temperature, and “soil temperatures must be warm enough to support whatever crop you are planting,” Mohler said. For corn that’s 50 degrees Fahrenheit or above and for soybeans it’s 54 degrees Fahrenheit or above, he said.

But after the harsh, record-breaking cold and snow, meteorologists are concerned that with the ground still frozen in the Ohio Valley and Upper Midwest, it may take longer for the frost to thaw out of the ground and that could keep soil temperatures lower longer, AccuWeather said.

This spring is also the second in a row with a severe drought for western Texas through central California and that’ll take a toll on the planting season too, the weather forecasting service said.

“This time last year farmers were already in the field,” said Mitch Kasper, managing principal with Midwest AG Investors, but in the Midwest, “with cold weather this week, and 20-30 inches of frost in most areas, we are in danger for a very late planting.”

“The root systems need time to mature before the hot summer weather hits,” he said. “Late planting makes the plants much more likely to be damaged later in the season.

March 27, 2014, 9:18 a.m. EDT

10 things steakhouses won’t tell you

These days, it’s distressingly rare to get a meal that’s well done

Got beef? Despite the sluggish economy and warnings about the health consequences of eating too much red meat, steakhouses have more than held their own in recent years. For 2014, sales in the premium steak-restaurant category are projected to grow 3.2%, compared with 2% for the broader full-service chain-restaurant category, according to market researcher IBISWorld. Moreover, some steakhouse chains have been in expansion mode: Since the mid ’90s, the Capital Grille, which is part of the Darden DRI -1.22%   family of restaurants, has gone from just a handful of locations in the Northeast to more than 50 spread across 20-plus states.

The problem with all this growth? There are concerns there may not be enough quality beef to go around, given that the best steakhouses typically serve USDA-graded prime, which accounts for just 3% of the total supply in the country. What’s more, the boom undermines the idea of steakhouses as unique destinations for special occasions. “It’s a sea of sameness,” says Mat Mandeltort, a veteran restaurant professional who’s a manager with Eby-Brown, an Illinois-based food-service company.

March 18, 2014, 9:38 a.m. EDT

Tomorrow’s hamburger may cost as much as today’s steak

Beef prices expected to rise through 2016

Beef: It’s what you can’t afford for dinner — for years to come.
Retail beef prices have climbed once again. From January to February, the prices that consumers paid for meat, poultry fish and egg climbed 1.2% (and over the past 12 months, 4%), according to government data ; that’s compared with 0.4% (and 1.4%) for food overall. The data shows that urban consumers paid an average of nearly $3.56 per pound for 100% ground beef.

What’s more, experts say that climbing beef prices are here to stay. The USDA’s Economic Research Service projects that beef prices will rise faster than almost anything else this year. Don Close, a cattle economist with Rabo AgriFinance says he thinks prices this year could rise 7% to 8% and roughly the same amount in 2015. Kevin Good, a senior analyst at cattle research firm CattleFax, says that “higher prices will continue through 2015 or 2016.”

Good says that ground beef may see especially steep price hikes. He thinks that while steak retail prices could climb 5% to 10% in 2014, ground beef could climb 10% to 15%.

So what’s with the sky-high beef prices? The bigger beef bills have been partially due to the fact that the cattle herd in the U.S. — the largest beef producer in the world — fell to an estimated 63-year low, according to a Bloomberg survey.

Where's the Beef

At the Comex silver depositories Thursday final figures were: Registered 53.18 Moz, Eligible 127.66 Moz, Total 180.84 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

As Great Britain stumbles and bumbles its way towards a Scottish independence referendum later this September, they should have called in Vlad the Bad to organise one of the instant ones, we present a poem from the history of the Irish Home Rule debacle of the 1880s.

It is never difficult to distinguish between a Scotsman with a grievance and a ray of sunshine.

P. G.Wodehouse.

United Kingdom they fancied wouldn't do.
To please some grumbling Irishmen they split it in two.
Two little kingdoms, but then the Scots, you see,
Claimed their ancient throne and rights, then there were three.
Three little kingdoms but then one more,
For Welshmen claimed a Parliament and then there were four.
Four little kingdoms wouldn't do it all!
One of them was too big; the others were too small.'
And this is the price we'll pay
Take a lesson from your history.
'Divide and conquer is the game we play.'
And this is the price we'll pay.
'All across Great Britain ancient hates revived.
Cornwall wants to rule herself, and then there were five.
Five little kingdoms, but London in a fix,
Raised the 'Southern English' flag and then there were six.

Miss J E Clarke of Eynsham - A poem in Judy Magazine for Girls 28 August 1889.

Right now the yes campaign is still stuck in the 30 percents. Sounds to me like Scotland’s “Wee Eck” needs to call in Russia’s Vlad.

“Say what you will, there is something fine about our old aristocracy. I'll bet Trotsky couldn't hit a moving secretary with an egg on a dark night.”

 P.G. Wodehouse.

Have a great Spring weekend everyone. In the UK it’s time to move the clocks round the house.

The monthly Coppock Indicators finished February.

DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up. The new Fed bubble continues, what could possibly go wrong?