Dec 27/Gold and silver rise/Huge bombshell again at Toshiba/China finally admits that it will not hit its targets: down goes commodity prices/Run on the bank at Monte dei Paschi as Weidmann states they must now raise 9 billion euros instead of 5 billion euros/

Gold at (1:30 am est) $1137.30 UP $5.40

silver  at $15.93:  UP 23 cents

Access market prices:

Gold: $1139.00

Silver: $15.96

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

TUESDAY gold fix Shanghai

Shanghai morning fix Dec 27 (10:15 pm est last night): $  1161.18

NY ACCESS PRICE: $1137.50 (AT THE EXACT SAME TIME)/premium $23.68

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1161.28

NY ACCESS PRICE: $1139.50 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!:  $21.78

China rejects NY pricing of gold  as a fraud/arbitrage will now commence fully

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Dec 27: 5:30 am est:  $xxx.00   (NY: same time:  $xxx    5:30AM)

London Second fix Dec 27: 10 am est:  $XXXX (NY same time: $xxx    10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

end

For comex gold: 

NOTICES FILINGS FOR DECEMBER CONTRACT MONTH:  1 NOTICE(S) FOR 100 OZ.  TOTAL NOTICES SO FAR: 9127 FOR 912700 OZ    (28.388 TONNES)

For silver:

 NOTICES FOR DECEMBER CONTRACT MONTH FOR SILVER: 7 NOTICE(s) FOR35,000  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 3787 FOR 18,935,000 OZ

Let us have a look at the data for today

.

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In silver, the total open interest ROSE by 681 contracts UP to 161,953 with respect to FRIDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .810 BILLION TO BE EXACT or 116% of annual global silver production (ex Russia & ex China).

FOR THE DECEMBER FRONT MONTH:  7 NOTICES FILED FOR 35,000  OZ.

In gold, the total comex gold ROSE BY 4,682 contracts AS WE HAD A RISE IN  THE PRICE GOLD ($3.10 with FRIDAY’S trading ).The total gold OI stands at 407,673 contracts. We are very close to the bottom with respect to OI. Generally 390,000 should do it.

we had 1 notice(s) filed upon for 100 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had  a big  change in tonnes of gold at the GLD, a withdrawal of 1.18 tonnes

Inventory rests tonight: 823.36 tonnes

.

SLV

we had a big change in silver, a deposit of 1.138 million oz into the SLV

THE SLV Inventory rests at: 341.348 million oz

.

First, here is an outline of what will be discussed tonight: Preliminary data

1. Today, we had the open interest in silver ROSE by 681 contracts UP to 161,953 DESPITE THE FACT THAT the price of silver FELL by  $0.12 with FRIDAY’S trading. The gold open interest ROSE by 4,682 contracts UP to 407,335 as the price of gold ROSE BY $3.10 WITH FRIDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

 

3. ASIAN AFFAIRS

i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 7.91 POINTS OR 0.25%/ /Hang Sang closed. The Nikkei closed UP 6.42 OR .03% /Australia’s all ordinaires  CLOSED/Chinese yuan (ONSHORE) closed DOWN at 6.9520/Oil ROSE to 53.21 dollars per barrel for WTI and 55.21 for Brent. Stocks in Europe: ALL MIXED.  Offshore yuan trades  6.9570 yuan to the dollar vs 6.9458  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT AS  MORE USA DOLLARS ARE ATTEMPTING TO LEAVE CHINA’S SHORES /

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

i)For the first time, Japanese births drop below 1 million.  Since deaths outnumber births, the population dropped.  Immigration is tiny.  The birthrate among women is 1.35 and what is needed is 2.1.

Unless the Japanese undergo huge immigration this country is doomed due to its high debt level to be shared among lesser amounts of citizens.

( zero hedge)

ii)Another bombshell from Toshiba.  We reported in July they the company had inflated its profits by over 1.2 billion USA for no less than 7 years.  In other words the company had inflated it’s earnings by 30% since 2008.  The second bombshell hit yesterday when the company stated that in its nuclear division it has severe cost overruns in the billions.  All 5 of the major officers bowed down to shareholders and then resigned.

c) REPORT ON CHINA

i)The following is very scary.  As I pointed out to you last week, the 14 million dollar default by Wu, chairman of multibillion dollar corporation CoSun is smoke and where there is smoke there is fire.  We now know that the bonds insured by the Chinese equivalent of the MBIA, Moody’s etc has been announced that the documents are fake…all of them!! i.e. the the insurer of all bonds underwritten by Co Sun are fake. How could this be possible?

 

trouble ahead..

( zerohedge)

ii)China announced that  it will miss its growth targets.  Commodities plunge!

( zero hedge)

iii)Bitcoin surges 20% in China as it anticipates a huge yuan devaluation.

( zero hedge)

iv)This is worth watching: the overnight interbank funding between Chinese bans rose to 33% as the POBC pulled out funding.  If they continue to do so this may bring down the entire Chinese financial system and then contagion will strike

(courtesy zero hedge)

v)Taiwan warns that Beijing’s threat against it’s existence is growing by the day. China’s large carrier has entered the South China’s sea carrying out drills:

( zero hedge)

4 EUROPEAN AFFAIRS

i)Italy/Monte dei Paschi

More trouble at Monte dei Paschi as their capital shortfall rose by another 3.8 billion to 8.8 billion euros.  It seems that depositors worried about a bail in have taken their money out in a  hurry especially in the period Nov 30 to Dec 21.

( zero hedge)

ii)NATO/Auditor General dead

Auditor General of NATO was found dead in his car.  They are stating it is suicide. The gun that killed him was found in the glove compartment.  The Auditor General had 3 guns to protect himself but the gun that was in the glove compartment was not registered to him

(courtesy zero hedge)

iii) Europol

This should increase the confidence level of all Europeans:  Europol finally admits that ISIS is actively targeting refugees to carry out terrorist attacks on European soil:

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Saturday:

Israeli Prime Minister lashes out at Obama for their shameful ambush at the UN as the USA for the first time did not use it’s veto power against a motion to halt Israeli settlements in the West Bank. Trump also lashed out stating that “things are going to be different at the UN after Jan 20.

it sure looks like Trump is going to change a lot of things once he gets into power:

( zero hedge)

ii)Sunday:

A very angry Israel summons all security council members to Israel for a reprimand. They accuse Obama of conspiring against Israel, in the planning of the vote.

(courtesy zero hedge)

iii) Both Russia and China attack new USA Defense bill

On the weekend, China lodged a complaint on the new USA defense bill signed by Obama which negates the “one China doctrine”. So not only Obama is disobeying the one China doctrine but no doubt so will Donald Trump.

Then the Russian weighed in on the new bill stating that any attempt by Obama to arm the Syrian rebels will be seen as a hostile act and they will act accordingly:

(courtesy zero hedge)

iv)Turkey

This is interesting:  Erdogan now completely turns towards Russia and against the West as he now states that he has “confirmed evidence” of USA support for ISIS.  We have pointed out to you that the USA invented ISIS and supported them so this is no surprise. The question will be what will the USA response be if he does supply the necessary evidence. Next question: will he release all of his Muslim migrants held in Turkey?
(courtesy zero hedge)

6.GLOBAL ISSUES

none today

7. OIL ISSUES

 none today

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)I have been providing figures for you on the Bundesbank repatriation.  For the yr 2016, it looks like we will have 111 tonnes repatriated which should bring it to exactly the level chosen by Buba : in other words the entire 300 tonnes of gold asked for has been repatriated.  (On Dec 29 we will get November’s reading) What is very strange is the slow repatriation out of Paris.  I would have thought that it would have been very easy for France to send Germany’s gold quite quickly.  Apparently not so.

Based on the data now before us, we should not have any gold leaving the FRBNY as no country (other than Germany) has asked for their gold back.

( GATA/zerohedge)

ii)Be careful fake 1 oz “gold” bars were sold in Winnipeg.  They contained no gold and did not weigh 1.0 z and the colour was also off.

( cbc news)

iii)Unbelievable: one inventory for both Comex and the ICE exchange.  The problems are both are exaggerating how much “gold” they really have

a must read..

( Bullion Star/Ronan Manly)

iv)The trading in the new SGEI  (International gold contract) is meant to internationalize the yuan currency.
( Koos Jansen/GATA)

v)The following is another huge story courtesy of Avery Goodman.  In late November Goodman wrote about BB and T’s Allison, a gold bug and a sound money advocate was in the running for Sec Treasury but at the end that job went to Mnuchin.  What if Allison is being touted for the important Fed’s Chairman job.

it makes sense…

a must read..

( Avery Goodman/GATA)

vi)Peru’s President proposes dredging the very important reservoir for gold as he claims it holds 1 gram /ml of water.  The problem here is that the reservoir is the major source of water for the farmers of that region

( Reuters/GATA)

vii)What will the crooks think of next: they are proposing confiscating gold as a supposed crackdown on terrorist financing.  There is not one shred of evidence that the terrorists use gold in their financing:

( zero hedge)

10.USA STORIES

i)The following is a biggy!! A top ex white house economist now admits that 94% of all new jobs initiated under the Obama regime were part time

( zero hedge)

ii)With the ECB and the BOJ tapering there would be nobody around to buy everybody’s bonds as those yields skyrocket. If the Fed do not repurchase bond that expire as well as sell bonds to lessen it’s balance sheet, the yields rise even more sending the globe into chaos.

Is this their plan? to knock off Trump?

a must read…

( zero hedge)

iii)USA prices have never been higher with the latest October figures from Case Shiller as prices surpassed July 2006’s peak

( zero hedge/Case Shiller)

iv)Consumer confidence rises to its highest level since 2001 on the Trump hope:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 4,682 CONTRACTS UP to an OI level of 407,335 AS THE  PRICE OF GOLD  ROSE $3.10 with FRIDAY’S trading. We are now in the contract month of December and it is the biggest of the year. Here the front month of December showed a DECREASE of 45 contracts DOWN to 563.We had 0 notice(s) served upon yesterday so we LOST 45 contracts 4500 oz will not stand for delivery and no doubt were bought out for cash plus a fiat bonus.

For the next delivery month of January we had a loss of 60 contracts down to 2037. For the next big active delivery month of February we had a GAIN of 2,395 contracts UP to 278,227.

We had 1 notice(s) filed upon today for 100 oz

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And now for the wild silver comex results.  Total silver OI ROSE by 681 contracts FROM 161,272 UP TO 161,953 DESPITE THE FACT THAT the price of silver FELL BY $0.12 with FRIDAY’S trading. We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). We are now in the next major delivery month of December and here it FELL BY 13 contracts DOWN to 218 CONTRACTS . We had 13 notices served upon yesterday so we NEITHER GAINED NOR LOST ANY SILVER CONTRACTS (OZ) THAT WILL STAND FOR DELIVERY IN THIS ACTIVE MONTH OF DECEMBER.

The next non active delivery month is January and here the OI FELL by 84 contracts DOWN to 969.

The next big active delivery month is March and here the OI ROSE by 298 contracts UP to 131,872 contracts.

We had 7 notices filed for 35,000 oz for the December contract.

Eventually at the end of December 2015: 6.4512 tonnes of gold stood for delivery

Eventually at the end of December 2015: 18.84 million oz of silver stood for delivery

VOLUMES: for the gold comex

Today the estimated volume was 103,038  contracts which is awful.

Yesterday’s confirmed volume was 83,136 contracts  which is awful

Initial standings for DECEMBER
 Dec 27.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 16,075.00 oz
Scotia
500 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
  45,045.266 oz
International Services of Delaware
750 kilobars.
and Scotia
20,930.766 oz
No of oz served (contracts) today
 
1 notice(s)
100 oz
No of oz to be served (notices)
562 contracts
56,200 oz
Total monthly oz gold served (contracts) so far this month
9127 notices
912,700 oz
28.388 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil oz
Total accumulative withdrawal of gold from the Customer inventory this month     4,449,219.3 oz
Today we HAD 2 kilobar transactions/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1 customer deposit(s):
 i) Into International Services of Delaware: 24,112.500 oz
(750 kilobars)
ii) Into Scotia: 20,930.766 oz
total customer deposits; 45,043.266 oz
We had 1 customer withdrawal(s)
i) out of Scotia: 16,075.00 oz
500 kilobars
total customer withdrawal: 16,075.000 oz
We had 0  adjustment(s)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

For December:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the DECEMBER. contract month, we take the total number of notices filed so far for the month (9127) x 100 oz or 912,700 oz, to which we add the difference between the open interest for the front month of DEC (563 contracts) minus the number of notices served upon today (1) x 100 oz per contract equals 968,900 oz, the number of ounces standing in this non  active month of DECEMBER.
 
