Baltic Dry Index. 765 +06
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
In heaven, the
police are British,
The cooks are French,
The engineers are German
The administrators are Swiss
And the lovers Italian.
The cooks are French,
The engineers are German
The administrators are Swiss
And the lovers Italian.
In the EUSSR, the
police are German
The cooks are British
The engineers are Italian
The administrators are French
And the lovers Swiss.
The cooks are British
The engineers are Italian
The administrators are French
And the lovers Swiss.
Anon.
We are living through a slow motion continental
Europe train wreck. Continental Europe’s locomotive and paymaster, has lurched
off the rails, joining Italy which has just dropped into its fourth recession
in six years, and lunatic France, which was put deliberately off the rails
by its leading love rat, President Hollande, who has other things on his mind.
If you think things in continental Europe are bad now, just wait until later in
the year when the fallout from idiotic American sanctions against Russia kick in.
The only upside to this self-imposed slow motion disaster, by now it should be
obvious to all that the one size fits all, Bilderberger Euro isn’t working in
anyone’s interest, that Europe needs to follow policies that work for Europe
and not America, and that the EUSSR is headed for the same fate of the old
defunct USSR.
Below, reasons to stay long fully paid up physical
gold and silver. Though both the USA and UK think that they are immune to the
consequences of this continental train wreck, unhappily for both they aren’t.
And neither is China for that matter. Winter 2014-2015 now needs a miracle.
Germany close to recession as ECB admits recovery is weak
Mario Draghi says the recovery remains “weak, fragile and uneven”, with a marked slowdown in recent weeks
German bonds yields plunged to a
historic low and two-year rates briefly fell below zero on Thursday on fears of
widening recession in the eurozone, and a flight to safety as Russian troops
massed on the Ukrainian border.
Yields on 10-year Bunds dropped
to 1.06pc after a blizzard of fresh data showed that recovery has stalled
across most of the currency bloc, with even Germany now uncomfortably close to
recession.
Commerzbank warned that the
German economy may have contracted by 0.2pc in the second quarter and is far
too weak to pull southern Europe out of the doldrums. Industrial output fell
1.5pc over the three months. The DAX index of equities in Frankfurt has dropped
10pc over the past month and is threatening to break through the psychological
floor of 9,000.
Mario Draghi, head of the
European Central Bank (ECB), said the recovery remained “weak, fragile and
uneven”, with a marked slowdown in recent weeks on escalating geopolitical
worries over Russia and the Middle East.
He said the ECB, which on
Thursday held benchmark interest rates at 0.15pc, “stands ready” to inject
money through purchases of asset-backed securities and quantitative easing if
needed, but would not take further action yet even though inflation had fallen
to 0.4pc.
----Hopes for a swift rebound in Germany are fading. The economics ministry said new orders in manufacturing fell 3.2pc in June, with orders from the rest of the eurozone collapsing by 10.4pc. “What this shows is that Europe is nowhere close to recovery. Monetary policy has run out of traction,” said Steen Jakobsen from Saxo Bank.
The worry is what will happen
over coming months as sanctions against Russia bite in earnest. The European
Commission said the measures were likely to shave 0.3pc off the eurozone’s GDP
this year, with most of the effect concentrated in the second half.
This was before Russia retaliated
with a sweeping ban on all imports of meat, fish, dairy products, fruit and
vegetables from the EU and the US.
----Italy has fallen back into a triple-dip recession, with GDP returning to levels last seen 14 years ago. The toxic mix of recession and very low inflation is a grave threat to Italy’s debt trajectory.
The public debt ratio jumped from
130.2pc to 135.6pc of GDP in the first quarter from a year earlier and will now
rise again, despite austerity measures and a primary budget surplus.
More
In related European news this
morning.
Paschi Quarterly Loss Larger Than Estimated on Provisions
Aug 8,
2014 12:00 AM GMT
Banca
Monte dei Paschi di Siena SpA stepped up bad-loan provisions as Italy fell
back into recession in the second quarter, leading to a worst loss than
expected for the bailed-out lender. Italy’s third-biggest bank said in a statement yesterday that its net loss shrank 36 percent to 178.9 million euros ($239 million) from a loss of 278 million euros a year earlier. That’s more than the average estimate of a 71.5 million-euro loss among six analysts surveyed by Bloomberg News.
“Results of the period were affected by a particularly difficult macroeconomic cycle,” Chief Executive Officer Fabrizio Viola said during a conference call yesterday. “The tough economic environment may lead to a time delay on our delivery on revenue side.”
Italy’s economy,
the euro area’s third largest after Germany and France, shrank in
the second quarter, extending a slump that has dragged on for most of the past
three years. Viola, 56, is cutting jobs and selling assets in an effort to turn
around the bank, which posted its ninth consecutive quarterly loss. Monte
Paschi, which has turned to the government twice since 2009, raised 5 billion
euros from investors in June, mainly to reimburse taxpayers.
