Friday 11 July 2014

Uncle Scam Gets a Kick in the Knees.



Baltic Dry Index. 836  -27

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

It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.

H. L. Mencken.
For more on the new Germany v USA game, scroll down to Crooks Corner, where Germany gives Uncle Scam an old fashioned German soccer  “kick in the knees.” Well it is the silly season after all.

Two years on from Europe’s “Mr Fixit’s” “whatever it takes” bluff, and nothing is fixed in the dodgy banking system across continental Europe. The new crisis involves Portugal’s Banco Espirito Santo, which seems to have given up the ghost, holy or not. Happily for the rest of us, the Holy Ghost Bank is too small to cause Europe’s banks to crash all by itself. But with France heading off into national suicide, Germany assuming financial responsibility for the Black Hole of Europe, the Ukraine, Italy and Spain unreformed, and the EUSSR on the brink of another recession, this isn’t a good time to be holding euros.
Europe’s banks, like America’s, are a nightmare of dodgy account, bogus valuations, leveraged derivatives gambling fraud, and mostly hidden state handout socialism. It won’t take much for Espirito Santo to escalate into a real banking crisis. Especially if the banks all stop lending to each other again.

Banks are an almost irresistible attraction for that element of our society which seeks unearned money.

J. Edgar Hoover.

Portugal banking crisis sends tremors through Europe

Portugal’s regulator suspends trading of Banco Espirito Santo after its share price crashes 17pc, reviving worries about the health of Europe’s banks

A mounting crisis at one of Portugal’s biggest banks and signs of a deepening economic slowdown in Europe have sent tremors through financial markets, triggering a sharp fall on European bourses and a flight to safety across the world.

Portugal’s regulator suspended trading of Banco Espirito Santo after its share price crashed 17pc in Lisbon, reviving worries about the underlying health of Europe’s banks. The STOXX index of European lenders fell to its lowest this year following a bank run in Bulgaria and a profits shock from Austria's Erste Bank. The index is down 11pc since early June.

Yields on Portugal’s 10-year debt surged 20 basis points on Thursday to 3.95pc, with contagion spreading to Greek, Spanish and Italian debt.

Capital Economics said the ructions in the bond markets confirm fears that Europe's tentative banking union has failed to stabilise the system. “Policymakers have done little to weaken the 'doom loop' between banks and sovereigns in the eurozone’s periphery,” it said.

Portugal’s stock market fell 4pc in a seventh day of declines on fears that a nexus of interlinked companies would be drawn into the squall. Spain’s IBEX was off 2pc and Italy’s MIB down 1.9pc, with knock-on effects spreading to London and New York.

“Banco Espirito Santo is far too small to have any systemic impact itself. What worries markets is that European banks have been selling off hard for several weeks and now we have had a whole string of economic surprises,” said Hans Redeker, currency chief at Morgan Stanley.

“Foreign funds have invested €430bn in European equities and €230bn in bonds since August 2012. If they think Europe’s recovery is stalling they may start pulling it out again."
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July 10, 2014, 10:52 a.m. EDT

Portugal’s banking turmoil revives darkest nightmares about Europe

Analysts worry Portugal exited bailout program too soon

LONDON (MarketWatch) — Just what Europe needed: another banking crisis.
Thursday’s turmoil in Portuguese financial conglomerate Espirito Santo International has sent stock markets tumbling, driven bond yields skyward and re-awoken niggling fears about the robustness of Europe’s banking system.

Sound familiar? Well, there are striking similarities to daily headlines from the crisis two years ago, when European Central Bank President Mario Draghi was forced to calm panicky bond markets with his famous “do whatever it takes” speech.

And as Peter Garnry, head of equity strategy at Saxo Bank, put it in a note on Thursday: “The event has hit European financials like a torpedo and has revived investors’ darkest nightmares about Europe.”

If your definition of that nightmare is a selloff, his description is pretty much spot-on. Portuguese government bonds are tanking, sending the benchmark 10-year yield to levels not seen since before the June ECB meeting, when the central bank launched an aggressive package of liquidity measures. The 10-year borrowing costs for government paper were up 21 basis points on Thursday, to 3.97%, according to electronic trading platform Tradeweb. That’s on top of the 13 basis-point rise on Wednesday.
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Next  more on our new lawless age. Is Russia moving in on Uncle Scam’s rendition tactics? Supposing Germany joins in?

"When the President does it, that means it is not illegal."

George W. Bush, with apologies to Richard M. Nixon and President Obama.

Russia Denies U.S.-Style Rendition of Ukrainian Pilot Vet

Jul 10, 2014 8:46 PM GMT
Russia denied snatching a Ukrainian female pilot to put her on trial, insisting it doesn’t follow the U.S. practice of rendition of prisoners after the government in Kiev said she was taken across the border illegally.

