Baltic Dry Index. 1041 -14
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."
Andrew Mellon.
With both sides in Hong Kong digging in and Beijing
losing patience, will stocks today sell off ahead of what might turn out to be
a decisive violent weekend? Whichever side prevails in Hong Kong, a new era is dawning
in East Asia. Will China tilt towards HK style freedom and democracy, or revert
to Ukraine style violence similar to that dished out in Odessa and the Donbas,
as Beijing reinforces a one party communist state. Stay long fully paid up
physical precious metals.
If HK wins, the rest of China will want the same. If
Beijing’s communists win, there will be a reappraisal of the west’s
relationship with communist China. The west has no cards to play in this
unfolding drama, and in fact is totally exposed to a violent outcome. The Great
Disconnect and the Greenspan/Bernanke/Yellen put may get called after this
weekend. As for the “Draghi put,” it doesn’t exist, seen off by the rise of AfD
in Euroland paymaster Germany.
Asia Stocks Drop for Sixth Day With Hong Kong Trading to Resume
Oct 3, 2014 1:03 AM GMT
Asian stocks dropped for a sixth day as the yen held two days of
gains, curbing the earnings outlook for Japanese exporters. Trading is due to
resume in Hong
Kong following a two-day holiday. The MSCI Asia Pacific Index (MXAP) declined 0.1 percent to 138.35 as of 9:00 a.m. in Tokyo, before markets open in Hong Kong. The gauge is down 2.6 percent this week, on course for the biggest weekly drop in six months. The measure has retreated 7.4 percent from a six-year high in July.
Pro-democracy leaders in Hong Kong said they will escalate protests if their demands aren’t addressed. European Central Bank’s President Mario Draghi said the central bank will buy assets for at least two years to boost inflation and economic growth in the euro area. U.S. jobless claims unexpectedly dropped last week, data showed yesterday. A report on American payrolls is due to be released today.
“Most world stock markets are currently in a correction,” said Monty Guild, chief investment officer of Los Angeles-based Guild Investment Management Inc., which runs global equity funds. “Many developed and emerging markets will be declining as investors withdraw funds to shift to U.S. dollar assets.”
More
China services growth dips to eight-month low in September: official PMI
By Koh Gui Qing BEIJING
(Reuters) - China's services sector grew at its slowest pace in eight months
in September after new orders shrank for the first time since the 2008 global
financial crisis, a survey showed on Friday, exposing more weakness in the
world's second-largest economy.The official non-manufacturing Purchasing Managers' Index (PMI) edged down to 54.0 in September from 54.4 in August, the National Bureau of Statistics said, but still well above the 50-point mark demarcating growth on the month from a contraction.
In a sign that China's cooling property market remained a key drag on the economy, the PMI showed the real estate sector shrank in September, alongside other industries such as logistics and aviation.
----Lackluster activity in the housing sector weighed on overall new orders, which fell to 49.5, a level not seen since December 2008 and down from 50 in August.
"The 'Golden September' peak season in the property sector did not materialize. The market tracked a weak trend and activity was on the subdued side," said Wu Wei, an official at the China Federation of Logistics and Purchasing, which helps to publish the PMI.
Friday's data raised questions about whether China's move this week to cut mortgage rates and downpayment levels for some home buyers would be enough to revive its sagging housing market and rejuvenate its sputtering economic momentum.
----Overall slack caused employment in the sector to shrink for the third consecutive month as a sub-index for jobs inched down to 49.5 from 49.6 in August.
China's slowdown risks are
undermining the lift to the Asia region from a stronger U.S. economy, Hak Bin
Chua, an analyst at Bank of America Merrill Lynch, wrote in a research note.
Its cooling import demand is also disproportionately hurting Asian commodity
exporters such as Indonesia and Thailand, he added.
More
Below, doom gloom and yet more doom, Soc Gen, says
it’s time to be out of all risk and safely installed in the nuclear bunker. If
Albert Edwards is even half way right, it’s over for Club Med in the Eurozone,
and the paper fiat currencies as we know/knew them. With our world from
Argentina, to the BRICs, to Hong Kong, to Japan, to the Middle East, to the
Ukraine, disintegrating before our disbelieving eyes, even Soc Gen’s stopped
watch is right twice a day. From totally disconnected complacent London, we appear
to be approaching one of those two moments.
Albert Edwards Says Watch Japanese Yen and Be Very Afraid
Oct 2,
2014 7:31 PM GMT
The Japanese
yen goes into freefall. China’s fragile economy tips over the edge. A wave of
profit-crushing deflation comes washing over the U.S. and Europe. Investors
panic. That’s the view of perennial pessimist Albert Edwards. The London-based analyst and his team at investment bank Societe Generale SA have been ranked No. 1 for global strategy in surveys by Thomson Reuters Extel every year since 2007, even with a history of saying unpleasant things that few want to hear.
