Friday, 30 May 2014


Baltic Dry Index. 940 -14  

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

"I mean, look at other challenges. In the Ukraine, the president put in place a very careful, calculated, calibrated strategy to bring the Europeans along, to not go so far that you provoked Putin but you put in place a policy that could work."

US Secretary of State John  Kerry. CNN May 28.

In World War Three news today, in whose cause did these hapless Ukrainian pawns die. Who staged the putch in Kiev that overthrew an elected, if corrupt President, who’d already agreed with the European Union negotiators to effectively give up power. What if he was bombing his own people, and burning unarmed protestors alive in Odessa?  Who paid for the putch, and used neo-Nazis and anti-Semite militias to enforce the Kiev coup?  Who incorporated the neo-Nazis militia into the coup military under the rebranding as the National Guard? Who unleashed the National Guard on East Ukraine?
Instead of explanations from Washington, comes only propaganda, whining, and ruthless demonization. 

If World War Three starts, which nation(s) (yes UK and Germany) will have blood on their hands, like Germany in WW1 and WW2? Is wiping out Manhattan really a fair swap for Moscow? Chicago and LA, for St Petersburg? We are half way down the road to MAD, and no one seems to care. Did the American War Party really expect those silly Russians in east Ukraine to only use bows and arrows?

Rebels Kill 14 Downing Ukraine Chopper as Russia Sees War

By Volodymyr Verbyany, Daryna Krasnolutska and Ilya Arkhipov May 29, 2014 4:41 PM GMT
Pro-Russian rebels downed a military helicopter in eastern Ukraine, killing 13 troops and a general, as an adviser to President Vladimir Putin accused the U.S. of pushing the world toward war through proxies in Kiev.

Insurgents shot down an Mi-8 transport chopper with a shoulder-fired missile amid heavy fighting in Slovyansk, 100 miles (160 kilometers) from the Russian border, Speaker Oleksandr Turchynov told parliament today. They also attacked a military base near Luhansk, according to the National Guard.

Russia demanded Ukraine halt its “fratricidal war” and withdraw troops from the mainly Russian-speaking regions of the east after separatists suffered the heaviest casualties of their campaign. Western countries should use their influence to stop Ukraine from “sliding into a national catastrophe,” the Foreign Ministry in Moscow said on its website.

Ukraine stepped up air patrols over Donetsk yesterday as a convoy of pro-Russian rebels moved through the eastern city with an anti-aircraft gun in tow, regrouping after dozens were killed in a government operation to retake the main airport.

President-elect Petro Poroshenko has vowed to wipe out the insurgents and re-establish order after winning office on May 25 with 54.7 percent of the vote. He’s faced with trying to stabilize an economy that the European Bank for Reconstruction and Development expects to shrink 7 percent this year while reclaiming swaths of territory captured by pro-Russian militias.

An economic adviser to Putin, Sergei Glazyev, said the U.S. controls the new Ukrainian government and is seeking to use the conflict to start a “third world war.”

“This can’t be called anything but madness -- the bombing of cities, airports, escalation of unmotivated violence against their own people,” Glazyev told reporters today in the Kazakh capital Astana.

Putin flew to Astana to sign a treaty with his counterparts from Kazakhstan and Belarus creating a trading bloc of more than 170 million people to challenge the U.S. and the European Union. Two other former Soviet staes, Kyrgyzstan and Armenia, plan to join the Eurasian Economic Union this year.

----Ukrainian forces used aviation and artillery assets to “destroy” the rebel unit that downed the helicopter today, the Interior Ministry’s National Guard unit said in a statement, without elaborating.

----“Russia is now our enemy,” First Deputy Minister Yuri Zyukov told reporters in Kiev. “It dictates and speaks in ultimatums we can’t accept.”

The standoff is threatening to escalate into a full-blown crisis, “undermining the sustainability of Russian gas transit to the EU through Ukraine,” Alexander Kornilov, an energy analyst at Alfa Bank in Moscow, said in an e-mailed note.

In other Ukraine news, anarchy now seems to be breaking out. How much longer before Russia intervenes like Vietnam in Cambodia, or America in Granada?

Ukraine's rebels in crisis after Donetsk 'coup'

Vostok Battalion, a pro-Russian group, seize control of Donetsk Peoples' Republic's headquarters, plunging rebel movement in east into crisis

By Roland Oliphant in Donetsk 8:27PM BST 29 May 2014
Ukraine's rebel movement was plunged into crisis on Thursday, when pro-Russian fighters backed by armoured personnel carriers seized the movement's headquarters in Donetsk and destroyed the barricades protecting it.

