http://www.bloomberg.com/news/2014-06-19/petrodollars-turn-aberdeen-into-independence-battleground.html


In the Fittie Bar next to Aberdeen’s industrial harbor, where North Sea oil workers come to drink between stints offshore, the debate over Scottish independence is raging.

Amid rounds of whisky and beer, engineer Paul Murray lectures the bar on how Scotland can go it alone with an economy underpinned by the energy resources that pay his salary. Sean Mizen, an Englishman who works on the oil rigs, said the U.K. is better off by sticking together.

“We’ve got the finances to do it,” said Murray, 46, facing a row of upturned Scotch bottles behind the bar. “Scotland can stand on its own and be a nation on its own.”

“You can’t just live on what’s out there,” replied Mizen, 30, who has a preference for Captain Morgan’s rum.

http://www.bloomberg.com/news/2014-06-19/gold-extends-gains-as-nikkei-futures-rise-copper-slips.html

European stocks extended this week’s gain as Shire Plc led drugmakers higher after rejecting a takeover bid. South Africa’s rand strengthened as record-low currency volatility boosted demand for higher-yielding assets, while U.K. bonds and gold dropped.

The Stoxx Europe 600 Index added 0.2 percent by 10:05 a.m. in London. Shire surged 12 percent. Standard & Poor’s 500 Index futures were little changed. Shares in emerging markets were poised for their first week of declines this month on concern higher oil costs will curb growth. The rand gained 0.6 percent against the dollar and the yield on 10-year gilts approached a three-month high. Gold retreated from a two-month high.

The S&P 500 closed at a record yesterday and European stocks approached a six-year high after the Federal Reserve said this week U.S. interest rates will remain low. Overnight borrowing costs for euro-area banks fell to a record-low 0.01 percent and volatility declined from currencies to stocks to bonds. Commodities led by oil headed for a second weekly gain as President Barack Obama said he’s sending U.S. military advisers to assist the Iraqi army battle an insurgency and is prepared to take more action.

“We’re still overweight global equities,” said Kelvin Tay, chief investment officer for South Asia Pacific at UBS Wealth Management. “Where risk assets are concerned, you tend to benefit from low interest rates and from the Fed’s statement, we don’t think that interest rates are going to go up anytime soon. There is some concern that the situation in Iraq could escalate and bring oil prices up another notch.”

http://www.bloomberg.com/news/2014-06-20/gold-options-signal-more-gains-as-yellen-shakes-up-market.html

Janet Yellen is breathing life back into the gold market.

Trading in bullion options show the biggest rally in nine months has more to run after some contracts betting on higher prices surged by the most since 2012 yesterday. Fed Chair Yellen’s outlook for low U.S. interest rates is bringing investors back to gold after a measure of volatility sank to the lowest since 2010 earlier this week.

This year’s surging equity markets left the metal out of favor as open interest in Comex futures slumped to a five-year low in April and holdings in global exchange-traded products backed by bullion reached the smallest since 2009 this month. Now, demand is rebounding as lower borrowing costs revive the threat of inflation and escalating violence in Iraq boosts the appeal of a haven.

“Yellen’s words worked like magic for the gold market, which has otherwise been very lackluster,” Dan Denbow, a portfolio manager at the $1 billion USAA Precious Metals & Minerals Fund in San Antonio, said yesterday. “The political turmoil in Iraq and Ukraine continues to provide support, but the main reason for the rally is Yellen.”

Now, if it were the banksters she was scaring....but the NY AG is doing that. Still, they could use some support from the feds....

http://www.bloomberg.com/news/2014-06-20/housing-falters-as-forecasters-see-u-s-sales-dropping.html

The two-year-old U.S. housing recovery is faltering.

The Mortgage Bankers Association yesterday lowered its new and existing home sales forecast for 2014 to 5.28 million -- a decrease of 4.1 percent that would be the first annual drop in four years. The industry group also cut its prediction on mortgage lending volume for purchases to $751 billion, an 8.7 percent decline and the first retreat in three years.

