TFMR Podcast - Friday, January 30


Right on cue, gold rebounded today and recovered most of the contract expiration losses of yesterday. Now, with another volatile week ahead, can it crawl back toward $1300 and, if it does, what will happen with silver?

As we wrap up the week and the month (a month which saw gold +8% while the S&P was -3%), just a discussion of these charts:



the HUI and the S&P

And this crazy chart of 10-year German and Japanese bond yields

Regarding the totally insane global interest rate picture, please print off and read this remarkable story from Zerohedge. Then take the printed copy and add it to your Stack For Posterity.

And finally, here's a fun article from SRSrocco covering many of the topics we regularly discuss here in Turdville:

Have a great weekend!



Jan 31, 2015 - 10:22am

Russia's Gazprom profits plunge 61%, hit by Ukraine row

Alexander Medvedev, deputy chairman of Gazprom management committee delivering a speech during a gas conference in Vienna Jan. 28. REUTERS Photo

Russia's gas giant Gazprom on Jan. 29 said its third quarter profits plunged 61 percent as supplies were suspended to Ukraine, one of its main customers.

The group's profits between July and September reached 105.7 billion rubles ($1.5 billion) but revenues in that quarter were down 6 percent year-on-year to 1.13 trillion rubles ($16.5 billion). In the first nine months of 2014, Gazprom's net profits fell by 35 percent to 556.2 billion rubles ($8.14 billion). Its revenues reached 4 trillion rubles ($58 billion), up 6 percent from the same period a year ago.

Gas sales fell 2 percent year-on-year between January and September to 2.084 trillion rubles ($30.5 billion), with those to Europe remaining fairly stable.

Jan 31, 2015 - 10:10am

The West's green eyes on China-Africa win-win cooperation

BEIJING, Jan. 31 (Xinhua) -- China-Africa cooperation has long been subjected to vile slanders from the West, even as its nature of mutual benefit has been repeatedly proved and widely acclaimed.

In the latest evidence of the win-win feature, the African Union and China signed a memorandum of understanding on Tuesday to boost cooperation on Africa's infrastructure, which has become a bottleneck hindering the development of the promising continent. Yet the deal, which like numerous others is conducive to Africa's sustainable development, did not stop the mud-slinging by biased Western media, which resorted to such terms as "neocolonialism" to smear China's goodwill. Such claims, sensational as they sound, are pure calumny and have no market both in Africa and across the world. And behind the slanders -- at least some of them -- are a pair of green eyes full of selfishness-born jealousy and frustration.

Deeply aware that poor infrastructure is its short slab, African countries have long decided to prioritize infrastructure development to speed up its modernization drive. According to the World Bank, an extra 93 billion U.S. dollars is needed every year over the next decade to bridge the infrastructure deficit alone in Africa. Yet the rich Western world has not been particularly helpful, partly because of its capital restrictions. As the Economist magazine has pointed out, new rules for insurance firms and pension funds in Europe penalize long-term illiquid investments, such as roads, ports and railways. But such projects are exactly what Africa desperately needs. On the other hand, decades after the independence of African countries, the West still has not disabused itself of the anachronistic, parochial intention to keep Africa as its backyard.

Thus when China, a time-honored friend of Africa which used to be poor and backward but has now grown into a giant with deep pockets, rich experience and mature technologies, came out with a truly helping hand, many in the West had their eyes glow green. Up to now, China has completed 1,046 projects in Africa, helping build 2,233 kilometers of railways and 3,530 kilometers of roads, among others. These projects have substantially improved the African people's daily life and facilitated the African countries' socioeconomic development.

Jan 31, 2015 - 10:06am

Greek bank debt plummets as investors head for the exit

The price of Greek bank debt hit all-time lows this week, shutting off their access to wholesale funding and increasing their reliance on central bank funding.

Greek lenders that enjoyed something of a renaissance last year, allowing them to raise 2.25bn in the bond market, saw prices collapse and yields spike after anti-austerity party Syriza won last Sunday's elections, stocking fears of a potential Greece exit from the eurozone. A 500m March 2017 bond for Piraeus Bank was quoted just below 22% on Friday, a jump from the 5.125% yield at which it priced in March last year. A similar picture could be seen across the sector, with Eurobank's 4.25% 2018 bond hitting 17.35%, Alpha Bank 3.375% 2017s hitting 18.29% and National Bank of Greece's 4.375% 2019s hitting 16.29%.

"Before the Grexit worries, banks were looking actually quite descent. And assuming there is a liquidity backstop, it was an interesting long position and one of these 'recovery stories'," said one investor. "Until there is a strong and credible commitment from the EU/Greek government that ensures emergency liquidity for banks, these remain un-investable to me."

Jan 31, 2015 - 9:59am

Greece starts countdown to cash crunch saying bailout over

Finance Minister Yanis Varoufakis set the clock ticking on Greece’s standoff with the euro area on Friday saying he’s ready to take his chances without a financial backstop rather than submit to more austerity.

