Dec 4.2014

total customer deposits :nil oz

Today, 0 notices was issued from  JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 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 December contract month, we take the total number of notices filed for the month (1849) x 100 oz to which we add the difference between the OI for the front month of December (2105) – the number of gold notices filed today (0)  x 100 oz  =  the amount of gold oz standing for the December contract month.

Thus the  initial standings:

1849  (notices filed for the month x 100 oz + (2105) OI for November – 0 (# of notices filed today equals 395,000 oz  standing for the December contract month or 12.29 tonnes)

we lost 136 contracts 13,600 oz standing.

This initiates the month of December for gold.

And now for silver

Today, we had 0 deposits into the dealer account:

 total dealer deposit: nil oz

we had 0 dealer withdrawal:

total  dealer withdrawal: nil  oz

We had 3 customer withdrawal:

i) Out of Delaware:  1008.05 oz

ii) Out of Brinks: 19,627.46 oz

iii) Out of HSBC:  20,403.29  oz

total customer withdrawal  41,038.8  oz

We had 1 customer deposits:

i) Into Scotia:  599,497.330  oz

total customer deposits: 599,497.33    oz

we had 0 adjustment

Total dealer inventory:  64.515 million oz

Total of all silver inventory (dealer and customer)   177.321 million oz.

The total number of notices filed today is represented by 57 contracts or 285,000 oz.  To calculate the number of silver ounces that will stand for delivery in December, we take the total number of notices filed for the month ( 2472) x 5,000 oz to which we add the difference between the total OI for the front month of December (611) minus  (the number of notices filed today (57) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  2472 contracts x 5000 oz  +  (611) OI for the November contract month – 57 (the number of notices filed today)  =15,130,000 oz of silver that will stand for delivery in December.

we lost 35,000  oz standing.

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:

Dec 4 no change in tonnage/720.02 tonnes

Dec 3 no change in tonnage/720.02 tonnes/

December 2/2014; wow!! we had a huge addition of 2.39 tonnes of gold /Inventory 720.02 tonnes

December 1.2014: no change in gold inventory at GLD

Nov 28.2014: a loss  in inventory of 1.19 tonnes/tonnage 717.63 tonnes

Nov 26.2014: we lost 2.09 tonnes of gold heading to India and or China/inventory at 718.82 tonnes

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.

Today, December 4  no change in inventory at GLD.

inventory: 720.03 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 :  720.03 tonnes.

end

And now for silver:

Dec 4/we lost another 2.204 million oz of silver/inventory 345.223 million oz

dec 3. we lost 2.73 million oz of silver/inventory 347.427 million oz and back where we were on Dec 1.2014.

dec 2 wow@!!@ a huge addition of 2.20 million oz of silver/inventory 350.158 million oz.

December 1: no change in inventory/347.954 million oz

Nov 28.2014: no change in inventory/347.954 million oz

Nov 26.2014; no change in inventory/347.954 million oz

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

December 4/2014/  we had another huge loss 2.204 million oz /inventory 345.223 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 10.2% percent to NAV in usa funds and Negative   10.4% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.5%

Percentage of fund in silver:38.00%

cash .5%

( December 4/2014)   

2. Sprott silver fund (PSLV): Premium to NAV  falls to positive 1.76% NAV (Dec 4/2014)  

3. Sprott gold fund (PHYS): premium to NAV  falls to negative -0.44% to NAV(Dec 4/2014) 

Early Thursday morning trading from Europe/Asia

1. Stocks  up on major  Asian bourses     with a  lower yen  value rising to 119.94 ( Moody’s lowering of its investment grade)

2 Nikkei up 167  points or 0.94%

3. Europe stocks all up except Spain  /Euro flat/ USA dollar index up to 88.98./

3b Japan 10 year yield at .44% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 117.70

3c  Nikkei now above 17,000

3fOil:  WTI  67.29  Brent:   70.04 /all eyes are focusing on oil prices.  A drop to the mid 60′s would cause major defaults.

