Despite the hockey-stick-like expectations of all the clever economists, Chicago PMI failed to bounce back from its total carnage in February. Printing 46.3 against expectations of 51.4, the index remains at near six-year lows. Must be the weather... oh apart from the massive surge in Midwest pending home sales...? This is the biggest 5-month plunge since Lehman.
This commentary showed up on the Zero Hedge website at 9:52 a.m. EDT yesterday morning---and today's first story is courtesy of Dan Lazicki.
In early 2013, JPMorgan's outspoken chief Jamie Dimon trolled Sen. Elizabeth Warren (D-Mass.) when he told her to "hit" him with a fine because his bank could "afford it."
Dimon has been a major critic of increased regulations on the financial services industry.
Warren, on the other hand, is a huge advocate for financial reform. She's the former head of the Congressional Oversight Panel for TARP and she also established the Consumer Financial Protection Bureau.
In a new afterword in the paperback version of her book "A Fighting Chance" she writes about Dimon's visit to her office and their heated discussion.
This interesting article appeared on the businessinsider.com Internet site at 11:24 a.m. EDT on Tuesday morning---and I thank Roy Stephens for sending it along.
If Citigroup, JPMorgan Chase and other big banks wanted to send a message to congressional Democrats with a "symbolic" withholding of donations, they can rest assured it was heard — but not in the way they intended.
The gesture by the banks to each withhold $15,000 in donations to the Democratic Senatorial Campaign Committee until lawmakers like Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio softened their tone on Wall Street was first reported last week by Reuters.
The big banks have thrown around money for years," she wrote in an e-mail posted on her blog. "But they are moving out of the shadows. They have reached a new level of brazenness, demanding that Senate Democrats grovel before them."
This story appeared on the usatoday.com Internet site at 7:33 p.m. EDT yesterday evening---and it's something I found in this morning's edition of the King Report.
Stage three is when inflation begins to run away and central banks lose control. Now the illusion wears off. Savings and other fixed-income cash flows such as insurance, annuities and retirement checks rapidly lose value. If you own hard assets prior to stage three, you’ll be spared. But if you don’t, it will be too late because the prices of hard assets will gap up before the money illusion wears off.
Finally, stage four can take one of two paths. The first path is hyperinflation, such as Weimar Germany or Zimbabwe. In that case, all paper money and cash flows are destroyed and a new currency arises from the ashes of the old. The alternative is shock therapy of the kind Paul Volcker imposed in 1980. In that case, interest rates are hiked as high as 20% to kill inflation… but nearly kill the economy in the process.
Right now, we are in late stage one, getting closer to stage two. Inflation is here in small doses and people barely notice. Savings are being slowly confiscated by inflation, but investors are still comforted by asset bubbles in stocks and real estate. Be nimble and begin to buy some inflation insurance in the form of hard assets before the Stage Three super-spike puts the price of those assets out of reach.
This longish commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime---and it's the second offering of the day from Roy Stephens. It's certainly worth reading.
Days after Zero Hedge broke the news that CNBC had just suffered its worst ever ratings year in 2014, we weren't at all surprised to read in the WSJ that "CNBC will no longer rely on TV ratings specialist Nielsen to measure its daytime audience, beginning later this year. Instead, it has retained marketing and research firm Cogent Reports for the task."
WSJ further reported that "CNBC’s daytime Nielsen ratings, which always have been relatively small, have fallen sharply over the past decade. In 2014—its least-watched year since 1995—CNBC had an average audience of 177,000 people from the hours of 9:30 a.m. and 5 p.m., according to Nielsen. That is down 17% from an average of 214,000 viewers in 2004, and it is a drop of 13% from 2013."
It has gotten so bad WSJ is now actively losing leverage, and money, when discussing ads: "Executives at CNBC said they were leaving money on the table with advertisers and they needed to make a change. “Nielsen has never measured us accurately,” said CNBC President Mark Hoffman. “If we can’t count the people the right way we can’t get paid the right way.”"
As the following update of CNBC's perhaps most popular (if least watched, lagging even Mad Money) day breaking segment, SquawkBox, the show that features Joe Kernen, Becky Quick and Andrew Ross Sorkin just suffered its worst quarterly Nielsen rating in the prime, 25-54 demo, in the show's history.
I think the CNBS moniker says a lot as to why nobody rates this network highly---and it's well deserved. Joe---and the program---should have been put out to pasture years ago. This Zero Hedge piece, courtesy of Dan Lazicki, showed up on their Internet site at 5:34 p.m. EDT yesterday afternoon---and the embedded charts are worth a look.
"The markets think they have Yellen's number," that she will never allow markets to go down, Kevin Warsh warns "that is a very dangerous development."
"This is an experiment we should be taking with great care without some obvious conviction that there is no financial stability risks."
Investors "think good times can last forever," he warns... they can't...
Amid all the turmoil in global geopolitics, "you still don't see any of those risks in financial markets.. and I cant help but think aggressive central banks are responsible for that."
This worthwhile Zero Hedge piece appeared on their Internet site at 8:20 a.m. EDT on Tuesday morning---and it's another contribution from Dan Lazicki. The embedded CNBC video interview with Warsh runs for 8:23 minute.
Iceland's government is considering a revolutionary monetary proposal -- removing the power of commercial banks to create money and handing it to the central bank.
The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A Better Monetary System for Iceland."
"The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy," Prime Minister Sigmundur David Gunnlaugsson said.
This very interesting story showed up on the telegraph.co.uk Internet site 8:18 p.m. BST yesterday evening, which was 3:18 p.m. in Washington. I found it embedded in a GATA release early yesterday evening Denver time---and it's certainly worth reading.
Just three weeks into the European Central Bank's 19-month bond-buying programme, analysts are already speculating that it may throttle back the pace of purchases early, possibly even this year.
An upturn in growth or inflation, a dramatic rise in asset prices and a scarcity of bonds have all been cited as factors that could prompt the ECB to "taper" its purchases.
"We expect the ECB will decide to cut back its bond purchases as early as the second half of this year," said DZ Bank analyst Hendrik Lodde, adding the economy could improve towards year-end.
This Reuters article, filed from London, was posted on their website at 6:48 a.m. BST on their Tuesday morning---and it's another article I found in yesterday's edition of the King Report.
In Germany there’s no such thing as guilt-free borrowing.
Even when it’s the lenders who pay the borrower.
“In German, debt is the same word as guilt,” former Italian Prime Minister Mario Monti said in an interview. The word is “Schuld.”
Monti is among the critics who say Chancellor Angela Merkel’s unwillingness to pull out the credit card is holding back the euro-area economy and making it harder to overcome the financial-crisis aftermath. By sitting on the fiscal sidelines even with a budget surplus, Berlin has put virtually the entire response to the threat of deflation on the European Central Bank.
Good for her! Keep that credit card in your wallet Angela baby! If you borrow it, you have to pay it back at some point. This Bloomberg news item, filed from London put in an appearance on their Internet site at 12:56 a.m. MDT---and it's courtesy of West Virginia reader Elliot Simon.
Statements made by the German Chancellor during her visit to Finland demonstrate her concerns about a split among European countries, arising from their different stances towards Russia, Deutsche Wirtschafts Nachrichten wrote.
Europe should pursue a unified policy towards Russia in the context of the Ukrainian crisis, German Chancellor Angela Merkel said during her visit to Finland, where she met with the country’s Prime Minister Alexander Stubb, German media reported.
There should be no individual approach of the E.U. states with regard to this issue, the German politician said during her speech at the University of Helsinki.
"We want to cooperate with Russia, but on the basis of certain principles,” Merkel stated, cited by the German newspaper “Hamburger Abendblatt”. If Europe continues to act in a common way, then the desired impact of anti-Russian sanctions will be achieved, the German politician said.
This sanctions thingy is such bulls hit---and it wouldn't surprise me in the slightest if some countries broke ranks on this issue in the future. This article was posted on the sputniknews.com Internet site at 9:24 p.m. Moscow time on their Tuesday evening, which was 1:24 p.m. EDT in Washington. I thank South African reader B.V. for finding it for us.
Asia Times’ roving correspondent Pepe Escobar just returned from a reporting trip to the Donetsk People’s Republic (DPR), the pro-Russian enclave in the Donetsk Oblast province of eastern Ukraine. The area’s been the scene of heavy fighting between pro-Russian rebels and the Ukrainian military. Escobar traveled to Donetsk at the invitation of Europa Objektiv, a German-based non-governmental media project. He traveled at his own expense.
I’ve just been to the struggling Donetsk People’s Republic. Now I’m back in the splendid arrogance and insolence of NATOstan.
Quite a few people – in Donbass, in Moscow, and now in Europe – have asked me what struck me most about this visit.
I could start by paraphrasing Allen Ginsberg in Howl – “I saw the best minds of my generation destroyed by madness.”
This boots-on-the-ground commentary appeared on the Asia Times website on Tuesday Hong Kong time---and it's definitely worth reading if you have the interest. I thank reader M.A. for finding it for us.View full GSD edition
Six world powers and Iran missed a Tuesday deadline to reach an outline accord reining in Tehran's nuclear program, extending talks into an extra day as they edged toward a deal but failed to agree crucial details such as the lifting of U.N. sanctions.
The negotiators ended talks in the Swiss city of Lausanne in the early hours of Wednesday and said they would reconvene later in the day, with Iran and Russia expressing optimism that an initial agreement was within reach.
The preliminary deal is a major milestone toward a final accord, with an end-June deadline, that could end the 12-year-old standoff and reduce the risk of another Middle East war.
With Iran asserting its "nuclear rights" and the United States threatening on Tuesday to abandon the negotiations, the talks have been bogged down on the issues of nuclear research, the lifting of U.N. sanctions and their restoration if Iran breaches the agreement.
This very interesting Reuters article appeared on their website yesterday evening, but was updated just before 1 a.m. EDT this morning---and is almost a completely different article than was posted earlier. Obviously the situation is very fluid at the moment. I thank Orlando, Florida reader Dennis Mong for sharing it with us. It's original headline was "Iran nuclear talks miss deadline; U.S. Threatens to walk away". There was a story about this issue in the Tehran Times late yesterday evening local time---and it's headlined "Minor issues remain on Iran bans in nuclear talks: Iran negotiator". This article is courtesy of Roy Stephens.
Last week, a coalition of predominantly Sunni Arab countries, primarily from the Arabian Peninsula and organized by Saudi Arabia, launched airstrikes in Yemen that have continued into this week. The airstrikes target Yemeni al-Houthis, a Shiite sect supported by Iran, and their Sunni partners, which include the majority of military forces loyal to former President Ali Abdullah Saleh. What made the strikes particularly interesting was what was lacking: U.S. aircraft. Although the United States provided intelligence and other support, it was a coalition of Arab states that launched the extended air campaign against the al-Houthis.
Three things make this important. First, it shows the United States' new regional strategy in operation. Washington is moving away from the strategy it has followed since the early 2000s — of being the prime military force in regional conflicts — and is shifting the primary burden of fighting to regional powers while playing a secondary role. Second, after years of buying advanced weaponry, the Saudis and the Gulf Cooperation Council countries are capable of carrying out a fairly sophisticated campaign, at least in Yemen. The campaign began by suppressing enemy air defenses — the al-Houthis had acquired surface-to-air missiles from the Yemeni military — and moved on to attacking al-Houthi command-and-control systems. This means that while the regional powers have long been happy to shift the burden of combat to the United States, they are also able to assume the burden if the United States refuses to engage.
This commentary, which is a hair on the longish side, appeared on the stratfor.com Internet site at 8:01 a.m. BST yesterday---and I said about the stories [and cartoons] about Yemen on Saturday, you really do need a program to keep up with the "who and what". But it's definitely worth reading if you have any interest at all in the situation over there. It's courtesy of Dan Lazicki.
China said an insurance system for bank deposits will start on May 1, a step toward scrapping remaining controls on interest rates and allowing lenders to fail in a more market-driven economy.
Deposits and interest up to 500,000 yuan ($81,000) will be fully covered, the State Council said in a statement on its website on Tuesday. Over that level, compensation would be according to the amount available from a bank’s liquidated assets, it said.
China is pressing ahead with rate liberalization just as bad loans at a six-year high and forecasts for the weakest economic growth since 1990 raise the stakes for ensuring that reform progresses without financial turbulence. The dominance of state-controlled lenders has previously left savers believing in an implicit government guarantee in the only major economy in Asia to lack a formal deposit insurance system.
