Baltic Dry Index. 590 -18 Brent Crude 55.09
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Money,
again, has often been a cause of the delusion of the multitudes. Sober nations
have all at once become desperate gamblers, and risked almost their existence
upon the turn of a piece of paper.
Charles
Mackay. Extraordinary Popular Delusions and the Madness of
Crowds
Has the oil market finally bottomed? Probably not, but
that’s the way to gamble at present, backed up by the US Fedster’s covering the
bet if it all goes horribly wrong. In the financialised, gambling casino,
formerly known as capitalism, on the Great Nixonian Error of fiat money,
gambling is now the only game left in town, backed up by the full faith and
credit of the taxpayers for the lucky few.
Below, a world now run by central bank apparatchiks for
the few. Shame about all that unemployed youth generation, or those hapless peons
toiling away in mining and metal bashing. What happens if the big bet on oil
turns out wrong?
Asia sags on growth worries, Aussie slides as RBA eases
By Shinichi Saoshiro TOKYO
(Reuters) - Asian stocks sagged on Tuesday amid ongoing growth concerns,
while the Australian dollar plumbed
six-year lows after the Reserve Bank of Australia cut interest rates to a
record low.MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent after the latest batch of weak U.S. data worsened worries about the state of the global economy.
Japan's Nikkei shed 1.2 percent and Hong Kong's Hang Seng lost 0.4 percent.
Many Asian bourses gained earlier in the session after Greece's new government appeared to take a step towards ending a stand-off with its creditors, before the lift petered out.
Spreadbetters saw hopes for an agreement on the Greek debt standoff lifting European stocks, forecasting Britain's FTSE to open up by as much as 0.1 percent, Germany's DAX 0.2 percent higher and France's CAC up 0.3 percent.
Buoyed by the RBA rate cut, Australian shares bucked the trend and surged 1.5 percent. The RBA cut its cash rate by a quarter of a point to 2.25 percent in a bid to spur a sluggish economy.
As a consequence the Aussie retreated to $0.7650, lowest since May 2009. Suffering collateral damage, the New Zealand dollar retreated to a four-year bottom of $0.7194.
"There'll be room for another cut this year, how soon remains to be seen. We've been thinking two (cuts) and it's hard to steer away from that at this point," said David De Garis, senior economist at National Australia Bank.
The RBA was the latest domino to fall as central banks across the globe eased to support sputtering economies and ward off deflation. The RBA move was seen adding pressure on the Bank of Korea to cut rates, forcing the Korean won to pare gains.
U.S. crude oil was up 0.6 percent at $49.88 a barrel, having already surged more than 10 percent over the past two sessions as some investors bet that a bottom had been reached after a seven-month-long rout. [O/R]
The currencies of oil-exporting countries such as the Canadian dollar and Norwegian crown held on to solid gains as a result.
More
Manufacturing in U.S. Expands at Slowest Pace in a Year
3:00 PM WET February
2, 2015
(Bloomberg) -- Factories expanded in January at the weakest pace in a year
as orders cooled, a sign weakness in overseas markets is restraining U.S.
manufacturing. The Institute for Supply Management’s index dropped to 53.5 from 55.1 in December, a report from the Tempe, Arizona-based group showed Monday. The median forecast in a Bloomberg survey of 74 economists called for a decline to 54.5. Readings greater than 50 signal growth.
The plunge in oil prices is limiting sales at manufacturers such as Caterpillar Inc. while slower growth from Europe to China and the strengthening dollar represent another hurdle for American exports. At the same time, consumer spending that’s coming off the best quarterly gain since 2006 indicates U.S. production will probably hold up.
“What we’re seeing is a moderation rather than any major deterioration,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, said before the report. “The weak global backdrop along with the stronger dollar is not very positive for U.S. exporters. We still have very strong domestic demand, which is a big positive.”
Economists’ estimates in the Bloomberg survey ranged from 52 to 56.5. Readings greater than 50 indicate growth.
