GIW Employee Reaches 50-Year Tenure

GIW Industries, the leader in the design, manufacture, and application of heavy duty, centrifugal slurry pumps, is excited to announce a new record in employment longevity: as of January, Reab Berry, Mechanical Engineer and renowned slurry pump exper…

Read more….

Patient Cypriots Queue As Banks Reopen

Yahoo! News
By Karolina Tagaris and Michele Kambas
March 28, 2013

NICOSIA (Reuters) – Cypriots queued at banks as they reopened on Thursday under tight controls imposed on transactions, but there was no sign of a run on deposits that had been feared after the government was forced to accept a stringent EU rescue package.

Banks were shut almost two weeks ago as the government negotiated a 10 billion euro ($13 billion) international bailout to avert a national bankruptcy, the first in Europe’s single currency zone to impose losses on bank depositors.

Bank staff turned up for work early as cash was delivered by armored trucks, and queues of at least a dozen people formed at branches in the capital, with uniformed security guards on duty.

Doors opened at noon (6:00 a.m. EDT) but initially at least there was no visible run on the banks, as had been feared.

A lot of money had already left electronically. Figures published by the Central Bank of Cyprus on Thursday showed that savers from other euro zone countries withdrew 18 percent of their deposits from the stricken island in February, as talk of a tax on bank accounts gained ground.

Overall private sector bank deposits in Cyprus fell by 2.2 percent to 46.4 billion euros last month, after a similar drop in January.

Authorities say the emergency rules imposed to limit withdrawals and prevent a bank run will be temporary, initially for seven days, but economists say they will be difficult to lift as long as the economy is in crisis.

The government said it had appointed a panel to investigate the banking meltdown and look into claims of junior bondholders.

“It will have a broad mandate,” said Constantinos Petrides, under-secretary to the Cypriot president. “It will investigate criminal, civil and political responsibilities.”

The capital controls decree was taped to the windows of bank branches and staff handed out copies to customers. In Nicosia, there was relief, but some apprehension about what might happen.

“You’ve no idea how much I’ve been waiting for this,” said 64-year-old pensioner Froso Kokikou, waiting in line at a branch of Cyprus Popular Bank, also known as Laiki.

“I feel a sense of fear and disappointment having to queue up like this; it feels like a Third World country, but what can you do?” Kokikou said. “This is what they imposed on us and we have to live with it.”

MATURITY

Kostas Nikolaou, a 60-year-old pensioner, said the uncertainty of the past two weeks had been “like a slow death”.

He added: “How can they tell you that you can’t access your own money in the bank? It’s our money, we are entitled to it.”

Many of those waiting in line were elderly people, who said they had run out of cash because they did not have bank cards.

President Nicos Anastasiades praised the “maturity and responsibility” shown by Cypriots in the face of the crisis.

“We have shown that not only do we want to drag our country out of this difficult position, but that we will do it,” a statement from the presidency said.

Anastasiades has taken a 25 percent pay cut, while cabinet ministers’ pay will go down by 20 percent, an official said.

The Cyprus stock exchange said it would remain closed on Thursday.

On international markets, German 10-year bond yields fell to their lowest level since August on fears of spillover from the Cyprus crisis to other struggling euro zone members. Yields fell 2 basis points to 1.256 percent. Traders cited the risk that depositors in other countries could take fright at any signs of a run on deposits in Cyprus.

Container trucks loaded with cash pulled up inside the compound of the central bank in the capital Nicosia on Wednesday night to prepare for the reopening, a central bank source said.

CASH LIMITS

A Finance Ministry decree limited cash withdrawals to no more than 300 euros per day and banned the cashing of cheques.

The island’s central bank will review all commercial transactions over 5,000 euros and scrutinize transactions over 200,000 euros on an individual basis. People leaving Cyprus may take only 1,000 euros with them.

A police source told Reuters that passengers leaving Cypriot airports were subject to extra searches. Notices at Larnaka airport warned travelers of the new restrictions and officers had orders to confiscate cash above the 1,000 euro limit.

With just 860,000 people, Cyprus has about 68 billion euros in its banks – a vastly outsized financial system that attracted deposits from abroad, especially Russia, as an offshore haven but foundered when investments in neighboring Greece went sour.

The European Union and International Monetary Fund concluded that Cyprus could not afford a rescue unless it imposed losses on depositors, seen as anathema in previous euro zone bailouts.

That view has angered Cypriots, whose foreign minister said his country was sacrificing too much for the bailout.

“Europe is pretending to help us but the price to pay is too high: nothing less than the brutal destruction of our economic model,” Ioannis Kasoulides told the French newspaper Les Echos.