“My role is to step back from the excessive enthusiasm that builds up in the market, and to just say, ‘This is wrong. This is going to go horribly wrong,’” the 53-year-old said by phone last week.
The cliche is that when the U.S. sneezes, Japan catches a cold. Edwards says Japan is just as apt to lead the way. After all, when the Internet bubble burst in 2000, Japan’s tech-heavy Jasdaq index started to slide weeks before the Nasdaq. Japan also pioneered the deflation that now threatens the West. In 1997, it was a plunging yen that helped trigger Asia’s currency crisis.
With the yen’s drop this week to a six-year low of 110 versus the dollar, Japan’s currency may once again be the first domino to fall in a chain of events that could be bad for everyone, according to Edwards
The U.S. stock market rally has been going for 66 months since the financial crisis bottomed in March 2009, a streak that’s already a year longer than average. A disconnect between buoyant equity prices and corporate profit growth in the low single-digits makes the situation especially precarious.
“Almost 100 percent of investors think we’re at the start of a long recovery,” Edwards said. “It’s already a long recovery. Forget about starting from here.”
In an hour-long interview, during which he made the global economy sound like a game of Mousetrap, Edwards explained why investors should be watching Japan for clues about what may happen in the next big economic trouble-spot: China, whose economy is already headed for its slowest full-year growth since 1990.
The argument was this: if the yen falls, it will take other Asian currencies down with it. Eventually China will be forced to weaken the yuan, by adjusting its trading range and expanding its money supply, to keep its exports competitive. That will squeeze developed economies that have yet to fully recover from the financial crisis.
More
Yen’s Steepest Decline in 20 Months Spreads Unease in Japan
Oct 2, 2014 7:49 PM GMT
The yen’s steepest decline in 20 months is prompting concern in Japan that the
central bank’s support for a weaker currency may hurt consumers and companies. Monetary authorities intervention to curb the slump is “possible,” according to Hirohisa Fujii, a former finance minister and member of the opposition party, after the currency’s steepest drop last month since January 2013. Some companies are suffering from the weaker yen, Nobuhide Minorikawa, Japan’s vice finance minister said this week, following comments from the nation’s economy minister on the risk of excessive gains or declines in the yen.
The chorus of dissent against the Bank of Japan’s accommodative monetary policy, which has seen 60 trillion yen ($553 billion) to 70 trillion yen committed to annual asset purchases, is growing louder, as consumer prices remain depressed and growth is anemic. The weaker yen puts Japan at risk of recession, Kazumasa Iwata, deputy governor of the central bank until 2008, warned last month.
“The whole notion of devaluing the currency has been a bad policy,” Robert Sinche, a global strategist at Pierpont Securities LLC in Stamford, Connecticut, said by phone. “They think the yen is overvalued, but we’ve just had a very extreme move and I think their concern was that it could destabilize markets and destablize the economy.”
Sinche forecasts the currency will slump to 120 yen per dollar by the end of 2015.
----The weaker yen is driving up the price of imported energy and hurting small companies, consumers, and Japan’s regional economies, Vice Finance Minister Minorikawa said in Tokyo yesterday. A weaker currency is positive for companies that have overseas business or rely on exports, he said.
BOJ Governor Haruhiko Kuroda said
last month, after the dollar rose above 109 yen, that he didn’t see any big
problems with current movements in exchange rates.
More
In other news, the sky just fell in on old BS “Bubbles”
Bernocchio. The next Lehman is virtually here.
You Know It’s a Tough Market When Ben Bernanke Can’t Refinance
Oct 3,
2014 5:00 AM GMT
Ben S. Bernanke said the mortgage market is so tight that even he is having
a hard time refinancing his own home loan. The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. -- “just between the two of us” -- that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”
When the audience laughed, Bernanke said, “I’m not making that up.”
“I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said.
Bernanke, addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago yesterday, said that the first-time home buyer market is “not what it should be” as the economy in general strengthens.
More
http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tough-market-when-ben-bernanke-can-t-refinance.html
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster
At the Comex silver depositories Thursday final figures were: Registered 65.68
Moz, Eligible 115.73 Moz, Total 181.41 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, a truly damming report from the UN in Iraq
and Geneva. How long before there becomes a UN mandated international force to
put “boots on the ground” to liberate Syria and Iraq? Who pays and how, given
the hollowed out state of the EU, USA, Russia and China?
