dec 29/Germany probably repatriates 44 tonnes of gold/Holland receives its last 3 tonnes/no changes at the GLD/SLV loses 431,000 oz/gold and silver whacked again/Greece goes to the polls on Jan 25.20015 as they fail to get the required 180 votes for a new President/

Good evening Ladies and Gentlemen:

Here are the following closes for gold and silver today:


Gold: $1181.70 down $13.60   (comex closing time)
Silver: $15.74 down 37 cents  (comex closing time)

In the access market 5:15 pm


Gold $1184.00
silver $15.80


The big news came from the FRBNY where we witness $64 million dollars worth of gold leave the bank (and New York shores)to repatriate the last amount owing to Holland and most likely Germany resumes her repatriation.  This gold is valued at $42.20 per oz and thus 1.516587 million oz (47.17 tonnes) leaves the bank.   We know that Holland was to receive its last 3 tonnes in November (they have thus repatriated 122.5 tonnes from the beginning of 2014).  Since Germany is the only country that officially has asked for her gold back, you can safely assume that Germany has received 44 tonnes of her 1500 tonne hoard held in NY back to Frankfurt.  The repatriation leaves behind a huge mess of derivatives as there is approximately 100 paper obligations per one oz of gold repatriated. ( Thus the 47.17 tonnes repatriated leaves behind a mess of 4,700 tonnes of paper obligations (151 million oz)

Also the Bloomberg story of a few months ago, that Germany does not wish to repatriate any more of her gold from the USA is totally bogus!!


The gold comex today had a fair delivery day, registering 16 notices served for 1600 oz. Silver comex registered 0 notices for nil oz.

Three months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.58 tonnes for a loss of 57 tonnes over that period.



In silver, the open interest fell by only 668 contracts despite Friday’s silver price rise of 44 cents.  Short covering was the object of the exercise today.   The total silver OI still remains relatively high with today’s reading at 148,436 contracts. The big December silver OI contract lost 2 contracts. It lowers to 20  OI contracts.


In gold we had a huge rise in OI with the rise in price of gold on Friday to the tune of $21.80. The total comex gold OI rests tonight at 374,019 for a gain of 1721 contracts. The December gold OI rests tonight at 286 contracts losing 13 contracts.





you have more important things to read instead of how gold/silver traded today.





Today, we had no change in  gold inventory  at the GLD /Inventory 712.30 tonnes

In silver, no change in silver inventory/

SLV’s inventory rests tonight at 330.569 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


First: GOFO rates:


GOFO rates moved slightly in both directions for today.  The ONE, TWO  moved slightly towards the positive direction but still remain negative.  The 3 and 6  month GOFO remained constant and the 12 month moved closer to the negative needle.


On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates. These rates are still fully manipulated. London good delivery bars are still quite scarce.

Dec 29 2014

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

 -.08%                    -.055%                      -.0400%             +.02333%             +.1325%

Dec 24 2014:



-.09%                     -.065%                    -.040 %                +.023%                 +.1375%






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 rose today by 1,721 contracts from  372,298 all the way up to 374,018 with gold up by $21.80 on Friday (at the comex close). This is what one would expect with such a sharp rise in price. We are now into the big December contract month where the number of OI standing for the gold metal registers 286 contracts for a loss of 13 contracts. We had 13 delivery notices served on Friday so we neither gained nor lost any gold contracts standing for delivery in the December contract month.  The non active January contract month fell by 27 contracts down to 445. The next big delivery month is February and here the OI rose to 222,140 contracts for a gain of 1,572 contracts. The estimated volume today was poor at 41,102. The confirmed volume on Friday was also poor at 71,015 even although  they had some help from our high frequency traders. The comex now has no credibility and many investors have vanished from this crooked casino. Today we had 16 notices filed for 1600 oz .

And now for the wild silver comex results. Silver OI fell by 668 contracts from 149,104 down to 148,436 even though silver was up by 44 cents on Friday. Short covering by the banks was no doubt in full force on Friday. The big December active contract month saw it’s OI lower by 2 contracts down to  20 contracts. We had 1 notices served on Friday so we lost 1 contract or 5,000 additional oz that will not stand     The estimated volume today was simply awful at 10,050. The confirmed volume on Friday was just as bad at 18,115. We had 0 notices filed for nil oz today.  It now seems that most of the volume at the comex is done off hours.

December initial standings


Dec 29.2014



Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz 64,492.92 oz ,(Brinks/Scotia) 2000 kilobars +192.92 oz
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil oz
No of oz served (contracts) today 16 contracts(1600  oz)
No of oz to be served (notices) 270 contracts (27,000 oz)
Total monthly oz gold served (contracts) so far this month  3111 contracts(311,100 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month  153,424.154 oz

Total accumulative withdrawal of gold from the Customer inventory this month

 216,969.4 oz

Today, we had 0 dealer transactions

total dealer withdrawal: nil oz



we had 0 dealer deposit:

total dealer deposit: nil oz



we had 2 customer withdrawals


i) Out of Brinks:  192.92 oz (6 kilobars???)

ii) Out of Scotia  64,300.000  (2000 kilobars ???)

total customer withdrawal: 64,492.92  oz  (2006 kilobars)





we had 0 customer deposits:



total customer deposits;  nil



We had 0 adjustments



Today, 0 notice 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 16 contracts of which 16 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 (3111) x 100 oz to which we add the difference between the OI for the front month of December (286) minus the # gold notices filed today (16) x 100 oz = 338,100 the amount of gold oz standing for the December contract month.

Thus the initial standings:

3111 (notices filed for the month x 100 oz) + (286) the number of OI notices for the front month of December served upon – (16) notices served today equals 338,100 oz or 10.51 tonnes.

we neither gained nor lost any gold ounces standing for the December contract month.


Total dealer inventory: 770,987.09 oz or 23.98 tonnes

Total gold inventory (dealer and customer) = 7.895 million oz. (245.58) tonnes)


Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 57 tonnes have been net transferred out. We will be watching this closely!


This initiates the month of December for gold.





And now for silver



Dec 29/2014:



 December silver: initial standings





Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 13,695.026  oz   (Delaware )
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil oz
No of oz served (contracts) 0 contracts  (245,000 oz)
No of oz to be served (notices) 20 contracts (100,000 oz)
Total monthly oz silver served (contracts) 2936 contracts (14,680,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  1,594,966.8  oz
Total accumulative withdrawal  of silver from the Customer inventory this month  7,596,397.0  oz

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 0 customer deposit:


total customer deposit  nil oz



We had 1 customer withdrawal:

i) Out of Delaware:  13,695.533 oz

total customer withdrawal: 13,695.533 oz



we had 0 adjustments



Total dealer inventory: 64.604 million oz

Total of all silver inventory (dealer and customer) 176.472 million oz.

The total number of notices filed today is represented by 0 contracts for nil 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 (2936) x 5,000 oz to which we add the difference between the total OI for the front month of December (20) minus (the number of notices filed today (0) x 5,000 oz = the total number of silver oz standing so far in November.

Thus: 2936 contracts x 5000 oz + (20) OI for the November contract month – 0 (the number of notices filed today) =14,780,000 oz of silver that will stand for delivery in December.

We lost 5,000 silver ounces that will not stand for the December silver contract. These were obviously cash settled and then another purchase of a future contract.



for those wishing to see the rest of data today see: or







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 29.2014 no change in gold inventory at the GLD/inventory 712.30 tonnes


Dec 26.2013/ a small loss of .6 tonnes of gold.  Inventory tonight at 712.30 tonnes


Dec 24.2014: wow!! somebody robbed the cookie jar/ we had a huge withdrawal of 11.65 tonnes from the GLD inventory/inventory at 712.90 tonnes. England must be bleeding badly!


Dec 23.2014; no change in gold inventory at GLD/724.55 tonnes


Dec 22.2014: no change in gold inventory at the GLD/724.55 tonnes

Dec 19.2014: a huge addition of 2.99 tonnes at the GLD/724.55 tonnes

Dec 18.2014: no change in inventory at the GLD/721.56 tonnes

Dec 17.2014: no change in inventory at the GLD/721.56 tones

Dec 16.2015  we lost 1.80 tonnes in tonnage at the GLD/721.56 tonnes

Dec 15.2014: we lost 2.39 tonnes of gold inventory at the GLD/Inventory at 723.36 tonnes

dec 12.2014: we had no change in gold inventory/GLD inventory 725.75 tonnes

Dec 11.2014: we had another addition of .95 tonnes of gold inventory at the GLD/Inventory 725.75 tonnes

dec 10.2014: we gained another 2.99 tonnes of gold at the GLD. If China cannot get its gold from London, then its only source will be the FRBNY.

Inventory: 724.80 tonnes

Dec 9.2014: we gained 2.69 tonnes of gold/inventory 721.81 tonnes

Dec 8.2014: we lost .900 tonnes of gold/inventory 719.12 tonnes

Dec 5.2014: no change in tonnage/720.02 tonnes

Dec 4 no change in tonnage/720.02 tonnes





Today, December 29 / we had no change in  gold   inventory at the GLD /Inventory rests tonight at 712.30 tonnes


inventory: 712.30 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 : 712.30 tonnes.






And now for silver (SLV):


Dec 29.2014 we had a small loss of 431,000 oz at the SLV to probably pay for fees/inventory 330.138 million oz.


Dec 26/ no change in silver inventory at the SLV/inventory 330.569

million oz.


Dec 24.2014: we had a huge loss of 7.566 million oz/inventory 330.569 million oz


Dec 23.2014: no change in silver inventory/338.135 million oz


Dec 22.2014: today we lost 862,000 oz of silver inventory from the SLV.  this left late Friday night./Inventory 338.135  million oz

Dec 19.2014; No change in silver inventory at the SLV/Inventory 338.997 million oz.

Dec 18.2014: we lost 2.012 million oz of silver from the SLV vaults/inventory 338.997 million oz

Dec 17.2014: no change in silver inventory/SLV 341.009 million oz

Dec 16.2014/ no change in silver inventory/SLV 341.009 million oz

Dec 15.2014: we lost 1.341 million oz of silver at the SLV/Inventory 341.009 million oz

Dec 12.2014 no change in silver inventory at the SLV/Inventory at 342.35 million oz

Dec 11.2014: we lost 2.873 million oz of silver inventory at the SLV/Inventory 342.35 million oz

December 10.2014; no change in inventory/345.223 million oz

Dec 9.2014: no change in inventory/345.223 million oz

Dec 8.2014: no change in inventory/345.223 million oz

Dec 5/2014: no change in inventory/345.223 million oz

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



December 29/2014 /we had a small loss of 431,000 oz at the SLV/inventory

registers: 330.138 million oz







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

Note: Sprott silver fund now for the first time into the negative 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 10.5% percent to NAV in usa funds and Negative 10.5 % to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.8%

Percentage of fund in silver:37.6.%

cash .6%



( December 24/2014)  no figures today/Canadian holiday.

2. Sprott silver fund (PSLV): Premium to NAV falls to – 0.36%!!!!! NAV (Dec 29/2014)

3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.40% to NAV(Dec 29/2014)

Note: Sprott silver trust back  into negative territory at -.36%.

Sprott physical gold trust is back in negative territory at -0.40%

Central fund of Canada’s is still in jail.







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




Early gold trading from Europe early Monday  morning:




Mark O’Byrne is off today/no report from Goldcore

(courtesy Mark O’Byrne/Goldcore)





SGE Withdrawals A Whopping 61t In Week 51, YTD 2016t

Wow!! 61 tonnes of gold was withdrawn from Shanghai vaults.  This generally comes extremely close to estimating demand from China  (the populace).  It excludes sovereign China itself who purchases gold with dollar reserves and not through the Shanghai exchange.

(courtesy Koos Jansen)

Koos Jansen

Withdrawals from the Shanghai Gold Exchange (SGE) came in very strong in week 51 at 61 tonnes, year to date the counter has reached 2016 tonnes.

Screen Shot 2014-12-27 at 12.18.55 PM
Blue (?????) is weekly gold withdrawn from the vaults in Kg, green (?????) is the total YTD.

Some SGE data lags one week, some not; in this post all data is up to week 51 (December 19).

Withdrawals from the vaults of the SGE captures Chinese wholesale demand, however, to get a more precise view on demand we have to add SGEI volume to the equation (read this post for a comprehensive explanation on the relationship between SGE withdrawals and volume on the Shanghai International Gold Exchange – SGEI). If we subtract SGEI volume from SGE withdrawals, at least 51 tonnes was withdrawn in week 51, at most 61 tonnes; year to date, at least 1,963 tonnes was withdrawn, at most 2,016 tonnes.

I could speculate on why Chinese wholesale gold demand is likely to be more in the area of the upper limit or bottom limit, fact is I have little evidence to back it up; all I know at this stage is that it’s somewhere in between.

Shanghai Gold Exchange SGE withdrawals delivery 2014 week 51, dips

Last week I wrote I expected withdrawals to be strong in the coming weeks, as December and January are seasonally the strongest months, but the Chinese are often aiming to buy their physical on the dips. In week 49 and 50 withdrawals were a bit held back because of the rising price of gold in renminbi. In week 51 the price was declining, so withdrawals were up.

