Baltic Dry Index. 881 -07
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Some
foreigners with full bellies and nothing better to do engage in finger-pointing
at us. First, China does not export revolution; second, it does not export
famine and poverty; and third, it does not mess around with you. So what else
is there to say?
Xi
Jinping.
We open today with high-level talks getting underway
in China between the world’s aging bankrupt hegemon, and the new rising wobbly hegemon.
Unusually this time round, in addition to the usual suspects, U.S. Secretary of State John Kerry and Treasury
Secretary Jacob J. Lew, they have been joined in Beijing by the Fed’s talking
Chair, presumably there to read the Riot Act about any further moves to reduce
the role of the fiat dollar in international trade. With China replacing
America as the world’s largest oil importer, from China’s point of view it
doesn’t make sense to price oil in dollars anymore. Besides, recent US bullying
of Russia and France make all nations leery of increasing their vulnerability to
US sanctions. The talking Chair’s threats are likely to fall on Chinese cloth
ears.
Below, China’s
President gets the opening underway in the latest round of international chess.
Is team Kerry/Lew/Yellen the new Bobby Fischer? They had better be, but remind
me again of how the USA treated its chess genius. With China opening e4, will
Team America reply c5?
All
that matters on the chessboard is good moves.
Xi
Jinping, with apologies to Bobby Fischer.
Xi Says China Conflict With U.S. Would Be Disaster
Jul 9, 2014 4:03 AM GMT
China’s President Xi Jinping called for greater military communication with
the U.S., saying as he opened high-level talks between the two countries that
any conflict would be a global disaster. China needs a stable environment “more than ever,” and it’s inevitable that the two sides will have some disputes, Xi said at the Diaoyutai guest house before the U.S.-China Strategic and Economic Dialogue in Beijing.
“A conflict between China and United States will definitely be a disaster for the two countries and the world,” Xi said. “As long as we uphold mutual respect, maintain strategic patience and remain unperturbed by individual incidents and comments, we’ll be able to keep relations on a firm footing despite ups and downs that may come our way.”
U.S. Secretary of State John Kerry and Treasury Secretary Jacob J. Lew arrived yesterday for the sixth round of the dialogue, this year aimed at rehabilitating relations strained by differences over cyber espionage and escalating maritime disputes between China and U.S. allies in the Asia Pacific. A year after U.S. President Barack Obama and China’s Xi declared their support for “a new model of major power relations,” the two countries face two days of negotiation over issues from climate change to global security.
“The United States and China will not always see eye-to-eye on every issue,” Obama said in a statement released as the talks got underway in Beijing. “That is to be expected for two nations with different histories and cultures.”
----Kerry and Lew are joined by Federal
Reserve Chair Janet Yellen and will meet with State Councilor Yang Jiechi and
Premier Li
Keqiang. While Kerry tackles the strategic differences, Lew will address
tensions emanating from U.S. firms’ growing complaints about access into the
Chinese market, the official said.
More
Next up, more on the “Wobble.” America suddenly replaces
China as the number one cause for concern. Is QE Forever and ZIRP fun or what?
Concern Over ‘Severe’ Pullback Sends U.S. Stocks Lower
Jul 8, 2014 9:35 PM GMT
U.S. shares extended a selloff today, with the Nasdaq Composite Index
sliding the most in two months, as Raymond James
& Associates said equities are vulnerable to losses and Citigroup Inc.
cited investor concerns for a “severe” pullback. Twitter Inc. and Pandora Media Inc., which trade at more than 150 times earnings, plunged at least 7 percent to pace a Dow Jones gauge of Internet shares to the biggest drop since May. The Nasdaq Biotechnology Index headed for its steepest two-day slide since April. Goldman Sachs Group Inc. and JPMorgan Chase & Co. sank more than 1.6 percent to lead bank shares lower. Alcoa Inc., the largest American aluminum producer, rose 1.3 percent in late trading after reporting earnings that topped estimates.
The Standard & Poor’s 500 Index lost 0.7 percent to 1,963.71 at 4 p.m. in New York. The Dow Jones Industrial Average (INDU) fell 117.59 points, or 0.7 percent, to 16,906.62. The Russell 2000 (RTY) Index sank 1.2 percent, while the Nasdaq Composite slid 1.4 percent, the most since May 6. About 6.4 billion shares changed hands on U.S. exchanges today, 7.3 percent above the three-month average.
