Friday, September 13, 2013

HO, HO, HUH? Customers outraged after Kmart starts Christmas advertising 105 days before the holiday

  • Kmart aired its first Christmas advertisement on September 8
  • Customers are infuriated at the out-of-season ad
  • The retailer said it wants to help consumers plan their holiday shopping

Kmart has launched its Christmas advertising campaign more than 100 days before the holiday in a desperate bid to beat off the competition.
But the extra-early ad blitz has infuriated shoppers who've taken to the retailer's Facebook page to slam the out-of-season commercial. 
Industry analysts say the unprecedented move will bring forward the Christmas ad cycle 'by a few weeks' as competitors jump on the promotional bandwagon.

What the? Kmart has enraged customers by airing its first Christmas advertisement about its layaway program - featuring a gingerbread man - more than 100 days before the holiday
What the? Kmart has enraged customers by airing its first Christmas advertisement about its layaway program - featuring a gingerbread man - more than 100 days before the holiday

Market leader: Ad industry analysts say Kmart's decision to air a Christmas ad this week will move the Christmas ad cycle up 'by a few weeks'
Market leader: Ad industry analysts say Kmart's decision to air a Christmas ad this week will move the Christmas ad cycle up 'by a few weeks'
The commercial, which first aired on September 8, promotes the retailer's layaway program.
It features a gingerbread man sneaking up on a woman working in an office cubicle, with a voice over saying: 'Don't let the holidays sneak up on you. Shop early with Kmart free layaway.'
Almost instantly, the retailer's Facebook page was brimming with complaints.
One customer wrote: 'What happened to Halloween and thanksgiving? Stop with the Christmas commercials ALREAY! [sic]'.
Another wrote: 'I WON'T be shopping at Kmart at Christmas. This is just a money making scheme. Kmart is only eager for the dollar signs. Places that start Christmas too early don't get my money. Christmas is NOT about's about Jesus and family.'
Unperturbed by the backlash, Kmart merely thanked its critics: 'We're just really excited for the holidays and layaway!'
Last year, Kmart's first holiday ad aired on October 28, behind Target's infamous October 15 promotional launch.
Secret Santa: A Kmart spokeswoman said the ad is being 'tweaked' but refused to comment on the retailer's holiday strategy
Secret Santa: A Kmart spokeswoman said the ad is being 'tweaked' but refused to comment on the retailer's holiday strategy
A Kmart spokeswoman said the ad was being 'tweaked', but would not comment on the company's broader holiday strategy.
'Customers can plan in advance in order to take advantage of layaway for holiday purchases,' Kmart said in a statement to ABC News.
Armed with National Retail Federation data showing 40 percent of holiday shoppers start buying before Halloween, several retailers have already announced their layaway schemes.
On August 22, Walmart announced plans to launch free layaway from September 13 to December 13, officially kicking off the start to the holiday season, according to ABC News.

Ace Metrix executive VP-marketing, Jonathan Symonds, said it's important that layaway ads are released early, but admitted it's 'eye opening' that Kmart is out of the gate six to eight weeks earlier than normal. 
'There might not be creative to respond with in the pipeline,' Symonds told Ad Age.
'It will, by definition, create a slightly earlier cycle. As opposed to right before Halloween, it will have the impact of pulling the season up by a few weeks. But it won't start the race today.'
National Retail Federation spokeswoman Kathy Grannis said Kmart's early blitz would boost competition in the sector.
'This might give new meaning to the phrase Christmas Creep,' she said. 'It's anybody's game right now, wheels are definitely in motion for a very promotional holiday season.'

Saez: 95% of 2009-2012 Income Gains Went to the Top 1%

Emmanuel Saez (UC-Berkeley, Department of Economics), Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2012 Preliminary Estimates) (Sept. 3, 2013):
From 2009 to 2012, average real income per family grew modestly by 6.0% (Table 1). Most of the gains happened in the last year when average incomes grew by 4.6% from 2011 to 2012. However, the gains were very uneven. Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012. Hence, the top 1% captured 95% of the income gains in the first three years of the recovery.
Table 1
Chart 3
New York Times, The Rich Get Richer Through the Recovery, by Annie Lowrey:

Given Choice Between Walmart and a Living Wage, Mayor Choses Walmart

(Photo: Techno Buffalo)Washington D.C. Mayor Vincent Gray vetoed on Thursday a landmark bill that would mandate giant retailers pay a living wage, caving to public threats from Walmart that it would ditch plans to build up to six mega-stores in the city before it would agree to above-poverty pay.
The bill had already passed the city council in July, overcoming a massive Walmart PR campaign opposing it, and it was inches from being signed into law when it reached the mayor’s desk.
Washington D.C. residents blasted the mayor for bowing to corporate bullying and dealing a blow to a city struggling with high poverty and unemployment and a soaring cost of living. “At a time when many D.C. residents are being displaced by rising costs and a lack of good jobs, this bill [sends] a clear message that D.C. residents believe everyone deserves to be paid a wage that allows them to afford to live in our city, and shop in the stores they work in,” said Reverend Graylan Hagler, pastor at Plymouth United Congregational Church of Christ and member of the Respect DC coalition.
Gray claims that he rejected the bill because he believes it would drive away employers, declaring, “I am vetoing this legislation precisely because I believe in providing a living wage to as many District residents as possible – and this bill is not a true living-wage measure.”
Yet, studies show that when Walmart megastores open, they don’t join the local retail economy but take it over, driving out local businesses and setting low standards for pay, working conditions, and job security. Researchers in Chicago found that Walmart stores in the city don’t increase the total number of local jobs, because they drive so many smaller employers out of business.
The dozens of community and labor organizations with Respect DC have been organizing against Walmart’s poverty wages since its 2010 public bid. When the retail giant refused to enter into a ‘community bargaining agreement’ with Washington D.C. residents to ensure basic human rights standards in the workplace, hopes turned to the living-wage bill introduced in January of this year.
The bill would have mandated that city retailers—with buildings greater than 75,000 square feet and with corporate sales over one billion dollars—pay an elevated minimum wage of $12.50 an hour.
Officials at Walmart, the largest private retailer in the United States, heaped praise on the mayor and told the media that they are moving forward immediately on plans to build two stores.
Washington D.C. residents, however, say that the fight is not over and and have already set to work urging the council to overturn the veto. “Gray’s veto is a disappointment, but the D.C. community isn’t going to be bullied by Walmart’s greedy corporate agenda,” Hagler declared.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License
Copyright: Common Dreams