Women Herded, Sold to Teens as Prize for Fighting With Islamist Terrorists
Oct 2, 2014 4:41 PM GMT
Islamic State extremists have herded hundreds of women to be given to its
fighters in Syria as a reward or sold as sex slaves and have summarily executed
women in professions, according to the United Nations. About 500 women and girls of the Yezidi and Christian minority communities were given to Islamic State fighters or trafficked for sale in markets in Mosul in Iraq and Raqqa in Syria, according to a report published today by the UN mission in Iraq and the world body’s human-rights office in Geneva.
“Women and girls are brought with price tags for the buyers to choose and negotiate the sale. The buyers were said to be mostly youth from the local communities,” according to the 29-page report, which cites testimony from witnesses and surviving victims. “Apparently ISIL was ‘selling’ these Yezidi women to the youth as a means of inducing them to join their ranks.” ISIL is an acronym for Islamic State’s former name.
The report is the UN’s second official one on acts committed by the Sunni extremist group and its affiliates that may amount to war crimes and crimes against humanity. The beheading of two American journalists and a British aid worker helped trigger the formation of a U.S.-led international coalition that’s helping Kurdish and Iraqi government forces combat the extremist group
The extremist militant group and its affiliates treat women “particularly harshly,” adding to a long list of “gross human-rights abuses” that include murder, physical and sexual assault, robbery and forced expulsion, according to the report.
Militants killed a female candidate in the general election in July and the next day abducted a candidate running for local office, the UN said in the report. Islamic State also ordered hospitals to instruct married women doctors to wear black, while unmarried females wore other colors so they are easily distinguishable.
The UN estimates that at least 8,493 civilians have died in the Iraqi conflict so far this year, and 1.8 million Iraqis remain uprooted from their homes.
“This report is terrifying,” Nickolay Mladenov, the UN’s envoy to Iraq, said today in an e-mailed statement. He said hundreds of other allegations weren’t included because they hadn’t yet been sufficiently verified. “Iraqi leaders must act in unity to restore control over areas that have been taken over by ISIL and implement inclusive social, political and economic reforms,” he said.
Zeid Ra’ad al-Hussein, the UN’s human rights chief, condemned the “staggering” array of abuses. He recommended that the Iraqi government accede to the Rome Statute, a treaty that established the International Criminal Court and requires all states that are parties to it to cooperate with the court on war crimes.
Zeid, a former Jordanian diplomat who is the first Arab and Muslim to hold the post, cited a Sept. 19 letter by 126 Muslim scholars to the head of Islamic State to emphasize that such acts aren’t endorsed or permitted by Islam.
The letter “clearly states that in Islam it is forbidden to kill the innocent, or to kill emissaries, ambassadors and diplomats -- hence, also journalists and aid workers; torture and the reintroduction of slavery are also forbidden, as are forcible conversion, the denial of rights to women and a multitude of other acts being carried out,” Zeid said in an e-mailed statement.
http://www.bloomberg.com/news/2014-10-02/islamic-state-sells-women-as-sex-slaves-un-says.html
Islamic State Leads Mideast Into Warlord Era as Nations Dissolve
Oct 2, 2014 9:37 PM GMT
The Middle
East may be sliding toward a warlord era, with nation-states increasingly
struggling to control all their territory and millions living under the rule of
emergent local chiefs and movements. Armed irregular forces hold effective power over growing areas of Iraq, Syria, Yemen and Libya where central government authority barely reaches. Motivated by religious ideology or regional separatism, they have grabbed oil facilities and weapons, imposed taxes or changed school curriculums, and fought each other as well as national armies.
“It is almost like the whole regional order that was built in the 20th century is collapsing,” Nadim Shehadi, associate fellow at the Middle East and North Africa Programme at Chatham House in London, said in an interview. “Non-state actors are filling the vacuum.”
The breakdown, in a region that holds more than half the world’s oil, has allowed extremist groups to thrive and drawn in external powers bent on stopping them. Underlying many of the conflicts is the inability of governments to provide security and basic services. In turn, economic failure will be even harder to remedy without functioning administrations.
It’s not clear whether interventions such as the U.S.-led bombing campaign in Iraq and Syria can put the pieces back together, said James Coyle, director of global education at Chapman University in California. Military operations will only achieve short-term gains, unless governments are “given legitimacy by the people through the provision of security and basic social services,” he said by e-mail.
More
Another weekend, and very possibly a pivot weekend in our developing 21st
century. If not “Black Friday” today in global stocks, will it be Black Monday
if Beijing cracks down over the weekend? If Beijing crushes Hong Kong, will
Russia take the opportunity to seize the initiative in the eastern Ukraine?
Have a great weekend everyone.
"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
The monthly Coppock Indicators finished September.
DJIA: +141 Down. NASDAQ: +289 Down. SP500: +216 Down.
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