Gold World News Flash |
- Some Thoughts on Overseas Investing in U.S. Real Estate
- Fiat Money Kills Productivity
- Italy's cost rise again/Spain 10 yr bond yields cross 6.9%/Italian bonds finish at 6.2%
- Eveillard – This Is All A Delusion, I Am Keeping My Gold
- Why Are We Certain that Gold Producers Will Soar?
- A $78 Billion Binge
- Gold Daily and Silver Weekly Charts - More Criminal Manipulation in the News
- Incompetent Economists
- Financial Collapse End Game, Operation Twist Deception, Infinite QE
- Central bank likely to impose curbs on gold coin sale
- Gold futures waver as summit looms
- Gold Takes Two Steps Back
- Morning Snapshot
- Rise, Platform, Blow Off, Correction: Au is Fine
- Gold Finally Finds a Bid
- Bullet-proof your portfolio with gold — and yourself too
- Asian expedition was productive but expensive too, so can you help?
- Here comes the crack-up boom: Negative interest rates start in Europe
- Barclays admits manipulating LIBOR rate; other banks still being investigated
- India may prohibit gold coin sales by banks
- 2012 Chaco Culture 5 Ounce Silver Bullion Coin Sales Begin
- Premier Royalty Corp acquires net smelter royalty on Canadian gold project
- Bullet-proof your portfolio with gold -- and yourself too
- After the Sovereign Debt Crisis Comes the Deleveraging
- Is That A NIRP In Your Pocket Or Is Gold Just Happy To See Negative Rates?
- China & Russia Buy Bullion as Protection
- It's Risky to Anticipate QE
- Barclays Found To Engage In Massive Libor Manipulation, Gets Wrist-slapped By Coopted Regulators
- Gold lower at 1567.46 (-4.40). Silver 26.887 (-0.16). Dollar firm. Euro soft. Stocks called better. Treasurys mixed.
- Daily US Opening News And Market Re-Cap: June 27
| Some Thoughts on Overseas Investing in U.S. Real Estate Posted: 27 Jun 2012 03:00 PM PDT by Charles Hugh Smith, Of Two Minds:
What few media pundits seem to grasp is that when our trade deficits transfer hundreds of billions of dollars to other nations, those dollars have to end up in dollar-denominated assets like bonds, stocks or real estate. Mish of Mish's Global Economic Analysis has tirelessly explained this dynamic many times: when U.S. dollars (USD) end up in another country as a result of our gargantuan trade deficits, the dollars don't just vanish into some other currency. One way or another, they have to flow into one dollar-denominated asset or another. Many people have missed the difference between dollars used to settle accounts and dollars held as a result of trade deficits. Many of those emotionally wedded to the belief that the U.S. dollar is doomed gleefully grabbed onto the news that China and Japan will swap currencies directly (yen and yuan) rather than intermediate the trade with U.S. dollars. This was mistakenly seen as a nail in the coffin of the USD. If I am in Japan and I have yuan due to trade with China, and I want to exchange those yuan for yen, I only need USD for about 10 seconds to intermediate the exchange. Cutting out the USD simply cut the exchange costs and lowered the daily trading volume of the USD.
| ||
| Posted: 27 Jun 2012 11:30 AM PDT from Azizonomics:
Last November I wrote: During 1947-73 (for all but two of those years America had a gold standard where the unit of exchange was tied to gold at a fixed rate) average family income increased at a greater rate than that of the top 1%. From 1979-2007 (years without a gold standard) the top 1% did much, much better than the average family. As we have seen with the quantitative easing program, the newly-printed money is directed to the rich. The Keynesian response to that might be that income growth inequality can be solved (or at least remedied) by making sure that helicopter drops of new money are done over the entire economy rather than directed solely to Wall Street megabanks. But I think there is a deeper problem here. My hypothesis is that leaving the gold exchange standard was a free lunch: GDP growth could be achieved without any real gains in productivity, or efficiency, or in infrastructure, but instead by just pumping money into the system. And now I have empirical evidence that my hypothesis has been true — total factor productivity.
| ||
| Italy's cost rise again/Spain 10 yr bond yields cross 6.9%/Italian bonds finish at 6.2% Posted: 27 Jun 2012 11:30 AM PDT by Harvey Organ, HarveyOrgan.Blogspot.ca:
Read More @ HarveyOrgan.Blogspot.ca
| ||
| Eveillard – This Is All A Delusion, I Am Keeping My Gold Posted: 27 Jun 2012 10:24 AM PDT from KingWorldNews:
"So the public sector is leveraging up in a major way in practically every country. And in a pure paper money system, which we've had for more than 40 years, in a pure paper money system you can always inflate. There are deflationary forces at work, but governments are making sure they are offset, if not more than offset, by leveraging up of the public sector. So I wouldn't worry too much about deflation. Jean-Marie Eveillard continues @ KingWorldNews.com
| ||
| Why Are We Certain that Gold Producers Will Soar? Posted: 27 Jun 2012 09:32 AM PDT For the past eighteen months, gold stocks have been pummeled. They showed some life from mid-May to mid-June - GDX, the gold miner's index, was up 21%, while gold rose 5.5%. That bounce was exciting, but they've still got a lot of lost ... Read More...
| ||
| Posted: 27 Jun 2012 09:01 AM PDT Dave Gonigam – June 27, 2012
Here is a lesser-known fact: Food stamps account for 25-40% of the monthly revenue at certain Wal-Mart locations, according to New York University nutrition professor Marion Nestle. Indeed, Wal-Mart collected nearly half of the total $1.2 billion in food stamp spending in Oklahoma between 2009-11, according to the Tulsa World. Food stamps — or if you prefer its current nomenclature, the Supplemental Nutrition Assistance Program (SNAP) — has become big business. Curse the zombies who are on the program all you want… but as you'll learn today, the zombie class includes the executives of grocery chains, soft-drink makers and the ever-present zombie banks.
Spending in 2011 totaled $78 billion, according to the Congressional Budget Office. The agency says spending grew faster than the number of recipients for two reasons: First, benefit amounts were increased 15% under the 2009 "stimulus" bill. Second, as you know all too well… food prices have gone up.
The agency figures one out of four people eligible for food stamps isn't taking advantage. So for the last four months, the USDA's been running radio commercials "targeted at the elderly, working poor, the unemployed and Hispanics," reports CNNMoney:  The part about "eating right" is especially rich… considering the vested interests in the program.
USDA has few limits on what you can buy with food stamps. No booze and no prepared foods — i.e., the mac and cheese served hot beneath a sneeze guard. Nearly everything else edible is fair game. So among the companies that lobbied Congress last year on issues related to the food stamp program are Cargill, Coca-Cola, Kellogg, Mars and PepsiCo… along with the aforementioned Wal-Mart. Plus, industry groups like the American Beverage Association and the Snack Food Association. In Washington, there's been idle chatter about tightening the list of eligible foods available under SNAP. In at least nine state capitals, that chatter has been put down in legislation. And in all nine cases, the legislation has gone down in flames. "In Florida, a proposal to ban food stamp purchases for soda and junk food was killed with the help of Coca-Cola, the Corn Refiners Association and Kraft Foods," according to a report from Eat Drink Politics, which describes itself as a "watchdog consulting group." "Sometimes good intention goes too far," says a list of talking points from the National Confectioners Association — the candy lobby. "For example, limiting food choices in SNAP could deny children an occasional treat during the holidays such as Christmas, Halloween, Hanukkah, Easter, etc. — and for birthday parties, shouldn't parents be able to make the decision whether treats will be offered?" The question of whether parents should "make the decision" on the taxpayer's dime is conveniently skirted.
"Anti-hunger advocates," writes Nestle, "fear that any move to restrict benefits to healthier foods, or even to evaluate the current food choices of SNAP recipients, will make the program vulnerable to attacks and budget cuts."
In 24 states, JPMorgan Chase administers the EBT (electronic benefit transfer) cards — the debit cards that replaced traditional "food stamps" nearly a decade ago. JPM has a five-year contract in Florida worth $83 million, and a seven-year deal in New York worth $112 million. The program in 13 other states is handled by Affiliated Computer Services, a unit of Xerox. In 11 more states, the contract is held by Fidelity National Information Services. Improbably, the defense contractor Northrop Grumman administers the cards in Illinois and Montana. "This business is a very important business to JPMorgan in terms of its size and scale," said Christopher Paton in 2010. He's chief of the JPM division that handles the program. How important, we don't exactly know. "Although state contracts are public record, they do not clarify exactly how the contracting firms turn a profit from EBT, and what those profits are," according to the Eat Drink Politics report. "Likewise, the Securities and Exchange Commission filings from the publicly traded corporations in the EBT market, such as JPMorgan Chase, do not itemize revenues from EBT business."
The professor is among the advocates of such restrictions. Here at The 5, we take no position… except the one behind the battlements against the zombies, whether they wear flip-flops in Wal-Mart or Pradas in the executive suite. "I'm not against supporting people in need," says our publisher, Joe Schriefer. "But when the handouts are too freely dispensed, it breeds corruption. America's welfare state is completely out of control… and shows no signs of improving." "Of course, you and I both know that our government doesn't have any money of their own to hand out. Instead, they take to 'stealing' the money from you and me." It might be directly via taxation. Or indirectly via money printing. Either way, you pay — unless you take some preventive steps. Joe has several in mind that you can start on this week. Most are easy to implement. Every one is completely legal and above board… for now. There are already moves afoot in Washington to change that. So you owe it to yourself to review these steps ASAP.
