JAN 13/Gold and silver under pressure with their usual Friday whack/gold and silver equity shares rise/JPMorgan continues to acquire silver each and every day this year/China very concerned with Tillerson’s remarks with respect to China’s policy in the South China Seas/Now it is Renault which joins Fiat and Volkswagen with fraudulent emissions installations in their respective cars/Dunn and Bradstreet lowers credit rating on Italy and that will be costly to owners of bonds and also increase collateral requirements/bank of America, JPMorgan and Wells Fargo all disappoint/Chief national guard responsible for Trump inauguration fired unexpectedly!! final draft!!

Gold at (1:30 am est) $1195.30 down $3.60

silver  at $16.72:  DOWN 6 CENTS

Access market prices:

Gold: $1198.00

Silver: $16.81

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:

FRIDAY gold fix Shanghai

Shanghai FIRST morning fix Jan 13/17 (10:15 pm est last night): $  1209.03

NY ACCESS PRICE: $1191.90 (AT THE EXACT SAME TIME)/premium $17.13

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1212.75

NY ACCESS PRICE: $1195.20 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!:  $17.55

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Jan 13/2017: 5:30 am est:  $1196.35   (NY: same time:  $1197.20   (5:30AM)

??????

London Second fix Jan 13.2017: 10 am est:  $1190.35 (NY same time: $1190.60  (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 JANUARY CONTRACT MONTH:  0 NOTICE(S) FOR nil OZ.  TOTAL NOTICES SO FAR: 1046 FOR 104,600 OZ    (3.2534 TONNES)

For silver:

 NOTICES FOR JANUARY CONTRACT MONTH FOR SILVER: 0 NOTICE(s) FOR nil  OZ. TOTAL NUMBER OF NOTICES FILED SO FAR; 432 FOR 2,160,000 OZ

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL by 545  contracts DOWN to 167,986 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .840 BILLION TO BE EXACT or 120% of annual global silver production (ex Russia & ex China).

FOR THE JANUARY FRONT MONTH IN SILVER:  0 NOTICES FILED FOR nil  OZ.

In gold, the total comex gold ROSE BY  6780 contracts WITH THE RISE IN  THE PRICE GOLD ($3.30 with YESTERDAY’S trading ).The total gold OI stands at 452,370 contracts.

we had 0 notice(s) filed upon for nil oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

We had no  change in tonnes of gold at the GLD/

Inventory rests tonight: 805.00 tonnes

.

SLV

we had no changes in silver into the SLV:

THE SLV Inventory rests at: 338.356 million oz

.

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

1. Today, we had the open interest in silver FELL by 545 contracts DOWN to 167,986 AS SILVER remained unchanged with YESTERDAY’S trading. The gold open interest ROSE by 6,780 contracts UP to 452,370 AS THE  PRICE OF GOLD ROSE BY $3.30 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

2c) COT report

Harvey

3. ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 6.52 POINTS OR 0.21%/ /Hang Sang closed UP 108.36 OR 0.47%. The Nikkei closed UP 152.58 POINTS OR 0.80% /Australia’s all ordinaires  CLOSED DOWN 0.77%/Chinese yuan (ONSHORE) closed DOWN at 6.9002/Oil FELL to 52.61 dollars per barrel for WTI and 55.65 for Brent. Stocks in Europe: MOSTLY IN THE GREEN. Offshore yuan trades  6.8407 yuan to the dollar vs 6.9004  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AGAIN AS  DOLLARS STOP LEAVING CHINA’S SHORES /

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

 none today

c) REPORT ON CHINA

China reacts to Tillerson’s “disastrous” policy  towards China’s pushing the envelop with respect to the South China’s seas.  Chinese officials see a huge devastating confrontation on the issue:

( zero hedge)

4 EUROPEAN AFFAIRS

i)FRANCE:Renault

Oh no!! just one day after Fiat Chrysler gets nailed we now see France’s Renault get nailed for cheating on emissions’

 

( zerohedge)

ii)Germany/Volkswagen:

Volkswagen upper management is telling its managers not to travel to the USA because of the threat of being nabbed for criminal fraud on the emissions scandal.

( zero hedge)

iii)Italy/Fiat:

Yesterday it was the EPA which announced that Fiat also engaged in criminal fraud by cheating on its emissions software.  Now we see that the Dept of Justice is set to go on a criminal emissions probe

( zero hedge)

iv)Now Dunn and Bradstreet downgrades Italy.  This is huge as more collateral will be necessary i.e. the ECB will demand for collateral for all of the bonds that it stores as swaps with hedge funds and the central bank of Italy

(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Israel/Syria

Israeli jets from inside Israel bomb the Damascus Military airport. Hezbollah has been storing more sophisticated weaponry there and thus the need for Israel to obliterate these weapons

( zero hedge)

ii)Turkey/Deutsche bank

Interesting:  Deutsche bank now accuses Deutsche bank of “economic terrorism” as the bank called in a considerable amount of outstanding Turkish loans. Actually Turkey is right but their economic terrorism is due to their massive amount of derivatives outstanding

(courtesy zero hedge)

6.GLOBAL ISSUES

Mexican drug cartels are finding new ways to defeat the state.  Angered by the huge 20% rise in taxes on gasoline, the thugs decided to penetrate state pipelines carrying the gas, upon which they siphoned off considerable supplies and then sold them to needy patrons desperate for lower prices on gas

( zero hedge)

7. OIL ISSUES

i)Many Chinese tankers are holding massive amounts of oil offshore.  You will recall that China has been buying large quantities of oil and story them in caverns. However it looks like these are now full and that is why tankers are still loaded with oil off shore.

( zero hedge)

ii)rig counts finally decline.  However crude production has surged with the huge number of rigs employed

(courtesy zero hedge

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)An excellent commentary on how the BIS is controlling the price of gold through swaps

 

( Robert lambourne/London’s Financial Times)

ii)We all agree that the physical price of gold will eventually defeat the paper price

( John Hathaway/Tocquille gold funds)

 

10.USA STORIES

i)S and P downgrades the City of Dallas plagued by the huge police and fire pension scandal

( zero hedge)

ii)This week he highlighted Bank of America’s commentary on the weakness of sales in the USA through the December holiday season.  They are correct:  core retail sales are the weakest in almost 3 years:

( zero hedge)

iii)This is not good.  Today core PPI came in red hot.  PPI is a good forecaster of future consumer price increase.  The USA is heading for stagflation which is a rise in inflation with stagnant growth

( zero hedge)

iv)U. of Michigan consumer sentiment confidence dropped from 89.5 to 88.9.  So ends the Trump bump:

( zero hedge)

v)Michael Snyder  is taking exception to the “strong” USA economy.  He states that if the economy is that strong, why are WalMart, Boeing and Lowe’s laying off workers?

 

( Michael Snyder/Economic Collapse Blog)

vi)Bank of America misses revenues and only because of accelerated expense reductions does earnings rise

( zerohedge)

vii)JPMorgan also disappoints despite an earnings jump:

( zero hedge)

viii)Rising rates are killing this huge mortgage lender, Wells Fargo

( zero hedge)

ix)Bill Holter and I have been detailing to you what will happen once a border tax is implemented.  Here is a great summary of potential winners and losers in this game:

( zerohedge)

( zero hedge)

xi)Guys and Gals;  I do not like this!! The DC National Guard Chief has been fired 7 days before inauguration:  the timing is extremely suspicious!

( zerohedge)

xii)The house passes the budget resolution which now clears the path

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 6,780 CONTRACTS UP to an OI level of 452,370 AS THE  PRICE OF GOLD ROSE $3.30 with YESTERDAY’S trading.  We are now in the contract month of JANUARY and it is one of the poorest deliveries of the year.

With the front month of January we had a LOSS of 1 contract(s) DOWN to 135.  We had 0 notices filed yesterday. so we GAIN OF 100 contract(s) or AN ADDITIONAL 10,000 oz WILL STAND for gold in this non active delivery month of January. For the next big active delivery month of February we had a LOSS of 6,789 contracts DOWN to 234,272. March had a LOSS of 8 contracts as it’s OI is now 520. We are on a par with respect to OI when we compare data for open interest Feb 2016.

We had 0 notice(s) filed upon today for nil oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI FELL by 545 contracts FROM  168,531 UP TO 167,986 AS the price of silver REMAINED UNCHANGED 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 non active delivery month of January and here the OI FELL by 1 contract(s) falling TO  229. We had 0 notice(s) filed on yesterday so we lost 1 silver contracts  or an additional 5,000 oz will not stand for metal in this non active month. The next non active month of February saw the OI rise by 107 contract(s) RISING TO  314.

The next big active delivery month is March and here the OI FALL by 2177 contracts DOWN to 131,228 contracts.

We had 0 notice(s) filed for nil oz for the January contract.

VOLUMES: for the gold comex

Today the estimated volume was 337,055  contracts which is excellent.

Yesterday’s confirmed volume was 317,752 contracts  which is excellent

Initial standings for january
 Jan 13/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 44,937.656 OZ
SCOTIA
BRINKS
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 65,2374.511 OZ
SCOTIA
No of oz served (contracts) today
 
0 notice(s)
nil oz
No of oz to be served (notices)
235 contracts
23,500 oz
Total monthly oz gold served (contracts) so far this month
1046 notices
104,600 oz
3.2534 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     4,750,367.9 oz
Today we HAD 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1  customer deposit(s):
i) Into Scotia;
65,274.511 oz
total customer deposits; 65,274.511 oz
We had 2 customer withdrawal(s)
i) Out of Scotia: 1511.05 oz
ii) out of Brinks; 47,426.600 oz
total customer withdrawal: 128,002.673 oz
We had 0  adjustment(s)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
For January:

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the JANUARY. contract month, we take the total number of notices filed so far for the month (1046) x 100 oz or 104,600 oz, to which we add the difference between the open interest for the front month of JANUARY (235 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 128,100 oz, the number of ounces standing in this non  active month of JANUARY.
 
Thus the INITIAL standings for gold for the JANUARY contract month:
No of notices served so far (1046) x 100 oz  or ounces + {OI for the front month (235) minus the number of  notices served upon today (0) x 100 oz which equals 118,100 oz standing in this non active delivery month of JANUARY  (3.9844 tonnes)
On first day notice for January 2016, we had .9642 tonnes of gold standing. At the conclusion of the month we had only .5349 tonnes standing so you can visualize the increasing demand for physical gold a t the comex.
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 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
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
JAN/     3.9844 tonnes
total for the 13 months;  226.374 tonnes
average 17.413 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
On first day notice for January 2016, we had .9642 tonnes of gold standing. At the conclusion of the month we had only .5349 tonnes standing so you can visualize the increasing demand for physical gold a t the comex.
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 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
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
JAN/     3.9844 tonnes
total for the 13 months;  226.374 tonnes
average 17.413 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventor 1,455,213.516 or 45.263 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,978,715.161 or 279.27 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.64 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 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 5 MONTHS  75 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
JANUARY INITIAL standings
 Jan 13. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 1,183,292.822 0z
CNT
BRINKS
DELAWARE
HSBC
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
1,206,254.370 oz
JPM
Scotia
No of oz served today (contracts)
0 CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
229 contracts
(1,145,000  oz)
Total monthly oz silver served (contracts) 432 contracts (2,160,000 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  14,673,224.4 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 4 customer withdrawal(s):
i) Out of CNT: 276,650.868 oz
ii) Out of BRINKS: 5010.600 oz
iii) Out of Delaware: 215,537.654 oz
iv) Out of HSBC: 686,093.700 oz
TOTAL CUSTOMER WITHDRAWALS: 1,183,292.822 oz
 we had 2 customer deposit(s):
i) Into JPMorgan:  608,201.510 oz**
** JPMorgan has deposited a huge amount of silver on each and every day starting in 2017:
ii) Into Scotia; 598,052.860 oz
total customer deposits;  1,206,254.37   oz
TED BUTLER IS CORRECT:  JPMORGAN IS MASSIVELY ACQUIRING SILVER.
 
 
 we had 0  adjustment(s)
The total number of notices filed today for the JANUARY. contract month is represented by 0 contract(s) for nil oz. To calculate the number of silver ounces that will stand for delivery in JANUARY., we take the total number of notices filed for the month so far at  432 x 5,000 oz  = 2,160,000 oz to which we add the difference between the open interest for the front month of JAN (229) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JANUARY contract month:  432(notices served so far)x 5000 oz +(229) OI for front month of JAN. ) -number of notices served upon today (0)x 5000 oz  equals  3,305,000 oz  of silver standing for the JAN contract month. This is  STILL huge for a non active delivery month in silver. We  lost 1 contracts or an additional 5,000 oz will not stand.
At first day notice for the January/2016 silver contract month we had 1,845,000 oz standing for delivery.  By he conclusion of the delivery month we had only 575,000 oz stand.
END
Volumes: for silver comex
Today the estimated volume was 64,765 which is excellent
YESTERDAY’S  confirmed volume was 69,363 contracts  which is EXCELLENT.
 
