NATO to Back Georgia
August 18th, 2008Via: Reuters:
NATO ministers will pledge support for Georgia and reiterate a promise of future membership on Tuesday while criticising Russian intervention in the country and urging Moscow to respect a peace deal, a spokeswoman said.
Washington called an emergency meeting of the 26 NATO foreign ministers to review ties with Moscow and discuss help to Georgia, a former part of the Soviet Union which won its pledge of eventual alliance membership at an April summit in Bucharest.
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A NATO spokeswoman played down reports of divisions among NATO allies on the response to Russia, saying ministers would deliver “a very clear message of solidarity to Georgia”.
“We will reaffirm the commitment in Bucharest and the meeting is also expected to approve a package of measures to support Georgia,” Carmen Romero said.
NATO states were expected to agree to send experts to assess damage to Georgia’s military infrastructure, including radar installations damaged by Russian action, she said.
Romero said there was expected to be a “strong message” to Russia calling for implementation of a ceasefire, its commitment to withdraw troops and an international peace mechanism.
“I think the allies are going to be firm that this was a violation of Georgia’s territorial integrity,” she said.
…
However analysts say isolating Moscow does not seem to be a viable option for Bush as Russia is just too important. If ties were to deteriorate to Cold War level, a lot is at stake, from U.N. cooperation on curbing Iran and North Korea’s nuclear ambitions to U.S. access to Asia and Afghanistan.
Russia is also a key energy supplier that some big European NATO members like France and Germany are loath to antagonise.
Russia was incensed by NATO’s promise of membership to Georgia. This would take NATO right up to Russia’s southern border and many analysts believe that and a similar promise of membership for Ukraine was behind this month’s fighting.
“American Officials Said”: Russia Deployed Several SS-21 Missile Launchers and Supply Vehicles to South Ossetia
August 18th, 2008This story is actually several days old. I first saw it on Democracy Now, but I couldn’t find any confirmation of it. I held off on posting this.
Can we get any confirmation of this from sources besides the U.S. Government?
“American officials said,” doesn’t cut it.
Via: New York Times:
Even as Russia pledged to begin withdrawing its forces from neighboring Georgia on Monday, American officials said the Russian military had been moving launchers for short-range ballistic missiles into South Ossetia, a step that appeared intended to tighten its hold on the breakaway territory.
The Russian military deployed several SS-21 missile launchers and supply vehicles to South Ossetia on Friday, according to American officials familiar with intelligence reports. From the new launching positions north of Tskhinvali, the South Ossetian capital, the missiles can reach much of Georgia, including Tbilisi, the capital.
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Russia’s efforts to strengthen its military position in the region have important political and military implications. American officials have demanded that Russian troops pull back from their positions inside Georgia and that the Russian military presence in the enclaves of South Ossetia and Abkhazia be limited to the Russian peacekeeping force that was there before the conflict erupted earlier this month. Ultimately, American officials say, the Russian peacekeepers themselves should be replaced by a neutral, international peacekeeping force.
But instead of thinning out their forces in South Ossetia, the Russians appear to have been consolidating their presence there by deploying SS-21 missile launchers and, American officials say, by installing surface-to-air missiles near their military headquarters in Tskhinvali. Such moves appear to buttress assertions last week by Russia’s foreign minister, Sergey V. Lavrov, that South Ossetia and Abkhazia are to be separated from Georgia.
Spanish Government Cuts Short Holiday as Economy Collapses
August 17th, 2008Oh yeah, the joy is spreading to Europe.
Via: Telegraph:
Jose Luis Rodriguez Zapatero, the Spanish prime minister, sought to address the “stagnation and slowdown” of the economy when he announced a package of 24 measures designed to lessen their effect.
Spain is among the European countries that, like Britain, have been hardest hit by the kock on effects of the economic downturn and credit crunch in the United States.
Mr Zapatero made the rare move of convening his cabinet during August, when Spaniards traditionally take their annual leave and Madridrelos escape the stifling summer heat of the capital. He called the meeting to approve a raft of measures that include the elimination of inheritance tax and the injection of finance into state housing projects.
