Feb 23/Gold rises on Mnuchin indecision/Silver breaks out of the 18.00 dollar stranglehold/Open interest in silver climbs close to 215,000 contracts (1.07 billion oz) despite yesterday’s drop/the volume at the comex exceeds 150,000 contracts which is humongous/gold/silver equity shares flounder s the bankers dig in their heels with respect to the silver onslaught/Huge drop in gasoline demand: lowest reading in 16 years/Mnuchin indecision sends gold and silver higher/Border tax now back into favour with Trump!/Final draft

Gold at (1:30 am est) $1247.00 UP $15.00

silver was : $18.14:  UP 20 CENTS

Access market prices:

Gold: $1249.50

Silver: $18.18



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:

THURSDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 23/17 (10:15 pm est last night): $  1245.85

NY ACCESS PRICE: $1236.70 (AT THE EXACT SAME TIME)/premium $9.15


Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1246.85


   SPREAD/ 2ND FIX TODAY!!:  10.15

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


London FIRST Fix: Feb 23/2017: 5:30 am est:  $1237.35   (NY: same time:  $1238.05   (5:30AM)


London Second fix Feb 23.2017: 10 am est:  $1247.90(NY same time: $1248.30 (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:


For silver: FEBRUARY



This is options expiry week for both the silver and gold contracts.  First day notice is this Tuesday, Feb 28.2017.  Options will expire on the comex tonight and on the OTC market in London, early Tuesday morning.  For the first time comex has silver in backwardation February/March by 2 cents.  The open interest on the silver comex is now over 1 billion oz and no doubt that the London OTC is multiples of that. We will be watching this week with open eyes.

The gold/silver equity shares performed terribly today against the huge runnup in the physical price.  Expect a big raid tomorrow.



Let us have a look at the data for today



In silver, the total open interest ROSE by 6182 contracts UP to 214,329 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  1.072 BILLION TO BE EXACT or 153% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY 2441 contracts DESPITE THE FALL IN  THE PRICE GOLD ($5.50 with YESTERDAY’S trading ).The total gold OI stands at 429,609 contracts

we had 5 notice(s) filed upon for 500 oz of gold.


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


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

Inventory rests tonight: 841.17 tonnes



we had no changes in silver into the SLV:

THE SLV Inventory rests at: 335.281 million oz



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

1. Today, we had the open interest in silver ROSE by A WHOPPING 6182 contracts UP to 214,329 DESPITE THE FACT THAT SILVER WAS DOWN 5 CENTS with YESTERDAY’S trading. The gold open interest ROSE by 2,441 contracts UP to 429,609 WITH THE FALL IN THE PRICE OF GOLD OF $5.50  (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  WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 9.84 POINTS OR .30%/ /Hang Sang CLOSED DOWN 87.10 POINTS OR 0.36% . The Nikkei closed DOWN 8.41 POINTS OR 0.04% /Australia’s all ordinaires  CLOSED DOWN 0.30%/Chinese yuan (ONSHORE) closed UP at 6.8753/Oil ROSE to 54.48 dollars per barrel for WTI and 56.81 for Brent. Stocks in Europe ALL MIXED. Offshore yuan trades  6.8566 yuan to the dollar vs 6.8780  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS A BIT AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN STRONGER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR



North Korea lashes out at both China and Malaysia as they now anticipate that China will orchestrate a regime change in the failed state

(courtesy zero hedge)


none today


Taiwan joins the global war on cash as they plan to ban purchases of houses cars and jewelry with cash

( zero hedge)


A centrist alliance caused French yields to tumble as a risk of a LePen victory falls:

(courtesy zero hedge)




This is what happens when you have negative interest rates.  In order  not to be dinged with a .75% tax on deposits at the bank, citizens decide to overpay their taxes.  Sweden must repay over 3.2 billion dollars equivalent back to its citizens for overpayment

(courtesy Mish Shedlock/Mishtalk)


i)Exxon cuts its reserves by a record 3.3 billion barrels of oil as the low price finally forced the company to act..and guess what the stock goes up

( zero hedge)

ii)The DOE reports today a huge inventory gain with production topping 9 million barrels. This caused oil to slide agai

( zero hedge)

iii)Gasoline demand is faltering equal to 460 kb/day or 5%.  This decline has not occurred since the turn of the century. It sure tells us that we are in a recession

( zero hedge)



none today


i)China now prepares its citizens that it will not bail them out when things go south

( GATA/Bloomberg)

ii)I highlighted this to you yesterday but it is worth repeating

( Craig Hemke/TFMetals/GATA

iii)The LME cuts a deal with banks to help propel gold future contracts


iv)Bitcoin joins gold as it is up 10 days in a row and now a record highs: $1153.00 and closing in on gold.

( zero hedge)

v)So much for the economy improving…Copper is getting clobbered

(courtesy zero hedge)


i)More contradictions as Mnuchin in an interview expresses his praise for a strong dollar:

( zero hedge)

ii)Mnuchin is interviewed by CNBC and again fails to disclose the Trump tax plan:and more confusion as to what they are going to do!

( zero hedge)

iii)Gold is the big winner as the dollar retreats on the Mnuchin confusion

( zero hedge)

iv)As David Stockman warned us;  Infrastructure stocks are belted today on a report that Trump may (will) delay the infrastructure bill until 2018)

( zero hedge)

v)The all important Fed’s National activity index drops in January.  It draws on 85 economic indicators:

( zero hedge)

vi)It now looks like Dallas taxpayers are going to bailout the deficient Dallas Police and Firefighter Pension fund

( zerohedge)

vii)It looks like Bannon is out of the National Security Council and McMaster is in.It sure looks like the Trump administration is in turmoil;’

(courtesy zero hedge)

viii)O’Keefe delivers the undercover footage of CNN trying to manipulate data

( zero hedge)

ix)The border tax is back on and that caused retailers to tumble. Intersetingly the dollar did not rally when this was announced:

( zero hedge)

xii)Trump reverses another Obama gem:  private prisons are back in!

( zero hedge)


Let us head over to the comex:

The total gold comex open interest ROSE BY 2441 CONTRACTS UP to an OI level of 429,609 DESPITE THE FALL IN THE  PRICE OF GOLD ( $5.50 with YESTERDAY’S trading). We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a LOSS of 32 contracts DOWN to 730.   We had 24 notice(s) served upon yesterday and therefore we LOST 8 contracts or an additional 800 oz will NOT stand for delivery and  IT LOOKS LIKE THE CASH SETTLEMENTS HAVE RESUMED FOR A FIAT PROFIT . The next non active contract month of March saw it’s OI FALL by 157 contracts DOWN TO 1459. The next big active month is April and here the OI ROSE by 1335 contracts UP to 278,295.

We had 5 notice(s) filed upon today for 500 oz

 And now for the wild silver comex results.  Total silver OI ROSE by 6182 contracts FROM 208,147 UP to 214,329  AS THE PRICE OF SILVER FELL TO THE TUNE OF 5 CENTS with respect to YESTERDAY’S trading.  We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The closing price of silver that day: $20.44

The  active month of February saw the OI FALL BY 52  contract(s) DOWN TO 121.  We had 52 notice(s) served YESTERDAY so we NEITHER LOST NOR GAINED ANY SILVER OUNCES STANDING IN THIS DELIVERY MONTH OF FEBRUARY.

The next big active delivery month is March and here the OI decrease by 5116 contracts down to 45,361 contracts WITH 4 TRADING DAYS LEFT BEFORE FIRST DAY NOTICE. For comparison purposes last year on the same date only 33,887 contracts were standing.(WITH 4 TRADING DAYS TO GO BEFORE FIRST DAY NOTICE)

We had 120 notice(s) filed for 600,000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 258,825  contracts which is VERY GOOD.

Yesterday’s confirmed volume was 209,293 contracts  which is good

volumes on gold are getting higher!

INITIAL standings for FEBRUARY
 Feb 23/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
257.20 OZ
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
32,150.000 oz
No of oz served (contracts) today
5 notice(s)
500 oz
No of oz to be served (notices)
725 contracts
72,500 oz
Total monthly oz gold served (contracts) so far this month
5320 notices
532,000 oz
16.547 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  319,2088.4   oz
Today we HAD 2 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1  customer deposit(s):
i) Into Scotia: 32,150.00
(1,000 kilobars)
total customer deposits; 32,150.00 oz
We had 1 customer withdrawal(s)
 i) Out of MANFRA: 257.20 OZ
total customer withdrawal: 257.20 oz
We had 0  adjustment(s)

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 5 contract(s)  of which 2 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 FEBRUARY. contract month, we take the total number of notices filed so far for the month (5320) x 100 oz or 532,000 oz, to which we add the difference between the open interest for the front month of FEBRUARY (730 contracts) minus the number of notices served upon today (5) x 100 oz per contract equals 604,500 oz, the number of ounces standing in this  active month of FEBRUARY.
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (5320) x 100 oz  or ounces + {(730)OI for the front month  minus the number of  notices served upon today (5) x 100 oz which equals 604,500 oz standing in this non active delivery month of FEBRUARY  (18.802 tonnes)
 we LOST 8 contracts or an additional 800 oz will stand in this active delivery month. 
On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 16.547 tonnes vs 7.9876 at the end of Feb).
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 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 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/     3.9004 tonnes
FEB/ 18.802 tonnes
total for the 14 months;  244.797 tonnes
average 17.485 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
Total dealer inventory 1,418,640.029 or 44.125 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,910.287.228 or 277.147 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.147 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 77 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
 feb 23. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
20,389.740 0z
Deposits to the Dealer Inventory
598,391.740 oz
Deposits to the Customer Inventory 
 977.20 oz
No of oz served today (contracts)
(600,000 OZ)
No of oz to be served (notices)
121 contracts
(605,000  oz)
Total monthly oz silver served (contracts) 585 contracts (2,925,000 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   6,703,736.7 oz
today, we had  1 deposit(s) into the dealer account:
 i) Into Brinks:  598,391.700 oz
total dealer deposit: 598,391.700 oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of HSBC:  20,389.740 oz
 we had 1 customer deposit(s):
i) Into Delaware: 977.20 oz
***deposits into JPMorgan have now stopped.
total customer deposits;  977.20  oz
 we had 0  adjustment(s)
The total number of notices filed today for the FEBRUARY. contract month is represented by 120 contract(s) for 600,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at 585 x 5,000 oz  = 2,925,000 oz to which we add the difference between the open interest for the front month of feb (121) and the number of notices served upon today (120) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the FEBRUARY contract month:  585(notices served so far)x 5000 oz  + OI for front month of FEB.( 173 ) -number of notices served upon today (120)x 5000 oz  equals  2,930,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We neither gained nor lost any silver ounces (contracts) standing in this delivery month of February. 
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
Volumes: for silver comex
Today the estimated volume was 150,348 which is gigantic!!!
FRIDAY’S  confirmed volume was 110,444 contracts  which is totally unbelievable.
To give you an idea of volume today’s confirmed volume::  150,348 contracts equates to 751 million oz or 107% of ANNUAL GLOBAL PRODUCTION EX CHINA EX RUSSIA
Total dealer silver:  31.238 million (close to record low inventory  
Total number of dealer and customer silver:   184.045 million oz
The total open interest on silver is NOW CLOSER TO   its all time high with the record of 224,540 being set AUGUST 3.2016.