“The deposit insurance scheme is a very crucial step toward interest-rate liberalization,” Ma Kunpeng, a Shanghai-based analyst at Sinolink Securities, said by phone. “Without deposit insurance, you can’t set the deposit rates free.”
This short Bloomberg story, co-filed from Shanghai and Beijing showed up on their Internet site at 3:13 a.m. Denver time on Tuesday morning---and it's another contribution from Elliot Simon.
It would appear de-dollarization among America's "allies" is accelerating...
As of 6 p.m. Tuesday, a total of 46 countries had applied to be founding members of #AIIB. Founding membership will be finalized on April 15.
This must read story put in an appearance on the zerohedge.com Internet site at 4:52 p.m. EDT yesterday afternoon---and I thank Dan Lazicki for sending it our way.
China may not allow Taiwan to join the Beijing-led Asian Infrastructure Investment Bank (AIIB), the country's foreign ministry spokeswoman Hua Chunying said in a briefing Tuesday.
As for Taiwan joining [the AIIB], we maintain that we should avoid the 'two Chinas' and 'one China, one Taiwan' situation," Chunying said, as quoted by Business Times.
According to the media outlet, Beijing frequently affirms the importance of its "one China" policy and cuts short Taiwanese involvement in international deals, as it considers the island to be a territory-in-waiting for reunification.
Earlier in the day, Taiwanese presidential spokesman Charles I-hsin Chen expressed Taipei's desire to join the bank.
This news item was posted on the sputniknews.com website at 3:52 p.m. Moscow time on their Tuesday afternoon, which was 7:52 a.m. EDT in Washington.
The long U.S. Dollar, Short U.S. Treasuries trades were the 'most crowded' earlier this year and while both have derisked modestly from record highs, this week saw the net speculative position in EURUSD futures surge more negative and has never been shorter.
Along similar 'strong dollar' lines, as Bloomberg reports, net long positions in Gold have dropped to their lowest since Dec 2013 and outright Gold short positions rose for the seventh week in a row to the highest since data began in 2006.
As I said on Saturday, the short position in gold by the technical funds in the Managed Money category of the Disaggregated Commitment of Traders Report is at all-time record high.
This tiny story has two excellent charts embedded---and they're well worth a quick look. It appeared on the Zero Hedge website at 2:10 p.m. EDT on Tuesday afternoon. It's another contribution from Dan Lazicki.
It is an essential impossibility to solve problems created by excess debt and artificial liquidity with more of the same. That’s our credo here at Casey Research, and the reason why we believe the gold price will turn around and not only go higher, but much, much higher.
While fellow investors around the world may not agree with gold-loving contrarians like us, they are buyers: gold is up in euros and almost everything else, except the dollar.
The dollar’s rise has been strong and seems all but unstoppable. But look at it in big-picture terms, as in the chart below, and ask yourself how sustainable the situation is.
I’m skeptical of reading too much into such charts. A peak like the one in the early 1980s would certainly take the USD much higher, and for several years to come. But still, this is an aberration. It’s not the new normal, but rather the new abnormal.
This commentary by Louis James appeared on the Casey Research website yesterday.
Altimus Capital Director of Portfolio Management Chris Gersch discusses the price of gold. He speaks on Bloomberg's “In The Loop.”
This 3:40 minute video clip from Bloomberg appeared on their website way back on March 2---and it's only because I'm short on precious metal stories that I'm posting it at all.
Of course the real reason that gold is priced where it is, is never discussed---and that's the trading positions of the Big 8 traders. Of course the COT Report is now wildly bullish, so if the price does fly, it won't because of any reasons that the talking heads are discussing here, it will because JPMorgan et al allow it. I thank reader David Caron for passing it around yesterday.
UBS is back as gold bull, particularly on the equities side.
In a note to clients UBS analyst Julian Garran makes the case that the U.S. Federal Reserve will be forced to continue easing thus boosting international liquidity in US dollars and, by consequence, demand and speculation in gold.
UBS said the key issues for gold are that with a strong US dollar “excess returns in the US are under pressure” and that dropping energy prices are putting the squeeze on corporate cash flows.
This is more main stream gold b.s., except this bulls hit is dated March 31---and it was posted on the mineweb.com Internet site yesterday.
Two months ago, when looking at the most recent physical gold withdrawal numbers reported by the Fed, we observed something peculiar: between the publicly reported surprise redemption by the Netherlands (122 tons) and the just as surprise redemption by the Bundesbank (85 tonnes), at least 207 tonnes of gold should have vacated the NY Fed's gold vault. Instead, the Fed reported that in all of 2014 "only" 177 tonnes of gold were shipped out of the massive gold vault located 90 feet below 33 Liberty Street. Somehow the delta between what we "shipped" and what was "received" in the past year was a whopping 30 tonnes, or about 15% of the total - a gap that is big enough to make even China's outright fraudulent trade numbers seems sterling by comparison.
According to the most recent earmarked gold data reported by the Fed, in the month of February another 10 tonnes of gold departed the NY Fed, following 20 tonnes in the month before - the tenth consecutive month of redemptions - which if one assumes is merely the delayed relocation of gold previously demanded for delivery, has crossed the Atlantic and is now to be found in Frankfurt.
it means that all of the 207 tonnes in Dutch and German withdrawals are now accounted for with a matched and offsetting "departure" at the Fed. Which is why the next monthly update of the Fed's earmarked gold will be especially interesting: if March data shows that the withdrawals continue, it will mean that either Germany, or some other sovereign, has continued to redeem their gold which for some reason they no longer trust is safe lying nearly 100 feet below street level on the Manhattan bedrock.
I posted Nick Laird's chart of this in yesterday's column, but this Zero Hedge story from 3:30 p.m. EDT yesterday is definitely worth reading nonetheless---and I thank Dan Lazicki for his final contribution to today's column.
VTB announced Monday it has become the first Russian bank to become a full member of the London Bullion Market Association (LBMA).
The bank has an active presence in the international market for precious metals and was considered the top bank in the Russian Bullion Forum in 2013 and 2014. They hold approximately 110 tonnes of gold and 550 tonnes of silver.
Full membership in the LBMA allows VTB to expand its operations across the emerging markets, especially in Asia, further boosting the strategic diversification of its markets and client base, VTB Chairman Yuri Soloviev said. The bank hopes to increase transactions of precious metals and expand into global markets.
VTB is also now able to have representation on certain committees within LBMA and to vote on measures and other items the association takes on.
The above four paragraphs are all there is to this tiny story that showed up on the cistranfinance.com Internet site this morning at 6:00 a.m.---but it doesn't state a time zone. I found it on the Sharps Pixley website shortly after 1 a.m. Denver time this morning.
Paul Singer is deeply pessimistic on the state of the developed world.
The conservative, cantankerous hedge fund manager thinks economic stimulus in Europe isn’t likely to work and that the U.S. political system will remain dysfunctional, even with Republican midterm gains.
“With euro interest rates at record lows, we cannot imagine that the ECB’s recently announced QE [quantitative easing] program will improve Europe’s serious economic situation,” Singer said of the European situation in a private letter to investors. “On the other hand, QE might have unpredictable and large negative repercussions if it triggers a generalized loss of confidence.”
ECB refers to the European Central Bank, which is engaged in quantitative easing, or the buying billions of dollars of bonds each month to try to spur regional economies.
This commentary appeared on David Stockman's website on Sunday sometime---and I thank Roy Stephens for today's first article.
Only six years after the end of the worst financial crisis since the 1930s some experts are worried another one may be on its way.
Some are "warning that the global community has failed to learn the lessons of the Greek debt crisis — or even of Argentina’s default in 2001, the consequences of which are still being contested furiously in courts on both sides of the Atlantic," writes The (U.K.) Guardian's Heather Stewart.
Some of the concern stems from the soaring dollar, plunging oil prices and the Federal Reserve's preparation to raise interest rates.
The dollar has reached multi-year highs against a range of currencies in recent weeks, oil prices have hit six-year lows, and many economists expect a Fed rate move in September.
"We’re going to have another financial crisis," Ann Pettifor, director of Policy Research in Macroeconomics, told The Guardian.
This story from The Guardian put in an appearance on the newsmax.com Internet site at 5:36 p.m. EDT on Sunday afternoon---and it's its worth reading. I thank Orlando, Florida reader Dennis Mong for sending it our way.
Kyle Bass spoke at the February 10th Buttonwood Gathering hosted by The Economist magazine. In this video, Kyle is on stage with: Ashvin Chhabra, Merrill Lynch Wealth Management, Rebecca Patterson, Bessemer Trust---and Philip Coggan, The Economist.
This 38:56 minute video panel discussion appeared on the shortjapandebt.com Internet site yesterday---and I thank Tres Knippa for passing it around.
The University of Michigan, defense contractor Lockheed Martin Corp. and a foundation helping Appalachian children all own stakes in an overseas investment fund backing two major Chinese companies, which recently froze their stocks and missed financial reporting deadlines.
The American organizations invested in the $1.4 billion fund — managed by New York banking giant Morgan Stanley — for their endowments or retirement funds, parts of which could be at risk amid news that auditors have yet to sign off on the Chinese companies' books.
Those delays sometimes mean accounting troubles are ahead, which could put the investments in jeopardy. But the companies declined to explain the reasons for the unusual delays, and would say only that the auditors' work wasn't finished.
"This is not something an auditing firm would do lightly," said Paul Gillis, a former partner for PricewaterhouseCoopers in China who teaches accounting at Peking University. "There are only two reasonable explanations for being late: One is management incompetence. Two is they're fighting with the auditors---and neither one of those is good," he said.
This AP story, filed from Washington, showed up on the news.yahoo.com Internet site yesterday afternoon EDT---and I thank West Virginia reader Elliot Simon for sharing it with us.
There's virtually no commentary with these two charts that were posted on the Zero Hedge website at 1:45 p.m. EDT on Monday. They're worth a quick peek---and it's the first offering of the day from Dan Lazicki.
This is the last in our series on how America’s money, economy and government have changed since the collapse of the Bretton Woods agreement and the end of gold-backed money.
Today, we keep the focus on government… and what it has become. The period is hardly coincidental: On August 15, 1971, President Nixon hammered the last nail in the coffin of honest money.
It was not the only reason for the profound changes that followed. There was also the opening up of Communist China to capitalism, the fall of the Soviet Union and the rise of the Internet, to name just a few. But the new credit-based money system was the least obvious change… and probably the most important.
The credit-based dollar brought about a new economy. It changed the way people thought and the way their government operated. Now, deep pools of money determine which candidates are presented to voters.
And there is a new branch of government: the “Deep State.” It is not mentioned in the Constitution. And it operates above and beyond the visible process of democratic government.
This commentary was posted up on the acting-man.com Internet site yesterday---and it's the second contribution of the day from Roy Stephens.
Dozens of Future Shop stores have been closed across Canada, its parent company Best Buy Canada Ltd. announced Saturday – a move that shocked workers. Some didn't know they were out of a job until they got to work.
The company said it was shutting down 66 Future Shop stores effective immediately. Meanwhile, another 65 stores will be closed for a week while they are converted to Best Buy stores.
The company said approximately 500 full-time and 1,000 part-time positions will be eliminated as a result of the consolidation.
"The company has been struggling for a long time," said retail analyst and CEO of CustomerLab, Jim Danahy. "It's the idea that people would show up to work this morning with no notice from their employer to find the door locked. That's the surprise. It's a head scratcher."
This article appeared on the cbc.ca website on Saturday morning EDT---and it, along with other store closings across Canada recently, shows the perilous state of the retail industry both here---and in the U.S.
If the cries of ‘Je suis Charlie’ were sincere, the western world would be convulsed with worry and anger about the Wallström affair. It has all the ingredients for a clash-of-civilisations confrontation.
A few weeks ago Margot Wallström, the Swedish foreign minister, denounced the subjugation of women in Saudi Arabia. As the theocratic kingdom prevents women from travelling, conducting official business or marrying without the permission of male guardians, and as girls can be forced into child marriages where they are effectively raped by old men, she was telling no more than the truth. Wallström went on to condemn the Saudi courts for ordering that Raif Badawi receive ten years in prison and 1,000 lashes for setting up a website that championed secularism and free speech. These were ‘mediaeval methods’, she said, and a ‘cruel attempt to silence modern forms of expression’. And once again, who can argue with that?
