Dec 28/offshore Chinese yuan comes close to 7.00; finishes at 6.9670/gold and silver rise again for the 4th straight day/Obama set to put sanctions on Russia for their “election hacking”/Turkey continual shuns the west and agrees with ceasefire proposals with respect to Syria/Grant Williams on what is going on behind on scenes on the increased accumulation of gold by Russia/

Gold at (1:30 am est) $1139.40 UP $2.10

silver  at $15.99:  UP 6 cents

Access market prices:

Gold: $1142.60

Silver: $16.02

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:

WEDNESDAY gold fix Shanghai

Shanghai morning fix Dec 28 (10:15 pm est last night): $  1161.18

NY ACCESS PRICE: $1141.90 (AT THE EXACT SAME TIME)/premium $19.28

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1159.93

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

HUGE SPREAD 2ND FIX TODAY!!:  $16.73.78

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Dec 28: 5:30 am est:  $xxx.1139.75   (NY: same time:  $1141.00    5:30AM)

London Second fix Dec 27: 10 am est:  $1134.60 (NY same time: $1138.60 ???    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:  38 NOTICE(S) FOR 3800 OZ.  TOTAL NOTICES SO FAR: 9165 FOR 916500 OZ    (28.506 TONNES)

For silver:

 NOTICES FOR DECEMBER CONTRACT MONTH FOR SILVER: 19 NOTICE(s) FOR95,000  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 3806 FOR 19,030,000 OZ

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by 1144 contracts UP to 163,097 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .816 BILLION TO BE EXACT or 117% of annual global silver production (ex Russia & ex China).

FOR THE DECEMBER FRONT MONTH:  19 NOTICES FILED FOR 95,000  OZ.

In gold, the total comex gold FELL BY 5,822 contracts DESPITE A RISE IN  THE PRICE GOLD ($5.40 with YESTERDAY’S trading ).The total gold OI stands at 401,513 contracts. We are very close to the bottom with respect to OI. Generally 390,000 should do it.

we had 38 notice(s) filed upon for 3800 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 n0 changes in silver 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 1144 contracts UP to 163,097 as the price of silver ROSE by  $0.23 with YESTERDAY’S trading. The gold open interest FELL by 5,822 contracts DOWN to 401,513 despite the fact that the price of gold ROSE BY $5.40 WITH YESTERDAY’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  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 12.43 POINTS OR 0.40%/ /Hang Sang closed UP 179.88 OR .83%. The Nikkei closed DOWN 1.34 OR .01% /Australia’s all ordinaires  CLOSED UP 1.01%/Chinese yuan (ONSHORE) closed DOWN at 6.9642/Oil FELL to 53.82 dollars per barrel for WTI and 55.97 for Brent. Stocks in Europe: ALL IN THE RED EXCEPT LONDON.  Offshore yuan trades  6.9767 yuan to the dollar vs 6.9642  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A LOT AS  MORE USA DOLLARS ARE  LEAVING CHINA’S SHORES /

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

i)Another earthquake hits close to Fukushima:

( zero hedge)

ii)Toshiba is real trouble as its stock crashes by limit down 20%.  The real problem is the nuclear division which is suppose to the flagship for earnings growth.  It has huge overruns in the building of nuclear reactors in the USA

( zerohedge)

c) REPORT ON CHINA

i)China flexes its muscle by showing off its firth generation stealth fighter jets

( zero hedge)

4 EUROPEAN AFFAIRS

none today

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)What a complete doorknob:  Obama set to announce economic sanctions against Russia as well as a covert cyber operation in punishment for the  “election hacking”

( zero hedge)

ib)And Russia’s response! No doubt Europe will be screwed again with the USA’s actions:

( zero hedge)

ii)The Syrian fiasco is becoming a real nightmare for Obama.  Now Turkey is agreeing to a ceasefire plan with Russia and they are snubbing Washington.  However Turkey wants Assad out which will never happen.  The big question will be what will happen to all of those migrants on Turkish soil?

( zero hedge)

iii)Wow!! Trump slams Obama with huge inflammatory statements. He tells Israel to remain strong and that Jan 20 is approaching quite fast

( zero hedge)

6.GLOBAL ISSUES

none today

7. OIL ISSUES

i)Commodity expert Ritterbush states that the OPEC agreement may collapse in May due to the rise in output from the USA shale boys:

( zero hedge)

ii) Freezing temperatures in the USA causes natural gas prices to surge:

( Nick Cunningham/Oil Price.com)

iii)Oil slides on a huge inventory build

( zero hedge)

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)Strange!! the Bundesbank is hiding it’s supposed audits of Germany’s gold reserves.  It will not release the bar codes.  I guess the simple reason is that the bars being retrieved from the west are new bars, having been refined by Swiss refiners which gave it new bar codes

( BullionStar/Ronan Manly)

ii)Chris Powell explains his interview of Russian TV

( Chris Powell/GATA/)

iii)As I pointed out to you yesterday, the EU is trying to confiscate gold whenever they can

( Reuters/GATA)

iv)The following commentary from Grant Williams of Hmmm fame, is a must read for everyone.  Basically he states that the world is changing and that oil is in reality being priced in gold

( Grant Williams)

v)Bill Holter with a great commentary to end the year:

( Bill Holter/Holter Sinclair collaboration)

vi)Frank Holmes on the gold and silver price manipulation case

( Market Watch/Kitco)

10.USA STORIES

i)Trading this morning: just before markets open!

(zero hedge)

ii)As the markets opened it was clear that 20,000 Dow was not in the cards:

did the POBC intervene this morning in Bitcoin, in the yuan value?

( zerohedge)

iii)This is what we should see with respect to home sales due to rising mortgage rates: pending home sales tumble!

( zero hedge)

iv)It sure looks like the aircraft industry is taking it on the chin:  Delta scraps a 4 billion order for 18 Boeing 787

( zero hedge)

v)Hillary’s email scandal is not over yet:

( zero hedge)

vi)As we have pointed out to you, losses on the banks must be huge due to the rise in interest rates.  In the past 3 months a gain of 34 billion dollars as turned into a loss of 14 billion or a swing of 48 billion dollars.  On a 4 week basis, the change is 37 billion dollars.  If this continues it will be a bloodbath for the banks on the Fed’s program of rate hikes:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 5,822 CONTRACTS down to an OI level of 401,513 DESPITE THE FACT THAT THE  PRICE OF GOLD  ROSE $5.40 with YESTERDAY’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 67 contracts DOWN to 496.We had 1 notice(s) served upon yesterday so we LOST 66 contracts 6600 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 407 contracts down to 1630. For the next big active delivery month of February we had a LOSS of 7,430 contracts down to 270,797.

 

We had 38 notice(s) filed upon today for 3800 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI ROSE by 1144 contracts FROM 161,953 UP TO 163,097 DESPITE THE FACT THAT the price of silver ROSE BY $0.23 with YESTERDAY’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 3 contracts DOWN to 215 CONTRACTS . We had 7 notices served upon yesterday so we GAINED 4 SILVER CONTRACTS OR AN ADDITIONAL 20,000 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 6 contracts DOWN to 963.

The next big active delivery month is March and here the OI ROSE by 818 contracts UP to 132,690 contracts.

We had 19 notices filed for 95,000 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 97,093  contracts which is awful.

