Baltic Dry Index. 1017
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz
No I don’t mean that we are about to have yet another
Great Stock Market Rout, though we are long overdue one as QE Forever and ZIRP
lose effectiveness, that great rout will probably await our traditional autumn
crash season. Today is black Wednesday due to the rapidly deteriorating crisis
in the Ukraine. More on that later, but stay long fully paid up physical gold
and silver.
Below, is the Alibaba IPO the final insanity signalling
the top?
Asian Stocks Retreat Amid Tech Slump; Yen Holds Gain
May 7,
2014 5:35 AM GMT
Asian stocks fell, with Japanese shares leading the regional index toward
its biggest drop in four weeks, as the yen held gains versus the dollar. New Zealand’s
currency weakened, while nickel and crude oil climbed. The MSCI Asia Pacific Index slipped 1.4 percent by 1:17 p.m. in Tokyo. Japan’s SoftBank Corp., the largest investor in Alibaba Group Holding Ltd., fell 4.2 percent after the Chinese e-commerce company filed for a U.S. initial public offering. Standard & Poor’s 500 Index futures were little changed.
----Nickel traded near a 14-month high, gold advanced and oil in New York added 0.6 percent. Rubber slumped.
Twitter Inc. (TWTR) slid 18 percent as insider shares became eligible for sale on the same day that Alibaba filed for what could be a record stock offering. China’s services sector expanded at a slower pace, data today showed before Federal Reserve Chair Janet Yellen addresses Congress on the U.S. economy. The U.S. urged Ukraine to proceed with its May 25 presidential election, rejecting Russia’s calls to postpone the vote amid clashes in the country’s east and south.
More
In China news, if it wasn’t for bad news we’d have no
news at all. Thankfully we have sell in May, go away, to fall back on. Below, China’s
wobble looks to be more than a wobble, at least to me in faraway London. When
China sneezes, will the world including the USA, catch a cold?
China Property Slump Adds Danger to Local Finances
May 7, 2014 5:31 AM GMT
China’s weakening property
market poses an increasing danger to local governments, threatening to strain
their finances and intensify an economic slowdown. Land sales in 20 major cities fell 5 percent in March from a year earlier, the biggest drop in at least a year, according to China Real Estate Information Corp. data compiled by Bloomberg. The value of land sales in third-tier cities declined 27 percent last month, according to SouFun Holdings Ltd., the nation’s biggest real-estate website owner.
Failure to find other revenue sources increases the risk of defaults and financial turmoil that curb economic expansion already projected this year at the slowest pace since 1990.
----“As the housing market is cooling off, we expect land-sale revenue will decline and this will add pressure on the funding capacity for local governments,” said Zhu Haibin, chief China economist with JPMorgan Chase & Co. in Hong Kong. Land sales will drop more in areas where oversupply in property is more severe, said Zhu, who previously worked at the Bank for International Settlements.
The weakness adds to the urgency of expanding China’s municipal-bond market so regional governments can sell debt directly to the public instead of through off-budget corporations called local-government financing vehicles. A sample of provincial, municipal and county administrations shows they have guaranteed repayment of about 37 percent, or 3.5 trillion yuan ($560 billion) of debt with land sales, according to a national audit report released in December.
More
China Workers Power Sets Off Strikes for Nike, Wal-Mart
May 6,
2014 10:00 PM GMT
The Chinese government is gaining an unlikely ally in its effort to overhaul
the economy: striking Chinese workers. So far this year, the China operations of International Business Machines Corp. (IBM), PepsiCo Inc., Wal-Mart Stores Inc. (WMT), and Yue Yuen Industrial Holdings Ltd. (551), a major supplier to Nike Inc. and Adidas AG (ADS), all have been idled by labor protests.
“This is not a blip,” says Dan Harris, a Seattle-based attorney representing companies operating in China. “It’s going to continue and get worse.”
While China’s communist party was founded to benefit the country’s “workers and peasants,” Chinese leaders aren’t known for their patience with protest. This latest wave of labor unrest -- at least when confined to pocketbook concerns -- might be different. The government wants to rebalance the slowing economy to rely more on consumption. Higher incomes for workers would be a good start.