Shanghai Gold Exchange SGE withdrawals delivery only 2014 week 51, dips

Year to date SGE withdrawals – 1963 tonnes, the bottom limit – were supplied by (my best estimates):

  • 442 tonnes mine production
  • 1,172 tonnes import
  • 349 tonnes recycled gold

If we use the upper limit – 2016 tonnes, import and/or recycled gold had to be more.

SGE premiums have been hovering in between 0.51 and 0.76 % above London spot throughout week 51.

Total SGE (gold) trading volume was down 14 % from the previous week at 410 tonnes. The uptrend is still intact as we can clearly see from the next chart.

Shanghai Gold Exchange SGE weekly gold volume

On the Shanghai Futures Exchange (SHFE) volume traded in Au futures accounted for 786 tonnes in week 51 (1,196 tonnes SGE + SHFE volume), on the COMEX 2,527 tonnes changed hands.

COMEX vs SGE + SHFE gold volume

Koos Jansen






Just got the data of gold leaving the FRBNY for November: 64 million dollars worth of gold valued at 42.20 dollars


Thus: 64 million dollars /42.20 dollars per oz = 1.516587 million oz

Translated into tonnes:47.17 tonnes.


If you recall, we needed 3 tonnes to finish the Dutch repatriation.

So now we have conclusive proof that Germany has now repatriated 44 tonnes of gold so far this year.


your data;


Selected Foreign Official Assets Held at Federal Reserve Banks (3.13) 1

Millions of dollars, end of period
Asset 2011 2012 2013 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Nov 2014/p
1 Deposits 125 6,426 7,970 7,808 5,942 6,565 6,566 5,243 5,260 5,248
Held in custody
2 U.S. Treasury securities2 2,572,194 2,876,637 2,977,160 2,932,948 2,952,019 2,968,786 2,988,859 2,982,672 2,951,956 2,946,569
3 U.S. government agency securities3 730,754 694,720 761,138 757,796 758,926 760,772 761,200 769,969 764,641 784,793
4 Earmarked gold4 8,417 8,417 8,410 8,376 8,369 8,336 8,315 8,305 8,248 8,184
  1. Except for earmarked gold, excludes items held for international and regional organizations.





I sent immediately the data to Koos Jansen who now reports on the above story:


Posted on 29 Dec 2014 by

Federal Reserve Bank New York Lost 47t Of Gold In November

The number we all have been waiting for; The Federal Reserve Bank of New York (FRBNY), which is the custodian for parts of the official gold reserves of 36 nations and the IMF, e.g. The Netherlands and Germany, saw its inventory of foreign gold deposits drop by 47 tonnes in November 2014. Year to date the FRBNY has lost 166 tonnes. The FRBNY only publishes how much gold it stores in total for foreign nations and the IMF, not country specific.

The German central bank, the Bundesbank, or BuBa, first announced a gold repatriation program in 2012. BuBa then revised their program in 2013; it intended to repatriate 300 tonnes of gold from the US and 374 tonnes from France by the end of 2020. However, in 2013 they only received a meager 5 tonnes from the US and 32 tonnes from France. No worries though, said Carl-Ludwig Thiele from BuBa, in 2014 Germany aims to get 30 to 50 tonnes back from New York to remain on schedule.

BuBa Jansen

Last November the Dutch central bank (DNB) surprisingly reported it had secretively repatriated 122.5 tonnes from New York. Quickly everybody in the gold space grabbed his or her calculator. If the Dutch got 122.5 tonnes from the FRBNY somewhere in between January and November, than how much should have been withdrawn in total from the FRBNY over this period, in order for Germany to remain on schedule? Now we know, based on official numbers: 166 tonnes was withdrawn in the first eleven months of this year, The Netherlands got 122.5 tonnes, which leaves 44 tonnes that Germany potentially got out of the vaults in Manhattan.

If the remaining 44 tonnes were all for sie Germans, this means Buba could be exactly on track to repatriate 30 to 50 tonnes this year.

FRBNY foreign gold deposits November 2014

Were both the dot-com bubble and housing bubble in the US preceded by large outflows of foreign gold deposits from the FRBNY?

FRBNY Nov 2014 

The German central bank still has some explaining to do. How did the Dutch get 122.5 tonnes back in few months and do they take seven years to repatriate 300 tonnes?

Rectification: in this post I speculated The Netherlands repatriated 122.5 tonnes in two months (October and November). This was obviously incorrect.

Koos Jansen
E-mail Koos Jansen on:




Gold Held In NY Fed Vault Drops To Lowest In 21st Century After Biggest Monthly Withdrawal Since 2001


Exactly one month ago we observed that, as expected in the aftermath of the Netherlands’ shocking and still not fully explained gold repatriation from the NY Fed, the amount of foreign earmarked gold on deposit with the Fed had just experienced a 42 ton withdrawal: the single largest outflow of gold held at the NY Fed in over a decade, going back all the way to 2001. This had brought the total amount of YTD gold withdrawals from the NY Fed to a whopping 119 tons: the most since the Lehman collapse.

However, because this total was insufficient to cover just the Dutch repatriation of gold from the NY Fed (which amounted to 122 tons), we knew there would be more activity when the November data hit. Sure enough, earlier today the Fed reported the total amount of earmarked gold (or gold “held in foreign and international accounts and valued at $42.22 per fine troy ounce; not included in the gold stock of the United States“) for the month of November: at $8.184 billion, this was a $60 million drop from the previous month.

In actual tonnage terms, this means that in Novembersome 47.1 tons of gold were withdrawn from the NY Fed, bringing the Fed’s total earmarked gold to just 6,029 tonnes: the biggest single monthly outflow going back to the turn of the century. This is also the lowest amount of gold held at the NY Fed vault located at 33 Liberty street (and just across from the even bigger vault located at 1 Chase Manhattan Plaza) in the 21st century.

But even more notable is that with the November data, we now know that all of the Dutch repatriated gold is now fully accounted for.

Which brings up a far more important question: net of the Netherlands withdrawals, there is some 44 tons of gold that has been quietly redeemed by another entity. The question is who: is it now the turn of Austria to reveal in a few weeks that it too, secretly, withdrew some 40+ tons of gold from “safe keeping” in the US? Or was it Belgium? Or did the Dutch simply decide to haul back some more. Or did Germany finally get over its “logistical complications” which prevented it from transporting more than just a laughable 5 tons in 2013? And most importantly, did Germany finally grow a pair and decide not to let “diplomatic difficulties” stand between it and its gold?

We should have the official answer shortly.







A terrific conversation with Wolf Richter and Fabrice Ristori

( on gold and why the bankers are terrified by gold:


(courtesy Wolf Richter/Ristori/



Gold “Terrifies” the International Monetary System

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Gold is the most maligned asset, if you listen to the Fed, the ECB, and other central banks. This was driven home again in a variety of ways, including what transpired before the Swiss gold referendum and Mario Draghi’s “all assets but gold” declaration. So I asked a man who knows,Fabrice Drouin Ristori, Founder and CEO of, why the heck central banks react toward gold in that bizarre manner.

WOLF: On November 30, the Swiss voted down the proposal presented in the “gold referendum.” Was there anything peculiar about the process?

FABRICE: The Swiss National Bank and most Swiss media campaigned for the NO side, which is quite unexpected in a democratic process. There are two lessons to be learned from this referendum: One, this campaign clearly shows that gold is the banking and financial system’s enemy #1 in Western countries, since a return to a gold standard would limit their money creating capacity, thus their power. And two, people in Western countries have lost awareness of what a monetary system based on true money is. The Swiss have now joined this category despite their long experience with the gold standard.

WOLF: Following the ECB’s decision to delay any QE till next year, Mario Draghi said that in terms of asset purchases, the ECB had discussed “all assets but gold.” Why would the ECB consider buying all assets – including “old bicycles,” as German politician Frank Schäffler had said so poignantly in July 2012 – but not gold?

FABRICE: The central bankers’ discourse is systematically anti-gold. Draghi’s announcement just confirms the fact that the ECB along with other Western central banks consider gold as their main enemy. In a gold-standard environment, they would lose the capacity of printing money, and they don’t want to give up this power.

Over the last few months, it has gotten quite difficult to purchase physical gold in large quantities, as proven by the backwardation phenomenon, when the Gold Forward Offer Rate is negative [GOFO is the interest rate at which participants are willing to lend gold on a swap against US dollars]. If the ECB were to buy physical gold in the markets it would create havoc on spot prices. And a rising gold price brings investors and economic agents to seriously question the stability of paper currencies. They might even abandon paper currencies in favor of tangible assets. To avoid that whole chain reaction, the ECB refuses to buy gold as part of its QE program.

WOLF: There have been a slew of countries trying to repatriate some of their gold, among them Venezuela, Germany, and the Netherlands. Seems easy enough, but some of these countries have a hard time repatriating their gold. What’s the deal?

FABRICE: Gold has been stored mainly in the United States and London in order to protect the gold reserves during times of conflicts – the Cold War, for example – and/or to improve the liquidity of their gold reserves by moving them closer to the large trading centers.

That certainly made sense at the time, but we are now seeing a reverse movement of repatriation as there are some doubts as to the real existence of those gold reserves in the two main storage locales, London and New York. There is a high probability that gold reserves from several countries have been leased to bullion banks and then sold on the markets in order to control the gold price and thus maintain the illusion of value of paper currencies such as the dollar, the euro, etc.

When central bankers, often under pressure from their own government, decide to repatriate their physical gold, one can logically assume that they have some doubts about all of their gold still being there, especially in a context where no real audits of gold reserves are being performed.

Physical gold is making a comeback in the international monetary system. Several governments and monetary authorities are aware of this and are worried about the existence of their gold reserves. I believe we are seeing the end of a game of musical chairs that will bring us a lot of bad surprises.

WOLF: With the Bank of Japan out to demolish the yen, successfully so far, Japanese households might someday get scared, dump their yen, and become big gold buyers. Is that something that would worry the BOJ since it has been telling the Japanese to pull their money out of the banks and put it in the stock market in order to drive up stocks?

FABRICE: All major central banks are worried about this movement toward physical gold. We see it through media pressure, for example, leading up to the Swiss gold referendum; we see it in announcements by central banks, such as Mario Draghi’s “all assets but gold” declaration;  we see it in outright market manipulation. Everything is done to bash gold so that no link can be established between the loss of purchasing power of paper currencies and the performance of gold.

Gold terrifies the pundits and powerbrokers of the current international monetary system. They’re terrified of gold’s eventual return at the core of the future international monetary system. And this is why they openly bash it.

They are trying, like in Japan, to influence individual decisions. But when the loss of faith in paper currencies manifests itself all over the world, I don’t see how investors would want to follow the advice of those who have contributed to the destruction of the purchasing power of these currencies through infinite money creation, such as QE and other methods.

WOLF: On a more personal note, you’re an entrepreneur. We here in San Francisco appreciate that. But why did you go that route?

FABRICE: I founded in 2011 to organize in one location a solution that lets investors own physical gold and silver directly in their name, without any intermediaries, and store it outside the banking system, which I think is crucial for a number of reasons. This way, each investor can become his or her own central bank. If I may, I would like to invite your readers to check out our solution at

Fabrice Drouin Ristori is the Founder and CEO of







(courtesy GATA, Chris Powell/Dr Paul Craig Roberts)

Russia 24 network interviews GATA secretary and Paul Craig Roberts on market rigging


8:45a ET Monday, December 28, 2014

Dear Friend of GATA and Gold:

On its “Geo-Economics” program this month, Russia’s biggest television network, Russia 24, interviewed your secretary/treasurer and former Assistant U.S. Treasury Secretary Paul Craig Roberts about gold and commodity market rigging by Western governments. The interview with your secretary/treasurer took place while he was in Munich, Germany, to address a meeting of the German Precious Metal Society and the Foundation for Liberty and Ratio —

— which explains the Munich skyline in the background of the broadcast. The papers he brandishes at the beginning of the interview are the filings with the U.S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission confirming that central banks are secretly trading all U.S. futures markets:

The “Geo-Economics” program has been posted at Russia 24’s Internet site here —

— and the segment on gold and commodity market rigging begins at the 11-minute mark. To watch, click on the video start button on the image of the European Union flag, or, if the button doesn’t appear, just click on the image of the flag. You’ll have to sit through a brief commercial before the program begins.

This is at least the second time your secretary/treasurer and Roberts have been cited by Russia 24. Since the network is part of a Russian government-owned media company, these appearances may signify that the Russian government is not only aware of gold price suppression by Western governments but also doesn’t mind public discussion about it. With a speech by its deputy chairman in Moscow, the Bank of Russia publicly took note of GATA’s work as early as 10 years ago:

While gold and commodity market rigging by Western governments remains a prohibited topic in the mainstream Western financial news media, it is a legitimate topic elsewhere. With your help GATA will continue to press the issue everywhere.