They Denied That We Were In A Depression In 1933 And They Are Doing It Again In 2013

By Michael Snyder
Great Depression Headlines
The more things change, the more things stay the same.  The Great Depression actually started in 1929, but as you will see below, as late as 1933 the Associated Press was still pumping out lots of news stories with optimistic economic headlines and many Americans still did not believe that we were actually in a depression.  And of course we are experiencing a very similar thing today.  The United States is in the worst financial shape that it has ever been in, our economic infrastructure is beingsystematically gutted, and poverty is absolutely exploding.  Since the stock market crash of 2008, the Federal Reserve has been wildly printing money and the federal government has been running trillion dollar deficits in a desperate attempt to stabilize things, but in the process they have made our long-term economic problems far worse.  It would be hard to overstate how dire our situation is, and yet the mainstream media continues to assure us that everything is just fine and that happy days are here again.
As I have already noted, the mainstream media was doing the exact same thing back during the days of the Great Depression.  The following are actual Associated Press headlines from 1933…
Decisive Break from Panic Shown in Business Figures
Markets Spurt To New Highs
New Farm Bill to End Depression
And the following is a headline discovery from 1933 that was made by Linda Goin
I was browsing through old newspapers the other day and discovered a page filled with news about the stock market and banks in the Daily Capital News from Jefferson City, Missouri. The date was March 15, 1933, well into the Great Depression, and the news was cautiously celebratory as a headline read, “Era of Fear is Declared at End Now.
The Depression-era classic song entitled “Happy Days Are Here Again” was played at the Democratic National Convention in 1932 and it went on to be featured by the Democrats for many years after that.  The following is an excerpt from a Wikipedia article about that song…
Today, the song is probably best remembered as the campaign song for Franklin Delano Roosevelt’ssuccessful 1932 presidential campaign. According to TIME magazine, it gained prominence after a spontaneous decision by Roosevelt’s advisers to play it at the 1932 Democratic National Convention, and went on to become the Democratic Party‘s “unofficial theme song for years to come”.
There is only one huge problem.
The election of Roosevelt didn’t end the depression.  Years of bitter economic suffering and dust bowl conditions were still ahead.  The Great Depression continued all the way up to the start of World War II, and the war years were certainly no picnic for average folks either.
But at least cheery headlines can make people feel better, right?
That is what some believe.
Others believe that giving people false hope is very cruel and that it sets up people for failure.
The following are some actual headlines that were found on mainstream news sites today…
CNBC: “Recession risk gone in all US states but 1: Moody’s Analytics
CNN: “Foreclosure crisis is drawing to a close
NBC News: “Stocks close near highs; S&P logs 7-day rally
Wow, those headlines sound great!
So are happy days here again?
Not quite.
In fact, things continue to get even worse in a whole host of ways.  Just consider the following statistics…
-According to a brand new Gallup poll that was just released, 20.0% of all Americans did not have enough money to buy food that they or their families needed at some point over the past year.  That is just under the record of 20.4% that was set back in November 2008.
-Gallup also found that the ability of American families to meet some of their other most basic needs is near an all-time low…
The Basic Access Index, which includes 13 questions about topics including Americans’ ability to afford food, housing, and healthcare, was 81.4 in August, on par with the all-time low of 81.2 recorded in October 2011.
-More than 90 million working age Americans are considered to be “not in the labor force”.
-The labor force participation rate is the lowest that it has been in 35 years.
-516,000 Americans ”left the labor force” last month.  That was a brand new all-time record high.
-The number of private sector jobs dropped by 278,000 last month.
-77 percent of the jobs that have been “created” so far this year have been part-time jobs.
-Approximately one out of every four part-time workers in America is living below the poverty line.
-Right now, 40 percent of all U.S. workers are making less than what a full-time minimum wage worker made back in 1968.
-The U.S. trade deficit with China has hit a brand new record high.
-The U.S. trade deficit with the EU has hit a brand new record high.
-The number of U.S. households on food stamps is at a brand new record high.
-One of the largest furniture manufacturers in America was just forced into bankruptcy
The maker of furniture brands such as Thomasville, Broyhill, Lane and Drexel Heritage said Monday that it has filed for Chapter 11 bankruptcy protection.
-Total mortgage activity has dropped to the lowest level that we have seen since October 2008.
Yes, those in the top 1 percent are doing very well for the moment thanks to the reckless money printing that the Federal Reserve has been doing.
But for most Americans, the last several years have been a continual struggle.  The following is a list that comes from one of my previous articles entitled “44 Facts About The Death Of The Middle Class That Every American Should Know“…
1. According to one recent survey, “four out of five U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives”.
2. The growth rate of real disposable personal income is the lowest that it has been in decades.
3. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000.
4. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
5. The home ownership rate in the United States is the lowest that it has been in 18 years.
6. It is more expensive to rent a home in America than ever before.  In fact, median asking rent for vacant rental units just hit a brand new all-time record high.
7. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck.
8. The U.S. economy actually lost 240,000 full-time jobs last month, and the number of full-time workers in the United States is now about 6 million below the old record that was set back in 2007.
9. The largest employer in the United States right now is Wal-Mart.  The second largest employer in the United States right now is a temp agency (Kelly Services).
10. One out of every ten jobs in the United States is now filled through a temp agency.
11. According to the Social Security Administration, 40 percent of all workers in the United States make less than $20,000 a year.
12. The ratio of wages and salaries to GDP is near an all-time record low.
13. The U.S. economy continues to trade good paying jobs for low paying jobs.  60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
14. Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.
15. At this point, one out of every four American workers has a job that pays $10 an hour or less.
16. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.
17. In the year 2000, about 17 million Americans were employed in manufacturing.  Today, only about 12 million Americans are employed in manufacturing.
18. The United States has lost more than 56,000 manufacturing facilities since 2001.
19. The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.
20. Back in the year 2000, more than 64 percent of all working age Americans had a job.  Today, only 58.7 percent of all working age Americans have a job.
21. When you total up all working age Americans that do not have a job, it comes to more than 100 million.
22. The average duration of unemployment in the United States isnearly three times as long as it was back in the year 2000.
23. The percentage of Americans that are self-employed has steadily declined over the past decade and is now at an all-time low.
24. Right now there are 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.
25. In 1989, the debt to income ratio of the average American family was about 58 percent.  Today it is up to 154 percent.
26. Total U.S. household debt grew from just 1.4 trillion dollars in 1980 to a whopping 13.7 trillion dollars in 2007.  This played a huge role in the financial crisis of 2008, and the problem still has not been solved.
27. The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark.
28. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
29. Back in the year 2000, the mortgage delinquency rate was about 2 percent.  Today, it is nearly 10 percent.
30. Consumer debt in the United States has risen by a whopping 1700%since 1971, and 46% of all Americans carry a credit card balance from month to month.
31. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.
32. One study discovered that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt, and according to a report published in The American Journal of Medicine medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States.
33. Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes.
34. Today, approximately 46.2 million Americans are living in poverty.
35. The number of Americans living in poverty has increased by more than 15 million since the year 2000.
36. Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
37. At this point, approximately 25 million American adults are living with their parents.
38. In the year 2000, there were only 17 million Americans on food stamps.  Today, there are more than 47 million Americans on food stamps.
39. Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.
40. Right now, the number of Americans on food stamps exceeds the entire population of the nation of Spain.
41. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
42. At this point, more than a million public school students in the United States are homeless.  This is the first time that has ever happened in our history.  That number has risen by 57 percent since the 2006-2007 school year.
43. According to U.S. Census data, 57 percent of all American children live in a home that is either considered to be “poor” or “low income”.
44. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent.  Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.
But there is no way that we are actually in another economic depression, right?
If that was the case, the mainstream media certainly would have told us, right?
According to John Williams of Shadow Government Statistics, if the U.S. government actually used honest numbers, they would show that the U.S. economy has actually been contracting continually since 2005.
In other words, if the numbers were not being manipulated they would show that we have had negative GDP growth every single year since 2005.
I don’t know about you, but that sure sounds like a depression to me.
What do you think?
Great Depression Headlines

