Baltic Dry Index. 1562 +19
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“The Germans [your country here] outside
looked from America to Russia, and from Russia to America, and from America to Russia
again; but already it was impossible to say which was which.”
With apologies to George Orwell and
Animal Farm.
We open
today with the German take on America’s botched Coup in Kiev. It is widely
reported that Berlin bankrolled the Coup with several hundred million dollars
of long term support. The reality is that we will probably never know. What we
do know though, is that this Coup had the unintended consequence of giving
Russia back the Crimea. That it will likely lead to a disastrous trade war with
Russia, and just possibly lead to a civil war in the Ukraine. 2014 has all the
makings of yet another game changing year of the 14s.
Stay long
fully paid up physical gold and silver. Now we must all play Chicken Kiev. An
American led trade war with Russia probably does in continental Europe’s,
wealth destroying European Monetary Union. Every cloud has a silver lining so
they say. On the Great Nixonian Error of
fiat money, it’s getting harder and harder to keep the dollar reserve standard
functioning. Did a Black Swan just fly in?
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith
Beyond Ukraine: Russia's Imperial Mess
By SPIEGEL Staff
----The
new premier speaks rapidly, as if to drown out any skepticism. "We want no
violence or casualties," he says, adding that everything should proceed
peacefully. "However, we are not letting the Ukrainians out of their
barracks, so that they can no longer act on any criminal orders from
Kiev." He says that his people are in control of all of Crimea, but NATO
experts claim that at least 2,000 Russian soldiers have been brought to the
peninsula by air, for a total of 20,000 troops in Crimea. Another 20,000 are
supposedly standing ready nearby.
----At this point, no one is
laughing. Russian soldiers have repeatedly prevented military observers from
the Organization for Security and Cooperation in Europe (OSCE) from entering
Crimea. Pro-Russian "civil defense squads" have threatened United
Nations special envoy Robert Serry in Simferopol. "Militarily speaking,
Crimea is already lost," says a NATO general. "The Ukrainian army is
fighting a lost cause." According to a German military internal situation
report, the events in Crimea could be repeated in eastern Ukraine.
So far, Moscow's provocations in Crimea
haven't resulted in any deaths. Nevertheless, all it takes is one murder or one
gun battle to ignite the powder keg of tensions in the region. It begs the
question: Almost 100 years after the beginning of World War I, and almost 25
years after the end of the Cold War and the realignment of Europe, could there
possibly be a new military conflict between the major powers in Europe?
'Most Serious Crisis' Since Cold
War
German Foreign Minister
Frank-Walter Steinmeier has called it the "most serious crisis since the
fall of the Berlin Wall" -- seemingly ignoring the terrorist attacks of
Sept. 11, 2001. US President Barack Obama characterized Moscow's intervention
as a "violation of international law," while former US Secretary of
State Hillary Clinton compared Putin's alleged concerns over "ethnic"
Russians in eastern Ukraine to Adolf Hitler's actions in Sudetenland in 1938.
Officials at NATO and the
European Union have been meeting almost around the clock. Late last week, Obama
spent more than an hour on the phone with Putin, who has shown no sign of
backing down. The Western leaders now face the challenge of exerting pressure
on Russia while simultaneously keeping the channels of communication open.
They are also being confronted
with a different series of questions: What kinds of sanctions could even
persuade Russia's aggressive leader to withdraw? What does Vladimir Putin want?
Does he want to annex Crimea or even eastern Ukraine, or perhaps seize control
of even more territory along Russia's borders? And are these merely the actions
of a cornered fighter or does he truly believe he can create a modern
reincarnation of the Soviet Union?
The United States and the EU
approved initial sanctions against Moscow late last week, Washington sent
military reinforcements to Poland and the Baltic countries and the German
federal police promptly suspended half a dozen cooperative programs with
Russia. On Sunday, the Polish Defense Minister announced that the US was
sending 12 fighter jets to Poland.