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




(courtesy Russia Today)


Ditching US dollar, China and Russia launch financial tools in local currencies


From Russia Today, Moscow
Monday, December 29, 2014

China and Russia have effectively switched to domestic currencies in trading using financial tools such as swaps and forwards, as they seek to reduce the influence of the US dollar and foreign exchange risks.

The agreement signed in the end of October comes into force today and and provides a currency swap of 150 billion Chinese yuan, up to US$25 billion.

The country’s Foreign Exchange Trade System will carry out similar transactions with the Malaysian ringgit and the New Zealand dollar.

From now on yuan swaps are available for 11 currencies on the foreign exchange market. …

… For the remainder of the report:





Ted Butler believes that JPMorgan is the huge purchaser of the USA Mint’s silver eagles;  (I think it is a little too far fetched, but I will get you decide)


(courtesy Ted Butler)




The Perfect Crime

Theodore Butler


December 29, 2014 – 10:20am

A couple of weeks ago, a long time subscriber correctly pointed out that I seemed to be speculating more than usual in my conclusion that JPMorgan was the big buyer of Silver Eagles and had accumulated as many as 300 million oz of silver, including Eagles and bullion. The subscriber noted that I usually relied on hard core facts that could be documented and not on speculation. As it turns out, I believe there are sufficient number of hard facts behind my speculation, but I had failed to point them out. So let me present the facts, as I see them, that point to JPMorgan having amassed the largest physical silver position in history.

First, let me set out what I am suggesting concerning JPMorgan and silver. I’m not suggesting I knew all the facts as they were developing, but I came to see them only afterward with the benefit of hindsight. The facts show that JPMorgan took over Bear Stearns and its concentrated short position in COMEX silver (and gold) in March 2008 when silver was close to $21, the highest level to that point in 28 years. The price of silver fell from that level in an irregular pattern until late 2010, while JPMorgan both decreased (bought back) much of its concentrated short position on sharp price declines and increased its short COMEX silver short position on rallies, as I publicly chronicled all along. At times, JPMorgan’s COMEX net short position exceeded 40,000 contracts or the equivalent of 200 million oz. Such a large concentrated position necessarily controlled the price of silver and was, in fact, manipulative on its face.

Because it controlled the price of silver, JPMorgan profited handsomely on its COMEX manipulation thru 2010 and not even an ongoing five year CFTC investigation interfered with JPM’s control on silver prices. However, in late 2010, investor demand for physical silver caused silver prices to break above the highs of early 2008 and JPMorgan could no longer control the price of silver through excessive paper short selling on the COMEX. Physical silver conditions tightened so much by the end of April 2011 that the price reached nearly $50 and, quite literally, JPMorgan (along with other collusive CME traders) were staring into a financial catastrophe, the same as undid Bear Stearns three years earlier.

But no bailout of JPMorgan was possible in April 2011 and instead, the bank along with interested parties at the CME Group arranged for a disorderly takedown of silver prices, almost assuredly with the approval of US regulatory officials. The disorderly takedown proved successful and the big shorts, particularly JPMorgan, escaped what would have been an epic financial catastrophe had they been forced to cover their massive silver short positions.

It is said that one learns more from failure, especially near disaster, than from success. It is my belief that at the time of JPMorgan’s near catastrophe in being short silver into April 2011 that the bank realized just how limited and critical the supply of silver in the world was and decided to use their near death experience to their advantage. It was at that time that the bank decided to buy as much physical silver as it could in order to profit even more to the upside than it did previously to the downside. Again, it was not possible for me to know this at that time and it has only come to me with the fullness of time and the developing factual evidence. What evidence?

For starters, there is the matter of extraordinary sales of Silver Eagles from the US Mint. Since April 2011, the US Mint has produced and sold 140 million Silver Eagles, more than in any similar period of time, in a price environment that can only be termed putrid and in which sales of Gold Eagles were notably lower. I would estimate that JPMorgan purchased close to half of the 140 million Silver Eagles sold since April 2011. According to very reliable sources on the retail front, general investment demand has been lower over this time, as retail buyers do not buy strongly into a declining price environment in any investment asset. Yet we know for a fact that there has been extraordinary buying of Silver Eagles, even while Gold Eagle sales cooled off notably, so someone had to be buying Silver Eagles.

If there is one thing that JPMorgan is expert at, given that it commands an army of lobbyists and has more government officials in its back pocket than any other entity on the face of the earth, it is the exploitation of US law and regulations. JPMorgan knew that US law dictated that the Mint must produce enough Silver (and Gold) Eagles to meet demand. That law was never intended to allow a single big buyer to demand the extraordinary amount of Silver Eagles that JPMorgan desired to buy, but that’s the purpose behind the exploitation of the law.

The Mint sells Silver Eagles at the prevailing price of silver on the day of the sale. In essence, the COMEX price of silver is the price of silver. By controlling the price of COMEX silver, JPMorgan sets the price at which it will buy Silver Eagles. It’s the perfect crime – JPMorgan sets the price of COMEX silver and then demands as many coins as the Mint and its suppliers can produce, even if that means producing the coins on a 24/7 basis. Hey, that’s the law. And remember when JPMorgan increased its COMEX short position in the summer, assuring that prices were about to drop and what occurred as a result? Sales of Silver Eagles nosedived temporarily and only resumed after prices were brought lower by this crooked bank. This is old stuff – what about some additional evidence that JPMorgan has amassed a massive quantity of physical silver?

When JPMorgan took over Bear Stearns in 2008, its Manhattan precious metals warehouse was not operating. But in May 2011, after the decision was made to accumulate physical silver, the warehouse was activated as a working COMEX-approved silver facility and guess what – after starting with zero silver inventory that warehouse has grown to nearly 50 million oz, the largest of all six COMEX warehouses. You can decide if this was just a coincidence but the most compelling reason to start a warehouse would be to store silver you owned in your own warehouse rather than to pay some other warehouse to store metal you own. The timeline, in any regard, is remarkable.

In 2012, as the custodian for the metal held in the big silver ETF, SLV, JPMorgan physically transferred 100 million oz of silver it was storing in one of its own London warehouses on behalf of the trust to Brinks as a sub custodian. In hindsight, the most plausible explanation was to make room for silver JPM would come to purchase by using the SLV as a means of acquiring physical silver on an undetected and unreported basis as I have been explaining continuously (avoiding the SEC’s 5% share ownership reporting requirement). I believe much more than 100 million oz of silver, perhaps double or triple that amount have been accumulated by JPMorgan using the SLV to transfer metal to its own London warehouses completely undetected and unreported. The details of the London Warehouse transfer can be found here.

Then there is the matter of the unprecedented physical turnover in the COMEX warehouses. As I have detailed on these pages, this unusual turnover began in April 2011 and not in 2008 when JPMorgan first became the COMEX kingpin and manipulator by virtue of the Bear Stearns takeover. This timeline further supports the decision of JPMorgan to begin acquiring physical silver after its near death experience in April 2011. With so much physical silver flowing into and out from the COMEX warehouses weekly, it would be easy for a big buyer to regularly skim off a continuous share of that physical flow. And this is in complete harmony with my conclusion that the unprecedented COMEX warehouse turnover is to due to tight conditions in that the tight conditions are mainly due to JPMorgan’s accumulation of physical silver.

Back in the late 1970’s the Hunt Brothers accumulated close to 100 million oz of physical silver (and more in futures contracts) and were found to have manipulated the price of silver higher as a result of that accumulation. What makes the much larger accumulation of physical silver by JPMorgan today different is that it is the perfect crime.

The Hunts were outsiders; JPMorgan is the ultimate insider. The Hunts ran afoul of the regulators; JPMorgan owns the regulators. The Hunts’ purchases were widely known; as far as I know, I’m the only one pointing to JPMorgan accumulating massive amounts of physical silver. The Hunts drove prices higher as they accumulated silver; JPMorgan, by virtue of its price control on the COMEX, has been able to accumulate silver on sharply declining prices. Talk about a stacked deck.

Given that JPMorgan has such control over the US regulators and is able to operate in near total secrecy in matters related to physical silver, it’s hard for me to imagine what could foil their perfect silver crime. All that’s missing is JPM selling out at extremely high silver prices. And considering that big banks, in essence, don’t have to report anything they don’t want to publicly report, I would be surprised if JPMorgan would even have to pay taxes if they made the many billions of dollars they seemed destined to make on silver to the upside.

Yes, it is true that I am speculating about JPMorgan and physical silver and that much of this is based upon analysis after the fact; but it was not possible for anyone to predict this in advance without practicing voodoo or communicating with the spirits. As for the evidence surrounding JPMorgan’s decision to accumulate physical silver, I guess you have to believe that all the circumstances revolving around April 2011 were completely coincidental to avoid making the connection.

As always, I can’t give you the exact timeline for the future. If there is much more additional physical silver for JPMorgan to accumulate at lower prices, I’m sure this crooked bank will arrange for those lower prices. But after no more additional silver is available on the cheap, it should be time for JPM to allow prices to climb. One more point – since JPMorgan has been accumulating silver for more than 3.5 years, its average price is considerably north of current prices. Back of the envelope calculations indicate an average price in the mid-$20’s and any profit to the bank would only accrue above those levels. Yes, it grates on me that JPMorgan has been able to illegally accumulate as much silver as I suspect and, most particularly, the manner in which that silver was accumulated; but at some point the accumulation should prove most beneficial to silver investors.

Ted Butler

December 29, 2014





I know that the following piece will scare you, but this is what is going to happen and you should be ready for it:


(courtesy Bill Holter/Miles Franklin)




 Fw: Fact or Fiction?




This past year was jam packed with news of all sorts.  Some was surprising, some of it was expected, while other news seemed to either be another dot to connect or an outlier dot to be connected later.  We even got news from time to time which even in today’s world could be considered bizarre or surreal.  Suffice it to say, were we receiving the current news of today just 15 years back, the financial and social worlds would have been in outright panic.  Not so today, the sheep are sound asleep even while a few well intending herders are sounding the alarm.  The populace in general have become dumbed down, beaten down, and barely able to read past whatever headline it happens to be for the day.  Let’s call the condition “comfortably numb” …

  I promised to write a “fictional” account of what my thoughts were “the day after” the financial lights go out.  This effort could easily be expanded into a full book because the ramifications of the coming credit meltdown are so far reaching.  The following is my opinion and as such, if you don’t agree with some of the possibilities I will provide, then please just smile, grin and bear it or just stop reading.  Here goes…
  For years Jack and Jill America had gone through the daily life of what
they believed was the American dream.  They’ve been married 25 years and have their 2.3 children.  Life has been getting tougher though, Jack and Jill both work but neither has had a substantive raise in nearly 10 years and their firstborn is now 3 years into college with the younger one getting ready for next fall.  They have accumulated some assets over the years but will have to refi their home’s equity to complete paying for college.  They’ve done everything they were told to do by the mainstream.  They’ve contributed to their 401K’s at work and even added to personal IRA’s and even 529 plans to help pay for college.  Jack and Jill have so far “climbed the hill” of life without any major setbacks, this is about to change as will their entire life!
  Going into a long weekend, Jack and Jill have a conversation over dinner.  They talk about the recent headlines they’ve been reading and the topic turns to the economy and markets.  The Dow just five days ago hit an all time high and the employment news earlier in the morning was really good!  The problem is, the employment news said the housing industry was doing terrific, particularly in their region.  Jill works in the mortgage market and Jack works for a bank so they both know this news doesn’t really add up, the discussion morphs into “are they really telling us the truth”?
  Then, something starts to happen at the front of the restaurant.  It looks like four or five couples are all arguing with the owner and the discussion is becoming heated.  You see, their credit cards are not working, none of them!  One gentleman slips out to cross the street and get cash from the ATM to pay his bill …but he came back empty handed.  The “tone” begins to change once another customer who went to a different ATM machine returns with the news his card was also denied.  The owner decides to call the police because it looks like he is going to be stiffed on most all of the tables since he generally is paid by credit or debit card 85-90% of the time.  The police inform him this is happening everywhere in the city, at gas stations, Walmart, restaurants, everywhere!  So, Jack leaves his business card and promises to come back on Monday to pay, a nice gesture but one he had no idea was pointless!
  They spend the weekend watching the news feverishly because they found out it was not “just” their city having these problems …it was all across the nation.  They feel some relief on Saturday morning as the “news” tells them a coordinated hack attack has taken down the clearing system for banks and is only temporary…but their warm fuzzy feeling turns to near fear when they go online to the internet.  It turns out, the banks are being closed indefinitely and something about China and gold …and dollars being refused by foreigners.  Jack doesn’t get it nor does Jill, how can this be?  What do you mean the banks are closed and dollars not being accepted?  Dollars are used all over the world …and what is Jack supposed to do Monday morning if his bank is closed?  Will they still pay him his salary?
  Monday morning comes and Jack goes to work only to find a sign in the front door “Bank closed indefinitely, sorry for the inconvenience” and a sign on the employee entrance with a phone number to call.  He calls and gets a recording, “due to circumstances out of our control, you will not be required to attend work until further notice”.  A cold chill washes down is back and he calls Jill.  She is already on her way home because her mortgage company is also closed, what are they going to do they wonder?  The first thought in both their minds is “food”, what are we going to do for food?  When they meet back at the house, Jack pulls out $300 from a drawer that he tucked away after coming back from vacation last month.  On their way to the store, they see huge lines as they pass gas stations.  They both wonder why there are lines since credit cards aren’t working but they soon find out …the grocery store is mobbed and the shelves are almost bare.  All of the canned goods are gone as are the basic staples like rice, pasta and beans.  There are a few vegetables left, along with spices and condiments but nothing else.  They were apparently too late.
  As they were leaving the store, Jill thought, “what about dog food” for our 3 beloved canine children?  Just as she started to say something, shots rang out and a big commotion near aisle nine.  Oh my God said Jack, this whole thing is breaking down!  They rushed out of harms way, got in their car and sped home.  How could this happen they wondered as the stock market was near all time highs?  How could “hackers” create such a havoc and now apparently some lives are going to be lost?  How could this happen, THIS IS AMERICA!
   As they pull into their subdivision with the intent of getting online to get a better idea of what was actually happening, they are stunned when they see a sign at the front gate.  The sign says “MANDATORY MEETING for ALL HOMEOWNERS tonight at 7:00 PM“.  They just look at each other and say “this is not good”.  What is going to happen?  They were about to find out!

