Baltic Dry Index. 1055 -08
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
It may take another
crisis to elevate a generation of leaders with the right medicine for nation
states to fit into the world of globalization. Until then, people must survive
stagflation as best they can.
The real interest
rate is probably minus 2% in the world today. It should be in line with the per
capita income growth rate or 1%. The difference is 3%.
This environment
redistributes wealth from savers to debtors on a scale of over $2 trillion per
annum or $55 billion per day. This must be the biggest legal robbery ever in
human history. But it is always coded in arcane academic lingos spoken by
respected central bankers with impeccable CVs. All that is just packaging; it
is robbery nevertheless.
Andy Xie
In our new lawless bankster age, good news is bad news now
it seems, after a central bankster QE Forever era, where all news was good news
for our monstrously distorted, mal-investment stock markets. With the Fed almost
ending QE Forever, the market now anticipates the crash that happens when the Fedster’s
try to end ZIRP. Ominously, we have entered the traditional stock market crash
season. But it is events in Asia over the next few days and weeks that really
matter.
U.S. stocks skid; Russell 2000 in correction territory
Published: Oct 1, 2014 4:34 p.m. ET
NEW YORK (MarketWatch) — U.S. stock investors turned away from stocks on
Wednesday and piled into safe havens such as Treasurys, sending the main
benchmarks sharply lower.Broad-based declines on Wall Street were led by tech and small-cap stocks. The Russell 2000 index RUT, -1.48% lost 1.5% and is now in correction territory, defined as a drop of more than 10% from a recent peak, in this case on March 4.
The Dow Jones Industrial Average DJIA, -1.40% fell 238.19 points, or 1.4%, to 16,804.71 and undercut its 50-day moving average. The blue-chip index moved by triple-digits in six out of past eight sessions. The index is down 2.75% from its record close set Sept. 19.
Wednesday’s skittishness appeared to have stemmed from upbeat employment and manufacturing data for September, which although points to positive momentum for the U.S. economy, continued to fuel worries that the Federal Reserve may raise interest rates sooner than later.
Private employers added 213,000 new jobs in September, and many view the report as a proxy for the non-farm payrolls data due on Friday. Manufacturing in the U.S. is still expanding, albeit slightly slower. Both PMI and ISM indexes ticked down, however indicated growth.
The upbeat economic data should be a positive, but ironically, have investors fretting they may need to retool their holdings.
The S&P 500 SPX, -1.32% fell 26.13 points, or 1.3%, to 1,946.16, with materials and industrials leading the losses. Only the utilities sector stayed in positive territory. The Nasdaq Composite COMP, -1.59% shed 71.30 points, or 1.6%, to 4,422.09.
More
Asia Stocks Heading for Five-Day Decline on Fed Concern
Oct 2, 2014 1:08 AM GMT
Asian stocks fell, with the benchmark index heading for a
fifth day of losses, amid concern over the end of the Federal Reserve’s
stimulatory bond-buying program and signs of weakness in the euro-area economy.
The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 139.64 as of 9:02 a.m. in Tokyo after retreating to a four-month low yesterday. The measure capped its biggest monthly drop in more than two years in September amid concern Chinese growth is slowing and that the Federal Reserve may increase U.S. interest rates sooner as it ends asset purchases. U.S. stocks tumbled yesterday, sending the Russell 2000 Index into a correction.
“The volatility in the global markets is likely to overwhelm risk assets,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by e-mail. “Equities are going to feel the pinch of a market pullback.”
Japan’s Topix index dropped 1.3 percent, the biggest decline in almost two months. South Korea’s Kospi index lost 0.5 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent, while New Zealand’s NZX 50 Index slid 0.3 percent. Markets in Hong Kong remain closed today, while those in mainland China are shut through Oct. 7.
More
And in the BRICs. Russia is in recession due to insane
sanctions that threaten to put continental Europe into a depression, while
Brazil in now collapsing along with the industrial commodities. And we haven’t
even got to any winter polar vortexes yet. Just wait until the Fedster’s
actually try to abandon ZIRP.
Brazil Market Rout Deepens as Rousseff Surges in Polls
Oct 1,
2014 10:11 PM GMT
Brazilian stocks plunged for a third day, pushing the benchmark gauge
down 7.6 percent this week, and the real sank to a five-year low as investors
abandoned wagers that elections will bring a new government into office capable
of turning around the slumping economy. Petroleo Brasileiro SA, the state-controlled oil company, and government-run utility Centrais Eletricas Brasileiras SA both tumbled to 17-week lows. The real lost 1.4 percent to the weakest since December 2008 as HSBC Holdings Plc predicted the currency may extend losses by year-end if there’s no policy change after the vote. The first round is scheduled for Oct. 5.
