Baltic Dry Index. 991 -24
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
The rich man in his castle,
The poor man at his gate,
He made them, high or lowly,
And ordered their estate.
The poor man at his gate,
He made them, high or lowly,
And ordered their estate.
All things bright and beautiful.
The
bankster in his mansion,
The
taxpayer at his gate,
Yellen
made them High or lowly,
She disordered
their estate.
With
apologies to All things bright and beautiful.
With the Great Vampire Squids having the Fed’s talking
chair over a barrel yet again, yesterday the New York Fed blinked and rushed out the punchbowl for Wall Street’s
Squids. Is “God’s work” fun or what? Shame about the metal bashers and
hamburger flippers though, but who really cares? As someone important on Wall
Street once said “they were a people so backward that they only knew how to
make money by working for it.” Still, the punchbowl notwithstanding, the Baltic
Dry Index has slumped below 1000 again. I wonder what that means?
It’s morally wrong to let a sucker keep his money.
Ebenezer Squid, with apologies to W. C. Fields.
Asian Stocks Climb After Fed Minutes Spur Rate Optimism
Oct 9, 2014 1:09 AM GMT
Asian stocks rose for a third day this week as Federal Reserve
concerns over a global economic slowdown spurred bets that U.S. interest rates
will remain low. The MSCI Asia Pacific Index (MXAP) gained 0.5 percent to 138.81 as of 9:02 a.m. in Tokyo, before markets open in Hong Kong and China. Futures on the Standard & Poor’s 500 Index slid 0.1 percent after the underlying gauge yesterday surged the most this year. Slowing global growth and a stronger dollar pose potential risks to the U.S. outlook, Fed policy makers said at their September meeting, according to the minutes released yesterday.
“Minutes of the September Fed meeting acted like a steroid,” said Matthew Sherwood, head of investment markets research at Perpetual Ltd. in Sydney, which manages about $29 billion. They “seemed to suggest that U.S. rates could remain highly accommodative for longer than initially expected if global demand remained weaker than expected.”
More
Fed Officials Saw Global Slowdown Among Risks to Outlook
Oct 8,
2014 10:18 PM GMT
Federal Reserve policy makers last month worried that slowing global growth
and a stronger dollar posed risks to the U.S. economy as they decided to
maintain a pledge to keep interest rates low for a “considerable time.” A number of officials said the U.S. expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.
The minutes highlight growing concern among policy makers who say further gains in the dollar could hurt exports and damp inflation, which has undershot the Fed’s goal for more than two years. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, is up almost 6 percent since the beginning of July.
Stocks
rose, sending the Standard & Poor’s 500 Index up the most this year, and
the dollar weakened as investors speculated that caution over the economic
outlook would lead the Fed to keep interest rates near zero for longer.
More
In other news, while the Atlantic hurricane season turned
out to be a pussycat this year, elsewhere picked up the difference. Is a “black
swan” headed for radiation ground zero, Japan? India?
Strongest 2014 Storm Churns Without Getting Closer Look
Oct 8, 2014 10:00 PM GMT
The strongest tropical system the Earth has produced in almost a year is now
churning in the Pacific Ocean on a track toward Japan. Super Typhoon Vongfong’s exact strength may never be known. Yesterday, the best estimate pegged its winds at just over 178 miles (286 kilometers) per hour, according to the U.S. Navy Joint Typhoon Warning Center in Pearl Harbor, Hawaii.
Vongfong, which is forecast to lose strength before reaching Japan, is a Category 5 storm on the five-step Saffir-Simpson wind scale used in the U.S. It’s the strongest system since Super Typhoon Haiyan, which killed more than 6,000 people in the Philippines last November with winds estimated at the time at 190 to 195 mph.
The lack of clarity for Vongfong, Haiyan and Cyclone Hudhud, now off the coast of India, comes from not having anyone inside the storm measuring its power. That’s a regular procedure for storms in the Atlantic and off the Pacific coast of Mexico.
