Baltic Dry Index. 1480 +89
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008
Why is the
Baltic Dry Index now suddenly surging after losing half its value since the
start of the year? Is China stockpiling copper, coal and iron ore, against a
military showdown with Japan later in the year? Time, as they say, will tell.
Time will
also tell is this is China’s Bear Stearns moment, in the words of Bank of
America “strategists.” If it is, the great disconnect is about to go into a
meat grinder. Did China’s canary just die? Another job for a chair in the Fed?
Run do not
walk to the exit. Getting out early beats all other strategies. Let
pro-gamblers like Warren Buffett stay in stealing every last dollar down to the
end. Cash is King, says an old Wall Street adage. Chaori is probably about to
change the game permanently.
"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.
Chaori Can’t Make Full Payment in China’s First Onshore Default
Mar 7, 2014 6:41 AM GMT
Shanghai
Chaori Solar Energy Science & Technology Co. (002506) has become the
first company to default in China’s onshore bond market after failing to pay interest due
today on a security in full. The maker of energy cells to convert sunlight into power is trying to sell some of its overseas solar plants to raise money to repay the debt, Vice President Liu Tielong said in an interview today at the company’s Shanghai headquarters. The company said on March 4 it will only be able to pay 4 million yuan ($653,990) of an 89.8 million yuan coupon due today on the notes.
Chaori Solar’s failure to pay makes it the first company to default in China’s onshore bond market, according to Guotai Junan Securities Co., the nation’s second-biggest brokerage. There haven’t been any defaults in the nation’s publicly traded domestic debt market since the central bank started regulating it in 1997, according to Moody’s Investors Service.
----This could be China’s “Bear Stearns
moment,” strategists at Bank of America Corp. said earlier this week, and may
prompt investors to reassess credit risks as they did after the troubled U.S.
lender was sold to JPMorgan Chase & Co. in March of 2008. Six months later,
Lehman Brothers Holdings Inc. collapsed in the biggest bankruptcy in U.S.
history.
More
Most China Stocks Fall as Investors Assess NPC, Chaori
Mar 7, 2014 5:29 AM GMT
Most Chinese stocks fell as investors
weighed reform prospects at a legislative meeting and the Wall Street Journal
reported Shanghai
Chaori Solar Energy Science & Technology Co. failed to make a bond interest
payment.
-----The Shanghai Composite Index (SHCOMP) fell 0.1 percent to 2,058.23 at 1:02 p.m., as three stocks slid for every one that rose. Investors are anticipating policies to help the economy move toward services and consumer spending, and away from the credit-driven construction that spurred growth in the past decade.
“There isn’t any exceeding of expectations from what has been announced at the meetings and the positives have been priced in the past few days,” Zhang Haidong, an analyst at Tebon Securities Co., said in Shanghai.“Investors are returning their focus to economic growth and the outlook for IPOs after the meeting.”
The Shanghai Composite has climbed 0.1 percent this week, poised for the first advance in three weeks. It has dropped 2.7 percent this year amid concern the resumption of new share offerings will divert funds and economic expansion will ease as banks tame lending.
More
Zombies Spreading Shows Chaori Default Just Start: China Credit
Mar 7, 2014 6:07 AM GMT
The number of Chinese companies with debt double equity has surged since the
global financial crisis, suggesting the first onshore bond default won’t be the
last. Publicly traded non-financial companies with debt-to-equity ratios exceeding 200 percent have jumped 57 percent to 256 from 163 in 2007, according to data compiled by Bloomberg on 4,111 corporates. The yield on five-year AA- notes leapt 13 basis points in two days to 7.82 percent on March 6, the most in almost four months, after Shanghai Chaori Solar Energy Science & Technology Co. (002506) said it won’t be able to fully pay an 89.8 million yuan ($14.7 million) coupon due today on its March 2017 bonds. Chaori Vice President Liu Tielong said in an interview today the company still can't make the payment.
Some “zombie” companies in China that have cash shortages will fail as authorities end an overly loose monetary policy, Xia Bin, an adviser to the State Council and former central bank board member, said on Feb. 10. Chaori may become China’s “Bear Stearns moment,” prompting investors to reassess credit risks as they did after the U.S. securities firm was rescued in 2008, according to Bank of America Corp.
“After the first one, there may be more defaults,” said Zhang Yingjie, Beijing-based deputy general manager in the research department of China Chengxin International Credit Rating Co., Moody’s Investors Service’s joint venture in China. “The domestic economy is slowing, liquidity is tightening globally and more bonds are maturing this year with greater refinancing pressure, so there may be more defaults.”