“This is completely different from the extra-territorial methods used by the U.S. in pursuing foreign citizens and whisking them away, as happened recently with Roman Seleznev, under U.S. law,” Russian Foreign Ministry spokesman Alexander Lukashevich told reporters in Moscow today.

Seleznev, the son of a Russian lawmaker, was forced by U.S. agents aboard a plane operated by a private company in the Maldives on July 5 and flown to the U.S territory of Guam in the Pacific Ocean, according to Russian authorities. He was ordered detained two days ago at a federal court in Guam on charges of selling credit card information he allegedly stole by hacking into the computers of U.S. retailers.

Russia’s detainment of Nadiya Savchenko, an officer in the Ukrainian army who served in Iraq and was captured by pro-Russian separatists in east Ukraine last month, is “clear proof of a liaison between terrorists in Ukraine and the Russian authorities,” Andriy Parubiy, secretary of the National Security and Defense Council, told reporters yesterday in Washington over a video link from Kiev.

Russia, which is accused by Ukraine of stoking a three-month rebellion by pro-Moscow rebels in the east of the country, said yesterday it had charged the pilot with complicity in the deaths of two Russian reporters.

Savchenko was captured trying to enter Russia as a refugee, Russia’s Investigative Committee said yesterday. She’s being held in pretrial detention in the city of Voronezh, where a court today ordered that she be held in prison until the end of August, according to the Russian Foreign Ministry.

“She was abducted and the reaction of the Ukrainian authorities will be very tough,” Ukrainian President Petro Poroshenko said in a website statement today. “This is a violation of all international agreements, all norms of law and is unacceptable.” Poroshenko said he ordered a new lawyer for Savchenko.

Her court-appointed lawyer, Nikolai Shulzhenko, said he doesn’t know the circumstances of how Savchenko entered Russia, the BBC reported.
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We end for the week with the other big World Cup news. Will FIFA’s dodgy executives make it out of Brazil after Sunday’s final? Where’s than man with his lamp when you need him. Did any teams throw any matches in Brazil?

Brazilian police label Match executive Ray Whelan ‘a fugitive’

• British director of ticketing firm accused of avoiding arrest
• Whelan had been questioned over $100m touting investigation
Thursday 10 July 2014 21.56 BST
The Brazilian police said they now consider Ray Whelan, the British senior director of Fifa’s official hospitality company arrested as part of a $100m ticket touting investigation, to be a fugitive.

Amid claim and counter-claim, his employer Match Services said that it was confident Whelan had done nothing wrong and said Rio police had failed to understand how their business worked.

But the investigator Fabio Barucke told Associated Press that Whelan left the Copacabana Palace hotel, where he and the majority of the senior Fifa executives in Rio are staying, through a service exit an hour before police arrived to re-arrest him.

“He’s now considered a fugitive,” Barucke said outside the hotel. “We have security camera images of him exiting the hotel through a service door.”

He said police expected to broaden their investigation into ticket scalping to include football administrators. Barucke said that police had recorded 900 calls between Whelan and the Algerian ticket broker Lamine Fofana since the World Cup began on 12 June, and that virtually all of them referred to the selling of tickets.

“Raymond knew that Fofana was a scalper, he knew that he was going to resell those tickets on the black market,” Barucke said.

Earlier this week, Match challenged police to justify the “arbitrary and illegal” arrest of Whelan, a director of Match’s accommodation service. He is a brother-in-law of the company founders Jaime and Enrique Byrom. Whelan, a former agent to Sir Bobby Charlton, is a longstanding Match employee.

Match Hospitality, the arm that sells packages to other individuals and companies around the world, has a number of shareholders including Infront Sports & Media, whose chief executive is the nephew of the Fifa president, Sepp Blatter.

Match Services, the subsidiary that deals with accommodation, ticketing and IT services for the World Cup, released a lengthy statement in which its chairman, Jaime Byrom, insisted the action against Whelan was “illegal and baseless”.

It said that tapped calls leaked to the Brazilian broadcaster Globo proved his innocence rather than implicating him.

It said the $25,000 worth of tickets under discussion with Fofana, who was among the 11 people arrested last week by police, were part of a hospitality package being sold at its published rate.

“Far from helping to incriminate Mr Whelan, they secured a nationwide audience who clearly heard Mr Whelan conduct a discussion for the possible sale of an official hospitality product.

“The 24 hospitality packages were offered on cash basis, which is highly unusual but permitted under the various terms and conditions,” Match said in a statement. “It must be noted that Mr Whelan was not aware of the fact that Match Hospitality had internally blocked sales to Mr Fofana.”

