Baltic Dry Index. 863 -18
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008
First Germany crushed the Brazilian football team
like a panzer on a French or Polish border, then Portuguese bank and government
bonds collapse. What else can go wrong in the Portuguese speaking world this
week? Not to worry though, we are safely assured that Espirito Santo default is
“adequately isolated.” Coming next, we’ll be told that the problem is
“contained,” probably followed by a bank depositor bail-in. This time round if an
bank bail-in happens, it won’t be the EUSSR just stealing from poor Cypriots
and Russian oligarchs. Any bail-in in
Portugal will hurt the Portuguese of all classes. Another wealth destroying
success for the Bilderberger imposed, unloved, unnecessary, deathbed euro.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Ex-Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President elect.
Espirito Santo Bonds Tumble to Records Amid Missed Note Payments
Jul 9, 2014 12:47 PM GMT
Banco Espirito Santo SA bonds plunged to record lows after a parent company
delayed payments on short-term notes, reawakening concern that banks remain
vulnerable as the euro region emerges from the sovereign debt crisis. Portugal government bonds also fell, sending the 10-year yield up the most since September, leading declines among securities from Europe’s most indebted nations. A gauge of Portuguese stocks fell to a seven-month low.
The selloff was prompted by Espirito Santo International SA delaying payment on securities to clients after the bank said in May its parent company faced a “serious financial situation” that could be damaging. Moody’s Investors Service placed Banco Espirito Santo under review for a potential downgrade citing “corporate governance shortcomings” last month.
“The bigger question is whether the government will have to get involved,” said Steve Hussey, a London-based financial institutions analyst at AllianceBernstein Ltd., which manages about $445 billion including bonds of Banco Espirito Santo. “Will it cost the government money? Will it have to step in to prevent systemic repercussions?”
The Lisbon-based bank’s 7.125 percent subordinated notes due November 2023 slid 4.4 cents on the euro to 89.05 cents, according to data compiled by Bloomberg. Portugal’s 10-year government bond yield jumped as much as 26 basis points to 3.91 percent today, the highest since May 21. It was up 19 basis points at 3.834 percent as of 12:30 in Lisbon.
The Portugal PSI 20 Index (PSI20) dropped for a sixth straight day, falling 2.32 percent.
More
In further bad news for the EUSSR, just as Europe’s
Mr Fixit is thinking about joining the Fed’s QE party, the Fedster’s are about
to cancel QE Forever. While I have my doubts that the Fed can end QE Forever
without triggering the event QE was brought in to prevent, namely a stock
market crash, the Fedsters’ not only say that they can, but will in this coming
October, irrespective of that being the traditional crash season for stocks.
July 9, 2014, 3:37 p.m. EDT
Fed plans to end bond purchases in October
Central bank provides key elements of exit plan, minutes show
WASHINGTON (MarketWatch) — Federal Reserve revealed in the
minutes of its June meeting released Wednesday that it has decided to end its
asset-purchase program in October if the economy stays on track.
According to the new plan, the Fed will make a $15 billion final
reduction at its October meeting, after trimming it by $10 billion at each
meeting up to that point.
Fed officials said that members of the public had asked them if the Fed
would end the program in October or with a final $5 billion reduction in
December.
Most Fed officials said that the exact end of the tapering issue will
have no bearing on the timing of the first rate hike. The Fed has said that
rates would remain near zero for a “considerable time” after the Fed halts its
program of bond purchases.
An end of the asset purchases will “set the clock on eventual tightening
-- which we think could start as soon as March 2015,” said Jim O’Sullivan,
chief U.S. economist at High Frequency Economics.
More
Fed’s Bullard Says Unemployment Drop to Push Inflation
Jul 10, 2014 5:00 AM GMT
Federal Reserve Bank of St. Louis President James Bullard said a rapid drop
in joblessness will fuel inflation, bolstering his case for an interest-rate
increase early next year. “I think we are going to overshoot here on inflation,” Bullard said yesterday in a telephone interview from St. Louis. He predicted inflation of 2.4 percent at the end of 2015, “well above” the Fed’s 2 percent target.