Bullish forecasts in early 2014 from MBA, Fannie Mae and Freddie Mac have been sideswiped by rising home prices and an economy that isn’t producing higher paying jobs. The share of Americans who said they planned to buy a home in the next six months plunged to 4.9 percent last month from 7.4 percent at the end of 2013, the highest in records going back to 1964, according to the Conference Board, a research firm in New York.

“The big housing rally wiped itself out because prices increased too quickly for buyers to keep up,” said Richard Hastings, a consumer strategist at Global Hunter Securities LLC in Charlotte, North Carolina, who predicted the slowdown eight months ago. “The pool of eligible new buyers is collapsing” because of stagnant incomes and lack of credit, he said.

It was a momentary loosening of the death grip

http://www.bloomberg.com/news/2014-06-20/draghi-s-calm-markets-spark-concern-of-german-risks-euro-credit.html

The European Central Bank’s unprecedented effort to fend off the threat of deflation has brought volatility in financial markets to a standstill. Policy makers aren’t so serene.

Price swings in euro-area bonds and equities have collapsed, borrowing costs for the riskiest issuers reached record lows and Cyprus accessed funding markets just a year after receiving a bailout. Rather than congratulate ECB President Mario Draghi, officials from Britain to the Bundesbank say persisting with the easing policy for too long may store up trouble.

“There’s a general discussion of whether investors are getting too complacent about risks,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “At some point we are likely to reach levels that could not give proper compensation for the risk people are taking. This is similar to what happened ahead of the financial crisis.”

The unease underscores the challenge for Draghi as he and fellow policy makers attempt to revive lending in the economy without unduly inflating asset prices or enabling governments to ease up on plans to cut their deficits. A monetary policy just for Germany would set interest rates at 4.65 percent, according to a Taylor Rule model compiled by Bloomberg, versus minus 10.75 percent for Spain or minus 19.25 percent for Greece.

http://www.bloomberg.com/news/2014-06-19/jpmorgan-said-to-buy-property-in-downtown-san-francisco.html

JPMorgan Chase & Co. (JPM)’s asset-management unit bought a San Francisco property from Jamestown LP in a $415 million deal that includes offices, a hotel and a development site, said two people with knowledge of the deal.

The purchase of 22 Fourth St. near Union Square closed today, said the people, who asked not to be named because the transaction is private. JPMorgan will acquire 430,000 square feet (40,000 square meters) in two buildings known as Pacific Place, as well as a land parcel, the people said. Tenants include the 198-room Hotel Palomar, software maker Intuit Inc. and retailers Old Navy, Levi’s and the Container Store.

Melissa Shuffield, a spokeswoman for New York-based JPMorgan, declined to comment. Jamestown, a closely held real estate investment firm based in Atlanta, confirmed the sale without naming the buyer or price in a statement today.

San Francisco’s office market is luring property investors after a surge in leasing demand led by technology companies pushed rents up 70 percent since 2010, according to Jones Lang LaSalle Inc. The metropolitan area has California’s lowest unemployment rate at 4.3 percent and an economy that has added jobs each month for almost five years, state labor data show.

http://www.bloomberg.com/news/2014-06-20/krone-shock-buffets-norway-as-central-bank-embraces-drop.html

Norway central bank Governor Oeystein Olsen is signaling a willingness to tolerate more weakness in the krone, among the worst-performing currencies of the past year, even if that causes inflation to accelerate.

The krone plunged yesterday by the most in a year after the central bank said it’s ready to cut interest rates for the first time since March 2012 to protect western Europe’s largest oil producer from an investment slump. As the currency lost as much as 2.3 percent against the euro and 2.1 percent versus a basket of its most-traded peers, Olsen said he was aware the bank’s comments surprised markets “a bit.”

The risk of krone losses driving inflation 0.5 percentage point higher than the central bank’s 2.5 percent target still means “it will still be close to target,” Olsen said yesterday in an interview with Bloomberg News after a press conference in Oslo. “The impact would have to be very, very strong before we end up being concerned.”

