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Dow, S&P 500 set record highs on Bernanke, upbeat earnings

"Stocks finished higher Thursday, with the Dow and S&P 500 setting fresh highs, boosted by a batch of upbeat economic reports and after Fed Chairman Ben Bernanke reiterated that monetary policy will remain highly accommodative, even as the central bank starts to pare back its bond buying. Bernanke returned to Capitol Hill to testify before the Senate Banking Committee on the economy and QE after reassuring the markets Wednesday that there was no concrete timetable for the Fed to scale back its bond purchase program. Bernanke also emphasized that there could be a lengthy time-lag between the end of asset purchases and a hike in interest rates." Continue reading →

Continue ReadingDow, S&P 500 set record highs on Bernanke, upbeat earnings

Bill Bonner: Has gold bottomed out?

"Is there any reason to doubt? Any reason for worries? Any reason to stash a gold coin in your safe, just in case this reprise of credit-based money doesn’t pan out? It took the Soviets 70 years to realise that their experiment with primitive communism wouldn’t work. They tried to run a huge, modern nation as though it were a paleolithic tribe. It took Zimbabwe nearly 30 years to discover that it couldn’t cover its expenses by printing up its own credit-based money (though it didn’t begin running the presses at full speed until near the end). And how long did it take the Thousand-Year Reich to discover that ignoring the laws of civilised nations would be fatal? Only 12 years!" Continue reading →

Continue ReadingBill Bonner: Has gold bottomed out?

Gold Slump Revives Hedges Scrapped During Bull Run

"Tumbling gold prices are raising the prospect of a return to hedging - a strategy that’s been shunned by investors and producers who spent at least $10 billion at the end of the last decade unwinding forward sales. A revival of hedging may be a last resort for producers from Toronto to Melbourne who have announced plans to trim spending, sell mines, cut staff and reduce high-cost production in response to a decline in the price of gold that could shave about $10 billion from earnings, according to data compiled by New Jersey-based Kenneth Hoffman at Bloomberg Industries." Continue reading →

Continue ReadingGold Slump Revives Hedges Scrapped During Bull Run

Goldman Sachs quarterly profits more than double to $1.93bn

"Investors had feared that the looming prospect of an end to the US Federal Reserve’s $85bn-a-month bond-buying programme would impact profits at Wall Street’s major banks. However, Goldman Sachs navigated the turbulent quarter better than they expected. Profits climbed to $1.93bn (£1.28bn), from $962m in the same period last year, while revenues rose from $6.6bn to $8.6bn. Goldman Sachs employees were paid $253,691 on average, although the bank’s highest earning staff take home considerably more than that. Michael Sherwood, co-chief executive of Goldman Sachs and head of its London operation, received $15.8m as a share bonus alone last year." Continue reading →

Continue ReadingGoldman Sachs quarterly profits more than double to $1.93bn

JP Morgan Getting Ready To Settle For $1 Billion For Manipulating Energy Markets?

"Sources told the Journal the deal could come in close to a staggering $1 billion, the largest payout in the history of the Federal Energy Regulatory Commission (FERC), which overseas power trading markets. JPM and FERC, the little regulator that could, are reportedly exchanging drafts of an agreement. Sources told the Journal the bank is working quickly to finish the deal so they can gear up for even more regulatory hoopla in the wake of the London Whale debacle. The filings describe how traders rigged their bidding in order to be eligible for 'make-whole' payments that would cover trading losses and generate a healthy profit, according to the Journal." Continue reading →

Continue ReadingJP Morgan Getting Ready To Settle For $1 Billion For Manipulating Energy Markets?

Clarification of William Kaye Regarding German / US gold in Hong Kong refineries

"Hong Kong fund manager William Kaye identifies the Hong Kong gold refiner that is recasting Western gold, including Western central bank gold, for the Asian market. Kaye remarks that this movement and recasting of gold should hardly be a sensation because it is completely consistent with everything known about the current gold market. Kaye also denounces Western exchange-traded gold funds as facilitating 'enormous potential mischief and abuse' of gold investors at the hands of the bullion banks that are exclusively authorized to put gold into and take gold out of the funds." Continue reading →

Continue ReadingClarification of William Kaye Regarding German / US gold in Hong Kong refineries

China’s Central Bank Subsidizes the Federal Deficit

"The Chinese central bank creates money out of nothing, just as the Federal Reserve does. Then it takes this newly counterfeited money and buys U.S. government debt, just as the Federal Reserve does. It bought $25 billion of this debt last month. The Federal Reserve bought $45 billion. So, when it comes to currency-rigging, which central bank is the greater culprit? The two economies, China’s and America’s, are addicted to the drug of fiat money. The first central bank to quit counterfeiting — the first one to 'taper' — starts the international recession. The first one to stop inflating permanently will turn the recession into a depression. Which will it be?" Continue reading →

Continue ReadingChina’s Central Bank Subsidizes the Federal Deficit

China’s richest man says ‘common prosperity’, not ‘wealth gap’ is priority

"Zong only went into business in his 40s, selling fizzy drinks to children and reportedly being so short of cash that he slept under a bridge in Beijing because he could not afford a hotel. But the company he launched, Wahaha, whose name means 'Laughing Child' in Chinese, went on to become China’s third largest soft drinks company, according to Euromonitor International. Zong’s fortune, as estimated by China-based luxury magazine publisher the Hurun Report, makes him the richest person in China and one of the wealthiest in Asia. Zong warned: 'If we had egalitarianism… we wouldn’t have enough to eat.' He called for lower taxes to stimulate investment." Continue reading →

Continue ReadingChina’s richest man says ‘common prosperity’, not ‘wealth gap’ is priority

Larry Summers’s Billion-Dollar Bad Bet at Harvard

"Matthew Klein at WaPo reminds us of the reckless bet that Larry Summers made on interest rates when he was president of Harvard. The Harvard endowment suffered serious losses. These were the risky investments that Iris Mack warned Summers about in an email and which resulted in her getting fired. Summers is now being considered for chairmanship of the Federal Reserve, where he would be in charge of interest rate policy." Continue reading →

Continue ReadingLarry Summers’s Billion-Dollar Bad Bet at Harvard

China defies IMF on mounting credit risk and need for urgent reform

"As you can see from the first chart, total credit has jumped from 129pc to 195pc of GDP since 2008, and has completely departed from its historic trend. The great mistake, plainly, was to keep the foot on the floor in 2010 and 2011, long after the Lehman crisis had subsided. The deeper thrust of the IMF report is that the growth model of the past 30 years is exhausted. The low-hanging fruit has been picked. If the Communist Party fails to take radical action, it will soon be caught in the middle income trap. Loans have jumped from $9 trillion to $23 trillion since 2008, a faster pace of debt build-up than in any major episode of the past century." Continue reading →

Continue ReadingChina defies IMF on mounting credit risk and need for urgent reform