Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1292.60 down $8.10 (comex closing time)
Silver: $18.28 down 7 cents (comex closing time)
In the access market 5:15 pm
Gold $1294.20
silver $18.28
Gold/silver trading: see kitco charts on right side of the commentary.
Today we witnessed another rout in the Euro. At one time early this morning it was trading in the 1.11 handle. It closed at 1.1201. The latest polls indicate that the Syriza party will win the Greek election on Sunday and the party claims that they are not responsible for any commitments promised by the previous government. If they leave the Euro, then this will create complete chaos for the ECB and various banks that have lent money to Greece together with the total implosion of credit default swaps underwritten by the big USA banks (and Deutsche bank) on the health of Greece.
The gold comex today had a good delivery day, registering 12 notices served for 1200 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 247.67 tonnes for a loss of 55 tonnes over that period.
In silver, the open interest rose by 543 contracts with Thursday’s silver price being up by 17 cents. The total silver OI continues to remains relatively high with today’s reading at 160,998 contracts. It seems that the bankers are very worried about silver as they covered again some of their short positions with the rise in the price of silver. The January silver OI contract fell by 34 contracts down to 3.
In gold we again had a good increase in OI with the rise in price of gold yesterday to the tune of $7.00 The total comex gold OI rests tonight at 450,985 for a whopping gain of 13,991 contracts. The bankers continue to supply the non backed paper with reckless abandon.
The January gold contract fell by 65 contracts down to 50 contracts.
Today, we had another addition of 1.20 tonnes of gold inventory at the GLD/Inventory at 741.65 tonnes
In silver, we had an addition of 1.053 million oz/SLV inventory 319.314 million oz
SLV’s inventory rests tonight at 319.314 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:
All rates moved in the positive direction GOFO/ All months are in contango and thus positive in rates.
On January 30/2015 the LBMA will officially stop providing the GOFO rates.
Jan 23 2015
+.075% +0825% +.09% +.1125% .1475%
Jan 22 2014:
+.035% +.0575% +.0725 % +.09% +.13%
end
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose today by a gigantic 13,991 contracts from 436,984 all the way up to 450,985 with gold up by $7.00 yesterday (at the comex close). We are now onto the January contract month. The non active January contract month saw it’s OI contracts fall by 65 contracts down to 50. We had 54 contracts served yesterday. Thus we lost 11 gold contracts or an additional 1100 oz will not stand for delivery in this January contract month. The next big delivery month is February and here the OI fell by only 3782 contracts to 172,581 contracts with those guys moving to April. First day notice is Friday Jan 30.2014 or just one week away. Is somebody sneeking up on the gold comex and ready to take huge delivery in February? The estimated volume today was poor at 103,668. The confirmed volume yesterday was excellent at 265,829 contracts. Today we had 12 notices filed for 1200 oz .
And now for the wild silver comex results. Silver OI rose by 543 contracts from 160,455 all the way up to 160,988 as silver was up by 17 cents yesterday. We thus had considerable shortcovering from the banking sector again today especially when you compare gold to silver OI. The front January contract month saw its OI fall to 3 contracts for a loss of 34 contracts. We had 34 notices filed yesterday, so we neither lost nor gained any silver contracts standing for silver in the January contract month. The next big contract month is March and here the OI fell by 191 contracts down to 103,774. The estimated volume today was poor at 16,356. The confirmed volume yesterday was excellent at 46,961. We had 0 notices filed for nil oz today. The rise in the price of silver is certainly scaring our bankers.
January initial standings
Jan 23.2015
| Gold |
Ounces |
| Withdrawals from Dealers Inventory in oz | nil oz |
| Withdrawals from Customer Inventory in oz | 964.50 oz (Scotia)30 kilobars?? |
| Deposits to the Dealer Inventory in oz | nil oz |
| Deposits to the Customer Inventory, in oz | nil oz |
| No of oz served (contracts) today | 12 contracts(1200 oz) |
| No of oz to be served (notices) | 38 contracts (3800 oz) |
| Total monthly oz gold served (contracts) so far this month | 74 contracts(7400 oz) |
| Total accumulative withdrawals of gold from the Dealers inventory this month | |
|
Total accumulative withdrawal of gold from the Customer inventory this month |
3,954.8 oz |
Today, we had 0 dealer transactions
total dealer withdrawal: nil oz
we had 0 dealer deposit:
total dealer deposit: nil oz
we had 1 customer withdrawal
i) Out of Scotia 964.5 oz (30 kilobars)
total customer withdrawal: 964.5 oz
we had 0 customer deposit:
total customer deposits; nil oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 12 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the December contract month, we take the total number of notices filed for the month (74) x 100 oz or 6200 oz to which we add the difference between the January OI (50) minus the number of notices served upon today (12) x 100 oz = 11,200 oz , the amount of gold oz standing for the January contract month. (0.348 tonnes of gold)
Thus the initial standings:
74 (notices filed for the month x 100 oz) +OI for January (50) – 12 (no. of notices served upon today) = 11,200 oz (0.348 tonnes)
we lost 1100 oz standing in this January gold delivery month.
Total dealer inventory: 770,487.09 oz or 23.96 tonnes
Total gold inventory (dealer and customer) = 7.962 million oz. (247.67) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 55 tonnes have been net transferred out. We will be watching this closely!
This initializes the month of January for gold.
end
And now for silver
Jan 23 2015:
January silver: initial standings
| Silver |
Ounces |
| Withdrawals from Dealers Inventory | nil oz |
| Withdrawals from Customer Inventory | nil oz |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 576,404.46 oz (Scotia) |
| No of oz served (contracts) | 0 contracts (nil oz) |
| No of oz to be served (notices) | 3 contracts (15,,000 oz) |
| Total monthly oz silver served (contracts) | 435 contracts (2,175,000 oz) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | |
| Total accumulative withdrawal of silver from the Customer inventory this month | 6,105,242.7 oz |
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposits:
i) Into Scotia: 576,404.46 oz
total customer deposit 576,404.46 oz
We had 0 customer withdrawals:
total customer withdrawal: nil oz
we had 0 adjustment
Total dealer inventory: 66.613 million oz
Total of all silver inventory (dealer and customer) 176.738 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 (435) x 5,000 oz to which we add the difference between the OI for the front month of January (3) – the Number of notices served upon today (0) x 5,000 oz = 2,190,000 oz the number of ounces standing so far for the January delivery month.
Initial standings for silver for the January contract month:
435 contracts x 5000 oz= 2,175,000 oz +OI standing so far in January (3)- no. of notices served upon today(0) x 5,000 oz equals 2,190,000 ounces standing for the January contract month.
we neither lost nor gained any silver ounces standing in this January delivery month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com or http://www.harveyorganblog.com
end
At 3:30 pm we receive the COT report and it was a dandy today.
First let us have a look at the Gold COT:
| Gold COT Report – Futures | ||||||
| Large Speculators | Commercial | Total | ||||
| Long | Short | Spreading | Long | Short | Long | Short |
| 223,257 | 60,802 | 42,480 | 120,946 | 298,756 | 386,683 | 402,038 |
| Change from Prior Reporting Period | ||||||
| 30,298 | -1,931 | 1,751 | -8,490 | 31,644 | 23,559 | 31,464 |
| Traders | ||||||
| 161 | 83 | 82 | 53 | 63 | 254 | 194 |
| Small Speculators | ||||||
| Long | Short | Open Interest | ||||
| 43,445 | 28,090 | 430,128 | ||||
| 4,461 | -3,444 | 28,020 | ||||
| non reportable positions | Change from the previous reporting period | |||||
| COT Gold Report – Positions as of | Tuesday, January 20, 2015 | |||||
Our large speculators:
Those large specs that have been long in gold added a humongous 30,298 contracts to their long side as they took on the bankers
Those large specs that have been short in gold covered 1931 contracts from their short side as they too did not like the lay of the land.
Our commercials;
Those commercials that have been long in gold pitched a huge 8490 contracts from their long side
Those commercials that have been short in gold added a monstrous 31,644 contracts to their short side. These guys supplied all the necessary non backed paper to the specs.
Our small specs;
Those small specs that have been long in gold added a huge 4461 contracts to their long side.
Those small specs that have been short in gold covered (like the large specs) a huge 3444 contracts from their short side.
and now for silver:
| Silver COT Report: Futures | |||||
| Large Speculators | Commercial | ||||
| Long | Short | Spreading | Long | Short | |
| 62,203 | 15,929 | 15,367 | 60,587 | 116,228 | |
| 2,395 | -3,940 | -478 | -776 | 8,061 | |
| Traders | |||||
| 76 | 40 | 43 | 40 | 51 | |
| Small Speculators | Open Interest | Total | |||
| Long | Short | 159,904 | Long | Short | |
| 21,747 | 12,380 | 138,157 | 147,524 | ||
| 1,481 | -1,021 | 2,622 | 1,141 | 3,643 | |
| non reportable positions | Positions as of: | 135 | 119 | ||
| Tuesday, January 20, 2015 | © | ||||
Our large specs:
Those large specs that have been long in silver added 2395 contracts to their long side
Those large specs that have been short in silver covered a large 3940 contracts from their short side as they too did not like the lay of the land.
Our commercials;
Those commercials that have been long in silver pitched 776 contracts from their long side
Those commercials that have been short in silver added a monstrous 8061 contracts to their short side.
Our small specs:
Those small specs that have been long in silver added another 1481 contracts to their long side.
Those small specs that have been short in silver covered 1021 contracts from their short side.
Conclusions: on both silver and gold>
the commercials continue to supply and the specs continue to add to their positions. Something has to give or we will have a commercial failure. Next week is first day notice.