Olsen said he’s willing to lower borrowing costs as offshore energy investment abates and record household debt weighs on consumers. His comments followed Norges Bank’s decision yesterday to leave its benchmark deposit rate at 1.5 percent for a 14th consecutive meeting, while pushing back the timing of monetary tightening until the end of next year, versus an earlier forecast for the “summer” of 2015. It said further weakening of the economy may warrant a rate reduction.

http://www.bloombergview.com/articles/2014-06-19/what-will-argentina-do-with-its-vultures


ARGENTINA'S SHIP LIBERTAD SEEMS TO HAVE ESCAPED FROM ELLIOTT'S CLUTCHES. PHOTOGRAPHER: JOAQUIN SARMIENTO/AFP/GETTY IMAGES

On Monday, Argentina lost its appeal against Elliott Management in the U.S. Supreme Court. That means that, leaving aside this footnote,1 Argentina needs to either negotiate a settlement with Elliott over billions of dollars in unpaid debt in the next two weeks, or default on its current debts on June 30. This seems bad for Argentina, and it is. But in a weird way, it almost puts Argentina in a stronger negotiating position than Elliott.

(Another self-conscious footnote: If you have no idea what I'm talking about, there's some basic background down here.2 )

On the one hand: Default is bad for Argentina. But it might not be that bad. It's an obviously technical default, not a "real" one: Argentina has the desire and capacity to make its interest payments on the exchange bonds; it can't because a vulture fund (Argentina's words) and a New York court won't let it.

Now bondholders like desire and capacity, but they prefer money; "we tried, but we can't give you your money" is not a great thing to tell them. But there are ways to get them their money even after default. I mean, Argentina has lots of experience with that! You default, you offer bondholders something in exchange for their bonds, and they take it. If what you give them preserves value, they're not that mad at you and are willing to continue to lend to you.

http://www.golemxiv.co.uk/2014/06/trade-deals-investment-treaties-death-democracy-companies-sue-whole-nations-win/



This is a talk I gave dealing with Trade Deals such as the TPP and TPIP and the threat posed by them and the Investment Treaties and Investor State Dispute Settlement mechanism they contain.

The talk was held in Friends House in Manchester, England and was organized by the Green Party and Equality Northwest. The talk was absolutely packed. The room was hot and there was standing room only and yet no one left. The day before I had given the talk to a meeting held in Sheffield, organized by the Sheffield Green party. If my non-scientific evidence is anything to go by, there is a growing discontent and a determination to question mainstream assurances and find new answers.

PODCAST LINKS:

http://www.bloomberg.com/news/2014-06-19/property-flops-seen-as-33-billion-in-trusts-due-china-credit.html

Chinese property trusts face record repayments next year as the real-estate market cools, fueling speculation among bond funds that more developers will collapse.

The trusts, which channel money from wealthy individuals to smaller builders that have trouble obtaining financing elsewhere, must repay 203.5 billion yuan ($32.7 billion) in 2015, according to Use Trust, a Chinese research firm. That’s almost double the 109 billion yuan due this year. New issuance of the products slumped to 40.7 billion yuan this quarter, the least in more than two years, Use Trust data show.

“Trust loan defaults will rise substantially,” said Fiona Cheung, head of Asia credit at Manulife Asset Management’s fixed-income team which oversees $44 billion globally. “It won’t be surprising if there are more collapses of China’s property companies. Those companies that suffer from weak sales, that bought land too aggressively last year funded by debt and that have poor access to capital markets will potentially experience cash flow pressure.”

JPMorgan Chase & Co. says the real-estate industry poses the biggest near-term risk to growth in the world’s second-largest economy after new home prices dropped in the most cities in two years last month. China’s banking regulator said on June 6 it will monitor developer finances, a sign of concern defaults may spread after the March collapse of Zhejiang Xingrun Real Estate Co., a builder south of Shanghai.

http://www.bloomberg.com/news/2014-06-20/fed-tops-iraq-as-one-thing-after-another-fails-to-rattle-markets.html

History, in the words of playwright Alan Bennett, is “just one bloody thing after another.”

Central bankers likely feel the same.