3g/ Gold down/yen down;

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 Draghi reports today on ECB rates/left unchanged

3k Japan defends the 120 yen to the dollar level

3l  :Polls show Abe will win a landslide in his election bid Dec 14.2014

3m Gold at $1203.00 dollars/ Silver: $16.43

3n USA vs russian rouble:  53.45

4.  USA 10 yr treasury bond at 2.28% early this morning.
5. Details: Ransquawk, Bloomberg/Deutsceh bank Jim Reid

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

Algo Eyes On Draghi Ahead Of ECB Announcement

Today we’ll learn more about whether Mr Draghi becomes Super Mario in the near future as the widely anticipated ECB meeting is now only a few hours away. We will do another summary preview of market expectations shortly, but in a nutshell, nobody really expects Draghi to announce anything today although the jawboning is expected to reach unseen levels. The reason is that Germany is still staunchly against outright public QE, and Draghi probably wants to avoid an outright legal confrontation. As DB notes, assuming no new policy moves, the success of today’s meeting will probably depend on the degree to which Draghi indicates the need for more action soon and the degree to which that feeling is unanimous within the council. Over the past weekend Weidmann’s comment about falling oil prices representing a form of stimulus highlights that this consensus is still proving difficult to build. It might need a couple more months of low growth and inflation, revised staff forecasts and a stubbornly slow balance sheet accumulation to cement action.

As if hypnotized by Draghi’s perpetual inability to actually do anything (as opposed to say), a massive barrier of selling has emerged at the 120 level in the USDJPY. It will surely be taken out later today in a major stop hunt, which will in turn push US futures, whether bought by central banks or not, to new record highs, while the Japanese currency ploughs on to SocGen’s point of no return, first at 123 then at 145, and then at #Div/0. Another question has emreged on European bonds: if and when Draghi does finally implement sovereign QE, will that be the signal to sell everything? Judging by the reaction in the US fixed income market, bonds have sold the news in each of the previous 3 QE episodes. Why should Europe be any different?

European equities have lacked direction and remain marginally higher ahead of today’s ECB & BoE rate decision with both central banks expected not to take any action. On a sector basis, consumer discretionary is the best performer, however energy stocks have been lagging as the FTSE 100 marginally underperforms given its large gearing toward resource based firms. In stock specific news, Ryanair opened the session significantly higher trading as high as 8.5% after raising their FY profit forecast with easyJet higher by 2.4% in sympathy with the move.

In Fixed income, Bunds have traded sideways and remained relatively unchanged as this morning’s session which has been directionless aided by the lack of pertinent macro news ahead of the ECB press conference. Elsewhere, the Spanish Tresoro sold a total of EUR 3.5bln as the Spanish 10y printed a record low yield at 1.840%; the French Tresor selling combined 4bln in 2023, 2025 and 2027 bonds as expected. Ahead of the ECB conference, analysts at Credit Suisse say risks are skewed toward ECB under-delivering on investors’ expectations for sovereign QE given recent moves in EUR rates market.

In China, equity markets are extending their gains to 3 year highs with the strong performance overnight being largely driven by large caps and brokers. The CSI 300, Shanghai Composite and Shenzhen Composite are up +2.9%, +2.3% and +1.6% overnight to be up +31%, +34% and +39% YTD. Money market rates were lower in China overnight whilst expectations of a RRR cut seems to be building up. In terms of year to date performance in Asian equities, China has closed the gap sharply and is not that far off from the Modi-driven rally in India and would say those two markets are broadly on par now. Whilst on this our Asian economists now expect China to decelerate from 7.3% in 2014 to 6.9%yoy in 2015H1, dragged by weak property investment. Contingent on supportive policy actions, they see risks to the outlook as balanced. Lagged effects of monetary policy easing, together with more expansionary fiscal policy, will pull up GDP growth to 7.2% in 2015H2. In India, data show an economy still treading sideways, but sharply rising consumer and business sentiment bodes well for the cycle. An investment recovery and re-acceleration in consumption seem likely in the coming year.

In summary, today’s key drivers and changes: ECB, Bank of England meetings today. Ruble erased gains; Putin gives annual speech. U.K. house price growth slowed last month. The Dutch and French markets are the best-performing larger bourses, Swedish the worst. The euro is little changed against the dollar. German 10yr bond yields rise; Spanish yields increase. Commodities gain, with natural gas, wheat underperforming and nickel outperforming. U.S. jobless claims due later.