The backlash followed the pattern set by Rushdie, the Danish cartoons and Hebdo. Saudi Arabia withdrew its ambassador and stopped issuing visas to Swedish businessmen. The United Arab Emirates joined it. The Organisation of Islamic Co-operation, which represents 56 Muslim-majority states, accused Sweden of failing to respect the world’s ‘rich and varied ethical standards’ — standards so rich and varied, apparently, they include the flogging of bloggers and encouragement of paedophiles. Meanwhile, the Gulf Co-operation Council condemned her ‘unacceptable interference in the internal affairs of the Kingdom of Saudi Arabia’, and I wouldn’t bet against anti-Swedish riots following soon.
I posted this story in my Saturday column, but it didn't show up until later in the day---and there's a chance that you may have missed it, so here it is again---and it's definitely worth your time. I thank South African reader B.V. for finding it for us. By the way, I had "issues" with three or four other stories in Saturday's missive, so if you were having hyperlink problem on stories you wanted to read, but couldn't, everything is fixed now---and the link to the Critical Reads section of Saturday's column is here.
Greece's prime minister has vowed not capitulate to the country's eurozone creditors, reviving controversial calls for debt relief as his government battles to unlock bail-out cash.
Addressing his parliament on Monday evening, Alexis Tsipras said he would seek an “honest compromise” with Greece’s international paymasters, but warned he would not submit “unconditionally” to demands for further austerity on his stricken economy.
Mr Tsipras, who spoke after a frustrating day of progress between his government and officials from the Brussels Group, insisted he would stop “the Greek people’s bleeding” as he ruled out measures such as hiking VAT.
The Leftist premier also repeated his claims for Second World War reparations from Germany, and insisted on debt relief from Greece's lenders.
This new item was posted on The Telegraph's website at 8:14 p.m. BST yesterday evening---and it's another contribution from Roy Stephens.
He is the billionaire Ukrainian oligarch who offered a bounty of $10,000 for the capture of any Russian "saboteur" and bolstered his country against the advance of Moscow-backed separatists.
Ihor Kolomoisky was appointed governor of Dnipropetrovsk region in south-east Ukraine last year and poured millions of dollars into volunteer battalions that headed out to fight rebel militia to the east.
A portly man with unruly grey hair and a beard, Mr Kolomoisky, 52, quickly became seen as the country's second-most powerful person after Petro Poroshenko, the president – and a patriot ready to reach into his wallet to stave off Russian aggression.
But this week Mr Poroshenko sacked his ally after a business dispute escalated and Mr Kolomoisky sent armed men to occupy the offices of two state energy companies in the capital, Kiev.
This very interesting news item was posted on the telegraph.co.uk Internet site at 8:00 a.m. BST on Sunday morning in the U.K.---and I received it from a reader who wishes to remain anonymous.
Five of India’s 40 AN-32 military transport aircraft being upgraded in Ukraine have gone missing "without a trace"; Ukrainian diplomat says the government is unable to help.
India says five of its 40 AN-32 military transport aircraft have gone missing "without a trace" while the planes underwent upgrades in Ukraine.
"These five aircraft are almost lost as it is difficult to trace them and diplomatic efforts to find their whereabouts have failed," the website DefenseNews quotes an Indian Air Force official as saying.
In 2009, India signed a contract with Ukraine's state-owned arms trading agency, Ukrspetsexport Corp., to upgrade its 104 AN-32 transport aircraft at a cost of US$400 million, as the fleet had reached its life expectancy.
You couldn't make this stuff up! This rather amazing news item appeared on the sputniknews.com Internet site at 5:38 p.m. Moscow time on their Monday afternoon, which was 10:38 a.m. in Washington. It is, of course, courtesy of Roy Stephens.
While attention has been focused in recent weeks on the role of Russia and President Vladimir Putin in brokering a new ceasefire in eastern Ukraine, the Russian president has made time for two crucial state missions—one to Cyprus and one to Egypt. What they both share in common is a border on the shore of the eastern Mediterranean Sea, a strategic body of water whose importance in the escalating NATO confrontation with Russia cannot be underestimated.
For more than 2000 years the Mediterranean Sea has been one of the world’s most strategic waters. It joins Middle East oil and gas with markets in the European Union. It joins Indian Ocean shipping, increasingly from China, India, South Korea and the rest of Asia to European markets and to the Atlantic Ocean through the Egyptian Suez Canal. It joins the vital Russian Black Sea Fleet naval base in Crimea to both the Atlantic and Indian Ocean. In brief it connects Europe, Eurasia and Africa.
With this in mind, let’s look at Putin’s most recent travels.
This short essay showed up on the journal-neo.org Internet site on Sunday sometime---and it's certainly a must read for any serious student of the New Great Game. I thank Roy Stephens for sending it along.
With the agreed deadline for reaching a “political framework” for a final comprehensive nuclear agreement only a few days away, the fate of the negotiations now hang on closing the gap between the P5+1 and Iran on removing sanctions.
The issues associated with Iran’s nuclear program have now been pretty much resolved, except for limits on Research and Development. But on sanctions relief, all the evidence indicates that the two sides have not advanced beyond where they were last November, when they were very far apart.
Part of the problem is the West’s myopic perspective on the issues. The Obama administration clings to the belief that the only reason Iran is negotiating is that it was so seriously hurt by the sanctions. It fails to grasp the depth of Iranian commitment to removing the sanctions as a matter of national pride as well as to be able to achieve a higher level of economic development.
In fact, Iranian national security strategists have been scheming for two decades about how to accumulate enough bargaining chips to induce the United States to negotiate an end to the sanctions imposed during the Clinton administration. An independent Iranian analyst told me some years ago that senior Iranian national security officials had been saying in private conversations from 2003 to 2005 that they viewed Iran’s future stockpile of enriched uranium as bargaining chips for the eventual negotiations with the United States.
This essay by Gareth Porter was originally posted on the antiwar.com Internet site on Sunday---and it was picked up by David Stockman's website---and given the headline show above. The actual headline reads "Sanctions---and the Fate of the Nuclear Talks". My thanks go out to Roy Stephens once again.
An Iranian journalist writing about the nuclear negotiations between the United States and Iran has defected. In an interview Amir Hossein Motaghi, has some harsh words for his native Iran. He also has a damning indictment of America's role in the nuclear negotiations.
“The U.S. negotiating team are mainly there to speak on Iran’s behalf with other members of the 5+1 countries and convince them of a deal," Motaghi told a TV station after just defecting from the Iranian delegation while abroad for the nuclear talks. The P 5 + 1 is made up of United States, United Kingdom, Russia, China, France, plus Germany.
This interesting story showed up on the weeklystandard.com website late Saturday afternoon GMT---and I thank reader Karen Nelson for bringing it to our attention.
As Iran talks appear to be coming to a close with a successful agreement that would both lead to the lifting of international sanctions and restrictions that would prevent the country from obtaining nuclear weapons, most in the international community are relieved.
Yet Republicans have teamed up with their counterparts in the Israeli political system to do everything they can to obstruct a deal – with tactics such as drafting new sanctions legislation and warning the Iranian leadership that the nuclear agreement will not outlast President Obama.
But this past week Senator John McCain ratcheted up this sabotage to a new level. During a floor speech he gave on March 24th, the senator suggested that Israel “go rogue” and that if they don't they may not survive the next 22 months of the Obama presidency.
This article put in an appearance on the alternet.org website on Sunday---and once again my thanks go out to Roy Stephens for sharing it with us.
For people in the Anglo-American world who have a moral conscience, the facts are soul-wrenching. The populations of the countries whose governments comprised “the Coalition of the Willing” are contaminated with war crimes committed by their governments in the Iraq Genocide. A progressive modern state was obliterated, and 2.7 million Iraqi people were murdered.
The crime was covered up with propaganda that demonized Saddam Hussein and created fear of nonexistent weapons of mass destruction.
The Iraqi genocide was based on a lie, and both Bush and Blair knew it. The two satanic leaders simply decided to destroy a people who they first demonized and marginalized.
Cheney and the neocons continue to justify the genocide and the illegal torture regime that they created in order to produce fake “terrorists” as a justification for their war crimes. The Western media, especially the New York Times, is also complicit in the Iraqi Genocide as are the insouciant Western peoples themselves who stood by cheering while millions of people were destroyed on the basis of a blatant and transparent lie.
This right-on-the-money commentary appeared on the Paul Craig Roberts website yesterday---and certainly falls into the absolute must read category.
Saudi Arabia’s escalating intervention in Yemen is a high-stakes gamble that risks back-firing in a series of complex ways, ultimately endangering Saudi oil infrastructure and the security of global energy supply.
Military analysts say there is little chance that air strikes by a Saudi-led coalition of Sunni countries will subjugate the Iranian-backed Houthi forces in Yemen. It may require a full-blown invasion by land forces to secure control. Large concentrations of Saudi armour and artillery are already massing near the border, though this may simply be a negotiating ploy.
The longer the conflict goes on, the greater the risks that it will stir up internal hatred in a country that has traditionally been relatively free of sectarian violence. Adam Baron, from the European Council on Foreign Relations, said the inflammatory comments about the Sunni-Shia struggle by politicians across the region are becoming “self-fulfilling prophecies”.
Al-Qaeda in the Arabian Peninsular (AQAP) – thought to be the most lethal of the jihadi franchises, and a redoubt for Saudi jihadis – already controls a swathe of central Yemen and is the chief beneficiary of the power vacuum.
This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 9:00 p.m. BST yesterday evening, which was 4:00 p.m. EDT. I thank Roy Stephens for sliding this into my in-box in the wee hours of this morning.
China’s biggest banks are accelerating cuts to their dividend payouts as bad debts pile up from struggling exporters in the Pearl River Delta, coal companies in the nation’s west and manufacturers in the Bohai Rim near Beijing.
Three of the nation’s four largest banks, including Industrial & Commercial Bank of China Ltd., this week cut their payment ratios for 2014 by the most in three years. ICBC’s fell to 33 percent from 35 percent a year earlier. The smaller China Citic Bank Corp. last week eliminated its payment altogether.
Rising charges for bad debts -- ICBC more than doubled provisions in the fourth quarter -- are cutting profits just as regulators require banks to hold extra capital. The average gain in net income for four of the five biggest banks -- ICBC, Agricultural Bank of China Ltd., Bank of China Ltd. and Bank of Communications Co. -- was 6.7 percent, the weakest in more than a decade, their results showed this week.
This Bloomberg article, co-filed from Shanghai and Beijing, showed up on their Internet site last Thursday---and I thank Elliot Simon for sending it along.
Russia decided to apply to join the China-led Asian Infrastructure Investment Bank (AIIB), the country’s Deputy Prime Minister Igor Shuvalov said on Saturday.
“I would like to inform you about the decision to participate in the AIIB,” which was made by Russian President Vladimir Putin, Shuvalov said at the Boao Forum for Asia.
Shuvalov added that Russia welcomes China’s Silk Road Economic Belt initiative and is happy about stepping up cooperation.
"We are delighted to be able to step up cooperation in the format of the Eurasian Economic Union (EEU) and China...the free movement of goods and capital within the EEU brings economies of Europe and Asia closer. This is intertwined with the Silk Road Economic Belt initiative, launched by the Chinese leadership," he said.
This article was posted on the Russia Today website in the wee hours of Saturday morning Moscow time---and I thank Roy Stephens for finding it. There was also a story on the South China Morning Post website headlined "Russia to join China-led Asian bank; Beijing opens door to Taiwan membership"---but I couldn't get it to load. Maybe you'll have more luck. It's also covered in more depth in this Zero Hedge article from Saturday headlined "De-Dollarization Continues as Russia Seeks AIIB Membership"---and I thank reader 'David in California' for that one.
Never in the history of American foreign policy has so much egg adhered to so little face as in the matter of Asia Infrastructure Investment Bank. All of America’s allies, including Britain and Australia, have elected to join the Chinese-led institution. That is a grand validation of China’s One Belt/One Road vision for infrastructure upgrades across the whole Eurasian landmass. China’s President Xi Jinping envisions $2.5 trillion of trade between his country and the “Silk Road” nations over the next decade. Rather than fret about the impact of a slowing (or shrinking) world economy on China’s export-driven prosperity, China is seeking to shape the economic environment around it.