The U.S. is the only country that regularly flies into tropical cyclones, the name given to the class of storms that include hurricanes and typhoons, said Dennis Feltgen, spokesman for the National Hurricane Center in Miami.
The
information these flights gather gives forecasters in the Atlantic and eastern
Pacific a much clearer picture of a storm’s power and temperament than anything
else in the world, said Jeff Masters, co-founder of Weather
Underground in Ann Arbor, Michigan.
----
While a lot of good information can be gleaned from satellites, the gap between
the estimates and what the storm is actually doing can be significant. Earlier
this year, Typhoon Rammasun -- which went ashore in China, killed at
least 62 and destroyed thousands of homes -- was stronger than projections,
Masters said.
---- Fortunately for Japan, Vongfong won’t be able to hold onto its power as it nears that nation. The Joint Typhoon Warning Center forecast calls for its winds to drop to about 86 mph, Category 1 level, by the time it gets close to Kyushu in about three days.
Masters said there is also a
chance it will miss Japan completely and sweep out into the central Pacific.
India, most likely, won’t be that lucky. Hudhud could reach the power of a Category 3 storm with winds of almost 121 mph as it nears the coast close to Visakhapatnam in about three days, the Navy estimates.
Masters said the storm will track across warm water without much wind shear to tear at its structure, so there’s nothing to keep it from getting and staying strong as it nears land. For the people in Hudhud’s path, it would help to be able to take a closer look.
More
Next, the arrival of the new Chinese order in Hong Kong.
HK will not be a model for China, just a footnote in the history mainland
China. “Be nice and we may let you experiment in limited democracy, as a
possible model for the 21st century. But social stability and
increasing wealth, trump all. Remember the grinding poverty of the 19th
century. Remember the murderous chaos of Mao’s Cultural Revolution and the
reign of the Gang of Four.”
We end for the day with developments in China.
There are limits to the exceptions you can enjoy, Hong Kong warned
People's Daily commentary scolds Hongkongers for thinking they deserve more special treatment
UPDATED : Tuesday, 07 October, 2014, 7:39pm
There were limits to the exceptions granted to Hong Kong by the central
government, the latest Beijing commentary on the Occupy sit-ins said.It also said that Hong Kong people "should realise that only dialogue and reconciliation can solve problems, not extreme resistance".
The piece, posted on the website of the Communist Party's official newspaper, said the benign treatment granted Hong Kong, such as the "one country, two systems" formula and the ability to govern itself, had led some in the city to think they were the exception to the rest of the nation.
"Occupy Central is the extreme embodiment of the ethos of 'Hong Kong exceptionalism'," and it had crossed a line, said the commentary. The writer is identified as Guoping.
The central government had taken a pragmatic approach in giving Hong Kong some "exceptional" policies, demonstrating Beijing's rationality, generosity and tolerance, it said, adding: "Some people should not keep asking for more; they should know where the line of exceptions is."
It also reasserted the supreme authority of the decision made by the National People's Congress Standing Committee on electoral reform, saying it must be "thoroughly executed and not be affected by external pressure like Occupy Central".
The commentary is the ninth on the Occupy sit-ins penned by Guoping.
The pen name was likely aimed at a different group of readers to typical state media editorials, said Hong Kong-based political commentator Johnny Lau Yui-siu.
"Guoping can mean 'national peace' or 'state's view'. The mainland media has a propensity to play on double entendres like this," he said.
On September 30 - two days into the protests - a Guoping commentary called for rational dialogue.
It said Beijing respected the differences between Hongkongers and mainlanders and understood Hongkongers' frustration.
"The tolerance, patience and sincerity the central authority has for Hong Kong has never waned. A rational dialogue could be had as long as the deluded few recognise the truth," it read.
In subsequent days, the writer defended the Hong Kong police force's handling of peaceful demonstrators, which included using tear gas and pepper spray.
State media released two other Guoping commentaries late on Sunday. One of them focused on how street politics was doomed to fail, while chastising protesters who confronted police for disturbing the social order.
