Jim’s Mailbox

Posted at 5:13 PM (CST) by & filed under Jim's Mailbox.

Jim,

In this interview to a Swiss newspaper Le Temps, the president of the biggest French bank, Société Générale, confirms openly that the bank will remain universal and will reinforce its activities in the investment banking (aka derivative) business.

"– assure son «attachement au modèle de banque universelle», c’est-à-dire d’un établissement présent sur toutes les activités. Et compte même s’appuyer «sur deux franchises mondiales», dans le domaine «des dérivés sur actions et des ressources naturelles»."

The title of the article is revealing : "L’ombre d’une américanisation de la finance," which translates to "The shadow of an Americanization of finance" (in Europe).

Such words coming from the President of the biggest French bank make me believe that the only outcome of all this is a complete meltdown of the Western world financial system before governments take the decision of restructuring the international monetary system.

Best regards,
CIGA Christopher

Click here to read the article…

 

Jim,

ECM lending facilities at rates well below the market is 1.2 Trillion Euros (1.58 Trillion USD).

“There is no stigma whatsoever on these facilities,” ECB President Mario Draghi said in Frankfurt on Feb. 9. “The use of these proceeds is a business decision. Our primary interest is in lending to the real economy.”

Mario Draghi knows very well that an infinite percentage of this money will reach the real economy if any at all. This money which is a free lunch will be used by banks to increase their profit and executive bonuses through more speculation on the markets (aka more derivatives).

So many lies…

QE is at full speed and it will kill the middle class of the Western world though hyperinflation.

I hope the Banksters pay for all this one day.

Regards,
CIGA Christopher

 

Jim,

As we like to say here, it is QE-E or QE everywhere. Here is Japan with another in their long line of QE’s.

Monty Guild

BOJ Unexpectedly Adds Stimulus as It Sets 1% Target for Inflation: Economy
By Toru Fujioka and Keiko Ujikane – Feb 14, 2012 3:03 AM MT

Japan’s central bank unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program and set an inflation goal after an economic slide fuelled criticism it has been slower to act than counterparts.

An asset fund increased to 30 trillion yen, with a credit lending program staying at 35 trillion yen, the Bank of Japan said in Tokyo today. The BOJ also said that it will target 1 percent inflation “for the time being.”

More…

 

Standard of Livings Are Declining Across Most of the Western World
CIGA Eric

Chart Notes:

Gold-adjusted retail sales, or constant currency sales, continues to contract year-over-years (YOY) since 2000. 2005 and 2007 saw brief periods of constant currency YOY gains, but they didn’t last long.

Constant currency retail sales hasn’t been able surpass a -10% contraction since 2008. This contraction rates sits like an anvil over spending.

Ever wonder why that trip to brick and mortar and/or online store produces that feeling of a loosing battle? The persistent decline in constant currency retail sales confirms our gut response that standard of livings are declining across most of the Western World.

Gold-Adjusted Retail Sales (RSGLDR) and YOY Change
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Headline: Retail Sales in U.S. Trail Forecasts as Auto Purchases Drop

Feb. 14 (Bloomberg) — Sales at U.S. retailers rose less than forecast in January, reflecting an unexpected drop in purchases of automobiles.

The 0.4 percent gain reported by the Commerce Department today in Washington was half the 0.8 percent rise median forecast of economists surveyed by Bloomberg News. Sales excluding cars climbed 0.7 percent, more than projected and the biggest gain since March.

Chains like Target Corp. and Limited Brands Inc. topped analysts’ sales forecasts last month, when many companies offered incentives to bring back shoppers after holiday sales stagnated. Further gains in employment are needed to bolster wages and underpin confidence, ensuring that demand can be sustained.

“Consumers are being very picky at this point,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We saw aggressive retailer discounting and sharp price cuts in the new year. It bodes poorly for retailers’ margins.”

The median forecast of 75 economists surveyed by Bloomberg projected sales excluding cars would rise 0.5 percent. Estimates ranged from little change to a 1.8 percent gain.

Prices of goods imported into the U.S. rose 0.3 percent in January, reflecting higher costs for automobiles and petroleum, a report from Labor Department also showed today. It was the second increase in the past six months, indicating little pressure in prices from overseas.

Source: businessweek.com

More…

Buy Gold Stock Weakness, Says The Market
CIGA Eric

Ephrem,

The market’s message after a massive, multi-decade breakout is buy weakness. Unfortunately, human behavior is hardwired for selling rather than buying fear. This means gold shares train, fueled by rising gold prices, will shed a lot of passengers along the way.

S&P Gold (Formerly Precious Metals Mining)*
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The gold shares mania phase, characterized by rising dividends and higher highs despite gold reaching its equilibrium price, could easily extend into 2020-2025.

Eric

Eric,

Its funny that you mention gold stocks climbing the wall of worry… Im noticing that the premium stocks with sound resources and good cash flows are taking turns inching up to their old time highs.. e.g., endeavour, fortuna, silver wheaton, anv etc.

Im just wondering when this "breakout" does happen will we be witnessing a massive run similar to the tech stock run i.e., 1996-1999? during their final mania phase. If so, should we be seeing a top sometime around 2015ish?

thanks
Ephrem

More…