It is not only the Obama administration that has been wrong-footed by the world’s embrace of China’s economic ambitions, but almost the whole of America’s foreign-policy elite. With almost no exceptions, American analysts have misunderstood China. One school argues that China inevitably will collapse of its own weight, because authoritarian governments supposedly are incapable of efficient allocation of resources; another warns of a Chinese plan for world domination.
Infrastructure is one of China’s great achievements. As The New York Times observed in a Sept. 13, 2013 report, China’s high-speed rail system already serves more passengers than the 54 million Americans who board domestic flights every day, and has transformed China’s economy. With 600 million Chinese migrating from the low-productivity countryside to higher-productivity employment in urban areas, the high-speed rail network has made business ventures possible that were not conceivable before.
This short, but very worthwhile read appeared on the Asia Times Internet site on Sunday sometime---and it's the final contribution of the day from Roy Stephen---and I thank him on your behalf.
Until March 31 countries can submit for membership of the Asian Investment Infrastructure Bank (AIIB), a financial institution proposed by China, which has the purpose of being a multilateral framework to finance infrastructure projects in the wide Eurasian region. In recent weeks many Western countries have submitted for membership, the US rejected application as it fears strong cooperation between Asia and Europe will weaken the US dollar hegemony. On April 15 the final list of the founding members will be disclosed.
In October 2013 the initial idea for the AIIB was first put forward by Chinese President Xi Jingping “on constructing a 21st Century Maritime Silk Road to promote maritime cooperation”. The project has currently developed into the New Silk Road Economic Belt.
The AIIB is very much about developing the infrastructure connecting Asia, Europe and Africa. For China to import resources such as oil, have strong export channels and to strengthen ties with trading partners. The main significance of the AIIB is non-US cooperation which will further weaken the US dollar hegemony and change the international monetary environment in the years to come.
This commentary by Koos showed up on the bullionstar.com Internet site yesterday sometime.
Annual core consumer inflation in Japan, the world's third-largest economy, stopped rising for the first time in nearly two years in February.
The core consumer price index (CPI) was flat from a year ago, stripping out the effect of last year's sales tax increase in April.
The last time the core CPI did not rise was in May 2013, when it was flat.
The latest figures are moving further away from the Bank of Japan's (BoJ) inflation target of 2%.
This short article appeared on the bbc.com Internet site on Friday---and I thank Dan Lazicki for bringing it to our attention.
Prime Minister Tony Abbott has cleared the way for Australia to join the new multi-billion-dollar, China-led Asian Infrastructure Investment Bank but says some issues remain before Australia could consider full membership.
Abbott announced Australia would sign a memorandum of understanding that will allow Australia to be involved in negotiations to set up the $100 billion bank.
"Key matters to be resolved before Australia considers joining the Asian Infrastructure Investment Bank include the bank's board of directors having authority over key investment decisions, and that no one country control the bank," Abbott said in a statement.
This news item was posted on The Sydney Morning Herald website on Sunday---and I found it embedded in a GATA release that Chris Powell filed from the Philippines yesterday afternoon local time.
Up until now, the world's descent into the NIRP twilight of fiat currency was a function of failing monetary policy around the globe as central bank after desperate central bank implemented negative and even more negative (in the case of Denmark some four times rapid succession) rates, hoping to make saving so prohibitive consumers would have no choice but to spend the fruits of their labor, or better yet, take out massive loans which they would never be able to repay. However, nobody said it was only central banks who could be the executioners of the world's saver class: governments are perfectly capable too. Such as Australia's.
According to Australia's ABC News, the "Federal Government looks set to introduce a tax on bank deposits in the May budget."
Ironically, the idea of a bank deposit tax was raised by Labor in 2013 and was criticized by Tony Abbott at the time. Much has changed in two years, and as ABC reports, assistant Treasurer Josh Frydenberg has indicated an announcement on the new tax could be made before the budget.
This disturbing article appeared on the Zero Hedge website just before midnight on Sunday evening EDT---and I thank reader M.A. for sending it our way.
Former Canadian foreign affairs minister John Baird has a new job as an adviser to global mining giant Barrick Gold, the corporation has confirmed.
In its annual report, the company listed Baird and former U.S. lawmaker Newt Gingrich as members of its international advisory board.
Barrick Gold says the group is made up of 10 external advisers who meet about once a year to provide advice to the board of directors and management on geopolitical and strategic matters.
This news item appeared on the cbc.ca Internet site on Saturday morning EDT---and I found it on the gata.org website.
Let the seller beware! The German citizen/investor who put away a few rolls of 20 mark gold coins (.2304 tr ozs. shown below) in 1918 would have done so at 119 marks per ounce. By early 1920 the previous rapid inflation had suddenly given way to deflation. Had that gold owner decided to cash in on gold's significant gains thinking runaway inflation was over, a 100,000 mark investment would have made him or her a millionaire.
The glow, however, would have quickly worn off.
By late 1921 the runaway inflation had resurfaced but now with a vengeance. Gold shot to 4,000 marks per ounce. By mid-1922 gold reached 10,000 marks per ounce and the wholesale price index went from 13 to 70. By late 1922, the roof caved in. Gold traded at 134,000 marks per ounce. In January, 1923, it cracked 1,000,000 marks per ounce. By midyear, it broke the 100 million marks per ounce barrier and at the peak of the hyperinflationary breakdown, it sold for over 100 billion marks per ounce.
The individual who thought he or she had the cat by the tail and cashed-in his or her golden chips during the 1920's deflation became a millionaire. In short order though, that millionaire became a pauper as wave after wave of hyperinflation washed over the German economy. One moral from this somewhat frightening tale is that becoming a millionaire or even a billionaire on one's gold holdings was inconsequential. Another is not to give up one's hedge until there is ample evidence that it is no longer needed.
Momentary nominal profits can be illusory.
Yes---and you can ask anyone from Zimbabwe about that as well. This interesting, but longish commentary by Michael Kosares showed up on the usagold.com Internet site on Monday.
The U.S. dollar's inverse relationship with gold has changed dramatically over the past decades and is likely to shift further as demand moves East and the world moves to a multi-currency system, according to the World Gold Council.
The organisation responsible for the development of the gold industry said in a report that gold prices are driven by multiple interconnected factors, and the US centric explanations about gold prices are risky for investors.
The council noted that gold market commentators, especially in the U.S., tend to link the changes in gold prices to the U.S. dollar and U.S. interest rates. While the US variables are important, the large demand for physical gold from emerging markets would make faulty any theory that relies too heavily on U.S.-metrics.
Generally, there is an inverse correlation between gold and the dollar. However, the council's analysis shows it is asymmetrical: Gold price increases more when the dollar weakens, than it falls when the dollar strengthens.
This is mostly a rehash of a WGC story that appeared late last week on the mineweb.com Internet site---and that's appeared in this space already---but there is some updated information in it. It's worth skimming, but that's about all. It appeared on the ibtimes.co.uk Internet site on Friday morning---and it's courtesy of Elliot Simon.
Withdrawals from the Shanghai Gold Exchange (SGE) remain exceptionally high despite being expected to drop following the Chinese New Year holiday. In the three weeks of trading since the holiday’s end, withdrawals from the exchange have totalled 149 tonnes which would seem to belie other reports that demand is slipping.
The latest figure from the SGE is for the movement of 53 tonnes out of the Exchange during week 11 (ended March 20), following 51 tonnes a week earlier and 45 tonnes in week 9. Total to March 20 is thus already 561 tonnes. So withdrawals from the SGE appear to be rising week on week at a time when they would normally expect to be falling back after the holiday buying spree has ended. Should the gold flows out of the exchange continue at this kind of rate, then the Q1 total figure will be of the order of 620-630 tonnes – comfortably a new Q1 record.
Even at the lower end of the likely Q1 flow level this would be 10% up on the previous highest Q1 withdrawal amount, which was 564 tonnes (this has almost been reached already with flows for seven working days yet to be announced) recorded a year ago when the full year figure was 2,102 tonnes. Q1 withdrawals will thus undoubtedly set a new record.
This commentary by Lawrie showed up on the mineweb.com Internet site at 11:27 BST yesterday morning. It's certainly worth reading.
So much for the "self-sustaining escape-velocity" recovery---again.
After rising at an annualized pace of 4.6% and 5.0% in Q2 and Q3, the final Q4 GDP estimate (a number which will still be revised at least 3-4 times in the coming years), slid more than half to 2.2%, the same as the second estimate from a month ago, and below the consensus Wall Street estimate of 2.4%.
The worst news was the following: For the year 2014, profits from current production decreased $17.1 billion, in contrast to an increase of $84.1 billion in 2013. Profits of domestic financial corporations decreased, and profits of domestic non-financial corporations increased. The rest-of-the-world component of profits decreased $9.0 billion in 2014, in contrast to an increase of $1.3 billion in 2013---and the fact that profits are now declining is not what those advocating EPS growth would like to see.
In short: a number which confirms the U.S. economy is once again slowing down, and will hit the breaks when in one month the BEA reports that Q1 GDP was at or below 1.0%, with snow in the winter getting the bulk of the ridiculous blame once again.
This news item was posted on the Zero Hedge website at 8:41 a.m. EDT on Friday morning---and today's first story is courtesy of reader M.A.
For the first time since October 2013, UMich Consumer Sentiment dropped for consecutive months (printing a final 93.0 for March down from 95.4 in Feb, but above the flash print earlier in the month). Under the surface there are concerns with an increasing number of respondents noting that household finance are worse than 5 years ago, and an increasing number of people seeing now as a "bad time to buy" a house or car.
This tiny Zero Hedge story, complete with an excellent chart, is worth thirty seconds of your time---and it's the first offering of the day from Dan Lazicki.
Intended warning or unintended slip? After Alan Greenspan's confessional admission that "Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it,"---we found it remarkable that during the Q&A after her speech today that Janet Yellen, when asked about negative rates, admitted that "cash in not a very convenient store of value," seemingly hinting at Bernanke's helicopter and that there will be no deflation in The U.S. ever...
Rick Santelli then sums it all up perfectly..."deflation is clearly the boogeyman... and the only thing that will save the middle class."
These two brief video clips appeared on the Zero Hedge website at 5:30 p.m. EDT yesterday afternoon---and it's the second contribution of the day from reader M.A.
The stock market is rigged. When I started making that claim years ago — and provided solid evidence — people scoffed. Some called it a conspiracy theory, tinfoil hats and that sort of stuff. Most people just ignored me.
But that’s not happening anymore. The dirty secret is out.
With stock prices rushing far ahead of economic reality over the last six or so years, more experts in the financial markets are coming to the same conclusion — even if they don’t fully understand how it’s being rigged or the consequences.
Ed Yardeni, a longtime Wall Street guru who isn’t one of the clowns of the bunch, said flat out last week that the market was being propped up. “These markets are all rigged, and I don’t say that critically. I just say that factually,” he asserted on CNBC.
This commentary by John appeared on the nypost.com Internet site late Wednesday evening---and I thank Brad Robertson for sending it our way.
Well that was a quick geopolitical event.
On the heels of what was set to be crude's best week since July 2013, Stratfor clarifying little risk of disruption to crude supplies, Goldman confirming negligible impact from Yemen and more to Iran, and reports from Saudi Arabia that "this [Yemen] operation will not go on for long, I think it will be days," WTI crude has tumbled back to the $48 handle and erased all the "gulf intervention" premium - refocusing on domestic storage concerns.
As Reuters reports, The Arab military campaign against Yemen's Houthi militia is likely to last days rather than weeks, Yemeni Foreign Minister Riyadh Yaseen told Saudi-owned al-Arabiya television on Friday.
In answer to a question about whether he thought the Saudi-led operation, which began on Thursday, would last days or weeks or more, Yaseen replied: "I expect that this operation will not go on for long, I think it will be days."
This tiny Zero Hedge story has an excellent WTI chart embedded in it---and it appeared on their Internet site at 2:36 p.m. EDT on Friday afternoon---and the 'click to enlarge' feature is a must to view the graph. I thank Dan Lazicki for sending it our way.
The slowdown that North American railroad companies had been bracing for in crude oil shipments has turned into a rout, with volumes falling faster than executives had predicted.
With energy companies scaling back drilling after prices for the commodity fell about 50 percent since July, industry executives and analysts anticipated that demand for hauling crude and extraction materials such as frac sand and pipes would slow after a four-year surge. They didn’t expect it to slow this much this fast.