There were two numbers of note today:
Both numbers were considerably better than the "expert consensus."
"That could be two-quarters' worth of net income," freelance investigative reporter Teri Buhl writes on her site, "and since JPM staffers are paid in part on how the whole company earns, that rumor about a year-end lackluster bonus is looking more like a reality." Buhl is keeping her sources close to the vest, but "a few seasoned wealth managers I spoke with," she ventured, "are weighing competitor offers and seriously thinking of jumping ship." JPM reports its Q2 numbers on July 13. Friday the 13th, we hasten to add. Heh…
Banks that take bailout money will be subject to European Union rules forcing them to dump their stakes in the phone company Telefonica, the oil giant Repsol and power firm Iberdrola. A report from UBS reckons $28 billion in assets will be up for grabs. Chris Mayer reckons it's just the beginning; recall, he forecast the "fire sale of the century" in these virtual pages last January. European banks will likely unload $1.8 trillion in assets over the next 10 years to raise cash. "There is no better, more-reliable way to make money than to buy something from someone who has to sell," he wrote at the time. "Bankers are the best people in the world to buy from." In his own banking days, "I would get at least three or four requests every year from some investor group asking if we had any assets we were looking to unload. Why? Because they know banks are stupid sellers." Chris has thoroughly researched how you, the retail investor, can buy quality assets from "stupid sellers." His recommendations are found in his entry-level newsletter, Capital & Crisis — which has amassed an average 42% annualized gain for each of the last two years. For a limited time, we're offering you the chance to get started on your own path to 42% annual gains… and you don't have to watch a lengthy presentation to do so.
Too easy, as it turns out: The "pixelated" camouflage that's been standard issue in the Army since 2004 is being scrapped. Despite $5 billion in development costs — yes, billion with a "B" — the camo did a rotten job of hiding a soldier from view. "Soldiers have roundly criticized the gray-green uniform for standing out almost everywhere it's been worn," reports The Daily:  "If we can see our own guys across a distance because of it, then so can our enemy," said one specialist who understandably wished to remain anonymous. Yes, that was surely obvious from the get-go. So why was the design chosen, anyway? Because the Marines had already switched to a pixel design. "That's what this really comes down to," says Eric Graves, editor of the military gear publication Soldier Systems Daily. "'We can't allow the Marine Corps to look cooler than the Army.'" "That's really going to help their case," quips Addison via email. "Our kids' soccer team needs new uniforms too. Not because they don't hide us from the other team. But because they're going to start falling off the kids' bodies in tatters. Cost: closer to $500 than $5 billion." "Maybe we could get picked up as an agency of the government and let Congress overpay our 12-year-olds."
"It seemed ridiculous how he was being treated, and I would be one of the first to contribute." "Honestly?" adds another reader. "$1,200 window-washing permits in Simi Valley? If there's a California earthquake soon, surely the epicenter will be Ronald Reagan's gravesite."
"Seriously? Flamenco dancers?! This explains why Spain is in the trouble it's in. Now you don't have to spill any more ink over it. And if Merkel gives them another dime in bailout money, the Germans better start drinking beer as a means of protest…"
The 5: We believe you've set a reader-mail record for references to the highest number of 5 Min. stories in the smallest amount of space. Well done! Cheers, Dave Gonigam P.S. "I made $1,235 in a single conference day," writes a happy attendee of the Agora Financial Investment Symposium, "which will more than cover my expense for attending the meeting… such a deal!" That's the caliber of guidance you'll find at our annual event in Vancouver. We'd love to have you join us July 24-27… but space is filling up quickly. For a rundown of speakers and registration information, give this a look right away.
| ||
| Gold Daily and Silver Weekly Charts - More Criminal Manipulation in the News Posted: 27 Jun 2012 08:44 AM PDT | ||
| Posted: 27 Jun 2012 06:57 AM PDT When, exactly, did economists become charlatans? Probably in the early-mid 20th century. That's when they stopped listening and began commanding. Instead of trying to understand how economies worked, they started to tell them what to do. And now, economists are almost all mountebanks and scamsters. They pretend to know what they don't know at all. And they pretend to be able to do what they can't do. They meddle. They interfere. They make precise estimates and forecasts. They make pompous judgments. They almost sound like they know what they are doing. Last month, The Atlantic magazine proved that it is run by half-wits. It put a photo of Ben Bernanke on the cover with the headline: "The Hero." "Ben Bernanke saved the global economy," said the description. Oh really? How did he do that? Don't bother to ask. Nobody knows what was wrong with the global economy…whether it has been 'saved'…or how it was saved…least of all, the editors of The Atlantic. Certainly, Ben Bernanke doesn't know. The biggest credit and real estate bubble of all time blew up on his watch…anyone could have seen it coming. But not Ben Bernanke. And how could he possibly 'save' a situation that he neither saw nor understood? Beats us. Our assessment of Bernanke is closer to that of Mike Shedlock: We can state without a doubt that Bernanke is an inflationist jackass, devoid of common sense. Clueless about trade, debt, history and gold. Shedlock believes The Atlantic cover will earn it a spot in the contrarian magazine cover hall of fame, next to TIME's famous 2005 cover: "Home $weet Home," which lauded the advantages of buying a house. We don't know. But we know Bernanke is an economist. And economists are frauds. Can they make us richer? No. Can they make the economy work better? No. What can they do? They can cause problems and then come up with claptrap solutions that make them worse. Here is Joseph Stiglitz again, missing the point: US inequality is at its highest point for nearly a century. Those at the top — no matter how you slice it — are enjoying a larger share of the national pie; the number below the poverty level is growing. The gap between those with the median income and those at the top is growing, too. The US used to think of itself as a middle-class country — but this is no longer true. The country will have to make a choice: if it continues as it has in recent decades, the lack of opportunity will mean a more divided society, marked by lower growth and higher social, political and economic instability. Or it can recognise that the economy has lost its balance. The gilded age led to the progressive era, the excesses of the Roaring Twenties led to the Depression, which in turn led to the New Deal. Each time, the country saw the extremes to which it was going and pulled back. The question is, will it do so once again? See how it works, dear reader? Stiglitz has no interest in what really causes "inequality." Nor does he care what role it plays in an economy. He is simply convinced that it is 'bad' and that we must "do something about it!" What does Stiglitz propose? Raising taxes on the 'rich' of course. In his mind, the economy is always losing its "balance" and going off the rails. And then, thank God, the economists of the progressive era and the New Deal come to the rescue. But how does he know what balance an economy should have? Of course, he has no idea…only his own prejudices and preferences. Economists are vain and incompetent. So are a lot of people. But what makes economists particularly reprehensible is that they are willing (and alas, able) to impose their prejudices on the rest of us. How do they do that? Ah…we are about to reveal the dark secret of economists, GDP and other claptrap. Stay tuned. Bill Bonner Incompetent Economists originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".
| ||
| Financial Collapse End Game, Operation Twist Deception, Infinite QE Posted: 27 Jun 2012 06:13 AM PDT Many are the events, signals, and telltale clues of a real live actual systemic failure in progress. Until the last several months, such banter was dismissed by the soldiers in the financial arena. But lately, they cannot dismiss the onslaught of evidence, a veritable plethora of ugly symptoms of conditions gone terribly wrong and solutions at best gone awry and at worst never intended in the first place. My theory has been steady from the TARP Fund scandal and the Too Big To Fail mantra of deceit. The plan all along since the breakdown began in September 2008 has been to preserve power, to maintain intact the insolvent banks an operational crew of zombies, to aid the financial sector bound in Wall Street, to pay benign neglect to Main Street and businesses (expect for symbols like General Motors), to expand the propaganda of a fictional recovery, and to maintain the endless wars. The wars serve two purposes, to enable significant fraud from overcharged services, and to hold open the gateways for sizeable money laundering flows into the Wall Street banks, those hollow structures that closely resemble a coke addict with dark teeth, wretched bones, wasted organs, lost attention, and a listless gait. The Greek showcase is coming to a neighborhood near you in Western Europe and Great Britain, soon to feature debuts across North America. No, the United States is not immune from the horrors of ruin since its marquee billboards read Zero Percent. It only means the wrecking ball works from the inside out, serving as the central needle in the Black Hole. An outline of the End Game can be written. This article is not comprehensive by any means. But it serves as a decent posting on an outhouse wall. Consider the following as musings in observation of Uncle Sam on death row. They bear no logical flow, just random concepts.
