Baltic Dry Index. 1327 -43
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"I
never think of the future. It comes soon enough."
Albert
Einstein
Call me an old fashioned dinosaur, but to me it doesn’t look like the
Central Bankster’s final bubble has sustainable legs anymore. The next Lehman
is out there and likely to surface after Christmas, if retailing is signalling
that the public, though not the Squids, have run out of money.
Below, today’s bad news from Asia.
"Anytime
you don't want anything, you get it."
Casey
Stengel.
China Slowdown Deepens With Weakening in Production, Investment
Nov 13, 2014 6:49 AM GMT
China’s economic slowdown deepened in October as industrial output growth and
fixed-asset investment trailed estimates, adding to pressure on policy makers
to step up stimulus efforts. Factory production rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing, compared with the 8 percent median estimate in a Bloomberg News survey and the second smallest rise since 2009. Retail sales gained 11.5 percent and fixed-asset investment in January through October increased 15.9 percent, the slowest pace since 2001.
The government has refrained from across-the-board interest rate cuts, instead adding liquidity and accelerating spending plans as the nation heads for the slowest full-year expansion since 1990. Leaders have discussed lowering the 2015 economic-growth target from this year’s 7.5 percent aspiration, according to a person with knowledge of the talks.
“The data highlights downward pressure on the mainland economy,” said Dariusz Kowalczyk, senior economist at Credit Agricole SA in Hong Kong. “It will encourage further monetary easing.”
Growth in retail sales compared with the 11.6 percent median projection of analysts surveyed by Bloomberg. The median estimate for expansion in January through October fixed-asset investment excluding rural households was 16 percent.
Factory gate prices fell 2.2 percent in October, a record 32nd straight decline, data this month showed. Factory output in November may be weighed by restrictions on pollution-intensive industries and construction in Beijing and five surrounding provinces, as the government sought cleaner skies for the Asia-Pacific Economic Cooperation forum.
More
China’s Leaders Said to Discuss Lowering 2015 Growth Target
Nov 13, 2014 4:25 AM GMT
China’s
leaders have discussed lowering the 2015 economic growth target and see the
need for the goal to be below this year’s level of about 7.5 percent, said a
person with knowledge of the talks. The central leading group for financial and economic affairs discussed targets including 7 percent, 7.3 percent, and below 7.5 percent, said the person, who asked not to be named because the discussions are private. The figure hasn’t been finalized, the person said. The State Council Information Office didn’t immediately respond to faxed questions seeking comment.
More
Spreading deflation across East Asia threatens fresh debt crisis
Asia's currency skirmishes are happening in a region of festering grievances and territorial disputes, with no Nato-style security structure to dampen down fires
Deflation is becoming lodged in
all the economic strongholds of East Asia. It is happening faster and going
deeper than almost anybody expected just months ago, and is likely to find its
way to Europe through currency warfare in short order.
Factory gate prices are falling
in China, Korea, Thailand, the Philippines, Taiwan and Singapore. Some 82pc of
the items in the producer price basket are deflating in China. The figures is
90pc in Thailand, and 97pc in Singapore. These include machinery,
telecommunications, and electrical equipment, as well as commodities.
Chetan Ahya from Morgan Stanley
says deflationary forces are “getting entrenched” across much of Asia. This
risks a “rapid worsening of the debt dynamic” for a string of countries that
allowed their debt ratios to reach record highs during the era of Fed largesse.
Debt levels for the region as a whole (ex-Japan) have jumped from 147pc to
207pc of GDP in six years.
These countries face a Sisyphean
Task. They are trying to deleverage, but the slowdown in nominal GDP caused by
falling inflation is always one step ahead of them. “Debt to GDP has risen
despite these efforts,” he said. If this sounds familiar, it should be. It is
exactly what is happening in Italy, France, the Netherlands, and much of the
eurozone.
Data from Nomura show that the
composite PPI index for the whole of emerging Asia – including India – turned
negative in September. This was before the Bank of Japan sent a further
deflationary impulse through the region by driving down the yen, and before the
latest downward lurch in Brent crude prices.
The Japanese know what it is like
to be on the receiving end. A recent study by Naohisa Hirakata and Yuto Iwasaki
from the Bank of Japan suggests that China’s weak-yuan policy - a polite way of
saying currency manipulation to gain export share – was the chief cause of
Japan’s deflation crisis over its two Lost Decades.
The tables are now turned. China
itself is now one shock away from a deflation trap. Chinese PPI has been negative
for 32 months as the economy grapples with overcapacity in everything from
steel, cement, glass, chemicals, and shipbuilding, to solar panels. It dropped
to minus 2.2pc in October.
