by ilene - March 10th, 2014 10:32 am
Courtesy of ZeroHedge
One of the two men who used stolen passports to board the missing Malaysia Airlines jet has been identified according to the nation’s inspector general of police. Authorities are not releasing details of his nationality but confirmed he is neither Malaysian nor from Xinjiang, China (the home of the Uighur separatists who have come under suspicion following Taiwanese authorities tip last week warning that terrorists were targeting Beijing’s international airport).
Malaysian authorities have identified one of the two men who used stolen passports to board the missing Malaysia Airlines jet, the nation’s inspector general of police told local media Monday, as international search teams continued to look — so far unsuccessfully — for wreckage from the jet.
"I can confirm that he is not a Malaysian, but cannot divulge which country he is from yet," Tan Sri Khalid Abu Bakar told the Star, a major Malaysian newspaper. He added that the man is also not from Xinjiang, China — a northwestern province of the mainland home to minority Uighurs. Uighur separatists have been blamed for a knifing rampage in southwestern China this month that left 29 dead.
Meanwhile, a Taiwanese official said national security officials received an anonymous tip last week warning that terrorists were targeting Beijing’s international airport.
According to the report by Taiwan’s Central News Agency, a man speaking Chinese claimed to have information of planned attacks directed against Beijing’s airport and subway system by the East Turkestan Independence Movement, an Islamic-inspired group seeking independence for the Uighurs. The caller identified himself as a member of a French-based anti-terror network and said he had called Taiwan’s national airline because he couldn’t reach anybody in Beijing.
As of Monday evening in Malaysia, investigators have found no confirmed wreckage of the airliner despite an intensive search by more than 40 ships and nearly three dozen aircraft off the southern coast of Vietnam.
by ilene - March 10th, 2014 9:36 am
Submitted by Tyler Durden.
Iron Ore prices have dropped 25% since the end of last year, sending the key steel-making component into a bear market after slumping by over 9% overnight – its biggest daily drop on record. We warned last week this was likely to happen on the heels of Copper prices fell on monetary financing fears as we explained here how Iron Ore replaced copper as the collateral pool for new loans (following China's clampdown on cash-for-copper deals last year) and stockpiles hit record highs. What is further hurting the Iron ore prices are concerns over China's new anti-pollution reforms which are set to close thousands of furnaces.
Iron Ore Stockpiles are at record highs…
The logic is simple: no stockpiles means end demand by steelmakers is brisk and there is no inventory build up which in turns keep Australia, Brazil and other emerging markets happy. Alternatively, large stockpiles indicates something is very wrong with final demand, and hence, the overall economy.
As we warned last week…
If copper is plunging on monetary financing fears out of China, iron ore will be next http://t.co/D4JXQDM0fz
— zerohedge (@zerohedge) March 7, 2014
And what happened… Iron Ore prices are collapsing as the new monetary metal is delevered…
leading to lower collateral values and a rapid tightening of credit conditions which is simply a vicious circle for China's subprime borrowers (the massively over-supplied and under-demanded steel industry being front and center)
by ilene - March 10th, 2014 9:05 am
Submitted by Tyler Durden.
Moments ago McDonalds reported its latest monthly comp store sales numbers. Printing at -1.4% for the US, this was a nearly double miss to expectations of a 0.6% decline, and was the 4th consecutive monthly drop in annual sales – the longest such stretch in the past decade and likely longer. Looking at this data, there are two observations: i) Americans, courtesy of record obesity rates, are finally getting serious about their health, and have shunned the infamous 99 cent deep fried meals or ii) courtesy of the Fed's "Fed's recovery", the average American can no longer even afford sub-$1 deep fast food.
There is a third option: that it snowed… In fact it snowed so much, everywhere, and the weather was so harsh around the world, that global store sales declined by 0.3%, far below the modest 0.1% drop expected. Yup. Must have been the snow.
by ilene - March 10th, 2014 8:51 am
Courtesy of Larry Doyle.
More often than not, I take the wisdom provided by selected talking heads and industry insiders with a pound of salt.
