Fire Breaks Out At Fessenheim Nuclear Power Plant, Injuries Reported

Breaking news from now from France 24, which follows the massive7.9 Costa Rica earthquake moments ago.

• BREAKING FRANCE: FIRE BREAKS OUT AT FESSENHEIM NUCLEAR PLAN, INJURIES REPORTED

Fessenheim is France's oldest nuclear power plant located in the Alsace region.

Did Mario Draghi Leak The Goldman Memo On Next ECB Steps

Just a few hours before someone (cough Draghi cough) leaked the details of the sterilized - though unlimited, peripheral spread-reducing - though not capped or fundamentally-based, SMP 2.0, Goldman Sachs released their 'view' of what Super-Mario will do. Rather unsurprisingly, almost verbatim, the rumors fit that 'guess' rather well as the chaps at Goldman fully expected demanded this 'compromise' solution. They also expect no rate cut - since economic data is not a broadly dismal and falling as it was - but do expect further non-standard measures including collateral-easing (which has been pre-announced to some extent in the 'credit-easing' camp).

Bloomberg FOIA Documents How Wall Street Made A Muppet Of The SEC, Mary Schapiro And Dodd Frank

That the SEC is the most incompetent, corrupt, irrelevant and captured organization "serving" the US public is known by everyone. And while the details of the SEC's glaring lack of capacity to do anything to restore investor confidence in the capital markets, which has become a casino used exclusively by Wall Street to defraud any retail investor still stupid enough to play (which lately a moot point as there have been no material retail inflows into mutual funds in over three years), are scattered, courtesy of Bloomberg we now have the best summary of just how the utterly clueless SEC is a muppet plaything of Wall Street, and together with it, the "grand regulation" that was supposed to keep Wall Street in check, is nothing but what Wall Street demand it to be, and forced the SEC, way over its head on regulation, to accept every change, that the very banks that are supposed to be regulated, demands as part of Dodd-Frank reforms. In short: everything we know about Wall Street 'regulation' has been a farce, and a lie, exclusively thanks to corruption rampant at the now documentedly incompetent Securities And Exchange Commission.

Will We Never Learn? Subprime Auto Loans Accelerating (Again)

It is remarkable that we greedy ignorant short-term-focused human beings never seem to learn that driving forward and looking in the rear-view mirror can only end in disaster. Forget 'dancing while the music plays' or other such 'defenses' of herd ignorance, the most recent data regarding Auto Loans is simply mind-blowing:

• Subprime borrowers received 56.46 percent of loans on used cars in the quarter, up from 52.70 percent a year earlier.
• The average loan-to-value on new cars was 109.55%
• The average used car loan-to-value ratio rose to 126.62%
• 77% of Subprime Auto Loans are for a period greater than five years

As Yahoo notes, citing some monkey, "Despite the rise in subprime loans overall, there is still a strong sense of managing risk. Because the overall lending environment has improved, lenders are making loans available to a wider range of customers."

Industrial Commodities Will Remain Under Pressure

Admin at Marc Faber Blog - 48 minutes ago

I am not that optimistic that we are at the beginning of a large rally in commodities in general because industrial commodities will remain under pressure due to the fact that the Chinese economy is slowing down considerably. - *in Economic Times* * *Related: Powershares DB Base Metals Fund ETF (DBB), United States Steel Corporation (X), Vale SA (ADR) (VALE) *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

Gold Is Going To Be Much Higher Over The Decade

Admin at Jim Rogers Blog - 2 hours ago

The situation with gold is that it has been up 11 years in a row without a down year, which is extremely unusual. I do not know of any asset that has been up 11 years without a down year. So gold is correcting. It would be normal for gold to continue to correct and have a down year. Such markets are supposed to do so. Whether it is going to do, that I do not know, but I do know that gold is going to be much higher over the decade. - *in Economic Times* Related: SPDR Gold Trust ETF (GLD) * **Jim Rogers is an author, financial commentator and successful international investor. He has ... more » 