And now the Gold inventory at the GLD

FEB 23/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 22/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 21/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

feb 17/a withdrawal of 2.37 tonnes of gold from the GLD/Inventory rests at 841.17 tonnes

FEB 16/we had no changes in the GLD inventory today/Inventory rests at 843.54 tonnes

Feb 15./another deposit of 2.67 tonnes of gold into the GLD inventory despite another attempted whacking of gold/inventory rests at 843.54 tonnes

FEB 14/another deposit of 4.14 tonnes of gold into the GLD inventory/rests at  840.87 tonnes

FEB 13/another deposit of 4.15 tonnes of gold into the GLD/Inventory rests at 836.73 tonnes

Feb 10/no changes at the GLD/Inventory rests at 832.58 tonnes

feb 9/no changes at the GLD/Inventory rests at 832.58 tonnes

Feb 8/another “deposit” of 5.63 tonnes of gold into the GLD/The addition is a paper addition/total inventory: 832.58 tonnes

Feb 7/another huge fake deposit of 8.30 tonnes of gold into the GLD/the addition is a paper addition and no doubt not physical/ total inventory: 826.95 tonnes

FEB 6/a huge deposit of 7.43 tonnes of gold into the GLD/Inventory rests at 818.65 tonnes

FEB 3/no change in gold inventory at the GLD/Inventory rests at 811.22 tonnes

Feb 2/another huge deposit of 1.48 tonnes/inventory rests at 811.22 tonnes

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

Jan 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

jan 25/another exactly the same withdrawal as yesterday: 5.04 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07 tonnes

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

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

Feb 23/2017/ Inventory rests tonight at 841.17 tonnes


Now the SLV Inventory
FEB 23/no changes in inventory at the SLV/Inventory rests at 335.281 million oz
FEB 22/no changes in inventory at SLV/inventory rests at 335.281 million oz
FEB 21/a deposit of 568,000 oz into the SLV/Inventory rests at 335.281 million oz
feb 17/2017/again no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
FEB 16/we had no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
Feb 15./no changes in silver inventory at the SLV/inventory rests at 334.713 million oz
FEB 14/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
FEB 13/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 10/no change in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 9/no changes in silver Inventory rests at 334.713 million oz
feb 8/No changes in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 7/no change in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 6/a we had no changes at the SLV/Inventory rests at 334.713 million oz
FEB3/ a tiny withdrawal of 136,000 oz to pay for fees etc/inventory rests at 334.713 million oz
Feb 2/no changes in silver inventory at the SLV/Inventory rests at 334.849 million oz
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
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/
Feb 23.2017: Inventory 335.281  million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 8.1 percent to NAV usa funds and Negative 8.4% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.2%
Percentage of fund in silver:39.6%
cash .+0.2%( feb 23/2017) 
2. Sprott silver fund (PSLV): Premium rises  to -.20%!!!! NAV (Feb 23/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises TO – 0.26% to NAV  ( feb 23/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.20% /Sprott physical gold trust is back into NEGATIVE territory at -0.26%/Central fund of Canada’s is still in jail.


Major gold/silver trading/commentaries for THURSDAY


The Oscars – Worth Their Weight in Gold?

The Oscars – Worth Their Weight in Gold?

  • 89th Oscars to air this weekend
  • Oscars have been dipped in 24 karat gold since 1929
  • If the Oscars were made of solid gold they would weigh 330 ounces
  • 330 ounces of gold is worth $408,210 at today’s prices (nearly €400k & £330k)
  • Oscars cannot be sold, making them a tricky investment piece
  • Steven Spielberg keeps his gold Oscar with the Academy for ‘safe-keeping’
  • Shows importance of owning gold in safest ways
  • Price of gold has climbed from $20.67 since the first Oscars ceremony to over $1,237 today


‘We All Dream In Gold’ read the strap line for last year’s Academy Awards. This is no doubt still the case for the nominees of the 24 awards set to be given out at this Sunday’s 89th Oscars.

Since the first awards in 1929 nearly 3,000 oscar statues have been awarded to the lucky darlings of the film industry. After the teary speeches, after-parties and press junkets following their win, what is left for those who have achieved the highest-level of recognition in the film industry?


Winning an Oscar is an expensive business, studios spend millions trying to get their hands on at least one, each year. But film and celebrity is a fickle trade and few people can remember who received Oscars last year, let alone when they were first launched in 1929.

How much value do they really bring?

As we all dream in gold, we’ve spent some time thinking about the golden Oscars, asking just how golden they are and how they hold up when compared to gold itself.

What is an Oscar?

Designed by George Stanley, the Oscar (rumours abound why it is has that nickname) shows a knight standing with a reel of film, clutching his sword. There are five spokes on the base, one representing the branches of the Academy: Actors, directors, producers, writers and technicians.

Fun fact, whilst the Oscars have been going on since 1929 and seemingly little has changed in regard to the appearance of the statue, the mould currently used was only created last year.

The Academy wanted a version of the statue that was closer to the original 1929 design. A 3D printer created the version that is used today and provides the trophies with their more authentic look.

The awards weigh around 8 and a half pounds, and are made from Britannia metal or Britannium and plated in copper, nickel silver, and on the top layer is 24-karat gold. Excluding three years during the Second World War, the statue has always been dipped in gold. So when the Academy says that we all dream in gold, they’re not wrong when it comes to the Oscars.

Worth its weight in gold?

As mentioned above, the gold on the Oscar is the icing on the cake, a cake which is made up of a few layers and alloys. However there is very little gold when it comes to the actual Oscar, in fact just 0.38 microns (one-two hundredth of the thickness of a human hair).

This year’s statues are rumoured to have a monetary worth of $629 each, demonstrating just how little gold Oscar is wearing.

This isn’t to say the Academy Award trophies aren’t worth anything.

Since the first ceremony in 1929, the price of gold has climbed from $20.67 to $1,237 today. Just the gold alone, in those 13.5 inch statues have climbed by nearly 60 times in price.

It is a classic example of how the dollar has devalued over the years – the dollar has devalued and has lost 98% of its value against gold in those 88 years.

But what if Hollywood had really wanted to show its stars how much they valued them? What if the dreams of gold really came true and the Oscar was made of solid gold?

At 8.7 lb, the statue in its current form is equivalent to 126.9 troy ounces but this weight has been taken on from the fact that the statue is made up of Britannia metal. Britannia metal is an alloy consisting of approximately 92% tin, 6% antimony and 2% copper.

Assuming that we are working with 24 karat gold with a density of 19.282 g/cm3, then research tells us that the cubic centimetres of this much tin is around 531.25, and it would take nearly 22.6 pounds of gold to fill it. This means a solid gold Oscar would weigh around 330 troy ounces and at today’s price would be worth around $408,210. A significant uptick from last year’s which were worth around $382,000.

Had actors and actresses received solid gold Oscars nearly 30 years ago, in 1991, then they would have seen a climb in value of over 3 times over. Not bad for a few months’ work on a film and not a bad return on any investment.

Regardless of whether or not someone remembers who won and what for, the solid gold Oscar wouldn’t care. The gold would act as a timeless store of value and insurance, no matter what the public and critics think of you and your film in the years ahead.

You can sell your gold but not your Oscar

Some of you might be arguing that the Oscars bring so much more than just a piece of gold, and the kudos that comes with them is priceless. If you were to sell an Oscar, you might argue, then you would get far more thanks to the kudos that comes with it being ‘an Oscar.’

Some trophies from the pre-1950s era have been sold and have done very well. David Copperfield bought Michael Curtiz’s 1942 Oscar for Casablanca, in 2003 for $299,000 later selling it for over $2 million. The 1939 Oscar for Gone With the Wind was estimated to sell for $300,000 in 1999 but was bought at a far higher price of $1.54 million.

You could take a leaf out of Steven Spielberg’s book. The ET director and one of the most successful directors of all time has previously bought two 1950s Oscars and rather than kept them in his cloakroom (as many seem to do) he has handed them both over to the Academy ‘for safekeeping’.

This is a similar approach taken by many who invest in the most precious of metal – gold. Gold investors often use storage facilities provided by the likes of GoldCore in Zurich, Singapore, Hong Kong and elsewhere, in order to maintain the safekeeping of their assets.

But before you start thinking you could go out and invest in an Oscar, it is no longer possible. Unlike investing in gold bars, which are borderless and cannot be controlled by one authority, the Oscars market is restricted. Those who receive Oscars are prevented from selling their awards at market price as since 1950 the trophies have been considered the perpetual property of the Academy.