“CYPRUS EURO”

Cyprus’s difficulties have sent tremors through the already fragile single European currency zone. Yields on Slovenia’s two-year bonds surged to nearly 7 percent on Thursday in a sign that investors are pricing in a high risk of default, despite denials by the new government that it needs a bailout.

The imposition of capital controls has led economists to warn that a second-class “Cyprus euro” could emerge, with funds trapped on the island less valuable than euros that can be freely spent abroad.

Reflecting fears of a spillover, ratings agency Moody’s said it kept euro zone strugglers Ireland and Portugal on negative outlook, citing the Cyprus bailout as an extra risk.

The European Commission said the capital controls were legal and justified under EU law provided they were strictly temporary and proportionate. The EU executive said it would monitor “the need to extend the validity of or revise the measures”.

The bailout, agreed in Brussels on Monday, looks set to push Cyprus deeper into an economic slump, shrink the banking sector and cost thousands of jobs.

Cyprus Popular Bank, the country’s second biggest, will be closed and its guaranteed deposits of up to 100,000 euros transferred to the largest bank, Bank of Cyprus.

Deposits of more than 100,000 euros at both banks, too big to enjoy a state guarantee, will be frozen, and some of those funds will be exchanged for shares issued by the banks to recapitalize them.

While big depositors will lose money, the authorities say deposits up to 100,000 euros will be protected.

Read more….

SUSTAINABLE TRENDS & UNSUSTAINABLE ONES

By Toby Connor, Gold Scents
Today I’m going to start off with a look at the big picture. The next chart pretty much says it all.
 There is a fundamental reason why gold has been going up for 13 years. That same fundamental is driving the cyclical bull markets in stocks.
For gold the fundamentals are sustainable and that’s why the gold chart is rising almost parabolic inter-spaced with normal corrections/consolidations along the way.
For stocks the fundamentals aren’t sustainable. You can’t drive a true bull market in stocks by printing money. It just creates bubbles and crashes. That’s why each one of these bull markets is followed by a devastating bear market. It’s why the stock market chart has gone nowhere in 13 years while gold has gone up, up and away.
Until the fundamentals change this pattern isn’t going to change. Pretty soon the stock market is going to stagnate and start to drift sideways (followed by another bear market, probably due to bottom in 2016). Pretty soon gold is going to generate another C-wave leg up (followed by another sharp move down into the next 8 year cycle low, also due in 2016).
Gold:Did we bottom two days ago or not? I don’t know. What I do believe is that the QE4 manipulation has basically created a double B-wave bottom. As we saw last summer, B-wave bottoms are frustrating SOB’s that whipsaw back and forth until everyone is knocked off, or dizzy and ready to puke. Then they take off and leave everyone behind.
 I think gold is in the process of breaking the manipulation but as we have seen it’s been tough to get a sustainable trend going. That is the hallmark of a B-wave bottom. Ultimately I think the manipulation just stretched the precious metals markets much further to the downside than would have occurred naturally, so once gold breaks free of this volatile bottoming process the rally will be just as aggressive if not more so than the rally out of the first B-wave low last summer.
As we saw last summer, B-waves can churn to the point were it’s pretty difficult to determine correct cycle counts. It appears to be happening again. Considering the current daily cycle is left translated it should drop back below $1555 before bottoming. That being said today’s move looks like the cycle low may have come on Friday. I wouldn’t count on gold to give us a clear signal in this environment though. So it’s anyone’s guess if we now  have a strange left translated daily cycle that bottomed above the prior low.For those of you trying to hold on to positions during this mess let me put up two more charts.
On the gold chart you can see the level that triggered a 99 and a 98 Blees rating on the COT report. Historically that kind of extreme only occurs when price is at, or very close to a final intermediate bottom.
You can also see that this price level generated an 88 million buying on weakness day in GLD. Again this is almost always a sign that price is about as low as it’s going to go. Let me emphasize I said price, not time. Just because price has reached a level that halts the selling doesn’t necessarily mean that a sustained rally will start immediately. As we have seen the market may still have to chew up a significant amount of time before it’s ready to take off. In our case I think gold is waiting for the stock market to stagnate before hot money starts to flow back into the sector.So we may have one more lower low to endure before this is over, and we may not, but two years from now traders will be knocking their head against the wall saying “all the signs were there, why didn’t I buy?” Or; “Why didn’t I hold my Old Turkey position?”
 This bottom is going to be too complex to time perfectly, and even if it did bottom on February 20th it’s already shown that it can still throw most people off just by chopping back and forth for a month. Maybe that chop has finally ended. Maybe the daily cycle is still going to make one more trip below $1600. I’ll let others compete to see who can second guess the next wiggle in the precious metal markets. All I can say is that the signs are there. Save your head the abuse two years from now and pay attention to them.

