Monday, 30 June 2014

The Wrong Sort of Revolution.

Baltic Dry Index. 831  +07

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

“All animals are equal, but some animals are more equal than others.”

George Orwell, Animal Farm.

We have reached the last day of the half year. While Scotland is busy commemorating its independence and the 700th anniversary of the Battle of Bannockburn, and the rest if the Europe and the English speaking world is commemorating the event that happened a hundred years ago that led up to World War One and independence for many of the constituent parts of Europe’s great empires, and America gets ready to celebrate its Independence Day on July 4th, we open with a different type of independence getting declared from the Eastern Ukraine to the Middle East.  Some independence declarations are more valid than others in our new lawless 21st century era.

Below, while America fiddles in the Ukraine, setting off a new Christian civil war,  if not yet World War Three, the Middle East as we knew it is collapsing into Moslem barbarism and medieval backwardness backed up by modern weaponry. But don’t tell the Fed’s final bubble stock market. It’s “dress up” Monday for the end of quarter and half year for stocks.

“The creatures 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

Isis declares its captive territories an 'Islamic Caliphate'

Jihadist group Isis demands all Muslims declare obedience to its leader as it lays claim to the mantle of the great Muslim empires of the past

Fresh from their victories over the Iraqi army and on the first night of the holy month of Ramadan, the jihadist group Isis has declared its captive territories an “Islamic Caliphate” and demanded all Muslims declare obedience to its leader.

In a recorded audio statement, the Islamic State of Iraq and al-Sham’s spokesman, Abu Mohammed al-Adnani, said the new caliphate ran from Aleppo to Diyala province, north-east of Baghdad, and was expanding every day.

“The time has come for the Ummah [nation] of Mohammed (peace be upon him) to wake up from its sleep, remove the garments of dishonour, and shake off the dust of humiliation and disgrace,” he says. “For the era of lamenting and moaning has gone, and the dawn of honour has emerged anew.

“The sun of jihad has risen. The glad tidings of good are shining. Triumph looms on the horizon. The signs of victory have appeared.”

He spoke in Arabic but written versions were published online in English and other languages.

By making the statement, the group is laying claim to the mantle of the great Muslim empires of the past, ruled by caliphs based in Baghdad, Damascus and Istanbul.

The group has referred to its territories as a caliphate before, but this is a typical piece of aggrandising propaganda intended to attract young followers in particular. Many Arabs, seeing the economic and social decay of their countries, hark back to a golden age of Muslim unity and power.

It is also a plausible threat of the group’s expansionist goals – with Iran, once part of the caliphate, and other Muslim nations such as Lebanon, Jordan, Saudi Arabia and Turkey now in the direct line of Isis’s advances.

The triumphalism of Sunni Islam was also emphasised, saying that “crosses and graves” were being demolished, and jizya – a tax for non-Muslims – was being implemented.

Isis crucifies nine people in Syrian villages

Crucifixions have been meted out by Isis across Syria as punishment to rebels

A man has survived being crucified by Isis in Syria, after the jihadists raided his village and nailed him to a cross for eight hours.

The unnamed man from Al-Bab, near the border with Turkey, was crucified as a punishment, the Syrian Observatory for Human Rights said.

He managed to survive the ordeal

Isis first emerged in Syria's war in late spring last year – and was initially welcomed by some Syrian rebels, who believed its combat experience would help topple Mr Assad.

But subsequent acts of immense brutality quickly turned the Syrian opposition, including Islamists, against Isis.

Rebels launched a major anti-Isis offensive in January 2014, and have pushed them out of large swathes of Aleppo province and all of Idlib in the northwest.

However, Isis remains firmly rooted in Raqa, its northern Syrian headquarters, and wields significant power in Deir Ezzor in the east near the border with Iraq.

Activists say the group's Iraq offensive and capture of heavy weapons – some of them US-made – appears to have boosted its confidence in Syria.

Children forced to watch as Pakistani couple who married for love were 'murdered as an example'

Five people – including father of the bride – arrested after honour killing of couple who wed without permission of their parents

A young couple murdered in Pakistan barely a week after they had married for love were killed as a warning to other girls not to marry without the permission of their parents, according to witnesses.

Residents of Satrah, Punjab, said relatives of the bride slit their throats and forced children to watch as they bled to death.

A string of similar murders has provoked revulsion around the world and promises of action inside Pakistan. But the nature of the latest deaths is savage even by the warped yardstick of the country’s grisly honour killings.

Local police said they had arrested five people in connection with the murder of Sajjad Ahmed, 31, and Muafia Bibi, 17, including the bride’s father and grandfather.

Muhammad Pervaiz, the local police chief, said: “It is a case of honour killing. The couple were not beheaded but were killed with the knives and had severe signs of torture on their heads.”

