Gold Falls on U.S. Budget Deal, Dollar Gains

“Gold fell in London with stocks and oil after reaching a two-week high yesterday and as a stronger dollar curbed demand for bullion as an alternative investment.

Gold rose to the highest since since Dec. 18 yesterday after U.S. lawmakers passed a bill averting automatic spending cuts and tax increases, heading off the so-called fiscal cliff. TheU.S. Dollar Index, a gauge against six counterparts, rose to the highest since Dec. 11 today, on speculation policy makers will struggle to reach an agreement to raise the U.S. debt limit….”

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“German unemployment increased less than economists forecast in December even asEurope’s debt crisis curbed company investment and economic growth.

The number of people out of work rose a seasonally adjusted 3,000 to 2.942 million, the Nuremberg-based Federal Labor Agency said today. Economists predicted an increase of 10,000, the median of 19 estimates in a Bloomberg News survey showed. The adjusted jobless rate held steady at 6.9 percent, close to a two-decade low…”

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“The first Basel agreement on global banking regulation, adopted in 1988, was 30 pages long and relied on simple arithmetic. The latest update, known as Basel III, runs to 509 pages and includes 78 calculus equations.

The complexity is emblematic of what happened over the past four years as governments that injected $600 billion to rescue failing banks during the worst financial crisis since the Great Depression devised ways to make the global banking system safer. Those efforts have been stymied by conflicting laws, divergent accounting standards and clashing rules adopted by nations to protect their interests, all of which have created new risks….”

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“Chinese property companies are marketing U.S. dollar-denominated bonds, ending a three-week pause in issuance from the region. Debt risk in Asia fell to the least in almost 20 months.

Country Garden Holdings Co. (2007), based in China’s southern Guangdong province, is offering 10-year notes to yield about 7.75 percent, according to a person familiar with the matter.Kaisa Group Holdings Ltd. (1638), headquartered in Shenzhen, plans to sell seven-year bonds at 10.25 percent, a person with knowledge of that deal said, also asking not to be identified because the terms aren’t set. Hopson Development Holdings Ltd. (754) meanwhile hired banks to help arrange fixed-income investor update meetings from Jan. 7, a person familiar with the matter said.

The real-estate companies would be the first issuers in Asia to sell debt in the U.S. currency since Zoomlion Heavy Industry Science and Technology Co. issued $600 million of 10- year securities Dec. 13, according to data compiled by Bloomberg. The cost of insuring corporate and sovereign bonds from non-payment in Asia outside of Japan has fallen to the lowest level since April 2011, prices from credit-default swap traders show.

“Sentiment is good so they want to take the chance when the window is still open to raise funds,” said Louisa Lam, a Hong Kong-based credit analyst at HSBC Holdings Plc. “We’ve already seen a long pipeline building late last year, so this month will be quite positive.”

Companies in Asia pay an average 3.86 percent to sell dollar bonds, the least in data going back to 1996, according to Bank of America Merrill Lynch indexes as of Dec. 31. That compares with 2.57 percent for companies globally, also the least in 16 years….”

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“The Australian dollar retreated from near a two-week high as concern U.S. lawmakers will struggle to agree on raising the nation’s debt ceiling overshadowed the bill they passed to avert the so-called fiscal cliff.

The Aussie slid versus most of its 16 major counterparts as officials in the world’s biggest economy turned their attention to a debate over raising the $16.4 trillion debt limit. An increase will be needed as early as mid-February, according to the U.S. Congressional Budget Office. The New Zealand dollar, also known as the kiwi, reversed a gain from yesterday as U.S. stock futures fell.

“All along, it’s been clear that the fiscal deal was not going to bring any real progress for long-term spending and tax reform,” said Todd Elmer, head of Group of 10 foreign-exchange strategy for Asia excluding Japan at Citigroup Inc. in Singapore. “There is some further upside for the Aussie and I doubt this temporary dip that we’re seeing is going to last.”

The Australian dollar lost 0.1 percent to $1.0491 as of 5:32 p.m. in Sydney from $1.0504 at the close yesterday, when the currency touched $1.0524, the strongest since Dec. 19…”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

 

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[youtube://http://www.youtube.com/watch?v=LPN7J369RNI 450 300]

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More back scratching ?

“The Senate passed legislation meant to end the “fiscal cliff” crisis in the wee hours of the morning. And it seems Hollywood’s rigorous backing of President Barack Obama and his Democrat peers in the waning months of 2012 paid off.

Section 317 of the freshly approved legislation includes an extension for “special expensing rules for certain film and television productions.” Congress first enacted production tax incentives favorable to the domestic entertainment industry in 2004, and extended them in 2008, but the deal was meant to expire in 2011.

The fiscal cliff deal extends the tax incentives through 2013–even as payroll taxes rise on ordinary Americans.

