Baltic Dry Index. 1186 -11
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
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.
The EUSSR put another bullet in the chamber, spun
the revolver raised the barrel to its head and pulled the trigger. We now await
Russia’s response later today or over the weekend. Europe suicidally continues
to march to Uncle Scam’s beat in his failed attempt to seize the Ukraine and
slice and dice up Belarus and Russia.
Below, The Telegraph’s AEP sums up the state of
play in our game of Russian roulette so far. Please don’t mention to anyone
especially the Scots, that the Price of Brent crude oil has fallen below $100
into the mid $90s, or that the global price of iron ore has plummeted almost
40% this year, nor that “Dr. Copper” is under pressure again. All things
usually associated with an arriving global slowdown if not recession. Europe’s
lunatic “leaders” far out of touch with the hapless led serfs, seem determined
that no matter what, they will bring on the next Lehman later this year. Shame
about the great disconnect in global stock markets though, and the new version
2.0 of the dot con bubble.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
West pushes crippling sanctions on Russia's oil industry despite Ukraine ceasefire
EU to ban loans to five state-owned banks and three energy companies
Europe and the US are to press
ahead with fresh economic sanctions against Russia despite the ceasefire in
eastern Ukraine, aiming to choke off credit and technology vitally needed to
arrest the decline of Russia’s oil industry.
The EU is to ban loans to five
state-owned banks and three energy companies from Saturday, targeting new oil
ventures the Arctic and the Siberia shale basin rather than gas operations.
US President Barack Obama said
his country will “deepen and broaden” its own array of measures. These are
aimed directly at the Russian oil industry, threatening to paralyse Exxon’s
$3.2bn joint venture in the Arctic with Rosneft. The sanctions may force BP to
shelve its plans for shale development with Rosneft in the Volga Urals.
The rouble fell to a record low
of 37.53 against the dollar. The MICEX index of stocks dipped 1.3pc yet it
remains far above levels seen earlier this year, suggesting investors are
starting to treat each wave of sanctions as political theatre.
“This has all taken on a ritual
flavour,” said Christopher Granville, from Trusted Sources. “EU bureaucrats
have taken so long to come up with their list and push this through that the
whole dispute has already moved on.”
Mr Granville said the West
crossed the Rubicon in July by shutting off external finance for key energy
companies and banks. “Credit markets are already closed, so adding more is not
going to have much effect,” he said.
Tim Ash, from Standard Bank, said
Russia faces a more immediate threat from tumbling oil prices, down almost $20
a barrel since June as fresh supply comes on stream from Libya and the US. Each
$1 fall in the price cuts the revenues of the Russian state by $2.8bn. “This
matters more than sanctions right now. Russia is hit brutally by the oil
channel. If prices drop to $80, they will be in very big trouble,” he said.
Brent
crude fell to a two-year low of $96.72 after the International Energy Agency
cut its demand forecast this year by 165,000 barrels a day below estimates a
month earlier, citing weakness in China. “It is ever clearer that Chinese oil
demand growth will struggle to get much above 2pc," it said.
-----The Kremlin vowed to fight back, threatening sanctions against imports of clothing and used cars, but appeared to stop short of an over-flight ban on European airlines, a major source of fees for Aeroflot.
Premier Dmitry Medvedev has
warned of “asymmetric” retaliation. It is unclear whether disruption in gas
supply to Poland this week is the first taste of this. Poland's state gas
company, PGNiG, said volumes have fallen 45pc, a claim denied by Gazprom.
More
Copper prices slip
September 12, 2014
COPPER prices slipped Thursday
after Chinese inflation data came in weaker than expected, prompting concerns
about demand in the world's largest consumer of the metal.
THE most actively traded December
contract fell 1.8 cents, or 0.6 per cent, to $3.0925 a pound, its lowest
settlement since August 19 on the Comex division of the New York Mercantile
Exchange.
The market turned negative early
in the session after the release of the China data and never recovered, posting
its third losing session of the past four.
China said its consumer-price
index rose two per cent in August from a year earlier, slowing from a 2.3 per
cent year-over-year increase in July and below the consensus forecast of
economists. China accounts for 40 per cent of global copper demand.
Prices have been on a mild
upswing over the last several months but remain weak in the face of mixed
messages on China's growth.
Analysts were divided on the
inflation implications for the market. Some speculated the weak data could
prompt another round of stimulus from China's central bank, which could drive
demand for the widely used metal.