Market Wrap

• S&P 500 futures up 0% to 2073.6
• Stoxx 600 up 0.2% to 350.1
• US 10Yr yield down 0bps to 2.28%
• German 10Yr yield up 2bps to 0.76%
• MSCI Asia Pacific up 0.6% to 140.5
• Gold spot down 0.4% to $1202.4/oz

Bulletin Headline Summary from RanSquawk and Bloomberg

• With the lack of any tier 1 data or speakers, markets have lacked any firm direction ahead of the BoE at 1200GMT/0600CST & ECB at 1245GMT/0645CST and the ECB press conference at 1330GMT/0730CST
• Treasuries steady before BOE and ECB decisions on interest rates, with Draghi press conference scheduled for 8:30am ET; Nov. nonfarm payrolls tomorrow, est. +230k with unemployment rate holding at 5.8%.
• 2Y yield has risen more than 10bps from Monday’s low, including 4bps increase Tuesday after Fed vice-chair Stanley Fischer said policy makers were getting closer to dropping “considerable time” language from its statement
• After pledging last month to raise inflation “as fast as possible,” Draghi is looking for consensus on what further action the ECB can take amid German disquiet over bond- buying and a wait-and-see approach by his own vice president
• ECB should follow U.S. example and accelerate bond purchases to stimulate economic recovery, la Repubblica reports, citing interview with Fed’s Fischer
• Saudi Arabia will probably deepen discounts for crude supplies to Asia after leading OPEC to maintain the group’s output target amid a global battle for market share
• Putin pledged to punish speculators attacking the ruble with “harsh” measures in a defiant speech that reached into Russian history to defend his annexation of Crimea and compared his international opponents with Adolf Hitler
• U.S. health-care costs grew 3.6%  to $2.9t in 2013, the smallest increase in more than 50 years and one that probably won’t be matched soon as spending accelerates to meet the needs of millions gaining insurance under Obamacare
• Obama exceeded his constitutional authority with an executive order allowing as many as 4m undocumented people to stay in the U.S. temporarily, a coalition of U.S. states claimed in the first lawsuit filed over the immigration action
• In American health-care worker who may have been exposed to the Ebola virus in West Africa is headed to a U.S. hospital for evaluation and possible treatment
• Sovereign yields mostly higher. Asian, European stocks, U.S. equity-index futures gain. Brent crude rises, gold and copper falls

Central Banks

• 7:00am: Bank of England seen maintaining 0.5% bank rate
• 7:45am: ECB seen maintaining 0.05% main refinancing rate
• 8:30am: ECB’s Draghi holds news conference
• 8:30am: Fed’s Mester speaks in Washington
• 12:30pm: Fed’s Brainard speaks in Washington Supply

FX

In the FX market, EUR/USD initially fell below the 1.2300 handle before staging a recovery to trade back above Aug. 2012 lows, a move primarily attributed to the pullback from multiyear highs observed in the USD-index. Elsewhere, USD/JPY remains in close proximity to the 120.00 level to the upside, which is a large size option expiry (2.1bln) for today’s 10am NY cut (1500GMT). Moreover, the RUB has weakened this morning following a public address from Russian President Putin who appeared to blame the West for the situation in Ukraine. Overnight, the AUD/USD traded slightly weaker, ignoring stronger retail sales as more banks look for more cuts from the RBA.

COMMODITIES

The metals complex shows divergence among spot gold and silver following Russian President Putin’s somewhat aggressive statements blaming the West for the ongoing problems in Ukraine. Furthermore, Platinum trades higher by around 1% helped by the slight strength of the RUB as Russia is the second largest producer of the metal. In precious metal related news, earlier reports emerged that China are said to consider loosening restrictions on gold imports, according to Bloomberg. The energy complex has been relatively quiet with the USD broadly flat with direction on the session to be dictated by the open of the NYMEX pit.

DB’s Jim Reid concludes the overnight recap

Today we’ll learn more about whether Mr Draghi becomes Super Mario in the near future as the widely anticipated ECB meeting is now only a few hours away. DB’s Mark Wall is not expecting anything concrete to be delivered with no new commitments to asset purchasing or tweaks to the tLTRO terms. He thinks that the council remains in wait and see mode until the impact of the current ABS/covered purchase programmes and take up from the Dec 11th tLTRO2 are known. Mark’s team continue to believe that a broad based asset purchase scheme (including Government bonds) will be announced by the end of Q1 but unlikely before. Assuming no new policy moves, the success of today’s meeting will probably depend on the degree to which Draghi indicates the need for more action soon and the degree to which that feeling is unanimous within the council. Over the past weekend Weidmann’s comment about falling oil prices representing a form of stimulus highlights that this consensus is still proving difficult to build. It might need a couple more months of low growth and inflation, revised staff forecasts and a stubbornly slow balance sheet accumulation to cement action.

