Baltic Dry Index. 610 unch. Brent Crude 65.20
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Merkel’s
husband, Joachim Sauer, meanwhile taught the president how to cut a Weisswurst,
another Bavarian specialty.”
We open today with more on the fiendish Bavarian “Weisswurst,” which so flummoxed President Obama at an
Alpen rifle village, open day, close to the G-7’s, 5 star, preferred wining and dining base at Schloss
Elmau. No sucking up Weisswurst there. He made up for it though with the
locals, with an unexpected deep knowledge of high quality Alphorn.
“That was without question the best alphorn performance that I’ve ever heard,” Obama told the crowd, all of whom were in traditional dress of leather shorts for the men and decorative dirndl dresses for the women. “I have to admit that I forgot to bring my lederhosen, but I’m going to see if I can buy some while I’m here.” Bloomberg.
Weisswurst
A Weisswurst (German Weißwurst [ˈvaɪsvʊɐ̯st] ( listen), literally white sausage; Bavarian: Weißwuascht) is a traditional Bavarian sausage made from minced veal and pork back bacon. It is usually flavoured with parsley, lemon, mace, onions, ginger, and cardamom, although there are some variations. Then the mixture is stuffed into pork casings and separated into individual sausages measuring about ten to twelve centimeters in length and about two centimeters in thickness.As it is very perishable, Weisswürste traditionally were manufactured early in the morning and prepared and eaten as a snack between breakfast and lunch—there is a saying that the sausages should not be allowed to hear the noon chime of the church bells.[1] Traditionally, Weisswürste may only be served until midday because preservatives are not used, the meat is not smoked, and hence the sausage is made fresh every day; indeed, they sometimes are called morning sausages. Before modern refrigeration technologies, in summertime the sausages would go bad before nightfall. Even today, most Bavarians eat Weisswürste before noon.
The sausages are heated in water—well short of boiling—for about ten minutes, which will turn them greyish-white because no color-preserving nitrite is used in Weisswurst preparation.
Weisswürste are brought to the table in a big bowl together with the hot water used for preparation (so it does not cool down too much), then eaten without its skin.[2] Ways of eating Weisswurst include the traditional way, called zuzeln (Bavarian for sucking), in which each end of the sausage is cut or bitten open, then the meat is sucked out from the skin.
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In more relevant and worrying news, Greece continues its stumble towards
the Eurozone door marked exit, dragging down German and European stocks with
every step. Greece may be going, thanks largely to Germany, but if Greece is
going, it’s going to take a lot of German stocks with it, it seems.
New Greek Budget Plan Falls Short of Last Week’s Pledge
June 9, 2015 — 3:45 PM BST Updated
on June 9, 2015 — 6:28 PM BST
Greece pulled back on budget
concessions to its creditors in new proposals Tuesday, as German Finance
Minister Wolfgang Schaeuble said it would be “daft” to accept blame for Prime
Minister Alexis Tsipras’s predicament.
The latest plan falls short of
the budget targets that Tsipras agreed on in a June 3 meeting with European
Commission President Jean-Claude Juncker, a European Union official said.
Greece didn’t dispute those objectives in any of its subsequent meetings with
creditor institutions last week, according to the official.
As a result, Greece is sliding
backward in its negotiations as it enters the last weeks of its bailout deal.
On June 30, Greece’s financial safety net is set to expire, putting any
remaining funds off limits unless Tsipras can reach an accord with creditors
before then.
“It’s
not possible that the borrower decides under what conditions the lender kindly
gives his money,” Volker Kauder, caucus leader of Chancellor Angela Merkel’s
bloc in parliament, said Tuesday in Berlin. “We want Greece to stay in the
euro, but whether this is achievable depends entirely on Greece.”
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Europe Stocks Extend Longest Losing Streak of ’15 Amid DAX Rout
June 9, 2015 — 7:05 AM BST Updated
on June 9, 2015 — 5:04 PM BST
A slump in German equities helped send European stocks down for a sixth day.The Stoxx Europe 600 Index fell 0.4 percent to 383.87 at the close of trading in London, earlier losing as much as 1.4 percent. Germany’s DAX Index declined 0.6 percent after entering a correction on Monday. It’s dropped 11 percent from its April peak.
Stocks have fallen in past days as Greece struggles to strike a debt deal after months of talks. Creditors are growing increasingly frustrated with the country’s government after it rejected the terms of an aid package again last week and deferred a payment due to the International Monetary Fund. Greece pulled back on budget concessions to its creditors in new proposals Tuesday.