| ||
| Central bank likely to impose curbs on gold coin sale Posted: 27 Jun 2012 05:17 AM PDT 27-Jun (Business Standard) — The Reserve Bank of India (RBI) is likely to clamp down on gold coin sales by banks, amid rising bullion imports adding pressure to the current account deficit and weakening the rupee. The Banking Regulation Act does not allow banks to trade in commodities and they play the role of a financial intermediary. This norm was relaxed in the pre-2008 era when the country saw a dollar influx that resulted in a sharp appreciation of the rupee. To sterilise dollar inflows, banks were allowed to sell gold, as they imported the yellow metal. The measure was temporary. "Banks were allowed to sell gold by importing it to fight the excess dollar flows. By the same logic, the measure should be reversed now as we are at the opposite end of the spectrum. It was a temporary measure, which unfortunately was made permanent by banks," a top RBI official said. [source]
| ||
| Gold futures waver as summit looms Posted: 27 Jun 2012 04:54 AM PDT 27-Jun (MarketWatch) — Gold futures veered between small gains and losses Wednesday, enjoying a big pop in price and volumes just before the U.S. equities open as investors continued to look ahead to a summit of European leaders. Gold for August delivery gained 10 cents to $1,575 an ounce on the Comex division of the New York Mercantile Exchange. Prices traded as high as $1,584.60 an ounce, according to Factset, in a jump around 8:20 a.m. Eastern. [source]
| ||
| Posted: 27 Jun 2012 04:40 AM PDT Good day. I'm at a loss this morning. Usually, I have done some reading the previous night, and come to work loaded for bear. But that didn't happen last night, as Alex and his band mates had "band practice" in my man cave/basement. While I love listening to Alex play his guitar, the beating of the drums gets to me after about, oh, five minutes! So I went upstairs to watch the baseball game, and since my computer is downstairs, no reading! Which means this could be short and sweet today. Then again, you never know with me, once I begin to bang on the keyboard with my fat fingers! And never knowing what's going to happen next is the trading pattern we've been thrust into these past months, but even more so now, as the central bankers around the world begin to figure out what they could have learned years ago, by reading the Pfennig, and that is they can't control the economy as they think they can! And with every central bank meeting between the U.S. and eurozone, the leadup to the meeting is full of anticipation, and then we are left with disappointment. The markets want more from the central banks, but they've done just about all they can do, and none of it works. You know, if they had just looked at Japan, they would have learned long ago that central bank meddling into the economy doesn't work over time. Sure, there are short-term blips of positive response, but those last about as long it takes to get lathered up about the economy, and then the disappointment sets in. I did an interview with thestreet.com yesterday, and we talked about gold, and a few other things. I made the point that while it doesn't make sense to me, investors are selling gold ahead of the Eurozone summit this week, as most people believe the eurozone leaders will disappoint the markets. And since the markets have had their share of disappointment lately (see Ben Bernanke x 2), they are selling gold and buying dollars. OK, to prepare for disappointment is sound, in my opinion. But to sell gold when there is uncertainty in the world, on both sides of the Atlantic? I don't find that as sound. But as I told the reporter, I learned long ago that the markets are never wrong. I might not agree with them, but you don't try to fight them. Instead, you do the old Ali, rope-a-dope. All this talk about disappointment isn't carrying over to what you're feeling while you read the Pfennig this morning! Yes, I've been very serious so far — not the usual Chuck stuff. Don't worry, it's coming! Yesterday, we saw the currencies bounce around in a very tight range, with no direction and no conviction to move either way. Gold lost $13. So it's one step forward, two steps back with gold these days. But I don't worry. Can you see me as Alfred E. Newman, with a balding head and a big beer belly, saying, "What, me worry?" As I told the reporter yesterday, gold's backing off this year certainly gives all those who missed the boat the first time cheaper levels to buy. This morning, I turned on the currency screens and noticed that half of the currencies were in the red, and the other half were in the green. Red is bad; green is good. And gold is down another $5 this morning — one step forward, two steps back. I really don't believe we'll see much movement in either direction today for the currencies, as the markets await the eurozone summit, which begins tomorrow. Last week, I wrote about what I believe the eurozone leaders need to do to calm the markets at this summit, so I won't get into that again, but I'm afraid we're not going to get what I believe is needed. There's been some "leaking" of news before the summit, and it appears that the eurozone leaders are going to opt to come up with a "plan to have a plan." Uh-oh! I don't think that's going to calm the markets, but as I said above, we don't know how the markets will react. Maybe they'll be buffaloed into thinking that this is good, just as they were last summer, when the U.S. debt commission couldn't come up with spending cuts, and the so-called "automatic cuts" were supposed to take over. From what I read this morning, the "plan to have a plan" will go about half of the way toward what I said was needed, by providing an accurate diagnosis of the challenges facing the eurozone, and the steps that will need to be taken. They'll talk about the four pillars (growth, banking union, fiscal union, political union), but they won't get past that discussion. And then the "plan to have a plan" will put off the next phase until late fall, and maybe even into winter! So you see, if the markets get a sniff of this, as I did, then the disappointment will really set in — unless, as I said above, they get buffaloed. And the eurozone leaders need time to put pressure on Germany to agree to all the things in the "plan." It all begins tonight when German Chancellor Angela Merkel sits down to dinner with French President Francois Hollande. Mr. Hollande will attempt to use his "French charm" and get the German Chancellor to weaken her stance. Whoa, that almost sounds like the beginning of one of those romance novels, or whatever they call them! But what will most likely happen is that Angela Merkel will use Jedi mind tricks on Hollande, and he won't know what hit him! I know what that feels like, as I've had Jedi mind tricks played on me for years. HA! Chris Gaffney and yours truly say that the Big Boss, Frank Trotter, plays Jedi mind tricks on us. The global growth prospects got a boost overnight, when the China Securities Journal talked about the country introducing more-proactive policies to ensure stable growth in the world's second-largest economy. Then the Xinhua News Agency said, "China plans to boost Hong Kong's integration with mainland financial markets." As I've told you all a couple of hundred times before, China still has the treasure chest stuffed full of reserves that can be used to stimulate their economy without going into debt doing so. But even more, China has more tools to use, as they have not painted themselves into a corner like Japan, the U.S. and the eurozone have done by cutting interest rates to the bone and then going to quantitative easing. T years ago, when economists and analysts said that the Chinese economy would collapse, I said that it would moderate, but not collapse, and that's exactly what's happening! I love it when a plan comes together! Italy auctioned some bonds this morning, and actually saw decent demand for their debt, and yields actually fell for the first time in a month of Sundays. But even this news isn't enough to take the markets focus off the eurozone summit that, as I said previously, begins tomorrow. Here in the U.S., we'll see the color of durable goods orders for May, and pending home sales data from May. Not much in the way of market moving data. The "experts" are forecasting an increase in durable goods orders of 0.5%, and top lawmakers in the Senate say they have reached a deal on freezing student loan rates for another year. But get this: They are still deciding the mechanics for how the proposal should make its way through the legislature before Congress leaves for the July Fourth holiday week. Hey, just pass it, no wait! Chuck, don't go there! Other than that, U.S. consumer confidence fell for the fourth consecutive month in June. The index number dropped from 64.4 in May to 62 in June. You know me — not that I want to see this, but it's finally going in the direction I believe it should have been going all along, given the wars, the debt, the unemployment and the list goes on. So maybe this is playing catch-up now. And in the category of "What the heck is going on here?" Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission (CFTC) — you know, the guys I complain about all the time for not doing their jobs — said regulation inevitably will lead the agency to go beyond domestic borders to police the derivatives market. He's not the only one who sees it that way. "We are looking at the CFTC effectively becoming the global swaps regulator," said Hannah Gurga, head of European affairs at Icap. "Maybe that will be a good thing for financial stability, but it's something overseas regulators need to be grappling with quite seriously." Isn't that the way things go in life? Screw up something beyond recognition, and get more powerful. Then There Was This… Yesterday, I talked about how the U.S. government was recruiting people to sign up for food stamps. I find this to be totally wrong. A couple of readers sent me a note that just made me laugh and laugh. So here goes: "The food stamp program, administered by the U.S. Department of Agriculture, is proud to be distributing the greatest amount of free meals and food stamps ever. "Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us to 'Please Do Not Feed the Animals.' "Their stated reason for the policy is because the animals will grow dependent on handouts and will not learn to take care of themselves." Chuck again — talk about ironic! And that's all I'll say about that! To recap… A very tight range for the currencies yesterday lead us into what will probably be another tight range trading day for the currencies ahead of the eurozone summit, which begins tomorrow. Chuck believes the eurozone leaders will leave the markets with disappointment, unless they are buffaloed, as they were last summer here in the U.S. Chuck Butler Gold Takes Two Steps Back originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".
| ||
| Posted: 27 Jun 2012 04:34 AM PDT
You may recall that it took about 10-years for all the pieces for the union and the single currency to fall into place once the Maastricht treaty was signed. However, in the midst of today's sovereign debt and banking crisis, I'm not sure the market will give Europe 10-weeks, let alone 10-years to work through its problems. Perhaps realizing this to be true, and perhaps in anticipation of a less than harmonious outcome to the summit, the ECB seems to be floating a more dovish tone. Peter Praet, the central bank's chief economist, suggested in an interview with FT Deutschland for release tomorrow that that there was no doctrine at the ECB prohibiting a drop in the refi rate below its current level of 1.0%. Similarly, Bloomberg reported today that ECB President Draghi is contemplating a cut in the deposit rate to 0%, and possibly even into negative territory, to stimulate bank lending. Goldman Sachs has already reacted by altering its expectations for the 05-Jul policy meeting from steady to a 25 bp cut. The EUR-USD dipped to pressure support at 1.2442/37 once again and continued firmness in the dollar is keeping gold in check for the time being. If Merkel continues to rebuff pressure from her eurozone colleagues, one might expect the further pressure on the single currency post-summit. While this would offer further support of the dollar, it would be only because of weakness in the euro, rather than any real fundamental underpinning for the greenback. Despite all of our own fiscal issues here in America, the dollar would only look modestly more appealing relative to the euro. 'The best looking horse at the glue factory' is my preferred metaphor. At that point, investors may once again turn to gold as the only true safe-haven. • US NAR pending home sales index surged 5.9% to 101.1 in May, above market expectations, vs 95.5 in Apr.