Yesterday’s confirmed volume was 114,578 contracts  which is awful

Initial standings for DECEMBER
 Dec 28.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 22,040.29 oz
Scotia
Brinks
Deposits to the Dealer Inventory in oz 3,699.97 oz

Brinks

Deposits to the Customer Inventory, in oz 
  1257.341 oz
Delaware
No of oz served (contracts) today
 
38 notice(s)
3800 oz
No of oz to be served (notices)
458 contracts
45,800 oz
Total monthly oz gold served (contracts) so far this month
9165 notices
916,500 oz
28.506 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     4,471,259.5 oz
Today we HAD 1 kilobar transactions/
Today we had 1 deposit(s) into the dealer:
 i) Into Brinks:  3,699.97 oz
total dealer deposits:  3699.97  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1 customer deposit(s):
 i)Into Delaware;  1259.34 oz
total customer deposits; 1,259.341 oz
We had 2 customer withdrawal(s)
i) out of Scotia: 1,093.32 oz
ii) Out of Brinks: 20,946.97 oz
total customer withdrawal: 22,040.29 oz
We had 1  adjustment(s)
i) Out of International Services of Delaware:  96.45 oz (3 kilobars) was transferred from the customer account into the dealer account of International Delaware
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 38 contract(s)  of which 4 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 (9165) x 100 oz or 916,500 oz, to which we add the difference between the open interest for the front month of DEC (496 contracts) minus the number of notices served upon today (38) x 100 oz per contract equals 962,300 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 (9165) x 100 oz  or ounces + {OI for the front month (496) minus the number of  notices served upon today (38) x 100 oz which equals 962,900 oz standing in this non active delivery month of DEC  (29.931 tonnes)
WE LOST 66  CONTRACTS OR AN ADDITIONAL 6600 OZ OF GOLD WILL NOT STAND FOR DELIVERY.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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.   29.931 tonnes
total for the 12 months;  222.498 tonnes
average 18.540 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: 198.297 tonnes per the 8 months or 24.787 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 1,643,369.419 or 51.11 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,039,323.447 or 281.16 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 281.16 tonnes for a  loss of 22  tonnes over that period.  Since August 8/2016 we have lost 73 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  73 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
DECEMBER INITIAL standings
 Dec 28. 2016
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 53,091.200 0z
Brinks
Deposits to the Dealer Inventory
  nil OZ
Deposits to the Customer Inventory 
nil oz
No of oz served today (contracts)
19 CONTRACT(S)
(95,000 OZ)
No of oz to be served (notices)
196 contracts
(980,000  oz)
Total monthly oz silver served (contracts) 3806 contracts (19,030,000 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 1 customer withdrawal(s):
i) Out of Brinks:  53,091.200 oz
TOTAL CUSTOMER WITHDRAWALS: 53,091.200 oz
 we had 0 customer deposit(s):
total customer deposits;  nil  oz
 
 
 we had 2 adjustment(s)
i) Out of CNT: 35,393.470 oz was adjusted out of the customer and this landed into the dealer account of CNT
ii) Out of HSBC: 20,376.180 oz was adjusted out of the customer account and this landed into the dealer account of HSBC
The total number of notices filed today for the DEC. contract month is represented by 19 contracts for 95,000 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  3806 x 5,000 oz  = 19,030,000 oz to which we add the difference between the open interest for the front month of DEC (215) and the number of notices served upon today (19) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the DEC contract month:  3806(notices served so far)x 5000 oz +(215) OI for front month of DEC. ) -number of notices served upon today (19)x 5000 oz  equals  20,010,000 oz  of silver standing for the DEC contract month.
we gained 4 contracts or an additional 20,000 oz will stand for delivery in this active delivery month of December.
Volumes: for silver comex
Today the estimated volume was 32,634 which is fair
YESTERDAY’S  confirmed volume was 32,615 contracts  which is poor.
 
Total dealer silver:  36.208 million (close to record low inventory  
Total number of dealer and customer silver:   183.525 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 28/no change in gold tonnage at the GLD/inventory rests at 823.36 tonnes
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Dec 28/ Inventory rests tonight at 823.36 tonnes
*IN LAST 59 TRADING DAYS: 126.45 TONNES REMOVED FROM THE GLD
*LAST 5 TRADING DAYS: 1.18 TONNES HAVE LEFT

end

Now the SLV Inventory
Dec 28/no changes in silver inventory at the SLV/Inventory at 341.348 million oz/
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 28.2016: Inventory 341.348  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.2 percent to NAV usa funds and Negative 7.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.1%
Percentage of fund in silver:38.6%
cash .+0.3%( Dec 28/2016) 
.
2. Sprott silver fund (PSLV): Premium FALLS to -.21%!!!! NAV (Dec 28/2016) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.81% to NAV  ( Dec 28/2016)
Note: Sprott silver trust back  into NEGATIVE territory at -0.21% /Sprott physical gold trust is back into NEGATIVE territory at -0.81%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver stories for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE

Holiday will be back tomorrow

end

 

Strange!! the Bundesbank is hiding it’s supposed audits of Germany’s gold reserves.  It will not release the bar codes.  I guess the simple reason is that the bars being retrieved from the west are new bars, having been refined by Swiss refiners which gave it new bar codes

(courtesy BullionStar/Ronan Manly)

Even the supposed audits of Germany’s gold reserves are secret

Section:

11:10a ET Tuesday, December 27, 2016

Dear Friend of GATA and Gold:

Bullion Star today publishes its primer on Germany’s gold reserves, noting that the custodian of the reserves, the Bundesbank, is extremely secretive about them, concealing even their supposed audits and omitting crucial information from the supposed list of the gold bars in the reserve. Bullion Star’s report on Germany’s gold is posted here:

https://www.bullionstar.com/gold-university/central-bank-gold-policies-d…

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

END

Chris Powell explains his interview of Russian TV

(courtesy Chris Powell/GATA/)

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

Section:

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

As I pointed out to you yesterday, the EU is trying to confiscate gold whenever they can

(courtesy Reuters/GATA)

EU to boost border checks on cash, gold to tackle ‘terrorism financing’

Section:

How about just not admitting so many people from Religious Crazy Land?

* * *

By Francesco Guarascio
Reuters
Wednesday, December 21, 2016

BRUSSELS, Belgium — The European Commission proposed on Wednesday tightening controls on cash and precious metals transfers from outside the European Union in a bid to shut down one route for funding of militant attacks on the continent.

The move follows Monday’s attack on a Christmas market in Berlin, where 12 people were killed as a truck ploughed into a crowd. 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 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.

… For the remainder of the report:

http://uk.reuters.com/article/uk-eu-security-financing-idUKKBN14A17P

END

The following commentary from Grant Williams of Hmmm fame, is a must read for everyone.  Basically he states that the world is changing and that oil is in reality being priced in gold

(courtesy Grant Williams)

Things That Make You Go Hmm… Like The Death Of The Petrodollar, And What Comes After

The story begins in the 1970s when Henry Kissinger and Richard Nixon struck a deal with the House of Saud — a deal which gave birth to the petrodollar system.

for the entire commentary :

http://www.zerohedge.com/news/2016-12-27/things-make-you-go-hmm-death-petrodollar-and-what-comes-after

 

 

end

 

Frank Holmes on the gold and silver price manipulation case

(courtesy Market Watch/Kitco)

 

All Eyes on Silver Price Manipulation Case

Frank Holmes joins Kitco News host Daniela Cambone live in the studio to discuss the revival of a silver manipulation case in which several major banks have been accused of conspiring to rig prices. Frank uses one word to describe his thoughts on the news – vindication. He explains that this case goes hand-in-hand with a recently settled gold price manipulation case by Deutsche Bank for around $60 million, adding that these types of events will “cleanse the marketplace.”

Daniela also asks Frank his thoughts on the European Central Bank saying it could be ready to taper come April and what this means for gold. Tune in to the full interview below to see what Frank has to say!

http://www.kitco.com/news/video/embed?vid=1442

All opinions expressed and data prov

Bill Holter with a great commentary to end the year:

(courtesy Bill Holter/Holter Sinclair collaboration)

Posted December 28th, 2016 at 9:52 AM (CST) by & filed under General Editorial.

The end of one year and the beginning of another is always the time to reflect and look forward.  2016 was a tale of two separate years.  The first half (which followed the Fed’s rate hike) saw unsettled markets.  Equities around the world looked like they were unravelling in Jan. and early February.  Sovereign credit markets were generally firm while gold and silver took off like scalded dogs.

Then in the middle of the year, equities rebounded, interest rates started to rise while the gold and silver rallies were contained.  Interestingly, the mining shares which were at one point in May, up 150% ytd, are still up roughly 50% but have been crushed anew.  The second half and in particular the last quarter has seen interest rates all over the globe begin to rise fiercely.  I believe this is THE most important event of 2016, the end of a 35 year bull market in “credit”!

As we end the year, there is nearly no “RISK premium” anywhere to be found.  In fact, the mainstream explanation for higher rates is the “reflation” trade, I disagree.  I believe the higher interest rates are a function of liquidity tightness.  The old debt/growth leading to more debt/more growth circle has been broken because “debt saturation” levels have been reached.  The central banks are stuck as they have cornered too much collateral and are now being forced to look at other markets (including equities) to onload to their balance sheets.  Risk premium serves a very important purpose in “pricing” assets. Central banks have tried to negate this concept and have only created a scenario of “premium” nowhere and “risk” everywhere.  In a world with more debt and the worst debt ratios ever, risk is unaccounted for.

