Baltic Dry Index. 1428 +33
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
In central banking as in diplomacy,
style, conservative tailoring, and an easy association with the affluent count
greatly and results far much less.
J. K. Galbraith
Just as the Fedster’s give up on QE Forever, to
rely instead on the magic of ZIRP
Forever and a talking chair, comes this from China. How long before the BRIC
crumbles, the EUSSR collapses, and the Fed can no longer support US stock
markets. Surely they can manage the Great Illusion beyond next Tuesday’s US
mid-term elections, but then what. Apre moi, le deluge. Just don’t let on to
Brussels and Berlin.
I
want to share something with you: The three little sentences that will get you
through life. Number 1: Cover for me. Number 2: Oh, good idea, Boss! Number 3:
It was like that when I got here.
President
Xi, with apologies to Alan Greenspan.
ICBC Posts Biggest Jump in Bad Loans Since ’06 on Economy
Oct 30, 2014 1:54 AM GMT
Industrial
& Commercial Bank of China Ltd., the world’s largest lender by assets,
reported its biggest jump in bad loans since at least 2006 as the property
market slumped and the economy cooled. Nonperforming loans rose 9 percent in the third quarter from the previous three months, the Beijing-based bank said in an exchange filing yesterday. Net income gained 7.7 percent from a year earlier to 72.4 billion yuan ($11.8 billion), matching the median analyst estimate in a Bloomberg News survey.
A
struggling Chinese economy is weighing on ICBC’s share price and is poised to
drag the company to its weakest full-year profit growth since at least 2001 as
more borrowers default. Challenges at home may encourage the bank to add to an
overseas expansion that already spans Asia, South America and Europe.
----ICBC’s
nonperforming loans rose to 115.5 billion yuan in September from 105.7 billion
yuan in June.
The increase was the biggest since quarterly data became
available with the bank’s listing in 2006. Nonperforming credit accounted for
1.06 percent of total advances.
More
China’s Property Prices May Decline Up to 10%, SouFun Says
Oct 30, 2014 2:36 AM GMT
China property prices may
decline as much as 10 percent this year and the slump may extend into 2015,
according to SouFun Holdings Ltd. “Chinese property prices are seeing an adjustment after the rapid increase in the past two years,” Vincent Mo, founder of China’s biggest real estate information website, said in a Bloomberg Television interview with Haslinda Amin in Singapore yesterday. “Prices should stabilize by the middle of next year.”
China’s new-home prices fell in all but one city monitored by the government last month from August, the most since January 2011 when the way the date is compiled changed, as the easing of property curbs failed to stem a market downturn amid tight credit. Home sales slumped 11 percent in the first nine months, prompting the central bank to ease mortgage restrictions on Sept. 30.
All but five of the 46 cities that imposed limits on home ownership since 2010 have removed or relaxed such restrictions amid the property downturn that has dented local revenues from land sales.
More
Back in the Fedster casino, the loons were out in
force secured by the Yellen Put. Reality doesn’t matter until one day it does.
When that day comes, will the fraud of QE4 be enough to punt off the final
collapse of the Fed’s latest and last bubble? The Fed has gone “all in” that it
will be enough. In the last act of the Great Nixonian Error of fiat money, we
are all mere serfs in the ending of the age of casino capitalism and
unrepayable debt. Four decades of mis and mal-investment have to be unwound.
Despite what the hopium witch doctors of casino capitalism say on our TV each
day, tomorrow will not be like today, which was like yesterday. Tomorrow will
shatter all illusions.
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
Dollar Jumps as Fed Ends Bond Buying While Crude Retreats
Oct 30,
2014 6:09 AM GMT
The dollar climbed to a four-week high after the Federal Reserve judged the
U.S. economy strong enough to end its asset-purchase program. Metals and oil
fell with Hong Kong stocks. The Bloomberg Dollar Spot Index gained 0.2 percent by 3:08 p.m. in Tokyo, with the euro weakening 0.3 percent and South Korea’s won leading emerging-market currencies lower. Gold dropped 0.4 percent and nickel slumped 2 percent. West Texas Intermediate crude oil slid 0.4 percent. Hong Kong’s Hang Seng Index dropped 0.5 percent after its biggest two-day rally in seven months. Standard & Poor’s 500 Index futures were little changed.