Each time the world economy shows signs of strengthening, it runs smack into geopolitical upheaval. The latest is the fighting in Iraq. Then there’s the violence in Ukraine and the Syrian civil war; also, military coups in Egypt and Thailand, clashes in Libya and street disturbances in Turkey.

A report this week from the Institute for Economics and Peace attempted to calculate the cost to the global economy of containing and dealing with violence: $9.8 trillion last year or 11.3 percent of gross domestic product. It cited upward revisions of China’s military expenditure and the intensifying of internal conflicts for the $179 billion increase from 2012.

“The danger is that we fall into a negative cycle: low economic growth leads to higher levels of violence, the containment of which produces lower economic growth,” said Steve Killelea, founder and executive chairman of the institute.

It's called blowback, and they brought it upon themselves. Those who fight with dollars will die broke. Economies should not be weapons of mass destruction.

When economies ARE used as weapons of mass destruction, they cannot simultaneously produce growth. Weaponized economies merely produce theft, destruction and ultimately, death.

http://www.oftwominds.com/blogjune14/central-planning6-14.html

EXCELLENT ESSAY WITH GRAPHIC PORN GALORE....

IT'S NOT EXACTLY THAT WE HAD CENTRAL PLANNING OF OUR ECONOMY...IT'S THAT THE ECONOMY WAS KILLED DEAD AND REPLACED BY A SYSTEM OF PLUNDERING THE PUBLIC FOR PRIVATE GAIN BY A FEW BANKSTERS.

UNTIL WE KILL (LITERALLY OR FIGURATIVELY) THE BANKSTERS AND THEIR CRONIES IN THE GOVT., WE AREN'T GOING TO HAVE AN ECONOMY IN THIS NATION OR THE WORLD.

WE WILL BE REDUCED TO SMALL, LEAKY LIFEBOATS OF LOCAL ECONOMIES THAT ARE SMASHED OR EATEN BY THE SHARKS AT THEIR WILL.

BLOGGER HAS A BOOK CALLED "GET A JOB". FOR SAMPLE CHAPTER:

http://www.oftwominds.com/get-a-job.html

http://www.bloomberg.com/news/2014-06-19/union-bank-of-india-enters-antwerp-s-diamond-industry.html


Antwerp, the world’s biggest trading hub for uncut diamonds, gets a new lender to the industry today as Union Bank of India opens a branch in the Belgian city.

The move by the Mumbai-based company means that five Indian lenders will be active in Belgium, according to the country’s central bank. The Antwerp office, in the heart of the city’s diamond district, will dedicate a fifth of its business to diamonds and also undertake trade finance, remittances and syndicated loans, Union Bank said in a statement.

The diamond industry globally needs more banks to help spread the risk of funding diamond transactions and to ensure more competition and choice, as well as keeping the industry on a sustainable footing, said Erik Jens, Chief Executive Officer at rival ABN Amro’s International Diamond & Jewellery group.

Diamond companies rely on financing, with dealers using credit to buy rough stones from miners and to fund gem-trading and the cutting and polishing of stones for jewelry production. The biggest lenders to the industry are State Bank of India (SBIN), ABN Amro, Antwerp Diamond Bank and Standard Chartered.

http://www.bloomberg.com/news/2014-06-19/caterpillar-sales-drop-accelerates-amid-mining-cuts.html


Caterpillar Inc. (CAT), the biggest maker of construction and mining equipment, reported a steepening decline in retail machine sales in Asia as miners continue to reduce spending.

Dealer sales in the Asia-Pacific region fell 30 percent in the three months through May compared with the same period a year earlier, the Peoria, Illinois-based company said today in a filing. Sales slid 25 percent in the three months through April.

Caterpillar dealers’ global sales slid 12 percent in three months through May, after falling 13 percent in the period through April.

“We believe global numbers will need to show some improvement shortly in order to support the positive move in Caterpillar’s stock year-to-date,” Stephen Volkmann, a New York-based analyst at Jefferies Group LLC who has a hold rating on the shares, said in a report.

http://www.bloomberg.com/news/2014-06-20/long-term-unemployeed-are-finally-catching-a-break.html

Americans who have been hunting for employment for more than six months are finally catching a break.