“Many investors wonder if the ride is over,” Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., said in a report today. “As stock indices hit new highs, there are those that fear further gains, given defensive positioning, but more worry about buying in now just in time for a severe pullback.”
More
Up next, what we wonder will happen at the Fukushima
nuclear disaster site? What effect will massive rainfall and runoff have on
this never ending radiation disaster?
Weakened typhoon leaves two dead, heads north from Okinawa to main Japan islands
TOKYO
(Reuters) - Torrential rains
battered Japan's Okinawa islands on Wednesday as a weakened but still dangerous
typhoon, leaving two dead and threatening widespread flooding as it headed for
the nation's main islands.
Typhoon Neoguri, a super typhoon
as it bore down on Okinawa this week, had winds gusting up to 162 kph (100 mph)
on Wednesday, but weather forecasters said the major concern now was rain,
especially as parts of the westernmost main island of Kyushu have already been
hit by heavy rain over the last week.
Authorities warned of record
rainfall in Okinawa as rivers in some areas overflowed. More than 200,000
residents were told to leave their homes, down from over 500,000 on Tuesday.
"Given the situation, there
is still potential for some serious damage," an official from the Japanese
Meteorological Agency (JMA) told a news conference.
Some 30 people were injured,
mainly from falls, but none of the injuries was life-threatening. Television
footage showed a collapsed building and flooded streets in Okinawa.
Neoguri was moving north across
the East China Sea at 20 kph as of 9 a.m. (0000 GMT), with sustained winds of
126 kph. It was expected to draw near Kyushu on Thursday morning before moving
east along the main island of Honshu.
More
We end for the day wondering if this signals the
end. All bubbles come to an end, just ask fallen former guru “Bubbles”
Greenspan. Is this the end of the BRICs and the QE Forever bubble in stocks?
Can bankrupt Argentina save the day and the bubble by beating Holland tonight? That’s
the Dutch football team not the man ruining France and about to blow-up the euro
and the EU.
“Speculative
bubbles do not end like a short story, novel, or play. There is no final
denouement that brings all the strands of a narrative into an impressive final
conclusion. In the real world, we never know when the story is over.”
Robert Shiller
Germany Reaches World Cup Final With Record 7-1 Defeat of Brazil
Jul 9,
2014 2:11 AM GMT
Brazil trailed Germany 1-0
with 22 minutes gone in its World Cup soccer semifinal. Seven minutes later,
the host nation’s bid to win a record-extending sixth title was over after it
had allowed four more goals. “There were 10 minutes when I don’t know what happened,” Brazil defender Marcelo told reporters after yesterday’s game in Belo Horizonte. “Today was the worst day of our lives. The Brazilian people have every right to criticize us.”
Germany won the most lopsided World Cup semifinal 7-1. The worst defeat in Brazilian history was also the biggest loss for a tournament host. The rout ended a run of 63 competitive matches at home without a defeat for Brazil, going back to 1975.
“It’s
very difficult to explain right now,” David Luiz, who
captained Brazil in the absence of the suspended Thiago Silva,
told reporters. “The dream is over in a way that the people didn’t want.”
More
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith.
At the Comex silver depositories Tuesday final figures were: Registered 56.12 Moz,
Eligible 119.44 Moz, Total 175.56 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, compare and contrast. As British shoppers seek value for every
penny they spend, does this seem like an economy that warrants an all-time
stock market high, or merely yet another sign of the world’s greatest
disconnect? I don’t care about money,
says one of Britain’s “billionaires,” who says that actually he’s only worth
£67 million. Does this sound like a stable society ready to ride out the “next
Lehman?”
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
Savvy British shoppers and discount stores force down retail prices
Prices falling rapidly as fiercely competitive supermarket sector helps drive down cost clothing and consumer goods
Shop prices fell at the steepest
rate for at least eight years last month as the popularity of discount stores
among the middle classes helped to drive down the cost of clothing and consumer
goods.
The overall price of items at the
till fell by 1.8 per cent compared with June last year, with the price of
clothes down by 13.7 per cent year-on-year.
The figures, compiled by the
British Retail Consortium/Nielsen shop price index, show the fastest drop in
prices since the trade association began compiling data in 2006.