Russian Advisers Ready Iraq to Use New Combat Aircraft

Jun 30, 2014 12:29 AM GMT
Russian military advisers helped to prepare Iraq’s air force to use five newly delivered combat planes in its campaign to recapture areas of the country’s north that fell to an al-Qaeda breakaway.

The used Russian Sukhoi combat aircraft arrived in Iraq as government ground forces, backed by helicopter gunships, pressed their offensive to drive Sunni fighters of the Islamic State of Iraq and the Levant from the northern city of Tikrit. Al-Mada Press reported late yesterday that government forces recaptured Ouja village, Saddam Hussein’s birthplace, south of Tikrit.

The Iraqi government turned to Russia to bolster its air capabilities, saying U.S. fighter jets were taking too long to be delivered. Russian advisers who arrived in Iraq are helping to put the “logistical procedures in place,” and the aircraft will enter service within three to four days, air force commander General Anwar Ameen said yesterday on state-run Iraqiya TV.

“One day after the Russian deputy foreign minister said that Moscow would not stand by idly, the Kremlin delivered the first of 25 Sukhoi fighter jets to Iraq,” said Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis in Dubai.

Ukraine's Poroshenko urges Putin to tighten borders after violence

By Thomas Grove KIEV Sun Jun 29, 2014 3:02pm EDT
(Reuters) - Ukrainian President Petro Poroshenko urged President Vladimir Putin on Sunday to strengthen Russian control over its borders to prevent militants and arms entering Ukraine after violence broke a truce there.

The ceasefire, declared by Poroshenko on June 20 to allow for peace talks with the pro-Russian rebels, is due to expire on Monday, a deadline also set by EU leaders considering new sanctions against Russia.

The statement came after a four-way telephone conversation among the Ukrainian and Russian leaders, French President Francois Hollande and German Chancellor Angela Merkel, said a statement from Poroshenko's office.

"Ukraine called on the President of Russia to strengthen control over the Russian side of the state border in order to stop the penetration into Ukraine of militants and mercenaries and supplies of weapons and armoured vehicles," it said.

The four leaders agreed to speak again on Monday, the statement added.

The European Union has threatened more penalties on Moscow beyond existing asset freezes and visa bans unless pro-Russian rebels act to ease the crisis in eastern Ukraine by Monday.

Another military unit stormed in Donetsk on Sunday

DONETSK/KYIV. June 30 (Interfax) - Armed people have attempted to storm a military unit deployed in Donetsk, an Interfax correspondent reported on Sunday evening.
Interior Ministry Forces unit No 3036 located on the premises of a military school was put under fire. There were explosions and a fire started on the unit's territory. Tenants of nearby apartment houses had to hide in basements.

Meanwhile, Ukrainian Interior Minister Arsen Avakov wrote on Facebook that servicemen of Donetsk military unit No 3037 passed through militia roadblocks and joined the army operation.

"More than 300 Guard servicemen led by Lt. Col. Borteyev and carrying Ukrainian flags broke through terrorist roadblocks and joined the antiterrorist operation forces in sector D," the minister emphasized.

He said the self-proclaimed Donetsk People's Republic gave the servicemen an ultimatum. They were told to lay down arms and to pass the unit's arms depot to the DPR.

Avakov said the arms depot was mined and blown up on his orders. "I gave the order to prevent the armaments and ammunition stored in that depot from falling into the hands of terrorists," he said.

Earlier on Sunday Donetsk military unit No A-1402 was taken under control by the Donetsk People's Republic.

"The militia took control of military unit No A-1402 on Stratonavtov Street today," the DPR press service told Interfax without providing any details.

Military unit No A-1402 is an air defense regiment armed with self-propelled air defense missile launchers Buk.

The militia took control of military unit No 3004 on June 26.

Ukraine’s Donetsk airport closed for technical reasons till October 31

June 28, 4:15 UTC+4
International airport of another eastern city, Lugansk, has been closed “for technical reasons” till September 10

We close for what promises to be yet another “interesting day,” with a challenge to the US media, conditioning the long suffering US public for yet another war. No not a war to crush Islamic barbarism and a return to the dark ages of spearing Islam by fire and the sword, but a war to ignite World War Three among the Christians.

Correcting The NYT’s False Narrative: Washington Triggered The Ukraine Crisis, Not Putin

by Robert Parry • 
It’s always interesting when the New York Times promotes a false narrative – as it has on Ukraine by blaming the crisis all on “Russian aggression” – and then has to shift its storyline when events move in a different direction, like President Vladimir Putin’s recent peacemaking initiatives.

On Thursday, the Times explained Putin’s call for an extended ceasefire as a case of him caving in to U.S. pressure. Correspondents Andrew Roth and David S. Herszenhorn wrote:

“Faced with the threat of additional economic sanctions from Washington, President Vladimir V. Putin of Russia discussed an extension of the cease-fire, which is to expire on Friday, in a telephone call with Chancellor Angela Merkel of Germany, President François Hollande of France and Ukraine’s new president, Petro O. Poroshenko.”