The surprise move by a group called the Vostok Battalion, a heavily armed rebel unit that has been involved in fighting against the Ukrainian army, sparked speculation about an internal coup within the fractious rebel movement.

There was also speculation that the move could have been an attempt by the leadership to purge undesirable elements with the Donetsk Peoples' Republic.

Key rebel leaders, who were not in the building when the fighters arrived, insisted they were still in control and that they had even ordered the operation.

"This is a police action directed against looters," a rebel source close to Alexander Borodai, the prime minister of the self-declared republic, said on Thursday afternoon. "There is no coup. Everything is under control."

Gunmen from the battalion, which includes fighters from mainland Russia as well as Ukrainian-born volunteers, said they had acted out of disgust at the looting of a supermarket following the battle for Donetsk airport on Monday.

"We're on the same side, we're never going back to Ukraine. We're just against lawlessness and theft," said one fighter as he picked through the chaos left behind by the building's occupiers.

The 11-story regional administration building has been the headquarters of the Donetsk rebel movement since it was stormed and occupied by pro-Russian activists on April 6, sparking the uprising that led to the current conflict in the region.

Since then it has been used variously as the 'republic's' government headquarters, a parliament, a hospital, a command centre, and most notoriously as a prison.

----In one office on the sixth floor a fridge was stocked with huge cheeses and sausages bearing the logo of the Metro supermarket, a superstore close to the airport that was reportedly raided by well-organised looters after Monday's battle brought life in the district to a standstill.

In other offices, fighters found vast quantities of cigarettes, soft drinks, and shops own-brand socks and underwear stacked on desks and in wardrobes.

"We were starving on the battle field for two days," said a masked fighter, as he tested the ripeness of several mangos looted from the fruit and vegetable department that were scattered on a desk in a sixth floor office.


Makhnitsky: Prosecutor Generals Office asks Ukrainian parliament to arrest MP Tsariov

May 29, 2014, 2:59 p.m.
Verkhovna rada (Ukraine's parliament) to meet on June 3 to decide on MP Tsariov's fate. 

 The Ukrainian Prosecutor General's Office has asked the Verkhovna Rada to give its consent to hold parliamentarian Oleh Tsariov criminally liable.

"The Ukrainian Prosecutor General's Office has filed a request (with the Rada) on holding Ukrainian people's deputy Oleh Tsariov criminally liable and on detaining and taking him into custody as a restrictive measure," acting Ukrainian Prosecutor General Oleh Makhnitsky said at the Rada on May 29.

At least 18 western Ukrainians killed in eastern Ukraine war

May 29, 2014, 11:11 p.m
When a military plane carried the bodies of 10 Ukrainian soldiers back to their native Volyn Oblast in western Ukraine, even commanders couldn’t hide their tears. The victims were among at least 18 servicemen killed on May 22, the bloodiest day yet for Ukraine forces taking part in the nation’s anti-terrorist operation.  

All killed that day in Donetsk Oblast were ambushed by Kremlin-backed separatists who attacked a Ukrainian military checkpoint near Volnovakha village. The casualties on the Ukrainian side numbered at least 17 soldiers while another 33 were wounded, according to official figures. All of the servicemen were from the 51st armored brigade. An 18th serviceman, also from western Ukraine, was killed in Luhansk Oblast on the same day in a different fight.


In Asian news, Abenomics is working in Japan, though not quite as forecast. While destroying the currency and raising sales tax has inflation surging, industrial production is falling as the global economy stalls and picking a fight with next door China has exports struggling, while household spending collapsed after Japan’s consumers wisely bought goods ahead of the sales tax increase. Those Japanese consumers are not as dumb as they looked to Japanese politicians. Will hints of another rise in sales tax coming, fool the Japanese consumer into spending again, or is it a case of how many fridges, washing machines. dishwashers, and flatscreen tvs does the Japanese consumer need?

Japan Inflation Quickens to Fastest Since 1991

May 30, 2014 6:11 AM GMT
Japan’s industrial production (JNIPMOM) and household spending fell more than forecast and inflation surged to a 23-year high on a tax rise that is pinching consumers who have seen limited wage gains.