The move came a day after figures showed that second quarter growth dropped to 0.1 per cent, its lowest level since 1993 when Spain emerged from its last recession and housing crisis.
“We face a situation of economic stagnation and a steep slowdown,” Mr Zapatero said after chairing the cabinet meeting and after cutting short his family holiday in the remote Doñana national park. “The government is working to make sure that the economy recovers as soon as possible.”
The cabinet approved the provision of a 20 billion euro (£15.9 billion) finance package in a bid to stimulate the economy and avoid a looming recession.
The package also aims to simplify environmental plans for public works and cuts red tape for small and medium-sized businesses. It will also boost railroad infrastructure, launch a partial privatisation of the airport system and allow longer opening hours for retailers.
The Spanish government’s new measures are in addition to an 18 billion euro spending plan announced in April aimed at reviving the economy.
But the conservative opposition have accused Zapatero, who was re-elected to a second term in March, of being too slow to take action on the economy and branded the government’s extraordinary cabinet meeting as nothing more than a publicity stunt.
More: Spain’s Year End Unemployment Could Top 10.4% Forcast
Neo’s Passport in the Matrix Expired on 9/11/2001
August 17th, 2008Neo’s Passport
Via: IMDB:
Some personal information can be seen on Thomas Anderson’s “criminal record” that Agent Smith glances at when he interrogates Neo: The last update to the file was July 22, 1998 Neo’s date of birth is “March 11, 1962” Neo’s place of birth is “Lower Downtown, Capitol City” Neo’s mother’s maiden name is “Michelle McCahey” Neo’s father’s name is “John Anderson” Neo attended “Central West Junior High” and “Owen Paterson High” (named after the film’s production designer). Seconds later a photocopy of his passport can be seen. There the place of his birth is CAPITAL CITY USA, his date of birth is the 13th of September 1971, the passport was issued on the 12th of September 1991 and will expire on the 11th of September 2001.
Russian Pullback to Begin Monday
August 17th, 2008Via: AP:
Russian troops will begin pulling back Monday from their positions throughout Georgia toward the country’s separatist-held region of South Ossetia, the Kremlin said Sunday.
Western pressure has been increasing on Moscow to withdraw its forces under a cease-fire deal signed by Russian President Dmitry Medvedev and Georgian President Mikhail Saakashvili. The United States and France have already accused Russia of defying the truce between the ex-Soviet neighbors, as Russian tanks and troops roamed freely across a wide swath of Georgian territory.
The EU-backed cease-fire agreement calls for Georgian and Russian troops to withdraw to the positions they held before fighting broke out Aug. 7.
Medvedev told French President Nicolas Sarkozy in a telephone conversation Sunday that Russian army troops will retreat toward the de facto Georgia-South Ossetia border on Monday, according to a Kremlin statement.
The troops will head toward a border between Georgia and South Ossetia that was delineated in a 1999 peacekeeping agreement signed by all parties, the Kremlin said. The statement did not say that the troops will return to Russia.
In Other News: Russia Considering Arming Its Baltic Fleet with Nuclear Warheads
The Average Briton Is Being Recorded 3,000 Times Per Week
August 17th, 2008Via: Telegraph:
With every telephone call, swipe of a card and click of a mouse, information is being recorded, compiled and stored about Britain’s citizens.
An investigation by The Sunday Telegraph has now uncovered just how much personal data is being collected about individuals by the Government, law enforcement agencies and private companies each day.
In one week, the average person living in Britain has 3,254 pieces of personal information stored about him or her, most of which is kept in databases for years and in some cases indefinitely.
The data include details about shopping habits, mobile phone use, emails, locations during the day, journeys and internet searches.
In many cases this information is kept by companies such as banks and shops, but in certain circumstances they can be asked to hand it over to a range of legal authorities.
Britain’s information watchdog, the Information Commissioner’s Office, has called for tighter regulation of the amount of data held about citizens and urged the public to restrict the information they allow organisations to hold on them.
