Baltic Dry Index. 761 -10 Brent Crude 53.22
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
J. K. Galbraith. The Great Crash: 1929.
Has Saudi Arabia’s oil war on Russia and OPEC, just punctured the
Fedster’s Wall Street Bubble and Japan’s Abenomics? From London this morning it
looks all too likely it has. Short Texas, short frackers, short tar pits, short
Scotland, short Halliburton. In the words of the greatest ever American alive
or dead, “this sucker could go down.” Will the Fed’s talking chair start buying
up fracking debt? Will the ECB ride in to rescue Scotland. Will China buy the
Diaoyu’s and save Abenomics for a slower death from Japanese demographics?
None of these questions will be answered today, but with 50 dollar West
Texas oil, the faraway US frackers are now getting paid in the 30s. A tsunami
of oil sector lay-offs lies right ahead. Followed by a tsunami of other lay-offs
in the consumer comfort support sectors. Followed in time by a tsunami of fracking debt
defaults. Did a big oily Black Swan just fly in on November
27th?
Oil prices steady after 5 percent plunge; Brent holds above $53
By Florence Tan SINGAPORE
(Reuters) - Oil edged up on Tuesday, steadying after a 5 percent plunge in
the previous session that saw prices touch fresh 5-1/2-year lows in an
oversupplied market.Worries about surplus oil supplies were fueled by data showing output in Russia hit a post-Soviet-era high in 2014 and exports from OPEC's second largest producer, Iraq, were the highest since 1980. Jitters over political uncertainty in Greece drove investors out of risk assets globally to safe-haven bonds.
"It's building on the recent bearish supply/demand outlook of oil, led originally by the OPEC meeting," said Mark Keenan, who heads Asia commodities research at Societe Generale.
Brent crude LCOc1 gained 16 cents and was at $53.27 a barrel by 11.30 p.m. ET, after dropping to a low of $52.66 on Monday, its lowest since May 2009. U.S. crude CLc1 was up 13 cents at $50.17 after slipping below $50 for the first time since April 2009.
A slew of factors had combined to push prices lower, Keenan said, pointing to the concerns about Greece, high output from Russia, Iraq and the United States and a stronger dollar.
U.S. commercial crude oil and products stockpiles were forecast to have risen in the week ending Jan. 2, a preliminary Reuters survey showed on Monday.
----A rebalancing of portfolios of major commodity indices which starts on Thursday may widen the spread between Brent and West Texas Intermediate, according to Societe Generale.
Up to $3 billion of Brent
contracts will be bought versus $1.14 billion of WTI contracts, the bank
estimated. Although the volumes are not significant, it could tilt sentiment
toward a stronger Brent, Keenan said.
More
Asian shares tumble as oil gloom deepens
By Hideyuki
Sano TOKYO
(Reuters) - Asian shares tumbled on Tuesday as sliding oil prices and
political uncertainty in Greece forced
investors out of risk assets and into the safety of government bonds.MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.0 percent, retreating almost halfway from its recovery from a 10-month low hit last month.
Japan's Nikkei .N225 dropped 2.4 percent. All markets in the region were under water with even high-flying mainland Chinese shares .CSI300, which hit 5-1/2-year highs earlier in the session, pulling back.
The unrelenting slide in oil prices showed little signs of slowing in the new year, plunging as much as 6 percent on Monday to hit their lowest since spring 2009, as increased output of U.S. shale oil has exacerbated a global supply glut.
"Falls in oil prices are going beyond many people's expectations. This will put pressure on the earnings of U.S. energy firms," said Hirokazu Kabeya, senior strategist at Daiwa Securities.
U.S. crude crashed below $50 a barrel on Monday while benchmark Brent tumbled LCOc1 under $53 after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports near 35-year peaks.
U.S. crude last traded at $50.23 while Brent stood at $53.38.
Although crude futures rebounded in Asia, concerns that current low prices would squeeze many energy producers hurt any assets with close links to energy.
The U.S. S&P 500 .SPX had its worst day in almost three months on Monday, dropping 1.8 percent, with energy shares leading the decline.
More
Oil Trades Near $50 as U.S. Stockpiles Seen Contributing to Glut
Jan 6, 2015 6:13 AM GMT
Oil traded near $50 a barrel in New York amid
speculation that U.S. crude inventories will expand, exacerbating a global
supply glut that’s driven prices to the lowest level since April 2009. Futures were little changed after losing 5 percent yesterday. Stockpiles in the world’s biggest oil consumer probably rose by 750,000 barrels last week, a Bloomberg News survey shows. A gauge of the dollar held near a nine-year high, diminishing the investment appeal of commodities, as the Federal Reserve weighs raising interest rates and amid concern that Greece will leave the European Union.