Thus the INITIAL standings for gold for the DEC contract month:
No of notices served so far (9127) x 100 oz  or ounces + {OI for the front month (563) minus the number of  notices served upon today (1) x 100 oz which equals 968,900 oz standing in this non active delivery month of DEC  (30.136 tonnes)
WE LOST 45  CONTRACTS OR AN ADDITIONAL 4500 OZ OF GOLD WILL NOT STAND FOR DELIVERY.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 12 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for 2016:
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   30.136 tonnes
total for the 12 months;  222.691 tonnes
average 18.557 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month. From May 2016 until Dec 2016 we have had: 198.502 tonnes per the 8 months or 24.812 tonnes per month (which includes the non delivery months of May, June and Sept).  In essence the demand for gold is skyrocketing.
Something big is going on inside the gold comex.
Just take a look at Nov 2016 deliveries at 8.3950 tonnes compared to last yr 0.6656 tonnes
December so far:  30.136 tonnes are standing vs last year’s  24 tonnes on first day notice and 6.45 tonnes on the completion of it’s delivery month.
Total dealer inventor 1,639,572.999 or 50.99 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,056,404.426 or 281.692 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 281.692 tonnes for a  loss of 21  tonnes over that period.  Since August 8/2016 we have lost 72 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 4 1/2 MONTHS  72 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
DECEMBER INITIAL standings
 Dec 27. 2016
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil 0z
Brinks
Deposits to the Dealer Inventory
  nil OZ
Deposits to the Customer Inventory 
nil oz
No of oz served today (contracts)
7 CONTRACT(S)
(35,000 OZ)
No of oz to be served (notices)
211 contracts
(1,055,000  oz)
Total monthly oz silver served (contracts) 3787 contracts (18,935,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  3,689,995.4 oz
 END
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: nil oz
 we had 0 customer deposit(s):
total customer deposits;  nil  oz
 
 
 we had 0 adjustment(s)
The total number of notices filed today for the DEC. contract month is represented by 7 contracts for 35,000 oz. To calculate the number of silver ounces that will stand for delivery in DEC., we take the total number of notices filed for the month so far at  3787 x 5,000 oz  = 18,935,000 oz to which we add the difference between the open interest for the front month of DEC (218) and the number of notices served upon today (7) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the DEC contract month:  3787(notices served so far)x 5000 oz +(218) OI for front month of DEC. ) -number of notices served upon today (7)x 5000 oz  equals  19,990,000 oz  of silver standing for the DEC contract month.
we neither gained nor lost any silver oz standing in this active delivery month of December.
Volumes: for silver comex
Today the estimated volume was 30,659 which is fair
YESTERDAY’S  confirmed volume was 27,050 contracts  which is poor.
 
Total dealer silver:  36.152 million (close to record low inventory  
Total number of dealer and customer silver:   183.578 million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD
Dec 27/a withdrawal of 1.18 tonnes from the GLD/Inventory rests at 823.36 tonnes
Dec 23/NO CHANGES IN GOLD INVENTORY AT THE GLD/RESTS TONIGHT AT 824.54 TONNES
Dec 22/no change in inventory at the GLD/Inventory rests at 824.54 tonnes
DEC 21/another massive 3.56 tonnes leaves the GLD/Inventory rests at 824.54 tonnes
Dec 20/no changes in gold inventory at the GLD/Inventory rests at 828.10 tonnes
Dec 19/A MASSIVE WITHDRAWAL OF 14.23 TONNES OF GOLD FROM THE GLD (WITH GOLD UP THESE PAST TWO TRADING SESSIONS)/INVENTORY RESTS TONIGHT AT 828.10 TONNES
Dec 16/no changes at the GLD/Inventory rests at 842.33 tonnes
Dec 15/ANOTHER HUGE WITHDRAWAL OF 7.11 TONNES OF GOLD/INVENTORY RESTS AT 842.33 TONNES
DEC 14/another huge withdrawal of 6.82 tonnes from the GLD/Inventory rests at 849.44 tonnes/
DEC 13/no changes in gold inventory at the GLD/Inventory rests at 856.26 tonnes
Dec 12/a withdrawal of 1.19 tonnes of gold from the GLD/Inventory rests at 856.26 tonnes
Dec 9/another huge withdrawal of 3.26 tonnes of gold leaves the GLD vaults on its way to Shanghai/Inventory rests this weekend at 857.45 tonnes
Dec 8/ANOTHER HUGE WITHDRAWAL OF 2.96 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 860.71 TONNES (THIS GOLD IS HEADING TO SHANGHAI)
DEC 7/ a huge change in gold inventory/a withdrawal of 6.23 tonnesas this gold is heading towards Shanghai/inventory rests at 863.67 tonnes
Dec 6/no changes in gold inventory/inventory rests at 869.92 tonnes.
Dec 5./ a tiny withdrawal of .32 tonnes and this is probably to pay for fees/inventory rests tonight at 869.92 tonnes
Dec 2/a huge withdrawal of 13.64 tonnes of gold leaving the GLD vaults/no doubt this is heading to Shanghai taking advantage of the huge premium/inventory rests tonight at 870.22 tonnes
Dec 1/no change in gold inventory at the GLD/Inventory rests at 883.86 tonnes
NOV 30/A SMALL WITHDRAWAL OF 1.18 TONNES FROM THE GLD/INVENTORY RESTS AT 883.86 TONNES/MAYBE THEY ARE AT THE BOTTOM OF THE BARREL FOR PHYSICAL GOLD TO TRANSFER TO THE BANKERS.
Nov 29/no changes in gold inventory at the GLD/inventory rests at 885.04 tonnes
Nov 28/no change in gold inventory at the GLD/Inventory rests at 885.04 tonnes
Nov 25 We had a massive 19.87 tonnes of gold leave the GLD/this would be a paper loss not real gold (they only have paper gold in their inventory/total inventory: 885.04 tonnes
Nov 23/a huge withdrawal of paper gold from the GLD equal to 4.66 tonnes/inventory rests at 904.91 tonnes
NOV 22/no changes at the GLD/Inventory rests at 908.76 tonnes
Nov 21/A MASSIVE 11.87 TONNES OF PAPER GOLD WERE SUPPLIED BY THE CROOKS TO SUPPRESS THE PRICE OF GOLD/INVENTORY RESTS AT 908.76 TONNES/ AND GOLD RISES???
Nov 18/no changes at the GLD/Inventory rests at 920.63 tonnes
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Dec 27/ Inventory rests tonight at 823.36 tonnes
*IN LAST 58 TRADING DAYS: 126.45 TONNES REMOVED FROM THE GLD
*LAST 4 TRADING DAYS: 1.18 TONNES HAVE LEFT

end

Now the SLV Inventory
Dec 27/a big deposit of 1.138 million oz/Inventory rests at 341.348 million oz
Dec 23/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 340.210 MILLION OZ/
Dec 22/WE HAD A SMALL DEPOSIT OF 948,000 OZ INTO THE SLV/INVENTORY RESTS AT 340.210 MILLION OZ/
DEC 21/no change in silver inventory at the SLV/Inventory rests at 339.262 million oz
Dec 20/a small withdrawal of 758,000 oz/inventory rests at 339.262 tonnes
Dec 19A HUGE DEPOSIT OF 1.327 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 340.020 MILLION OZ
Dec 16/A HUGE WITHDRAWAL OF 2.37 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 338.693 MILLION OZ/
Dec 15/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 341.063 MILLION OZ/
Dec 14.no change in inventory at the SLV/Inventory rests at 341.063 million oz/
DEC 13/ a huge withdrawal of 1.802 million oz from the SLV/Inventory rests at 341.063 million oz
Dec 12/no change in silver inventory/inventory rests at 342.865 million oz/
Dec 9/no change in silver inventory/inventory rests at 342.865 million oz/
Dec 8/a huge withdrawal of 3.09 million oz from the SLV/Inventory rests at 342.865 million oz
DEC7/no changes in silver inventory at the SLV/Inventory rests at 345.995 million oz/
Dec 6/no changes in silver inventory at the SLV/inventory rests at 345.995 million oz
Dec 5/no changes in silver inventory at the SLV/inventory rests at 345.995 million oz/
Dec 2 a tiny withdrawal of 155,000 oz and this is probably to pay for fees/inventory rests at 345.995 million oz/
Dec 1/no changes in silver inventory at the SLV/inventory rests at 346.150 million oz/
NOV 30/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 346.150 MILLION OZ
Nov 29/no changes in silver inventory /inventory rests tonight at 346.150 million oz/
Nov 28/no change in silver inventory/inventory rests tonight at 346.150 million oz/
Nov 25/we had another withdrawal of 949,000 oz from the SLV/Inventory rests at 346.150 million oz
Nov 23/A HUGE WITHDRAWAL OF 3.083 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 347.099 MILLION OZ
NOV 22/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 350.182 MILLION OZ
Nov 21/a MASSIVE 6.071 MILLION OZ OF SILVER WITHDRAWN FROM THE SLV VAULTS/INVENTORY RESTS AT 350.182 MILLION OZ/AND SILVER HOLDS IN PRICE???
Nov 18/no changes in silver inventory at the SLV/Inventory rests at 356.253 million oz
.
Dec 27.2016: Inventory 341.348  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.6 percent to NAV usa funds and Negative 7.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.2%
Percentage of fund in silver:38.5%
cash .+0.3%( Dec 23/2016) holiday/will report tomorrow
.
2. Sprott silver fund (PSLV): Premium FALLS to -.09%!!!! NAV (Dec 23/2016) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.73% to NAV  ( Dec 23/2016)
Note: Sprott silver trust back  into NEGATIVE territory at -0.09% /Sprott physical gold trust is back into NEGATIVE territory at -0.73%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver stories for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE

Holiday/will resume tomorrow

END

 

I have been providing figures for you on the Bundesbank repatriation.  For the yr 2016, it looks like we will have 111 tonnes repatriated which should bring it to exactly the level chosen by Buba : in other words the entire 300 tonnes of gold asked for has been repatriated.  (On Dec 29 we will get November’s reading) What is very strange is the slow repatriation out of Paris.  I would have thought that it would have been very easy for France to send Germany’s gold quite quickly.  Apparently not so.

Based on the data now before us, we should not have any gold leaving the FRBNY as no country (other than Germany) has asked for their gold back.

(courtesy GATA/zerohedge)


Bundesbank Repatriates Gold From New York, Paris “Faster Than Planned”

In January of 2016, the Bundesbank announced that three years after commencing the transfer of some of its offshore-held gold from vaults located at the Banque de France in Paris and the NY Fed in New York, it had repatriated a total of 366.3 tonnes, bringing the German central bank’s gold reserves held in Frankfurt to 1,402 tonnes, or 41.5% of Germany’s total gold of 3,381 tonnes, for the first time greater than the 1.347 thousand tonnes located at the New York Fed, which as of January 27, 2016 held 39.9% of Germany’s official gold.

“With approximately 1,403 tonnes of gold, Frankfurt has been our largest storage location, ahead of New York, since the end of last year,” said Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank. “The transfers are proceeding smoothly. We have succeeded in once again significantly increasing the transport volume compared with 2014. This means that operations are running very much according to schedule,” added Thiele last January.

As a reminder, according to its gold storage plan, unveiled in January 2013, the Bundesbank would store half of Germany’s gold reserves in its own vaults in Frankfurt am Main by 2020 which would  necessitate a transfer to Frankfurt of 300 tonnes of gold from New York and all 374 tonnes of gold from Paris. It also meant that as of January, another 111 tonnes of gold from the NY Fed and 196.4 tonnes of gold from Paris remained to be transfered.

The “politically correct” motives for the transfer, as well as the logistics and the mechanics behind it were explained in a March 2015 video released by the Bundesbank…

… the real reasons, however, is that following several reports on this website which cast doubts on Germany’s gold holdings, in late 2012 the German Court of Auditors demanded that the Bundesbank undertake an audit of its gold reserves. Specifically, the court wanted to ensure that the nearly 3400 tons of gold, of which more than 2,000 tonnes held offshore, is in fact in existence – ‘because stocks have never been checked for authenticity and weight’.  The move to repatriate was only accelerate following rumors that much of the offshore-held gold might have been “rehypothecated”, and not be there anymore, that it might have been melted down, leased, or sold.

Ironically, at the time, Bundesbank Board member Carl-Ludwig Thiele told the Handelsblatt that these moves were a “trust-building” measure, and he tried vigorously to put the rumors about the missing gold to rest. Of course, repatriating your gold from foreign central banks is precisely the opposite of a “demonstration of confidence.”

What made matters worse is that at the end of 2013,
the Bundesbank announced it had managed to repatriate only 37 tonnes of
the total 700 scheduled for redemption, further spooking the local
population and suggesting that conspiracy theories that the gold was
missing were in fact accurate.