Total dealer silver:  29.202 million (close to record low inventory  
Total number of dealer and customer silver:   180.808 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

 

At 3:30 pm est we receive the COT report which gives us position levels of our major players. You will recall that the bankers hoodwinked the specs into going net short for the past 3 weeks. Let us see what happened this week:

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
214,000 104,518 89,161 96,763 222,579 399,924 416,258
Change from Prior Reporting Period
5,145 -7,787 18,140 -647 7,557 22,638 17,910
Traders
162 91 80 50 48 246 192
 
  Small Speculators      
  Long Short Open Interest    
  44,077 27,743 444,001    
  -3,310 1,418 19,328    
  non reportable positions Change from the previous reporting period  
COT Gold Report – Positions as of Tuesday, January 10, 2017

Our large specs;

those large specs that have been long in gold added 5145 contracts to their long side

those large specs that have been short in gold covered 7787 contracts from their short side as they could not be goaded any more.

 

Our commercials:

our commercials that have been long in gold pitched 647 contracts from their long side.

our commercials that have been short from around 4 BCE until now, added another 7557 contracts to their short side

Our small specs;

those small specs that have been long in gold added 28 contracts to their long side

those small specs that have been short in gold added 215 contracts to their short side

Conclusions: commercials again go net short by 8204 contracts and the game begins again until we put them in their tomb.

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
88,430 23,829 10,536 41,425 120,362
1,609 -1,701 659 -1,068 2,055
Traders
90 38 34 33 39
Small Speculators Open Interest Total
Long Short 165,040 Long Short
24,649 10,313 140,391 154,727
28 215 1,228 1,200 1,013
non reportable positions Positions as of: 136 100
  Tuesday, January 10, 2017   © SilverSeek.c

Our large specs:

those large specs that have been long in silver added 1609 contracts to their long side

those large specs that have been short in silver covered 1701 contracts from their short side.

 

Our commercials;

those commercials that have been long in silver pitched 1068 contracts from their long side

those commercials that have been short in silver added another 2055 contracts to their short side.

 

our small specs;
those small specs that have been long in silver added 28 contracts to their long side

those small specs that have been short in silver added 215 contracts to their short side.

Conclusions: commercials go net short by 3123 contracts and that is again bearish. The game continues until we put the crooks in their tomb.

 

 

 

And now the Gold inventory at the GLD

Jan 13/17/there were no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 12/2017/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 11/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 10/no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 9/A WITHDRAWAL OF 8.87 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 805.00 TONNES

Jan 6/no changes in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 5/no change in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 4/no change in inventory/inventory rests at 813.87 tonnes
Jan 3.2017/a huge 9.49 tonnes of gold leaves the GLD/inventory rests at 813.87 tonnes
DEC 30/no changes in gold inventory at the GLD/Inventory rests at 823.36 tonnes
Dec 29/no changes in gold inventory at the GLD/Inventory rests at  823.36 tonnes
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Jan 13/2017/ Inventory rests tonight at 805.00 tonnes
*IN LAST 69 TRADING DAYS: 144.81 TONNES REMOVED FROM THE GLD
*LAST 16 TRADING DAYS: 19.54 TONNES HAVE LEFT

end

Now the SLV Inventory
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338356 million oz/
Jan 12.2017/ no changes in the SLV Inventory/ rests at 338.356 million oz
Jan 11/ A HUGE WITHDRAWAL F 2.843 MILLION OZ/INVENTORY RESTS AT 338.356 MILLION OZ/
JAN 10/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
JAN 9/no changes in inventory at the SLV/Inventory rests at 341.199 million oz/
jan 6/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 5/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 4/a small withdrawal of 149,000 oz (probably to pay for fees/inventory rests at 341.199 million oz
Jan 3.2017/no changes in silver inventory at the SLV/Inventory rests at 341.348 million oz/
DEC 30/no changes in silver inventory at the SLV/inventory rests at 341.348 million oz/
Dec 29/no changes in silver inventory at the SLV/Inventory rests at 341.348 million oz
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/
.
Jan 13.2017: Inventory 338.356  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.1 percent to NAV usa funds and Negative 6.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.8%
cash .+0.2%( jan 13/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to +.14%!!!! NAV (Jan 13/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO – 0.23% to NAV  ( Jan 13/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.14% /Sprott physical gold trust is back into NEGATIVE territory at -0.23%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE

Gold Lower Before Trump Presidency – Strong Gains Akin To After Obama Inauguration

Gold prices have had a good start to 2017 and has made gains in the majority of currencies, building on the strong gains seen in 2016. So far in 2017, gold is 3.5% higher in dollars, 2.3% higher in euros and 4% higher in sterling.

gold-price-currenciesgold-annual-returns-obamaGold Annual Returns During First Four Years Of Obama Presidency – Goldprice.org

Increasing nerves regarding the Trump Presidency likely account for some of the gains. Although the fundamentals of the gold market remain strong even were Trump not becoming President of the United State of America.

A backdrop of financial repression and global currency debasement involving ultra loose monetary policies and near negative interest rates, a push for cashless society, a still massively indebted U.S. and global economy and still very fragile banking systems all bodes well for gold prices in the coming years – not too mention positive supply demand fundamental that is peak gold.

Trump is icing on the cake in this regard. While it is always best to fade short term noise about breaking news and the latest market developments, ignoring Trump in the White House as an investor is very much a case of trying to ignore a giant white elephant in a very small room.

We should indeed ignore the short term noise of the Trump inauguration next week – although it is set to be compelling box office viewing! However, it would be imprudent to ignore the likely impact of four years of the Trump Presidency on markets and particularly the gold market. On Wednesday past, we had just a little taste of this when his press conference led to turmoil and massive volatility in markets and gold rising on safe haven demand to over $1,200 per ounce.

Trump’s extraordinary press conference this week highlighted the risks facing markets. Geo-political risk in terms of his ongoing war with U.S. intelligence agencies, increasing tensions with Russia, China, the EU, Mexico and other nations and the real risk of trade, currency and actual wars.

Warnings about the likely impact of the Trump Presidency on markets should be considered carefully – especially in the light of the “irrational exuberance” that continues to be seen on U.S. markets with ‘Dow 20,000’ a breadth away and valuations suggesting another massive bubble with all the risks that entails to pensions and investments.

Indeed, there is a strong argument for becoming more cautious and conservative and reducing allocations to risk assets such as stocks and bonds and increasing allocations to gold.

We believe that gold is likely to perform as well in the first four years of the Trump Presidency as it did in the first four years of the Obama Presidency. Past performance is no guarantee of future returns and all the usual caveats that apply in this regard. However, we believe that the over used “perfect storm” is brewing for gold and it will likely outperform risk assets in the coming years.

So how did gold prices perform during the first four years of Obama’s Presidency?

It is hard to believe but President Obama took his oath of office and made his inauguration address 8 years ago next week – on January 20th, 2009.

Gold prices closed on Obama’s inauguration day at $857.25 per ounce (and silver at $11.34 per ounce). Sentiment towards gold was poor as gold prices had “peaked” at near $1,000 per ounce in March 2008.

Subsequently gold had fallen as low as near $700 per ounce in late 2008, correcting lower after the very strong gains seen in the previous years and especially in 2007  and early 2008, at the outset of the global financial crisis.

In dollar terms, gold had risen by 20% in 2005, by 23% in 2006 and by 31% in 2007. It began 2008 with further gains – rising from just below $900 per ounce to near $1,000 per ounce in early 2008, prior to the period of correction and consolidation in the rest of 2008.

So gold had risen relentlessly and had more than doubled in value from near $450 per ounce at the start of 2005 to near $1,000 per ounce in March 2008. Most “experts” including Nouriel Roubini and Paul Krugman were out in force at this time, simplistically declaring gold a risky ‘bubble’ and discouraging investors from diversifying their portfolios and having an allocation to safe haven gold.

There was also a consensus and great ‘hope’ that Obama would clean up Wall Street and put the heavily indebted U.S. economy on a more sustainable financial and economic path – something which never happened.

It was against this backdrop that Obama came to power. Gold was unloved and derided by Wall Street and the financial pundits and languished at $857 per ounce (see chart).

Gold in US Dollars – January 2009 to January 2010 (Bloomberg)

One month later, gold had risen to $992.90/oz and silver to $14.44/oz. Thus, in just the 30 days subsequent to Obama’s inauguration, gold surged nearly 16% and silver surged by over 27%.

Exactly 12 months later on January 20th, 2010, gold had risen to $1,111.05/oz for a gain of nearly 30% in the first year after Obama’s inauguration. In the following 12 months, silver had risen to $17.88/oz for a gain of 57.6% in the first year after President Obama’s inauguration.

A similar performance in the coming month would see gold rise from $1,200/oz to $1,392/oz.
A similar performance in the coming year would see gold rise from $1,200/oz to $1,555/oz.

We caution that these returns subsequent to Obama’s first inauguration are interesting statistics and should not be used as a trading tool. In and of themselves solely they are somewhat meaningless.

Conclusion

Past performance is no guarantee of future returns – especially over short time horizons. However, over the long term, history including market history does tend to, to paraphrase Marc Twain, if not repeat then at least rhyme. This is the case with monetary history – every single fiat currency has ultimately collapsed as have the economies using those fiat currencies.

Given the fact that the U.S. monetary and fiscal position is much worse now than it was 8 years ago – the taboo (for now) U.S. national debt has grown massively – it seems very likely that we will see similar gains for gold in the coming months and years.

On January 20, 2009, when Obama was sworn in, the debt was $10.626 trillion. Today it’s about to reach $20 trillion – at $19.957 trillion. Obama added an incredible $9 trillion to the national debt, more than any other President. Another inconvenient truth ignored by the same experts that continue to either ignore gold or not cover it in a balanced, fact, evidence based manner.

gold-dollars-10-years

We have long stated that we believe gold will reach a record inflation adjusted high over $2,500/oz and we see that as likely during the first four years of the Trump Presidency.

However, gold’s primary function is as a diversification, financial insurance and a hedge against geo-political, systemic and of course monetary risks – all of which abound as we head into the Trump years.

http://www.goldcore.com/us/gold-blog/gold-lower-trump-presidency-strong-gains-akin-obama-inauguration

END

 

An excellent commentary on how the BIS is controlling the price of gold through swaps

 

(courtesy Robert lambourne/London’s Financial Times)

Gold swaps by BIS exploded in 2016 from nothing to record level

Section:

By Robert Lambourne
Thursday, January 12, 2017

Disclosures in the monthly statements of account published by the Bank for International Settlements since March 2016 indicate that in the last nine months of 2016 the bank increased substantially its use of gold swaps.