Jim Rogers – US Economy is no longer producing. There are no more farmers just wall street.

TWITTER announces secret $20 billion IPO, Investors, public will not yet get look at company finances, GOLDMAN SACHS lead underwriter

TWITTER announces secret $20 billion IPO
Twitter has filed for an initial public offering of stock, months earlier than expected.
The 7-year-old microblogging site announced the news — via tweet, of course — on Thursday afternoon: “We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.”
A minute later, Twitter followed up its IPO tweet with a new message: “Now, back to work” along with a photo of employees in the company’s San Francisco offices.
Twitter’s valuation has been estimated at about $10 billion.,0,6439890.story

Investors, public will not yet get look at company finances

Updated, 10:22 p.m. | Twitter, which began as a side project in a small but failing start-up seven years ago and grew into one of the world’s largest platforms for public conversation, is about to take its biggest step yet into maturity: selling stock to the public.
The company announced on Thursday — in a tweet, one of the 140-character messages that are the backbone of the service — that it had filed paperwork with regulators to eventually sell shares in an initial public offering. However, it had filed the first documents months earlier under a special provision of securities law that allows a company with less than $1 billion in annual revenue to keep its financial data secret until it begins actively marketing its stock to investors.
GOLDMAN SACHS lead underwriter
Goldman Sachs Group Inc. GS -1.04%is the lead underwriter on the planned initial stock sale, people familiar with the matter said. One person familiar with the matter said other banks are expected to join Goldman in managing what is likely to be one of the highest-profile IPOs since Facebook went public in the spring of last year. A Twitter spokesman declined to comment.
Twitter has already achieved a valuation of more than $9 billion, as judged by private sales by employees of their stock to BlackRock Inc. BLK +0.19% earlier this year, people familiar with that transaction have said. Such a valuation would still put Twitter well behind Facebook, which went public with a valuation of about $100 billion. After initially struggling, Facebook shares hit a new all-time high this week and now trade above their IPO price.

Modern day financial repression and disinformation: Financialization of America creates incentives for massive income inequality.

America in the last couple of decades has undergone a massive reformation when it comes to the financial system.  The ability to convert everything and anything into a tradable security has been the biggest goal of Wall Street and has captured our entire economy like a starving grizzly bear chowing down on Alaskan salmon.  Even once stale real estate, once thought of as the cornerstone of wealth for most Americans is now a volatile and speculative commodity where large hedge funds dive in and out like bombers for quick profits.  The end result is that more Americans are finding it harder to keep up while most of the wealth aggregates in fewer and fewer hands.  Since the recession ended, most of the new jobs are being added in low wage segments of the economy.  An easy way to boost profits is to slash benefits and cut wages.  Good for the stock market but not necessarily for working Americans.  Sadly, that is the rub of this modern day system.  The stock market is benefitting companies that may not have the best interest of the overall economy at heart.  If that is the case, is this system truly functioning well?

Low wage job growth
It is abundantly clear that most of the job growth since the recession hit has come in the form of lower paying sectors:
Index of payrolls
Leisure and hospitality, typically the lowest paid of the service sector fields is the top employment growth segment.  It should be no surprise then that household incomes adjusting for inflation are back to levels last seen in the mid-1990s.  At the same time while wages hover in purgatory, inflation in important items like housing is increasing yet again.  The increase in housing over the last few years has largely been because Wall Street investors have decided to chase after residential properties as a way to diversify their portfolios.  It is also easier to pilfer properties from struggling Americans losing their homes at the hands of financial products created by said Wall Street firms.  Easy to leverage the easy money the Fed is handing out to the large banks but the end result does not benefit most Americans.
Growing income inequality however is benefitting the stock market.  So in a way, it also makes sense that lower paying jobs are growing because people are having less access to disposable income and credit to the majority of Americans has tightened up dramatically since the recession hit (not so much for large banks hence the flood into the real estate market).
This large financialization is also being seen as many more Americans struggle for even basic necessities.
Struggling for food
One recent poll found that 20 percent of Americans have struggled to afford food in the last year:
food stamps
Source:  Gallup
This is incredibly high and nearly matches the figure we saw in the depths of the recession.  It also helps to explain why we now have a record number of families on food stamps.  Record in the stock market and record usage of food stamps.  These are probably two stats you do not expect to occur for the same country but that is the current situation we live in.
Ultimately the system is not benefitting most Americans in what you would expect from a booming stock market and real estate market.  The tools necessary to play in this game are being heavily restricted (i.e., easy credit, etc) and most Americans are left to contend with the pangs of an ongoing austerity.
Income inequality in a modern Gilded Age
Historians look back at previous depressions and point out massive income inequality and stock market euphoria as indicators of underlying problems.  In the 1920s, income inequality was incredibly rampant as many in big cities like New York benefitting from financial mania partied on while most parts of America were struggling.  Today, income inequality is even higher than it was back then:
Over half of all income generated in 2012 was at the hands of the top 10 percent of income earners.  What this means of course is that the other 90 percent are battling out for the remaining 50 percent of income.  This also explains why we now have a generationally high Gini ratio:
gini ratio america
It is important to have an economy that builds up the bulk of our households, not just a tiny portion.  The stock market is simply reflecting a system that is designed for a small minority.  We should be concerned about a dramatically shrinking middle class and the fact that many cities are literally going into failed state status but this is simply ignored in the press.  If you think that it is good to follow this policy, just look at economies where they have a massive underemployed youth population or where income inequality is this high.  This kind of financializaton is destined to bring booms and busts and after each cycle, the middle class continues to diminish.