As a result, following blowback from both the media and the public, the Bundesbank accelerated its activity, and repatriated 120 tonnes in 2014 and another 210 in 2015, implying that the Bundesbank’s faith in its foreign central bank peers had declined in inverse proportion to the following accelerated redemption schedule as of January 2016.

Almost one year later, last Friday, Germany’s Bild reported that in 2016 the Bundesbank has repatriated “more of its gold than planned”, as it moves toward relocating half of the world’s second-largest reserve at home.

“We brought back significantly more gold to Germany in 2016 again than initially planned. By now, almost half of the gold reserves are in Germany,” Bube president Jens Weidmann told the German publication.

As Reuters added, in the wake of the European financial crisis, many ordinary Germans have demanded to see more of the 3,381 tonnes of gold in vaults at home. “Some had even questioned whether it still exists, prompting the Bundesbank to publish a long list of details on the gold holdings in 2015.”

According to Bild, around 1,600 tonnes of Germany’s gold reserves are now in the country, a figure set to rise to 1,700 tonnes by 2020.

This means that the Bundesbank repatriated roughly 200 tonnes of gold in 2016, comparable to the 210 tonnes its brought back to Frankfurt in 2015, and the total held domestically  amounts to 1,600 tonnes at the end of 2016, just shy of the 1,700 or so planned to be repatriated over the next three years, suggesting that for some unknown reason, the German central bank has aggressively pushed forward the redemption timetable ahead of its scheduled completion in 2020.

Neither Bild, nor Weidmann, explained why after initially dragging its feet on gold relocation in 2013, over the past two years the German central bank has demonstrated a curious sense of urgency in repatriating its gold.  In any case, we are confident that the German population will be happy to learn that nearly half of its gold is now on domestic soil, just in time for the holidays.

end

 

Be careful fake 1 oz “gold” bars were sold in Winnipeg.  They contained no gold and did not weigh 1.0 z and the colour was also off.

(courtesy cbc news)

High-quality counterfeit gold bars sold in Winnipeg and other Canadian cities

Section:

From the Canadian Broadcasting Corp., Toronto
Friday, December 23, 2016

http://www.cbc.ca/news/canada/manitoba/counterfeit-gold-bars-1.3911346

If you’re planning on buying gold bars anytime soon, Winnipeg police are advising extra caution after a series of “suspicious transactions” at locations in the city.

The transactions took place Nov. 30 at a number of pawn shops and gold buyers, police said, involving the sale or pawning of counterfeit one-ounce gold bars.

Six of the bars were exchanged in Winnipeg for just under $5,000.

City police said officers in other Canadian cities also investigated similar incidents.

Police said the bars and packaging were very high-quality counterfeits.

They were bearing either Perth Mint or PAMP (Produits Artistiques Métaux Précieux — Switzerland) stamps.

Police say anyone purchasing a similar bar should take extra steps to ensure its authenticity.

 

 

end

 

Unbelievable: one inventory for both Comex and the ICE exchange.  The problems are both are exaggerating how much “gold” they really have

a must read..

(courtesy Bullion Star/Ronan Manly)

Ronan Manly: Comex and ICE exaggerate gold inventories

Section:

12:26p ET Saturday, December 24, 2016

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly reports today that both the Comex and the Intercontinental Exchange are exaggerating their gold inventories. Manly’s analysis is headlined “COMEX and ICE Gold Vault Reports Both Overstate Eligible Gold Inventory” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/comex-and-ice-gold-vault-r…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

end

 

The trading in the new SGEI  (International gold contract) is meant to internationalize the yuan currency.
(courtesy Koos Jansen/GATA)

Koos Jansen: China’s gold market means to internationalize its currency

Section:

9:59a ET Sunday, December 25, 2016

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen reiterates today that an objective of the Shanghai Gold Exchange is to internationalize China’s currency, and he publishes an English translation of a speech given last month in Beijing by the deputy general manager of the exchange, Teng Wei, who emphasized that point. Jansen’s commentary is headlined “China’s Gold Market Opens Up to Boost RMB Internationalization” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/chinas-gold-market-opens-u…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

END

 

The following is another huge story courtesy of Avery Goodman.  In late November Goodman wrote about BB and T’s Allison, a gold bug and a sound money advocate was in the running for Sec Treasury but at the end that job went to Mnuchin.  What if Allison is being touted for the important Fed’s Chairman job.

it makes sense…

a must read..

(courtesy Avery Goodman/GATA)

Avery Goodman: Gold advocate, Fed foe under consideration for Cabinet position

Section:

7:30p ET Monday, December 26, 2016

Dear Friend of GATA and Gold:

Market analyst Avery Goodman writes tonight that a gold standard advocate and supporter of ending the Federal Reserve remains in consideration for a Cabinet post in the Trump administration and maybe even for the chairmanship of the Fed. Goodman’s report is headlined “Strong Gold Standard Advocate Still Considered for Top Cabinet Position” and it’s posted at Goodman’s internet site here:

http://averybgoodman.com/myblog/2016/12/26/strong-gold-standard-advocate…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

END

 

Peru’s President proposes dredging the very important reservoir for gold as he claims it holds 1 gram /ml of water.  The problem here is that the reservoir is the major source of water for the farmers of that region

(courtesy Reuters/GATA)

 

Peru’s president proposes dredging reservoirs for gold

Section:

By Mitra Taj and Marco Aquino
Reuters
Monday, December 26, 2016

President Pedro Pablo Kuczynski proposed dredging a reservoir in a dry northern region of Peru to extract what he described as “much more gold” than what the country’s biggest gold mine holds, according to an interview with a local newspaper.

Kuczynski said Poechos, Peru’s biggest reservoir and a key source of water for drinking and farming in the northern Piura region, could hold one gram of gold per cubic meter in 580 million cubic meters of sediment.

“It has to be dredged,” Kucyznski said in a videotaped interview with financial daily Gestion. …

Kuczynski said the sediment could be removed from Poechos for five or six years to extract its gold before letting it accumulate again for 20 years, a repeatable process that he said would make it “the only mine in the world that’s renewable.”

Kuczynski, a former investment banker who once managed a mine in West Africa for Alcoa Corp, said the same model could be used in another reservoir in Peru, Olmos, which Brookfield Infrastructure Partners LP recently bought from Brazilian builder Odebrecht. …

… For the remainder of the report:

http://www.reuters.com/article/us-peru-economy-growth-idUSKBN14F142

 

 

END

 

Chris Powell is interviewed on Russia TV, their 24 hr news program on the west’s gold suppression scheme:
(courtesy  Chris Powell/GATA)

Le Metropole Members,

GATA secretary interviewed at length on Russia 24’s ‘Geo-
Economics’ program

Submitted by cpowell on 06:35PM ET Tuesday, December 27, 2016.
Section: Daily Dispatches
1:38p ET Tuesday, December 27, 2016

Dear Friend of GATA and Gold:

Last week’s “Geo-Economics” program on the Russia 24 television
network, the round-the-clock news channel based in Moscow, gave
your secretary/treasurer a lot of time to discuss gold’s role as
an international currency and the policy of Western governments
to subvert it in favor of the U.S. dollar. The program cited the
Russian government’s steady acquisition of gold as well as the
Indian government’s interference with gold purchases by its
citizens.

Russia 24 is owned by the Russian government, which, as you might
infer from the program, does not regard gold price suppression as
mere “conspiracy theory” but rather recognizes it as longstanding
Western government policy aimed at exploiting the developing
world, including Russia itself.

Last week’s “Geo-Economics” program about gold was 20 minutes
long and has been posted at You Tube, your secretary/treasurer
appearing at the 6:15, 7:15, 10:15, 12:15, and 18:45 marks, where
even if you don’t speak Russian you at least can see that he has
a face for radio:

https://www.youtube.com/watch?v=GO2rSA9HiKc

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end
What will the crooks think of next: they are proposing confiscating gold as a supposed crackdown on terrorist financing.  There is not one shred of evidence that the terrorists use gold in their financing:
(courtesy zero hedge)

Europe Proposes Confiscating Gold In Crackdown On “Terrorist Financing”

Hot on the heels of China gold import restrictions, and India’s demonetization and gold confiscations, The European Commission proposed tightening controls on cash and precious metals transfers from outside the EU under the guise of shutting down one route for funding of militant attacks on the continent, following the Berlin Christmas attack.

China has already begun de facto gold import restrictions, and as Jayant Bhandari detailed previously, India is experiencing a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the economy and civilization. There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow.

And now, as Reuters reports, it appears last Monday’s attack on a Christmas market in Berlin, where 12 people were killed as a truck ploughed into a crowd, has given The European Commission just the excuse to tighten capital controls – specifically cash and precious metals – into and out of Europe.

It is part of an EU “action plan against terrorist financing” unveiled after the bombings and shootings in Paris in November 2015.

 

Under the new proposals, customs officials in European Union states can step up checks on cash and prepaid payment cards sent by post or in freight shipments.

 

Authorities will also be able to seize cash or precious metals carried by suspect individuals entering the EU.

 

People carrying more than 10,000 euros (8,413.56 pounds) in cash already have to declare this at customs when entering the EU. The new rules would allow authorities to seize money below that threshold “where there are suspicions of criminal activity,” the EU executive commission said in a note.

 

EU officials said some of the recent attacks in Europe were carried out with limited funds, sometimes sent from outside the EU by criminal networks.

The Commission is also considering whether to set up an EU-focussed “terrorist finance tracking programme” along the lines of the U.S.-EU TFTP, which has long been opposed by EU lawmakers and privacy campaigners because it allows widespread checks on consumers’ bank transfers.

The plan complements Commission proposals after the Paris attacks to tighten controls on virtual currencies such as bitcoin, and prepaid cards, which French authorities said were used to fund the bombings.

 

EU states backed these proposals on Tuesday. Under the deal, which still needs European Parliament approval, holders of prepaid cards would have to show some form of identity when they make payments of 150 euros or more.

But it gets better…

The Commission is also proposing common rules for the 28 EU countries on freezing “terrorists’ financial resources” and on confiscating assets even from those thought to be connected to criminals.

So – cash, bitcoin, precious metals, and prepaid cards over $150 are all instruments of the “terrorists” and are now open to confiscation if you are a suspicious person… which, by their rhetoric, you are if you actually hold any of these assets

 

 

end

Your early TUESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight

 
 

1 Chinese yuan vs USA dollar/yuan UP to 6.9520(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS A BIT  TO 6.9570 / Shanghai bourse CLOSED DOWN 7.91 POINTS OR 0.25%   / HANG SANG CLOSED 

2. Nikkei closed UP 6.42 OR .03% /USA: YEN RISES TO 117.38

3. Europe stocks opened ALL MIXED  OR CLOSED    ( /USA dollar index RISES TO  103.11/Euro DOWN to 1.0439

3b Japan 10 year bond yield: RISES TO    +.061%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 117.38/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  53.21  and Brent: 55.21

3f Gold UP/Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

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.

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS TO +194.%/Italian 10 yr bond yield RISES 2 full basis points to 1.830%    

3j Greek 10 year bond yield RISES to  : 7.25%   

3k Gold at $1141.80/silver $15.92(7:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP   23/100 in  roubles/dollar) 60.74-

3m oil into the 53 dollar handle for WTI and 55 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT a SMALL   DEVALUATION DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 117.38 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0296 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0751 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.194%

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.554% early this morning. Thirty year rate  at 3.124% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE/JAPANESE STIMULUS PLAN DISAPPOINTS

Global Stocks, US Futures Rise In Thin Trading As Volumes Plunge

 Most world markets have reopened following the holiday weekend, but trading volumes remain significantly muted. Asian and European shares advance modestly amid low volumes with U.K. and Ireland closed; S&P futures are little changed while the dollar rose and oil extended its longest winning streak in four months.

Crude advanced for a seventh day ahead of the new year when OPEC and other producing nations are expected to start reducing output. European shares edged higher, though volume was two-thirds lower than the 30-day average. Despite the dolllar rising against most peers, gold reached an almost two-week high amid reduced supply during the holidays.

With most carbon-based traders out on vacation this week, do not expect volumes to pick up, although with algos in charge it is possible to have a pickup in volatility due to thin, illiquid markets. As Reuters notes, concerns about Italian banks, Chinese growth and U.S. President-elect Donald Trump’s protectionist bent look set to keep investors on edge into the start of 2017.

For now the prevalent theme remains one of Trump and “optimism”, as even the president-elect tweeted last night…

The world was gloomy before I won – there was no hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!

… although that too appears to have peaked and traders are now casting cautious glances at what comes next: “The financial markets seem to have already priced in expectations toward a Trump presidency, and are shifting toward a market that’s waiting to gauge his actual policies,” Hideyuki Ishiguro, a senior strategist at Daiwa Securities told Bloomberg. “We also have a lack of market participants with overseas markets closed.” In addition to the U.K., financial markets in Australia, New Zealand and Hong Kong remained shut on Tuesday.

