The Mess That Greenspan Made - Part 8

All the Gold in China

This chart depicting the dramatic rise in China gold demand from Sharelynx appears to be making the rounds this morning and it really is stunning. Note that the 2013 demand total of nearly 1,600 tonnes shown below is considerably higher than the World Gold Council figure, but also considerably lower than some of the more bullish estimates.

Granted, most U.S. investors could care less about this sort of thing, that is, so long as share prices for such companies as Tesla and Facebook continue to rise.

But, others around the world have noticed the sharp increase in gold demand from the Middle Kingdom and the possible (actually, pretty likely) future impact on prices, the latest example being China ‘has more gold than official figures show’ in today’s Telegraph.

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Thursday Morning Links

Huge demand for Greek five year bond – BBC
The rebound in Greece is astonishing – Reuters
Fed Plays Down Own Interst Rate Forecasts – Bloomberg
Bank of England holds fire but set to lead on rate hike – CNBC
UK and US interest rate rises: who will blink first? – Telegraph
Jobless Claims in U.S. Drop to Lowest Level Since May 2007 – Bloomberg
Currency War: Europeans Ordered to Start Consuming – Dollar Collapse
Putin Expected to Sign China Gas Deal as Crisis Forces Hand – Bloomberg
Report: 85% of pensions could fail in 30 years – USA Today
Yes, the SEC was colluding with banks on CDO prosecutions – Reuters
SAC Capital to be sentenced in $1.8B fraud deal – Washington Post
Ambivalence About Front-Running – Forbes
What you need to know about the Heartbleed bug – AP

Asia stocks seesaw as China trade drops – AP
Who wins when ‘activists’ invest? Not you – MarketWatch
Why Do Investors Make Bad Choices? – Bloomberg
Do you own stock? You’re getting a 23% raise – USA Today
Yes, stocks are rigged and Fed is the biggest rigger – MarketWatch
U.S. To Withdraw $430B From Stocks In 2014 – Most Since Last Bubble – Zero Hedge
Treasuries Advance, Yield Drops to 3-Week Low on Fed, China Data – Bloomberg
Gold at 2-1/2-week high after Fed minutes ease rate fears – Reuters
Solid Gains for Gold as Market Place Deems Fed More Dovish – Kitco
Citi remains negative on Gold mining sector – BullionStreet
China ‘has more gold than official figures show’ – Telegraph

The Rise of the Secular Stagnationist – PragCap
Stiglitz: Inequality an Equal Concern for China, U.S. – Caixin Online
China says no major stimulus planned; March trade weak – Reuters
Economists up German growth forecast to 1.9 pct – AP
Unemployment still main worry for Spanish: study – xinhuanet
Spain Borrowing at German Yields? It’s Possible, Thanks to U.S. – Bloomberg
How Western Is Germany? Russia Crisis Spurs Identity Conflict – Spiegel
Canada’s housing market boosts soft landing view – Finance & Commerce
Banker Who Helped Crash Housing Market Crafting Mortgage Reform – Free Beacon
Fed’s hard line on funding to bring more pain to Wall Street – Reuters
Fed officials fretted over investor reaction to rate forecasts: minutes – Reuters
How the Feds Blind Us To Our Malaise – RCM


Where in the World is Ukraine?

There are some pretty fascinating details behind the map below from this Washington Post survey where respondents were asked to locate Ukraine on a map of the world.

To wit:

We wanted to see where Americans think Ukraine is and to learn if this knowledge (or lack thereof) is related to their foreign policy views. We found that only one out of six Americans can find Ukraine on a map, and that this lack of knowledge is related to preferences: The farther their guesses were from Ukraine’s actual location, the more they wanted the U.S.  to intervene with military force.

Most thought that Ukraine was located somewhere in Europe or Asia, but the median respondent was about 1,800 miles off — roughly the distance from Chicago to Los Angeles — locating Ukraine somewhere in an area bordered by Portugal on the west, Sudan on the south, Kazakhstan on the east, and Finland on the north.

Interestingly, members of military households were no more likely to correctly locate Ukraine (16.1 percent  correct) than members of non-military households (16 percent  correct), but self-identified independents (29 percent  correct) outperformed both Democrats (14 percent  correct) and Republicans (15 percent  correct).

That last part – on party affiliation – speaks volumes about the nation’s political woes…

Get Your Ticket Punched at the SEC

Retiring Securities and Exchange Commission trial attorney James Kidney, a key participant in the 2008 suit against Goldman Sachs, used his farewell luncheon as an opportunity to air some grievances about how the organization treats Wall Street bigwigs with kid gloves. Some of his most illuminating remarks were recorded in this story at Businessweek.

The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”

In his speech, Kidney also hit the agency for using misleading statistics to showcase its enforcement efforts. The SEC should focus on the quality of its actions, rather than try to file as many as possible just to tout its record to lawmakers and the media, he said.

“It is a cancer,” Kidney said of the agency’s use of numbers. “It should be changed.”

“I don’t think we did a very aggressive job with all the major players in the crash of ’08,” he said, noting that as a civil enforcement agency, the commission does not need to prove its cases beyond a reasonable doubt like the Justice Department does. “The SEC has a lower burden of proof and we should be pushing the envelope a bit.”

“I have had bosses, and bosses of my bosses, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.”

Also see yesterday’s quote of the day from Matt Taibbi: “There’s this really, kind of scary psychological moment that we’ve crossed in America where we no longer think of a certain kind of offender as appropriate for jail”.

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