More
Special Report: How scams and shakedowns brought Ukraine to its knees
By Steve Stecklow, Elizabeth
Piper and Oleksandr Akymenk
KIEV Thu Aug 7, 2014 10:47am EDT
(Reuters) - Late last year, Ukraine’s consumer protection agency began
filing lawsuits against Foxtrot, the country’s largest electronics retailer. By early March, Foxtrot faced
at least 231 separate suits that demanded fines totaling more than $150
million.Many of the suits accused the company of minor violations of Ukraine’s labeling law – such as not placing a "quality seal" on tiny memory cards and wafer-thin batteries inside mobile phones. Foxtrot said it placed the seals on the external packaging, which the law also allows.
Viacheslav Povroznick, Foxtrot’s CEO, said agency officials proposed a deal – pay $1 million in cash and the lawsuits would disappear. "We said no," he said. "It was like a kind of extortion." Today, the company still faces a mountain of litigation.
Six months after a popular uprising toppled President Viktor Yanukovich, Ukraine’s new leaders are fighting wars on two fronts. One struggle is against Russian-backed insurgents in the east. The other is against staggering corruption that top officials say infected every level of government - and continues to this day.
More
In other news this morning, a tale of two Asia’s.
But what happens to China’s exports as Europe’s train wreck kicks in? As
America gets back into Iraq War Three?
BOJ Holds Stimulus as Weaker Economy Challenges Kuroda
Aug 8,
2014 5:23 AM GMT
The Bank of Japan
maintained record stimulus after recent production and export data highlighted
weakness that could challenge Governor Haruhiko Kuroda’s push to stoke faster
inflation. The central bank stuck with a pledge to increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen ($687 billion), the bank said in a statement today, as forecast by all 34 economists surveyed by Bloomberg News.
The BOJ cited “some weakness” in exports and production, striking a note of concern about the strength of the world’s third-biggest economy. Output slumped the most in more than three years and retail sales fell in June, showing the economy struggling to rebound from a sales-tax increase.
“If exports continue to deteriorate and incomes don’t pick up, the BOJ will have to cut its overall assessment of the economy,” said Hideo Kumano, executive chief economist at Dai-ichi Life Research Institute in Tokyo and a former BOJ official. “There is still sufficient room left for the BOJ to take further easing.”
More
http://www.bloomberg.com/news/2014-08-08/boj-holds-stimulus-as-weaker-economy-challenges-kuroda.html
China Reports Record Trade Surplus
Aug 8, 2014 5:34 AM GMT
China’s trade surplus surged to a record in July as export growth
unexpectedly accelerated and imports fell, suggesting global demand will help
the government achieve its 2014 economic-expansion goal of about 7.5 percent. Overseas shipments increased 14.5 percent from a year earlier, the Beijing-based customs administration said today, beating all estimates in a Bloomberg News survey that had a median projection of 7 percent. Imports dropped 1.6 percent, leaving a trade surplus of $47.3 billion, bigger than all analyst estimates.
Sales
to the biggest markets of the U.S. and Europe surged,
indicating strength in demand that will reduce pressure on Premier Li Keqiang to
expand stimulus in the second half to bolster growth. The report contrasts with
the International Monetary Fund’s estimate last month of a slowdown in the U.S. economy
that accompanied a cut in its global growth outlook.
----China’s
exports to the European Union rose 17 percent in July from a year earlier and
shipments to the U.S. jumped 12.3 percent, the biggest gain since November,
based on customs data compiled by Bloomberg. Sales to countries in the Association of Southeast Asian Nations gained 11.9 percent.
More
Obama Authorizes Airstrikes as U.S. Drops Food in Iraq
Aug 8,
2014 3:40 AM GMT
President Barack Obama said he authorized airstrikes against
militants in Iraq if they threaten U.S. personnel, and he dispatched planes to
drop food and water for trapped civilians threatened with “genocide.” U.S. aircraft dropped supplies today to Iraqis threatened by fighters from the Islamic State extremist group near Sinjar, close to the border of Syria. All the planes safely left the airspace.
The airlift was precipitated by
the plight of about 50,000 people, half of them children, who have been
stranded in mountainous territory after advances by the militant Islamic State.
The people are Yezidis, an ethno-religious minority. The militants have also
targeted Christians, Obama said.
The extremists “have called for
the systematic destruction of the entire Yezidis people, which would constitute
a genocide,” Obama said tonight in televised remarks from the White House. “The
United States of America cannot turn a blind eye.
----The airstrike authorization also covers breaking the siege in the mountainous area if necessary, according to an administration official, who briefed reporters on condition of anonymity. No strikes had occurred, according to administration officials who spoke to reporters by telephone soon after Obama’s statement.
After its breakthrough two months
ago, when it routed the Iraqi army and seized the city of Mosul, the Islamic
State, the radical Sunni group that threatens the government in Baghdad,
returned to the offensive this week. They have been pushing back the Kurdish
fighters that had been protecting the communities.
