Baltic Dry Index. 1391 +66
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
It is put up
or shut up time for Europe’s leaders, who up until now have talked themselves
into a corner over the USA-EU coup d’état in the Ukraine. The EU geniuses must
now either come up with some fig leaf of nominal sanctions against Russia for
occupying the Crimea, or actually impose real sanctions and risk
plunging the EU back into a deep recession. In the inmate asylum of the EUSSR,
it’s 2014s version of 1914. For much of the continental EU, real Russian
sanctions playing to the media gallery, cuts their own throat.
EU to Weigh Ukraine Sanctions, Russia Spurns Diplomacy
Mar 6, 2014 12:52 AM GMT
European Union leaders will consider repercussions for Russia at an
emergency meeting today on the Ukraine crisis, after Russia’s foreign minister
fended off a U.S. effort to ease tensions in the Crimean peninsula. German Chancellor Angela Merkel and U.K. Prime Minister David Cameron will participate in today’s EU meeting in Brussels, a day after the 28-nation bloc offered 1.6 billion euros ($2.2 billion) in emergency aid to help the new Ukrainian government avert a default.
Western nations including the U.S. are threatening Russia with sanctions over its military intervention in Crimea while pursuing diplomacy in an effort to defuse the crisis. Russia has accused the West of supporting a coup against Ukraine’s former president and rejected EU proposals to broker a settlement.
----Russia’s Foreign Minister Sergei Lavrov
refused to attend a meeting yesterday with his Ukrainian counterpart in Paris
that was urged by Kerry. Lavrov and Kerry met in the French capital in their
first face-to-face encounter since Ukrainian president Viktor Yanukovych fled
his country during a popular uprising last month.
More
Elsewhere
the Ukraine coup is just seen as a big western media run bore.
Asian Stocks Heading for Six-Week High as Japan Climbs
Mar 6,
2014 4:16 AM GMT
Asian stocks advanced, with the regional benchmark heading for its
highest close in six weeks, as telecommunications companies led gains. Japanese
shares rose after the yen weakened and an advisory committee said the world’s
largest pension fund doesn’t need a domestic-bond focus. SoftBank Corp. jumped 4 percent in Tokyo as Japan’s third-largest wireless carrier contributed the most to the regional benchmark’s advance. Myer Holdings Ltd. (MYR), Australia’s largest department-store operator, added 1.9 percent in Sydney after the nation’s retail sales in January climbed the most in a year. Tencent Holdings Ltd., the world’s best-performing major technology stock in the past five years, increased 1.9 percent in Hong Kong to head for a record close.
The MSCI Asia Pacific Index rose 0.7 percent to 138.52 as of 12:01 p.m. in Hong Kong, with about two shares rising for each that fell. The 128.6 trillion yen ($1.26 trillion) Government Pension Investment Fund should seek yearly returns of 1.7 percent plus the rate of pay increases for workers, according to a draft report from the committee tasked with helping the health ministry decide on economic assumptions for investment targets.
“I think pension funds are moving in the right direction because they have been too risk averse,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($107 billion) in assets. “It’s not a bad thing they are going to take risk, but we need to be ready for higher volatility in assets.”
Japan’s Topix index rose 0.9 percent as the yen touched a five-week low against the dollar. Hong Kong’s Hang Seng Index added 0.5 percent. South Korea’s Kospi Index was little changed. New Zealand’s NZX 50 Index advanced 0.6 percent, extending a record high.
More
Europe’s Russia Gas Imports Jump to 3-Week High as Buyers Hoard
Mar 6,
2014 12:01 AM GMT
European utilities boosted imports of natural gas from Russia to the highest level in three weeks even as
storage remains at record-high levels amid the mildest winter since 2007. Russia shipped 493 million cubic meters of gas to Europe, excluding the Baltic States, on March 3, the highest level since Feb. 10, Energy Ministry data show. Storage sites in the region are 47 percent full, 12 percentage points above the same time last year and the highest since at least 2008, according to Gas Infrastructure Europe, the Brussels-based lobby group.