The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.

Hollywood players routinely beg the government to raise their taxes so they can pay their “fair share.”

Yet the industry moves new productions to places where existing tax breaks help its bottom line. That means plenty of shows and films are shot in states like New Mexico, which feature highly favorable tax rates, as well as destinations north of the border with similar perks….”

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“Outgoing Louisiana Republican Rep. Jeff Landry told Breitbart News there are at least 17 GOP members who plan to unseat House Speaker John Boehner on Thursday, and Boehner may resign on Wednesday evening during or after a GOP caucus meeting.

Landry, who lost his bid for re-election in a member-member race to leadership-sponsored Rep. Charles Boustany, told Breitbart News that “if they don’t got 20, they’re so close to 20 – they’re close.”

Landry said another member organizing the effort told him they’ve got at least 17 – which is the bare minimum needed to unseat Boehner. “They’re somewhere between 17 and 20,” Landry said in a phone interview. “I think they’re trying to get to 25.”

Landry added that that another member told him “there’s a pretty good chance Boehner will resign at the conference tonight.”

Ron Meyer from American Majority Action made a similar claim. “I have confirmed with a group of Congressmen that Speaker Boehner will not be elected Speaker tomorrow,” Meyer said in an email to reporters. “He will either resign or be forced out tomorrow.”

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** UPDATE — Boehner is now making concessions in what AMA’s Meyer says is an attempt “to try to save face.” The Hill reports he told Republicans he won’t negotiate one-on-one with President Barack Obama anymore. …”

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“….In part one of this two part series – Hey You – I examined how an invisible government of wealthy, power hungry men have utilized the propaganda techniques of Edward Bernays and lured the American people into a narcissistic, techno-gadget, debt based servitude. Over the last one hundred years they have created a totalitarian state built upon egotism, material goods, and fulfilling our desires through Wall Street peddled debt and mass consumerism. It has been an incredibly effective form of control that has convinced the masses to love their servitude. The ruling oligarchs correctly chose the painless, amusement saturated, soft totalitarianism of Huxley’s Brave New World over the fearful, pain inflicting, surveillance state, house of horrors detailed in Orwell’s 1984.

“A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” – Aldous Huxley – Brave New World

The nefarious establishment of the Federal Reserve in 1913, launch of welfare programs in the 1930s, expansion of the entitlement state in the 1960s, creation of the credit card in 1970, mass media marketing propaganda, and the formation of an empire of debt laid the foundation for a society based on triviality, egotism, irrelevance and mass delusion. The conscious manipulation of the habits and opinions of the masses by an invisible government of powerful men using media propaganda and easy to access consumer credit has reached its mathematical limit. The oligarchs built a society dependent upon exponential growth. This unsustainable prototype began to show signs of strain in the 1990s. The powerful interests have been growing ever more desperate and blatantly obvious in their looting and pillaging of the debt bloated carcass of a country. They used their control of the political system to repeal Glass-Steagall, allowing the Wall Street banking cabal to become Too Big to Control. The oligarch puppets at the Wall Street controlled Federal Reserve did the bidding of their masters by reducing interest rates and expanding the money supply to create two epic bubbles.

The Dot.com bubble was created by Wall Street utilizing hype and misinformation to fleece millions into believing we had entered a new paradigm. The only people who got rich were the Wall Street hucksters, shysters and shills….”

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“Dec. 31 (Bloomberg) — The Standard & Poor’s 500 Index will probably surpass its record high in 2013 as bears capitulate and the lure of a four-year bull market pulls “everyone in the pool,” according to Laszlo Birinyi.

Expansion in U.S. housing, recovering markets in Europe where bank shares have rallied 36 percent since June and buying by individual investors will push the advance in equities to its fourth and final stage, “acceptance,” said Birinyi, the president of Birinyi Associates Inc. The benchmark gauge for American equity is within 11 percent of its record after gaining 107 percent since March 2009, data compiled by Bloomberg show.

Birinyi, the former Salomon Brothers Inc. executive, is sticking to the bullish forecast he has given to clients of his Westport, Connecticut-based research firm since stocks hit a 12- year low following the credit crisis four years ago. The 69- year-old money manager says the bull market that began in March 2009 resembles advances that pushed equities up more than threefold in the 1980s and fourfold in the 1990s.

“We’re still very comfortable with the market,” Birinyi said in a telephone interview on Dec. 20. “Our view all along since 2009 is that we’re in the midst of a protracted bull market, similar to 1982 and 1992, markets that went on for four or five years.” ”

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Black pools? Robots ? Diabolical market makers ?

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“Byron Wien started predicting surprises in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley.

He continues the tradition today as Vice Chairman at Blackstone.

His “Ten Surprises for 2013,” which he believes have a better than 50 percent probability of happening, have a bearish slant from the perspective of the U.S. investor.  He sees stocks falling while commodity prices rise.