| ||
| Rise, Platform, Blow Off, Correction: Au is Fine Posted: 27 Jun 2012 03:35 AM PDT Many chart geeks - myself included - are managing the 1520 to 1530 area as important support for gold, which it is if the 'price' of gold is what matters. And with legions of individuals and funds holding GLD or other forms ... Read More...
| ||
| Posted: 27 Jun 2012 03:32 AM PDT Good day. Last night, I went to bed with the Cardinals losing in Miami 2-1; it was the sixth inning. Apparently, after I went to bed, crazy stuff happened, with the Cardinals erasing a 6-1 deficit and winning 8-7 in 10 innings! WOW! Wish I had seen that! And apparently, there's a new sheriff in town for men's swimming. The Olympic trials are always cool to watch, as Americans compete against each other, and the athlete that shows up 0.005 seconds late loses his job! To be an Olympic-caliber athlete must be something! I had to stop for a minute to see what one of my favorite analysts, David Rosenberg, was saying on Bloomberg TV this morning. Mr. Rosenberg believes that the U.S. may be heading back to recession. I guess we differ there, because I don't truly believe that we ever left what I have called the depression. One in seven Americans receive food stamps these days. Do you call that Happy Days? I don't! But I do like that he said we may be heading back to recession, because that plays well with my call about how we're about to get hit with the backside of the financial storm that first hit us in 2008. The currencies fought to keep their heads above water yesterday, and pretty much succeeded in doing so, while gold finally found a bid and pushed higher by $13 on the day. It was a day that saw the sale of new homes here in the U.S. jump 7.6% in May, which surprised a lot of people, including me, who thought the annualized pace of new-home sales would be around 345,000, but instead printed at 369,000. Even with this one month of good data, newly built homes continue to move sideways, within the 300,000-400,000 range for the past three years. These newly built homes also continue to fight competition from existing home sales, which have steep price advantages, and the fact that there is ample supply of these distressed homes. So I would be surprised to see these lofty new-home sales continue, but then maybe people have lost their minds and prefer to buy overpriced new homes, instead of distressed, lower-priced existing homes. The Greek finance minister resigned yesterday. Greece political and government officials are turning Japanese too. I can't begin to count the number of Japanese political and government officials who have had to fall on a sword in the past 15 years. Oh, and Cyprus became the fifth eurozone country that has requested a bailout. OK, I want to see the media take this one on! They've made a circus of the Greece debacle, and as I said yesterday, Greece's economy is about the size of the Dallas-Fort Worth area. Cyprus' economy would be about the size of Branson, Mo! But the media will talk about contagion and all the problems that Cyprus will create. Maybe you're seeing a trend here this morning. I'm really not in a good mood, and when that happens, the sarcastic Chuck comes out of me. And believe me, I can be sarcastic like nobody's business! So now that I've realized what I'm doing, I'll try to correct it, but it won't be easy, as I'm just in no mood to deal with twits this morning! There's a new Reserve Bank of New Zealand (RBNZ) governor. Gone is Mr. Alan Bollard, who was a thorn in my side for years! Bollard never missed an opportunity to diss kiwi (NZD). And that's not what I believe a central banker should do. I've gone on at length over the years about how a central banker should embrace a strong currency, because it represents the stock of the country and fights inflation. So the new RBNZ governor's name is Graeme Wheeler. Hopefully, he harkens back to the day of Don Brash, who was a "real" central bank governor! New Zealand's kissin' cousin across the Tasman, Australia, saw the Australian dollar (AUD) slip below parity yesterday, but has regained parity overnight. The pull on the A$ from the eurozone is simply amazing to me. But I guess when you think of things as a whole, it makes some sense. I've told you how the eurozone is China's biggest customer, so if China exports head to the eurozone, you can bet Singapore's does too, and Hong Kong's and Japan's, etc., and therefore the Asian slowdown, which carries over to Australia. One thing that has helped the A$ through this slowing down of Asia is the fact that the Reserve Bank of Australia (RBA) has indicated that they are content in sitting and watching to see the effects of their 75 basis points of rate cuts in the past six months will have on the economy before taking the next step. Most Aussie observers were thinking that the RBA would be coming right back to the rate cut table this summer. Did you see that the U.S. Congress is considering delaying the so-called automatic spending cuts until next March? Couldn't be because this is an election year, could it? But that's par for the course, eh? They made a deal, and the deal said if they don't come up with spending cuts, $1.2 trillion of discretionary spending cuts will "automatically" kick in. The first part of the deal failed, and therefore the "automatic" cuts were to kick in. But let's just think about this for a minute. I would bet a dollar to a Krispy Kreme that these so-called "automatic cuts" don't come to fruition. What do you think? What's the big deal? I mean it's $1.2 trillion over 10 years! It's not as if they had to cut $1.2 trillion of the debt right here, right now! Speaking of the debt, though, there are only four months to go in the U.S. fiscal year, the White House is estimating tax revenues for 2012 of $2.47 trillion and spending of $3.8 trillion, which is a deficit of $1.33 trillion for 2012. A numbers guy does all the math on this stuff (thanks for sending along, Dennis!) and he calculates that the $1.33 trillion deficit this year is equal to $3.64 billion of debt created per day. Speaking further of the debt and deficit spending, I just love the saber rattling going on in a battle of words between the U.S. president and Treasury secretary and the eurozone officials. Just the other day, Germany's finance minister basically told the U.S. president to mind his own business. When the finance minister heard that the U.S. president was calling for Europe to move faster in fighting their debt crisis, the German FM said, "Mr. Obama should first of all take care of reducing the American deficit, which is higher than in the eurozone. People are always very quick at giving others advice." But doesn't the German FM know that the U.S. economic slowdown is Europe's fault? There I go again with the sarcasm. But isn't this the same thing the Chinese have been telling the U.S. to do, for years now? Take care of your own house before you begin to criticize others. But not us — we're now the "it's somebody else's fault generation." And then I might as well go the full nine yards with sarcasm here, since I'm on this debt and deficit road. It's been 3 ½ years since the Fed heads changed interest rates in this country, and they won't be changing them (unless they go even lower) until late in 2014. I guess they don't have to change rates, because all their stimulus plans have worked so well, eh? Yesterday, I read a report on India, and in the report, the author talked about how the Indian government had recently claimed that they were going to support the rupee (INR) and stop the bleeding. I said to myself, "Self, hasn't the Indian government said this all before?" Yes, Chuck, they have! You are correct! OK, so the point here is that we shouldn't get all caught up in this government jawboning. The Indian government has made these claims before and done nothing. The rupee gets a short-term bump because everyone thinks the government is going to really pull a rabbit out of their hat, and then they get disappointed. I don't see why "this time, it will be different." Speaking of "this time it's different," longtime readers know I really dislike that saying. But my friend, John Mauldin, made a point the other day in his weekly letter that I agree with. John was talking about how the Treasury yield curve used to be an excellent indicator of coming recessions. But that's not the case right now. But as John points out, and I have too, the Treasury yield curve is no longer moved by the markets. The Fed has manipulated the yield curve with their bond buying, so this time "it is different." This morning, the euro (EUR) was moving higher (up to 1.2530), and then the results of the latest Spanish bond auction, showing a poor performance, knocked the euro back down to 1.25, and even lower as it bounces back and forth around 1.25. In the U.K., the latest debt numbers were wider than expected in May, and that has weighed heavily on the pound sterling (GBP) this morning. The Olympics are drawing nearer, and I'm still waiting for that host country currency rally. Moody's cut the ratings of 28 Spanish banks yesterday, and issued a warning to Canada! Whoa there, partner! Moody's said that the steps the Canadian government took last week to keep the housing market from overheating might have come too late. Moody's also said that the "buildup in consumer debt that has already occurred, and the Canadian consumers' reliance on low interest rates to support high debt loads remains a risk." The thing the Moody's doesn't have to be worried about is the strength of the Canadian banks, and this is a huge key in dealing with this overheating of the housing sector. The Canadian dollar/loonie (CAD) is more driven by commodity prices than this Moody's warning. And the ratings agency Fitch said yesterday that Norway's outlook was stable. I could have told them that! But it won't be enough for the krone (NOK) to break the chain connected to the euro. But one of these days, traders and investors will realize that Norway is not the eurozone! Then There Was This… Antione sent me this story yesterday from CNNMoney.com titled: "Government Wants More People on Food Stamps": "More than one in seven Americans are on food stamps, but the federal government wants even more people to sign up for the safety net program." "The department is spending between $2.5-3 million on paid spots, and free public service announcements are also airing. The campaign can be heard in California, Texas, North Carolina, South Carolina, Ohio and the New York metro area. "In fiscal 2011, the federal government spent more than $75 billion on food stamps, up from $34.6 billion at the end of fiscal 2008, according to the USDA." Chuck again. OK, I'm not trying to be insensitive to people in need, but this is getting out of hand, folks. In a time when we, as a country, should be looking for ways to save money here, and not spend what we don't have, let's not recruit more people for the program! To recap… The currencies kept their heads above water yesterday, but gold finally found a bid and gained $13. Moody's downgraded 28 Spanish banks, and warned Canada about the housing market overheating. The euro gained overnight, but gave it all back with the poor performance of a Spanish bond auction this morning. Chuck Butler Gold Finally Finds a Bid originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?". More articles from The Daily Reckoning….