Tuesday data showed Chinese industry racked up its strongest profit growth in three months in November, suggesting the world’s second-largest economy was improving. In Japan, however, core consumer prices fell in annual terms for the ninth month as household spending slumped.

“Markets have calmed down a lot since the U.S. election and the decisions by the ECB and Fed (earlier in December),” said Daniel Lenz, a bond market strategist with DZ Bank in Frankfurt. “There is a feeling that some of the expectations after the Trump election may have been exaggerated and now it is a question of waiting to see what the U.S. government will look like when it finally takes shape.”

The Shanghai Composite Index, which has been hovering around the same level since mid-December, slid 0.3 percent. China’s economy is closing out the year on a high note as the earliest December indicators give no signs that the expansion is faltering. Data on Tuesday showed industrial-profit gains accelerated in November. The Jakarta Composite Index rose 1.5 percent, ending its longest losing streak since 2005 and helping send the MSCI Emerging Markets Index up 0.2 percent. Japan’s Topix index gave up earlier gains to finish lower for the fourth straight day, after data showed the nation’s consumer prices dropped in November. Toshiba Corp. sank the most in a year on reports it may book a loss of as much as 500 billion yen ($4.3 billion) on its U.S. nuclear operations.

The Stoxx Europe 600 Index added 0.1%. Despite heading for its biggest monthly rally in more than a year, it’s been hovering around overbought levels. An index tracking volatility expectations jumped 11% on Tuesday, the most in a month.

S&P 500 futures slipped less than 0.1% after closing on Friday just 0.4% shy of a new record, while the Dow Jones Industrial Average is just points away from the 20,000 level.

Top stories also include Toshiba saying it may have to write down its nuclear business; the ECB warning Monte Paschi its capital shortfall has surged by over 75% in a few weeks, Panasonic, Tesla to Start Output at Buffalo Plant Next Summer, Russia caling the U.S. move to supply Syria rebels weapons a hostile act; Russia finding the first black box from the Black Sea crashed jet.

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2258
  • Stoxx 600 up 0.1% to 360
  • DAX up less than 0.1% to 11459
  • German 10Yr yield down less than 1bp to 0.22%
  • Italian 10Yr yield up 2bps to 1.84%
  • Spanish 10Yr yield up 2bps to 1.4%
  • S&P GSCI Index up 0.5% to 393.8
  • MSCI Asia Pacific up less than 0.1% to 134
  • Nikkei 225 up less than 0.1% to 19403
  • Shanghai Composite down 0.3% to 3115
  • U.S. 10-yr yield up 2bps to 2.55%
  • Dollar Index up 0.02% to 102.99
  • WTI Crude futures up 0.5% to $53.27
  • Brent Futures up 0.1% to $55.24
  • Gold spot up 0.8% to $1,144
  • Silver spot up 1.7% to $16.01

Global Headline News

  • Toshiba Says Nuclear Writedown May Reach Billions of Dollars: Writedowns may be more than company’s projected profit
  • Oil Extends Longest Run of Gains Since Aug. Before OPEC Cuts: Prices to recover as output curbs help rebalancing: Al-Falih
  • Dollar Gains Amid Japan Importer Buying, Rise in Treasury Yields: Greenback set for first advance versus yen in five days
  • Democrats Plotting ‘Collision Course’ With Trump’s Tax Plan: They’ll emphasize benefits for the rich amid populist pitch
  • Gold Surges Above $1,150 as Precious Metals Post Year-End Rally: Platinum, palladium, silver also rallying
  • Panasonic, Tesla to Start Output at Buffalo Plant Next Summer: Plant’s capacity to reach 1GW by 2019
  • Qualcomm Signs 3G/4G China Patent License Pact With Gionee: Qualcomm granted Gionee a royalty-bearing patent license
  • Outrage Over Economy Doesn’t Explain Surging Global Populism: Greece’s anti-establishment push shows progress can be slow
  • Russia Urges Libya Leadership Role for UN-Defying Military Chief: UN envoy ignoring influential players in Libya: Gatilov

* * *

In Asia, the MSCI index of Asia-Pacific shares ex-Japan was marginally higher while Japan’s Nikkei closed little changed. “It is the time of the year when markets trade with hushed tones,” Jingyi Pan, market strategist at IG, wrote in a note. “The magnitude of moves could remain capped with thin market trades expected to remain the case. Markets are expected to remain thin today,” Pan added saying that “for Asia, it is likely to be a second day of mixed performance with a lack of leads. Japan could nevertheless experience gains with the dollar climbing against the yen.” 6 out of 11 sectors decline in the MSCI Asia Pacific Index with industrials, telecom services underperforming and health care, consumer staples outperforming. China’s CSI 300 index was down 0.1% and the Shanghai Composite slipped almost 0.2 percent, despite the upbeat industrial data.

Asian Eco Data:

  • Japan Nov. core consumer prices -0.4% Y/Y; est. -0.3%
  • Japan Nov. jobless rate 3.1%; est 3.0%
  • Japan Nov. household spending fell 1.5% Y/Y
  • China Jan.-Nov. industrial companies’ profit rises 9.4% Y/Y

Top Asian News

  • Early China Data Show Economy on Firmer Footing in December: Satellite activity gauge stabilizes near a five-year high
  • China Promotes Yin Yong to Deputy Governor of Central Bank: Yin was director of SAFE’s investment center from 2007 to 2015
  • Investors Bet on Vietnam as Valuations Top Southeast Asia: Corporate earnings expected to see double-digit growth
  • Tepco Seeks Growth With Services as Gas Market Set to Open: Tepco partners with Nippon Gas to supply fuel, gain customers

In Europe, stocks rose in light trading as U.K. and Ireland are closed today. 18 out of 19 Stoxx 600 sectors rise with media, food & beverage outperforming and banks and autos underperforming. 67% of Stoxx 600 members gain, 29% decline. Germany’s DAX and France’s CAC both gained around 0.1% while Spain’s IBEX dipped by a similar amount.

European Eco Data:

  • Finland Dec. Consumer Confidence Index 19.5, prior 17.6
  • Finland Dec. Business Confidence 1, prior -4
  • Switzerland Dec. Total Sight Deposits CHF528.4b, prior CHF527.9b
  • Switzerland Dec. Domestic Sight Deposits CHF463.6b, prior CHF457.3b

Top European News:

  • Paschi Says ECB Sees the Need for $9.2 Billion of Capital: Paschi seeking further information on ECB calculations
  • Nornickel to Buy $1.1 Billion of Copper Ore From Rostec: Rostec, Nornickel agreed on copper contract this week
  • Deutsche Bank Says 2017 CET1 Requirement Is at Least 9.51%: ECB lowers 2017 phase-in CET1 ratio from 10.76% in 2016

In currencies, the Bloomberg Dollar Spot Index rose less than 0.1 percent, trading near the highest level in more than a decade.  The yen slipped against the dollar for the first time in five days, while the euro was little changed. The South Korean won fell 0.5 percent against the dollar, after strengthening for the first time in nine sessions on Monday. The South African rand strengthened 0.5 percent.

In commodities, crude futures advanced 0.5 percent to $53.26 a barrel in New York. Prices are set to recover next year as production cuts help re-balance an oversupplied market, Saudi Arabia’s Energy Minister Khalid Al-Falih said last week. OPEC and 11 nations from outside the group including Russia have agreed to trim about 1.8 million barrels a day from January. Gold rose 0.9 percent to $1,143.65 an ounce, while silver and platinum climbed more than 1.5 percent.

US Event Calendar

  • 9am: S&P CoreLogic Case-Shiller U.S. Home Price Index MoM, Oct. (prior 0.83%)
  • 10am: Conf. Board Consumer Confidence, Dec., est. 108.5 (prior 107.1)
  • 10am: Richmond Fed Manufact. Index, Dec., est. 5 (prior 4)

i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 7.91 POINTS OR 0.25%/ /Hang Sang closed. The Nikkei closed UP 6.42 OR .03% /Australia’s all ordinaires  CLOSED/Chinese yuan (ONSHORE) closed DOWN at 6.9520/Oil ROSE to 53.21 dollars per barrel for WTI and 55.21 for Brent. Stocks in Europe: ALL MIXED.  Offshore yuan trades  6.9570 yuan to the dollar vs 6.9458  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT AS  MORE USA DOLLARS ARE ATTEMPTING TO LEAVE CHINA’S SHORES /

3a)THAILAND/SOUTH KOREA/:

none today

b) REPORT ON JAPAN

For the first time, Japanese births drop below 1 million.  Since deaths outnumber births, the population dropped.  Immigration is tiny.  The birthrate among women is 1.35 and what is needed is 2.1.

Unless the Japanese undergo huge immigration this country is doomed due to its high debt level to be shared among lesser amounts of citizens.

(courtesy zero hedge)

Demographic Shock Ground Zero: Japan Births Drop Below Million For The First Time On Record

While both global monetary and fiscal policies struggle to keep aggregate demand if not rising, then at least constant, demographics continues to wreak havoc on the best laid plans of central planners around the rapidly aging world. Just last week we reported that in 2016, the US population grew at the slowest pacesince the Great Depression, largely driven by the collapse in household formation as the number of Millennials living at home with their parents has hit a 75 year high.

However, while the US is finally starting to feel the social, political and economic hit from an aging population, nowhere is the demographic impact more visible than in what is the epicenter of the developed world’s demographic problems: Japan. It is here that according to the latest government data, the number of births in Japan is likely to fall below a million this year for the first time since data became available in 1899, reflecting a fast-ageing society and the high cost of child care.

The number of births is estimated at 981,000 this year, down from slightly more than a million last year, data from the ministry showed. Births hit a record high of 2.696 million in 1949.

Japan will also post a natural population decline this year as deaths outpace births, its 10th consecutive drop, as seen by the light blue line in the chart above.

A shrinking population of women in their 20s and 30s is a key factor in the falling number, a ministry official said. Japan’s fertility rate was 1.45 in 2015, up 0.03 points from a year earlier, helped by an economic recovery, and is recovering from the record low of 1.26 hit in 2005. However, it is still far from the government’s goal of 1.80.

On Thursday, Japan’s cabinet approved a record $830 billion spending budget for fiscal 2017, which includes child-rearing support: at this rate, the local population may not need the free money in the not too distant future. The only hope, as in the case of many European nations, is that a surge in immigration will offset the natural decline of the domestic population whose average age has never been higher.

Meanwhile, after peaking at the start of the decade, Japan’s total population of 126.92 million is back to the where it was at the start of the century and declining fast.

* * *

Courtesy of Mizuho, here are some further observations on Japan’s demographic plight, and an amusing tangent where according to the Tokyo-based bank, Japan is now also fabricating demographic data to obfuscate the full severity of the demographic situation:

Summary and macroeconomic implications:

The total population of Japan was 126.92m in December 2016 (down 160,000 or 0.13% YoY). With statistical disconnects set to continue, it appears likely that users of population data for 2010–2015 will be kept in the statistical shade (there appears to be little will to conduct statistical revisions by bureau authorities). An increase in the foreign population has been especially conspicuous in areas such as Tokyo, with such increases partially offsetting natural declines. It will be interesting to see the degree to which trends in the foreign population are reflected in new population projection released after the end of January 2017. We have already noted that the Nikkei newspaper ran an article on its front page titled “Japanese births set to drop below 1m in 2016” on 22 December, and while this is an issue we have previously discussed in our reports, we will be focusing on reactions and measures undertaken by the authorities and politicians.

Disconnect in population statistics continues: population data for 2010–2015 to be kept in the statistical shade?

According to the Ministry of Internal Affairs and Communications’ population estimates, the total population of Japan as of December 2016 was 126.92m (down 0.13%, or 160,000, YoY; see Figures 1 and 2).

Japan’s population statistics have reflected figures from the 2015 national census survey fully since October 2015, but estimates were based on figures from the 2010 national census survey in September 2015 and months prior, with this statistical disconnect to be allowed to stand without any retroactive revisions taking place. In essence, this means that the population is not falling by as much as expected and that previous population statistics can be assumed to be mistaken. According to Statistics Bureau authorities, there will be no retroactive revision of statistics and the statistical disconnect will live on in population statistics between October 2010 and September 2015.

This is a regrettable outcome both for users of the statistical data sets and policymakers involved in demographic planning. With the complementary correction value directly applicable only to the total population, we note that attribute-level data for this period have been rendered unsuitable for time series analyses. The total population on a seasonally adjusted basis (using the complementary correction value) declined 28,000 MoM in December (see Figure 5).

