WSJ : Gold Futures Rise to Six-Month High

"Gold for April delivery, the most active contract, rose $23.80, or 1.8%, to settle at $1,370.50 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest close since $1,386.70 reached on Sep. 9.

Gold prices have gained 14% this year as instability in emerging markets and worries about U.S. economic growth reinvigorated investor demand for the haven asset. Some traders view gold as safer than stocks or government bonds because it isn't linked to a particular country or government.

Leaders of the Group of Seven advanced economies called on Russia to defuse the situation in Ukraine's Crimea region by reducing troop levels and halting annexation efforts. Russian troops have occupied Crimea since late February. Crimea will vote Sunday whether to secede from Ukraine and join Russia. The G-7 said it won't recognize the results of Crimea's referendum".

Source: WSJ

WSJ:Chinese Markets Hit by Signs of Sluggish Commodity Demand

          The Wall Street Journal reports,"signs of weakening Chinese demand for commodities are filling in a picture of a slowing economy and sparking a selloff in the country's currency, its stock market and in prices of the coal, copper and iron ore that China buys".

"The selloff rattled markets across the region Wednesday. Japan's Nikkei Stock Average fell 2.6%—its biggest decline in more than a month—and the offshore yuan, which is freely traded outside mainland China, dropped to its lowest level in eight months".

"Iron-ore traders say buyers are staying on the sidelines and stockpiles are rising in China's ports as a drop in exports and tightening credit make steel mills reluctant to add inventory. Copper prices are down on fears that inventory would flood the market if companies dumped the metal to unwind risky trades.

The price for premium hard coking coal from Australia fell 2.4% on Wednesday and is down 13% this year".

China's stock market, one of the world's worst performers this year with a 5.6% decline, sank to its lowest level in nearly eight months on Wednesday. The benchmark Shanghai Composite Index closed down 0.2% at 1997.69, after touching 1974.38, its lowest level since July 30, 2013.

The yuan weakened further against the U.S. dollar on Wednesday, falling 0.1% in Shanghai and leaving it down 1.5% this year. The decline is a reversal from years of steady appreciation, including a 2.9% gain in 2013.

"Copper extended its slide to a fourth day, falling more than 3% in Shanghai and bringing its decline for the year to around 15%. The metal is piling up in warehouses in China as demand from manufacturers slows. In addition, much of the stored copper is used as collateral for loans. As prices fall, borrowers could come under pressure to post more collateral, forcing them to sell copper to raise money".

Investors are awaiting data on Chinese industrial production and fixed-asset investment set to be released Thursday. Economists expect industrial production to have climbed 9.5% in January and February compared with the same two months a year earlier.

The question mark is if Chinese lately dissapointing data is because of a usually seasonally murky  economic indicators at the start of the year in China because of the long Lunar New Year holiday, which some years falls in January and others in February. 

The big debate among analysts has been whether the Chinese government will step in if growth slows.

The latest wave of selling in markets was driven by fears that another Chinese company was running into financial trouble.

Shares of Baoding Tianwei Baobian Electric Co. , a power-equipment maker that has made bad bets on the solar industry in recent years, fell 5.1%, the daily downside limit, and the company's bonds were suspended from trading for a second day.

Iron-ore prices are down 6% this week, as investors worry about rising supply and weakening demand. "The substantial decline in exports and significant increases in both Chinese port stocks of iron ore and finished steel inventories have sparked fears that spot cargoes could face prolonged downward pressure," said Kash Kamal, a London-based analyst at broker Sucden Financial.

Tim Condon, an economist at ING, said the lack of transparency in China's financial policies often generates uncertainties and anxiety for investors.

"Sentiment has definitely turned sour toward China and it does raise the question why it's so easy to accentuate the negative in this country," he said".

Is the Ukraine crisis a buying opportunity?

This is the question investors must consider in deciding whether the Ukraine crisis is a Rothschild-style buying opportunity or a last chance to bail out of equities and other risky assets before it is too late. The balance of probabilities in such situations is usually tilted towards a peaceful solution — in this case, Western acquiescence in the Russian annexation of Crimea and the creation of a new national unity government in Kiev that is acceptable to Putin.