| ||
| Bullet-proof your portfolio with gold — and yourself too Posted: 27 Jun 2012 03:31 AM PDT GATA Gold Chain Saves Man's Life From RIA Novosti, Moscow http://en.rian.ru/crime/20120627/174265615.html An entrepreneur from Krasnoyarsk was saved by a gold chain around his neck when it deflected a bullet fired at him, a regional investigation committee said on Wednesday. The police received information about the attack on Wednesday. According to the investigators, a 33-year-old entrepreneur was attacked at the entrance to his house in Krasnoyarsk. "According to the preliminary investigation, the entrepreneur went into his house and when he was on the first floor the doors of the elevator opened and a killer came out of it and shot the man twice. One of the bullets hit the gold chain around the neck of the victim and rebounded from it. The other bullet lodged in the chest," a statement of the investigation committee said. Despite the injury, the businessman fought the attacker and managed to detain him. * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
| ||
| Asian expedition was productive but expensive too, so can you help? Posted: 27 Jun 2012 03:31 AM PDT GATA 11p HKT Thursday, June 27, 2012 Dear Friend of GATA and Gold: Maybe you've heard the old story about the hand-written message on the slip of paper in the Chinese dessert: "Help! I'm a prisoner in a Chinese fortune cookie factory!" It's not quite that bad at GATA's roving headquarters right now but your secretary/treasurer's long expedition to the western shores of the Pacific Ocean has been a bigger expense than we're used to undertaking even as we hope that it has been unusually productive — appearances on Asia's two widest-reaching television networks, Channel NewsAsia in Singapore and CNBC Asia in Hong Kong (http://www.gata.org/node/11490), and presentations at financial conferences in both cities, including Standard Chartered's "Earth's Resources" conference, a venue a bit more respectable than those to which contrarians and troublemakers commonly are invited. The expedition required an updating and compressing of your secretary/treasurer's "stump speech," a product that has been evolving for years now. While the speech is now shorter — readable aloud in about 15 minutes — and more of an outline aimed at people new to the subject, it is still fully annotated with references and links to all the important original source material. With luck it will be a valuable introduction especially for financial journalists, should any turn up over the next few years: http://www.gata.org/node/11507 You can help by sending it to any investment firms, mining companies, and news organizations with which you have any connection. And of course you can help — especially if you haven't already — by making a financial contribution to GATA despite the especially hard times being endured right now by the monetary metals sector. Whether this expedition was worthwhile or not, it has run our modest finances way down and we don't do much fundraising even as we're ready to continue our work if the support is still there. As always, until the World Gold Council with its multi-million-dollar annual budget decides to get serious and confront the elephant in the room, surreptitious market rigging by central banks, we have to depend on you: CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
| ||
| Here comes the crack-up boom: Negative interest rates start in Europe Posted: 27 Jun 2012 03:31 AM PDT GATA Draghi May Enter Twilight Zone Where Fed Fears to Tread By Jana Randow http://www.bloomberg.com/news/2012-06-26/draghi-may-enter-twilight-zone-… European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve. While cutting ECB rates may boost confidence, stimulate lending, and foster growth, it could also involve reducing the bank's deposit rate to zero or even lower. Once an obstacle for policy makers because it risks hurting the money markets they're trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15. "The European recession is worsening. The ECB has to do more," said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB's next policy meeting on July 5. "A negative deposit rate is something they need to consider, but taking it to zero as a first step is more likely." Should Draghi elect to cut the deposit rate to zero or lower, he'll be entering territory few policy makers have dared to venture. Sweden's Riksbank in July 2009 became the world's first central bank to charge financial institutions for the money they deposited with it overnight. The Fed rejected cutting its deposit rate from 0.25 percent last year. With Europe's debt crisis damping inflation pressures and curbing growth, the ECB may feel the benefits outweigh the negatives. "A rate cut could have an important psychological effect in the current environment," said Christoph Kind, head of asset allocation at Frankfurt Trust, which manages about $20 billion. "Negative interest rates aren't an irrational concept. I'm not sure, though, whether in the case of the ECB it will have the desired effect." The ECB uses three interest rates to steer borrowing costs in financial markets. The main refinancing rate determines how much banks pay for ECB loans, while the deposit and marginal rates provide a floor and ceiling for the interest banks charge each other overnight. If the deposit rate was cut to zero or lower, it would discourage banks from parking excess liquidity with the ECB overnight, potentially prompting them to lend the cash instead. Almost 800 billion euros ($1 trillion) is being deposited with the ECB each day. On the other hand, a deposit rate cut could hurt banks' profitability by lowering money-market rates, potentially hampering credit supply to companies and households and reducing banks' incentive to lend to other financial institutions. "It won't help the prospect of a functioning money market because banks won't be compensated for the risk they're taking," said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. It would make more sense to lower the benchmark rate, thus reducing the interest banks pay on ECB loans, and keep the deposit rate where it is, Green said. The ECB has lent banks more than 1 trillion euros in three-year loans, with the interest determined by the average of the benchmark rate over that period. Societe Generale SA estimates that cutting the key rate by 50 basis points would save banks 5 billion euros a year. The deposit rate traditionally moves in tandem with the benchmark, which policy makers kept at a record low of 1 percent on June 6. Draghi said "a few" officials called for a cut, fueling speculation the bank could act next month. The deposit rate has served as the de-facto benchmark, steering overnight market borrowing costs, since the ECB started to provide banks with unlimited liquidity after the collapse of Lehman Brothers Holdings Inc. in 2008. That policy removed the need for banks to borrow from each other to meet their reserve requirements, pushing down interest rates. The euro overnight index average, or Eonia, stood at 0.33 percent yesterday. "If you want to ease monetary policy, you won't get it from cutting the main refinancing rate," said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. "Reducing it alone wouldn't translate into lower market rates. Slashing the deposit rate makes more sense." The ECB isn't the only central bank in Europe considering cutting interest rates below zero. Denmark's central bank signaled last month that it is willing to let rates go negative to fight an appreciation of the krone, and the Swiss government has said it's also assessing emergency measures such as negative rates to weaken the franc if Europe's debt crisis escalates. Other institutions have opted against such a move. The Fed started paying interest on deposits to help keep the federal funds rate near its target in October 2008 and has reimbursed banks with 0.25 percent on required and excess reserve balances since December that year. Some Fed policy makers last August argued that reducing the rate could be helpful in easing financial conditions. While they discussed doing so in September, many expressed concern that such a move "risked costly disruptions to money markets and to the intermediation of credit," the Fed said in minutes published on Oct. 12. The Bank of Japan introduced a Complementary Deposit Facility in October 2008 to provide financial institutions with liquidity and stabilize markets, and has kept the interest it pays for the funds at 0.1 percent since then. Governor Masaaki Shirakawa told reporters on May 23 there would be "large demerits" to reducing the deposit rate because it could lead to a decline in money-market trading. While the Bank of England cut its deposit rate to zero in March 2009, financial institutions that have a reserve account at the central bank don't have an incentive to use the facility as all reserves are remunerated at the benchmark rate of 0.5 percent. "If the ECB cut the deposit rate, it would take an important profit opportunity away from banks," said Tobias Blattner, an economist at Daiwa Capital Markets Europe in London. By doing so, the "ECB would also be "encouraging banks to lend to the real economy" even though there's hardly any demand for credit," he said. Blattner predicts the ECB will cut its benchmark and leave the deposit rate at 0.25 percent. ECB Executive Board member Benoit Coeure said on Feb. 19 that market interest rates of zero or lower "can result in a credit contraction." That's because banks, trying to preserve their deposit bases by paying customers a reasonable interest rate, may reduce lending to companies and households because the return is too low and invest in higher-yielding assets instead. The ECB has been examining the possible impact on markets of a deposit rate cut, helping to ease policy makers' concerns, according to a euro-area official who asked not to be named because the deliberations are not public. Callow said lowering the deposit rate would encourage banks in fiscally-sound countries like Germany, which are flush with excess cash, to lend to troubled banks on the euro-area periphery, which are dependent on ECB funding. That would have the twin benefits of reducing banks' addiction to ECB funding and shrinking excess liquidity in the system. "A deposit rate at zero will be of particular support to banks in southern Europe because it could help encourage some flow of credit," said Callow. "A negative deposit rate can be damaging for money markets." Negative rates would destroy the business model for money-market funds, which would face the prospect of paying to invest, said Societe Generale economist Klaus Baader. European money-market funds totaled 1.1 trillion euros at the end of March, according data from Fitch Ratings Co. "But the ECB doesn't set policy to keep alive certain parts of the financial sector," he said. "Policy makers want to show that they haven't exhausted their options yet." Another consequence of an ECB deposit rate cut may be that some banks take advantage of a clause in the three-year loans allowing them to pay the money back after a year, which would reduce excess liquidity in the system. That could be the basis for a compromise between the ECB and the Bundesbank, whose President Jens Weidmann has repeatedly warned of the risks related to too-generous liquidity provision, said Carsten Brzeski, senior economist at ING Group in Brussels. "Reducing excess liquidity with a rate cut should sound rather interesting for the Bundesbank," he said. "Maybe that's the twilight zone where Draghi and Weidmann will meet." Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
