Jan 18/China’s housing bubbles implodes/China sites platform violations in Bitcoin trading/Pearson of Great Britain plummets as does Target in the USA as they issue dire warnings as well as poor results/Gold and silver whacked in the access market/

Gold at (1:30 am est) $1211.30 DOWN $0.70

silver  at $17.23:  UP 13 CENTS

Access market prices:

Gold: $1204.65

Silver: $17.04



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

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

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

And now the fix recordings:

WEDNESDAY gold fix Shanghai

Shanghai FIRST morning fix Jan 18/17 (10:15 pm est last night): $  1232.92

NY ACCESS PRICE: $1215.10 (AT THE EXACT SAME TIME)/premium $17.82


Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1230.75



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


London Fix: Jan 18/2017: 5:30 am est:  $1212.50   (NY: same time:  $1214.70   (5:30AM)

(????  why the discrepancy)

London Second fix Jan 18.2017: 10 am est:  $1214.75 (NY same time: $1214.60  (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.


For comex gold: 


For silver:


Let us have a look at the data for today



In silver, the total open interest ROSE by 3,468  contracts UP to 172,056 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .860 BILLION TO BE EXACT or 123% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY 13,513 contracts WITH THE RISE IN  THE PRICE GOLD ($16.70 with YESTERDAY’S trading ).The total gold OI stands at 467,937 contracts.

we had 37 notice(s) filed upon for 3700 oz of gold.


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


We had no  changes in tonnes of gold at the GLD

Inventory rests tonight: 807.96 tonnes



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 ROSE by 3,468 contracts UP to 172,056 AS SILVER ROSE 38 CENTS with YESTERDAY’S trading. The gold open interest ROSE by 13,513 contracts UP to 467,037 AS THE  PRICE OF GOLD ROSE BY $16.70 WITH YESTERDAY’S TRADING

(report Harvey).

2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 4.23 POINTS OR 0.14%/ /Hang Sang closed UP 257.29 OR 1.23%. The Nikkei closed UP 80.84 POINTS OR 0.43% /Australia’s all ordinaires  CLOSED DOWN 0.37%/Chinese yuan (ONSHORE) closed UP at 6.8480/Oil FELL to 51.67 dollars per barrel for WTI and 54.72 for Brent. Stocks in Europe MOSTLY IN THE RED. Offshore yuan trades  6.8181 yuan to the dollar vs 6.8480  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AGAIN AS  DOLLARS STOP LEAVING CHINA’S SHORES /




 none today


i)China seems to be going after Bitcoin as they site platform violations .Gold will surely benefit from this

(courtesy zero hedge)

ii)A Chinese province now admits to fabricated economic data.  I would be willing to be that all Chinese data is fabricated

( zero hedge)


iii)Finally housing prices are coming down in China with respect to Tier one and Tier two cities

( zero hedge)


i)Great Britain

The world’s largest education company, Pearson PLC rocked London as its company crashes on the London Stock Exchange after giving a dire warning of its business. This is the same company that sold the Financial Times.  It is putting its famed Penguin Random House up for sale.

( zero hedge)


Deutsche bank is set to scrap bonuses to at least 90% of its bankers. The huge amount of fines has not helped this bank

( zero hedge)

iii) Europe

Jamie Dimon, of JPMorgan is warning that the Euro zone may not survive:

(courtesy zero hedge)


 none today


Both the Canadian dollar and the Mexican peso were pounded today.  The Canadian economy is not doing well at all with huge excess capacity.  The Governor of the Bank of Canada states that a rate cut remains on the table:

( zero hedge)


API reports a drawdown in oil, they also reported a huge build in gasoline inventories

( zerohedge)



i)The details on Deutsche banks 7.2 billion settlement over the mortgage scandal

(courtesy Arons/Farrell/DOJ/Bloomberg)

ii)An excellent commentary from Chris Powell as he describes that Trump does not want a strong dollar policy.  So exactly what was the mechanics throughout the years to allow the USA to have a strong dollar policy?  Yes, it was the suppression of gold via gold leasing


i)Target tumbles after cutting their guidance for the year. Target performance rubbed off onto WalMart:

( zero hedge)

ii)Trump tells Canada and Mexico that he will begin NAFTA renegotiation within days of his inauguration. However the Globe and Mail reports that he will concentrate on Mexico.

( zero hedge)

iii)So much for wag inflation, the most important part of Janet Yellen’s mantra.  Instead of growing at 2% it grew only .2% year over year and it is the weakest in 2 and 1/2 years. When the Fed states that it wants 2% inflation, what it really wants is wage inflation to pay for things.  It is just not happening@!!

( zerohedge)

iv)USA inflation is rearing its ugly head as we witness the highest rent inflation in almost 10 years and well above the Fed’s target.  Core inflation has been rising now for the 14th consecutive month

( zero hedge)

v)The high dollar is certainly killing USA manufacturing.  USA manufacturing stagnates for the 14th straight month

( zero hedge)

vi)My goodness, that did not last long:  the border tax scenario is back on the table!!

( zerohedge)

vii)All foreign central banks have liquidated a record 405 billion USA in treasuries. China has sold the most since 2011 at 66 billion in just the month of November.

If this pace continues and if there are no foreign buyers for these treasury notes, the Yellen will be in a bind as rates rise and nobody around to buy the new treasuries that Trump will need to finance all of his new infrastructure spending.

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 13,513 CONTRACTS UP to an OI level of 467,937 AS THE  PRICE OF GOLD ROSE $16.70 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 54  contract(s) DOWN to 132.  We had 61 notices filed YESTERDAY so we GAINED 7 contract(s) or AN ADDITIONAL 700 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 420 contracts DOWN to 216,884.(feb  2016: 211,000 contracts). March had a GAIN of 114 contracts as it’s OI is now 697. We are on a par with respect to OI when we compare data for open interest re the Feb 2016 contract.

We had 37 notice(s) filed upon today for 3700 oz


And now for the wild silver comex results.  Total silver OI ROSE by 3,468 contracts FROM  168,588 p to 172,056 AS the price of silver ROSE 38 CENTS 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 0 contract(s) REMAINING AT  229. We had 0 notice(s) filed on yesterday so we neither lost nor gained any silver contracts or oz in this delivery month of January. The next non active month of February saw the OI rise by 3 contract(s) RISING TO 219.

The next big active delivery month is March and here the OI ROSE by 3067 contracts UP to 132,930 contracts.

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

VOLUMES: for the gold comex

Today the estimated volume was 188,174  contracts which is fair.

Yesterday’s confirmed volume was 426,849 contracts  which is huge

volumes on gold are getting higher!

Initial standings for january
 Jan 18/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 13,921.298 OZ
49 kilobars
Deposits to the Dealer Inventory in oz 1899.95 oz


Deposits to the Customer Inventory, in oz 
 55,772.123 oz OZ
No of oz served (contracts) today
37 notice(s)
3700 oz
No of oz to be served (notices)
95 contracts
9500 oz
Total monthly oz gold served (contracts) so far this month
1134 notices
113,400 oz
3.5272 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     4,804,476.6 oz
Today we HAD 2 kilobar transaction(s)/
Today we had 1 deposit(s) into the dealer:
 i) Into Brinks:  1899.95 oz
total dealer deposits:  1899.95  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 2  customer deposit(s):
 i) Into JPMorgan: 12,345.600 oz
(384 kilobars)
ii) into Scotia;  43,426.523 oz
total customer deposits; 55,772.123 oz
We had 2 customer withdrawal(s)
i) Out of Scotia: 1,575.35 oz (49 kilobars)
ii) Out of Brinks: 12,345.948 oz
total customer withdrawal: 13, 921.298oz
We had 0  adjustment(s)
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 37 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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 (1134) x 100 oz or 113,400 oz, to which we add the difference between the open interest for the front month of JANUARY (132 contracts) minus the number of notices served upon today (37) x 100 oz per contract equals 122,900 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 (1134) x 100 oz  or ounces + {OI for the front month (132) minus the number of  notices served upon today (37) x 100 oz which equals 122,900 oz standing in this non active delivery month of JANUARY  (3.8227 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.
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.
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/     3.8277 tonnes
total for the 13 months;  226.213 tonnes
average 17.401 tonnes per month vs last yr  51.534 tonnes total for 13 months or 3.964 tonnes average per month.
Total dealer inventor 1,457,113.466 or 45.322 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,982,278.436 or 279.38 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.38 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.
And now for silver
 Jan 28. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 632,290.783 0z
Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory 
1,257,073.923 oz
No of oz served today (contracts)
(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  15,605,338.6 oz
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 3 customer withdrawal(s):
i) Out of Brinks:  623,349.403 oz
ii) out of CNT:  6928.770 oz
iii) Out of Delaware: 2012.610 oz
 we had 2 customer deposit(s):
i) Into JPMorgan:  623,349.403 oz**
** JPMorgan has deposited a huge amount of silver on each and every day starting in 2017:
ii) Into Scotia; 633,724.520 oz
total customer deposits;  1,257,072.923   oz
 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.
Volumes: for silver comex
Today the estimated volume was 54,775 which is very good
YESTERDAY’S  confirmed volume was 94,664 contracts  which is huge.
Total dealer silver:  28.582 million (close to record low inventory  
Total number of dealer and customer silver:   181.605 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.