The U.S. began coordinating with
Kurdish and Iraqi security forces as the extremists advanced, the official
said.
Islamic State
fighters extended their advance by seizing the Mosul dam, the country’s
largest. It holds back water that, if unleashed, could flood Mosul, northern
Iraq’s biggest city, and cause damage as far as Baghdad.
More
We end for the week with Russia toying with closing
its airspace to western airlines, financially disadvantaging them compared to
Asian airlines. How many passengers are prepared to pay a lot more to fly a
much longer route to and from Asia? How long before America’s botched coup in
Kiev really crashes the global economy?
Siberia Flight-Ban Threat Forces Airlines to Mull Options
Aug 8, 2014 12:04 AM GMT
Russia’s threat to bar European and North American airlines from overflying
Siberia, the latest salvo in tit-for-tat sanctions over Ukraine, is forcing
carriers to consider new routes to and from Asia. United Airlines and Delta Air Lines Inc., which rank second and third in the world by traffic, said yesterday they were weighing their options after Russia formally broached the idea of a Siberia ban. United Parcel Service Inc., the biggest package-delivery company, also is making contingency plans.
A closing of Siberian airspace threatens to escalate tensions between Russia and the U.S. and its allies in Europe, which have sought to punish President Vladimir Putin for backing Ukraine’s separatists. North American and European passenger and airfreight operators cross eastern Russia hundreds of times a week because it’s the shortest -- and cheapest -- path to Asia.
More
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
At the Comex silver depositories Thursday final figures were: Registered 59.83
Moz, Eligible 114.98 Moz, Total 174.81 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what else, yes it’s the bankster’s again.
They can resist anything except temptation.
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.
African Bank Fights Collapse in Espirito Santo-Like Drama
Aug 7, 2014 11:00 PM GMT
African
Bank Investments Ltd. (ABL), which plummeted this week after surprising
investors with the need for more funding, is now counting on shareholders or
the government to stave off collapse. South Africa’s largest supplier of unsecured loans slumped 90 percent since saying on Aug. 6 its chief executive officer and founder resigned, losses will be at a record this year and it requires about $791 million of new capital. The bank is cutting funding to its loss-making Ellerines furniture retailer to shore up returns.
“If the top three shareholders get together and will put in the money, calculations show that Abil will survive,” Kokkie Kooyman, the head of Cape Town-based Sanlam Global Investments, which has $900 million under management, said yesterday in a phone interview. “I’m amazed that regulators and auditors didn’t step in earlier and warn of this.”
The speed and magnitude of the decline highlights the prospect of a second banking bailout in less than a week after Portugal’s Banco Espirito Santo SA required about $6.6 billion of government funds following a 73 percent stock plunge. Bank of Portugal Governor Carlos Costa had sought private investors to inject the cash, with government funds being a last resort.
The South African Reserve Bank is in talks with Abil, Hlengani Mathebula, an SARB spokesman, said yesterday by phone from Pretoria, without giving more details. There’s “no indications that other South African banks have been affected negatively by Abil’s trading update,” SARB said on Aug. 6.
Public Investment Corp., the South African pension fund which is Abil’s second-largest shareholder, said it will only invest more in the bank if it develops other sources of revenue to become more like a traditional bank and changes its board.
“If we rescue, it will depend on management’s plan, or we’ll be throwing good money after bad,” chief investment officer Daniel Matjila said yesterday by phone.
Abil, which offers loans to individuals who might not be able to obtain them from traditional banks, survived a 2002 crisis among small lenders in South Africa that caused Saambou Holdings Ltd. and Unifer Holdings Ltd. to fail. Bad loans have increased amid rising South African unemployment and inflation.
“Even if you accept Abil is relatively small in a systemic sense, you have to consider the huge impact on a section of the population that can’t otherwise get funding,” Adenaan Hardien, chief economist at Cadiz Asset Management, said by phone from Cape Town yesterday. “The country can ill afford to cut these people out of the loan market.”
----Abil started to falter in March last year after South Africa’s National Credit Regulator said the Johannesburg-based lender had been involved in reckless lending, forcing the bank to abandon plans to raise $300 million in foreign debt markets.
The bank relies on market funding for its business instead of deposits, meaning if it failed there would be no need to compensate angry savers.
Coronation Fund Managers Ltd. (CML) and Stanlib Ltd. are Abil’s two other biggest shareholders. Neither returned calls and messages seeking comment.
More
A happy man has
an american pay-check
a british mansion
a japanese wife and
a chinese cook
an american pay-check
a british mansion
a japanese wife and
a chinese cook
An unhappy man has
a chinese pay-check
a british cook
a japanese house and
an american wife
a chinese pay-check
a british cook
a japanese house and
an american wife
Anon.
Have a great weekend everyone.The monthly Coppock Indicators finished July.
DJIA: +157 Down. NASDAQ: +318 Down. SP500: +232 Down. The Fed’s final bubble has taken on a
very scary wobble, but this is nothing compared to the return of real interest
rates at some point ahead.
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