The article then continued the tough-guy, ultimatum-threatening chest-pounding that has become de rigueur for the State Department and the mainstream U.S. news media.

Normally, when one party in a dispute makes an allegation and fails to provide meaningful evidence to support it, news organizations add something like: “However, the claim could not be independently verified” or the Times might have noted that “similar claims by the State Department in the past have proven to be false.”

But the Times simply can’t seem to deviate from its four-month display of an extraordinary lack of balance, which brings us back to the Times’ attempt to explain Putin’s peacemaking as a development that could only be explained as him caving in to U.S. pressure. [For more on the Times’ bias, see’s “NYT’s One-Sided Ukraine Narrative.” For more on Herszenhorn’s bias, see “Ukraine, Through the US Looking Glass.”]

There is, of course, an alternative explanation for Putin’s recent behavior: that he never sought the Ukraine crisis and surely did not plan it; it resulted, in part, from U.S. and European provocations designed to put Putin in a corner in his own corner of the world; Putin reacted to this Western maneuver but was always willing to compromise as long as the end result was not a strategic threat to Russia.

"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."

Henry Hazlitt

At the Comex silver depositories Friday final figures were: Registered 57.04 Moz, Eligible 118.43 Moz, Total 175.47 Moz.  

Crooks and Scoundrels Corner

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

Today, a look at smoke and mirrors Japan. As Abenomics fails to deliver as promised, plan B increasingly looks like stirring up trouble with China. Stay long fully paid up physical precious metals. The Great Nixonian Error of fiat money is headed for a shock as great as the currencies suffered one hundred years ago in World War One.

“The world is a place that’s gone from being flat to round to crooked.”

Mad Magazine.

Printing Press “Prosperity”: The Complete And Utter Failure Of Abenomics

by Contributor • 
By Andy Sirkis
Despite claims to the contrary in the mass media, Japan’s economy is continuing to suffer mightily under the leadership of Prime Minister Abe Shinzo. Abe is from a famous family and he’s a convincing talker, so he was able to bamboozle people into believing that he could make Japan prosper with his three arrows. These metaphorical arrows stand for “monetary stimulus,” “fiscal stimulus,” and “structural reform.”

When Abe was elected using his “three arrows” symbolism to attract votes, I thought the Japanese people were beginning to believe in magic. Perhaps they were gullible or a little lazy in thinking or thought they would receive “free stuff” from Abe. No matter, Abe became Prime Minister in December 2012 and shot off his arrows.

With his “monetary stimulus” arrow, Abe arm-twisted the central bank into doubling the money supply in just a few months time. I could just imagine Abe rubbing his palms together and fiendishly muttering “We’re going to be rich, rich, RICH!” All that the central bank had to do was type a few numbers into their computers to make this happen. Naturally, the newly created money was distributed to politically powerful banks.

How did all of this money creation affect the common people? Despite claims that Japan has less than 2 percent inflation, I can assure you that the prices of many goods, especially imported goods like energy, have increased dramatically since the monetary stimulus arrow was fired. Wages, on the other hand, have remained depressed. With higher expenses to pay, Japanese people can’t afford other goods they would like to buy and businesses can’t afford to raise wages, hire, or expand. Only Abe’s bankster friends have profited from this scheme by speculating in the stock market with the counterfeited money that had been credited to their accounts with the central bank computer.

Japanese people are mostly smart enough to realize that typing numbers into a computer can’t make an economy strong, yet they just haven’t figured out that Abe’s monetary stimulus is nothing but a sneaky counterfeiting scheme.

At the same time as the monetary stimulus arrow doubled the money supply, Abe and his gang used their fiscal stimulus arrow to enormously increase spending on government works projects.

----To pay for his “fiscal stimulus” arrow Abe decided to raise taxes and take the money he needed by force. He raised car taxes and income taxes and he raised sales taxes by 60 percent, but he also announced plans to raise sales taxes by 100 percent. He is considering increasing taxes on married people and poor people. With each tax increase and threat of further tax increases, the economy has weakened further.

And what of Abe’s third arrow, “structural reform”? No one knows what this political slogan actually means. It sounds like some modern day form of Soviet era Glasnost, but there’s been no significant deregulation or loosening of government controls that have long stifled the Japanese economy. We do know that Abe has spent a great deal of effort making enemies with the neighbors. Effectively, Abe’s aggressiveness in foreign affairs is the real third arrow.

As China Flexes Muscle, Obama Frets Over Rival’s Weakness

Jun 29, 2014 11:00 PM GMT
China is tailgating Japanese warplanes, playing chicken with Vietnamese ships and questioning America’s toughness. Yet it isn’t Chinese strength that most worries President Barack Obama, it’s Chinese fragility.