And now the Gold inventory at the GLD

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

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 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 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 16/no changes at the GLD/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
Jan 18/2017/ Inventory rests tonight at 807.96 tonnes


Now the SLV Inventory
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338.356 million oz/
Jan 12.2017/ no changes in the SLV 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 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 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 18.2017: Inventory 338.356  million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.9 percent to NAV usa funds and Negative 6.4% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.8%
cash .+0.3%( jan 18/2017) 
2. Sprott silver fund (PSLV): Premium RISES to +.30%!!!! NAV (Jan 18/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises TO – 0.17% to NAV  ( Jan 18/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.30% /Sprott physical gold trust is back into NEGATIVE territory at -0.17%/Central fund of Canada’s is still in jail.


Major gold/silver trading/commentaries for WEDNESDAY


Gold Up 5.5% YTD – Hard Brexit Cometh and Weaker Dollar Under Trump


Gold prices extended their run of gains to a seventh session and added another $12 to $1,215 an ounce yesterday. Gold prices have consolidated on those gains today and are now up 5.5% in dollar and sterling terms and 5% in euro terms year to date.

gold-prices-ireland-2017Gold in USD – 1 Year

Gold bullion has risen every day except one so far in 2017, building on the 8.1 percent gain in 2016. Investors are concerned about the huge uncertainty facing us from a ‘Hard Brexit’ and the potential for political and financial contagion in the EU as we head into the new year.

Although the pound bounced higher after recent sharp falls, the FTSE 100 fell 1.5% and suffered worst day since immediate aftermath of the EU referendum.

U.K. Prime Minister Theresa May confirmed the UK will have a “Hard Brexit” and will leave the European Union’s single market while seeking a new arrangement on the customs union.

May warned EU politicians that the UK is prepared to crash out of the EU if it cannot negotiate a reasonable exit deal in a speech where her tough talking rhetoric prompted key figures in Brussels to say that the country was on track for a “Hard Brexit”.

The prime minister told EU counterparts that any attempt to inflict a punitive outcome on the UK would be an “act of calamitous self-harm” for the EU because the UK would retaliate and slash taxes to attract companies from across the world.

Although May said that the UK could be the EU’s “best friend” if the article 50 divorce talks went well, in a one-hour address intended to spell out the UK’s negotiating strategy, she also said she was prepared to walk away from the EU.

If that were not enough for markets to digest, the Donald Trump is just three days away from being sworn in as the next U.S. president.

U.S. President-elect Trump told the Wall Street Journal that the strong dollar is “killing” the ability of U.S. companies to compete, sending the greenback reeling yesterday.

His comments also appeared to send U.S. equity markets lower. The S&P 500 Index and the Dow Jones Industrial Average fell 0.3 percent and the NASDAQ Composite fell by more, falling 0.6 percent due to a selloff in biotechnology shares.

Credit Card Limits Increased To 50,000 (£ $ €)

Due to ongoing requests for higher credit and debit card transactions, we have increased our maximum card transaction sizes from 5,000 to 50,000 GBP, EUR or USD.

  • You can now lock in prices online and transact immediately for up to 50,000 (GBP, EUR or USD) on your Visa and Mastercard credit cards (not American Express) for one transaction

  • We do not limit card payments to 50,000 per day but to 50,000 per individual transaction. This means that clients can do a number of transactions for 50,000 on a single day. Certain banks may have restrictions in this regard.

  • In the volatile markets of today, this added liquidity is advantageous and, to our knowledge, these are the highest credit and debit card transaction limits in the bullion market. This will be attractive to investors seeking to lock in prices without having to wait for funds to clear first.

  • Credit and debit card rates have come down significantly and are now 1.9% for credit cards and 0.45% for debit cards. Please keep in mind that this is subject to your own credit card limits.




The details on Deutsche banks 7.2 billion settlement over the mortgage scandal

(courtesy Arons/Farrell/DOJ/Bloomberg)

DOJ: Deutsche Bank Agrees to Pay $7.2 Billion for Misleading Investors

January 17, 2017, 12:42 PM MST January 17, 2017, 1:32 PM MST

Deutsche Bank AG reached a final settlement with the U.S. Justice Department over its handling of mortgage-backed securities before 2008, resolving one of its biggest litigation risks.

The bank agreed to pay $7.2 billion and admitted to misleading investors, the Justice Department said on Tuesday. The penalty was in line with the bank’s Dec. 23 announcement that it had reached an agreement in principle in the matter. It will pay a $3.1 billion civil penalty and provide $4.1 billion in relief to homeowners.

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” Attorney General Loretta Lynch said in a written statement. “Deutsche Bank did not merely mislead investors: It contributed directly to an international financial crisis.”

The final settlement caps a negotiation process that had sent the company’s shares to a record low in September, when Deutsche Bank said the Justice Department had made an opening request of $14 billion to settle. The news spurred concern that the bank might not have enough capital.

Deutsche Bank’s American depositary receipts declined about 3 percent to $18.61 at 3:11 p.m. in New York.

“Our conduct in this matter, which occurred from 2005 to 2007, falls short of our standards and is unacceptable,” Deutsche Bank Chief Executive Officer John Cryan said. “We apologize unreservedly for it. We have subsequently exited many of the underlying activities and comprehensively improved our standards. As we enter 2017, we are pleased to have resolved this matter.”

Independent Monitor

The bank, under the terms of the agreement, agreed to hire a monitor to review its compliance with its pledge to provide consumer relief. The lender already has monitors reviewing its compliance with foreign exchange practices, U.S. sanctions laws and derivatives trading.

The mortgage-securities monitor, Michael Bresnick, is a former Justice Department official now at the law firm Venable LLP.

In a statement of facts issued along with news of the accord, Deutsche Bank admitted to making false representations and omitting material information from disclosures to investors about the loans included in residential mortgage-backed securities sold by the bank.

“This misconduct, combined with that of other banks we have already settled with, hurt our economy and threatened the banking system,” said Benjamin Mizer, the principal deputy assistant attorney general and head of the Justice Department’s civil division. “To make matters worse, the bank’s conduct encouraged shoddy mortgage underwriting and improvident lending that caused borrowers to lose their homes they couldn’t pay their loans.”

Midrange Penalty

The penalty against Deutsche Bank was in the midrange of mortgage-related settlements by big banks stemming from the financial crisis. Over the last few years, Bank of America Corp. agreed to pay $16.7 billion; JPMorgan Chase & Co., $13 billion; Citigroup, $7 billion; Goldman Sachs Inc., $5.1 billion; and Morgan Stanley, $3.2 billion.

Deutsche Bank, Germany’s biggest bank, continues to defend itself from other U.S. probes and potentially expensive civil suits — liabilities that Cryan has set out to resolve as he seeks to restore confidence. The bank declared a hit of $1.2 billion from the Justice Department settlement to fourth-quarter pretax profit on Dec. 23.

The bank still faces investigations into whether it manipulated foreign-currency rates and precious metals prices and whether it facilitated transactions that helped investors illegally transfer billions of dollars out of Russia. In a memo to employees in December, the lender said it found “deficiencies” in the bank’s systems and controls in Russia, but no indications that it breached sanctions in the country.

And on Tuesday, the U.S. Supreme Court refused to stop antitrust lawsuits that accuse some of the world’s biggest banks, including Deutsche Bank, of conspiring to rig the London Interbank Offered Rate, known as Libor. The court rejected the banks’ appeal without explanation, leaving them vulnerable to the prospect of paying out billions of dollars in damages if the suits succeed.

Deutsche Bank had set aside 5.9 billion euros ($6.3 billion) for all of its outstanding legal costs as of Sept. 30, about 2 billion euros of which it used for the settlement with the U.S. Its common equity tier 1 ratio, a key metric of financial strength, stood at 11.1 percent, below the target level of at least 12.5 percent for 2018.


What was the ‘strong-dollar policy’ except gold leasing and price suppression?


7:55p ET Tuesday, January 17, 2017

Dear Friend of GATA and Gold:

Financial news organizations tonight are full of reports about the imminent demise of the U.S. government’s longstanding “strong-dollar policy,” what with President-elect Trump having declared in an interview with The Wall Street Journal that the dollar is “too strong.”

The Journal’s headline is “Trump Comments Signal Shift in Approach to U.S. Dollar”:


The headline in the Financial Times is “Trump Team Shifts Further from Strong-Dollar Policy”:


CNBC says “Trump Just Signaled the Death of Clinton-Era Strong-Dollar Policy”:


And Marketwatch’s headline is “Trump Is Waving Adios to the Longstanding ‘Strong-Dollar Policy'”:


But as always, even now no news organization seems to be explaining exactly how the “strong-dollar policy” was implemented. The policy prevailed through periods of war and peace as well as periods of U.S. government budget restraint and wretched excess.