Oil slumped almost 50 percent in 2014, the most since the 2008 financial crisis, after the Organization of Petroleum Exporting Countries resisted calls to cut output as they compete with U.S. producers. The market faces “more problems” this year, according to Morgan Stanley, with surging exports from countries including Russia and Iraq contributing to a surplus that Qatar estimates at 2 million barrels a day.
“No one is willing to cut supplies while the strong dollar is playing a negative role with uncertainties growing in Europe,” Will Yun, an analyst at Hyundai Futures Corp. in Seoul, said by phone today. “Even if prices fall below $40, the market may not be too surprised.”
More
Gold Advances for Third Day on ‘Flight to Safety’ as Stocks Sag
Jan 6, 2015 5:09 AM GMT
Gold climbed for a third straight day to head for the longest run of gains
since October as slumping equity markets and concern that Greece may quit
the euro area spurred demand for a haven. Silver and palladium rose. Bullion for immediate delivery advanced as much as 0.3 percent to $1,208.29 an ounce, the highest level since Dec. 30, and traded at $1,206.85 at 1:02 p.m. in Singapore, according to Bloomberg generic pricing. The metal, which fell last year, has rallied from a one-month low of $1,168.34 on Jan. 2.
Asian stocks extended a global rout today after oil slid below $50 a barrel for the first time since 2009. The euro traded near an almost nine-year low as campaigning began in Greece for a Jan. 25 election that Prime Minister Antonis Samaras said may lead to an exit from the 19-member region should the opposition Syriza party win. Assets in the SPDR Gold Trust expanded yesterday for the first time in two weeks, while U.S. coin sales jumped and trading volumes in China increased.
More
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
At the Comex silver
depositories Monday final figures were: Registered 64.66 Moz, Eligible 110.88
Moz, Total 175.54 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on the clash between those tax and work
shy feckless Greeks, and those lovable, masters of the universe, continental
Europe section anyway, modern Germany. If those feckless modern Greeks can’t be
trained via austerity into becoming southern, model modern Germans, Mrs Merkel
now seems to have decided to have them expelled from the euro, and possibly the
EUSSR. In the latest spin out of the paymasters of the EUSSR, tossing Greece
under the bus, won’t affect the eurobus nor any of the other passengers on it.
I have my doubts they are correct. I suspect that Germany is about to make its
biggest mistake since Operation Barbarosa.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
Greece vs Europe: who will blink first?
The eurozone stands on the brink of another crisis as Athens confronts Brussels and Berlin
There is a whiff of 1914 to the
latest Balkan showdown. Everybody thinks everybody else is bluffing, all of
them betting that a calamitous chain reaction will be averted.
In Germany, Der Spiegel reports
that Angela Merkel thinks Greece can be ejected safely from the euro, if the
rebel Syriza party wins the elections on January 25 and carries out its pledge
to tear up Greece’s hated “memorandum” with the EU-IMF “Troika”. The German
Chancellor’s team are blanketing the airwaves in what looks like a campaign to
drive the threat home.
“We are past the days when we
still have to rescue Greece,” said Michael Fuchs, the parliamentary leader of
Mrs Merkel’s Christian Democrats. “The situation has completely changed. It is
entirely different from three years ago when we didn’t have the backstop
defences in place. Greece is no longer 'systemically relevant’ for the euro.”
He added wickedly that the single currency might actually be stronger without
the Balkan troublemaker.
It was revealed last week that
Germany offered Greece a “friendly” return to the drachma in 2011. Months
later, Mrs Merkel was prepared to eject Greece from EMU altogether. Tim
Geithner, the former US Treasury Secretary, said the Europeans seemed
determined to teach Greece a lesson: “They lied to us, and we’re going to crush
them,” was the gist of it. Mrs Merkel retreated only after it became clear that
Spain and Italy would be engulfed by contagion if Greece was thrown out.
This time, Berlin seems almost
eager to finish the job. Yet Syriza’s ice-cool leader, Alexis Tsipras, is
equally convinced that the EU elites will back down, knowing that they have
invested too much political capital in Greece’s salvation to walk away. After
all, the sums involved now are tiny compared to the €245 billion in loans
already dispersed since the crisis erupted in May 2010. Surely, after having
claimed so confidently that the crisis was essentially over, Mrs Merkel can
hardly admit that her strategy has failed?
Syriza
itself is a neo-Marxist mélange, an ideological work in progress. Mr Tsipras no
longer has a picture of Che Guevara in his office and has quickly mastered the
Brussels vernacular – so much so that EU leaders and City economists presume,
rightly or wrongly, that his rhetoric is just for domestic consumption. Yet the
ultra-Left Aristeri Platforma still holds the biggest bloc of votes on Syriza’s
central committee, and has stated that the movement must “be ready to implement
its progressive programme outside the eurozone” if the EU refuses to yield.
more
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11325993/Greece-vs-Europe-who-will-blink-first.html
“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 December.
DJIA: +138 Up. NASDAQ:
+247 Down. SP500: +198 Down.
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