Nov 25/GLD remains constant/silver loses 1.342 million oz/Inventory at SLV now at 347.954 million oz/Gold now deeper into backwardation/gold and silver rise with silver the standout/

My website is now ready but we still have to add a little  stuff to it.  You can find my site at the following url:

http://www.harveyorganblog.com or  www .harveyorgan.wordpress.com

I will continue to send the  comex data down to my good friends at the Doctorsilvers website on a continual basis.

They provide the comex data. I also provide other pertinent data that may interest you. So if you wish you can view that part on my website.

 

 

Gold: $1197.10  up $1.60
Silver: $16.55  up 17  cents

In the access market 5:15 pm

Gold $1201.00
silver $16.68

 

 

Gold and silver had  a good day despite the antics of our bankers due to options expiry

(described below)

The gold comex today had a fair delivery  day, registering  7   notices served for 400 oz.  Silver comex registered 28 notices for 140,000 oz.

A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 247.44 tonnes for a loss of 56 tonnes over that period. .

In silver, the open interest fell by 10,371 contracts despite Monday’s small fall in price ( 2 cents). For the past year, we have been witnessing liquidation of contracts despite the fact that it cost nothing to roll.  This makes no sense and it smacks of cash settlements which are totally illegal.   The total silver OI still  remains relatively high with today’s reading  at 164,522 contracts. The big December silver OI contract lowered by 21,258 contracts down to  32,871 contracts which is quite normal.  We have 2 more trading days before first day notice and our banker friends are not sleeping well these past couple of days.

In gold we had a huge loss in OI even though Monday  saw a small drop in price of gold to the tune of $2.00.  The total comex gold  OI rests tonight  at 439,447  for a  loss  of  29,301 contracts. The December gold OI rests tonight at 93,395 contracts.  We witnessed a huge contraction of 55,860 contracts.

 

 

TRADING OF GOLD AND SILVER TODAY

GOLD

In trading of  gold and silver today, our two precious metals were doing nicely in the Asian trading zone last night. Gold hit its high spot right at  London’s first fixing of gold (2 am est),  with our ancient metal of kings registering a fix of $1202.25. (almost identical to Monday’s fix). Gold then swooned to $1193.40, its nadir for the day at 9 am just after to comex opening.It then climbed to 1199.50 at the second London fix. It is obvious that this being options expiry week for the OTC had a lot to do with trading today.  Gold closed at the comex at $1197.10 and then proceeded to pierce the 1200 dollar mark in access trading.

 

Silver:

Silver performed much better than   gold during last night’s trading.   By London’s first fix the price of silver had already reached $16.57. The bankers did not particularly like the advance of silver and tried to knock it down but to no avail as silver started to rebound.  Silver hit its zenith at 5 am in the morning est at $16.72. From there it was one steady fall whereupon silver once again hit $16.54 which seemed a strong support level. (at comex opening 8: 40 am).  Then silver advanced to $16.68 and again it was whacked down again only to rebound again where it closed at $16.59 (comex closing time) and then shooting up to $1670 in the access market.

Remember that options expiry  for comex is over today but we still have options expiry for the OTC gold this  Friday.

 

 

Today, we had no changes in tonnage of gold Inventory at the GLD / inventory rests tonight at  720.91 tonnes.

In silver, no changes:

SLV’s inventory  rests tonight at 347.965 million oz.

 

 

 

We have a few important stories to bring to your attention today…

Let’s head immediately to see the major data points for today.

OH OH!!!

First:   GOFO rates:

all rates move again deeper into the negative  and thus deeper  into backwardation!!

Now, all the months of GOFO rates( one, two, three  six month GOFO and one year) moved toward    the negative with the mostly used 1 to 6 month rates deeper into the negative and thus  in backwardation Even the one year rate is closing in on backwardation.   On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.

It looks to me like these rates even though negative are still fully manipulated.

London good delivery bars are still quite scarce.

The backwardation in gold is incompatible with the raid on gold . It does not make any economic sense.

Nov 25 2014

1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

-.29750%            -0.2325%           -0.15333%     – .0433300%          + .076670%

Nov 24 .2014:

1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

-.2520%         -.1975%           -.1275%           -037500%       +.090%

end

 

 

 

 

Let us now head over to the comex and assess trading over there today,

Here are today’s comex results:

The total gold comex open interest fell dramatically as is the latest custom at the comex once first notice approaches by 29,301 contracts from  468,051 all the way down  to 439,447  with gold down by $2.00  yesterday (at the comex close).  The front delivery month is November and here the OI lowered from 20 contracts down to 11 for a loss of 9. We had 4 delivery notices filed on yesterday so we lost  5 gold contacts or 500 additional ounces will not  stand for the November delivery month.  The big December contract month  saw it’s Oi fall by a huge 55,860 contracts down to 93,395 with the November contract moving off the board yesterday.  The estimated volume today was fair at 189,482 when you consider many had to roll .  The confirmed volume yesterday was good at 243,004.   On this 20th day of notices, we  had 7  notices filed for 700 oz.

And now for the wild silver comex results.  The total OI fell in sympathy to gold  by 10,371  contracts from  176,523 falling  to 164,522 even though  silver was down by only 2 cents  yesterday. It seems to me than the comex rewards many of these longs to accept cash instead of standing for metal.  In just does not make sense when the cost to roll is zero why many cash out of their contracts instead of keeping in the game.   In ounces, the total OI   represents a total of 822 million oz or 117.4% of annual global supply.  We are now in the non active silver contract month of November and here the OI plummeted by 58 contracts down to 30. We had 0 notices filed yesterday so we lost an astounding 58 contracts or 290,000 oz.  Owners of these contracts decided not to receive metal and abandon their contracts after waiting the entire month.  It just does not make sense. The big December active contract month saw it’s OI fall by a normal 21,258  contracts down to 32,871.   The December contract month still remains highly elevated for this time in the delivery cycle.  In ounces the December contract  is represented by 164 million oz or 23.4% of annual global production  (production = 700 million oz – China). The estimated volume today was excellent at 63,563.  The confirmed volume yesterday  was humongous at 98,155. We also had 28 notices filed  today for 140,000 oz.

The first day notice for both metals will be on Friday, Nov 28.2014 the day after Thanksgiving. Options expiry as mentioned above was yesterday, but we still have OTC options that will expire on Friday.  We thus have 2 more  comex sessions before first day notice.

Data for the November delivery month.

November initial standings

Nov 25.2014

Gold

Ounces

Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 2432.15 oz (,Scotia,Manfra)includes 1 kilobar and an exact 2400.00 oz withdrawal)
Deposits to the Dealer Inventory in oz 1299.99 oz (Brinks)
Deposits to the Customer Inventory, in oz 990.75 oz (Manfra)
No of oz served (contracts) today  7 contracts(700 oz)
No of oz to be served (notices) 4 contracts (400 oz)
Total monthly oz gold served (contracts) so far this month  1420 contracts  (142,000 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month    80,623.1  oz

Total accumulative withdrawal of gold from the Customer inventory this month

 785,599.1 oz

Today, we had 1 dealer transactions

total dealer withdrawal:  nil   oz

 

we had one dealer deposit:

 

i) into Brinks:  1299.99 oz

total dealer deposit:  1299.99 oz

we had 2 customer withdrawal:

i) Out of Scotia: 2400.000 oz  (we have been witnessing

many of these lately/how could this be possible?

ii) Out of Manfra: 32.15 oz (1 kilobar)

total withdrawal:  2432.15 oz

we had 1 customer deposit:

 

i) Into Scotia:  990.75 oz

total customer deposits : 990.75 oz oz

We had 0 adjustments:

Total Dealer inventory: 870,210.561 oz or   27.06 tonnes

Total gold inventory (dealer and customer) =  7.954 million oz. (247.44) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 56 tonnes have been net transferred out. We will be watching this closely!