2016 also saw the rise of the populist movement.  We saw it in Britain, the U.S. and then Italy.  Globalism is in the process of being rebuked and will again be tested in France and Germany next year.  The movement has clearly gained traction as the globalist policies have not and are not working.  People can “feel” this and see it with their own eyes.

2016 may have been the tipping point, 2017 could very well be the year the tipping point is widely known and understood.  The French and German elections are slated, the validity of the “European Union” stands in the balance.  It will be quite interesting to see, should the EU begin to unravel what will happen with the ECB?  Who guarantees the ECB and what happens with their giant balance sheet?  Of course, the same questions need to be asked about the euro itself and how sovereign currencies will be reintroduced?

“Truth” was also a key topic in 2016 thanks to WikiLeaks.  Globalist propaganda “truth” versus the actual truth has come out into the open and become a battleground.  In fact, several nations are trying to “legislate” truth, the latest being Obama Quietly Signs The “Countering Disinformation And Propaganda Act” Into Law. This is obviously quite dangerous and sews the seeds of potential conflict.  The last quarter of 2016 saw some extremely interesting “truths” come out.  Some that we certainly already knew, some we could not even imagine.  What was interesting, nothing WikiLeaks put forth was denied, only their “methods” and thus the shots fired at messengers only.

It is hoped 2017 will be different and President elect does “drain the swamp”.  Many do not believe this will happen.  Many are either scared stiffless into their snowflake shelters while many others believe him to be a Trojan horse set in place to continue the pillaging.  I personally do not believe this, we will find out shortly after his arrival.  Either Mr. Trump is real or he is not.  If he is not, what we have lived with over the last many years will continue into a lawless hyperinflation.  It is with the assumption that Mr. Trump is real and truly a patriot that I will look at 2017.

First, I believe we will see some clues almost immediately as to whether Mr. Trump is real or not.  Who will he nominate to replace Justice Scalia?  Will he negate the many ridiculous (unconstitutional) executive orders?  How will Jeff Sessions proceed?  These are just a few questions but correct answers I believe will suffice to at least knowing the direction we are headed.

Maybe the following is wishful thinking, maybe not but I do believe 2017 has the potential to be the year of the truth bombs (plural)!  Interest rates have already risen and will begin to expose the over leveraged in a fashion often described by Warren Buffett as the “tide going out”.  We already see signs of this with various cities (Detroit, Chicago, Dallas), various states (Illinois, California, Puerto Rico), and even on a federal level.  Higher rates will undermine bond values and thus pension/retirement funds.  This is an ugly truth that will affect the general population and cannot be ignored.

The “rule of law” is another area.  No one was prosecuted after the 2008 debacle, will Wall St. finally be held accountable?  Will crooks go to jail or will it be smoothed over with monetary fines?  What about these firms who have already paid fines, will they be successfully sued in civil courts?  Will trustees be held accountable as pension plans/benefits fail?  What about election fraud?  Will there be investigations into cities who returned more votes for Hillary than were cast in total?  Will the Podesta e-mails be investigated for Clinton foundation tax fraud amongst other misdoings?  What about the pedophilia information, will this be a string they pull on or does it get a pass?  Banking is obviously another topic, how are the “insolvents” handled?  Will bail ins prevail in 2017 as per new legislation?

These are all tough questions and by no means totally inclusive as fraud prevails throughout every nook and cranny.  It is my belief we will see early on this coming year as to the “mechanics”.  One thought process to explore and likely in my opinion is a plan exists to dump it all on Mr. Trump.  In other words and as Jim has asked, “will the machine even operate for him or do they just shut down and let the roof cave in”?

Thinking this through, if the Trump administration does actually pull on a few threads, do they unravel the whole system?  If they don’t pull on various threads, will the “machine” (ESF) actually function for Trump?  I guess it boils down to whether or not he is “one of them”.  As stated, I do not believe he is “paid for” so it will be game over one way or another.  Either the administration digs under the wrong rock or the fuse is lit before he even takes office.

I have written and offered proof that we are past the point of no return financially.  The collapse is already carved in stone, higher rates will expedite the process.  The question as I saw the election is whether we would deal with the coming financial, economic and social ramifications under a true rule of law or not.  I suspect we will end 2017 “knowing” many things as “fact” that we only know in our gut now.  In fact, if I was asked advice for Mr. Trump, I would advise he contact John Williams and go to the American people with his findings.

If Mr. Trump was smart (and gave no fear for his life), he would go to the American people with “benchmark” revisions going back some 30 or more years.  Yes, the entire system will come down (as it will anyway) on his watch but coming clean is the best way to do it.  Show true inflation, growth and unemployment numbers …during each previous administration and where we are truly now!  This would be one heck of a truth bomb but the easiest way to avoid blame AND clear the slate to go forward.

To finish, yes there was much speculation and even “hope” in this writing.  But one thing is for sure, we will one way or another see more “truth” than we have for many years.  The truth will come because as Ricky used to tell Lucy, “you got a lot of ‘splaining to do”!

The conditions now exist that the “old truth” cannot be stretched any further, recent elections are proof the common man is no longer being fooled.  Whether they be internal, external, international, financial, economic, social and of course criminal, truths of all sorts will most likely circle the globe like a flock of black swans in 2017!

That will do it for the remainder of the week unless something big comes up and needs commentary.  We wish you a safe, healthy, happy and prosperous New Year!

Bill and Jim

end

Your early WEDNESDAY 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 6.9642(BIG DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS A LOT  TO 6.9767 / Shanghai bourse CLOSED DOWN 12.43 POINTS OR 0.40%   / HANG SANG CLOSED UP 179.88 OR .83% 

2. Nikkei closed DOWN 1.34 OR .01% /USA: YEN RISES TO 117.67

3. Europe stocks opened ALL IN THE RED EXCEPT LONDON    ( /USA dollar index RISES TO  103.44/Euro DOWN to 1.0400

3b Japan 10 year bond yield: RISES TO    +.060%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 117.67/ 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::  53.82  and Brent: 55.97

3f Gold UP/Yen DOWN

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 DOWN for WTI and DOWN 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 +190.%/Italian 10 yr bond yield FALLS 1 full basis points to 1.822%    

3j Greek 10 year bond yield FALLS to  : 7.14%   

3k Gold at $1139.00/silver $15.88(8:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP   9/100 in  roubles/dollar) 60.57-

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 BIG   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 117.67 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  1.0302 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0713 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  +.190%

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 2.562% early this morning. Thirty year rate  at 3.133% /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 Rise, Dow Flirts With 20,000 As London Reopens; Oil In Longest Winning Streak In 7 Years

Global markets continued their levitation with the UK returning from vacation, pushing the MSCI Asia Pacific Index higher for the first time in seven days, while oil headed for the longest winning streak in almost seven years ahead of the promised OPEC production cut which is set to begin in just days. The USDJPY rose for a second day, pushing US equity futures higher and the DJIA is once again teasing with the 20,000 mark, although a race of sorts has emerged between the Dow and bitcoin, as to who can cross key psychological levels first: the Dow and 20,000 or Bitcoin and 1,000.

Despite the full reopening of global markets, trading remains thin across the globe during the last week of the year, with volume on the Topix about 45% below the 30-day average on Wednesday.  European equities fluctuated and Hong Kong stocks rose the most in a month after being closed Monday and Tuesday. More than twice as many shares on Japan’s Topix index rose than declined, even though the Nikkei225 ultimately closed fractionally lower at 19,402. Australian stocks rode a rise in commodities to gain 1 percent. Indonesian shares added 1.9 percent while Shanghai shed 0.3 percent.

Crude climbed for an eighth session before OPEC and other producing nations start reducing output. The yen fell the most among major currencies against the dollar.

“Until data starts to turn negative or the headlines suggest that (U.S. president-elect) Trump’s stimulus programme could fall short of expectations, the dips in the dollar will be shallow with the currency aiming for new highs,” wrote Kathy Lien, managing director of FX strategy for BK Asset Management. “But at the first sign of bad news there could be massive correction in what is quickly becoming a crowded long dollar trade,” Lien added.

The dollar index was steady at 102.930, while the Bloomberg Dollar Spot Index was also little changed, trading near the highest level in more than a decade. The euro inched up 0.2 percent to $1.0474 and sterling dropped again, sliding to a 2 month low of 1.2224.