The sheer scale of
over-investment is epic. The country funnelled $5 trillion into new plant and
fixed capital last year - as much as Europe and the US combined - even after
the Communist Party vowed to clear away excess capacity in its Third Plenum
reforms. Old habits die hard.
Consumer prices are starting to
track factory prices with a long delay. Headline inflation dropped to 1.6pc in
October. This is so far below the 3.5pc target of the People’s Bank of China
that it looks increasingly like a policy mistake. Core inflation is down to
1.4pc.
---- China has flirted with deflation before: during its banking crisis in the late 1990s, and again during the West’s dotcom recession from 2001-2002. Both episodes proved manageable.
This time the level of debt
greater by orders of magnitude, with a large chunk in trusts, wealth product,
and other parts of the shadow banking nexus, and a further $1.2 trillion in
“carry trade” loans from Hong Kong. Standard Chartered thinks total debt has
reached 250pc of GDP. This is roughly $26 trillion, the same size as the US and
Japanese commercial banking systems put together, and therefore a headache for
us all.
More
In other news, be prepared for
the oil patch bust of all busts. In the oil patch, no one yet believes in the
bear market.
"I
know but one sure tip from a broker.... your margin call."
Jesse
Livermore
Brent Drop From Four-Year Low as OPEC Seen Resisting Cuts
Nov 13, 2014 7:15 AM GMT
Brent crude extended losses from a four-year low, trading near $80 a barrel
amid signs that OPEC remains unwilling to reduce output to ease concern of a
global supply glut. West Texas Intermediate was steady in New York. Futures slid as much as 0.6 percent in London, declining from the lowest close since September 2010. Saudi Arabia is committed to a stable market and speculation of a price war within the Organization of Petroleum Exporting Countries “has no basis in reality,” Oil Minister Ali Al-Naimi said yesterday in Acapulco, Mexico. Crude stockpiles in the U.S., the world’s biggest oil consumer, probably rose for a sixth week, a Bloomberg News survey shows before government data today.
Oil has collapsed into a bear market as leading OPEC members resisted calls to cut production and instead reduced export prices to the U.S., where output has climbed to the highest level in more than three decades. Venezuela, Libya and Ecuador have asked for action to prevent crude from falling further. The group is scheduled to meet Nov. 27 in Vienna.
“The key theme is an increase in supply in the face of a slightly softer demand scenario,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “There seems to be a divergence in opinion, with some suggesting that the Saudis will agree to cuts at the meeting, but I’d suggest their actions aren’t pointing in that direction.”
More
http://www.bloomberg.com/news/2014-11-13/oil-extends-drop-to-3-year-low-as-opec-unlikely-to-cut.html
We end with suicidal Europe, still marching to assured destruction to
the American War Party’s Ukrainian folly. Uncle Scam having declared economic
war on Russia over his botched coup in Kiev last February, will keep pushing
the envelope, until either we end up in an all too real nuclear shooting war,
or the EUSSR comes to its senses and breaks with John Bull and Uncle Scam and
ends suicidal economic sanctions.
Below, how to repeat the 1930s.
"When
a President does it, that means that it is not illegal."
President
Obama, with apologies to “Tricky Dick.”
Russia to Fly Bombers to U.S. Gulf as Ukraine Worsens
Nov 13, 2014 12:34 AM GMT
The European Union and the U.S. will weigh further sanctions against Russia’s
economy and Ukrainian separatists today, after the reported movement of tanks,
artillery and combat troops into eastern Ukraine.
Representatives of the EU’s 28 member states and the U.S. are meeting today in Brussels to discuss imposing new penalties on individuals or on the Russian economy for the country’s interference in Ukraine, according to diplomats close to the talks.
While no consensus has been reached yet, officials will prepare options for an EU foreign ministers meeting in Brussels on Nov. 17, when the group could move to expand penalties, said the diplomats, who spoke on condition of anonymity because they weren’t authorized to be quoted.
“We have seen columns of Russian equipment, primarily Russian tanks, Russian artillery, Russian air-defense systems and Russian combat troops entering into Ukraine,” U.S. Air Force General Philip Breedlove, NATO’s top military commander, told reporters in Bulgaria. “We do not have a good picture at this time of how many. We agree that there are multiple columns that we have seen.”
Hours later, Russia’s defense minister announced yesterday that his country will send long-range air patrols as far as the Gulf of Mexico and the eastern Pacific Ocean.
---- When officials from the EU and U.S. meet in Brussels today, they’ll be considering options to tighten the economic noose, according to the diplomats close to talks. The likeliest first step, they said, is to blacklist Ukrainian separatists and Russians involved in the Nov. 2 elections in eastern regions, which the Ukrainian government considers illegitimate.
Broader Sanctions?