Production fell 2.5 percent in April from the prior month, the trade ministry said in today, more than a 2 percent drop forecast by economists surveyed by Bloomberg News. Household spending declined 4.6 percent from a year earlier, steeper than a projected 3.4 percent drop, while core consumer prices rose 3.2 percent.

The data show the challenge facing Prime Minister Shinzo Abe as he tries to cap the world’s biggest debt burden while the Bank of Japan carries out record easing to drive inflation. Weak growth next quarter -- the period that Abe will look at when deciding whether the economy can bear a further increase in the sales tax -- would boost the chances of further fiscal support.

In other Asian news, as China flexes its muscle in Southeast Asia, America responds with an untimely mixed message. I wonder what they’re thinking in Beijing, Hanoi and Tokyo this morning?

Pivot Pledge Wearing Thin on Hagel Trip as China Sway Rises

May 30, 2014 1:55 AM GMT
President Barack Obama’s emphasis this week on restricting the use of the military abroad risks an unintended consequence: deepening concern about fading U.S. engagement among Asian nations locked in disputes with China.

Obama’s defense chief, Chuck Hagel, leads the U.S. delegation to an annual security conference in Singapore that starts today, two days after Obama said the armed forces can’t be the “primary component of our leadership.” The gathering concludes a week that’s seen China’s fighter jets challenging Japanese planes and the sinking of a Vietnamese fishing boat after a collision with a Chinese vessel.

The incidents underscored China’s determination under President Xi Jinping to press territorial claims against Japan and the Philippines -- two U.S. allies -- and Vietnam, a former American foe that now welcomes U.S. military visits. While the Obama administration says it’s “rebalancing” toward Asia, Asian governments may seek greater assurances of support.

Hagel to Caution China on Overplaying Hand in Region

May 30, 2014 1:33 AM GMT
U.S. Defense Secretary Chuck Hagel said he will meet with a senior Chinese military official during a security conference in Singapore and caution him about escalating territorial conflicts in the Asia-Pacific region.

Hagel is scheduled to meet with Lieutenant General Wang Guanzhong, deputy chief of general staff of China’s People Liberation Army and part of the country’s delegation to the annual Shangri-La security conference this weekend.

The U.S. has “a huge interest” in keeping sea lanes in the region open for commerce, Hagel told reporters on board his military aircraft heading to Singapore. Hagel said he also planned to discuss tensions between China and Vietnam over the South China Sea in “some specific terms.”

The U.S. and China “do have areas where we cooperate as well as directly confronting areas of, not competition, but areas where we think China is overplaying its hand in presenting new challenges and new tensions in this area,” Hagel said of his upcoming meeting with Wang.

Far across the Pacific in America, there was yet more signs that the US economy is also starting to wobble. Below, despite the bullish spin, less inventory building is often a sign that businesses are worried about the forward health of the economy. But we wouldn’t expect the modern media spin machine to have any connection to reality.

U.S. Economy Shrinks for First Time Since 2011; Pent Demand Suggests Temporary Setback

May 29, 2014 9:15 PM GMT
Less is more for the U.S. economy, which suffered its first contraction since 2011 last quarter.

Gross domestic product fell at a 1 percent annualized rate, worse than the most pessimistic forecast in a Bloomberg survey of economists, revised Commerce Department figures showed today in Washington. The good news: Much of the decline was due to less inventory building that economists say can’t last. As a result, some are boosting second-quarter growth forecasts, with Morgan Stanley projecting a 4.2 percent gain.

Stockpiles grew at less than half the pace than in the final three months of 2013, lopping 1.6 percentage points off GDP while businesses cut back on investment.

Express Tumbles as It Cuts Forecast, Plans Store Closings

May 30, 2014 5:01 AM GMT
Express Inc. (EXPR), a retail chain that targets 20-something shoppers, tumbled as much as 13 percent in late trading after cutting its annual forecast and announcing plans to close 50 stores over the next three years.

The company now expects earnings of 74 cents to 90 cents a share this year, down from a previous forecast of as much as $1.23, according to a statement yesterday. Shutting the stores will boost profit by $5 million to $8 million, Express said. The move follows an almost 10 percent sales drop in the first quarter.

Manhattan Condo Prices Fall as Buyers Push Back

May 30, 2014 5:01 AM GMT
Manhattan condominium prices fell in April by the most in more than three years, a sign the market is slowing during the busiest selling season.

Sale prices for previously owned units dropped 1.4 percent from March, the biggest decline since September 2010, after four consecutive monthly increases, according to a report today by real estate website Condo prices are likely to be little changed through the spring, rising 0.1 in May, StreetEasy projected.