There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the BIS’ December 2016 statement of account, the bank’s gold swaps likely stood in excess of 480 tonnes as of the end of the calendar year.

This is the BIS’ highest level of gold swaps recorded in recent times.

The BIS’ annual report for its financial year ended March 31, 2010, disclosed that 346 tonnes of gold were acquired through gold swaps from commercial bullion banks. A review of the previous use of gold derivatives by the BIS reveals that the transactions in 2009-10 were far more substantial than anything done by the bank in the years immediately leading up to that.

the use of gold swaps by the BIS increased in the financial year ended March 31, 2011, with 409 tonnes of gold swaps reported. As this chart will show, that was the peak amount reported by the bank prior to this year:

March 2011: 409 tonnes.
March 2012: 355 tonnes.
March 2013: 404 tonnes.
March 2014: 236 tonnes.
March 2015: 47 tonnes.
March 2016: 0 tonnes.

As the table shows, the use of gold swaps by the BIS fell considerably up to March 2016, when the use of swaps appeared to have stopped.

The BIS offers no explanation for its renewed use of gold swaps in its interim financial statements for the 2016-17 financial year, which were published on November 7, 2016. By contrast, back in 2010 the BIS discussed its gold swaps with the Financial Times in an article published on July 29 that year. BIS General Manager Jaime Caruana said the gold swaps were “regular commercial activities” for the bank:

http://www.ft.com/cms/s/0/3e659ed0-9b39-11df-baaf-00144feab49a.html

Here are excerpts from the article:

“Some analysts speculated that the swap deals were a surreptitious bailout of the European banking system ahead of last week’s publication of stress tests. But bankers and officials have described the transactions as ‘mutually beneficial.’ …

“‘The client approached us with the idea of buying some gold with the option to sell it back,’ said one European banker, referring to the BIS.

“Another banker said: ‘From time to time central banks or the BIS want to optimize the return on their currency holdings.'”

It is notable that none of these comments in the FT article focused on the gold market itself but implicitly accepted that gold was being used as collateral to support dollar loans to commercial banks.

An alternative explanation — that the swap transactions were initiated by the BIS to place more unallocated gold in the hands of certain central banks — seemed plausible, since the gold market was tight at the time.

Perhaps not conicidentally, the BIS has renewed its use of gold swaps just when many commentators consider gold market conditions to be tight again, as they were in 2010 and 2011.

—-

Robert Lambourne is a business executive in the United Kingdom and a GATA consultant.

* * *

END

We all agree that the physical price of gold will eventually defeat the paper price

(courtesy John Hathaway/Tocquille gold funds)

Real metal will defeat paper gold someday, Hathaway writes contentedly

Section:

12:34p ET Thursday, January 12, 2017

Dear Friend of GATA and Gold:

In his market letter this month. Tocqueville Gold Fund manager John Hathaway says the physical gold market will defeat the paper gold market someday, leading to a much higher price for the monetary metal.

Can the gold investment industry do anything to hasten the day, or should the industry remain content to collect fees and commissions all the way to the supposed inevitability, even though by then most of its investors may be dead?

Hathaway offers no suggestions but does seem content. His letter is posted at the Tocqueville internet site here:

http://tocqueville.com/insights/gold-strategy-investor-letter-4Q16

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

 

 

END

Your early FRIDAY 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 DOWN to 6.9004(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS COMPLETELY   TO 6.8407 / Shanghai bourse CLOSED DOWN 6.52 POINTS OR 0.21%   / HANG SANG CLOSED UP 108.36 OR 0.47% 

2. Nikkei closed UP 152.58 POINTS OR 0.80%   /USA: YEN RISES TO 114.40

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index RISES TO  101.19/Euro UP to 1.0651

3b Japan 10 year bond yield: RISES TO    +.05%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.40/ 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::  52.61  and Brent: 55.65

3f Gold UP/Yen UP

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

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil 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 10yr bund FALLS TO  +.307%/Italian 10 yr bond yield DOWN  to 1.884%    

3j Greek 10 year bond yield FALLS to  : 6.96%   

3k Gold at $1199.20/silver $16.78(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP  46/100 in  roubles/dollar) 59.30-

3m oil into the 52 dollar handle for WTI and 55 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 114.40 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  1.0067 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0725 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  +.305%

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 2.343% early this morning. Thirty year rate  at 2.940% /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

Futures Rise On Friday 13th Ahead Of Deluge Of Bank Earnings; Dollar Continues To Decline

European shares rose as Fiat rebounded on hopes concerns about parallel to Volkswagen are overblown, Asian stocks were little as Chinese shares fell to the lowest level of 2017 after poor export data, and U.S. equity-index futures rose ahead of a deluge of bank earnings. The dollar is headed for a weekly loss and gold trades at the highest price in almost two months.

On this supposedly unlucky day it’s US bank earnings that are going to be a big attraction with JPM, Wells Fargo and BofA reporting all prior to or at the open. As DB notes overnight, after the Trump trades disappointment this week – which continued yesterday – this will likely impact the overall direction of markets.

The focus this morning however has been the gloomy December trade numbers out of China which were released overnight. In US Dollar terms exports dropped -6.1% yoy in December which is a fair bit more than expected (-4.0% consensus) and also down from -1.6% in the month prior. At the same time imports shrunk to +3.1% yoy (vs. +3.0% expected) from +4.7% and so had the effect of reducing the surplus. A weaker yuan did help to cushion the fall in exports in local currency terms (+0.6% yoy vs. -0.1% expected). The trade surplus was $40.82 billion for December, versus November’s $44.61 billion.

On an annual basis, 2016 exports fell 7.7% and imports down 5.5% . The export drop was the second annual decline in a row and the worst since the depths of the global crisis in 2009. It will be tough for foreign trade to improve this year, especially if the inauguration of Trump and other major political changes limit the growth of China’s exports due to greater protectionist measures, the country’s customs agency said on Friday. It will be tough for foreign trade to improve this year, especially if the inauguration of Trump and other major political changes limit the growth of China’s exports due to greater protectionist measures, the country’s customs agency said on Friday.  China’s trade surplus with the United States was $366 billion in 2015, according to U.S. customs data, which Trump could seize on in a bid to bring Beijing to the negotiating table to press for concessions, economists at Bank of America Merrill Lynch said in a recent research note.

“The trend of anti-globalization is becoming increasingly evident, and China is the biggest victim of this trend,” customs spokesman Huang Songping told reporters. “We will pay close attention to foreign trade policy after Trump is inaugurated president,” Huang said. Trump will be sworn in on Jan. 20.

As we have said for years, central bankers can print everything except trade, and that particular omission is starting to become particularly felt in a world which has grown so reliant on globally interconnected supply chains and logistics.

Meanwhile in capital markets, the dollar headed for a weekly loss and gold traded at the highest price in almost two months as investors were concerned that market moves since the U.S. election have gone too far. European stocks and U.S. equity futures climbed and Chinese shares fell after data on exports. The USD was fractionally lower after touching the lowest point in almost a month on Thursday.

The Stoxx Euro 600 Index rebounded from its biggest drop since the end of November as Federal Reserve Chair Janet Yellen reiterated that the U.S. economy is doing well. The Shanghai Composite Index fell to its lowest level of the year, while the Shenzhen Composite slide to the lowest level in 5 months after a crackdown on insurers and as trade data showed China’s overseas shipments remain subdued.

In a week characterized by a reversal in many of the market moves seen since Donald Trump’s election, Friday will see the release of a report on U.S. holiday-season retail sales as well as earnings from Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co. Since Trump’s victory. The scheduled of financial earnings this morning is as follows:

  • BlackRock (BLK) 6:30am, Exp. $5.02
  • Bank of America (BAC) 6:45am, Exp. $0.38
  • PNC Financial Services (PNC) 6:45am, Exp. $1.85
  • First Republic Bank (FRC) 8am, Exp. $1.03
  • JPMorgan Chase & Co (JPM) 8am, Exp. $1.43
  • Wells Fargo & Co (WFC) 8am, Exp. $1.00

“The banking sector will be the major focus,” said Naeem Aslam, chief market analyst at Think Markets UK. “With rising interest rates and hopes of more friendly regulation, the shares of these banks have a lot of upside in the coming days.”

Overnight, in a town hall meeting, Janet Yellen said that the U.S. economy is doing well, with inflation now pretty close to the Fed’s 2 percent target. The central bank should begin discussing how to shrink its bloated balance sheet this year, according to three regional Fed presidents who stepped up pressure for a debate on when to unwind emergency-era measures that the Fed preferred to postpone.

A snapshot of markets reveals that  the Stoxx Europe 600 Index climbed 0.6 percent at 10:55 a.m. London time, rebounding from a 0.7 percent drop on Thursday. Automakers rose 0.4 percent after tumbling the most since July following U.S. government accusations that Fiat Chrysler Automobiles NV violated pollution laws. Health-care shares rose for the first time in three days after sliding on concern over price pressures under Trump.

The Shanghai Composite Index slid 0.2% in a fourth day of losses, the longest run since October. Overseas shipments dropped 6.1 percent from a year ago in December, China’s customs administration said.

Futures on the S&P 500 Index added 0.2%, on course to erase Thursday’s decline.

In rates, the benchmark 10-year Treasury yield fell one basis point to 2.35 percent, after touching the lowest level since Nov. 30 on Thursday. Bonds fell across Europe, with the yield on U.K. 10-year Gilts climbing two basis points to 1.32 percent and the yield on similar-maturity Greek debt climbing four basis point to 6.8 percent.  The symbiotic dance between the dollar and U.S. Treasury bond yields held firm on Friday. Both headed lower to end a week in which has seen the dollar fall almost 1 percent and yields extend their longest downturn since last summer.

“Bond markets continue to retrace from the yield highs set in the middle of last month,” RBC Capital markets rates strategists wrote in a note to clients on Friday. “The latest move (is) seen as a typical ‘buy-the-rumor-sell-the-fact’ reaction as Donald Trump’s pre-inauguration press conference proved to be a disappointment in terms of forthcoming growth boosting policies,” they said.