So what did the U.S. government actually do to keep the dollar strong?
GATA long has maintained that the “strong-dollar policy” was mainly gold price suppression, implemented largely through the gold carry trade devised by President Clinton’s treasury secretary, former Goldman Sachs Chairman Robert Rubin, an enterprise in which Western central banks “leased” gold to investment banks at negligible interest rates and encouraged them to sell the metal and invest the proceeds in U.S. government bonds paying closer to 5 percent. The investment banks thereby collected a spread that was risk-free as long as they had the assurance that, as Federal Reserve Chairman Alan Greenspan told Congress in July 1998, “central banks stand ready to lease gold in increasing quantities should the price rise”:


Gold leasing gave the U.S. government a strong dollar, strong government bond prices, and low interest rates even as the government’s debt began to explode under Presidents Bush and Obama. For inflation was safely concealed behind a gold price that was suppressed by artificial and imaginary supply.

So if the U.S. government wants a weaker dollar, it probably needs only to curtail gold leases and swaps and take some central bank feet off the gold market, feet that seem to have been stomping on gold pretty hard lately, given the explosion of gold swapping through the Bank for International Settlements over the last year:


This easing of gold price suppression probably can be done without prompting any suspicion from mainstream Western financial news organizations, which are either brain-dead or as compliant as news organizations in totalitarian countries. Tonight only Marketwatch seems to have come across a hint of what the “strong-dollar policy” was really about. Of the Rubin years at Treasury, Marketwatch writes:

“The Clinton administration’s tune soon changed once Rubin replaced [Lloyd] Bentsen. Rubin drove home the shift by faithfully repeating that a strong dollar was in America’s interest. Some well-timed intervention that burned the fingers of dollar bears also helped.

“Intervention”? There’s a big story there, but what mainstream financial news organization will ever dare to tell it?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.




Here are Trump’s 5 options for weakening the dollar.  The author missed the big one: stopping the use of gold leasing and gold suppression

(courtesy Wong/Bloomberg/GATA)

Trump’s options for weakening dollar extend far beyond tweeting


No mention of gold here.

* * *

By Andrea Wong
Bloomberg News
Tuesday, January 17, 2017


Donald Trump may have a point: The dollar is indeed strong. Judging from the Federal Reserve’s own trade-weighted dollar index, the U.S. currency is now around 7 percent above its four-decade average.

A strong dollar isn’t necessarily detrimental to the economy, but it may torpedo Trump’s vision to revive America’s manufacturing sector. Before his comments to the Wall Street Journal that the strong dollar is “killing” the ability of U.S. companies to compete, the 22 percent appreciation since mid-2014 had already worsened the trade deficit, while the full effect hasn’t yet percolated into the real economy.

What can Trump and his administration do if they want a weaker dollar? Here are five options.

1. Jawboning

Talk is cheap, but it has worked for Trump — so far. If history is any guide, traders stop listening to government officials and central bankers in the absence of concrete policies that target exchange rates.

Just look at Japan. When Abenomics lost steam and traders started to bet on a stronger yen, Finance Minister Taro Aso repeatedly warned that the surge had been disorderly and one-sided, hinting that the government could intervene to weaken it. The yen ended up surging as much 22 percent last year.

2. Coordinated Intervention

The Treasury Department has worked with central banks worldwide to bring down and drive up the dollar over the past three decades — most recently in 2011. The problem is coordinated intervention has gone out of vogue in recent years, partly because analysts aren’t sure whether it really works when officials are trying to sway a vast market like the dollar, which sees about $5 trillion exchange hands every day.

Also, most currency interventions are sterilized, meaning central banks would inject or take out liquidity on the side as part of the transaction to maintain the level of money supply. An argument “common among economists, was that sterilized intervention has no long-lasting effect and unsterilized intervention is just another kind of monetary policy,” Jeffrey Frankel, an expert in currency intervention and a professor at Harvard University’s Kennedy School of Government, wrote in a paper published December 2015.

3. Unilateral Intervention

Going it alone is simply a taller order than having the backing of your allies, in this instance the Group-of Seven-nations. A 2013 communique among G-7 nations denounced unilateral intervention and agreed not to target exchange rates.

Yet the statement acknowledged that “excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.” The Trump administration could spin the same communique to make the case for intervention.

While Charles St. Arnaud, a senior economist at Nomura Securities International, doesn’t think Trump will unilaterally weaken the dollar, “the U.S. can have a good argument,” he said. “The dollar has appreciated a lot in a rapid pace. They can always argue it’s difficult for the economy to adjust to such a big, broad-based appreciation.”

Unilateral intervention poses the risk of turning into a full-blown currency war. If the Treasury decides to break from the pack and starts weakening the dollar, other countries may be justified to do the same.

4. Creation of Sovereign Wealth Fund

Nomura also floated a rather left-field option: creating a sovereign wealth fund. Many emerging nations and even developed ones such as Norway have coffers that buy foreign assets from government bonds to real estate, and there’s no reason why the U.S. can’t follow.

5. Non-Currency Intervention

In the end, Trump may just focus on protectionist policies that produced a weaker dollar as a natural consequence. He has vowed to renegotiate trade treaties and impose import tariffs on China and Mexico, moves that may destabilize the dollar and engineer a more favorable exchange rate for America’s exporters.

* * *



Bill Holter discusses the Hugo Salinas Price commentary issued yesterday.

The following is a must read..


(courtesy  Bill Holter)


It looks just like a Ponzi scheme doesn’t it? (Please post public side)

GATA forwarded a fabulous link yesterday
http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=304  to Hugo Salinas Price’s latest writing.  This is a very short read and represents visually what Richard Russell said for years …”Inflate or Die”.  Please read it carefully because if you do not understand it, you will not understand “why” mathematically we are about to go through financial and economic disaster. 
    Looking at this graph, you will notice the parabolic move began in 1971.  This was possible because “debt” had previously been constrained by the amount of purported U.S. gold holdings.  De linking from gold allowed literally parabolic growth in new debt issuance. The increase in reserves really started to accelerate around the year 2000 and went vertical beginning around 2008.  These were both years when the economy (and markets) began to seriously falter.  It has been my contention that these years also coincided with “debt saturation” milestones where Kirk called down to the engine room demanding “more power”.
  Before moving on, let’s look at how Ponzi schemes work and how they die.  At first, there are few investors so adding even one more sucker to the pile is meaningful as his capital can be parceled out into meaningful “dividends”.  But as the scheme grows, say to 100 unsuspecting souls, one more new investor only equals 1% “payouts” to the group.  Then as the pool gets even larger at 1,000 or more, one new mark is almost meaningless.  As the returns shrink, people begin to look elsewhere and bail out spelling the beginning of the end.  If you look at the above chart again, it pretty much mirrors the birth, growth, maturity and coming death of all Ponzi schemes…doesn’t it?
  Looking at the chart from a real world vantage point, the last two plus years has been more than a minor hiccup …the parabolic “trend” has clearly changed and reversed.  Mr. Salinas Price wrote that Mr. Trump has communicated desires to eliminate the trade deficit which will expedite the decline of paper reserves.  I would remind you what Mr. Trump said yesterday, “the dollar is too high”!  This is further evidence of a move away from globalism toward nationalism.  A “lower” dollar will help our exports while curbing imports.  This will truly not be good for an over levered world that relies on product sales to the U.S. to pay their debt service.  Another way to look at it is through the eyes of “Smoot-Hawley” glasses, we already know what happens to trade when tariffs are erected, trade volumes implode.
  For the last few years, even with the U.S. trying and struggling to “play the game”, the debt structure had already begun to slow and roll over.  Now with Mr. Trump at the helm, it looks like the U.S. will no longer play the game.  Simply put, “game over” will be rapidly seen and understood as inevitable where no amount of hope will trump “policy” nor Mother Nature!  The credit contraction is here and now, if you know this and understand what it means, then you know where it will all end.
  As mentioned at the beginning, Richard Russell’s most famous quote was “inflate or die”.  With regard to the above chart, Sir Richard was saying “inflation” (growth of debt) must either continually go up AND at an increasing rate …or it rolls over and dies.  This is exactly why for the last few months I have harped on “credit” and why it is so important.  Credit conditions all over the world have been tightening.  The greatest fear of the Federal Reserve has always been a credit contraction that could not be reversed …their greatest fear has arrived and in spades!  Please understand that “credit” affects EVERYTHING.  Production, consumption and the “ability” to consume, and importantly “distribution”.  Without credit, the economic, nor financial world will turn …which of course will affect the “social world” as stomachs begin to growl in hunger.
  You see, unlike past “reflations”, there is now little to no unencumbered collateral left (even including sovereign balance sheets) anywhere in the world.  The amount of existing debt (Ponzi clients) is so large, new additional debt (new Ponzi clients) has little to no effect on the entire pool.  In other words, we have reached and past the point of “debt saturation” where the ability to add meaningful debt does not exist.  The availability to obtain new credit is winding down.  Assets are now in the process of being sold to pay existing debt down, very similar to Ponzi clients asking for their money back.  Mr. Trump’s proposed policies of weakening the dollar and balancing the trade deficit will only speed the process …into complete and utter chaos.  The “utter chaos” part is easily forecast because of debt levels compared to current production, and financial derivatives are often 10 times or many more the underlying assets themselves.  “Orderly” will not be used to describe the coming liquidation process!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome,  bholter@hotmail.com