Purchases and prices typically rise during the second quarter, traditionally an active time for New York real estate. Contracts to buy condos in April dropped 3.2 percent from the previous month and almost 14 percent from a year earlier, signaling that buyer appetites have cooled after competition for tight inventories pushed up values, according to StreetEasy

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

Albert Einstein.

At the Comex silver depositories Thursday final figures were: Registered 56.83 Moz, Eligible 119.29 Moz, Total 176.12 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over. 
In the war of words between America’s kettle calling China’s pot black, it was China’s turn to sound off yesterday. In addition to dropping IBM from supplying equipment to China’s government, to be followed of course by all of China’s local governments, China lobbed the ball back into America’s court and said it will take unspecified further measures depending on what America does next. Dropping the indictments would be the wise course, but that would make Uncle Sam and the Washington gang look weak, so we won’t be following the wise course of action from here. A game of tit for tat looks likely to develop, until some poor slobs on both sides end up in a holding cell at international airports. In the meantime, of course, both sides will keep on hacking each other’s computers. We already know, thanks to the whistle-blower Snowy, America’s NSA, among others, hacks everyone in the world from the US president down.

China Threatens Further Action Against U.S. Over Hacking Dispute

By Bloomberg News May 29, 2014 11:03 AM GMT
China said it will take further action against the U.S. for prosecuting five of its military officers for alleged hacking, saying it has evidence its companies have also been hacked.

Online attacks from a “specific country” have targeted Chinese companies, its military and important websites, Ministry of National Defense spokesman Geng Yansheng said. Geng didn’t specify the country in remarks posted on the ministry’s website today in response to a question about the indictment.

China will take further action depending on what happens with the U.S. prosecution of the five, who are accused of stealing commercial secrets, he said. The U.S. has still not given a clear explanation of its own cyber spying on foreign companies and governments revealed by former government contractor Edward Snowden, Geng said.

Geng’s remarks come after China’s government was said to be reviewing its reliance on servers from International Business Machines Corp. (IBM), in an early sign of specific retaliation. Relations between the two countries are tense over a number of issues, including China’s pressing of territorial claims against U.S. allies in the region.

“China has an old phrase, if you want to correct others you need to correct yourself first,” Geng said, according to the transcript on the ministry’s website. “The U.S.’s own behavior is not correct, and it has done a lot of bad things, so how is it qualified to make irresponsible remarks about others over the Internet issue?”

China has consistently opposed and cracked down on hacking, including any theft of commercial secrets, Geng said.

----Asked about reports the U.S. wants increase its cyber defense force to 6,000 staff by 2016, Geng said the U.S. hypes the Internet threat from other countries as an excuse to expand its offensive cyber capabilities, according to the statement.

“Last year’s report by U.S. company Mandiant about China is like this, and this year the U.S. Justice Department’s indictment against Chinese soldiers is like this,” he said, referring to a report by cybersecurity provider Mandiant Corp. about a Chinese military unit. “We can see such U.S. behavior was planned for long and has ulterior motives.”

The U.S. National Security Agency collects phone records from Verizon Communications Inc. (VZ) and other carriers and operates a program known as Prism under which it compels Google Inc. (GOOG), Facebook Inc. and other Internet companies to hand over data about users suspected of being foreign terrorists, according to documents exposed since June by Snowden.


Another weekend, and a very real hot civil war has now broken out in the Ukraine, and still no one seems to notice or care. We may be at our very own Sarajevo 1914 moment, but you wouldn’t know it from mainstream media, or our totally disconnected casino stock markets. But signs of America starting to wobble, might just be the first indication that the Fed’s “taper” is having an impact. To mangle a metaphor, the missing money has to show up somewhere. Will a new European war save the day? Have a great weekend everyone.

I do not believe that civilization will be wiped out in a war fought with the atomic bomb. Perhaps two-thirds of the people of the earth will be killed.

Albert Einstein.

The monthly Coppock Indicators finished April

DJIA: +189 Down. NASDAQ: +347 Down. SP500: +249 Down.  Sell in May, go away.

Thursday, 29 May 2014

Russian Bear Growls.

Baltic Dry Index. 954 -19 

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

“We made too many wrong mistakes.”

Secretary of State Kerry, with apologies to Yogi Berra.