* * *

Market Snapshot

  • S&P 500 futures up 0.2% to 2268
  • Stoxx 600 up 0.5% to 364
  • FTSE 100 up 0.4% to 7323
  • DAX up 0.5% to 11575
  • German 10Yr yield up less than 1bp to 0.32%
  • Italian 10Yr yield up 2bps to 1.91%
  • Spanish 10Yr yield up 2bps to 1.42%
  • S&P GSCI Index down less than 0.1% to 400.3
  • MSCI Asia Pacific up less than 0.1% to 141
  • Nikkei 225 up 0.8% to 19287
  • Hang Seng up 0.5% to 22937
  • Shanghai Composite down 0.2% to 3113
  • S&P/ASX 200 down 0.8% to 5721
  • US 10-yr yield down 1bp to 2.35%
  • Dollar Index down 0.2% to 101.15
  • WTI Crude futures down 0.4% to $52.79
  • Brent Futures down 0.4% to $55.80
  • Gold spot up 0.2% to $1,198
  • Silver spot up 0.1% to $16.80

Top News

  • Boeing Wins $22 billion order from Indian carrier SpiceJet: order for 205 aircraft includes purchase rights for 50
  • Yellen Sees No Serious Short-Term Obstacles for U.S. Economy: says inflation “pretty close” to Fed’s 2% target, doesn’t want to see banking regulations rolled back
  • AltaGas, WGL Said to Hold Talks on Merger Topping $5 Billion: WGL was said to be weighing a sale after Iberdrola interest; cos. supply natural gas to customers in North America
  • Anadarko Sells Eagle Ford Assets to Focus on Permian, Rockies: Sanchez, Blackstone pay $2.3b for properties in Texas; deal to help Anadarko boost investment in Delaware Basin
  • Fiat Rises as Investors Question VW Parallels in Cheating Charge: EPA says Fiat Chrysler used illegal software in 104,000 autos
  • Paris Prosecutors Open Probe Into Renault Diesel Emissions
  • Mnuchin Start Date Looks Iffy as Congress Scours Wall St. Past: Senate panel to provide seven-day notice for Mnuchin hearing
  • KKR to Buy Hitachi Koki for $1.3 Billion as Group Sheds Unit: Japanese conglomerate selling non-core units as it reorganizes
  • Pandora Media Rallies as Results Top Estimates, 7% Cut in Jobs Set: the world’s largest online radio service said 4Q results exceeded its forecast; co. eliminating jobs to boost efficiency
  • Sirius Chairman Said to Say Still Keen on Buying Pandora: NYP
  • Hon Hai, Sharp Considering LCD Plant in the U.S.: Nikkei
  • Coty May Eliminate Up to 210 Jobs in Switzerland: Bilan

Looking at regional markets, Asia stocks traded mixed following a negative lead from the US as participants continued to digest Trump’s first press conference as President-elect. Nikkei 225 (+0.8%) outperformed to recoup some of yesterday’s losses, as JPY-crosses saw upside higher with USD/JPY testing 115.00 to the upside, before dipping to the mid-114 range. ASX 200 (-0.8%) suffered amid underperformance in financials after some less hawkish comments from Fed’s Bullard and Lockhart, as they indicated they are more in favour of less than 3 US rate hikes this year. Shanghai Comp (+0.2%) initially suffered from a reduced liquidity operation by the PBoC and uninspiring Chinese trade data, while Hang Seng (+0.4%) was lifted by energy names as oil markets rallied yesterday and also benefited from several Property names reporting positive earnings as well as. 10yr JGBs traded lower amid the risk-on tone in Japan and a disappointing auction for enhanced liquidity, while the curve flattened due to underperformance in the short end.

Top Asia News

  • PBOC Said to Boost Yuan Curbs as Banks Told to Balance Flows: lenders to stop transactions unless inflows match outflows
  • Takata Said Near $1 Billion Air-Bag Settlement With U.S.: may announce a settlement as soon as Friday
  • Nintendo Switch Off to Wobbly Start as Pricing, Timing Unveiled: Price of around $300 more than anticipated, higher than rivals
  • Vietnam Recalibrates as Trump and Duterte Upset Strategy: setbacks include TPP trade deal, South China Sea disputes
  • Chinese Paper Calls Tillerson’s South Sea Threat ‘Foolish’: editorials offer more pointed response than government

European equities trade in the green (Euro Stoxx 50: +0.8%), with the move higher fuelled by Fiat Chrysler, who trade higher by 3%, with other Auto names initially trading higher in tandem before separate reports suggest the French prosecutor is looking into Renault’s (-4.2%) role in the emission scandal. The FTSE MIB is the best performing index in the wake of Fiat’s denial, while financials also outperform this morning ahead of a number of high profile US earnings including Wells Fargo, JP Morgan and Bank of America. Fixed income markets have seen the front end of core EGB markets slipping in yields as today is the first time the ECB are able to purchase securities with a yield below the -0.4% deposit rate, with the longer end suffering. Elsewhere, focus looks ahead to DBRS review of Italian sovereign debt after the close today, with some pricing in a downgrade already given the current state of Italian banks. If DBRS were to downgrade Italy, this could have a significant impact on the size of Italian collateral and could see significant flattening of the BTP curve.

Top European News

  • VW Pulled Out of Daimler Deal Before Embarking on Diesel Cheat: alliance talks involved discussions of cross shareholdings
  • French M&A Fund Bets on Successful Deal in Syngenta Takeover: shares trade at 14% discount to ChemChina takeover offer
  • Patek Philippe Chairman Tells Swiss Watch Industry to Slow Down: signs of revival after two years of job cuts on China slowing
  • Bang & Olufsen Soars as Profits Are Buoyed by New $11,500 TVs: shares soar to highest level in more than six years after earnings that showed it’s getting better at squeezing profit out of its sales

In currencies,  the Bloomberg Dollar Spot Index lost 0.1 percent after falling 0.5 percent on Thursday. The gauge is down 0.7 percent for the week. Turkey’s lira slipped 0.9 percent after surging 2.8 percent against the dollar on Thursday. The currency is down 4.2 percent this week after touching the lowest point on record. The central bank is implementing measures to force banks to borrow at a higher rate, according to a person with direct knowledge of the matter. The offshore yuan extended gains for a third day. China has asked some banks to stop processing cross-border yuan payments until they balance inflows and outflows, people familiar with the matter said, as authorities step up a campaign to curb a record amount of money leaving the nation in the local currency. The yen traded at 114.60, taking the week’s gain to 2.1 percent, the best performance since the end of July.

In commodities, the diesel emissions scandal has been reignited and further fuelled by the possible involvement of Renault, so the commodity market is perhaps looking to the palladium vs platinum relationship for reaction. Otherwise, focus will be on Gold over the session ahead, which sees the key US retail sales release impacting on the USD to some degree. Prices have dipped back under USD1200 in the meantime, but with room for further USD correction, fresh upside in the yellow metal still possible. Oil held near $53 a barrel were pretty stable after a mid-morning dip; WTI dropping 50-60 cents, but still comfortably away from the USD50.00 mark — bolstered by last year’s OPEC agreement on production – and after its biggest two-day gain in almost six weeks as Saudi Arabia said it cut output even more than required by an OPEC deal.

Looking at the day ahead, the highlight is likely the December retail sales report where the market consensus for headline sales is running at +0.7% mom, while the core is expected to come in at +0.4% mom. Also due out is the December PPI report where the consensus there is for a +0.3% mom rise in the headline. Business inventories for November and  the preliminary University of Michigan consumer sentiment survey for this month follow later on. Meanwhile the Fed’s Harker is scheduled to speak again at 9.30pm ET. The other big focus is clearly those aforementioned US bank earnings reports.

* * *

US Event Calendar

  • 8:30am: PPI Final Demand MoM, Dec., est. 0.3% (prior 0.4%)
  • 8:30am: Retail Sales Advance MoM, Dec. est. 0.7% (prior 0.1%)
  • 9:30am: Fed’s Harker Speaks on Economic Mobility in Philadelphia
  • 10am: Business Inventories, Nov., est. 0.6% (prior -0.2%)
  • 10am: U. of Mich. Sentiment, Jan. P, est. 98.5 (prior 98.2)
  • 1pm: Baker Hughes rig count

Bank Earnings:

  • BlackRock (BLK) 6:30am, $5.02
  • First Horizon National (FHN) 6:37am, $0.25
  • Bank of America (BAC) 6:45am, $0.38
  • PNC Financial Services (PNC) 6:45am, $1.85
  • First Republic Bank (FRC) 8am, $1.03
  • JPMorgan Chase & Co (JPM) 8am, $1.43
  • Wells Fargo & Co (WFC) 8am, $1.00

DB’s Jim reid concludes the overnight wrap

On this supposedly unlucky day it’s US bank earnings that are going to be a big attraction with JPM, Wells Fargo and BofA reporting all prior to or at the open. After the Trump trades disappointment this week – which continued yesterday – this will likely impact the overall direction of markets. The remainder of the US banks will report next week while the corporate calendar will also kick into gear which may all be a welcome distraction. In addition we also got an announcement yesterday that UK PM Theresa May will detail some of her Brexit plans at a long-awaited speech next Tuesday, so that should be something to look forward to as well. The focus this morning however has been the December trade numbers out of China which were released a few hours ago. In US Dollar terms exports dropped -6.1% yoy in December which is a fair bit more than expected (-4.0% consensus) and also down from -1.6% in the month prior. At the same time imports shrunk to +3.1% yoy (vs. +3.0% expected) from +4.7% and so had the effect of reducing the surplus. A weaker yuan did help to cushion the fall in exports in local currency terms (+0.6% yoy vs. -0.1% expected).

Equity markets in China were initially weaker following the data but have since recovered with the Shanghai Comp currently +0.12%. The Nikkei (+0.85%) has rebounded while the Hang Seng is also +0.45% although there’s losses currently for the Kospi (-0.51%) and ASX (-0.95%). The other focus overnight has been on comments from Fed Chair Yellen. She was largely positive, saying that “unemployment has now reached a low level, the labour market is generally strong and wage growth is beginning to pick”. The Fed Chair also said that Dodd- Frank bank regulation made “important changes” and that she would not want to see it “rolled back”. There were no comments made around policy outlook.

Back to yesterday. Perhaps the most interesting story to emerge was the balance sheet unwinding comments to come out of the Fed. Some of it came from Philadelphia Fed President Patrick Harker who said that the Fed can start  considering stopping balance sheet reinvestment and later start unwinding the balance sheet when the Fed funds rate gets to 100bps. In addition, St Louis Fed President James Bullard said that the “committee may be in a better position to allow reinvestment to end or to otherwise reduce the size of the balance sheet”. So if you share the FOMC median 3 rate hikes this year view then this could be a 2017 story although in reality the Fed talk probably won’t get serious until the Fed funds rate gets to 100bps. You’d imagine that this debate will also be greatly influenced by political pressures but it’s certainly one to keep an eye on.

Speaking of tapering, the ECB minutes of the December meeting were released yesterday. The text suggested that there was a fair bit of debate and differing views amongst policy members. Indeed the debate was over continuing at the €80bn pace for an additional six months or extending the programme for nine months at a €60bn pace – which the Bank eventually settled on. It was revealed that a “few members voiced an initial preference for the first option….while expressing readiness to join a consensus forming on the second option”. At the same time while the text also revealed that “very broad support emerged  among members” for the second option, there were “arguments also put forward in support of a shorter purchase horizon, namely limited to six months, at a rescaled pace of purchases of €60bn”. Some members “could not support either of the two options….in view of their well known general scepticism regarding APP and public debt purchases in particular”. On a related noted, German Finance Minister Wolfgang Schaeuble also said yesterday that the ECB should start unwinding its ultra-loose monetary policy this year.

Moving on. In terms of markets and as highlighted earlier, it was another day of generally unwinding Trump trades following the disappointment at the lack of substance in his press conference. The big mover gain was the Greenback with the Dollar index falling -0.37% to take it to -1.51% since Trump spoke on Wednesday although it has recovered modestly this morning. Emerging markets were the big beneficiaries of yesterday’s weakness with currencies in Turkey (+2.82%), South Africa (+1.79%), Colombia (+1.78%) and Chile (+1.26%) in particular standing out. EM equities (+1.12%) also had a decent day. Equity markets were weaker across the pond although in fairness did recover a bit into the close. The S&P 500 finished -0.21% after being down as much -0.93% while the Nasdaq Biotech index recovered similarly to finish +0.36% following that sell off on Wednesday. Markets in Europe did however come under more pressure however with the Stoxx 600 closing -0.65% although the FTSE 100 (+0.03%) managed to eke out a positive return and in doing so capped a fairly incredibly 13th consecutive daily gain – extending the record streak.

There was a bit of corporate news too to digest. Fiat Chrysler shares fell steeply after the automaker became the latest to be accused by the EPA of violating pollution laws on diesel vehicles. According to the FT the group could face a fine of as much as $4.6bn. Meanwhile Amazon announced that they are to add 100k full time jobs in the US over the next 18 months which will likely put them in Trump’s good books ahead of his inauguration. There was, however, plenty of focus on the fact that the hires could come at the expense of the bricks and mortar retailers in the US.