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Jan 23/the action at the GLD is very volatile: today they added 1.20 tonnes of gold to their inventory/Inventory 741.65
Jan 22 no change in gold inventory at the GLD/Inventory 740.45 tonnes
Jan 21.2015: Tonight, we lost 1.79 tonnes of gold from the GLD/Inventory 740.45 tonnes
Jan 20.2015:
Late Friday night, we had another addition of 13.74 tonnes of gold on top of the earlier amount of 9.56 tonnes which were added to inventory.
Tonight another 11.45 tonnes was added to inventory
Thus so far inventory rests at 742.24 tonnes of gold.
There is no chance that these guys could have assembled 34.65 tonnes over the weekend. The addition is nothing but a paper entry!! No real physical has been received.
Jan 16.2015 we had a huge addition of 9.56 tonnes of gold into the GLD/New inventory 717.15 tonnes. (where on earth did they obtain that quantity of physical gold??)
Jan 15/ no change in inventory at the GLD today/inventory 707.59 tonnes
Jan 14.2015 we had a small withdrawal of .23 tonnes of gold from the GLD/inventory 707.59 tonnes
Jan 13.2015 no change in gold inventory/GLD inventory tonight at 707.82 tonnes
Jan 12 no change in gold inventory/GLD inventory tonight at 707.82 tonnes
, Jan 23/2015 / we add an addition of 1.20 tonnes to inventory at the GLD
inventory: 741.65 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 : 741.65 tonnes.
end
And now for silver (SLV):
jan 23/2015/ a huge addition of 1.053 million oz. This entity is also being quite volatile/Inventory at SLV 319.314 million oz.
Jan 22 a huge reduction of 6.75 million oz/Inventory at 318.261 million oz
Jan 21 no change in silver inventory/Inventory at 325.011 million oz
Jan 20.2015: no change in silver inventory so far tonight/Inventory at 325.011 million oz
Jan 16.2015: we had another withdrawal of 1.34 million oz of silver inventory/Inventory 325.011 million oz
(something is up!!)
Jan 15.2015 we had a huge withdrawal of 1.628 million oz/Inventory 326.391 million oz
Jan 15.2015: no change in silver inventory/327.979 million oz
Jan 13.2015 no change in silver inventory/327.979 million oz/
Jan 12.2015 we had a huge withdrawal of 1.915 million at the SLV/inventory at 327.979 million oz.
Jan 23/2015 /a huge addition of 1.053 million oz of silver inventory at the SLV
registers: 319.314 million oz
end
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 5.9% percent to NAV in usa funds and Negative 5.6 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 60.7%
Percentage of fund in silver:38.8%
cash .5%
( Jan 23/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to + 1.83%!!!!! NAV (Jan 23/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to -.11% to NAV(Jan 23/2015)
Note: Sprott silver trust back into positive territory at +1.83%.
Sprott physical gold trust is back in negative territory at -.11%
Central fund of Canada’s is still in jail.
end
And now for your most important physical stories on gold and silver today:
Early gold trading from Europe early Friday morning:
(courtesy Mark O’Byrne)
Gold in Euros Surges As ECB Print Trillion Euros and ‘Grexit’ Election Sunday
Stocks, bonds and precious metals surged yesterday as markets cheered the latest wave of money printing on a grand scale.
Gold surged 3 per cent in euro terms (see chart below) after Mario Draghi in the ECB announced a massive quantitative easing or QE programme of over EUR 1 trillion from March 2015 to September 2016.
The QE programme is even larger than expected at €60 billion every month rather than the €50 billion that had been expected. The euro fell another 0.9 per cent against the dollar to an 11-year low and has shed another 1% versus the Swiss franc. Gold was nearly 1% higher in dollar and sterling terms also.
Gold is headed for the third week of gains and is 4.2% higher this week and has jumped 9.3 percent this year in dollars and 17% in euro terms as stagnating economies again lead central banks to the default position of ultra loose, zero percent interest rate policies and debt monetisation – the creation of currency to buy government bonds.
Stock and bond markets, increasingly dependent on central bank largesse, ’stimulus’ and support also saw gains. European shares have jumped 1.7%, gaining ground for the seventh consecutive session as traders, banks and many market participants celebrate the ECB’s decision to buy government bonds, and after a strong session for Asian stocks overnight.
Further financial repression mean that borrowing rates for indebted and in some cases insolvent euro zone countries hit new record lows. As we saw with the Swiss franc recently, financial repression and price manipulations can only work for so long prior to being overwhelmed by market forces and the laws of supply and demand.
Silver, the poor man’s gold rose 1.4%. Among other commodities, oil prices jumped, with benchmark Brent crude futures climbing 1.3%, as news of the death of Saudi Arabia’s King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.
Ultra Loose Monetary Policies and Currency Wars
The ECB moves confirms that ultra loose monetary policies are set to continue globally and currency wars and beggar thy neighbour currency devaluations are set to continue.
As ever context is important. Japan has doubled down and is now printing yen with reckless abandon in what appears to be a last ditch desperate attempt to prevent Japan falling into a Depression.
Canada, Denmark and India have all cut interest rates in recent weeks – showing that ultra loose monetary policies and currency wars are here to stay. Also, the fragile narrative of a U.S. economic recovery and rising interest rates by the Federal Reserve is now being questioned and interest rates look set to remain near zero percent in the coming months in the U.S.
Draghi’s “big bazooka” or weapon of mass delusion was bigger than expected, promising €60 billion every month, although he did not have it all his way and in the small print it is clear that Germany played a large role in crafting the final details.
Angela Merkel had made Germany’s opposition to the ECB underwriting the purchases of bonds of weaker countries well known. The Netherlands, Austria and Finland were supportive of Germany’s stance.
So, it is no surprise that beyond the headlines – which celebrate the fact that the ECB intends to expand the money supply from €2 trillion to €3.1 trillion over 18 months – the ECB will only be directly responsible for 20% of bond purchases.
“While Mr Draghi succeeded in pushing a bigger than expected purchasing package, he failed in ensuring that the risks of asset purchases would be divided equally among eurozone countries with only 20 percent of the QE subject to a regime of risk sharing,” according to the Daily Telegraph.
The balance will be generated by National Central Banks (NCBs). If they buy sovereign bonds which then default they will be liable for the losses. Germany hopes this measure will discourage less disciplined governments from issuing bonds to finance social programs that they cannot afford.
However, the fact that eurozone central banks will now buy sovereign bonds en masse – driving down the interest rates that governments need to pay – means that governments will still be able to run deficits more cheaply.
“It would be a big mistake if countries were to consider that the presence of this programme might be an incentive to fiscal expansion. That would undermine confidence,” Draghi said. “It’s not directed, certainly, to monetary financing at all. Actually it’s been designed as to avoid any monetary financing. It should increase the lending capacity of banks.”
Time will tell how well designed this bazooka is. We would add that a bank’s capacity to lend is only as effective as a consumers and businesses capacity to borrow.
The “irrational exuberance” in markets is a fitting counterbalance to the next hurdle facing the Eurozone economy and political project.
Greek Election and ‘Grexit’ Risk
The elections in Greece on Sunday look set to bring Syriza, the anti-austerity group, to power.
Greece’s pro debt forgiveness Syriza party has widened its lead over the ruling conservatives, two surveys showed yesterday, days before a snap national election. A poll by Metron Analysis to be published on Friday showed Syriza would win 36 percent of the vote, ahead of Prime Minister Antonis Samaras’ New Democracy party which would take 30.7 percent of the vote.
Syriza have made clear that they intend to take a hard line in renegotiating what they regard as an odious debt agreement which forced the losses of reckless banks onto the backs of tax payers who were then “bailed out.”
The big question is if they come to power will Greece leave the monetary union?
The resentment felt in Greece towards the Eurozone will likely result in Syriza having a strong mandate. Syriza have said that they do not intend to drag Greece out of the Euro but will not completely rule that option out. If new terms and debt write downs are not agreed, it may have no option.
From the EU’s point of view any renegotiation would open a can of worms as other “bailed out” countries such as Ireland would likely demand similar concessions. So while Greece exiting the Euro is not likely at this stage, it is possible if negotiation proves fruitless.
MARKET UPDATE
Today’s AM fix was USD 1,293.50, EUR 1,150.29 and GBP 863.49 per ounce.
Yesterday’s AM fix was USD 1,287.00, EUR 1,107.96 and GBP 848.44 per ounce
Gold climbed $10.20 or 0.79% to $1,303.70 per ounce yesterday and silver rose $0.23 or 1.27% to $18.38 per ounce.
Gold denominated in euros has hit its highest since mid-April 2013 this morning at €1,153.13/oz. That has taken its gain for the year to 17.7%, against a 9.4% rise in dollar terms.

Gold bullion retreated below $1,300 this morning as gold appears to be consolidating after recent gains. Spot gold was last at $1,294.70 per ounce, off $5.50 in London.
In other metals, silver was also marginally lower at $18.30 per ounce after earlier hitting $18.40 per ounce, just short of the September high hit in prior session at $18.49 per ounce. Platinum fell from four-month highs and was down $1 at $1,271 per ounce, while palladium gained $1 to $770.
Market attention will not begin to shift to the Greek elections on Sunday. The Syriza party still maintains a lead in the polls. A poll by Metron Analysis to be published on Friday showed Syriza’s lead over the New Democracy party growing to 5.3 points from 4.6 points.
Syriza’s leftist leader Alexis Tsipra’s charisma is winning over the citizens of Greece that struggle with 25% unemployment plus wage and pension cuts. He promises to overturn austerity and demand a debt write-off from European partners.
The left wing anti austerity party could change the landscape of the eurozone as we know it. This uncertainty allied with concerns about ECB QE is increasing safe haven flows into gold bullion.
Get Breaking News and Updates Here
end
Russia adds 600,000 oz of physical gold into the arsenal (18.66 tonnes)
Total reserves: 38.8 million oz or 1206 tonnes.