We open with war news from the Ukraine. As far as I can see from faraway, safe, non-Russian energy dependent, UK, the only thing preventing a Russian intervention, is the continuing gas talks over the Ukraine paying its bills, and the still relatively low casualty figures and collateral damage. But time is fast running out on all. Is the west misreading Russia’s signals, just as America did before Chinese troops intervened in the Korean war?

“It’s like deja vu all over again.”

President Putin, with apologies to Yogi Berra.

Russia Urges ‘Emergency Steps’ Over Ukraine After Rebel Losses

May 28, 2014 10:00 PM GMT
Russia called for unspecified “emergency” measures to halt the violence in eastern Ukraine after separatist militias suffered the heaviest casualties of their insurgency.

“It’s necessary to take emergency steps to stop the bloodshed and start an inclusive internal Ukrainian dialogue,” Foreign Minister Sergei Lavrov told his German counterpart Frank-Walter Steinmeier by phone yesterday, according to the ministry’s website. “There’s no excuse” for military action in the southeastern part of the country, Lavrov said.

Ukraine stepped up air patrols over the eastern city of Donetsk yesterday as a convoy of pro-Russian rebels moved through the city with an anti-aircraft gun in tow, threatening renewed violence after dozens of militants were killed in a government operation to retake the area’s biggest airport.

Both sides suffered casualties as rebels stormed a National Guard base in Luhansk last night, the Interior Ministry said on its website, without further details.

President-elect Petro Poroshenko has vowed to wipe out the insurgents and re-establish order after winning office May 25. He’s faced with trying to stabilize an economy the European Bank for Reconstruction and Development expects to shrink 7 percent this year while reclaiming swaths of the Donetsk and Luhansk regions captured by pro-Russian militias.

----The Foreign Ministry in Moscow said earlier yesterday that Russia is being asked to provide humanitarian aid to people in eastern Ukraine affected by the conflict. Russia wants Ukraine’s help delivering supplies across the border and expects “the fastest possible answer” to its proposal, the ministry said on its website.

Ukraine said thanks, but no thanks.

----As the violence continued, Ukraine stopped short of accepting an EU proposal to reach a debt and price deal for natural gas from Russia and avert a threatened shutoff. Russia, the world’s largest supplier of the fuel, has twice cut gas flows to Ukraine since Putin came to power in 2000, leading to shortages throughout Europe.

Under the EU plan, Ukraine’s state energy company, NAK Naftogaz Ukrainy, would pay Russian gas exporter OAO Gazprom (GAZP) $2 billion by May 30 and a further $500 million by June 7. That would partially cover Ukraine’s outstanding debt, which Gazprom Chief Executive Officer Alexey Miller said yesterday will reach $5.2 billion by June 7.

Ukraine’s government is “ready to clean the bill” and “pay the arrears” of its bill, Prime Minister Arseniy Yatsenyuk said in Berlin yesterday. The country is seeking a market-based price of $250-$350 per 1,000 cubic meters, he said.

Russia is ready to discuss the price and is willing to consider canceling a requirement for Ukraine to prepay for the fuel if the country pays Gazprom in accordance with a May 26 agreement, the Energy Ministry in Moscow said in an e-mailed statement.

“I hope that we won’t reach a situation where we have to move to prepayments,” Putin said in the Kremlin yesterday after Energy Minister Alexander Novak laid out a proposal to resolve the dispute.

And from Uncle Sam’s spin machine, conveniently omitting how the CIA and Ollie North ran Nicaragua and the fight against the USSR in Afghanistan. What Uncle Sam can do, the Russian bear can do too, but Uncle Sam expected the Russian bear merely to get up and dance to Washington’s tune. Coming next Manpads, just like the US provided SAMs to bin Laden’s forces fighting Russians in Afghanistan. The march to war continues. Stay long precious metals.

"'Truth,' it has been said, 'is the first casualty of war.'"

Samuel Johnson.

Russia's Hand in Ukraine Is Exposed 

609 By
Among those who died fighting in Donetsk this week were Russian citizens -- at least eight, according to the city’s mayor. With that revelation, Russia’s involvement in the violence in eastern Ukraine is no longer in question.

The confirmed presence of foreign fighters exposes as untrue repeated claims by Russian President Vladimir Putin and Foreign Minister Sergei Lavrov that they are merely horrified bystanders to events in eastern Ukraine. Those claims were never plausible, given Russia's record in Crimea and thin popular support for the secessionist rebels in the east.