Today, 0 notices was issued from  JPMorgan dealer account and 6 notices were issued from their client or customer account. The total of all issuance by all participants equates to 7 contracts  of  which 0 notices were stopped (received) by JPMorgan dealer and 0  notices were stopped (received) by JPMorgan customer account.

To calculate the total number of gold ounces standing for the November contract month, we take the total number of notices filed for the month (1420) x 100 oz to which we add the difference between the OI for the front month of November (11) – the number of gold notices filed today (7)  x 100 oz  =  the amount of gold oz standing for the November contract month.

Thus the  initial standings:

142,000  (notices filed today x 100 oz + (11) OI for November – 7 (no of notices filed today)= 142,400 oz  standing for the November contract month.(429 tonnes)

we lost 400 oz of gold standing for the November contract month.

And now for silver

Nov 25/2014:

 November silver: initial standings

Silver

Ounces

Withdrawals from Dealers Inventory  621,035.48  oz  (CNT)
Withdrawals from Customer Inventory 736,106.44 oz
(Brinks, HSBC,Scotia)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 943,300.210 oz (Brinks,Scotia)
No of oz served (contracts) 28 contracts  (140,000 oz)
No of oz to be served (notices) 2 contracts (10,000 oz)
Total monthly oz silver served (contracts) 184 contracts 920,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  2,004,724.5 oz
Total accumulative withdrawal  of silver from the Customer inventory this month 9,548,160.3 oz

Today, we had 0 deposits into the dealer account:

 total dealer deposit: nil oz

we had 1 dealer withdrawal:

 

i ) out of CNT:  621,035.48 oz

total  dealer withdrawal: 621,035.48  oz

We had 3 customer withdrawals:

i) Out of Brinks: 75,577.300 oz  (one decimal )

ii) Out of HSBC:  600,497.78 oz

iii) Out of Scotia:  60,031.36  oz

total customer withdrawal  736,106.44  oz

We had 2 customer deposits:

i) Into Brinks;  300,002.810 oz

ii) Into Scotia;  643,297.400 oz  (one decimal)

total customer deposits: 96,672.600    oz

we had 0 adjustment

Total dealer inventory:  64.278 million oz

Total of all silver inventory (dealer and customer)   176.933 million oz.

The total number of notices filed today is represented by 28 contracts or 140,000 oz.  To calculate the number of silver ounces that will stand for delivery in November, we take the total number of notices filed for the month (184 ) x 5,000 oz to which we add the difference between the total OI for the front month of November (30) minus  (the number of notices filed today (28) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  184 contracts x 5000 oz  +  (30) OI for the November contract month – 28 (the number of notices filed today)  = 930,000 oz of silver that will stand.

 

We lost an astounding 290,000 oz standing. There is no doubt that these were cash settled.

It looks like China is still in a holding pattern ready to pounce when needed.

For those wishing to see data on the currencies and bourse closings you can see it on my site athttp://www.harveyorgan.wordpress.com or http://www.harveyorganblog.com

end



The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.



***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold.  I can visualize demand coming to the buyers side:


i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China

 

vs no sellers of GLD paper.

 

 

And now the Gold inventory at the GLD:

 

Nov 25.2014/no change in tonnage of gold inventory at the GLD/inventory at 720.91 tonnes

Nov 24.2015: no change in tonnage of gold inventory at the GLD/inventory at 720.91 tonnes

Nov 21.2014: no change in tonnage of gold inventory at the GLD/inventory 720.91 tonnes

Nov 20.2014; no changes in tonnage of gold at the GLD/tonnage 720.91 tonnes

Nov 19.2014: we lost 2.1 tonnes of gold/Inventory back to 720.91 tonnes.  No doubt physical gold is heading to China.

Nov 18.2014: no change in inventory/ Inventory level 723.01 tonnes

Nov 17.2014; we had a huge addition of 2.39 tonnes of gold added to the GLF inventory/inventory rests tonight at 723.01 tonnes. They may be running out of metal to give China!!!

Nov 14. we had no change in gold inventory at the GLD/inventory 720.62 tonnes

nov 13. we lost another 2.05 tonnes of gold at the GLD/Inventory at 720.62 tonnes

Nov 12.2014; we lost another 1.79 tonnes of gold at the GLD/Inventory at 722.67 tonnes

This gold left the shores of England and landed in Shanghai.

Today, Nov 25 no changes in tonnes of gold  inventory

inventory: 720.91 tonnes.

The registered  vaults at the GLD will eventually become a crime scene as real physical gold  departs for eastern shores leaving behind paper obligations to the remaining shareholders.   There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat  (same banks).

GLD :  720.91 tonnes.

 

end

 

 

And now for silver:

 

Nov 25.14 we had a loss of  1.342 million oz from the SLV/inventory 347.954 million oz

Nov 24.2014: no change in silver inventory at the SLV/Inventory 349.296 million oz

Nov 21.2014: no change in silver inventory at the SLV

Inventory:  349.296 million oz

Nov 20.2014; no change/inventory 349.296 million oz

Nov 19.2014: a huge addition of silver inventory to the tune of 2.396 million oz/inventory 349.296 million oz

Nov 18.2014; no change in silver inventory  346.90 million oz

Nov 17.2014 .SLV inventories remain constant tonight at 346.90 million oz

Nov 14.2014; wow!! we had an addition of 2.012 million oz into the SLV/inventory at 346.900 million oz

Nov 13. no change in silver inventory at the SLV/344.888 million oz.

Nov 12.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.  And please note that gold leaves GLD/silver does not.  Why? there is no physical silver at the SLV..just paper obligations.

Nov 11.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.

Nov 25.2014  a loss of 1.242 million oz of inventory at the SLV /347.954 million oz

end

And now for our premiums to NAV for the funds I follow:

Note:  Sprott silver fund now deeply into the positive to NAV

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded  at Negative 10.3% percent to NAV in usa funds and Negative   10.4% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.4%

Percentage of fund in silver:38.00%

cash .6%


( Nov 24/2014)   

2. Sprott silver fund (PSLV): Premium to NAV falls to positive 2.72% NAV (Nov 25/2014)  

3. Sprott gold fund (PHYS): premium to NAV  rises to negative -0.50% to NAV(Nov 25/2014)

Note: Sprott silver trust back hugely into positive territory at 2.72%.

Sprott physical gold trust is back in negative territory at  -0.50%

Central fund of Canada’s is still in jail.

 

 

end

 

 

 

And now for your most important physical stories on gold and silver today:

Early gold trading from Europe early Friday morning:

(courtesy Goldcore/Mark O’Byrne)

 

 

FT’s Tett: Gold “Tangible” and “Clear”; People “Unnerved” About “Money” in “Bottomless Cyber Space”

Published in Market Update  Precious Metals  on 25 November 2014

By Mark O’Byrne

Gillian Tett, markets and finance commentator and an Assistant Editor and former U.S. Managing Editor of the Financial Times, looked at the increasing concerns about money today and the benefits of gold in an important article on Friday.


Gillian Tett, FT Assistant Editor

The article’s introduction pointedly states:

“Ordinary people are unnerved about how money works in a bottomless cyber space. Gold seems tangible, clear and timeless”

She refers to numerous examples of how finite gold is taking a more prominent place in the public consciousness as a monetary asset and as money.

She mentions the Swiss gold referendum which will take place on Sunday and how at least a very large minority of the Swiss population prefer gold-backed currency to fiat. She also mentions Rand Paul of the U.S. Republican party who favours greater use of gold as currency.

She makes some important points regarding gold being tangible and finite in a world of trillion dollar central bank experiments and a risky “ethereal” or intangible cyberspace:

“Most ordinary people have no idea what central banks are really doing, with their trillion-dollar experiments. They are unnerved about how money works in a bottomless cyber space. But the beauty of gold is that it seems tangible, clear and finite. It also seems timeless, creating an impression of permanent, intrinsic value.

Of course, this image is – ironically – also an illusion. You cannot actually do anything practical with gold (as you can, say, with a lump of coal). Its value, like that of fiat currency, depends on social convention. But culture, as Greenspan now recognises, is a very powerful thing – especially in a world of finance that is rushing more deeply into ethereal cyberspace every day.”