Elsewhere, in rates 10y Treasury yields touched an intraday low of 2.305% yesterday which is the lowest yield since the end of November, before paring much of that into the close to finish only a shade lower on the day at 2.363%. Sovereign bond markets in Europe also ended up on the firmer side (10y Bund yields falling 1.4bps to 0.307%). In the commodity complex Oil got another boost after Saudi Arabia announced that it had cut production even more than required by the OPEC deal. WTI edged back up to $53/bbl (+1.45%) after hitting as low as $50.71/bbl earlier in the week. Gold (+0.32%) also continued its urge to take the YTD move past +4% already.

Before we wrap up, there wasn’t a huge amount to take away from yesterday’s economic data. In the US a boost from higher energy prices saw the import price index rise +0.4% mom in December and so putting the YoY rate at +1.8% which is the highest since March 2012. Initial jobless claims came in at 247k last week which is up from the very low 237k reading the week prior. Finally the December monthly budget statement revealed a slightly wider than expected $27.5bn deficit. Meanwhile in Germany we learned that Germany’s economy grew 1.9% in calendar year 2016 which is a little bit more than what the consensus expected (of 1.8%). Our economists in Europe noted that growth was strongly tilted towards consumption thanks to several tail winds (refugee crisis, low inflation, labour market strength), while slowing exports weighed on private equipment investment. They also note however that with several tail winds fading and a workday effect weighing, GDP growth looks set to slow in 2017 to 1.1%. In other news, Euro area industrial production was confirmed as rising a much better than expected +1.5% mom in November (vs. +0.6% mom expected).

Looking at the day ahead, this morning in Europe it’s particularly quiet with no significant data due out although expect there to be some focus on the BoE’s credit conditions and bank liabilities survey, due out at 9.30am GMT. This afternoon in the US the calendar is a fair bit busier however. The highlight is likely the December retail sales report where the market consensus for headline sales is running at +0.7% mom, while the core is expected to come in at +0.4% mom. Also due out is the December PPI report where the consensus there is for a +0.3% mom rise in the headline. Business inventories for November and  the preliminary University of Michigan consumer sentiment survey for this month follow later on. Meanwhile the Fed’s Harker is scheduled to speak again at 2.30pm GMT. The other big focus is clearly those aforementioned US bank earnings reports.

END

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 6.52 POINTS OR 0.21%/ /Hang Sang closed UP 108.36 OR 0.47%. The Nikkei closed UP 152.58 POINTS OR 0.80% /Australia’s all ordinaires  CLOSED DOWN 0.77%/Chinese yuan (ONSHORE) closed DOWN at 6.9002/Oil FELL to 52.61 dollars per barrel for WTI and 55.65 for Brent. Stocks in Europe: MOSTLY IN THE GREEN. Offshore yuan trades  6.8407 yuan to the dollar vs 6.9004  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AGAIN AS  DOLLARS STOP LEAVING CHINA’S SHORES /

3a)THAILAND/SOUTH KOREA/:

none today

b) REPORT ON JAPAN

c) REPORT ON CHINA

China reacts to Tillerson’s “disastrous” policy  towards China’s pushing the envelop with respect to the South China’s seas.  Chinese officials see a huge devastating confrontation on the issue:

 

(courtesy zero hedge)

China Daily: Tillerson’s “Disastrous” Actions Would Set The Course For A “Devastating Confrontation”

We were surprised by how contained China was this morning after yesterday’s confirmation hearing of Rex Tillerson, in which the former Exxon CEO said that a failure to respond to China had allowed it to “keep pushing the envelope” in the South China Sea and added that “we’re going to have to send China a clear signal that first the island-building stops and second your access to those islands is also not going to be allowed” and that putting military assets on those islands was “akin to Russia’s taking Crimea” from Ukraine.”

Traditionally such a direct threat would be i) perceived as very undiplomatic and ii) prompt an immediate, and angry rebuke from Beijing, with China immediately shifting to the offensive.

“This is the sort of off-the-cuff remark akin to a tweet that pours fuel on the fire and maybe makes things worse,” Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra told Bloomberg. “Short of going to war with China, there is nothing the Americans can do.”

But not today: during his press conference earlier today, Foreign Ministry spokesman Lu Kang could barely muster the will to sound defensive, saying China has been acting within the limits of its sovereignty. “Like the U.S., China has the right within its own territory to carry out normal activities,” he said at a regular briefing in Beijing. When asked repeatedly about Tillerson’s comments on blocking access to islands, China’s foreign ministry spokesman said he couldn’t make any guesses as to what Tillerson was referring to and would not answer hypothetical questions, Reuters reported.

As it turns out, China may not have had time to digest what Tillerson said. After all his South China sea remark was toward the end of his nearly all day long hearing, and so many local media outlets may have simply missed it. However, they caught up today, and first China Daily, then its nationalist tabloid, the Global Times took turns to first mock, then attack Tillerson.

Here is the gist of the China Daily op-ed published earlier today: according to the Chinese daily mouthpiece, not only were Tillerson’s views “divergent from, even contrary to, those of Trump on some critical issues. He openly conceded he is yet to have a serious, in-depth discussion with Trump on foreign policy imperatives. These boil down to one simple point – his remarks at the Wednesday hearing, sensational as they were, turned out to be of little reference value except for judging his personal orientations.

Yet while China realizes that Tillerson’s bluster was intended for a specific audience, that does not make it any happier:

The backlash that has ensued is understandable. It is certainly no small matter for a man intended to be the US diplomat in chief to display such undisguised animosity toward China.  Tillerson labeled China’s reclamation projects in the South China Sea as “an illegal taking of disputed areas without regard for international norms,” in obvious disregard of the essential truth that all those activities took place well within the country’s persistent, historical territorial claims.

Blaming the “extremely worrisome” state of affairs in the South China Sea on an “inadequate US response”, the US secretary of state nominee even claimed China’s access to those islands should “not to be allowed”. Which sounded intimidating; though he stopped short of elaborating how to achieve it. And like Trump, he blamed Beijing for “not being a reliable partner” in dealing with the Democratic People’s Republic of Korea.

And then, the not so subtle threats followed:

Such remarks are not worth taking seriously because they are a mish-mash of naivety, shortsightedness, worn-out prejudices, and unrealistic political fantasies. Should he act on them in the real world, it would be disastrous.

As many have observed, it would set a course for devastating confrontation between China and the US. After all, how can the US deny China access to its own territories without inviting the latter’s legitimate, defensive responses?

Finally, the mocking of Tillerson as a clueless former company exec who does not have the faintest understanding of diplomacy: “Tillerson wanted a reality-based China policy that is “based on what we see and not based on what we hope”. But what he presented was based more on what prejudice and arms-spurred self-righteousness make him believe and hope than on real-world realities. What happened on Wednesday shows that if and when confirmed, Rex Tillerson needs to first acquaint himself with the ABCs of China-US relations and diplomacy at large.

The Global Times approach was almost verbatim. First, the justification of Tillerson’s “bluster”:

It is suspected that he merely wanted to curry favor from senators and increase his chances of being confirmed by intentionally showing a tough stance toward China.

Tillerson did not give details of how he would achieve his self-proclaimed goals. Nonetheless, he also mentioned that Chinese and American economic interests are deeply intertwined and that “China has been a valuable ally in curtailing elements of radical Islam.” He noted that “We should not let disagreements over other issues exclude areas for productive partnership.”

Motives aside, the GT then explained that China no longer views itself as America’s subordinate:

China has enough determination and strength to make sure that his rabble rousing will not succeed. Unless Washington plans to wage a large-scale war in the South China Sea, any other approaches to prevent Chinese access to the islands will be foolish. The US has no absolute power to dominate the South China Sea.

Following this, just like in the case of China Daily, there was the mocking:

Tillerson had better bone up on nuclear power strategies if he wants to force a big nuclear power to withdraw from its own territories. Probably he just has oil prices and currency rates in his mind as former ExxonMobil CEO.

Next, the not so thinly veiled threat – again – aimed not so much at Tillerson but at Trump:

As Trump has yet to be sworn in, China has shown restraint whenever his team members expressed radical views. But the US should not be misled into thinking that Beijing will be fearful of their threats.

How does it all end according to China? Unless Trump’s diplomatic team changes course, the Times said “the two sides better prepare for a military clash.”

Tillerson’s statements regarding the islands in the South China Sea are far from professional. If Trump’s diplomatic team shapes future Sino-US ties as it is doing now, the two sides had better prepare for a military clash. South China Sea countries will accelerate their negotiations on a Code of Conduct. They have the ability to solve divergences by themselves without US interference.

And the conclusion:

Just as the Philippines and Vietnam are trying to warm their ties with China, Tillerson’s words cannot be more irritating.  It is hoped that Tillerson will desire a productive partnership with China more and his harsh words are just coaxing the Senate Foreign Relations Committee. But no matter what, China will always respond to various US diplomatic maneuvers.

As a reminder, all this has already happened and Trump isn’t president yet. We eagerly look forward to the president-elect’s next steps vis-a-vis an increasingly angry CHina and vice versa.

4 EUROPEAN AFFAIRS

Oh no!! just one day after Fiat Chrysler gets nailed we now see France’s Renault get nailed for cheating on emissions’

FRANCE:Renault

(courtesy zerohedge)

Renault Shares Tumble After Anti-Fraud Authority Accusations Of “Cheating” On Emissions Tests

Update: Unsurprisingly, Renault has denied the charges, and claims it has had no official notification of the investigation…

Renault hasn’t been officially notified about the French diesel probe, a spokesman said by phone.

Renault isn’t using software to cheat on emissions, the spokesman said

*  *  *

Yesterday we sarcastically noted “they are all at it” when Fiat Chrysler was slammed by the EPA for emissions cheating, and now get further confirmation of the farce as The FT reports, French authorities have started a preliminary investigation into Renault amid suspicion the company may have “cheated” to conceal abnormal emissions of pollutants from some of its diesel engines.

The government commission’s report over the summer found that nitrogen oxide emissions for many Renault models went well beyond their official limit under “normal” driving conditions, by a factor of more than 10 in the case of some models.

Renault share tumbled on the headlines…

As The FT details, the decision, made on Thursday, comes after France’s independent anti-fraud authority referred the carmaker to state prosecutors in November, after completing its own investigation.

Three judges were appointed to lead the investigation, the Paris prosecutor said in a text message, into whether they “made merchandise dangerous for human health.”

Last year, three Renault sites in France were raided by authorities as part of a sprawling national investigation linked to the Volkswagen emissions scandal, sparking fears that the emission-rigging case was spreading across Europe.

The French government, which owns 20 per cent of Renault, and the carmaker has denied using software to cheat emission testing, saying its models “conformed to the laws and norms in each market where they are sold.”

 

END

Germany/Volkswagen:

 

Volkswagen upper management is telling its managers not to travel to the USA because of the threat of being nabbed for criminal fraud on the emissions scandal.

(courtesy zero hedge)

 

Volkswagen Tells Its Managers Not To Travel To The US

in the last days of the Obama administration, the outgoing president has taken on a surprising urgency in closing “open” cases of alleged fraud, if mostly involving foreign carmakers. Case in point, this week’s $4.3 billion settlement with Volkswagen to put the diesel emmisions scandal to rest, and yesterday’s unexpected accusation by the EPA that Fiat was likely engaging in a similar scheme to defraud the US government of its true emissions. The crackdown has led to various curious outcomes, the most surprising of which is that Volkswagen has warned its senior managers not to travel to the United States after six current and former managers were indicted for their role in the German carmaker’s diesel test-cheating scheme, according to Reuters.

The company agreed to pay $4.3 billion in civil and criminal fines in a settlement with the DoJ on Wednesday, the largest ever U.S. penalty levied on an automaker. However, Attorney General Loretta Lynch said the DoJ would continue to pursue “the individuals responsible for orchestrating this damaging conspiracy”.