In terms of trading, given that I’m confident broad based QE is coming I don’t think setting up for disappointment today is a particularly fruitful policy. It might work for a short while but given the illiquidty, especially in assets like credit, one would have to be confident of a big move wider in the short-term or a view that the ECB will never quite be able to pull the trigger. We think we’ll get a few small hints today and the trigger in Q1. As such we continue to be bullish European credit.

Away from Europe and the ECB, the recent Fed speak on balance has been viewed to be more hawkish than what the market was prepared for. Indeed earlier this week we heard from both Dudley and Fischer who seemed keen to emphasise that that normalisation of short term rates is just a matter of time. Yesterday Philly Fed’s Plosser noted that US recovery is well advanced and that means “we should no longer be conducting monetary policy as if we were still in the midst of a financial crisis or in the depths of a recession”. He added that “Keeping the funds rate target near zero when inflation is close to our goal
and the economy is near full employment is both unprecedented and risky”.

Speaking on financial market stability and in her first public address since joining the Fed, Governor Lael Brainard also said that Fed should be prudent and circumspect in using monetary policy to combat financial stability risks because of its broad effects on the economy. Treasuries bear flattened modestly overnight in reaction to these comments with the 2yr closing 2bp higher at 0.55% with the 10yr falling 1bp to 2.28%. The June 2016 Fed Funds implied rate is 8.5bp higher this week.

In terms of other markets equities were higher on both sides of the Atlantic. The S&P 500 (+0.38%) and Dow (+0.18%) made new highs whilst the Stoxx600 was more than half a percent higher on the day. Brent was lower once more to close just below US$70/bbl whilst WTI was slightly higher on an unexpected decline in US crude inventory. Energy stocks added another 1% to be up for a third day in a row. Its hard to say if we are forming a bottom here but it does seem that the correlation between crude oil and energy stocks have somewhat faded in recent days.

Switching to Asia, Japan’s upcoming election and the ongoing rally in Chinese equities are the two notable market themes for now. On Japan local polls are pointing towards a landslide victory for PM Shinzo Abe’s ruling LDP in the Dec 14th parliamentary elections. Local polls by four news outlets all showed that LDP was set to win around 300 seats in the 475-seat lower house. A convincing victory should strengthen the government’s mandate for Abenomics and increases the prospect of PM Abe staying in office through 2018. Indeed in a scenario where LDP wins 295 or more seats our Japanese macro strategist thinks equities could rise sharply and JPY will weaken more with temporary upward pressure on JGB yields due to further currency depreciation.

In China, equity markets are extending their gains to 3 year highs with the strong performance overnight being largely driven by large caps and brokers. The CSI 300, Shanghai Composite and Shenzhen Composite are up +2.9%, +2.3% and +1.6% overnight to be up +31%, +34% and +39% YTD. Money market rates were lower in China overnight whilst expectations of a RRR cut seems to be building up. In terms of year to date performance in Asian equities, China has closed the gap sharply and is not that far off from the Modi-driven rally in India and would say those two markets are broadly on par now. Whilst on this our Asian economists now expect China to decelerate from 7.3% in 2014 to 6.9%yoy in 2015H1, dragged by weak property investment. Contingent on supportive policy actions, they see risks to the outlook as balanced. Lagged effects of monetary policy easing, together with more expansionary fiscal policy, will pull up GDP growth to 7.2% in 2015H2. In India, data show an economy still treading sideways, but sharply rising consumer and business sentiment bodes well for the cycle. An investment recovery and re-acceleration in consumption seem likely in the coming year.