The new government may be operating without a financial safety net for the first time in five years by March after Varoufakis challenged the euro area to agree to a new framework of support that allows for more spending. Greece won’t engage with officials from the troika who have been policing the conditions of its rescue since 2010, he said at a joint press conference with Eurogroup Chief Jeroen Dijsselbloem in Athens.

“We don’t plan to cooperate with that committee,” Varoufakis said. “The Greek state has a future, but what we won’t accept has a future is the self-perpetuating crisis of deflation and unsustainable debt.” The standoff could see Greek banks effectively excluded from European Central Bank liquidity operations and the government with no source of funding, having rejected European aid while still shut out of international markets.

Euro-area governments are “committed to providing support for Greece during the life of the program and beyond until it has regained market access, provided Greece fully complies with the requirements and the objectives of the program,” Dijsselbloem said. “I had several constructive meetings and talks with the members of the new Greek government.” “In diplomatic parlance, they say that talks were constructive and honest when they have ended in disagreement,” European Parliament President Martin Schulz said after his meeting with Tsipras on Thursday.

Jan 31, 2015 - 9:56am

Tsipras says Greece to repay ECB, IMF, reach deal with euro area

Greek Prime Minister Alexis Tsipras sought to repair relations with the country’s creditors after a week- long selloff in bonds and stocks, triggered by his pledge to end the country’s bailout agreement.

Greece will repay its debts to the European Central Bank and the International Monetary Fund and reach a deal soon with the euro area nations that funded most of the country’s financial rescue, Tsipras said Saturday in an e-mailed statement.

“My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda, in no way entails that we will not fulfill our loan obligations to the ECB or the IMF,” Tsipras said.

Change of heart, or just change of spin?

Jan 31, 2015 - 9:51am

Leave a Chilly Douche bag comment

Fellow Turd's , I encourage you to leave a comment at Financial Survival Network

First, click on the FSN link below and then scroll down the page till you find the interview.

Turd Ferguson with Don Harold

I cannot tolerate when interviewers blind side the speaker.

Jan 31, 2015 - 9:14am

@ abguy4 Re: Palin

Right on, ditto that. Bollocks?

For a night and day comparison, check out McAlvany's latest podcast:

Monroe Price: Free Expression and Strategic Communication | McAlvany Commentary 2015
Jan 31, 2015 - 9:09am

a POUND of Sterling silver.

The pound sterling has not been a pound of sterling silver for centuries (if ever). In the time of Charlemagne, 240 silver pennies were made from a pound of silver. I do not recall that the silver was .925.

However, a British sovereign (a gold pound until the 1930s, with time off during and a few years after WWI) is .2354 oz gold. A gold ounce (on Kitco) costs 851.14 British pounds. By my calculation, it takes over 200 modern British pounds to buy the gold equivalent of a British gold pound.

British silver stopped being sterling in 1920. In 1919, there was .8409 oz silver in a British crown. There were 4 crowns in a pound. Thus a British pound's worth of silver when British silver was sterling was 3.3636 oz of silver. A silver ounce (on Kitco) is 11.43 British pounds. By my calculation, it takes 38.45 modern British pounds to buy the silver equivalent of a British pound sterling.

Jan 31, 2015 - 9:04am

@ bollocks

Bollocks - I luv yah Bro, BUT, did you just make me watch Sarah Palin???? WTF?? I'd like to go wash my eyes out, but once having been seen, it can't be un-seen. UGH~!

I just slapped myself in the face. You just used up a whole lot of Hat Tips

and please don't respond by telling me wtf she was attempting to say. I speak English (that's what we claim over here anyways), and i bin to colluge, and I can't even begin to convince myself that she has two brain cells in communication with one another. The fact that she is now, or ever has been "on the National scene" is a National embarrassment, that we don't need to be reminded of.

However, if YOU have a point, we're all ears............cheerio..............................;-}

Jan 31, 2015 - 8:43am

chilly dipper

Chilli Dic asks how the avg British Citizen may have been affected ,

i guess an easy example of "how was the avg person in the British Empire affected buy the removal of the "Pound Sterling" as the reserve currency. It used to be a POUND of Sterling silver. do the math it is like 1% of it's initial value.

More recently and from Wikipedia:

"In 1940, an agreement with the U.S.A. pegged the pound to the U.S. dollar at a rate of £1 = $4.03. (Only the year before, it had been $4.86.)[27] This rate was maintained through the Second World War and became part of the Bretton Woods system which governed post-war exchange rates. Under continuing economic pressure, and despite months of denials that it would do so, on 19 September 1949 the government devalued the pound by 30.5% to $2.80. The move prompted several other currencies to be devalued against the dollar."