  With trepidation, Jack and Jill showed up at the completely filled community center, the pitch and decibel level were off the charts.  So much commotion and so loud, until some guy started clanging two metal garbage can tops together to get people to quiet down.  As it turns out, the “guy” happens to be a long time County Sherriff’s Deputy, Dave.  He informs the crowd that they are now on their own, as is everyone else in the country.  The banking system has come down and will not be back up for an indefinite period of time, “the big one” everyone knew was coming but had ignored for so long, has finally arrived.  The national guard has been called out to the cities as have regular military.  The cities are war zones he says, it’s only a matter of time before it spills out and into the suburbs.
  The deputy also informs everyone that he will not be going to work the next day as he would not be paid anyway.  He lives in this neighborhood and plans to stay home to protect his family and belongings, he also informs “all of my other co workers have made the same decision”, we are all on our own now.  Most shocking to Jill was when he asked for a show of hands as to who had firearms and who didn’t.  She had no idea that almost three quarters of her neighborhood had guns.  She was not a real fan of guns but Jack convinced her they should get their concealed handgun licenses.  They had had their licenses for several years but the sad part is they never bought any guns because they didn’t see any immediate need, they do now!
  Deputy Dave pretty much took over from that point.  He chose who he wanted “guarding the gates” for a rotation on a 24 hour basis.  The neighborhood also had several ex military personnel.  In almost light switch fashion, the community turned into a functioning military garrison.  He also made clear, any crime from within would be dealt with swiftly and severely, theft of anything from within would be considered a capital offense.  Groups began to form.  Close neighbors began to group up and talk to each other.  Jack and Jill saw three of their immediate neighbors all together and approached them.  What are we going to do they all asked?
  What exactly did “indefinitely” mean?  One neighbor said he didn’t think there would be much of a problem for more than a week or so as the his computer geek friends told him the problem was being fixed.  Another neighbor said he wouldn’t be so sure of that, the Chinese have asked for an audit of U.S. gold and would not accept any dollars for any trade until they were satisfied we still had some gold to back our dollars.  He went on to say the Chinese were rumored to be paying $50,000 per ounce for any and all gold for sale which would make U.S. gold worth $ trillions …if we still had it.  Jack asked the question, “what does gold have to do with any of this, dollars are in the banks, not gold”?  You see, Jack, (like 95%+ of the populace) even being in the financial world didn’t understand what was happening even after the fact.  His ignorant bliss was being shattered.
  Several days passed, the dog food was almost all gone.  Jack looked in the pantry and calculated they could keep eating for another 5 days before the food was completely gone.  There had been talk about food pantries the government was setting up in cities, word also got around about one opening in the little town three miles away.  Jack thought to himself, at least we won’t starve.  His relief then turned to panic as Jill came in from next door, she was just informed that one the neighbors was shot and killed as he was leaving town.  He had gone in and bartered for a little bit of food, now, he and the food were both gone.  In less than one full week, the United States had gone from “model civility” to lawlessness.
  Jack was furiously thinking about what he could do to feed his family.  He remembered the little old lady down by the river who had chickens, maybe he could buy some eggs?  She was only two miles away and it would be safe to go on foot by jumping a couple of fence lines, so he told Jill his plan and set out with his $300 cash in hand.  Sure enough, the little old lady was there and she met Jack with a shotgun pointed, she remembered him though from the bank.  Jack asked if he could buy some eggs and she said “with what?”.  Jack told her he would gladly give her $20 for a dozen eggs and the old lady just laughed at him.  He said “how about $100 for a dozen?”, she laughed again and said he couldn’t have any eggs for $1,000.  She would however consider accepting something “real” in exchange.  If he had a bicycle, or some 20 gage shotgun shells or something she could use, then he’d have some eggs.  She thought to herself, this guy is a banker and understands money, maybe he has silver for exchange? … (Fat chance, I had to throw this one in for laughs!)
  Jack got back home and told Jill the bad news about the eggs, he said the old lady actually wanted “something” for the eggs instead of his dollars.  Jill now thought to herself, maybe jewelry or cooking utensils?  What about her handheld sewing machine?  Jill made the trek herself and did end up coming back with two dozen eggs and a promise for four dozen more next over the next 2 weeks so at least they would have something be it ever so small to eat for a time.
  This little bright spot turned dark pretty quickly as all of a sudden the lights went out.  They had not thought of this, nor did they think about their water supply.  People were getting sick from drinking the water as the plant workers were not working to purify it.  But now, now that the electricity is out, so is the water supply.  No electricity = no pumps, no pumps = no flow, could it get any worse?
  Jack and Jill lived for this first two week period after the banks shut down as well as they could considering their circumstances.  They had little food stocked up.  Nothing much to barter with.  Even though they only lived two miles from a river, they had no way to purify water.  If they did have food stocked up, they didn’t have any guns or ammunition to protect it (but they did have their “licenses”!) or themselves from other hungry souls in search of food.  They went from a casual dinner together one Friday night to living like barbarians within two weeks.  They had no clue whatsoever was coming, and when it did, they had no idea nor ability to deal with it.
  As I mentioned at the beginning, this saga is fodder for an entire book.  I apologize for not touching on all facets but it just could not be done in the space available.  Suffice it to say, when the banking system comes down, EVERYTHING will change.  Think of what life will be like within cities?  Think about the average American today.  50 million live on food stamps and over half have less than $500 in savings.  These people don’t have the ability to prepare.  Think of the millionaires out there who have their wealth in banks?  Or in stocks which cannot be traded?  How many Americans can live off of the land today?  Five percent?  Less?
  Without credit, nothing will work.  Distribution will definitely break down which means after the shelves are cleared, they will not be re stocked.  A new currency, one the people can have faith in as well as one that foreigners will accept will by necessity be introduced.  How long a banking/system closure takes place is anyone’s guess, however, it is not a guess that a financial panic will engulf the U.S. as well as most of the world.  We have lived a fantasy which has also engulfed “values” of all sorts.  Asset values, wage values as well as social values.  All of these will be re set.  I can assure you, the “mindset” of this nation will change more drastically than any time in her history.  I believe we will see a major shift in ideology, ethics and faith.  If anything good can come from what I believe is coming, it will be this shift in thought process toward truthfulness and godliness.  We as a nation have been moved so far down the rabbit hole on purpose to hide what was happening.  Our society has been so dumbed down, the really sad part is when the tsunami does hit …the majority will still not understand why.
 I assume if you are reading this then you already know “why”, your job now is to decide “what?”.  “What”? …as in what you should do to prepare the best you can for what is mathematically coming!  Regards,  Bill Holter






And now for the important paper stories for today:



Early Monday morning trading from Europe/Asia



1. Stocks up on major Asian bourses / the  yen slightly falls  to 120.47,

1b Chinese yuan vs USA dollar/ yuan slightly strengthens  to 6.2228
2 Nikkei down 89 points or 0.50%

3. Europe stocks all down  /Euro up/ USA dollar index down to 89.94/

3b Japan 10 year yield at .33% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 120.47

3c Nikkei now above 17,000

3e The USA/Yen rate well above the 120 barrier
3fOil: WTI 55.38 Brent: 59.38 /all eyes are focusing on oil prices. This should 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 Oil rises this morning for both WTI and Brent despite the fall on Rouble/

3k Greek third vote on Monday failed to elect a new president with 168 votes.

Needed 180 votes/ this forces Greece into a snap election  (see below)

3l China coming to the aid of cash strapped countries like Venezuela, Russia and Argentina. China relaxes reserve requirements and thus stimulation  (see below)

3m Gold at $1192 dollars/ Silver: $16.08

3n USA vs Russian rouble:  ( Russian rouble down 2.6 roubles per dollar in value)  56.11!!!!!!

3 0  Chinese set to relax all reserve requirements as they are now set to stimulate their economy.

3p  Greeks bank shares plummet!! (over 20% down)

4. USA 10 yr treasury bond at 2.22% early this morning. Thirty year rate well below 3%  (2.78%!!!!)
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid



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



Greek Assets Tumble, Global Santa Rally Briefly Halted As Renewed Threat Of Grexit Looms

Up until the Greek presidential vote made headline news, the biggest event of the day was not the full-blown bubble levitation in the Shanghai Composite which rose another 0.33% to a fresh 4 year high of 3,168 on expectations the recent PBOC targated intervention will transform into a full blown rate cut, but the sudden drop in the USDJPY and its first derivative, the Nikkei stock index, which turned negative on Monday after the health ministry announced a suspected case of the deadly Ebola virus, spooking investors but boosting health-related shares. A man who returned to Japan from Sierra Leone on Dec. 23 was suspected of contracting Ebola, the Ministry of Health, Labour and Welfare said. Test results are expected by Tuesday morning. If confirmed, it would be the first case positive diagnosis in Asia.

As a result, the Nikkei benchmark fell 0.5 percent to close at 17,729.84 points, wiping out early gains inspired by last week’s strong Wall Street performance. Even so, the Nikkei is on track for a yearly rise of almost 9 percent (in Yen terms, it is quite negative if expressed in USD) as the weak yen and aggressive asset buying by the Bank of Japan have helped offset the country’s disappointing economic performance.

But it was the result of the third and final presidential vote, which came 12 Yes votes short of the 180 threshold to elect a Greek president, that has sent Greek risk assets reeling and has spilled over into European stocks. Even US-based algos appear to have noticed and for some inexplicable reason futures are not of their now mandatory Green color.

As noted earlier, following the failed vote Greek banks are cratering, with many entering a bear market as of the last price update, such as Eurobank Ergasias -23%, Piraeus Bank -21%, National Bank of Greece down  18%, Alpha Bank 17% lower. While in the past this would have been enough to send European shares limit down and peripheral bonds bidless, algos have forgotten their programmed kneejerk reaction since Greece has been off the front page for so long. As a result, Europe is down but not nearly where it would have been had today’s vote taken place a couple of years ago. Then again, with the USDJPY far more important than what Greece may or may not do, all that will take for the Santa rally to resume, if only in the US, is for “someone” to buy a few yards of Dollar-Yen, push the pair to 121, and all shall be well once more.

Ruble declines for second day. The Italian and Spanish markets are the worst-performing larger bourses, the Swedish the best.  The euro is little changed against the dollar. Greek 10Y bond yields rise; French yields decline. Commodities gain, with copper, nickel underperforming and wheat outperforming. U.S. Dallas Fed index due later.

Market Wrap:

  • S&P 500 futures down 0.2% to 2080.6
  • Stoxx 600 down 0.2% to 343.3
  • US 10Yr yield down 2bps to 2.23%
  • German 10Yr yield down 2bps to 0.57%
  • MSCI Asia Pacific up 0.5% to 138.5
  • Gold spot down 0.3% to $1192.9/oz

Bulletin headline summary from Bloomberg:

  • Treasuries gain with EGBs, German 10Y yield falls to new record low 0.563% after Greek Prime Minister Samaras failed in his third and final attempt to persuade parliament to back his candidate for head of state.
  • Greece faces snap elections early in the New Year, may bring in a party opposed to austerity and reawaken the region’s sovereign debt crisis
  • Prognosticators are convinced Treasury yields have nowhere to go except up; calls for higher yields next year are the most aggressive since 2009, when USTs suffered record losses, according to data compiled by Bloomberg
  • After pumping record amounts of cash into Japanese shares last year, foreign investors have hardly added to holdings in 2014, providing the clearest look at how global investors have become disillusioned with Prime Minister Abe after he pushed through a tax increase in April that sent Japan into recession
  • Japan’s prime minister may gain the direct power to mobilize troops in the event of an intrusion into Japanese waters by foreign ships, the Nikkei newspaper reported, citing a draft of new security legislation
  • Japan detained the captains of two Chinese coral-fishing boats for refusing to allow their vessels to be searched, incidents that came amid a report the countries may resume talks to establish a maritime hotline
  • Planes and ships from four nations scoured the Java Sea for an AirAsia Bhd. jet that vanished more than a day ago with 162 people on board, as Indonesian investigators said the jet had likely crashed to the bottom of the sea
  • Sovereign yields mostly lower. Asian stocks mostly higher; European stocks and U.S. equity-index futures fall. Brent crude higher, gold and copper fall



On the weekend, the EU (and ECB officials) were trying desperately  to convince Greek parliamentarians to vote positive for Dimas as President of Greece. Obviously democracy was not part of the plan:
(courtesy zero hedge)

Greek Prime Minister: “It’s Best For The Country” To Do Away With Democracy

During a state-TV “interview” which many are dubbing pure fear-mongering propaganda ahead of Monday’s final ‘vote of confidence’, Greek Prime Minister Samaras unleashes his most assanine M.A.D. comments yet.