U.K. gas prices jumped the most in 29 months on March 3 as Russia took control of the Crimean peninsula in Ukraine, which transits about 15 percent of Europe’s use, before paring gains the next day after President Vladimir Putin said there was no immediate need for military action. Bulgaria and Serbia, which suffered shortages in the past decade amid disputes between Russia and Ukraine, are pumping gas into storage.
“The increased flow could be for countries such as Bulgaria, Romania, Serbia and around there that are dependent on Russian imports via Ukraine,” Thierry Bros, an analyst at Societe Generale SA said yesterday by e-mail from Paris.
More
But there
may be trouble ahead. The big disconnect just keeps on getting bigger. Stay
long fully paid up physical gold and silver.
Ukraine’s Wheat, Corn Face Mounting Drought Risk, Martell Says
Mar 5, 2014 7:09 PM GMT
Winter-wheat crops and corn prospects in Ukraine face mounting risk from an
intensifying drought in central and eastern areas amid political tensions with Russia, according
to Martell Crop Projections. Parts of Ukraine, projected to be the world’s third-biggest corn exporter and sixth-largest wheat shipper, got 30 percent to 50 percent of normal rain in the past four months, Martell said. Normal precipitation this spring probably won’t compensate for soil-moisture deficits of as much as 4 inches (10 centimeters).
“This is a serious drought developing,” Gail Martell, the president of the agricultural consulting company in Whitefish Bay, Wisconsin, said in a telephone interview. “It will take a lot of spring rain to change the pattern.”
---- The weather pattern that brought heavy rain to western Europe and Russia during the past three months left most of Ukraine dry, Martell said. This upper-atmosphere “omega pattern” shows some signs of weakening without signaling a dramatic improvement in precipitation this month, she said.
“The developing drought has been masked by the lack of evaporation during the winter months,” Martell said. “Once it begins to warm up in the next 30 days, the wheat crops are going to show stress from the dry weather.”
More
China Bear Stearns Moment Seen by BofA in Solar Default
Mar 6, 2014 3:50 AM GMT
The growing risk of default by Shanghai Chaori Solar Energy Science &
Technology Co. 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. “We doubt that the financial system in China will experience a liquidity crunch immediately because of this default but we think the chain reaction will probably start,” Hong Kong-based strategists David Cui, Tracy Tian and Katherine Tai wrote in a note yesterday. During the U.S. financial crisis, it took a year “to reach the Lehman stage” when investors began to panic and shadow banking froze, the strategists added.
The maker of solar cells said March 4 it may not be able to make an 89.8 million yuan ($14.7 million) interest payment in full by the deadline tomorrow. As sub-prime mortgages fell amid the 2008 U.S. financial crisis, banks began hoarding cash, causing two Bear Stearns Co. hedge funds to seek bankruptcy protection. The troubled bank was sold to JPMorgan Chase & Co. in March of that year in a deal facilitated by the U.S. Federal Reserve. Six months later, Lehman Brothers Holdings Inc. collapsed in the biggest bankruptcy in U.S. history.
Chaori’s potential failure to pay
investors would mark the first bond default in Asia’s largest economy,
highlighting the strain in China’s $4.2 trillion bond market after a trust
product issued by China Credit Trust Co. was bailed out in January.
----Billionaire investors George Soros
and Bill Gross
have drawn parallels this year between the situation in China now and that in
the U.S. in the run-up to the 2008 financial crisis. Borrowing costs for
China’s high-yield debt issuers may jump 200 basis points, or 2 percentage
points, following a default by Chaori, according to Yang Kun, a Shanghai-based
bond analyst at Guotai Junan Securities Co.