“The impact is occurring more quickly than the rails originally projected to investors,” said Matt Troy, an analyst with Nomura Securities International Inc. in New York. “The consensus view was that very high double-digit growth would moderate to low double digits, and as we have seen in recent weeks we’ve broken that floor and in some cases gone negative.”
Rail stocks and tank-car leasing are reflecting the dwindling traffic. The Standard & Poor’s 500 Railroads Index posted its biggest weekly decline since October and lessors’ rates for oil cars have fallen by about a third in the last six months, Cowen & Co. said in a report on Friday.
This Bloomberg article, filed from Dallas, appeared on their Internet site at 6:22 p.m. Denver time on Thursday evening---and I thank West Virginia reader Elliot Simon for finding it for us.
These days, a momentous change in economic doctrine has policymakers openly targeting rising securities prices. It is believed that central bank Credit-induced wealth effects will stimulate spending, system-wide Credit expansion and, eventually, a steady 2% increase in the general price level. What began with the free-market advocate Alan Greenspan in the nineties (stealthily) nurturing U.S. non-bank Credit expansion, has regressed to open global government manipulation of sovereign bond, corporate debt, equities and currency markets.
There are serious flaws in today’s New Age doctrine that ensure spectacular failure. Generally speaking, global policy is pro-Bubble – pro-Credit Bubble, pro-securities market Bubbles, pro-wealth redistribution and pro-global Bubble-induced financial and economic maladjustment. It is pro unsustainable divergence between inflating securities prices and deflating economic prospects.
Fundamentally, market-based Credit is unstable, with this era’s great experiment requiring progressive government intervention and manipulation. Providing robust incentives for leveraged speculation ensures mispriced Credit, loose Credit Availability and boom and bust dynamics. It also ensures an inflating pool of trend-following and performance-chasing finance. Incentivizing flows to the risk markets as opposed to savings only exacerbates the proclivity of markets toward destabilizing speculative excess. As we’ve witnessed over the years, mounting market distortions and associated fragilities have been met with only more aggressive policy measures. A breakdown in market pricing mechanisms is celebrated as a historic “bull market.”
Importantly, it has reached the point where the risks associated with a bursting global Bubble overshadow policy discussions and objectives. Policymakers now endeavor to completely repress market self-adjusting and correcting mechanisms (i.e. “quasi-Capitalism”). Bear markets and recessions have become completely unacceptable, as this historic Bubble’s “Terminal Phase” runs its regrettable course.
Doug's weekly Credit Bubble Bulletin appeared on his Internet site on Friday evening sometime and, as usual, I thank reader U.D for sending it our way.
Here is a short pop quiz: When Israeli Prime Minister Benjamin Netanyahu addressed Congress earlier this month about the parameters of the secret negotiations between the United States and Iran over nuclear weapons and economic sanctions, how did he know what the negotiators were considering? Israel is not a party to those negotiations, yet the prime minister presented them in detail.
When Hillary Clinton learned that a committee of the U.S. House of Representatives had subpoenaed her e-mails as secretary of state and she promptly destroyed half of them—about 33,000—how did she know she could get away with it? Destruction of evidence, particularly government records, constitutes the crime of obstruction of justice.
When Gen. Michael Hayden, the director of both the CIA and the NSA in the George W. Bush administration and the architect of the government’s massive suspicionless spying program, was recently publicly challenged to deny that the feds have the ability to turn on your computer, cellphone, or mobile device in your home and elsewhere, and use your own devices to spy on you, why did he remain silent? The audience at the venue where he was challenged rationally concluded that his silence was his consent.
The common themes here are government spying and lawlessness. We now know that the Israelis spied on Secretary of State John Kerry, and so Netanyahu knew of what he spoke. We know that the Clintons believe there is a set of laws for them and another for the rest of us, and so Mrs. Clinton could credibly believe that her deception and destruction would go unpunished.
This commentary appeared on the Paul Craig Roberts website on Friday sometime---and it's worth reading.
The leaked proposal, published on Wikileaks, comes from the ongoing secretive Trans-Pacific Partnership (TPP) deal negotiations and outlines the intent to grant multinational corporations with the opportunity to sue foreign governments if their laws and regulations interfere with claimed future profits.
The whistleblower organization, Wikileaks, published a 56-page draft chapter dated January 20 from the secretive negotiations over a deal that has become the cornerstone of Obama’s economic agenda. The chapter, entitled “Investment”, proposes empowering multinational corporations to sue foreign governments.
Under the agreement, corporations may challenge foreign government’s laws and regulations if they interfere with “distinct, reasonable investment-backed expectations”, and they can do so before tribunals under the World Bank or the United Nations. This process is known as Investor-State Dispute Settlement (ISDS), and while it has existed in the past, the large scope of the TPP has prompted some serious concerns.
TPP negotiations have been kept tightly under wraps, with only select officials reviewing the documents in secured reading rooms. The leaked chapter would mark the first disclosure of the accord to the public since an early version leaked in 2012. Opponents of the TPP have voiced concerns about the secrecy of the deal, saying it allows governments to push forward provisions disliked by their constituents. The Obama administration, along with other TPP opponents have argued that the secrecy is necessary for a smooth negotiation.
It's no accident that this is all being done in secret. This must read news item put in an appearance on the sputniknews.com website at 10:13 p.m. Moscow time on their Friday evening, which was 2:13 p.m. in Washington.
Britain's record low inflation is unlikely to force the Bank of England to cut rates below their already rock-bottom levels, its governor has said, underscoring a fracturing of views between the top policymakers at Threadneedle Street.
Mark Carney said the Bank's next move in interest rates would be an increase rather than a cut, putting him at loggerheads with his chief economist, Andrew Haldane.
"We're still in a position where our message is... that the next move in interest rates is going to be up," Mr Carney said during a panel discussion at a Bundesbank conference in Frankfurt.
Mr Haldane surprised investors last week when he said a recent sharp slowdown in inflation meant the bank was as likely as not to cut rates - a view that had been previously rejected by Mr Carney.
This article appeared on The Telegraph's website at 3:50 p.m. GMT on their Friday afternoon---and it's the first contribution of the day from Roy Stephens.
Max Keiser is outspoken to say the least.
He hosts the Keiser Report, his show for Russian English-language channel RT, alongside his wife and producer Stacy Herbert, and is known for his angry outbursts against those he calls the “banksters”.
He was a Wall Street stockbroker in the 1980s, an experience he often draws on to guide viewers through the otherwise impenetrable jargon of global finance.
Now, though, he is based in the heart of London, which he says is the centre of the world when it comes to financial misconduct.
This absolute must read interview with Max appeared on theepochtimes.com Internet site back on March 18---and for obvious reasons had to wait for today's column. It's Max doing what he does best---telling it like it really is. I thank reader Jules Mounteer for bringing it to our attention.
Tony Rooke, in an act of civil disobedience, refused to pay the mandatory £130 TV license fee claiming it violates Section 15 of the Terrorism Act. Rooke’s accusation was aimed at the BBC who reported the collapse of WTC 7 over 20 minutes before it actually fell, and the judge accepted Rooke’s argument. While it was not a public inquiry into 9/11, the recognition of the BBC’s actions on September 11th are considered a small victory, one that was never reported in the U.S.
“Today was an historic day for the 9/11 truth movement,” Peter Drew of AE911Truth UK told Digital Journal, “with over 100 members of the public attending, including numerous journalists from around the U.K. as well as from across other parts of Europe.”
Well, dear reader, it's been a well-known fact from the outset that this case is one of the many major monkey wrenches in the Fantasyland story surrounding the actual events of 9/11. It falls into the absolute must read/watch category---and for obvious reasons it had to wait for my Saturday column. The first reader through the door with it was Dan Lazicki.
If the cries of ‘Je suis Charlie’ were sincere, the western world would be convulsed with worry and anger about the Wallström affair. It has all the ingredients for a clash-of-civilisations confrontation.
A few weeks ago Margot Wallström, the Swedish foreign minister, denounced the subjugation of women in Saudi Arabia. As the theocratic kingdom prevents women from travelling, conducting official business or marrying without the permission of male guardians, and as girls can be forced into child marriages where they are effectively raped by old men, she was telling no more than the truth. Wallström went on to condemn the Saudi courts for ordering that Raif Badawi receive ten years in prison and 1,000 lashes for setting up a website that championed secularism and free speech. These were ‘mediaeval methods’, she said, and a ‘cruel attempt to silence modern forms of expression’. And once again, who can argue with that?
The backlash followed the pattern set by Rushdie, the Danish cartoons and Hebdo. Saudi Arabia withdrew its ambassador and stopped issuing visas to Swedish businessmen. The United Arab Emirates joined it. The Organisation of Islamic Co-operation, which represents 56 Muslim-majority states, accused Sweden of failing to respect the world’s ‘rich and varied ethical standards’ — standards so rich and varied, apparently, they include the flogging of bloggers and encouragement of paedophiles. Meanwhile, the Gulf Co-operation Council condemned her ‘unaccept-able interference in the internal affairs of the Kingdom of Saudi Arabia’, and I wouldn’t bet against anti-Swedish riots following soon.
Yet there is no ‘Wallström affair’. Outside Sweden, the western media has barely covered the story, and Sweden’s E.U. allies have shown no inclination whatsoever to support her. A small Scandinavian nation faces sanctions, accusations of Islamophobia and maybe worse to come, and everyone stays silent. As so often, the scandal is that there isn’t a scandal.
This news item was posted on the spectator.co.uk Internet site early Saturday morning in London---and I thank South African reader B.V. for sliding it into my in-box shortly after I'd filed today's column.
The European Commission has said it wants to abolish geo-blocking, the practice of limiting access to online services based on a user's location.
The EU’s internal market and geo-blocking “cannot coexist", the EU's commissioner for digital single market, Andrus Ansip, said Wednesday (25 March).
He listed a set of goals to feature in the digital strategy he will publish in May. These include: “Better access for consumers and businesses to digital goods and services; Shaping the environment for digital networks and services to flourish; and Creating a European Digital Economy and Society with long-term growth potential”.
“Consumers and companies in Europe are digitally grounded. They cannot choose or move freely. In the 21st century, this is absurd,“ said the former prime minister of Estonia, one of the most digitally advanced countries in the world.
This interesting article showed up on the euobserver.com website on Wednesday---and is another story that had to wait for today's column. This one is courtesy of Roy Stephens.
May 30, 1941 was the day when Manolis Glezos made a fool of Adolf Hitler. He and a friend snuck up to a flag pole on the Acropolis in Athens on which a gigantic swastika flag was flying. The Germans had raised the banner four weeks earlier when they occupied the country, but Glezos took down the hated flag and ripped it up. The deed turned both him and his friend into heroes.
Back then, Glezos was a resistance fighter. Today, the soon-to-be 93-year-old is a member of the European Parliament for the Greek governing party Syriza. Sitting in his Brussels office on the third floor of the Willy Brandt Building, he is telling the story of his fight against the Nazis of old and about his current fight against the Germans of today. Glezos' white hair is wild and unkempt, making him look like an aging Che Guevara; his wrinkled face carries the traces of a European century.
Initially, he fought against the Italian fascists, later he took up arms against the German Wehrmacht, as the country's Nazi-era military was known. He then did battle against the Greek military dictatorship. He was sent to prison frequently, spending a total of almost 12 years behind bars, time he spent writing poetry. When he was let out, he would rejoin the fight. "That era is still very alive in me," he says.
Glezos knows what it can mean when Germans strive for predominance in Europe and says that's what is happening again now. This time, though, it isn't soldiers who have a choke hold on Greece, he says, but business leaders and politicians. "German capital dominates Europe and it profits from the misery in Greece," Glezos says. "But we don't need your money."
In his eyes, the German present is directly connected to its horrible past, though he emphasizes that he doesn't mean the German people but the country's ruling classes. Germany for him is once again an aggressor today: "Its relationship with Greece is comparable to that between a tyrant and his slaves."
This longish essay appeared on the German website spiegel.de on Monday---and is the third article in a row that had to wait for Saturday's column. It's worth reading if you have the interest---and it's the second offering in a row from Roy Stephens. It now sports the above headline, but the original read "German Power in the Age of the Euro Crisis".