| ||
| Barclays admits manipulating LIBOR rate; other banks still being investigated Posted: 27 Jun 2012 03:31 AM PDT GATA Barclays Pays $450 Million to End Libor Probe By Brooke Masters and Kara Scannell http://www.ft.com/intl/cms/s/0/2a4479f8-c030-11e1-9867-00144feabdc0.html Barclays has agreed to pay a total of $450 million to US and UK regulators to settle a probe into allegations that its employees sought to manipulate the London interbank lending rate that is the basis of more than $350 trillion of contracts worldwide. The settlement covers the US Commodity Futures Trading Commission and Department of Justice, as well as the UK Financial Services Authority. The CFTC imposed a $200 million penalty, the Justice Department $160 million, and the FSA a record L59.5 million fine. Unlike many US-only deals, the settlement will include a detailed final notice from the FSA in which Barclays will admit failings. In response, Barclays said Bob Diamond, chief executive, and three other senior executives had agreed to forgo their annual bonus this year. "The events which gave rise to today's resolutions relate to past actions which fell well short of the standards to which Barclays aspires in the conduct of its business," Mr Diamond said in a statement. "I am sorry that some people acted in a manner not consistent with our culture and values." Nearly a dozen regulators worldwide are investigating allegations of Libor manipulation and two similar rates set daily by panels of banks in London, Tokyo, and Brussels. The investigations have had two strands: whether panel banks deliberately lied about the rate at which they could borrow in order to make themselves appear stronger; and whether traders at the banks and hedge funds sought to shift around the rates for profit purposes. While virtually every bank on the rate-setting panels has received subpoenas or requests for information, the Financial Times reported last year that Barclays was a top target because of e-mails suggesting that confidentiality barriers, known as "Chinese walls," between its traders and the Libor rate-setters may have been breached. The bank said in March in its 2011 annual report that it had been informed by regulators that it was facing potential enforcement proceedings and was "engaged in discussions with those authorities about potential resolution." The bank and the FSA declined to comment on Wednesday. The pending deal would not affect a European Commission probe into whether Barclays and other banks acted as a cartel to influence Euribor, the Brussels-based rate at which banks lend euros to one another. People familiar with the EU investigation said its competition enforcers usually try to tackle the entire alleged cartel rather than picking off particular institutions for settlement. Barclays helped spark that probe and sought whistleblower status after discovering that one of its former traders was involved in efforts to influence the setting of Euribor. Libor measures the short-term interbank lending rates and is set daily in 15 currencies and 10 time periods by panels of banks under the auspices of the British Bankers' Association. Every day, each bank submits the rates at which it believes it could borrow. The top and bottom quartile are thrown out and the rest are averaged. Libor serves as the benchmark for everything from interest rate swaps to corporate loans and individual mortgages. Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
| ||
| India may prohibit gold coin sales by banks Posted: 27 Jun 2012 03:31 AM PDT GATA Central Bank Likely to Impose Curbs on Gold Coin Sale By Manojit Saha http://business-standard.com/india/news/central-bank-likely-to-impose-cu… MUMBAI — The Reserve Bank of India is likely to clamp down on gold coin sales by banks, amid rising bullion imports adding pressure to the current account deficit and weakening the rupee. The Banking Regulation Act does not allow banks to trade in commodities and they play the role of a financial intermediary. This norm was relaxed in the pre-2008 era when the country saw a dollar influx that resulted in a sharp appreciation of the rupee. To sterilise dollar inflows, banks were allowed to sell gold, as they imported the yellow metal. The measure was temporary. "Banks were allowed to sell gold by importing it to fight the excess dollar flows. By the same logic, the measure should be reversed now as we are at the opposite end of the spectrum. It was a temporary measure, which unfortunately was made permanent by banks," a top RBI official said.
In its recent interactions with bankers, the central bank sounded its discomfort over the practice of banks pushing gold coin sales and asked them to go slow. However, banks have not stopped the practice of incentivising their staff to push gold sales, as they earn a margin of Rs 100-150 per gramme of gold sold. Gold and silver imports were around $61.5 billion as of March-end — a growth of 44.4 per cent during 2011-12 as against 43.5 per cent in 2010-11. In 2011 India imported 969 tonnes of the yellow metal compared to 958 tonnes in the previous year, according to data compiled by the World Gold Council. In value terms, imports in 201-12 were around $60 billion. However, according to data released by the government, gold and silver imports in April and May 2012 came down sharply to $4.3 billion, compared to $9.2 billion last year. RBI Governor D Subbarao had said earlier that the central bank was looking into the issue of rising gold imports and formed a committee headed by an executive director-rank officer to examine the reasons. Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
| ||
| 2012 Chaco Culture 5 Ounce Silver Bullion Coin Sales Begin Posted: 27 Jun 2012 03:31 AM PDT Authorized Purchasers are now able to order 2012 Chaco Culture National Historical Park 5 Ounce Silver Bullion Coins from the United States Mint. Along with that debut, the initial sales numbers for the silver coins are also known. United States Mint AP's ordered 3,200 of the new bullion coins, according to sales data published by the [...]
| ||
| Premier Royalty Corp acquires net smelter royalty on Canadian gold project Posted: 27 Jun 2012 03:30 AM PDT Premier Gold Mines has announced that its subsidiary, Premier Royalty Corp, has agreed to purchase a 1% net smelter return royalty on the Thunder Creek Deposit of the Timmins West Mine Complex in Ontario, Canada, for a cash consideration of $7m.
| ||
| Bullet-proof your portfolio with gold -- and yourself too Posted: 27 Jun 2012 01:49 AM PDT Gold Chain Saves Man's Life From RIA Novosti, Moscow http://en.rian.ru/crime/20120627/174265615.html An entrepreneur from Krasnoyarsk was saved by a gold chain around his neck when it deflected a bullet fired at him, a regional investigation committee said on Wednesday. The police received information about the attack on Wednesday. According to the investigators, a 33-year-old entrepreneur was attacked at the entrance to his house in Krasnoyarsk. "According to the preliminary investigation, the entrepreneur went into his house and when he was on the first floor the doors of the elevator opened and a killer came out of it and shot the man twice. One of the bullets hit the gold chain around the neck of the victim and rebounded from it. The other bullet lodged in the chest," a statement of the investigation committee said. Despite the injury, the businessman fought the attacker and managed to detain him. ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
| ||
| After the Sovereign Debt Crisis Comes the Deleveraging Posted: 27 Jun 2012 01:39 AM PDT
By EconMatters
Meanwhile, Cyprus also beat Italy to officially become the fifth Euro Zone bailout nation as ''negative spillover effects through its financial sector, due to its large exposure in the Greek economy,'' according to a government statement.
Although no specific amounts were determined yet, WSJ reported that two external consultancies estimate Spanish banks' actual capital needs could be at around €62 billion ($77.5 billion), and Cypriot Finance Ministry staff said they expect the total financing needs to come to €10 billion ($12.5 billion).
Between the two, Spain is the one causing a lot higher anxiety. Spain is Europe's fourth largest economy, which is larger than the other four euro bailout sisters—Greece, Ireland, Portugal and Cyprus--combined. And remember Spain already requested up to €100 billion ($125.7 billion) from EU bailout earlier this month to recapitalize its regional banks reeling from the collapse of its massive real estate bubble. Sadly, judging from the current debt situation (see graph below), the Euro bailout train most likely will not stop here.
Previously, we discussed how in the not so distant future, almost all countries in the world could end up in one of these three classes--bankruptcy, credit counseling or debt renegotiation due to decades of deficit spending. That also means many nations, after the storm of debt/banking crisis, will need to implement various government austerity programs, and households will commence debt deleveraging--a long and painful process. An analysis from McKinsey should illustrate this point more clear. Using the previous deleveraging cycle of Sweden and Finland post financial crisis during the 1990s as a baseline, McKinsey compared the current progress of US, UK and Spain. What KcKinsey found is that the United States may have been half way through that process, while households in Spain and the United Kingdom have only just begun to deleverage. (see chart below).
McKinsey reckons the US could return to trend as early as mid-2013, but cautions:
More despair would come to Spain:
UK, even though not part of the Euro sovereign bailout discussion yet, its prospect is not that much better:
What's more, "Significant public-sector deleveraging typically occurs only when GDP growth rebounds, in the later years of deleveraging." And since today's deleveraging economies are larger and under more challenging circumstances, the current deleveraging process could take longer than the historical experience of five to seven years from Sweden and Finland in McKinsey's baseline.