Away from Asia, the Russian Ruble bounced off its record lows yesterday on reports of central bank intervention. Russia’s central bank yesterday said that it spent US$700m of its FX reserves to support the currency on Monday which also marks its first intervention since fully free floating the Ruble on Nov 10. The currency hit another fresh low against the Dollar of 54.87 yesterday morning before recovering to close at around 53.2. The Ruble is still the worst performer in the EM world this year though after having lost around 38% of its value against the US Dollar. Its a similar story in the EM credit space with Russia 5Y CDS being the standout laggard amongst peers. Russia CDS is around 120bp wider this year which compares with the c.35-40bps YTD spread tightening in Indonesia, Hungary, Thailand and Turkey.

Moving onto today, we have more Fed speak to look forward to with Fisher (on the Texas economy and monetary policy), Mester (opening remarks at a Financial Stability conference) and Brainard (keynote address on Financial stability) lined up for today. Weekly jobless claims will be the only notable release ahead of tomorrow’s NFP. All eyes will be on ECB today as previewed above although we also have the BoE’s policy meeting although consensus is not looking for any major changes there.

end

Early this morning: ECB keeps rates unchanged as expected:

(courtesy zero hedge)

ECB Keeps Rates Unchanged, As Expected

No surprises in the official ECB statement…

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.05%, 0.30% and -0.20% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

… However, the same will hardly be said about Draghi’s presser in 45 minutes.

end

…and they keeps kicking the can down the road again.  Markets do not like it.

Gold rebounds/oil falls.

(courtesy zero hedge)

Markets Slide As Draghi Kicks The Can

But, but, but all the clever talking heads said he had to do it now…

• *DRAGHI SAYS ECB TO REASSESS CURRENT STIMULUS NEXT QUARTER
• *DRAGHI SAYS ECB MAY NOT DECIDE ON NEW MEASURES IN JANUARY
• *DRAGHI: DECISION TO CHANGE BALANCE SHEET LANGUAGE NOT UNANIMOUS

This is not what the market wanted to hear – Draghi kicking the can with no indication they are any closer to getting Zee Germans on board with direct monetization of European fiscal irresponsibility.

US Stocks and EURUSD reacted first

As S&P Futures are now unch on the week…

Gold moved early but has extended its gains for now…

and European bond spreads jumped higher…

And DAX Futures just lost 10,000

Charts: Bloomberg

*  *  *

This would appear to be the perfect BTFD opportunity because EVERYONE has cash on the sidelines and knows Draghi will do it eventually… right?

end

Putin is very upset as we vows to punish speculators.   He also states that he has instruments to thwart speculators.  I wonder what he is talking about?

(courtesy zero hedge)

Putin Vows to Punish Speculators Pushing Down Ruble’s Value

President Vladimir Putin vowed to punish speculators attacking the ruble with “harsh” measures in a defiant speech that reached into Russian history to defend his annexation of Crimea and compared his international opponents with Adolf Hitler.

“The authorities know who these speculators are and the instruments we can use to influence them,” Putin said today in his annual address to parliament regarding efforts to defend the country’s currency, which is trading near a record low. “The time has come to use these instruments.”

Putin, who did not comment on the tailspin in oil prices in his 70-minute speech, also announced plans for an amnesty for those returning capital to Russia. The president said he’ll eliminate unnecessary bureaucracy as he works to reassure a nation threatened by a spiraling economic crisis.

The data from Russia depict an economy that’s reeling from a plunge of more than a third in global oil prices this year and sanctions imposed by the U.S. and its allies over the conflict in Ukraine. The Economy Ministry acknowledged this week that gross domestic product in the world’s biggest energy exporter may shrink in 2015 for the first year in six.

Nazi Invasion

Putin, speaking in a chandeliered hall of the Grand Kremlin Palace in Moscow, vowed to repel any effort to force Russia to back down over Ukraine as he recalled how his country fought off the Nazis in World War II, which is known in Russia as the Great Patriotic War and is an emotional rallying-point for the population. More than 27 million citizens of the Soviet Union died during the conflict, which began when Hitler invaded the country in 1941, violating a non-aggression pact.

President Vladimir Putin speaks during his annual address in the Grand Kremlin Palace in Moscow, today.

“Hitler, with his humanity hating ideas, was going to destroy Russia and throw us back behind the Urals,” Putin said. “Everyone should remember how this ended. Next year we will commemorate the 70th anniversary of the victory in the Great Patriotic War. Our army overcame the enemy, freedEurope.”