Lavrov recently challenged those who insisted Russia was backing the rebels to produce a single captured Russian agent. Of course, he can maintain that the Russian citizens killed in Donetsk were simply volunteers motivated by attacks on their ethnic kin in Ukraine. The eight, however, included Chechens, who by no stretch of the imagination are Russian nationalists.

There are certainly Chechen mercenaries available for hire, but they also answer to Chechen strongman Ramzan Kadyrov, who is fiercely loyal to Putin. Kadyrov has denied sending anyone to fight in Ukraine, but in an otherwise hard-to-explain twist, he personally negotiated the recent release of two Russian journalists held by pro-Ukraine forces. It is inconceivable that Kadyrov would send fighters to Ukraine without Moscow's approval or, more likely, instructions.

This conflict is following a script more than 20 years old: Russia intervenes in its ex-Soviet neighborhood using “volunteers,” including Chechens, and unmarked Russian military equipment to provide deniability.

Although transparent, Russia’s subterfuge is useful. It provides Europe’s leaders cover to avoid imposing costly economic sanctions on Russia. Putin withdrew troops from its border with Ukraine just before Sunday’s election there, the failure of which German Chancellor Angela Merkel had set as a trip wire for broader sanctions. European Union leaders who met on Tuesday were plainly relieved that they would not have to follow through on her threat.

Man-portable air-defense systems

In less dramatic news, now the US economy is starting to wobble. But don’t let on to our disconnected, QE forever driven stock markets.  China seems headed for a hard landing, the BRICs are in meltdown, Europe is dead in the water, with the UK and France moving closer to the exit, and now the US economy looks like coming off the rails.  Time for some deep out of the money purchased put options on stocks. How much longer can corporate stock buybacks on borrowed money, still keep the Fed’s final bubble expanding? I don’t know either, but the fan’s now gone into overdrive.

“I always thought that record would stand until it was broken.”

Janet Yellen, the talking chair, with apologies to Yogi Berra.

First-quarter U.S. GDP seen dipping into negative territory

May 28, 2014, 4:55 PM E
The U.S. economy almost certainly contracted in the first quarter during an unusually harsh winter, a government report to be released Thursday is expected to show. That’s because American exports didn’t increase as much as previously believed and construction spending was a bit softer, too.

Economists polled by MarketWatch predict gross domestic product will reveal a 0.6% decline in the first three months of the year instead of a meager 0.1% increase as originally reported. The report – the second of two updates to first-quarter GDP – will be released at 8:30 a.m. Eastern.

Does it really matter? Not all that much. The economy was repeatedly disrupted by cold and snowy weather and much of the activity that did not take place then is occurring now during the warmer spring months. Wall Street expects second-quarter growth to snap back with a 3.8% gain.

Yellen Has Scant Power to Relieve U.S. Housing Slowdown

By Rich Miller and Victoria Stilwell May 28, 2014 5:44 PM GMT
The hesitant housing recovery has surprised and concerned Federal Reserve Chair Janet Yellen and her colleagues at the central bank. It’s not clear how much they can do about it.

While the industry is rebounding from a weather-ravaged first quarter, the pickup will probably fall short of previous projections, according to economists at Goldman Sachs Group Inc. of New York and Macroeconomic Advisers LLC in St. Louis. As a result, they trimmed their forecasts for economic growth in the second half of 2014 to about 3.25 percent from 3.5 percent.

“Housing is a growing worry,” said Macroeconomic Advisers’ senior economist Ben Herzon.

Yellen and many of her colleagues agree. The Fed chair flagged the industry as a risk to the outlook in testimony to Congress on May 7, while Federal Reserve Bank of New York President William C. Dudley said last week he had been surprised by how weak it had been recently. He added that he still expects gross domestic product to “get back on a roughly 3 percent growth trajectory” after stalling in the first quarter.

The trouble from the Fed’s perspective is that many of the forces holding housing back are outside of its control. While the Fed can influence mortgage rates through its conduct of monetary policy, it can’t do much, if anything, to counteract the other causes of faltering demand: lagging household formation, stingy lenders and wary borrowers.

Elsewhere in America food price inflation looks here to stay.

Exclusive: Deadly pig virus re-infects U.S. farm, fuels supply fears

By Tom Polansek CHICAGO Wed May 28, 2014 12:50pm EDT
(Reuters) - An Indiana farm has become the first to confirm publicly it suffered a second outbreak of a deadly pig virus, fueling concerns that a disease that has wiped out 10 percent of the U.S. hog population will be harder to contain than producers and veterinarians expected.