San Francisco Said to Discuss Making City Offshore Yuan Center

San Francisco Mayor Edwin Lee discussed ways to make the city an offshore yuan hub in a meeting with Bank of China Ltd. (3988) executives this week, said two people with knowledge of the matter.

The Sept. 9 meeting in San Francisco also included officials from the city’s Chinese consulate and was a preliminary discussion, said the people, who asked not to be identified as the talks are private. State-owned Bank of China clears yuan transactions in Hong Kong and Taiwan, enabling companies in those locations to use the Chinese currency in trade and finance.

San Francisco would join London, Paris and Frankfurt in seeking to become centers for yuan trading, which the Bank of International Settlements said last week more than tripled globally from 2010 to 2013, making the currency the world’s ninth most-traded.

China has promoted international use of the yuan as it moves to allow greater cross-border capital flows and loosen controls on exchange and interest rates.

Lee had “a very good meeting with representatives from the Bank of China,” Christine Falvey, director of communications for the mayor’s office, said by e-mail.

“He regularly meets with business leaders in the banking industry to discuss investment opportunities in San Francisco,” she said, without elaborating.

Calls today to the office of Bank of China spokeswoman Zhao Rong and the lender’s news department in Beijing went unanswered.

Hong Kong, the first yuan hub set up outside China, accounted for almost 90% of all transactions in the currency outside the mainland last year, according to data from the city’s monetary authority.

Singapore signed a memorandum in April with China’s central bank for cooperation on the yuan business, with Industrial and Commercial Bank of China Ltd. being appointed to clear yuan transactions in the city.

Bank of China’s Taipei branch won the right to clear yuan transactions in Taiwan in December.

Housing Bubble In Full Bloom, Zany Price Increases, And Now A Sudden Slowdown

Wolf Richter
Cities have seen dizzying home-price increases that are giddily reported and fuse with pandemic housing hype and trillions from the Fed into a self-propagating force. And it has become accepted wisdom that the housing market would recover all the way to where it was in 2006, which would represent a complete recovery, a sign that the Fed has done its job, that it cured at least one of the ills that has been dogging this economy for so long.
Alas, not too long ago, everyone had called 2006 “the peak of the housing bubble,” the apogee of all craziness, one of the causes of the disaster that followed, and everybody had tales of just how crazy it was back then. All this is forgotten. The prices of 2006 are suddenly no longer the peak of the housing bubble, but a goal to get back to.
Electronic real-estate broker Redfin covers 19 metro areas with its Real-Time Price Tracker. It’s based on sales contracts that are reported to the MLS data bases upon signing, and thus far timelier than other gauges. It measures prices per square foot, thus eliminating the issue of larger versus smaller homes. In its report at the end of August, home prices in San Francisco soared 27.3% from a year ago; in Riverside, CA, 29.6%; in Sacramento, CA, 38.8%; and in Las Vegas a cool 39.1%.
Toxic Mix: higher prices and higher mortgage rates
Price increases that make the last bubble appear boring! So in San Francisco, the median list price, according to Redfin, is $832,000. The median sales price is 7.5% higher.
Mortgage rates have jumped too. Combined with higher home prices, they make a toxic mix. So if our homebuyer in San Francisco pays $16,000 down on his median home and finances $816,000 for 30 years, with a fixed-rate mortgage at the average rate of 4.80%, the payment will set him back $4,281 a month.
If the price on that unit was up 27%, it would have cost $655,000 a year ago. Back then, rates on equivalent mortgages were about 3.5%. With the same amount down, he would have financed $639,000. The payment would have been $2,736 a month. In the course of a year, for exactly the same unit, the mortgage payment jumped 55%.
Insanity. Homes weren’t cheap last year either. Have incomes jumped 55% to make up for it? Um, no. In other cities, such as Las Vegas, it would be even worse. In other words, the new housing bubble has been beautifully inflated – and is approaching full bloom. Thank you halleluiah, Fed.
What’s next? Repeat of 2007-2009?
“The price increases are crazy,” real-estate agent Amy Downs in the Dallas suburb of Garland echoed to the Wall Street Journal. And it’s not good for business; a lot of her clients stopped searching for a new home.
Homebuilders have pushed to the max. But after raising prices for well over a year, they’re suddenly feeling the heat – suddenly being in August. Builders are normally able to raise prices in August, on average by 2% from July, according to John Burns Real Estate Consulting. But in its survey of 273 builders, covering about 16% of the new-home sales across the country, 47% of the builders raised prices in August, 48% kept them flat, and 5% lowered them.
By contrast, in July, 64% raised prices, 36% kept them flat, and 0% lowered them. You just down lower prices in the summer. The 5% in August was the worst score on price reductions since March 2012.
The summer debacle was confirmed by homebuilder Hovnanian Enterprises during itsearnings call on Monday for the quarter ended July 31. CEO Ara Hovnanian talked about improving gross margins and “positive operating trends.” And then he proffered an iffy forecast: the company expected “to report much stronger results” for the fourth quarter,assuming” – emphasis mine – “that market conditions remain stable.”
But that appeared to be a big IF in his own mind
During the quarter, net contract dollars rose 8%, net contract numbers only 2%, compared to prior year, he said. “We jokingly wish we had a June quarter end, so that we could have reported that our net contract dollars were up 17% and the number of contracts were up about 10%, similar to what many of our peers recently reported that had June quarter ends.”
Because July was crummy. And August was worse – weekly net contracts were down 5% from prior year. “To put this slowdown into perspective,” he said, “we were well ahead of our internal year-to-date budgets for net contracts going into July, and we are now slightly behind our year-to-date internal budget for net contracts at the end of August.” Among the reasons: “significant home price increases, higher mortgage rates, and a little lower consumer confidence.”
The company had raised prices “aggressively” in 80% of its communities. For example, in a single-family detached community at Roseville, CA, they’d implemented a series of price increases, each time watching how sales responded. At one point, sales did slow down but then picked up again on their own, “as people adjusted to the prices,” he said. The last price increase in June brought the cumulative price increases for the 12-month period to $141,000, or 40%.
It triggered a backlash. “We got a little over-exuberant with the last price increase,” he explained. Sales ground to a halt – they sold one home in the following 7 weeks, as opposed to one home per week. Hence, they made “a small downward pricing adjustment” – and a week later, they sold another unit.
Their strategy was to raise home prices “to the point of significantly slowing down sales pace,” he explained. And that point has been reached. Homebuyers are maxed out. That’s what ultimately pricked the last housing bubble. And that’s what will eventually prick this bubble too.
While Texas hadn’t experienced the crazy run-ups in home prices during the prior housing bubble, it did experience a collapse in demand for new homes afterwards. For builders the story was bloody. In Dallas, half of them didn’t make it. But now, prices in the delayed Texas housing bubble hit all-time highs. Builders are giddy. And cracks are forming. Read….. “If You’re Average In This Business” You Die – Grand Homes CEO