Greek bank deposits plunged to their lowest level in 10 years in February as a political standoff between the government in Athens and the country’s creditors raised the prospect of a possible euro exit.
The deposits of households and businesses fell 5 percent in February to €140.5 billion ($154 billion), their lowest level since March 2005, according to Bank of Greece data released on Thursday. Greeks have pulled about €23.8 billion from the banking system in the past three months, 15 percent of the total deposit base.
Greek lenders are depending on Emergency Liquidity Assistance controlled by the European Central Bank to stay afloat as depositors flee. The country’s creditors have given Prime Minister Alexis Tsipras, elected in January on a platform to end austerity, a Monday deadline to present enough details of a new economic plan to convince them to release more bailout funds.
This Bloomberg story, filed from Athens, was posted on their website at 8:05 a.m. MDT on Thursday morning---and it's something I 'borrowed' from yesterday's edition of the King Report. You should note that the Bloomberg 'thought police' left off four words from the headline that I show above---and that are included in the link as well.
Ukraine’s $3 billion debt to Russia could undermine the IMF’s four-year multibillion dollar bailout program. If the debt is considered official, it will breach the terms of providing financial assistance, said IMF spokesperson William Murray.
The Ukraine debt includes $3 billion in Eurobonds lent by Russia to the country’s previous government in December 2013. IMF rules say a bailout cannot be provided to a country if it defaulted on a loan from a state institution.
"We have a non-tolerance policy," William Murray told reporters at a news conference on Thursday, adding that Ukraine's debt to Russia should be considered state debt.
"If I'm not mistaken, the $3 billion Eurobond comes from the Russian sovereign wealth fund, so it's official debt," he said.
I posted a story on this particular issue in yesterday's column, but this one showed on the Russia Today Internet site at 10:22 a.m. Moscow time on their Friday morning. It's worth skimming---and I thank Roy Stephens for sending it.
Russia has already supplied 300 mln cubic meters of natural gas to Ukraine’s Donbas region, Energy Minister Alexander Novak told reporters on Friday.
"Most likely it is slightly more than 300 million cubic meters", he said.
In late February, Naftogaz of Ukraine refused to supply gas to Donbas. Kiev said it was impossible because the gas transportation system delivering gas to the east of Ukraine had been destroyed.
Russia’s gas giant Gazprom agreed to discuss gas supplies to Donbas outside the trilateral gas talks between Russia, Ukraine and the E.U.
The above four paragraphs are all there is to this brief article that appeared on the tass.ru Internet site at 7:54 p.m. Moscow time on their Friday evening, which was 11:54 a.m. EDT in Washington.
Well, its semi official, Minsk 2 is dead because Kiev has decided that the Eastern territories have to surrender first to Kiev before they will carry through with the rest of the political rearrangement terms of this agreement. And, of course this is absurd. Usually the vanquished, Kiev in this case, surrenders to the winner, which is clearly the Donbass rebels, and so Cohen understandably describes this period of relative calm as a pause to the next offensive. Cohen considers this political absurdity is direction from Washington interests. And with Washington's additional vandalism through NATO spokespersons and congressional support to send lethal weapons, Obama is being hard pressed to keep to his "give the Minsk 2 agreement a chance". Unfortunately, at present he is being very quiet about all this and one is inclined to suspect an element of disingenuousness (or even indifference) on the president's part. Cohen by now is even more convinced that there must be a regime change in Kiev in order for this terrible war to be resolved. And, of course, these events are "to sabotage Merkel and Minsk 2," and her efforts to resolve this with "no military solution". So far Washington is succeeding and Cohen believes that the United States and Russia are closer to war due to these latest events.
Meanwhile the IMF is beginning to send funds to the beleaguered regime - and Cohen points out that a 1/3 of it was from "private sources". This amounts to $40billion in total and is understood to be part of "war aid" to Kiev.
But Stephen Cohen is mildly encouraged that 48 members, 6% of Congress, opposed the bill to supply lethal aid to Kiev. There are also cracks showing in the politics of the oligarchs involved in Kiev's parliament. Purges of supporters of the previous governments are also starting. These are showing up in the form of 6 (and counting) "suicides" that so far involve the use of window exits of taller buildings; special mention is also made of one of the leading political competitors with his own "pocket army", one Ihor Kolomoiskii, was told to disarm his "troops" and there was almost an armed standoff with the government. That suggests that the government is breaking down through a process of squabbling fiefdoms. He has since been "fired" by Poroshenko as governor of a province. There is no rule of law in the government of Kiev is Cohen's very astute conclusion, and it should be to the shame of the United States that we support it.
But with Europe increasingly cool towards continuing this crisis and the trends of new relationships between Russia and the East, Cohen is increasingly seeing this process as a break down of Washington's power with the potential for the dissolution of NATO. Again, this broadcast excels in details of events that see the course of history changing in profound ways right before our eyes.
This 39:47 minute audio interview was posted on the John's website on Tuesday---and for length reasons had to wait for today's column. I thank Larry Galearis for bringing it to my attention---and now to yours. If you have the interest, it's definitely worth your time.
While a source of much schadenfreude by its neighbors and casual onlookers, Turkey has become a glaring example of what happens to a formerly respectable nation as it devolves entirely into a banana republic with not only authoritarian overtones but a police state to boot. And earlier today, Turkey's conversion to a full blown police state was complete when, after weeks of heated debates and brawls in parliament, Turkey’s government passed a security package expanding police powers, along with an online surveillance law and a discretionary fund for President Recep Tayyip Erdogan to fund covert operations.
In other words, president Erdogan has just voted himself quasi-dictatorial powers with a private police force to defend him.
As Bloomberg details, the parliament voted to approve security laws that allow police to conduct searches and arrests without immediate court orders and use firearms against militants. The law separately empowered government-appointed governors to order police or paramilitary forces to conduct searches and detain suspects for up to 48 hours without immediate court orders, state-run Anadolu Agency said.
This Zero Hedge spin on a Bloomberg story put in an appearance on the ZH website at 8 a.m. EDT yesterday morning---and it's another contribution from reader M.A., for which I thank him.
Saudi Arabia kept some key details of its military action in Yemen from Washington until the last moment, U.S. officials said, as the kingdom takes a more assertive regional role to compensate for perceived U.S. disengagement.
The Middle East's top oil power told the United States weeks ago it was weighing action in Yemen but only informed Washington of the exact details just before Thursday's unprecedented air strikes against Iran-allied Houthi rebels, the officials said.
Although the Saudis spoke with top U.S. officials as they debated an air assault in support of embattled Yemeni President Abd-Rabbu Mansour Hadi, U.S. officials acknowledged gaps in their knowledge of the kingdom’s battle plans and objectives.
Asked when he was told by Saudi Arabia that it would take military action in Yemen, General Lloyd Austin, the head of the U.S. military’s Central Command, told a Senate hearing on Thursday he spoke with Saudi Arabia’s chief of defense "right before they took action." He added that he couldn't assess the likelihood of the campaign succeeding because he didn't know the "specific goals and objectives."
This Reuters article, filed from Washington, was posted on their Internet site at 9:25 p.m. EDT on Thursday evening---and it's the third contribution of the day from Elliot Simon.
Saudi Arabia‘s U.S.-backed aggression against the sovereignty of Yemen is a textbook example of how local conflicts are internationalized – and become tripwires for regional wars and even global conflagrations.
Like Libya, Yemen is yet another Middle Eastern country that doesn’t really exist: it is actually at least two separate countries, perhaps three – the southern provinces, which are primarily Sunni, the northern tribes, who adhere mostly to the Zaydi form of Shi’ite Islam, and the area around Sa’na, the capital, one of the oldest continuously inhabited cities on earth, where all Yemen’s clashing cultural, political, and religious factions meet.
The north/south division dates back to the nineteenth century British colonization, when, in 1839, the British seized the port city of Aden and administered it as a subset of the Indian Viceroyalty. It became a major trading center after the opening of the Suez canal, and the Brits pushed outward, extending their influence throughout what had been a land perpetually divided between the Ottoman Empire and local imams, including the distinctive Zaydis in the north. In 1911, the Zaydis rose up against the British and their local collaborators, abolished the north/south division negotiated by the British Foreign Office, and established the Mutawakkilite Kingdom of Yemen under Imam Yahya. Yahya’s dream was to recreate the ancient Qasamid dynasty, founded in the seventeenth century: a "Greater Yemen" extending into what is today Saudi Arabia as well as the whole of modern Yemen.
This essay by Justin appeared on the antiwar.com Internet site on Friday sometime---and it's courtesy of Dan Lazicki. I haven't read it yet, but it's on my 'to do' list for this weekend.
Lee Kuan Yew, the founding father of Singapore who died this week at 91, had a lot to say about India. He never sugar-coated his remarks, nor did he resort to the many clichés used by thinkers both in the West and in India.
In 2000, Lee published "From Third World to First," an account of the rise of Singapore beginning in 1965. It contains a long section on India’s flaws, both as a civilization -- Lee believed the caste system was inimical to meritocracy, which is the foundation of economic development -- and as a new nation-state that he said couldn't transcend its native introversion and its (democratic) directionlessness.
Reading these pages is a bit like reading V.S. Naipaul on India, only from the viewpoint of a rigorously pragmatic, clear-sighted and technocratic statesman. Five Indian prime ministers across five decades -- Jawaharlal Nehru, Indira Gandhi, Morarji Desai, Rajiv Gandhi, Narasimha Rao -- are one after the other allowed one or two kind sentences for their idealism, good intentions and unpromising circumstances. Then their personal frailties and flaws in economic management, leadership and foreign policy are ruthlessly, and very persuasively, dissected.
This very interesting commentary put in an appearance on the bloomberg.com Internet site at 6 p.m. on Wednesday evening EDT---and I thank Dan Lazicki for sharing it with us. It's another one of those articles that had to wait for my Saturday column.
Some say that when the average “mom-and-pop” retail investors get back into the stock market, it could be time to get out. But what about when even teenagers start buying?
China has entered a new stock frenzy, like something out of America in the Roaring 20s or the dottiest days of the dot-com bubble, with trading volumes continuing to push to new record highs.
On Wednesday, combined trading on the Shanghai and Shenzhen markets hit 1.24 trillion yuan ($198 billion), the seventh straight session in which turnover surpassed the 1 trillion yuan mark. By comparison, the New York Stock Exchange typically saw $40 billion-$50 billion a day in trading during the first two months of this year.
The lure of flush times on the Shanghai market is sweeping in unlikely investors by the hundreds of thousands. This week, both the China Securities Daily and the Beijing Morning Post had dueling reports about recent college graduates and, yes, teenagers buying shares.
This news item appeared on the marketwatch.com Internet site at 11:45 p.m. EDT on Thursday evening---and I thank Roy Stephens for digging it up for us over at David Stockman's website.
We find it amusing how many people try to read into the tea leaves when looking at the NYSE margin debt (especially since the real leverage long ago left the CNBC TV studio in downtown Manhattan, as explained before), when the real action is half way around the world. Because, in the immortal words of Crocodile Dundee, "That is not margin debt. This is margin debt."
The brief Zero Hedge story has an embedded chart showing the margin purchases on the Shanghai and Shenzhen stock exchanges---and they're over the moon. The chart is worth the trip---and I thank Dan Lazicki for sending it to me on Thursday. I didn't post it in yesterday's column, but it fits perfectly with the previous story on the bubble dynamics in China's equity markets.
New Zealand’s spy agency watchdog is launching an investigation into the scope of the country’s secret surveillance operations following a series of reports from The Intercept and its partners.
On Thursday, Cheryl Gwyn, New Zealand’s inspector-general of intelligence and security, announced that she would be opening an inquiry after receiving complaints about spying being conducted in the South Pacific by eavesdropping agency Government Communications Security Bureau, or GCSB.
In a press release, Gwyn’s office said: “The complaints follow recent public allegations about GCSB activities. The complaints, and these public allegations, raise wider questions regarding the collection, retention and sharing of communications data.”
This month, The Intercept has shined a light on the GCSB’s surveillance with investigative reports produced in partnership with the New Zealand Herald, Herald on Sunday, and Sunday-Star-Times.
I knew that the Hobbits of the Shire wouldn't be pleased with what Saruman was doing in their midst---and if they're smart, they and the Ents, should make the trip to Isengard just outside Blenheim---and do what they have to do to the white domes of Orthanc. When they're done, they can celebrate with a few cases of Oyster Bay Sauvignon Blanc. This short article was posted on the firstlook.org Internet site on Thursday sometime---and it's the final offering of the day from Roy Stephens, for which I thank him.
