US Selloff Spooks Thinly Traded Global Markets Sending Stocks, Yields, Dollar Lower

One day after the biggest drop in US stocks in over two months, taking the Dow ever further from the “promised” Dow 20000, global stocks struggled as they tried to close out 2016 on a positive note. The dollar dropped the most in two weeks, sliding alongside bond yields, while oil retreated from its highest close in 17 months as investors prepared to close out a volatile year for financial markets. European stocks slid from a 2016 peak, and extended losses for 2016 after briefly going green for the year.

“Yesterday’s U.S. pending home sales number disappointed. Falling U.S. yields pushed the dollar generally lower,” said Marshall Gittler, head of investment research at FXPrimus.

The yield on 10-year U.S. Treasury notes slipped to a two-week low, pulling the dollar to a two-week low against the yen. “The dollar fall was mostly due to renewed doubts about the U.S. recovery after pending home sales dropped in November. This is where the risk-off reversal started,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.  “This pushed the exhausted U.S. bulls to the sidelines and triggered a sell-off in both the dollar and U.S. stocks. We’re seeing a bit of follow through in Europe today,” she said.

As a result of the dollar drop, which saw the Bloomberg dollar spot index slide for the first time in 4 days, the Japanese Yen strengthened to as much as 116.25, the lowest print in the pair since Dec. 14, sending Japan’s Topix to its biggest drop in more than a month, sliding 1.2%. The benchmark is heading toward a loss of 1.9% for the year, its first annual decline in five years. The Nikkei 225 Stock Average pared its gain for 2016 to 0.6%.  “Flow-driven move pushed USD/JPY lower after U.S. markets underwent a rebalancing on recent stock rally and bond sell- off before the year-end,” says Wako Ogawa, director of foreign-exchange sales at Deutsche Securities in Tokyo

Crude futures slipped for the first time in nine days, threatening to halt the longest winning streak since 2010. Gold extended gains. Oil was mixed after data showed a surprise build in U.S. crude inventories. U.S. crude fell 0.2 percent to $53.95 a barrel, while Brent was last up 0.2 percent at $56.32.

Despite the recent pick up in volatility, ostensibly the resut of a last minute pension fund reallocation, trading continues to be thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average. Investors sold U.S. equities at the fastest rate since before Donald Trump’s surprise election, trimming a post-election rally that took major indexes to all-time highs. The dollar is retreating after rising to the highest level in more than a decade on speculation the incoming president will boost inflation, paradoxically sending consumer confidence (measured by the University of Michigan) to decade highs, on expectations of record low inflation.

European stocks have so far failed to rebound from yesterday’s US rout, with the Stoxx Europe 600 Index losing 0.3%, after closing at the highest level in a year on Wednesday. The gauge is down 1.4% for 2016. Trading volume in Europe less than half the 30-day average. Cyclical shares including banks, carmakers and miners were among the best performers in the final quarter of the year amid bets for stronger economic growth fell the most.

While there was some strength in the MSCI Asia Pacific ex-Japan Index, which added 0.2% after breaking a string of six consecutive losses on Wednesday, Japan’s Topix dropped 1.2%, its biggest drop in a month, heading toward a loss of 1.9% for the year, its first annual decline in five years. The Nikkei 225 Stock Average pared its gain for 2016 to 0.6%.

Elsewhere in Asia, the Jakarta Composite Index jumped 1.8 percent, bringing its three-day rally to 5.5 percent and erasing a two-week selloff. Australia’s S&P/ASX 200 advanced 0.3 percent to the highest level in more than a year.

Futures on the S&P 500 were little changed. The benchmark index fell 0.8 percent on Wednesday. It’s up 10 percent in 2016 after adding 2.3 percent so far this month.

There was a global dip in longer-term interest rates, as U.K. gilts led European bonds higher. Yields fell 6 basis points to 1.23 percent. Euro zone yields were also falling on concerns about the strength of a rescue plan for Italian banks and normal year-end caution. The yield on German 10-year bunds fell two basis points to 0.17 percent, while those on Treasuries dropped four basis points to 2.46 percent, extending Wednesday’s decline of five basis points. Australia’s 10-year yield slid seven basis points to 2.78 percent.

Markets Snapshot

• S&P 500 futures up less than 0.1% to 2246.5
• Stoxx 600 down 0.3% to 361
• FTSE 100 down less than 0.1% to 7101
• DAX down 0.3% to 11438
• German 10Yr yield down 2bps to 0.18%
• Italian 10Yr yield up less than 1bp to 1.81%
• Spanish 10Yr yield down less than 1bp to 1.33%
• S&P GSCI Index up 0.1% to 399.7
• MSCI Asia Pacific up 0.2% to 135
• Nikkei 225 down 1.3% to 19145
• Hang Seng up 0.2% to 21791
• Shanghai Composite down 0.2% to 3096
• S&P/ASX 200 up 0.2% to 5699
• US 10-yr yield down 4bps to 2.47%
• Dollar Index down 0.56% to 102.72
• WTI Crude futures down 0.2% to $53.95
• Brent Futures up 0.3% to $56.41
• Gold spot up 0.6% to $1,148
• Silver spot up 0.9% to $16.18

Top Global News

• Petrobras Sells Petrochemical, Biofuel Assets for $587m: Alpec agrees to buy Suape petrochemical plant in Pernambuco
• BMO’s Downe Has No Plans to Step Down Amid Executive Shuffle: Management moves part of bank’s succession plan to build depth
• Alere Sues U.S. Saying Medicare Removal May Kill Arriva: Company wants billing revocation halted while it appeals
• China Reduces Dollar Weighting in Currency Basket, Adds 11 More: Dollar will fall to 22.4% in trade-weighted basket
• Oil Trades Near 18-Month High Before U.S. Inventory Data: Nationwide crude inventories rise by 4.2 million barrels: API
• Dollar Drops to Two-Week Low Versus Yen as Treasury Yields Fall: USD declines against all of its G-10 peers, led by yen
• Top Trader Citigroup Sees Risk of ‘More Rapid’ Dollar Gains: Fed tightening on fiscal thrust to support dollar: Elmer
• San Francisco Software Startup AppDynamics Files for U.S. IPO: AppDynamics had $158.4m in rev. in 9 months ended Oct. 31
• Political Upheavals May Herald Trouble for Megadeals in 2017: Cross-border M&A drove majority of deals announced this year

* * *

European stocks declined for first day in four sessions, with trading volumes remaining thin. 15 out of 19 Stoxx 600 sectors fall with autos, banks underperforming and real estate, food & beverage outperforming. 54% of Stoxx 600 members decline, 43% gain. “Momentum has been deteriorating the last couple of sessions and the daily momentum indicators suggest a toppish situation,” UBS technical analyst Marc Muller writes in note. “If we were to see another pullback campaign starting in the defensive camp together with the beginning of a correction phase in the overstretched cyclical/financial themes, the headline indices in Europe would be tactically very vulnerable.”