The Fed cited job gains in its decision to wind up the unprecedented bond-buying program, which has suppressed U.S. yields and fueled capital inflows into emerging-market assets. Officials retained a commitment to keep key interest rates low for a “considerable time.” An update on third-quarter U.S. gross domestic product is due today, and euro-area confidence data is scheduled before inflation tomorrow, when the Bank of Japan will report on monetary policy.
“The U.S. currency is back on its uptrend,” said Imre Speizer, a markets strategist at Westpac Banking Corp. in Auckland. The Fed statement “was a hawkish surprise to the market.”
More
Fed Unshaken by Global Market Turmoil Bets on Job Gains
Oct 30, 2014 4:00 AM GMT
Federal Reserve officials dismissed recent turmoil in global financial
markets, and focused instead on “solid” employment gains that will keep them on
a path toward an interest-rate increase next year. A majority of U.S. policy makers at their meeting yesterday also set aside concerns, both among their own members and in financial markets, about too-low inflation, voting to proceed with plans to end their third round of asset purchases.
“The FOMC is making a pretty bold call here,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “The economy’s momentum is strong enough to push through the headwinds of slower world growth.”
While bond and commodities markets have signaled concern about a global slowdown since Fed officials last met Sept. 16-17, U.S. central bankers decided to go with the facts in hand, said Paul Mortimer-Lee, chief economist for North America at BNP Paribas in New York.
“They have concentrated on what they are sure of: the labor side of the economy is improving,” Mortimer-Lee said. On inflation, the message was, “We are going to take our time and look.”
The Federal Open Market Committee maintained its commitment to keep interest rates low for a “considerable time.”
More
In better news for the talking chair, and the
Yellen Put, the ex-Fedster most responsible for the havoc of today’s final bubble,
thinks he sees the error of our ways. For what possible reason could he finally
be right now? Keep taking the hopium.
Oh, so they have internet on computers now!
Fallen guru
Greenspan, with apologies to Homer Simpson.
Greenspan Sees Turmoil as QE Boost to Markets Unwinds
Oct 29, 2014 2:35 PM GMT
Former Federal Reserve Chairman Alan
Greenspan said he doesn’t think the Fed can unwind years of extraordinary
stimulus without causing turmoil in financial markets. “I don’t think it’s possible,” Greenspan said during an event today at the Council on Foreign Relations in New York, responding to a question about the likely market impact of the Fed’s exit.
----While the Fed’s bond-buying program has been a “terrific success” in boosting asset prices, it hasn’t galvanized effective demand in the real economy, Greenspan said.
The Fed’s bond purchases have had
a “major effect” on price-to-earnings ratios, capitalization rates in real
estate, and all income-earning assets broadly by “getting the real rate of
return on long-term assets down,” Greenspan said.
The program “hasn’t been a success
on the demand side for one fundamental reason,” Greenspan said. “What you’re
basically seeing is an explosion of assets, an explosion of reserve balances,
and that’s the only two statistics that are moving.”
The purchases created deposits in
the financial system that largely returned to the Fed in the form of reserve
balances.
In other news, an energy revolution is coming next
decade. In the new graphene based Carbon Age, solar energy is going to wreck
the business models of coal, oil, uranium, and even natural gas. The trouble is
getting from here to there without a central bankster created depression first.
While You Were Getting Worked Up Over Oil Prices, This Just Happened to Solar
Oct 29, 2014 11:52 AM GMT
Every time fossil fuels get
cheaper, people lose interest in solar deployment. That may be about to change.
After years of struggling against
cheap natural gas prices and variable subsidies, solar electricity is on track
to be as cheap or cheaper than average electricity-bill prices in 47 U.S.
states -- in 2016, according to a Deutsche Bank report published this week.
That’s assuming the U.S. maintains its 30 percent tax credit on system costs,
which is set to expire that same year.
Even if the tax credit drops to
10 percent, solar will soon reach price parity with conventional electricity in
well over half the nation: 36 states. Gone are the days when solar panels were
an exotic plaything of Earth-loving rich people. Solar is becoming mainstream,
and prices will continue to drop as the technology improves and financing
becomes more affordable, according to the report.
The chart below shows how far
solar will come out ahead in each state in 2016, assuming a worst-case scenario
of lower tax credits. The blue bars show the anticipated cost of solar energy
(assuming a conservative 20-year lifespan for the panels) minus average
electricity prices. Positive numbers indicate the savings for every kilowatt
hour of electricity.