As reported on Monday, one of the six charged, Oliver Schmidt, was arrested by the FBI at Miami International Airport on Saturday as he was about to fly home from holiday in Cuba. Schmidt, who is caught up in the “Dieselgate” investigation by the U.S. Department of Justice (DoJ), was ordered to be charged and held without bail on Thursday pending trial.

While the biggest German carmaker agreed to pay $4.3 billion in civil and criminal fines in a settlement with the DoJ on Wednesday, the largest ever U.S. penalty levied on an automaker, Attorney General Loretta Lynch said the DoJ would continue to pursue “the individuals responsible for orchestrating this damaging conspiracy”.

Hence, guilty until proven innocent. Incidentally similar “advice” was given to Swiss bankers in the years following Obama’s crackdown on Swiss banking secrecy, when all local bankers could be arrested on sight if they attempted to enter the US.

Which also explains the travel ban: under German’s constituion, citizens can be extradited only to other European Union countries or to an international court. But leaving Germany at all could pose a risk of being extradited to the United States from a third country. “Several Volkswagen managers have been advised not to travel to the United States,” one legal adviser to Volkswagen said on condition of anonymity because the matter is confidential.

A second legal adviser said this also applied to managers who had not yet been charged with any offense in the United States. “One doesn’t need to test the limits,” the adviser said.

Schmidt was among those who had been warned by lawyers working for the company not to travel to the United States, one of the legal sources said.

Meanwhile, the German Federal Criminal Police Office said it was not aware of any request to extradite the other five indicted VW managers.

Confirming that the German carmaker, which exmploys more than 600,000 workers, is taking the advice seriously, Reuters reports that only one board member traveled to this week’s auto show in Detroit: VW passenger car brand chief Herbert Diess, who joined Volkswagen in July 2015, just two-and-a-half months before the VW’s decade-long deception of U.S. authorities became public.

A senior manager at the VW brand who asked not to be named called Diess’s decision to travel to Detroit “bold” and said his peers had been given guidance not to leave Germany as the risk of impending U.S. charges rose – although he would not go so far as to call it a “travel warning”. He said colleagues knew after being questioned by Jones Day lawyers, who are carrying out an independent internal investigation into the emissions affair, whether they had something to fear in the United States, and may have used this to determine travel plans.

Charles Kuhn, a partner at criminal law firm Hickman & Rose, said people in such a position faced “a harsh choice – voluntarily hand themselves in, or never leave Germany without fear that an international arrest warrant will land them in US custody anyway”.

“It’s the kind of impossible decision that leaves people holed up in embassies for years,” he said. “It depends on the alleged offense, but it is sometimes better to face the music than to live in the shadow of the DoJ.”

It is unclear how treatment of non grata Volkswagen, and other employees, would go under Trump, who seems far less worried about EPA violations, but is certainly focused on foreign companies hiring American workers. We are confident that Volkswagen will be able to obtain travel leniency…. it just may cost it a factory in Detroit, or two.

 

END

Italy/Fiat:

 

Yesterday it was the EPA which announced that Fiat also engaged in criminal fraud by cheating on its emissions software.  Now we see that the Dept of Justice is set to go on a criminal emissions probe

(courtesy zero hedge)

Now Dunn and Bradstreet downgrades Italy.  This is huge as more collateral will be necessary i.e. the ECB will demand for collateral for all of the bonds that it stores as swaps with hedge funds and the central bank of Italy

(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Israeli jets from inside Israel bomb the Damascus Military airport. Hezbollah has been storing more sophisticated weaponry there and thus the need for Israel to obliterate these weapons

 

(courtesy zero hedge)

Israeli Jets Bomb Damascus Military Airport; Syria Vows It Will Respond To “Flagrant Attack”

Just as the Syrian proxy war showed some hopeful signs of finally dying down, the Syrian army command said on Friday that Israeli jets have bombed the Mezzeh military airport west of Damascus, accusing Tel Aviv of supporting terrorism, and warned Tel Aviv of repercussions of what it called a “flagrant” attack. Syrian state TV quoted the army as saying several rockets were fired from an area near Lake Tiberias in northern Israel just after midnight which landed in the compound of the airport, a major facility for elite Republican Guards and special forces. The airport was rocked by multiple explosions, some of which were captured by social media.

Video shows large flames after military airport near Damascus bombed at least 8 times by suspected Israeli jets tonight.

“Syrian army command and armed forces warn Israel of the repercussions of the flagrant attack and stresses its continued fight against (this) terrorism and amputate the arms of the perpetrators,” the army command said in a statement.

Explosin in Damascus, Syria military airport Mezzhee, some reports on Israeli airstrikes

Israeli jets attacked Syria army base in Damascus as part of its ‘support of terrorists groups: Sana news agency pic.twitter.com/0e2wFEjnmM

The statement did not disclose if there were any casualties, but said the rockets caused a fire. Earlier, state television said several major explosions hit Mezzeh military airport compound near Damascus and ambulances were rushed to the area, without giving details.

The airport southwest of the capital is a major strategic air base used mainly by Syrian elite Republican Guards and had been a base used to fire rockets at former rebel-held areas in the suburbs of Damascus. State television did not give any further details.

Army warns of “consequences of blatant attack on Airport.” says missiles used NOT F-35.

Footage from the scene with heavy fire and the sounds of explosions has surfaced on social media. Multiple reports from journalists and activists on the ground described the bombing, with the opposition also reporting there were rockets fired.

“Rockets strike at Mezzeh Military airport in Damascus minutes ago,” tweeted Hadi al-Bahra, former president of the National Coalition of Syrian Revolution and Opposition Forces.

In the past, Israel has targeted positions of Lebanon’s Hezbollah group inside Syria where the Iranian-backed group is heavily involved in fighting alongside the Syrian army. According to Israeli breaking, the airport was bombed because it was a “suspected holding ammunition depots for Hezbollah. ”

BREAKING: Military airport near Damascus bombed. Suspected holding ammunition depots for Hezbollah. Syrian media attribute to Israeli jets.

Israeli defence officials have voiced concern that Hizbollah’s experience in the Syrian civil war, where it has played a significant role and recently helped the Syrian army regain the eastern sector of the city of Aleppo, has strengthened it.

Rebels operating in the area have said Hizbollah’s major arms supply route into Damascus from the Lebanese border has been targeted on several occasions in recent years by air strikes. This has included strikes on convoys of weapons and warehouses.

Israel and the terrorists are attacking Damascus tonight mezzeh airport.

This is the second time in two months the Israeli Defense Forces have being accused by Syria of targeting Syrian positions from Israeli territory.  On December 7, SANA reported that “several surface-to-surface missiles” were launched by the IDF from the Golan Heights. At the time, the source in the Syrian armed forces slammed the attack as a “desperate attempt” by Israel to endorse terrorists.

Rebels operating in the area have said Hezbollah’s major arms supply route into Damascus from the Lebanese border has been targeted on several occasions in recent years by air strikes. This has included strikes on convoys of weapons and warehouses. Damascus airport was also hit by air strikes in 2013. Tel Aviv neither confirms nor denies involvement in striking targets inside Syria. Damascus has also been tightlipped about previous strikes.

 

 

END

 

Interesting:  Deutsche bank now accuses Deutsche bank of “economic terrorism” as the bank called in a considerable amount of outstanding Turkish loans. Actually Turkey is right but their economic terrorism is due to their massive amount of derivatives outstanding

(courtesy zero hedge)

 

Deutsche Bank Rejects Charge It Is An “Economic Terrorist”

Over the year, Deutsche Bank has been accused – and found guilty – of doing many illegal things (and paid handsomely for it, both in terms of penalties as well as sacked CEOs), but what happened yesterday was new.

As we observed yesterday morning, as part of his latest attack on currency speculators, Erdogan compared FX traders to terrorists, saying that “terrorists with dollars and with weapons have no difference.” Furthermore, on Thursday the government friendly daily Yeni Safak reported that Deutsche Bank and other German institutions were attempting “economic terror” against Turkey by recalling loans to companies before their their due dates.

The German lender was not happy, and on Friday Deutsche Bank’s Turkish unit rejected claims that it’s plotting to undermine the economy, and said it’s “unacceptable” for the lender’s name to be associated with terrorism.

“Claims in the story about calling loans before their maturity and conducting operations in coordination with other institutions are totally groundless,” the bank’s Istanbul-based business said in an e-mailed statement Friday quoted by Bloomberg.

Like many other failing regimes, most notably Venezuela, Erdogan and his aides often invoke a conspiracy against Turkey by outside powers when the lira declines, “saying other nations are jealous of the country’s economic growth under his leadership.” On Thursday, Erdogan accused Turkey’s enemies of speculating in the lira and again called on Turks to “thwart these games” by selling their holdings in other currencies.

Meanwhile, the one thing that could prop up the crashing currency, a rate hike, has been virtually proihibted by Erdogan who has warned that any such action by the central bank will be rejected by his administration. Erdogan is hoping to boost the lagging economy with cheap loans, however in the process it has sent the currency plunging.

Thursday was not the first time that Deutsche Bank has been singled out by the Turkish press. In January 2014, the German lender denied local reports that it deliberately drove down shares of a Turkish state-run lender that had been implicated in a corruption scandal. Deutsche Bank said most of the shares it processed in that episode were owned by its clients, and it wasn’t trading sufficient volumes to affect the company’s share price. More recently, the Frankfurt-based institution figured in a different way in government rhetoric.

In an amusing interlude, last September, when Deutsche Bank’s shares were plunging, amid capital concerns, Yigit Bulut, a chief adviser to Erdogan, said Turkey should consider buying Deutsche Bank.

“Some very good companies in the EU are going to fall into trouble and we need to be ready to buy a controlling stake in them,” Bulut wrote on Twitter. “Wouldn’t you be happy to make Germany’s biggest bank into a Turkish Bank!!”

As Bloomberg adds, Bulut also criticized Germany’s flagship carrier, Deutsche Lufthansa AG, soon after his appointment in 2013. He said the airline was behind anti-government protests that began in Istanbul’s Gezi Park that summer, because its position in Europe was threatened by plans to build a new airport in Istanbul.

Deutsche Bank, which has been in Turkey since 1987, employs 143 people at its Turkish unit. In the next TRY crisis, it is a distinct possibility many if not all could be arrested on allegations they are conspiring to take down Erdogan, whose authoritarian ways have been mostly ignored by the country’s western friends and allies.

6.GLOBAL ISSUES

Mexican drug cartels are finding new ways to defeat the state.  Angered by the huge 20% rise in taxes on gasoline, the thugs decided to penetrate state pipelines carrying the gas, upon which they siphoned off considerable supplies and then sold them to needy patrons desperate for lower prices on gas

(courtesy zero hedge)

Mexican Drug Cartels Looting State-Owned Gas Pipelines For Black Market Sales

A couple of weeks ago we highlighted the protests that had engulfed Mexico after the finance ministry announced plans to raise gasoline prices by 20.1% starting January 1st.  Amid the chaos, the country’s powerful Jalisco New Generation cartel threatened to to burn down gas stations as retribution for taking advantage of “the majority of the people who don’t make even a minimum wage.”

But before readers blow this off as just another protest by an angry population which fails to grasp the “global deflationary collapse” while focusing on “fringe, outlier events”  – at least in the words of central bankers –  things suddenly got serious when none other than the country’s powerful Jalisco New Generation cartel has entered the fray, threatening to burn gas stations in response to the price hikes, according to Jalisco authorities cited by TeleSur.

“They are speculating in order to obtain million dollar profits from the majority of the people who don’t make even a minimum wage, we have already realized that the (shortage) of fuel is because dealers don’t want to sell fuel unless they can do so at a profit, all of our people are now ready to start the mission,” the Mexican drug cartel stated in a WhatsApp message circulating in Jalisco.

