The Truth Behind the Headlines
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China completes railway link with ASEAN countries

China completes railway link with ASEAN countries | The Truth Behind the Headlines | Scoop.it
The construction of a crucial 141 km-rail link between China and the Association of Southeast Asian Nations (ASEAN) was completed Tuesday.


This is part of the SKRL (Singapore-Kunming Rail Line) that is a high priority for ASEAN in getting ready for the Asian Economic Community that ASEAN is due to morph into by 2015, turning the entire Greater Mekong Sub-region into one big free-trade zone.  Basic travel infrastructure is a huge issue in places like Cambodia, Myanmar and Laos yet. 


I've been watching this story for months and this is a major portion of the project.  Details on the ASEAN Connectivity Plan are here.

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U.S. Treasury Rout Continues, Commodity Prices Accelerate | stockpricetoday.com

U.S. Treasury Rout Continues, Commodity Prices Accelerate | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

The rout in U.S. Treasuries is becoming biblical. 30 Year Bond futures dropped 1.5 points, crashing through horizontal support at 147 and 146.5 to close Wednesday afternoon’s trading at 146.01. The yield climbed to 2.91%. 10 Year Treasury yields rose to 1.80%, up 0.071%. This sell-off in Treasuries is particularly worrisome because there has not been a commensurate rise in equities. The S&P 500 (AMEX:SPY) rose just 1.60 to close at 1405.53 (0.11%). If the money is rotating out of U.S. Bonds and Securities and not flowing into U.S. equities, where is it going?


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Bank of America drills open customer safe deposit box and removes contents.

Bank of America drills open customer safe deposit box and removes contents. | The Truth Behind the Headlines | Scoop.it
So, you think keeping your valuables and extra cash in a bank safe deposit box is safe? Well, think again.  Bank of America drilled open a customer’s safe deposit box, removed the contents an...


Do you still think your money is safe in any bank in this country?  the sheer incompetence of the people working there is enough for me to say no, leaving aside anything more sinister than that. 


Note two things in this story.  1) This couple is obviously 'central Asian' possibly Irani or Iraqi and 2) they are well-off.  It's pretty simple to connect some dots here.



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Commodities Off Hard in Risk Off Trade | stockpricetoday.com

Commodities Off Hard in Risk Off Trade | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
Today it was the grain complex, which has seen spectacular moves to the upside recently, drop back around ~3% on average for the majors. Corn was off 2.1%, Wheat, Soybeans and Soybean oil all dropped 3.1% while Oats crashed nearly 3.8%. the S&P 500 was off a svelte 0.14% in comparison. Gold (AMEX:GLD) dropped $10, after putting in a strong performance overnight in Asia hitting a high near $1628 on the October contract.
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The Myanmar gold rush is on - The Nation

The Myanmar gold rush is on - The Nation | The Truth Behind the Headlines | Scoop.it

The multinationals are flooding into Myanmar. A hotel room cannot be had for love or money. A hotel that used to charge US$75 per night is now $150 and is over- booked. Everyone and his brother is queuing up for visas. People are deliberately flying from Phnom Penh to Yangon on Myanmar Air because it is the only flight where you can get a visa onboard.



This has been brewing for a long time.  Yangon is one of the world's next big boomtowns, Coke and Pepsi can't wait to bring fresh, if bottled, water the the rural areas of the country and everyone from Exxon-Mobil to CNOOC is licking their lips at the vast Natural Gas and Oil reserves. 


China began this rush with the pipeline they started building from Kyaukpyu to Kunming (2400 km) and the West realized they had to get a foothold soon or be left behind. The pipeline cuts out the whole trip for oil tankers through the Straits of Malacca and the South China Sea, obviating much of the U.S. 7th fleet's strength vis a vis China.


Yes, it's the wild west in Myanmar, but it's going to explode over the next few years.  And comanies like GE will be there right behind the State Dept.'s heels.



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Japan’s Growth Slows, Cue Keynesian Stimulus | stockpricetoday.com

Japan’s Growth Slows, Cue Keynesian Stimulus | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

It’s a real shame that after 25 years the leadership in Japan will not give us their dreams of infinite mercantilism. The latest print for Japanese GDP was just 0.3% growth, which immediately prompted proclamations from prominent Japanese government officials as to the need for more monetary and fiscal stimulus.


Of course this is exactly what the Japanese economy has been living and struggling with for the past 25 years.

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'Rebel atrocities strengthen Assad, turn Syrians off opposition' RT

The Arab League has postponed Sunday's crisis meeting on Syria, where rebels are struggling to regain ground in the country's biggest city, Aleppo.