More
Most China Stocks Fall; Lou Says Below-Target Growth Acceptable
Mar 6, 2014 5:38 AM GMT
Most Chinese stocks declined as Finance Minister Lou Jiwei said
economic growth below the government’s target is acceptable and investors
speculated new share sales will divert funds. Property developers rallied. Prada SpA (1913), the Italian maker of handbags, sank to the lowest level since August 2012 in Hong Kong while Yanzhou Coal Mining Co. (600188) dropped 2.1 percent in Shanghai after Lou said the government will impose higher taxes on luxury goods and products that hurt the environment. The ChiNext Index of small companies lost 0.7 percent as the Shanghai Securities News said regulators will draft a reform plan for initial public offerings this year. Poly Real Estate Group Co. climbed 4.1 percent as a gauge of property companies rose 1.6 percent.
Almost two stocks dropped for each that rose on the Shanghai Composite Index (SHCOMP), which fell 0.1 percent to 2,051.79 at 1:32 p.m. local time, paring an earlier 1.1 percent loss. Policy makers can achieve their goals with economic growth of 7.2 percent or 7.3 percent, as their key focus is employment, Lou said at a briefing in Beijing. Premier Li Keqiang unveiled a 7.5 percent expansion target yesterday.
“There’s market concern that the economy will still face relatively big downside pressure,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Small-caps face correction pressure as a new round of IPOs may start soon.”
Investors are trying to judge the ruling Communist Party’s toleration for slower growth as policy makers seek to tame the country’s $21 trillion debtload and reduce pollution. China hasn’t missed a target for annual growth since 1998, during the Asian financial crisis when Zhu Rongji was premier. That year, the economy expanded 7.8 percent, versus an 8 percent goal.
More
China's Li Doesn't Believe His Own Numbers
2
China’s Premier Li Keqiang isn’t the sort of man to blush in public. But
yesterday, when he went in front of China’s national legislature and targeted 7.5% growth in gross domestic
product for 2014, he should have.The problem isn't the number -- most economists agree that 7.5% is a manageable if difficult goal. Rather, the issue is that Li Keqiang himself doesn’t believe in the accuracy of Chinese GDP statistics.
That, at least, is what he told then-U.S. ambassador to China Clark Randt over dinner on Mar. 12, 2007. At the time, Li was the Secretary General of Liaoning Province, and widely viewed as a potential successor to Chinese President Hu Jintao. According to a Mar. 15, 2007, declassified U.S. diplomatic cable (released by Wikileaks) recounting the dinner, a “smiling” Li declared that Chinese GDP figures were “man-made” and therefore unreliable -- “for reference only."
Of course, only the most naïve economist would believe that a country as large and unruly as modern China could produce accurate GDP figures. Li told Randt that he preferred three different measures for evaluating his province’s economy, all of which were harder to fudge: electricity consumption, volume of rail cargo, and loan disbursements. “By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth,” the cable reported. Not long after the cable was released, the Economist -- in tribute to Li’s candor -- created the Keqiang Index, revealing a far more volatile Chinese economy than official GDP numbers suggested.
More
China Military Spending Rise Signals Firm Stand on Disputes
Mar 6, 2014 4:56 AM GMT
China is beefing up
spending on high-tech weapons and upgrading combat readiness as it throws its
military weight behind territorial claims that have stirred tensions with Japan and Southeast
Asian neighbors. Premier Li Keqiang said the defense budget from the central government -- which will rise 12.2 percent to 808.2 billion yuan ($131.6 billion) this year -- would be used to modernize the force and enhance defense of its land, coastal and air boundaries. Defense will make up a slightly larger part of the government’s total expenditure than last year.
In a reference to rising friction with Japan, Li said at the opening of a meeting of the annual legislature that China “will safeguard the victory of World War II and the postwar international order, and will not allow anyone to reverse the course of history.”
China has signaled that it won’t back away from its more assertive stance in regional disputes, said Mathieu Duchatel, head of the China and Global Security Project at the Stockholm International Peace Research Institute, or Sipri, in Beijing.
“If anyone moves in the region on territorial disputes there will be a strong answer,” Duchatel said. “The rising military spending reinforces this position and makes it more credible.”
