Baltic Dry Index. 845 -18 Brent Crude 60.70
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
Get gold! After a brave attempt at a bottom and a Libya news based
rally, crude oil prices slumped again under the weight of over production, and
dire bad news about global oil and commodity demand. A tidal wave of corporate and national
defaults is a serious possibility for early 2015. Adding to the financial
terror to come, our world of unstable fiat currencies on the Great Nixonian
Error of fiat currency, is now undergoing meltdown, and the BDI is slumping
again, suggesting the global economy is in a renewed slowdown.
Up first Russian developments overnight and analysis from “Mish,” Mike
Shedlock. Stay long fully paid up physical precious metals. In a world of
unstable fiat currency trade war anarchy, in the words of the Greatest American
that ever strode planet earth, the “decider,”
“this sucker could go down.”
"I
am here to make an announcement that this Thursday, ticket counters and
airplanes will fly out of Ronald Reagan Airport."
George
W. Bush, Washington, D.C., Oct. 3, 2001
Russia Defends Ruble With Biggest Rate Rise Since 1998
Dec 16,
2014 12:38 AM GMT
Russia took its biggest
step yet to shore up the ruble and defuse the currency crisis threatening its
stricken economy. In a surprise announcement just before 1 a.m. in Moscow, the Russian central bank said it would raise its key interest rate to 17 percent from 10.5 percent, effective today. The move was the largest single increase since 1998, when Russian rates soared past 100 percent and the government defaulted on debt.
The news prompted an immediate gain in the ruble, with one-month ruble forwards up 1.6 percent in Asian trading.
Yet the announcement, as well as its timing, underscored the financial straits in which Russia now finds itself. If sustained, the new higher rates would squeeze an economy that is already being hurt by sanctions led by the U.S. and European Union, and by a collapse in oil prices. Some analysts said they doubted the economy could withstand such high rates for long
More
Russian Ruble, Turkish Lira, Ukrainian Hryvnia Hit Record Lows; Global Currency Crisis on Deck
As oil continues to slide so does the Ruble. Emerging market currencies have gone on for the ride as have the currencies of Eastern European countries, especially Ukraine. The Russian Ruble, Turkish Lira, and Ukrainian Hryvnia are at or near record lows.
Since the beginning of the year,
the Ruble has gone from 32.99-per-US$ to 65.51-per-US$. That's a decline of
49.64%.
Since the beginning of the year,
the Lira has gone from 2.15-per-US$ to 2.37-per-US$. That's a relatively modest
decline of 10.23%. However, the lira slide since the beginning of 2013 (not
shown on chart) is 25.74%
The worst thing Russia could do
would be to blow its currency reserves in a foolish attempt to stop the Ruble
slide. Were Russia to blow its currency reserves, Russia would cause or
exacerbate a crisis, not prevent one.
The best thing for Russia to do is let the decline play out.The market will eventually find a level. In the meantime, there is little or nothing Russia can do.
Global Currency Crisis on Deck
Yes, Russia is facing a currency crisis. So is Ukraine, Turkey, Venezuela, and numerous other countries.
I believe a global currency crisis is in the works.
The best thing for Russia to do is let the decline play out.The market will eventually find a level. In the meantime, there is little or nothing Russia can do.
Global Currency Crisis on Deck
Yes, Russia is facing a currency crisis. So is Ukraine, Turkey, Venezuela, and numerous other countries.
I believe a global currency crisis is in the works.
More
In Asia, more bad news and red flags from China. I agree with “Mish” above, a global currency crisis has arrived, from continental Europe, to Russia, to Japan, to Latin America, to the weaker of the petro nations. We haven’t seen anything yet as corporate and national defaults start to break out in 2015.
China's manufacturing swings to contraction: HSBC data
Published: Dec 15, 2014 8:57 p.m. ET
LOS
ANGELES (MarketWatch) -- China's manufacturing activity appears to be
contracting this month for the first time since May, according to HSBC's
preliminary or "flash" version of its monthly manufacturing
Purchasing Managers' Index, released Tuesday morning. The PMI's headline number
fell to a seven-month low of 49.5, down from November's final read of 50.0, and
dropping below the 50 mark that separates overall growth from contraction.