The ruble has lost a third of its value since Putin started his incursion into the Ukraine’s Crimean peninsula in March, the most among 24 developing countries Bloomberg tracks. The ruble slid 1.1 percent to 53.77 per dollar following Putin’s comments, erasing gains earlier in the day.

Weakening Russia

Putin’s anti-West rhetoric during the speech was “one degree higher than usual” as the Russian leader tried to use it to rally support, saidGleb Pavlovsky, a former Kremlin adviser. “The historical part of the speech was very strange. Putin is in a conspiracy mode.”

“Western” allies are seeking to weaken Russia with sanctions and attacks on the ruble and oil price, Foreign Intelligence Chief Mikhail Fradkov, a former prime minister, told reporters after Putin’s annual address.

The drop in the oil price is partially caused by U.S. actions and foreign investment funds are “taking part” in ruble speculation via intermediaries, Fradkov said.

The Bank of Russia today reduced the rate it charges banks to borrow foreign currency in a bid to slow the ruble’s slide and ease a dollar shortage. The ruble has “substantially” deviated from its fundamental value, creating risks for financial stability and spurring expectations of inflation and depreciation, the central bank said in a statement on its website, reiterating its readiness to intervene without limits.

“The Bank of Russia has moved to a free-floating ruble but this doesn’t mean it is distancing itself completely from influencing the ruble and that the exchange rate can become a target for financial speculation,” Putin said.

Recession Warning

Russian GDP may shrink 0.8 percent next year, compared with an earlier estimate of 1.2 percent growth, Deputy Economy Minister Alexei Vedev said Dec. 2. Inflation accelerated to 8.3 percent in October, the fastest since July 2011. It will end the year at 9 percent and slow to 7.5 percent at the end of 2015, Vedev said, predicting that retail sales will shrink in 2014 amid rising unemployment.

Putin said Russia must escape the “trap” of zero growth by achieving annual productivity gains of 5 percent, to return GDP expansion to above the world average within 3-4 years.

State-run VTB Group, the second-largest lender, gained as much as 12 percent in Moscow trading after Finance Minister Anton Siluanov said the government would give out aid from its $82 billion National Wellbeing Fund to finance infrastructure projects via VTB.

Annual Tradition

The “good part” of Putin’s address is that he said he’d like a reduced government role in the economy and more freedom for business activity, said Luis Saenz, head of equity sales and trading inLondon for Moscow-based BCS Financial Group. “The bad part is that Putin’s recipe for overcoming the crisis is made mostly from general proclamations.”

The speech has become an annual tradition after then-PresidentBoris Yeltsin first delivered it in 1994. Putin has previously used the occasion to declare major policy initiatives, including an effort he backed two years ago to goad companies and individuals to repatriate capital by ending the use of offshore destinations.

“I am sure if none of this happened, they would have invented another excuse to hold back the growing potential of Russia,” Putin said of the sanctions. “Every time they believe that Russia gets too strong, they use these instruments. But it’s pointless to talk to Russia in the language of force.”

end

With bourses around the world tumbling, out comes Draghi with another stick save:

(courtesy zero hedge)

Here Comes The Stick Save: ECB “QE Coming” Headline Sends Stocks To New Record High

Who could have seen that coming!!??? Apparently Draghi could not clarify exactly what he meant in 90 minutes, 3 hours ago!!!!

• *ECB SAID TO PREPARE BROAD-BASED QE PACKAGE FOR JANUARY MEETING

So, despite telling us earlier than not January and not ready, we get this spurious headline just as EURUSD crossed 1.2450… Fun-durr-mentals indeed.

Here is Bloomberg’s Jana Randow:

• European Central Bank Governing Council expects to consider proposal for broad-based asset program including sovereign debt next month, two euro-area central-bank officials familiar with deliberations said.
• Package envisaged to include all kinds of bonds, no equities
• Package hasn’t been designed yet; no decision on implementation taken yet
• Composition of package may be influenced by incoming data
• Officials asked not to be identified because discussion is private
• ECB spokesman declines to comment

We would guess this is thanks to ECB’s Daniele Nouy who is speaking at a German Finance Ministry event.

Here’s the machines reading the headlines…

Is the market really going to fall for this again?!!

*  *  *

And now Bloomberg is retracting!!!