The farm, through its veterinarian, publicly acknowledged on Tuesday a repeat incident of Porcine Epidemic Diarrhea virus (PEDv), which has killed up to 7 million pigs and pushed pork prices to record highs since it was first identified in the United States a year ago.

Matt Ackerman, whose veterinary practice is in southeastern Indiana, told Reuters the farm's operators did not want to be identified but authorized him to speak on their behalf.

The state and federal effort to stamp out PEDv has operated on an assumption that a pig, once infected, develops immunity and will not be afflicted by the disease again for at least several years. Likewise, farms that had endured the disease were not known to suffer secondary outbreaks.

But a year after the virus was identified, repeat outbreaks have occurred at farms but not been publicly confirmed before now. These so-called secondary outbreaks are a challenge to efforts to stem the disease, which is almost always fatal to baby piglets.

The U.S. Department of Agriculture is fighting against repeated outbreaks by trying to extend immunity in female hogs through effective vaccines, Chief Veterinary Officer John Clifford told Reuters at the general session of the World Animal Health Organization in Paris. "It happens and it could happen again," he said about secondary outbreaks of PEDv. "We need to practice good bio-security, cleaning and disinfection, all-in all-out, in order to break the cycle and prevent its re-emergence."

Nationwide, PEDv outbreaks seem to recur in about 30 percent of infected farms, the American Association of Swine Veterinarians told Reuters, confirming for the first time the likelihood of repeated outbreaks.

Hog futures reached a record high last month and are up nearly 25 percent at $113.75 per hundredweight since the first U.S. outbreak was confirmed last year. Retail pork prices also have set new records, and a wave of re-infection could cause even more losses to the nation's hog herd.

Between, graphene, recent solar power advances, and this breakthrough below in supercaps, the next decade ushering in the new Carbon Age, ought to be one of another giant leap forward for mankind. Structural supercaps alone, if it lives up to its potential, will alter the way we make many things, well beyond just phones, homes and cars. With graphene, solar and supercaps, much of the third world will get access to clean drinking water, and adequate electric power, for the first time. Elsewhere, lighter faster trains. Lighter safer, electric vehicles. Solar replacing the need for dangerous subsidised nuclear power? Still to this old Scots commodity trading dinosaur, I’d like to know what happens to structural supercaps in a thunderstorm.

“The future ain’t what it used to be.”

 Andre Geim and Konstantin Novoselov, with apologies to Yogi Berra.

Structural supercapacitors could make batteries and power cords obsolete

By Lakshmi Sandhana May 26, 2014
Imagine using a mobile phone powered entirely by its casing, or an electric car that runs off power stored in its chassis. Researchers at Vanderbilt University have created a structural supercapacitor that could, they believe, bring this closer to reality, making batteries and power cords obsolete. The structural supercapacitor could make it possible to store energy directly in structural materials, allowing them to deliver power long-term while surviving the real-life mechanical stresses they're bound to experience.

The team's new supercapacitor looks like a thin grey wafer, and is made of silicon electrodes that have been chemically treated to have inner surfaces containing nanoscale pores. Instead of storing energy in chemical reactions, like batteries, the supercapictor stores power by assembling electrically-charged ions on the surface of the porous material. In a recent test, the supercapacitor was able to store and release power without a hitch, the team reported, even when it was subjected to vibrational accelerations exceeding 80 g and stresses of up to 44 psi.

“These devices demonstrate – for the first time as far as we can tell – that it is possible to create materials that can store and discharge significant amounts of electricity while they are subject to realistic static loads and dynamic forces, such as vibrations or impacts,” said Cary Pint, Assistant Professor of Mechanical Engineering at Vanderbilt University.

----"The majority of building materials that we use in these systems have absolutely no function than to just maintain mechanical integrity," Pint tells Gizmag. "What if we could take the tons of materials used in homes and convert them to energy storage systems that were not more expensive, could perform the same mechanical function as building materials, but could have decades worth of energy storage capability built in?".

"For a home or stationary powered system, this technology is the seed to putting solar panels on the roof and enabling power delivery around the clock without the need for a grid, even when the sun isn't shining," he adds.