We have long made the point that owning all your assets – whether they be investments, savings, deposits, crypto currencies or even gold in a digital format with dependency on a single company and its websites, platforms, I.T., applications, the internet and electricity is imprudent.

This rise in interest in gold among the public is based on the fact that monetary affairs are completely beyond the control of average citizens.

Before the crisis of 2008, it seemed irrelevant to the average working person. Years of austerity are now causing average people to look more closely at the system only to find it incomprehensible and unstable. The growing divide between the super-rich and everybody else is leading them to conclude that the current system is shambolic and simply not working.

We find it very encouraging that Tett should put gold back on the agenda of such a widely read financial publication as the Financial Times. It may herald the start of a more balanced discussion of gold.

This seems possible, given recent developments, such as the ECB’s recent suggestion that they may buy gold in an EU QE or with the Dutch central banks repatriation of a large amount of it’s sovereign gold and, of course, the recent statements of Alan Greenspan himself.

The backdrop to her article was her recent interview with Alan Greenspan at the CFR whose comments reverberated around the gold blogosphere but was largely ignored by the mainstream media.


Alan Greenspan, Ex Fed Chairman

Greenspan, who chaired the Federal Reserve from 1987 till 2006 stated in this interview at the Council on Foreign Relations that “gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.”

Coming from the most influential central banker in recent history this was regarded as quite the admission.

In Greenspan’s early career he was an advocate of the gold standard. But during his long tenure at the Fed he was a practitioner of loose monetary policies – the very policies that a gold standard is designed to curtail.

Many now regard Greenspan as a primary, though perhaps unwitting, architect of today’s monetary turmoil. Tett refers to a comment by a former colleague of Mr. Greenspan – dismissing his elevation of gold on the basis of his poor performance in the run up to the crisis.

While we agree that Greenspan’s legacy is a tarnished one, we also recall his statement to Marc Faber at the New Orleans Investment Conference last month where he said “I never said the central bank is independent.”

At that conference he also stated that the Federal Reserve was sitting on “a pile of tinder” and that gold would go “measurably higher.”

Tett has a record of unbiased analysis and commentary regarding the gold markets. In 2011 she suggested that it would be “foolish to simply deride or ignore” the Gold Anti-Trust Action Committee (GATA).

GATA’s contention of manipulation of the gold markets have now been borne out.

Tett is highly respected both in journalism but also in financial and economic circles. In her previous roles, she was U.S. Managing Editor and oversaw global coverage of the financial markets. In March 2009 she was Journalist of the Year at the British Press Awards. In June 2009 her book Fool’s Gold won Financial Book of the Year at the inaugural Spear’s Book Awards.

In 2007 she was awarded the Wincott prize, the premier British award for financial journalism, for her capital markets coverage. She was British Business Journalist of the Year in 2008.

Tett’s important FT article can be read in full on the FT here or for those without a subscription it can be read here.

Get Breaking News and Updates On Gold Markets Here

MARKET UPDATE
Today’s AM fix was USD 1,202.25, EUR 966.59 and GBP 767.04 per ounce.
Yesterday’s AM fix was USD 1,196.00, EUR 964.67 and GBP 764.51  per ounce.

Gold dipped 0.2% in light trading yesterday  to close just above $1,196 as rising global equities reduced demand for safe havens. The other precious metals also closed lower, with silver slipping 0.1% while platinum and palladium gave up 1.7% and 0.4%, respectively.

EUR in USD – YTD 2014 (Thomson Reuters)

The dollar was firm ahead of U.S. economic data (GDP and consumer confidence), and the market awaits the Swiss referendum on central bank gold reserves for more trading cues on Sunday. A yes vote will lead to fireworks in the gold market and higher prices.

HSBC, commenting on the Swiss vote, says: “The impact of a ‘yes’ vote could quickly translate into prices and take gold as much as $50/oz higher. The impact on gold of a “yes” vote on the gold market could be notable. On a basic level, a ‘yes’ vote would require the SNB to increase bullion stocks. But it would also be a strong signal in support of the utility of gold and may help galvanize the bullion market, which has seen steep declines since the beginning of 2013.

Bullion prices were also lifted by news that China’s net gold imports from conduit Hong Kong rose to 77.628 tonnes in October from 68.641 tonnes in September, as the world’s largest gold buyer saw strong demand for jewellery and bullion coins and bars.

Holdings in gold-backed ETP’s rose 1.6 metric tons to 1,617.8 tons as of yesterday, gaining for a second session, while still close to a five-year low, according to Bloomberg data.
Silver for immediate delivery advanced 1.4% to $16.7237 an ounce, rising for a fourth day in the longest run of gains since June 26. Platinum climbed 1.4% to $1,221.63 an ounce. Palladium gained 0.5% to $796.25 an ounce.


Silver in USD – 2 Years (Thomson Reuters)

Sales of gold American Eagle coins from the U.S. Mint have already outstripped last November’s total with nearly another week of the month to go, standing at 53,000 oz this month compared to 48,000 oz in November last year.

Silver Amrican Eagle sales are at 3.096 million oz, up from 2.3 million oz in November last year and on track for a record year of sales.
China’s gold demand remains very robust as seen in Shanghai Gold Exchange (SGE) deliveries and Hong Kong gold exports to China .

China’s net gold imports from main conduit Hong Kong rose to 77.628 tonnes in October from 68.641 tonnes in September as the world’s biggest consumer saw strong demand for jewellery and bars. Total imports from Hong Kong to the mainland rose to 111.409 tonnes last month from 91.745 tonnes in September, according to data e-mailed to Reuters by the Hong Kong Census and Statistics Department.

 

end

 

 

xxxxx

 

As I pointed out to you above gold is now in severe backwardation from the one month out to 6 months and we are very close to a complete 1 year negative GOFO rate.  This spells doom to the second London gold pool:

 

 

 

(courtesy James Turk/Kingworldnews/Eric King)

 

 

Gold’s backwardation worsens despite rising price, Turk tells KWN

Section:

7:40p ET Monday, November 24, 2014

Dear Friend of GATA and Gold:

Gold’s price has been rising but its backwardation has been worsening, GoldMoney founder and GATA consultant James Turk tells King World News tonight, adding that while the war against gold by central planners remains fierce, they will lose just as they lost upon the collapse of the London Gold Pool in 1968. An excerpt from the interview is posted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/24_L…

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

 

 

end

 

A must read…

 

(courtesy Ben Davies/GATA)

Updated link for Ben Davies’ ‘Bubble-ology’ on central banking’s destruction of markets

Section:

7:38a ET Tuesday, November 25, 2014

Dear Friend of GATA and Gold:

With his new study, “Bubble-ology,” Hinde Capital CEO Ben Davies describes the “financialization” of the world economy by central banks, their market-destroying interventions and, really, their destruction of basic productivity. Davies’ study has been posted at a link more accessible than the link dispatched to you yesterday. The new link:

http://clearslide.com/v/re4krg

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

 

end

 

 

 

The  right wing opposition leader Le Pen is now demanding that their gold to be repatriated from London and the USA. You will now see an avalanche of countries wishing that their gold must leave foreign soil and onto their home turf:

 

(courtesy zero hedge)

 

 

 

Here Comes France: Right-Wing Leader Marine Le Pen Demands Central Bank Repatriate French Gold

First Germany, then the Netherlands, perhaps Switzerland this weekend, and now the French right-wing Front National, which shockingly came first in May’s European parliament elections, and whose leader Marine Le Pen is currently polling in first place in a hypothetical presidential election (in both a first and run off round), ahead of president Hollande, has sent a letter to the governor of the French Central Bank, the Banque de France, demanding that France join the list of nations which have repatriated, or at least tried to, their gold.