It was also the 14th month in a
row in which shop prices fell, easing the pressure on households where
wage-earners have suffered pay freezes.
Although the price of food is
still rising, it did so by only 0.6 per cent in June, the lowest level of
inflation since the index began.
The popularity of Aldi and Lidl,
the discount supermarket chains, particularly among middle classes, was part of
the reason for the price drops, analysts said.
The “big four” supermarket chains
— Asda, Sainsbury’s, Tesco and Morrisons — have cut prices to compete with Aldi
and Lidl, which together account for 8.3p in every pound spent on groceries.
This has gone up from 6.7p a year ago.
Christine Cross, the chief retail
and consumer adviser at PricewaterhouseCoopers, the auditor, said that discount
stores were springing up in the most affluent parts of the country, signalling
a permanent change in spending habits.
She said: “The recession has
changed people’s spending habits and all of the discount stories, such as Aldi,
Lidl and pound stores, are pushing into the South East and South West at an
increasing rate. If you look in their car parks you will see as many BMWs as
beaten-up cars because people are feeling the pinch.
“Aldi is also building a
reputation for award-winning wines and other products, which is tempting
shoppers towards them.”
The low prices are expected to
continue for another year at least. The monthly report said that apart from
volatile coffee prices, due to a drought in Brazil, the global outlook for
rising commodity prices “remains modest”.
Howard Archer, the chief UK
economist at Global Insight, the financial analyst, said: “Inflation is going
to stay muted for some time to come, certainly for the rest of this year and
into the beginning of next year.
Although the economy is doing well and
employment is high, earnings growth is still very weak so people are still
pretty squeezed and they are cautious about what they spend.
“The shops are having to price
competitively to get people to part with their money. There is clearly a big
supermarket war going on, and Lidl and Aldi are a big factor in that.” Mr Archer
said that the rise of discount supermarkets and shops such as Poundland
signified a long-term “change in culture” in the nation’s spending habits. He
said the lengthy economic downturn meant “people have got into the habit of
looking for the best deals”.
MoreBillionaire financier tells judge: 'I don't care about money'
As Sir Christopher Hohn battles his wife in Britain's biggest divorce he insists he is not motivated by getting richer
A billionaire financier who is
locked in a legal battle with his ex-wife over the size of her divorce
settlement has told a court: "I don't really care about money".
Sir Christopher Hohn insisted
that, despite being one of the world's most successful hedge fund managers, he
is not motivated by getting richer.
The 47-year-old is battling his
former spouse Jamie Cooper-Hohn who is demanding half his money.
Mrs Cooper-Hohn, 49, claims their
joint assets were about £849 million and that her ex-husband is worth another
£872 million from personal assets in his hedge fund, The Children's Investment
Fund group of companies.
But Sir Christopher claims he is
worth just £67 million and that much of his wealth was built up after they had
separated.
He believes his wife is entitled
to a quarter of the money.
Speaking in court on Tuesday, he
said: "I have no interest in working for anybody. I don't need the money.
"Why would I want to work
for anybody, I'm a billionaire.
"Why would I want to work
for anybody.
"I don't really care about
money, I gave away all the money I made to charity."
Sir Christopher, knighted last
month in the Queen's Birthday Honours, has become one of the country’s biggest
philanthropists after giving more than £1 billion to charity through the
Children's Investment Fund Foundation, which is linked to his hedge fund.
It is as chairman of CIFF that
Mrs Cooper-Hohn claims she contributed to the couple's combined wealth.
Sir Christopher described himself
as being among the top ten investors in the world.
"Over the long term I am an
unbelievable moneymaker," he said.
"I'm not the only one –
there's a handful."
Presented with a list of other
successful investors, he said: "They are up there with the greats, so is
Warren Buffett.
"There are about five to ten
investors in the world who have done as well as me out of tens of thousands.
More
Money,
again, has often been a cause of the delusion of the multitudes. Sober nations
have all at once become desperate gamblers, and risked almost their existence
upon the turn of a piece of paper.
Charles
Mackay. Extraordinary Popular Delusions and the
Madness of Crowds
The monthly Coppock Indicators finished June
DJIA: +169 Down. NASDAQ: +332 Down. SP500: +241 Down. The Fed’s final bubble still grows,
but …..
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