“It’s not a question of what’s good for me or New Democracy. It’s best for the country that there are not snap elections.”

Translation: you don’t need no stinking democracy, trust us – your benevolent rulers – to do what’s best for the Greek people.

  • *GREECE’S BIGGEST PROBLEM IS POLITICAL UNCERTAINTY: SAMARAS (not record youth unemployment, povrty, and suicide rates, and surging youth emigration)
  • *SAMARAS SAYS NOW IS TIME FOR LAWMAKERS TO DO THEIR DUTY (ignore the people’s pleas and pain, vote for EU bureaucrats)

And with Greece’s (anti-EU) Syriza party now leading by 2.5pts in the latest polls, it is hardly surprising Samaras is pulling out all the ‘turmoil’ threats. “Greek people don’t want elections,” he chides. By ‘Greek people’, we assume he means ‘unelected European bureaucrats’.




This morning Greece failed to elect a President and an election is called for Jan 25.2015.  Banking shares and Greek bonds tumble greatly!!

(courtesy zero hedge)




Greece In Turmoil After Third Failed Presidential Vote Means January 25 Snap Elections

And just like that Grexit is back.

It appears that with a few short days left in the year, the Santa rally is finally over, if only in Greece where both bonds and stock are tumbling after the third vote for PM Samaras’ appointed presidential appointee Stavros Dimas concluded as many had expected: in failure, with 168 Greek lawmakers voting in favor of Dimas, well short of the 180-vote threshold needed. 132 voted against Mr. Dimas. This means that the “worst case” scenario – at least as described by Goldman – is now on deck: a snap general election that could bring the anti-bailout Syriza party to power. And speaking of Syriza, and its triumphant leader Samaras, moments ago he announced that the now inevitable Greek elections will take place on January 25: pencil that date in for even more turmoil.

As for Samaras, his coalition government is now expected to resign later today.

The biggest question now is just how far ahead of New Democracy is the anti-bailout Syriza in polls, and will it be able to achieve a sufficient majority without needing ND or other coalition parties in order to rule, but with a 6%+ lead, Syriza’s chances look good to quite good:

Considering the rather violent market reaction in Greece right now, where everything is selling off, many have decided not to wait tunil then.

In terms of next steps, this is what happens via Bloomgberg:

  • Samaras is expected to chair a cabinet meeting after the vote
  • Parliament will be dissolved, incumbent President Karolos Papoulias may call new elections today, though he has up to 10 days to do so; actual date of vote is announced through a presidential decree posted on parliament’s main entrance.
  • Elections must be held within minimum 21 days and maximum 30 days after they’re announced
  • Jan. 25: By convention, parliamentary elections are held on Sundays, meaning this could be the first realistic date for the vote; Feb. 1 is also a possibility
  • Thereafter: If the party that places first has majority, its leader gets a mandate to form a cabinet which is sworn in on the third day after elections; if there’s no clear majority, the president hands mandate to leader of party with most votes to form a government within three days and put it to parliament for approval; failure to form a workable coalition means mandate passes to second-placed party and then third-placed, each of which has three days; if, as happened in 2012, each party fails to form a government, parties meet with president to try and form a coalition; if that fails, new elections are held
  • Feb. 28: Greece’s two-month bailout extension expires, potentially leaving the country without a financial lifeline or access to bond markets

The market reaction upon learning the news:

  • Greek stock market tumbles, leading declines in European stocks while generic Greek govt bond spreads vs Germany widen after Greece’s PM Samaras fails to install president in final round of voting and now faces snap elections early next year.
  • Greek/German 10Y spread +70bps to 861bps vs day low of 757bps; curve extends inversion
  • Greek 10 Year yield exceeds 9.5% for the first time since September 2013
  • German 10-Year yield falls to record 0.563%
  • Stoxx 600 falls as much as 0.8% to session low; Greek banks are the biggest decliners, with Eurobank Ergasias -23%, Piraeus Bank -21%, National Bank of Greece down  18%, Alpha Bank 17% lower
  • European shares fall, though are off intraday lows, with the telcos and banks sectors underperforming and basic resources, health care outperforming.
  • The Italian and Spanish markets are the worst-performing larger bourses.

Finally, for those who missed it, here is Goldman’s warning of fire and brimstone should the Greek indeed decide the time to exit the Eurozone has come:

Goldman Warns Greeks Of “Cyprus-Style Prolonged Bank Holiday” If They “Vote Wrong”

Funny what a difference two months make. Back on October 4, we wrote “Here We Go Again: Greece Will Be In Default Within 15 Months, S&P Warns” and… nobody cared as the Greek stock market meltup continued. Now, after the biggest three-day rout in Greek stock market history (or about 30% lower), and with the overhyped, oversold, oversusbcribed recent Greek 5 Year bond issue available in the open market some 16 points lower, and suddenly everyone cares. Including Goldman Sachs.

Overnight the bank with the $58 trillion in derivative exposure issued a note “From GRecovery to GRelapse” which is quite absent on the usual optimism, cheerfulness and happy-ending we have grown to expect from the bank whose former employee is in charge of the European printing press. Here is the punchline: “In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.


Dear Greeks, “don’t vote wrong” as EU’s Juncker urges you – you have been warned.


Here is the full note.


Why Have Greek Assets Tumbled?



Over the last three months, Greek assets have come under intense selling pressure. The 10y Greek government bond trades at a yield of 9.1% compared to 5.5% in September and the Athens stock exchange is trading 32% lower over the same time-frame (and 40% below the post-crisis peak). As we have written extensively, this deterioration in market conditions has taken place despite an ongoing improvement in macroeconomic indicators. Markets have sold off on the back of election uncertainty ahead of a key year for Greece’s recovery process.

Greece needs official sector funding to pass the 2015 funding hump and ensure financial stability.

Indeed 2015 is a pivotal year for Greece. The most recent growth data prints suggest that the recovery may be gaining momentum. But financial risks still lurk, which could destabilize the Greek economy back into recession. More specifically, 2015 is the last year the government faces large financing needs, nearing €24bn (net of the established primary surplus). Part of those needs may be covered with domestic resources (see Box 1). However, additional funds will likely be required to ensure the government is able to meet its liabilities. As discussed in Box 1, the additional funds required may range between €6bn and €15bn depending on different economic assumptions.

It is important to note that from 2016 onwards, overall financing needs become a lot more manageable (compared to €24bn in 2015) – at or below €10bn until 2022 (lower primary surpluses or higher bond yields than the ones provisioned in the program could push these calculations up somewhat).

With government bond yields at prohibitively high levels, the Greek government will require official sector financing to provide the additional funds for 2015. €7.1bn of IMF funds are currently available as part of the Greek assistance program under relevant conditionality. In addition, the Eurogroup decided on Monday to grant Greece a precautionary credit line (ECCL) provided Greece completes the ongoing review by end of February. There are three main items to be agreed on for the current review to reach a conclusion: a) further reform in labor markets and in union legislation, b) further pension system reform, and c) further budget cuts. Greece is also likely stay under close economic supervision thereafter.

Political complications arise with the presidential vote.

According to the Greek constitution, the parliament needs to elect a President of the Hellenic Republic every five years. The presidential vote requires an extended majority. The term of the incumbent, President Karolos Papoulias, ends in early March 2015. The parliament would need to start the process of electing a new president at least one month in advance – by early February the latest. Should the parliament fail to elect a president, general elections would need to be held.

Due to a tight timeframe between the new deadline for completion of the program review and the deadline for the presidential election, the government decided to speed up the voting process. Three votes will take place – first two on the 17th and the 23rd of December respectively. The first two votes require a majority of 200 votes, which is unlikely to be achieved given the current parliamentary balances. The one that essentially matters is the third and final one on the 29th of December, where the Greek government would need to find 180 votes in the current parliament (of 300 members) to back their presidential candidate. As things stand, the government majority does not suffice to elect a president and avoid elections. 25 independent MPs and MPs from small parties would need to consent to meet the tally.

In the event that the parliament elects a president, the government and the troika will likely resume negotiations and an agreement is likely to be found. Financial risks would decline and Greek assets would likely rally.

In the event that the parliament fails to elect a president, general elections would be held and market uncertainty/pressures would extend. At this stage it is important to understand that market pressures are not linked to the democratic process of elections nor to a potential government change, whatever the ensuing government formation may be.They are linked to the risk of policy discontinuity and a severe clash between Greece and international lenders. More specifically, we think the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited. Any such attempt would lead to an interruption of official financing to Greece.

Examining the downside scenario.

To be sure, even in the event of a government change, there is room for a cooperative solution between Greece and Europe. Greece has made significant reform progress between 2012 and the gap between what has already been implemented and what remains to be done is not insurmountable.

Also, the incentives for a clash are not there. For instance any Greek government would likely want to capitalize on the momentum that the economy is building on the activity front, rather than trigger a disruptive capital flight that would lead Greece to a double–dip recession. In addition, given that more than 80% of Greek debt is held by the official sector and given that any OSI would be feasible only as part of an agreement with the Euro-area, there is an incentive for a Greek government to pursue cooperative solutions.

However, the history of the Euro-area crisis has shown that the probability of an “accident” can never be dismissed, when it comes to intra-EMU politics. And it is important for markets to be able to understand and quantify the aspects of a potential downside scenario, where official financing to Greece is interrupted.
The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.

Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need.

But herein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.

And this risk can become more pressing from a timing perspective. At the heat of the Greek crisis, there was evident deposit and broader capital flight, which Greek banks helped accommodate with ECB’s help via the ELA facility. In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.

Will European assets be affected?

Outside the spectrum of Greek assets, the main question becomes whether Euro-area assets (such as peripheral bonds, the EUR etc) as well as global assets (equities) are likely to be affected by the Greek crisis. We think this is unlikely. Should financial pressures from a Greece related shock hit the peripheral countries formerly in a program (Ireland & Portugal), there may be special arrangements to avert the transmission of the shock locally. Moreover, in our view, the ECB is likely to engage in outright market purchases of sovereign debt securities as part of their monetary policy operations in H12015. We do not think that the volatility from Greece is likely to derail the QE decision.

There is of course the risk of broader contagion, should the participation of Greece in EMU once again be put in doubt. But we think this is a low probability event as the majority of the Greek population is still in favor of EMU participation and as all major political parties in Greece currently deem Euro-exit as undesirable.






And now here is what you should suspect will happen in the coming days with respect to Greece:


(courtesy Open Europe/zero hedge)




As Greek Bonds Top 12%, What Happens Next?




Greek stocks are down over 8% (and were worse) back to more than 2-year lows (as banking stocks are massacred) and 3Y bond yields are back over 12% (post-bailout highs) following Samaras’ 3rd failed attempt to avoid a snap-election and all the GREXIT possibilities that brings. So, what happens next?

Not Good…


And the Greek curve is now massively inverted as ECB QE momo muppets rush for the exits at the short-end…


Not-er Good…


As Open Europe explains,

What happens in Greece now?

The government’s candidate for President, Stavros Dimas, gained only 168 votes – well short of the 180 he needed and no further improvement on the previous round.

The Greek parliament will be dissolved and snap elections called. The parliament must be dissolved within 10 days, while Greek Prime Minister Antonis Samaras has already said he will ask for the snap elections to be held on 25 January (must take place within 30 days and on a Sunday). As we previously noted on this blog, things will probably get worse in Greece before they get better.

Has anyone gained from this saga?

The recent polls have shown that the governing New Democracy have closed the gap somewhat on SYRIZA. An Alco poll for Proto Thema released on Saturday put SYRIZA on 28.3%, New Democracy on 25%, Golden Dawn on 5.2%, PASOK on 4.6%, To Potami on 4.4%, the Greek Communist Party on 4.2%, and the Independent Greeks on 3%. Previous polls had put the gap between the top two parties at almost eight percentage points.

In general, it is clear that there are concerns around SYRIZA’s ability to govern and what exactly they will do when in power. They have said they will renegotiate the Greek bailout and push for a debt restructuring, however, it is far from clear what they will do if they do not get what they want or how hard they will push back against other eurozone countries unwillingness to take such action. Much of the market uncertainty – Greek borrowing costs have risen and the stock market has fallen sharply – can be attributed to markets trying to price this political uncertainty.