The ‘Regulations’ section of the oscars.org website reads, ‘Award winners shall not sell or otherwise dispose of the Oscar statuette, nor permit it to be sold or disposed of by operation of law, without first offering to sell it to the Academy for the sum of $1.00. This provision shall apply also to the heirs and assigns of Academy Award winners who may acquire a statuette by gift or bequest.’

The idea is that the honour of winning an Oscar is maintained, were it to be sold then some believe it would be cheapened. This is where a solid gold Oscar would be very different.

The market for gold is affected by economics and the desire to hold gold as a form of insurance, rather than the prestige that comes with owning a piece of something that is gold-plated and was once owned or won by somebody who happened to be famous and or was a great actor.

 Gold does not discriminate, the Oscars do

Few will have missed the furore that surrounds the Academy Awards when it comes to recognition that it shows to ethnic minority groups. The issue has its own hashtag #OscarsSoWhite.

But what few people discuss is the discrimination when it comes to the benefit of winning an Oscar. A 2008 paper by Kevin Sweeney, finds that “an Oscar increases a male winner’s salary by 81% holding all other variables constant.”

But this is not the case for women, Sweeney finds that, “Female winners do not experience this same clear boost in their salaries…women, experience significantly lower salary increases from winning an Academy Award than men. In such cases, winning an Academy Award did not have a statistically significant effect on women’s salaries in the sample.”

As mentioned above, gold does not discriminate when it comes to who you are or when you won, and it certainly doesn’t care what nationality you are.

Gold is a stateless form of money, something that has been bought for generations as a store of value across the globe. The Chinese Aunties don’t care who won an Oscar when it comes to Chinese New Year, parents don’t mind which film won when it comes to buying their daughter’s wedding jewellery in India and central bankers can’t give two hoots about the best costume winner when they are accumulating gold reserves and diversifying their foreign exchange reserves.

These people and everyone who chooses to own gold, know that it will hold its value and act as a form of insurance and money in the months and years to come.

Give the gift of gold

February is the month of love and this year’s Oscars attendees will certainly be feeling it when they get hold of the 2017 Academy Awards’ infamous ‘Everyone Wins’ goody bags. Last year each of the gift bags were worth £232,000 and included (according to Forbes):

‘ a year’s worth of Audi rentals ($45,000), 15-day private tour of Japan ($54,000), VIP all-inclusive trip to Israel ($55,000) and a lifetime’s supply of Lizora skincare products ($31,200).’

This year the bags have even more bizarre, luxury products:
“including a female sex toy, the Nuelle Fiera Arouser for Her, deluxe Swiss toilet paper …” according to the Telegraph.

The swag bags are provided by Distinctive Assets, whose Managing Director said “We are gifting them for the same reason that they are paid upwards of $20 million for a single film…because their personal brand has value as a commodity.”

The commodity that is celebrity is (as we said early on) is very fickle and comes and goes with the tides. Gold, the ultimate commodity and money, is not.

Its shine has not been tarnished over the years and it still sees constant and universal demand.

This year, celebrities are not the only commodities that will be on show. A 14 carat gold and diamond OM bracelet is part of the swag bag. As we wrote earlier this month, gold jewellery is a bad investment when compared to a pure gold bar or sovereign coin. Demand for gold jewellery is falling and the resale price is appalling compared to the initial purchase price. Celebrities would be better served, if they were gifted with a few gold bars or coins which will hold their value, in contrast to a flimsy gold bracelet or bangle.

Who will win Best Picture this year?

Personally, I’m not going gaga over ‘La La Land’ like most people seem to be, so I’m rooting for ‘Arrival’. But sometimes these things come down to personal preference.

Look out for our-post Oscars coverage next week. I’m afraid that doesn’t mean we’ll be giving you an actress-by-actress account of who wore what designer, instead we’ll be looking at the winning pictures and how much gold it takes to win an Oscar.

Interestingly the films nominated for this year’s Best Picture Award are diverse in their costs in terms of gold ounces. We will show you in previous years how much the price of movies has and hasn’t changed when it comes to spend in dollars and gold.


Celebrity, fame and awards all have their worth and they’re good fun for lots of people. In the same way, imagining what holding a solid gold Oscar in our hands would be like is also fun.

Winning an Oscar and being acknowledged for being a great actor would be wonderful. Winning a solid gold Oscar would be even better – a conversation starter and contrary to the Oscar ‘regulations’ in the event of financial crisis and collapse, it could be sold for close to its gold melt or spot value.

When it comes to protecting your life savings, or having essential financial insurance for a rainy day, we just think it’s better to own the good, timeless commodity and currency that are gold coins and bars.

But let’s be honest, most of us are unlikely to win any sort of Oscar – be it one made from base metal or investment grade gold bullion, and so a few gold coins or gold bars are better guarantees of wealth and financial security in the long-run


China now prepares its citizens that it will not bail them out when things go south

(courtesy GATA/Bloomberg)

China’s $9 trillion moral hazard is now too big to ignore


From Bloomberg News
Wednesday, February 22, 2017

China may be about to embark on its most ambitious — and perilous — campaign to convince investors that they shouldn’t depend on a bailout when markets go south.

In a rare show of cooperation, the nation’s main financial regulators are drafting new rules for asset-management products that aim to make clear the investments don’t have government guarantees, people familiar with the matter told Bloomberg News on Tuesday.

The products, which promise higher returns than bank deposits but are viewed by many investors as a form of risk-free savings, have become an integral part of the Chinese financial system after swelling in recent years to almost $9 trillion as of June 30.

Policy makers face a difficult balancing act. If they fail to dispel the notion of an implicit government guarantee, riskier investments could proliferate and pose an even greater threat to the financial system when China faces its next bout of market turmoil. But if authorities act too forcefully now, they risk triggering a stampede away from products that have become a key funding source for banks. …

… For the remainder of the report:





I highlighted this to you yesterday but it is worth repeating

(courtesy Craig Hemke/TFMetals/GATA)

Metals Capped Into FOMC Minutes

An incredible amount of fraudulent, virtual silver is being created in order to cap price and paint the chart. Will JPM and the rest of The Evil Empire be successful once again in capping price and routing the Specs. The reaction to today’s FOMC minutes may help to determine the outcome.

Again, I can’t stress enough the devious and fraudulent nature of this latest attempt to contain and cap price. The past four days have seen the price of Comex Digital Silver pressing up against the key resistance of $18 and the 200-day moving average near $17.93. See below:

Over this same time period, the Comex Silver Banks led by JPM have increased the total supply of Comex silver contracts by 12,809 contracts. So, while price has been flat, total supply of Comex silver contracts has been increased by 6.5%. THIS is how you cap price and paint the chart!

Imagine for a moment where price would be this morning if total open interest was held flat for the past week. How much higher would price be if sellers of existing contracts needed to be found for the 12,809 contracts of buying pressure? On a larger scale, yes the price of Comex Digital Silver is up $2 year-to-date or about 13%, but how much higher would price be if The Banks hadn’t fraudulently added 44,000 new contracts since December 30?

Why do we always describe this as “fraud”? Two primary reasons:

  1. The Banks are selling something that they don’t have. Can you enter into a contract to sell a house or a car if you don’t actually own the house or car you are attempting to sell?
  2. The Banks create this new “silver” from whole cloth without depositing as collateral any additional silver into their Vaults.

Regarding point #2, see below. Note that at the beginning of 2017, total silver within the Comex vaulting structure was 181,903,037 ounces. Total Comex open interest that day was 163,812 contracts. With each contract representing 5,000 ounces of silver, this equates to a virtual exposure of 819,060,000 ounces.

As of last Friday, total open interest had grown to 205,602 contracts or 1,028,010,000 ounces or virtual silver yet the total amount of silver in the Comex vaults was stagnant at 184,088,021 ounces.

So, The Comex Silver Banks have increased the supply of virtual silver by 25% while only increasing the supply of physical silver in the vaults by 2%. This is fraud, this is a scam and this has absolutely ZERO connection to the supply/demand fundamentals of actual physical silver.

And what are The Banks attempting to accomplish in their aggressive efforts to cap price? Two things. First, maintaining price below the 200-day moving average is important in managing future Spec demand for additional Comex paper.

Second and perhaps more important is the chart-painting aspect of keeping price below $18. As you can see on this weekly chart, by capping price here, JPM et al are effectively attempting to paint a massive head-and-shoulder top onto the weekly chart.

So, once again, you must be alert and cautious here. The forces aligned against you in the Comex silver “market” are powerful and these criminals are doing everything in their collective power to rig price in their favor. Will they be successful (again)? That will depend upon a number of factors going forward. For today, at least, you’d be wise to not underestimate the collusive power of The Banks and the fraudulent nature of their paper derivative pricing scheme.



The LME cuts a deal with banks to help propel gold future contracts


London Metal Exchange cuts deal with banks to propel gold futures


By Peter Hobson
Thursday, February 23, 2017

LONDON — The London Metal Exchange has reached a 50:50 revenue-sharing deal with a company founded by a group of banks to promote trade in its new gold futures contracts, sources said, aiming to overcome market scepticism surrounding their launch in June.

Usually, exchanges merely consult potential users about their needs when planning new financial and commodity contracts. But in this case the LME has opted for a radical departure from normal practice as it tries to grab a piece of London’s $5 trillion-a-year gold market.

Sources close to the matter told Reuters that the five banks and a proprietary trader that are shareholders in the new company have undertaken to bring guaranteed minimum levels of trade in the gold futures.

Should they meet these levels, the project partners will receive a half share of the revenue under an incentive scheme designed to ensure the contracts have turnover, viability, and credibility from the outset.

“We’re all committed to market-making and will at least bring our own trading book,” said a source at one of the banks involved in the project. “It’ll come with some built-in volume.” …

… For the remainder of the report:





John Embry notes that the boys are having great difficulty keeping silver below 18 dollars.

