Baltic Dry Index. 703 -17 Brent Crude 48.26
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Call
it the Goldman Sachs test. If this is something Goldman would do to its
clients, don't do it."
Felix
Salmon.
While we await the epic European fight between Syriza’s 21st
century Spartans and Frau Merkel’s economic Panzers, there was renewed action
in the oil war. Both bears and bulls lobbed Grads at each other all day. Below
yesterday’s action, as New York and Boston enjoy renewed global warming.
Oil Trades Near 6-Year Low as OPEC Fails to Turn Focus From Glut
Jan 27, 2015 5:51 AM GMT
Oil traded near the lowest level in almost six years as OPEC’s warning that
prices may surge without new investment in production failed to shift the market’s
focus from more immediate signs of a global supply glut. Futures were little changed in New York after falling 1 percent on Monday. A spike to $200 a barrel is possible without spending for the long term, according to OPEC Secretary-General Abdalla El-Badri. U.S. crude inventories probably rose to 402.1 million barrels last week, the most in records dating back to August 1982, a Bloomberg News survey shows before a government report on Wednesday.
Oil slumped almost 50 percent last year amid the fastest pace of U.S. crude production in more than three decades while the Organization of Petroleum Exporting Countries resisted calls to reduce output. Prices may drop to as low as $30 a barrel, Gary Cohn, the president of Goldman Sachs Group Inc., said in an interview with CNBC on Monday.
“Supply is still the issue, we need to see that cut back,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “The potential is still for the downside in the near term because of that need to see a reduction in current production. Demand doesn’t improve rapidly on the falling price, it does take a while to kick in.”
More
Goldman Sachs’s Cohn Says Oil Prices May Hit $30 in Extended Slump
Jan 26,
2015 10:13 PM GMT
Oil prices will
probably continue to decline and could reach as low as $30 a barrel, according
to Gary Cohn,
president of Goldman Sachs Group Inc. “We’re probably in the lower, longer view,” Cohn, a former oil trader, said Monday in an interview with CNBC.
West Texas Intermediate for March delivery fell 44 cents to close at $45.15 a barrel on the New York Mercantile Exchange, the lowest settlement since March 11, 2009.
Crude oil has slumped almost 60 percent since June as the Organization of Petroleum Exporting Countries resisted calls to cut output and the U.S. pumped at the fastest pace in more than three decades. Drillers in the U.S. have begun to idle rigs as falling prices make wells aiming to tap shale reserves unprofitable.
Cohn, 54, said the commodity business is “very, very strong” because consumers and oil-producing nations are in different positions than they have been in the past few years.
“If you’re a consumer today and you can lock in these prices, you’re a lot more aggressive in the markets in hedging than you ever have been,” Cohn said. “The flip side is if you’re an oil-exporting country today and you’re looking at these oil prices and you see a fairly steep forward curve and you see 10 or 15 dollars of price higher a year forward then you do in the spot market, you have to consider trying to lock into that forward price.”
More
OPEC’s El-Badri: $200 Oil Possible If There's Lack of Investment
Jan 27, 2015 5:13 AM GMT
OPEC’s secretary-general said oil prices as
high as $200 a barrel are possible if producers fail to invest in new supply. “If you don’t invest in oil and gas, you will see more than $200,” Abdalla El-Badri said in an interview in London on Monday, without giving a timeframe. West Texas Intermediate, the U.S. crude benchmark, erased a decline of as much as 2.7 percent following his comments.
Crude prices tumbled 46 percent last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries said they wouldn’t curb output in response to a supply glut caused in part by surging U.S. shale oil production. The International Energy Agency, the Paris-based adviser to 29 nations, said Jan. 21 that a decline in prices may deter investment in all types of energy.
“He is raising a valid concern that falling investments due to the current price collapse may leave us with little oil coming out of the ground in a few years,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail Monday. Prices as high as $200 probably won’t happen because “a move back above $100 will bring the shale oil drillers out in force as they can relatively quickly react to rising prices.”