After crashing the day before, Shanghai zinc and nickel prices were also pulled higher. “There is strong positive sentiment on the outlook for these industrial metals going into 2017, and that’s what we’re seeing today,” said a Perth-based commodities trader. “Let’s see if this carries in to the main LME session later on.” Iron ore on the Dalian Commodity Exchange extended gains after breaking a 9-day slump the previous day. It was last up 3.5 percent at 569.0 yuan ($81.82) per tonne. The raw material has risen about 170 percent this year, boosted by expectations of Chinese stimulus. It has also benefited from hopes that the incoming Trump Administration will increase infrastructure spending.

In China, the onshore yuan has been trading in a narrower range in the past week, stoking speculation that China is seeking to stabilize its currency as the year ends. The currency was little changed at 6.9557 per dollar; USD/CNY has traded in range of 193 pips since Dec. 21 through today, compared with range of 630 pips from Dec. 14 to 21. The offshore yuan dropped 0.11% to 6.9656; PBOC sets yuan’s fixing 0.05% lower at 6.9495. “The PBOC is trying to actually stabilize the RMB against the dollar,” Wang Tao, UBS head of China economic research, said in a Bloomberg Television interview. “It’s trying to manage expectations among Chinese households and corporates so that you don’t have this very mechanical, one- sided depreciation expectation”

China’s s economy showed improvement in 4Q with gains across all industries, according to China Beige Book; revenues, profits, jobs and capital expenditures improved from 3Q while new orders were stable, it says. Meanwhile the tightening in financial conditions continued with overnight CNH hibor surges 8.6%, most since September, to 15.18%

A snapshot of global markets: The Stoxx Europe 600 Index swung between a gain and loss of less than 0.1%. Hong Kong’s Hang Seng Index added 0.8 percent, rebounding from a five-month low, as banks led a rally by Chinese companies. The Hang Seng China Enterprises Index rallied 1.3 percent, the most in a month, and the Shanghai Composite Index lost 0.4 percent. The Jakarta Composite Index headed for the biggest two-day since February, extending Tuesday’s 1.5 percent gain. The Philippine Stock Exchange Index posted the steepest advance since October.

The Topix was flat, with about 10 percent of companies in the benchmark measure trading without the right to receive the next dividend. India’s S&P BSE Sensex rose 0.5 percent, extending Tuesday’s 1.6 percent gain following the recent decline to a five-week low. South Korea’s Kospi index declined 0.9 percent, the most in two weeks. Australia’s S&P/ASX 200 Index was up 1 percent after holidays Monday and Tuesday.

S&P 500 futures rose again, extending monthly gains by another 0.2%.  The Nasdaq Composite Index rose to an all-time high and the Dow Jones Industrial Average approached 20,000.

In rates, 10Y US yields rose on Tuesday to one-week highs in response to the strong domestic data which reinforced hopes for a series of monetary tightening by the Federal Reserve next year.

Market Snapshot

  • S&P 500 futures up 0.2% to 2266
  • Stoxx 600 up less than 0.1% to 361
  • FTSE 100 up 0.3% to 7091
  • DAX down less than 0.1% to 11468
  • German 10Yr yield down 2bps to 0.19%
  • Italian 10Yr yield down 3bps to 1.82%
  • Spanish 10Yr yield down 4bps to 1.35%
  • S&P GSCI Index up 0.3% to 399.2
  • MSCI Asia Pacific up 0.3% to 135
  • Nikkei 225 down less than 0.1% to 19402
  • Hang Seng up 0.8% to 21755
  • Shanghai Composite down 0.4% to 3102
  • S&P/ASX 200 up 1% to 5685
  • US 10-yr yield down less than 1bp to 2.56%
  • Dollar Index up 0.15% to 103.17
  • WTI Crude futures up 0.5% to $54.19
  • Brent Futures up 0.6% to $56.44
  • Gold spot up 0.2% to $1,141
  • Silver spot down 0.5% to $15.89

Top Headline News

  • Delta Cancels $4b Boeing Order Inherited From Northwest: Decision ‘consistent’ with fleet strategy for widebody craft
  • Qualcomm Fined $853 Million by South Korea’s Antitrust Agency: Fair Trade Commission describes ‘monopolistic’ practices
  • Toshiba’s Record Fall Highlights U.S. Nuclear Cost Nightmare: Writedown related to dispute over value of Westinghouse deal
  • Oil Trades Near 17-Mo. High Before Planned OPEC Supply Cuts: Inventories should stabilize as output is trimmed: Del Pino
  • Gold Shakes Off Trump Slump With Third Advance as Year-End Nears: Bullion prices head for best run of advances since Nov.
  • Miners Unearth a Profit Bonanza, Rally Set to Last Into 2017: Rebounding prices end losses that forced debt cuts, mine sales
  • Dynegy Files FERC Mitigation Proposal for Engie Plant Purchase: Asks FERC for expedited approval of mitigation plan

Asian stocks advanced, ending a six-session drop. 10 out of 11 sectors rise in the MSCI Asia Pacific Index with materials, information technology outperforming and consumer staples, consumer discretionary underperforming. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent. Australian stocks rode a rise in commodities to gain 1 percent. Indonesian shares .JKSE added 1.9 percent while Shanghai .SSEC shed 0.3 percent. Japan’s Nikkei was basically unchanged. “Gains at the start of the week on Wall Street and the rally in crude oil prices have helped most Asian markets move into black this morning,” said Jingyi Pan, market strategist at IG Asia Pte Ltd. “Nevertheless, we again have the condition of low volume plaguing markets.”

Asia Econ Data

  • Japan Nov. Retail Sales Rise 0.2% M/m; Est. -0.5%
  • Japan Nov. Industrial Production Rises 1.5% M/m; Est. +1.7%
  • Vietnam Dec. Trade Deficit $300M; Est. $400M Deficit
  • Vietnam’s Dec. Consumer Prices Rise 4.74% Y/Y; Est. +4.85%
  • Vietnam 2016 GDP Grows 6.21%, Prime Minister Phuc Says
  • Macau Nov. Visitor Arrivals Unchanged Y/y
  • Macau Nov. Consumer Prices Rise 1.53% Y/y

Asian Top News

  • China Banking Official Urges Cut to Reserve Ratio: People’s Bank of China has held ratio at 17% since February
  • Chinese Insurer to Compensate Bondholders After Cosun’s Default: Zheshang Property’s payments will start from Dec. 28
  • Hitachi Koki Shares Up Most in 16 Years as Parent Eyes Sale: KKR in final stage of talks on $1.3 billion deal, Nikkei says

In Europe, stocks are little changed after trading resumed in U.K. and Ireland after holidays.  11 out of 19 Stoxx 600 sectors drop with real estate, travel & leisure underperforming and basic resources, oil & gas outperforming. 54% of Stoxx 600 members decline, 43% gain. “The political fog remains intense in Europe, resulting in limited visibility as we head into 2017,” HSBC strategists Robert Parkes and Amit Shrivastava write in note. “Investors have to grapple with the uncertainty surrounding the numerous key political events on the horizon. Any one of these has the ability to shock and call into question the future of the whole EU project. But it is not all bad news. The global economy is showing signs of life and we could be finally exiting a multi-year earnings downgrade cycle.”

European Top News

  • BP to Buy Woolworths Australian Gas Stations for $1.3 Billion: U.K. oil company set to acquire 527 retail fuel outlets
  • U.K. Builder Bovis Slumps Most Since October as Production Falls: Bovis will hand over 3,950 to 4,000 homes this year
  • Turkey, Russia Agree on Plan for Syria Truce, Anadolu Reports: Erdogan accuses U.S.-led coalition of aiding IS, Kurds
  • Vestas Secures Wind Turbine Orders in U.S., Honduras: Order for 200 MW of V110-2.0 MW turbine components in U.S.
  • Volkswagen to Hire More Than 1,000 IT Experts in Next 3 Years: From high-tech sectors, gaming industry, research centers
  • Boohoo.com to Acquire Certain Assets of Nasty Gal Inc. for $20m: Further update after seeking U.S. court approval on Jan. 5

In commodities, crude futures jumped 0.4% to $54.10 a barrel, extending Tuesday’s 1.7% climb. Prices are set to recover next year as production cuts help rebalance 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 was up 0.3 percent at $1,141.71, climbing for a third day from an 11-month low.

In currencies, the yen slipped 0.1 percent to 117.57 per dollar after falling 0.3 percent Tuesday. The Bloomberg Dollar Spot Index was little changed, still trading near the highest level in more than a decade.