(courtesy Van der Walt/Bloomberg/GATA)
Russia adds to world’s fifth-biggest gold reserves for 9th month
By Eddie van der Walt
Bloomberg News
Thursday, January 22, 2015
LONDON — Russia is showing no signs of slowing gold purchases as the fifth-biggest holder boosted reserves for a ninth month.
The country’s gold reserves rose to about 38.8 million ounces as of Jan. 1 from 38.2 million ounces a month earlier, the central bank said today on its website. It’s the longest stretch of monthly increases since August 2013, data from the International Monetary Fund show.
Russia has more than tripled its gold hoard since 2005 and holds the most since at least 1993, even as it recently had to use its international reserves to defend the ruble. Sanctions imposed by the U.S., the European Union, and their allies have compounded the effect of plunging energy prices and led Russia’s economy to the brink of recession. The ruble slid almost 50 percent in the past 12 months. …
… For the remainder of the report:
http://www.bloomberg.com/news/2015-01-22/russia-adds-to-world-s-fifth-bi…
end
Hugo talks about the lunatics that are running the asylum:
(courtesy Hugo Salinas Price/GATA)
Hugo Salinas Price: Folly triumphant
By Hugo Salinas Price, Chairman
Mexican Civic Association for Silver
Thursday, January 22, 2015
The world today is in the hands of a set of quacks who pass themselves off as “economists.” Their pseudo-economic science is nothing but ancient superstition dressed in modern garb. Yesterday they sold us “indulgences”; today they sell state bonds.
The whole spectacle should be riotously funny except for the fact that these quacks and their coterie of flatterers who grant them awards, distinctions, and Nobel Prizes have driven the world to the brink of destruction.
We behold a spectacle worthy of the satire of the great Erasmus of Rotterdam, who wrote his immortal “In Praise of Folly” in 1511. His treatise became the world’s first best-seller — all literate Europe read it and laughed. Laughter is an enormously effective demolisher of pomposity, as the semiologist Humberto Eco pointed out in his book “The Name of the Rose.”
Would that we had an Erasmus around today to make the world laugh itself silly at the antics of the quacks who pass themselves off as economists, central bankers, and finance ministers. …
… For the full commentary:
http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=2…
end
Bill Murphy and Ed Steer interviewed at the Vancouver gold conference and they give they take on the gold/silver situation:
GATA’s Bill Murphy and Ed Steer interviewed at Vancouver conference
8:05p ET Thursday, January 22, 2015
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy and board member Ed Steer, interviewed by Vanessa Collette, discussed the prospects for the monetary metals last weekend at Cambridge House’s Vancouver Resource Investment Conference. The interview is 12 minutes long and can be seen at GoldSeek’s companion site, SilverSeek, here:
http://www.silverseek.com/commentary/vancouver-conference-interview-if-i…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Interesting story on Confederate gold lost in the uSA:
(courtesy Brent Ascroft/GATA)
Confederate gold treasure may be in Lake Michigan
By Brent Ascroft
WZZM-TV13, Grand Rapids, Michigan
Thursday, January 22, 2015
MUSKEGON, Michigan — Could there be roots to one of the Civil War’s most enduring mysteries in Muskegon, Michigan? That’s what two local treasure hunters strongly believe and they have four years of research that they feel proves it.
Kevin Dykstra and Frederick J. Monroe were diving in northern Lake Michigan in 2011 and found the remains of a shipwreck, they believe, could be “Le Griffon,” which sank in 1679. The funny thing is, the pair weren’t searching for shipwrecks at the time of their 2011 find.
They were searching for a much bigger treasure — lost Confederate gold from the Civil War.
Both Kevin and Frederick have decided to go public with their research, which reveals that West Michigan could be home to this 150-year old mystery. …
… For the remainder of the report:
http://www.wzzm13.com/story/news/local/lakeshore/2015/01/22/civil-war-my…
end
Koos Jansen goes through the history to determine that gold will be part of a new international monetary system:
(courtesy Koos Jansen/In Gold We Trust)
Koos Jansen: Will gold be part of a new international monetary system?
11:46a ET Friday, January 23, 2015
Dear Friend of GATA and Gold:
Bullion Star market analyst and GATA consultant Koos Jansen, reviewing U.S. government records showing government officials meeting in secret to plan their secret interventions in the gold and currency markets — that is, not “conspiracy theory” but conspiracy facts — today joins those observers who are inclined to think that the secret policy of the world’s major central banks is to redistribute gold reserves among themselves more fairly. A review of such speculation was dispatched to you Tuesday:
http://www.gata.org/node/14994
Jansen’s commentary is headlined “Will Gold Be Part of a New International Monetary System?” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blog/koos-jansen/will-gold-be-part-of-a-new-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy John Rubino/Dollar Collapse blog)
This Is What Gold Does In A Currency Crisis, Euro Edition
Submitted by John Rubino via Dollar Collapse blog,
Yesterday the European Central Bank acknowledged that the currency it manages is being sucked into a deflationary vortex. It responded in the usual way with, in effect, a massive devaluation. Eurozone citizens have also responded predictably, by converting their unbacked, make-believe, soon-to-be-worth-a-lot-less paper money into something tangible. They’re bidding gold up dramatically.
So after falling hard in 2013 and treading water for most of 2014, the euro price of gold has gone parabolic in the space of a couple of months. This sudden rather than gradual awakening is the standard pattern for a currency crisis, mainly because it takes a long time for most people to figure out their government is clueless and/or lying. But once they do figure it out, they act quickly.
Europe’s gold chart isn’t as dramatic as Russia’s (see it here) because Europe doesn’t depend on oil exports and the euro, while dropping versus the dollar, isn’t yet in free-fall. But with another trillion euros due to hit the market in the coming year, and a series of currency union-threatening political crises in the pipeline, the flight to safety could easily become a stampede.
Europe and Russia, meanwhile aren’t the only countries with incipient currency crises. Here’s gold in Canadian dollars:
Just to be clear, this isn’t a prediction about the immediate future, but an attempt to illustrate the nature of gold. It behaves this way in crises because it is sound money which can’t be created in infinite quantities by panicked central banks as can euros, Canadian dollars and all other fiat currencies. These charts illustrate what happens when this difference starts to matter.
Right now, the fear is country-specific. Europeans start to distrust their government and shift to gold, without necessarily questioning foundational concepts like big, activist government and central bank management of fiat currencies. They still assume that the euro would be fine if managed correctly.
The next stage will begin when enough local currencies blow up to make people realize that the problem isn’t with specific governments or national forms of money, but with the idea of fiat currency itself. When that happens the global gold chart will look like Europe’s — but with more zeros.
end
And yet today Lew was threatening Draghi of being a currency manipulator, as he was frightened the dollar has risen too high against the Euro:
(courtesy GATA/Lange/Reuters)
U.S. Treasury’s Lew backs strong dollar, points to improved economy
By Jason Lange
Reuters
Friday, January 23, 2015
U.S. Treasury Secretary Jack Lew said today a strong U.S. dollar was good for America and that the robust performance of the U.S. economy was driving movements in currency markets.
His comments supported a long-standing policy of the Treasury that strength in the currency was positive if it reflected economic fundamentals rather than efforts by foreign governments to gain an unfair edge in global trade.
The dollar has surged about 20 percent against its major trading partners since early May. Lew suggested that fundamentals were a factor in its rise.
“Other parts of the globe are not doing as well. That leads to some movement in currencies,” Lew said in an interview with U.S. network CNBC from Davos, Switzerland.
“The strong dollar, as all of my predecessors have joined me in saying, is a good thing. It’s good for America.” …
… For the remainder of the report:
http://www.reuters.com/article/2015/01/23/usa-economy-jacklew-idUSL1N0V2.
end
An excellent commentary from Lawrence Williams of Mineweb
(courtesy Lawrence Williams/Mineweb)
2015 Black Swans abounding – Safe Haven gold to benefit
Global economic uncertainty may prompt return to safe haven gold buying.
January 2015 has already been remarkable for the number of Black Swan (unanticipated) events which have hit the markets in such a short space of time. Some of these have been totally unheralded like the Swiss National Bank’s decision to unpeg the Swiss Franc from the Euro and the Charlie Hebdo massacre – which really did take the markets by surprise – while others may, in hindsight have been a little more predictable. These include the escalation of fighting in Eastern Ukraine as both sides appear to have used a recent ceasefire to boost their military arsenals and prepare for more fighting; the death yesterday of King Abdullah of Saudi Arabia – perhaps predictable in that he was 90 years old and in poor health – but nonetheless promoting new uncertainties in what is a particularly volatile part of the world; the apparent growth in strength of Boko Haram in West Africa, which has the potential perhaps to spread to major gold producing areas if the rebel group is unable to be held back. And all this within a three week period! Who knows what else is in store for us in the remaining 49 weeks that lie ahead?
There are some very predictable potentially destabilising factors coming up. The latest opinion polls for Greek elections this weekend suggest the country is poised to put the left wing anti-austerity party, Syriza, into power, possibly with an overall majority sufficient to govern without a coalition partner. Pre-election rhetoric suggests that Syriza, if in power on its own, would renege on Greek debt commitments and drop many of the austerity measures imposed on the nation by the IMF and Eurozone. There are fears that this could lead to Greece’s exit from the Eurozone throwing the single currency system into disarray and a debt default could have a huge adverse impact on a number of major European banks culminating in a financial meltdown which could outdo that following the Lehman collapse, which was seen as leading to the 2008 global financial crisis.
A result of the Charlie Hebdo massacre in Paris threatens to unleash an anti-Muslim backlash throughout Europe, or stimulate copycat killings by other fanatical fundamentalists which all creates a sense of worry throughout much of Europe and possibly in the U.S. itself.