(courtesy Kingworldnews/John Embry)

Embry notes desperation to keep silver below $18


1:59p ET Thursday, February 23, 2017

Dear Friend of GATA and Gold:

Interviewed by King World News today, Sprott Asset Management’s John Embry notes the ever-more obvious and desperate efforts by bullion banks and central banks to keep silver below $18. Embry thinks silver is the most undervalued asset. He also reflects on his recent visit to Argentina. The interview is excerpted at KWN here:


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




Bitcoin joins gold as it is up 10 days in a row and now a record highs: $1153.00 and closing in on gold.

(courtesy zero hedge)


Bitcoin Up 10 Days In A Row – Surges To Record High

As the dollar drops, and fears over US trade action may exaggerate capital outflows in China, Bitcoin has renewed its rally post-Golden Week to new record highs. The virtual currency is up 10 days in a row as we noted previously that the Chinese have discovered a workaround for the PBOC’s crackdown on Bitcoin exchanges.

Record highs in USD terms… (not yet record highs in Yuan terms)

As we noted previously, China’s central bank has stepped up oversight of bitcoin exchanges this year, leading major trading platforms to impose halts on withdrawals and other checks to appease the regulator. But, as Quartz reports, Chinese traders aren’t playing along—they are apparently flocking to peer-to-peer marketplaces to continue buying and selling bitcoin.

As Yuan trading on bitcoin exchanges has plummeted…

Quartz notes that one of the longest established peer-to-peer marketplaces is LocalBitcoins, which acts as a kind of directory for buyers and sellers to find each other. Users can arrange to meet in person, on chat platforms, or talk on the phone to arrange exchanges involving bitcoin.

Yuan volumes on the marketplace have exploded in the past week. Trading on LocalBitcoins currently accounts for about 6% of the total trading volume in yuan, according to data source Crypto Compare.

And Bitcoin prices have practically erased all of the Chinese crackdown losses…

It seems the Chinese will not be stopped in their effort to get capital out of the country – even as the PBOC spends billions propping up the currency in the short-term to create the illusion of stability.

(courtesy zero hedge)

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


1 Chinese yuan vs USA dollar/yuan STRONGER AT  6.8753(SMALL REVALUATION NORTHBOUND   /OFFSHORE YUAN NARROWS   TO 6.8566 / Shanghai bourse DOWN 9.84 POINTS OR .30%   / HANG SANG CLOSED DOWN 87.10 POINTS OR 0.36% 

2. Nikkei closed DOWN 8.41 POINTS OR 0.04%   /USA: YEN FALLS TO 112.83

3. Europe stocks opened ALL MIXED     ( /USA dollar index FALLS TO  101.14/Euro UP to 1.0569


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  54.48  and Brent: 56.81

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.261%/Italian 10 yr bond yield UP  to 2.218%    

3j Greek 10 year bond yield RISES to  : 7.32%   

3k Gold at $1246.50/silver $18.12(8:15 am est)   SILVER CLOSE TO RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 23/100 in  roubles/dollar) 57.75-

3m oil into the 54 dollar handle for WTI and 56 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 SMALL   REVALUATION NORTHBOUND   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  1.0088 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0662 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  +.261%


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 2.395% early this morning. Thirty year rate  at 3.026% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


Futures Flat, Global Stocks Near Record High After Minutes Fail To Spark Dollar Rally

One day after the FOMC Minutes guided to a rate hike “fairly soon”, but not soon enough in the eyes of the market (March hike odds dropped after the release), the dollar has posted minimal gains, while global stocks held near record highs on Thursday; S&P futures were fractionally in the green to start the session; crude climbed back above $54 after API showed U.S. stockpiles fell. US and euro zone government bond yields fell or held steady as concerns of an imminent rate hike faded.

The rally that has taken the value of global equities to over $70 trillion and the MSCI All-Country World Index to a record, appears to again be losing momentum as investors grapple with political uncertainty and the Fed’s schedule for lifting borrowing costs. The minutes showed many Fed policymakers said it may be appropriate to raise rates “fairly soon” if jobs and inflation data met expectations. But they also highlighted deep uncertainty over President Donald Trump’s economic program and wrestled with uncertainty on issues ranging from the Trump administration’s fiscal stimulus plans to the headwinds a rising dollar may pose.

Stocks in Europe were mixed in early trading before rising led by telecommunications companies, following solid earnings from Telefonica SA. Bank stocks were stronger on the back of solid earnings from Barclalsy whose profit before tax of £3.2bn for 2016, rose threefold from the £1.1bn the year before. Its reorganisation has included the sale of its Africa business and selling off “non-core” assets.  The STOXX 600 stocks index was marginally higher and close to 14-month highs touched on Tuesday. A 4 percent fall in miner Rio Tinto and a fall of nearly 5 percent in EasyJet, which were among companies whose shares went ex-dividend, weighed on the index.

The MSCI Asia index ex-Japan edged up 0.1 percent, trading near the highest level since July 2015 it hit on Wednesday. Earlier, the index lost as much as 0.15%. Japan’s Nikkei closed fractionally lower, as banks fell, and Australian shares ended down 0.4 percent. MSCI’s world index also nudged higher and was within half a point of Wednesday’s record high.

The dollar edged up less than 0.1 percent against a basket of major currencies but held below highs hit on Wednesday, having fallen immediately after the minutes were released. The euro, which has been buffeted by investor nerves over France’s presidential election, to be held in April and May, was flat at $1.0556. The yen was also barely changed at 113.28. Sterling strengthened 0.2 percent to $1.2468.

As discussed yesterday, in addition to Trump’s policies on taxes, spending and trade, markets are now trying to gauge his attitude to the dollar. Trump said before his inauguration that the dollar’s strength against the Chinese yuan was “killing us”, raising concern in the “strong dollar” policy espoused by recent U.S. administrations could change. However, in an interview with the WSJ, Treasury Secretary Steven Mnuchin praised the strong dollar on Wednesday, saying it reflected confidence in the economy.

French bonds advanced after a pact between independent presidential candidate Emmanuel Macron and centrist Francois Bayrou, which for now has helped ease fears the country could elect a leader who favors leaving the European Union. “Yesterday’s developments in France were positive for French bonds and broader risk appetite,” said Orlando Green, European fixed income strategist at Credit Agricole in London.

Earlier this morning, French OATs extended gains, led by the 10y-30y sector, as 30y bonds fall as much as 4bps following latest OpinionWay poll showing gains for Macron in second round. Poll shows Macron would beat Le Pen 60%-40% in the second round; that compares with 59%-41% spread in Wednesday’s poll.  Italian bonds underperform with 10y yields rising 6bps, leading losses, as concession is built ahead of next week’s supply, which include two issues in the 10y bucket for €2-3BN. German 10Year bonds edged up 1 basis point to 0.28%, having closed on Wednesday at 0.27 percent.

Stronger-than-expected demand at sale of 20-year debt causes Japan’s sovereign curve to flatten; bonds rise in Singapore ahead of this year’s first 10-year sale.

Oil prices rose after data showed a decline in U.S. crude stockpiles as imports fell. Brent crude last traded at $56.56, up 72 cents a barrel. Prices have been rising since the Organisation of Petroleum Exporting Countries and other oil producers agreed output cuts last year. “It’s a battle between how quick OPEC can cut without shale catching up,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.

Copper fell almost 1 percent to $5,982 a tonne on concern about fresh regulation that could affect China’s property boom. Gold rose less than 0.1 percent to $1,238 an ounce, supported by uncertainty over the Fed rate outlook. Zinc and nickel also fell more than 1 percent.

Market Snapshot

  • S&P 500 futures up 0.1% to 2,362.75
  • STOXX Europe 600 little changed at 373.55
  • German 10Y yield fell 0.5 bps to 0.274%
  • Euro down 0.2% to 1.0542 per US$
  • Brent Futures up 1.5% to $56.67/bbl
  • Italian 10Y yield fell 5.3 bps to 2.194%
  • Spanish 10Y yield fell 0.3 bps to 1.69%
  • MXAP little changed at 146.12
  • MXAPJ little changed at 470.84
  • Nikkei down 0.04% to 19,371.46
  • Topix down 0.05% to 1,556.25
  • Hang Seng Index down 0.4% to 24,114.86
  • Shanghai Composite down 0.3% to 3,251.38
  • Sensex little changed at 28,862.89
  • Australia S&P/ASX 200 down 0.4% to 5,784.66
  • Kospi up 0.05% to 2,107.63
  • Brent Futures up 1.5% to $56.67/bbl
  • Gold spot little changed at $1,237.58
  • U.S. Dollar Index up 0.2% to 101.39

Top Overnight News via BBG

  • Barclays shares rose to the highest in more than a year as its capital ratio exceeded expectations and the bank signaled progress in efforts to divest its Africa unit and sell off unwanted assets
  • Carlyle Group is closing the money raising process this week for its fourth fund that will focus on distressed debt and special-situations after reaching its target of $2.5 billion
  • Mohamed El-Erian is warning traders not to get complacent about the prospect of a Fed interest-rate hike next month
  • Germany’s central bank increased risk provisions to manage losses it anticipates to make once ECB starts to raise interest rates
  • Smaller Chinese banks have sold record amounts of short-term debt this month before possible new rules that would constrain their ability to issue the securities
  • The U.K. won’t be able to retake complete control of its destiny though Brexit, European Central Bank chief economist Peter Praet said
  • Allergan has “no interest” in Valeant Pharmaceuticals, most likely not even “in pieces,” Allergan CEO Brent Saunders said during an interview at Bloomberg headquarters in New York.
  • PSA Ready for ‘Opportunities’ as Profit Gain Helps Opel Stance
  • Tesla Keeping Model 3 Steady Overshadows CFO Exit, Cash Needs
  • HP Sales Soar Past Estimates on Personal-Computer Strength
  • Exxon Caves to Oil Crash With Historic Global Reserves Cut

Asia equity markets traded mixed following a weak lead from Wall Street where the Dow Jones outperformed amid rising du Pont and Dow Chemical merger bets. ASX 200 (-0.4%) underperformed amid losses seen in the metals and mining sector as Rio Tinto (-5.2%) shares sunk, while Nikkei 225 (-0.1%) traded in the red amid a firmer JPY and a mild pullback of yesterday’s gains in Toshiba (-4.7%) shares. Shanghai Comp. (-0.3%) traded in the red following a weak CNY 50bIn liquidity injection by the PBoC, while Hang Seng (-0.3%) was led lower following reports that Chinese banks could pass on higher funding costs to customers amid increasing short-term borrowing rates. 10yr JGBs traded higher amid the risk-off tone in the region with the yield curve beginning to flatten in the super long end, while participants look ahead to the auction for 20yr government paper.

