Baltic Dry Index. 688 -15 Brent Crude 49.00
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."
Oakley
R. Bramble
Yesterday the Great
Disconnect bubble in global stock markets, fuelled by free money from global
central banks pushing asset inflation, resumed its wobble. From the continuing
slide in commodity prices, to the continuing collapse in the Baltic Dry
[shipping] Index, to a monster fight between the Greek Spartans and the troika’s
storm troopers, to renewed conflict in the Ukraine, where the latest German reports
have 500 US mercenaries involved in the fighting, plus 15,000 Ukrainian regular
troops cut off, the news everywhere was pretty dire for the central banksters
peddling the myth of a sustainable global recovery. Meanwhile the soaring dollar, in the midst of
the global currency wars, is pushing much of Africa towards default. They
borrowed in dollars to fund unwise investment and expenses, in countries like
Ghana, and are now running out of ability to cover the dollars to service the
debt.
U.S. Stocks Plunge Nearly Three Hundred Points
Bloomberg) -- U.S. stocks
tumbled, with the Nasdaq 100 Index falling the most since April, as a drop in
durable-goods orders and disappointing results from Caterpillar Inc. to
Microsoft Corp. heightened concern about the economy’s strength.
Technology shares in the Standard
& Poor’s 500 Index plunged 3.3 percent for the biggest drop since November
2011. Microsoft lost 9.3 percent, the most in 18 months, as software-license
sales to businesses were below forecasts. Caterpillar plunged 7.2 percent after
forecasting 2015 results that trailed estimates as plunging oil prices signal
lower demand from energy companies. Procter & Gamble Co. slid 3.5 percent
as a surging U.S. dollar cut into its earnings.
Apple Inc. jumped more than 6
percent in after-market trading after reporting revenue that topped estimates.
Yahoo! Inc. surged 6 percent in late trading after announcing a tax-free
spinoff of its stake in Alibaba Group Holding Ltd.
“Currency headwinds, as well as
evidence of a continual deceleration of global growth, is having a major
impacts on quarterly results,” Chad Morganlander, a money manager at St.
Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion, said
in a phone interview. “Coupled with that, durable goods orders were somewhat
disappointing, which scotches any optimism for today’s trading session.”
The Standard & Poor’s 500
Index slipped 1.3 percent to 2,029.55 at 4 p.m. in New York, below its average
price for the past 50 days. The Dow Jones Industrial Average declined 291.49
points, or 1.7 percent, to 17,387.21, after losing almost 400 points earlier in
the day. The Nasdaq 100 Index tumbled 2.6 percent for the biggest drop since
April.
More
Global shares wilt, dollar nervous before Fed outcome; Apple outperforms
(Reuters) - Asian stock markets followed Wall Street into the red on Wednesday, while the dollar was on edge following speculation the Federal Reserve could take a dovish turn in its post-meeting statement later in the session.Apple Inc (AAPL.O) provided some relief after the bell as record sales of its iPhone line helped it beat expectations, sending its stock up more than 5 percent, helping to lift U.S. stock futures ESc1 by 0.3 percent.
But earnings from other majors generally disappointed, with multinationals from DuPont
That left a soggy feel to Asian trade and Australia's main index .AXJO eased 0.2 percent while the Nikkei .N225 dropped 0.1 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was off a slim 0.1 percent.
On Wall Street, the Dow .DJI ended with losses of 1.65 percent, while the S&P 500 .SPX fell 1.34 percent and the Nasdaq .IXIC 1.89 percent.
Nine of the 10 primary S&P 500 sectors fell, with tech .SPLRCT off 3.3 percent in its biggest one-day drop since November 2011. Shares in Microsoft slid more than 10 percent, while Caterpillar (CAT.N) shed 7 percent.
The latest U.S. economic news was mixed with durable goods orders surprisingly soft, but notable strength was seen in housing and consumer sentiment.
Soft business investment and corporate earnings stoked talk the Fed would have to acknowledge the more difficult environment in its policy statement at 1400 GMT.
Further fuelling such expectations, Singapore's central bank unexpectedly eased policy ahead of its scheduled review, joining a growing list of central banks that took steps to counter disinflation and slowing growth.
More
Today’s “Dip” Is A Warning—-Get Out Of The Casino!
by David Stockman •
Shortly after today’s open,
the S&P 500 was down nearly 2% and off its recent all-time high by 3.5%.