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Key Economic Events Week of 11/30

11/30 9:45 ET Chicago PMI
12/1 9:45 ET Markit Manu PMI Nov
12/1 10:00 ET ISM Manu PMI Nov
12/2 8:15 ET ADP Employment Report
12/3 9:45 ET Markit Services PMI Nov
12/3 10:00 ET ISM Services PMI Nov
12/4 8:30 ET BLSBS
12/4 8:30 ET US Trade Deficit Nov
12/4 10:00 ET Factory Orders

Key Economic Events Week of 11/23

11/23 9:45 ET Markit flash PMIs
11/23 1:00 ET Goon Daly
11/23 3:00 ET Goon Evans
11/24 9:00 ET Case-Shiller home prices
11/24 10:00 ET Consumer Confidence
11/24 11:00 ET Goon Bullard
11/24 12:00 ET Goon Williams
11/24 12:45 ET Goon Chlamydia
11/25 8:30 ET Q3 GDP 2nd guess
11/25 8:30 ET Durable Goods
11/25 10:00 ET Personal Inc and Spend
11/25 10:00 ET Core inflation
11/26 US Market holiday

Key Economic Events Week of 11/16

11/16 2:00 pm ET Goon Chlamydia
11/17 8:30 ET Retail Sales
11/17 8:30 ET Import Price Index
11/17 9:15 ET Cap Ute and Ind Prod
11/17 10:00 ET Business Inventories
11/17 1:00 pm ET Chief Goon Powell
11/18 8:30 ET Housing Starts
11/18 1:20 pm ET Goon Bullard
11/19 8:30 ET Jobless claims
11/19 8:30 ET Philly Fed

Key Economic Events Week of 11/9

11/9 1:30 pm ET Goon Mester
11/10 7:30 am ET Goon Kaplan
11/10 10:00 ET JOLTS job openings
11/10 10:00 ET Goon Rosengren
11/11 Veteran's Day. Bond market closed.
11/12 8:30 ET CPI
11/12 11:45 ET Chief Goon Powell
11/12 2:00 pm ET Federal budget
11/13 7:00 ET Goon Williams
11/13 8:30 ET PPI
11/13 8:30 ET Goon Bullard
11/13 10:00 ET Consumer sentiment

Key Economic Events Week of 11/2

11/2 9:45 ET Markit Manu PMI
11/2 10:00 ET ISM Manu PMI
11/2 10:00 ET Construction Spending
11/3 U.S. Election Day
11/4 November FOMC begins
11/4 8:30 ET ADP jobs report
11/4 8:30 ET US Trade Deficit
11/4 9:45 ET Markit Services PMI
11/4 10:00 ET ISM Services PMI
11/5 8:30 ET Productivity & Unit Labor Costs
11/5 2:00 ET FOMC Fedlines
11/5 2:30 ET Chief Goon Powell presser
11/6 8:30 ET BLSBS
11/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/26

10/27 8:30 ET Durable Goods
10/27 10:00 ET Case-Shiller home prices
10/27 10:00 ET Consumer Confidence
10/27 10:00 ET Richmond Fed
10/28 8:30 ET Advance Trade in Goods
10/28 8:30 ET Wholesale Inventories
10/29 8:00 ET ECB monetary policy stmt
10/29 8:30 ET Q3 GDP first guess
10/30 8:30 ET Personal Income and Spending
10/30 8:30 ET Core Inflation
10/30 10:00 ET UMich Consmer Sentiment

Key Economic Events Week of 10/19

10/19 11:45 ET Goon Chlamydia
10/20 8:30 ET Housing Starts
10/20 1:00 pm ET Goon Evans
10/21 10:00 ET Goon Mester
10/21 2:00 pm ET Fed Beige Book
10/22 8:30 ET Initial Jobless Claims
10/23 9:45 ET Markit Oct flash PMIs

Key Economic Events Week of 10/12

10/13 8:30 ET CPI and Core CPI
10/14 8:30 ET PPI
10/14 9:00 ET Goon Chlamydia
10/15 8:30 ET Philly Fed
10/15 8:30 ET Empire State Idx
10/15 8:30 ET Import Price Idx
10/16 8:30 ET Retail Sales
10/16 9:15 ET Cap Ute & Ind Prod
10/16 10:00 ET Business Inv

Key Economic Events Week of 10/5

10/5 9:45 ET Markit Svc PMI
10/5 10:00 ET ISM Svc PMI
10/5 10:45 ET Goon Evans
10/6 8:30 ET Trade Deficit
10/6 10:00 ET JOLTS job openings
10/6 10:45 ET Chief Goon Powell
10/7 2:00 ET Sept FOMC minutes
10/7 3:00 ET Goon Williams
10/8 8:30 ET Initial jobless claims
10/9 10:00 ET Wholesale Inventories
10/9 12:10 ET Goon Rosengren

Key Economic Events Week of 9/28

9/29 8:30 ET Advance trade in goods
9/29 9:00 ET Case-Shiller home prices
9/29 10:00 ET Consumer Confidence
9/30 8:15 ET ADP employment report
9/30 9:45 ET Chicago PMI
10/1 8:30 ET Personal Income and Spending
10/1 8:30 ET Core Inflation
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/2 8:30 ET BLSBS
10/2 10:00 ET Factory Orders

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