“The government is trying to play a game that uses worker demands to push its broader economic goals,” said Mary Gallagher, director of the Center for Chinese Studies at the University of Michigan. “They have a belief they can use this kind of activism.”
That’s a gamble. Six years after a new labor law gave workers greater rights, Chinese labor remains in a twilight world. While the central government wants workers to see income gains, local Chinese officials -- often promoted based on their ability to maintain stability and generate growth -- usually side with employers in any dispute.
More
http://www.bloomberg.com/news/2014-05-06/china-workers-power-sets-off-strikes-for-nike-wal-mart.html
In the rush
to World War Three news, America’s pot continues to shrilly call Russia’s
kettle black. Without a change in the War Party in Washington, increasing
sanctions on Russia only incentivise Russia to annex more of the Russian
speaking and Orthodox Ukraine. For Russia, it’s an existential issue like Kennedy’s
Cuba. For Uncle Scam, it’s a mere chess move designed to install a pro-west
Nato government in the Ukraine, designed to bring about the collapse of Russia
and Belorus and the “Stans,” leaving China “contained.” War when it comes, and
it seems to me in sleepy London that war is coming, will go global PDQ. As in
1914, it will not be the walk in the park romp, that the west’s war mongers
seem to think it will be.
I’m no
General, but when push comes to shove, it’s all likely to go nuclear pretty
fast. Russia’s great leveller is taking out the west’s great financial centres
of Manhattan, London, and Frankfurt. Probably adding in Chicago and Boston, Munich
and Paris to complete the takedown. This is not 1914 or even 1939. War’s reach
is now global from day one. Stay long fully paid up and locally held, physical
gold and silver. The nutters have taken over the asylum now.
Russia won’t seek to annex the region because of the risks of getting bogged down in a civil war, capital flight from Moscow and having to rescue the local economy, according to Barbara von Ow-Freytag, who advised the German government from 2008 to 2013 on Russian issues.
“Putin’s main goal right now isn’t an invasion of eastern Ukraine,” she said in a May 4 interview. “He’d do it if he could pull it off, but it would be far too expensive.”
Deluded wishful
thinking, it seems to me. When an existential threat to a nation arises, as
with Israel, and as with the UK 1939-1940, a nation will to whatever it takes,
whatever the cost.
Putin Eyes Ukrainian Arms Prize as Troops Build Up Along Border
May 7, 2014 1:26 AM GMT
As Russian President Vladimir
Putin positions his army along the border with Ukraine, his eyes are
trained on more than former Soviet territory. The parts of Ukraine where separatists and loyalists face off in ever-more violent clashes are home to the most valuable assets of the nation’s defense industry. More than 50 factories form an arms cluster that caters to Russia based on a trade accord from two decades ago, churning out air cargo transporters, helicopter engines and other hardware.
“Taking Ukraine’s eastern and southern regions would be hugely beneficial for Russia from a military and economic point of view,” said Mikhail Barabanov, the editor-in-chief of the Moscow Defense Brief magazine. “Russia will have control of the very important and valuable defense companies and plants.”
The Russian government’s $15 billion agreement with ousted Ukrainian President Viktor Yanukovych in December included a trade pact that set out to further intertwine the two countries’ defense industries. Putin has since warned that disruption to supplies would harm his military’s capability. Last week he said it would also be catastrophic for the Ukrainian arms industry.
More than half of Russia’s nuclear arsenal was built in Ukraine or is equipped with a Ukraine-made navigation system, according to analysts including Serhiy Zgurets, the chief editor of Defense Express, a Ukrainian military consultancy.
The factories in the eight regions of Ukraine form the strategic backbone of an industry with $1.3 billion in annual exports. As well as Antonov air cargo transporters, Mi-8/17 and Mi-26 attack helicopter engines, they produce equipment for Albatros submarine chasers and service ballistic missiles.
“We hope the situation won’t develop into a complete interruption of cooperation,” Putin said on April 28 in Petrozavodsk, Russia. “In any case, we are working on all issues related to the replacement of imports.”