----The
Stoxx 600 extended its lowest level since February and has lost 4.2 percent in
six days. A technical analysis signal shows the gauge is close to being
oversold, with the relative strength index near 30. Last time it reached that
level, in December, the index was about to start its biggest first-quarter
rally since 1998.
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In American news, David Stockman
takes on the “Bubbles” Greenspan legacy. What it shows is when the Great
Nixonian Error of fiat money took over the American and with it the global economy.
A large Bank is exactly the place where a vain and shallow person in authority, if he be a man of gravity and method, as such men often are, may do infinite evil in no long time, and before he is detected. If he is lucky enough to begin at a time of expansion in trade, he is nearly sure not to be found out till the time of contraction has arrived, and then very large figures will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street. 1873
The Warren Buffet Economy——Why Its Days Are Numbered (Part 1)
by David Stockman •
During
the 27 years after Alan Greenspan became Fed chairman in August 1987, the
balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call it 23X.
Let’s see what else happened over
that 27 year span. Well, according to Forbes, Warren Buffet’s net
worth was $2.1 billion back in 1987 and it is now $73 billion.
Call that 35X.
During those same years, the
value of non-financial corporate equities rose from $2.6 trillion to $36.6
trillion. That’s on the hefty side, too—- about 14X.
When we move to the underlying
economy that purportedly gave rise to these fabulous gains, the X-factor is not
so generous. As shown above, nominal GDP rose from $5.0 trillion to $17.7
trillion during the same 27-year period. But that was only 3.5X
Next we have wage and salary
compensation, which rose from $2.5 trillion to $7.5 trillion over the
period. Make that 3.0X.
Then comes the median
nominal income of US households. That measurement increased from $26K
to $54K over the period. Call it 2.0X.
Digging deeper, we
have the sum of aggregate labor hours supplied to the nonfarm
economy. That metric of real work by real people rose from 185
billion to 235 billion during those same 27 years. Call it 1.27X.
Further
down the Greenspan era rabbit hole, we have the average weekly wage
of full-time workers in inflation adjusted dollars. That was $330 per
week in 1987 and is currently $340 (1982=100). Call that 1.03X
Finally,
we have real median family income. Call it a round trip to nowhere
over nearly three decades!
----The real truth is that Alan Greenspan and his successors turned a whole generation of gamblers into the greatest lottery winners in recorded history.
That happened because the
Fed grotesquely distorted and financialized the US economy in the name of
Keynesian management of the purported “business cycle”. The most visible
instrument of that misguided campaign, of course, was the Federal funds or
money market rate, which has been pinned at the zero bound for the
last 78 months.
----The simple truth is, the Fed has caused systematic, persistent and massive falsification of prices all along the yield curve and throughout all sectors of the financial market. The single most important price in all of capitalism is the money market rate of interest. It sets the cost of carry in all asset markets, and therefore indirectly fuels the bid for all debt, equity and derivative securities in the global financial system.
Needless to say, when the cost of
money is set at— and held at— zero in nominal terms, and driven deeply
negative in after-inflation and after-tax terms, it becomes the mothers
milk of speculation. Accordingly, it is neither a slightly lower trend
rate of CPI inflation over the past 27 years nor an improvement in
the art of central banking which has driven the core reference rate
in the world financial markets—the 10-year US Treasury Note—–down by 80%.
Instead, the true agent of
that decline is massive central bank intrusion into financial
markets, wholesale manipulation of prices and fraudulent monetization of
public debt and other securities. Just since 2006, the combined balance sheets
of the world’s central banks have expanded from $6 trillion to $22 trillion,
meaning that the scale of the implicit monetary fraud has been monumental.
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We end for the day on Europe with Belgium remembering the war. The
Napoleonic war of 1815. Euros anyone, even those marked with the German satanic
“X”?
Belgium a country invented by the British to annoy the French.
Charles
de Gaulle.
Belgium defies France with euro coin marking Napoleon defeat
Brussels sidesteps French protests by minting a coin with an irregular denomination
12:08AM BST 09 Jun 2015
Belgium
on Monday began minting €2.50 coins marking the 200th anniversary of Napoleon's
defeat of at the Battle
of Waterloo, after France
forced it to scrap a two-euro coin made for the same purpose. Paris objected to the new Belgian coin, commemorating the French emperor's defeat by British and Prussian forces, earlier this year, saying it would create tensions at a time when Europe's unity is under threat.
Belgium was forced to get scrap about 180,000 two-euro coins that had already been minted after Paris sent a letter saying they could cause an "unfavourable reaction in France".