----Elsewhere, factories in the U.K. expanded at a faster pace last month while manufacturing in China contracted. Markit Economics said Monday that its index of U.K. purchasing managers improved to 53 in January from 52.7 a month earlier. The Chinese government’s gauge dropped to 49.8 from 50.1 in December, a report showed Feb. 1.
More
In the EUSSR the game of bluff plays on to a deadline of February 28.
History In the Balance: Why Greece Must Repudiate Its “Banker Bailout” Debts And Exit The Euro
by David Stockman •
Now and again history reaches an
inflection point. Statesman and mere politicians, as the case may be, find
themselves confronted with fraught circumstances and stark choices.
February 2015 is one such moment.
For its part, Greece stands
at a fork in the road. Syriza can move aggressively to recover
Greece’s democratic sovereignty or it can desperately cling to the
faltering currency and financial machinery of the Euro zone. But
it can’t do both.
So by the time the current
onerous bailout agreement expires at month end, Greece must
have repudiated its “bailout debt” and be on the off-ramp
from the euro. Otherwise, it will have no hope of economic recovery
or restoration of self-governance, and Syriza will have betrayed its mandate.
Moreover, the stakes extend
far beyond its own borders. If the Greeks do not take a stand for
their own dignity and independence at what amounts to
a financial Thermopylae, neither will the rest of Europe ever escape
from the dysfunctional, autocratic, impoverishing superstate regime that
has metastasized in Brussels and Frankfurt under cover of the “European
Project”.
Indeed, the crony capitalist
corruption and craven appeasement of the banks and financial markets that
have become the modus operandi there are inexorably
destroying the EU and single currency. By fleeing the euro and ECB
with all deliberate speed, therefore, the Greeks will give-up nothing except
the opportunity to be lashed to the greatest monetary train wreck ever recorded.
So Greek Finance Minister Yanis
Varoufakis has the weight of history on his shoulders as he makes
the rounds of European capitals this week. His task in not
merely to renounce the ham-handed “austerity” dictated by the
Troika. Apparently even the French are prepared to acknowledge that the hideous
suffering that has been imposed on Greece’s less fortunate
citizens must be alleviated. Yet the latter is only a symptom of
what’s wrong and what stands in the way of a real solution.
The true evil started with the
bailouts themselves and the resulting usurpation by the EU
politicians and apparatchiks of both financial market price discovery
and discipline and sovereign democratic prerogatives. Accordingly, the terms
of Greece’s current servitude can’t be tweaked, “restructured” or
“swapped” within the Brussels bailout framework.
Instead, Varoufakis must
firmly brace his interlocutors on the true history and the condition
precedent that stands before them. Namely, that the Greek
state was effectively bankrupt even before the 2010 bailout, and that
the massive amounts of debt piled upon it thereafter was essentially a
fraudulent conveyance by the EU.
Accordingly, Greece’s legitimate
debt is perhaps $175 billion based on the pre-crisis euro debt
outstanding at today’s exchange rate and the haircut that would have
occurred in bankruptcy. Greece’s new government has every right to
repudiate the vast amount beyond that because it arose not
from the actions of the Greek people, but from the treachery of EU
politicians and the Troika apparatchiks—-along with the unfaithful
stooges in the Greek parliament and ministries which executed their fraudulent
conveyance.
Indeed, the purpose of the
massive EU, ECB and IMF loans to Greece was just plain ignoble and
corrupt. The European superstate deployed its vast fiscal and
monetary powers to make whole the German, French,
and Italian banks and other financial institutions which had
gorged on Greece’s sovereign debt. For more than a decade, heedless
gamblers and lazy money managers and bankers had loaded up on Greek debt
bearing yields that superficially bore a premium relative to the German
and US treasury benchmarks, but in fact did not remotely
compensate for the self-evident credit risk
embedded in Greece’s budgetary profligacy.