That said, New Democracy has also not come out of this unscathed. Greek Prime Minister Antonis Samaras has looked weakened by this saga. He has continuously warned that snap elections could provoke a new crisis in Greece. While these warnings seem valid, some believe his approach has verged on scaremongering. The extent he has pushed back against elections has also at times verged on a dismissal of democracy and the democratic process.

PASOK, the Greek Socialist Party, seems to be the biggest loser. Currently part of the governing coalition with 28 MPs in the Greek parliament, in new elections the support for the party could fall to between 3% and 5% – leaving it with around 15 MPs in the new parliament.

How might a new Greek government look?

As the graph below shows (based on the poll cited above), it is unlikely that any party will have a clear majority in the new parliament, even with the 50 seat bonus given to the most voted party. This means SYRIZA would have to find a coalition partner.

Recent polling by Alco for Proto Thema suggests that no party will command an absolute majority of seats in the new Greek Parliament following snap elections, although SYRIZA will likely be the largest party.

However, there are few obvious candidates. SYRIZA has been at loggerheads with the current governing parties so some form of grand coalition seems very unlikely. At the moment, the most likely candidate is To Potami – a new party formed earlier this year which should gain a decent number of seats. They are meant to be a centrist party (its short lifespan makes it hard to judge conclusively), so this could help balance out concerns over SYRIZA’s more radical factions. However, there seems to be little love lost between the parties’ two leaders, so striking a deal could prove tricky.

All this raises the question of whether we could have a replay of the 2012 elections where the first general election failed to yield a stable governing coalition meaning another round of elections is needed.

What does this mean for the Greek economy?

A huge amount of uncertainty.

Firstly, questions will be raised about whether Greece can meet the conditions of its recent bailout extension. The deal allowed the country an extra two months to complete some further reforms and for the EU/IMF/ECB Troika to complete its current bailout review. However, the first two weeks of this period have been spent on the presidential vote – little time has been spent taking action. Now the parliament is to be dissolved, meaning that nothing can happen for at least a month or six weeks – and certainly no new legislation can be passed. Some work will continue behind the scenes, but with the political establishment in full election mode, minds will be elsewhere. Furthermore, the landscape could fundamentally change after the elections, providing an excuse to delay any radical reforms.

Secondly, the new government will have to negotiate a process for exiting the current bailout and filling Greece’s funding gap over the next few years – likely to be double digit billions. The window to work in here is small meaning the pressure will be on, reducing the room for manoeuvre. With the bailout finishing at the end of February the new government will have little time to secure a deal or face cash shortages in the following months. The negotiations over the future role of the IMF will be particularly fraught, with many in Greece keen to see them leave but with eurozone partners wanting the funds involvement to continue. Fundamentally, Greece and the Eurozone will have to face up to the question of debt restructuring for the first time in two years – an issue many incorrectly thought had been put to bed.

Thirdly, the new Greek parliament will still have to elect a new President. This can take more or less time depending on how solid the new government is. However, after the new Greek parliament takes office, the rules to elect the new President will become less strict – meaning that even a relative majority of MPs would be enough in a potential third round.

What does this mean for the Eurozone?

It has once again been clear from this episode that financial market jitters in Greece are now largely contained, there has been little to no spill over into other Eurozone countries.

That said, what happens in Greece could have important implications. If SYRIZA come to power, many could see it as a dry run for what might happen in the Spanish elections due at the end of 2015, in which Podemos are expected to make huge gains and possibly be the largest party. Similarly, SYRIZA are seen by many as the template which a number of populist/anti-austerity parties are trying to follow. This is driven home by the fact that Pablo Iglesias, the leader of Spain’s anti-establishment party Podemos, tweeted the following earlier today, “2015 will be the year of change in Spain and Europe. We will start from Greece. Come on, Alexis! Come on, SYRIZA!”.

The negotiations over Greece’s debt will also be seen a precedent. Any deal or restructuring offered to Greece may have to be offered to other countries, particularly those who took bailouts and have very high debt levels (both Ireland and Portugal qualify). The conditionality will also be scrutinised, particularly at a time when France and Italy are pushing back against the strict reform and fiscal consolidation criteria. Any additional room given to Greece will be noted and demanded by other eurozone states. As has often been the case, Greece may once again become a testing ground for the next round of Eurozone crisis policies.







Now we watch for bank runs at Greek banks. Remember that the ECB has hundreds of billions of Greek sovereign debt plus Greek bank debt.  A default of sovereign Greece will cause huge impairment at the ECB and cause additional capital to be raised from the rest of the EU.

Then we have massive amounts of credit default swaps which will be come into play:





(courtesy zero hedge..a must read)



When Fearmongering Goes Bad: Greece Scrambles To Prevent Deposit Run Goldman Warned About In Its “Worst Case”




Earlier today we got a classic, if rare, example of what happens when bankers bluff with a 2-7 off suit… and the people call it.

Recall that just over two weeks ago, none other than Greek currency swap expert Goldman (alongside Jean-Claude Juncker who quite explicitly warned Greeks not “to vote wrong“) came out with a fire and brimstone worst-case scenario for Greece, which was nothing but an attempt at fearmongering designed to scare Greek MPs into doing Samaras’ bidding, in which it said not electing the designated presidential candidate may lead to a worst-case scenario which involves a “Cyprus-style prolonged bank holiday.”

For those who have forgotten, these were the salient points from Goldman:

In the event that the parliament fails to elect a president, general elections would be held and market uncertainty/pressures would extend. At this stage it is important to understand that market pressures are not linked to the democratic process of elections nor to a potential government change, whatever the ensuing government formation may be. They are linked to the risk of policy discontinuity and a severe clash between Greece and international lenders. More specifically, we think the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited. Any such attempt would lead to an interruption of official financing to Greece.


Examining the downside scenario.


To be sure, even in the event of a government change, there is room for a cooperative solution between Greece and Europe. Greece has made significant reform progress between 2012 and the gap between what has already been implemented and what remains to be done is not insurmountable.


Also, the incentives for a clash are not there. For instance any Greek government would likely want to capitalize on the momentum that the economy is building on the activity front, rather than trigger a disruptive capital flight that would lead Greece to a double–dip recession. In addition, given that more than 80% of Greek debt is held by the official sector and given that any OSI would be feasible only as part of an agreement with the Euro-area, there is an incentive for a Greek government to pursue cooperative solutions.


However, the history of the Euro-area crisis has shown that the probability of an “accident” can never be dismissed, when it comes to intra-EMU politics. And it is important for markets to be able to understand and quantify the aspects of a potential downside scenario, where official financing to Greece is interrupted.


The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.


Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need.


But herein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.


And this risk can become more pressing from a timing perspective. At the heat of the Greek crisis, there was evident deposit and broader capital flight, which Greek banks helped accommodate with ECB’s help via the ELA facility. In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.

Stripping all the political correctness, what Goldman said is that unless Greece quickly folds back in line and does as unelected Brussels eurocrats demand, there may well be a Cyprus-style bank closure coupled with preemptied bank runs.

Oops. Because if that was the doubled-down bluff, then Greece just called it, and the “downside scenario” is now in play.

Which means Greece now has to scramble to avoid precisely what Goldman warned would happen if the Greeks dared to put their (meagre) savings at risk. And, case in point, here is the Greek finance minister rushing to squash the next steps, which – as Goldman so conveniently explained – involve potential bank runs, a potential bank holiday, and potential Cyprusing of the financial system, only this time it is not Russian oligarchs who are most exposed – they have learned their lessons by now – by ordinary Greeks.

Here is with what is sure to be an amusing backtracking on all the fearmongering that had been unleashed previously.

The government has guaranteed that bank accounts are safe and legislated deposit safeguards in the event of a shakeup ahead of Monday’s parliamentary election for Greek president, Finance Minister Gikas Hardouvelis said in an interview on Sunday’s Vima.


Hardouvelis was speaking ahead of the third and last attempt by this Parliament to elect a Greek president that will held on Monday, December 29. Failure to elect one
“We are preparing to withstand any rolling and pitching. We have already passed laws safeguarding bank deposits, and are in constant touch with our EU fellow-members, while the whole government will be on alert and vigilant,” Hardouvelis said.


Hardouvelis said that Greece must continue “to the next stage, which will be based on our growth plan, under our own initiative, without coercion by the troika of Greece’s lenders.”


Speaking of “bank deposits, which are safe,” he said his ministry had “taken care this past week and legislated the option of the Hellenic Financial Stability Fund’s to lend money to the Hellenic Deposit and Investment Guarantee Fund if it needs greater reserves than those available to support depositors.”


Asked whether he thought that a new government might be elected with a stance hostile to the memorandum, the finance minister replied, “The key to avoid tossing and turning and our economy’s future in 2015 and later is held by the European Central Bank… This key can easily and abruptly be used to block funding to banks and therefore strangle the Greek economy in no time at all.”

Actually no.

The ECB’s hands are tied right now, because the last thing Mario Draghi can do is proceed with open monetization of peripheral bonds (which would have to be purchased in any ECB public QE alongside all other Eurozone bonds) at a time when Greece can pull the rug from under the ECB’s already massive holdings of Greek public debt, and enforce a haircut which would impair the ECB’s balance sheet, in the process costing Mario Draghi his job and a handing the victory to the “sound money” Bundesbank on a silver platter.

Worse, should Greece decide to default it would means those several hundred billion Greek bonds currently held in official accounts would go from par to worthless overnight, leading to massive unaccounted for impairments on Europe’s pristine balance sheets, which also confirms that Greece once again has all the negotiating leverage.

So with the ECB out of the picture, and with the ball in Greece’s court, it actually makes the situation that much more unstable, and indeed could be just the precursor to the “Cyprus-style bank holiday” that Goldman warned about.

How credible will this warning be in practical terms over the next month as Greece prepares for a historic election? Keep an eye on those lines in front of ATMs, because unlike Cyprus, at least the Greeks still have access to Euros. The question is will they pull out enough Euros before their only currency option in front of the ATM is New Drachmas?








Please read  the following carefully:


Two major problems for the ECB:


1. It will be difficult for them to conduct QE and purchase Greek + other nations bonds only to see the entire house of cards fall on an Grexit


2.  The IMF is putting on hold the 43 billion euros of debt funding needed by Greece even though it is only to pay interest and bond redemption. Nothing goes to Greece themselves to help them in their economic funk.


(courtesy zero hedge)





Draghi’s QE Plan In Jeopardy After IMF Suspends Aid For Greece Until New Government Is In Place


Things for Europe (and liquidity addicts around the globe) just got a little more complicated. Earlier today, moments after the failed Greek presidential vote pulled the forgotten topic of a Grexit up front and center, the IMF announced that it is suspending financial aid to Greece under its huge rescue program until a new government is formed. RTE quotes IMF spokesperson Gerry Rice who said discussion on the completion of the sixth review of Greece’s bailout will resume once a new government is in place. Mr Rice added that the holdup in the program would not impact the country’s finances in the short term.

According to RTE, German Finance Minister Wolfgang Schaeuble said Greece must stick to agreed economic reforms regardless of the outcome of the election. In a statement, Mr Shaeuble said “these tough reforms are bearing fruit, they have no alternative.”

And while the symbiotic relationship between Greece and Europe has been well-known for a long time, with Europe pretending to fund Greece (when it was just paying the interest and maturities on Greek debt held by official European entities), and Greece pretending to reform (when it was really just resting), the charade has now been put on indefinite hiatus:

A negotiating team from the “troika” of creditors from the EU, IMF and European Central Bank, had been due to resume talks in Athens next month to wind up the €240 billion bailout and agree an interim, post-bailout programme.


In a bid to reassure international partners, Syriza leader Alexis Tsipras has sounded a more moderate tone recently, promising to keep Greece in the euro and negotiate an end to the bailout agreement rather than scrap it unilaterally.


But he has stuck to his promise to reverse many of the tough austerity measures imposed during the crisis, reversing cuts to the minimum wage, freezing state layoffs and halting the sale of state assets.

There are two reasons why this is an issue: first, as wereported back in October, according to S&P absent substantial external capital inflows, Greece will be in default within 15 months. Actually make that 12 months now:

S&P estimates Greek financing needs for the next 15 months to be at EU43 billion. … S&P estimates Greece will draw EU5 billion from intl bond sales, EU20 billion from internal mkt, EU12 billion from official lenders inluding the IMF in next 15 mos. S&P also forecasts Greece will repay EU3 billion in bonds held by investors who refused to participate in 2012 debt writedown, and if it doesn’t then Greece will following Argentina in being held in “contempt to court” fo cramming down foreign law covenants.

The second reason is far more serious for the market permabulls everywhere, because in a world in which all the upside is due to central-bank driven multiple expansion, suddenly the ECB’s QE which everyone is convinced will take place in Q1, has been put on hiatus as there is no way the ECB can commit to monetizing Greek debt at a time when the IMF may halt the check kiting scheme, whereby IMF funds the ECB using Greece as a pass-thru. What’s worse: even the mere threat of a debt moratorium by Tispras whose prime ministerial campaign will be based on a platform of ending austerity and renegotiating the Greek bailout, means Draghi’s hands are tied as the Bundesbank will declare check and mate on the Goldman apparatchik at the ECB should he engage QE only to see Greece exit the Eurozone and crush the ECB’s monetization scheme when Europe is not a true federalized entity.