European Econ Data

• Norway November Retail Sales Rise 0.2% M/M, In Line W/ Estimates
• U.K. Dec. House Prices Rise 0.8% on Month, Nationwide Says
• Sweden November Trade Deficit SEK1.1b; October Deficit SEK2b
• Eurozone Nov. M3 Money Supply Rises 4.8% vs Year Ago
• Austria Dec. Manufacturing PMI 56.3 vs 55.4 in Nov.

Top European News

• Italy’s Padoan Criticizes ECB for Paschi Recapitalization Demand: Germany urged ECB to ensure Italy complies with rules
• London House-Price Growth Lags Behind U.K. First Time Since 2008: Values rose annual 3.7% in capital and 4.5% nationally
• Political Risks Leave Euro-Pound Analysts Most Divided on Record: Widest range of estimates in a decade

Asian stocks gain, erasing previous losses, while Japanese shares posted the biggest slide in seven weeks. 10 out of 11 sectors rise in the MSCI Asia Pacific Index with consumer staples, health care outperforming and industrials, consumer discretionary underperforming. “A market riding on expectations toward a Trump presidency is coming to a close, and we’re starting to focus on reality,” said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co. in Tokyo. “I expect investors to take a more nervous stance toward U.S. economic indicators from here on.”

Asian Econ Data

• Hong Kong Nov. Exports Rise 8.1% Y/y; Est. -1%
• S. Korea Cuts 2017 GDP Forecast to 2.6%, Sees Inflation at 1.6%
• S. Korea Nov. Industrial Output Rises 4.8% Y/y; Est. +1.5%
• South Korean January Manufacturers’ Confidence Falls to 71
• Macau Nov. Visitor Arrivals Unchanged Y/y; Macau Nov. Consumer Prices Rise 1.53% Y/y
• One BOJ Member Sees Long Way to Go to Meet Price Goal: Summary

Top Asian News

• Takata Gains on Report Up to $1 Billion U.S. Settlement Near: Settlement could include criminal guilty plea, WSJ reports
• Dentsu CEO Quits Over Employee Suicide Blamed on Overwork: Japanese advertising agency under labor ministry investigation
• Who’s Had the Worst Year? How Asian Leaders Fared in 2016: Asia felt like a relatively stable part of the world
• Toyota Hybrid Bet Pays Off as Dieselgate Spurs Europe Demand: Carmaker’s hybdrid sales in Europe likely to jump 40% in 2016

In currencies, the Bloomberg Dollar Spot Index slipped 0.5 percent at 9:54 a.m. in London after trading Wednesday at the highest level in more than a decade. The euro was up 0.5 percent, while the yen rose 0.8 percent, the most since Dec. 19. The Australian dollar climbed 0.5 percent and the New Zealand dollar strengthened 0.4 percent.

In commodities, crude futures in New York slid 0.4 percent to $53.86 a barrel as an industry report was said to show U.S. stockpiles climbed last week. Crude settled at $54.06 on Wednesday, the highest close since July 2015. Gold rose for a fourth session, adding 0.6 percent to $1,148.16. The metal has been rebounding from an 11-month low.

US Event Calendar:

• 8:30am: Advance Goods Trade Balance, Nov., est. -$61.6b (prior – $62.0b)
• 8:30am: Wholesale Inventories MoM, Nov. P, est. 0.2% (prior -0.4%)
• 8:30am: Initial Jobless Claims, Dec. 24, est. 265k (prior 275k)
• 9:45am: Bloomberg Consumer Comfort, Dec. 25 (prior 46.7)
• 10am: Freddie Mac mortgage rates
• 10:30am: EIA natural-gas storage change
• 11am: DOE Energy Inventories

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 4.12 POINTS OR 0.12%/ /Hang Sang closed UP 36.17 OR .17%. The Nikkei closed DOWN 256.58 OR 1.32% /Australia’s all ordinaires  CLOSED UP 0.25%/Chinese yuan (ONSHORE) closed UP at 6.9555/Oil FELL to 53.98 dollars per barrel for WTI and 56.42 for Brent. Stocks in Europe: ALL IN THE RED .  Offshore yuan trades  6.9734 yuan to the dollar vs 6.9555  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS A BIT AS  MORE USA DOLLARS ARE ATTEMPTING TO  LEAVE CHINA’S SHORES /

(courtesy zero hedge)

With China facing currency and illiquidity concerns, an ex POBC official urges that it is now time for the “nuclear option”  i.e. a full one stop devaluation of the yuan against the dollar. Remember of Jan 1, 2017, the 50,000 usa cash limit withdrawal begins again.  Also remember that the Chinese New Year begins next month and always that signals huge withdrawal of USA dollars.

What a joke:  the Government of Italy slams the ECB for revealing that it has a bank run problem

Syria has its ceasefire deal as 62,000 opposition fighters sign for it and it is to take effect on Dec 30 at midnight.  The USA is not invited to the agreement except that once Donald takes office he may join.  What a slap in the face to the USA and the UN who couldn’t come close to a deal for the past several years.

(courtesy zero hedge)

Putin Announces Syrian Ceasefire Deal, Ready To Start Peace Talks; Obama Snubbed Again

Yesterday we reported that, in what was the latest “PR fiasco” for the outgoing Obama administration, Turkey and Russia sat down, and appeared on the edge of hammering out a ceasefire plan for Syria between the two nations – something which the UN has been unable to achieve for years – in a deal which would not include the United States and be distinct from separate intermittent U.N.-brokered negotiations, which have so far failed to end the fighting in the proxy Syria war.