----Solar has already reached grid parity in 10 states that are responsible for 90 percent of U.S. solar electricity production. In those states alone, installed capacity growth will increase as much as sixfold over the next three to four years, Deutsche Bank analyst Vishal Shaw wrote in the Oct. 26 report.
The reason solar-power generation
will increasingly dominate: it’s a technology, not a fuel. As such, efficiency
increases and prices fall as time goes on. The price of Earth’s limited fossil
fuels tends to go the other direction.
More
I
think Obama picked me because of my motivational skills. Everyone says they
have to work a lot harder when I'm around.
The
talking chair, with apologies to Homer Simpson.
At the Comex silver depositories Wednesday final figures were: Registered 66.52
Moz, Eligible 114.41 Moz, Total 180.93 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Lisa,
if you don't like your job you don't strike. You just go in every day and do it
really half-assed. That's the American way.
President
Obama, with apologies to Homer Simpson.
The future or is it still avoidable?
The Colder War
John Mauldin | Oct 29, 2014
|
|
|
|
The story of energy is the story of human expansion. From the days
when we roamed the African savanna, we tamed first fire and then other forms of
energy, using them as tools to control our environment and improve our lives.
The control of energy has always been at the heart of the human story.
This week our Outside
the Box essay is from my friend Marin Katusa, who has written a
fascinating book about a part of that story, a subplot of intrigue and
conspiracy. Under Putin, Russia has aspired to dominate the energy markets.
Called The Colder War,
Marin’s book is a well-written tale of the rise of Putin and his desire to
change the way the world’s energy markets are controlled.
I sat down a few months ago with an advance copy, not sure what to
expect. Marin is personally very colorful and entertaining, but would that
charisma translate to words on a page? I started on a Sunday afternoon and
finished before I laid my head on the pillow that night. The Colder War was an
entertaining and gripping story of the rise of Putin and the shifting sands of
the world of oil. It was also an insightful overview of the last century. I
highly recommend it.
At the end of the day, I disagree with Marin as to Putin’s ability
to achieve his vision. While Putin wants to displace the petro-dollar as the
global medium of energy exchange, he will fail. But maybe that’s the hometown
boy in me thinking my team will win.
----The Colder War
By Marin KatusaI am going to tell you a story you’ll wish weren’t true.
Sometime soon, likely in the next five years or so, there is going to be an emergency meeting in the White House Situation Room. It probably will start in the wee hours of the morning, when the early risers among Europe’s oil traders and currency speculators have already begun to scramble out of the way of what’s coming. None of the worried participants in that meeting will have a good solution to propose, because there will be no way for the United States to turn without embracing calamity of one kind or another.
The president will listen as his closest advisers lay out the dilemma. After a long silence, he will say, “You’re telling me that everything – everything – is coming unglued.”
He’ll be right. At that point, there will be no good options, only less awful ones.
Don’t count on the wise and worldly who occupy the highest echelons of government power to know what they are doing when they sit in that meeting. Solving the puzzle of what to do will fall to the same kind of people who today are standing by and letting the disaster build.
Some of them just don’t know any better. They see all of mankind’s turmoil as cartoonlike conflicts between white hats and black hats. Others know that reality is more complex, but choose to feign ignorance – it’s so easy, and often politically convenient, to let everything boil down to good guys battling bad guys.
More
“The singular feature of the great crash of
1929 was that the worst continued to worsen. What looked one day like the end
proved on the next day to have been only the beginning. Nothing could have been
more ingeniously designed to maximize the suffering, and also to ensure that as
few as possible escaped the common misfortune. The fortunate speculator who had
funds to answer the first margin call presently got another and equally urgent
one, and if he met that there would still be another. In the end all the money
he had was extracted from him and lost. The man with the smart money, who was
safely out of the market when the first crash came, naturally went back in to
pick up bargains. …..The bargains then suffered a ruinous fall. Even the man
who waited out all of October and all of November, who saw the volume of
trading return to normal and saw Wall Street become as placid as a produce
market, and who then bought common stocks would see their value drop to a third
or a fourth of the purchase price in the next twenty-four months. The Coolidge
bull market was a remarkable phenomenon. The ruthlessness of its liquidation
was, in its own way, equally remarkable."
J.K. Galbraith. The Great Crash: 1929.
The monthly Coppock Indicators finished September.
DJIA: +141 Down. NASDAQ: +289 Down. SP500: +216 Down.
No comments:
Post a Comment