This newspaper’s findings come days after the Government published plans to grant local authorities and other public bodies access to the email and internet records of millions. Phone companies already retain data about their customers and give it to 650 public bodies on request.
“The Dollar Is Strengthening Because the U.S. Is Leading the Economies of Other Countries Over a Cliff”
August 17th, 2008Via: GreenFaucet:
The dollar is strengthening because the US is leading the economies of other countries over a cliff. Both in terms of easy monetary policies and the continued vendor financing arrangement where we buy their goods financed by their buying our treasuries and keeping our interest rates artificially low. Their currencies are now reflecting their deteriorating fundamentals. To be sure, the long commodities/ short US dollar trade was very crowded and is also playing a part as it unwinds.
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Meredith Whitney, the Oppenheimer banking sector analyst who dared to separate herself from the comfort of her community herd and boldly predicted the financial disaster a year ago, thinks that, according to a Fortune article where she is the feature cover story, investors should still avoid banking stocks because they will be forced to report even bigger credit losses in the future. The article reads, “Whitney is convinced the economy is about to slip into an ‘early 1980s style’ recession that will devastate the 10% of the population that became overextended during the housing boom.”
Now who do you trust? Someone who has been dead on in predicting this mess from the beginning, or someone from the pack of pathological pollayanas who mindlessly continues to call one false bottom after the other? You know who I’m talking about. Whitney warns, “What’s ahead is much more severe than what we’ve seen so far.” Furthermore, according to Whitney, the banks need to more drastically reduce headcount (from a reduction of 7% so far to 25%–see my commentary “Escape From New York”) and “get real” about how their valuing their mortgage-related debt. Banks are only under-estimating housing price declines. They see drops limited to 20-25% where Whitney sees declines around 40%.
If all of that weren’t enough, the coup de grace for the consumer is a new credit law (well-intentioned as it may be) that will go into effect this fall that will, as the Fortune article citing Whitney’s view writes, “force banks to reduce the amount of credit they extend to consumers.” This of course will force consumers to cut back even further on spending. Whitney says that this is “basically going to amount to a pay cut for the average American consumer.”
Research Credit: efs
Are Gold Prices Failing to Reflect Shortages of Gold Bullion? No.
August 17th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
There are some stories floating around saying that the U.S. Mint has suspended sales of American Eagle gold coins. I haven’t posted these stories because, as I write this, the U.S. Mint continues to take orders for the coins. The U.S. Mint has suspended sales of the coins in the past, and the website clearly indicated that fact.
However, people keep submitting this information to me, so let’s look at some statements from a GATA story from yesterday:
…through their agents the bullion banks the Western central banks, desperate to prop up a corrupt and tottering financial system, have put gold so much on sale that even the U.S. Mint can’t find any now. The price reported from the commodities markets is a fiction — a scary one, perhaps, but a fiction no less.
Don’t get me wrong here, because I love a conspiracy as much as the next guy (and dealing with ‘conspiracies’ is part of my full time work on this site), but the statement above makes no sense.
Go to BullionVault.com and look at the real time prices displayed on the front page. BullionVault features a large, private gold bullion market that is always open for trading. BullionVault trades only allocated, Good Delivery gold bullion. All trades require payment in full. There is no credit, margin, leverage, lending, etc.
If, “The price reported from the commodities markets is a fiction,” surely the prices in a totally non-leveraged physical bullion market would reflect the discrepancy, right?
Kitco shows the spot market close (it’s the weekend now) at bid/ask 786.00/788.00.
BullionVault’s live price (trades 24/7) in the Zurich facility is bid/ask 785.42/788.32. Zurich has the most liquidity and the smallest spreads. The spread is wider during weekend trading.
Every transaction on BullionVault represents a transfer of ownership of physical gold bullion from one party to another. The prices are set by market participants who are willing to sell the physical gold that they already own.
What might we conclude from this?
There is no shortage of gold because the allocated market on BullionVault is indicating order flow with prices that are right in line with spot prices. If there was actually a shortage of gold, prices on allocated gold would be higher.
Note: I am a BullionVault client and affiliate.