Then moments ago, Russian President Vladimir Putin confirmed an agreement has been reached on ceasefire in Syria and the start of peace talks.

Quoted by AP, Putin said that Russia and Turkey will guarantee the truce, which is set to begin at midnight. He says it will be followed by peace talks between Syrian President Bashar Assad’s government and the opposition, and that the Syrian parties would take part in talks to be held in Kazakhstan, without specifying a date.

Syria’s military confirmed that it had agreed to a nationwide cease-fire starting at midnight.

Russian Defense Minister Sergei Shoigu says the truce will include 62,000 opposition fighters across Syria, and that the Russian military has established a hotline with its Turkish counterpart to monitor compliance.

Leaving an olive branch for the new US administration, if not for Obama, Foreign Minister Sergey Lavrov says that that President-elect Donald Trump’s administration will be welcome to join the Syrian peace process once he takes office.

Russia is a key ally of Assad, while Turkey is one of the main backers of the opposition. Several previous attempts to halt the civil war have failed, which is why today’s agreement, coming just days after the dramatic retaking of Aleppo by Assad’s forces, is especially historic… if it lasts.

“This agreement we’ve reached is very fragile, as we all understand. They require special attention and patience, professional attitude, and constant contact with our partners,” Putin said at a meeting with Russian foreign and defense ministers.

The agreement, which was previously announced by Turkey, is set to take effect at midnight on December 30 according to Russia’s defense minister and is detailed in three documents/

“The first was signed by the Syrian government and the Syrian opposition to stop hostilities in the territory of the Syrian Arab Republic. The second one is a set of measures to control the ceasefire. The third document is a declaration of intention for Syrian settlement,” the Russian president said cited by RT.

The truce is supported by seven major armed opposition groups that have over 60,000 fighters in their ranks, Russian Defense Minister Sergey Shoigu said.He added that if the agreement holds, it would allow Russia to scale down its military presence in Syria.

END

 

Michael Snyder lays out perfectly what may happen on Jan 15.2017 when 70 nations gather in Paris to see if they can create a framework for a two state system in Israel.

There is no question that Israel has been stabbed in the back by Obama who may in his last 5 days try and get official status for a Palestinian state with Jerusalem as its capital. Immediately Trump will move the USA embassy to Jerusalem which will be opposed by all Arab nations including the PLO. Then instead of peace, we have chaos which is probably what Obama wants in the first place

 

(courtesy Michael Snyder/EconomicCollapse Blog)

 

Circle January 15th: 70 Nations Will Gather In Paris To Discuss The Creation Of A Palestinian State

By Michael Snyder, on December 27th, 2016

On January 15th, representatives from 70 different countries will gather in Paris, France for an unprecedented global conference.  The stated goal of this conference is to promote a “two-state solution” as the way that lasting peace will be brought to the Middle East.  In Israel, there is a tremendous amount of concern that whatever is agreed upon at this conference will immediately be used as the basis for a UN Security Council resolution that would permanently divide the land of Israel and create a Palestinian state.  But things would have to move very rapidly in order for that to happen, because Barack Obama’s time in the White House comes to an end on January 20th, and Donald Trump has already made it exceedingly clear that he would never support such a resolution.

The UN Security Council resolution that was passed on Friday was one of the most significant events that we have witnessed in decades.  Resolution 2334 made all Israeli settlements in the West Bank and in East Jerusalem illegal, it set the 1967 ceasefire lines as the border between the Israelis and the Palestinians, and it granted every single inch of East Jerusalem to the Palestinians.  But it stopped short of giving official UN Security Council recognition to a Palestinian state, and that is why this conference on January 15th is so important.

On Wednesday, U.S. Secretary of State John Kerry will lay out a plan which many believe will serve as the blueprint for the upcoming conference in Paris.  This is something that I discussed yesterday.  Apparently Kerry has been working on this for quite some time, and according to the Times of Israel, Jewish officials are fearful that he may propose something drastic…

At a press briefing Tuesday, State Department spokesman Mark Toner confirmed Kerry’s plans for the speech, though he refused to detail whether the top US diplomat would use the opportunity to announce a new American initiative, which officials in Jerusalem fear he may.

Toner said the secretary holds the conviction that “it is his duty in his remaining weeks and days as secretary of state to lay out what he believes is a way towards a two-state solution” and that “it’s always important to keep the process moving forward.”

If Kerry’s plan is embraced by the conference in Paris, it is anticipated by many that it would serve as the basis for a UN Security Council resolution that would formally create a Palestinian state before Donald Trump is inaugurated on January 20th.  The following comes from the Guardian…

The Israeli government is reportedly fearful that any guidelines agreed in Paris would be turned into another UN resolution before Trump’s inauguration, and it has ratcheted up its rhetoric, presenting itself as the victim of an international conspiracy.

A spokesman for Netanyahu claimed to have “ironclad evidence” that the Obama administration had plotted behind the scenes to promote the UN resolution. Israel has said it will present evidence against the Obama administration to the incoming Trump team.

If what an Egyptian newspaper is claiming is true, then there may very well be an international conspiracy at work against Israel.  According to a transcript published by the Al-Youm Al-Sabea newspaper, John Kerry and U.S. National Security Adviser Susan Rice met with Palestinian officials in early December and presented Kerry’s plan to them at that time…

In a meeting in early December with top Palestinian negotiator Saeb Erekat, US Secretary of State John Kerry told the Palestinians that the US was prepared to cooperate with the Palestinians at the Security council, Israel’s Channel 1 TV said, quoting the Egyptian Al-Youm Al-Sabea newspaper.

Also present at the meeting were US National Security Adviser Susan Rice, and Majed Faraj, director of the Palestinian Authority’s General Intelligence Service.

Kerry is quoted as saying that he could present his ideas for a final status solution if the Palestinians pledge they will support the proposed framework. The US officials advised the Palestinians to travel to Riyadh to present the plan to Saudi leaders.

The Obama administration is denying all of this of course.  But if it is true, then the betrayal of Israel by Obama is much deeper than any of us realized.

With less than a month to go in his presidency, Barack Obama has decided to launch an all-out attack on Israel.  Once Resolution 2334 passed and the uproar against it was limited, that emboldened the Obama administration to go for broke.

Now it looks like they actually could try to get a Palestinian state created before he leaves office on January 20th, and if that happens it will be absolutely catastrophic for America.  You see, the truth is that we have been warned for many years that our land will be divided after the land of Israel is officially divided into two states.  Many of us have been watching for the creation of a Palestinian state for a very long time, and now we may be right on the verge of it happening.

When Donald Trump takes office he would not be able to reverse the creation of a Palestinian state, but one thing that he could do would be to move the U.S. embassy to Jerusalem.

If that happens, the Palestinians are promising to throw a massive temper tantrum…

When asked how the Palestinians would react if Trump carried out his promise to move the US embassy to Jerusalem, Erekat reportedly said the Palestine Liberation Organization would rescind its recognition of Israel and ask Arab states to expel their US envoys.

Erekat made precisely that threat in a December 19 conference call organized by the Wilson Center policy forum. He said he would immediately resign as the chief Palestinian negotiator, and that “the PLO will revoke its recognition of Israel” as well as all previously signed agreements with Israel. Furthermore, said Erekat, all American embassies in the Arab world would be forced to close — not necessarily because Arab leaderships would want to close them, but because the infuriated public in the Arab world would not “allow” for the embassies to continue to operate.

Ultimately, everything that is happening now is setting the stage for the biggest war in the Middle East that we have ever seen.

So instead of this “peace process” being the solution, it is actually going to cause the Middle East to explode in violence.

For a very long time I have been warning that the worst days of the Obama era were still in front of us, and we are currently watching that play out right in front of our eyes.  This betrayal of Israel is the worst thing that he has done during his entire time in the White House, and now America is greatly cursed as a result.

December 27th, 2016 | Tags: 2017, A UN Security Council Resolution Establishing A Palestinian State, America, America’s Reprieve, Barack Obama And A Palestinian State, Barack Obama Has Betrayed Israel, Barack Obama Has Given East Jerusalem To The Palestinians, Consequences For Dividing The Land Of Israel, Dividing The Land Of Israel, Israel, John Kerry, Michael T. Snyder, Pain, Painful, Palestinian State, Palestinians, Two State Solution, UN Resolution Dividing The Land Of Israel, UN Resolution Establishing A Palestinian State, UN Resolution On A Palestinian State, UN Resolution Palestinian State, UN Resolution To Divide The Land Of Israel, UN Security Council Resolution 2334 | Category: Commentary

end

6.GLOBAL ISSUES

India

Chaos strikes India.  Of the 15.3 trillion rupees issued of our two demonitized notes, 14 trillion has already been handed in.  The government expected 5 trillion would remain outstanding and not to be returned for fear of tax evasion.  It seems that the government guessed wrong, but Modi, not to be undone, it contemplating more harsh measures which will further kill his country.  He is one complete moron

(courtesy zero hedge)

Both API and DOE report bigger inventory builds but USA production dipped very modestly

Oil Slides After Bigger Than Expected Inventory Build

8. EMERGING MARKETS

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.754% DOWN 2  in basis point yield from WEDNESDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.04% DOWN  2  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.326%  DOWN 2  IN basis point yield from  WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.795  DOWN  2  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.175% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.0473 UP .0060 (Euro UP 60 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 116.47 DOWN: 0.608(Yen UP 61 basis points/ 

Great Britain/USA 1.2224 UP 0.0007( POUND UP 7 basis points)

USA/Canada 1.3516 DOWN 0.0044(Canadian dollar UP 44 basis points AS OIL FELL TO $53.71

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This afternoon, the Euro was UP by 60 basis points to trade at 1.0473

The Yen ROSE to 116.47 for a GAIN of 61 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 ROSE 7  basis points, trading at 1.2224/

The Canadian dollar ROSE by 44 basis points to 1.3516,  WITH WTI OIL FALLING TO :  $53.71

The USA/Yuan closed at 6.9534

the 10 yr Japanese bond yield closed at +.04% DOWN 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 6 IN basis points from WEDNESDAY at 2.481% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.1082 DOWN 3  in basis points on the day /

Your closing USA dollar index, 102.72 DOWN 50 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 THURSDAY: 1:30 PM EST

London:  CLOSED UP 14.18 OR .20% 
German Dax :CLOSED DOWN 23.94 POINTS OR 0.21%
Paris Cac  CLOSED DOWN 9.54 OR 0.20%
Spain IBEX CLOSED DOWN 17.80 POINTS OR 0.19%
Italian MIB: CLOSED DOWN 35.45 POINTS OR 0.18%

The Dow was DOWN 13.90 POINTS OR .07% 4 PM EST

NASDAQ WAS DOWN 6.47 POINTS OR .12%  4.00 PM EST
WTI Oil price;  53.71 at 1:00 pm; 

Brent Oil: 56.01  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  60.43 (ROUBLE UP  5/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS  TO +0.175%  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:$53.85

BRENT: $56.83

USA 10 YR BOND YIELD: 2.477%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.079%

EURO/USA DOLLAR CROSS:  1.0486 up .0073

USA/JAPANESE YEN:116.54  down 0.542

USA DOLLAR INDEX: 102.63  down 59  cents (BREAKS HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2252 : up 35  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.175%

END

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

TRADING IN GRAPH FORM

Bonds & Bullion Bounce But Banks Bruised As Dollar Dumps

 

Interesting day…

 

Bonds & Bullion now outpacing stocks post-Fed… (and bank stocks are down 1.6% post-fed)

 

Once again the opening ramp but it was lackluster as hopes for Dow 20,000 are dashed for now as pension rebalancing (and front-running tax-selling) accelerates…WTF was that idiotic panic buying atthe close in Small Caps!??

 

On the week, Trannies are worst…

 

VIX briefly tagged 13.5 today with The Dow now 200 points from Dow 20k…

 

Utilities are now the only sector green post-Xmas with financials underperforming… Financials biggest 2-day drop in 3 months

 

5Y yields dropped below 2.00% for the first time in 10 days, 10Y below 2.50%, and 3Y below 1.50% following the super strong 7Y auction…NOTE the 10Y yield briefly dipped lower post-Fed intraday but 30Y is -5bps…

This is the best 2 day drop in 5Y yields (-10bps) since June 27th.

As a reminder, despite the non-stop spewing on mainstream media, the yield curve is notably flatter post-Trump… not steeper!

 

The USD Index tumbled most since november 1st…

 

Led by JPY strength (on bank derisking following Toshiba contagion)

 

USD weakness sent PMs and copper higher but crude fell after inventory data…

 

WTI broke its 8-day win streak…

 

Gold is now up 5 days in a row…longest streak since before election

 

But we note that of all the precious metals, only Palladium is green post-Trump…

 

For the first time in the contracts’ history, the Jan/Feb Gasoline spread has moved into backwardation (Bloomberg reports that recent regional refinery outages at PES Philadelphia Energy Solutions Inc. and Irving Oil Lt.’s Saint John unit have limited supplies to New York Harbor, pushing front month contracts higher than the forward period).

• Backwardation
• Deris

Strange:  continuing jobless claims soar the most since 2009 right after the Trump election.
(courtesy zero hedge)

Narrative Breaks – Continuing Jobless Claims Soar Most Since 2009 Following Trump’s Election

This does not fit with the narrative. Continuing Jobless Claims are up over 6% in the weeks following Donald Trump’s election…

This is the biggest surge since May 2009…

Finally, while Jeffrey Gundlach’s “granddaddy of recession indicators” is based on the unemployment rate, we note that initial jobless claims are rapidly approaching their 2-year average – which in the past has probabilisticly been followed by a recession…

Still stocks are at record highs so what could possibly go wrong?

end

The soaring dollar hits the uSA trade deficit right in the nose as it rose from a huge 61.9 billion deficit to 65.3 billion in November.  This should automatically lower 4th quarter estimation down .2- .4%.  The Atlanta Fed’s last estimation of 4th quarter GDP was 2.5% growth

(courtesy zero hedge)

Soaring Dollar Hits US Trade, Sends Goods Trade Deficit To Highest Since March 2015

Who could have possibly thought that a soaring dollar would have an adverse impact on the US trade deficit, and thus, the US economy. Well, not the Fed, if only for now, because just as the Fed hiked rates only for the second time in a decade, the US advance goods trade deficit soared from $61.9 billion to $65.3 billion, far higher than the consensus print of $61.6 billion. This was the highest advance trade gap since March of 2015 when the dollar was likewise soaring.

The reason for the far greater than expected deficit: exports of goods fell 1.0%, while imports of goods rose 1.2%.

Exports of Goods were down 0.99% in November, according to the advance estimate. Most of this $1.2 billion decline came from a $1.8 billion drop in exports of capital goods, which was offset by a $1.2 billion rise in exports of industrial supplies.

Imports of Goods were up 1.19% in November, according to the advance estimate. This $2.2 billion rise was largely a result of a $2.0 billion rise in industrial supplies imports.

All else, equal, this means that Q4 GDP is about to be revised between 0.2% and 0.4% lower, from its current perch, which according to the Atlanta Fed is currently at 2.5%.

end

Obama is set to announce retaliation against Russia for the “hacking” into the Democratic Party computers during the Presidential election

(courtesy zero hedge/two commentaries)

Obama To Announce “Retaliation” Measures Against Russia As Early As Today

With Obama vacating the White House in just over three weeks, the outgoing president is seemingly eager to make relations between the US and Russia as untenable as possible in his last days on the job (or as the Russian foreign ministry put it, “after him the deluge” comparing Obama to a certain French monarch) and ignoring today’s warning that Russia would immediately respond to any sanctions by the White House, Obama is expected to announce a series of “retaliatory” measure against Russia for “meddling in the US election” as soon as Thursday, CNN reports .

As we detailed previously, the delay in sanctions against Russia had resulted 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 US assets 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.

Additionally, earlier reports of Obama sanctions resulting in a warning by the Russian Foreign Ministry which on Wednesday said that any action by the US would lead to a prompt Russian retaliation.

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.

* * *

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.”

Fast forward just a few hours when CNN reported that the “Obama administration is preparing to announce, as soon as Thursday, a series of retaliation measures against Russia for meddling in the US election” even though the US has yet to demonstrate any evidence of Russian intervention, in effect making any action endorsed by Obama yet another unprovoked strike against a sovereign nation. Perhaps the only difference from the Iraq invasion is that this time the US is not “positive” Russia is also guilty of holding weapons of mass cyberdestruction.

Obama has been under pressure from some Democrats to issue a response to Russia over the hacking before he cedes the White House to Donald Trump in January. Critics fear that Trump, who has expressed a desire for warmer relations with the Kremlin, will take no action against Russia. which seemingly is unacceptable when engaging yet another fact-free narrative fabricated by the CIA.

The actions expected to be unveiled by Obama include expanded sanctions and diplomatic measures, the officials said, in what the administration deems a proportional response to a Russian operation that went beyond cyber hacking activities common among nations.

The problem, as the WaPo noted last night, is that if the administration relies on the original 2015 executive order which will be invoked to launch this diplomatic “retaliation”, it will also have to demonstrate some proof that the individuals or entities it names were involved in the scheme, and until now, the White House has provided no documentation to back up its official October assessment that the Russian government was attempting to “interfere” in the U.S. election besides just repeating the allegation over and over and over, as if that somehow makes it true.

Ultimately, any action Obama launches will likely be undone by Trump in less than a month, which is why the only question is how material Obama’s action would be, and what if any, the Russian retaliation will be shortly thereafter.

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As promised the USA announces sanctions against Russia.  They expel 35 diplomats for the election hacking plus sanctions against Russian entities

We now await Mr Putin’s turn to retaliate:

(courtesy zero hedge)

US Announces Sanctions Against Russia, Expels 35 Diplomats In Retaliation For Election “Hacking”

As promised (or threatened), the Obama administration has just unveiled – via US Treasury – new sanctions against Russia over election hacking allegations (that as yet have not been supported by any actual evidence). Despite president-elect Trump’s comments that “we ought to get on with our lives,” the sanctions apply to five entities and six individuals. In addition, US officials are expelling 35 Russian diplomats.

As Bloomberg reports, among those targeted were officials of GRU, Russia’s military intelligence agency, which cybersecurity experts in the U.S. have linked to the hacking of the Democratic National Committee and party officials through a group they have nicknamed APT 28 or Fancy Bear. The U.S. also is sanctioning some Russian state institutions and cyber companies associated with them.

Issuance of Amended Executive Order 13694; Cyber-Related Sanctions Designations

12/29/2016

Today, the President issued an Executive Order Taking Additional Steps To Address The National Emergency With Respect To Significant Malicious Cyber-Enabled Activities.  This amends Executive Order 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities.”  E.O. 13694 authorized the imposition of sanctions on individuals and entities determined to be responsible for or complicit in malicious cyber-enabled activities that result in enumerated harms that are reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States.  The authority has been amended to also allow for the imposition of sanctions on individuals and entities determined to be responsible for tampering, altering, or causing the misappropriation of information with the purpose or effect of interfering with or undermining election processes or institutions.  Five entities and four individuals are identified in the Annex of the amended Executive Order and will be added to OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List).  OFAC today is designating an additional two individuals who also will be added to the SDN List.

Specially Designated Nationals List Update

---

The following individual has been added to OFAC’s SDN List:

• ALEXSEYEV, Vladimir Stepanovich; DOB 24 Apr 1961; Passport 100115154 (Russia); First Deputy Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).
• BELAN, Aleksey Alekseyevich (a.k.a. Abyr Valgov; a.k.a. BELAN, Aleksei; a.k.a. BELAN, Aleksey Alexseyevich; a.k.a. BELAN, Alexsei; a.k.a. BELAN, Alexsey; a.k.a. “Abyrvaig”; a.k.a. “Abyrvalg”; a.k.a. “Anthony Anthony”; a.k.a. “Fedyunya”; a.k.a. “M4G”; a.k.a. “Mag”; a.k.a. “Mage”; a.k.a. “Magg”; a.k.a. “Moy.Yawik”; a.k.a. “Mrmagister”), 21 Karyakina St., Apartment 205, Krasnodar, Russia; DOB 27 Jun 1987; POB Riga, Latvia; nationality Latvia; Passport RU0313455106 (Russia); alt. Passport 0307609477 (Russia) (individual) [CYBER2].
•  BOGACHEV, Evgeniy Mikhaylovich (a.k.a. BOGACHEV, Evgeniy Mikhailovich; a.k.a. “Lastik”; a.k.a. “lucky12345”; a.k.a. “Monstr”; a.k.a. “Pollingsoon”; a.k.a. “Slavik”), Lermontova Str., 120-101, Anapa, Russia; DOB 28 Oct 1983 (individual) [CYBER2].
•  GIZUNOV, Sergey (a.k.a. GIZUNOV, Sergey Aleksandrovich); DOB 18 Oct 1956; Passport 4501712967 (Russia); Deputy Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).
•  KOROBOV, Igor (a.k.a. KOROBOV, Igor Valentinovich); DOB 03 Aug 1956; nationality Russia; Passport 100119726 (Russia); alt. Passport 100115101 (Russia); Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).
•  KOSTYUKOV, Igor (a.k.a. KOSTYUKOV, Igor Olegovich); DOB 21 Feb 1961; Passport 100130896 (Russia); alt. Passport 100132253 (Russia); First Deputy Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

The following entities have been added to OFAC’s SDN List:

•  AUTONOMOUS NONCOMMERCIAL ORGANIZATION PROFESSIONAL ASSOCIATION OF DESIGNERS OF DATA PROCESSING SYSTEMS (a.k.a. ANO PO KSI), Prospekt Mira D 68, Str 1A, Moscow 129110, Russia; Dom 3, Lazurnaya Ulitsa, Solnechnogorskiy Raion, Andreyevka, Moscow Region 141551, Russia; Registration ID 1027739734098 (Russia); Tax ID No. 7702285945 (Russia) [CYBER2].
•  FEDERAL SECURITY SERVICE (a.k.a. FEDERALNAYA SLUZHBA BEZOPASNOSTI; a.k.a. FSB), Ulitsa Kuznetskiy Most, Dom 22, Moscow 107031, Russia; Lubyanskaya Ploschad, Dom 2, Moscow 107031, Russia [CYBER2].
•  MAIN INTELLIGENCE DIRECTORATE (a.k.a. GLAVNOE RAZVEDYVATEL’NOE UPRAVLENIE (Cyrillic: ??????? ???????????????? ??????????); a.k.a. GRU; a.k.a. MAIN INTELLIGENCE DEPARTMENT), Khoroshevskoye Shosse 76, Khodinka, Moscow, Russia; Ministry of Defence of the Russian Federation, Frunzenskaya nab., 22/2, Moscow 119160, Russia [CYBER2].
•  SPECIAL TECHNOLOGY CENTER (a.k.a. STC, LTD), Gzhatskaya 21 k2, St. Petersburg, Russia; 21-2 Gzhatskaya Street, St. Petersburg, Russia; Website stc-spb.ru; Email Address stcspb1@mail.ru; Tax ID No. 7802170553 (Russia) [CYBER2].
•  ZORSECURITY (f.k.a. ESAGE LAB; a.k.a. TSOR SECURITY), Luzhnetskaya Embankment 2/4, Building 17, Office 444, Moscow 119270, Russia; Registration ID 1127746601817 (Russia); Tax ID No. 7704813260 (Russia); alt. Tax ID No. 7704010041 (Russia) [CYBER2].

*  *  *

Additionally – potentially unrelated:

• U.S. TO CLOSE TWO RUSSIAN COMPOUNDS IN MARYLAND AND NEW YORK USED FOR INTELLIGENCE-RELATED ACTIVITIES – U.S. OFFICIAL
• U.S. EXPELS 35 RUSSIAN DIPLOMATS IN WASHINGTON AND SAN FRANCISCO, GIVES THEM 72 HOURS TO LEAVE – U.S. OFFICIAL

Bloomberg reports that The FBI and Homeland Security Department will release a report Thursday with technical evidence intended to prove Russia’s military and civilian intelligence services were behind hacking attacks during this year’s presidential campaign, according to a U.S. official.

The documentation will be offered in tandem with sanctions that the Obama administration announced Thursday in retaliation for the breach of Democratic National Committee e-mails as Democrat Hillary Clinton and Republican Donald Trump were campaigning for the White House. The Russian government, which has denied responsibility for the hacking, has vowed to respond to any new sanctions with unspecified counter-measures.

The joint report will include newly declassified information exposing the internet infrastructure that Russia used in the cyberattacks, including malware and computer addresses, according to the official who asked asked not to be identified before the report is made public.

The release is intended to serve two purposes: to help prove the Russian government carried out the hacking while also frustrating officials in Moscow by exposing some of their most sensitive hacking infrastructure, the official said.

Now we await Putin’s promised retaliation.

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Russia responds to the sanctions:

(courtesy zero hedge)

 

Russia Responds To Obama Sanctions

Having already made it clear that any sanctions would be met with retaliation, IFX reports that Russian Commissioner Foreign Ministry on human rights, democracy and the rule of law, Konstantin Dolgov exclaimed that “any anti-Russian sanctions are futile and counter-productive.”

Via IFX (Google Translate)

Keyed US anti-Russian sanctions in connection with the alleged cyber attacks from Moscow are counterproductive and are intended to cause damage including the future of the process of restoring bilateral relations, said Commissioner Foreign Ministry on human rights, democracy and the rule of law, Konstantin Dolgov, via “Interfax” .

“Any anti-Russian sanctions are futile and counter-productive,” he said.

“I can only reconfirm that this hysteria demonstrates the complete lack of orientation by the outgoing US administration,” said the Russian diplomat

“Such unilateral steps are pursuing the aim of damage relations and complicate their recovery in the future”, – he said.

As a reminder, Russia had 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.

Sanctions certainly did not hurt before…

 

 

end

Obama Under “Intense Pressure” To Release Evidence Proving Russians Hacked The Election

As noted previously, at some point today the White House is set to unveil new sanction, and other retaliatory “measures” against Russia and specifically the Kremlin, in retaliation for what according to a constantly repetitive narrative has been Russian hacking of the US election. Obama will do so by using a 2015 executive order that would allow the president to freeze the US assets of Russians overseas who have engaged in cyber acts, even though such order only applies to actions that have threatened U.S. national security or financial stability, neither of which have yet been invoked in the current “hacking” scandal.  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 problem is that if the administration relies on the 2015 Executive Order to launch this latest round of diplomatic “retaliation”, it will also have to demonstrate some proof that the individuals or entities it names were involved in the scheme, and until now, the White House has provided no documentation to back up its official October assessment that the Russian government was attempting to “interfere” in the U.S. election besides just repeating the allegation over and over and over, as if that somehow makes it true.

Which perhaps is why this morning The Hill writes that the Obama administration is “under intense pressure to release evidence confirming Russian interference in the presidential election before leaving office.”

As the website correctly note, “the administration up until now has provided little documentation to back up its official October assessment that the Russian government was attempting to “interfere” in the U.S. election.” Actually, it has provided exactly zero documentation, but that has not stopped the media machine from parroting the claims and repeating it ad nauseam, in hopes the emotional appeals through repetition will make it factual.

Just as bad, the Hill also writes that nor has Obama “corroborated subsequent leaks from anonymous officials contending that the CIA believes the campaign was an attempt by Russian President Vladimir Putin to ensure Donald Trump’s victory.”

So where are we in the process of producing evidence? Apparently nowhere:

President Obama has ordered the intelligence community to produce a complete review of its findings before Trump takes office on Jan. 20. The White House has said it will make as much of the report public as it can. But officials have warned that the document will contain “highly sensitive and classified information” and it is unclear how much concrete evidence it will be able to release.

Releasing any documentation of Russian interference would be a slap in the face to Trump, who has rejected assertions that the Kremlin was involved in the hacks on the Democratic National Committee (DNC) and Hillary Clinton campaign chairman John Podesta. The president-elect and his team have treated any suggestion of Russian involvement as an attack on the legitimacy of his election win, and Republican leaders in Congress have treaded carefully on the issue.

Well, let Obama released the proof first, then we’ll worry about “slaps in faces.” For now, all we have are ever louder, if unsubstantiated allegations by the CIA:

The firestorm ignited by the CIA’s assessment has spurred calls from both parties for the administration to provide proof of Russian meddling. In late November, seven Democrats on the Senate Intelligence Committee urged the White House to declassify “additional information concerning the Russian Government and the U.S. election.”

As of last week, they had not yet received a response.

The House Intelligence Committee earlier this month demanded a briefing on the subject, but was rebuffed intelligence leaders, which said that they will not brief Congress again until the completion of the report for the White House.

Journalists have also pushed for more documentation. VICE journalist Jason Leopold and Ryan Shapiro, a Ph.D. candidate at the Massachusetts Institute of Technology (MIT), filed a Freedom of Information Act (FOIA) lawsuit against the CIA, the FBI, the Department of Homeland Security and the Office of the Director of National Intelligence seeking records pertaining to Russian interference.

And even Trump’s transition team has said the White House should provide definitive proof to back up its claims. “If the CIA Director [John] Brennan and others at the top are serious about turning over evidence … they should do that,” Trump aide Kellyanne Conway said earlier this month. “They should not be leaking to the media. If there’s evidence, let’s see it.”

Meanwhile, Obama has asked the public to take the assessment of Russian interference purely on faith, suggesting that “the American people already know everything they need to know to accept the conclusions of the CIA report.” Just like they knew all about Iraq’s “Weapons of Mass Destruction.”

“There are still a whole range of assessments taking place among the [intelligence] agencies,” Obama told NPR earlier this month, referring to the report. “But that does not in any way, I think, detract from the basic point that everyone during the election perceived accurately — that in fact what the Russian hack had done was create more problems for the Clinton campaign than it had for the Trump campaign.”

Private security firms have provided more detailed forensic analysis linking two well-known Russian intelligence groups to the data breach at the DNC. Beyond that, the evidence of Russian interference is compelling, though circumstantial.