Whelan, who was first arrested on Monday when police seized tickets and other documents before being released on Tuesday morning, works out of the company’s base in Manchester. It also has offices in Zurich, close to Fifa House, and Rio. The Match group of companies has won a series of Fifa contracts to run ticketing, travel, accommodation and technology services at the World Cup since 1994.

Eyebrows were raised when Match was awarded the exclusive rights to hospitality and accommodation for the 2010 and 2014 World Cups but Fifa insisted it was an open tender. In 2011 Fifa announced that Match would continue as its exclusive contractor until 2023 in a deal said to be worth at least $300m.

The brothers initially worked at the 1986 World Cup in Mexico as independent operators and won their first Fifa contract at the 1994 World Cup in the US. In the subsequent two decades they have become closely entwined with Fifa.
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Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Ukraine, with apologies to Cary Grant. To Catch A Thief.

At the Comex silver depositories Thursday final figures were: Registered 55.11 Moz, Eligible 119.92 Moz, Total 175.03 Moz.  

Crooks and Scoundrels Corner

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

It has not been a good year for the CIA, NSA, and all the other USA alphabet soup spooks hiding out in Germany. First they were discovered to be listening in on Chancellor Merkel’s cell phone and everyone else’s across Germany. Well why not, they listen in to President Obama’s cell phone, and everyone else from the Supreme Court down to the lowliest bent Congressman, you never know when something useful might turn up. Then they were caught with not one but two (and counting?) spies in the German intelligence system, it was just like the good old days of the 1940s again. To suggest that this has strained relations is putting it mildly. It’s hurt the German’s feelings, except that following Germanys 7-1 crushing of Brazil in Brazil, we all know that German’s don’t have feelings. 
 
Below, Uncle Scam tries to make up, if not actually stop spying on Germany. It’s not his fault, really it isn’t. Like John Bull before him, it’s an Anglo-American DNA thing not to trust Johnny Foreigner, especially if they have valuable commercial secrets to exploit.

It's good to trust others but, not to do so is much better.

President Obama, with apologies to Benito Mussolini

U.S. Seeks to Mend German Relations After Spy Expelled

Jul 11, 2014 5:00 AM GMT
President Barack Obama’s administration lavished praise on its partnership with Germany while sidestepping specifics of espionage allegations that led to the expulsion of the top American intelligence officer in Berlin.
“We’re in touch because we recognize the value and the strong partnership that exists between the United States and Germany,” White House press secretary Josh Earnest told reporters yesterday.

The administration must move quickly beyond such reassuring words to avoid damaging trans-Atlantic trade talks, business deals and national-security priorities, including talks on Iran’s nuclear program and sanctions against Russia for its role in Ukraine, according to foreign-policy specialists.

“There are high stakes,” Jeffrey Anderson, head of a German-European studies center at Georgetown University in Washington, said in an interview. “There are plenty of areas where we need to work with the Germans, or where we can, and all this is getting sidetracked.” The damage is potentially long-term, Anderson said. “It’s implanted seeds of mistrust, disappointment and betrayal that are going to take a long time to uproot.”

The efforts may intensify within days. Secretary of State John Kerry may meet his German counterpart, Frank-Walter Steinmeier, at talks in Vienna on curbing Iran’s nuclear ambitions.

“I would expect that Secretary Kerry and Foreign Minister Steinmeier will have an opportunity to speak sometime in the coming days, and I would just reiterate that our relationship with Germany is extremely important,” State Department spokeswoman Jen Psaki told reporters in Washington yesterday. “We have many areas we work together on.”

Germany’s decision to oust a U.S. intelligence official after the discovery of two alleged double agents spying for Washington reflects frustration that has been building since former National Security Agency contractor Edward Snowden revealed extensive classified files on surveillance activities in the U.S. and abroad. Among the disclosures was the alleged hacking of German Chancellor Angela Merkel’s mobile phone.

The anger in Germany is being fed by domestic politics, cultural differences, dashed hopes that Obama’s election would change relations, and the long reach of history, which has given Germans dark memories of government surveillance.

With the world’s fourth largest economy generating a $3.6 trillion gross domestic product last year, according to the World Bank, Germany is also a crucial economic partner
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Retaliation for Spying: Germany Asks CIA Official to Leave Country

July 10, 2014 – 05:31 PM
In what amounts to a diplomatic earthquake, Berlin has asked the country's top CIA official to leave Germany. The measures comes in response to the second allegation in a week of a German government employee spying for the US.