In fiery speech, Warren calls for limiting size of banks

WASHINGTON – Senator Elizabeth Warren said Thursday morning that “we have to pick up the slingshots again” in the David versus Goliath battle with big banks.
Warren, a Massachusetts Democrat who entered politics as a critic of big banks, used a fiery speech at George Washington University Law School marking five years since the collapse of Lehman Brothers to renew her call to reinstate the Glass-Steagall Act, aimed at limiting the size and scope of banks, which are federally insured.
“It would reduce ‘too big’ by dismantling the behemoths,” she said. “Big banks would still be big – but not too big to fail or, for that matter, too big to manage, too big to regulate, too big for trial, or too big for jail.”
The act was repealed during the Clinton administration. Her bill to reinstate it is cosponsored by senators John McCain, an Arizona Republican, Maria Cantwell, a Washington Democrat, and Angus King, a Maine Independent who often sides with Democrats.
The speech drew standing applause for Warren, a former Harvard Law School professor who is particularly popular on college campuses.
Warren said that the four biggest banks have grown 30 percent since the financial collapse, increasing the “too big to fail” problem that forced the government bailout and hurt the overall economy. She said despite the flaws of the financial overhaul known as Dodd-Frank, “I would have voted for it twice.”
She blamed “intense pressure” from the financial services industry for preventing regulators from writing 60 percent of the rules required under the Dodd-Frank legislation.”

POWERFUL speech about the Military Industrial Complex & US Imperialism ...

5 Years Later, Wall Street Still Sucking Life Out of America Like Vampires at a Blood Drive

On Sept. 15, 2008, the Lehman Brothers collapse became the 9/11 of the financial world, sending the global economy into panic. Stocks plunged, credit dried up and working people were forced out of their homes. Jobs and pensions were wiped out in the ugliest financial episode since the Great Depression—mostly because the financial sector had gotten out of control..
Five years later, the big banks continue the most expansive crime spree in the history of capitalism, getting bigger, richer and bolder every day. Like undead creatures from a horror film, financial predators have spread themselves into every corner of society, preying and feeding and making us weaker. In an epic fail on the part of federal prosecutors and the SEC, no one at Lehman was ever prosecuted for financial shenanigans that included shady accounting practices former CEO Dick Fuld claims he didn’t know about. As the five-year anniversary approaches and the statute of limitations runs out, we can be sure that no one will ever pay for Lehmans’ crimes—except for us.
You could wallpaper your house with the list of dirty deals that have gone down since the financial crisis. JPMorgan sent $6 billion up in smoke in a bad bet, then lied about it to regulators. HSBC laundered money for drug cartels. Big banks manipulated the world’s benchmark interest rates. Every day, bankers defraud municipal and state finances with rigged deals that enrich them as schools crumble and children go without healthcare. There’s insider trading, racketeering, tax evasion, usury, and creative financial products set to explode in your face. Everything you can think of, and, alas, much that you can’t.
Oh, well, say the regulators. Stuff happens.
It’s perfectly obvious that if ginormous Wall Street banks don’t fear prosecution— and Attorney General Eric Holder told us flat-out they needn’t—then the cheating, lying, casino games, and law-breaking will continue. Jim Chanos, an early detector of the Enron fraud, warns that today’s Wall Street executives have even embraced the perverse logic that they have a fiduciary duty to cheat — if everybody else is doing it, says the executive, then I have an obligation to get in on the action.
Nothing but massive reform and no-holds-barred prosecutorial assault will drive a stake into the heart of this monster.
Yet on Tuesday, the smart financial reformer Eliot Spitzer lost his bid for NYC comptroller, a role in which he could keep public money out of the hands of financial predators, whose scams he understands. It can’t escape notice that NYC is the home of several of the most powerful banking institutions on Earth: Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup. Or that newspapers, presumably on different sides of the political spectrum, melted into one giant anti-Spitzer bullhorn; ignoring positive polls, running biased stories and denouncing him on their editorial pages.
Economist and former regulator Bill Black noted in an email that “Wall Street was obsessed with defeating Eliot Spitzer in the Democratic primary election for Comptroller” and pointed out that his anti-financial fraud prosecution was extremely effective when he served as New York’s attorney general: “An economic study found that victims of financial frauds received a substantially greater recovery of their losses when Spitzer’s office was involved in cases compared to securities fraud cases where only the SEC brought an action.” Clearly Wall Street doesn’t like that kind of outcome.
It’s not easy to find potent weapons against Wall Street predators, and in the meantime, we’re still waiting for reform. We wanted it so badly that we pitched tents in city parks during the Occupy movement to send the message, but the politicians wouldn’t hear us, because their ears were stuffed with Wall Street money. Thanks to an army of lobbyists unleashed in Washington, we can’t even seem to get the relatively timid Dodd-Frank rules designed to stop bankers from playing casino games with our savings.
The Federal Reserve could rein in the banks by splitting them up through antitrust laws, as economist Robert Reich has suggested. But we’d need someone at the Fed who is actually willing to take on this project. Unfortunately, over at the White House, we have Obama pushing crony capitalist poster boy Larry Summers for Fed chair—a man who played a key role in deregulating the financial sector, who has gleefully gorged himself on Wall Street money, and who, while in the White House, opposed even the weak Volcker Rule to curb risky trading contained in Dodd-Frank.
The banks continue to bigfoot their way around our legal and political systems, buying up whatever support they require to keep the show going.
If you think things have gotten pretty ugly, just stick around. Another financial crisis is likely. Former Treasury Secretary Hank Paulson just told a group of bankers and economists in Manhattan to expect it, and he has a unique perspective on the topic, having helped bring on the last one.
Paulson knows something else: This time the Democrats will likely be held responsible.
Copyright: AlterNet

Unprecedented Inequality: The Top 1 Percent Captured 95% of the Income Gains Since 2009; 94.4% of Crisis Aid Went to the Financial Sector; Surprise? Or Not?