However, Chinese Prime Minister
Li Keqiang said recently that China's financial system has sufficient liquidity
and that the country shouldn't rely on monetary policy to stimulate growth.
Analysts also said a strong US
dollar is weighing on copper, making the metal more expensive for users of
other currencies.
The dollar has gained five per
cent against global currencies since July, as a burgeoning recovery in the US
has brought the Federal Reserve closer to raising rates.
"The consensus is that
interest rates are coming up, the dollar's rising and that's putting pressure
on all the metals," said Fain Shaffer, president of Infinity Trading in
Indianapolis.
"There's questionable demand
out of China, Europe, and they're just on the defensive.
There's not a lot of reason today
to be long metals."
In let’s breakup the UK Union news, the prospect of
a Scots independence “victory” has Scottish businesses planning to flee south.
With Brent crude slumping about 20% so far this year, Scotland would be most
unwise to vote for independence to become the helpless flotsam in the
international oil war now underway between, America, Saudi Arabia and Russia.
If Uncle Scam’s game of Russian roulette backfires and triggers a new Great
Recession, wiping out much of Europe and the oil patch, the UK and even the USA
itself may be in need of a bailout.
Scotland's biggest companies reveal Yes exodus plans
Royal Bank of Scotland, Lloyds Banking Group, TSB, Clydesdale, Tesco Bank and Aegon have revealed they have plans to quit for England if Scotland votes Yes in favour of independence on September 18
Scotland is facing a wholesale
exodus of its biggest companies should the country vote for independence in a
week’s time with senior business figures warning that the exit plans are
neither “bluff” nor “bluster”.
With just six days of campaigning
left a slew of firms – including Royal Bank of Scotland, Lloyds Banking Group,
TSB, Clydesdale, Tesco Bank and Aegon – have dramatically revealed that they
have plans to quit for England if Scotland votes Yes in favour of independence
on September 18.
An RBS statement released on
Thursday morning said the bank had undertaken contingency planning as “material
uncertainties” from a Scottish referendum vote “could have a bearing on the
bank’s credit ratings”.
It said it “believes that it
would be necessary to re-domicile the bank’s holding company and its primary
rated operating entity to England”. In a message to staff, RBS’s chief
executive Ross McEwan said this “is not an intention to move operations or
jobs”.
Relocating will likely cost RBS
and Lloyds £1bn each, according to Chirantan Barua, an analyst at Bernstein.
---Adrian Grace, the chief executive of Aegon, said the insurance company had no choice but to plan for a Yes vote: “This includes establishing a new registered life company in England to complement our existing Scottish and English registered companies. This means irrespective of any currency, regulatory or tax change we can continue to serve all our customers.”
Standard Life had on Wednesday
been among the first financial companies to reassure customers and shareholders
that it had the ability to move the billions of pounds in pension funds and
savings to England if the company felt it was necessary.
However, the Edinburgh-based
pensions giant went further than many others, refusing to rule out moving even
in the event of a No vote next week: “If the referendum result is supportive of
Scotland remaining part of the United Kingdom, resulting in the devolution of
further powers as seems likely, we will monitor any impact that this may have
on our stakeholders and take whatever action we feel is required.”
More
We end for the week, possibly the last week of the
Union of 1707 as we know it, with Venezuela possibly entering final meltdown.
'Never
believe
anything in politics until it has been officially denied.'
Otto
von Bismarck.
Venezuela Threatens Harvard Professor for Default Comment
Sep 12, 2014 5:17 AM GMT
Venezuelan President Nicolas Maduro instructed the attorney general and public
prosecutor to take “actions” against Harvard Professor Ricardo Hausmann, saying
the economist sought to destabilize the country by suggesting the government
default on its debt. Maduro lashed out at Hausmann during a televised address last night, calling him a “financial hitman” and “outlaw” who forms part of a campaign “that has been initiated around the world against Venezuela.” He didn’t specify what actions he had asked the attorney general and prosecutor to take.
Venezuelan bonds tumbled earlier this week after Hausmann co-wrote an opinion piece on Sept. 5 with a Harvard colleague arguing the country should consider defaulting because it had already racked up billions of dollars of arrears with importers that were causing widespread shortages in the economy and imposing hardship on Venezuelans.
“Normally governments declare that they have an inability to pay way before this point,” Hausmann, a Venezuelan native who served as planning minister in the 1990s under the government that Maduro’s mentor and predecessor, the late Hugo Chavez, tried to topple in a coup attempt, said in a phone interview from Boston after the opinion piece came out.