Top Asian News

  • SoftBank Denies It’s Looking for Stake in Merged Vodafone- Idea
  • Chinese State Fund’s Broker Says It’s Buying Hong Kong Stocks
  • Emerging-Markets Hedge-Fund Assets Reach Record in ’16, HFR Says
  • Hong Kong Property Stock Rally Gathers Pace on Earnings Outlook
  • Japan Stocks to Watch: NTT Docomo, Takata, Tepco, Mitsui & Co
  • China Said to Appoint Guo Shuqing as Banking Regulator Head: WSJ
  • Adelson’s Sands Missing Stock Rally as Rivals Pull in VIPs
  • China Expands Drug Insurance Coverage in Boost to Pharma Stocks
  • BAT Forecasts Earnings Growth Amid Race for Smoking Alternatives

European bourses opened mixed but now trade mostly higher as earnings dictate play, Barclay’s (+3.5%) profits almost treble to GBP 3.2bIn and the Co. reported strong progress in restructuring and Glencore (+2.4%) also impressed investors with annual profits rising 48% off the back of higher commodities prices and strong trading results. Telecoms outperform after Orange reported better than expected earnings. Fixed income, underperformance has been noted in the periphery as Italian yields trade wider by 1.7% with Italian press reporting that former PM Renzi is looking to call new elections in early June. Analysts at Citi noting a June election would be challenging but not impossible. The GE/FR spread had tightened post yesterday’s news that Centrist Bayrou has pulled out of the French election race lending support to Macron, however there has been a bit of an unwind in recent trade.

Top European News

  • Glencore Completes Turnaround as Profit Soars on Trading
  • Copper Strike Poses Supply Threat Even After Miners Return
  • Leviathan Partners Approve $3.75 Billion Gas-Development Plan
  • Downbeat Outlook Eclipses Magyar Telekom Profit as Shares Fall
  • U.K. Claim That Burning Biomass Is Clean Seen as ‘Flawed’
  • Centrica Sees No Reason for Further Rough Impairments Now:

In currencies, the Bloomberg Dollar Spot Index gained 0.1 percent, after falling 0.2 percent on Wednesday. The yen added 0.2 percent to 113.14 per dollar, following a 0.3 percent gain the previous day. The euro weakened 0.2 percent to $1.0538 after gaining 0.2 percent on Wednesday. It’s been a very quiet morning in FX, with the FOMC minutes offering little fresh insight into Fed thinking. UST yields hold their ground however, but this may waiver as the count down to the March FOMC looms. This explains the range bound markets seen today, which looks set to continue over coming weeks. EUR/USD has been in focus, but looks reluctant to retest 1.0500 after yesterday’s brief dip below here, but all now depends on whether Le Pen’s performance in the polls changes to any notable degree. USD/JPY is also largely sidelined, but if stocks hold up, we expect little deviation from 112.50-114.50, and testing these limits looks unlikely any time soon. The crosses have also stabilised, most significantly EUR/JPY, having recovered 1 JPY from yesterday’s lows circa 118.50.

In commodities, West Texas Intermediate crude climbed 1.4 percent to $54.33 a barrel, rebounding from a 0.9 percent drop in the previous session. Movement across the spectrum of commodities remains confined to near term ranges, highlighted by the WTI test of USD55.00 earlier in the week – which was swiftly rejected. This may change later today ahead of the DoE report, with prices better supported despite the raft of inventory data to its detriment. Production cuts (and more to come?) are perhaps yet to feed through, and this looks to be driving the support seen on dips. Gold (and Silver) continue to dance to the tune of the USD, but we are ever watchful on equities which relentlessly push higher. Copper is back testing USD2.70 again, but all base metals have slipped a little on the back of the overnight CAPEX data. Less so Nickel as the Philippines environment minister underlined her backing from the president.

Looking at today’s calendar, in the US we’ve got initial jobless claims and the Kansas City Fed’s manufacturing survey. Away from the data the Fedspeak continues with Lockhart (1.35pm GMT) and Kaplan (6.00pm GMT) both scheduled. The ECB’s Praet is also due to speak at various stages through the day.

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, Jan., est. 0.00, prior 0.14
  • 8:30am: Initial Jobless Claims, Feb. 18, est. 240k, prior 239k; Continuing Claims, Feb. 11, est. 2068k, prior 2076k
  • 9am: House Price Purchase Index QoQ, 4Q, prior 1.5%; FHFA House Price Index MoM, Dec., est. 0.5%, prior 0.5%
  • 9:45am: Bloomberg Consumer Comfort, Feb. 19, prior 48.1
  • 11am: Kansas City Fed. Manf. Activity, Feb., est. 9, prior 9
  • 1pm: Fed’s Kaplan Speaks in Fort Worth

DB’s Jim Reid concludes the overnight wrap

If you’re someone who is disillusioned with global politics at the moment then yesterday you were perhaps offered an escape route assuming you have 39 years of travelling time left in you and you can source a spaceship that can move at the speed of light. If you tick both boxes then hop along to the Trappist-1 star system and its newly discovered seven earth sized planets, three of which scientists have deemed to be in the ‘habitable zone’. I read about this last night while watching the ‘Brit Awards’ (UK version of the Grammys) where tributes were paid to the likes of David Bowie. I couldn’t help be thankful that our planets have better names than the ones scientists discovered yesterday. I’m not sure “Is there life on ‘E’ ‘F’ or ‘G’?” would quite have worked played with a haunting piano line.

In markets yesterday planet F referred to the Fed and France as they were the two big macro stories. Starting with the former, the main passage to note from the FOMC minutes last night was that “many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the committee’s maximum-employment and inflation objectives increased”. While there was that mention of “many participants” the “fairly soon” aspect of timing makes it hard to argue that March is any closer for the next move. That said it was highlighted that “a few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the Committee greater flexibility in responding to subsequent changes in economic conditions” suggesting that there are a few members who would clearly be happy going next month.

In terms of the mention of future balance sheet strategy the only real takeaway was the reference that “participants also generally agreed that the committee should begin discussions at upcoming meetings about the economic conditions that could warrant changes in the existing policy of reinvesting proceeds from maturing Treasury securities and principal payments from agency debt and mortgage-backed securities, as well as how those changes would be implemented and communicated”. So no real new insight on that front. With regards to Trump and the question marks there, the minutes showed that “most participants continued to see heightened uncertainty regarding the size, composition and timing of possible changes to fiscal and other government policies, and about their net effects on the economy and inflation over the medium term, and they thought some time would likely be required for the outlook to become clearer”.

All in all then a fairly balanced set of minutes. Bloomberg’s calculator shows the probability of a Fed hike in March at 34% this morning which is actually down slightly from 36% the day before. May is at 62% from 59% – so not particularly big moves. Markets elsewhere didn’t really do much in the aftermath either. 10y Treasury yields closed out at 2.414% which was down 1.6bps on the day, having traded as high as 2.452% earlier on. The Greenback finished slightly lower (-0.15%) while risk assets were subdued. The S&P 500 (-0.11%) suffered only its third negative day in the last 3 weeks although the Dow (+0.16%) did finish higher and in doing so marked a three-decade record of nine consecutive new record closing highs. While we’re on the Fed it’s worth noting that Fed Governor Powell also spoke yesterday and said that a hike is warranted “fairly soon” should the economy continue on its current path. When asked if March is on the table, his reply was “Yes”.

Meanwhile in France the latest update is the news that centrist candidate Francois Bayrou will now team up with independent candidate Macron in forming an alliance in the presidential election. The news should be a small positive for Macron. Bayrou had been running at around 5-6% in the recent polls and a portion of that should now transfer to Macron in the first round. An Elabe poll released on Tuesday found that Macron would get 17% of votes in the first round if Bayrou decided to run, and 18.5% without Bayrou running. So that suggests a 1.5% swing in Macron’s favour. The same poll showed Fillon as  benefiting from an extra 1% from Bayrou not running with the rest split around the far left and right. So as we noted a very marginal positive for Macron. The suggestion is that Bayrou has a strong influence on the centrist electorate so it could still be a bigger boost to Macron further down the line.

European bond markets were notably stronger yesterday including a bounce back for 10y OATs (-7.4bps) to 1.006%. They outperformed Bunds (-2.1bps to 0.275%) while peripherals were a bit more mixed (yields flat to 6bps lower). It’s worth highlighting that 2y Bund yields finished down another 2bps yesterday at -0.902% and so extending their record low. They are in fact now down 24bps from the highs in January which has coincided with political uncertainly steadily climbing higher. European equities were alot more mixed yesterday. The Stoxx 600 finished -0.01%, the DAX +0.26% but the peripherals were much weaker with the IBEX and FTSE MIB -0.88% and -0.83% respectively.

This morning bourses in Asia are generally trading in the red with commodity related names in particular underperforming. The Nikkei (-0.27%), Hang Seng (-0.48%), Shanghai Comp (-0.39%) and ASX (-0.26%) are all lower as we goto print. Yesterday’s declines across base metals don’t appear to be helping although Oil (+0.88%) has bounced back over $54/bbl following a -1.36% loss yesterday. Sovereign bond yields in Asia have also generally tracked lower.