Finally, in view of last week’s UK  European election vote, won quite easily by UKIP, and the decision to carry on with business as usual in Brussels, likely imposing Jean-Claude Juncker as the next EC President, it might be well for the EU to start making contingency plans for a UK exit from the EU. Britain’s square peg has never fitted well in continental Europe’s round holes, and the EU is unlikely to make a suitable compromise with Britain sufficient to sway Britain’s voters. The UK needs to move fast before France under love rat Hollande needs a bailout, and Ms. Le Pen moves into the Elysee Palace.

Europe has an even bigger crisis on its hands than British a exit

British people will vote to leave the EU unless offered a new dispensation, writes Ambrose Evans-Pritchard

9:02PM BST 28 May 2014
If Europe's policy elites could not quite believe it before, they must now know beyond much doubt that they have lost Britain. This island is no longer part of the European project in any meaningful sense. 

British defenders of the status quo were knouted on Sunday. UKIP won 27.5pc of the vote, or 29pc after adjusting for the negligence - or worse - of the Electoral Commission in allowing a spoiler party with much the same name to sow confusion. Margaret Thatcher's Tory children are scarcely more friendly to the EU enterprise.

Britain's decision to stay out of monetary union at Maastricht sowed the seeds of separation, as pro-Europeans fully understood at the time, though almost nobody expected EMU officialdom to clinch the argument so emphatically by running the currency bloc into the ground with 1930s Gold Standard policies and youth unemployment levels above 50pc in Spain and Greece, and above 40pc in Italy.

European leaders must henceforth calculate that the British people will vote to leave the EU altogether unless offered an entirely new dispensation: tariff-free access to the single market along lines already enjoyed by Turkey or Tunisia; and deliverance from half the Acquis Communautaire, that 170,000-page edifice of directives and regulations that drains away sovereignty, and is never repealed.

Ideological hardliners would prefer to see Britain leave rather tolerating any reversal of the one-way Monnet Doctrine, and some talk of shutting British goods out of the European markets. They are fanatics. Others know that the EU's global credibility would be shattered if one of its largest states - and twin-leader in projecting military power - were to walk away in disgust, as Germany's Wolfgang Schauble has repeatedly warned.


Between 1959 and 1969, the Élysée was occupied by Charles de Gaulle, the first President of the Fifth Republic. De Gaulle did not like its lack of privacy, and oversaw the purchase of the luxurious Hôtel de Marigny to lodge foreign state officials in visits to France, saying, "I do not like the idea of meeting kings walking around my corridors in their pyjamas."

At the Comex silver depositories Wednesday final figures were: Registered 56.23 Moz, Eligible 119.89 Moz, Total 176.12 Moz.  

Crooks and Scoundrels Corner

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

Below, one of the Squids gets it. But one has to wonder what would have happened if the now slightly poorer ex-Goldmanite hadn’t been French.

“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.”

'Fabulous Fab' will not appeal fraud conviction

Fabrice Tourre, a former Goldman Sachs trader, misled investors on the sale of mortgage-linked securities

By agencies 10:53PM BST 27 May 2014
Former Goldman Sachs trader Fabrice Tourre will not appeal a US court ruling that he defrauded investors.
A New York jury concluded in August last year that the Frenchman, nicknamed "Fabulous Fab", misled investors on the sale of mortgage-linked securities that sank in value after the housing bust.

Tourre has been ordered to pay $825,463 in penalties, disgorgement of ill-gotten gains and interest payments.

Tourre, who is pursuing a doctorate in economics at the University of Chicago, said on Tuesday he wanted to move on with his life.

"After careful consideration, I have decided not to pursue a lengthy appeal process which, if successful, would lead to a retrial," Tourre said in a statement released through a spokesman.

"While my lawyers have advised me there are strong grounds to appeal, I prefer to move forward with my education and close this difficult chapter of my life."

Tourre said he looked forward to completing his degree "and to making meaningful contributions to my field".
Tourre became a symbol of Wall Street excess that was partly to blame for the 2008 financial crisis. A two-week civil trial in July 2013 focused on a series of communications that the jury agreed showed Tourre had misled investors about the risk of the investments.

Do not expect that once taking advantage of Russia's weakness, you will receive dividends forever. Russian has always come for their money. And when they come - do not rely on an agreement signed by you, you are supposed to justify. They are not worth the paper it is written. Therefore, with the Russian is to play fair, or do not play.

Otto von Bismarck

The monthly Coppock Indicators finished April

DJIA: +189 Down. NASDAQ: +347 Down. SP500: +249 Down.  Sell in May, go away.