The country’s benchmark bonds due 2027 sank 3.6 cents to 70.08 on the dollar on Sept. 8, driving their yield up to a six-month high of 14.4 percent, as Hausmann’s comments added to investor concern about a nation that saw its foreign reserves sink to an 11-year low last month.
Venezuela’s debt has rebounded the past three sessions, with the benchmark securities closing yesterday above 74 cents, as Maduro sought to reassure creditors. On Sept. 10, he told a television audience that the government would meet its “international obligations completely, down to the last dollar.”
“As for believing things, I can believe
anything, provided that it is quite incredible.”
Oscar Wilde.
At the Comex silver depositories Thursday final figures were: Registered 63.12
Moz, Eligible 117.81 Moz, Total 180.93 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Six days left to save the Union, so what is the No
campaign’s latest wheeze? Telling the Scots riff raff that their betters are
voting No and they had better vote No too. If I didn’t know better, I might
think that the No campaign really wants a Yes outcome. Coming soon “Scotland twined with Haiti.”
“Those who don't know history are destined to repeat it.”
Edmund Burke.
Better Together's latest brainwave: 'Listen peasants, clever people are voting No!'
James Kirkup Scotland Last updated: September 11th, 2014I’ve just received the worst political press release I’ve had in quite a while. It’s from the Better Together campaign against Scottish independence. Here’s a taste:
NEWS FROM BETTER TOGETHER: NEW POLL – EXPERTS BACK A NO VOTE
A new, authoritative poll has shown that academic experts from across Scotland’s universities have overwhelmingly said No Thanks to separation.
The Times Higher Education Referendum poll had more than 1,000 responses, which were verified to have all come from academics with ac.uk email address.
The poll found that 54% of academics were voting No, compared to 40% voting for separation.
It goes on to quote no less a figure than Professor Hugh Pennington, Emeritus Professor of Bacteriology at the University of Aberdeen, saying that independence would be bad.
What message do we take away from this? In essence, clever people in universities think you should vote No. So vote No. Because these are really, really clever folk. Experts, in fact. They know stuff, about science and books and everything. So do what they tell you and vote No. Got that, thickos?
Really, this is a referendum campaign that will be decided by working-class voters in the central belt and where Yes campaign is basing its appeal to voters on a populist rejection of elite opinion. So what does the No side do? It issues a press release saying that the experts are voting No, apparently asking voters to put faith in judgment of people like Prof Pennington because, well, if he knows about germs and stuff then he must know what’s best for the country, right? Does anyone actually imagine that a single voter will look at all this and think “Well, I was voting Yes, but since the Emeritus Professor of Bacteriology at the University of Aberdeen believes that a No vote is the country’s best interests, I’ll change my mind and vote No.”
This is Fifties politics, where chaps in a stiff collars tell the hoi polloi what’s good for them. But Better Together seem to have missed the last half-century of social and political progress: the abolition of the university constituencies, the internet, the death of deference – all the things that mean that people no longer put quite the same faith in “experts” that they once did. Perhaps this partly explains why the No vote is strongest among older Scots, people who are still inclined to give a certain grudging respect to authority figures like professors, central bankers and the rest.
The experts from Scottish universities are undoubtedly clever people. But that doesn’t mean that voters are stupid. Treating them as if they are won’t do the No campaign any good at all.
http://blogs.telegraph.co.uk/news/jameskirkup/100286071/better-togethers-latest-brainwave-listen-peasants-clever-people-are-voting-no/
Another weekend and incredible madness seems to have engulfed the west.
While Great Britain is out busy trying to Balkanise itself, continental Europe
and America are busy trying to provoke World War Three, likely to be the
shortest of all the World Wars so far. Unhappy with merely trying for WW3,
America’s Peace President wants a rematch in Iraq and Syria, but without US “boots
on the ground.” In Japan the central bank is now monetising Japanese Government
bonds with a negative yield. As Zero Hedge so accurately put it
So, in summary, normally, people
who buy debt expect to get their money back plus some interest. Negative yield
means the buyer gets back less than he or she puts in.
In other words, the Bank of Japan
is now ISSUING debt TO the Japanese Treasury.
What could possibly go wrong? Use the dips in gold to swap paper for
something with intrinsic value. Have a good weekend everyone.
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
The monthly Coppock Indicators finished Aug.
DJIA: +152 Down. NASDAQ: +312 Down. SP500: +231 Down.
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