Further ahead, the U.K. general election could see the continued rise of right wing anti-Europe party. UKIP, or perhaps its fade back into possible obscurity should a general election see a polarisation of support for the established main political parties as has happened in the past. A conservative victory should start the run-up to a referendum on EU membership and polls suggest now that a majority would favour a Brexit (British exit), but much could change in the two years before such a referendum is due given the huge amount of establishment propaganda which would probably be brought into play to try and keep Britain within the Community.
Meanwhile in the Middle East there is little sign of ISIL, which controls huge swathes of Syria and Iraq, including oil producing regions which give it revenue, being pushed back. Indeed there is the prospect of ISIL-related fundamentalist Muslim militant organisations springing up elsewhere in the Middle East and North Africa, as it has with Boko Haram in West Africa.
The death of King Abdullah in Saudi Arabia brings more uncertainty into the Middle Eastern region as basically pro-Western policies there could be changed depending on the chosen new ruler and what his political leanings might be.
But these are mostly at least semi-predictable factors. Black Swan events are, by definition, totally unpredictable and who knows what might happen next in this respect. But the chances are something will for which the global financial community is currently totally unprepared.
Fighting in the Ukraine is said to be escalating again for example and there is the definite possibility of much greater Russian direct involvement. Some suggest that the recent build-up of the Ukrainian military in the disputed region will force President Putin to take a much more overt approach ‘to protect the ethnic Russian nationals’ in and around Donetsk, regardless of the economic consequences. This has the potential to flare up into a major, and much more widespread, military conflagration, lead to a total shutdown of gas supplies through the Ukrainian pipelines and thereby to much of Europe too. Ukraine would run out of the wherewithal to support its troops without ever more Eurozone cash being pumped in to support it. Russia seems to hold the military aces here.
Gold should thrive on uncertainty in terms of a big rise in safe haven demand – and we already look like having a very uncertain year ahead. Gold may have come back from its recent interim peaks following the SNB decision in particular and the much-heralded announcement of the ECB’s QE programme (although this turned out to be bigger than expected) and it seems to be having difficulty today holding on to the $1,300 level. But this could be just a temporary hiatus. As other geopolitical and economic factors come into play, there could be a huge boost – and that’s just from events which might be seen as predictable. More Black Swans could further upset the apple cart that is the global economy and lead to yet another gold price upsurge as a result.
end
January 23, 2014
Silver Bottomed, Gold to 3,000 in two years – John Embry Interview
https://www.youtube.com/watch?v=9VsCs9jBYfM&x-yt-cl=84503534&x-yt-ts=1421914688
-END-
Bill Holter tackles yesterday’s big story of the Swiss and Chinese forming a yuan currency centre in Zurich.
very important..
(courtesy Bill Holter/Miles Franklin)
The “Neutral” Swiss Just Changed Sides!
The Swiss have been known for many things. They are renowned chocolate and watch makers as well as financiers. They are well known as a very low crime society where nearly everyone has a gun (maybe this is why crime is low?) but their greatest claim to fame has been their “neutrality. They did not participate in either World War I or WWII, They did however do business with both sides during World War II and profited handsomely. If you recall, many accounts they had held went unclaimed for years because many of the “depositors” were killed during the holocaust.
And now for the important paper stories for today:
Early Friday morning trading from Europe/Asia
1. Stocks all up on major Asian bourses on ECB QE / the yen rises to 117.93
1b Chinese yuan vs USA dollar/ yuan slightly weakens to 6.2278
2 Nikkei up 183 points or 1.05%
3. Europe stocks rise on ECB QE /Euro crashes into 1.11 handle// USA dollar index up to 95.46/
3b Japan 10 year yield back down to .25% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 117.93/
3c Nikkei now above 17,000/huge Japanese sell off in bond market
3e The USA/Yen rate still well below the 120 barrier this morning/
3fOil: WTI 46.59 Brent: 49.53 /all eyes are focusing on oil prices. This should cause major defaults as derivatives blow up.
3g/ Gold down /yen up;
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
3k Saudi King Abdullah dead/New King Salman takes over
3l Yields on all European bonds plummet as expected due to ECB QE
3m Gold at $1299.00. dollars/ Silver: $18.31
3n USA vs Russian rouble: ( Russian rouble par per dollar in value) 64.46!!!!!!
3 0 oil rises into the 46 dollar handle for WTI and 49 handle for Brent
3p ECB provides emergency fund for Greece for the next two weeks.
3Q European PMI’s better than expected
4. USA 10 yr treasury bond at 1.81% early this morning. Thirty year rate well below 3% (2.39%!!!!)/yield curve flattens/foreshadowing recession
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid
(courtesy zero hedge)/your early morning trading from Asia and Europe)
Euro Crash Continues Sending Stocks Higher, Yields To Record Lows; Crude Stabilizes On New King’s Comments
Today’s market action is largely a continuation of the QE relief rally, where – at least for the time being – the market bought the rumor for over 2 years and is desperate to show it can aslo buy the news. As a result, the European multiple-expansion based stock ramp has resumed with the Eurostoxx advancing for a 7th day to extend their highest level since Dec. 2007. As we showed yesterday, none of the equity action in Europe is based on fundamentals, but is the result of multiple expansion, with the PE on European equities now approaching 20x, a surge of nearly 70% in the past 2 years.
But the real story is not in equities but in bonds where theperfectly expected frontrunning, as well as backrunning, of some €800 billion in European debt issuance over the next year, taking more than 100% of European net supply, has hit new record levels just as forecast:
- YIELD ON US 10Y DROPS 6BPS TO 1.80%
- GERMAN 10 YEAR BOND YIELD DROPS TO RECORD LOW 0.37%
- BELGIAN 10 YEAR BOND YIELD DROPS TO RECORD LOW 0.685%
- FRENCH 10 YEAR BOND YIELD FALLS TO RECORD LOW 0.585%
- SPANISH 10 YEAR BOND YIELD DROPS TO RECORD LOW 1.365%
- ITALIAN 10 YEAR BOND YIELD DROPS TO RECORD LOW 1.512%
- HUNGARIAN 10 YEAR BOND YIELD DROPS TO RECORD LOW 2.92%
- POLISH 10 YEAR BOND YIELD FALLS TO RECORD LOW 2.06%
The rush into risk is further facilitates by the crashing Euro which has just tumbled below 1.12 , the lowest level in 11 years, and is now sure to lead to major FX losses for US multinationals, as well as a collapse in Chinese exports, further intensifying the global deflationary wave.
Perhaps just as notable is that following yesterday’s expected, but still surprising, announcement of 91-year-old King Abdullah’s death, which sent Brent briefly higher, the crude complex has come back down to earth after his successor, Prince Salman, said he would maintain policies on oil. To think: just 6 months ago the Saudi news would have likely sent the oil complex limit up…
Over in Asia, stock markets rose across the board following suit from sharp rallies across the globe after the ECB’s larger-than-expected QE announcement. The Nikkei 225 (+1.05%) traded close to 1-month high although unable to finish around best levels weighed by a modest JPY rebound. Shanghai Comp (+0.25%) and Hang Seng (+1.3%) were further bolstered by a better than Exp. Chinese HSBC Flash Mfg. PMI (49.8 vs. Exp. 49.5 (Prev. 49.6), despite the number showing the 2nd consecutive month of contraction.
As noted above, European equities (Eurostoxx50 +1.43) reside firmly in the green in a continuation of yesterday’s gains following the larger than expected ECB quantitative easing programme which is providing support for the DAX, currently trading near record highs. However, Italian banks remain under pressure weighing on the FTSE MIB following news today that the Populari banks’ lobby will oppose new legislation imposing change into joint-stock companies. In Fixed income, the unveiling of the sovereign bond programme has led to Eurozone bond yields continuing to print fresh record lows with the bund future up 87 ticks heading into the North American session, with T-notes up 19 ticks in sympathy with the move. Of note, the Prelim Barclays month end extensions for US Treasury is at +0.09y (Prev. +0.09yrs).
European risk got a modest tailwind from today’s flash PMI report, which was fractionally better than expected, with the manufacturing PMI rising to 51.0 from 50.6, the highest in 6 months. Goldman explains: “The Euro area composite PMI rose from 51.4 to 52.2 in January, more than our and consensus expectations of a smaller increase (Cons: 51.7, GS: 51.6). The expansion in the composite PMI was driven by a 0.7pt increase in the services component to 52.3 and by a 0.4pt rise in the manufacturing component to 51.0. The German composite PMI continued to rise, by 0.6pt to 52.6, while the French composite PMI fell back by 0.2pt to stand at 49.5.
In addition to the Euro area aggregate PMI, Flash PMIs were released for Germany and France. The German composite PMI came in stronger than expected at 52.6 in January (Cons: 52.4). The 0.6pt increase in the services PMI (to 52.7) more than offset the 0.2pt contraction in the manufacturing component. The German composite PMI has been volatile in the past year and declined during 2014 as a whole but, in the past three months it has displayed positive momentum. By contrast, the French composite PMI declined by 0.2pt to 49.5, against consensus expectations of a small increase (Cons: 50.1). While the French manufacturing PMI expanded by a notable 2.0pt (to 49.5), the French services PMI lost 1.1pt (to 49.5). The French manufacturing PMI has been below the 50 mark for 9 consecutive months, pointing to lingering weaknesses.
As also noted previously, WTI (+1.2%) and Brent crude (+1.9%) futures traded higher overnight following news of the death of King Abdullah, who was an advocate for lower prices. However, oil prices have since pulled away from best levels throughout the morning due to reports that his successor Prince Salman would maintain policies on oil. Elsewhere, copper (-1.8%) prices fell after speculation over aggressive Chinese hedge fund selling and China’s second contractionary PMI reading also weighing on the base metal.