His prediction for Iran may scare some people, but he is a bit more hopeful for immigration reform in the U.S.

Without further ado …”

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“…MidAmerican purchased the development from Sunpower for between $2 and $2.5 billion. ”

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“SAN FRANCISCO (Reuters) – Microsoft Corp bought start-up id8 Group R2 Studios Inc as it looks to expand further in technology focused on the home and entertainment, a person familiar with the situation said on Wednesday.

id8 Group R2 Studios was started in 2011 by Silicon Valley entrepreneur and investor Blake Krikorian. It recently launched a Google Android application to allow users to control home heating and lighting systems from smartphones.

Krikorian’s Sling Media – which was sold to EchoStar Communications in 2007 – made the “Slingbox” for watching TV on computers…”

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“Al Jazeera, the Qatar-based cable- news channel, acquired Current TV, the network founded by former Vice President Al Gore, gaining access to more U.S. viewers.

“We are proud and pleased that Al Jazeera, the award- winning international news organization, has bought Current TV,” Gore, Current TV’s chairman, and Joel Hyatt, a co-founder and chief executive officer, said today in a statement.

The move lets Al Jazeera expand its U.S. footprint beyond the nine pay-television providers that carry its programming. Current TV, a news and opinion channel founded in 2005, reaches almost 60 million U.S. homes. Al Jazeera’s English network was started in 2006 and broadcasts to 250 million households worldwide in 130 countries, according to its website.

“Current Media was built based on a few key goals: To give voice to those who are not typically heard; to speak truth to power; to provide independent and diverse points of view; and to tell the stories that no one else is telling,” Gore and Hyatt said in the statement. “Al Jazeera, like Current, believes that facts and truth lead to a better understanding of the world around us.”

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“Most Asian stocks rose, pushing a regional equities index to its highest level in 17 months, after a gauge of U.S. manufacturing added to optimism that the outlook for economic growth is improving.

Rio Tinto Group, the world’s second-largest mining company, climbed 1.7 percent in Sydney as metals prices rose. Australian miner Aquarius Platinum Ltd. (AQP) soared 16 percent, the most in four years, amid speculation that South African supply of the metal will be lower during the first quarter. Samsung Electronics Co. fell 1.3 percent in Seoul after being named in a new patent- infringement complaint filed in Washington by InterDigital Inc. over technology related to the latest mobile-phone standards…”

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Asian  indices

 

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“…The next crisis according to Roubini could be just two months away, with spending cuts set to kick in at about the same time that the U.S. hits the debt ceiling. This is going to begin another “messy” debate between Democrats and Republicans.

“The longer-term picture is bleaker still. The reality is that America is yet to wake up to the full extent of its fiscal nightmare. Even the typical Republican voter is not – being on average older and poorer than a Democrat voter – in favour of gutting the welfare state. Tea Party extremists are more noise than signal. That is why the plans of Mitt Romney and Paul Ryan, the Republicans’ losing presidential ticket, postponed all the tough spending cuts on Social Security and Medicare by a decade.

Neither Democrats nor Republicans recognize that maintaining a basic welfare state, which is right and necessary in our age of globalization, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich. A deal that extends unsustainable tax cuts for 98 per cent of Americans is therefore a pyrrhic victory for Mr Obama…”

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The melt up story

DOW UP 308

NASDAQ UP 93

S&P UP 36

WTI UP $1.13

GOLD UP $9.8

[youtube://http://www.youtube.com/watch?v=CwnyTZW0DOc 450 300]

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“New Jersey Gov. Chris Christie launched a ruthless assault on Republican House Speaker John Boehner Wednesday, tearing into the GOP leader for his decision to pull the plug on a Hurricane Sandy relief bill.

The speech/press conference was like something out of a movie, a righteous tirade against the way that Washington does business, that people wish would happen in real life.

“There is only one group to blame,” Christie said. “The House Majority and John Boehner.”

“Last night, the House Majority failed the basic test of leadership and they did so with callous disregard to the people of my state,” he said. “It was disappointing and disgusting to watch.”

“Shame on you, shame on Congress.”

Following his remarks, Christie doubled down on his criticism in a lengthy — and incredibly candid — press conference in which he laid into House Republicans for putting “palace intrigue” ahead of their actual jobs.

“Our people were played last night as a pawn…and that’s why people hate Washington, D.C.,” Christie said later. “They forget that we’re the ones who sent them there.”

Asked who he thought was responsible on the holdup over Sandy aid, Christie laid the blame entirely on Boehner.

“It was the Speaker’s decision — his alone,” Christie said, adding that he tried to reach Boehner four times, but that the Speaker did not take his calls until this morning.

“I won’t get into my conversation with [Boehner], but I will tell you there is no reason to believe anything they tell me.”

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