Listen to Eric Sprott share his thoughts on negative trends in the economy, economic ramifications of global geopolitical unrest, the movement in precious metals this week, and his opinion on the newly implemented electronically-based London Gold Fix.
This 10:27 minute audio interview with Eric was conducted by Geoff Rutherford on Friday---and posted on the sprottmoney.com Internet site yesterday. It's worth your while.
Hinde Capital in London, in cooperation with the free-market advocates of the Cobden Centre, this week published the first part of an interview with former Bank for International Settlements official William R. White, who in a speech in June 2005 to a BIS conference confessed on behalf of the bank to the international central bank gold price suppression scheme.
White is now chairman of the Economic and Development Review Committee of the Organization for Economic Cooperation and Development, and in the Cobden Centre interview he expresses skepticism about "quantitative easing," contends that the biggest problem of the world financial system is excessive debt, argues that much of this debt will have to default and be written off, and laments that free markets are being impaired by central bank interest rate-suppression policies that are propping up uneconomic businesses.
Of course gold price suppression is a prerequisite of interest rate suppression and is just as antithetical to free markets, so it would have been nice if White was questioned about that, especially since his former employer, the BIS, remains the broker for surreptitious central bank interventions in the gold market.
This GATA release, that Chris Powell filed from the Philippines yesterday, has some very interesting embedded links---along with the link to the Hinde Capital interview. This commentary is definitely worth your while.
Late last year, when looking at a Goldcorp slideshow, we noticed something surprising: the gold miner had forecast that 2015 would be the year when gold production would peak among the mining industry.
According to a report issued by Goldman's Eugene King looking at commodity scarcity, the chart below "shows that there are only 20 years of known mineable reserves of gold and diamonds."
Of course, this analysis is meaningless in a vacuum: if the "known reserves" of gold plunge in the coming decade, no matter how many gold futures and GLD short sales are conducted by the BIS, the price will have to go up, and it will go up high enough to where a new surge of gold miners will come online and find thousands of new tons of gold reserves around the globe.
Unless they don't, and Goldman is correct that "peak gold" may have arrived. This will be even more true if over the coming years the long overdue fiat economic panic finally washes over the globe, and a revulsion toward central bank policies forces a scramble into gold whose value (if not price since fiat currencies will be redundant) soars.
The answer is unclear, but what is certain is that like the price of oil over the past decade and until last fall when price discovery finally became somewhat credible, what happens in the physical realm has absolutely zero marginal impact on the price of commodity which has about 100 ounces in deliverable paper contracts for every ounce in underlying. It will be only after the gold price distortions via the derivative market are eliminated that such trivial price-formation forces as supply and demand are once again relevant.
Of course this 20-year projection goes out the window if the gold price rises many orders of magnitude higher than it is now, as marginal deposits will become major ore bodies overnight. But as this Zero Hedge article from yesterday states, JPMorgan et al will have to release their iron grip in the COMEX futures market before anything else happens. This article is definitely worth your while---and I thank Dan Lazicki for his final contribution to today's column.
The market would seem to believe that there is a direct inverse relationship between dollar strength and the gold price and also, in the current environment of negative interest rates that any rise in these rates stimulated by the U.S. Federal Reserve or perhaps the ECB or elsewhere, will be gold price negative. Indeed any hint of these generally accepted maxims does indeed tend to move the gold market in something of a knee jerk reaction.
But, a new report out from the World Gold Council (WGC) authored by Juan Carlos Artigas, the WGC’s director for Investment Research, points out that these common gold wisdoms are not entirely accurate and that following the way the gold market has acted under these scenarios shows that the bland acceptance of these norms as fact rather misses out on gold’s real world performance.
Regarding the inverse relationship with the strength of the dollar – while this in essence is correct, Artigas points out that this relationship is a very asymmetric one – and indeed does not always occur at all – as witness some of the gold price’s upwards movement when the dollar has been particularly strong. Indeed the WGC research has shown that the gold price increases more when the dollar weakens than it falls when the dollar strengthens. To make the point the report notes that at the time it was prepared (March 20) the dollar index had risen by 20% since the beginning of 2014, yet gold had only fallen by 1.2% over the same period. But obviously such statistics are a little dangerous – if one chooses one’s dates carefully one could probably come up with some totally different ratios.
Of course this new report from the World Gold Council doesn't breath a word about the short positions held by the Big 8 trader in the COMEX futures market. Their actions along---and nothing else---determines the gold price, along with the prices of the other three precious metals. That's all there is, there ain't no more. This commentary by Lawrie appeared on the mineweb.com Internet site at 4:37 p.m. GMT yesterday.
A visit today to the website of ICE Benchmark Administration (IBA), which now runs the new London gold benchmarking process on behalf of the LBMA, confirms there are now seven Direct Participants in the LBMA Gold Price with JP Morgan now joining Barclays, Goldman Sachs, HSBC, Scotiabank, SocGen, and UBS in the setting of the twice daily gold benchmark. Talk about ‘The Usual Suspects’!
If any bank selection could be guaranteed to inflame those within the gold bull community who preach gold price manipulation, it would be the addition of JP Morgan, following that of Goldman Sachs and UBS, over the original four members of the old London Gold Fixing panel. A cynic might suggest the LBMA and ICE might have made the selection of the participants to deliberately rile GATA and its supporters, as all the above banks are those widely reckoned by the gold price manipulation theorists to be controlling the gold price for their own ends and for those of some allied central banks. Manna for the conspiracy theorists!
And still there are no Chinese banks involved. Will there ever be? Until the benchmarking process participants are widened to include entities from outside the Western banking elite, the process will remain suspect in the eyes of those who feel that there are no level playing fields in the global financial markets – if indeed there ever were!
The above three paragraphs are all there is to this brief commentary that appeared on the mineweb.com Internet site at 4:58 p.m. GMT yesterday---and Lawrie's comments are spot on. It's a must read.
The volume of gold sold forward by mining companies rose by 103 t last year, the biggest annual increase since 1999, an industry report showed on Friday.
That far outstrips an estimate given late last year of 42 t to 52 t, after Mexican gold and silver miner Fresnillo said it was hedging 47 tonnes of output over five years.
In their quarterly Global Hedge Book Analysis, Societe Generale and GFMS analysts at Thomson Reuters said the bulk of the rise in the global gold hedge book last year was driven by Fresnillo and Russia's Polyus Gold, which announced a major hedging deal in July.
"Of the growth in the book in 2014, the majority (85 t) came from these two companies. Together they now account for half of the outstanding global hedging," the report said.
This is much ado about nothing once again, dear reader, as these amounts are piddling compared to what they were almost 20 years ago. It was a situation that I remember all too well---and so do the miners. This Reuters gold-related news story appeared on the miningweekly.com Internet site yesterday---and I thank South African reader B.V. for digging it up for us.
As most readers who are interested in gold will know, China’s official gold reserves are small in proportion to the size of their economy and their foreign exchange reserves. This disproportionate position has been difficult for China to escape from. Any slight move from their immense stock of U.S. dollars into gold could disrupt the gold market, and thus the U.S. dollar, spoiling the party for everybody.
China is forced to buy in secret. The latest update on the size of their official gold pile was in April 2009, when they disclosed to have 1,054 tonnes, up 454 tonnes from 600 tonnes, which they claimed to have since 2003. Common sense indicates the PBOC did not buy 454 tonnes in a few months; most likely they bought this amount in secret spread over six years (2003 – 2009). More common sense suggests they continued to buy in secret since 2009 and they hold at least twice the weight they currently claim.
Last week I reported it’s very likely the renminbi will be adopted into the SDR basket this year and before inclusion China will announce their true gold reserves. All arrows point in the same direction, IMF chief Lagarde stated: China’s yuan [renminbi] at some point would be incorporated in the International Monetary Fund’s Special Drawing Right (SDR) currency basket, IMF Managing Director Christine Lagarde said, …”It’s not a question of if, it’s a question of when,”
As I said in my column yesterday, I would be rather disappointed if they didn't have north of 5,000 tonnes in their reserves when they do announce. This must read commentary by Koos Jansen, which includes his thoughts on the withdrawals from the Shanghai Gold Exchange for the week ending on March 20, was posted on the Singapore-based website bullionstar.com yesterday sometime.
After last week's initial jobless claims drop - which nevertheless held the 4-wk average above 300k - this week saw the number drop once more. Against expectations of 290k, claims printed 282k, leaving the 4-week average at 297k, conveniently below the 300k mark. Continuing claims continues to flat line at an elevated level. This means that since the end of QE3, initial jobless claims are unchanged as the trend of improvement has clearly stalled.
This brief Zero Hedge article, with two excellent charts, showed up there at 8:37 a.m. EDT on Thursday morning---and today's first story is courtesy of Dan Lazicki.
How can it be? Services PMI was at 6-month highs. The Kansas City Fed Index tumbled to -4 in March (against expectations of +1) and was last below this level in Feb 2013. KC Fed has now missed for 6 of the last 8 months and the report is a disaster across the board. New orders plunged to -20 (2nd lowest print since Lehman), order backlogs imploded, average workweek collapsed to -17 (lowest since Lehman), and future capex expectations fell to a five-year low. As one respondent noted, "we do not see the economy as being as strong as a portrayed in the national media reports."
This Zero Hedge story is also chock full of charts that are worth your while. It was posted on their Internet site at 11:17 a.m. EDT yesterday morning. It's another offering from Dan L.
There might be a train wreck ahead — investors should look out for withering corporate profits when first-quarter results start pouring in, with some companies' profits expected to vanish entirely, according a USA Today review of S&P Capital IQ data.
In fact, at least 19 companies in the bellwether S&P 500 are expected to see their profits plummet by 90 percent or more, according to analyst projections.
Analysts' consensus projects that overall S&P 500 earnings will slump by almost 3 percent for the first quarter of this year. All 10 recessions since 1945 were preceded by downward trending growth in earnings per share during the previous 12-month period, said Sam Stovall, managing director of U.S. Equity Strategy at S&P Capital IQ’s Global Markets Intelligence group.
This business-related news story appeared on the newsmax.com Internet site at 6:00 a.m. EDT on Thursday morning---and I thank West Virginia reader Elliot Simon for sending it along.
With Trannies now down almost 6% year-to-date, the S&P just fell back below the red-line for 2015, joining the Dow. Small Caps and NASDAQ remain up 2% for now. Bonds, gold, and silver are back in the green for 2015.
Year-to-Date, stocks not happy...as PMs and bonds push back into green.
This is another short, 2-chart Zero Hedge story from yesterday morning EDT---and this one is courtesy of Dan Lazicki as well. It's certainly worth a peek.
James Grant of Grant’s Interest Rate Observer discusses risk in the markets and the Fed.
This 4:41 minute video clip took place on the Fox Business website on Wednesday---and once again I thank Dan Lazicki for sharing it with us.
Something highly unusual, and potentially quite bearish, has just happened to the stock market. The S&P has closed on its absolute low three days in a row---and the pundits over at CNBS are fraught with worry.
But never fear, the President's Working Groups on Financial Markets---a.k.a. The Plunge Protection Team---will not allow things to get out of hand in the equity or bond markets to the downside, just like they're not prepared to let the precious metals get away to the upside.
This 2:36 minute video was posted on the CNBC website yesterday---and once again I thank Dan Lazicki for sharing it with us.
Professor Michel Chossudovsky is the author of many important books. His latest is The Globalization of War: America’s Long War Against Humanity. Chossudovsky shows that Washington has globalized war while the US president is presented as a global peace-maker, complete with the Nobel Peace Prize. Washington has military deployed in 150 countries, has the world divided up into six US military commands and has a global strike plan that includes space operations. Nuclear weapons are part of the global strike plan and have been elevated for use in a preemptive first strike, a dangerous departure from their Cold War role.
America’s militarization includes military armament for local police for use against the domestic population and military coercion of sovereign countries in behalf of US economic imperialism.
One consequence is the likelihood of nuclear war. Another consequence is the criminalization of US foreign policy. War crimes are the result. These are not the war crimes of individual rogue actors but war crimes institutionalized in established guidelines and procedures. “What distinguishes the Bush and Obama administrations,” Chossudovsky writes, “is that the concentration camps, targeted assassinations and torture chambers are now openly considered as legitimate forms of intervention, which sustain ‘the global war on terrorism’ and support the spread of ‘Western democracy.’”