Without being overly cynical strictly for cynicism’s sake, I discount a fair bit of the analysis put forth by many financial sleuths based on the individual ‘talking his own position.’ In fact, I believe that many outlets predominantly look for guests who play the game and toe the industry’s party line.
To that end, I look elsewhere for insights and perspectives that I really appreciate. Who are some of the money managers I truly respect but are rarely seen on major financial outlets? Bob Rodriguez, Jeremy Grantham, and Seth Klarman, who just so happens to offer some pointed insights highlighted today in a commentary in the FT: >>>>>>
One of the world’s most respected investors has raised the alarm over a looming asset price bubble, calling out “nosebleed valuations” in technology shares like Netflix and Tesla Motors and warning of the potential for a brutal correction across financial markets.
Seth Klarman, the publicity-shy head of the $27bn Baupost Group whose investment opinions have attracted almost a cult-like following, said that investors were underplaying risk and were not prepared for an end to central banks reversing a five-year experiment in ultra-loose money.
While noting that he could not predict exactly when a significant market correction would occur, Mr Klarman wrote in a private letter to clients: “When the markets reverse, everything investors thought they knew will be turned upside down and inside out. ‘Buy the dips’ will be replaced with ‘what was I thinking?’?.?.?.? Anyone who is poorly positioned and ill-prepared will find there’s a long way to fall. Few, if any, will escape unscathed.”
Baupost, which is closed to new investment, returned $4bn to clients last year.
The warning by Mr Klarman, who has won a devoted audience for his highly cautious, value-driven approach, and whose out-of-print book on investment sells second-hand for as much as $2,900 on Amazon, comes after US shares surged by almost a third last year. Many well known technology companies, such as Facebook, more than doubled.
“Any year in which the S&P 500 jumps 32 per cent and the Nasdaq 40 per cent while corporate earnings barely increase should be a cause for concern, not for further exuberance,” Mr Klarman wrote.
“On almost any metric, the
War Talk Roundup: China Has “No Room for Compromise with Japan”; Spotlight on China, Japan, US, Iran, Russia, Ukraine, North Korea
by ilene - March 10th, 2014 4:04 am
Courtesy of Mish.
The global macro picture is bad enough in and of itself. Simmering feuds between rival nations certainly do not help the picture. Here are a few recent stories that caught my eye.
China has No Room For Compromise with Japan
The New York Times reports China has No Room For Compromise with Japan.
March 8, 2014
The Chinese foreign minister took a strong stand Saturday on China’s growing territorial disputes with neighboring nations, saying that “there is no room for compromise” with Japan and that China would “never accept unreasonable demands from smaller countries,” an apparent reference to Southeast Asian nations.
In the East China Sea, China refuses to accept Japan’s administration of, or its claims to, islands that Japan calls the Senkaku and China calls the Diaoyu.
“On the two issues of principle — history and territory — there is no room for compromise,” Mr. Wang said in answer to a question from a Japanese reporter on the deterioration of China-Japan relations. “If some people in Japan insist on overturning the verdict on its past aggression, I don’t think the international community and all peace-loving people in the world will ever tolerate or condone that.”
Tensions between China and Japan have been playing out in diplomacy around the globe. In January, the Chinese ambassador to Britain and his Japanese counterpart both wrote op-ed articles for The Daily Telegraph in which they equated the other country to Lord Voldemort, the villain in the Harry Potter series. The two ambassadors even refused to sit at the same table during a televised BBC interview. Also in January, Mr. Abe told an audience at the Davos conference in Switzerland that the rivalry between China and Japan was similar to that between Germany and Britain before World War I, meaning their differences could supersede their close trade ties.
