General market update and developments in Cyprus.
- Cypriot Bank Levy Is ‘Ominous’ for Bondholders, Barclays Says (BBG)
- Euro, Stocks Drops; Gold, German Bonds Rally on Cyprus (BBG)
- Total chaos:Cyprus tries to rework divisive bank tax (Reuters)
- More total chaos: Cyprus Prepares New Deposit-Tax Proposal (WSJ)
- Euro Slides Most in 14 Months on Cyprus Turmoil; Yen Strengthens (BBG)
- Osborne to admit fresh blow to debt target (FT)
- Even the Finns are giving up: Finnish Government May Relinquish Deficit Target to Boost Growth (BBG)
- Moody’s Sees Defaults as PBOC Warns on Local Risks (BBG)
- Australia Faces ‘Massive Hit’ to Government Revenue, Swan Says (BBG)
- Inside a Warier Fed, Watch the New Guy (Hilsenrath)
- Obama to Tap Perez for Labor Secretary (WSJ) - and with that the "minorities" quota is full
- Finally, this should be good: BuzzFeed to Launch Business Section (WSJ)
Asia has badly lagged U.S. and European stock markets this year and over the past 12 months. We explain why it's happened and why it may continue.
We Could Offset the Need for the “Sequestration” Budget Cuts By Stopping Nuclear Subsidies
In the upcoming week the key focus on the data side will be the US February retail sales figures on Wednesday, which should provide clearer evidence on how the tax increases that took place on January 1 have affected the consumer. In Europe, industrial production and inflation data will be the releases to watch. On the policy side, the focus will be on the BoJ appointments in an otherwise relatively quiet week for G7 central banks. Italy’s newly elected lawmakers convene for the first time on Friday 15 March and the expectation remains that President Napolitano will formally invite Mr Bersani to try and form a new government. He may also opt for a technocrat government. Although clearly preferred by markets, winning political backing may prove challenging.
The Dow is at a record high and so are corporate profits - so why does it feel like most of the country is deeply suffering right now? Real household income is the lowest that it has been in a decade, poverty is absolutely soaring, 47 million Americans are on food stamps and the middle class is being systematically destroyed. How can big corporations be doing so well while most American families are having such a hard time? Isn't their wealth supposed to "trickle down" to the rest of us? Unfortunately, that is not how the real world works. But now we have replaced capitalism with something that we like to call "corporatism". In many ways, it shares a lot of characteristics with communism, and that is why nations such as communist China have embraced it so readily. Today, most big corporations are trying to minimize the number of "expensive" American workers on their payrolls as much as they can. Right now, the system is designed to continually funnel more money and more power to the very top of the pyramid. The global elite are becoming more dominant with each passing day. The idea of a very tiny elite completely dominating all the rest of us goes against everything that America is supposed to stand for. In the end, it will result in absolute tyranny if it is not stopped.
The current globally-coordinated central bank ZIRP/bailout policies are destroying the world's saving class. As Jim Rogers notes, "For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know." The bigger danger that concerns him is the "hollowing out of the 'saving class'" resulting from this situation. Central planners' policies are "punishing the prudent in favor of rescuing the irresponsible." Rogers owns gold, silver, and other precious metals and commodities - as a better way to play the debasement of currencies - and concludes rather ominously that, "this has happened before in world history, and the aftermath has always had grievous economic, social - and often human - costs."
Consensus suggests India is a basket case while China is recovering. We think both views are incorrect and therein lies opportunities for contrarian investors.
Liquefied natural gas (LNG) technology - from LNG seaborne tankers and LNG trains to floating LNG facilities have quickly gone from concept to commercialization, opening up new possibilities in new frontiers and rendering the remote - well, much less remote. Analysts say FLNG terminals will become a major growth market within the next couple of years, as they offer more flexibility than stationary terminals. Liquefaction of natural gas is the process of super-cooling natural gas to minus 260 degrees Fahrenheit (minus 162 degrees Celsius) at which point it becomes much safer and easier to transport. After its been shipped to its destination, regasification plants at importing or receiving terminals return the fuel to a gaseous state. A lot of money is being dumped into LNG technology right now. It’s a major bet on the LNG market, but here’s why it’s solid...