But aside from these measures,
the situation has thus far been characterized by a horrifying sense of
helplessness. On the one hand, Russia is part of the globalized community of
nations, tightly interconnected through regular political consultations, the
economy and tourism. Russia's commodities exports to Europe make up close to
half of the central government budget, and its connections to the rest of the
world are obvious. But then, on the other hand, there is the Russian president,
who is apparently trying to break ranks with this interdependent, civilized
world.
The events of the last few weeks
have underscored a lack of understanding between East and West, as well as the
West's crass ignorance and incomprehension of Putin's motives. As much as the
leaders on both sides feel that they know each other, vast differences remain.
"Putin is living in another
world!" German Chancellor Angela Merkel reportedly exclaimed in a phone
call with Obama last week. Putin, for his part, voiced almost identical
opinions about the West in a press conference with handpicked journalists,
saying, "They sit there across the pond as if they're in a lab running all
kinds of experiments on rats, without understanding consequences of what
they're doing." By "rats" he apparently meant the new Ukrainian
leadership, which Putin believes is being controlled by Washington.
But the Kremlin leader has
succeeded in one respect: He has divided the West. This process began months
before his foray into Crimea, when he granted temporary asylum to US
whistleblower Edward Snowden. Snowden had leaked documents on the massive
surveillance activities of the NSA, heightening the distrust among the Western
allies to levels unseen since World War II. And the fact that Washington has made
no effort to conclude a no-spying agreement with Berlin has only worsened the
sense of alienation between the two countries.
More
In business
news, China’s renewed wobble is spreading. We are a half a misstep away from a
black swan. Is the world’s largest bond fund about to implode? Surely not
another MF Global?
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
Iron Ore’s Bear Market Deepens on Demand Concern in China
Mar 11, 2014 2:40 AM GMT
Iron
ore extended its decline into a bear market, slumping by the most since
August 2009, amid concern that demand in China is slowing
just as rising output signals a global glut. Ore with 62 percent content delivered to Tianjin fell 8.3 percent to $104.70 a dry ton, the lowest since October 2012 and the biggest drop in more than four years, according to data from The Steel Index Ltd. yesterday. The benchmark price lost 27 percent since Aug. 14, when it reached a five-month high of $142.80. The raw material dropped into a bear market on March 7.
BHP Billiton Ltd. (BHP) and Rio Tinto Group predict lower prices this year after producers in Australia and Brazil spent billions of dollars to expand output. Banks from Citigroup Inc. to Standard Chartered Plc predict a global surplus, and Goldman Sachs Group Inc. listed iron ore among its least-preferred commodities for 2014. A surge in stockpiles at China’s ports spurred speculation the inventory overhang threatens imports.
“The fall in iron ore prices may reflect the beginning of a buyers’ strike in China’s iron ore markets, much like we saw in September 2012 when prices tumbled below $90, as surplus concerns mount,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in a report today. The market is “biased to oversupply in the very near term, and may prompt a further drop in the iron ore price.”
----China’s imports were 61.24 million metric tons in February, down from 86.83 million tons in January, according to customs data released on March 8. Stockpiles at ports stand at 105 million tons, 21 percent higher this year, according to data from Shanghai Steelhome Information Technology Co.
“Anecdotal evidence suggests that
increases in stockpiles at the ports, especially iron ore, are for
trade-finance deals instead of production,” HSBC Holdings Plc analysts Ma
Xiaoping and Qu Hongbin said in a report.
More
Investors closely monitoring Pimco after internal strife
By Luciana Lopez and Jennifer
Ablan
NEW YORK (Reuters) - Several U.S. institutional investors said they are closely monitoring the developments at Pimco, the world's largest bond firm, in the wake of Mohamed El-Erian's abrupt resignation as CEO and ensuing acrimony between him and co-founder Bill Gross.