Among them is Tracey Mutz, who landed a job this month as director of project management for 1st Money Center Inc. after being out of work since March 2013. “It was terrible,” said Mutz, 52. “I wasn’t getting any responses.”

Now, she’s “happy” with the position she found. The specialty financing company is located a mile from her home in Hurst, Texas, and has “a great office environment.”

Mutz isn’t alone in experiencing better times. Faced with a shrinking pool of available workers and incipient wage pressures, companies are starting to give the longer-term unemployed a second look. The number of Americans without a job for 27 weeks or more fell to 3.37 million in May from 4.35 million a year earlier, though some of that drop reflects people leaving the workforce.

http://soberlook.com/2014/06/the-bojs-balance-sheet-is-about-to-go.html

http://3.bp.blogspot.com/-FVftY03nxBg/U59pHDsAtzI/AAAAAAAAfbc/7SUdZWXvYWc/s1600/BOJ+balance+sheet.PNG



The Bank of Japan's balance sheet continues to expand at a fairly constant pace. Relative to the size of the GDP, this is already the largest QE program in the world. Yet some analysts believe that the BoJ will accelerate securities purchases later this year.

Here is why. Credit Suisse for example projects that Japan's inflation rate has peaked and is about to begin declining. In fact CS researchers see a complete divergence between the BoJ's own projection of inflation and reality. A number of other researchers (for example Scotiabank) agree.

http://2.bp.blogspot.com/-F9_oJw1sGcs/U59pNBDInUI/AAAAAAAAfbk/P5kjVfR2WUs/s1600/Inflation+projections.PNG

This potential decline in inflation dramatically raises the risk of Japan slipping back into deflation - something that the BoJ and the Abe administration have been desperately trying to avoid. As inflation begins to lag the BoJ's projections, the central bank will accelerate QE to new highs.


The reason many researchers believe Japan's inflation may have peaked has to do with the yen.



MORE

http://www.bloomberg.com/news/2014-06-20/billionaires-at-basel-bet-art-better-investment-than-cash.html


A visitor walks past to the artworks by Martin Creed in the gallery section of Art..


The main thing that’s driving the growth of the art market is the demand for a good investment for the very rich, art adviser Todd Levin said.

Levin, standing outside the convention center in Basel, Switzerland, was referring to the brisk sales inside at Art Basel, the world’s largest modern-and contemporary-art fair. A self-portrait by Andy Warhol sold for $32 million within 15 minutes of the fair’s start on June 17. Other numbers were impressive: $4 million for a David Hockney landscape; $3 million for a Fernand Leger painting; $250,000 for a towering sculpture by Thomas Houseago.

“It’s about the need of high-net worth investors to park their excess capital,” said Levin, director of Levin Art Group in New York. “They don’t want to keep it in cash in the bank. They can’t put it in a mattress. Art has historically provided the greatest intergenerational return of any asset class.”

The Artnet C50 Index, which combines performance data from 50 top contemporary and postwar artists, advanced 434 percent from the start of 2003 through last year, beating asset classes including gold, fine wine and stocks.

http://hosted.ap.org/dynamic/stories/O/OIL_PRICES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-20-03-51-48

The price of U.S. benchmark crude for August delivery rose 2 cents to $106.07 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, slipped 12 cents to $114.94 a barrel in London, after setting a nine-month high the day before.

In other energy futures trading on the Nymex:

- Wholesale gasoline fell 0.6 cent to $3.09 a gallon.

- Natural gas rose 0.4 cent to $4.59 per 1,000 cubic feet.

- Heating oil fell 0.4 cent to $3.06 a gallon.

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-20-02-48-31

HONG KONG (AP) -- Asian stock markets struggled Friday as the euphoria faded from the Fed's promises of prolonged low rates to boost growth.

Markets were subdued in lackluster trading, with Japanese and Australian benchmarks headed lower after big gains the previous day.

The fluctuations reflect investors' cautious mood heading into summer plus lingering concern over the possible widening of the turmoil in Iraq and uncertainty about the U.S. economy's resilience.