People aged 65 and over accounted for 27.32% of the total population in December, up 0.58ppt YoY, while the ratio of people aged 15–64 came to 60.27% (down 0.46ppt) and the ratio of people aged 0–14 came to 12.41% (down 0.11ppt)

We note that the net number of marriages (number of marriages – number of divorces) between August 2015 and July 2016 came to 413,000 (up 5,000), and while a decline in the number of divorces was the main factor here, we nevertheless note signs of a bottoming out in this data point. We will be following this as a leading indicator for the number of births moving forward.

We also note that the Tokyo Metropolitan Government released new population projection on 29 November. Tokyo’s population for 2015 was projected at 13.35m based on March 2013 population projection (according to National Institute of Population and Social Security Research), but in the event ended 150,000 above this at 13.49m. The updated stats also suggest a population of 13.98m in 2025, 800,000 above the previous projection (13.18m) (see Figure 11).

This research institute will be releasing new population projection from January 2017, but it will also be interesting to see how the “population pessimists” react thereafter. One of the main points of focus will be whether materials are updated using population data altered to reflect new estimates and statistical anomalies or whether there is a naïve ongoing use of old estimates. The upside being seen in Tokyo’s population stats has come about mainly as a result of prolonged lifespans and increases in the foreign population (which is growing at an annual rate of above 30,000) (see Figure 12).

There have been substantial net increases in the number of Chinese, Southeast Asians (especially Vietnamese), and South Asians (especially Nepalese) settling in Tokyo (see Figure 13).

* * *

Which is good news for the millions of Middle-eastern and north-African refugees who have suddenly found themselves “undesirable” in Europe: well, if Germany won’t have them, then surely Japan’s PM Abe will welcome them with open arms.

 

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Another bombshell from Toshiba.  We reported in July they the company had inflated its profits by over 1.2 billion USA for no less than 7 years.  In other words the company had inflated it’s earnings by 30% since 2008.  The second bombshell hit yesterday when the company stated that in its nuclear division it has severe cost overruns in the billions.  All 5 of the major officers bowed down to shareholders and then resigned.

 

(courtesy zero hedge)

Toshiba CEO “Apologizes” After Stock Plummets On Latest Accounting Scandal

Last July, a pillar of so-called “Japan Inc” crashed when Toshiba admitted it had inflated profits by a stunning $1.2 billion for no less than 7 years, with fabricated figures amounting to 30% of the company’s “profits” since 2008.

In the immediate aftermath of the scandal becoming public, Toshiba’s then- CEO Hisao Tanaka said on Tuesday at a news conference, following a 15-second bow of contrition, that he “felt the need to carry out a major overhaul in our management team in order to build anew our company.” “We have suffered what could be the biggest erosion of our brand image in our 140-year history.”  As a result, Tanaka, who together with five members of his senior staff, resigned after bowing down to, and apologizing to investors.

 

Tanaka et al: “Sorry we got caught”

Of course, the only reason Mr. Tanaka apologized and resigned is not because he was actually cooking books the for an unprecedented 7 years, a period during which the CEO most certainly received tens if not hundreds of millions in equity and profit-linked compensation, but because he was caught. This was confirmed because none of his bonuses had been clawed back even as “a panel of external lawyers and accountants said on Monday there was a “systematic” and “deliberate” attempt to inflate profit figures amid a corporate culture in which employees were afraid to speak out against bosses’ pushes for unrealistic earnings targets.”

Fast forward to Monday, when in its second major scandal announcement in as many years, Toshiba said cost overruns at U.S. nuclear reactors it is building were likely to force a write-down of as much as several billion dollars, clouding its turnaround plan after the 2015 accounting scandal. Specifically, the company said it may have to book several billion dollars in charges related to a U.S. nuclear power plant construction company acquisition, rekindling “concerns about its accounting acumen.”

Toshiba’s latest writedown would be another slap in the face for a sprawling conglomerate hoping to recover from a $1.3-billion accounting scandal, as well as a writedown of more than $2 billion for its nuclear business in the last financial year.”This will come as an additional shock to Toshiba’s institutional investors that may further undermine confidence in company management, as well as significantly weakening its international nuclear credentials,” said Tom O’Sullivan, founder of energy consultancy Mathyos Japan.

The warning sent the stock price of one of Japan’s largest companies crashing over 10% in Tokyo trading, came just as the Japanese conglomerate seemed to have turned a corner thanks to an upswing in its semiconductor business.

Cited by the WSJ, Toshiba execs on Tuesday said the company was looking at emergency steps to raise funds, including borrowing from its main banks. They said they couldn’t rule out the possibility that Toshiba’s U.S. nuclear-power subsidiary, Westinghouse Electric Co., would fall into negative net worth as a result of the write-down.

But most notable, or perhaps frustrating to Toshiba shareholders, is that Toshiba’s new CEO, Satoshi Tsunakawa, who only took the helm in June, also took the “apologetic” way out, and became the latest boss of the company to bow before the cameras after the 2015 scandal, which led to a clean sweep of top management after the company acknowledged it had padded its financial results for years.

“I apologize to shareholders, business partners and all stakeholders for the trouble we have caused,” Mr. Tsunakawa said in a news conference at the company Tokyo headquarters.

Tsunakawa: “Sorry we couldn’t do math”

Well, if that isn’t sufficient to absolve the CEO and his company, not to mention investors, of gross stupidity and perhaps, criminality, we don’t know what is.

He continued: “We would have needed to boost our capital base anyway because our shareholders’ equity ratio is low” the CEO said in a press conference.

According to Reuters, as of end-September, Toshiba had shareholders’ equity of 363 billion yen, or just 7.5 percent of assets, which could fall close to zero if the company is forced to log significant losses. Asked if Toshiba’s liabilities would exceed its assets, Chief Financial Officer Masayoshi Hirata said the company had not yet completed its estimation of the charge.

Analysts said further write-downs were possible and expressed fears about the nuclear business weighing down the company, which makes everything from elevators to electronic devices. Already, Toshiba took a ¥260 billion impairment charge in its last fiscal year when it downgraded the book value of Westinghouse. Recently, demand from customers including Chinese smartphone makers has helped Toshiba’s core semiconductor unit boost profits. Before news of the nuclear write-down, the company said it anticipated earning ¥145 billion net profit for the year ending March 2017.

Since Toshiba has positioned its nuclear and semiconductors businesses as key pillars of growth while seeking to scale down less profitable consumer electronics units such as personal computers and TVs, we see much more bowing by the company’s current and future chief executives in the not too distant future, especially since it is once again management that was openly lying to shareholders, insisting they remain optimistic when the reality was anything but: Ttoshiba executives have often said the nuclear business has a bright future and will remain a core unit despite the global trend away from nuclear power after the Fukushima Daiichi accident in Japan in 2011.

And then the apologies and the bowing began.

c) REPORT ON CHINA

The following is very scary.  As I pointed out to you last week, the 14 million dollar default by Wu, chairman of multibillion dollar corporation CoSun is smoke and where there is smoke there is fire.  We now know that the bonds insured by the Chinese equivalent of the MBIA, Moody’s etc has been announced that the documents are fake…all of them!! i.e. the the insurer of all bonds underwritten by Co Sun are fake. How could this be possible?

 

trouble ahead..

(courtesy zerohedge)

As Mystery Of China’s Multi-Billionaire Default Deepens, A New “Bond Scare” Emerges

Last week, in a largely “under the radar” event, one of China’s wealthiest billionaires (if only on paper), Wu Ruilin, chairman of the Guangdong based telecom company Cosun Group, and whose personal fortune of 98.2 billion yuan ($14 billion) makes him wealthier than Baidu founder Robin Li who is ranked 8th on the Hurun Rich List 2016, shocked Chinese bond market watchers when he defaulted on a paltry 100 million yuan ($14 million) in bonds sold to retail investors through an Alibaba-backed online wealth management platform, citing “tight cash flow.”

Needless to say, many were stunned that a billionaire for whom $14 million is pocket change, blamed “tight cash flow” for defaulting on mom and pop investors. In any case, as South China Morning Post reported, despite the founder’s personal fortune, according to a notice put up by the Guangdong Equity Exchange on Tuesday, two subsidiaries of Cosun Group are each defaulting on seven batches of privately raised bonds they issued in 2014. According to the notice, “the issuer had sent over a notice on December 15, claiming not to be able to make the payments on the bonds on time, due to short-term capital crunch.”

To be sure, yet another default in a Chinese landscape suddenly littered with bankrupting debt dominoes would have been the end of it, however this morning Reuters added to the mystery when it said that the fate of the defaulted $45 million Chinese corporate bond sold through an Alibaba-backed online wealth management platform was thrown into doubt on Monday, after a bank said letters of guarantee for the bonds were counterfeit.

Quoted by Reuters, China Guangfa Bank Co Ltd (CGB) said guarantee documents, official seals and personal seals presented by the insurer of the bonds “are all fake” and that it has reported the matter to the police.

The dispute highlights challenges in China’s loosely regulated online finance industry, where retail investors often buy high-yielding bonds and other assets, expecting them to be “risk-free” due to guarantees provided by various parties.

As first reported last Wednesday, at the center of the latest dispute are up to 312 million yuan ($45 million) worth of high-yielding bonds issued by southern Chinese phone maker Cosun Group that defaulted this month. The bonds were sold through Zhao Cai Bao, an online platform run by Ant Financial Services Group, the payment affiliate of e-commerce firm Alibaba Group Holding Ltd.

Ant Financial has asked Zheshang Property and Casualty Insurance Co Ltd, which wrote insurance on the bonds, to repay investors. On Sunday, Zheshang Insurance published two documents on its website that it said were from CGB carrying the bank’s official seals, and that guaranteed Zheshang Insurance policies for the Consun bonds. The letters were issued at CGB’s Huizhou branch in December 2014, when the Cosun bonds were sold, Zheshang Insurance said.

And yet, suggesting there is a massive landmine hiding just below the surface of China’s bond market, far worse than merely the consequences rising interest rates, on Monday, CGB said the documents were fake and that it had reported the incident to police as “suspected financial fraud.”

While material misrepresentation of facts in Chinese finance is hardly new, the recent alleged violations usher in a whole new breed of fraud, one which is far less nuanced and far more simplistic and includes outright forgeries of documents that backstop tens if not hundreds of billions in debt. The Cosun dispute follows similar instances of financial fraud this year including forged bond agreements that led to brokerage Sealand Securities sharing potential losses of up to $2.4 billion. In May, the government advised banks to be vigilant after several cases of bill fraud.

Ant Financial on Tuesday said Zheshang Insurance “hasn’t any reason to refuse repayment” which it was obliged to do “within three days” of default.

Making matters worse, the fraud has taken place in the context of a bond default that, according to an Ant Financial spokeswoman cited by Reuters, was a “a one in billions incident” on the platform.

Incidentally, Cosun’s bond issuance totals 1 billion yuan, according to Zheshang Insurance. The insurer’s total registered capital is 1.5 billion yuan.

Should more such “one in billions incidents” emerge, Chinese bond investors – already freaked out by the recent record plunge in Chinese govt bond futures, soaring overnight funding rates, and fears over Fed rate hikes – will rush for the exits just as China’s housing bubble is also popping as reported yesterday, leading to a rerun of the US 2006/2007 dual bursting of the housing/credit bubbles, only this time instead of an $8 trillion financial system, the world will have to backstop China… whose banking system at last check had over $30 trillion in liabilities.

Incidentally, we wonder if now that China’s bond insurers are also under the spotlight, if that means China’s very own MBIA/Ambac moments is imminent, as billions in bond insurance contracts are deemed “fake” by the insurers who would rather not pay up on what is set to be an avalanche of defaults.

* * *

Finally, for those interested in what Bloomberg last week dubbed the “latest China Finance Scare”, namely outright forgeries in various debt products, mostly focusing on Entrusted Bonds, here is a useful primer courtesy of BBG:

There’s another Chinese financial practice that’s prompting high-decibel warnings. So-called entrusted bond holdings are a way for financial institutions to skirt rules on using borrowed money to invest in bonds. How? By getting a third party to buy the bonds and agreeing to purchase them at a later date. What could possibly go wrong? How about the worst rout in China’s bond market in a decade. That’s left regulators concerned about the prospect of investors failing to make good on such arrangements, estimated to involve at least $144 billion of bonds.

1. Why entrust us with this news only now?

Concerns about entrusted bond holdings have worsened the tumble in the debt market. Last week, Caixin cited market rumors when it reported a brokerage called Sealand Securities Co. had refused to take over bonds held by a counterparty. That got investors worried. Oversea-Chinese Banking Corp. then said in a note, citing media reports it didn’t identify, that the entrusted holding agreement may have been tied to alleged fraud by ex-staff. Sealand cleared the air when it said it would in fact fulfill the bond contracts that had been stamped with a forged seal. The whole incident was enough to frighten an already jittery market.