Ukraine, whose government in the capital Kiev is struggling with a burgeoning budget deficit and counting on the International Monetary Fund for a $17 billion bailout, needs the revenue from its defense industry more than ever.
State-run companies like attack helicopter engine maker Motor Sich, turbine producer Zorya Mashproekt, and ballistic-missile services company Yuzhmash are located in the most volatile areas of Ukraine.
----Ukraine was the world’s eighth-biggest supplier of arms in 2009-2013, according to SIPRI. Russia was the fourth-biggest buyer of Ukrainian defense-related products in 2009-2013 after China, Ethiopia and Pakistan, SIPRI said.
The ironclad Russian trade relationship forged in a 1993 treaty two years after the collapse of the Soviet
Union would be hard to unravel, even as the crisis shreds political ties.
If the more than 20 contracts that make up the mass transfer of goods and expertise to Russia were canceled, Ukraine would stand to lose at least $600 million a year, while Russia’s defense budget might swell by more than $2 billion a year as it looks for replacements, according to Defense Express.
More
In suicidal
continental Europe, the fallout from Russian sanctions is just beginning. Just
wait until the layoffs start.
SocGen Posts Surprise Profit Decline on Russia Writedown
May 7, 2014 6:00 AM GMT
Societe
Generale SA (GLE), the second-largest French bank by market value, reported
a 13 percent decline in first-quarter profit after writing down goodwill at its
Russian unit. Net income fell to 315 million euros ($439 million) from 364 million euros a year earlier, the Paris-based bank said in a statement today. Earnings missed the 868 million-euro average estimate of eight analysts that Bloomberg News surveyed by phone and e-mail.
Societe Generale, among the biggest foreign banks in Russia, cited “the decline in the ruble, growing uncertainty concerning the environment and delayed performances” in taking a 525 million-euro writedown.
The U.S. and European Union have imposed sanctions on individuals and companies after Russia seized Crimea, Ukraine’s mainly Russian-speaking peninsula, and allegedly backed pro-Russian militants who have taken over part of eastern Ukraine. The crisis threatens economic growth across Europe, particularly in countries bordering Russia or dependent on Russian energy, the European Commission said May 5.
More
In other war
news, Vietnam and America sparred with China. The Philippines seizes a Chinese
ship. Our world is fast becoming a very dangerous unstable place as the 21st
century resource wars start to unfold. Is the US allied with Vietnam now to
contain China? How long before it’s China’s turn to get the Ukraine coup
treatment from America’s War Party at the Project for the New American Century?
Vietnam Says Prepared to Act on China Rig in Disputed Waters
May 7, 2014 7:10 AM GMT
Vietnam said it is
prepared to take measures over China’s placement of an exploration rig in
disputed waters, as the U.S. called the Chinese move “provocative and
unhelpful” given recent regional tensions. Vietnam can’t accept this month’s placement of the HD-981 rig and deployment of vessels in an area it considers part of the country’s exclusive economic zone and continental shelf, Deputy Prime Minister Pham Binh Minh told Chinese State Councilor Yang Jiechi yesterday by phone, according to a posting on the website of Vietnam’s foreign ministry. Vietnam demanded that China withdraw the rig and vessels and hold talks to resolve the issue, Minh said.
“Vietnam will take all suitable and necessary measures to safeguard its legitimate rights and interests,” Minh said, according to the posting.
The rig’s location is near the Paracel
Islands, which are now under Chinese control, said Li Mingjiang, an
associate professor at the S. Rajaratnam School of International Studies in Singapore.
Vietnam also claims the Paracels, and both countries, as well as Brunei, Malaysia, the Philippines
and Taiwan, have
claims to other territory in the South China Sea.
More
Tensions surge in S. China Sea as Philippines seizes Chinese boat
MANILA/BEIJING(Reuters) - Philippines police seized a Chinese fishing boat in the disputed South China Sea on Wednesday, an official told Reuters, the latest flare-up of tensions in the oil and gas-rich waters that are claimed wholly or in part by six Asian nations.
Chief Superintendent Niel Vargas of the Philippine National Police Maritime Group said a maritime police patrol apprehended a Chinese fishing boat around 7 a.m. on Tuesday off Half Moon Shoal.