From her letter, here is the full list of French demands (google translated):

  • Urgent repatriation on French soil of all of our gold reserves located abroad.
  • An immediate discontinuation of any gold sales program.
  • Conversely, a gradual reallocation of a significant portion of foreign exchange reserves in the balance sheet of the Bank of France by buying gold at each significant decrease in the price of an ounce (recommendation 20%) .
  • A suspension of any financial commitment or loan contract would wager that our gold reserves.
  • At the patrimonial and financial balance of the 2004 gold sales transactions ordered by N. Sarkozy.

Her full letter below (link)

Mr. Christian Noyer

Governor of the Banque de France
31 rue Croix des Petits-Champs
75049 PARIS Cedex 01

Nanterre, November 24, 2014

Open letter to Mr Christian Noyer on the gold reserves of France

Dear Governor

On behalf of the French and in my capacity as the main opposition leader, I am writing to you because it is my duty to present a petition on the gold reserves of France, under the best interests of our nation.

Even before the outbreak of the 2008 crisis, the National Front had anticipated and informed the political institutions of the future worsening of the macro-economic and geopolitical context. As part of the business model increasingly libertarian adopted by France under pressure from Brussels, no economic fundamentals may not sustained improvement. All French can see that the austerity policies demanded by the EU and the ECB and implemented by the government are a proven failure and serious for our country.

The monetary institution you lead a historic mission to be the custodian of national central bank monetary reserves including gold reserves. According to our strategic vision and sovereign, they are neither the state nor the Bank of France but the French people and in addition serve as the ultimate guarantee of public debt and our currency.

In monetary Cold War played between the Western countries and the BRICS countries, gold gradually takes an important role. According to the World Gold Council, China’s official gold reserves, India and Russia have increased significantly between 2007 and 2013.
For these reasons and because of the rapid growth of global systemic risk, it is of utmost importance to the future solvency of our nation to engage, by mid-2015, a detailed audit procedure, the results will be the subject of a report. This report must obtain validation of French macro-prudential authorities, ACPR, and will be made public in the year.

This comprehensive audit should contain:

  • A complete inventory of physical gold amounts to 2435 tons currently displayed and their quality (serial number, purity, bars ‘Good Delivery’ …), conducted by an independent French body (to be defined). This inventory, under supervision of a bailiff, must indicate the country in which the gold reserves are stored in France or abroad.
  • A census of all formal financial employment agreement or secret vis-à-vis private banks and corporations, or bilateral loan between France and national and international institutions, having pawned the gold of France to ensure rescue of the euro. In this case, the comprehensive audit should contain the conditions of agreement or loans.

Furthermore:

Whereas, on 30 November, will take place in Switzerland a vote on a request from popular initiative referendum “Save gold for Switzerland” of the UDC party (Democratic Union of the Centre) which provides for the repatriation of their reserves of gold on their soil.

Whereas at the request of some national central banks informed, this country phenomenon for the “return of national gold reserves” and democratic control exists since 2013 in Germany (Bundesbank), Poland etc.

Whereas the Dutch Central Bank recently said it had repatriated 122.5 tons of gold.

Whereas, on 19 May 2014 the Bank of France along with other banks of the Eurosystem, announced it has signed the Washington Agreement gold sales CBGA 4 (Dirty Gold Under the Central Bank Gold Agreements) which provides no transfer of quotas on this five-year period (2014-2019), in contrast to the three previous agreements.

Whereas in fact, the Bank of France already independent, conducted as part of the agreement CBGA 2 on gold sales agreed in 2004 by Nicolas Sarkozy, then Minister of Economy and Finance of the Raffarin government .

The declared official target of more actively manage the foreign exchange reserves of the state to generate € 100 million in additional tax revenue in 2005. N. Sarkozy also said that gold sales would be used “either to finance investments that prepare the future, either to reduce the debt, but in no case to fund operating expenses. ”

Over the period 2004-2012, about 614.6 tonnes of gold were sold by France, while at the same time the other central banks of the Eurosystem with the ECB have agreed to limit their gold sales. According to a report of the Court of Auditors in 2012, this operation is extremely costly for public authorities and constitutes a serious violation of the national heritage, made without any democratic consultation.

Mr Governor, according to your statements, “gold remains an important element of global monetary reserves.” For the French, you are considered the ultimate guarantor of the security of this gold reserve and therefore the stability of our currency and national financial stability. As a result, your responsibility is huge.

Also, depending on the situation we discover, I urge you to do it:

  • Urgent repatriation on French soil of all of our gold reserves located abroad.
  • In immediate discontinuation of any gold sales program.
  • Conversely, a gradual reallocation of a significant portion of foreign exchange reserves in the balance sheet of the Bank of France by buying gold at each significant decrease in the price of an ounce (recommendation 20%) .
  • A suspension of any financial commitment or loan contract would wager that our gold reserves.
  • At the patrimonial and financial balance of the 2004 gold sales transactions ordered by N. Sarkozy.

The implementation of these measures is crucial for the future of France face socio-economic problems that may occur.

Just like your heroic predecessors of the Bank of France in 1939 and 1940 had organized the evacuation of French gold, you need to undertake this vast national treasure of the security operation, patriotic act which will be recognized in due time by the public opinion.

I sincerely hope that, respectful of your duties as a senior official in the service of the state, you demonstrate lucidity and courage necessary for the defense of the general interest of our country. The stakes are high, it is the future of France in question!

Please accept, Excellency the Governor, the assurances of my highest consideration.

Marine Le Pen

 

 

end

 

 

And Chris Powell comments on the above story:

 

French populist leader joins gold repatriation campaign

Section:

1:16p ET Tuesday, November 25, 2014

Dear Friend of GATA and Gold:

Marine Le Pen, leader of the populist National Front political party in France and likely France’s next president if the country should last until another election, has picked up the gold repatriation issue by writing to the governor of the central bank, the Banque de France. Le Pen’s letter, translated from French to English, is posted at her party’s Internet site here:

https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&…

An official of the central bank disclosed last year that it is secretly trading gold for its own account and for other central banks “nearly on a daily basis”:

http://www.gata.org/node/13373

That same official said this month that central banks are managing their gold reserves “more actively” these days, while worrying more about “auditability,” perhaps since the gold sometimes is construed to be in more than one place at the same time:

http://www.gata.org/node/14716

As their national anthem enjoins the French: Aux armes, citoyens. Formez vos bataillons — particularly around the Banque de France.

 

 

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

 

end

 

 

GOLD ANALYSIS

 

(courtesy Lawrence Williams/Mineweb)

 

 

China 2014 gold demand heading for 2,100 tonnes

 

Despite reports to the contrary, Chinese gold demand remains high and looks set to get close to last year’s record levels.

Author: Lawrence Williams
Posted: Tuesday , 25 Nov 2014

LONDON (MINEWEB) –

With gold withdrawals from the Shanghai Gold Exchange having reached 1,761 tonnes by November 14, and weekly withdrawals since the Golden Week holiday at the beginning of October averaging comfortably over 50 tonnes, China looks to be heading for an annual demand total (SGE gold withdrawals equate to overall demand) of comfortably over 2,000 tonnes again this year assuming these levels are maintained.

Historically November and December are strong months for Chinese gold demand ahead of the Chinese New Year (February 19 2015), which suggests gold demand will remain strong through January and the first half of February too.

Indeed should the current weekly demand levels hold up – the past six weeks have seen withdrawals from the SGE of 52 tonnes, 54 tonnes, 47 tonnes, 60 tonnes, 52 tonnes and 68 tonnes respectively – then we could be heading for an annual figure of around 2,100 tonnes. This is not far short of last year’s record of 2,199 tonnes as stated by the China Gold Association in its China Gold Yearbook released in September (of which 1,507 tonnes came from imports of gold bullion, 17 tonnes in dore imports from overseas mines, 428 tonnes of domestically mined gold thus leaving 247 tonnes to have come from recycled gold scrap. Figures are all from Koos Jansen, Nick Laird and the China Gold Association).