The investors, including retirement systems, have formally put Pimco on "watch lists," a signal that they will keep a much closer eye its performance than usual. It could eventually lead to reductions in the amount of money they allocate to funds at the firm, whose full name is Pacific Investment Management Co and which has $1.91 trillion in assets.
"We intend to go out and meet with them over the course of the next month," said David Hunter, chief investment officer of the North Dakota State Investment Board. The board, which has about $400 million invested with Pimco, put the fund on its watch list on February 28.
----The California Public Employees' Retirement System, the largest U.S. pension fund, said it had not placed Pimco on a formal watch list, but it was also paying close attention to developments.
"CalPERS staff has
tremendous respect for the staff at Pimco," the system said in an emailed
statement. "That being said, we are monitoring the issue and will keep our
board aware of the changes."
In a statement, Pimco CEO Douglas
Hodge said: "We are focused on communication with our clients, and have
been in regular contact with them following the recent leadership transition.
They understand the changes we have taken and why, and are ready to move
forward with us."
----The closer scrutiny by state and local pension systems shows that Gross, though, may have more work to do to assuage investor concerns after El-Erian's surprise departure and reports of growing discord between the two men amid weak fund performance.
Overall, customers withdrew $41.1 billion from Pimco's flagship Total Return Fund last year, a record amount for the manager, according to investment research firm Morningstar. The fund posted another $1.6 billion in outflows in February, reducing assets to $236 billion and marking the 10th straight month of outflows.
The Total Return Fund, which Gross manages, trailed more than 70 percent of its peers in February.
More
In other
news, has anyone seen our plane? Apparently flying in south east Asia is now so
lax that no one bothers to track commercial airplanes. Are we supposed to
believe in alien abduction or that the plane was being flown by the 21st
century equivalent of “Wrong Way Corrigan.” Below, how to get to Beijing by
flying south. Would you really want to fly on a 777 or in or around Malaysia?
Malaysia Shifts Focus of Plane Search to Malacca Strait
Mar 11, 2014 5:19 AM GMT
Malaysian investigators looking
for a jet that went missing more than three days ago broadened their search to
the western part of the country and land areas, after scouring the sea near
Vietnam yielded no clues.
“The focus now is on the West
Peninsular of Malaysia at the Straits of Malacca,” the airline said in a
statement today. The authorities are also looking at the possibility of an
attempt by Malaysian Airline System Bhd.’s Flight 370 to turn back to Subang,
near the capital Kuala Lumpur.
The shift comes as investigators from at least nine countries are trying to locate the jet, which disappeared more than three days ago en route from Kuala Lumpur to Beijing with 239 people aboard. The search originally focused on the Gulf of Thailand, between Malaysia and Vietnam, then was broadened to the west as well as eastward to the South China Sea.
“It’s becoming increasingly mysterious as the days go by,” said Shukor Yusof, an analyst at Standard & Poor’s in Singapore. “Now we’re into the fourth day and we still haven’t gotten anything. That’s why it makes this deeply, deeply baffling.”
With today’s technology, it’s unusual for a plane to vanish without a distress call. When they do disappear suddenly, it’s typically because of an event such as a massive engine failure or explosion. Yet that would create widely scattered debris, and search teams haven’t been able to recover any remnants. That the plane was a Boeing Co. 777, one of the most reliable jets in the air, only adds to the puzzle.
----“It’s disturbing the aircraft hasn’t been found,” said Louis Sorrentino, Jupiter, Florida-based managing officer of ICF International’s aviation safety, security and regulatory compliance practice. “The 777 is a huge aircraft and debris should be visible.”
The Gulf of Thailand, where most of the search was conducted earlier, is only 269 feet deep, and therefore a wreckage plume would be visible, Sorrentino said.
More
We end for
the day, with what has long been suspected and posited. Was Libya set up and if
so by whom and why?
Lockerbie bombing 'was work of Iran, not Libya' says former spy
Iranian defector Abolghassem Mesbahi says Pan Am 103 attack was revenge for US Navy strike on Iranian passenger jet
The Lockerbie bombing was ordered
by Iran and carried out by a Syrian-based terrorist group, a former Iranian
intelligence officer has admitted.