In the South China Sea, China has been trying to stake sovereignty to islands and waters that are also claimed by Southeast Asian nations. Vietnam, the Philippines and Malaysia are among the opponents to China’s claims. The United States has said it takes no side on sovereignty issues but will maintain freedom of navigation. More recently, it has asserted that the so-called nine dashes map that some Chinese officials say defines China’s ambitious claims in the
by ilene - March 9th, 2014 11:23 pm
By John Mauldin
“The belief that wealth subsists not in ideas, attitudes, moral codes, and mental disciplines but in identifiable and static things that can be seized and redistributed is the materialist superstition. It stultified the works of Marx and other prophets of violence and envy. It frustrates every socialist revolutionary who imagines that by seizing the so-called means of production he can capture the crucial capital of an economy. It is the undoing of nearly every conglomerateur who believes he can safely enter new industries by buying rather than by learning them. It confounds every bureaucrat who imagines he can buy the fruits of research and development.
“The cost of capturing technology is mastery of the knowledge embodied in the underlying science. The means of entrepreneurs’ production are not land, labor, or capital but minds and hearts….
“Whatever the inequality of incomes, it is dwarfed by the inequality of contributions to human advancement. As the science fiction writer Robert Heinlein wrote, ‘Throughout history, poverty is the normal condition of man. Advances that permit this norm to be exceeded – here and there, now and then – are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of society, the people slip back into abject poverty. This is known as bad luck.’
“President Obama unconsciously confirmed Heinlein’s sardonic view of human nature in a campaign speech in Iowa: ‘We had reversed the recession, avoided depression, got the economy moving again, but over the last six months we’ve had a run of bad luck.’ All progress comes from the creative minority. Even government-financed research and development, outside the results-oriented military, is mostly wasted. Only the contributions of mind, will, and morality are enduring. The most important question for the future of America is how we treat our entrepreneurs. If our government continues to smear, harass, overtax, and oppressively regulate them, we will be dismayed by how swiftly the engines of American prosperity deteriorate. We will be amazed
by ilene - March 9th, 2014 9:51 pm
IF you walk into a farm-supply store today, you’re likely to find a bag of antibiotic powder that claims to boost the growth of poultry and livestock. That’s because decades of agricultural research has shown that antibiotics seem to flip a switch in young animals’ bodies, helping them pack on pounds. Manufacturers brag about the miraculous effects of feeding antibiotics to chicks and nursing calves. Dusty agricultural journals attest to the ways in which the drugs can act like a kind of superfood to produce cheap meat.
But what if that meat is us? Recently, a group of medical investigators have begun to wonder whether antibiotics might cause the same growth promotion in humans. New evidence shows that America’s obesity epidemic may be connected to our high consumption of these drugs. But before we get to those findings, it’s helpful to start at the beginning, in 1948, when the wonder drugs were new — and big was beautiful.
That year, a biochemist named Thomas H. Jukes marveled at a pinch of golden powder in a vial. It was a new antibiotic named Aureomycin, and Mr. Jukes and his colleagues at Lederle Laboratories suspected that it would become a blockbuster, lifesaving drug. But they hoped to find other ways to profit from the powder as well. At the time, Lederle scientists had been searching for a food additive for farm animals, and Mr. Jukes believed that Aureomycin could be it. After raising chicks on Aureomycin-laced food and on ordinary mash, he found that the antibiotics did boost the chicks’ growth; some of them grew to weigh twice as much as the ones in the control group.
Mr. Jukes wanted more Aureomycin, but his bosses cut him off because the drug was in such high demand to treat human illnesses. So he hit on a novel solution. He picked through the laboratory’s dump to recover the slurry left over after the manufacture of the drug. He and his colleagues used those leftovers to carry on their experiments, now on pigs, sheep and cows. All of the animals gained weight. Trash, it turned out, could be transformed into meat.
Keep Reading The Fat Drug – NYTimes.com.
by ilene - March 9th, 2014 9:43 pm
Courtesy of Mish.
Every day numerous people send links to articles, edit my typos, comment on the blog, monitor comments on my blog, translate articles, etc.
It’s a community and I appreciate the global involvement and global help.
Each day I get between 50 and 200 emails from readers. I respond to most of them. But even though I spend 2 hours or more every day reading and answering emails, I cannot respond to all of them.
Frequently, I offer a one word response: thanks.