Salvatore Babones: The economy is growing, but most workers are left behind

Important inequality update from Emmanuel Saez:
Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to 2012. Hence, the top 1% captured 95% of the income gains in the first three years of the recovery. From 2009 to 2010, top 1% grew fast and then stagnated from 2010 to 2011. Bottom 99% stagnated both from 2009 to 2010 and from 2010 to 2011. In 2012, top 1% incomes increased sharply by 19.6% while bottom 99% incomes grew only by 1.0%. In sum, top 1% incomes are close to full recovery while bottom 99% incomes have hardly started to recover.
94.4% of Crisis Aid Went to the Financial Sector; Surprise? Or Not?
Inquiring minds just might be asking “Where the hell did all the fiscal stimulus, financial aid, and monetary stimulus go?”
It’s a damn good question.
And I have the percentage answer for Spain (by Spain’s own admission). Results would be similar for any country you look at (including the US).
For example, every penny of QE went to Wall Street and distressed banks, not the average Joe on the street. Paying interest on reserves (then jacking up money supply so that reserves soared) was pure profit to the banks.
Via translation from El Blog Salmon please consider the financial sector took 94.4% of the public aid in 2011.

Ex-Lehman Employees Cashing In From 'Recovery' That Left Most Workers Behind

NEW YORK -- Five years after the fourth-largest U.S. investment bank collapsed, sparking a panic that many believed would bring down the world financial system, many of the executives who tried to paper over the bank’s mounting losses are reaping the benefits of the Wall Street comeback.
The Huffington Post charted the career paths of 63 former Lehman Brothers employees named in an independent bankruptcy examiner's report as having knowledge of an accounting maneuver that allowed Lehman to disguise the true extent of its deteriorating finances, likely postponing the reckoning.
A stunning 47 of these bankers still hold senior positions in the financial services industry, including Michael McGarvey, an executive and senior member of Lehman's finance group who described the accounting move in internal emails as "basically window-dressing" based on "legal technicalities." Within Lehman, the this group was responsible for most aggressively pushing the dodgy accounting move, known as Repo 105, according to emails published with the 2,200-page examiner's report.
The former Lehman bankers are participating in a recovery that has flooded Wall Street with cash again, even as wages for average workers have stagnated. The big banks that survived on massive taxpayer bailouts and an unceasing flow of cheap government loans are larger than ever before and making huge profits. The stock market is booming, notching record highs.
Wall Street paid out nearly $122,000 in bonuses per banker last year, up 9 percent from the year before -- an amount equal to nearly one and a half times the median household income in the United States. Another big bonus bump of up to 20 percent is expected in 2013.
There's far less to cheer about on Main Street: The median worker now earns about $5,000 less than she did in 1999, adjusted for inflation, according to Economic Policy Institute data. The unemployment rate is falling, but mostly because people are giving up. In July, the share of people who have stopped looking for work rose to the highest point since 1978.
McGarvey, who declined to comment, is still at Lehman Brothers, after a fashion. He's now a senior vice president at the entity that replaced the bank after it filed for bankruptcy on Sept. 15, 2008. He and seven others from the Repo 105 crew are helping to unwind massively complicated trades and sell off Lehman's assets for the bank's estate, a task that is expected to take several more years to complete.
They are well-paid: an average of $383,000 in salary in bonuses in 2009, the last year for which data is available. That's more than the average Lehman employee earned at the bank itself pre-crash, according to the firm's earnings reports.
A spokeswoman for Lehman's estate declined to comment.
Others once involved in Repo 105 are scattered across the financial services industry: at Barclays, the British bank that purchased Lehman’s investment business out of bankruptcy; at Nomura, the Japanese bank that bought Lehman's international operations; and at more than two dozen other banks and investment companies.
Not all Wall Street workers have profited from the rebound. Banks culled thousands of support staff in the wake of the Lehman disaster, and many of these people have struggled to find work.
One of them, Stacey Kobell, is finally working again, but only after more than three years without a steady job. She had an up front and personal view of the financial crisis: For six years, until November 2008, she worked as an executive assistant at Lehman Brothers.
In 2010, following a miserable year paying bills with unemployment checks and what she could earn selling her belongings on eBay, Kobell had a panic attack in her New York City apartment. She immediately packed up and moved to Tampa, Fla., to live with her mother.
Kobell now lives in Orlando, working for a property management company. She is grateful to have a job, she said, even though she earns $20,000 less than she did five years ago. But she still can’t come to terms with what happened. "I'm angry because these idiots let the company get destroyed," Kobell said of her former employers. "What the hell were they thinking?"
The record shows they were thinking of profits, and not much at all of risk. In the years leading up to its collapse, Lehman bankers earned enormous salaries and bonuses by converting home mortgages into financial instruments that investors could buy and trade. The bank accumulated a huge inventory of these mortgage bonds. When the housing market began to falter in 2007, Lehman ramped up its use of Repo 105.
Just before the end of each quarter, when Lehman would report to the public details about its financial health, the bank would temporarily sell as much as $50 billion in assets it didn't want showing up in those disclosures. Then, after the close of the quarter, it would buy them all back, paying a little bit more than the selling price. This made the bank look less indebted than it actually was.
Whether or not the maneuver was legal remains unresolved. The independent bankruptcy examiner called it "balance sheet manipulation," but the U.S. government ended an investigation into Repo 105 without bringing any charges.
The degree of involvement of other Lehman employees in the scheme varied. Some, like Kaushik Amin, the former head of liquid markets in Lehman’s fixed-income division, drove subordinates to use Repo 105 to shift increasingly massive sums off the firm's balance sheets.
Amin, who earned $12.5 million at Lehman in 2007, joined UBS as a senior executive after the collapse but left the Swiss bank in 2012. It's not clear where he is now.
Jerry Rizzieri, who reported to Amin, urged the sales team to “push capacity higher.” In one November 2008 email, he mused about the state of Lehman's financial reporting had the bank not used the accounting maneuver: "Can you imagine what this would be like without 105?"
Rizzieri is currently the head of fixed income at Mizuho Securities USA, a subsidiary of the large Japanese bank.
Paolo Tonucci, Lehman's former treasurer, and John Feraca, who ran the desk responsible for executing Repo 105 transactions, hold senior positions at Barclays.
Lehman's former chief financial controller, Martin Kelly, is now CFO at Apollo Global Management, which oversees $113 billion in assets. Kelly told the Lehman bankruptcy examiner that there was "no substance" in the Repo 105 transactions, according to the examiner's report.
One former employee is now a regulator: Irina Veksler, a former vice president in Lehman's treasury department, is a senior bank examiner at the Federal Reserve.
Not everyone has had a successful post-Lehman life. HuffPost was unable to track down 11 former employees named in the report. A few of them retired; one died. Former CEO Dick Fuld fled to his Florida mansion.
None of these former employees responded to requests for comment.
Matthew Lee, a former senior vice president, is currently unemployed. In May 2008, four months before the bankruptcy filing, Lee wrote a letter to top management in which he characterized Repo 105 as deceitful and dangerous.
Lee was also the first to tell investigators working for Anton Valukas, a former U.S. Attorney who led the exhaustive review of Lehman's collapse, about the accounting move. In his lengthy report, Valukas indicated he had found sufficient evidence for the U.S. government to sue top Lehman officers, including Fuld and three former chief financial officers, for fraud.
Last year, however, the Securities and Exchange Commission dropped its Lehman probe without bringing charges. The New York Times reported this week that internal divisions over whether the Repo 105 scheme was legal or not ultimately scuttled the investigation.
It was a risky move for an employee in Lee’s position to challenge management. But he felt morally compelled, he wrote, to sound the alarm.
“These are, indeed, turbulent times in the economic world and demand, more than ever, our adherence and respect of the [code of ethics] so that the firm may continue to enjoy the investing public’s trust and confidence in us,” Lee concluded.
He was fired a few weeks later.