That suggests the world most likely could experience a long deflationary period. Some economists are starting to worry about the U.S. and Europe could face a coming Japanese-style deflation cycle. Although we don't believe that is in the cards, since Japan is unique in its demographics, banking and government systems, we do think darker days are ahead, and America's lost decade would at least get an extension.
| ||
| Is That A NIRP In Your Pocket Or Is Gold Just Happy To See Negative Rates? Posted: 27 Jun 2012 01:36 AM PDT Gold and Silver are spiking once again, after experiencing quite a roller-coaster ride of rips and dips in the last week or so but this latest spike is suggesting the market's concerns at NIRP is growing. Moments ago, when noting the recent drive for NIRP at the ECB, we noted, that "once [the EUR747 billion in ECB deposits] has to pay to stay, it is certain that nearly $1 trillion in deposit cash, currently in electronic format, would flood the market." Judging by the dramatic move in gold in the last few minutes, at least the PMs appear to already be discounting just such a move.
Chart: Bloomberg
| ||
| China & Russia Buy Bullion as Protection Posted: 27 Jun 2012 01:15 AM PDT 27-Jun (ResourceInvestor) — Consumers made the most of the dip in the price of bullion and mainland China's gold purchases via Hong Kong hit a record 101.7 tonnes in April, up 62%, reported Bloomberg. Meantime, the Russian central bank has again increased its gold reserves by 500,000 ounces. Former Russian finance minister Alexei Kudrin said that a full-blown economic and financial crisis in the euro zone is inevitable and will develop within a year. Russia is clearly buying gold to protect the ruble from devaluations and Russia from an international monetary crisis. China is doing the same both by official gold purchases and by encouraging individuals to buy precious metals. This is eminently understandable and sensible. It is the antithesis of the argument that central banks have everything under control. They know that is not true and so buy gold themselves. [source] PG View: Individual investors should be seeking the protection of gold for all the same reasons that countries like China and Russia are doing so.
| ||
| Posted: 27 Jun 2012 01:01 AM PDT Gold and "risk" assets rally whenever traders get the faintest scent that more QE is coming. Our view is that while more QE will eventually happen, buying in anticipation of such a policy move is fraught with danger ... Read More...
| ||
| Barclays Found To Engage In Massive Libor Manipulation, Gets Wrist-slapped By Coopted Regulators Posted: 27 Jun 2012 12:55 AM PDT We can finally close the case on the massive Libor manipulation issue that we first brough to the world's attention back in January 2009 when we penned: "This Makes No Sense: Libor By Bank." As of minutes ago, Barclays is the first bank to admit it has engaged in gross manipulation of the key benchmark rate that sets the cost of capital for $350 trillion in interest-rate sensitive products. As the CFTC notes, as it produly announces an epic wristslap of $200 million for Barclays Bank: "The Order finds that Barclays attempted to manipulate and made false reports concerning two global benchmark interest rates, LIBOR and Euribor, on numerous occasions and sometimes on a daily basis over a four-year period, commencing as early as 2005." Surely this massive fine will teach them to never do it again, until tomorrow at least, when the British Banker Association once again finds 3 month USD liEbor to be... unchanged. In other news, who would have thought that the fringe "conspiracy" brigade was right all along once again. From the CFTC: CFTC Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning LIBOR and Euribor Benchmark Interest Rates The Order finds that Barclays attempted to manipulate interest rates and made related false reports to benefit its derivatives trading positions The Order also finds that Barclays made false LIBOR reports at the direction of members of senior management to protect its reputation during the global financial crisis Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) issued an Order today filing and settling charges against Barclays PLC, Barclays Bank PLC (Barclays Bank) and Barclays Capital Inc. (Barclays Capital) (collectively Barclays or the Bank). The Order finds that Barclays attempted to manipulate and made false reports concerning two global benchmark interest rates, LIBOR and Euribor, on numerous occasions and sometimes on a daily basis over a four-year period, commencing as early as 2005. According to the Order, Barclays, through its traders and employees responsible for determining the Bank's LIBOR and Euribor submissions (submitters), attempted to manipulate and made false reports concerning both benchmark interest rates to benefit the Bank's derivatives trading positions by either increasing its profits or minimizing its losses. This conduct occurred regularly and was pervasive. In addition, the attempts to manipulate included Barclays' traders asking other banks to assist in manipulating Euribor, as well as Barclays aiding attempts by other banks to manipulate U.S. Dollar LIBOR and Euribor. The Order also finds that throughout the global financial crisis in late August 2007 through early 2009, as a result of instructions from Barclays' senior management, the Bank routinely made artificially low LIBOR submissions to protect Barclays' reputation from negative market and media perceptions concerning Barclays' financial condition. The CFTC Order requires Barclays to pay a $200 million civil monetary penalty, cease and desist from further violations as charged, and take specified steps, such as making the determinations of benchmark submissions transaction-focused (as set forth in the Order), to ensure the integrity and reliability of its LIBOR and Euribor submissions and improve related internal controls. "The American public and our markets rely upon the integrity of benchmark interest rates like LIBOR and Euribor because they form the basis for hundreds of trillions of dollars of transactions and affect nearly every corner of the global economy," said David Meister, the CFTC's Director of Enforcement. "Banks that contribute information to those benchmarks must do so honestly. When a bank acts in its own self-interest by attempting to manipulate these rates for profit, or by submitting false reports that result from senior management orders to lower submissions to guard the bank's reputation, the integrity of benchmark interest rates is undermined. The CFTC launched this investigation to protect the markets and the public from such illegal conduct, and today's action demonstrates that we will bring the full force of our authority to bear as we carry out that mission." LIBOR and Euribor LIBOR – the London Interbank Offered Rate – is among the most important benchmark interest rates in the world's economy, and is a key rate in the United States. LIBOR is based on rate submissions from a relatively small and select panel of major banks, including Barclays, and is calculated and published daily for several different currencies by the British Banker's Association (BBA). Each panel bank's submission is also made public, and the market can therefore see each bank's independent assessment of its own borrowing costs. LIBOR is supposed to reflect the cost of borrowing unsecured funds in the London interbank market. Euribor, which is calculated in a similar fashion by the European Banking Federation (EBF), is another globally important rate that measures the cost of borrowing in the Economic and Monetary Union of the European Union. LIBOR impacts enormous volumes of swaps and futures contracts, commercial and personal consumer loans, home mortgages and other transactions. For example, U.S. Dollar LIBOR is the basis for the settlement of the three-month Eurodollar futures contract traded on the Chicago Mercantile Exchange (CME), which had a traded volume in 2011 with a notional value exceeding $564 trillion. In addition, according to the BBA, swaps with a notional value of approximately $350 trillion and loans amounting to $10 trillion are indexed to LIBOR. Euribor is also used internationally in derivatives contracts. In 2011, over-the-counter interest rate derivatives referenced to Euro rates had a notional value in excess of $220 trillion, according to the Bank for International Settlements. LIBOR and Euribor are relied upon by countless large and small businesses and individuals who trust that the rates are derived from candid and reliable submissions made by each of the banks on the panels. Barclays' Unlawful Conduct to Benefit Derivatives Trading Positions As the Order shows, Barclays, in pursuit of its own self-interest, disregarded the fundamental principle that LIBOR and Euribor are supposed to reflect the costs of borrowing funds in certain markets. Barclays' traders located at least in New York, London and Tokyo asked Barclays' submitters to submit particular rates to benefit their derivatives trading positions, such as swaps or futures positions, which were priced on LIBOR and Euribor. Barclays' traders made these unlawful requests routinely, and sometimes daily, from at least mid-2005 through at least the fall of 2007, and sporadically thereafter into 2009. The Order relates that, for example, one trader stated in an email to a submitter: "We have another big fixing tom[orrow] and with the market move I was hoping we could set [certain] Libors as high as possible." In addition, certain Barclays Euro swaps traders, led at the time by a senior trader, coordinated with and aided and abetted traders at other banks in each other's attempts to manipulate Euribor, even scheming to impact Euribor on key standardized dates when many derivatives contracts are settled or reset. The traders' requests were frequently accepted by Barclays' submitters, who emailed responses such as "always happy to help," "for you, anything," or "Done…for you big boy," resulting in false submissions by Barclays to the BBA and EBF. The traders and submitters also engaged in similar conduct on fewer occasions with respect to Yen and Sterling LIBOR. Barclays' Unlawful Conduct at the Direction of Senior Management The CFTC Order also finds that Barclays, acting at the direction of senior management, engaged in other serious unlawful conduct concerning LIBOR. In late 2007, Barclays was the subject of negative press reports raising questions such as, "So what the hell is happening at Barclays and its Barclays Capital securities unit that is prompting its peers to charge it premium interest in the money market?" Such negative media speculation caused significant concern within Barclays and was discussed among high levels of management within Barclays Bank. As a result, certain senior managers within Barclays instructed the U.S. Dollar LIBOR submitters and their supervisor to lower Barclays' LIBOR submissions to be closer to the rates submitted by other banks and not so high as to attract media attention. According to the Order, senior managers even coined the phrase "head above the parapet" to describe high LIBOR submissions relative to other banks. Barclays' LIBOR submitters