The
output subindex extended its fall from the previous month, though at a slower
pace, but new orders swung to a decrease, even as new export orders accerlated
their gain. "The manufacturing slowdown continues in December and points
to a weak ending for 2014," wrote HSBC chief China economist Hongbin Qu in
comments accompanying the report. "The rising disinflationary pressures,
which fundamentally reflect weak demand, warrant further monetary easing in the
coming months," Qu wrote. Chinese stocks eased following the data, with
Hong Kong's Hang Seng Index HSI,
-1.38% down 0.9% compared
to a 0.7% deficit ahead of the PMI release, while the Shanghai Composite Index SHCOMP,
+0.63% saw its advance
slim to 0.2% from 0.4%. HSBC's final December PMI was due out Jan. 2.
China's real-estate tycoons gloomy about property market
Published: Dec 15, 2014 11:59 p.m. ET
HONG
KONG (MarketWatch) -- Several Chinese real-estate tycoons have a dim view of
the outlook for China's property markets next year, according to a report
Tuesday by the Beijing News newspaper. "Don't cherish any hope about another
boom for China's property markets," Wang Jianlin -- chairman of top
Chinese commercical developer Dalian Wanda Group Co. -- reportedly warned
recently at an annual industry meeting. "It's unrealistic to think there
will be another upsurge of property prices in the second half of 2015 following
the government's monetary-easing measures," he said, while adding that a
"collapse" of property market is also impossible, given China's
"mighty government." At the same meeting, Huayuan Property Co.'s 600743,
+0.23% former chairman Ren
Zhiqiang also predicted that property investment may continue its slide through
early 2015, as the nation's developers still struggle with "large
inventories" and "financial strain."
Several
other magnates echoed his opinions."It's getting worse day by day,"
said Pan Shiyi, chairman of Soho China Ltd. 0410,
-0.18% at a separate
economic forum over the weekend. Soho China has been holding cash for about two
years, as Pan can't see where the market will go in this "volatile
period," he reportedly said. Feng Lun, chairman of Beijing Vantone Real
Estate Co. 600246,
-0.21% said at the second
forum that China's local governments have become far less interested in
attracting property investments to their cities. He said "to survive"
is the current goal for China's real-estate developers.
More
Coal prices tumble on China slowdown
Coal prices have fallen sharply this year as China slowdown hits demand, writes Andrew Critchlow.
OIL may have captured the
headlines recently in commodity markets after a rout in prices, but an equally
troubling delinquent in the global energy supply nexus has been coal.
Once the lifeblood of industrial
economies in the 19th century, coal has enjoyed somewhat of a renaissance since
China joined the World Trade Organisation in 2001, creating huge demand for
energy in Asia’s powerhouse economy.
However, that momentum finally
came to a halt over the past couple of years and the reasons for this slowdown
can be traced back to some of the same issues that are now hitting prices of
its richer cousin, oil.
The shale-gas revolution in the US has created a
massive surplus in global supply of thermal coal from West Virginia, just as
demand from core markets such as India and China has started to weaken.
Thermal coal prices at the
world’s biggest export hub in Newcastle, Australia, have tumbled 25pc this year
and hit a five-year low last week at around $62 per tonne. Glencore estimates
that a quarter of Australia’s thermal coal mines are now unprofitable. Over the
short-term, traders of seaborne coal are concerned that the expected restocking
which normally takes place in the major consuming bloc of China, Japan, India,
Korea, the European Union and Taiwan has so far failed to materialise. The big
medium-term risk weighing on mining companies and investors is whether China is
approaching a point of “peak coal” consumption.
According to the Paris-based
International Energy Agency: “For decades, Chinese coal consumption has known
only one direction: upwards. During the past 30 years, annual coal use in China
decreased only twice, most recently in 1997. Given the orientation of Chinese
policy to diversify the power system beyond coal and the big emphasis on air
quality, the question is whether the trend will stop soon, resulting in a peak
in coal demand.”
More
Oil Spilling Over Into Central Bank Policy as Fed Enters Fray
Dec 15, 2014 12:14 PM GMT
Norway’s central bank
stunned investors last week by cutting its main interest rate to
head off a “severe downturn” due to plunging oil prices. Ninety minutes later, Russia’s central bank raised its
benchmark to bolster a currency weakened by crude’s decline. The split among two of the largest oil exporters shows how the slump in the price of crude to its lowest in five years will make 2015 a year of divergence for global central banks and increased volatility in financial markets.
The U.S. Federal Reserve enters the fray this week. Some economists expect it to drop the commitment to hold rates near zero for a “considerable time.” Hiring is accelerating and officials including Vice Chairman Stanley Fischer have emphasized the boost to consumer demand from oil’s decline
Cheaper oil “lends support to our expectation of monetary-policy divergence next year, making Fed tightening in the first half more likely, while pushing other central bankers to be relatively more dovish,” Credit Suisse Group AG economists led by Neville Hill and James Sweeney said in a Dec. 12 report to clients.
They analyzed 18 economies to gauge the effect of oil’s drop -- on prices and growth and fiscal and monetary policies.
Because it threatens to drag down inflation, the fall in crude supports the case for more stimulus in the euro area, Japan, South Korea, India and Turkey, they reckon. It could slow tightening in South Africa, the U.K., Canada and Malaysia.
On the flip side, by acting like a tax cut in the U.S., where consumer spending accounts for two-thirds of the economy, crude’s drop is a seen as a reason for a turn in monetary policy; they see the first interest-rate rise in eight years coming in 2015 regardless of recent doubts on that score from Nobel laureate Paul Krugman.
“The fall in oil prices increases our conviction that the Fed will start tightening in June,” the Credit Suisse team said.
More
"I
couldn't imagine somebody like Osama bin Laden understanding the joy of
Hanukkah."
George
W. Bush, at a White House menorah lighting ceremony, Washington, D.C., Dec. 10,
2001
At the Comex silver
depositories Monday final figures were: Registered 64.59 Moz, Eligible 111.00
Moz, Total 175.59 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
"The
London Banker Henry Fauntleroy forged to keep his bank solvent. He was executed
for it in 1824."
Manias,
Panics and Crashes. Charles P. Kindleberger.
City fund manager who dodged thousands in train fares banned from financial industry
Jonathan Burrows banned from City by Financial Conduct Authority after he admits to exploiting loophole to avoid £43,000
The former BlackRock fund manager
who exploited a loophole to dodge thousands of pounds in train fares has been
banned from working in financial services by the City watchdog.
The Financial Conduct Authority
(FCA) on Monday
announced that
Jonathan Burrows had been barred “from performing any function in relation to
any regulated activities for not being fit and proper”.
Mr Burrows, a managing director
at BlackRock who was on a reported £1m a year, travelled to work via train
without buying a ticket for five years.
In the morning, he would
board the train at Stonegate, a rural station in East Sussex without ticket
barriers, and exit at Cannon Street, tapping out with an Oyster card.
This meant he paid the maximum
Oyster fare, which tops out at £7.20, rather than the £21.50 cost of a ticket.
In April, he paid £43,000 after
being caught, and it
subsequently emerged that he had left his job at the fund management giant. He has not been prosecuted.
Mr Burrows, when interviewed by
the FCA, admitted evading his fare on multiple occasions despite knowing he was
breaking the law. “The FCA does not consider that this is fit and proper
behaviour for an approved person,” the watchdog said.
Tracey McDermott, the FCA’s head
of enforcement, said Mr Burrows had fallen short of what is expected from
senior members of the financial services world.
Burrows held a senior position
within the financial services industry. His conduct fell short of the standards
we expect,” she said.
“Approved persons must act with
honesty and integrity at all times and, where they do not, we will take
action.”
In a statement following the
announcement, Mr Burrows repeated apologies for his actions.
"I have always recognised
that what I did was foolish. I have apologised to all concerned and reiterate
that apology publicly today," he said.
"While I respect the FCA’s
decision today, I also regret it, coming as it did after a 20 year career in
the City that was without blemish.
More
"Do you have blacks, too?"
George W. Bush, to Brazilian President
Fernando Cardoso, Washington, D.C., Nov. 8, 2001
The monthly Coppock Indicators finished November.
DJIA: +136 Down. NASDAQ: +262 Down. SP500: +204 Down.
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