2. So why do investors use entrusted holding agreements?

Brokerages and other institutional investors ask counterparties to buy bonds from them when they need to circumvent internal rules on note holdings and leverage, according to Xu Hanfei, a bond analyst at Guotai Junan Securities Co. Or they can simply have third parties buy the notes directly from the market. The practice boosts leverage by effectively giving the financial institutions loans: As brokerages and institutional investors don’t carry the bonds on their books, they can use the funds freed up on paper to purchase more bonds, which can then be rolled into more such agreements. “Non-bank financial institutions, which emphasize returns, have more motivation to amplify leverage through entrusted holdings,” said Li Liuyang, a market analyst at Bank of Tokyo-Mitsubishi UFJ in Shanghai.

3. How widespread is the practice?

Outstanding entrusted holdings are “in the trillions of yuan,” according to Guotai Junan’s Xu. That estimate is based on the bond holdings of the brokerages and smaller banks that are major participants in such transactions. That means the amount of money tied up in such deals is at least 5 percent of the 21 trillion yuan ($3 trillion) of outstanding corporate notes in China, according to data compiled by Bloomberg.

4. What broader risks does it pose to China’s financial markets?

A default in an entrusted holding could turn what otherwise might have been a problem with one company’s liquidity into a broader credit event, given that multiple parties may be involved, according to Li at Bank of Tokyo-Mitsubishi UFJ. Li says “everyone is worried about similar situations in their transactions with non-bank financial institutions.” OCBC said that things had got so bad that banks were reluctant to lend to non-bank institutions amid a breakdown in trust between investors.

5. What are regulators doing about it?

Authorities including the central bank and the China Securities Regulatory Commission are investigating some financial institutions’ entrusted bond holdings after the Sealand incident, people familiar with the matter said Tuesday. The holdings run contrary to the central bank’s push to trim investments made on borrowed money, according to China Merchants Bank Co. “It’s just a question of when Chinese regulators will clean up entrusted bond holdings,” said Liu Dongliang, a senior analyst at the bank. Tommy Xie, an economist in Singapore at OCBC, says China’s market rout may prompt regulators to strengthen rules on entrusted holdings. He describes them as “a common practice in the grey area of the bond market.”

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China announced that  it will miss its growth targets.  Commodities plunge!

(courtesy zero hedge)

Commodity Futures Plunge Following China Growth Downgrade

Less than a month ago we warned that the Chinese commodity bubble 2.0 was bursting as speculative volume had exploded relative to open interest and exchanges had begun (after unreal surges in prices) to crackdown on the speculation. The carnage continued and over the last few days has bloodbath’d even more as China warns that it will miss its growth targets.

Spot The Odd One Out…

  • Zinc -22%
  • Iron Ore -20%
  • Steel Rebar -20%
  • China Coking Coal -25%
  • Copper -13%
  • Bitcoin +18%

It appears as China housing bubble pops, commodity bubble pops, and credit-fueled growth bubble pops… there is only one place left for Chinese trend-followers to flee to – Bitcoin.

 

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Bitcoin surges 20% in China as it anticipates a huge yuan devaluation.

(courtesy zero hedge)

 

Bitcoin Surges 20% In A Week As Chinese Volumes Hit Record High

The last 5 days have seen Bitcoin prices (in dollars) soar over 18% and over 20% in Yuan as volumes on Chinese exchanges continues to build, seemingly anticipating notable Yuan devaluation (confirmed by various derivative bets being placed on the Chinese currency) and/or further capital controls looming as yet another hot money Chinese bubble explodes in commodity-land.

Is another major Yuan devaluation looming?

Last week saw the heaviest Bitcoin trading ever on Chinese exchanges…

Source: BitcoinWisdom.com

Notably, gold was well bid overnight also…

END

 

This is worth watching: the overnight interbank funding between Chinese bans rose to 33% as the POBC pulled out funding.  If they continue to do so this may bring down the entire Chinese financial system and then contagion will strike

(courtesy zero hedge)

Chinese Interbank Funding Freezes Again As Overnight Repo Hits 33%

While we have previously shown the amazing gimmicks the Chinese central bank does with the short end of the offshore Yuan interbank offered rate, which as previously explained, and as shown in the animation below, has become the PBOC’s favorite means of punishing currency speculators by making Yuan borrowing costs against shorts crushingly high, forcing short unwinds…

… when it comes to more traditional unsecured short-term funding markets, like the simple overnight repo, these reflect overall levels of liquidity in the interbank market, or as the case may be, complete absence thereof.

And while China is notorious for suffering major liquidity shortages heading into a new year (including the non-lunar variety), what happened overnight in China is worth pointing out because according to Bloomberg data, the overnight repo rate traded on Shanghai Stock Exchange soared as much as 30.87% to 33%, the highest since September 29, before closing at 18.55%.

And while some of the liquidity squeeze was certainly calendar driven, what is more concerning for Chinese markets, where as we reported recently the local authorities, regulators and even press are confirming that the government crackdown on the credit and housing bubble may be serious for once due to fears about “rising social tensions”, much of the overnight repo rate spike was driven by the PBOC which pulled a net 150 billion yuan of funds in open-market operations today, the most since December 7.

The result was another brief, but painful, freeze of the interbank lending market.

Should the PBOC continue to not only not inject liquidity among banks, but aggressively withdraw it, it is possible that a repeat of the 2013 bank crisis when as a result of the government’s eagerness to delever the economy it almost crushed its financial sector (it ultimately gave up, with Chinese debt/GDP subsequently rising to 300% according to the IIF), should be one of the more notable risk factors for 2017.

 

 

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Taiwan warns that Beijing’s threat against it’s existence is growing by the day. China’s large carrier has entered the South China’s sea carrying out drills:

(courtesy zero hedge)

Taiwan Warns Beijing Threat “Growing By The Day” As Chinese Carrier Conducts Drills

4 EUROPEAN AFFAIRS

More trouble at Monte dei Paschi as their capital shortfall rose by another 3.8 billion to 8.8 billion euros.  It seems that depositors worried about a bail in have taken their money out in a  hurry especially in the period Nov 30 to Dec 21.

(courtesy zero hedge)

The Italian Bank Run: Monte Paschi Capital Shortfall Surges 75% To €8.8Bn Due To “Rapid Liquidity Deterioration”

While the big news last week was that Italy’s third largest bank, Monte Paschi, had been nationalized after JPM destroyed the bank’s chances of securing a private-sector rescue, and that Italy would issue up to €20 billion in public debt to fund the bailout of this, and other insolvent Italian banks, it appears there may be more moving parts to the story.

Recall that as we warned, the biggest danger for both Monte Paschi, and Italy’s banking system in general, is that retail depositor confidence in the Siena bank is shaken enough to lead to a bank run either in the world’s oldest bank, or worse, across the entire Italian banking sector, leading to a worst case probability outcome of falling bank dominoes as bank funding needs explode, resulting in even more deposit outflows, and so on in a toxic feedback loop.

To be sure, Monte Paschi’s deposit run is hardly new, and as the bank itself admitted last week, it had already suffered roughly €14 billion in deposit outflows, or 11%, in the first nine months of the year as shown in the chart below.

It turns out that  the bank run not only continued but accelerated.

As Reuters reports this afternoon, the ECB has told Monte dei Paschi it needs to plug a capital shortfall of €8.8 billion, 76% greater than the previous €5 billion gap estimated by the bank, and which hole the entire recently failed bank recapitalization was aimed at plugging, the lender said on Monday.

Meanwhile, for those who missed the last few episodes in the dramatic third bailout, and nationalization, in as many years involving Monte Paschi, here is a recap from Reuters:

Last Friday the Italian government approved a decree to bail out Monte dei Paschi (BMPS.MI) after Italy’s No. 3 lender failed to win investor backing for a desperately needed 5 billion euro capital increase. The bank said on Monday it had officially asked the ECB last Friday for go ahead for a “precautionary recapitalisation”.

A precautionary recapitalisation is a type of state intervention in a struggling bank that is still solvent. It means only a modest bail-in of investors though the government can buy shares or bonds only on market terms endorsed by EU state aid officials in Brussels.

In its reply, the ECB said it had calculated the capital it believed the bank needed on the basis of a shortfall emerging from European stress test of large lenders earlier this year. In those tests Monte dei Paschi was the only Italian bank to come short under an adverse scenario.

The ECB said the lender was solvent but signaled the bank’s liquidity position had rapidly deteriorated between the end of November and December 21, Monte dei Paschi said.

In other words, depositors yanked even more billions from the bank – a perfectly reasonable course of action in light of concerns about the bank’s viability – which in turns has led to an even worse liquidity situation at Monte Paschi.

The Siena bank said that it “has quickly started talks with the competent authorities to understand the methodologies underlying the ECB’s calculations and introduce the measures for a precautionary recapitalisation…”

The bank’s problems date back several years but successive Italian governments have failed to tackle the issue, which became a political taboo this year with new EU rules banning state bailouts unless private investors take losses first. The European Commission said on Friday it would work with Rome to establish conditions were met for a bailout of Monte dei Paschi.

But on Monday ECB policymaker Jens Weidmann said plans for a state bailout of Monte dei Paschi should be weighed carefully as many questions remain to be answered. In an interview with Bild, the Bundesbank head said the bar should be high for government funds being used for bank as these are intended as last resort. He added that the planned Italian government measures can only be directed to banks that are healthy “in their core.” He also joined S&P in warning that the raised rescue funds may not serve to cover  foreseeable losses and that if government funds are used, there should be matching public funding because of Italy’s high government debt. There won’t be as the whole point of the exercise is to avoid angering the public by impairing its investments.

Italy’s market watchdog Consob said last week the bank’s shares and securities would be suspended from trading until the conditions of a state bailout become clear.

 

 

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Auditor General of NATO was found dead in his car.  They are stating it is suicide. The gun that killed him was found in the glove compartment.  The Auditor General had 3 guns to protect himself but the gun that was in the glove compartment was not registered to him

(courtesy zero hedge)

Mystery Surrounds NATO Auditor General’s Suspicious Death

Police in Belgium are probing the suspicious circumstances surrounding the death of a high ranking NATO official – the auditor general, whose responsibilities included probing terror financing – after his body was discovered in his car with a gunshot wound to the head.

As SudInfo reports, troubling elements accumulate around the death of Yves Chandelon, a senior official of the NATO based in Luxembourg, who lived in Lens, near Tournai.

The man was found dead on Friday in Andenne, with a bullet in his head. An autopsy was performed on Tuesday. The family does not believe it was suicide as many have reported.

Did Yves Chandelon have any enemies? Was he threatened in the course of his work in NATO? Was it an odious crime made to look like suicide, or did the man go through a troubled period? For his relatives, the incomprehension is total.

The 62-year-old auditor general of NATO was found in the Belgian town of Andenne, 62 miles away from his home and office in Lens on December 16. As The Express reports,

As Auditor General, Mr Chandelon was responsible for internal accounting at NSPA as well as external investigations into money laundering activities and terrorist financing – and more bizarrely it has been reported locally that the gun which killed him was found in the glovebox of the vehicle.

According to local newspaper reports Mr Chandelon was the registered keeper of three weapons however the gun found at the scene did not belong to him, it has been claimed.

Police are currently probing whether he had received any threats that could be related to his work and highlighted that the gun used was not registered in his name.

According to Flemish newspaper ‘The Morning’, Mr Chandelon’s relatives said he attended his office Christmas party the night before he died.

Reporting gets even more confusing as LaMeuse carried two reports with additional facts about Chandelon’s death. The first stated that a “farewell letter” was found in Chandelon’s car. The second stated that the gun used in the apparent suicide was found in his right hand, despite the fact that Chandelon was left-handed.

It has been reported that the former director of The Institute of Internal Auditors (IIA) Luxembourg had complained of getting strange telephone calls before he died and “felt threatened”.

We are sure the facts will all come out and this ‘strange’ episode will be brushed under the carpet – like the mysterious deaths of various senior European bankers over the past few years.

 

 

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This should increase the confidence level of all Europeans:  Europol finally admits that ISIS is actively targeting refugees to carry out terrorist attacks on European soil:

(courtesy zero hedge)

Europol Admits ISIS Actively Targeting Refugees To Carry Out Terrorist Attacks In The EU

Confirming what most of us deduced long ago via the application of just a bit of common sense, Europol and Frontex, Europe’s  border and coast guard agency, are finally admitting that their intelligence indicates coordinated efforts on the part of ISIS to recruit asylum seekers, both in Syria and in migrant camps after they’ve already reached Europe, to carry out terrorist attacks.  In a report published my Europol, counter-terrorism experts warn that, among other things, “Syrian refugee diaspora may become vulnerable to radicalisation once in Europe and may be specifically targeted by Islamic extremist recruiters.”