Finally, and most importantly in a world in which just central banks, and the occasional robot, are left trading FX with each other, EUR/USD extended on its decline following yesterday’s news of the ECB’s larger than expected QE programme, which caused the pair to breach 1.1300 to hit Sep. 2003 lows. The weaker EUR has also weighed on EUR/CHF as it descended to its lowest level in 12 years and lifted the USD-index (+0.6%) which is trading around 11yr highs. Moreover, in response to the weaker EUR, analysts this morning have been hypothesizing that the SNB could well cut rates again in the near-term in a similar fashion to the Danish cut yesterday. Analysts at IFR further state that the front month EuroSwiss interest rate futures are almost fully priced for a 50bps cut.
In terms of the day ahead, focus this morning will be the manufacturing and services PMI’s for the Euro-area as well as regionally in Germany and France. We are also expecting business and manufacturing confidence in the latter as well as December retail sales out of the UK where consensus is for an energy related decline in the headline (-0.7% mom from 1.7% previously). The Chicago Fed national activity index will be the notable read out of the US but we suspect focus will still be on how much follow through we will get from markets on the back of the ECB action yesterday.
In Summary: European shares stay higher, advancing for a 7th day to extend their highest level since Dec. 2007. Currently close to intraday highs, with the food & beverage and autos sectors outperforming and basic resources, oil & gas underperforming. Euro weakens to 11-year low against dollar, heading for a sixth weekly decline before the Greek vote on Sunday. European bond yields fall to records. Crude oil gains after the death of Saudi Arabia’s King Abdullah, with half- brother Salman named as his successor. Euro-area composite PMI data above estimates. German January manufacturing PMI, French services PMI below estimates, French manufacturing PMI above. U.K. retail sales above expectations. The French and German markets are the best-performing larger bourses, U.K. the worst. Commodities gain, with nickel, zinc underperforming and natural gas outperforming. U.S. manufacturing PMI, Chicago Fed index, existing home sales, leading index due later.
Market Wrap
- S&P 500 futures up 0% to 2056.5
- Stoxx 600 up 1.4% to 369
- US 10Yr yield down 6bps to 1.81%
- German 10Yr yield down 8bps to 0.37%
- MSCI Asia Pacific up 0.9% to 140.9
- Gold spot down 0.6% to $1294.1/oz
- Euro down 1.15% to $1.1235
- Dollar Index up 0.85% to 94.87
- Italian 10Yr yield down 10bps to 1.45%
- Spanish 10Yr yield down 11bps to 1.3%
- French 10Yr yield down 9bps to 0.53%
- S&P GSCI Index up 0.7% to 384.4
- Brent Futures up 2% to $49.5/bbl, WTI Futures up 1.4% to $47/bbl
- LME 3m Copper down 1% to $5610.5/MT
- LME 3m Nickel down 1.8% to $14590/MT
- Wheat futures down 0.6% to 530.5 USd/bu
Bulletin headline summary from RanSquawk and Bloomberg
- EUR/USD (-130 pips) underperforms its neighbouring pairs in a continuation of yesterday’s downward trend to reach Sep. 2003 lows in the wake of the ECB QE announcement. In addition European yields continue to tumble lifting T-notes (+19 ticks) in sympathy with the move higher in bund futures (+89 ticks)
- The death of Saudi Arabia’s King Abdullah lifts WTI and Brent crude overnight, however gains have been capped as his successor Prince Salman has said he would maintain policies on oil
- Looking ahead, sees US Manufacturing PMI, Existing Home Sales, Leading Index and earnings from General Electric and McDonalds
- Treasuries gain led by long end as Europe’s bonds surge after ECB pledge to buy the currency bloc’s sovereigns; German 10Y yield falls to new record low, Italy 10Y yield fell below 1.5% for first time on record.
- ECB’s asset-purchase program will continue past September 2016 if it hasn’t met its inflation objectives by then, Governing Council member Ignazio Visco said
- Bank of Japan Governor Kuroda said that central bankers around the world have no shortage of tools to address deflation risks and that in Japan policy makers may need to look at fresh options if further stimulus is needed
- Denmark’s central bank signaled it is ready to step up currency interventions and continue cutting rates to stamp out any lingering speculation it may be unable to defend its euro peg
- The fight for power in Greece enters its final hours, with Prime Minister Antonis Samaras making a last-ditch appeal to voters as he tries to defy opinion polls showing a victory for his anti-austerity opponent
- ECB set limits on accessing its bond-buying program that will exclude Greece for at least six months, raising pressure on whichever party wins Jan. 25 elections to heed the demands of official creditors
- China preliminary PMI from from HSBC Holdings Plc and Markit Economics was at 49.8 in January, exceeding the median estimate of 49.5 in a Bloomberg survey and up from December’s 49.6
- U.K. retail sales unexpectedly increased in December led by sales of food, computers and auto fuel as the plunge in oil prices boosted Britons’ spending power
- Salman Bin Abdulaziz Al Saud ascended to the throne of Saudi Arabia after the death of his half-brother King Abdullah, taking the helm of the biggest Arab economy amid political turmoil in the Middle East and tumbling oil prices
- Sovereign yields fall, led bu EU periphery with Greece 10Y -42bps, Portugal -22bps, Italy and Spain each lower by ~10bps. Asian, European stocks surge, U.S. equity-index futures steady. Brent and WTI rise; copper and gold fall
DB’s Jim Reid Concludes the overnight recap
To use our 2015 analogy, yesterday saw the plates spun very hard and it will be difficult to stand in the way of its impact. Yesterday’s program was at the same time bigger, faster and more explicit than what had been promised before and what the market had come to expect. The ECB announced an expansion of its purchase program so that now the ECB will be buying €60bn of assets a month including the current ABS and covered bond programs and the new purchase program for “euro-denominated investment-grade securities issued by euro area governments and agencies and European institutions”. The program looks set to carry on until the end of September 2016 at least. This alone will expand the ECB balance sheet by about €1.1tr and our European economist’s Mark Wall and Marco Stringa think this will be made up of around €700-800bn of euro government bond purchases.
More specifically on the duration of the plan, the statement went on to say that these purchases, “are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term.” This was “whatever it takes” in everything but name. To our eye this implies that if inflation continues to run below target with few signs of it sustainably rebounding back the ECB will continue purchasing beyond next September. While they of course could end it early if inflation picks up it’s interesting to highlight that even after 6 years of on-and-off QE programs in the US, core inflation there has (with only a brief period in 2012) continued to run notably below its 2% target. As our economist’s wrote, “this means the ECB have rotated from an intention to expand the balance sheet by up to EUR 1 trillion to a position of EUR 1 trillion at least, particularly if the TLTRO turns out to be a source of balance sheet expansion.” As we wrote in yesterday’s EMR, at present it is hard to see the date at which ECB QE ends so this program could end up exceeding all previous forecasts by a large amount. For more detail on the specifics of the program you can read their note here:http://pull.db-gmresearch.com/p/1891-07D9/99218332/DB_DataFlash_2015-01-….
With the ECB now committed to a large and sustained QE program we continue to believe that this will be a good environment for European equities and European credit whether you like the fundamentals or not or whether you think it makes any difference to the economy longer-term. Indeed if you believe a lack of structural reform, increasing inequality and low fiscal injections are holding back growth then yesterday’s announcement hardly changes the long-term picture. Indeed it could even prevent improvements here. We continue to think Oil, the Fed and Greece will cause early year volatility but we continue to expect European assets to out-perform. They aren’t going to be buying IG credit (after much speculation over the last few months) but this shouldn’t prevent the asset class from benefiting from the liquidity.
The immediate price action post the ECB decision was one where we saw further weakness in the euro but clear outperformance in European equity and bond markets. We’ll recap these in a little more detail below but Asian risk markets have largely followed suit with a firmer bias overnight. The Nikkei, Hang Seng, Shanghai Composite and the ASX 200 are up +1.00%, +1.35%, +1.78% and +1.51%, respectively. The Euro is hovering at around 1.132 against the Dollar, Gold is easing off a little at just below $1300/oz while the 10yr UST yield is a tad lower from the US close at around 1.858% as we go to print. The positive tone is also driving Asian credit spreads tighter overnight with the Asia and Australian iTraxx indices 4bps and 3bps tighter, respectively. Meanwhile oil markets have rallied some 1.5% overnight possibly on the news that King Abdullah of Saudi Arabia has died with his half brother succeeding him as King. The HSBC flash manufacturing PMI for China came in sub-50 for the second consecutive month (49.8 v 49.5 expected) but the impending glut of central bank liquidity is perhaps overriding any fundamental concerns for now. On the corporate news front, Hutchison Whampoa has entered into exclusive talks with Telefonica for an indicative cash price of £9.25bn and deferred upside interest payments to a further £1bn. The deal has been reported by the media for sometime but looks like a deal completion is not expected until mid-2016 (Bloomberg).
Recapping the European price action yesterday the Stoxx 600 closed +1.66% higher having been relatively subdued in the build up to the announcement. Elsewhere the DAX (+1.32%), CAC (+1.52%), FTSE MIB (+2.44%) and IBEX (+1.70%) all closed stronger. The Stoxx has now risen for six consecutive days and rallied nearly 8% off the levels from two weeks ago. Credit markets also firmed. Crossover closed 11bps tighter and is now 60bps off the wides earlier this month. Meanwhile the Euro dropped to a fresh 11-year low versus the Dollar, finishing 2.1% lower at $1.137 having touched intraday lows of $1.132. Having initially traded weaker in the morning, bonds rallied across the Euro-area. Benchmark 10y Bunds closed nearly 8bps tighter whilst 10y yields in France (-8.7bps), Spain (-12.6bps) and Italy (-14.2bps) struck fresh record lows at 0.617%, 1.404% and 1.549% respectively – although in reality the majority of government bonds are trading at or near record lows now.