Here's the opposite of what you will hear every night between now and the election on Syria.  The U.S. is not only the instigator of the fighting in that country the government has alinged themselves with Al Qaeda to do it. 


The long game here is the further isolation of Iran and the atomization of the Middle East by the U.S. government backing any Sunni group they can use as convenient, if violent and disgusting, quislings. 

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This is what Wall Street’s terrifying bot invasion looks like

This is what Wall Street’s terrifying bot invasion looks like | The Truth Behind the Headlines | Scoop.it

This is what high frequency trading looks like, when specially programmed computers make massive bets at lightning speed, Mother Board reports. Created by Nanex, the GIF charts the rise of HFT trading volumes across all U.S. stock exchanges between 2007 and 2012.The initial murmur, the brewing storm, the final detonation: Not just unsettling, it’s terrifying.

 

As Mother Board notes, we don’t know is what the long term consequences are of all this hyper-volume as depicted by the Nanex GIF and the kind of systemic risks created from the market’s ongoing evolution from human traders to rapidfire AI. Sometimes things go wrong, a software glitch, an algorithm gone rogue and the music stops, like last week when Knight Capital lost $10 million a minute when it’s trading platform went haywire or during the infamous Flash Crash when the Dow dropped 1000 points in mere minutes.


Via Dr. Stefan Gruenwald
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U.S. Banks Join Brits in LIBOR Party | stockpricetoday.com

U.S. Banks Join Brits in LIBOR Party | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
JPMorgan (NYSE:JPM) is not finally being hit with the ugly stick by the regulators regardless of the hopeful tone of this article by the Huffington Post,...
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Is This Why #Gold Is Outperforming? | ZeroHedge

Is This Why #Gold Is Outperforming? | ZeroHedge | The Truth Behind the Headlines | Scoop.it
Gold is significantly #winning today - well ahead of stocks and the USD after being closely synced with them since the lows last Friday pre-ramp. The question is why? We have an idea.

 

Gold is winning because the petrodollar flow is more than the Fed can handle.  Now that they'ze started open repo operations, even more flow is being added to the system, hence the bids are coming in at forward physical price.  Sept/Oct contracts are still flat to negative, implying a very tight physical market which cannot be manipulated for very long.  The closer we get to futures expiry in this condition the more likely we will see a pop above $1650 as settlement worries loom driving shorts to cover at higher prices.

 

A weekly close over $1632 would be a massive technical breakout both of horizontal resistance from the July High and the 144 EMA.  Volume being very low implies the market is ready to move.


Via Graham Jervis
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CME to Raise Oil Margins and Re-Elect Obama | stockpricetoday.com

CME to Raise Oil Margins and Re-Elect Obama | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
Hat tip to Zerohedge who noted that the CME (NYSE:CME) Group is raising margins on oil futures contracts 3.7% now that Brent Crude is solidly back above $110...
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Iran Increases Use of Barter for Oil wiwth South Korea

Iran Increases Use of Barter for Oil wiwth South Korea | The Truth Behind the Headlines | Scoop.it
South Korea represents the potential limits of Western pressure on Iranian exports. A form of barter set up by Iran provides an incentive to keep—or in the case of Seoul, to resume—its crude purchases.

 

The issue not discussed here is that Iran is having to ship the oil to its customers as opposed to the other way around.  To get S. Korea to buy again, skirting the insurance issue, this is what they have to do. 

 

The attack on both HSBC and Standard Chartered Bank by u.S. regulators is part of this grand plan to isolate iran.  the more the U.S. spends on this folly the quicker we will reach our terminal moment.  Singaporean importers are buying Iranian Fuel Oil again as well. 

 

Let's see it there's an 'incident' of piracy' in the next few weeks. 

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Don't Count out the Euro or Gold

Don't Count out the Euro or Gold | The Truth Behind the Headlines | Scoop.it

I'm not sure Draghi has put anything concrete in place like Axel is suggesting but he's certainly making it very clear as to what he wants.  An integrated Euro is what has been on the table for over 60 years and this is just one more move in the game.

 

There is still a significant amount of risk in the system that central planners like Draghi and Bernanke cannot account for.  Axel Merk is smart enough to know that there are many forms of tail risk.  Yes, Draghi's words have made it clear that he has lessened the most important source of it: uncertainty in the competence of the E.C.B.'s leadership.  That creates a put underneath the fear trade.

 

I'm one to bet on stability in almost all things as the most likely outcome.  In the end we play the probablities, and the probabilities state that there is enough will on the part of central bankers to preserve their system at our expense even if they get the timing wrong and it costs them more than they wanted it to.