  • Radicalised persons are not necessarily profound believers
  • Elements of the (Sunni Muslim) Syrian refugee diaspora may become vulnerable to radicalisation once in Europe and may be specifically targeted by Islamic extremist recruiters
  • The majority of attacks claimed by IS appear to be masterminded and perpetrated by individuals inspired by IS, rather than those who work with the organisation directly
  • Intelligence suggests that IS has assembled teams in Syria which are sent to the EU tasked with carrying out attacks
  • Training possibilities for IS are believed to be decreasing in Syria

The report goes on to note that “German authorities were aware of around 300 recorded attempts made by jihadists to recruit refugees” as of April 2016 while Merkel continued to relentlessly push her “open-border” policies.

The majority of attacks carried out in the name of IS appear to have been masterminded and performed by individuals who were inspired by IS, rather than those who worked with the terrorist organisation directly. Intelligence suggests, however, that IS has also put together teams in Syria which are sent to the EU tasked with carrying out attacks. It is believed that this ‘external terrorism network’, began sending fighters abroad two years ago.

Given that it is in the interests of IS to inflame the migration crisis to polarise the EU population and turn sections of it against those seeking asylum, there is a risk of some infiltration of refugee camps and other groups. The extent of this is unknown, however, making the subject susceptible to exaggeration and exploitation especially by populist factions and (extreme) right-wing parties. A real and imminent danger is the possibility of elements of the (Sunni Muslim) Syrian refugee diaspora becoming vulnerable to radicalisation once in Europe and being specifically targeted by Islamic extremist recruiters. It is believed that a number of jihadists are travelling through Europe for this purpose. According to unconfirmed information, German authorities were aware of around 300 recorded attempts made by jihadists to recruit refugees who were trying to enter Europe by April 2016.

Refugees

Moreover, Europol notes that the power vacuum in Libya has resulted in the country becoming a “springboard” for “EU foreign terrorist fighters who, on returning to Europe, plan further terrorist attacks.”

CT experts are concerned that Libya could develop into a second springboard for IS, after Syria, for attacks in the EU and the North African region. Since mid-2015 Libya has become a major destination for IS fighters in its own right and is believed to having become a hub for EU foreign terrorist fighters who, on returning to Europe, plan further terrorist attacks.

Finally, the report warns that recent success in hitting numerous targets across Europe will only encourage further attacks which are likely to become more violent and sophisticated over time.

The success generated by these terrorist attacks, as seen from an IS perspective, will encourage the group to hit more targets in the EU. Although France appears to be the primary focus of IS, the organisation has threatened all countries that are part of the US led coalition against IS in Syria and Iraq, including Germany, the UK and other Member States, which have specifically been mentioned as enemies of IS in several video messages.

New attacks by both terrorist groups and lone actors are thus to be expected, most probably following the patterns that have been used in earlier attacks. New variations in attack, for example in the use of car bombs, may also develop.

And while many people have pretty much assumed most of the “findings” above from the “intelligence community,” we guess it’s better that the truth is being revealed later rather than never.  Hopefully Merkel gets a chance to peruse the report before she becomes the latest prominent European politician to find herself without a job.

Refugee ISIS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Saturday:

Israeli Prime Minister lashes out at Obama for their shameful ambush at the UN as the USA for the first time did not use it’s veto power against a motion to halt Israeli settlements in the West Bank. Trump also lashed out stating that “things are going to be different at the UN after Jan 20.

it sure looks like Trump is going to change a lot of things once he gets into power:

(courtesy zero hedge)

Netanyahu Lashes Out At “Shameful Ambush” By Obama; Looks Forward To Working With “Friend” Trump

Following yesterday’s unexpected vote in the United Nations, when the United States broke with a long-standing approach of diplomatically shielding Israel, and did not wield its veto power as it had on many prior occasions – a decision Israeli PM Benjamin Netanyahu called “shameful” – leading to the adoption of a resolution demanding an end to Israel settlement building, Israel said it would re-assess its ties with the United Nations.  It also said it would not comply with the resolution, suggesting it may now be a “rogue nation” when it comes to UN enforcement.

Israel for decades has pursued a policy of constructing Jewish settlements on territory captured by Israel in the 1967 war. Most countries view Israeli settlement activity in the West Bank and East Jerusalem as illegal and an obstacle to peace. Israel disagrees, citing a biblical connection to the land, and blames the failure of peace efforts on the Palestinian refusal to recognize Israel’s Jewish identity.

And, until yesterday, the US would traditionally turn its eyes away from global anti-Israel consensus (it, too, officially opposes the settlements) and always veto any UN decisions going against Israel.

Then everything changed, when defying heavy pressure from long-time ally Israel the United States abstained in the Security Council decision, which passed with 14 votes in favor. The decision to abstain from vote is one of the biggest American rebukes of its long-standing ally in recent memory and marked a final chapter in the icy relations between Netanyahu and Obama over the last eight years.

It was unclear if the Obama administration voted as it did mostly to spite Trump, who previously tweeted that Washington should use its veto, and after the vote tweeted that “as to the UN, things will be different after Jan. 20th.”

Whatever the reason, Israel – and its leader – were furious: I instructed the Foreign Ministry to complete within a month a re-evaluation of all our contacts with the United Nations, including the Israeli funding of U.N. institutions and the presence of U.N. representatives in Israel,” Netanyahu said in broadcast remarks reported by Reuters.

“I have already instructed to stop about 30 million shekels ($7.8 million) in funding to five U.N. institutions, five bodies, that are especially hostile to Israel … and there is more to come,” he said, without naming the institutions or offering further details.

Netanyahu also lashed out at President Barack Obama on Saturday, accusing him of a “shameful ambush” at the United Nations and saying he is looking forward to working with his “friend” President-elect Donald Trumpaccording to AP.

The resolution, while mostly symbolic, could hinder Israel’s negotiating position in future peace talks. Netanyahu also said the U.S abstention was “in complete contrast” to U.S. commitments, including one he said Obama made in 2011, not to impose conditions for a final agreement on Israel at the Security Council.

The Obama Administration conducted a shameful anti-Israel ambush at the U.N.,” Netanyahu said, calling the decision “distorted” but said that Israel will overcome it.

He said he spoke with U.S leaders, both Democrats and Republicans, who vowed to fight the move, including he said, from Israel’s “friend” in the incoming administration, i.e., Trump.

“The decision taken at the U.N. yesterday was part of the swan song of the old world biased against Israel,” Netanyahu said. “We are entering a new era and as the President-elect Trump said yesterday, this is going to happen much quicker than people think. In this new era there is a high price for those trying to harm Israel,” he said.

Needless to say, the Palestinians wholeheartedly welcomed the U.N. resolution.

 

 

end

Sunday:

A very angry Israel summons all security council members to Israel for a reprimand. They accuse Obama of conspiring against Israel, in the planning of the vote.

(courtesy zero hedge)

An Angry Israel Summons Foreign Ambassadors, Accuses Obama Of Conspiring Against It

Israel’s anger mounted for a second day after Friday’s United Nations snub, when on Sunday it summoned ambassadors of countries from the UN Security Council for a Christmas Day reprimand for their support of a resolution condemning Israel’s illegal settlements on Palestinian lands. The vote passed in the 15-member Security Council on Friday because the United States broke with its long-standing approach of diplomatically shielding Israel and did not wield, as a permanent member of the forum, its veto power, instead abstaining.

On Saturday, Prime Minister Netanyahu lashed out at the US, calling Obama’s behavior a “shameful ambush”, warning he would re-evaluate his contacts with (and defund) the United Nations, while saying he looks forward to working with his “friend” Donald Trump. Then on Sunday, Netanyahu put his personal imprint on the show of anger by repeating at the weekly cabinet meeting what an unidentified Israeli government official contended on Friday – that Washington had conspired with the Palestinians to push for the resolution’s adoption. The White House has denied the allegation

According to our information, we have no doubt the Obama administration initiated it (the resolution), stood behind it, coordinated the wording and demanded it be passed,” Netanyahu told the cabinet in public remarks. “The resolution that was passed at the UN yesterday is part of the swan song of the old world that is biased against Israel but, my friends, we are entering a new era,” Mr Netanyahu said at a Hanukkah candle-lighting ceremony. “And just as President-elect Trump said yesterday, it will happen much sooner than you think.”

One can only hope that in this “new era” airplanes full of world-famous army singers are not targeted in retaliation for diplomatic scandals.

Ambassadors from 10 of the 14 countries that voted in favor of the resolution and have embassies in Israel – Britain, China, Russia, France, Egypt, Japan, Uruguay, Spain, Ukraine and New Zealand – were summoned to the Foreign Ministry in Jerusalem, the ministry said.

Moments ago, the Haaretz newspaper added that Netanyahu had also summoned the US ambassador.

BREAKING: NETANYAHU SUMMONS US AMBASSADOR DAN SHAPIRO OVER SECURITY COUNCIL VOTE, PM OFFICE OFFICIAL SAYS

The move came as Israeli prime minister Benjamin Netanyahu cancelled a visit to Israel by Volodymyr Groysman, his Ukrainian counterpart, and accused US President Barack Obama of “disgraceful” behaviour for failing to exercise the US veto. Mr Groysman had due to arrive in Israel on Wednesday on his first official visit to the Jewish state.  As reported yesterday, Israel will also suspend some of its funding to the UN, Netanyahu said in a vituperative speech on Saturday evening, in which he warned of further diplomatic and economic retaliation against countries that opposed Israel in international bodies. The Israeli leader vowed to work with incoming US President Donald Trump and members of Congress to fight “all-out war against this resolution”, in his sharpest public attack ever on Mr Obama.

Sunday is a regular work day in Israel, but most embassies are closed, and calling in envoys on Christmas Day is highly unusual Reuters adds.

At the weekly cabinet meeting on Sunday, Netanyahu described a telephone conversation with U.S. Secretary of State John Kerry on Thursday, when Israel and President-elect Donald Trump successfully pressed Egypt to drop the anti-settlement resolution it had put forward. It was resubmitted a day later by New Zealand, Senegal, Venezuela and Malaysia.

“Over decades American administrations and Israeli governments disagreed about settlements, but we agreed that the security council was not the place to resolve this issue,” Netanyahu said.

“We knew that going there would make negotiations harder and drive peace farther away. As I told John Kerry on Thursday, ‘Friends don’t take friends to the Security Council’,” he said, switching from Hebrew to English.

Israel has pursued a policy of constructing settlements on territory it captured in a 1967 war with its Arab neighbors – the West Bank, Gaza and East Jerusalem, areas Palestinians seek for a state.

Most countries view the settlement activity as illegal and an obstacle to peace. Israel disagrees, citing biblical and historical connections to the West Bank and Jerusalem as well as security interests.

Netanyahu’s government is likely to get new support in pursuing hardline policies toward the Palestinians when Mr Trump, who has promised to be the most pro-Israel president in history, takes office on January 20 the FT notes. Foreign diplomats in Israel had, before Friday’s vote, speculated that Mr Obama might withhold the US veto on a resolution critical of Israel as a way of putting down legal parameters on the conflict and the two-state solution before leaving office.

Mr Trump said on Saturday that the UN vote was “a big loss yesterday for Israel in the United Nations will make it much harder to negotiate peace.”

“All American presidents since (Jimmy) Carter upheld the American commitment not to try to dictate permanent settlement terms to Israel at the Security Council,” Mr Netanyahu said on Saturday evening. “And yesterday, in complete contradiction of this commitment, including an explicit commitment by President Obama himself in 2011, the Obama carried out a shameful anti-Israel ploy at the UN.”

END

 

On the weekend, China lodged a complaint on the new USA defense bill signed by Obama which negates the “one China doctrine”. So not only Obama is disobeying the one China doctrine but no doubt so will Donald Trump.

Then the Russian weighed in on the new bill stating that any attempt by Obama to arm the Syrian rebels will be seen as a hostile act and they will act accordingly:

(courtesy zero hedge)

 

 

Russia Warns Any Attempt By Obama To Arm Syrian Rebels Will Be Seen As A “Hostile Act”

First, it was China which lodged a protest against the US defense bill, which was signed by Barack Obama late on Friday and which, among other things, contained a provision to establish as US “ministry of truth” and media propaganda. On Sunday, China lodged “stern representations” with the United States after Obama signed the NDAA into law which suggests a plan to conduct high-level military exchanges with self-ruled Taiwan. Part of the $618.7 billion National Defense Authorization Act “expresses the sense of Congress that (the U.S. Department of Defense) should conduct a program of senior military exchanges between the United States and Taiwan“.

In other words, it appears the Trump team is not the only one jeopardising the “One China” policy: as Reuters adds, in a statement late Sunday, China’s Foreign Ministry said it had lodged a protest with the United States over the Taiwan content of the act and expressed its strong opposition. Taiwan is Chinese territory and purely an internal matter, the ministry said.