No Pain... No Gain... and NO CENTRAL BANKERS!

Dog Poet Transmitting.......

May your noses always be cold and wet.

It's always good to start out with something at least comically refreshing before we get into the dreadful directions awful people want to take us in. You can match this up with the fashion photos recently posted. I could answer this particular question for a lot less than 2 million dollars but a lot of people wouldn't like the answer. The answer is so obvious that any objective mind will catch it. If you're seduced by group think well, there you go.

As the cosmic worm turns, public focus is personalizing. Shrill disinfo creeps are getting showcased. My thought is that the 9/11 lie is coming to term. Slowly but surely the truth is becoming more powerful than the lies. This accounts for the manic intensity on the part of those grown fat on lies. The ground is moving under them. Terra is no longer firma for them. Day by day, the specter of their fate becomes more solidified. The ominous patter of tiny demon feet can be heard; the offspring of their unholy congress with the dark side of the moon. Hecate's brood is hungry and they generally feed on their parents, unless the proper safeguards have been put into place but... these modern magicians are no Dr. John Dee's, There is no Agrippa or Paracelsus among them. These watered down occult poseurs would be best served by reading what Agrippa wrote after putting magic aside completely;

"But of magic I wrote whilst I was very young three large books, which I called Of Occult Philosophy, in which what was then through the curiosity of my youth erroneous, I now being more advised, am willing to have retracted, by this recantation; I formerly spent much time and costs in these vanities. At last I grew so wise as to be able to dissuade others from this destruction. For whosoever do not in the truth, nor in the power of God, but in the deceits of devils, according to the operation of wicked spirits presume to divine and prophesy, and practicing through magical vanities, exorcisms, incantations and other demoniacal works and deceits of idolatry, boasting of delusions, and phantasms, presently ceasing, brag that they can do miracles, I say all these shall with Jannes, and Jambres, and Simon Magus, be destined to the torments of eternal fire.”

There are two things that every human being, who gives a damn about their own survival and the survival of those they love, must keep in mind, all wars are magical wars and all of the varieties of evil that presently caper and cavort among us, are the offspring of Central Bankers. Whether it be direct or indirect, they either set the policy or provide the funding for pretty much everything. By setting policy, they have such enormous resources that they can guarantee success in any endeavor, no matter how pernicious or absurd. By providing funding, they control the continuance of any endeavor and can make it succeed or fail accordingly.

Every empire and many countries, have a shadow government that stays out of the light. They are the sort of life forms who bear no love for light in any case. What is magic? Magic can be what is practiced by the media. It is what is practiced in the economic area. It is most usually performed to the intent of controlling the state and direction of the human mind. The best of magicians control their own minds and are then automatically in control of all minds. That is not to be understood in the literal sense. There is a deeper meaning there. Those of you who utilize torrents might find the complete collection of Manly Palmer Hall's lectures to be informative.

There's truth to be had in Crowley's quote (I’m no fan of his), “Magick is anything I say it is.” It's my theory... and it is only my theory, I haven't read it anywhere but- in my own experience, the whole of ceremonial magic takes place inside the mind of the magician. All those circles and pentagrams, all the scents and sounds take place 'inside' the mind of the practitioner. It is inside the mind that the magical circle is drawn and it is from the mind that the power of summoning, banishing or whatever you get up to gets down in. Anyone familiar with the Aphorisms of Patanjali should be aware of the supremacy of mind, in all matters related to the subject under discussion. Of course, wisdom and true understanding only come when the heart swallows the mind; that's my focus but... sadly, it is not a focus shared by those laying waste to everything around us.

Obviously, I can only talk around this subject and portions of my conversation may seem not only limited but less than comprehensive, to the point that they might even seem misleading. There's nothing I can do about that. As is ever the case when I am talking about things like this, it's what I'm not saying that is most important. The mind takes away from what it contemplates, those things it finds most personally desirable, or which fit into their already preconceived notions. Rarely does someone embrace what was not previously known and move to prove it out. Change is hard. We never seek it until our existence becomes unbearable without it. This is why pain remains our greatest motivator. It's possible to be pain free but only when one is committed to the process of eternal change. That statement is a bit of a blind as well, since the changeless is the objective, WHEN the awareness of it is present.