US Event Calendar:

  • 8:55am: Redbook weekly sales
  • 10am: Pending home sales MoM, Nov., est. 0.5% (prior 0.1%)
  • 4:30pm: API weekly oil inventories

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 12.43 POINTS OR 0.40%/ /Hang Sang closed UP 179.88 OR .83%. The Nikkei closed DOWN 1.34 OR .01% /Australia’s all ordinaires  CLOSED UP 1.01%/Chinese yuan (ONSHORE) closed DOWN at 6.9642/Oil FELL to 53.82 dollars per barrel for WTI and 55.97 for Brent. Stocks in Europe: ALL IN THE RED EXCEPT LONDON.  Offshore yuan trades  6.9767 yuan to the dollar vs 6.9642  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A LOT AS  MORE USA DOLLARS ARE  LEAVING CHINA’S SHORES /

3a)THAILAND/SOUTH KOREA/:

none today

b) REPORT ON JAPAN

Another earthquake hits close to Fukushima:

(courtesy zero hedge)

Magnitude 5.9 Quake Strikes Japan, In Proximity To Fukushima

A 5.9 magnitude quake has struck northeastern Japan, 18km NNE of Daigo, and in close proximity to the infamous Fukushima nuclear power plant the US Geological Survey reported; no tsunami warning has been issued. The epicenter of the quake was given as Ibaraki Prefecture in central Japan, the same as was impacted during the 2011 Fukushima quake. The prefecture has a population of some 3 million people.

Earlier, the Japanese Meteorological Agency (JMA) earlier put the magnitude at 6.3.

The Quake had shaking intensity of 6- on Japan’s scale of 7; and the shaking was felt as far as Tokyo. According to NHK, the Tokaido Shinkansen high speed train has been halted for safety checks after the quake.

According to Japan’s government there are no reports of damage to nuclear plants after the quake, while Tepco quickly stated that there are “no abnormalities at its Fukushima plants” after the quake

  • SUGA: NO REPORTS OF DAMAGE TO NUCLEAR PLANTS AFTER QUAKE
  • TEPCO: NO ABNORMALITIES AT FUKUSHIMA NUCLEAR PLANTS AFTER QUAKE
  • NO INJURIES REPORTED AFTER QUAKE IN N.EASTERN JAPAN, NHK SAYS

end

Toshiba is real trouble as its stock crashes by limit down 20%.  The real problem is the nuclear division which is suppose to the flagship for earnings growth.  It has huge overruns in the building of nuclear reactors in the USA

(courtesy zerohedge)

Toshiba Falls By Limit 20%, CDS Soar By Most On Record As Full Extent Of Damage Revealed

One day after Toshiba’s new CEO, Satoshi Tsunakawa, pulled a page from the book of his ill-fated predecessor Hisao Tanaka who presided over the biggest accounting fraud scandal in the company’s history, and bowed down during a press conference to apologize to investors, the company’s stock crashed by the limit 20%, bringing its two day loss to 32% and wiping out $5 billion in market cap in two days.

As we noted yesterday, Tsunukawa said that “I apologize to shareholders, business partners and all stakeholders for the trouble we have caused,” after 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.”

The problem is that the nuclear business, together with the semiconductors, has been positioned as one of key pillars underpinning Toshiba’s growth which has been trying to shift away from its consumer electronics core. Alas, the latest gaffe now means that much of Toshiba’s growth is gone, and the stock price reflect that overnight, when Toshiba’s stock plunged by 20%, the most permitted, before it was halted for trading.

The crash wiped out $5 billion off Toshiba’s value in two days and prompted a credit rating downgrade on Wednesday, as the company grapples to plug a potential multi-billion dollar hole resulting from cost overrunings from the nuclear business it acquired from Chicago Bridge And Iron. It did not comment on whether that would wipe out its asset value and tip the company into negative net worth. Executives said it could take until February to pinpoint the exact impact.

Toshiba shares, however, took an immediate hit on Wednesday, falling 20 percent to hit the Tokyo exchange’s daily downward limit. That follows a 12 percent drop on Monday after initial warnings from the group. As Reuters adds, investors also fretting that a blow to the group’s finances could even weaken its competitiveness in its core semiconductor business – specifically investment in 3D NAND, a new advanced type of flash memory – or result in firesales and dilutive share issues.

Adding insult to injury, for the first time in seven years, the value of the group fell below that of tech rival Sharp.

Meanwhile, S&P downgraded Toshiba, already in junk territory, to B- from B, with a “negative” outlook. S&P said it expected shareholder equity to “drastically shrink” as a result of the writedown, eroding the group’s resilience, while expected higher working capital would burn more cash. As a result, Toshiba credit default swaps soared by a record 225 bps, surging to an all time wide 370 bps according to a trader quoted by Bloomberg.

“Toshiba’s ability to enhance its shareholders’ equity is likely to continue to be difficult for the foreseeable future,” S&P said, adding it also saw “persistently tough business conditions”.

The immediate question for Toshiba’s management now is – just like for Monte Paschi – how to plug the capital hole. Credit analysts at SMBC Nikko Securities, cited by Reuters, said that they saw three options as Toshiba deals with the imminent task of enhancing its capital base: making more profits faster, selling assets and increasing capital. Only the middle option is likely in the short term, however.

Toshiba is still burning cash despite a positive bottom line in the first half of the financial year and cannot raise more capital on the stock market while it remains on Tokyo’s watch list, where it has been since a 2015 accounting scandal.

“I expect Toshiba to start with asset sales, and then to issue preferred shares if asset sales are not enough. They will start with measures other than (the chip business) listing,” one source close to the company said.

Toshiba has said it will consider all options to bolster its finances, even “the positioning” of its nuclear business which is centred around Westinghouse, a U.S. firm bought in 2006. And since investors know a distressed firesale when they see one, Toshiba will be lucky to get anything remotely close to fair market value for the assets it is trying to sell. Our advice, since this could well turn into Japan’s “Monte Paschi” debacle, do not retain JPMorgan: after all Dimon’s botched recapitalization is one of the main reasons why the third largest Italian bank ended up getting bailed out by Italian taxpayers for the third time in as many years.

end

c) REPORT ON CHINA

China flexes its muscle by showing off its firth generation stealth fighter jets

(courtesy zero hedge)

China Rattles Sabre – Tests Prototype Fifth-Generation Stealth Fighter

As president-elect Trump plays Boeing and Lockheed off against each other, China flexed its military muscles once again – after sending its aircraft carrier Liaoning into the western Pacific – by testing the latest version of its fifth-generation stealth fighter, state media reported on Monday, as it tries to end the West’s monopoly on the world’s most advanced warplanes.

As The South China Morning Post reports, the newest version of the J-31, now renamed the FC-31 Gyrfalcon, took to the air for the first time on Friday, the China Daily reported.

The so-called “fifth-generation” twin engine jet is China’s answer to the US F-35, the world’s most technically advanced fighter.

The new FC-31 has “better stealth capabilities, improved electronic equipment and a larger payload capacity” than the previous version which debuted in October 2012, the newspaper said, quoting aviation expert Wu Peixin.

“Changes were made to the airframe, wings and vertical tails which make it leaner, lighter and more manoeuvrable,” Wu told the paper.

The jet is manufactured by Shenyang Aircraft Corp, a subsidiary of the Aviation Industry Corp of China.

The manufacturer has said that the FC-31 will “put an end to some nations’ monopolies on the fifth-generation fighter jet”, the China Daily reported.

 

 

end

4 EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

What a complete doorknob:  Obama set to announce economic sanctions against Russia as well as a covert cyber operation in punishment for the  “election hacking”

(courtesy zero hedge)

Obama Set To Announce Economic Sanctions And “Covert Cyber Ops” Against Russia For “Election Hacking”

Just a week after Obama held a press conference announcing that he sent a stern warning to Vladamir Putin regarding his alleged “election hacking” efforts (see “Obama Told Putin To “Cut It Out” On Hacking“), the Washington Post is reporting that the Obama administration is close to announcing a series of economic sanctions and other measures to punish Russia for its “interference” in the 2016 presidential election.  Quoting “U.S. officials,” WaPo said that an announcement from the Obama administration could come as early as this week and would likely include “covert cyber operations.”

According to WaPo’s “sources”, the delay in sanctions against Russia have come from Obama’s inability to take unilateral actions under current laws.  While Obama previously signed an executive order that would allow him to freeze the assets in the United States of people overseas who have engaged in cyber acts, it only applies to actions that have threatened U.S. national security or financial stability.  Further, per a “senior administration official,” use of the existing law would require (1) actual election infrastructure to be designated as ‘critical infrastructure’ and (2) the administration to prove that such infrastructure was actually “harmed,” conditions which the National Security Council say have not been met. 