Staying in Asia it’s worth noting that the National People’s Congress (NPC) in China is now just around the corner with the event kicking off on March 5th. As a reminder this is where the government sets out its working plan for the year. Our China Chief Economist Zhiwei Zhang published a report yesterday previewing the event with what he expects to hear. He thinks that the government will set a growth target broadly unchanged from last year, keeping 6.5% as the floor. He is curious if the government will send signals on how they are going to handle the pressure from the US on trade issues. Further opening up some service sectors may be one option. Zhiwei highlights that investors should also pay close attention to press conferences during the NPC. Experience in the past suggests that messages from those press conferences may have a significant impact on the market.

Also worth highlighting yesterday are our published takeaways from DB’s Bank Capital Forum 2017. Every year, the event brings together major investors, issuers and senior regulators to discuss the latest market and regulatory developments in banking. This year’s main topic was bank resolution and the keynote address was delivered by Dr. Elke König, Chair of the EU Single Resolution Board. It was followed  by a regulatory outlook panel, issuer panel and investor panel. The report should be in your inbox, contact Michal.Jezek@db.com if not.

Wrapping up, yesterday’s economic data in the US was reserved to the January existing home sales report which revealed that sales rose a better than expected +3.3% mom in January (vs. +1.1% expected). In Europe the notable data was the Germany IFO survey. The headline business climate reading jumped 1.1pts to 111.0 (vs. 109.6 expected) and so matching the December level again which is the highest since March 2014. Firms were most upbeat about the current assessment of the economy with that component rising 1.5pts to 118.4 while the expectations component rose 0.8pts to 104.0. Meanwhile in the UK  Q4 GDP was confirmed at a slightly above market +0.7% qoq (vs. +0.6% expected) but earlier downward revisions meant annual growth was revised down two-tenths to +2.0% yoy. Finally there were no surprises in the final January CPI print for the Euro area at -0.8% mom. That puts the headline annual rate at +1.8% while the core is at +0.9%.

Looking at today’s calendar, this morning we’re kicking off in Germany again where we’ll get the final revisions to Q4 GDP (no change from the +0.4% qoq flash expected) along with the various growth components. Also due out will be various confidence indicators in France for February along with the UK’s CBI distributive trades survey for February. This afternoon in the US we’ve got initial jobless claims and the Kansas City Fed’s manufacturing survey. Away from the data the Fedspeak continues with Lockhart (1.35pm GMT) and Kaplan (6.00pm GMT) both scheduled. The ECB’s Praet is also due to speak at  various stages through the day.


i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 9.84 POINTS OR .30%/ /Hang Sang CLOSED DOWN 87.10 POINTS OR 0.36% . The Nikkei closed DOWN 8.41 POINTS OR 0.04% /Australia’s all ordinaires  CLOSED DOWN 0.30%/Chinese yuan (ONSHORE) closed UP at 6.8753/Oil ROSE to 54.48 dollars per barrel for WTI and 56.81 for Brent. Stocks in Europe ALL MIXED. Offshore yuan trades  6.8566 yuan to the dollar vs 6.8780  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS A BIT AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN STRONGER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR


North Korea lashes out at both China and Malaysia as they now anticipate that China will orchestrate a regime change in the failed state

(courtesy zero hedge)

China Prepares For “Regime Collapse” In North Korea

Over the weekend, following reports that China has banned all North Korean coal imports – in the aftermath of last week’s North Korean ballistic missile launch- which marked a troubling escalation in relations between the two formerly “amicable” nations, we discussed how China was tipping its hand that not only was Kim Jong-Un potentially losing a “very big ally”, but that it could also lead to “jeopady” for his regime, and a potential political coup in the generally unstable dictatorship.

Now, it appears that the likelihood of a regime collapse in North Korea is being taken seriously by none other than the country’s formerly largest trading partner, China, which as SCMP reports, “will take the necessary measures to safeguard national security in the event of the collapse of the neighbouring North Korean regime”, a defence official said on Thursday.

The recent assassination of North Korean leader Kim Jong-un’s half-brother Kim Jong-nam has sparked renewed concerns over the stability of Pyongyang and the possibility of a collapse of the reclusive regime, SCMP adds.

Beijing, long seen as the guarantor of Pyongyang’s security, had mostly largely silent on the incident. However in the aftermath of the abrupt coal import suspension, Chinese officials no longer had the luxury of avoiding the topic.

Asked whether China had a contingency plan for a North Korean collapse, defence ministry spokesman Ren Guoqiang said Beijing has maintained its usual policy towards Pyongyang, and urged the “relevant parties to refrain from any actions that will escalate tensions”.

“We are resolute in safeguarding the peace and security of the Korean Peninsula, sticking to the objective of denuclearization and to resolving disputes through dialogue and consultation,”Ren said on Thursday. “The Chinese military will take the necessary measures, according to the need that arises in the security environment, to safeguard national security and sovereignty,” he said.

Ren denied recent reports that China had sent troops to the border between China and North Korea after Kim Jong-nam’s death to prevent potential large-scale refugee crossings. Beijing has often been criticised by US President Donald Trump for not doing enough to rein in Pyongyang’s nuclear development. The latest missile test has reaffirmed South Korea’s resolve to deploy the Terminal High Altitude Area Defence (THAAD), a US-developed anti-ballistic missile system, following North Korea’s fourth nuclear test in January last year.

South Korea’s acting president, Hwang Kyo-ahn, said on Monday the deployment could not be delayed in the face of the growing nuclear missile threat from the North, despite Beijing’s hostility to the move, Reuters reported. Beijing has strongly protested deployment of THAAD, arguing that the system is not targeted to prevent an attack from North Korea, but could be used to spy on Chinese missile flight tests. Ren at the defence ministry yesterday reiterated China’s opposition to THAAD, saying China would “take all necessary measures to safeguard its national security and sovereignty”.

* * *

Meanwhile, in an inexplicable move, the WSJ reports that in an escalation that is certain to only antagonise China, North Korea lashed out at Beijing in a state-media commentary published on Thursday, in unusually pointed rhetoric from Pyongyang toward a powerful neighbor that it has long relied on for economic support. In Thursday’s piece, North Korea even adopted a mocking tone, saying that the country is “styling itself a big power, is dancing to the tune of the U.S.

The KCNA statement also vowed that cutting its exports wouldn’t deter North Korea from developing its nuclear arsenal. “It is utterly childish to think that the DPRK would not manufacture nuclear weapons and intercontinental ballistic rockets if a few penny of money is cut off,” the statement said.

The commentary, published by the state-controlled Korean Central News Agency, didn’t name China, but left little doubt about its target: “a neighboring country, which often claims itself to be a ‘friendly neighbor’.” In particular, the article lambasted China for playing down North Korea’s nuclear capabilities, and for curbing foreign trade—an apparent reference to China’s statement over the weekend that it would suspend coal imports from North Korea for the rest of the year.


North Korea remains heavily reliant on its larger neighbor for trade, while China sees North Korea as a buffer against South Korea and Japan, both U.S. allies. But Beijing’s patience wore thin after Pyongyang conducted a series of nuclear and ballistic-missile tests last year, prompting China to back fresh United Nations sanctions in November that target North Korea’s coal exports. According to the KCNA report, the unnamed country “has unhesitatingly taken inhumane steps such as totally blocking foreign trade related to the improvement of people’s living standard under the plea of the U.N. ‘resolutions on sanctions’ devoid of legal ground.”

While an early round of U.N. sanctions restricted coal imports from North Korea, China is widely believed to have used a so-called humanitarian exception to exceed that cap. That loophole was removed in last November’s U.N. resolution, and North Korea’s protest against China suggests that Beijing has made clear it intends to adhere to the new rule, said Adam Cathcart, a scholar who focuses on China-North Korea relations at the University of Leeds in the U.K.

“I would take this editorial as hard evidence that China has told North Korea it is narrowing the definition of coal exports for ‘humanitarian purposes,’” Mr. Cathcart said, adding that it was exceedingly rare for North Korea to criticize China so directly. Mr. Cathcart called the KCNA editorial “a frontal assault on China’s position on the U.N. sanctions issue,” a shift from the oblique critiques of China that North Korea usually turns to when it expresses its displeasure.

* * *

North Korea’s apparent anger at the Chinese comes as Pyongyang has escalated a diplomatic row with another friendly nation in Asia, Malaysia, after authorities in Kuala Lumpur identified a North Korean embassy official and a state-owned airline employee among seven suspects still at large in the killing of dictator Kim Jong Un’s half brother. North Korea has denied its involvement in last week’s public slaying of Kim Jong Nam. Malaysian authorities have refused to turn over the corpse to North Korea, as the embassy there has demanded, instead conducting its own autopsies—a move decried by North Korea as part of a broader conspiracy engineered by South Korea and the U.S.

Just hours before its broadside against China, KCNA published a report blaming Malaysia for an “undisguised encroachment upon the sovereignty of the DPRK,” referring to North Korea by the acronym for its formal name, the Democratic People’s Republic of Korea.  “The biggest responsibility for his death rests with the government of Malaysia as the citizen of the DPRK died in its land,” KCNA reported, quoting a group called the Korean Jurists Committee.

* * *

While it remains unclear if there are political pressures mounting on Kim Jong-Un from within (or externally), some have suggested that his reaction to a potential military coup could be terminal, and irrational, resulting in ballistic missile launches at close neighbors, with potentially dire consequences.




Taiwan joins the global war on cash as they plan to ban purchases of houses cars and jewelry with cash

(courtesy zero hedge)

Taiwan Joins Global War On Cash: Plans To Ban Purchases Of Houses, Cars, & Jewelry

The cancerous virus of freedom-destroying worldwide cash-bans – in the name of fighting terrorism – has reached Taiwan this week. With the aim of ‘preventing money-laundering’, Taiwan may ban cash purchases of properties and luxury goods, Taipei-based Economic Daily News reports, citing unidentified official at Ministry of Justice.

As we previously noted, the War on Cash is not merely continuing, it is intensifying.