Dollar Rally
August 16th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
On August 8th, with regard to the U.S. Dollar Index and dollar bears, I wrote:
U.S. Dollar Index, Weekly Interval
We need to keep a close eye on this now because it has the potential to turn very ugly. I encourage everyone to draw their own lines in the sand.
Here’s mine:
I’m not staying short the dollar if we get a weekly green candle close above that upper channel line.
Welcome to very ugly.
Why is the dollar gapping up?
Fiat paper confetti wealth is trying to flee from asset to asset, currency to currency, continent to continent as the whole damn show unwinds. We’ve seen recent, post real estate collapse bubbles in the grains, metals, oil, euros and now, as ridiculous as it sounds, the juice appears to be going back into U.S. Dollars.
From a technical perspective, it appears that a watershed event has occurred on the dollar. I’ve never referred to a monthly interval chart before on Cryptogon, but I’m going to here. The chart below shows us over two years of activity on the U.S. Dollar Index, with each candle representing an entire month.
U.S. Dollar Index, monthly interval
While the August candle obviously hasn’t closed yet, there are a number of factors worth mentioning.
The parabolic SAR has been bearish since 2006. It just flipped to bullish on the August candle.
The upper channel line, that has contained all of the action since 2006, has been breached to the upside.
The stochastic, in extreme oversold territory for years, is pulling up and away. Note the trend line over the stochastic.
Not only is the MACD histogram slope positive, there is a cross up for the first time in years.
Finally, RSI has broken up and out.
I told you guys where the edge of my tolerance was for holding out bearish… I executed my stop in a mechanical, dispassionate manner.
I closed my UDN position, ate the loss and took out a hedge (against my NZD and physical gold) with UUP. Since then the move has just kept going. Please, PLEASE understand that UUP is going to pull back as this move consolidates. I went into it as a hedge, so if it pulls back, it means my other positions will increase, and vice versa.
If you’re looking to speculate here, be very careful because you could get whipsawed. I’d wait for the daily stochastic to pull back and buy a cross up anywhere below 60. My goal is to just stay as flat as possible through this period of chaos. As such, I just pulled the trigger fast on the chase.
How much of my gold have I sold throughout this… massacre?
Not one gram. The fact that I’m having to hedge my physical gold position with a bullish dollar vehicle is prima facie evidence that this economic system is capable of fabricating its own absurd reality—a reality that I can’t comprehend in any logical way. At some point, I have no idea when, the grand illusion will unwind. History teaches us that that these Ponzi schemes always do.
Subprime Pain Sweeps the World
August 16th, 2008Via: Business Day:
MORE than 100 local councils, charities, churches, hospitals and nursing homes across Australia are sitting on a $2 billion black hole after buying subprime investments structured by Wall Street banks during the bull market but which are now potentially worthless.
Melbourne’s Metropolitan Ambulance Service and local councils are among those facing losses of hundreds of millions of dollars in the subprime meltdown because of bad debt they bought through a global investment bank.
A document leaked to BusinessDay revealed that Lehman Brothers is managing tens of millions of dollars in funds for Victoria’s community, education and health sectors, much of it invested in high-risk financial instruments now potentially worthless.
Other Victorian entities with millions in subprime exposure are not-for-profit defence personnel insurer Defence Health, which has $39 million managed by Lehman Brothers, and $17 million for the Victoria Teachers Credit Union.
BusinessDay has identified more than 150 government, private and charitable institutions that bought complex financial instruments such as collateralised debt obligations (CDOs). There have been few buyers for CDOs and similar structured finance products since the subprime meltdown this time last year that sent global financial markets into a tailspin.
These toxic investments will wreck the finances of many local government and charitable organisations for years.
Twenty-three local councils are preparing a class action lawsuit against Wall Street bank Lehman Brothers to recover their losses.
Among those that bought the products are four universities, dozens of super funds, ambulance services, the St Vincent de Paul Society, the Starlight Children’s Foundation, the Boystown charity for underprivileged children, and the Anglican, Baptist, Uniting and Catholic churches.
Related: “We Americans Were Very Clever”
Research Credit: IL