More
Echoes of U.S. Subprime Seen in China Debt Ratings for Dagong
Mar 7, 2014 3:16 AM GMT
Competition among China’s
credit-rating agencies is intensifying, leading to a slide in standards
reminiscent of what happened in the U.S. before the financial crisis, according
to Dagong Global Credit Rating Co.
----“China’s rating system has problems similar to those in the U.S. in 2008,” Guan Jianzhong, the Beijing-based chairman of Dagong, said in a phone interview yesterday. “There’s cut-throat competition and it’s not about who accurately evaluates the risks, but comes down to prices and ratings.”
The U.S. Financial Crisis Inquiry Commission said in 2011 that inflated credit grades were partly to blame for the worst downturn since the Great Depression, as rating companies lowered standards to win business amid a housing boom that fueled issuance of mortgage-backed bonds. China ended in 2012 a four-year ban on sales of asset-backed securities and credit assessments are of growing importance as market forces play a greater role in pricing risk in its $4.2 trillion bond market.
More
“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.”
At the Comex
silver depositories Thursday
final figures were: Registered 52.66 Moz, Eligible 130.58 Moz, Total 183.24 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the man who invented the Bitcoin, or maybe
not. Me, I prefer gold and silver that can’t be created or wiped out by the NSA
or GCHQ or spendthrift central banksters.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
The Face Behind Bitcoin
/ March 6, 2014 6:05 AM EST
Satoshi Nakamoto stands at the
end of his sunbaked driveway looking timorous. And annoyed.
He's wearing a rumpled T-shirt,
old blue jeans and white gym socks, without shoes, like he has left the house
in a hurry. His hair is unkempt, and he has the thousand-mile stare of someone
who has gone weeks without sleep.
He stands not with defiance, but
with the slackness of a person who has waged battle for a long time and now
faces a grave loss.
Two police officers from the
Temple City, Calif., sheriff's department flank him, looking puzzled. "So,
what is it you want to ask this man about?" one of them asks me. "He
thinks if he talks to you he's going to get into trouble."
"I don't think he's in any
trouble," I say. "I would like to ask him about Bitcoin. This man is
Satoshi Nakamoto."
"What?" The police
officer balks. "This is the guy who created Bitcoin? It looks like he's
living a pretty humble life."
I'd come here to try to find out
more about Nakamoto and his humble life. It seemed ludicrous that the man
credited with inventing Bitcoin - the world's most wildly successful digital
currency, with transactions of nearly $500 million a day at its peak - would
retreat to Los Angeles's San Gabriel foothills, hole up in the family home and
leave his estimated $400 million of Bitcoin riches untouched. It seemed
similarly implausible that Nakamoto's first response to my knocking at his door
would be to call the cops. Now face to face, with two police officers as
witnesses, Nakamoto's responses to my questions about Bitcoin were careful but
revealing.
Tacitly acknowledging his role in
the Bitcoin project, he looks down, staring at the pavement and categorically
refuses to answer questions.
"I am no longer involved in
that and I cannot discuss it," he says, dismissing all further queries
with a swat of his left hand. "It's been turned over to other people. They
are in charge of it now. I no longer have any connection."
Nakamoto refused to say any more,
and the police made it clear our conversation was over.
But a two-month investigation and
interviews with those closest to Nakamoto and the developers who worked most
frequently with him on the out-of-nowhere global phenomenon that is Bitcoin
reveal the myths surrounding the world's most famous crypto-currency are
largely just that - myths - and the facts are much stranger than the
well-established fiction.
More. Much more.
Dorian Satoshi Nakamoto chased by reporters, denies founding Bitcoin
March 6, 2014, 1:36 p.m.
Dorian Satoshi Nakamoto, who Newsweek alleges is the creator of Bitcoin,
rode around Los Angeles in a car with a reporter while being chased by several
other journalists.Nakamoto emerged from his home and joined a reporter for the Associated Press, according to The Times' Andrea Chang, who relayed her information to Times deputy business editor Joe Bel Bruno.
In a brief exchange with Chang, Nakamoto denied being the creator of Bitcoin.
Before leaving his home in Temple City, journalists had staked themselves outside as the result of a Thursday report by Newsweek. The magazine alleges that Nakamoto is the man who invented Bitcoin, the popular cryptocurrency that gained widespread adoption in 2013.
Bitcoin was invented in the late 2000s, but the identity of the founder has remained a mystery. Many believe the creator uses "Satoshi Nakamoto" as a pseudonym.
http://www.latimes.com/business/technology/la-fi-tn-bitcoin-founder-la-chased-20140306,0,3692933.story#ixzz2vFxJzXT7
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
J. K. Galbraith
Have a great weekend everyone. In the northern hemisphere at
least, Spring is almost here.
The monthly Coppock Indicators finished February.
DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up.
The new Fed bubble continues, but the DJIA and S&P seem to be running out
of momentum.
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