More
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
At the Comex
silver depositories Wednesday
final figures were: Registered 52.66 Moz, Eligible 129.82 Moz, Total 182.48 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, as everyone races to save “money,” how our outsourced medicines are made. While the one percent thrive on QE forever and too big to fail or jail bailouts, for everyone else it’s a descent into the third world. Trust me I’m a doctor. Flies or not, keep taking the pills.
Flies Found By FDA Threaten Indian Town Built on Generics
Mar 6,
2014 3:17 AM GMT
America’s $93 billion pipeline of generic pharmaceuticals often starts in
places like Toansa, a village in northern India where a drug-making facility
rises up beside mustard fields and manure-flecked ox-cart tracks. Toansa’s factory complex -- owned by Ranbaxy Laboratories Ltd., one of India’s largest drugmakers -- has for years produced ingredients for dozens of pharmaceuticals sold to Americans, including AstraZeneca Plc’s top-selling heartburn medication Nexium, as well as its own generic copies of drugs including Pfizer Inc.’s Lipitor.
Ranbaxy and its Toansa factory are in the crosshairs of the U.S. Food and Drug Administration, which has recently taken a tougher stance on the quality of generic drugs originating in India amid complaints by doctors and others. The agency said last month that it has begun a $20 million program to test generic drugs.
In January, FDA inspectors paid a surprise visit to the facility in Toansa, in a rural area north of New Delhi, and found broken equipment, windows stuck open and flies “too numerous to count,” according to the FDA’s report of its inspection. Workers ran quality tests over and over until they got the results they wanted, the FDA noted.
Shortly after, the FDA banned the import of drug components made at the Toansa plant.
Ranbaxy voluntarily suspended all shipments of active pharmaceutical ingredients, or APIs, from Toansa and a second Indian plant, Dewas, after the FDA ban, Ranbaxy’s parent company, Daiichi Sankyo Co., said in a Feb. 25 statement. Ranbaxy is continuing to make drugs for non-U.S. markets using API inventory from Toansa and Dewas and from external sources, Yasuki Minobe, a Daiichi spokesman, said by telephone March 4.
A recent visit to Toansa found a town deeply dependent on the fortunes of Ranbaxy. While consumers in rich nations have learned about the workers who make their T-shirts and tennis shoes, less light has been shed on those who make medications that save and extend lives. The happenings in Toansa help illuminate working conditions in India’s pharmaceuticals industry, which has grown as wealthy governments seek to reduce the costs of medical treatments.
In August, a machine explosion at the Toansa facility left worker Rajan Sikka with shattered bones in his face, memory loss and partial paralysis. In early October, a contract worker there died from inhaling poisonous gas, according to a police account cited in his postmortem report. The worker had been handling chemicals after being asked to fill in for a technician who went on a break, according to a coworker and family members citing accounts from the worker’s colleagues.
Ranbaxy said there had been no gas in the area of the deceased worker, a 28-year-old who it said apparently died of cardiac arrest. It said Sikka, the injured worker, is recovering at home. Ranbaxy strives to “continuously strengthen and improve our systems, processes and occupational health and safety procedures,” a spokesman said in a Feb. 24 e-mail.
The FDA’s Toansa ban completed a grim sweep: Ranbaxy once had four Indian facilities registered with the FDA to send drugs and drug components to America. Toansa was the last of the four to have its products suspended from U.S. sale for failing to meet the FDA’s so-called current Good Manufacturing Practices.
Those last two suspensions came after Ranbaxy agreed last year to pay a $500 million settlement in the U.S., in which it admitted it sold batches of drugs that were improperly manufactured, stored and tested. It also pleaded guilty to four felony counts of knowingly making false statements to the FDA.
----While Indian producers accounted for 6 percent of the dollar value of all generic drugs sold in the U.S., they accounted for one-quarter of generics sold by volume, according to Standard Chartered, which analyzed data from IMS Health.
More
"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."
Elgin Groseclose
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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