More
Elsewhere, Europe prepares for war.
After The “Syriza Shock”: Now Comes The Hard Choice Of Escape Or Merely Re-setting The Terms of Greece’s EU Servitude
by David Stockman •
We can
heartily praise Alexis Tsirpras for calling bull on the destructive
puzzle palace economics thrust on his country by the hypocrites and liars who
rule from Brussels. And his finance minister designate, economist
Yanis Varoufakis, is surely on the right track when he targets the
rent-seeking bankers, big businesses and media operators who have plundered the
Greek state for decades.
Indeed, his pledge that “we are
going to destroy the Greek oligarchy system” should resonate throughout the
length and breadth of Europe. After all, what has smothered growth, enterprise
and hope in the EU is exactly the kind of crony capitalist corruption of
economic life and exploitation of the state that had already wrecked the Greek
economy—-even before the Trioka administered the coup de’ grace.
So the Syriza Shock is an
inflection point. It represents the beginning of the end of unimpeded rule
by the elitist apparatchiks who dominate the central banks and the economic
policy machinery of Brussels, Washington and London. Overwhelmingly, their
half-baked Keynesian and statist solutions have propped up the giant banks,
fueled stupendous inflation of financial assets and enabled an era of
obscene gambling windfalls to the very rich which is unprecedented in
modern history.
But what centrally administered
financialization has not done is relieve the middle and
working classes from a relentless assault on their living standards
or a growing recognition that their voices have been totally muted in the halls
of government. So it was only a matter of time before a revolt of the
“demos” would materialize; and, needless to say, what could be more
supremely fitting than that the insurrection has started in the very
land where the demos first found its voice?
But here’s where the good news
turns into the heavy trauma ahead. Greece’s problem is not simply the
oppressive details and features of the “memorandum” imposed by its Troika
overlords.
The true evil is the very
structure and modus operandi of the entire EU and its euro based
monetary system. Greece will forever be under the boot heel from the north
if it seeks to merely “restructure” its debts and supplicatory
relationships with Brussels and Frankfurt—–even if it plays a resolute,
courageous and crafty hand of poker during its upcoming “negotiations” with the
EU and IMF apparatchiks.
The fact is, Brussels is the
epicenter of an utterly failed superstate and the ECB is a radically
misconceived monetary experiment that has no place to go except toward an
eventual violent implosion. Moreover, the relevant irony here is that these
wholly misbegotten institutions have mis-appropriated the very ideas—–wider
scope for open trade and productive enterprise and the conveniences and
efficiency of common money—-on which a Greek revival truly depends.
More
Greece's New Leader Sends Germany A Loud Message With His First Act
Submitted by Tyler Durden on
01/26/2015
In his first act as PM, Tsipras
visits Kaisariani rifle range where Nazis executed 200 Greeks on 1 May 1944.
More
At the Comex silver
depositories Monday final figures were: Registered 66.61 Moz, Eligible 110.38
Moz, Total 176.99 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on Uncle Scam’s undeclared trade war on
Russia to slice and dice up Russia for Russia’s natural resources. Russia it
seems wants to know more about how Uncle Scam via the Fedster’s and the Great
Vampire Squids, manipulate stocks and take down currencies and commodity
markets. As “Snowy the NSA whistle-blower” says, try not to say anything too compromising
on an Apple I-phone. You never know who’s also listening in. Stay long fully
paid up physical precious metals, I suspect this undeclared trade war on Russia
will end up in a shooting real war.
"Finance
is the art of passing customer segregated funds from hypothecation to hypothecation
until it finally disappears."
Russia tried to learn how to use high-speed trading to rock market, U.S. says
Published: Jan 26, 2015 4:31 p.m. ET
WASHINGTON (MarketWatch) — Russia sought to use spies to get more
information about high-frequency trading in a potential bid to destabilize the
market, according to a court document released by the U.S. government on Monday.The U.S. government on Monday made one arrest and charged two other diplomats with spying on behalf of Russia.