“That is a break from where most of the committee seems to be, which is a very slow convergence of inflation to target,” he said in a reference to the policy-making Federal Open Market Committee.
A drop in unemployment to 6.1 percent in June, the lowest level in almost six years, increases pressure on the Fed to raise the main interest rate sooner than most officials have estimated, Bullard said.
More
http://www.bloomberg.com/news/2014-07-10/fed-s-bullard-says-unemployment-drop-to-push-inflation.html
Meanwhile back un the EUSSR, Europe’s Mr Fixit, was
going all out to give the UK the bum’s rush to the EU exit. The UK should take
him up on his timely offer. Getting out of the minefield before France
collapses taking down the euro and Germany with it, ought to be a top priority for
Her Majesty’s weak, U-turn prone, new world order promoting Government.
Draghi Says Europe Needs Higher Powers as Leaders Quarrel
Jul 10,
2014 12:01 AM GMT
European Central Bank President Mario Draghi
said the region needs more-centralized powers to push governments to overhaul
their economies. “There is a case for some form of common governance over structural reforms,” Draghi said in a speech in London yesterday. “This is because the outcome of structural reforms, a continuously high level of productivity and competitiveness, is not merely in a country’s own interest. It is in the interest of the union as a whole.”
Draghi has repeatedly said the ECB’s ultra-loose monetary policy isn’t sufficient to sustain the euro area’s fragile recovery if governments backslide. European Union finance ministers meeting in Brussels this week signaled a willingness to give politicians extra leeway so long as they take measures to fix their economies.
They then clashed as Italian Prime Minister Matteo Renzi pushed back against austerity measures.
“Historical experience, for example of the International Monetary Fund, makes a convincing case that the discipline imposed by supranational bodies can make it easier to frame the debate on reforms at the national level,” Draghi said. “I would see merits in initiating, as a one-off, a new convergence process within the euro area -– one which ensures that all countries are truly in a position to benefit from membership.”
ECB Executive Board member Benoit Coeure said earlier yesterday that convergence could be complemented by action such as a European effort to increase investment by channelling private savings. It could culminate in the transfer of budgetary responsibilities to the European level, he said in Athens.
More
Elsewhere, the wobble intensifies, but don’t let on
to global stock markets.
Japan Machine Orders Fall by Record in Spending Caution Sign
Jul 10,
2014 2:43 AM GMT
Japan’s machinery orders
fell the most on record in May, suggesting that companies remain cautious about
deploying record cash reserves into investment. Core orders, a leading indicator of capital spending, dropped 19.5 percent from April, the Cabinet Office said today in Tokyo. The slide, the biggest in data back to 1987, was larger than forecast by all 23 economists surveyed by Bloomberg News. The median projection was for a 0.7 percent gain.
Today’s data highlight the difficulty for Prime Minister Shinzo Abe in steering the world’s third-largest economy through the aftermath of a sales-tax increase in April. Abe needs companies to pour some of their 232 trillion yen ($2.3 trillion) cash stockpile into investments that could strengthen a recovery and spur inflation.
More
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
At the Comex silver depositories Wednesday final figures were: Registered 56.12
Moz, Eligible 119.48 Moz, Total 175.60 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks or bent banksters and doubled over
politicians today. Today a warning that tomorrow may not be like today, which
was like yesterday. We are about to move on from candles and buggy whips, and
into our new carbon based age of cheap renewable electricity. Still with that
revolution still about 5 years away, this might not be the right moment for the
EUSSR to follow America’s urging and to tell President Putin’s Russia to, in
the infamous words of 1975s US President Ford to New York City, “drop dead.”
Besides, President Putin now seems quite happy to pass over the bottomless pit
of the Ukraine to the EUSSR, now that he has got back the Crimea, thanks to
Obama’s botched coup in Kiev.