But Belgium has managed to skirt the French protests using a rule that allows eurozone countries to unilaterally issue coins if they are in an irregular denomination - in this case, €2.50.
Napoleon Bonaparte was forced into exile after his grand European ambitions were crushed at the hands of the Duke of Wellington's forces at the Battle of Waterloo on June 18, 1815, which took place on what is now the outskirts of Brussels.
France had said in its initial
letter to Belgium that the battle "has a particular resonance in the
collective consciousness that goes beyond a simple military conflict".
But Belgian Finance Minister Johan
Van Overtveldt said the new coins - of which there will be 70,000 - were not
being released in a deliberate bid to anger France.
"The goal is not to revive
old quarrels. In a modern Europe, there are more important things to sort
out," he said Monday.
"But there's been no battle
in recent history as important as Waterloo, or indeed one that captures the
imagination in the same way."
The €2.50 coins will be usable in
Belgian shops, but collectors are expected to snap many of them up. Sold in
special plastic bags priced at six euros, they show the Lion's Mound monument
that stands at the battlefield site, as well as lines indicating the position
of the troops.
Several thousand copies of a
silver coin - with a face value of 10 euros, but sold at 40 euros - will also
be released.
“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.
At the Comex silver
depositories Tuesday final figures were: Registered 57.84 Moz, Eligible 120.88
Moz, Total 178.73 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, more on the Scapegoat of Hounslow,
improbably charged by America of causing single handedly America’s stock market
“flash crash” some 5 years ago.
You
may be sure that the Americans will commit all the stupidities they can think
of, plus some that are beyond imagination.
Charles de Gaulle.
The Alleged Flash-Trading Mastermind Lived With His Parents and Couldn’t Drive
Liam Vaughan
June 9, 2015 — 5:01 AM BST
Navinder Singh Sarao will never rank among the most notorious inmates of HM
Prison Wandsworth.William Joyce betrayed Britain to the Nazis. Ronnie Kray ruled the ganglands of the East End. Bruce Reynolds masterminded the Great Train Robbery.
Today Nav Sarao sits in a 10-foot-by-six-foot cell at Wandsworth, considered one of the worst prisons in Britain, accused of an altogether different sort of crime: helping to wipe more than $1 trillion off financial markets five years ago. At “Wanno,” a forbidding Dickensian fortress south of the River Thames, time moves to the same monotonous rhythm: the jangle of guards’ keys at 6:30 a.m.; yard exercise at 8 a.m.; dinner at 4:30 p.m.; lockdown by 8 p.m.
Until one morning in late April, virtually no one in the great investment houses of the City had ever heard of Sarao. But then Scotland Yard arrived in Hounslow, on the western fringes of London. What happened next stunned everyone.
Sarao was arrested at his parents’ modest, suburban home that Tuesday and accused of helping to cause the so-called flash crash of 2010, when the U.S. stock market plunged in a matter of minutes. While prices recovered almost as quickly as they’d fallen, the episode staggered investors. No one could explain it. Here at last, authorities claimed, was an answer: a glorified day trader living with his mom and dad near Heathrow Airport.
This Tuesday, Sarao will return to court in his gray prison tracksuit and sit in the glass-fronted dock for an eighth time. The U.S. is seeking to extradite him on 22 counts ranging from wire fraud to market manipulation.
Sarao, 36, denies all the charges, and many observers doubt he, or anyone else, caused the flash crash single-handedly. Instead, they point to an uncomfortable truth about 21st Century markets: computers, not people, largely drive prices moment to moment.
“I’ve not done anything wrong apart from being good at my job,” Sarao exclaimed in court in May, the only time he has spoken publicly since his arrest.
For all the question marks surrounding this case, the biggest of all has been Sarao himself. To Fleet Street, he is the “The Hound of Hounslow,” a tabloid caricature of City greed and excess.
---- Navigating the ins and outs of high-tech markets is now the least of Sarao’s worries. Whiling away up to 23 hours a day locked-up and conserving his four daily tea bags are greater priorities. If he’s lucky, he might get a job in the laundry or kitchen until his fate is decided.
While Sarao sits in Wanno, pressing questions remain unanswered. First: could a lone trader really bear some responsibility for the flash crash, one of the most harrowing moments in Wall Street history? Second, and perhaps more important: if so, don’t we have a bigger problem?
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Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
No update today.
The monthly Coppock Indicators finished May
DJIA: +107 Down. NASDAQ: +195 Down. SP500: +139 Down.
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