US risk assets fed off the better tone. Indeed, both the S&P 500 (+1.53%) and Dow (+1.48%) closed firmer with the former now moving back into positive territory for 2015 (+0.21%). This was despite what was generally a mixed set of economic data prints. Jobless claims dropped 10k to 307k but this raised the four-week average to 307k – the highest reading since June last year. However our US colleagues point out that nonfarm payrolls still grew 267k that month suggesting that a relatively elevated reading on the moving average is not necessarily a signal of a slowing labour market. Elsewhere, the FHFA house price index rose to +0.8% mom (from 0.6%) and ahead of expectations of 0.3%. The Kansas City Fed manufacturing index disappointed however (3 vs. 8 expected). Treasuries were volatile. 10y yields are one point hit an intraday high of 1.947% before falling to 1.809% immediately post the announcement. They eventually settled back more or less where they started the day at 1.86%. With much of the focus on ECB, further falls in oil markets went largely unnoticed. Indeed both WTI (-3.08%) and Brent (-1.04%) dropped to $46.31/bbl and $48.52/bbl respectively.
With the ECB decision out of the way, attention will now move to Greece this Sunday where we should have an indication of the election results by 10pm GMT. Yesterday’s decision was a boost for Greek assets. Sub-investment grade Sovereigns will be included in the ECB plan although we note these will have to be under a programme. The main caveat centers around the 33% issuer limit which means that the ECB will not be able to purchase Greek bonds before July given the volume of Greek bonds held in the SMP. Recent opinion polls have pointed towards further support for Syriza with the lead widening anywhere from 3% to 4-6% depending on the poll. Perhaps of more interest is what yesterday’s decision would mean for a Syriza outright win in terms of dealing with the Troika and whether or not this makes the negotiation process easier? The Eurogroup meeting next week could well offer some clues into the near term outlook for Greece. 10y Greek yields closed some 50bps tighter yesterday whilst Greek equities (+1.14%) halted two days of previous declines.
In terms of the day ahead, focus this morning will be the manufacturing and services PMI’s for the Euro-area as well as regionally in Germany and France. We are also expecting business and manufacturing confidence in the latter as well as December retail sales out of the UK where consensus is for an energy related decline in the headline (-0.7% mom from 1.7% previously). The Chicago Fed national activity index will be the notable read out of the US but we suspect focus will still be on how much follow through we will get from markets on the back of the ECB action yesterday.
end
Late last night, the Euro starts to crumble:
(courtesy zero hedge)
“”Whatever It Takes” Or “Make It Stop””
“Whatever it takes” appears to have ‘worked’ to crash the currency of the Eurozone… but – unlike the Keynesian ‘exports-are-awesome’ textbook plan of competitive currency devaluationists (just ask Japan) – economic growth expectations continue to collapse… Perhaps it’s time to say “make it stop” before all central bank credibility is entirely destroyed…
Source: @Not_Jim_Cramer
Then by early this morning, we witness a huge European bloodletting:
(courtesy zero hedge)
European Bloodbath: Freefalling EUR Plummets On Broad Liquidation Puke
Down over 200 pips in the past 3 hours…
… and down over 500 pips in less than 24 hours…
… and any hedge funds that had an even modestly long EUR position are being FXCMed on this epic liquidation puke.
In other news, nothing brings prosperity quite like absolutely destroying your currency. In the meantime, Chinese exports to Europe grind to a halt, while CFO at half of the S&P500’s companies which have exposure to Europe are already busy coming up with new non-GAAP terms to represent “Net Income excluding the impact of central bank lunacy.”
Saudi King Abdullah Has Died; Crude Prices Jump
Saudi King Abdullah Has Died; Crude Prices Jump
Submitted by Tyler Durden on 01/22/2015 – 18:28
After first falling ill and being hospitalized in December, Saudi Arabia officials have announced:
*SAUDI ARABIAN KING ABDULLAH DIES, CROWN PRINCE SALMAN SUCCEEDS: STATE TV
As we noted previously when considering this possibility,“a new King can do (almost) anything he wants, including changing oil policy.” 79-year-old Crown Prince Salman has been named succesor (and has his own health issues – reportedly suffering from Dementia). Oil prices popped around 80c on the news.
end
The big story of the day: the Syriza party has a good lead coming into the election on Sunday. The leader Tsipras states that he will not honour commitments of the previous government.
(courtesy zero hedge)
Syriza Leads In 6 Polls; Leader Tsipras Shuns Merkel, Says “Won’t Honor Commitments”
With the leads in at least six polls (of between 4% and 10%), Syriza leader Alexis Tsipras has come out swining for the anti-EU vote this morning:
- *TSIPRAS SAYS ONLY SYRIZA CAN END GREECE’S CATASTROPHIC COURSE
- *TSIPRAS SAYS WON’T HONOR COMMITMENTS MADE BY PREVIOUS GOVT
- *TSIPRAS SAYS WILL NEGOTIATE WITH EUROPEAN PEERS NOT WITH MERKEL
For now Greek assets remain bid on the glorious awesomeness of Draghi but we suspect – though The ECB gave themn room to negotiate and Djisselblom mentioned the possibility of ‘working’ with Greece – that if things go as the polls suggest Monday could see more bloodletting in EURUSD (and bank runs in Greece).
As Bloomberg reports, Tsipras had a lot more to say…
Greeks called on Jan. 25 to decide whether to continue with the tragedy of catastrophic austerity or whether to return to growth, democracy
Many Greeks turning to Syriza not because of ideology but out of need
Tax burden needs to be eased for middle class, Syriza would abolish property tax, introduce levy for large real estate holdings
ECB QE decision was “historic”, pleased by turn away from austerity to measures aimed at boosting growth
Syriza knows obligation arising from membership in European institutions,austerity wasn’t part of EU’s founding treaty
Syriza doesn’t recognize commitments made by previous govt that will bind new administration
As Keep Talking Greece blog reports, 2 days before the election, Syriza leads in six polls:
Left-wing SYRIZA constantly leads in all polls conducted a couple of days before the crucial elections on Sunday. Its difference to Nea Dimokratia is 4.4%-10%. However, pollsters “see” no majority government so far. On the other hand, the rates of undecided still remains between 9% and 10%.
Poll GPO for MEGA TV
- SYRIZA 32.5%
- ND 26%
Metron Analysis for Parapolitika daily
- SYRIZA 29.6%
- ND 25.2%
Public Issue for Avgi daily (SYRIZA’s newspaper)
- SYRIZA 35%
- ND 30%
MARC for Alpha TV
- SYRIZA 32.2%
- ND 26.4%
RASS for Ependysi daily
- SYRIZA 31.3%
- ND 26.5%
PALMOS for tvxs.gr
- SYRIZA 30.2%
- ND 20.3%
To Potami seems to secure the third position, closely followed by Golden Dawn.
* * *
And then there’s this!!
end
Another nail in the coffin of the USA dollar as Russia and China are to build a huge 240 billion high speed rail link to carry goods. The USA dollar will be bypassed entirely.
(courtesy zero hedge)
More Isolation? Russia, China To Build $240 Billion High-Speed Rail Link
The ongoing ‘isolation’ of Russia took another turn for the un-isolated-er today when, as Bloomberg reports, China will build a 7,000-kilometer (4,350-mile) high-speed rail link from Beijing to Moscow, at a cost of 1.5 trillion yuan ($242 billion), Beijing’s city government said. The rail-link – which will bring travel time between Beijing and Moscow down from 5 days to 30 hours – signals a 10-year partnership between the two nations and follows thedropping of the French company, Alstom, from the project.
China will build a 7,000-kilometer (4,350-mile) high-speed rail link from Beijing to Moscow, at a cost of 1.5 trillion yuan ($242 billion), Beijing’s city government said on the social networking site Weibo.
The rail line seeks to facilitate travel across Europe and Asia, Beijing’s municipal government said Jan. 21 in a post on Weibo, China’s equivalent of Twitter. The journey from Beijing to Moscow would take “two days” on a route passing through Kazakhstan, the post said.
The proposed rail line comes as Russia’s economy struggles to recover from the fall in the price of crude oil and as relations with the U.S. and Europe deteriorate over the Ukraine conflict, and as China pushes to market its high-speed rail technology internationally.
The rail line was mooted in November, after Russia and China last year agreed on the largest natural-gas supply deal in history. Alexander Misharin, a first vice-president at state-owned OAO Russian Railways, said in a Nov. 18 interview that the plan would cost $60 billion to reach Russia’s border, and would cut the Beijing-Moscow journey from five days to 30 hours.
The link to Beijing would take eight to 10 years to build, Misharin said in November.
* * *
And would enable a new longest rail journey on earth…
But, as Malaysia Chronicle notes, not everyone’s a winner,
The building of the huge project to China Railway High-speed (CRH), a subsidiary of the state-controlled China Railway (CR).
They will work with the local firm Uralvagonzavod after deciding to drop the French company, Alstom, from the project, one of the world’s leading high speed train manufacturers.
* * *
And follows more unisolated-er activity…
In May, after more than a decade of talks, natural-gas exporter OAO Gazprom reached a $400 billion deal with China to build a pipeline and start supplies. Misharin, in the November comments, compared the new transport network to the Suez Canal “in terms of scale and significance.”
Those comments came a month after a delegation to Moscow led by Chinese Premier Li Keqiang signed accords that included high-speed rail cooperation, a three-year 150 billion yuan ($24 billion) local-currency swap deal and a double-taxation treaty.