Abolghassem Mesbahi, a defector
to Germany, said Pan Am flight 103 was downed in 1988 in retaliation for a US
Navy strike on an Iranian commercial jet six months earlier, in which 290
people died.
He claims the Ayatollah Khomeini,
who was Iran’s Supreme Leader, ordered the bombing “to copy exactly what
happened to the Iranian Airbus”.
Previously unseen evidence
gathered for the aborted appeal hearing of Abdelbaset al-Megrahi, the former
Libyan intelligence officer convicted of the bombing, supports Mr Mesbahi’s
claim and suggests that the bombers belonged to the extremist group the Popular
Front for the Liberation of Palestine – General Command (PFLP-GC).
Documents obtained by Al Jazeera
television for a documentary called Lockerbie: What Really Happened?
name key individuals said to be involved in the bombing, including the alleged
bomb-maker, the alleged mastermind and the man who may have put the bomb on the
doomed Boeing 747.
The new evidence not only casts
new doubt on the conviction of Megrahi, but adds weight to previous claims that
the truth about the bombing was covered up by Britain and the US because they
did not want to antagonise Syria, a key power on the doorstep of Saddam
Hussein’s Iraq.
Megrahi, the only man ever
convicted of Britain’s worst terrorist attack, dropped his appeal when he was
granted compassionate release from prison in 2009 because he was suffering from
cancer, but protested his innocence until he died in May 2012.
Ever since his conviction in 2001
there have been claims that Megrahi was the victim of a miscarriage of justice,
and many of the families of the 270 victims of the bombing believe the true
story has never been told.
----Colonel Muammar Gaddafi admitted responsibility for the Lockerbie bombing in 2003 and agreed to pay £1.7 billion in compensation to the families of the dead.
But his son Saif Al Islam has
repeatedly said that the admission was merely an expedient political move to
persuade the west to lift crippling sanctions and pave the way for lucrative
oil deals, some of which were brokered by Tony Blair.
More
"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.
At the Comex
silver depositories Monday
final figures were: Registered 52.08 Moz, Eligible 131.08 Moz, Total 183.16 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, sad to see a once great source of quality news reporting dropping to the standards of the Murdoch press. In pressing for a trade war with Russia over the Ukraine coup, America well knows that it is Europe, in particular Continental Europe, that will be the collateral damage. How high is America expecting Europe’s disastrous youth unemployment to go, just for getting their Kiev coup go horribly wrong, enabling Russia to retake the Crimea?
Time for the UK policy to return to the “splendid isolation” of the late 19th century. Time to drop out of other's wars. If Washington and Brussels want to fight a war in the Ukraine with Russia, let them. Just don’t involve the UK. If that means the UK leaving the EU and NATO for that matter, so what. It might just spare London from nuclear attack, in the event a losing Russia presses the issue, and decides to swap Moscow for Manhattan. The war party seems on the attack again in Washington and New York. President Obama playing golf with celebs in Florida hardly seems to be signalling war though. Crocodile tears, or should that be Alligator tears seems more the order of the day. Stay long fully paid up gold and silver.
The New York Times is totally wrong in its attack on London
AN op-ed in the New York Times
slamming the UK’s response to the Ukrainian crisis is making waves. Its author,
Ben Judah, makes some decent if unoriginal points about how London depends on
Russian cash, but his piece is so full of holes a fisking is in order. Here
goes.
1 “On the [Shard’s] top floors,
ultra high net worth individuals entertain escorts in luxury apartments. By
day, on floors below, investment bankers trade incomprehensible derivatives.”
Wrong. The flats haven’t been
sold yet. There are no rich owners and no prostitutes. There are no derivatives
traders – the only financial firm that has moved in is Duff and Phelps, which
provides various corporate advisory, valuation and restructuring services.