Marking its most vocal response yet to the United States for alleged spying and a tough new tone, the government in Berlin asked Washington's top CIA official in Germany to leave the country on Thursday. The news followed a meeting of the Parliamentary Control Panel (PKGR) in the federal parliament responsible for scrutiny of intelligence services.

---- The first case involved an employee with Germany's foreign intelligence service. Last Friday, federal prosecutors in Germany said they had arrested the employee of the Bundesnachrichtendienst (BND) foreign intelligence agency on suspicion he had acted as a spy against Germany by selling secrets to US intelligence agents, including documents pertaining to the special parliamentary committee investigating spying by the NSA in Germany.

And this Wednesday, the Federal Prosecutor's Office in Karlsruhe confirmed it is investigating a second case, based on suspicions that an employee with the Defense Ministry in Berlin may also have passed secrets on to the US.

The revelations of the past week show that, in addition to conducting signals intelligence to gather information on Germany, US intelligence agencies are also using human intelligence. They strongly suggest that US services in Germany continue to collect large amounts of intelligence, and all this despite the outrage over the NSA scandal and news in October 2013 that the Americans had been spying on Chancellor Merkel's mobile phone.

Initially, there had been talk of a formal expulsion of the CIA employee, who is officially accredited as the so-called chief of station and is responsible for the US intelligence service's activities in Germany. A short time later, the government backpedalled and said it had only recommended that he leave. Although it cannot be compared with a formal explusion, it remains an unfriendly gesture.

On a diplomatic level, it is no less than an earthquake and represents a measure that until Thursday would have only been implemented against pariah states like North Korea or Iran. It also underscores just how deep tensions have grown between Berlin and Washington over the spying affair.

---- Officially, the government in Berlin had been reserved in its reaction, with officials indicating they would wait to see what the investigation concluded and also whether the US offered a possible explanation. By Thursday, however, irritation in Germany had grown such that the government abandoned its reserve.
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We end for the week with a terrible thought, what if Germany goes on to win the World Cup on Sunday? Below, taking its lead from the German football team, Germany gives Uncle Scam a diplomatic “kick in the knees.” As seen from listening in London, it’s just not Cricket! Will Berlin really ask the American’s to leave and ask back the Russian in their place? Can’t anyone take a joke anymore?

Germany's Choice: Will It Be America or Russia?

By Markus Feldenkirchen, Christiane Hoffmann and René Pfister
July 10, 2014 – 05:48 PM
For decades, Germany's position in the West remained unquestioned. Following the NSA spying and other political scandals, many Germans want greater independence from the US. But does that mean getting closer to Moscow?

John Emerson never stops smiling. On the evening of Friday, July 4 -- Independence Day -- the United States ambassador shook hands on the red carpet at a reception given by his embassy at Berlin's former Tempelhof Airport, which has since been transformed into a park. Emerson greeted his guests with a diplomat's practiced joviality. He faced an endless line of businesspeople, German government officials and celebrities, and although he could be seen sweating, his smile remained unbroken, as if to convey the message that all was still well in the world.

It's been a common scene at recent encounters between American and German officials. But behind the perfect façade, relations are cracking. Even as workers were decorating Tempelhof Field with pennants and small flags last Friday, a report was making the rounds in the German capital that could very well drag relations between Washington and Berlin to a new low.

During questioning, an employee of Germany's foreign intelligence agency, the Bundesnachrichtendienst (BND), told German authorities he had sold secret documents to the Americans. Given that special encryption technology was found during a raid of his apartment, it seems highly unlikely that selling the classified information was his idea.

---- The developments are only the latest tussle in a relationship between Germany and the United States that has suffered in recent years. German Chancellor Angela Merkel has already abandoned hope that the United States will come to its senses and rein in its intelligence agencies. During Merkel's last visit to Washington, US President Barack Obama wasn't even willing to commit to a no-spy agreement guaranteeing Germany a modicum of security.

The chancellor did, however, expect the Americans to at least refrain from involving her in any further embarrassing incidents -- she has no interest in seeing a continued rise in anti-US sentiment in Germany, a development that would ultimately offer her no choice but to distance herself from the Americans once again. But that point may have already been reached.

---- Although less serious than a formal expulsion, the action is still tantamount to a diplomatic kick in the knees.
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http://www.spiegel.de/international/germany/as-us-scandals-grow-germans-seek-greater-political-independence-a-979695.html#ref=nl-international

Another weekend, and while the 21st century continues disintegrating from Pax Americana 1945-2001, the big question facing the world is will it be Argentina or Germany seizing the World Cup? Will it be Latin America’s annual dead beat, or continental Europe’s paymaster? Pity Club Med if it’s another German Blitzkrieg. Have a great weekend everyone.

“The Germans 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.

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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