* * *
Now who’s isolated?
end
USA oil rig counts continue to fall as demand for oil falters:
(courtesy zero hedge)
US Rig Count Craters To Lowest Since August 2010
With oil prices down another 6% this week (despite Saudi leadership uncertainty and ECB QE), widespread layoffs announced in Shale states, and despite Lew’s comments that he doesn’t see US oil production declining, it is perhaps no surprise that the US rig count cratered further to its lowest level since August 2010. The US rig count is now down over 15% from the highs, with its biggest 10-week drop since May 2009 (and down 8% YoY). The pace of collapse in the rig count has now accelerated for 7 weeks in a row, and judging by lagged oil prices, there is a lot more room to drop yet. The oil rig count standalone is now down 7% YoY – its biggest drop sicne Nov 2009. As T.Boone Pickens so rightly noted, watch the US rig count (and suggested itwill need to drop 500 rigs or more before any stability returns).
- *U.S. OIL RIG COUNT -49 TO 1,317, BAKER HUGHES SAYS
- US HORIZONTAL DRILLING RIGS DOWN 24 AT 1,229 IN WEEK TO JANUARY 23 — BAKER HUGHES
The rig count continues to collapse… as 4-month lagged oil prices lead the way – just as they did before…
- *ENERGY RIGS IN TEXAS’S EAGLE FORD FORMATION DOWN FOUR TO 181
- *MISSISSIPPIAN LOSES FIVE RIGS TO 63: BAKER HUGHES
- *ENERGY RIGS IN PERMIAN BASIN SLIDE BY 6 TO 481: BAKER HUGHES
- *ENERGY RIGS IN WILLISTON BASIN FALL BY 12 TO 153: BAKER HUGHES
- *ENERGY RIGS IN MARCELLUS FORMATION GAINS ONE TO 76
Notice that the rig count always undershoots before prices are able to reverse.
* * *
Not “unambiguosly good”!
Houston (and CO, ND, PA, WV) we have a problem…
But don’t worry – Treasury Secretary Lew says the oil companies can handle it…
- *LEW SAYS U.S. CRUDE PRODUCERS CAN HANDLE DECLINE IN OIL PRICES
As credit risk hovers near record highs for the sector
Charts: Bloomberg
end
A good outline of the shale companies and who will file first for bankruptcy protection:
(courtesy zero hedge)
These Shale Companies Will File For Bankruptcy First: Goldman’s “Best And Worst” Shale Matrix
Over a month ago we presented a ranking of “America’s most levered energy companies.” Since then they have all, without exception gotten clobbered, not only in their publicly traded stock but also their debt.
Today, long after the liquidation whirlwind has left junk bond owners dazed and confused, Goldman catches up, and lays out a matrix of shale companies sorted not only by leveraged (they see 2.5x as the cutoff; we used 4.0x) but also by shale asset quality. From there, it also lays out the various opportunities, if any, available to the management teams in the resultant 4 quadrants.
Readers will be most interested in the “restructuring/bankruptcy” option, most applicable for Group 4, because these are the names which, all else equal, will file for bankruptcy first.
This is what Goldman’s Jason Gilbert has to say:
We believe oil market weakness presents H&Y E&P management teams with difficult decisions. For certain stronger companies, the challenge may be one of deciding if and when to high grade the portfolio through M&A. For some weaker companies, the decisions may be more stressful, with many lower-quality names being forced to consider (1) selling themselves, (2) restructuring/filing for bankruptcy protection, and/or (3) bolstering liquidity through asset sales and/or second lien debt issuance.
We have created a 2×2 matrix, shown in Exhibit 1, where we classify E&Ps according to both asset quality and balance sheet strength. In Exhibit 2, we provide the backup data on each company that justifies its classification in the chart below.
The matrix in question:
the explanation:
Group 1: Strong balance sheet/strong assets
Companies in this group have assets we rate “B+” or higher and leverage below 2.5x. Names that we place in this group include Chesapeake Energy (OP), Concho Resources (NC), Cimarex Energy (NC), and Diamondback Energy (NC). The average yield for this group is 6%.
From a strategic standpoint, we view companies in this grouping as having high optionality on both the buy and the sell side. In other words, these are companies we could envision as targets for IG upstream players looking to add high-quality shale exposure. However, these companies could also be acquirers of distressed assets or companies with complementary portfolios. From a bondholder perspective, we believe this group is well positioned for consolidation in the industry.
Group 2: Strong balance sheet/weak assets
Companies in this group have assets we rate “B” or lower and leverage also below 2.5x. Names include QEP Resources (NC), Newfield Exploration (OP), WPX Energy (OP), SM Energy (NC), and PDC Energy (NC).
Similar to Group 1 above, we see these companies as adders of acreage, with a focus on core positions in key shale plays. Unlike companies in Group 1, however, we do not view these names as likely targets for IG upstream. With an average yield of 7.1%, we believe bond pricing somewhat reflects this lack of upside optionality vs. Group 1.
Group 3: Weak balance sheet/strong assets
This group includes companies with 2015E leverage above 2.5x and assets we rate “B” or higher. Companies include Antero Resources (NC), EP Energy (OP), Laredo Petroleum (NC), Oasis Petroleum (NC), Range Resources (OP), Rosetta Resources (NC), and Whiting Petroleum (U).
We see companies in this group as being the most attractive targets for Group 1 and Group 2. One theme we heard consistently at the GS Global Energy Conference earlier this month is that management teams are willing to pay up to be in the “cores” of shale plays vs. buying “fringier” acreage at discounted prices. While this theme is not new, we believe it is even truer at $50/bbl WTI.
From a seller’s perspective, we believe the rationale for strategic combinations has also changed. Group 3 companies are the ones that have accumulated strong assets at the expense of limited financial flexibility. Facing likely negative ABL revisions and an unsecured HY E&P debt market that is essentially closed, we believe management teams that were previously committed to corporate independence may reconsider their options.
In short we believe the “bid/ask” spread for Group 3 has shrunk, and, as a result, we view this group as being the current sweet spot for E&P credit investors. At an average yield of 7.5% and bonds typically trading in the low/mid-$90s, we see potential for double digit returns if our $65/bbl WTI oil price in 2016 plays out. However, we do not see the same downside risk as in Group 4 below if crude remains lower for longer.
Group 4: Weak balance sheet/weak assets
This group includes companies with leverage above 2.5x and assets we rate “B-“ or lower. Names we highlight are Approach Resources (NC), Exco Resources (NC), Goodrich Petroleum (NC), Halcon Resources (IL), Magnum Hunter (NC), Midstates Petroleum (NC), Rex Energy (NC), Sabine Oil & Gas (U), Samson Investment (NC), Sandridge Energy (IL), and Swift Energy (U).
We view management teams in this group as facing the most difficult decisions. Given the general lack of “core” assets, we believe strategic interest from a larger acquirer is less likely than for Group 3. Furthermore, with the bonds in this group generally trading below $80, we believe 101% change of control provisions act as de facto “poison pills” for acquirers.
Given high leverage and the lack of strategic interest, we believe many companies will need to seek alternative sources of capital. While the options here will vary case by case, we note that most of these names have secured debt baskets that can be used to bolster liquidity. Based on the phone calls we receive, investor interest in this type of security remains high, which suggests to us we will see robust second-lien issuance as soon as the conclusion of 1Q earnings. The bottom line is that, for now, we think investors should tread lightly in this group, despite the average bond yield of 19% (excluding obviously distressed names Swift Energy, Samson Investment, and Sabine Oil & Gas).
Worth noting: the above is actually an optimistic baseline:
Our ratings are predicated on a $65/bbl WTI oil price in 2016. While we believe the consensus largely shares this view, there are clearly risks to the downside. Therefore – and all else being equal – we believe investors should prefer names with lower base portfolio decline rates. On average, we believe lower decline names will have more flexibility to cut capex and hibernate while waiting for an eventual recovery in prices.
And here is the backup data used by Goldman to justify the blessing (or curse) of any one given company in its quadrant.
For those of you who are following this case where it seems the Argentinian government is behind the assassination.
(courtesy zero hedge)
Argentine President “Convinced” Nisman Death Was Not Suicide As New Twists Emerge
“No one believes the suicide hypothesis,” one of Nisman’s investigative team told Reuters, adding that, “he was very convinced of his ideas and prepared to see them through. He had received threats all his life and it never intimidated him.” With the news of no gunpowder residue sinking in, and protests rising, even Argentina’s President is now uncomfortably admitting it, saying on Thursday that she was “convinced” Nisman’s death was not a suicide, explaining that people had led him astray in his investigation in order to smear her name and then “needed him dead.” However, instead of vowing to shed light on the matter, Fernandez and her government have been on the defensive, trying to refute Nisman’s claims against her. Neighboring Uruguay said it felt sorry for Argentina and that its justice system needs to clear up the case to maintain “the minimal confidence our societies need.” Questions abound…
Some have suggested Nisman may have killed himself after realizing his report was based on false evidence. It was met last week with criticism that it relied too heavily on hearsay.
New findings over the past few days have cast doubt over Nisman’s state of mind.
Friends and colleagues say he appeared upbeat. When one asked him via Whatsapp on Saturday afternoon how he was getting on, his response was a photo of piles of documents and highlighters.
To a journalist for Clarin newspaper, Nicolas Winaski, he wrote “Everything will be known, Nicolas, you will see”, saying that he was “calm” and adding a smiley face to his message.
But that same day, Nisman asked to borrow a gun from a colleague, apparently saying he needed it for self-protection even though media reports say he already had guns registered in his name. The borrowed gun was the one found by his body.
The case keeps taking new twists.
While the security ministry originally said it found Nisman’s flat locked from the inside, suggesting he was alone, the locksmith who forced entrance into the flat said the door was merely pulled shut with the keys in the lock.
The prosecutor probing the case has called for patience. She is waiting to talk with Nisman’s doctors and see the results of toxicological and psychopathological checks, and said she would not be influenced by the president’s comments.