As China’s economy grows at its slowest pace in 24 years, the country’s domestic strains are drawing increased attention. While Americans stew over the prospect of being eclipsed by a new superpower, their president frets about instability in the world’s second-largest economy.

“We welcome China’s peaceful rise,” Obama said in a recent NPR interview. “In many ways, it would be a bigger national security problem for us if China started falling apart at the seams.”

Though no one expects that to happen any time soon -- if ever -- Chinese President Xi Jinping confronts an array of potential triggers for unrest. After more than three decades of growth that has raised per capita income to more than 17 times its 1978 level, China’s breakneck change is only intensifying.

"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

Alan Greenspan

The monthly Coppock Indicators finished May

DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down.  Crisis? What crisis?

Friday, 27 June 2014

Did The Talking Chair Lie?

Baltic Dry Index. 824  -22 

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

"Bullion doesn't pay interest or dividends, nor does it grow or expand by itself. That's the price you pay for tranquillity."

Pierre Lassonde

Last week the Fed’s talking chair said, “nothing to see here, it’s all just noise. Move along be happy. ZIRP will be with us forever.” Yesterday, the Fed’s talking sofa, said “ZIRP forever” ends next March. Did the talking chair lie? Who knows, but how do you spell CRASH in Chinese, if the sofa is right and not the chair? Ominously, the Baltic Dry Index is collapsing again.

Below, what passes for adult financial policy in our new lawless 21st century age. Like the English Court of Chancery of old, the Fed’s new policy on ZIRP now seems to hang on the length of the furniture’s foot.

"Equity varies with the length of the Chancellor's foot".

U.S. Stocks Drop as Bullard Says Rates to Rise by March

Jun 26, 2014 9:27 PM GMT
U.S. stocks slipped for the third time in four days after James Bullard, president of the Federal Reserve Bank of St. Louis, suggested today that higher interest rates may happen sooner than people though

----Bullard, speaking in an interview on Fox Business Network, predicted the central bank’s first interest-rate rise will happen in the first quarter of next year. Most investors are forecasting higher rates later in the year, according to Ryan Larson of RBC Global Asset Management (U.S.) Inc.

“Bullard’s comments are somewhat contradictory to what Chair Yellen indicated last week,” Larson said in a phone interview. “Contradictory language coming from Fed officials is putting pressure on the market.”

Asian Stocks Fall as Fed Official Says Rates May Rise

Jun 27, 2014 5:06 AM GMT
Asian stocks fell with the regional benchmark index paring its seventh straight weekly gain and slipping from a six-year high, as a Federal Reserve official said the U.S. may raise interest rates by March.

Samsung Electronics Co., South Korea’s largest exporter of consumer electronics, was the biggest drag on the regional index, falling 1.1 percent. Oracle Corp. Japan fell 5.8 percent, leading losses among information technology shares, after its operating profit forecast missed estimates. Ono Pharmaceutical Co. jumped 4.8 percent in Tokyo, leading health-care shares higher, on a report its melanoma drug will be approved.

The MSCI Asia Pacific Index (MXAP) slid 0.5 percent to 144.78 as of 1:04 p.m. in Tokyo with nine of its 10 industry groups falling. The measure closed yesterday at its highest level since June 2008 and is heading for a 0.1 percent gain this week.

“It’s a timely warning that the time for the Fed to start raising interest rates is drawing nearer,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $160 billion. “I don’t think that risk is factored into the market sufficiently.”

Japan’s Topix (TPX) index slipped 1.4 percent as the yen surged 0.4 percent against the dollar. A report today showed inflation accelerated at the fastest pace in 32 years, swelled by a sales-tax increase and higher utility charges. Consumer prices excluding fresh food rose 3.4 percent in May from a year earlier, the statistics bureau said, matching the median forecast in a Bloomberg News survey of economists.

While ZIRP forever or ending in March 2014, may be a fun way of gaming the US stock market for Wall Street’s Great Vampire Squids, half a world away ending ZIRP threatens to end the Great Chinese Real Estate bubble, already starting to collapse under the weight of its own excesses. The one off, unprecedented China transformation, 1978 – 2014, is completely unsustainable in a world without ZIRP and endless QE Forever. As the Fed’s final and fatal bubble nears its pin, stay long fully paid up physical precious metals. When the Fed’s final bubble blows, 2007-2009 will look like a teddy bear’s picnic compared to what happens next. But don’t let on to the banksters and squids high on the heroin of ZIRP and QE Forever.

China’s Manhattan Project Marred by Ghost Buildings

Jun 27, 2014 5:18 AM GMT
China’s project to build a replica Manhattan is taking shape against a backdrop of vacant office towers and unfinished hotels, underscoring the risks to a slowing economy from the nation’s unprecedented investment boom.