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



2. Nikkei closed UP 80.84 POINTS OR 0.43%   /USA: YEN FALLS TO 113.32

3. Europe stocks opened MOSTLY IN THE RED      ( /USA dollar index FALLS TO  100.70/Euro UP to 1.0686


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  51.67  and Brent: 54.72

3f Gold DOWN/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 RISES TO  +.365%/Italian 10 yr bond yield UP  to 1.9221%    

3j Greek 10 year bond yield RISES to  : 7.17%   

3k Gold at $1212.70/silver $17.11(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 16/100 in  roubles/dollar) 59.24-

3m oil into the 51 dollar handle for WTI and 53 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   REVALUATION UPWARD from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0020 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0708 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.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.365%


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 2.338% early this morning. Thirty year rate  at 2.961% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


“Everything Is A Partial Reversal Of Yesterday” – Stocks, Dollar Rebound Following Trump Scare

European shares decline led by a plunge in Pearson shares, S&P futures were modestly in the green as Asian and EM stocks gained. The dollar rebounded against most major currencies after retreating 1.3% on Tuesday to the lowest in a month following Trump’s “strong dollar” comments and halted a seven-day drop against the yen.

Asian traders said shares were helped by hopes that the concerns about a stronger dollar expressed by the U.S. President-elect at the weekend, would be beneficial to emerging markets where companies have borrowed heavily in dollars. Asia’s MSCI’s ex-Japan Asia-Pacific shares index rose 0.3%, just shy of a three-month high hit last Thursday. Energy and cyclical stocks were the chief gainers. Short-covering also helped, especially in China where stocks tumbled more than 4% last week as traders took some money off the table before Trump’s inauguration on Friday. European stock markets were fractionally in the red steady after a choppy start, banking shares under pressure as investors chewed over details of the impact of regulatory fines on Deutsche Bank.

“You’ve seen the banks ease, everything has taken a breather after the strong start in January for stocks,” Andy Sullivan, a portfolio manager with GL Asset Management in London told Reuters. “The last few days have been choppier and for the rally to be sustained, we need to see earnings growth start to come through.”

The Yen and gold retreated for the first time in eight days. Bonds edged lower before Thursday’s ECB meeting, where few surprises are expected. Oil reversed course after earlier gains, slipping below $52 a barrel.  Sterling, which soared more than 3 percent on Tuesday after Prime Minister Theresa May’s Brexit speech, fell back 0.7 percent.

Everything is just a partial reversal of the price action yesterday,” said RBC Capital Markets currency strategist Adam Cole, arguing that the greenback’s weakness had been primarily driven by excessive positioning at the end of last year.

Ahead of today’s December CPI report in the US, strengthening inflation in the U.K. and eurozone will likely underpin confidence in a growth rebound, however concerns about the policies of Trump and looming elections in Germany and France are among issues clouding the outlook according to Bloomberg. That’s taken the edge off the so-called reflation trade, with strategists starting to rethink bets on returning inflation and a stronger dollar.

“We need to see what the next steps from central banks will be, what policy action will follow the inauguration,” said Peter Schaffrik, the head of European rates strategy at Royal Bank of Canada. “We’ve had a lot of news flow. Markets need to see some concrete action.”

Meanwhile, the MSCI index of global share prices reached its highest since mid-2015 on Friday and, driven by a bounce in expectations for U.S. inflation and growth since Trump’s election, is within sight of all-time highs. But worries about the new U.S. president’s attitude to trade and politics, with relations with China in focus, have begun to show up more in some asset prices since the start of the year. As a result, with doubts growing about the sustainability of the “Trump trade” – higher stocks and a stronger dollar – investors’ favorite safe havens for capital have been in demand.

The Stoxx Europe 600 Index fell 0.2 percent. Pearson Plc plunged 27 percent to the lowest since 2009 after cutting its profit forecast for this year. The MSCI Emerging Markets Index rose 0.3 percent, poised for the highest closing level since Nov. 8. Futures on the S&P 500 added 0.1%. The underlying gauge lost 0.3% on Tuesday.

The Bloomberg Commodity Index halted a five-day rally, retreating 0.4 percent. West Texas Intermediate crude slumped 1.5 percent to $51.67 a barrel, the most in a week. Gold lost 0.3 percent, snapping a seven-day winning streak that was the longest since November.

In rates, yields on 10-year Treasuries climbed three basis points to 2.36 percent, after falling seven basis points on Tuesday. Gilts yields rose, with the 10-year benchmark trading one basis point higher at 1.32 percent.

Market Snapshot

  • S&P 500 futures up 0.1% to 2265
  • Stoxx 600 down 0.2% to 362
  • FTSE 100 down less than 0.1% to 7219
  • DAX down less than 0.1% to 11537
  • German 10Yr yield up less than 1bp to 0.32%
  • Italian 10Yr yield down less than 1bp to 1.91%
  • Spanish 10Yr yield up less than 1bp to 1.39%
  • S&P GSCI Index down 0.8% to 397.5
  • MSCI Asia Pacific up 0.3% to 140
  • Nikkei 225 up 0.4% to 18894
  • Hang Seng up 1.1% to 23098
  • Shanghai Composite up 0.1% to 3113
  • S&P/ASX 200 down 0.4% to 5679
  • US 10-yr yield up 2bps to 2.35%
  • Dollar Index up 0.24% to 100.57
  • WTI Crude futures down 1.5% to $51.70
  • Brent Futures down 1.5% to $54.66
  • Gold spot down 0.2% to $1,215
  • Silver spot down 0.3% to $17.15

Global Headline News

  • Trump’s Options for Weakening Dollar Extend Far Beyond Tweeting
  • By Ripping NATO, Trump Makes Europe Nervous and Arms Trade Happy
  • Bayer-Monsanto Pledge Investment, Jobs After Trump Meeting
  • Davos Cocktail Circuit Hums With Trump Optimism After Day One
  • Amazon Said to Walk Away From $1 Billion Souq.com Takeover Talks
  • Fed’s Williams Sees Gradual Hikes to Keep Economy on Track
  • Oil Extends Gains Above $52 as U.S. Crude Supplies Seen Falling

Looking at regional markets, Asia stocks were mostly higher as the region shrugged off the negative lead from Wall Street where the financial sector led stocks lower amid an unwinding of the Trump trade. ASX 200 (-0.4%) was today’s laggard after weakness in financials dampened the tone, considering the sector’s near 50% index weighting and with the Big 4 banks all firmly lower. Nikkei 225 (+0.4%) was initially negative as JPY strength dampened exporter sentiment, although the index then recovered alongside USD/JPY reclaiming the 113.00 handle while Toshiba shares (+2.9%) outperformed on reports the Co. is mulling spinning off its semiconductor business. In China, Hang Seng (+1.1%) and Shanghai Comp. (+0.1%) were higher after another substantial liquidity operation by the PBoC valued at CNY 460BN, while participants also digested the latest Chinese property prices which showed continued stellar advances, albeit at a slightly softer pace. Of course, the “national team” ias now officially intervening, making sure there is no selloff during Xi’s Davos visit. Finally, 10yr JGBs saw mild losses amid the improvement in risk appetite and following a paltry BoJ buying operation valued at JPY 710bIn in government bonds ranging from 5yr-25yr+ maturities.

Top Asia News

  • China Home Prices Rose in Fewest Cities in 11 Months Amid Curbs
  • Hong Kong Regulator Sues StanChart, UBS Over 2009 Timber IPO
  • China Stock Volatility Wanes Amid Speculated State Intervention
  • Optimism Reigns in India as CEOs, Consumers Look Beyond China
  • Diageo Said to Weigh Raising Stake in India’s United Spirit
  • China’s Xi Takes on Trump in Rebuttal Against Protectionism
  • Top Four Most Expensive Cities Worldwide in Asia, London Fifth

European markets are trading mixed this morning with the EUROSTOXX 600 trading flat and FTSE 100 trading higher after traders and investors digest yesterday’s Brexit speech from PM May. In stock specific news Pearson hit limit down following a 27.5% nosedive after the Co. announced they are scrapping 2018 profit target and dividend. Also of note, HSBC today announced bankers generating 20% of HSBC’s London  revenue may move to Paris which will raise some eyebrows after the aforementioned PM speech yesterday. Price action across fixed income markets have been somewhat subdued with the bund 2-10yr curve flattening by around 1bps. Elsewhere, Italy have begun marketing for their Sep’33 EUR dominated bond.