In another comment, posted on China.com.cn the writer slammed protesters for using "populism" to mobilise young people. The news portal is affiliated with the State Council Information Office.
Lau said such essays did not achieve much. "On the mainland, people have come to doubt what the state media says, or even assume the opposite of what is said is happening. In Hong Kong, given the far-fetched content, people don't take them very seriously," he said.
State television continues to run reports on Occupy Central on its evening news, including interviews with local opponent Robert Chow Yung.
http://www.scmp.com/news/hong-kong/article/1611075/there-are-limits-exceptions-you-can-enjoy-hong-kong-warned
China’s Long Game With Taiwan Just Got Longer
Oct 8, 2014 5:00 PM GMT
With protesters in Hong Kong settling for talks with the government rather
than immediate political concessions, it looks like China has won --
or at least averted disaster -- and without sending in the tanks. Yet this short-term success only underscores Chinese President Xi Jinping’s long-term challenge in realizing his goal of a “great national rejuvenation.”
Restoring China to the stature it enjoyed before the 19th century Opium Wars means more than controlling Hong Kong; it requires eventual reunification with Taiwan.
In the aftermath of the “Umbrella Revolution,” however, Beijing is farther from recovering Taiwan, which it considers part of the mainland, than it was a decade ago. For all of China’s economic achievements, the mainland’s political system repels many it aspires to govern.
“I don’t want Taiwan to be like China, where you have to use a VPN to see the outside world and where the economy is directed by the government,” said Mei Chen, 35, a sales executive in Taipei, referring to the virtual private networks used to circumvent mainland censorship.
China’s rulers have long sought to recover national territory lost during what the government calls the era of “humiliation” that preceded Communist rule.
More
Beijing Raises Smog Alert as Pollution Envelops North China
Oct 9, 2014 5:52 AM GMT
Beijing raised its air pollution alert to orange, the second-highest level, triggering limits on some
industrial production as smog enveloped northern China for a second
day. The concentration of PM2.5, fine particulates that pose the greatest risk to human health, was 359 micrograms per cubic meter at 11 a.m. near Tiananmen Square in Beijing, the Beijing Municipal Environmental Monitoring Center said on its website. The WHO recommends 24-hour exposure to PM2.5 at concentrations no higher than 25.
Under the orange alert, people are advised to cut down on outdoor activity, while the elderly and people with heart and lung ailments should stay inside. It was an upgrade from yesterday’s yellow alert, which called for measures such as increased road cleaning and spraying of water at construction sites, according to the Beijing Meteorological Bureau.
Reduced visibility led traffic authorities to close several highways out of Beijing, the official Xinhua News Agency said. The smog is partly the result of farmers burning stalks on their land after the autumn harvest, Xinhua said, citing the environmental protection bureau of Henan province.
Beijing is planning to impose pollution-control measures next month, similar to those enacted ahead of the 2008 Olympics, when leaders of the Asia-Pacific Economic Cooperation forum gather in the city for an annual summit. In August, the city ordered vehicles off the road to ensure clear skies for an APEC preparation meeting.
More
CNPC Anti-Corruption Head Said to Be Detained for Investigation
Oct 9, 2014 3:45 AM GMT
China National Petroleum
Corp.’s executive in charge of rooting out graft has been detained by
authorities, according to two officials at the country’s biggest oil and gas
producer. Wang Lixin, the head of the discipline and inspection department at the state-owned company, has been held for investigation since late September, said the officials, who requested their names not be used because the information isn’t public. At least two directors under Wang are also being investigated, they said.
The officials said they don’t know the specific date that Wang was detained or whether he’s being investigated by anti-corruption authorities that have snared at least seven executives at the company. The most powerful was Zhou Yongkang, CNPC’s former chairman, in July.