Toby Connor

GoldScents

A financial blog primarily focused on the analysis of the secular gold bull market.

If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions, email Toby.

SCA ruling moves Mittal, Kumba dispute a step closer to resolution

The long-running iron-ore dispute between ArcelorMittal South Africa (Mittal) and Kumba Iron Ore took a step towards resolution on Thursday, when the Supreme Court of Appeal (SCA) dismissed an appeal by Imperial Crown Trading 289 (ICT) and the Department of Mineral Resources (DMR) against a 2011 North Gauteng High Court ruling on the status of mineral rights at the Sishen mine, in the Northern Cape.
Both ICT and the DMR had appealed Justice Raymond Zondo’s ruling granting Kumba’s Sishen Iron Ore Company (SIOC) exclusive rights to mine iron-ore or quartzite at the property, while setting aside the DMR’s controversial decision to grant ICT prospecting rights over the same property.

Read more….

Manchester Engineering-Engineered Steel Fabrication

Manchester Engineering is a highly experienced steel fabrication company based in Queensland, Australia. Our main workshop is located in China, which enables us to provide steel fabrication services and products at prices that cannot be matched by ou…

Read more….

Mechanix Wear-High-Performance Mining Work Gloves

Since the debut of our first high-performance work glove in 1991, Mechanix Wear has built a reputation as a leader in performance hand protection. Our roots in racing have propelled our work gloves i…

Read more….

Evraz moves to sell SA steel unit to BEE group for $320m

International steel group Evraz has announced plans to sell 85% of South African steel and vanadium producer Evraz Highveld to a black economic-empowerment (BEE) consortium for $320-million – the transaction would be the largest BEE deal in the South African steel sector.A non-binding term sheet had been signed with a consortium represented by an entity known as Nemascore, about which little information was immediately available.

In fact, market observers were taken by surprise both by the size of offer and the lack of information about the BEE purchaser.

Read more….

Rick Rule draws three profound lessons from the Cyprus debacle

GATA

10:17p ET Wednesday, March 27, 2013

Dear Friend of GATA and Gold:

Interviewed today by King World News, Sprott Asset Management’s Rick Rule draws three profound lessons from the debacle in Cyprus:

“1) That ultimately, given the leveraged nature of the system, deposit insurance is just another social promise that won’t be able to be kept.

“2) That the regulators are completely incapable of balancing their own budgets, never mind managing a business as complex as banking.

“3) You need to have some of your assets outside of the system. You need to own some things that they can’t print and regulate. And my nominations for those things would be bullion — gold, silver, platinum, or palladium.”

An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/27_Cy…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Ambrose Evans-Pritchard: Cyprus has killed the myth that EMU is benign

GATA

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, March 27, 2013

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/995799…

The punishment regime imposed on Cyprus is a trick against everybody involved in this squalid saga, against the Cypriot people and the German people, against savers and creditors. All are being deceived.

It is not a bailout. There is no debt relief for the state of Cyprus. The diktat will push the island’s debt ratio to 120 percent in short order, with a high risk of an economic death spiral, a la Grecque.

Capital controls have shattered the monetary unity of European Monetary Union. A Cypriot euro is no longer a core euro. We wait to hear the first stories of shops across Europe refusing to accept euro notes issued by Cyprus, with a G in the serial number.

The curbs are draconian. There will be a forced rollover of debt. Cheques may not be cashed. Basic cross-border trade is severely curtailed. Credit card use abroad will be limited to E5,000 (L4,200) a month. “We wonder how such capital controls could eventually be lifted with no obvious cure of the underlying problem,” said Credit Suisse.

The complicity of EU authorities in the original plan to violate insured bank savings — halted only by the revolt of the Cypriot parliament — leaves the suspicion that they will steal anybody’s money if leaders of the creditor states think it is in their immediate interest to do so. Monetary union has become a danger to property.

One can only smile at the denunciations of Eurogroup chief Jeroen Dijsselbloem for letting slip that the Cypriot package is a template for future EMU rescues, with further haircuts for “uninsured deposit holders.”

That is not the script. Cyprus is supposed to be a special case. Yet the “Dijssel Bomb” merely confirms that the creditor powers — the people who run EMU at the moment — will impose just such a policy on the rest of Club Med if push ever comes to shove. At the same time, the German bloc is lying to its own people about the real costs of holding the euro together. The accord pretends to shield the taxpayers of EMU creditor states from future losses. By seizing E5.8 billion from savings accounts, it has reduced the headline figure on the EU-IMF Troika rescue to E10 billion.