It began in the West, with relatively minor infringements on our right to use the currency of our own nation. The War has now shifted to India, been radically ratcheted up, and inflicted upon a population of 1.2 billion people, where 68% of transactions were conducted with cash. And now, as The Economic Daily News reports (via Google Translate), to Taiwan…

With the goal of strengthening the prevention and control of money laundering, Taiwan’s Ministry of Justice plans to promote large-scale transactions without cash. The first wave may lock real estate, luxury cars and jewelry transactions.

According to the provisions of the money-laundering control law, which currently controls the use cash payment tools, The Ministry of Justice to discuss the plan with other regulators in the second half of the year.

Once finalized, the sale of real estate, cars, and jewelry will not be possible using cash; only non-cash payment tools, such as credit cards, financial cards, checks, electronic payments or remittances.

Current regulations require the keeping of records and reporting of any transcations over 500,000 Yuan (around $72,000), with no limit on the amount of cash that can be used.

As to whether a lower threshold will be set, it is unclear; but from indications, for the sale of real estate, luxury cars or jewelry the threshold will be zero – and only non-cash allowed.

Officials said that in addition to changes in the concept of the majority of normal business people should not be affected, but for some with bad credit, who can not apply for a credit card or bank account, it admitted the new law may cause inconvenience.

Of course, the excuse for all this cah ban is simple –

The Ministry of Justice internal data show that the criminal group’s asset allocation is especially heavy in gold, diamonds, and real estate. Real estate transactions are considered to high-risk money laundering transactions.

As we noted previously, on the face of it, this ‘war on cash’ smacks of conspiracy theory, yet certainly, all governments would benefit from this control and would be likely to get on board. In fact, it might prove to be the only way out of their present economic problems.

So, how would it play out? Here’s roughly how I saw Phase I:

  • Link the free movement of cash to terrorism (Create a consciousness that any movement of large sums suggests criminal activity.);
  • Establish upper limits on the amount of money that can be moved without reporting to some government investigatory agency;
  • Periodically lower those limits;
  • Accustom people to making all purchases, however small or large, through a bank card;
  • Create a consciousness that the mere possession of cash is suspect, since it’s no longer “necessary”.

When I first wrote on the subject, there was considerable criticism as to the possibility that such a programme would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the programme has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name – “the War on Cash”.

References in the media have been made that terrorist groups fund their attacks with cash. Dozens of countries have placed limits on the maximum amount of money that can be moved without reporting. Some, notably France, have already begun lowering their limits. Banks in some countries, notably Sweden, are already treating all cash transactions as suspicious. The previously theoretical Phase I is now well under way.

It would appear Taiwan is joining the rest of the world in this war on cash. There are three major players involved in the war on cash:

1. The Initiators

Who? Governments, central banks.

Why? The elimination of cash will make it easier to track all types of transactions – including those made by criminals.

2. The Enemy

Who? Criminals, terrorists

Why? Large denominations of bank notes make illegal transactions easier to perform, and increase anonymity.

3. The Crossfire

Who? Citizens

Why? The coercive elimination of physical cash will have potential repercussions on the economy and social liberties.

The shots fired by governments to fight its war on cash may have several unintended casualties:

1. Privacy

  • Cashless transactions would always include some intermediary or third-party.
  • Increased government access to personal transactions and records.
  • Certain types of transactions (gambling, etc.) could be barred or frozen by governments.
  • Decentralized cryptocurrency could be an alternative for such transactions

2. Savings

  • Savers could no longer have the individual freedom to store wealth “outside” of the system.
  • Eliminating cash makes negative interest rates (NIRP) a feasible option for policymakers.
  • A cashless society also means all savers would be “on the hook” for bank bail-in scenarios.
  • Savers would have limited abilities to react to extreme monetary events like deflation or inflation.

3. Human Rights

  • Rapid demonetization has violated people’s rights to life and food.
  • In India, removing the 500 and 1,000 rupee notes has caused multiple human tragedies, including patients being denied treatment and people not being able to afford food.
  • Demonetization also hurts people and small businesses that make their livelihoods in the informal sectors of the economy.

4. Cybersecurity

  • With all wealth stored digitally, the potential risk and impact of cybercrime increases.
  • Hacking or identity theft could destroy people’s entire life savings.
  • The cost of online data breaches is already expected to reach $2.1 trillion by 2019, according to Juniper Research.

This issue has expanded more quickly than we’d anticipated. Clearly, the governments that are forcing it into being are running out of time. There can only be one reason why they’d rush a programme that normally would be given more time for people to accept, and that’s that they see a crash coming before they can get Phase II of the programme underway.




A centrist alliance caused French yields to tumble as a risk of a LePen victory falls:

(courtesy zero hedge)

French Yields Tumble To 1-Month Lows After Macron Alliance

While bookmakers’ odds are unchanged for a Le Pen victory, French bond yields have tumbled to one-month lows as the prospect of a centrist alliance in the country’s presidential election eased market anxiety that far-right candidate Marine Le Pen will win.

French yields are down to one-month lows.As The FT notes, the decision on Wednesday by independent candidate François Bayrou not to stand in the country’s elections, and instead throw his support behind fellow centrist Emmanuel Macron, has helped French bonds snap a three-day losing streak.

“Though the polls continue to suggest that a Le Pen victory is unlikely in the second, decisive round, the tone throughout yesterday’s session was clear in that the market does not wish to be proven incorrect, yet again,” said Lyn Graham-Taylor at Rabobank.

And despite the collapse in German yields, the French spread has also reduced notably… though only to 4 days lows…

“It is increasingly debatable, above all in bond/credit market terms, whether there is another story in financial markets other than the French elections and related market fears,” noted Marc Ostwald, a strategist at Admisi.





This is what happens when you have negative interest rates.  In order  not to be dinged with a .75% tax on deposits at the bank, citizens decide to overpay their taxes.  Sweden must repay over 3.2 billion dollars equivalent back to its citizens for overpayment

(courtesy Mish Shedlock/Mishtalk)

Sweden Has Another Problem – It’s Collecting Too Much Tax



Submitted by Mike Shedlock via MishTalk.com,

As a direct result of Sweden’s tax laws in conjunction with negative interest rates by the central bank, Sweden’s citizens now purposely overpay their tax bills in record amounts as a savings vehicle.

Here’s the peculiar result: The Swedish Government Complains it Collects Too Much Tax.

Data released on Wednesday showed Sweden’s government generated a budget surplus of SKr85bn ($9.5bn) in 2016, with approximately SKr40bn coming from tax overpayments. The government will have to repay more than £3.5bn to businesses and individuals who purposely paid too much tax in 2016.

The government wants to discourage further overpayments but the national debt office has admitted its efforts will probably not be enough.


While bank interest rates plummeted, Swedish tax rules meant that excess deposits in taxpayers’ payment accounts continued to earn a minimum of 0.56 percent annual interest, leading many people to use them like makeshift bank accounts.


Most governments would be pleased with an annual budget surplus more than twice the forecast size. But Stockholm has complained that this “involuntary borrowing” from residents will cost it around SKr800m more over 2016 and 2017 than if they had borrowed the money at market rates.


Unfortunately for the debt office, there is little chance that the problem will go away anytime soon. At its latest policy meeting last week the central bank said it was more likely to cut rates further into negative territory than increase them in the short term.

Given negative interest rates, even if Sweden paid zero percent on overpayments, the Swedish government would lose money vs. borrowing from the central bank.

I suppose the government could charge money for excess payments, but officials might be worried about voter backlash


Exxon cuts its reserves by a record 3.3 billion barrels of oil as the low price finally forced the company to act..and guess what the stock goes up

(courtesy zero hedge)

Exxon Cuts Reserves By A Record 3.3 Bilion Barrels As Oil Crash Finally Takes Toll

Last September, when the price of oil was well below where it had been trading for the bulk of the past several years,  we reported that NY Attorney General Eric Schneiderman was probing why Exxon Mobil hasn’t written down the value of its assets, two years into a pronounced crash in oil prices. The complaint was simple: out of the 40 biggest publicly traded oil companies in the world, Exxon – then still led by now Secretary of State Rex Tillerson – was the only one that hasn’t booked any impairments in the prior 10 years.

As the WSJ wrote at the time, “since 2014, oil producers world-wide have been forced to recognize that wells they plan to drill in the future are worth $200 billion less than they once thought, according to consultancy Rystad Energy. Because the fall in prices means billions of barrels cannot be economically tapped, such revisions have become a staple of oil-patch earnings, helping to push losses to record levels in recent years.” And yet, Exxon had – until the later half of 2016 – declined to take any write-downs, the only major oil producer not to do so, which has led some analysts to question its accounting practices.

Maybe the NYAG was on to something?

To be sure, the company had played down the criticism, saying it is extremely conservative in booking the value of new potential fields and wells. That reduced its exposure to write-downs if the assets later prove to be worth less than expected. Then again, not even the most “conservative” company could have factored in oil crashing from $100 to $42 without that impacting the balance sheet.

Needless to say, avoiding reality and Exxon’s “ability” to avoid write-downs, and the massive losses that come with them, had been the main factors helping the company outperform rivals since prices began falling in mid-2014. Exxon shares had fallen by about half of the average of top peers Chevron,  Royal Dutch Shell, Total and BP. Since 2014, those companies have booked more than $50 billion overall in write-downs and impairments.  But not Exxon.

Then-CEO Rex Tillerson has an unusual explanation why Exxon has refused to write down assets so far: Rex told trade publication Energy Intelligence in 2015 that the company has been able to avoid write-downs because it places a high burden on executives to ensure that projects can work at lower prices, and holds them accountable.

“We don’t do write-downs,” Mr. Tillerson told the publication. “We are not going to bail you out by writing it down. That is the message to our organization.”

All of that changed this afternoon, when Exxon, now ex-Tillerson, disclosed the deepest reserves cut in its history as the ongoing rout in oil prices erased the value of a $16 billion oil-sands investment and other North American assets.  In a press release filed after the close, Exxon announced that “proved reserves were 20 billion oil-equivalent barrels at year-end 2016, inclusive of a net reduction of 3.3 billion oil-equivalent barrels from 2015. Reserves changes in 2016 reflect new developments as well as revisions and extensions to existing fields resulting from drilling, studies, analysis of reservoir performance and application of the methodology prescribed by the U.S. Securities and Exchange Commission.