Thus last year’s actual Chinese demand figures are comfortably in excess of those estimated by the World Gold Council and Thomson Reuters earlier in the year, which either suggests the latter’s methodology for estimating Chinese imports and demand is understating the true picture, or that the Chinese are exaggerating their total figures upwards which we feel is unlikely. And if the figure of 2,100 tonnes is indeed reached it will mean that Chinese gold demand in 2014 will only be around 5% down on last year’s record, a far cry from what the mainstream media has been suggesting.

 

 

end

 

 

And now for the important paper stories for today:

Early Tuesday morning trading from Europe/Asia

1. Stocks  mixed on major  Asian bourses     with a  higher yen  value falling to 118.03

1b Chinese yuan vs USA dollar  (yuan slightly strengthens) to 6.13568 (potential for another rate cut

2 Nikkei up 50  points or 0.29%

3. Europe stocks all up (except London  /Euro rises/ USA dollar index down at 88.26.

3b Japan 10 year yield at .45% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 118.03

3c  Nikkei now above 17,000

3e  The USA/Yen rate crosses back above the 118 barrier

3fOil:  WTI  76.14  Brent:   8014 /all eyes are focusing on oil prices.  A drop to the mid 60′s would cause major defaults.

3g/ Gold up/yen up;  yen just above 118 to the dollar/

3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion

Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP

3i  Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt (see Von Greyerz)

3j China set to offer stimulus to its struggling economy

3k  Ferguson (St Louis) in turmoil after no indictment on grand jury

3l: USA 30 year bond rate drops below 3.00%

3m Gold at $1197.00 dollars/ Silver: $16.61

 

3n  Bond yields plummet in European periphery/Spain’s 10 year bond yield at 1.966% , the lowest in 200 years.

4.  USA 10 yr treasury bond at 2.30% early this morning.
5. Details: Ransquawk, Bloomberg/Deutsceh bank Jim Reid

 

 

(courtesy zero hedge/your early morning trading from Asia and Europe)

 

 

 

Futures In Fresh Record Territory As OECD Cuts Global Growth Projections Again

Just two months after the OECD cut its global growth outlook, overnight the Organisation for Economic Co-operation and Development cut it again, taking down its US, Chinese, Japanese but mostly, Eurozone forecasts. In the report it said: “The Economic Outlook draws attention to a global economy stuck in low gear, with growth in trade and investment under-performing historic averages and diverging demand patterns across countries and regions, both in advanced and emerging economies.  “We are far from being on the road to a healthy recovery. There is a growing risk of stagnation in the euro zone that could have impacts worldwide, while Japan has fallen into a technical recession,”OECD Secretary-General Angel Gurria said.  “Furthermore, diverging monetary policies could lead to greater financial volatility for emerging economies, many of which have accumulated high levels of debt.” And sure enough, the OECD’s prescription: more Eurozone QE. As a result, futures in the US are in fresh all time high territory ignoring any potential spillover from last night’s Ferguson protests, just 30 points from Goldman’s latest 2015 S&P target, Stoxx is up 0.5%, while bond yields are lower as frontrunning of central bank bond purchases resumes. Oil is a fraction higher due to a note suggesting the Saudi’s are preparing for a bigger supply cut than expected, although as the note says “it is unclear if the cut sticks.”

RanSquawk’s summary of key “market” drivers: 

European equities once again trade firmly in the green, with little in the way of fresh fundamental macro newsflow on offer. Nonetheless, the DAX enters the North American open at its highest level in 2 months, with heightened expectations of an ECB QE programme continuing to bolster price action. This has been enhanced by recent comments from ECB’s Coeure who said he wants the ECB to have an asset buying discussion next week, adding to the recent rhetoric from Draghi and Constancio. Furthermore, RBS are the latest bank to offer their insight on the situation by saying that it would be an oversight for Dec sovereign QE purchases to be ruled out. As such, financials are the outperforming sector, with the periphery also seeing outperformance as peripheral banks would be set to benefit the most from such action by the ECB. Fixed income products were initially seen in the green from the offset in a similar fashion however, Bunds have since pared their earlier gains in what has been a relatively choppy session for prices. However, they were provided some support alongside a modest bout of softness in European stocks after the OECD cut their global, US, Chinese, Japanese and Eurozone growth forecasts while leaving the UK’s on hold.

European stocks rise for 3rd day led by banks and carmakers, extending a 2-month high. Miners, oil & gas stocks underperform. Asian shares gain; U.S. stock index futures advance ahead of U.S. 3Q GDP. Euro falls against the dollar. Commodities gain, with silver outperforming, wheat underperforming. Brent oil, WTI crude advance.

Looking at the day ahead the calendar starts to kick into gear in the US this afternoon with the second snapshot of Q3 GDP, along with FHFA house price data, Case-Shiller house price prints, November consumer confidence and the Richmond Fed PMI for November. In terms of GDP, the market consensus is going for a 3.3% print, which is 0.2ppts lower from the initial reading.

Market Wrap:

  • S&P 500 futures up 0.1% to 2070.1
  • Stoxx Europe 600 up 0.5% to 347.28
  • US 10Y yield down 1bps to 2.29%
  • German 10Y yield down 2bps to 0.77%
  • MSCI Asia Pacific up 0.1% to 140.54
  • Gold spot up 0.4% to $1201.73/oz

Bulletin Headline Summary

  • European sentiment has been further bolstered by continuing expectations for an ECB sovereign QE programme
  • OECD cuts their global, US, Chinese, Japanese and Eurozone growth forecasts while leaving the UK’s on hold
  • Looking ahead, today sees the release of US GDP, core PCE and consumer confidence data
  • Treasuries steady overnight as week’s auctions continue with $13b 2Y FRN and $35b 5Y notes; latter yield 1.610% in WI trading vs. 1.567% in October. Market activity may be quiet as U.S. Thanksgiving Day looms.
  • 2Y notes sold yday stopped through by 1.1bps; 3.71 bid-to- cover ratio was highest since December
  • Chaos erupted in Ferguson, Missouri, after a grand jury declined to indict a white police officer for the fatal shooting of an unarmed black teenager
  • Germany’s GDP grew 0.1% in the three months through September, the Federal Statistics Office said today, confirming a Nov. 14 estimate. Private consumption climbed 0.7%, while capital investment sank 0.9%
  • China’s banking regulator expanded a trial to allow more regions including Beijing to set up firms to buy bad loans from local financial institutions, government officials familiar with the matter said
  • France ruled out delivery of a warship to Russia over the conflict in Ukraine and criticized the government in Kiev for saying it wants to join NATO
  • The trade organization for the U.S. corporate loan market is asking a federal court to overturn new rules that would require investment firms that manage securities created from the debt to retain portions of those deals
  • “There’s a substantial degree of uncertainty around the degree of spare capacity in the economy,” Bank of England Governor Mark Carney said in testimony to U.K. lawmakers; also said rate increases likely to be limited and gradual
  • China’s benchmark money-market rate fell the most since September as the central bank cut the yield offered on 14- day repurchase agreements for the third time in as many months
  • By joining Mario Draghi and Haruhiko Kuroda in the global stimulus camp, PBOC Governor Zhou Xiaochuan signaled deeper concern over China’s outlook and recognition that targeted measures alone weren’t going to be enough to revive growth
  • Sovereign yields lower. Asian stocks mostly higher; European stocks and U.S. equity-index futures gain. Brent crude and gold rise, copper falls

FX

AUD/USD took out stops below Thursday’s low before breaking below the Nov’14 low at 0.8541 to reach its lowest level in four years following comments from RBA’s Lowe who once again jawboned the AUD. From a UK perspective, this morning saw the BoE’s appearance in front of the Treasury Select Committee, although it failed to offer much in the way of market-moving comments as some had hoped for. Of note, BoE’s Forbes was relatively hawkish by suggesting that there could be less slack in the UK economy than originally estimated, however, GBP/USD was relatively unmoved by these comments. Overnight, JPY strengthened against its major peers which saw USD/JPY briefly break below 118.00, buffeted by selling from Japanese exporter names and long-position liquidations ahead of month-end. However, the JPY strength has since seen a modest pullback heading into the North American open.