Russia has a long history of trying to influence elections across Europe, and intelligence experts say it’s plausible that Putin would see an upside to a Trump White House, given his expressed desire to “get along” with the Kremlin.  He hinted in the fall that he might refuse help to some NATO allies should they be attacked by Russia. The statement sent shock waves through the foreign policy community, as the alliance’s chief purpose has long been to serve as a check on Russian aggression.

Although there is disagreement among lawmakers about whether Russia intended to help Trump, few disagree that the DNC and Podesta hacks were in some way an attempt to meddle in the election. Public reporting and previous briefings by intelligence agencies appear to have convinced them of that.

To be sure, the neocons in the Senate are getting restless and are desperate to damage relations with Russia even more: “There are 100 United States senators. … I would say that 99 percent of us believe that the Russians did this, and we’re going to do something about it,” Sen. Lindsey Graham (R-S.C.) told CNN’s Jim Sciutto on “The Situation Room” on Tuesday.  Lawmakers have vowed to hold hearings on the matter when Congress returns in January.

Obama, meanwhile, has promised to deliver his report to Congress and release what he can as soon as the intelligence community completes it. “I’m sure what is happening right now is they are going through the calculus of, ‘How much intelligence, how many sources and methods are we willing to burn to make our point?’” said one former White House official.

“My guess is they will have information that indicates course of conduct and links to activities that suggest motivation,” but no smoking gun that will convince those who aren’t already convinced, he said.

“I think the link between what [the public] gets to see and whatever retaliatory action [Obama takes] is going to be very, very tight,” the former official said.  “Showing information is a necessary precondition for most of the public types of retaliation that have been contemplated.”

Except, apparently, in this case, in which Obama is again set to launch a cyberwar shot across the Russian bow with the US public once again expected to believe that its administration would never lie to it.

And with that we await for Obama to disclose just which Russians it has decided to put on the latest sanctions “black list”, and whose assets Washington believes it can confiscate without suffering consequences that are too great. And, of course, we will eagerly look forward to the imminent Russian counter-retaliation due out shortly after.

end

The FBI provides no proof on the Russian hacking.  If this is all they have, then Putin will be laughing all night;

(courtesy zero hedge)_

“Grizzly Steppe” – FBI, DHS Release “Report” On Russian Hacking

As part of the “evidence” meant to substantiate the unprecedented act of expelling 35 Russian diplomats and locking down two Russian compounds without a major concurrent political or diplomatic incident, or an act of war, and which simply provides an outlets for the Democrats to justify the loss of their candidate in the US presidential election (sorry, Putin did not tell the rust belt how to vote), the Department of Homeland Security and the FBI released a 13-page “report” on the Russian action done “to compromise and exploit networks and endpoints associated with the U.S. election”, i.e., hack it.

As the DHS writes, “this document provides technical details regarding the tools and infrastructure used by the Russian civilian and military intelligence Services (RIS) to compromise and exploit networks and endpoints associated with the U.S. election, as well as a range of U.S. Government, political, and private sector entities. The U.S. Government is referring to this malicious cyber activity by RIS as GRIZZLY STEPPE.”

Where things get awkward, however, is at the very start of the report, which prefaced by a broad disclaimer, according to which nothing in the report is to be relied upon and that everything contained in it may be completely false.

No really: “this report is provided “as is” for informational purposes only. The Department of Homeland Security (DHS) does not provide any warranties of any kind regarding any information contained within. DHS does not endorse any commercial product or service referenced in this advisory or otherwise.”

Which then begs the question who provides warranties of any kind to the allegation that Russia hacked the election, the 13-page report supposedly provides technical details regarding tools and infrastructure used by Russian civilian and military intelligence services to “compromise and exploit networks and endpoints associated with the U.S. election, as well as a range of U.S. Government, political, and private sector entities.”

So with that useful background in mind, we present some more notable excerpts from the report, where we get an introduction to the alleged Russian “parties” –  APT and APT 28. and note that nowhere in the report is it actually confirmed that these are the two alleged hackers or that they were instructed to “hack” the DHS (or the election as Obama puts it) by the Kremlin.

The U.S. Government confirms that two different RIS actors participated in the intrusion into a U.S. political party. The first actor group, known as Advanced Persistent Threat (APT) 29, entered into the party’s systems in summer 2015, while the second, known as APT28, entered in spring 2016.

Both groups have historically targeted government organizations, think tanks, universities, and corporations around the world. APT29 has been observed crafting targeted spearphishing campaigns leveraging web links to a malicious dropper; once executed, the code delivers Remote Access Tools (RATs) and evades detection using a range of techniques. APT28 is known for leveraging domains that closely mimic those of targeted organizations and tricking potential victims into entering legitimate credentials. APT28 actors relied heavily on shortened URLs in their spearphishing email campaigns. Once APT28 and APT29 have access to victims, both groups exfiltrate and analyze information to gain intelligence value. These groups use this information to craft highly targeted spearphishing campaigns. These actors set up operational infrastructure to obfuscate their source infrastructure, host domains and malware for targeting organizations, establish command and control nodes, and harvest credentials and other valuable information from their targets.

While there is more in the report below, essentailly what it does is blames several “known” Russian hacking organizations for what was simply a very unsophisticated phishing attack, one which could have been conducted by any 15-year-old in Cambodia or any other location around the globe.

The report comes as part of a slate of retaliatory measures against Russia issued Thursday by the Obama administration in response to the hacks. The Intelligence Community in October formally attributed the attacks to Russia, but provided no evidence to support its assessment.  It is unclear if this report, for which the DHS “does not provide any warranties of any kind regarding” its contents is what is supposed to pass off as “proof” that Russia hacked the US election; if so, Putin will indeed be laughing all night.

end

 

The Russian Embassy in the UK mock Obama:

“Lame Duck President”

(courtesy zero hedge)

Obama Mocked By Russian Embassy: “Everyone Will Be Glad To See The Last Of This Hapless Administration”

The following tweet, just sent out by the traditionally outspoken Russian Embassy in the UK, hardly needs commentary.

View image on Twitter

Follow

Russian Embassy, UK ✔@RussianEmbassy

President Obama expels 35 diplomats in Cold War deja vu. As everybody, incl people, will be glad to see the last of this hapless Adm.

3:09 PM – 29 Dec 2016

end

that is all for tonight

I will see you tomorrow night

Harvey