“She is free to have an opinion like any citizen,” Viviana Fein said. “I am focused on my investigation, on what I will achieve and discover along with the judge working with me.”
Argentines say they have already waited more than 20 years for answers to the 1994 bombing and they fear justice won’t be done for Nisman either.
Whatever the outcome of the investigation is, the crisis has hurt the leftist Fernandez.
While thousands of protesters gathered outside her residence this week, some shouting “murderer”, more sober critics have attacked her handling of the matter.
So far, she has limited her response to rambling Facebook posts.
But, as Reuters adds, questions abound.
Why would Nisman kill himself on the eve of the hearing in Congress after dedicating years to investigating the 1994 bombing of a Jewish communitycenter in Buenos Aires and believing he was on the cusp of proving a cover-up at the highest levels of government?
If Nisman was so much under threat as to warrant the police assigning him 10 bodyguards, why was none of them in the building at the time?
When they could not contact him all of Sunday, why did they wait for his mother to arrive with a spare key in the evening rather than force the door open?
“The causes of the death are not clear … and clarification is today an imperative of maximum priority for all of Argentine society,” the president of the Jewish Association AMIA, Leonardo Jmelnitzky, said at an event in front of the center that was bombed in 1994.
* * *
And the case has convulsed Argentina and set off a storm of conspiracy theories, many pointing at Fernandez herself, Argentine intelligence services, or Iran, or all three.
Social unrest is rising…
Your more important currency crosses early Friday morning:
Eur/USA 1.1157 down .0187
USA/JAPAN YEN 117.93 down .782
GBP/USA 1.4959 down .0048
USA/CAN 1.2425 up .0038
This morning in Europe, the euro continues to crash, trading now just above the 1.11 level at 1.1157 as Europe reacts to deflation, announcements of massive stimulation and rising bourses. 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 up again in Japan by 78 basis points and settling just below the 118 barrier to 117.93 yen to the dollar. The pound was well down this morning as it now trades just below the 1.50 level at 1.4959.(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 falling apart (oil down/all of Target stores closing/all of Sony stores closing) and now its yield curve is inverted. This morning the Canadian dollar is trading down at 1.2425 to the dollar. It seems that the three major global carry trades are being unwound. (1) The total dollar global short is 9 trillion USA, and as such we now witness a sea of red blood on the streets as derivatives blow up with the massive rise in the dollar against all paper currencies.We also have the second big yen carry trade unwind as the yen refuses to blow past the 120 level.(3) the Nikkei vs gold carry trade These massive carry trades are causing deflation as the world reacts to a lack of demand. Bourses around the globe are reacting in kind to these events.
end
Early Friday morning USA 10 year bond yield: 1.81% !!! down 6 in basis points from Thursday night/
USA dollar index early friday morning: 95.46 up another 1.38 cents from Thursday’s close
The NIKKEI: Friday morning : up 183 points or 1.05%
Trading from Europe and Asia:
1. Europe stocks all green .
2/ Asian bourses all in the green … Chinese bourses: Hang Sang in the green ,Shanghai in the green, Australia in the green: /Nikkei (Japan) green/India’s Sensex in the green/
Gold early morning trading: $1299.00
silver:$18.31
Closing Portuguese 10 year bond yield: 2.45% down 14 in basis points from Thursday (all peripheral bond yields fell)
Closing Japanese 10 year bond yield: .23% !!! down a monstrous 9 in basis points from Thursday ( a huge percentage fall in yield)
Your closing Spanish 10 year government bond, Friday down 3 in basis points in yield from Thursday night.
Spanish 10 year bond yield: 1.38% !!!!!!
Your Friday closing Italian 10 year bond yield: 1.53% down 2 in basis points from Thursday:
trading 15 basis points higher than Spain:
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Friday night/USA dollar index/USA 10 yr bond:
Euro/USA: 1.1201 down .0145
USA/Japan: 117.73 up .985
Great Britain/USA: 1.4978 down .0028
USA/Canada: 1.2410 up .0025
The euro tried to recover this afternoon from a huge hit overnight but by closing time finished well down for the day and just above the 1.12 level to 1.1201.(during the early morning it was trading in the 1.11 handle) The yen was well up in the afternoon, and it was up by closing to the tune of 98 basis points and closing just below the 118 cross at 117.73 and still causing much grief again to our yen carry traders who need a much lower yen (to surpass 120). The British pound tried to gain some ground back during the afternoon session but failed as it turned slightly negative on the day closing at 1.4978. The Canadian dollar crashed again today as it was down on the day at 1.2410 to the dollar.
As explained above, the short dollar carry trade is being unwound, the yen carry trade , the Nikkei/gold carry trade, and finally the long dollar/short Swiss franc carry trade are all being unwound and these reversals are causing massive derivative losses. And as such these massive derivative losses is the powder keg that will destroy the entire financial system.
end
Your closing USA dollar index: 94.78 up a monstrous 71 cents from yesterday.
your 10 year USA bond yield , down 9 in basis points on the day:
1.80%!!!!
end
European and Dow Jones stock index closes:
England FTSE up 36.20 points or 0.53%
Paris CAC up 87.89 or 1.93%
German Dax up 213.96 or 2.05%
Spain’s Ibex up 70.90 or 0.67%
Italian FTSE-MIB up 50.01 or 0.24%
The Dow: down 14138. or 0.79% (the wheels fell off during the last hour of trading)
Nasdaq; up 7.48 or 0.16%
OIL: WTI 45.33 !!!!!!!
Brent: 48.61!!!!
Closing USA/Russian rouble cross: 63.90 up 1/4 rouble per dollar on the day.
And now for your more important USA economic stories for today:
Your New York trading for today:
(a good summary of today’s action)
Crude, Copper, & Euro Currency Crushed By King Dollar’s Best Week In Over 3 Years
Crazy week (for a short week) with epic moves in FX and commodity markets. Treasuries kinda quiet and we suspect for many, stocks disappointing given the trillion dollars of awesomeness from Draghi…
Release The Draghi…
Or perhaps – this better summed up the carnage of the week…
Stocks ended the week higher led by Nasdaq and Trannies but we closed very weak as we suspect Greek election fears weighed on risk
But from ECBQE, US equities have given plenty back today… It’s time for ECBQE2!!!
Benoit Coeure Is No Jim Bullard!!!
Leaving only The Nasdaq green for 2015…
What happens next?
The USD soared on the week as CAD, Swissy, and EUR all dumped…
Treasury yields ended the week lower with 30Y leading (down 7.5bps) and flattening dramatically…
Gold (and bond yields) were smashed lower at 10amET(just as EURCHF surged… cue mysterious music)…
But gold and silver retraced most of that plunge… leaving them green on the week…
But after ECBQE it was copper and crude that were crushed…
With copper dumping after regaining China crash losses…
UPS spoiled the “everything is awesome” narrative, warning about US domestic weakness and not greatly benefitting from low fuel prices…
* * *
SUMMING UP THE WEEK
FX was chaos…
- EURUSD dropped around 3% (EUR weakness) down 6th week in a row (23 of last 30 weeks), worst since July 2012, 5.1% swing from high to low is biggest drop since May 2010 to its lowest since May 2003.
- Swissy dropped 2.25% on the week (Swiss Franc weakness), worst week since Jan 2013 but still up around 16% over 2 weeks
- Loonie crashed 3.65% worst week for Canadian Dollar since September 2011
- The US Dollar Index – up 2.5% – had its best week since September 2011 up 9 of the last 11 weeks
Commodities very also volatile…
- Gold up 3rd week in a row, up over 12% (low to high) best 3-week swing since August 2011
- Silver up 3% this week, 3rd week in a row, 19% is best 3 week swing since Aug 2013
- WTI Crude Oil down 15th of last 17 weeks dropping over 7% this week to near new cycle lows (4th worst week since June 2012)
- Copper worst week since Nov 2014, down 5 of last 6 weeks, lowest close since July 2009 (back below 2.50), falling after recovering the China crash drop.
Treasuries mixed
- 30Y Futures to new record high close price (up 4th week in a row), best 4 week run since April 2013 (down 7bps on the short week)
- 2Y and 5Y yield closed up 1bps on the week
Stocks had their best week in 2015 overall…
- Trannies up 2.5% – best week since October 2014
- Nasdaq up 2.7% – best week since October 2014
Leaving Silver still 2015’s winner followed by gold with oil laggard… stocks doing slightly better than last year at this time, PMs doing a lot better and The Dollar massively better
Charts: Bloomberg
end
Existing home sales drop year over year for the first time since 2010:
(courtesy zero hedge)
Existing Home Sales Drop Year-Over-Year For First Time Since 2010
Despite surges in mortgage applications juxtaposed with notably downbeat commentary from KB Home and Lennar, existing home sales rose modestly in December (+2.4%) but missed expectations for the 2nd month in a row (+3.0%) for a SAAR of 5.04mm sales. Only the Southern region saw sales improve. However, for all of 2014, there were 4.93 million sales, a 3.1% decline from 2013 (5.09 million) – the first drop since 2010. This should be no surprise as NAR finally admits the problem (instead of blaming weather) – “Housing costs – bothrents and home prices – continue to outpace wages and are burdensome for potential buyers trying to save for a downpayment while looking for available homes in their price range.” It’s the price, stupid!
For the first YoY drop since 2010… as the “echo bubble” bursts…
The trend of weak housing data continues…
US Manufacturing Growth Slows To 1 Year Low As Shale Collapse Cripples New Order Spending
We will see you on Monday.
bye for now
Harvey,





































Are you being totally honest with us Hervey? I mean, how much Gold does America really have?
It seems these GLV’s, comex, JP’s keep finding Gold a ton at a time from nowhere, or, is it coming from fort knox? Something is just not right.
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