Let's revisit the concepts that 'all wars are magical wars', and Central Bankers are the nastiest and most dangerous of humanities enemies. I can expand that to include anyone who is engaged in money changing, usury and all the other legalized forms of theft that are business as usual here. The way to lead a nation to war is to first set the public against itself and put them at war with themselves. One definition of magic is, the performance of illusion on the human mind. This includes the art of misdirection. This kind of thing can be relatively harmless if you're at a David Copperfield show or similar. However, when it's objective is wide spread suffering and the enslavement and murders of countless individuals, for the sole purpose of personal gain, it becomes something else entirely. We know, with assurance now, that all wars are funded and very often started by Central Bankers, who fund both sides of the conflict, for the purpose of creating debt, with the intent to control the country and to have access to their resources. This is a proven truth. Ergo, get rid of the Central Bankers and you immediately remove the source of most present human misery.

There is no need for further hemming and hawing. There is no need for argumentative, philosophical dispute, or the insidious twaddle of economists in the employ of Central Bankers. Humanity must come together and force the end to Central Banking. If this is done, everything else can be managed. Consider nearly every evil present on the planet today. You can trace their existence back one way or the other to Central Bankers. The Central Bankers are linked in policy and process with the shadow government Satanists; those magicians from the dark side who take their power from the declining regent of a departing age. They shall all fail. Still, they are dangerous even in their failure because they can take you down with them. Don't let that happen.

Keep in mind the irresistible impetus of Mr. Apocalypse. He cannot be stopped. He is precise and perfect and a mathematical certainty. You simply need to endure to see it... well, that's not all really. You have to be on the right side of history. The right side of history is not the increasingly emergent and camouflaged Khmer Rouge, PC fascism that is seeking to destroy western culture and push it beyond recognition. The right side of history is not nation building, following nation destruction. The right side of history is not putting the process of lawmaking into the hands of corporate lobbyists, so that now, corporations are actually writing the laws, simply because they have more cash. For the typical swine seeking office, their mantra is, “show me the highest bidder”. That's how all that going along with the program comes about. The right side of history is to be in full recognition that whatever is bad for Israel is good for everyone else. Israel and the Central Bankers are indistinguishable and their backdoor, reverse kabala antics, are a primary source of all wars being magical wars.

None of this means you have to do anything, as much as it means you need to see what is in front of you. Safe and sane action always follows clear vision. If you can't see, then you don't know where you're going. If you can see, the question doesn't arise. Some years ago, a complete National Geographic team went off the side of a mountain, when they decided to keep moving on, after a blanketing fog had descended. When you can't see, don't move. When you can see, the question doesn't arise.

Recognize what is. Do not look for an acceptable alternative that provides you with a compromised situation, where you can hold on to what you consider to be more important than the truth. Nothing is more important than the truth. Lacking the truth is the fog which descends. You need to come into possession of that metaphorical miners head lamp. Just because the concept of the lamp is a metaphor does not mean that the real thing isn't around. I assure you it is and there are people who are in possession of it.

All this time passing... there's a reason for all this time passing ...and hope remaining and chaos diverted and avoided. You're being given a grace period to get your head together, as soon as that happens, your life will follow suit.

End Transmission.......

Gold Hits 1-Month Low Pre-Fed, Asian Stockpiles Cut Bar Demand Outlook in Half

Gold Hits 1-Month Low Pre-Fed, Asian Stockpiles Cut Bar Demand Outlook in Half

LONDON PRICES for wholesale gold slipped to 1-month lows at $1334 per ounce Thursday lunchtime, extending an early $20 slump in what one dealer called “anaemic trade”.

European stock markets reversed morning losses, and crude oil rallied, as the US and Russian foreign ministers met in Switzerland to discuss Syria’s chemical weapons.

Gold priced in Sterling fell to a 5-week low beneath £846 as the British Pound held near 7-month highs on the currency market.

Silver meantime dipped below $22.50 per ounce, down almost 6% for the week so far.

“Gold’s massive trading volumes in mid-year will now dwindle,” says the latest Gold Survey Update from Thomson Reuters GFMS, because inventories amongst the world’s heaviest consumer nations are already “generally heightened” following the surge in re-stocking during 2013′s price crash.

“India is the exception, [because] changes in import and distribution rules have meant that inventories generally are low, while smuggling is on the increase,” says the report.

Overall, and even with the world’s former No.1 consumer being eclipsed by China in 2013, GFMS is now expecting “a tangible contraction” in jewelry fabrication and perhaps a 50% drop in gold bar demand worldwide during the second-half of the year.

For professional investors, and “as geopolitical risks fade,” Bloomberg quotes chief investment strategist Wang Xiaoli at CITICS Futures, China’s largest brokerage by market value, “the focus is shifting back to QE and the Fed meeting next week.

“We expect the market to remain volatile till then.”

With the US Fed widely expected to start tapering its quantitative easing program next week, “The one thing I would say is that we should expect volatility,” agrees Peter Sands, CEO of Standard Chartered Bank, speaking to CNBC at the World Economic Forum in Dalian, China.

“When you have that degree of intervention, stopping it is not going to be a smooth and simple process.”

“I don’t see a short-term crisis in emerging Asia,” said IMF deputy director general Zhu Min at the same conference, noting concerns over the impact of Fed tapering on developing economies.

Credit ratings agency Moody’s today warned that the plunging Rupee, widely blamed on the approach of Fed tapering, would hurt the ability of Indian companies to borrow.

“The situation is very different from 1997,” Zhu countered. “[But] if a country has payment problems, our job is to maintain global financial stability.”

“The gold market is expecting tapering next week from the Fed,” said Bank of America Merrill Lynch metals strategist Michael Widmer in an interview Wednesday.

“If the Fed delays or doesn’t do it all, gold could rally.”

But longer-term, real interest rates are rising, says Widmer, and inflation expectations are low.

“So why hold gold? I would sell into that rally.”

Writing late Wednesday, the “short-term uptrend line [in gold] could be taken out if prices dip below $1350,” said analyst Edward Meir at brokers INTL FC Stone.

“In addition, downside bets seem to be increasing” on the gold futures and options market.

Data on speculative gold contracts last week showed hedge funds and other non-industry players cutting their bearish bets by 60% from July’s 13-year peak.

The number of bullish bets held by speculative traders in US gold futures and options rose only 11% over those two months, however.

“We would read any tapering of less than $10bn per month as bullish relative to where gold is now,” said South Africa’s Standard Bank in a note Wednesday, “while tapering of more than $15bn would [be] bearish.”

Cutting the Fed’s $85 billion in monthly QE “may weigh on gold,” agrees bullion market maker HSBC. But “an emphasis by the Fed to keep [its short-term interest] rate low may help off-set some of bullion’s potential losses.”

Adrian Ash