That does not do justice to how I feel, especially to those who send something every day or nearly every day.
Unlike other bloggers, I seldom offer “hat tips” and the reason is simple. I tend to read emails LIFO (last in first out), and most often when someone sends me a link, another person already has.
So here is my word of thanks. But I also need to do more. For those who contribute every day, I need to offer special thanks.
I have three mainstay spell checkers: Randy, Curt, and Mark. What one of them misses, another one of them will catch. The only problem is how long it takes me to find the email pointing out my error. Typically it’s not spelling per se, as I spellcheck myself, but rather stuff like saying “an” when I mean “and” or vice versa. When you proof your own article you do not see such things.
I am going to get in trouble over this one because I am sure to leave someone out. Apologies offered in advance.
by ilene - March 9th, 2014 9:28 pm
Courtesy of ZeroHedge
Over the past three years there has been endless debate over whether the Fukushima radioactive fallout is hitting the US west coast, or if, as the media spin would have it, it is largely isolated, and best to just take their word for it for the simple reason that no federal agency currently samples Pacific Coast seawater for radiation.
The answer may finally be in sight, and it is not a pleasant one: USA Today reports that "very low levels of radiation from the Fukushima nuclear disaster likely will reach ocean waters along the U.S. West Coast next month, scientists are reporting. Current models predict that the radiation will be at extremely low levels that won't harm humans or the environment, said Ken Buesseler, a chemical oceanographer at the Woods Hole Oceanographic Institution who presented research on the issue last week.
Hopefully these "models" are better at forecasting than the Fed's (which are operated by three supercomputers), and the definition of "minimum" hasn't undergone the same material revisions as did "maximum" in the context of the maximum permitted radiation dose falling on Tepco workers in the days when Japan desperately was lying every day about the magnitude of the radioactive disaster. Obviously, it is one thing to make up predictions for the sake of avoiding a panic, it is something entirely different to have empirical data: "I'm not trying to be alarmist," Buesseler said. "We can make predictions, we can do models. But unless you have results, how will we know it's safe?"
As if Buesseler doesn't know that any actual data that reveals alarming results will be seasonally adjusted, and then all excess radiation will be blamed on the "harsh winter weather."
Mockery of economists and other idiots aside, here are the facts on the prevailing models:
There are three competing models of the Fukushima radiation plume, differing in amount and timing. But all predict that the plume will reach the West Coast this summer, and the most commonly cited one estimates an April arrival, Buesseler said.
A report presented last week at a conference of the American Geophysical Union's Ocean Sciences Section showed
by ilene - March 9th, 2014 9:24 pm
- Mean Girls
One of the biggest stories of the week was the ongoing fallout from the Mohamed El-Erian / Bill Gross break-up at PIMCO. In the wake of Greg Zuckerman’s incredible story at the Wall Street Journal, it had become the talk of the industry, forcing many investors to think twice about their allocations to the firm’s products.
My friend Jenn Ablan, a Reuters reporter who covers all the Bond Kings for Reuters came away from a call with Gross that contained some wild accusations about the Zuckerman article and the whole thing just blew wide open the other day.
The question for investors everywhere is whether or not PIMCO is in disarray or if its vaunted decision-making process can be trusted anymore. Institutions, individual investors, professional advisers and money managers of all kinds have allocated hundreds of billions to the firm. The now-public issues about Gross’s ego and monomania have led to a public discussion to this effect.
My own take is that we will never know about all of the dynamics between Gross and El-Erian – both of whom I have a great deal of respect for as investors and thinkers – but that we probably shouldn’t rush to judgment over a few errant quotes and comments during an emotionally charged time for both of them. Also, as others have posited, bull markets don’t end pleasantly – especially bond bull markets that had run on for thirty years. The aftermath at PIMCO could never have been congenial after three decades of downhill marathoning.
Below are some of the better musings on the topic:
BTW, Barry and I have promised our employees and ourselves not to split so acrimoniously if, heaven forbid, we ever felt the need to (we don’t, I’m writing this blog post wrapped in his arms at our getaway cottage in New England).