The White House is still finalizing the details of the sanctions package. Holding up the announcement is an internal debate over how best to adapt a 2015 executive order that gave the president the authority to levy sanctions against foreign actors who carry out cyberattacks against the United States.

The order was used as the “stick” in negotiations over a highly-publicized 2015 agreement with China that neither nation would hack the other for economic gain.

But officials concluded this fall that the order does not cover the kind of covert influence operation that the Intelligence Community believes Russia carried out during the election — hacking political organizations and leaking stolen emails with the goal of influencing the outcome.

The April 2015 order allows the Treasury Department to freeze the assets of individuals or entities who used digital means to damage U.S. critical infrastructure or engage in economic espionage.

The National Security Council concluded that it would not be able to use the authority against Russian hackers because their malicious activity did not clearly fit under its terms, which require harm to critical infrastructure or the theft of commercial secrets.

“You would (a) have to be able to say that the actual electoral infrastructure, such as state databases, was critical infrastructure, and (b) that what the Russians did actually harmed it,” a senior administration official told The Post. “Those are two high bars.”

Obama Putin

Of course, laws are merely suggestions for an Obama administration that has grown quite comfortable legislating through executive action from the White House.  As Zachary Goldman, a sanctions and national security expert at New York University School of Law, points out the current laws simply require the Obama administration to “engage in some legal acrobatics to fit the DNC hack into an existing authority, or they need to write a new authority.”

“Fundamentally, it was a low-tech, high-impact event,” said Zachary Goldman, a sanctions and national security expert at New York University School of Law. And the 2015 executive order was not crafted to target hackers who steal emails and dump them on WikiLeaks or seek to disrupt an election. “It was an authority published at a particular time to address a particular set of problems,” he said.

So officials “need to engage in some legal acrobatics to fit the DNC hack into an existing authority, or they need to write a new authority,” Goldman said.

Administration officials would like Obama to use the power before leaving office to demonstrate its utility.

And, not surprisingly, another administration official points out that “part of the goal here is to make sure that we have as much of the record public or communicated to Congress in a form that would be difficult to simply walk back.”  Yes, that is the problem with legislating through executive action rather than acknowledging the will of the American people and trying to work with Congress.

And while Obama and Democrats continue their crusade to delegitimize the Trump administration, we would point out once again that, despite all the rhetoric, not a single person has gone on the record and/or presented a single shred of tangible evidence to confirm Russian involvement in the DNC and/or John Podesta email hacks

 

end

 

And Russia’s response! No doubt Europe will be screwed again with the USA’s actions:

(courtesy zero hedge)

Russia “Tired Of Obama Lies About Hackers”, Vows Response To Any New Sanctions

As Washington prepares to unleash new sanctions on Russia, it appears Putin won’t take this laying down. If U.S. adopts new sanctions against Russia, govt in Moscow will resort to counter-measures, Foreign Ministry spokeswoman Maria Zakharova warns in a website statement.

As we detailed previously, the delay in sanctions against Russia have come from Obama’s inability to take unilateral actions under current laws.  While Obama previously signed an executive order that would allow him to freeze the assets in the United States of people overseas who have engaged in cyber acts, it only applies to actions that have threatened U.S. national security or financial stability.  Further, per a “senior administration official,” use of the existing law would require (1) actual election infrastructure to be designated as ‘critical infrastructure’ and (2) the administration to prove that such infrastructure was actually “harmed,” conditions which the National Security Council say have not been met. 

Obama Putin

And Russia has pre-emptively warned of retaliation

The outgoing US administration still hopes to finally have time to do something else for bad relations with Russia, and so she brought down. With clearly inspired leaks in the American media have once again trying to scare the extension of anti-Russian sanctions measures “diplomatic” and even sabotage against our computer systems. And this last “Christmas greetings” from the Obama team, already preparing for eviction from the White House cynically want to present as a reaction to certain “cyber attack from Moscow.”

Frankly, we are tired of the lies about the “Russian hackers”, which continues to flow into the United States from the very top. The Obama administration has launched six months ago, this misinformation in an attempt to play up the desired for himself a candidate in the November presidential election, and not achieving the desired, looking for an excuse for their own failure, and with a vengeance is played on Russian-American relations.

But the truth of the provocation orchestrated by the White House, sooner or later will still come out. Yes, it’s already happening. How else to December 8 reported the US media, the State of Georgia State Secretary Brian Kemp he said that the authorities in the region followed where came hacker attack on its electronic system of vote counting shortly after the election. Footprints led to the computer at the US Department of Homeland Security. This information quickly tried to cover up the stream of new anti-Russian charges that do not contain a single proof.

It only remains to add that if Washington really takes new hostile steps, it will get the answer. This also applies to any action against Russian diplomatic missions in the United States, which immediately ricocheted on US diplomats in Russia. Perhaps the Obama administration is quite indifferent to what will happen to the bilateral relations, but the story is unlikely to forgive her behavior on the principle of “after us the deluge.”

In other words, Europe is about to get screwed again.

 

 

end

The Syrian fiasco is becoming a real nightmare for Obama.  Now Turkey is agreeing to a ceasefire plan with Russia and they are snubbing Washington.  However Turkey wants Assad out which will never happen.  The big question will be what will happen to all of those migrants on Turkish soil?

(courtesy zero hedge)

Another PR Fiasco For Obama: Russia, Turkey Agree On Syria Ceasefire Plan, Snub Washington

 

 

end

 

Wow!! Trump slams Obama with huge inflammatory statements. He tells Israel to remain strong and that Jan 20 is approaching quite fast

(courtesy zero hedge)

Trump Slams Obama “Inflammatory Statements”, Tells Israel To “Stay Strong, Jan 20 Is Fast Approaching”

Just when you thought it was safe to turn Twitter down from ’11’, president-elect Donald Trump unleashes a triple whammy tweet-storm against the Obama administration, “shocking” the mainstream media with his frankness…

First, he took direct aim at Obama…

Doing my best to disregard the many inflammatory President O statements and roadblocks.Thought it was going to be a smooth transition – NOT!

Then unloaded a double-tweet aimed at the treatment of Israel…

We cannot continue to let Israel be treated with such total disdain and disrespect. They used to have a great friend in the U.S., but…….

not anymore. The beginning of the end was the horrible Iran deal, and now this (U.N.)! Stay strong Israel, January 20th is fast approaching!

As Obama ends his ‘reign’ with scorched earth tactics – somehow aimed at protecting his legacy – we suspect Trump’s first 100 days will be spent busily unscrambling these eggs.

 

 

end

 

Bibi blasts Kerry’s speech this afternoon as being biased against Israel. In this conflict all Israel is asking for is recognition of Israel as a state something that they are not willing to do.  Why on earth would Israel even talk to the Palestinians until they agree to that and stop paying Palestinians for murdering Israelis

(courtesy zero hedg)

Bibi Blasts Kerry’s Speech As “Biased Against Israel”, Delivers Statement – Live Feed

 

6.GLOBAL ISSUES

none today

7. OIL ISSUES

Commodity expert Ritterbush states that the OPEC agreement may collapse in May due to the rise in output from the USA shale boys:

(courtesy zero hedge)

Ritterbusch Warns OPEC Agreement May “Collapse Within Months”: Here’s Why

As OPEC, which currently is pumping crude at a record rate yet has managed to fool algos and “experts” into bidding up crude to multi-month highs on “promises” it will cut a little over 1 million bpd in output starting in 2017, an “agreement” which Russia and other Non-OPEC nations may or may not join depending on whether OPEC states comply with the cuts (Russia has made it very clear it won’t start cutting for a a while in the new year), a problem OPEC has long hoped to avoid mentioning, let alone addressing, has emerged. We are talking, of course, about US shale, the biggest marginal swing producer in the world.

The problem, in a nutshell, is one of clean balance sheets (those companies which had to file bankruptcy, have done so by now, and as a result most now have a far lower All-In Production Cost, not to mention far less debt, and re-energized management teams) as well as one of rising efficiency due to drilling technological advances. Nowhere is this more evident than in this excerpt from Bloomberg:

[A]t 8.8 million barrels a day, the U.S. is already pumping almost as much crude as two years ago, with just a third of the rigs it operated at the peak, data from Baker Hughes Inc. and the Energy Information Administration show.

And while drillers have added about 200 rigs since May according to Baker Hughes, taking advantage of rising prices as talk of an OPEC supply cut circulated, one wonders what will happens to US oil production once the number of rigs returns to its recent historical levels between 1,800 and 2,000?