Markets got a short-term boost from Federal Reserve Chair Janet Yellen's pledge this week that short-term rates would not rise from record lows anytime soon

http://bigstory.ap.org/article/eu-cracks-down-corporate-tax-avoidance-scheme


BRUSSELS (AP) — The European Union is closing a loophole that allows companies to shift their profits between different country divisions to avoid taxation.

European Union finance ministers in Luxembourg on Friday agreed on the reform after months of squabbling because some countries feared losing business from multinational firms.

The ministers say the legislation will ensure that corporations can't shift profits across borders of the EU's 28 nations to redefine their gains as tax-deductible loans to their subsidiaries.

Small EU countries specializing in attracting firms with low corporate taxation, like Luxembourg and Malta, had long opposed the legislation.

http://www.spiegel.de/international/europe/cameron-and-juncker-fight-over-role-in-european-commission-a-975528.html

Reading the newspaper hasn't been particularly pleasurable for Jean-Claude Juncker in recent days. First, British historian Timothy Garton Ash compared him to King Louis the XVI, who was executed by the guillotine. Then, the Swiss paper Weltwoche lumped him together with Hitler and Mussolini and the British tabloid Sun described him as "the most dangerous man in Europe."

Juncker had suspected that the British press in particular would go on the attack against him, but he recently had to summon the police after paparazzi climbed over a fence into his property. Furthermore, his 90-year-old father burst into tears when a tabloid accused him of Nazi association. (The older Juncker was forceably recruited into the Wehrmacht following the occupation of Luxembourg.)

The situation is a delicate one: British Prime Minister David Cameron continues to categorically reject Juncker as the next president of the European Commission. Yet a majority in the European Parliament supports the former Luxembourg prime minister. The European Council, made up of EU heads of state and government, has the power of nomination, but the body is divided.

Several voices, including the influential German weekly Die Zeit last week, have called on Juncker to withdraw his candidacy as a final service to Europe. It is a potential solution that Berlin, too, could live with, despite Chancellor Angela Merkel's official support for Juncker's candidacy.

http://www.spiegel.de/international/europe/greek-shipowners-spend-freely-as-country-suffers-a-975754.html

There was a time when Greece's shipowners adorned the covers of gossip magazines and ran football clubs, secure in the affection of millions of fans. But these days, men like Theodoros Veniamis, one of the richest shippers in the country, need personal protection. Many don't leave home without it.

On the list of Greeks hated by their countrymen, shipowners have almost reached the top; only politicians are more reviled. They are threatened by radical leftist groups and even physically attacked. There have also been attempted kidnappings. In at least one case, a family of a shipowner paid millions in ransom.

Shipping magnates in Greece are considered greedy and unscrupulous. According to international analyses, at least €140 billion of shipping industry money has gone untaxed since 2002, a sum that would reduce the critically indebted country's financial obligations by almost half. In Switzerland alone, there is thought to be up to €60 billion in Greek funds, mostly belonging to shipping companies. They were partly accumulated legally, thanks to a web of special regulations allowing tax exemptions for ship owners, and partly illegally, through outright tax evasion. In the past year, Viktor Restis, a shipping company owner, was arrested under suspicion of money laundering.

'We Follow Our Own Metabolism'

But that's not all. Greece remains a country in crisis. Unemployment stands at 27 percent, tax revenues are stagnant and Athens is haggling with international lenders over a potential new debt cut. Meanwhile, shipping companies are expanding their fleets as if money were no object.

Deeb Salem, a former Goldman Sachs (GS -0.08%) trader who said he helped the bank earn more than $7 billion, wants to be paid the almost $5 million difference between his 2010 bonus and what he told his mother to expect.

Salem said in an arbitration hearing that he was led to believe that his 2010 bonus would be $13 million, down from a $15 million award for 2009 when he was paid more than CEO Lloyd Blankfein. Instead, Salem said his bonus was unfairly docked because of a written warning he received about his 2007 self-evaluation.

http://money.msn.com/investing/post--ex-goldman-trader-says-dollar8-million-bonus-is-too-low

You my need a tissue.
http://www.democraticunderground.com/1017198235