 

But, chaos is also a possibility that has to be accounted for.  In either case Gold wins as an investment.

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Gold Rises with Equities, Bonds Continue Swoon | stockpricetoday.com

Gold Rises with Equities, Bonds Continue Swoon | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

Why gold (AMEX:GLD) is trading as a risk asset with equities and not a risk-averse asset is odd to me, but that is the situation. Gold is rising with bond yields along with equities. Now the last time I checked the gold bears were still of the opinion that once bond yields started to rise gold would be pulled down to somewhere south of $1200 per ounce. Well, since the U.S. treasury market topped on July 23rd, yields on the 10 year U.S. Treasury note (AMEX:UST) has risen from 1.382% to 1.845%, a 33.5% rise in yield.

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US Treasuries Continue to Fall, Equities Hold | stockpricetoday.com

US Treasuries Continue to Fall, Equities Hold | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

If one takes a quick peak at the charts one will see that July 23rd marked a turning point in the bond and currency markets. The Euro hit its low versus both the Yen (AMEX:FXY) and the US Dollar (AMEX:UUP) that day and the yields on U.S. Treasuries and Japanese Government Bonds (JGB) hit their low as well. Since then the markets have all pivoted in the opposite direction. But what is interesting is not that the have done so, after all the short-Euro/long US Dollar trade is one of the most crowded in the history of man, but the extent to which the Dollar and the Yen have diverged.

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Malaysia urges Asean to unite over South China Sea

KOTA KINABALU: Malaysia's foreign minister urged Southeast Asian countries on Sunday to settle their overlapping claims in the South China Sea before bringing them up with Beijing.
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Time to trade Treasury Bonds? - IndexTrader

Time to trade Treasury Bonds? - IndexTrader | The Truth Behind the Headlines | Scoop.it

I believe, the trade of the decade is shorting the US Treasury bond market. US Treasury bonds pay a fixed rate of interest every six months until they mature. They are issued in a term of 30 years.


US bonds are also seen as the most liquid safe havens in the world. This is particularly important to understand in the context of how people think about “safety”.



He's absolutely right.  I'm not the only one to have seen that sharp sell off in U.S. treasuries last week.   Note that there wasn't a commensurate sell-off in JGB's at the same time.... the Yen is getting a better safe-haven bid than the Dollar.  That should scare some people.


Once there isn't anymore DV01 to squeeze out of the U.S. Treasury and Corporate bond markets the money will begin to flow out quickly. Money will flow into gold very quickly, as people will not care about the Basel III capital definitions.  This happened in the 70's and it'll happen here as well.


Shorting Treasuries is one thing, it's the biggest market in the world.  Where is that money going to flow.?  It has to flow somewhere.   Some will flow into the Euro (cover your shorts now boys), some more will flow into the Yen, yes the Yen, and a lot of it will flow into gold, oil and other commodities.


I would take his analysis one step further and short LQD, the corporate bond fund (40% invested in UST's btw), because that's a crowded trade as well. 


Again, this week's T.I.C. report is a big deal.  The Fed has begun printing through the use of  normal repos.  The AMB is expanding at 9.5% again and bank credit is expanding while excess reserves were drawn down slightly. 

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Indonesia's June money supply rises 20.9 pct y/y | Reuters

Indonesia's June money supply rises 20.9 pct y/y | Reuters | The Truth Behind the Headlines | Scoop.it
JAKARTA, Aug 10 (Reuters) - Indonesia's broad money supply(M2) in June rose 20.9 percent from a year earlier, growing atthe same pace as in May, the central bank said on Friday.


The title says it all.  GDP rose 6.4% in the 2nd quarter as well leaving Indonesia as one of the few counreis upping their GDP targets for the 2nd half of 2012.  Now, relatively speaking their 5.75% interest rate is staggeringly high compared to the zombie nightmare that is the West, or even their neighbors in Malaysia (3.0%) or Singapore (~0.12%) but both of those countries have currencies that are in demand relative to nearly all others.


The Rupiah has been one of the weakest currencies of 2012 and without a rise in interest rates soon it will degrade further once the bubbles begin appearing in real estate. 

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Christ Almighty! US Foreign Policy vs. Middle Eastern Christianity by Justin Raimondo -- Antiwar.com

Christ Almighty! US Foreign Policy vs. Middle Eastern Christianity by Justin Raimondo -- Antiwar.com | The Truth Behind the Headlines | Scoop.it

Washington’s playing the Sunni card condemns the peoples of the Middle East to the tyranny of sharia law: it means the utter destruction of ancient Christian communities from Tripoli to Chaldea. This has been a consistent pattern of US foreign policy since the Bush administration, which, after all, launched our disastrous invasion of Iraq and thus condemned its heretofore safe and relatively free Christian community to death.