Top European News

  • May’s Brexit Hardball Raises Chances of All-or-Nothing EU Deal
  • Pound Rescued by May Faces Choppy Waters as Political Risks Loom
  • U.K. Employment Steady, Wages Pick Up in Resilient Labor Market
  • UBS’s Orcel Says Market Hasn’t Discounted All Negatives Yet
  • Trump’s Barbs Aimed at Merkel Seen Aiding Her Election Pitch
  • Chip Gear-Maker ASML’s Quarterly Sales Forecast Beat Estimates
  • Sweden’s Biggest FX Trader Warns Rate Hike Could Come Quicker
  • Pearson Cuts Forecast on Textbook Slump; to Sell Penguin
  • Burberry Gives Fresh Boost to Luxury as Sales Beat Estimates
  • Maersk Is Most Likely to List Energy Units Separately, CEO Says
  • German Jobless Mystery Explained as Refugees Hide in Statistics

In currencies, the Bloomberg Dollar Spot Index added 0.4 percent at 11 a.m. London time, after retreating 1.3 percent on Tuesday to the lowest in a month. The pound dropped 0.8 percent to $1.2311 after surging 3.1% on Tuesday. The euro slipped 0.3 percent to $1.0684 while the Russian ruble gained 0.3 percent. The yen weakened 0.7 percent to 113.35 per dollar, after soaring 3.9 percent over the previous seven days. FX markets have been range bound this morning, with the USD rebounding but showing no signs of resuming its uptrend, but current levels still look corrective as yet. The US 10yr looks to have found a near term base at 2.30%, and this looks to have placed a bid in USD/JPY in the mid 112.00’s, but stock market risk continues to unnerve the market, prompting ongoing caution just yet despite the overwhelming yield differentials with signal a buy. EUR/USD looks to be finding plenty of selling interest on spikes above 1.0700, but the pullbacks are extremely shallow as the ECB meeting ahead still carries modest risk on any mention of tapering. USD/CHF is still hovering above parity as a result, but recoveries here are lacking in any traction to suggest further consolidation (or another setback) in the near term. For GBP, it looks as though the post PM speech honeymoon is over, as talk of City job losses to the continent have taken the shine off GBP. The domestic jobs report showed another healthy earnings rise of 2.7%, while the unemployment rate stays at 4.8%.

In commodites, moves have been largely muted, but for the erratic moves seen on Oil prices, though price action all inside established ranges, to suggest traders looking for sizeable orders either way. Focus on the USD keeps Gold supported for now, with equity markets also showing vulnerability ahead of the presidential inauguration at the end of the week to add a safe have bid under the yellow metal. The Bloomberg Commodity Index halted a five-day rally, retreating 0.4 percent. West Texas Intermediate crude slumped 1.5 percent to $51.67 a barrel, the most in a week. Gold lost 0.3 percent, snapping a seven-day winning streak that was the longest since November. Iron ore futures slid 0.6 percent on the Dalian Commodities Exchange, also ending a seven-day stretch of gains. Zinc led industrial metals higher in London, climbing as much as 1.7 percent for the first daily advance this week. S&P Global raised 2017 price assumptions for zinc, copper and iron ore.

Looking at today’s calendar, in the US the headline release is the December inflation report where market expectations are currently sitting at +0.3% mom for the headline and +0.2% mom for the core. Industrial and manufacturing production prints for last month will also be released, followed shortly after by the NAHB housing market index reading for this month. Away from the data, the most notable Fedspeak today will likely be Fed Chair Yellen when she speaks at 3pm ET in a discussion at the Commonwealth Club where she is expected to give an economic assessment. The Fed’s Kaplan will also speak at 9am ET and the Fed’s Kashkari at 4pm GMT. Away from that we’ll also get comments from the ECB’s Nouy while the EU’s Tusk is due to speak at European Parliament. Finally the US corporate reporting calendar today is headlined by Goldman Sachs and Citigroup, who both report prior to or at the US open.

* * *

DB’s Jim Reid concludes the overnight wrap

Given that Brexit discussions are all the rage again at the moment and that the Alps have become a regular holiday destination for me and the family, one wonders what the future holds for travelling to and from the continent. However it appears that perhaps Bronte may have given us residential status. Over the weekend I picked the family up from France after travelling through Europe on business in early January and after a 10 hour drive arrived at pet passport control in Calais only for the officers to refuse to let Bronte through immigration. It was a big shock but apparently her passport hadn’t been stamped properly when issued. She’s now been over the border several times and this hadn’t been picked up until now. After many frantic phone calls we eventually found a back street late night vet open a few miles drive away and they allowed us to get a fast tracked French passport for her after the requisite checks. So Bronte is now effectively a dual citizen without having to sing (or bark) “Le Marseillaise”.

While I didn’t hear any mention of animal migration rights in UK PM May’s hotly anticipated Brexit speech yesterday it was a fairly upbeat attempt at balancing a harder Brexit than the market would like with a commitment to being an open global player. It was a great speech in theory but a lot depends on the goodwill of EU member states for her to get her wishes of a comprehensive free trade agreement in goods and services with the continent. Even with such goodwill, it seems optimistic that this could get done within two years. So this may be a big challenge but there was enough flexibility and openness to the world in the speech and enough fear beforehand for it to be well received by markets. In fact GBPUSD (+3.05%) ended up eclipsing any of the huge daily gains made in 2008 and in fact had the best day since 1993 after closing last night at $1.241, although it has retraced about -0.60% this morning. A decent contributor to yesterday’s surge was the comments from President elect Trump to the WSJ on concerns over a strong dollar.

Meanwhile, in addition to Trump’s comments, yesterday at the World Economic Forum in Davos, Anthony Scaramucci – who is a member of Trump’s transition team – added further weight to the argument by saying that “we have to be careful about a rising dollar”. The USD index finished last night down -0.86% and is now actually down -3.40% from the 2017 high mark already. Coming back to the Trump interview for a second, another comment from the President-elect which appeared to gain some traction was his one calling a so called border tax “too complicated”. The reaction in US equity markets following all this seemed to imply that there are growing doubts about what policies Trump might actually follow through on. With Treasuries continuing to unwind after the 10y yield fell 7.1bps yesterday to close at 2.326% and the lowest since November, it was financials that were most under pressure yesterday with the S&P 500 financials index tumbling -2.28% for its worst day since June last year. Amazingly that was despite another strong set of bank earnings yesterday with Morgan Stanley the latest to beat market expectations at the profit line after posting the biggest Q4 profit since the financial crisis. The S&P 500 and Dow both ended -0.30% while prior to this in Europe the Stoxx 600 had closed -0.15%. The FTSE 100 (-1.46%) was the standout underperformer though and clearly weighed down by that huge rally for Sterling.

This morning in Asia bourses have generally bounced back from a soft start. There’s been gains for the Hang Seng (+1.19%), Shanghai Comp (+0.45%) and the Nikkei (+0.60%), while the Kospi is little changed. Currencies in the region are generally stronger while rates markets are also fairly mixed. There’s also been some data out of China this morning with the December house price series. It showed that new home prices, excluding government subsidized housing, rose in 46 of the 70 main cities last month which compares to 55 in November, suggesting a cooling down in the market.

Staying with China, it was interesting to hear from China President Xi Jinping yesterday when he made his debut at the annual Davos shindig. While refraining from mentioning Trump by name, Xi said that “countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others”. He also warned that “no one will emerge as a winner from a trade war” and referred to the Paris agreement as being a “hard-won achievement” and one that “all signatories should stick to”.

Moving on. The most notable data for us over the course of yesterday was the ECB’s bank lending survey. The survey reported that credit standards for loans to enterprises in the Euro area tightened in Q4 2016 for the first time in three years. While current conditions have tightened, the recent rally in European bank equities does indicate that a slowdown in lending may still be avoided and this was reflected in the survey with expectations of lending standards easing over Q1 2017. We published a Credit Bites report on this survey yesterday where you’ll find some more detail.

Away from that we also got the latest inflation numbers out of the UK. Headline consumer prices in December were reported as rising more than expected during the month (+0.5% mom vs. +0.3% expected) and helped to push the YoY rate up to +1.6% from +1.2%. The core also rose to +1.6% yoy from +1.4% and is now at the highest level since August 2014. Headline retail prices also rose a bit more than expected (+0.6% mom vs. +0.4% expected) although PPI output prices did miss (+0.1% mom vs. +0.4% expected). Meanwhile in Germany the January ZEW survey revealed that expectations rose 2.8pts during the month to 16.6 although that was slightly less than what the consensus estimate was pegged at (18.4 expected). In contrast, the current situation component surged to 77.3 (vs. 65.0 expected) from 63.5 and is at the highest level since 2011. Across the pond the NY Fed’s manufacturing survey weakened 1.1pts to 6.5 this month.