COMMODITIES

In the commodity complex, WTI and Brent crude futures reside in modest positive territory in the build up to this week’s OPEC meeting, ahead of which the Iraqi Oil Minister said oil prices are not acceptable and something needs to be done, adding that all means are to be used to raise prices. In metals markets, precious metals trade in relatively neutral territory ahead of key upcoming risk events while copper was seen lower overnight as questions over the efficacy of the recent PBOC stimulus limit upside for the base metal.

* * *

DB’s Jim Reid concludes the overnight summary

Markets continue to give thanks to the central banks as positivity continues to resonate after Friday’s surprise rate cut in China and the extreme dovishness from Draghi. In the US the S&P extended its all-time highs to close +0.29% higher marking a third successive record close, although markets were somewhat more subdued ahead of a raft of macro releases today. As far as data was concerned yesterday, the preliminary US services PMI for November dropped to 56.3 from 57.1, although remains above the 55.9 level a year ago. As well as this, we had a modestly softer Chicago Fed Activity index (0.14 vs. 0.33 expected), although somewhat offset by a firmer Dallas Fed reading (10.5 vs. 9 expected). Treasuries ended the day fairly muted (the 10yr virtually unchanged at 2.306%), whilst the DXY closed 0.2% lower.

Before we round up the European price action yesterday, the tone in Asia remains largely constructive with Chinese equities leading the way. The Shanghai Composite and Shenzhen Composite are +0.60% and +0.86% as we type, respectively with the former reaching at a 3-year high. China’s money market rates also fell overnight with its benchmark 14-day repo rate declining by the most since September (to 3.2% from 3.4%). Its 7-day repo rate also fell by 25bps. H-shares are a little weaker though with the Hang Seng and HSCEI indices down -0.21% and -0.67%, respectively. Away from China, bourses in Japan resumed trading after yesterday’s holiday with a moderately positive tone (NKY +0.35%). Asian credit spreads are still generally tighter overnight with China property continuing to be the biggest beneficiary of the PBOC’s easing announcement. Asian sovereign credit protection is also generally better offered across the board with higher beta names such as Indo (-3bp) outperforming the rest. Brent is trading below US$80/bbl again ahead of the OPEC meeting this Thursday, whilst Gold is flattish at around US$1197/oz as we type.

Turning back to Europe yesterday the Stoxx 600 closed +0.14%, paring back earlier gains as Energy stocks (-0.67%) weighed on the index later in the day with the weakness in Crude. Meanwhile yields in the periphery extended their rally with the 10 year benchmark in Italy, Portugal and Spain 3bps, 4bps and 4bps lower respectively – the latter closing at 1.966% and trading below 2% for the first time ever with our data going back over 200 years. Markets were initially buoyed by a better than expected IFO print out of Germany, with the index rising a surprising 1.5pts to 104.7 in November and fully reversing the October decline. Our European colleagues noted that regressions based on IFO and PMI suggest GDP growth of 0.2%-0.3% qoq in Q4, but point out that these regressions painted too positive a picture over the last couple of quarters and as a result continue to stick with expectations of a further slowdown from Q3 to stagnation in Q4.

While we think central bank liquidity has been, is and will continue to be the main driver of markets, yesterday reminded us that at least in Europe, the journey will be volatile en route to government QE.This was evidenced yesterday with ECB member Benoit Coeure quoted as saying (Bloomberg) that the ECB will not act hastily to add more stimulus and instead the decision will centre on incoming economic data – specifically mentioning that ‘there’s unanimous agreement in the Governing Council that there might be situations where we’d have to do more’. Coeure then went on to say that the central bank will not commit to any particular time line and instead any decision around sovereign QE will take place in December or later, giving the bank sufficient time to analyse the current success of the ABS and covered bond buying schemes.

In case this wasn’t enough, two further ECB members, perhaps at the more skeptical end of the scale added to proceedings. Firstly, Austria’s central bank governor Nowotny suggested that the ECB should be steady and that although there are always circumstances for more policy action, this is unlikely to happen as midterm inflation expectations are still anchored. Perhaps it was less of a surprise when later in the day the Bundesbank’s Weidmann commented that the focus on the asset purchase programme is distracting from the true problems around how the euro area should generate growth, and, when asked specifically on sovereign QE, he said that buying government debt ‘comes with legal obstacles and is no panacea for the region’.

Staying in Europe, for those looking for a potential big story for 2015, Greece continues to bubble up on the edges of the macro world. Yesterday our resident expert George Saravelos published his thoughts going into 2015 for the nation. With regards to near-term uncertainty, both the outcome of current negotiations and of the February presidential election remains highly fluid. In terms of the former, Greek officials meet with the Troika today and a Eurogroup Working Group is set to discuss progress this Thursday with the end date for which an agreement can last be reached being December 18th (closure of European national parliaments for holiday season). George points out however, that February’s political events and possible early elections remain the major source of event risk for Greece. On the Greece side, the pressure on the government will likely emanate from maturing debt and the damaging consequences of default, as well as pressure that may be placed on Greek banks’ access to ECB financing. On the other side of the coin, Greece’s official sector debt makes European governments much more directly exposed to Greek debt. However in contrast to 2010-2012, low levels of market stress increases the incentives to put pressure without risking broader contagion. All-in-all we may be left in a situation where both sides have an incentive to stall agreement until market pressure returns. We could be looking at 2015 marking a new phase of political- rather than financial – tension where the prevailing policy consensus is challenged by a government that has itself been born out of the aftermath of the crisis.

Looking at the day ahead the calendar starts to kick into gear in the US this afternoon with the second snapshot of Q3 GDP, along with FHFA house price data, Case-Shiller house price prints, November consumer confidence and the Richmond Fed PMI for November. In terms of GDP, the market consensus is going for a 3.3% print, which is 0.2ppts lower from the initial reading. DB’s Joe Lavorgna, however, expects the figures to be close to the initial print (+3.5% forecast). He points out that there will be another revision to Q3 next month and then a more comprehensive revision next July when the annual benchmark is conducted. Given the trending pattern of initial to ‘final’ readings on real GDP growth being revised up in 11 out of the last 13 quarters, he expects this print to eventually be revised higher (possibly above 4%). This morning we also have the Q3 GDP print from Germany to look forward to as well as French production, manufacturing and confidence reads. With regards to the former, the market is expecting a +0.1% print for the quarter, although as we’ve mentioned previously, our German economists are expecting GDP to stagnate through the next two quarters and haven’t ruled out the potential for a negative quarter. To wrap it up, the OECD will also release its latest economic forecasts today.

 

 

end

 

 

 

China is feeling the currency wars initiated by Japan as it lowers its yuan to the dollar:

 

(courtesy zero hedge)

 

 

 

 

 

Currency Wars Reignite As Yuan Tumbles Most In 2 Months And Chinese Bond Market Freezes

Did China just re-enter the currency wars? The Chinese Yuan dropped 0.29% overnight – its biggest drop since September and 2nd biggest devaluation since March – as the currency tumbles back in line with the PBOC’s fixing for the first time in over 3 months. Despite ‘hopes’, S&P confirms the recent (and reconfirmed) rate cut doesn’t signal renewed government intentions to resort to aggressive stimulus to prop up economy. More troubling is the fact that China’s huge corporate debt market appears to be freezing as over $1.2 billion in bond sales were scrapped or delayed last week suggesting wall of maturing debt will find it increasingly difficult to roll-over and keep the dream alive (especially in light of Haixin’s bankruptcy last week).

CNY dropped notably overnight, now back in line with the PBOC fix for the first time in 3 months…

As Bloomberg reports,

PBOC will probably push USD/CNY fixing higher amid expectations for a weaker yen and euro, as well as the need for looser policy at home, according to Richard Iley, chief economist for Asia at BNP Paribas.