But soon the robo-machines and day traders were buying the “dip” having
apparently once again gotten the “all-clear” signal.
Don’t believe it for a second!
The global financial system is literally booby-trapped with accidents waiting
to happen owing to six consecutive years of massive money printing by
nearly every central bank in the world.
Over that span, the collective
balance sheet of the major central banks has soared by nearly $11 trillion,
meaning that honest price discovery has been virtually
destroyed. This massive “bid” for existing financial assets
based on credit confected from thin air drove long-term bond yields
to rock bottom levels not seen in 600 years since the Black Plague;
and pinned money market costs at zero—-for 73 months running.
What is the consequence of
this drastic financial repression along the entire yield curve? The answer
is bond prices which keep rising regardless of credit risk,
inflation or taxes; and rampant carry trade speculation that can’t get out
of its own way because central banks have made the financial gamblers’
cost of goods—the “funding” cost of their trades—-essentially zero.
Needless to say, this is all too
good to be true because it has generated humungous funding mismatches.
That is, on the warranted word of central bankers—-who are petrified of a
Wall Street hissy fit in any event—-speculators have funded
long-term debt and equity securities with overnight money which must be
rolled every day. This “works”, of course, until the carry-traders are
hammered by a sudden, powerful and unexpected shock owing to either a sharp
drop in the price of their “long” asset or spike in the carry cost of
their overnight funding.
More
In oil news, in a move sure
to add to pressure on US frackers and oil prices generally, America is about to
greatly expand the area available for offshore drilling. The timing to say the
least is unfortunate.
Obama Plans Offshore Oil Drilling From Virginia to Georgia
(Bloomberg) -- The Obama
administration proposed opening to offshore drilling an area from Virginia to
Georgia in a policy shift sought by energy companies but opposed by
environmentalists worried about resorts such as the Outer Banks or Myrtle
Beach.
The offshore plan for 2017-2022
marks the second time President Barack Obama has recommended unlocking areas in
the U.S. Atlantic for oil drilling, and it drew a swift retort from allies who
say the payoff doesn’t justify the risk of a spill along the populated coast.
The agency said Atlantic leases won’t be auctioned for at least six years and
drilling wouldn’t start for several more years.
“This plan takes a balanced
approach to oil and gas development,” Interior Secretary Sally Jewell told
reporters Tuesday on a conference call. “It protects areas that are just too
special to develop.”
Managing the U.S. oil and gas
boom has become a fraught issue for Obama, who has trumpeted the benefits of
the jump in production and falling prices, while also seeking to balance it
with a desire to combat climate change and guard against pollution.
Environmentalists say the administration hasn’t done enough to counter the
risks of spills such as the BP Plc disaster in 2010 and rising greenhouse-gas emissions.
----In addition to planning for Atlantic exploration, the White House said it would designate 9.8 million acres in the Beaufort and Chukchi seas near Alaska as off limits for future drilling. Still, the Interior Department didn’t stop Arctic exploration altogether, saying it would allow one new sale each in the Beaufort, Chukchi and Cook Inlet. And it would have 10 sales in the most resource-rich area, the Gulf of Mexico, and none in the eastern Gulf or Pacific Ocean.
Exploration in the Atlantic, which has about 5 percent of the recoverable oil of the Gulf of Mexico, will require a 50-mile buffer to protect the coast, the department said.
This proposal is the first step in setting out the leasing of federal waters, and Jewell said comments from industry, citizens and environmentalists could lead to changes before it’s finalized.
More
In continental Europe news,
paymaster bully Germany, seems intent of wiping out Greece. Little wonder the
Great Disconnect is wobbling again. Stay long fully paid up precious metals, in
this fight between David and Goliath, both parties are likely to miscalculate
and end up dead.
Germany's top institutes push 'Grexit' plans as showdown escalates
Germany’s Wolfgang Schäuble is 'relaxed' about Greek exit from the euro
A top German body has called for
a clear mechanism to force Greece out of the euro if the left-wing Syriza
government repudiates the terms of the country’s €245bn rescue.
“Financial support must be cut
off if Greece does not comply with its reform commitments,” said the Institute
of German Economic Research (IW). "If Greece is going to take a tough
line, then Europe will take a tough line as well."