Before we look at the day ahead, there was also some interesting Fedspeak to mention yesterday. NY Fed President Dudley probably didn’t help the Dollar sell-off by saying that “the risk that the Fed will snuff out the expansion anytime soon seems quite low because inflation is simply not a problem”. He also said that “the economy is not growing much above its sustainable long-term pace”. Meanwhile the usually dovish Fed Governor Lael Brainard sounded a bit more hawkish by saying that “if fiscal policy changes lead to a more rapid elimination of slack, policy adjustment would, all else being equal, likely be more rapid than otherwise”.

Looking at today’s calendar, this morning in Europe we’re kicking off in Germany where the final CPI revisions for December will be made. We then turn to the UK where the November and December employment stats will be released, before we then get the final December inflation data revisions for the Euro area. This afternoon in the US the headline release is likely to also be the December inflation report where market expectations are currently sitting at +0.3% mom for the headline and +0.2% mom for the core. Industrial and manufacturing production prints for last month will also be released, followed shortly after by the NAHB housing market index reading for this month. Away from the data, the most notable Fedspeak today will likely be Fed Chair Yellen when she speaks at 8pm GMT in a discussion at the Commonwealth Club where she is expected to give an economic assessment. The Fed’s Kaplan will also speak at 2pm GMT and the Fed’s Kashkari at 4pm GMT. Away from that we’ll also get comments from the ECB’s Nouy while the EU’s Tusk is due to speak at European Parliament. Finally the US corporate reporting calendar today is headlined by Goldman Sachs and Citigroup, who both report prior to or at the US open.


i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 4.23 POINTS OR 0.14%/ /Hang Sang closed UP 257.29 OR 1.23%. The Nikkei closed UP 80.84 POINTS OR 0.43% /Australia’s all ordinaires  CLOSED DOWN 0.37%/Chinese yuan (ONSHORE) closed UP at 6.8480/Oil FELL to 51.67 dollars per barrel for WTI and 54.72 for Brent. Stocks in Europe MOSTLY IN THE RED. Offshore yuan trades  6.8181 yuan to the dollar vs 6.8480  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE COMPLETELY NARROWS AGAIN AS  DOLLARS STOP LEAVING CHINA’S SHORES /





A Chinese province now admits to fabricated economic data.  I would be willing to be that all Chinese data is fabricated

(courtesy zero hedge)

Chinese Province Admits It Fabricated Economic Data For Three Years

While it will hardly come as a surprise to China watchers who have for years mocked China’s cooked “data”, overnight the state-run People’s Daily reported that the severely impacted by the commodity crunch of the past 2 years rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, citing local officials have said, raising fresh doubts about the accuracy of China’s economic data just two days ahead of the release of China’s GDP report.

The city of Shenyang in Liaoning province of China

City and county governments in the northwestern region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers Tuesday, Bloomberg adds. Not surprisingly, the fabricated economic data was meant to show a state of economic strenght with fiscal revenues inflated by at least 20%, and some other economic data were also false, the paper said, without specifying categories.

Why paint a rosier picture? The same reason as alwasy: Chen said the data were made up “because officials wanted to advance their careers.” The fraud misled the central government’s judgment of Liaoning’s economic status, he said, citing a report from the National Audit Office in 2016.

The admission of fraud comes now because with growth now moderating, officials have “sought to improve the credibility of economic data” as diffusing financial risks becomes a key policy consideration, along with keeping growth ticking along at a rapid clip.

And while the outgoing Obama administration is cracking down on “fake news”, Ning Jizhe, head of the National Bureau of Statistics, has said China is focusing on preventing “fake economic data” as well as increasing the quality of its statistics. Naturally, incidents such as this one will make China watchers that much more skeptical.

Fake economic data may be the least of Liaoning’s worries which in recent years has seen an unprecedented purge of more than 500 deputies from its legislature Bloomberg reports. The deputies were implicated in vote buying and bribery in the first provincial-level case of its kind in the Communist Party’s almost seven-decade rule, according to the official Xinhua News Agency. Former provincial party chief Wang Min, who led Liaoning from 2009 until 2015, was earlier expelled following corruption allegations by China’s top anti-graft watchdog.

As China’s debt-fueled economic impulse continues, if only for a few more months, we expect more such instances of fake data to swim to the surface.


China seems to be going after Bitcoin as they site platform violations .Gold will surely benefit from this

(courtesy zero hedge)

Bitcoin China Tumbles After PBOC Finds Platform “Violations”

itcoin prices in China had fallen last week after the PBOC began to investigate platforms and now, as Beijing News reports, margin trading and short selling violations were found at Bitcoin exchanges OkCoin and Huobi.com after preliminary inspections, according to PBOC officials.

Violations were also found at the BTCC online bitcoin exchange, including unauthorized businesses and illegal margin funding, Shanghai Securities News says on cnstock.com, citing officials at the PBOC Shanghai branch.

The reaction – for now – is muted, but all three major Chinese Bitcoin exchanges are seeing prices fall…

Perhaps indicating more controls to come, officials noted “these bitcoin trading platform financing irregularities are leading to abnormal market volatility. In addition, these platforms are not required to establish anti-money laundering internal control system.”





Finally housing prices are coming down in China with respect to Tier one and Tier two cities

(courtesy zero hedge)


China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration

After several months of slowing price growth across China’s housing market, if mostly in the lower-tiered cities, China’s National Bureau of Statistics reported that average monthly property prices growth in December continued to slow from November across the 70 cities tracked by the NBS, and this time impacted even the formerly untouchable, “Tier 1” cities.

Housing prices in the primary market increased 0.4% month-over-month after seasonal adjustment (weighted by population) in December, lower than the growth rate in November. Out of 70 cities monitored, 61 saw housing prices increase in December from the previous month, the same number as November.

However it is on an annual, population-weighted basis, where we got the first confirmation that the latest Chinese housing bubble has finally popped, as housing prices across the 70 cities were up 12.7% Y/Y, below the 12.9% annual growth rate in November. This was the first moderation in year-over-year housing price growth after 19 months of continued acceleration.

Looking at city-level data, house price inflation decelerated across all city tiers. In tier-1 cities, December price growth was 0.5% month-over-month after seasonal adjustment, slightly lower than 0.6% in November. Tier 2/3/4 cities saw housing price growth of 0.5%, 0.4% and 0.4% respectively in December, all lower than the growth rates in November.

Goldman notes that it expects the housing market to continue cooling down this year, thus adding a headwind to activity growth, and also becoming a headwind to the recent surge in Chinese PPI, which in turn has led a brief impules of exported inflation around the globe. If and when Chinese housing overshoots to the downside, look forward to the next deflationary wave emanating from China to once again spoil the central bankers’ reflationary party.

Finally, a more practical question: now that the Chinese housing bubble has finally hit its inflection point and is headed downward, prompting the momentum chasers to flee, the question is whether the Chinese stock market is about to become the bubble choice du jour, as happened in mid to late 2014 and early 2015, when the bursting of the home bubble once again pushed all the housing speculators into the stock market with scary, if entertaining, consequences. It may not be a bade idea to buy some deep out of the money calls on the Shenzhen composite, as that is the place where the most degenerate of Chinese gamblers eventually congregate to every time the housing bubble bursts, only to be reincarnated two years down the line


Great Britain

The world’s largest education company, Pearson PLC rocked London as its company crashes on the London Stock Exchange after giving a dire warning of its business. This is the same company that sold the Financial Times.  It is putting its famed Penguin Random House up for sale.

(courtesy zero hedge)

World’s Largest Education Company Crashes After Dire Warning, Warns Of “Unprecedented” Business Decline

British education group, and the world’s largest education company, Pearson PLC lost a quarter of its market cap in an instant this morning after it issued a dire warning about the state of the textbook business, cut profit forecast, and warned of an “unprecedented” decline in its North American business. It also put its stake in the iconic Penguin Random House book business for sale in a bid to raise cash, not long after selling the Financial Times to the Nikkei.

In an unscheduled update ahead of its full-year results in March, the former owner of the Financial Times said it was revising down its prior operating profit goal for 2017 and rebasing its dividend this year after a sharp slump in an arm of its American business. Pearson said its North American courseware market was “much weaker than expected”, with net revenues falling 30 per cent in the fourth quarter, taking the overall yearly decline to 18 per cent. Operating profit in 2017 will be 570 million pounds to 630 million pounds, the London-based company said in a statement, below the average analyst estimate compiled by Bloomberg of 702.9 million pounds. The world’s largest education company withdrew its profit goal for 2018 after sales of materials for U.S. higher education dropped 30 percent in the fourth quarter.

“Whereas we had previously anticipated a broadly stable North American higher education courseware market in 2017, we now assume that many of these downward pressures will continue”, the company said. Furthermore, while Pearson said it expected 2016 operating profit in line with guidance, it scrapped its 2018 profit goal.