 

Industrial Commodities Will Remain Under Pressure

Admin at Marc Faber Blog - 2 hours ago

I am not that optimistic that we are at the beginning of a large rally in commodities in general because industrial commodities will remain under pressure due to the fact that the Chinese economy is slowing down considerably. - *in Economic Times* * *Related: Powershares DB Base Metals Fund ETF (DBB), United States Steel Corporation (X), Vale SA (ADR) (VALE) *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

Nobody Has Anything Favorable To Say About Europe

Admin at Marc Faber Blog - 2 hours ago

I would say the opportunity in my opinion, and as I have written about this in my reports, is essentially to now pick up some European shares at very distressed valuations. Two years ago a book was published 'Invest in Europe Now'. Of course the timing was not particularly good and the markets since then in Europe have completely imploded. Now recently the markets have bounced off their lows in the case of Italy, Spain, Portugal and France by between 18% and 30% from the lows in June-July. The correction is now coming, but I do not think we will see new lows because whereas two year... more » 

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Signs of Stagflation Emerging

Eric De Groot at Eric De Groot - 4 hours ago

Manufacturing contracted in August as the PMI fell to 49.6 percent, a decrease of 0.2 percentage point when compared to July's reading of 49.8 percent. A reading below 50 percent indicates that it is generally contracting. Prices Paid rose to 54 percent in August. This was increase of 14.5 percentage points compared to the July reading of 39.5 percent. Rising... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

Coordinated Central Bank Actions For One More Kick Of The Can

Eric De Groot at Eric De Groot - 4 hours ago

Rapid accumulation after strong distribution of US Treasury bonds revealed focused participation by the invisible hand in July 2011. This setup illustrated by the magenta circle in the chart below preceded a sharp bond market rally that lasted until October 2011. A similar setup exists today. Jim’s and Monty’s instincts are sharp as ever. The invisible... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Now That The Easy Stuff Has Failed, All That's Left Is The Hard Stuff

The disregard for the future and the fundamentals of fiscal well-being is about to reap consequences. The Powers That Be counted on "time healing all," as if the mere passage of time would magically heal a broken economy and political machine. Time heals all--unless you have an aggressive cancer. The system has been pushed to extremes: the expectations are impossibly high, the promises are impossibly generous and the sums of money demanded by the vested interests "just to stay afloat" are stratospheric. The "run to fail" levers have all been pushed to the maximum, and it is simply too politically painful to make any real-world adjustments that might save the system from imploding. Nobody wants a crisis, yet a crisis is the only thing that can save the system from implosion.

Spain's Hell Is A Bankruptcy Lawyer's Heaven

You've seen Spanish youth unemployment rates soaring; been brow-beaten with data on the dramatic rise and acceleration of Spanish bank non-performing loans; and the rate of Spanish capital outflows chart is now ubiquitous; but where there is pain, there is also pleasure. As we are always looking on the bright-side and trying to find a silver-lining, Michael Cembalest provides just such a chart. To wit, the unprecedented surge in corporate bankruptcies in Spain; without question, a boon for the bankruptcy-lawyer industry and perhaps just the economic boost the country needs. Tongue-out-of-cheek, this is just a disastrous chart of reality on the ground.

Spot The Unsustainable Entitlement

 
In the words of Sesame Street, one of these spending components of the long-run budget plan is not like the others; one of these entitlements is not the same; can you spot which one? As BofAML notes, "no long-run budget plan would likely be effective if this rapidly growing program is not significantly constrained. This cost reflects growth in the economy, an aging population and an 'excess' growth factor that includes both medical advances and presumably inefficiencies."