It is undeniable that the Obama administration’s strenuous efforts to attach itself to the coattails of the “Arab Spring” have radically accelerated the threat: indeed, it is fair to say that one of the main consequences of our “successful” policy has been and will continue to be a regional Christian pogrom. The only question is whether this is the inevitable albeit inadvertent consequence of a broader policy, or an intentional campaign to eradicate Christianity from the Middle East.


So where are the much-vaunted and politically powerful “Christian” groups in the US, who are supposed to exert so much influence over the Republican party and its candidates? While the Christians of the Middle East are sinking beneath an Islamist wave, as Washington cheers (and funds the jihadists), such Christian “leaders” as the Rev. John Hagee are too busy anticipating World War III and supporting Israel to notice.

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Drought in U.S. Has Futures and Obama’s Dander Up | stockpricetoday.com

Drought in U.S. Has Futures and Obama’s Dander Up | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

Corn, Wheat and Soybean futures are all hanging around near all-time highs. Corn has been the single best investment of the past 5 years, followed very closely by Gold (AMEX:GLD). But, somehow, because farmers are losing crops due to the drought and those that haven’t are securing record prices, and presumably solid profits as a result, American taxpayers need, in Obama-world, to transfer even more of their wealth to these people because of the vagaries of Mother Nature.

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Using Synthetic Biology to Engineer Life to Survive on Mars and Aid Human Colonization

Using Synthetic Biology to Engineer Life to Survive on Mars and Aid Human Colonization | The Truth Behind the Headlines | Scoop.it
A team of undergraduates from Stanford and Brown universities are applying synthetic biology to space exploration, outfitting microbes to survive extreme Martian conditions and produce resources needed to sustain a human colony.

 

Cool stuff, but until we figure out how to get Mars a magnetic field you won't be terra-forming it anytime soon.  If it did support life at one point it doesn't now and because without a magnetic field there's nothing to protect the atmosphere from being stripped off by solar wind.

 

There has to be more to this story than that then.

 

 


Via Dr. Stefan Gruenwald
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HSBC says it may sell Vietnam insurance business | Reuters

HSBC says it may sell Vietnam insurance business | Reuters | The Truth Behind the Headlines | Scoop.it
LONDON (Reuters) - HSBC Holdings said on Thursday it is considering a sale of its Vietnam insurance business in a deal which could fetch about $400 million for Europe's biggest...

 

I'm not sure if this is another example of the large banking concerns' need to raise capital in the face of deflating core assets deteriminig the future course of their business or the danger of investing in a frontier market as convoluted as Vietnam can be. 

 

Wither way HSBC is going to need the cash to deal with the regulatory and litigation costs they are straing at in light of LIBOR-Gate and the current money-laundering investigation in the U.S.

 

If Sumitomo wins this business it will be another small example of the power of the strong Yen to allow Japanese multinationals to buy up distressed assets and/or invest in the future of who will become a major trading partner for them in the near future.

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Lenovo’s Thinkpad 2 To Push Windows 8 | stockpricetoday.com

Lenovo’s Thinkpad 2 To Push Windows 8 | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
Lenovo is everything that a company like Acer is not.  Earlier in the week Acer's CEO came out and complained that Microsoft's (NASDAQ:MSFT) tablet, Surface,...
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Brent Surges past $110, Equities Continue to Rally

Brent Surges past $110, Equities Continue to Rally | The Truth Behind the Headlines | Scoop.it
Since it was revealed that the Fed began normal repo operations last week after 4 years of reverse repos the equity and commodity markets have been pushing...
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For Unpaid College Loans, Feds Dock Social Security

For Unpaid College Loans, Feds Dock Social Security | The Truth Behind the Headlines | Scoop.it

by Annamaria Andriotis:

 

"It's no secret that falling behind on student loan payments can squash a borrower's hopes of building savings, buying a home or even finding work. Now, thousands of retirees are learning that defaulting on student-debt can threaten something that used to be untouchable: their Social Security benefits.

 

"According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds. That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just 6 cases in 2000. ..."

 

[Well, what did you expect? A free ride?]

 

Ah. Debt slavery.  First they teka your money when you earned it. Hold it for 40 years so you can't use it to pay off your debts, then dock your pay after it accrues interest the entire time.  That is just stunning.


Via Hal
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