The boat has 11 crew and police found about 500 turtles in the vessel, some of which were already dead, he said, adding that a Philippine boat with crew was also seized, and found to have 40 turtles on board. Several species of sea turtles are protected under Philippine law.
Maritime police are now towing the boats to Puerto Princesa town on the island of Palawan where appropriate charges will be filed against them, Vargas said.
The incident is bound to raise the ire of Beijing, which claims almost the entire South China Sea, rejecting rival claims from Vietnam, the Philippines, Taiwan, Malaysia and Brunei.
More
We end for
the day with a case of good old Yankee get up and go enterprise. A case right
out of the Great Nixonian Error of fiat money. What Nixon did on the world
scale, single mother Mrs. Brice tried locally. What’s good for the goose and
all that. But it seems that Mrs. Brice is not the only one turning to good old
Yankee enterprise. Now why did the BOE
suddenly remove all the UK’s red fifty Pound notes last week? For the record,
and before I get a visit from the man from the BOE, while I do own a
toothbrush, I don’t own a Hewlett-Packard 3-in-1 inkjet printer.
But the U.S. government has a technology, called a printing press
(or, today, its electronic equivalent), that allows it to produce as many U.S.
dollars as it wishes at essentially no cost.
Dr. B. S, Bernanke.
Mom With HP Printer Shows the Digital Ease of Bogus Cash
May 7,
2014 5:01 AM GMT
Tarshema Brice hardly ranks among the world’s elite counterfeiters. But with
the help of modern consumer technology, she developed an exacting system for
crafting fake U.S. greenbacks. First, the 34-year-old hairstylist and janitor took $5 bills with a specific watermark and soaked them with “Purple Power” degreaser. Next, she scrubbed off the ink with a toothbrush. After drying the now-blank notes with a hair dryer, she fed them through a Hewlett-Packard (HPQ) Co. 3-in-1 inkjet printer that emblazoned them with scanned images of $50 or $100 bills.
The counterfeits looked and felt real and could pass any rudimentary test by a retail clerk. Brice, who pleaded guilty to counterfeiting last month in federal court, admits she produced between $10,000 and $20,000 in fake bills over two years before her scam unraveled in September. The Richmond, Virginia, resident “was raising six children on her own with modest income and was filling the gaps by making counterfeit money,” says her lawyer, Charles E. James Jr.
Brice’s scam is emblematic of a modern twist in a crime as old as money itself: digital technology has revolutionized the counterfeiting craft. Not long ago, producing good fakes was the province of artisans who etched printing plates and churned out millions in bogus bills on off-set presses. Today, all it takes is a scanner, a color printer and, for best results, some small bills and household cleaner.
“Back in the day, there was a
significant outlay of funds to produce a counterfeit note,” said Ed Lowery, the
agent in charge of the Secret Service’s criminal division. “You had to buy lots
of quality paper, the ink, the printing press. You didn’t print up a thousand
at a time, you printed up four or five million. You had a distribution
network.”
Now, “why would you print up a
couple of million in counterfeit? Depending on the technology you are using,
you could just print up some to go out on a Friday night,” he said.
Statistics highlight the growth:
In 1995, less than 1 percent of fake bills were produced on digital printers.
In the last fiscal year, nearly 60 percent of the $88.7 million in counterfeit
currency recovered in the U.S. was created using inkjet or laser printers, the
Secret Service says.
More
"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
At the Comex
silver depositories Tuesday
final figures were: Registered 54.69 Moz, Eligible 120.13 Moz, Total 174.82 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, yet another example of modern dumbed down Britain,
the nation once known as Great Britain. Below, how a nasty bunch of old timer
Morrisons’ pensioner freeloaders, were preventing all the rest of us impoverished
UK consumers from getting an extra 5,000 Pounds a month of extra savings on our
groceries, ready meals, foodstuffs, chemicals, etc., and booze. This wicked
bunch of Old Morrisonians were eating our lunch and we didn’t know it. But
brave millionaire CEO Dalton Philips was onto their scam, and has slammed
Morrisons till firmly shut on their grubby little aged fingers. No longer will
a lifetime of work, slaving behind the Morrisons checkout, bring a ten percent
off discount, on a once a month egg, chips and beans. Now these aged Morrisons malingerers, can get to know how
the rest of us feel paying for over-priced egg, chips and beans, in the
Morrisons check-out waiting room. Subsidising their once a month life of Riley
in the Morrisons canteen.