The Federal Bureau of Investigation says the trio sought information, and sought to set up a spy ring, to find out about a number of topics, including the impact of the economic sanctions the U.S. has imposed on Russia and an airplane manufacturing deal.
But one of the topics Russia wanted to know more about is a topic the U.S. government is also struggling to comprehend: high-frequency trading. Russia apparently wanted to use such trading to destabilize the market.
According to the FBI, a banker, Evgency Buryakov, was told to tell a Russian state-owned news outlet to get information on three specific questions. This was a conversation he had with the Russian trade representative, Igor Sporyshev, as translated by the FBI:
Buryakov: You can ask about ETF... E-T-F. E, exchange.
Sporyshev: Yes, got it.
Buryakov: How they are used, the mechanisms of use for destabilization of the markets.
Sporyshev: Mechanism — of — use — for —market — stabilization in modern conditions.
Buryakov: For destabilization.
Sporyshev: Aha.
Buryakov: Then you ask them what they think about limiting the use of trading robots... You can also ask about the potential interest of the participants of the exchange to the products tied to the Russian Federation.
A spokeswoman for the IntercontinentalExchange ICE, +0.48% , which owns the NYSE, declined to comment. An email to the Russian Embassy’s press office was not immediately returned.
High-frequency trading has been blamed by some for adding instability to markets.
In the book “Flash Boys,” author Michael Lewis says a surprisingly large number of the people pulled in by the big Wall Street banks to build the technology for high-frequency trading were Russians.
One, former Goldman Sachs programmer Sergey Aleynikov, was convicted of stealing trade secrets, before his conviction was overturned.
http://www.marketwatch.com/story/russia-tried-to-learn-how-to-use-high-speed-trading-to-rock-market-us-says-2015-01-26?dist=tcountdown
S&P Cuts Russia's Rating to Junk; Sanctions and Oil Slump Hammer Ruble
Jan 26,
2015 11:49 PM GMT
Russia’s foreign-currency
credit rating was cut to junk by Standard
& Poor’s, putting it below investment grade for the first time in a
decade, as policy makers struggle to boost growth amid international sanctions
and a drop in oil prices. S&P, which last downgraded Russia in April, cut the sovereign one step to BB+, according to a statement released on Monday, the same level as countries including Bulgaria and Indonesia. The ratings firm said the outlook is “negative.” Russian stocks on U.S. exchanges tumbled with the ruble following the announcement, which came after the close of equity trading in Moscow.
The world’s biggest energy exporter is on the brink of a recession after oil prices fell to the lowest since 2009 and the U.S. and its allies imposed sanctions over President Vladimir Putin’s actions in Ukraine. The penalties have locked Russian corporate borrowers out of international debt markets and curbed investor appetite for the ruble, stocks and bonds.
More
http://www.bloomberg.com/news/2015-01-26/russia-credit-rating-cut-to-junk-by-s-p-for-first-time-in-decade.html
A
permanent Governor of the Bank of England [your CB here] would be one of the
greatest men in England [your nation here.] He would be a little 'monarch' in the City; he
would be far greater than the 'Lord Mayor.' He would be the personal embodiment
of the Bank of England; he would be constantly clothed with an almost indefinite
prestige. Everybody in business would bow down before him and try to
stand well with him, for he might in a panic be able to save almost anyone he
liked, and to ruin almost anyone he liked. A day might come when his favour
might mean prosperity, and his distrust might mean ruin. A position with so
much real power and so much apparent dignity would be intensely coveted.
Walter Bagehot. Lombard Street. 1873 [Replace the BOE with the Fedsters and you know why Russia was curious.]
The monthly Coppock Indicators finished December.
DJIA: +138 Up. NASDAQ:
+247 Down. SP500: +198 Down.
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