It appears the tweet was redacted for reasons unknown

There is ABSOLUTELY nothing new from what #Draghi said earlier in this #ECB QE breaking news. Calm down.

— Maxime Sbaihi (@MxSba) December 4, 2014

Charts: Bloomberg

end

Then late in the afternoon this bombshell:

“Draghi Loses The Majority” Blasts A Triumphant German Press

Wondering why stocks suddenly found a soft patch in the last few minutes of trading? Here is the reason: according to a report in German Die Welt, the ECB’s president and former Goldman Sachs employee, Mario Draghi, has just lost the majority on the ECB Executive Board:

Back row (left to right): Yves Mersch, Peter Praet, Benoît Cœuré
Front row (left to right): Sabine Lautenschläger, Mario Draghi (President), Vítor Constâncio (Vice-President)

From a just released report (google translated) in Germany’s Die Welt:

The outlooks for growth and inflation are bleak. Mario Draghi will therefore open the gmoneyates – and is met with increasing resistance. And on the ECB’s Executive Board, he has just lost the majority.

….

According to information obtained by “Die Welt”, internal resistance to Draghi is now larger than previously thought. He can no longer count on a majority within the Board currently. In the vote on the official opinion of the Governing Council on monetary policy are for information of the “world” three of the six directors supported by the President to the original tune.

 

In addition to Sabine Lautenschlager andYves Mersch, who had already previously expressed skepticism about bond purchases, one can now add the Frenchman Benoît Coeuré who is against Draghi’s course.  …There had been dissenting voices within the Board on several occasions, but there was always a majority behind the President.

Not this time. Then again, “Draghi is still able to enforce his position easily. Because ultimately decides the proportion of votes on the Board, but in the 24-member Governing Council, in addition to the directors and the governors of the national central banks are represented. Among them there were reportedly more votes against, among others, Bundesbank President Jens Weidmann.”

So will Draghi follow Obama in pursuing QE by “executive decision” without a clear majority support? Recall that even Kuroda had a slim 5:4 majority when he decided to go full-Krugman. And if he does so, expect the cold war between South and North Italy to go ballistic and make the smoldering cold war 2.0 between Russia and the West seem like a dress rehearsal.

end

And the farce in Venezuela continues:  Maduro is to include foreign held gold as official reserves..???   confiscation?? and diamonds????

(courtesy zero hedge)

Venezuela “Boosts” Reserves With Rocks, Other “Easily Converted To Cash” Stuff; Suffers Major Blackout

With its bonds trading at 50% of face value, CDS implying an 84% chance of default, a black-market FX rate that signals massive devaluation is likely, and a teetering-on-the-brink of social unrest population entirely dependent on President Maduro’s generosity (and the military junta), it is perhaps not entirely surprising that they are trying any trick in the book to bolster reserves. The Venezuelan Central Bank issued a statement today (akin to Europe’s hookers-and-blow GDP adjustment) that enables them to count a whole new set of ‘assets’ as potential international reserves including “stones” and “precious metals held in their vaults on behalf of foreign financial institutions.” Hey presto… new reserves.

Risk is rising…

And Reserves are sliding

So make up some new ones…As Bloomberg reports,Central bank sends e-mailed statement explaining parts of new central bank law issued by President Nicolas Maduro.

“Foreign currencies that are easily converted in the principal international marketplaces and that are used as a unit of account or payment in commitments assumed by the Bolivarian Republic of Venezuela will make up part of international reserves”

 

“Assets that can be added as reserves include diamonds and stones or precious metals defined as reserve assets by the bank board and that have been deposited in the bank’s own vaults or those of financial institutions abroad rated as first class”

 

Venezuela’s intl reserves have traditionally been made up of sources including monetary gold, deposits and FX-denominated securities issued by foreign financial institutions or foreign public entities where Venezuela has a stake and interest: Central bank

*  *  *

Did Venezuela just say they will use foreign-deposited gold in their vaults as reserves? Confiscation?

*  *  *

And if that wasn’t enough, a massive blackout just hit Caracas…

end

Michael Snyder continues on the same theme as Charles Smith of TwoMindsBlog that there is a monstrous derivatives underwritten on oil which will break the banks:

(courtesy Michael Snyder/EconomicCollapseBlog)

By Michael Snyder, on December 3rd, 2014