“China is losing the currency wars, steadily increasing the risk of another engineered bout of CNY weakness,” Hong Kong-based Iley says in interview today

Financial conditions are “uncomfortably tight,” and more easing will be required if real GDP growth is to “have any hope of being propped up close to politically mandated levels next year”

*  *  *

And the fundaraising strains appear to be showing up in the Chinese corporate debt space (as Bloomberg reports)

China’s companies scrapped or delayed at least 7.55 billion yuan ($1.2 billion) of bond sales since Nov. 20 as borrowing costs jumped, flagging fundraising strains even as the central bank eased monetary policy.

The yield on AAA rated corporate securities due in three years rose 17 basis points last week, the most in a year, to 4.43 percent. The increase comes as investors held more cash ahead of planned new share sales this week, with initial public offerings to lock up at least 1 trillion yuan, according to Australia & New Zealand Banking Group Ltd.

*  *  *

but but but, QE and rate cuts and stuff…

 

 

 

end

 

No agreement on curtailing output on oil sends this commodity plunging;

 

(courtesy zero hedge)

 

 

 Oil Plunges As Venezuela Hints No Output Reduction
 

Following the four-way pre-OPEC meeting between Russia, Mexico, Venezuela, and Saudi Arabia, Venezuela’s foreign minister warned:

  • *NO AGREEMENT ON OUTPUT REDUCTION AT 4-WAY MEETING: RAMIREZ

And oil prices slipped notably. “The most important thing is we are talking,” Ramirez noted… but markets are not waiting.

 

 

Furthermore, Rosneft’s Sechin warns “Oil market is oversupplied but not critically,” which seems to fit with the collapse of demand perspective…

 

Charts: Bloomberg

 

 

 

end

 

Then two hours later…

 

(courtesy zero hedge)

 

 

 

Oil Rebounds On Reports OPEC Will Cut Supply, Seek Stricter Compliance

Less than two hours after Venezuela noted that no supply cut had been pre-agreed, The Wall Street Journal reports…

  • *OPEC MEMBERS SAID TO MOVE TOWARD CUTTING OIL SUPPLY: WSJ

And oil prices are jumping. However, a big below the surface shows this story is more about stricter compliance than an actual supply cut.

 

 

As WSJ reports,

OPEC members are inching toward a compromise that could lead them to cut oil supply, as the producer group prepares for one of its most closely watched meetings in years this week.

 

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday’s meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position.

end

This does not look good:

 

(courtesy zero hedge)

 

 

 

 

Hacked US Documents Said To Reveal Extent Of Undisclosed US “Lethal Aid” For Ukraine Army

 

It has been half a year since it was first revealed that the US has been sending non-lethal aid to the Ukraine: recall that it was in early June when Obama announced he had approved $5 million in body armor, night vision goggles and additional communications equipment for the Ukrainian military.

Since then the topic of whether or not to arm the Ukraine army in its civil war against the separatist eastern region has been a hot topic as recently as today, when VOA reported that “U.S. Vice President Joe Biden has condemned what he calls Russia’s “aggression” in Ukraine,but stopped short of saying the United States will provide Ukraine with lethal aid… the White House nominee to fill the number two position at the State Department has said the United States should consider giving Ukraine lethal military equipment.”

However, as lately has been a recurrent theme, the Obama administration may not have been exactly forthright with the public or the facts. At least that is the conclusion based on hacked documents released earlier today by the Ukrainian hackers group CyberBerkut, which reveal that despite assurances to the contrary, the US has in fact been providing substantial lethal aid to Ukraine’s armed forces.

As Sputniknews reports, “according to the hackers, the information was obtained during the visit of US Vice President Joe Biden to Ukraine last week, when they were able to access confidential State Department documents via a mobile device of a US delegation member.”

“After examination of just a several files there is the impression that the Ukrainian army is the branch of US Armed Forces. The volume of US financial assistance amazes with its scale. They also show the highest level of degradation of the Ukrainian Armed Forces. Besides, thousands of dollars go on personal accounts of military personnel and used by certain officers in personal needs. What will the American taxpayers say?” the statement published on the officialCyberBerkut web page said.

Sorry, but the American taxpayers are too busy with other more pressing matters, than policing how their government spends their money.

Other documents published by the hackers indicate that Washington is ready to supply Ukraine with “400 units of sniper rifles, 2,000 units of assault rifles, 720 hand grenade launchers, nearly 200 mortars and more than 70,000 shells for them, 150 stingers and 420 anti-tank missiles.”

The leaked documents presented below have not been verified so take them with a grain of salt, although it is worth recalling that it was a hacked leak of Victoria Nulan’s conversation in February 2014 that revealed that extent of behind the scenes meddling by the US State Dept in Ukraine’s internal affairs just ahead of the presidential coup.

The Naval Command asks US to sponsor Ukrainian officers during military exercises headed by the Pentagon on the Ukraine territory

 

 

end
This is what happens to an oil producing country if oil in the crapper:

Nigeria Raises Rates, Devalues To Defend Collapsing Currency As Oil-Price Blowback Spreads

Having exposed the demise of various oil-producing nations’ currencies previously, it is noteworthy that Nigeria folded today and devalued the Naira peg to the USDollar by over 8% from 155 to 168 and widened its ‘intervention’ bands from 3% to 5% (the upper band is where the market is trading). Furthermore, the central bank raised rates from 12% to 13%.

All oil-producing nations are seeing dramatic pressure on their currencies since oil topped…

Forcing Nigeria to devalue…

 

The adjusted peg appears to ‘try’ to cap the collapse of the currency at current levels after the old peg-band was crushed a few weeks ago… and Nigeria is rapidly running out of reserves to defend its currency.

 

Unfortunately, the currency remains notably weaker…

 

Charts: Bloomberg

 

 

end

 

 

Your more important currency crosses early Tuesday morning:

Eur/USA 1.2423 down .0010

USA/JAPAN YEN  118.03  down  .420

GBP/USA  1.5668  down .0029

USA/CAN  1.1271   down .0018

This morning in  Europe, the euro down, trading now well above the  1.24 level at 1.2423 as Europe reacts to deflation and announcements of massive stimulation. In Japan  Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31. And now he wishes to give gift cards to poor people in order to spend. The yen continues to reverse like a yoyo as on Monday, Japan’s finance minister stated that the yen is fallen faster than it should.  It finally settled  in Japan down 42  basis points and settling above the 118 barrier to  118.03 yen to the dollar (heading towards 120).  The pound is slightly down  this morning as it now trades well below  the 1.57 level at 1.5668.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation).  The Canadian dollar is up again today trading at 1.1271 to the dollar.

 Early Tuesday morning USA 10 year bond yield:  2.30% !!!  down 1  in  basis points from Monday night/

USA dollar index early Tuesday morning:  88.20 up 5 cents from Monday’s close

end

The NIKKEI: Tuesday morning up 50 points or 0.29% (Abe’s helicopter route to provide free cash)

Trading from Europe and Asia:
1. Europe  all in the green

2/    Asian bourses mixed       / Chinese bourses: Hang Sang  in the red, Shanghai in the green,  Australia in the red:  /Nikkei (Japan) green/India’s Sensex in the red/

Gold early morning trading:  $1198.00

silver:$ 16.61

 

Closing Portuguese 10 year bond yield:  2.92% down 5 in basis points on the day

 Closing Japanese 10 year bond yield:  .45% down 1 in basis points from Monday

Your closing Spanish 10 year government bond Tuesday/ down 5   in basis points in yield from Monday night.

Spanish 10 year bond yield:  1.92% !!!!!!

Your Tuesday closing Italian 10 year bond yield:  2.14% down 4  in basis points:

trading 22 basis points higher than Spain:

 IMPORTANT CLOSES FOR TODAY

Closing currency crosses for Tuesday night/USA dollar index/USA 10 yr bond:

Euro/USA:  1.2476  up .0041

USA/Japan:  117.86 down .600 !!!!