2 “The old imperial elite has
become crude and mercenary...Britain’s ruling class has decayed to the point
where its first priority is protecting its cut of Russian money...Any
moralising remnant of the British Empire is gone.”
Nonsense. The UK establishment
has always been mercenary and generally put growth first, and it continues to
moralise (about the environment and much else). The old elite liked to invade
countries; the modern one cannot, having run out of cash. But forget the elites:
the UK public doesn’t want to risk a recession by waging a trade war. The
author says that the UK is betraying the US, but America has practised a
similar kind of diplomacy for years with China, Saudi Arabia etc.
3 “The townhouses in the capital’s poshest
districts are empty.”
A laughable exaggeration. Yes,
some overseas buyers keep their properties empty. But Kensington and Chelsea’s
resident population fell just 2.2 per cent in the decade to 2011; it remains
the second most densely populated local authority in England and Wales. Other
boroughs with prime property have seen their population soar.
4 “The grotty Southwark
riverside”
Out of date. The London Bridge
area is being transformed; major multinationals are based in More London and
the regeneration zone keeps expanding.
5 “A city where oligarchs
are celebrated and migrants are exploited but that pretends to be a
multicultural utopia.”
Garbage. On most metrics London
is astonishingly well integrated – the one racist/fascist party has all but vanished,
school kids whose native language isn’t English now get almost identical
results as native speakers, more and more children are of mixed parentage, all
jobs are open to migrants, including the governorship of the Bank of England.
London is probably better at integration than any other major city. The idea
that migrants are all being exploited is extreme ignorance. Just look at any
office in a bank, a tech firm or any business; a vast chunk of the best-paid,
best qualified people are migrants. And among the low-paid, most have been able
to send money home or drastically improve their lives.
6 “Near the Shard are the
immigrants from Lithuania and Romania, who broke their backs on construction
sites, but are now destitute and whiling away their hours along the banks of
the Thames.”
Complete fantasy – and numbers of
Eastern Europeans in work keep rising.
7 “The planning regulations have
been scrapped”.
How wrong can anybody be?
The main claim is that Londoners
have become the “oligarchs’ valets.” What the author doesn’t mention are the
equally important Russian-German gas and trade ties, how our trade policy is
determined at EU level, or how China and the US operate their own
interdependent relationship of convenience. The West needs to become much tougher
on Putin – but ending globalisation would be utterly foolish.
http://www.cityam.com/article/1394429878/new-york-times-totally-wrong-its-attack-london
London’s Laundry Business
LONDON — THE city has changed. The buses are still
dirty, the people are still passive-aggressive, but something about London has
changed. You can see signs of it everywhere. The townhouses in the capital’s
poshest districts are empty; they have been sold to Russian oligarchs and
Qatari princes.
England’s establishment is not what it was; the old
imperial elite has become crude and mercenary. On Monday, a British civil
servant was
photographed arriving in Downing Street for a national security council
meeting with an open document in his hand. We could read for ourselves lines
from a confidential report on how Prime Minister David Cameron’s government
should respond to the Crimea crisis. It recommended that Britain should “not
support, for now, trade sanctions,” nor should it “close London’s financial
center to Russians.”
The White House has imposed visa restrictions on some
Russian officials, and President Obama has
issued an executive order enabling further sanctions. But Britain has
already undermined any unified action by putting profit first.
It boils down to this: Britain is ready to betray the
United States to protect the City of London’s hold on dirty Russian money. And
forget about Ukraine.
Britain, open for business, no longer has a “mission.”
Any moralizing remnant of the British Empire is gone; it has turned back to the
pirate England of Sir Walter Raleigh. Britain’s ruling class has decayed to the
point where its first priority is protecting its cut of Russian money — even as
Russian armored personnel carriers rumble around the streets of Sevastopol. But
the establishment understands that, in the 21st century, what matters are
banks, not tanks.
More
A newspaper is a device for making the ignorant more ignorant and the crazy crazier.
H. L. Mencken.
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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