One thing we do know is that after two years of quietly avoiding the spotlight, the shale industry is ready to return with a bang, and according to Reuters, “US shale drillers are set to ramp up spending on exploration and production next year as recovering oil prices prompt banks to extend credit lines for the first time in two years.”

The credit increase is small, but with major oil producers worldwide aiming to hold down production in 2017, U.S.-based shale drillers are looking to boost market share to take advantage of higher prices, and greater availability of capital will make that easier.

 

North America-focused oil and gas producers are expected to increase capital investments by 30 percent in 2017, according to analysts at Raymond James. A number of shale producers including Pioneer Natural Resources, Diamondback Energy and RSP Permian have forecast bigger budgets and increased output for next year.

 

Every six months, oil and gas producers negotiate credit with banks based on the value of reserves in the ground. Through the latest round of talks in the fall, 34 companies had their available credit lines raised an average of about 5 percent, or more than $1.3 billion, according to data compiled by Reuters.  The combined bank credit for the companies stood at $30.3 billion, compared with $28.9 billion at the end of spring 2016.

 

The industry’s available credit had been cut by 40 percent over the past three reviews as it contended with a two-year price rout. “The ‘animal spirits,’ seem to be coming back to the exploration and production market, albeit slowly,” said Reorg Research analyst Kyle Owusu, referring to the human emotion that drives confidence.

 

Of the 34 companies, 12 saw increases of 5 to 90 percent, while 10 companies had their borrowing bases cut in the latest round, and 12 companies’ credit limits were left unchanged.

Curiously, despite the recent renaissance within shale, overall U.S. crude oil production is forecast to fall to 8.8 million barrels per day in 2017 from 8.9 million bpd this year, according to the DOE. But, according to many analysts, shale output could increase from 200,000 to 500,000 bpd in 2018.  Furthermore, according to a Citi report, if oil prices jump by another $10 from the current level of ~$50, shale output could quickly rise by a further 500,000 barrels.

Still, some such as SocGen head of commodities research Mike Wittner,, believe that shale companies could struggle to revive output quickly enough to disrupt the re-balancing of the oil market. “It’s going to take them a while to gear up,” Wittner said. “The investment’s got to gather pace, the drillers and the fracking contractors also need time. It’s a gradual process.”

And then there are those like commodity expert Ritterbusch & Associates who believe that US shale will be able to return to recent output levels far faster than consensus, and certainly OPEC believes.

According to a recent report by Ritterbusch, US drillers are returning to work at a pace that will threaten the tenuous agreement among OPEC and other major producers to cut output.  

“It appears OPEC is already furthering a US shale recovery despite the fact that OPEC cuts have not even begun,” Ritterbusch & Associates writes, pointing to the rapidly rising rig count and increased output from US fields.

As a result, and taking a contrarian stance to the consensus, Ritterbusch now expects US oil production to rise to 9 million bpd as soon as the end of Q1 in 2017, from 8.8M currently.

Such an accelerated return to production  would not only allow US producers to grab “a significant portion of OPEC’s market share,” but more importantly would cause the OPEC production cut agreement to break apart as early as next spring, Ritterbusch says, as Saudi Arabia once again panics and scrambles to recapture market share lost not to Iran and/or Iraq this time, but to a newly resurgent US shale industry, which as a reminder, is what caused the historic OPEC cartel breakdown on Thanksgiving 2014 which sent the oil price crashing and from which it has yet to recover.

As a reminder, all this excludes the all too high likelihood of a surge in production from previously mothballed regions like Nigeria and Libya, both of which are aggressively ramping up output to recapture long lost market share, and are willing to aggressively underbid the competition in the process.

If Ritterbusch is right, buy lots of 6 month Brent/WTI puts, because today’s high price will be a fond memory once the latest OPEC agreement collapses as it becomes every oil producer – and shale – for himself.

 

 

end

 

Freezing temperatures in the USA causes natural gas prices to surge:

(courtesy Nick Cunningham/Oil Price.com

 

Freezing Winter Sees Natural Gas Prices Surge

Submitted by Nick Cunningham via OilPrice.com,

Natural gas prices are surging as cold weather eats into U.S. inventories, tightening the market much more quickly than many analysts had expected.

The blast of Arctic weather in December put a strain on natural gas markets, with millions of people cranking up the heat to keep warm. The EIA reported a surprise drop in storage levels in the week ending on December 16, falling by 209 billion cubic feet. That decline puts total storage levels at 3,597 Bcf, or just a small 78 Bcf above the five-year average.

(Click to enlarge)

Such a scenario was difficult to imagine earlier this year, when the U.S. was emerging from peak winter demand season with record levels of gas sitting in storage. Flush with supply, prices crashed below $2/MMBtu. But natural gas production suddenly started to fall after years of blistering growth, upending forecasts calling for years of oversupply. Meanwhile, demand continues to rise as gas-fired power plants replace coal, so while natural gas consumption is highly seasonal, the seasonal peaks are getting taller and the valleys are getting shallower. Structural demand will continue to rise.

By mid-December, Arctic weather descended on much of the U.S., pushing temperatures to extremely low levels. As a result, the heating degree days (HDD) – a measure of demand for gas pertaining to home heating – was 11 percent above average.

But seasonal shifts still matter. In the first three weeks of December U.S. natural gas consumption averaged 92 billion cubic feet per day (Bcf/d), up 21 percent from year-ago levels and also 17 percent above the five-year average. In other words, the U.S. is consuming natural gas at record levels, leading to a much faster drawdown in inventories than had been predicted earlier this year.

The end result is that natural gas prices are surging, topping $3.70 per million Btu (MMBtu), the highest price in years. The tightening of the market and the rise in prices is a godsend for struggling gas drillers, which had fallen out of favor with investors in recent years because of persistently low prices. Chesapeake Energy, one of the largest natural gas producers in the U.S., has seen its share price spike by more than 300 percent this year, and it’s also up by more than a third in just the past few months, reflecting the rise in gas prices.

As the market improves, natural gas drillers are starting to do something that they have not one in years: add rigs back to the gas fields. Natural gas production climbed for years, right through until early 2016, even though gas producers suffered from years of low prices. The reason is that even as natural gas drilling stopped growing, the mad dash for oil led to rising output of associated gas. So even as the gas rig count fell, output did not, that is, until the crash of oil prices led to a drying up of oil drilling.

Now, rising gas prices could lead to an uptick in gas drilling as companies once again return to targeting gas formations specifically. The gas rig count is now up to 129, up more than 30 percent in just the past few months. Most of those extra rigs have been deployed in the Marcellus and Utica Shales in Pennsylvania and Ohio, along with the Haynesville Shale in Louisiana, a few of the most gas-rich areas of the country.

The coal industry could get a temporary reprieve with higher natural gas prices. 2016 is expected to be the first full-year in which gas controlled a larger market share than coal, and while the trend towards gas is expected to continue, coal plants could be called upon more often in the near-term because of tightening gas supplies.

While drillers and coal miners are excited about rising gas prices, costlier gas is not good for many others. Petrochemical companies, using gas as a feedstock for a range of products including plastics and fertilizer, will have to pay more. So too will consumers. LNG exporters, depending on how their contracts are structured, could take a hit. U.S. LNG could become less competitive abroad.

It remains to be seen if output will rebound quickly. If not, a cold winter and rising structural demand for gas could see further gains in prices, potentially topping $4/MMBtu before the start of injection season in the spring. Regional bottlenecks could emerge once again, with prices temporarily spiking much higher. In the winter of 2014, bottlenecks and shortages led to a massive price spike for New England, which is less likely but not entirely out of the realm of possibility either.

The shale gas revolution made headlines long before the boom in oil drilling. Shale gas could once again become a point of focus for the industry.

 

 

end

 

Oil slides on a huge inventory build

(courtesy zero hedge)

 

Oil Slides After Biggest Inventory Build In 6 Weeks

Having risen for the 8th straight day – the longest stretch in 7 years – oil prices kneejerked lower after API reported a surprisingly large 4.8mm inventory build (1.5mm draw expected) – the largest in 6 weeks. Gasoline and Distillates saw draws but Cushing built for the 4th week of the last 5.