- Firms Send Record Cash Back to Investors (WSJ)
- And in totally opposite news, from the same source: Firms Race to Raise Cash (WSJ)
- China warns over fresh currency tensions (FT)
- Hollande faces pressure over jobs pledge (FT)
- Obama efforts renew ‘grand bargain’ hopes (FT)
- Shirakawa BOJ Expansion Gets No Respect as Stocks Cheer Exit (BBG)
- Japan’s Nakao Defends Easing as China’s Chen Expresses Concern (BBG)
- Boeing Had Considered Battery Fire Nearly Impossible, Report Says (WSJ)
- ECB Chief Plays Down Italy Fears (WSJ)
- China moves to make its markets credible (FT)
- Euro Group head says UK at risk of 'sterling crisis' (Telegraph)
Imagine the following: you read in a newspaper that a group of investors has sold US dollars to the tune of $820 million over the past two months for other currencies. This incidentally represents approximately 0.082% of the broad dollar money supply TMS-2 (which amounts to roughly $9.3 trillion at present). It means they would have been selling roughly $20 million per trading day. You then learn that $4 trillion of US dollars are traded in global currency markets every single trading day. Would you believe that their selling has influenced the exchange value of the dollar beyond a rounding error? And yet, we are supposed to believe that the selling of an equivalent amount of gold from the gold holdings of exchange traded funds over the past two months (they have sold 140 tons, or 0.082% of the total global gold supply) has greatly influenced the gold price.
So much for that December plunge in the US trade deficit, which plunged from $48.6 billion to three year low of $38.5 billion supposedly on a drop in energy imports, but in reality was due to a drop in broad imports as the US economy ground to a halt ahead of the Fiscal Cliff. In January, or after the stop gap measure to allow the economy to continue, things went back to normal, with the US returning to doing what it does best: importing, especially importing expensive energy, and sure enough the deficit spiked promptly back to $44.4 billion - it recent long-term average - as exports were $2.2 billion less than December exports of $186.6 billion while January imports were $4.1 billion more than December imports of $224.8 billion. Immediate result: look for banks to trim 0.2-0.3% GDP points from their Q1 GDP forecasts.
Governments Worldwide are Implementing Orwellian Gold Confiscation Today. You Just Haven’t Realized it Yet.Submitted by smartknowledgeu on 03/07/2013 04:52 -0400
Bankers have turned the paradigm of monetary truth upside down. People believe in fiat paper & digital money that is counterfeit and have always ended up in massive collapse to their intrinsic value of zero, and have zero belief in real money, like physical gold and silver, that has served civilizations as money and kept price indexes constant and stable for over 5,000 years.
The world is rapidly running out of clean water. Some of the largest lakes and rivers on the globe are being depleted at a very frightening pace, and many of the most important underground aquifers that we depend on to irrigate our crops will soon be gone. At this point, approximately 40 percent of the entire population of the planet has little or no access to clean water, and it is being projected that by 2025 two-thirds of humanity will live in "water-stressed" areas. But most Americans are not too concerned about all of this because they assume that North America has more fresh water than anyone else does. And actually they would be right about that, but the truth is that even North America is rapidly running out of water and it is going to change all of our lives.
Unlike the session before, there has been little actionable news overnight, with the euphoria from the record high DJIA still translating into a buying panic, and forcing algos to buy futures because other algos are buying futures, and so on, simply because nothing says cheap like all time high prices (and forward multiples that are higher than 2007 levels). The one event so far was the Europe's second Q4 GDP estimate which came in as expected at -0.6%, the fifth consecutive decline in a row. More notable was that Q4 exports tumbled by 0.9% which was the biggest fall since Q1 2009. And while the news has served to keep the EURUSD in line and subdued ahead of tomorrow's ECB conference, the stock market buying panic has moved to European stocks which continue to ignore fundamentals, and are soaring, taking peripheral bond yields lower with them, despite ongoing lack of any clarity what happens in Italy as Bersani is ready to propose a government to parliament which is certain not to pass. But in a world in which fundamentals and reality have lost all significance, and in which only momentum and hope matter, we expect that risk will continue being bid in line with central bank balance sheet expansion until this tired 4 year old last recourse plan no longer works.