It noted that the part of the defense policy bill referring to Taiwan was not legally binding, but said it was an interference with China’s internal affairs that China could not accept.

“We urge the U.S. side to abide by its promises made to China on the Taiwan issue, stop U.S.-Taiwan military contacts and arms sales to Taiwan, to avoid damaging Sino-U.S. ties and peace and stability in the Taiwan Strait.”

Then, overnight, Russia also joined the global opposition to the US defense policy bill when it said on Tuesday that a U.S. decision to ease some restrictions on arming Syrian rebels had opened the way for deliveries of shoulder-fired anti-aircraft missiles, a move it said would directly threaten Russian forces in Syria.

According to Reuters, Foreign Ministry spokeswoman Maria Zakharova said the policy change easing some restrictions on weapons supplies to rebels was set out in a new U.S. defense spending bill signed by Obama while on his last vacation as US president in Hawaii, and that Moscow regarded the step as a hostile act.

Rebel fighter clean a weapon in al-Rai town, northern Aleppo countryside,
Syria December 25, 2016, Reuters photo

“In the administration of B. Obama they must understand that any weapons handed over will quickly end up in the hands of jihadists with whom the sham ‘moderate’ opposition have long acted jointly,” Zakharova said in a statement. “Such a decision is a direct threat to the Russian air force, to other Russian military personnel, and to our embassy in Syria, which has come under fire more than once. We therefore view the step as a hostile one.”

Cited by Reuters, Zakharova accused the Obama administration of trying to “put a mine” under the incoming administration of President-elect Donald Trump by attempting to get it to continue what she called Washington’s “anti-Russian line.”

To be sure, any sabotage attempts by Obama be faced with an uphill climb: a back-and-forth exchange between Trump and Putin over nuclear weapons last week tested the Republican’s promises to improve relations with Russia.

The Obama administration and U.S. intelligence officials have accused Russia of trying to interfere with the U.S. election by hacking Democratic Party accounts. Russia, meanwhile, has laughed at these accusations, and last week Putin slammed the Democrats as “shameless losers” in his annual year-end press conference, saying “the party that is called the Democrats has clearly forgotten the original meaning of that name” and added that “the use of administrative resources (by the Democrats) is absolutely shameless.”

END
This is interesting:  Erdogan now completely turns towards Russia and against the West as he now states that he has “confirmed evidence” of USA support for ISIS.  We have pointed out to you that the USA invented ISIS and supported them so this is no surprise. The question will be what will the USA response be if he does supply the necessary evidence. Next question: will he release all of his Muslim migrants held in Turkey?
(courtesy zero hedge)

Erdogan Says He Has “Confirmed Evidence” The US Supports ISIS

One year after this website demonstrated that Turkey was cooperating with the Islamic State, in the very least trading cash in exchange for crude oil sold to various Turkish outposts (a trade which was subsequently ended by the Russian air force), Turkey has flipped the tables and on Tuesday Turkish President Recep Tayyip Erdogan said he has uncovered evidence that US-led coalition forces have helped support terrorists in Syria – including Isis.

“They give support to terrorist groups including ISIS” Erdogan said during a speech in Ankara on Tuesday, adding that US coalition forces “give support to terrorist groups including Daesh, YPG, PYD. It’s very clear. We have confirmed evidence, with pictures, photos and videos.

Which, incidentally, should also not come a surprise in light of the May 2015 declassified Pentagon report, which claimed that ISIS was created as a Pentagon tool to overthrow Syria’s president Assad.

Nevertheless, the “pot calling the kettle black” comes at a sensitive time for both the US and Turkey, which are both pivoting aggressively, one internally from Obama to Trump, while the other is shifting its foreign geopolitical allegiance from the US to Russia, which may also explain today’s outburst by Erdogan.

Saying that the US have accused Turkey of supporting IS, speaking at a press conference on Tuesday the Turkish leader blamed the US-led coalition for assisting terrorists themselves. Apart from IS, he also mentioned Kurdish People’s Protection Units in northern Syria (YPG) and Democratic Union Party (PYD) as groups supported by the coalition.

Earlier on Tuesday, Moscow accused Washington of “sponsoring terrorism” in Syria. Commenting on the latest National Defense Authorization Act signed into law by President Barack Obama, the Russian Foreign Ministry pointed out that the new bill “openly stipulates the possibility” of delivering more weapons to Syria, and added that those arms “will soon find their way to the jihadists,” which Russia would view as a “hostile act.”

Erdogan’s comments echoed those from the Iranian Defense Minister Hossein Dehghan, who told RT that Washington appears unready to play a serious role in fighting Islamic State, as it has fostered terrorists itself and now wants them to remain in the Middle East.

“The Western coalition is of a formal nature, they have no real intention to fight neither in Syria nor in Iraq. We don’t see any readiness on their part to play a truly useful and meaningful role in fighting IS, because it’s them who have raised terrorists and they are interested in keeping them there,” Dehghan said.

According to the Iranian defense minister, Tehran has never coordinated its operations with the Americans and “will never collaborate with them.”

He then slammed the US’ motives behind the “war on ISIS’ saying that “maybe the coalition forces would like to see terrorists weakened, but certainly not destroyed, because those terrorists are their tool for destabilizing this region and some other parts of the world.”

One wonders how long before Putin is blamed for this latest political scandal, because if indeed Erdogan does provide proof of US support for the Islamic State, then the Pentagon will need a back story very fast, and what better scapegoat than the Russian president.

6.GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKETS

none today

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 10:00 am

Euro/USA   1.0444 DOWN .0010/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING RATES

USA/JAPAN YEN 117.38 UP 0.206(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2242 DOWN .0028 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3538 UP .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS TUESDAY morning in Europe, the Euro FELL by 10 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0448; Europe is still reacting to Gr Britain BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ AND TODAY MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 7.81 0r 0.25%     / Hang Sang  CLOSED 0 POINTS OR 0.0% CLOSED FOR HOLIDAY  /AUSTRALIA IS CLOSED FOR HOLIDAY% / EUROPEAN BOURSES ALL MIXED/SOME CLOSED 

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this TUESDAY morning CLOSED UP 6.42 OR .03% 

Trading from Europe and Asia:
1. Europe stocks ALL MIXED 

2/ CHINESE BOURSES / : Hang Sang CLOSED FOR HOLIDAY/   Shanghai CLOSED DOWN 7.91.40 POINTS OR 0.25%   / Australia BOURSE CLOSED /Nikkei (Japan)CLOSED UP 6.42 OR .03% /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1141.40

silver:$15.93

Early TUESDAY morning USA 10 year bond yield: 2.554% !!! UP 1 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.124, UP 1 IN BASIS POINTS  from FRIDAY night.

USA dollar index early TUESDAY morning: 103.11 UP 13 CENT(S) from FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.82% UP 7  in basis point yield from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.064% UP  1  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.391%  UP 2  IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.846  UP  2  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.207% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.0457 UP .0004 (Euro UP 4 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 117.45 UP: 0.268(Yen DOWN 27 basis points/ 

Great Britain/USA 1.2254 DOWN 0.0017( POUND DOWN 17 basis points)

USA/Canada 1.3557 UP 0.0033(Canadian dollar DOWN 33 basis points AS OIL ROSE TO $53.72

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 4 basis points to trade at 1.0457

The Yen FELL to 117.45 for a LOSS of 27 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 17 basis points, trading at 1.2254/

The Canadian dollar FELL by 33 basis points to 1.3557,  WITH WTI OIL RISING TO :  $53.72

The USA/Yuan closed at 6.9490
the 10 yr Japanese bond yield closed at +.064% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2 IN basis points from FRIDAY at 2.567% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.147 UP 3  in basis points on the day /

Your closing USA dollar index, 103.04 UP 6 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 1:30 PM EST

London:  CLOSED 
German Dax :CLOSED up 22.31 POINTS OR 0.19%
Paris Cac  CLOSED UP 8.60 OR 0.18%
Spain IBEX CLOSED UP 8.90 POINTS OR 0.10%
Italian MIB: CLOSED UP 45.81 POINTS OR 0.24%

The Dow was UP 14.08 POINTS OR .07% 4 PM EST

NASDAQ WAS UP 24.75 POINTS OR .45%  4.00 PM EST
WTI Oil price;  53.72 at 1:00 pm; 

Brent Oil: 55.84  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  60.71 (ROUBLE UP  26/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS  TO +0.207%  FOR THE 10 YR BOND  2:30 EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:$53.88

BRENT: $56.05

USA 10 YR BOND YIELD: 2.561%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.136%

EURO/USA DOLLAR CROSS:  1.0454 up .0003

USA/JAPANESE YEN:117.42  up 0.231

USA DOLLAR INDEX: 103.04 up6  cents (BREAKS HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2263 : down 9  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.207%

END

And now your more important USA stories which will influence the price of gold/silver

TRADING IN GRAPH FORM

Dow 20k Disappoints For 10th Day Despite Market Optimism Surging Most Since Dot-Com Peak

Dow 20k is “inevitable”, it’s a “no brainer” according to the business news punditry…

Maybe just don’t play…?

 

Volume was terrible…lowest Dec 27th volume in at least 10 years…

 

Before we start on today’s disappointing miss of Dow 20k once again, we want to note that the level of equity market exuberance is almost unprecedented…

The last time Americans’ optimism about the stock market registered such a dramatic one-month surge was during the dot-com boom. As stocks reached a record, the share of households anticipating higher equity prices a year from now surged to 44.7 percent in December from 30.9 percent a month earlier, the biggest monthly advance since November 1998, the Conference Board’s report on consumer confidence showed Tuesday. The group’s overall measure of sentiment rose this month to the highest level since August 2001.

So with that said – let’s look at today’s failed ramp for Dow 20k…the 10th day in a row…

 

Nasdaq hit another new high, but note that the S&P (green) managed to squeeze to unchanged post-Fed before running out of steam…

 

Dow was today’s laggard (barely able to stay green) as Nasdaq (record high above 5500) and Small Caps led…with an ugly close just when everyone hoped for the 330 Ramp…

 

Financials (red) and Tech (blue) were ripped higher at the open but faded for the rest…

 

VIX and Stocks fell together again today after the initial flurry until shortly after Europe closed…

 

Treasury yields rose across the complex and a weak 2Y auction sent the short-end notably higher (in yield) later in the day…

 

With 5Y yields dramatically underperforming since Trump…

Bloomberg notes that Treasury five-year notes are lagging behind surrounding maturities by the most since July 2015 as traders price in a more hawkish Federal Reserve and a pickup in economic growth. The underperformance is seen in the so-called butterfly-spread index, which measures how the five-year note is performing against the two- and 10-year Treasury by replicating a trade involving the three securities. A positive reading signals investors are more bearish on the middle of the three maturities, making it relatively cheap versus the others.

The USD Index rose again today but has generally been range-bound since the initial Fed reaction (in a very tight range)…

 

CAD weakness is notable post-xmas, and AUD strength yesterday has been erased…

 

Despite USD strength, commodities gained…

 

With WTI crude topping $54…

 

But notably, Gold also gained for the 2nd day in a row – spiking overnight as China opened (and Bitcoin was bid)…

end

 

The following is a biggy!! A top ex white house economist now admits that 94% of all new jobs initiated under the Obama regime were part time

(courtesy zero hedge)

Top Ex-White House Economist Admits 94% Of All New Jobs Under Obama Were Part-Time

An extremely important commentary this weekend from zero hedge. They discuss who very important aspects as we enter the Trump regime:

possible scenarios:

i) the Trump spending of 1.5 trillion USA for 10 yrs or $500 billion per year

ii) Trump initiates a border tax

iii) the Fed raises rates over a period of 4 years

iv) The ECB tapers, and the Fed does not repurchase bonds once their expire

v)  The Fed may also sell assets to lessen its balance sheet.

With the border tax, as described above, the USA governments trade deficit will fall to zero but the 10 yr rate rises to 4%. Without this rise to 4%, the budgetary deficit was scheduled this year to rise to 1 trillion.  With debt payments today of about 400 billion USA with interest rates low, a 400% rise would cause the deficit to rise to 2.6 trillion dollars ( 400 x 4  = 1. trillion). This would surely blow up all of our too big to fail banks (B. of America, Citibank, JPMorgan, Morgan Stanley, Deutsche bank,Goldman Sachs with honorable mentions to Well Fargo)

 

 

end

With the ECB and the BOJ tapering there would be nobody around to buy everybody’s bonds as those yields skyrocket. If the Fed do not repurchase bond that expire as well as sell bonds to lessen it’s balance sheet, the yields rise even more sending the globe into chaos.

Is this their plan? to knock off Trump?

a must read…

(courtesy zero hedge)

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