The skyscraper-filled skyline of the Conch Bay district in the northern port city of Tianjin has none of a metropolis’s bustle up close, with dirt-covered glass doors and construction on some edifices halted. The area’s failure to attract tenants since the first building was finished in 2010 bodes ill across the Hai River for the separate Yujiapu development, which is modeled on New York’s Manhattan and remains in progress.

“Investing here won’t be better than throwing money into the water,” Zhang Zhihe, 60, said during a visit to the area last week from neighboring Hebei province to look at potential commercial-property investments. “There will be no way out -- it will be very difficult to find the next buyer.”

The deserted area underscores the challenge facing China’s leaders in dealing with the fallout from a record credit-fueled investment spree while sustaining growth and jobs in the world’s second-biggest economy. A Tianjin local-government financing vehicle connected to the developments said revenue fell 68 percent in 2013 to an amount that’s less than one-third of debt due this year.

“There will have to be a reckoning,” said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong. Sales of bonds by local-government vehicles to repay bank loans are just “buying time,” he said. “The people will pay” for it through bank bailouts, recapitalization with public money or inflation.

----Tianjin, a city of 14.7 million people whose center is about 125 kilometers (78 miles) southeast of Beijing’s, saw its economic growth cool to 10.6 percent in the first quarter of 2014 from a year earlier, from 17.4 percent in full-year 2010, compared with a moderation in national expansion over the same period to 7.4 percent from 10.4 percent. An annual pace of 10.6 percent would be the weakest for Tianjin since 1999.

Shanghai Developer Said to Halt Project on Funding Shortage

Jun 27, 2014 5:09 AM GMT
A closely held Shanghai developer has suspended construction at a property project due to a lack of funds, according to two government officials familiar with the matter.

Construction at Shanghai Yuehe Real Estate Co.’s mixed-use project, including residential, office and retail space, in the city was halted this month and the project was frozen by a court, according to the people, who asked not to be identified because they aren’t authorized to speak publicly about the matter. Shanghai Pudong Development Bank Co. (600000), a medium-sized Chinese bank, loaned about 240 million yuan ($39 million) to the 220,000 square meter (2.4 million square foot) development in suburban Jiading district, they said.

“There will be more developers having troubles as the property downturn prolongs,” said Duan Feiqin, a Shenzhen-based property analyst at China Merchants Securities Co., in a phone interview today. “Many Chinese cities face oversupply of those mixed-use property projects amid the e-commerce boom, while a lot of developers, especially those small ones, are not capable of doing such developments.”

Yuehe is the latest example of Chinese developers facing pressure as the nation’s slowing property market weighs on the growth of the world’s second-largest economy. Moody’s Investors Service in May revised its credit outlook for Chinese developers to negative from stable, citing a slowdown in home- sales growth as liquidity weakens and inventories rise.

----Pudong Bank loaned more than 200 million yuan to Yuehe and has taken steps to preserve assets, the lender said in an e-mail statement to Bloomberg News queries yesterday. Collateral for the loan is “adequate and valid,” the bank said. Two phone calls to Yuehe went unanswered.

In March, Zhejiang Xingrun Real Estate Co., a closely held developer in a city near Shanghai, became insolvent with 3.5 billion yuan of debt. Its residential projects have been halted and authorities have detained its largest shareholder and his son, according to the city’s government.

World’s Biggest Debt Load Lures Distressed Funds to China

Jun 27, 2014 4:53 AM GMT
Distressed debt funds are raising cash to seek greater opportunities in China, where Standard & Poor’s says corporate borrowing topped the U.S. last year.

Planned commitments to funds investing in Chinese and other Asian troubled assets are set to surpass $2 billion this year, up from $303 million in 2013, data from researcher Preqin Ltd. show. Morningside Group Holdings Ltd. in Hong Kong plans a $103 million vehicle, Preqin said. Guangzhou-based Shoreline Capital Management Ltd. is seeking $500 million for its third distressed-debt fund, according to co-founder Ben Fanger.

China’s economic growth has slowed to the least in more than a decade even as companies increased debt to $14.2 trillion as of Dec. 31, surpassing the $13.1 trillion in the U.S., according to a June 15 S&P report. Non-performing loans jumped the most since 2005 in the first quarter and state-owned asset management companies are raising funds to help clean up lenders’ balance sheets.

“Now that China is facing slowing growth and the banks are selling bad loans, distressed opportunities have multiplied,” said Fanger at Shoreline, which manages about $650 million of assets. “We have begun investing in NPLs again, as well as rescue and bridge financings.”

In other news.

Iraq Buys Used Russian Fighter Jets Amid U.S. Delivery Delay

Jun 26, 2014 10:49 PM GMT
Iraq has bought used fighter jets from Russia and Belarus to battle Islamist militants after long delays in the delivery of F-16 planes from the U.S. left troops without air support, Prime Minister Nouri al-Maliki said.

Maliki, in an interview with BBC Arabic yesterday, blamed the U.S.’s “long, very slow way” for delaying the delivery of 36 aircraft. “We shouldn’t have just bought U.S. jets, we should have bought British, French and Russian jets to provide air support. If we had air support, none of this would have happened,” he said, according to excerpts e-mailed by the BBC.

The U.S is delivering the first F-16 aircraft “as quickly as possible” and has said all along that they’ll be handed over in the fall, Army Colonel Steve Warren, a Pentagon spokesman, told reporters in Washington yesterday. He also said that the remaining 200 of 500 Hellfire missiles approved for delivery to Iraq will be sent in the coming weeks.

---- ISIL’s rapid military advance has raised the specter of civil war in OPEC’s second-largest oil producer.
Militants have consolidated their hold over parts of country’s north, with the contested town of Tal Afar “controlled by gunmen,” according to Noureddin Qablan, deputy chief of Nineveh provincial council in northern Iraq.

Iraq’s army shelled militant positions around Diyala, Al Arabiya television said. In Tikrit, a town halfway between Mosul and Baghdad that was seized by ISIL during its initial advance, the Iraqi air force carried out aerial attacks against the group yesterday, Al Arabiya television said.

Some ISIL fighters withdrew from the Al Alam district south of Tikrit, local news agency Almada reported. Reuters said that one of the army helicopters crashed after being fired on by insurgents.

Dead Friend in River: Inside Ukraine’s Refugee Crisis

Jun 26, 2014 10:00 PM GMT
When Volodymyr Vesyolkin’s friend turned up dead in a river days after he brazenly unfurled a Ukrainian flag in their separatist-controlled town, he knew it was time to go.

Vesyolkin left his home and business in Horlivka, a city of 260,000 in the Donetsk region that’s been ravaged as government troops battle pro-Russian insurgents. Seeking to start a new life, he salvaged as much of his bakery as he could, loading metal ovens into his truck and navigating military checkpoints on the 15-hour drive to Kiev. Now safe in the capital with his wife and three children, life starts anew.

“I understood this wouldn’t end in a month,” Vesyolkin, 35, said in a June 19 interview in a central Kiev restaurant. “Here, I’ve gone back to delivering the bread to shops myself.”

More than 400 people have died in the conflict, according to UN figures, many caught in the crossfire of a struggle for Ukraine’s future that erupted in the country’s easternmost regions after Russia’s takeover of Crimea in March. While far smaller than Syria’s refugee crisis, the United Nations estimates that about 35,000 have fled and Ukrainian officials warn of a “humanitarian disaster.”

The difficulty for President Petro Poroshenko to create lasting stability has been laid bare by a one-week truce that ends today with the government saying a peace deal isn’t close. The cease-fire was violated daily, including rebels shooting down a government helicopter, killing all nine people on board.

The number of people fleeing their homes doubled in the past two weeks, Ivan Simonovic, the UN official in charge of human rights, told the Security Council on June 24. The total number of people displaced, including from Crimea, is more than 46,000 as of a day earlier, he said.

In Europe news this morning, in yet another segment of the curse of the EUSSR, Germany suffers an electric shock.  And when the new super-efficient solar panels arrive in the next five years with their 30+ percent efficiencies, the existing electric power generation industry globally will become a dinosaur next decade.

Germany’s New Coal Plants Push Power Glut to 4-Year High

Jun 27, 2014 6:22 AM GM
Germany is headed for its biggest electricity glut since 2011 as new coal-fired plants start and generation of wind and solar energy increases, weighing on power prices that have already dropped for three years.

Utilities from RWE AG to EON SE are poised to bring units online from December that can supply 8.2 million homes, 20 percent of the nation’s total, according to data compiled by Bloomberg. That will increase spare capacity in Europe’s biggest power market to 17 percent of peak demand, say the four companies that operate the nation’s high-voltage grids. The benchmark German electricity contract has slumped 36 percent since the end of 2010.

The new coal plants are starting as Germany aims to almost double renewable-power generation over the next decade. Wind and solar output has priority grid access by law and floods the market on sunny and breezy days, curbing running hours for nuclear, coal and gas plants, and pushing power prices lower. The profit margin for eight utilities in Germany narrowed to 5.4 percent last year from 15 percent a decade ago.

“The new plants will run at current prices, but they won’t cover their costs,” Ricardo Klimaschka, a power trader at Energieunion GmbH who has bought and sold electricity for 14 years, said June 25 by e-mail from Schwerin, Germany. “The utilities will make much less money than originally thought with their new units because they counted on higher power prices.”