Chief executive John Fallon said Pearson was taking “more radical action to accelerate our shift to digital models, and to keep reshaping our business”.

“The education sector is going through an unprecedented period of change and volatility. We have already taken significant steps on restructuring, reducing our cost base by £375m last year”, said Mr Fallon.

The stunned market reacted quickly, and the company lost about a quarter of its market cap in minutes at the start of Wednesday trading. The shares were then halted on volatility after continuing their decline as analysts peppered executives with questions about their business and the industry on a conference call that extended past an hour. The company’s enrollment projections were too aggressive, Chief Financial Officer Coram Williams said on a conference call. Pearson sank to 585.5 pence in early trading in London, cutting the company’s market value to 4.81 billion pounds ($5.9 billion)

Pearson’s sudden capitulation contrasts with months of optimistic statements CEO John Fallon about the challenges Pearson faces in the U.S., where college enrollments and its testing business are down, and textbook sales unexpectedly declined, Bloomberg reports.

“It’s a difficult time for Pearson,” Fallon said on the call. The company is seeking to build a more sustainable and growing digital business, he said. “We’ll manage our balance sheet so we can sustain the company through this challenging transition.”

Despite record amount of student loans in the US, fewer older students are enrolling, community college admissions also are dropping, and more students are renting textbooks.

The company will also issue an exit notice over its 47% stake in publisher Random House to JV Bertelsmann, Europe’s largest media group by sales, “with a view to selling our stake or recapitalising the business and extracting a dividend”. The Penguin stake may raise as much as 1.2 billion pounds, according to Ian Whittaker, an analyst at Liberum Capital. Pearson will use it to strengthen its balance sheet and return excess capital to shareholders, the company said.

The dividend, which amounted to 52 pence a share for 2016, will be cut beginning this year to reflect the lower earnings guidance. The current dividend equals 6.4 percent of Pearson’s share price, the highest yield among companies in the U.K.’s benchmark FTSE-100 Index.

As Bloomberg adds, analysts have been questioning the health of Pearson’s education business since last year. Neil Campling, an analyst at Northern Trust Securities, called the announcement “the warning we’ve been expecting,” in a note on Wednesday. “The higher education business declined further and faster than the company expected in 2016 although in light of the plethora of negative data points we have highlighted throughout the year we are not surprised,” Campling wrote. “The North American higher-education courseware market essentially collapsed in the critical fourth-quarter back-to-school season.”

Pearson combined Penguin with Bertelsmann’s Random House in 2013, leaving the British company owning just under half of the venture, which publishes books from writers including John Grisham, Ken Follett and George R. R. Martin. In 2015, it generated revenue of 3.7 billion euros ($3.95 billion) and operating earnings before interest, taxes, depreciation and amortization of 557 million euros.

Random House, the world’s largest book publisher. The German company is open to increasing its stake in the venture “provided the terms are fair,” CEO Thomas Rabe said in a statement. “Strategically this would not only strengthen one of our most important content businesses, it would also once further strengthen our presence in the United States, our second largest market,” Rabe said.

Pearson gets almost all its profit from education after already selling the Financial Times and its half of the Economist Group. The company announced a reorganization last year as it seeks to address sluggish demand in its main business.





Deutsche bank is set to scrap bonuses to at least 90% of its bankers. The huge amount of fines has not helped this bank

(courtesy zero hedge)

Deutsche Bank To Scrap Bonuses For 2016: As Many As 90% Of Bankers, Traders Affected

While Deutsche Bank shareholders have certainly seen some recent relief following last year’s stock acrobatics which sent the the largest German lender crashing to all time lows last fall, the bank’s employees have far less to look forward to.

First, it was a report by the NY post, according to which Deutsche Bank may hold back on giving out bonuses to as many as 90% of bankers and traders, noting that only the top 10% of revenue generators may get a bonus for 2016, and even that would be paid out over the next five years, according to a source briefed on internal discussions.

The bank was rocked last year by concern about its capital adequacy, a 23% in its share price and rising litigation bills from Europe to the U.S. Chief Executive Officer John Cryan, 56, has eliminated jobs, suspended dividends and sold risky assets to shore up profitability and capital buffers. The bank on Tuesday reached a $7.2 billion final settlement with the U.S. Justice Department over its sales of mortgage securities before the financial crisis. It’s still seeking to end an investigation related to its Russian unit. While reports have suggested that the settlement could affect the bank’s ability to pay bonuses, it couldn’t be confirmed if the bank had used incentive compensation for the settlement.

The post added that this wouldn’t be the first time that John Cryan, Deutsche’s CEO, has cut bonuses since taking over in 2014: last year, the bank cut the bonus pool by 11 percent and delayed paying its employees until March.

Then earlier today, Bloomberg confirmed the news when it reported that Deutsche will tell senior employees as soon as this week that they probably won’t get a bonus for 2016 because of the lender’s performance last year.

The decision to withhold bonuses for management board members and most top bankers across the firm was taken at the end of last year and isn’t directly related to the cost of settling legal disputes, said the person, who asked not to be identified discussing internal matters. There will be some retention bonuses paid to the highest performers, according to the person.”

The decision won’t affect junior Deutsche Bank employees, who have already been shifted into fixed salaries.  In the autumn, the bank had explored alternatives to cash bonuses including paying staff with shares in the non-core unit or Deutsche Bank stock.



Jamie Dimon, of JPMorgan is warning that the Euro zone may not survive:

(courtesy zero hedge)

Jamie Dimon: “The Euro Zone May Not Survive”

According to some, it all started with Mario Draghi, who back in 2012 said that the ECB would prevent the collapse of the Eurozone “whatever it takes.” By saying that, he effectively took the impetus away from Europe’s politicians to engage in any real structural reform and promote difficult policy changes, and well, here we are five years later with a “populist” wave sweeping across Europe which is now ex the UK.

And while few are willing to discuss the topic of Europe’s viability in the current regime, JPM’s Jamie Dimon broke the tranquil setting of Davis where all remains well, to wanr that Europe needs to address disagreements spurring the rise of nationalist leaders or the region’s strong economic ties will break, warning that politicians must get to grips with the discontent that’s spurring support for populist leaders across the continent.

Dimon said he hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn’t happened, and if nationalist politicians including France’s Marine Le Pen rise to power in elections across the region “the euro zone may not survive,” Dimon, 60, said in a Bloomberg Television interview with John Micklethwait.

Not mincing his words, Dimon warned that “what went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they’re kind of doubling down,” the JPM CEO said in the interview in Davos. He continued that unless leaders address underlying concerns, “you’re going to have the same political things about immigration, the laws of the country, how much power goes to Brussels.”

This reminds us of what Jeff Gundlach said during this weekend’s Barron’s roundtable: when asked “what will we be talking about this time next year” his answer was simple: “Trouble in the euro zone.”

As Bloomberg notes, “Dimon’s remarks on Europe were unusually pessimistic, coming in a wide-ranging interview in which he also criticized regulations that he said stunt economic growth. But he reiterated optimism for President-elect Donald Trump. Minutes later, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein also expressed concern about Europe, telling CNBC that leaders are facing a backlash in the midst of a long, complicated process to create an economic bloc.”

“That’s complicated, that’s very hard to do,” said Blankfein, 62. “It’s not done, and it’s not accomplished. We’re finding the pain of that.”

The bottom line is the region must become more competitive, Dimon said, which in simple economic terms means accept even lower wages. It also means major political overhauls: “I say this out of respect for the European people, but they’re going to have to change,” he said. “They may be forced by politics, they may be forced by new leadership.”

It is unclear how Europeans will adopt these major “changes” without anger at the establishment growing even more.

Yet while he was clearly concerned about Europe, Dimon said he isn’t as concerned about the future of the U.S. under Trump, whose own rise drew on a populist movement. The reason for that: Trump’s decision to surround himself with a “who’s who” list of former Wal Streeeters.

The real estate mogul and reality TV star is enlisting “very serious people” for his administration, such as former Goldman Sachs alumni Steven Mnuchin and Gary Cohn, who’ve been tapped to lead the Treasury Department and help oversee White House economic policy.


“The side that people are worried about a little bit, and I think is may be blown out of proportion, is trade,” Dimon said. “They’re listening to tweets and one-liners and statements” from Trump. But in his book, “The Art of the Deal,” the president-elect “will tell you he does that” as a tactic, Dimon said.

Asked about a concerns Trump may start a trade war with China, Dimon said he’s not worried. “I think these very rational people will be very thoughtful when they go about the actual policy,” he said.