IW is the second German institute
in two days to issue a blunt warning to the new Greek premier, Alexis Tsipras,
who has vowed to halt debt payments and reverse austerity measures imposed by
the EU-IMF Troika.
The ZEW research group said on
Tuesday that the EU authorities should order an immediate stress test of banks
linked to Greece, and drive home the threat that they are willing to let a
Greek default run its course rather than cave to pressure. “Europe should
clearly signal that it is not susceptible to blackmail,” it said.
Germany’s finance minister,
Wolfgang Schäuble, said in Brussels that debt forgiveness for Greece is out of
the question. “Anybody discussing a haircut just shows they don’t know what
they are talking about.”
Mr Schäuble said he was sick of
having to justify his rescue strategy. “We have given exceptional help to
Greece. I must say emphatically that German taxpayers have handed over a great
deal,” he said.
In a clear warning, he said the
eurozone is now strong enough to withstand a major shock. “In contrast to 2010,
the financial markets have faith in the eurozone. We face no risk of contagion,
so nobody should think we can be put under pressure easily. We are relaxed,” he
said.
Officials in Berlin are irritated
that Mr Tsipras has gone into coalition with the Independent Greeks, a
viscerally anti-German party that seems to be spoiling for a cathartic showdown
over Greece’s debt. “This increases the risk of a head-on collision with the
international creditors,” said Holger Schmieding, from Berenberg Bank.
Mr Schmieding said the likelihood
of “Grexit” has risen to 35pc. He warned that Mr Tsipras could be in for a
reality shock after making “three impossible promises to his country in one
campaign”. The risk is that he will end up “ruining his country” like Argentina’s
Peronist leader Cristina Kirchner. “Vicious circles can start fast,” he said.
More
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino
At the Comex silver
depositories Tuesday final figures were: Registered 66.61 Moz, Eligible 111.04
Moz, Total 177.65 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Presented without need of comment.
J. K.
Galbraith.
Government in £9 million payout after single letter blunder causes business to collapse
A High Court judge has found Companies House liable for the demise of Taylor & Sons Ltd, after they mistakenly recorded that it had been wound up
It was a 124-year-old Welsh family business which took five generations to build up, yet a blunder over a single letter was all that was needed to cause its collapse, leaving the government with a £9 million legal bill.A High Court ruling has found Companies House liable for the demise of Taylor & Sons Ltd, after they erroneously recorded that the Cardiff engineering firm had been wound up.
In fact it was another, entirely unconnected, company - Taylor & Son Ltd - which had actually gone bust.
By the time Companies House, an executive agency of the Department of Business, Innovation and Skills, tried to correct its mistake three days later, it was already too late for the Cardiff engineering firm.
“They [Companies House] had already sold the false information to the credit reference agencies,” said Philip Davison-Sebry, 57, former managing director and co-owner of Taylor & Sons Ltd.
“We lost all our credibility as
all our suppliers thought we were in liquidation. It was like a snowball
effect.”
Mr Davison-Sebry, a
father-of-three from St Fagans, Cardiff, said that within just three weeks, all
of its 3000 suppliers had been in touch to terminate orders and credit
facilities were withdrawn.
“I was on holiday in the Maldives
when I got a message to urgently contact Corus, one of our major clients. They
said they weren’t happy at all I was on holiday, asking how could I be on
holiday at a time like this?” he said.
“They said we were in liquidation
and that the credit agencies had told them. I rang the office to find out what
was going on – it was like Armageddon. This was all on the day of my wife’s
50th birthday. We will never forget it”.
Despite desperate attempts to
reassure customers and suppliers that there had been a mistake, the business,
which was established in 1875 and had its roots in the 18th century, proved
impossible to save.
It lost its best customer in Tata
Steel, which had provided it with a £400,000-a-month income, and contracts to
construct three Royal National Lifeboat Institution stations never
materialised, costing £3m in lost business.
The one-letter mistake was
recorded on the companies register on 20 February, 2009 and within two months
the company, which employed 250 people, had gone into administration.
But after a four year legal
battle, Mr Davison-Sebry has emerged victorious when a High Court judge ruled
this week that Companies House was legally responsible for Taylor & Sons’
catastrophic loss of business and ultimate collapse.
More"The paper standard is self-destructive."
Hans F. Sennholz
The monthly Coppock Indicators finished December.
DJIA: +138 Up. NASDAQ:
+247 Down. SP500: +198 Down.
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