Investors who bid up the prices of Brazilian stocks, bonds and the real earlier this year as polls showed a surge in support for opposition candidates are reversing course after the most recent surveys signaled President Dilma Rousseff is likely to win a second four-year term. Under her watch, inflation has quickened beyond the government’s target even as Brazil fell into a recession, while government policies that limit the prices Petrobras can charge for fuel brought about four consecutive quarters of falling profit.
----About $215 billion has been wiped from the value of Brazilian shares since the Ibovespa reached this year’s high on Sept. 2, according to data compiled by Bloomberg. The gauge has slumped 15 percent in the span while the iShares MSCI Brazil Capped exchange-traded fund tumbled 22 percent. The Ibovespa dropped 2.3 percent to 52,858.43 today, the lowest since June 5.
----The real retreated to 2.4811 per dollar at the close of trading in Sao Paulo, following a 9.5 percent slump in the third quarter, the worst performance among 24 emerging-market currencies after Russia’s ruble
More
http://www.bloomberg.com/news/2014-10-01/brazil-market-rout-deepens-as-rousseff-surges-in-polls.html
Below China. See
Crooks Corner for a new era dawning. Stay long fully paid up physical gold and
silver, held safely outside of the larcenous reach of John Bull and Uncle Scam.
If a run on gold and silver develops, I expect a LBMA default in London.
Hong Kong crisis exposes impossible contradiction of China's economic growth
Hong Kong's crisis comes at a treacherous moment, up to its neck in China's credit bubble
China's Xi Jinping cannot make
any serious concessions to Hong Kong's democracy movement. The Umbrella
Revolution spreading from the affluent Island to the poorer quarters of Kowloon
is an existential threat to the Chinese Communist Party.
"If he were to give way, it
would set off contagion across the mainland," said George Walden, a
veteran British diplomat who survived the Cultural Revolution inside China and
later negotiated Hong Kong's future with Deng Xiaoping. Beijing has already blocked
all images of the protests in the Chinese media as a political quarantine
measure.
"Xi Jinping has a horror of
what happened to the Communist Party in the Soviet Union. If things get
seriously out of hand, he may mobilise 'patriotic compatriots' (Beijing-controlled
agitators) on the streets. In the end he will bring out the troops, if he has
to," he said.
President Xi will surely play for
time, hoping the protests will fizzle as Hong Kong's business elites try to
rein in their unruly children, or try to buy them off quietly. But he cannot
yield. "The authorities see this as a matter of life and death, a fuse
that can take down their world," said Zhao Chu, a Chinese columnist and
star on Weibo - China's Twitter.
Whether it escalates to full
coercion depends on whether Hong Kong's poor join the students in serious
numbers. We know from the "Tiananmen Papers" that Deng Xiaoping was
willing to let the democracy protests run for a while in 1989, until workers
threatened a general strike and set up their own blockades. The real massacre
was at Beijing's Gongzhufen and Muxidi crossroads, three miles west of
Tiananmen Square, where the students were gathered.
"The next few days are key.
It will determine which way the silent majority goes," said Jonathan Fenby,
a former editor of the South China Morning Post, now at Trusted Sources.
"Most of Hong Kong's 7m people prize stability. They may think these
militant youths are trouble-makers, but they don't like being pushed around by
Beijing either."
The students did win a victory in
2012, blocking the imposition of China's "patriotic education" in
Hong Kong. That is where Joshua Wong - the star of today's protests - cut his
teeth. It may have given him false confidence. He is now listed as a "threat
to internal stability" by Chinese state security.
That triumph came at the end of
the Hu Jintao era, a time of drift, corruption and a pervasive belief that
uber-growth would last forever. Xi Jinping is a different animal, leading a
different country. All can now see that China has picked the low-hanging fruit
of catch-up growth, and has reached the limits of credit
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...”
“But it (the boom) could not last forever
even if inflation and credit expansion were to go on endlessly. It would then
encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole
monetary system.”