This is legerdemain. They have simply switched the cost of the new credit line for Cyprus to the European Central Bank. The ECB will have to offset the slow-motion bank run in Cyprus with its Emergency Liquidity Assistance (ELA), and this is likely to be a big chunk of the remaining E68 billion in deposits after what has happened over the past two weeks.

Much of this will show up on the balance sheet of the Bundesbank and its peers through the ECB’s Target2 payment nexus. The money will leak out of Cyprus unless the Troika tries to encircle the island with razor wire.

“In saving E5.8 billion in bailout money, the other euro-area countries will likely be on the hook for four to five times more in contingent liabilities. But, of course, the former represents real money that gives politicians a headache; the latter is monopoly central bank money,” said Marchel Alexandrovich from Jefferies.

Chancellor Angela Merkel will do anything before the elections in September to disguise the true cost of the EMU project. It has been clear since August 2012 that she is willing let the ECB carry out bailouts by stealth, as the lesser of evils. Such action is invisible to the German public. It does not require a vote in the Bundestag. It circumvents democracy.

Mrs. Merkel can get away with this, provided Cyprus does not leave EMU and default on the Bundesbank’s Target2 claims, yet that may well happen.

“I wouldn’t be surprised to see a 20 percent fall in real GDP,” said Nobel economist Paul Krugman. “Cyprus should leave the euro. Staying in means an incredibly severe depression.”

“Nobody knows what is going to happen. The economy could go into a free fall,” said Dimitris Drakopoulos from Nomura.

The country has just lost its core industry, a banking system with assets equal to eight times GDP, and has little to replace it with. Cyprus cannot hope to claw its way back to viability with a tourist boom because EMU membership has made it shockingly expensive. Turkey, Croatia, or Egypt are all much cheaper. Manufacturing is just 7 percent of GDP. The IMF says the labour cost index has risen even faster than in Greece, Spain, or Italy since the late 1990s.

What saved Iceland from mass unemployment after its banks blew up — or saved Sweden and Finland in the early 1990s — was a currency devaluation that brought industries back from the dead. Iceland’s krona has fallen low enough to make it worthwhile growing tomatoes for sale in greenhouses near the Arctic Circle.

If Cyprus tries to claw back competitiveness with an “internal devaluation,” it will drive unemployment to Greek levels (27 percent) and cause the economy to contract so fast that the debt ratio explodes.

The IMF’s Christine Lagarde has given her blessing to the Troika deal, claiming that the package will restore Cyprus to full health, with public debt below 100 percent of GDP by 2020.

Yet the IMF has already been through this charade in Greece, and Lagarde’s own staff discredited the doctrine behind EMU crisis measures. It has shown that the “fiscal multiplier” is three times higher than thought for the Club Med bloc. Austerity beyond the therapeutic dose is self-defeating.

Some in Nicosia cling to the hope that Cyprus can carry on as a financial gateway for Russians and Kazakhs as if nothing has happened. RBS says the Russians will pull what remains of their money out of Cyprus “as soon as the capital controls are lifted.”

The willingness of the Cypriot authorities last week to seize money from anybody in any bank in Cyprus — even healthy banks — was an act of state madness. We will find out over time whether this epic blunder has destroyed confidence in the country as a financial centre or whether parts of the financial and legal services sector can rebound.

Yet surely there is no going back to the old model, even though the final package restricts the losses to the two banks that are actually in trouble. Savers above E100,000 at Laiki will lose 80 percent of their money if they get anything back. Those at the Bank of Cyprus will lose 40 percent.

Thousands of small firms trying to hang on face seizure of their operating funds. One Cypriot told me that the E400,000 trading account of his father at Laiki had just been frozen, leaving him unable to pay an Egyptian firm for a consignment of shoes.

The Cyprus debacle has taught us yet again that EMU has gone off the rails, is a danger to stability, and should be dismantled before it destroys Europe’s post-war order.

Whether it marks a watershed moment in the crisis is another matter. Italy, Spain, France, and Portugal have their own crises, moving to their own rhythm.

The denouement will arrive when the democracies of southern Europe conclude that recovery is a false promise and that the only way to end mass unemployment is to break free of EMU’s contractionary regime.

It will be decided by Italy, not Cyprus.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Mining in Mongolia: a risky business?

A wealth of proven resources has attracted mining giants from across the globe to Mongolia. But could the resource explosion prove dangerous to Mongolia’s boom economy? With strict new rules about to come into force and an uneasy relationship with fo…

Read more….

« Previous Page — Next Page »