were told not to submit at levels where Barclays was "sticking its head above the parapet." The directive was intended to fend off negative public perceptions about Barclays' financial condition arising from its high LIBOR submissions relative to the submissions of other panel banks, which Barclays believed were too low given the market conditions. Despite concerns being raised by the submitters that Barclays and other banks were, for example, "being dishonest by definition" and that they were submitting "patently false" rates, the submitters followed the directive and submitted artificially lower rates. The senior management directive for low U.S. Dollar LIBOR submissions occurred on a regular basis during the global financial crisis from August 2007 through early 2009, and, at limited times, for Yen and Sterling LIBOR during the same period. As the U.S. Dollar senior submitter said in October 2008 to his supervisor at the time, "following on from my conversation with you I will reluctantly, gradually and artificially get my libors in line with the rest of the contributors as requested. I disagree with this approach as you are well aware. I will be contributing rates which are nowhere near the clearing rates for unsecured cash and therefore will not be posting honest prices." Barclays' Obligations to Ensure Integrity and Reliability of Benchmark Interest Rates In addition to the $200 million penalty, the CFTC Order requires Barclays to implement measures to ensure that its submissions are transaction-focused, based upon a rigorous and honest assessment of information and not influenced by conflicts of interest. See pages 31-44 of the CFTC's Order. Among other things, the Order requires Barclays to:
| ||
| Posted: 27 Jun 2012 12:28 AM PDT {}
| ||
| Daily US Opening News And Market Re-Cap: June 27 Posted: 27 Jun 2012 12:05 AM PDT From RanSquawk
Market Re-Cap European equities are seen modestly higher at the midpoint of the European session, with the utilities and financials sectors leading the way higher. As such, the Bund is seen lower by around 40 ticks at the North American crossover. The closely-watched Spanish 10-yr government bond yield is seen lower on the day, trading at 6.85% last, as such, the spread between the peripheral 10-yr yields and their German counterpart has been seen tighter throughout the European morning. Issuance of 6-month bills from the Italian treasury passed by smoothly, selling EUR 9bln with a higher yield, but not an increase comparable with yesterday's auction from the Spanish treasury. The decent selling from Italy today may pave the way for tomorrow's issuance of 5- and 10-year bonds, which will be closely watched across the asset classes. Data of note has come from Germany, with the state CPIs coming in slightly higher than the previous readings, proving supportive for the expectation of national CPI to come in flat at 0.0% over the last month. Looking ahead in the session, US Durable Goods Orders for May are due at 1330BST/0730CDT followed by Pending Home Sales and the weekly DOE Oil Inventories at 1500BST/0900CDT and 1530BST/0930CDT respectively. Asian Headlines China may cut the RRR in July as funds are expected to remain tight even after the CNY 95bln of reverse repos by the PBOC yesterday, according to unsourced reports. (Shanghai Securities News) The Chinese economy is expected to grow by more than 7.5% in the first half of this year, according to the ministry of industry and information technology. (Newswires) The ministry added that some economic indicators slowed faster in Q2 and economic downward pressure is increasing. US Headlines BarCap preliminary US Treasury month-end extension seen +0.02yrs EU & UK Headlines Italian PM Monti has set the stage for a tough fight with Germany at the EU summit this week, insisting he will continue to push Italy's proposal to use Eurozone bailout funds in an attempt to stabilize financial markets. (FT) The Eurogroup are to hold a teleconference today in order to discuss a request for emergency lending from Cyprus and the details of a similar request from Spain, according to Eurozone officials. (Newswires) The leader of the opposition SPD has called for German Chancellor Merkel to back urgent crisis measures to reduce Eurozone sovereign borrowing costs, warning that without such action the EMU will explode. The opposition leader did back Merkel in opposing jointly-guaranteed Eurozone bonds or a redemption fund. (FT) ECB's Weidmann has said crafty attempts to cheat past EU treaties by the quick introduction of Euroarea liability such as Eurobonds, deposit insurance or a joint debt fund would undermine confidence in the currency union. (Sueddeutsche Zeitung) Spain's government may increase taxes to rein in the budget deficit, including scrapping a rebate for homeowners that PM Rajoy introduced six months ago to meet a campaign pledge. (Newswires) France is seeking to raise EUR 500mln with an oil product tax. The tax is to be based on the value of stocks of oil products and will affect both refiners and distributors, according to unidentified sources. (La Tribune) EU's Barnier says a banking union is the first step to integration and that the UK must be a part of the supervision plan. (Newswires) Italy sells EUR 9.00bln 6-month BoTs with a bid/cover 1.615 (Prev. 1.61), yield 2.957% (Prev. 2.104%) - highest yield since December. (Newswires) Equities European equities are seen higher at the halfway point today, with utilities and financials leading the way, and the basic materials sector seen as the only laggard. Trade in equities remains cautious, as investors continue to focus on the tail-end of the week and the EU summit as the next risk events. US equity futures currently indicate a slightly higher open on Wall Street today. In other equity news, the Glencore and Xstrata merger deal continues to take focus following last night's news that Qatar holdings has said it wants better terms in the merger between the companies and believes an exchange ratio of 3.25 new Glencore shares for every Xstrata share would provide a more appropriate distribution of benefits. With Qatar Holdings remaining a major shareholder in Xstrata, the requests from Qatar may throw the entire merger deal into question. At the midpoint today, Xstrata and Glencore shares trade lower by 0.2% and 2.1% respectively. German utility E.ON are seen outperforming today, following news that the company have received final bids from four bidders for its waste incinerator business as it tries to raise more than EUR 1bln, according to sources close to the process. Halfway through the day, E.ON shares trade 2.8% higher. FX EUR/USD has been range-bound throughout the European morning, currently trading just above the pivot level for the day. The pair is seen between two touted option expiries at the 1.2450 and the 1.2500 levels for 10am (1500BST) NY cut today. The pair has been observed slightly softer throughout the day as participants continue to eye the EU summit later in the week. Unconfirmed market talk of decent sized bids in GBP/USD have helped prevent any major downside this morning, but the pair does continue to be observed. The pair did experience some strength following the better-than-expected CBI reported sales figure from the UK, but the effects were not long-lasting, resuming the downward trend. A touted option expiry in the pair lies at 1.5600 for the 10am (1500BST) NY cut. Commodities WTI and Brent crude futures are seen lower going into the NYMEX pit open, moving in tandem with European equities, however both remain in a tight range throughout the European session. Energy participants can look forward to the weekly DOE inventory numbers as the next flashpoint of price action, due at 1530BST/0930CDT. Oil & Gas News:
Geopolitical News Iran cannot lawfully block access to tankers carrying crude through the Strait of Hormuz, according to a UK professor on international energy law and former WTO-adviser.
|
Overseas investor buying of U.S. real estate is a consequence of trade deficits that have built up huge surpluses of U.S. dollars that must be recycled into dollar-denominated assets. Perhaps we should welcome the investment as both necessary and positive.
I have long suspected that a money supply based on nothing other than faith in government is a productivity killer.
Good evening Ladies and Gentlemen:
With global stock markets trading higher, today King World News interviewed legendary value investor Jean Marie Eveillard, who oversees $50 billion at First Eagle Funds. Eveillard told KWN that despite "the fact that the stimulus has been completely unprecedented in scope … the economic recovery seems to be sputtering." He also discussed the gold market, but first, here is what Eveillard had to say about the ongoing crisis: "There is no doubt that there are major deflationary forces at play. There is also no doubt that the private sector is continuing to deleverage. But in order to prevent the deleveraging of the private sector from sending the economy into a replay of the Great Depression, governments are leveraging themselves."
Here's a fairly well-known fact: One in seven Americans is on food stamps.
The number of Americans on food stamps totaled 46.4 million as of March — the most-recent figure available. The number is down slightly from the record set in January:
While the number of Americans on food stamps grew 70% from 2007-11, the cost of the program grew 135%.
The Agriculture Department is spending up to $3 million to encourage even more people to sign up for SNAP.
"A vast percentage of food stamps' money goes into the pockets of soda companies and snack food companies," says the aforementioned professor Nestle.
Often the food companies and industry associations donate to anti-hunger organizations — to bolster their lobbying heft.
The financial sector also has its hands deep in the SNAP candy jar.
"Banks that administer SNAP have a vested interest in keeping SNAP enrollments high," concludes professor Nestle, "and makers of junk foods have a vested interest in making sure that there are no restrictions on use of benefits."
U.S. stocks are drifting higher, as they did toward the end of yesterday. The Dow has huffed and puffed its way above 12,600 — which still puts the index lower than it was last Friday.
Back to JPMorgan: The latest estimate on its loss from the "London whale" trade is $9 billion.
The impending bailout of Spanish banks is about to touch off what Reuters calls a "fire sale of corporate Spain."
Gold is moving little today, at $1,574. Silver sits at $26.97.
"War is America's No. 1 zombie industry," Bill Bonner reminded us on Monday in The Daily Reckoning… and the newest evidence is easy for all to see.
"Regarding the oil change place in Simi Valley, Calif.," writes a reader after yesterday's episode, "we should take up a collection for him to hire a good lawyer to sue the city for harassment."
"Flamenco dancers," writes an incredulous reader, "is what the Spanish come up with as a means of protesting the banks?!"
"Baby boxes and California window washing!" writes our final correspondent. "I just live in Jacksonville. Where's flamenco when you need it?"
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment