Meet The New Leadership Of Europe: Presenting The “Juncker Commission”

As reported eaelier this morning, here, courtesy of Bloomberg, are the nominees for the next European Commission under the presidency of Jean-Claude “If Serioues Then lie” Juncker, with one from each of the European Union’s 28 countries. Job assignments were announced today by the incoming president, Jean-Claude Juncker of Luxembourg.
Juncker sailed through his European Parliament confirmation in July; hearings await the rest in late September, followed by a vote on the whole slate.
Juncker got over one hurdle by persuading EU governments to nominate nine women, the minimum demanded by the Parliament. The team includes five former prime ministers and seven veterans of the previous commission. It is scheduled to take office on Nov. 1 for a five-year term.

This post was published at Zero Hedge on 09/10/2014.

Sterling Volatility Spikes To 3-Year High As Scottish Independence Nears

The dramatic rise in support for Scottish independence is nowhere more evident than in GBPUSD implied volatility, which has soared to 3-year highs as The Guardian reports a further poll showing next week’s referendum is on a knife-edge with a gap of just 1 percentage point between yes and no. As one ‘Yes Scotland’ representative noted, “This new Scotland could be less than a fortnight away. But we must not be complacent. The scaremongering, dissembling and misrepresentation of the no campaign will be ramped up as we approach polling day.” Of course, Scotland is not the only EU nation seeking separation, as we illustrate below, and as Goldman Sachs notes, there could be a broader impact on the risk premium across Europe as Scottish independence leads to other calls for more regional autonomy.
GBPUSD volatility has exploded…

This post was published at Zero Hedge on 09/09/2014.

German Opinion Poll: 22% Can Imagine Voting for AfD

EU Skepticism Still Growing in Germany The recent state election in the Free State of Saxony already indicated as much: EU-skepticism is alive and well in Germany, even with the imminent threat from the EU’s sovereign debt and banking crisis on the back-burner.
This has now been further confirmed by the release of an Emnid survey (Emnid is a large polling company in Germany, comparable to Gallup), according to which 22% of German voters can imagine voting for the AdF (‘Alternative fr Deutschland’), an EU-skeptic party formed in February of 2013).
Note here that ‘could imagine to vote for’ is not the same as ‘would vote for if the election were held tomorrow’ – based on that, the party would receive only 6% of the nation-wide vote, which is however a clear improvement over the actual result in the last parliamentary election. Note that the party received 7% in the European election, which was a quite respectable, though not sensational result.

European election 2014: the AfD received a respectable 7% of the vote

This post was published at Acting-Man on September 8, 2014.

Scottish Independence Referendum: The Complete Summary

For those just catching up on the main news event of the weekend, namely the sudden surge in Scotland “Yes” vote polling surpassing 50% for the first time, here is a complete round up of the background, updates and expert reactions from RanSquawk, Bloomberg and AFP.
ANALYSIS: THE CASE OF SCOTTISH INDEPENDENCE
Recent polling shows the ‘Yes’ campaign overtaking the unionists for the first time, just 10 days ahead of the final vote on September 18th Independent Scotland runs the risk of limited currency options and fiscal uncertainty UK debt ratings hang in the balance as worst-case scenario sees Westminster shouldering an estimated extra GBP 140bln in former Scottish debt BACKGROUND
The ‘No’ party – the unionists – are led by Alistair Darling, former Chancellor of the Exchequer, previously held a lead over the nationalists but this has reversed in the most recent polling, with the ‘No’ vote holding 49%.
The ‘Yes’ party – the nationalists – are led by Alex Salmond, Scotland’s First Minister, and harbour hopes of swinging the referendum in their favour as latest polls suggest they have been overtaken the ‘No’ camp by 2ppts.
Serious doubts remain over the future of Scotland’s currency if the nationalists win. Salmond has repeatedly stated his intention of keeping the GBP, but all 3 main UK parties have made clear they would not be willing to share their currency and central bank with a foreign state. Also, a potential use of the GBP without a currency union would not be compatible with EU membership, as the EC requires member states to have a monetary authority of their own.
HOW WILL THE MARKET REACT?
‘No’ Victory – Given the somewhat complacent attitude market participants have had towards the vote indicates that the upside in riskier assets is limited in case the unionists win the referendum with a large majority. Nevertheless, expect to see some tightening in spreads of the shorter-dated implied volatilities which have widened heading into the risk event.
However, a close vote could lead to a second referendum in 5-10 years and as such, changes to UK regional governance would take place as a result of more devolution, with additional powers going to Scotland such as more autonomy over taxation. In turn, business leaders, including the head of Standard Life and RBS, will have to decide as to whether to relocate their headquarters to the UK or stay in Scotland depending on what type of policies Scotland decides to pursue with its additional powers.
‘Yes’ Victory – Great uncertainty revolves around an independent Scotland, specifically due to the lack of clarity over the potential new fiscal arrangements such as interest rates, taxation, investor protection, financial stability and monetary policy.

This post was published at Zero Hedge on 09/08/2014.

EU – Nothing Works, Not Even Stimulation

Mario Draghi cannot launch QE without German political assent … It is surely wishful thinking to suppose that the ECB is ready to launch full-fledged QE, given its political make-up … Mario Draghi’s comments on the eurozone economy at Jackson Hole have put him in direct conflict with Berlin – UK Telegraph
Dominant Social Theme: These last five years have been a problem, but now you can smell the hope and change.
Free-Market Analysis: We’ve written regularly about the difficulties with the EU for years and what’s astonishing is that almost all of our predictions about its dysfunctional nature – and predictable results – have been realized, and yet the EU staggers on.
There were even, as we anticipated, street demos and open rebellion in parts of the EU at the height of the current crisis. Athens was bloodied and Spain, Italy and Portugal among other countries saw serious unrest, especially among youth. And yet, surprisingly, the EU withstood the blows primarily through the use of uncompromising political, civilian and military force. The elites were not afraid to “crack heads.”
It is Southern Europe that has borne the brunt: Taxes have risen, services have been cut and formal employment has never returned. Young people have little work; older workers cannot trust the vaunted EU safety net. Retirements have been put off. Poverty has risen.
Enter Mario Draghi and the Eurocrats once again to salvage a continually unsalvageable mess. Draghi intends to print lots of money in order to buy securities in the open market, presumably including national and EU debt.

This post was published at The Daily Bell on September 08, 2014.

Weekly Gold Trend Analysis: EU Quantitative Easing Takes Center Stage

The big story this week regarding gold shifted away from political issues as the market digested the lessening of tensions in Ukraine following negotiations between Russia and Crimea over a ceasefire.
What was a brief gold price recovery as the dollar weakened lagged during the week. A dollar drop provided some bargain hunting and short covering that lifted prices on Friday, but generally, the trend was down. In the near term, the dollar will likely retain strength against gold, though long term, analysts seem more hopeful.
As Reuters pointed out:
Weak demand has shaken the seasonal strength and outlook for the yellow metal remains sluggish in the near term … On the global front, gold succumbed to heavy offloading from hedge funds and investors following robust US macro data even as optimistic view of the economy amid Fed rate hike concerns prompted selling.
The Week’s Monetary and Industrial Trends
On the financial front, the big news was the surprise announcement by Mario Draghi that the European Central Bank would cut its benchmark interest rate. But of even more import was Draghi’s position regarding ECB stimulus. Draghi intends what amounts to an almost US$1 trillion stimulus for the EU, according to reports.
Draghi’s action included a rate cut but he also indicated a broadening of asset-backed securities. He intends to “significantly steer” the ECB’s balance sheet to 2.7 trillion euros up from 2 trillion euros today. Whether he can accomplish his goals via quantitative easing remains questionable given German resistance, which is based on legal facilities embedded in duly signed EU documents.

This post was published at The Daily Bell on September 06, 2014.

Palladium Breaks Multi-Year High Over $900; Russian SWIFT Payment Ban Proposed By UK

Palladium Breaks Multi-Year High Over $900; Russian SWIFT Payment Ban Proposed By UK
The palladium price made a new 13 year high today and reached $909/oz, its highest since February 2001. Markets fear that the global supply of palladium could be impacted by the threat of further sanctions against Russia.
Palladium in U. S. Dollars – 20 Years (Thomson Reuters) The Russian mining industry has not been the target of sanctions so far, but with the oil sector already affected and the gas sector possibly the target of upcoming sanctions by the EU, markets remain fearful.
Russia is the world’s largest palladium producer accounting for over 40% of global production. This is mainly through Norilsk Nickel, the world’s largest mining company which mines nickel, copper and palladium in the area of Norilsk in Siberia, the world’s most northerly city. Palladium is mined as a by-product of nickel and copper mining.

This post was published at Gold Core on 1 September 2014.

The Ultimate Demise Of The Euro Union

The European Union (EU) was created by the Maastricht Treaty on November 1st 1993. It is a political and economic union between European countries which makes its own policies concerning the members’ economies, societies, laws and to some extent security. To some, the EU is an overblown bureaucracy which drains money…and compromises the power of sovereign states. For others, the EU is the best way to meet challenges smaller nations might struggle with – such as economic growth or negotiations with larger nations – and worth surrendering some sovereignty to achieve. Despite many years of integration, opposition remains strong.
ACCORDINGLY, there are signs the EU is teetering on implosion.
Indeed the Euro zone break up is inevitable for numerous reasons.
Unpayable government debts and the massive bailouts in Greece, Portugal, Spain and Ireland logically pave the road to an eventual EU break up.
While it’s convenient to have the one currency for 17 different nations, the nature of those national economies and their strength is quite different and problematic. Indeed and fact it favors wealthy countries like Germany and France at the expense of the PIIGS (i.e. Portugal, Italy, Ireland, Greece and Spain).
Another issue is that while the 17 nations share the same Central Bank, they do not have a central control on government budgets, nor central political control.
Paul Griffiths, Colonial First State chief investment officer does not want to put a time frame on the euro zone being shrunk, but says it will eventually be very different from what it is today.

This post was published at Gold-Eagle on September 1, 2014.

Gold and silver set to shine as EU revs up sanctions on Russia and then what happens?

old and silver prices will likely head higher this week as the traditionally strong month of September is turbo-charged by the slide towards EU recognition of the war in the Ukraine, with Russia now being told to back off by next weekend or else.
Such threats have not worked in the past. But whether the 28-nation bloc can agree to anything strong enough to really deter Russia from its mission in Ukraine is doubtful.
New sanctions
Measures proposed range from taking away the hosting of the 2018 World Cup to switching off the SWIFT system of banking transfers. The EU will consider the immediate damage to its own business interests and also the probable Russian response, a crippling ban on EU car imports, for example.

This post was published at Arabian Money on 31 August 2014.

august 29

Gold closed down $2.90 at $1285.80 (comex to comex closing time ). Silver was up 13 cents at $19.40
In the access market tonight at 5:15 pm
gold: $1287.00
silver: $19.46
Today is first day notice and also the last day for options on the OTC. GLD : a slight loss of .6 tonnes of gold (probably to pay for fees etc)
SLV : no change in silver inventory at the SLV/now 331.528 million oz
Today we have commentaries concerning the Ukraine, Russia, Japan, Germany and the EU, Italy and the terror of ISIS.
On the physical side of things, we have a great commentary from Koos Jansen on silver as this metal has volume in China exceeding that of the comex. Also the Shanghai Silver Exchange has only 3.3 million oz of inventory left having depleted over 29 million oz over one year. Once depleted where do you think China will go to, in order to feed its burgeoning demand? We will discuss these and other stories
So without further ado………………
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically remained the same. Again, they must have found some gold to lease..
London good delivery bars are still quite scarce.
August 29 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.088000% .1020000% .1200% .1500% .228000%
August 28.2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
08800% .104000% .12000% .1500% .224000%
end
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on August 29, 2014.

“Unrigged” Close Buying-Panic Saves S&P 2,000 For Long Weekend

For the 6th week of the last 8, Treasury yields declined with 30Y pressing to 3.05% (and 10Y 2.32%) handles to 15-month lows. US equity markets saw volume crater as the early high-stops were run in the EU session and low-stops run in the US session before the ubiquitous EU close ramp lifted futures to VWAP and S&P cash to 2000.xx where it stayed for the rest of the day in a wholly unrigged way. Trannies ended the week red and Russell the best. The USD Index closed at 13-month highs (up 7 weeks in a row). Despite USD strength, gold and silver rose 0.5% on the week but oil was the big winner 2.4% (testing $96) as copper tumbled 2%. Credit markets closed at their wides (as stocks closed at their highs). Interestingly, once the Sept POMO schedule was released, TSYs sold off on the day to close red (but end 4-7bps lower on the week). VIX closed unch today but the ridiculous late-day panic-buying spree in futures grabbed stocks back above the crucial 2000 level for the S&P. Year-to-date, Treasuries lead 16.75% as the S&P ( 8.5%) overtook gold ( 6.7%) in the last few days.

This post was published at Zero Hedge on 08/29/2014.

Summer Ends, Jackass Appears

In a continuance of our “holiday tradition”, Jim Willie stopped by Turdville yesterday to share his thoughts on current events and where he thinks this all headed.
The Jackass was his usual self, even if a bit under the weather. In this podcast, we discuss:
Yesterday’s announcement by Gazprom that they will begin accepting payment in rubles and yuan The escalation of US and EU sanctions against Russia and how they are failing/backfiring The growing isolation of the US as a economic superpower The eventual emergence of a new global currency regime This baby clocks in at slightly over 60 minutes so please try to pace yourself. You don’t want to overdo it.
TF
CLICK HERE TO LISTEN

This post was published at TF Metals Report By Turd Ferguson | Friday, August 29, 2014.

German Finance Minister Tells EU Leaders: Free Money Party’s Over

Has Germany had enough? Hot on the heels of Mario Draghi’s ‘demands’ that EU leaders undertake “structural reforms” to boost competitiveness and overcome the legacy of Europe’s debt crisis, German Finance Minister Wolfgang Schaeuble unleashed perhaps the most worrisome statement tonight for all the free-money-party-goers – the music is about to stop. In an interview with Bloomberg TV, Schaeuble blasted “Europe needs to find ways to foster growth,” adding that “the ECB has reached the limit in helping the Euro Area.” In a clear shot across the bow of his ‘core’ cohort, Schaeuble said he “understood” Hollande’s demands but shot back that “monetary policy can only buy time.”
As WSJ notes, the French are seeking aid…

This post was published at Zero Hedge on 08/28/2014.

Continued EU Weakness Gives Rise to Two Inflationary Trends

German economy ‘losing steam’ as business confidence plunges again … Survey of optimism among companies adds to gloom enveloping Europe’s biggest economy … Germany’s businesses are rapidly losing confidence in the prospect of a recovery in the eurozone, in a further blow to the single currency’s biggest economy. Companies’ assessment of the business climate is now at a 13-month low, having deteriorated for four successive months, according to a survey of 7,000 firms conducted by the Munich-based IFO think tank. – UK Telegraph
Dominant Social Theme: Something must be done to save Europe and the euro.
Free-Market Analysis: What does the future hold? More and more money stimulation it would seem. China – the BRICS – and the US are printing endless gouts of money, and now it appears as if the European Union is headed in the same direction.
In fact, the EU cannot simply print, as the Germans stand in the way. But according to this article and others, the German economic situation is declining, so perhaps there will be less pushback to plans to stimulate.
Certainly, without German economic vitality, the eurozone is even worse off than it’s been in the past. Here’s more:
The study is the latest blow to Angela Merkel’s hopes of Germany leading the eurozone out of its current economic malaise. Separate data for investor confidence and inflation have also shown activity slowing down. The economy contracted in the second quarter of the year, and another quarter of decline would tip it into recession.

This post was published at The Daily Bell on August 26, 2014.

The Soverign Debt Solution

The Solution to the Sovereign Debt Crisis

After all is said and done, this is basically what’s been happening in Europe, where countries like Spain, Greece, Ireland, Portugal, Italy and Cyprus depend on each other and the stronger members of the European Union to keep buying their bonds, burying them ever deeper in debt (to each other).

But it’s not limited to just Europe, of course. The US is in just as bad of shape as far as debt is concerned.  In all western nations, as the cartoon above adequately portrays, there seems to be a symbiotic relationship between the banks and the countries in debt.  The banks enable the governments to keep borrowing just to be able to buy more debt from other countries’ governments, which are doing the exact same thing.  The whole sovereign bond market is one giant Ponzi scheme, just waiting to capsize.

Greed, Fear, Bubbles and Market Madness

Grant Williams, of Vulpes Investment Management, provides us with a brilliant presentation explaining how greed and fear play into the making of economic bubbles.  After giving a few examples of historic bubbles of the past, Williams then goes on to describe two bubbles in the present.  Spoiler alert!

Williams presents the latter two bubbles happening today as one nearing a collapse and the other in a “sweet spot” ready to enter the hyper-inflating mania phase.