German power for delivery next year, a European benchmark, slumped to a nine-year low of 33.65 euros ($45.82) a megawatt-hour on April 3 on the European Energy Exchange AG in Leipzig, Germany, and settled yesterday at 34.40 euros. The contract fell 5.8 percent this year, more than respective drops of 1.7 percent and 4.6 percent for the equivalent French and Nordic prices. German next-year electricity may reach 33.40 euros, according to Arendal, Norway-based energy-analysis firm Markedskraft ASA.

Lower prices “leave a trail of blood in our balance sheet,” Bernhard Guenther, chief financial officer at RWE, Germany’s biggest power producer, said May 14 on a conference call after the company lowered its goal for annual net income.

---- Wind and solar’s share of installed German power capacity will rise to 42 percent by next year from 30 percent in 2010, according to European Union data compiled by Citigroup Inc. The share of hard coal and lignite plant capacity will drop to 28 percent from 32 percent, the data show.

---- “We have a huge oversupply of power and Germany wants to switch to renewable energy,” Claudia Kemfert, who heads the energy unit at the DIW economic institute, a research group in Berlin, said in an e-mail on June 20. “That’s why investments in new coal plants are bad investments.”

Meanwhile Italy goes off reservation as the Draghi low interest rescue plan causes debt levels to soar. What (more) could possibly go wrong? Euros anyone? I just hope that the UK can exit the EUSSR before it all implodes like its model Gorbachev’s Soviet Union. There’s simply no sign in continental Europe of anyone wanting to reform the EUSSR.

The bankster in his mansion,
The taxpayer at his gate,
Draghi made them High or lowly,
He disordered their estate.

With apologies to All things bright and beautiful.

Italian Debt Swells to Rival Germany as Bonds Rally: Euro Credit

Jun 27, 2014 12:01 AM GMT
As Italy’s borrowing costs fall to new lows, its debt is rising to the most ever.

The country owed 5 percent more in April compared with a year earlier, with debt reaching 2.15 trillion euros ($2.9 trillion), Bank of Italy figures show. That matches the outstanding borrowing of Germany, the largest economy in Europe and the most of any country on the continent, at the end of last year, according statistics office Eurostat.

While Germany is scheduled to grow 2 percent this year, Italy will expand 0.3 percent in 2014, according to a Bloomberg survey. To ensure its debt is sustainable, Prime Minister Matteo Renzi is under pressure to push through spending cuts and foster growth in an economy burdened by the threat of deflation and the highest number of people unemployed in modern history.

“In our forecasts Italian debt will overtake Germany by the end of the year,” said Raffaella Tenconi, an economist at Bank of America Merrill Lynch in London. “It is particularly important that the government moves ahead with the promised reforms to firm the sovereign credit rating and strengthen further investors’ appetite for Italian assets.”

With the European Central Bank backstopping the euro over the past two years, the yield on 10-year Italian bonds meanwhile fell to as low as 2.69 percent this month, narrowing the premium over equivalent German bunds to the least in three years.

In the first four months of this year, Italy’s debt rose by 77 billion euros, almost as much as the total 79.8 billion euros it grew in 2013, according to the central bank.

We close this morning with the revenge of the Greeks, as 360,000 luckless Germans get stung in a bogus Greek lottery. No matter that the scam lottery seems to have been run by bent Germans scamming greedy, if luckless fellow Germans. Those tax and work shy, austerity wracked  Greeks seem to have allowed the scam to run for three years.  Welcome to modern, down on its luck, 21st century continental Europe. Not to worry, it was only unbacked fiat euros round tripping back to Germany probably. And as ex-Goldmanite ECB Guru Mario Draghi is fond of saying, there’s plenty more where they come from, and he’ll do whatever it takes to keep it that way, and don’t you ever forget it!

It’s morally wrong to let a sucker keep his money.

W. C. Fields. EUSSR Ethicist.

Greece authorities break up €36m racket over non-existent lottery

More than 360,000 Germans tricked into buying fake online lottery cards for draw that does not exist

By Nick Squires, Rome 6:40AM BST 26 Jun 2014
Police in Greece have broken up a racket which made €36 million (£29 million) by selling worthless, fake online lottery cards to around 360,000 Germans.

Police in Athens arrested two men, both German born, on suspicion of tricking their customers into paying to take part in non-existent draws.

It was not immediately clear why the men had based themselves in Greece for the scam.

The men were part of a suspected gang which allegedly used illegally-obtained lists of betting company clients, whom they then phoned, offering cash prizes or free holidays in return for a monthly subscription of about 30 euros.

The fraud had been going on for at least three years, police said.

The crackdown came after authorities enlisted the help of the German federal police.

"Members of this racket had tricked around 360,000 people in Germany into participating in non-existent lottery draws for a monthly fee of 29.90 euros," the police said in a statement.

"Their profit exceeded €36.5 million.”

Bogus companies had been set up to funnel the proceeds into various bank accounts.

The two men, aged 44 and 36, were arrested in Athens. They are suspected to have been ringleaders of the racket, the police said.

Police raided their homes and seized computers, hard drives and USB data storage devices.

The Greek police said the investigation would continue with the aim of identifying other accomplices

At the Comex silver depositories Thursday final figures were: Registered 57.04 Moz, Eligible 119.17 Moz, Total 176.21 Moz.  

Crooks and Scoundrels Corner

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

After the French dumped a pervert into the IMF as Great Leader, which all ended sordidly in a New York hotel and an attempted flight to France, and an arrest at Kennedy Airport, Europe’s “Great Leaders” have become a little gun shy of appointing any more failed socialist leaders recommended by France.

Below, the comedy of modern tragic wealth destroying Europe. With youth unemployment reaching one in every two in parts of Club Med, and capital and people flight out of old socialist France rapidly turning London into a great French city, we could have hoped for more from Europe’s Great Leaders assembled in conclave in Brussels, than a discussion over the EC President in waiting’s drinks bill. And what is wrong with a little cognac for breakfast, I might ask?  Doesn’t everyone on the continent have to drink drink, on account of the continent’s dodgy water and sanitary habits.

This ailing continent needs newer and better politicians. But where could we find them? There is no sign of a European Obama or anything remotely like him.

Der Spiegel

Fears over Jean-Claude Juncker's drinking

Concerns about the lifestyle of European Commission's president in waiting raised by EU leaders ahead of key summit

Jean Claude-Juncker's drinking habits have been discussed at the highest levels by European leaders who privately have concerns over the lifestyle of the continent’s president-in-waiting, it has emerged.

With David Cameron facing defeat in his attempt to prevent Mr Juncker being confirmed as president of the European Commission, it can be disclosed that a series of allegations about his alcohol consumption have been the subject of top-level talks.

On Thursday, as Mr Cameron became increasingly isolated in Europe, he declared himself “unapologetic” over his attempt to block the former leader of Luxembourg.

The Prime Minister will use a Brussels summit to force an unprecedented vote on the appointment because he believes Mr Juncker will not deliver Britain’s desired European Union reforms.

Allegations have circulated around Brussels in recent years about Mr Juncker’s drinking.

One senior diplomatic source has said he “has cognac for breakfast”.

However, it can now be disclosed that concerns about Mr Juncker’s lifestyle have been raised in recent meetings of EU leaders.

A European diplomat in Brussels said: “His alcohol consumption has been raised by a number of leaders since the parliament election.”

A separate European Commission source confirmed the report.

Sources also described how Mr Juncker “chain-smoked” through a series of meetings on Thursday and disclosed that he is attempting to get rules changed so that he can smoke in buildings in Brussels.

A source close to Mr Juncker who has been present at EU summits, said: “This is quite ridiculous and 100 per cent untrue. There was absolutely no discussion of this.”

Mr Cameron attended a dinner with fellow European leaders in Ypres on Thursday as part of First World War commemorations. British officials said he used the dinner to push for EU reform.

He directly warned European leaders of the “consequences” of their decision to make Mr Juncker, an arch-federalist, the president of the European Commission. British officials indicated that giving Mr Juncker the job could push Britain towards an exit from the EU.

There have also been suggestions that Mr Cameron could campaign for Britain to leave the EU in a future referendum if Mr Juncker prevents him reforming the UK’s relationship with Brussels.

He said: “I am completely unapologetic about standing up for an important principle in Europe, which is that the elected heads of government should make these choices.”

Asked what the consequences of Mr Juncker’s appointment could be, Mr Cameron added: “Well, everything has consequences in life. And obviously, I think proceeding in the way that countries are planning 
to proceed in choosing this individual, I believe that this is the wrong approach.”

Angela Merkel, the German chancellor, attempted to offer Mr Cameron an olive branch in what was seen as an attempt to stop him forcing a vote on the issue.

She pledged to “give something back” to Mr Cameron in exchange for defying him over the appointment. Mr Cameron is furious that Mrs Merkel initially promised to support his increasingly acrimonious attempt to block Mr Juncker’s candidacy.

However, in recent weeks she gave Mr Juncker her public backing following domestic political pressure.

---- Mr Juncker faced more controversy yesterday after he refused to reveal his lucrative earnings from private speaking engagements after Germany’s Süeddeutsche Zeitung newspaper revealed that he is hired by at least four agencies for speaking engagements.

Another weekend, and another weekend closer to (the death of the EUSSR, the China hard landing, the disintegration of Iraq, the total economic collapse of the Ukraine, the arrival of food and fuel inflation, the ending of ZIRP, all of the above, your option here.)  Still no reason for any of this to weigh on stocks, thanks to free money still pouring out from the Fed. Have a great weekend everyone.

"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgit are mere memories."

Richard Russell

The monthly Coppock Indicators finished May

DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down.  Crisis? What crisis?