Great Britain/USA:  1.5714  up .0017

USA/Canada:  1.1237 down .0051

The euro rose in value during this afternoon’s  session,  and it up by closing time , finishing just above the 1.24 level to 1.2476.  The yen was up  during the afternoon session, and it gained 60 basis points on the day closing below the 118 cross at 117.86.   The British pound gained more lost  ground   during the afternoon session and it was up on the day closing  at 1.5714.  The Canadian dollar was well  up  in the afternoon and was up on the day at 1.1237 to the dollar.

Currency wars at their finest today.

Your closing USA dollar index:   87.92  down 23 cents  from Monday.

your 10 year USA bond yield , down  5   in basis points on the day: 2.26%!!!!  (and the Dow is up???)

European and Dow Jones stock index closes:

England FTSE up 1.35 or 0.02%

Paris CAC  up  13.87  or 0.32%

German Dax up 75.68 or 0.77%

Spain’s Ibex up 57.10 or  0.54%

Italian FTSE-MIB up  84.01    or 0.42%

The Dow: down 2.96 or .02%

Nasdaq; up 3.36   or 0.07%

OIL:  WTI 73.79  !!!!!!!

Brent: 78.10!!!!

end

 

 

And now for your big USA stories

Today’s NY trading:

 

Texas Tea & Treasury Yields Tumble As Trannies Top The Day

 

Never in the history of US equity markets has the S&P 500 closed above its 5-day moving average for 28 days in a row… until today. While most indices tracked sideways in a very narrow range today, Trannies outperformed (helped by weaker oil, but even when oil rallied intraday Trannies rallied too). VIX tracked back below 12.5 with an inverted term structure for the 5th day in a row. The USD lost ground for the 2nd day in a row, driven by EUR strength (with notable AUD weakness extending). Silver rallied as gold flatlined andcopper tumbled after US GDP beat. However, the two big themes today were the collapse in oil prices (as rumors/news ahead of OPEC sent volatility soaring) to a $73 handle – the lowest close since 2010; and the plunge in Treasury yields (with a very stroing 5Y auction and big block trade in TLT suggesting short-covering). Finally,AAPL broke above a $700 billion market cap brieflytoday but was unable to hold it.

 

28 days and counting… will the S&P ever be allowed to break its 5DMA

 

On the day, Trannies led the way… though they finally started to get the joke of what collapsing oil prices means into the close… Russell 2000 was rescued at the very last minuet to close barely green, S&P red…

 

We thought this was interesting, YTD performance of some of the crazier momo names…

 

USDJPY and stocks lost some correlation late on…

 

The disconnect between stocks and bonds is becoming irrationallerer…

 

and HY energy credit names were hit hard today as stocks decoupled from credit after Europe closed…

 

FX markets were dominated by a 2nd day of USD weakness/EUR strength but AUD weakness is also notable…

 

But bonds were notably strong today with 30Y back under 3.00% and 7Y back under 2% – back at one-month lows… (2Y move is a roll so just look at today’s action)

 

With a notable block trade popping up on TLT suggesting someone was forced to cover shorts… (note there was a big block sell in TBT at the same time)

 

Silver rallied strongly, gold was flat but copper and crude oil was smacked hard today…

 

As Crude dumped, pumped, and dumped on OPEC rumors…

 

Charts: Bloomberg

Bonus Chart: AAPL hits $700 billion market cap briefly as XOM and MSFT fight for their positions…

 

Bonus Bonus Chart: For those that enjoy it, we came very close to signalling another Hindenburg Omen today and we know what happened last time…

end

 

We now have a downward direction in house prices

 

(courtesy zero hedge/Shiller report)

 

Case Shiller Reports “Broad-Based Slowdown For Home Prices”, First Monthly Decrease Since November 2013

While the just revised Q3 GDP surprised everyone to the upside, the Case Shiller index for September which was also reported moments ago, showed yet another month of what it called a “Broad-based Slowdown for Home Prices.” The bad news: the 20-City Composite gained 4.9% year-over-year, compared to 5.6% in August. However, this was modestly above the 4.6% expected. However, what was more troubling is that on a sequential basis, the Top 20 Composite MSA posted a modest -0.03% decline, the first sequential drop since February. And from the report itself: “The National Index reported a month-over-month decrease for the first time since November 2013. The Northeast region reported its first negative monthly returns since December 2013 and its worst annual returns since December 2012 due to weaknesses in Washington D.C. and Boston.”

Case Shiller Year over Year

and Month over Month

 

Case Shiller’s own visualization:

From the report:

“The overall trend in home price increases continues to slow down,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The National Index reported a month-over-month decrease for the first time since November 2013. The Northeast region reported its first negative monthly returns since December 2013 and its worst annual returns since December 2012 due to weaknesses in Washington D.C. and Boston. The West and Southwest, previously strong regions, are seeing price gains fade. The only region showing any sustained strength is the Southeast led by Florida; price gains are also evident in Atlanta and Charlotte.

 

“The 10- and 20-City Composites continued their year-over-year downward trend, gaining 4.8% and 4.9% compared to last month’s year-over-year gains of 5.6%. Las Vegas, which has shown doubledigit annual gains, posted an annual return of 9.1%, its first time below 10% since October 2012. Miami, however, continues to impress with another double digit annual gain of 10.3%. It is the only city that currently has a year-over-year double digit gain. Charlotte was the only city in September to show an annual increase relative to last month. Eighteen of the 20 cities reported slower annual gains compared to last month.

 

“Other housing statistics paint a mixed to slightly positive picture. Housing starts held above one million at annual rates on gains in single family homes, sales of existing homes are gaining, builders’ sentiment is improving, foreclosures continue to be worked off and mortgage default rates are at precrisis levels. With the economy looking better than a year ago, the housing outlook for 2015 is stable to slightly better.”

That said, if China continues its recent easing path, expect US housing prices to jump in the coming months as Chinese “hot money” once again is parked in the once place where, in the absence of anonymous Swiss bank accounts, it is treated best: US real estate.

 

end

 

Unbelievable!!  The 30 yr rate drops below 3%.  Richmond Fed also falters:

 

(courtesy zero hedge)

 

 

30 Year Yield Drops Below 3.00% As Richmond Fed Tumbles Most Since 2006

 

 

Despite the clear message from stocks that everything in the world is awesome, 30Y Treasury yields have tumbled back below 3.00% – 1-month lows. Perhaps the slew of disappointing data is right after all that the US is not decoupling… just don’t tell stocks. Against expectations of a 16 print, Richmond fed printed 4, plunging from its  exuberant 20 levels last month. This is the biggest miss since Jan 2013 (and biggest MoM drop since May 2006) as new order volume collapsed, employment and workweek tumbled, and most major future expectations indices dropped.

 

Richmond fed collapsed…

 

What do stocks know?

 

As 30Y broke back below 3.00%

 

Richmond Fed Breakdown…

 

end

 

Consumer confidence fading and remember that the consumer is 70% of GDP:

 

(courtesy zero hedge)

 

 

 

Record Stocks & Plunging Gas Prices Send Consumer Confidence Tumbling, Biggest Miss Since June 2010

 

With business confidence at post-crisis lows (in the US and around the world), it is hardly surprising that consumer confidence would fade and at 88.7 (vs 96.0 expectations), this is the biggest miss since June 2010. It appears last month’s exuberant surge/beat was anomalous as we tumble from 94.5 in October, in spite of tumbling gas prices and record high stocks… The drop was largely driven by a slide in ‘hope’ as expectations fell to the lowest since June. Labor, employment, and business conditions all dropped.

 

Average:

That is all for today

I will see you Wednesday night

bye for now

Harvey,

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One comment

  1. Bob Mitchell · · Reply

    Harvey,

    You said above, “We had 0 notices filed yesterday so we lost an astounding 58 contracts or 290,000 oz. Owners of these contracts decided not to receive metal and abandon their contracts after waiting the entire month. It just does not make sense.”

    Well … would it make sense if the owner of each contract were paid a $5.00 per oz premium to not demand the physical silver? $10.00 per oz premium?

    Like

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