 

API

  • Crude +4.2mm (-1.5mm exp) – biggest in 6 weeks
  • Cushing +528k (+500k exp) – 4th build in last 5 weeks
  • Gasoline -2.8mm (+1mm exp)
  • Distillates -1.7mm (+1mm exp)

Following last week’s surprise build, API reported another surprise build this week in overall crude inventories…

 

And the reaction was a kneejerk lower holding below $54…

8. EMERGING MARKETS

none today

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

Euro/USA   1.0400 DOWN .0062/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 117.67 UP 0.189(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 1.2212 DOWN .0062 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3573 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 62 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 12.43 0r 0.40%     / Hang Sang  CLOSED UP 179.98 POINTS OR 0.83%  /AUSTRALIA  CLOSED UP 1.01%  / EUROPEAN BOURSES ALL IN THE RED EXCEPT LONDON 

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 WEDNESDAY morning CLOSED UP 6.42 OR .03% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED EXCEPT LONDON 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 179.98 OR .83%  Shanghai CLOSED DOWN 12.43 POINTS OR 0.40%   / Australia BOURSE CLOSED UP 1.01% /Nikkei (Japan)CLOSED DOWN 1.34 OR .01% /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1140.20

silver:$15.88

Early WEDNESDAY morning USA 10 year bond yield: 2.562% !!! DOWN 1 IN POINTS from TUESDAY 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  3.133, DOWN 1 IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 103.44 UP 40 CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.77% DOWN 5  in basis point yield from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.06% DOWN  1/2  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.342%  DOWN 5  IN basis point yield from  TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.812  DOWN  3  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 47 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 WEDNESDAY

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

Euro/USA 1.0383 DOWN .0078 (Euro DOWN 78 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 117.55 UP: 0.078(Yen DOWN 8 basis points/ 

Great Britain/USA 1.2221 DOWN 0.0052( POUND DOWN 52 basis points)

USA/Canada 1.3576 UP 0.0033(Canadian dollar DOWN 2 basis points AS OIL ROSE TO $54.08

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This afternoon, the Euro was DOWN by 78 basis points to trade at 1.0383

The Yen FELL to 117.55 for a LOSS of 2 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 52  basis points, trading at 1.2221/

The Canadian dollar FELL by 2 basis points to 1.3576,  WITH WTI OIL RISING TO :  $54.08

The USA/Yuan closed at 6.9558
the 10 yr Japanese bond yield closed at +.06% DOWN 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2 IN basis points from TUESDAY at 2.547% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.117 DOWN 3  in basis points on the day /

Your closing USA dollar index, 103.56 UP 52 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 WEDNESDAY: 1:30 PM EST

London:  CLOSED UP 37.91 OR .54% 
German Dax :CLOSED up 2.75 POINTS OR 0.02%
Paris Cac  CLOSED DOWN 0.27 OR 0.01%
Spain IBEX CLOSED DOWN 31.70 POINTS OR 0.34%
Italian MIB: CLOSED DOWN 151.44 POINTS OR 0.78%

The Dow was DOWN 111.30 POINTS OR .56% 4 PM EST

NASDAQ WAS DOWN 48.88 POINTS OR .89%  4.00 PM EST
WTI Oil price;  54.08 at 1:00 pm; 

Brent Oil: 56.24  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  60.23 (ROUBLE UP  43/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS  TO +0.195%  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:$53.63

BRENT: $55.94

USA 10 YR BOND YIELD: 2.508%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.094%

EURO/USA DOLLAR CROSS:  1.0411 down .0048

USA/JAPANESE YEN:117.17  down 0.333

USA DOLLAR INDEX: 103.25  up 21  cents (BREAKS HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2219 : down 54  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.195%

END

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

TRADING IN GRAPH FORM

Rebalance Rout: Stocks Slump Most Since October As Bonds, Bullion Bounce

 

Who could have seen this coming?

This just about sums things up…

 

And Bob Pisani is not happy…

Stocks midday: classic low-volume drift lower. Bids have evaporated, buyers acting like done for year. < 1% from historic high on .

As The S&P tumbled most since Oct 11th…

 

Trannies and Small Caps were worst today…

 

Futures show the difference as yesterday’s US open was a buying panic and today’s a selling panic…

 

VIX topped 13 briefly today as The Dow dropped 150 points from opening highs…

 

Sectors red across the board post-Xmas… Financials were hit but oddly Utes also sold (despite lower yields)…

 

The long bond is now best post-Fed – holding unchanged as stocks and gold slide…

 

High- and Low-Beta stocks in the S&P 500 have become entirely uncorrelated for the first time since the peak of the dotcom crash…

 

Bonds had their best day since August today – amid record indirects at the 5Y auction – with yields down 4 to 6bps across the complex) – 30Y yields dropped to 3-week lows…

 

It seems S&P dividend yields capped the 5Y yield advance…

 

The USD Index rose again on weakness across all majors overnight, then faded during the US day session…

 

Copper sank on the day as China fears continue as gold & silver gained…

 

Silver jumped above $16 again…

 

Gold up 4 days in a row – longest streak since before election…

 

Bitcoin was whacked early on but recovered its losses…

 

Trading this morning: just before markets open!

Which Comes First – Dow 20k Or $1000 Bitcoin?

For 10 straight days, prognosticators have promised that the Dow Jones Industrial Average will break gloriously above 20,000 for the first time in history, proving how great the economy must be (or will be) and leading investors to the next secular bull leg of this miracle of wall street.

So far it hasn’t happened… (Dow +11.75% post-Trump)

But halfway around the world, Chinese fears (of capital controls and devaluation) have sparked an exodus into alternative currencies – most notably Bitcoin as it soars towards $1000. (BTC +42% post-Trump)

So which comes first – the greed of Dow 20,000 or the fear of $1000 Bitcoin?

(courtesy zero hedge)

(courtesy zero hedge)

Delta Scraps $4 Billion Order For 18 Boeing 787 Dreamliners As Airbus Cuts A380 Production

As we have pointed out to you, losses on the banks must be huge due to the rise in interest rates.  In the past 3 months a gain of 34 billion dollars as turned into a loss of 14 billion or a swing of 48 billion dollars.  On a 4 week basis, the change is 37 billion dollars.  If this continues it will be a bloodbath for the banks on the Fed’s program of rate hikes:

(courtesy zero hedge)

 

Bank EPS Misses On Deck: Rising Rates Lead To Biggest Bank Portfolios Losses Since The “Taper Tantrum”

Wondering how the blow out in interest rates is impacting commercial banks, which just happen to have hundreds of billions in duration exposure in the form of various Treasury and MBS securities, not to mention loans, structured products and of course, trillions in IR swap, derivatives and futures? Wonder no more: the Fed’s weekly H.8 statement, and specifically the “Net unrealized gains (losses) on available-for-sale securities” of commercial banks, gives a glimpse into the pounding that banks are currently experiencing. In short: it has been a bit of a bloodbath.

After hitting a recent high of $34 billion in gains three months ago when interest rates were still near 2016 lows, the reported amount of net unrealized gains has tumbled, and from a gain it has turned into a loss of $14 billion as of the week ended December 14. On a 4-week rolling basis, the change amounts to $37 billion in losses, the biggest monthly drop since the 2013 Taper Tantrum.

This may not be the end of it: as the next chart below shows, commercial banks are holding just shy of an all time high of $747 billion in Treasuries and other non-MBS securities, a number which rises to $2.43 trillion if one includes all Treasury and agency securities on commercial bank balance sheets.

Should rates keep rising, the “unrealized” losses will keep building.

Where on the bank income statement do these losses appear? As we explained the last time this was an issue, in the aftermath of the 2013 Taper Tantrum, it comes down to the the Available For Sale (AFS) line, which runs through the Accumulated Other Comprehensive Income line.

It means that the November and December spike in rates will hammer those banks which hold their bond portfolios as AFS, and thus are subject to Mark to Market and ultimately flow through the P&L.

It also means that the shorthand to get a sense of how substantial the MTM losses from bond holdings will be is to look at the massacre that is going on in the AFS line and extrapolate it to all other levered commercial bank (and hedge fund) rate exposure. Expect math PhD-programmed algos that determine the marginal momentum of the S&P to figure this out some time over the next 2-3 weeks once banks begin reporting results which “unexpectedly” are well below expectations, especially since instead of steepening, the Net Interest Margin line has remained very much unchanged, and if anything, has modestly flattened, failing to offset the losses from bank holdings of rate-sensitive securities.

 

 

end

Hillary’s email scandal is not over yet:

(courtesy zero hedge)

Federal Appeals Court Revives Hillary Email Case Leaving Key Decision To Trump’s Attorney General

That is all for today

I will see you tomorrow night

H

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