Fossil industry is the subprime danger of this cycle
The cumulative blitz on energy exploration and production over the past six years has been $5.4 trillion, yet little has come of it
The epicentre of irrational
behaviour across global markets has moved to the fossil fuel complex of oil,
gas and coal. This is where investors have been throwing the most good money
after bad.
They are likely to be left
holding a clutch of worthless projects as renewable technology sweeps in below
radar, and the Washington-Beijing axis embraces a greener agenda.
Data from Bank of America show
that oil and gas investment in the US has soared to $200bn a year. It has
reached 20pc of total US private fixed investment, the same share as home
building. This has never happened before in US history, even during the Second
World War when oil production was a strategic imperative.
The International Energy Agency
(IEA) says global investment in fossil fuel supply doubled in real terms to
$900bn from 2000 to 2008 as the boom gathered pace. It has since stabilised at
a very high plateau, near $950bn last year.
The cumulative blitz on
exploration and production over the past six years has been $5.4 trillion, yet
little has come of it. Output from conventional fields peaked in 2005. Not a
single large project has come on stream at a break-even cost below $80 a barrel
for almost three years.
"What is shocking is that
upstream costs in the oil industry have risen threefold since 2000 but output
is up just 14pc," said Mark Lewis, from Kepler Cheuvreux. The damage has
been masked so far as big oil companies draw down on their cheap legacy
reserves.
"They are having too look
for oil in the deepwater fields off Africa and Brazil, or in the Arctic, where
it is much more difficult. The marginal cost for many shale plays is now $85 to
$90 a barrel."
A report by Carbon Tracker says
companies are committing $1.1 trillion over the next decade to projects that
require prices above $95 to break even. The Canadian tar sands mostly break
even at $80-$100. Some of the Arctic and deepwater projects need $120. Several
need $150. Petrobras, Statoil, Total, BP, BG, Exxon, Shell, Chevron and Repsol
are together gambling $340bn in these hostile seas.
Martijn Rats,
from Morgan Stanley, says the biggest European oil groups (BP, Shell, Total,
Statoil and Eni) spent $161bn on operations and dividends last year, but
generated $121bn in cash flow. They faces a $40bn deficit even though Brent
crude prices were buoyant near $100, due to disruptions in Libya, Iraq and
parts of Africa. "Oil development is so expensive that many projects do
not make sense," he said
MoreSunPower Offers Batteries to Hold Solar Power Until Night
Jun 24, 2014 5:00 AM GMT
SunPower
Corp. (SPWR), the second-largest U.S. solar manufacturer, is offering
energy-storage systems to California homeowners that will power houses at night
with electricity generated from sunlight during the day. The company is testing systems that combine rooftop solar panels with battery storage in new homes built by KB Home (KBH), San Jose, California-based SunPower said in a statement today.
Such systems will reduce consumers’ reliance on electric utilities and the grid, cutting power bills and providing electricity during blackouts, Chief Executive Officer Tom Werner said yesterday in an interview.
Though the technology isn’t widely used today, and SunPower only expects to install about 10 of the systems in KB Home houses this year, Werner expects it to become standard in less than five years
More
Solar Cell Efficiency World Record Set By Sharp — 44.4%
June 23rd, 2013 by MathiasEditor’s Note: In May, Sharp regained the world’s triple-junction, non-concentrator solar cell efficiency record — 37.9%. Now, it has also taken the overall world solar cell efficiency record — 44.4%. Here’s another repost from Solar Love on the news.
A research team at Sharp Corporation has announced that it has created a solar cell capable of converting 44.4% of incoming sunlight into electricity. The solar cell is of the “concentrator triple-junction compound” type, which basically is a lens-based system that focuses sunlight.
The high conversion efficiencies that we see with compound solar cells are due to several photoabsorbing layers typically made from indium and gallium. Sharp’s record-setting solar cell uses three layers (InGaP top, GaAs middle, and InGaAs bottom), as you can see on the illustration below:
More
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
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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