Chossudovsky points out that the ability of US citizens to protest and resist the transformation of their country into a militarist police state is limited. Washington and the compliant foundations now fund the dissent movement in order to control it.
This absolute must read commentary by Paul showed up on his Internet site yesterday sometime---and I thank Roy Stephens for bringing it to our attention.
A lack of data on foreign buyers scooping up property in Canada has made it tougher for the central bank to understand housing market and financial system risks, a senior bank of Canada official said on Wednesday.
Overseas home owners could respond more quickly to house price shocks, potentially exacerbating price moves, Deputy Governor Tim Lane said.
But he also noted any indebtedness they have would have less impact on the Canadian financial system assuming their money comes from abroad.
Foreign buying has helped pump up Canada's housing market, particularly in major centers like Toronto and Vancouver.
This Reuters article appeared on their Internet site at 5:40 p.m. EDT yesterday afternoon---and it's the second offering of the day from Elliot Simon.
"We have an interest rate environment that is causing huge problems for us in Germany," Wolfgang Schaeuble said at a banking event in Berlin.
However, he added that he was not criticising the European Central Bank (ECB), which needed to defend its inflation target.
"A low interest rate leads to a misallocation of resources with all the risks and side-effects that you see when bubbles are forming," he said, adding that there was too much central bank money and debt in the world.
Mr Schaeuble also said that bond buying by the European Central Bank meant countries had less incentive to reform.
This Reuters article found a home over at the telegraph.co.uk Internet site at 4:37 p.m. GMT yesterday afternoon, which was 12:37 p.m. in New York. It's courtesy of South African reader B.V.---and it's worth reading.
Nearly a month after the Hype Alpe Adria bad bank Heta Asset Resolution "unexpectedly" imploded under a house of non-GAAP and misreported cards, and which led to only the second European creditor bail-in after Cyprus in what until then was considered the safest European nation, unleashing a herd of black swans which will result in not only the insolvency of one of Austria's provinces, Carinthia, but a week ago led to its first foreign casualty, German Duesseldorfer Hypothekenbank AG which had to be bailed out by the German FDIC-equivalent, the ECB has finally realized it may have a major problem at hand.
So, doing what it does best, a month after the fact and long after the black swans have left the stable so to speak, Mario Draghi's ECB has asked Eurozone banks "to detail their exposure to Austria and provisions they plan to make after the country halted debt repayments by a "bad bank" winding down defunct lender Hypo Alpe Adria," financial sources told Reuters.
This Reuters article from yesterday gets the Zero Hedge treatment. It was posted on their Internet site at 10:36 a.m. EDT yesterday---and it's another contribution from reader Dan L. It's also worth reading.
With Washington throwing its full faith and credit behind a new Ukrainian bond issue, it appears it’s time for Moscow to play spoiler to current debt restructuring talks between Kiev and its creditors. Russia is the country’s second-largest creditor after buying $3 billion in bonds back in the days of Viktor Yanukovych (who was once the victim of an attempted assassination by egg and who famously fled the country amid widespread protests last year) and now the Kremlin wants its money and isn’t likely to be amenable to any haircuts imposed on private creditors. Here’s more from Bloomberg:
Ukraine, after gaining a lifeline from the International Monetary Fund, included Russia’s bond among the 29 securities and enterprise loans it seeks to renegotiate with creditors before June. Finance Minister Natalie Jaresko has promised not to give any creditor special treatment. The revamp will include a reduction in the coupon, an extension in maturities as well as a cut in the face value, she said.
Russian Deputy Finance Minister Sergey Storchak said March 17 that the nation isn’t taking part in the debt negotiations because it’s an “official” creditor, not a private bondholder.
Should Russia decide to stick with a hardline stance on the negotiations (and it’s likely they will) it could not only embolden other prospective holdouts, but may indeed force Ukraine into a default.
This very interesting news item appeared on the Zero Hedge Internet site at 11:30 a.m. EDT yesterday morning---and I thank Dan Lazicki for digging it up for us.
Panic reached the inner sanctum of the Russian central bank.
It was Dec. 16 -- the day Russian traders would later christen Black Tuesday -- and the ruble was in a free fall.
“Intervene! Intervene!” a central bank official shouted.
Governor Elvira Nabiullina watched the currency on her tablet screen react to her emergency rate increase. No, she said, not this time: Russia would no longer fight the market. Speculators needed a cold shower, she said.
That daring decision, related by two people with knowledge of the meeting, has begun to pay off for Nabiullina, 51, and her patron, President Vladimir Putin. Despite sanctions meant to punish Russia for its foray into Ukraine a year ago, the ruble has stabilized. Since Black Tuesday, when it plunged to a record low, the ruble has rebounded 19 percent against the dollar, the most among 24 emerging-market currencies.
As this Bloomberg article states shortly afterwards---"While her central bank is nominally independent, analysts agree Putin is ultimately in charge. Yet Nabiullina has emerged as a power in her own right, with a direct line to the president." This very interesting article, filed from Moscow, appeared on their Internet site at 3 p.m. Denver time on Wednesday afternoon---and I thank Elliot Simon for his third offering of the day.
Iran and Russia have called on Saudi Arabia to halt airstrikes on Yemen as supporters of Yemen’s ruling Houthi militants stage demonstrations throughout the country, protesting against the Saudi-led military intervention.
Speaking to Iranian President Hassan Rouhani, Russia’s Vladimir Putin called for an "immediate cessation of military activities" in Yemen and increased efforts to find a peaceful solution to the crisis, the Kremlin said in a statement on Thursday.
Iranian Foreign Minister Mohammad Javad Zarif said that military operations against Yemen will only lead to further destabilization of the region, which has fallen under Houthi control after an onslaught of increased violence in recent months.
Iran is suspected of providing supplies and training to the Houthi rebels, but Tehran has publicly denied these claims.
This news item put in an appearance on the Russia Today Internet site at 5:34 p.m. Moscow time on their Thursday afternoon, which was 9:34 a.m. in Washington. I thank Casey Research's own Bud Conrad for passing this story around yesterday.
The U.S. approaches towards the ousted Yemeni President Abd Rabbuh Mansur Hadi and the former President of Ukraine Viktor Yanukovych represent double standards, Russian Foreign Minister Sergei Lavrov said Thursday.
"A much-employed cliche has to be used: obvious double standards, but we clearly did not want neither what is happening in Ukraine, nor what is happening in Yemen," Lavrov said at a press conference.
On Wednesday, Saudi Arabia-led coalition which includes Bahrain, Qatar and Egypt launched airstrikes against Houthi rebel positions in Yemen following a request by Hadi. The United States is not participating in the military operation, but agreed to provide logistical and intelligence support.
It is necessary to renew the negotiations process in Yemen, as playing political games between Shiite and Sunni Muslims is too dangerous, Russian Foreign Minister said.
This story showed up on the sputniknews.com Internet site at 12 minutes to midnight Moscow time on their Thursday evening---and it's another article that's courtesy of Roy Stephens.
The long-simmering struggle between Saudi Arabia and Iran for Mid-East supremacy has escalated to a dangerous new level as the two sides fight for control of Yemen, reminding markets that the epicentre of global oil supply remains a powder keg.
Brent oil prices spiked 6pc to $58 a barrel after a Saudi-led coalition of ten Sunni Muslim states mobilized 150,000 troops and launched air strikes against the Iranian-backed Houthi militias in Yemen, prompting a furious riposte from Tehran.
Analysts expect crude prices to command a new “geo-political premium” as it becomes clear that Saudi Arabia has lost control over the Yemen peninsular and faces a failed state on its 1,800 km southern border, where Al Qaeda can operate with near impunity.
Over 3.8m barrels a day (b/d) pass through the 18-mile Bab el-Mandeb Strait off Yemen, one of the world's key choke points for crude oil supply. While there is little likelihood of disruption to tanker traffic, Saudi Arabia is increasingly threatened by Shiite or Jihadi enemies of different kinds.
The Ambrose Evans-Pritchard offering turned up on the telegraph.co.uk Internet site at 8:41 p.m. GMT last night, which was 4:41 p.m. EDT. Once again I thank Roy Stephens for sending it our way. It's certainly worth reading, but it's hard to keep all the waring factions straight as you read on. A printed program would be nice.
The AIIB Charter is still under discussion. The media report that China is not seeking a veto in the decision-making comes as a pleasant surprise.
Equally, China is actively consulting other founding members (who now include U.K., Germany, France, Italy, etc). These would suggest that Beijing has a much bigger game plan of scattering the U.S.’ containment strategy. Clearly, the Trans-Pacific Partnership free-trade deal is already looking more absurd if China were to be kept out of it. The point is, AIIB gives financial underpinning for the ‘Belt and Road’ initiative, which now the European countries and Russia have embraced, as they expect much business spin-off.
China has said that its Silk Road projects are not to be confused as a latter-day Marshal Plan for developing countries, and that, on the contrary, the projects will be run on commercial terms. Which opens up enormous opportunities for participation by western companies. In geopolitical terms, therefore, China hopes that the ‘win-win’ spirit that permeates the AIIB and ‘Belt and Road’ will render ineffectual the American attempts to hem it in on the world stage and compel Washington to revisit a ‘new type of relations’ with China.
This short commentary by career Indian diplomat M.K. Bhadrakumar appeared on the Asia Times website yesterday---and it's a must read. I thank reader M.A for finding it for us.
Bullion Star market analyst and GATA consultant Koos Jansen calls attention to a segment of the "Business Middle East" program on the French-based Euronews television network that this week asked whether gold market manipulation would diminish under the new gold price-fixing mechanism in London. Looks like gold market manipulation can get into the mainstream financial news media ... at least in Arabic.
The video clip has an English voice-over translation, so you can follow along. This news item was embedded in an article that Koos Jansen posted on the Singapore website bullionstar.com yesterday. I found it in a GATA release---and I thank Chris Powell for the above paragraph of introduction.
China should increase its gold holdings to around 5 percent of its total foreign exchange reserves to help diversify currency risks, the World Gold Council (WGC) said.
China currently holds about 1.6 percent of its foreign exchange reserves in gold, which is relatively low compared with developed countries and some developing countries, WGC China managing director Roland Wang said.
"The ideal amount should be at least 5 percent of its total forex reserves," Wang told Reuters in an interview in Hong Kong.
China's holdings as a percentage of total reserves in Q4 2014 compare with 2.4 percent for Mexico, 5.7 percent for Australia, 6.7 percent for India and 12.1 percent for Russia, according to WGC figures.
Of course we know what the World Gold Council's "figures" are worth, don't we dear reader? I would guess that China holds at least 5 percent already, if not more---and probably much more. They'll let the world know the exact amount when it suits them. This Reuters article, filed from Hong Kong, showed up on their website at 2:19 a.m. EDT on Thursday morning---and I found it on the Sharps Pixley Internet site. Most of the article is the usual main stream media bulls hit, so be warned of that fact if you decide to read it.
Yesterday's concentration on gold at the spectacular Mines and Money Hong Kong conference may have inadvertently proved GATA's longstanding contention that gold market manipulation simply can't be discussed in polite company almost anywhere in the world.
For at the outset of a panel discussion described as a debate about the direction of the gold price, its moderator, Rod Whyte, a longtime gold advocate and member of the Board of Directors of Australia-based business information provider Aspermont Ltd., announced that the panelists had agreed that gold market manipulation would not be discussed because the topic is "too inflammatory."
Since Whyte has expressed support for GATA at other venues, the calculated avoidance of the manipulation issue would seem to have been someone else's idea. In any case the panel included two members who could not have been expected to want to discuss the issue: Philip Klapwijk, formerly an analyst for Gold Fields Mineral Services, now managing director of Precious Metals Insights Ltd. in Hong Kong, and Albert Cheng, Far East managing director for the World Gold Council.
While Klapwijk predicted that the price of gold will fall substantially, predictions for the gold price are of no particular concern to GATA. We recognize that as long as the futures markets are operating, central banks can drive the price down to zero or up to infinity.
This commentary by Chris Powell was posted on the gata.org Internet at 6:51 p.m. Hong Kong time on their Thursday evening---and it's a must read.