“The CJNG, in support of the working class, commits itself to making burn all the gasoline stations that to December 30 of the current year, at 10:00 p.m.” — before the price increases go into effect — “have not normalized the sale of fuel at the fair price,” the message said, according to the Mexican news outlet Aristegui Noticias.

Gas Looting

Alas, after the knee jerk reaction to riot subsided, which would have only resulted in gas prices soaring even higher anyway, Mexico’s drug cartels did what any clever black market entrepreneurial organization would do:  they decided to steal the gasoline and sell it themselves.  With a modest upfront capital investment of $5,000 – $8,000, the cartels have realized they can tap directly into state-owned gas pipelines and withdraw seemingly unlimited supplies of gasoline which they then sell along the highway at a discount to official government prices.  It’s a win-win situation whereby the drug cartels make 100% profit margins and citizens get “cheap” fuel.

The black market is booming. Several states experienced gasoline shortages at the end of last year as more thieves tapped into state-owned Petróleos Mexicanos (Pemex) pipelines. The pilfered fuel was sold to drivers hoping to save money. Pipeline theft in 2015 increased sevenfold, to more than 5,500 taps, from just 710 in 2010. Pemex attributes the company’s 12-year slide in crude production in part to the growth in illegal taps.

The drug cartels have turned to fuel theft as a side business worth hundreds of millions of dollars each year, and crime groups focused solely on gasoline robbery have sprung up, says Alejandro Schtulmann, president of Empra, a political-risk consulting firm in Mexico City. “You only need to invest $5,000 or $8,000 to buy some specific equipment, and the outcome of that is huge earnings.”

Fuel theft creates a vicious cycle: The theft increases costs for Pemex and makes the official gasoline supply more scarce, contributing to higher prices for legal consumers. Theft amounts to about $1 billion a year, says Luis Miguel Labardini, an energy consultant at Marcos y Asociados and senior adviser to Pemex’s chief financial officer in the 1990s. “If Pemex were a public company, they would be in financial trouble just because of the theft of fuel,” he says. “It’s that bad.”

Of course, there are some losers in all of this as Enrique Peña Nieto has basically become the least popular President in Mexico since one-party ruled ended in 2000.

All this is creating headaches for Enrique Peña Nieto, whose popularity was already the lowest of any president since one-party rule ended in 2000. Peña Nieto is limited to a single term, and polls show potential candidates from his Institutional Revolutionary Party (PRI) trail populist opposition leader Andrés Manuel López Obrador in the race for the mid-2018 presidential election. López Obrador has made the jump in gasoline prices his latest rallying cry against the administration.

“This is definitely going to have consequences for the PRI,” says Jorge Chabat, a political scientist at the Center for Economic Research and Teaching, a university based in Mexico City. “Frankly, I don’t see any way that they can win in 2018.”

State-owned Pemex is also one of the losers with the company expected to lose about $1 billion to theft this year…but no one really pays taxes anyway so it shouldn’t be that big a deal.

7. OIL ISSUES

Many Chinese tankers are holding massive amounts of oil offshore.  You will recall that China has been buying large quantities of oil and story them in caverns. However it looks like these are now full and that is why tankers are still loaded with oil off shore.

(courtesy zero hedge)

Oil Erases Saudi Jawbone Gains Amid China Glut Concerns

Oil prices rallied the last couple of days on the heels of Saudi jawboning about just how much they cut production, after concerns on US shale production surging. However, prices are falling back as despite near-record imports of crude reported overnight in China, it appears that historical demand has ‘glutted’ refiners (who exported record product in 2016) leaving a slew of oil tankers stranded off the Chinese coast.

As Reuters reports, China’s crude oil imports jumped to a record high in December as refiners stepped up purchases ahead of a possible OPEC deal to cut supply and bolster prices, and as more independent refiners won import permits.

Exports of refined fuel also surged to a new high as the country’s giant state refiners shipped more product offshore in the face of a growing domestic surplus, adding to pressure on Asian refining margins.

Crude imports hit 36.38 million tonnes in December, data from the Chinese General Administration of Customs showed, or 8.57 million barrels per day (bpd).

This was up 9 percent from November and well above the previous record of 8.04 million bpd set last September.

Inbound shipments to China rose to a record average of 7.63 million barrels a day in 2016, boosted by the teapots, Bloomberg notes that government data shows. The purchases were one of the factors that helped crude prices recover from their worst crash in a generation. But then, authorities began clamping down on anyone skirting rules.

However, as Bloomberg warns, that demand/import picture is backward-looking, as now a clutch of tankers filled with crude its buyers couldn’t touch revealed the pall of gloom that’s spread over a coveted oil market.

China’s independent refiners, which contributed to the nation’s record purchases from overseas last year, were unable to take delivery of the shipments earlier this month because they hadn’t received government approval on how much they’re allowed to import in 2017. Vessels with oil wereidling off the coast of the eastern province of Shandong, where the plants known as teapots are clustered, according to people with knowledge of matter.

“Following the granting of import licenses from the central government, the Chinese teapots represented a new demand segment in the Asian oil market,” said John Driscoll, the chief strategist at JTD Energy Services Pte, who has spent more than 30 years trading crude and petroleum in Singapore. However, “in addition to the infrastructure constraints from Qingdao to Shandong, regulations, credit issues and geopolitical swings can impair their ability to import. The window of opportunity can slam shut as fast as it opened,” he said.

The vessels carrying crude that were idling off Shandong were unable to discharge the oil at terminal ports because they weren’t able to clear customs, said the people, who asked not to be identified as they aren’t authorized to speak to the media.

“The Chinese government is tightening supervision as some problems emerged with a surge in crude imports by the independent refiners including alleged misuse of the imported oil or evasion of taxes,” Jean Zou, an analyst with commodities researcher ICIS-China, said by phone.

China will definitely insist on its policy to liberate the oil market gradually but it also has to review, reassess and solve the consequential controversies.”

Saudi Arabia reportedly reduced output to less than 10 million barrels a day and will consider renewing its pledge to trim supply in six months, according to Energy Minister Khalid Al-Falih. Still, until monthly production data is released, “these claims cannot be verified,” according to Commerzbank AG.

And the end-result is Saudi jawboning is losing its power…

end

 

rig counts finally decline.  However crude production has surged with the huge number of rigs employed

(courtesy zero hedge)

Rig Count Unexpectedly Declines Following Biggest Crude Production Surge In 20 Months

Following the biggest jump in US crude production since May 2015, the US oil rig count trend continues to point to further rises in production.

However, the US oil rig count tumbled most since June (-7 to 522) in the latest week.

This is the fiurst drop in rig counts in 14 weeks.

end
Your humour story of the day!

Here’s a joke for you. JP Morgan, which has racked up more than $30 billion in fines over the last five years, was just docked by the CFTC for more wrongdoing, the same CFTC which can’t find them doing illegal in the silver market…

CFTC Orders J.P. Morgan Securities LLC to Pay $900,000 for Supervision Failures

end

8. EMERGING MARKETS

none today

 end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am

Euro/USA   1.0651 UP .0037/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 FALLING RATE

USA/JAPAN YEN 114.40 DOWN 0.299(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 1.2171 UP .0008 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3134 DOWN .0016 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT FROM EU)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 37 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0651; 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 6.52 or 0.21%     / Hang Sang  CLOSED UP 108.36 POINTS OR 0.47%  /AUSTRALIA  CLOSED DOWN 0.77%  / EUROPEAN BOURSES ALL IN THE GREEN 

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 FRIDAY morning CLOSED UP 152.48 OR 0.80% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 108.36 OR 0.47%  Shanghai CLOSED DOWN 6.52 POINTS OR 0.21%   / Australia BOURSE CLOSED DOWN 0.77% /Nikkei (Japan)CLOSED UP 152.58 OR 0.80%  /  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1199.30

silver:$16.81

Early FRIDAY morning USA 10 year bond yield: 2.343% !!! UP 1 IN POINTS from THURSDAY 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  2.94, UP 2 IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 101.19 DOWN 26 CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.91% Par  in basis point yield from THURSDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.05% UP 1  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.431%  UP 3  IN basis point yield from  THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.896  UP  1/3  in basis point yield from THURSDAY 

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

GERMAN 10 YR BOND YIELD: +.338% UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.0635 UP .0020 (Euro UP 20 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.78 UP: 0.117(Yen DOWN 12 basis points/ 

Great Britain/USA 1.2202 UP 0.0039( POUND UP 39 basis points)

USA/Canada 1.3124 DOWN 0.0026(Canadian dollar  UP 35 basis points AS OIL FELL TO $52.60

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 20 basis points to trade at 1.0635

The Yen FELL to 114.78 for a LOSS of 12 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 39  basis points, trading at 1.2202/

The Canadian dollar ROSE by 26 basis points to 1.3124,  WITH WTI OIL FALLING TO :  $52.60

The USA/Yuan closed at 6.8984
the 10 yr Japanese bond yield closed at +.04% DOWN 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 6 IN basis points from THURSDAY at 2.404% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.999 UP 6  in basis points on the day /

Your closing USA dollar index, 101.21 DOWN 24 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 FRIDAY: 1:00 PM EST

London:  CLOSED UP 45.44 OR 1.62% 
German Dax :CLOSED UP 108.14 POINTS OR 0.94%
Paris Cac  CLOSED UP 58.52 OR 1.20%
Spain IBEX CLOSED UP 104.20 POINTS OR 1.11%
Italian MIB: CLOSED UP 357.95 POINTS OR 1.87%

The Dow was DOWN 5.27 POINTS OR .03% 4 PM EST

NASDAQ WAS UP 26.63 POINTS OR .48%  4.00 PM EST
WTI Oil price;  52.60 at 1:00 pm; 

Brent Oil: 55.63  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.62 (ROUBLE DOWN 23/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD RISES TO +0.338%  FOR THE 10 YR BOND  1:30 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:$52.50

BRENT: $55.57

USA 10 YR BOND YIELD: 2.398%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.990%

EURO/USA DOLLAR CROSS:  1.0642 UP .0026

USA/JAPANESE YEN:114.52  down 0.161

USA DOLLAR INDEX: 101.19  DOWN 26  cents (BREAKS AGAIN HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2190 : up 27  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.338%

END

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

TRADING IN GRAPH FORM

Dow 20k Disappoints For Fourth Straight Week As Banks Pump’n’Dump

 

“I was promised Dow 20k, where’s my Dow 20k?!!”