To resolve the confrontation, such a government would probably have to guarantee the official status of the Russian language and preserve Russia’s effective veto over Ukrainian relations with NATO and the European Union. This is indeed the most likely scenario, and the one most investors and businesses are effectively assuming will happen by the end of the week.

The trouble is that the alternative, a civil war in Ukraine, while far less likely, would have far greater impact  on European and global economies, on energy prices and on stock-market prices around the world that are setting record highs.

In the 1991 and 2003 Iraq wars, for example, investors did well to “buy on the sound of gunfire,” but only after the outcome of the engagement was clear. In 2002, the Standard & Poors 500 index fell by 25 percent during the run-up to war. It only turned decisively in March, when the U.S. attack on Iraq began, gaining 35 percent by the end of the year.

Similarly in 1990 and 1991, it was only six months after Saddam Hussein’s invasion of Kuwait, when victory for the U.S.-led forces in Iraq had become inevitable, that equities advanced strongly. They gained 25 percent over the next four months.

A better analogy for the current confrontation may be the 1962 Cuban Missile Crisis. After a summer of nervous speculation in which stock markets around the world fell by 20 percent, President John F. Kennedy confronted Russian leader Nikita Khrushchev with a nuclear ultimatum to remove Soviet missiles from Cuba. Within a week, Wall Street started rising and ultimately gained almost 30 percent in six months.

But the 1962 rebound only started once it became clear that Khrushchev was backing down and Kennedy had won the war of nerves. A logical explanation for this week’s stock market movements is that investors now see a similar outcome in Ukraine.

But this time with Russia as the winner .

Source: Reuters

The Battle of Waterloo and Nathan Rothschild‏

Arriving at the Exchange amid frantic speculation on the outcome of the battle, Nathan took up his usual position beside the famous 'Rothschild Pillar.' Without a sign of emotion, without the slightest change of facial expression the stony-faced, flint eyed chief of the House of Rothschild gave a predetermined signal to his agents who were stationed nearby.

Rothschild agents immediately began to dump consuls on the market. As hundred of thousands of dollars worth of consuls poured onto the market their value started to slide. Then they began to plummet.

Nathan continued to lean against 'his' pillar, emotionless, expressionless. He continued to sell, and sell and sell. Consuls kept on falling. Word began to sweep through the Stock Exchange: "Rothschild knows." "Rothschild knows." "Wellington has lost at Waterloo."

The selling turned into a panic as people rushed to unload their 'worthless' consuls or paper money for gold and silver in the hope of retaining at least part of their wealth. Consuls continued their nosedive towards oblivion. After several hours of feverish trading the consul lay in ruins. It was selling for about five cents on the dollar.

Nathan Rothschild, emotionless as ever, still leaned against his pillar. He continued to give subtle signals. But these signals were different. They were so bubtly different that only the highly trained Rothschild agents could detect the change. On the cue from their boss, dozens of Rothschild agents made their way to the order desks around the Exchange and bought every consul in sight for just a 'song'!

A short time later the 'official' news arrived in the British capital. England was now the master of the European scene.

Within seconds the consul skyrocketed to above its original value. As the significance of the British victory began to sink into the public consciousness, the value of consuls rose even higher.

Napoleon had 'met his Waterloo.'

Nathan had bought control of the British economy.

Overnight, his already vast fortune was multiplied twenty times over.

George Soros eyes European Bank Shares

**European bank shares are “very depressed,” making it an “attractive time” to invest, Soros said. Still, he said it is going to be a “very tough year” for lenders as they try to shrink balance sheets and boost their capital to pass the European Central Bank’s stress tests, he said.

The 43-member Bloomberg Europe Banks and Financial Services Index trades at a 0.2 percent discount to book value, while the KBW Bank Index, which tracks 24 U.S. lenders, trades at a 14 percent premium, data compiled by Bloomberg show**.

Source: Bloomberg