Ludwig Von Mises
At the Comex silver depositories Wednesday final figures were: Registered 65.68
Moz, Eligible 115.57 Moz, Total 181.55 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the Asian consequences of the botched
Obama/War Party coup in Kiev. In the Ukraine, the US war Party spent over 5
billion dollars to start a coup to overthrow the elected, legitimate,
pro-Russian, if corrupt, President of the Ukraine, employing neo-Nazis and
anti-Semite parties to provide the muscle. The USA then immediately recognised
their imposed puppet. The Crimea then broke away and rejoined Russia. The
Russian speaking east then tried to do the same thing. The American backed
puppet government then proceeded to bomb and shell the rebellious cities and
citizens of the east. Russia then sent in “volunteers” and arms to eventually
get to today’s uneasy truce, while America re-arms Kiev’s forces that failed so
miserably in round one. Presumably to start round two once fully rearmed.
In Hong Kong and in Taiwan, the young demonstrators
expect nothing less than full US backing for their democracy. But Uncle Scam is
conflicted and probably powerless. If China follows America’s Ukraine puppet’s
actions and moves to violently suppress Hong Kong, what position can Uncle Scam
then take. Any attempt at imposing US sanctions on “red” China will super-fast rebound
of the USA economy and probably bring the whole corrupt house of cards down.
Uncle Scam has no proxy neo Nazi troops in the region ready and able to take on
the PLA for saving Hong Kong. Obama isn’t about to try bombing China. If Hong
Kong is crushed as Uncle Scam stands aside, what message does that send to
Taiwan and Japan. Whichever side prevails, a new era is dawning in East Asia.
Below, what happens next in Hong Kong?
Hong Kong Students’ Deadline on Leung Nears; Talks Sought
Oct 2, 2014 5:11 AM GMT
Hong Kong Chief Executive Leung
Chun-ying faces a deadline from student leaders today to resign or see an
escalation of pro-democracy protests that have choked city streets for nearly a
week.
In what may have been the biggest
sit-in since the start of the protests Sept. 26, close to 200,000 people
occupied three main protest areas last night, one student leader estimated.
Police haven’t given any official estimates.
After midnight, several hundred
protesters marched to Leung’s office where they confronted lines of police,
while hundreds of others slept outside on roads and under raised highways. By
morning, crowds had thinned, although enough people remained to continue
blocking roads feeding the Central business district and the shopping areas of
Mong Kok and Causeway Bay.
----Student leaders yesterday said they would escalate the protests and may surround Leung’s residence, which overlooks Central, if he didn’t resign today. This morning, about 100 police officers guarded the road outside the office, a rectangular low-rise block that’s part of the government headquarters complex in Admiralty, facing about 200 protesters wearing black T-shirts.
There were some tentative signs of possible negotiations between protesters and the authorities. Lester Shum, deputy secretary general of the Hong Kong Federation of Students, reiterated demands yesterday for Leung to quit and said that students might be willing to talk to Carrie Lam, the city’s No. 2 official.
----At a ceremony marking China’s National
Day yesterday, Leung didn’t address the students’ demands. He defended China’s
plans to vet candidates for the city’s first leadership election in 2017,
saying choosing the chief executive through a popular vote was better than the
current system whereby the top official is selected by a 1,200-member committee
representing various facets of Hong Kong society.
----The People’s Daily, the official newspaper of the Chinese Communist Party, said in an editorial today that the central government was “very satisfied” after saying yesterday that the consequences for Hong Kong “will be unimaginable” if the protests drag on.
The clashes with police this week
were the city’s biggest since unrest in the 1960s led by pro-Communist groups
inspired by Mao Zedong’s Cultural Revolution. The spreading protests -- the
most serious challenge to China’s authority since the end of British colonial
rule in 1997 -- have triggered solidarity demonstrations globally.
Events to support Hong Kong
protesters were held in dozens of cities yesterday from Wellington to Kyoto,
Oslo to London, and New York to Toronto, according to the Twitter and Facebook
pages of event organizer, United for Democracy: Global Solidarity with Hong
Kong.
Thousands of democracy activists in Taiwan gathered in Taipei at a rally attended by Wu’er Kaixi, a survivor of the Tiananmen Square crackdown in 1989, when the People’s Liberation Army was used to crush student-led democracy demonstrations.
Scholars and student leaders in Taiwan led chants calling for the demise of China’s Communist Party, while some in the crowd in Liberty Square waved their mobile phones and held umbrellas aloft in support of Hong Kong’s protesters, who used umbrellas to fend off pepper spray squirted by police.
More
The monthly Coppock Indicators finished September.
DJIA: +141 Down. NASDAQ: +289 Down. SP500: +216 Down.