In any event, while the algos simply refuse to accept reality, or their math PhD programmers are just too dumb to grasp what happened today, things in early 2015 are already shaping up quite volatile. And perhaps most important, the Syntagma riot-cam, which has been in storage for the past two years, may finally make a come back.




And now the economy of Brazil is deeply in trouble as demand for commodities falters:


(courtesy zero hedge)



Brazil’s Economy Just Imploded



China may have mastered the art of fabricating economic data to a level unmatched by anyone except the US Department of Labor, but its derivative countries have much to learn. And none other more so than one of China’s favorite sources of commodities over the past decade: Brazil. It is here that things are going from worse to catastrophic, as disclosed in today’s update of Brazil’s fiscal picture.

Here are the disturbing facts showing that behind the world’s propaganda growth facade, it is all hollow: Brazil’s consolidated public sector primary fiscal balance, which posted a significantly worse than expected R$8.1bn primary deficit in November driven by the R$6.7bn deficit of the Central Government, dipped into negative territory: -0.18% of GDP, driven by the significant deterioration of the Central Government finances.

This is the worst fiscal outturn since November 1998. Furthermore, the primary surplus of subnational government (States and Municipalities) has also been eroding, a reflection of the authorizations given by the Treasury since 2011 for increased borrowing by the States. For instance, the States and Municipalities posted a negligible 0.08% of GDP surplus during Jan-Nov 2014, down from 0.46% of GDP during Jan-Nov 2013.

It gets worse: the overall public sector fiscal deficit widened to a very high 5.82% of GDP (the highest fiscal deficit since September 2003) given the high 5.64% of GDP net interest bill and steady erosion of the primary fiscal surplus. Given the BRL depreciation during the month, the interest on the stock of Dollar swaps issued by the central bank reached R$8.7bn.

The steady decline of the public sector savings rate is leading to a wider current account deficit despite weaker growth and low investment. In fact, the twin fiscal and current account deficits are now tracking at a combined, very troublesome 9.9% of GDP, the worst picture in 15 years (since September 1999). Repairing the severely unbalanced macro picture demands a deep fiscal and quasi-fiscal adjustment and a significantly weaker BRL.

Last but not least, gross general government debt rose to 63.0% of GDP in October, up from 56.7% of GDP in 2013 and 53.4% of GDP in 2010 (and the highest level since October 2009).

To summarize, in Goldman’s words

  • The fiscal picture has deteriorated very significantly since 2011 at both the flow (fiscal deficit) and stock (gross public debt) levels.
  • President Rousseff and Finance Minister designate Levy will face, among other things, the very significant challenge of repairing the severely deteriorated fiscal picture.
  • The steady erosion of the fiscal stance pushed net and gross public debt up. Furthermore, fiscal and quasi-fiscal activism undermined the effectiveness of monetary policy, contributed to inflation very high and drove the current account deficit to a very high level despite weak growth.

In other words, after Japan, this is merely the latest Keynesian success story. And now BTFATH in the S&P 500 because the US will, any minute now, decouple from the entire world.














Ukraine’s largest nuclear power plant suffers it’s second emergency shutdown in  3 weeks. Is Ukraine doing something to force the IMF to hand over money?


(courtesy zero hedge)




Ukraine’s Largest Nuclear Power Plant Suffers 2nd Emergency Shutdown In 3 Weeks

Following a reported “minor” accident three weeks ago,Ukraine’s Zaporizhia nuclear power plant, Europe’s largestand the 5th biggest in the world, was shutdown. The ‘glitch’ it appears has reoccurred as RT reports, one of the reactors at the Zaporizhia Nuclear Power Plant has automatically shut down. Causes are still being investigated.



As RT reports,

One of the reactors at the Zaporizhia Nuclear Power Plant has automatically shut down after a glitch. This is the second halt in operations in recent weeks at the plant in Ukraine’s southeast, which covers at least one fifth of the country’s power needs.



“Unit 6 at Zaporizhzhya NPP was disconnected from the network by the automatic system that prevents damage to the generator. The reactor is running at 40 percent of nominal power,” the plant’s official website says stressing that radiation at the facility is equal to the natural background, which is 8-12 microroentgen/hour.


This accident took place on Sunday morning at 05:59 am local time (03:59 GMT). Causes are still being investigated,while the Energy Ministry hopes to restart the unit in the coming days. The remaining five reactors continue to generate an estimated 4,530 MW.


The previous incident at Zaporizhia NPP happened on November 28, but the fact went public five days later, when Ukraine’s Prime Minister Arseny Yatsenyuk revealed it during the first session of his new cabinet.

*  *  *

As we concluded previously,

Of course, there is no way to actually know what is happening on the ground as the NPP is located close enough to the “fog of war”, that its status, and updates thereof, could merely be part of the fog of war. That said, if there is an unspoken message here by Ukraine, which recently handed over its gold to unknown “Western” interests, and suddenly feels neglected by its western allies (as its central bank head is about to find out personally), it is targeted directly at the IMF: “hand over more loans, or the nuclear power plant gets it.”

*  *  *

Which raises the following question…

Oil plummets today and even goes below the 53.00 dollar level.
(courtesy zero hedge)

WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows

JUust as T. Boone Pickens warned “watch the rig counts” last week, so the Baker Hughes rig countjust collapsed for the 3rd week in a row to 8-month lows. This is the fastest 3-week drop since mid-2009. Crude prices were already weak but the news has flushed WTI to a $52 handle (not seen in the front-month contract since May 2009)


Rig count is tumbling…


Some context for the surge in US rig count…


And while the drop in Canadian rig count sounds impressive – it’s the worst since 2009 – it’s much more seasonal


WTI Hits A $52 handle!!


And then there’s this…


Charts: bloomberg



There is blood on the street:  Civeo cuts its headcount by 45%/suspends dividend and will use this money to pay back debt.  I guess they believe the oil price in the low 50’s is here to stay:
(courtesy zero hedge)

There “Is” Blood: Energy Services Firm Civeo Cuts Headcount 45% & Guidance By 30%, Suspends Dividend

In what we suspect will be the first of many, Houston-based Civeo (which provides workforce accomodation to the oil industry) has crashed over 20% after-hours (after being down over 65% since September already) following the total carnage of its earnings report.

  • *CIVEO SEES 2015 REV $540M-$600M, EST. $817.3M

And in what is likely the death knell for this irrational bubble, Civeo has suspended the dividend and will use excess cash flow to cut debt in 2015 (wait what!!!).



Civeo Announces Initial 2015 Operating Guidance

HOUSTON, Dec. 29, 2014 (GLOBE NEWSWIRE) — Civeo Corporation (NYSE:CVEO) today announced the company’s initial 2015 guidance, which reflects decisions by major oil companies in North America to significantly reduce 2015 capital spending, particularly in Canada, continuing weakness in global commodity markets and the resulting impact on the company’s business in Canada, Australia and the United States.

The acceleration in November of the decline in global crude oil prices and forecasts for a potentially protracted period of lower prices have resulted in major oil companies reducing their 2015 capital budgets from 2014 levels. This has had the effect of reducing the near-term allocation of capital to development or expansion projects in the oil sands, which is a major driver of demand for the company’s services in Canada. It has also increased the difficulty of reliably estimating 2015 occupancy levels for the company’s facilities. Likewise in Australia, persistently low metallurgical coal prices continue to negatively impact demand for accommodations in Civeo’s primary markets. In addition to these operational factors, the company expects to be negatively impacted by the continuing weakness in the Canadian and Australian dollars, which are down 2% and 6%, respectively, over the past two months against the US dollar and down 8% and 9%, respectively, year-to-date in 2014.

Based on current information and expectations for demand, the company anticipates first quarter 2015 revenues will be in the range of $160 million to $175 million with EBITDA in the range of $45 million to $55 million. Management expects typical seasonality in 2015 in which second quarter earnings are sequentially lower with Canadian spring break up. Earnings in the second half of 2015 are expected to be sequentially weaker as certain contracts expire or are replaced with contracts with fewer committed rooms at lower rates, particularly in Australia, causing estimated occupancy and average daily rates to decline. For the full year 2015, revenues are expected to be in the range of $540 million to $600 million, with expected 2015 EBITDA in the range of $135 million to $160 million. In giving its initial 2015 guidance, the company also reiterates its fourth quarter 2014 guidance of $200 million to $210 million of revenues with an EBITDA margin of 32% to 34%.

Entering 2015, the company has approximately 35% to 40% of its lodge rooms contracted in Canada, down from over 75% contracted for 2014 at the beginning of 2014. The company expects Canadian occupancy of 44% to 47% with an average daily rate of approximately C$139 to C$145 for 2015. In Australia, the company has approximately 35% to 40% of its village rooms contracted, down from over 55% contracted for 2014 at the beginning of 2014. Civeo expects Australian occupancy of 55% to 57% with an average daily rate of A$88 to A$95 for 2015.

In reaction to softer markets, the company is pursuing additional revenue opportunities, adjusting its cost structure, limiting capital expenditures and suspending its quarterly dividend.

Management is actively seeking short term accommodations agreements to augment contracted room revenue and maintain market share and providing certain services to third parties for a fee. Partially offsetting the expected reduction in lodge revenues is Civeo’s recently completed McClelland Lake Lodge. In 2015, the company expects to begin realizing the full-year benefits of this 1,997 room facility, which has the majority of its rooms under contract through the first quarter of 2017.

In addition, the company has reduced headcount in its Canadian and U.S. operations by 30% and 45%, respectively, from levels at the beginning of 2014.These efforts have included closing locations which were unprofitable at the expected low levels of occupancy, including the temporary closure of the Athabasca Lodge and the permanent closure of the Lakeside Lodge as well as the continued assessment of two U.S. locations. In terms of its manufacturing operations, the company closed its Australian manufacturing location due to projected limited demand for additional rooms over the next several years and is assessing the manufacturing capacity required to support the North American market. 2015 operating costs are expected to decrease by more than 35% in Canada and by more than 15% in Australia from 2014 levels. Management also expects 2015 SG&A expenses in Canada to be approximately 20% lower than 2014 and more than 10% lower in Australia year-over-year. Management will continue to focus on operating costs as clarity on market conditions improves.

The company expects 2015 capital expenditures to be in the range of $75 million to $85 million, a significant reduction compared to estimated 2014 capital expenditures of approximately $260 million to $280 million. The 2015 capital expenditures guidance excludes up to approximately $50 million of capital for unannounced and uncommitted projects, the spending for which will be contingent on securing customer contracts.

In addition, as a result of the company’s current outlook and guidance described above, the company could be required to record impairment charges related to the carrying value of its assets and/or goodwill.

Civeo’s board of directors, upon the unanimous recommendation of the value creation committee of the board, has unanimously determined to suspend the company’s quarterly dividend in order to maintain the company’s financial flexibility and best position Civeo for long-term success. Civeo’s board regularly reviews the company’s operations and capital allocation priorities. In light of the company’s revised outlook and expected refinancing of its credit facility in connection with the previously announced migration, the company anticipates that excess cash flow and its existing cash balances may be used to reduce indebtedness in 2015. Until such time as industry conditions and the company’s performance and outlook improve, Civeo’s board of directors intends to take such actions with respect to the dividend and other forms of returning capital to shareholders as are prudent and necessary to assure the company’s financial strength and competitive standing in each of its markets.

The company continues to pursue its migration to Canada and, prior to year end, plans to file a Form S-4 related to the migration with the Securities and Exchange Commission. The anticipated timing of the migration remains the second or third quarter of 2015, subject to a number of conditions including, but not limited to, shareholder approval and the refinancing of the company’s debt, as will be more fully described in the Form S-4.

President and Chief Executive Officer Bradley J. Dodson, stated, “As it became evident during the fourth quarter that capital spending budgets among the major oil companies were going to be cut, we began taking steps to reduce marketed room capacity, control costs and curtail discretionary capital expenditures. In Canada, we have since closed our Athabasca and Lakeside lodges and are evaluating similar actions in select other locations. We are limiting our discretionary capital spending in 2015 to those projects that are supported by customer contracts. From a revenue perspective, we are reassessing where in our regional markets we can profitably improve occupancy while maintaining the high safety and service levels for which our company is known. These efforts reflect our proactive approach to improving the company’s structural efficiency, managing cash flow and maintaining our balance sheet.”




As for the latest theory as to who hacked the Sony movie the interview:
Seattle based Taia Global believes after reviewing the data suggests it was the Russians:
(courtesy zero hedge)

Step Aside North Korea: According To New “Theory” Sony Hackers Are In Fact Russians

Remember when evil North Korean hackers were blamed by everyone in the administration for penetrating the firewall of one of the wealthiest, most sophisticated, most secretive multi-national corporations in what now everyone realizes was an epic publicity, not to mention, punking stunt? Well, now that Kim Jong-Un has served his purpose, and the Interview has generated far more revenue than it would have otherwise (but not before North Korea got to troll the US, showing it too has lost all respect for the leader of the free world after it called Obama “A monkey in a tropical jungle“) it is time to milk The Interview for some more propaganda talking points.