Translated: Trump’s ex-Goldman advisers will never let him do anything that could hurt Goldman’s interests in the US or around the globe.


 none today


Both the Canadian dollar and the Mexican peso were pounded today.  The Canadian economy is not doing well at all with huge excess capacity.  The Governor of the Bank of Canada states that a rate cut remains on the table:

(courtesy zero hedge)

Loonie Plunges As Canadian Central Bank Warns “Rate Cuts Remain On The Table”

The loonie is tumbling this morning after Bank of Canada Governor Stephen Poloz, speaking at a press conference in Ottawa, said if downside risks materialize then rate cuts remain on the table.

As Bloomberg details:

  • Higher Canadian bond yields, driven by rising U.S. yields, are not consistent with the country’s economic outlook
  • “While this reaction is consistent with past correlations, it is at odds with Canada’s macroeconomic situation where there is material excess capacity, unlike the US economy.”
  • Some Trump policies incorporated into forecast show a boost of GDP by 0.1 percent by 2018.
  • Excess capacity has boosted risk of missing the inflation target
  • The elimination of excess capacity in the economy is reliant on fiscal stimulus. Main ingredient however is infrastructure spending, which is not yet evident in economic data.

And the Canadian dollar is losing ground fast…

How long before Trump accuses Canada of currency manipulation?

Additionally the peso is getting pounded after Wilbur Ross comments on border taxes and tariffs…



API reports a drawdown in oil, they also reported a huge build in gasoline inventories

(courtesy zerohedge)

Oil Unsure As Huge Gasoline Inventory Build Offsets Crude Draw

Following last week’s surge in crude and product inventories, API reported a much bigger than expected drawdown in crude inventories ( versus -1mm expectations). While this spiked WTO prices, they fell back amid massive builds in gasoline (9.75mm) and distillates.



  • Crude -5.042mm (-1mm exp)
  • Cushing -1.01mm (-500k exp)
  • Gasoline +9.75mm
  • Distillates +1.17mm

Another massive build in gasoline inventories offsets the exuberant price action from a big draw in crude and cushing… (though notably there is a seasonal norm here)


WTI had slipped to a $51 handle before the NYMEX close today on USD strength, and whipsawed wildly on the API print…




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



GBP/USA 1.2372 DOWN .0088 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT)


Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 3 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0686; Europe is still reacting to Gr Britain HARD 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 UP 4.23 or 0.14%     / Hang Sang  CLOSED UP 257.29 POINTS OR 1.13%  /AUSTRALIA  CLOSED DOWN 0.37%  / EUROPEAN BOURSES MOSTLY IN THE RED 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 80.84 OR 0.43% 

Trading from Europe and Asia:
1. Europe stocks MOSTLY IN THE RED 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 257.29 OR 1.23%  Shanghai CLOSED UP 4.23 POINTS OR 0.14%   / Australia BOURSE CLOSED DOWN 0.37% /Nikkei (Japan)CLOSED UP 80.84 OR 0.43%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1213.85


Early WEDNESDAY morning USA 10 year bond yield: 2.358% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.961, UP 1 IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 100.70 UP 40 CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING


And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.84% PAR  in basis point yield from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.056% UP 1  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.45%  UP 9  IN basis point yield from  TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.961  UP  5 POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 53 points HIGHER than Spain.





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

Euro/USA 1.0683 DOWN .0014 (Euro DOWN 14 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.42 UP: 0.527(Yen DOWN 53 basis points/ 

Great Britain/USA 1.2308 DOWN 0.0078( POUND DOWN 78 basis points)

USA/Canada 1.3219 UP 0.0158(Canadian dollar  DOWN 158 basis points AS OIL FELL TO $51.33


This afternoon, the Euro was DOWN by 14 basis points to trade at 1.0683


The POUND FELL 78  basis points, trading at 1.2309/

The Canadian dollar FELL by 158 basis points to 1.3219,  WITH WTI OIL FALLING TO :  $51/33

The USA/Yuan closed at 6.8359
the 10 yr Japanese bond yield closed at +.056% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 3 IN basis points from TUESDAY at 2.378% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.977 UP 3  in basis points on the day /

Your closing USA dollar index, 100.74 UP 44 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY: 1:00 PM EST

London:  CLOSED UP 27.23 OR 0.38% 
German Dax :CLOSED UP 59.39 POINTS OR 0.51%
Paris Cac  CLOSED DOWN 6.29 OR 0.13%
Italian MIB: CLOSED UP 61.94 POINTS OR 0.32%

The Dow was closed DOWN 22.05 OR .11%

NASDAQ WAS closed UP 16.93 POINTS OR .31%  4.00 PM EST
WTI Oil price;  51.33 at 1:00 pm; 

Brent Oil: 54.28  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.42 (ROUBLE up 50/100 roubles from YESTERDAY)



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:


BRENT: $54.28



EURO/USA DOLLAR CROSS:  1.0629 down .0067 

USA/JAPANESE YEN:114.64  UP 1.735

USA DOLLAR INDEX: 101.31  UP 101  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2257 : DOWN 129  BASIS POINTS.

German 10 yr bond yield at 5 pm: +.365%


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


Dow Drops As Dollar, Bond Yields Spike Most Since Election

For Goldman bulls today…


The Dollar Index surged higher today rebounding from its biggest drop since July with its biggest spike since the election today following Trump/Ross comments on NAFTA and extended by Yellen’s comments late on regarding rate hikes… (and we suspect with Xi leaving Davos, China currency strength was unwound)


The Dow dropped… (The Dow is down 4 shocking days in a row – the longest losing streak since the election)


As not even Goldman Sachs could rescue bank stocks… (the last two days were the worst for Goldman since Brexit)


And Bond yields spiked most since the election…(30Y perfectly tagging 3.00%)


*  *  *

While The Dow ended red, Trannies and Small Caps were panic-bid into the close as USDJPY went bananas…


On the week however, all major US indices remain red…


VIX spiked to 2-week highs at the open but was quickly slammed lower…


The entire curve is now higher in yield on the week (led by the belly underperforming)…


The Dollar Index rallied back into the green for the week (led by a collapse in the loonie)…


As the dollar soared so NAFTA partners currencies plunged…


And it makes one wonder if Yuan strength yesterday was all about face-saving for Xi…


Gold broke its 7 day winning streak and dropped most in over a month…


Crude also tumbled to a $51 handle (ahead of tonight’s API data)




Target tumbles after cutting their guidance for the year. Target performance rubbed off onto Wal-Mart:

(courtesy zero hedge)

Target Tumbles After Cutting Guidance, Reports Poor Comps; Drags Wal-Mart Lower

US retailer woes continued this morning, a trend the began well prior to the poor holiday spending season, when retail giant Target not only announced ahead of its Feb 28 Q4 earnings result that comparable sales during the combined November/December period decreased 1.3%, but that “as a result of this softer-than-expected sales performance, the Company updated its fourth quarter and full-year 2016 guidance.”

Target now expects fourth quarter comparable sales in the range of (1.5) percent to (1.0) percent, compared with prior guidance of (1.0) percent to 1.0 percent. In fourth quarter 2016, Target expects both GAAP EPS from continuing operations and Adjusted EPS of $1.45 to $1.55, compared with prior guidance of $1.55 to $1.75.

For full-year 2016, Target now expects GAAP EPS from continuing operations of $4.57 to $4.67, compared with prior guidance of $4.67 to $4.87. The Company expects full-year 2016 Adjusted EPS of $5.00 to $5.10, compared with prior guidance of $5.10 to $5.30. The 43-cent difference between these ranges reflects $0.44 of early debt-retirement losses and a $0.01 benefit from the resolution of income tax matters.

“While we were pleased with Black Friday sales, December digital sales growth of more than 40 percent and continued strength in our Signature Categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores,” said Brian Cornell, chairman and CEO of Target.

Target shares tumbled as much as 4.9% on the news, which has dragged Wal-Mart as much as 1.5% lower.


Trump tells Canada and Mexico that he will begin NAFTA renegotiation within days of his inauguration. However the Globe and Mail reports that he will concentrate on Mexico.

(courtesy zero hedge)

Trump Warns Canada, Mexico He Will Begin NAFTA Renegotiation “Within Days Of Inauguration”


So much for wag inflation, the most important part of Janet Yellen’s mantra.  Instead of growing at 2% it grew only .2% year over year and it is the weakest in 2 and 1/2 years. When the Fed states that it wants 2% inflation, what it really wants is wage inflation to pay for things.  It is just not happening@!!

(courtesy zerohedge)



USA inflation is rearing its ugly head as we witness the highest rent inflation in almost 10 years and well above the Fed’s target.  Core inflation has been rising now for the 14th consecutive month

(courtesy zero hedge)

Highest Rent Inflation Since 2007 Sends Core CPI Above Fed’s Target For 14th Consecutive Month


The high dollar is certainly killing USA manufacturing.  USA manufacturing stagnates for the 14th straight month

(courtesy zero hedge)



  1. Your Info is irrelavant. Last year your inventory numbers were a lot less then 279 tonnes. Its just numbers thye put up whatever. As long as physical is not delivered it wont change…you just write a bunch of numbers that never make a difference..probably not even accurate


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