All of this was plainly evident. During
the years before the crisis and especially under the oligarchy dominated
Karamanlis government, Greece’s spending relative to GDP soared. Yet Athens
didn’t bother to impose the taxes necessary to pay for its public spectacles,
such as the 2004 Olympics, or its vast expansion of the state
bureaucracy, its wasteful gorging on German defense equipment or the
ever-rising subventions to special interest groups.
More
“The boom can last only as long as the
credit expansion progresses at an ever-accelerated pace. The boom comes to an
end as soon as additional quantities of fiduciary media are no longer thrown
upon the loan market...”
Ludwig Von Mises
At the Comex silver
depositories Monday final figures were: Registered 67.73 Moz, Eligible 110.32
Moz, Total 178.05 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, big trouble as the realisation sets in that
the great commodity “super cycle” was just another central bankster
malinvestment bubble.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
Vale cuts dividend in half
The world's largest iron ore miner slashes investor returns as it grapples with collapse in commodity prices
Vale, the largest mining group in
the world, said it is planning to cut its dividend by more than half to deal
with the collapse in commodity prices.
The managers of Brazil-based
Vale, which is heavily reliant on the price of iron ore, proposed to the board
at a meeting last week to cut the return to shareholders to a $2bn (£1.3bn)
minimum dividend payment for 2015, down from $4.2bn last year.
The dividend payment would be the
lowest payment by the miner since the banking crisis in 2007.
Global demand for iron ore is suffering
from oversupply and a sharp slowdown in China as the housing market cools.
The benchmark iron ore price has
fallen to a six-year low of $62 per tonne yesterday, down 56pc from around $140
per tonne in January of 2014.
Vale
is in particularly exposed to iron ore prices and China. In the third quarter
of 2014, Vale reported revenues of $9.2bn down 26pc on a year earlier, and
$2.8bn or 30pc of that revenue was attributable to China. Vale slumped to a
loss before tax of $1.7bn in the third quarter down from a pre-tax profit of
$4.4bn in the same period a year earlier.
The
drop in commodity prices has come at a difficult time for Vale as the miner is
in the middle of an almost $20bn expansion of its Carajás iron-ore operation in
the Brazilian Amazon. Spending on the project is straining cash levels as the
iron ore price tumbles.
More
February 2, 2015 2:42 pm
Phibro: the rise and fall of a commodities powerhouse
Gregory Meyer in New York
Phibro is to be dismantled, ending a 114-year-long run for a former giant of
the commodities markets that started in a Hamburg living room and became rich
enough to take over a Wall Street investment bank. The trading house’s business will be wound down in the first quarter, owner Occidental Petroleum said last week. Occidental had bought the former Philipp Brothers in 2009 from Citigroup.
The decision to close comes as crude and other commodities scrape multiyear lows. Phibro chief Andrew Hall is an inveterate oil bull, renowned for making huge gains on bold bets that prices will rise. “He never goes short,” Stephen Chazen, Occidental chief executive, once said.
Under Citi, Phibro was a profit engine that never suffered a losing year. But under Occidental it became a victim of listless oil markets followed by what Chris Stavros, chief financial officer, called “sharp commodity price movements” as crude plummeted to below $50 per barrel.
At its pinnacle in 1980, Phibro had $23.7bn in revenue, which ranked it the 15th largest US company at the time and was more than Occidental’s net sales last year. In 1981, it acquired Salomon Brothers, the bond trading powerhouse.
The Salomon deal generated unaccustomed headlines for the laconic company. Phibro used a combination of discretion and aggressiveness to move “beach sands from Australia to Rotterdam, copper concentrates from the Philippines to Japan, cocoa from Brazil to Germany,” and some 150 other commodities from tungsten to wax on any given day, according to a company history by Helmut Waszkis.
More
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster.
The monthly Coppock Indicators finished January
DJIA: +124 Down. NASDAQ: +220 Down. SP500: +178 Down.
No comments:
Post a Comment