Oil giants CNPC and its Hong Kong-listed unit PetroChina Co. have been in the spotlight of President Xi Jinping’s anti-graft campaign since August 2013, targeted by the Central Commission for Discipline Inspection, the Communist Party’s top graft-busting agency, known as the CCDI.
While shares in PetroChina rallied in the aftermath of the Zhou probe as investors bet the worst of the investigations were over, Wang’s detention may suggest that’s not the case.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
At the Comex silver depositories Wednesday final figures were: Registered 66.21
Moz, Eligible 116.89 Moz, Total 183.10 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, welcome to our voodoo economics and the new
lawless era. Stay long fully paid up physical gold and silver. At some point
ahead we and our descendants are going to need both in spades.
“The Germans [your nation here] 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.
Larry Summers’ Goofball Economics
by David Stockman •
Its no wonder governments are
broke and central bank money printers are going wild throughout much of the
developed world. They are unfortunately listening to the kind of goofball
economics that issues from Keynesian economists like Larry Summers and his clones
and confederates at the IMF.
But their latest missive is so
over the top that even JM Keynes himself must be rolling in his grave.
According to Summers and the IMF, public infrastructure spending should be
exempt from fiscal discipline because it pays for itself and, in fact,
generates $3 of output for every dollar spent. Not to be outdone by the
departed supply-side maniac, Jude Wanniski, Summers claims
infrastructure spending is an out-and-out “free lunch”:
What is crucial everywhere is the
recognition that in a time of economic shortfall and inadequate public
investment, there is for once a free lunch – a way for
governments to strengthen both the economy and their own financial positions.
Here’s how the Great Summers
reckons. First, he says you need to “assume that the investment earns a 6
per cent real return”. He then notes that government will
take about 25% from the income produced, meaning that 1.5% of that
real return on public investment will end up in the treasury’s
coffers.
Next Dr. Summers observes
that “interest costs less inflation (i.e. real) are below 1 per cent
in the US and much of the industrialised world over horizons of up to 30
years”. Yes, thanks to the Fed’s financial repression they are actually
negative for most of the yield curve and has been for years under ZIRP and QE.
----Breathtaking! So government
should get on with it and spend-up a storm. The way to reduce swollen
deficits is still that old Keynesian canard—- that is, spend your way
to prosperity!
Nor is Summers a small-time
thinker. He claims that injunction is a universal truth that applies to
virtually every government in the world “possibly excepting China”. Hmmm.
After an orgy of infrastructure spending that makes the ancient pharaohs
seem like skinflints, Summers says, possibly China should be
excepted?
It puts you in mind of the story
about an economist and friend who tumbled into a 30-foot deep hole.
The friend inquired about the economist’s plan for getting out and the
latter replied, “First, assume we have a ladder”!
Like the legendary economist,
Summers has simply “laddered” his way through the whole analysis. To wit,
there is no reason whatsoever to assume that public investment as
practiced in crony capitalist democracies produce any return to society,
let alone 6% after inflation, or that sustainable real interest rates
could possibly be under 1%.
Indeed, the overwhelming evidence
of history and logic goes entirely in the opposite direction. Namely, that
actual returns on public investment are decidedly lower than the ultimate
carry cost of the public debt, and that a public investment spree would
therefore compound the fiscal disaster already upon us.
So start with the preposterous
assumption that public investment produces a real return of 6% annually. During
the last decade and one-half Congress has appropriated an average
of $5 billion for public works projects and $8 billion for mass transit.
At the 8% nominal return stipulated by Summers 2% inflation plus 6%
real), these “investments” would have generated returns of $150
billion by now.
What kind of crackpot would
believe such a thing? Water projects produce virtually no public benefit and
for the most part simply shift private activity
from say trucks to barges–meaning that there is no gain in output to tax. And
self-evidently, mass transit capital investment generates huge annual losses—a
truth underscored by the large operating subsidies paid each year by
taxpayers.
More
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
The monthly Coppock Indicators finished September.
DJIA: +141 Down. NASDAQ: +289 Down. SP500: +216 Down.
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