 

It’s been a month since Bob Pisani said that Dow 20k was “inevitable”…

 

Gold leads in 2017 and bonds are beating stocks as crude lags…

 

Stocks were desperately pushed higher into the close today to ensure the S&P closed green on the week.. but failed…

 

Energy stocks (black) were the worst on the week, Tech (blue) best, and Financials (red) unch…

 

VIX flash-crashed to a 10-handle early on this morning as stocks ramped at the open…

 

Banks pumped-and-dumped after earnings…

 

And no – NIM didn’t explode – this is why!! The Yield curve has NOT steepened!!! No matter how many times the media claims it has…

 

“Most Shorted” stocks ended the week unchanged after a yuuge squeeze on Thursday…

 

Apparel stocks plunged to its lowest since Nov 2012…

 

Breadth remains anything but supportive…

 

And SVXY Puts exploded to record highs relative to calls (SVXY is the inverse VIX ETF, thus SVXY Puts ~ VIX Calls ~ Bearish stocks)

 

A lot of vol in bond markets the last two days (echoing the dollar and yuan) but bonds ended the week higher in price, lower in yield with little curve effect…

 

The USD Index tumbled by the most since the week before the election, erasing the post-Fed-rate-hike gains…NOTE – The Dollar Index has fallen back to unchanged year-over-year

 

It’s deja vu all over again in The Dollar Index… (one year lagged)

 

With AUD and JPY the strongest on the week (and Cable weakest)…

 

Copper was the week’s biggest gainer in commodity-land (best week since Thanksgiving) but gold is now up 3 weeks in a row (the best run since June)… Crude ended the week down almost 3% – the worst week since before the election…

 

Gold back at $1200…

 

Finally, a silver lining… Global economic surprise indices are at their highest since 2010 – having risen in the last 3 months – post-Trump – by the most since the bounce off 2009’s lows… Only trouble is – this series is majorly mean-reverting as expectations follow trend…

END

 

S and P downgrades the City of Dallas plagued by the huge police and fire pension scandal

(courtesy zero hedge)

S&P Downgrades City Of Dallas On “Continued Deterioration” Of Police Pension

 

END

 

This week he highlighted Bank of America’s commentary on the weakness of sales in the USA through the December holiday season.  They are correct:  core retail sales are the weakest in almost 3 years:

(courtesy zero hedge)

Core Retail Sales Growth Weakest In Almost 3 Years As Trump Animal Spirits Fade

Yesterday’s confidence data showed a retracement in the ‘Trump Bump’ and now, just as BofA had predicted, US Retail Sales disappointed across the board in December. The Control Group rose just 0.2% MoM (missing expectations of a 0.4% rise) but it was Ex-Auto-and-Gas that missed the most (unchanged in December against expectations of a 0.4% surge) that was most worrisome as it appears Americans bought cars and not much else.

Earlier this week Bank of America warned that December retail sales could come in weaker than expected, when it looked at its internal credit and debt card spending data and found a 1.0% drop. Moments ago the official data released from the Dept of Commerce confirmed that once again BofA was right, when it announced that in December, US retail spending rose 0.6%, below the expected 0.7%, however much of this was thanks to spending on cars and gas. If one excludes autos, the rise was only 0.2%, below the 0.5% expected, and if one also excludes gas, there was no increase in spending in December whatsoever.

In fact this is the weakest year-over-year retail sales since Feb 2014…

Full Breakdown… Only gasoline and Auto sales rose notably…

This disappinting data should not be a total surprise.

 

 

END

This is not good.  Today core PPI came in red hot.  PPI is a good forecaster of future consumer price increase.  The USA is heading for stagflation which is a rise in inflation with stagnant growth

(courtesy zero hedge)

Core PPI Comes Hotter Than Expected, Driven By Rising “Brokerage, Investment Advice” Prices

While headline PPI came in at 0.3% on a sequential basis, as expected, and rose 1.6% on the year, also in line with expectations, it was the core PPI that came in modestly hotter than expected, printing at 0.2%, above the expected 0.1%, and rose 1.6% Y/Y, above the 1.5% expected, and far above the -1.1% drop reported one year ago.The headline jump was driven by a spike in energy prices, as final demand energy rose 2.6% in December. Accounting for almost half of the December jump in final demand goods prices, the index for gasoline climbed 7.8% , while heating oil was up 9.6%.

Away from the non-core energy and gasoline prices, the headline PPI rise was driven, surprisingly, mostly by “prices for securities brokerage, dealing, investment advice, and related services” which advanced 4.4%. In other words, brokers are capitalizing on the rush by retail investors to jump in the market and are hiking prices.

Nonetheless, on an annual basis, the 1.6% increase in PPI was the highest since August 2014.

Broken down between goods and service:

The breakdown:

The breakdown between goods and services:

Final demand goods: Prices for final demand goods jumped 0.7 percent in December, the largest increase since a 0.7-percent rise in June. Sixty percent of the December broad-based advance can be traced to the index for final demand energy, which climbed 2.6 percent. Prices for final demand goods less foods and energy rose 0.3 percent, and the final demand foods index increased 0.7 percent.

Accounting for almost half of the December jump in final demand goods prices, the index for gasoline climbed 7.8 percent. Prices for light motor trucks, jet fuel, iron and steel scrap, chicken eggs, and liquefied petroleum gas also increased. In contrast, the index for fresh fruits and melons fell 13.6 percent. Prices for residential electric power and for plastic resins and materials also decreased.

* * *

Final demand services: The index for final demand services inched up 0.1 percent in December after increasing 0.5 percent in November. About 70 percent of the December advance can be attributed to prices for final demand services less trade, transportation, and warehousing, which rose 0.2 percent. The index for final demand trade services also advanced 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services declined 0.4 percent.

Most of the December increase in the index for final demand services can be traced to prices for securities brokerage, dealing, investment advice, and related services, which advanced 4.4 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; apparel, footwear, and accessories retailing; food retailing; and health, beauty, and optical goods retailing also moved higher. In contrast, prices for airline passenger services fell 2.4 percent. The indexes for fuels and lubricants retailing, loan services (partial), and apparel wholesaling also decreased.

* * *

In short, in December, the price of gasoline and heating surged, brokerage fees jumped, and everything else was largely in line as airplane tickets dropped while the price of fruits and melons tumbled.

 

END

 

U. of Michigan consumer sentiment confidence dropped from 89.5 to 88.9.  So ends the Trump bump:

(courtesy zero hedge)

Consumer Confidence Disappoints As Trump Hope Dips

After surging to 12-year highs in December, following Trump’s election victory, UMich consumer sentiment faded in January and missed expectations (98.1 vs 98.5 exp). While inflation outlooks picked up modestly off record lows, economic ‘expectations’ – hope – dipped from 89.5 to 88.9 as the Trump Bump appears to have stalled.

While not quite as big a drop as Bloomberg confidence data, it appears Trumphoria is fading…

Even as inflation outlooks bounce off record lows…

On the bright side, survey respondents improved their view of it “being a good time to buy” Household Items, Homes, and Vehicles.

 

 

END

 

Michael Snyder  is taking exception to the “strong” USA economy.  He states that if the economy is that strong, why are WalMart, Boeing and Lowe’s laying off workers?

(courtesy Michael Snyder/Economic Collapse Blog)

Why Are Wal-Mart, Boeing, & Lowe’s Laying Off Workers If The U.S. Economy Is In Such Great Shape?

Submitted by Michael Snyder via The Economic Collapse blog,

The stock market has been on quite a roll in recent weeks, but signs of trouble continue to plague the real economy.  Earlier this week, I talked about the “retail apocalypse” that is sweeping America.  Major retail chains such as Sears and Macy’s are closing stores and laying off workers, but I didn’t think that Wal-Mart would be feeling the pain as well.  Unfortunately, that is precisely what is happening.  USA Today is reporting that approximately 1,000 jobs will be cut at Wal-Mart’s corporate headquarters in Bentonville, Arkansas by the end of this month…

Walmart’s plan to lay off of hundreds of employees is the latest ripple in a wave of job cuts and store closures that are roiling the retail industry.

The world’s largest retailer is cutting roughly 1,000 jobs at its corporate headquarters in Bentonville, Ark., later this month, according to a person familiar with the matter who was not authorized to speak about it.

The company is saying that these cuts are necessary because Wal-Mart is always “looking for ways to operate more efficiently and effectively“.  But something doesn’t smell right here.  You don’t get rid of 1,000 employees at your corporate headquarters if everything is just fine.

I have driven past Wal-Mart’s headquarters in Bentonville a number of times, and it is in a beautiful part of the country.  Bentonville and the surrounding areas had been booming, but it looks like times may be changing.

And today Lowe’s…

Lowe’s is changing its store staffing model and will lay off “less than 1%” of its employees soon.

Lowe’s has over 285,000 workers.

Meanwhile, there are signs of trouble out on the west coast as well.  The Los Angeles Times is reporting that there is going to be a new round of engineering job cuts at Boeing…

Boeing Co. has internally announced a new round of employee buyouts for engineers companywide, including in Southern California, and warned that layoff notices will follow later this month to engineers in Washington state, where the company has a large presence.

Management did not cite a target for the number of projected job cuts.

The news comes after company Vice Chairman Ray Conner and the new chief executive of Boeing Commercial Airplanes, or BCA, Kevin McAllister, warned in December of the need to aim for further cuts in 2017.

And according to Boeing spokesperson Doug Alder, similar job cut announcements are coming for other classes of workers as well.

So why is Boeing getting rid of so many employees?

Well, the truth is that Boeing’s business is way down.  The following comes from Wolf Richter

Business has been tough. In 2016, deliveries fell by 14 jets from a year ago, to 748. Net orders dropped 13% from an already rotten level in 2015, to just 668, down 53% from 2014. And the lowest level since 2010!

When the economy is doing well, air traffic tends to rise, and when the economy is doing poorly it tends to go down.

Needless to say, the fact that Boeing is doing so poorly does not bode well for the future.

In addition to Wal-Mart, another major retailer that is letting people go is Petco

Petco is cutting 180 positions with about 50 at its San Diego headquarters, the pet supply retailer confirmed Wednesday.

The company made the cuts across its workforce and include both existing and open positions.

Petco has about 650 workers at its headquarters in Rancho Bernardo. It employs 27,000 in the U.S.

My wife and I have three cats, and even though Petco tends to be a bit overpriced we have always appreciated the work that they do.

Unfortunately, when the economy gets tough spending on pets tends to be one of the first things to get cut back, and this current trouble at Petco could be a sign that rough sledding is ahead for the entire economy.

Of course your personal perspective on these things is likely to be very heavily influenced by your immediate surroundings.  Those that live in wealthy enclaves of major cities such as San Francisco, New York City or Washington D.C. may be wondering how anyone could possibly be talking about economic trouble right now.

But if you live in economically depressed areas of Appalachia or the upper Midwest, it may seem like the last economic recession never even ended.

There have been pockets of economic prosperity in recent years, and this has resulted in some people becoming exceedingly wealthy.  Meanwhile, things have just continued to become even tougher for millions of other families as the cost of living always seems to grow faster than their paychecks do.

If you are in the top one percent of all income earners, maybe to you it seems like things have never been better.  But most of the country is living paycheck to paycheck and is just struggling to survive from month to month.  The following comes from CNN

The rich are money-making machines. Today, the top mega wealthy — the top 1% — earn an average of $1.3 million a year. It’s more than three times as much as the 1980s, when the rich “only” made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn’t changed in over three decades.

The workers being laid off at the companies discussed above are real people with real hopes and real dreams.  Perhaps many of them will be able to land other employment fairly soon, but the truth is that the job market is really tough in many areas of the country right now.

Finding a good job that will allow you to pay the bills and support your family is not easy.  You may find that out the hard way if you end up losing your current job during the economic troubles that will come in 2017.

Earlier today, I came across an excellent article by Gail Tverberg that detailed a whole bunch of reasons why a significant economic downturn appears to be imminent in 2017.  If you would like to read it, you can find it here.  She points to many of the same things that I have been pointing to for a very long time.

Even though economic conditions were fairly stable throughout 2016, our long-term problems just continued to get even worse.  So the truth is that we are more primed for a major crisis today than we have been at any point since the last recession.

My hope is that things will not be nearly as bad in 2017 as Gail Tverberg and others are projecting that they could be, but the warning signs are definitely there, and it isn’t going to take much to push the U.S. economy off the rails.

 

END

 

Bank of America misses revenues and only because of accelerated expense reductions does earnings rise

(courtesy zerohedge)

Bank Of America Misses Revenues As FICC Disappoints, EPS Beats On Accelerated Expense Reductions

 

END

 

JPMorgan also disappoints despite an earnings jump:

(courtesy zero hedge)

JPM Earnings Jump On Slashed Expenses, FICC Trading Beats As Equity, IB Misses; Credit Card Charge-Offs Spike

 

END

 

Rising rates are killing this huge mortgage lender, Wells Fargo

(courtesy zero hedge)

How Rising Rates Are Hurting America’s Largest Mortgage Lender, In One Chart

 

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