Morrisons boasts that it went “from a humble stall
on a Bradford Market to over 500 stores and online deliveries.” They claim to
be the UK’s fourth largest food retailer. Be sure to look for that extra £5,000,
a month allegedly coming soon to a store near you. Meanwhile I think I’ll check
out Lidl and Aldi with the Morrisons’ pensioners. Morrisons’ can go back to
that Bradford Market stall for all I care.
“I
wear the chain I forged in life....I made it link by link, and yard by yard; I
girded it on of my own free will, and of my own free will I wore it.
Dalton
Philips, with apologies to Jacob Marley and Charles Dickens.
£1m-a-year Morrisons boss cuts pensioner perk of JUST £5,000-a-month for hundreds of elderly ex-staff
PUBLISHED:| UPDATED:
Dalton Philips, the £1million-a-year chief
executive of Morrisons, has axed funding for social activities for hundreds of
elderly ex-staff.
The company has stopped payments of just £5,000 a
month to subsidise pensioners’ lunches, a magazine and other perks.
Philips could afford to pay the £5,000 out of his
£850,000 basic salary and still have nearly £66,000 left each month, not
counting his £17,750 a month pension benefit.
Morrisons claims it slashed the payments because
too few people took part. But correspondence from the company, seen by the
Mail, states the motive was to funnel money into cutting prices in stores.
Pensioners say the £5,000 a month is a drop in the
ocean to the firm, and the decision has upset former staff who want to keep in
touch with old colleagues, many of whom are in their seventies and eighties.
Sheila Underwood, 72, of Colnbrook, Berkshire,
worked for 20 years at Argyll and Safeway, now part of the Morrisons empire,
before retiring at 56.
She said: ‘I have been to the lunches and I know
how much people value them.
‘Some people are quite lonely, and this gives them
the chance to be in a community of former colleagues. It is more than
just a lunch, it is about camaraderie.
‘In the scheme of things, what difference is that
bit of money going to make to Morrisons? The saving is out of all proportion to
how people will feel.’
The activities were organised through the Morrisons
Plus group. The social programme was started by the Safeway Pensioners’
Association and continued by Morrisons when the companies merged in 2003.
The firm said admin costs had become too high, and
claimed less than 10 per cent of the 8,000 Morrisons Plus members went to the
lunches, typically held at in-store restaurants.
But the pensioners say that although the proportion
of former staff taking part is low, the decision still affects hundreds of
people.
In the last round of lunches, 194 attended in
Maidstone, Kent, 164 in West Yorkshire, 121 in Warrington, more than 80 in
Glasgow and Birmingham and 60 in Blackpool.
One former worker said: ‘People have been meeting
for many years. It was their major social event and now it is being taken
away.’
A letter from the firm’s pensions team to members
did not mention low take-up, stating: ‘This funding will be diverted into
providing the very best pricing to you and all our other customers.’
A spokesman added: ‘Morrisons Plus members will
carry on getting benefits such as discounts on groceries. However, we’ll no
longer be funding the pensioner committee and meals for members. They didn’t
prove popular and only a small number took them up.’
What shall I put you down for?"
"Nothing!"
"You wish to
be anonymous?"
"I wish to be
left alone. Since you ask me what I wish, gentlemen, that is my answer. I don't
make merry myself at Morrisons, and I can't afford to make idle people merry. Via
higher prices I help to support the Aldi and Lidl, -- they cost enough, -- and
those who are badly off must go there."
"Many can't go
there; and many would rather die."
"If they would
rather die, they had better do it, and decrease the Morrisons’ pensioner population."
Dalton Philips, with apologies to Scrooge and Charles Dickens.
The monthly Coppock Indicators finished April
DJIA: +189 Down. NASDAQ: +347 Down. SP500: +249 Down. Sell in May, go away.
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