European Credit Buying The Rumor; European Stocks Not So Much

Whether it is "buying-the-rumor" to "sell tomorrow's news" or some contagion from domestic bank-to-sovereign credit arbitrage, European credit markets are giddy with the Draghi rumors. European sovereigns are better but are leaking back a little now - with 2Y limping higher in yield. European stocks seem thoroughly unimpressed for now broadly-speaking (despite EUR strength helping drag US equities higher?) The world, it seems, has no idea what is going on once again... and then Merkel adds this:

• *MERKEL TELLS LAWMAKERS SHE OPPOSES UNLIMITED ECB BOND PURCHASES
• *MERKEL CAN ACCEPT TEMPORARY ECB BOND BUYING, BARTHLE SAYS
• *MERKEL CAN ACCEPT ECB BOND BUYING OF SHORT MATURITIES: BARTHLE

Which sends EURUSD into spasm...

Chart Of The Day: China Industrial (Lack Of) Production

It appears China's growth trajectory just dead-cat-bounced and is now resuming its downward trend. With Industrial Production at its lowest since March 2009 (though we are sure we will be told - "yeah, but it's still growing at 9.2% YoY"); perhaps it is better to look at this chart with no 'government-sponsored' y-axis since the bottom line is - it's bad and getting worse (and the PBoC remains 'stuck').

Analysts Respond To ECB's Toned Down Plan: "Priced In" And Details Still Lacking

The first responses by the Wall Street sellside brigade to the ECB's "unlimited" yet somehow "sterilized", no longer rate capping thus unsterilized plan emerge and they are, in a word and as expected, unimpressed.

Saving The World

Saving the World somehow seems like an extreme sport. It is talked about by many but practiced by few. The newest attempt has been claimed by Mario Draghi but it may be one of those Lance Armstrong kind of things where the steroids of the moment pushed the claimer past his boundaries. The markets, the equity markets in particular, have been betting for weeks that the world was going to be saved and have been waiting for the evidence of the transformation as I have stood on the sidelines and shook my head. I have seen the prophets before; the world is going straight to Heaven, the world is going straight to Hell and yet somehow we always find ourselves stuck in Perdition where mankind vacillates between the two. In Mario Draghi’s case, you see, he needs the parishioners to go along with the scheme and while everyone may share the same Bible the interpretation is not the same.

Gold’s Rise To Continue Above $2,500/oz On Negative Real Interest Rates

Gold prices languished from 1980 to 2000 and had declining correlations with debt levels because GDP growth was sufficient to mute fears about budget and deficit issues. The current economic recovery has been too weak to support a sustained rise in real rates above the 2% level that has acted an inflection point for gold prices. With energy and food inflation deepening and soon to affect consumer price indices, interest rates may have to rise significantly in order to restore real interest rates above 2%.  This is with ex Federal Reserve Chairman Volcker did in the late 1970’s - when he increased interest rates to above 15% in order to protect the dollar and aggressively tackle inflation. It is unlikely that similar ‘hawkish’ monetary policy would be implemented by the Bernanke Fed today. It is unlikely that they would and even doubtful if they could – given the appalling fiscal situation and levels of debt in the US and global economy.  A continuing succession of higher real gold prices above the inflation adjusted high, or real record high, of $2,500/oz is likely until we see interest return to more normal levels and zero percent interest policies are supplanted by positive real interest rates.

For Spain, The Beginning Of The End Arrives As Bank Of Spain Starts Using ELA

As we described in detail yesterday, things are going from worse to worserer as the problems in Spain - more specifically in its banking sector - are deepening as deposit flight accelerates, and "the private sector is leaving the banking system." But the Bank of Spain isn't leaving anything to chance. The WSJ disconcertingly highlights that last month the central bank appears for the first time to have activated an emergency lending program that will enable its banks to borrow from the Bank of Spain directly, bypassing the ECB's relatively tough collateral demands. That would make Spain at least the fourth euro-zone country - following Greece, Ireland and Portugal - to use the ELA, which generally is reserved for situations when banks have exhausted all other financing options. As we pointed out yesterday, this would appear to confirm a "full-blown bailout" is imminent, as the collateral problems mount.

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