A second possibility is
broadening the existing sanctions on Russia’s financial, defense and energy
industries by banning business with additional companies or further tightening
limits on EU or U.S. involvement in those sectors, they said. A third, though
unlikely, possibility would be to expand sanctions to sectors that are as yet
untouched, the officials said.
More
"In politics stupidity is not a handicap."
Napoleon
Bonaparte.
At the Comex silver
depositories Wednesday final figures were: Registered 66.20 Moz, Eligible 113.24
Moz, Total 179.44 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
The usual suspects today. In our new lawless age of
central banksterism, fiat currency, QE and ZIRP, speculation, i.e. gambling,
became the only investment in town. Since everyone used to know that 90 percent
of gamblers lose and the other 10 percent only breakeven, the house wins of
course, sensible people rarely speculated. Fast forward to today’s bankster and
squid run lawless age.
It’s morally wrong to let a sucker keep his money.
Ebenezer Squid, with apologies to W. C. Fields and Goldie.
Forex Investors May Face $1 Billion Loss as Trade Site Vanishes
Nov 13, 2014 5:01 AM GMT
The first time Rajibuddin Mandal, a family doctor in Birmingham, England,
tried his hand at trading currencies online, he lost 2,000 British pounds. From
that experience, he concluded that the foreign-exchange market was too big, too
complex and too hazardous for amateur investors like himself. He decided he
needed help from the professionals. One site he found on the Internet in early 2013 seemed to be speaking directly to him. Called secureinvestment.com, the website acknowledged that currency trading was risky.
“Ninety percent of traders in forex end up losing money,” it said. Secure Investment said it offered something safer: It made trading decisions for investors and guaranteed their principal. That meant, Mandal thought, that even if he didn’t make money, the worst that could happen would be that he would break even, Bloomberg Markets will report in its December issue.
Secure Investment said that it traded in excess of $4.8 billion daily for more than 100,000 investors in 140 countries. The company said it posted all of its trades every day, showing which ones were winners and which were losers. The site said investors had averaged net gains of 1 percent each trading day during the past five years.
----The site said that those average gains of 1 percent daily couldn’t be compounded into an annual return. Even without compounding, those kinds of daily returns would amount to an annual gain of about 250 percent -- or more than 25 times the average annual return of the Standard & Poor’s 500 Index, with dividends reinvested, for the past 50 years. Secure Investment didn’t provide that kind of context.
In May and June last year, Mandal and his wife, Wasima, 37, also a physician, invested $30,000 each with Secure, which required customers to use U.S. dollars. The Mandals swapped pounds for $60,000, using a bank. Following instructions from Secure, they then wired the money to banks in Australia and Cyprus to open their accounts.
Logging into the company’s website regularly, they watched as Secure traded the dollar versus the euro. Secure’s website showed that their accounts had soared in value to a total of $245,000 -- a fourfold increase -- in just 10 months.
Mandal says he decided to
withdraw some money in March. In an e-mailed response, Secure said he’d have to
wait. It cited issues with the U.S. Foreign Account Tax Compliance Act, which
is a Treasury Department rule that applies to U.S. citizens using foreign
accounts -- a law that was irrelevant to Mandal, who’s a U.K. citizen. The
March 5 e-mail said Mandal would get the money in a few days.
“Thank you for your patience,” it
said.
Mandal says he wasn’t yet
suspicious. He got another e-mail from Secure on April 30.
“Our Technical Department is
currently working on system updates,” it said. “Our company sincerely
apologizes for any temporary glitches that may occur.”
The next day, the website went
offline. It never returned. Neither did the Mandals’ investment. As far as he
knows, their entire $60,000 has disappeared forever.
----Customers in 11 countries on five continents say they have seen their money evaporate with Secure. Twenty-five investors interviewed say Secure, which was incorporated in Panama in 2008, had instructed them to wire money to banks in Australia, Cyprus, Latvia and Poland.
The company’s website provided an explanation: “From time to time, Secure Investment may change bank account information, because it chooses the financial partner that currently offers more profitable cooperation conditions.”
----Secure Investment lured customers by creating its own good reputation and by publishing a seemingly successful trading record on its elaborate website. It was all a lie. The company’s claims to have offices and a large staff were also false. At least some of its so-called customer testimonials were actually delivered by actors.
The deception worked -- for a
while. In March, Secure’s website was more popular than Forex.com, run by Gain
Captial Holding Inc., the second-largest U.S.-based, over-the-counter forex
trading firm, according to Alexa.com, a unit of Amazon.com Inc. that tracks
page views of millions of websites.
More
"It
doesn't matter if you're rich or poor, as long as you've got money.
Joe
E. Lewis
The monthly Coppock Indicators finished October.
DJIA: +137 Down. NASDAQ: +275 Down. SP500: +210 Down.
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