And sure enough, here comes the Seattle-based cyber security firm Taia Global, which according to the NY Daily News as cited by the Mail has analyzed the “data” and concluded that not so Lil’ Kim was right (the FBI was wrong) and it wasn’t North Korea after all. So who was it?Why the evil Russians of course.

From the Mail:

A new theory has surfaced that downplays North Korea’s involvement in the Sony hacking scandal and suggests the people responsible are actually Russian, based on a linguistics study of the leaked emails.


Security experts believe the origins of the now-infamous Guardians of the Peace are Russian after analyzing about 1,600 words attached to the Sony emails the hacking group leaked to a variety of media outlets.


The words were investigated by Seattle-based cyber security firm Taia Global.


‘Our preliminary results show that Sony’s attackers were most likely Russian, possibly but not likely Korean and definitely not Mandarin Chinese or German,’ the company wrote in a Christmas Eve blog post, according to The New York Daily News.

Wait a minute: it was just ten days ago that the infallible FBI announced it “now has enough information to conclude that the North Korean government is responsible for” the Sony hack, and will “impose costs and consequences on individuals, groups, or nation states who use cyber means to threaten the United States or U.S. interests.” The statement promptly served as a basis for Obama to do his now traditional press conference demanding that North Korea suffer “costs” – that now most entertaining aspect of US foreign policy (such as the “cost” contained in Europe’s triple dip recession as a result of Russian sanctions, or the “cost” to America’s imploding shale industry as a result of the “secret agreement” between Kerry and Saudi Arabia to put Russia out of business).

Of course, since the propaganda was incomplete and the now traditional false-flag, fabricated YouTube clip “proving” North Korean involvement was missing, some were dubious. But that didn’t matter: the US population, eager to swallow any BS story hook, like and sinker, did just as it was expected, and went out to prove its patriotism by showing those evil North Koreans just who is boss by watching a C-grade comedy flop.

Well, now it is time to move the propaganda goal posts once more. Enter evil Russia.

The firm deducted that while the analysis did not clear North Korea of any involvement in the hack, it was unlikely.


That is based on the phrasing and language used by the hackers, who communicated in English.


The Taia Global study determined 15 out of 20 phrasings in the emails matched the Russian language.


Nine matched Korean, and none were Mandarin or German.

The Mail adds that since their so-called hacking of Sony, “the hackers appear to have turned their attention to the FBI and on December 21 they posted a message which cynically ‘praised’ the FBI’s investigation into the hack, with a link to a video that repeated the phrase ‘You are an idiot’ repeatedly.

Judging by the latest spin, they were right. But more importantly, they were, drumroll, Russian.

At this point we stopped reading because the lies upon lies were just too much. We do wonder, however, which upcoming movie flop it will be Americans’ sworn patriotic duty to watch: Rocky 56, Red Dawn 2, or the sequel to The Hunt for Red October, which the Russians will vocally object to and demand to be banned, only for the producing studio to release the film straight to internet and collect $5.99 for the rental.


Your more important currency crosses early Monday morning:



Eur/USA 1.2197 up .0025

USA/JAPAN YEN 120.47  up .120

GBP/USA 1.5549 down .0002

USA/CAN 1.1624 up .0009

This morning in Europe, the euro is up , trading now just below the 1.22 level at 1.2197 as Europe reacts to deflation and announcements of massive stimulation and tumbling bourses due to the failure in Greece to elect a new President. In Japan Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31.  He now wishes to give gift cards to poor people in order to spend. The yen continues to trade in yoyo fashion.  This morning it settled down in Japan by 12 basis points and settling well above the 120 barrier to 120.47 yen to the dollar.  The pound is down this morning as it now trades just below the 1.56 level at 1.5549.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation/Dec  12 a new separate criminal investigation on gold,silver oil manipulation). The Canadian dollar is dowm today trading at 1.1624 to the dollar.


Early Monday morning USA 10 year bond yield: 2.22% !!! down 3  in basis points from Friday night/


USA dollar index early Monday morning: 89.94 down 9 cents from Friday’s close



The NIKKEI: Monday morning down 89 points or 0.50%

Trading from Europe and Asia:
1. Europe stocks mostly in the red except London

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

Gold early morning trading: $1192.00





Closing Portuguese 10 year bond yield: 2.75% up 4 in basis points from Friday


Closing Japanese 10 year bond yield: .33% !!! par in basis points from Friday


Your closing Spanish 10 year government bond, Monday ,down 6 in basis points in yield from Friday night.

Spanish 10 year bond yield: 1.67% !!!!!!
Your Monday closing Italian 10 year bond yield: 1.98% down 1 in basis points from Friday:

trading 31 basis points higher than Spain:





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



Euro/USA: 1.2150  down .0022

USA/Japan: 120.65 up 0.296

Great Britain/USA: 1.5513 down .0032

USA/Canada: 1.1643 up .0028

The euro fell a bit  in value during the afternoon , and it was down by closing time , finishing well just below the 1.22 level to 1.2150. The yen was down in the afternoon, and it was down by closing  to the tune of 30 basis points and closing well above the 120 cross at 120.65. The British pound lost considerable ground during the afternoon session and it was still down on the day closing at 1.5513. The Canadian dollar was  down in the afternoon and was down on the day at 1.1643 to the dollar.

Currency wars at their finest today.



Your closing USA dollar index: 90.12 up 9 cents from Friday.


your 10 year USA bond yield , down 3 in basis points on the day: 2.22%!!!!





European and Dow Jones stock index closes:



England FTSE  up 23.58 points or .36%

Paris CAC up 22.08 or .51%

German Dax   up 5.02 points  or .057%

Spain’s Ibex  down 87.60 or .84%

Italian FTSE-MIB down 222.11 points or 1.15%


The Dow: down 15.48 or 0.09%

Nasdaq; up 0.05 or 0.00%

OIL: WTI 53.69 !!!!!!!

Brent: 57.95!!!!



Closing USA/Russian rouble cross: 58.97  weakens by over 5 roubles per dollar.






And now for your more important USA economic stories for today:



Your trading today from the New York:



S&P New Record High As Crude Crash Continues To May 2009 Lows


Summing up the last two months…


and in chart format…


After weakness overnight (GREXIT fears), stocks saw panic-buying back to record highs at the US cash open thanks to extreme high beta to USDJPY’s momo ignition… and while Treasuries rallied, GDP expectations were smashed lower, and crude prices crashed-er, stocks ended mixed to green.


Big short squeeze at the US open… (but it didn’t hold)… notice the squeeze again at 1425ET when Tepper told CNBC that 2015 would be a good year!!


Ignited by USDJPY…


The cash indices ramped at the open and faded (apart from Trannies). Tapper’s comments sparked a rally in the late day… another weak close (3rd in a row)


But futures show the roller-coaster better as GREXIT fears stumbled stocks overnight…


Treasuries rallied… (as The Santa Claus Rally seems to apply to them and stocks)…


The USDollar gained 0.25% on the day led by JPY and EUR weakness… with all the USD buying pressure starting as US equities opened…


The USD strength took the shine off PMs as oil prices collapsed lower (to a $52 handle briefly), copper was flat…


Crude had a modest rally early on Libyan tanker fires but very quickly started to re-crash again…


Which all makes perfect sense…


As does this…


Charts: Bloomberg





The Dallas Fed manufacturing index tumbles as commodities like oil crash:


(courtesy zero hedge)



Dallas Fed Tumbles Below Lowest Estimate As Commodity Crash Comes Knocking


Who could have possibly anticipated that the one state that contributed the most high-paying jobs during the “recovery” on the back of the shale miracle, is facing recession (as JPM predicted)? Certainly not economists, who have correctly predicted exactly zero of the last 20 economic recessions, and whose lowest estimate for today’s Dallas Fed manufacturing outlook survey was 5.0 (with 12.5 on the high side, and a 9.0 consensus mean). Moments ago we got the official number and it was a doozy, plunging from 10.5 to just 4.1, the lowest print since the Polar Vortex swept away economic activity across the US and when the Dallas Fed printed a tiny 0.3. The drop of 6.4 from the November print was also the largest slide in economic activity since October 2013.

Surely this latest proof that the US is not decoupling from the rest of the world, will be sufficient to push the S&P even higher on hopes that the US is, all evidence to the contrary , decoupling.


The full breakdown by component – virtually every component posted a decline since November, except for wages which rose a meager 1.2. However, the more than proportional offset: hours worked tumbled from 5.7 to 0.0, resulting in lower overall compensation.

Some of the other highlights (from the report):

The general business activity index fell from 10.5 to 4.1. The company outlook index was almost unchanged at 8.4, with 21 percent of respondents noting an improved outlook.


Labor market indicators reflected unchanged workweeks but continued employment increases. The December employment index held steady at a solid reading of 9.2, with 17 percent of firms reporting net hiring compared with 7 percent reporting net layoffs. The hours worked index dropped from 5.7 to 0, indicating no change in hours worked in December.


Upward pressures on prices eased, while wage pressure increased slightly. The raw materials prices index fell from 15.3 to 10.2, its lowest reading in eight months. The finished goods prices index declined as well to a 13-month low of 4.2. Looking ahead, 26 percent of respondents anticipate increases in raw materials prices over the next six months, while 24 percent expect higher finished goods prices. The wages and benefits index ticked up from 23.9 to 25.1. This index has been consistently elevated this year, suggesting continued upward pressure on compensation costs.


Expectations regarding future business conditions remained optimistic in December. The index of future general business activity fell from 18.3 to 13.9, while the index of future company outlook edged up to 24.1. Indexes for future manufacturing activity moved down in December but remained in solidly positive territory.

But the most notable component, Capital Expenditures, which is now a harbinger of what is about to happen to capital spending across the energy sector in 2015, unambiguously crashed from 13.3 to 5.6. And just like that trillions in job-creating capital spending is mothballed.

Which, of course, is good news for management: just think of all those pent up buybacks that will now be enabled, courtesy of the indefinite freeze in capex. Surely that alone will send stocks to newer all time highs as nothing but financial engineering is left.






UPS expects a 15% surge in returns from Xmas purchases:


(courtesy zero hedge)

Holiday Hangover – UPS Expects 15% Surge In “Dirty Business” Of Xmas Gift Returns


United Parcel Service expects to handle four million returns the first full week of January, up 15% from two years ago as online sales continue to grow as returns “represent a larger percentage of overall sales.” As WSJ reports, more than 20% of returns happen during the holiday season – representing $60 billion in merchandise. While returns may be a boon for delivery companies, they are costly for retailers as returns, replacements and damaged goods represent about 10% of revenue. With return rates as high as 50%, one manager explains “‘returns’ is just a dirty business… Retailers are really losing their shirts on it.”


As WSJ reports,

More than 20% of returns happen during the holiday season—about $60 billion in merchandise, according to Optoro, a logistics provider.


The U.S. Postal Service handled 3.2 million returns in the two weeks that followed last Christmas and said there will be even more this year. United Parcel Service Inc. expects to handle four million returns the first full week of January, up 15% from two years ago as online sales continue to grow.



Returns may be a boon for delivery companies, but they are costly for retailers. Best Buy Co. estimates that returns, replacements and damaged goods represent about 10% of revenue and for the year cost the electronics retailer $400 million. The chain is trying to reduce those losses by selling more so-called open-box inventory online and at its stores around the country. Hudson’s Bay Co. , which owns Saks Fifth Avenue and Lord & Taylor, has tried to encourage customers to return products to its stores, so it can try to land another sale in the process.


“Returns—it is just a dirty business,” said Frank Poore, chief executive of logistics platform CommerceHub, which connects manufacturers with major retailers to fill online orders.



Last January, some retailers were surprised by the high number of returns,said Bala Ganesh, retail-segment marketing director at UPS. Mr. Ganesh said some retailers had as many as 30 trailers full of returns sitting outside their distribution centers waiting to be processed.



“Retailers are really losing their shirts on it,” said Tobin Moore, Optoro’s CEO. “As the returns rate increases, more retailers are paying attention to it.”



In addition, 62% of consumers said they had returned an item bought online in 2014, compared with 51% in 2012.



The return rate for online purchases is about three times as high as for items bought in stores, where shoppers can try on and test their choices. UPS’s Mr. Ganesh said that some high-end apparel retailers have return rates as high as 50%.



The holidays are the real crunchtime for returns, said co-founder Matt Watson. “If you don’t manage to sell them in season, they might not sell at all.”

*  *  *
It’s the thought that counts… and before the credit card bill arrives, it looks like returns will make retail sales this holiday look even less exciting than they already are.




I will see you Tuesday night

bye for now




  1. Another 574K ounces gone from SLV today. The 431K loss reported in this post was redeemed last Friday.


  2. Greece goes to the poles in 20015? Not sure if the world would exist by then?;-)


  3. Thanks for sharing your thoughts on best resume
    review services. Regards


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