As a result of very low prices during 2016, certain quantities of liquids and natural gas no longer qualified as proved reserves under SEC guidelines.

In other words, after years of denials, and claims that “we don’t do write-down”, Exxon just concluded the biggest reserve cut on record, as 3.3 billion barrels of crude was removed from the company’s “proved reserves” category. The revisions were triggered when low energy prices made it mathematically impossible to profitably harvest those fields within five years. The massive 3.5-billion barrel Kearl oil-sands development in western Canada accounted for most of the hit, with another 800 million oil-equivalent barrels in North America did not qualify as proved reserves, “mainly due to the acceleration of the projected economic end-of-field life.”

Following the reserve cut, the company’s total reserves dropped to 20 billion, the lowest in two decades.

As Bloomberg adds, the oil-sand mines in northern Alberta are among the costliest types of petroleum projects to develop because the raw bitumen extracted from the region must be processed and converted to a thick, synthetic crude oil. As such, they have been particularly hard hit by the worst oil slump in a generation.

The reductions were partially offset by reserves additions of oil and natural gas totaling approximately 1 billion barrels of oil equivalent in the U.S., Kazakhstan, Papua New Guinea, Indonesia and Norway, which replaced 65% of production and were the result of acquisitions, improved asset performance and a decision to fund an expansion of the Tengiz project in Kazakhstan.

According to Bloomberg calculations, the 19 percent drop amounts to the largest annual cut since at least the 1999 merger that created the company in its modern form. That includes 1.5 billion barrels of reserves that were pumped from wells. The previous record cut was a 3 percent reduction taken during the height of the global financial crisis in 2008.

Proved Reserves are among the most important metrics watched by investors because they are an indicator, along with commodity prices, of future cash flow. When the 2008 reserves cut was announced in February 2009, Exxon shares lost more than 4 percent in a single day, wiping out almost $17 billion in market value.

Today, after the biggest reserve write down in history, the shares gained 0.2% to $81.08 in after-hours trading as of 5:46 p.m. in New York on Wednesday, after closing at $80.93, suggesting that either the market does not care about fundamentals, or had largely priced in the announcement. As noted above, Exxon was facing an SEC probe into how it valued its portfolion, and signaled in October and again last month that the revision was probably coming, which may explain the lack of reaction.

On Tuesday, ConocoPhillips engaged in a similar reserve reduction when it removed the equivalent of 1.15 billion barrels of oil-sands crude from its books as part of a 21 percent cut that pushed the Houston-based company’s reserves to a 15-year low.

Under SEC rules, proved reserves can only include oil fields that can be produced economically within the next half decade. Price trends from the previous 12 months are compared against the estimated cost to harvest crude and gas in determining which reserves are counted.




The DOE reports today a huge inventory gain with production topping 9 million barrels. This caused oil to slide again

(courtesy zero hedge)

WTI/RBOB Slide After Crude Inventory Hits Record High, Production Tops 9 Million Barrels

After API’s surprise draw across all major categories, DOE reported the 7th weekly crude build in a row (even as crude imports plunged). Gasoline, Distillates, and Cushing all saw draws even as crude production rose to new cycle highs – back above 9mm bbl/d.

So here is a question for the crude bulls from Bloomberg’s Javier Blas: the U.S. imported way less crude last week (down 1.2 million b/d week-over-week, to 7.3 million b/d) and exported again lots (1.2 million b/d, or nearly 100,000 b/d week-over-week). And yet, crude stocks build-up again. So where’s is the rebalancing?


  • Crude -884k (+3.3m exp)
  • Cushing -1.7mm
  • Gasoline -893k (-1.5mm exp)
  • Distillates -4.229mm


  • Crude +564k (+3.25m exp)
  • Cushing -1.528mm (-50k exp)
  • Gasoline -2.628mm (-1.5mm exp)
  • Distillates -4.924mm (-1.0mm exp)

7th weekly crude build in a row but major draws across the other categories…

Notably, Bloomberg’s Javier Blas points out that U.S. refinery intake traditionally reaches a seasonal bottom between the second half of February and the first half of March. Last week intake, at just 15.5 million, was already low already and any further reduction would make a big increase in crude stocks more likely. Refinery Utilization tumbled to its lowest since April 2013…

Furthermore, some crude that was on floating storage in so-called contango deals is coming now in-land, increasing imports; but U.S. Crude oil exports rose above one million barrels a day for the first time on record the week ended Feb. 10. WTI averaged $2.26 a barrel below global benchmark Brent this year, making U.S. crude more attractive to overseas buyers.

As a reminder, US crude inventories are already at a new record high…


As are gasoline inventories…

Gasoline demand rose in the last week but remains down over 5% YoY…the biggest drop in 16 years.


Production remains on a rising trend – back above 9mm barrels/day, tracking the lagged rig count and suggesting – noise apart – considerably more production to come…


Bloomberg’s Javier Blas concludes:

I don’t see yet any sings of the U.S. domestic oil market rebalancing, despite the best efforts by OPEC. What’s becoming more and more clear is that the domestic industry is ramping up activity faster than most have predicted. OPEC cuts have lifted prices and created space for U.S. production overseas. OPEC failed to kill shale, and now it’s throwing it a big economic incentive to prosper.

WTI and RBOB rallied overnight following the API data and while both initially spiked on the print, they are falling now.. what will happen 15 minutes after?


Finally we remind readers of what happens next…for the last four weeks, bang on at the 3:45 pm London time (15 minutes after the DOE release), the algo emerged when bearish EIA figures also triggered buying.

Just like it did last week…


And the week before…


And the week before that…

*  *  *

No buying panic today yet…





Gasoline demand is faltering equal to 460 kb/day or 5%.  This decline has not occurred since the turn of the century. It sure tells us that we are in a recession

(courtesy zero hedge)

Recession Concerns Grow After Gasoline Demand Slides Most In 16 Years

Two weeks ago, we reported that when Goldman observed the latest gasoline demand data, it said that either something must be wrong with the data, or the US is in a recession: as the firm’s commodity analyst Damien Courvalin put it, such a steep drop in in US gasoline demand “would require a US recession.” He added that “implied demand data points to US gasoline demand in January declining 460 kb/d or 5.2% year-on-year. In the absence of a base effect, such a decline has only occurred in four periods since 1960 during which time PCE contracted.”

Bloomberg’s Liam Denning confirms that “big dips in U.S. gasoline demand, especially of 5 percent or more, are almost unheard of outside of a recession or oil crisis.” Goldman then adds that “to achieve the 5.9% decline suggested by the weekly data, our model requires PCE to contract 6%, in other words, a recession.”


At this point Goldman – which naturally was aghast at the possibility that there is an under the radar consumer recession taking place at a time when the bank was predicting three rate hikes – quickly pivoted and explained that a far more likely explanation is that the latest weekly report was an aberration, and that there was simply something wrong with the data.

Our analysis identifies weekly yield and exports as systematically deviating from their final values and such biases suggest that demand could be revised higher by 190 kb/d. The EIA’s real-time export data still includes estimates and we see potential for the recent shifts in the Mexican gasoline market to exacerbate the overstatement of US exports by an additional 185 kb/d given (1) lower PEMEX refinery turnarounds, and seasonally lower demand exacerbated by the January 16% hike in prices. Adjusting for these lower exports points to US gasoline demand declining only 85 kb/d yoy in January, in line with our macro model.

After chosing to ignore the data, Goldman then reiterated its fudged, rosy outlook based on its own fudged data:

Looking forward, we reiterate our outlook for strong global demand growth in 2017 and view the recent US gasoline builds as reflective of transient regional shifts in gasoline supply instead. Given our outlook for strong consumer spending in 2017, we believe that US gasoline demand growth will remain resilient this year at 60 kb/d, albeit below last year’s 150 kb/d growth because of higher prices.  From a global perspective, these declines remain modest, especially compared to the 510 kb/d 2016 demand growth from the 40 countries we track.

The problem with this narrative is that with every passing week that the DOE fails to correct the “error” in its residual calculation, assuming there is one, the less credibility the “non-recession” thesis has.

Which is why among the numbers released in today’s weekly update by the DOE, the one most anticipated was the one showing gasoline demand: what it revealed was troubling, with gasoline demand in the past 4 weeks sliding some 5.2% compared to last week, the much anticipated rebound, or data revision, remains elusive.


It also suggests that the worst-case scenario may be the right one: something is wrong with US consumer spending.

While one can debate if the gasoline demand data is accurate, there are other troubling indicators: as Bloomberg points out, the recent pace of recovery in US miles driven is slowing sharply.

Vehicle-miles traveled increased by just 0.5%, year over year, in December. For much of the prior two years, roughly coinciding with the crash in oil prices, growth had averaged more than 3 percent, sometimes spiking above 5 percent. In addition, the slowdown is fairly broad in geographic terms. Of the five regions into which the Federal Highway Administration divides the U.S., three showed outright year-over-year declines in December, the first time that’s happened since March 2014.

Those three regions represent almost 60 percent of the entire country’s vehicle-miles traveled; again, it’s the first time that much of country has experienced a decline in about three years:”

Among the other notable observations on American driving habits, namely that “the number of miles driven by the average American peaked more than a decade ago (see this blog post by Harry Benham of Carbury Consulting).

In addition to the recent economic improvement on the back of trillions in central bank liquidity, one can also point to the gasoline price base effect: today’s average of about $2.22 per gallon is far below the levels of $3.60 or more paid back in the summer of 2014. But the rebound over the past year, highly visible on gas-station placards along every highway, must have registered with at least some drivers:”

Whatever the reasons, Bloomberg concludes that “the size of the change is acute, and does suggest that a shorter-term action may be the cause. However, there may be a combination of near-term price sensitivity intertwined with longer-range shifts in vehicle technology and driving patterns. The next few weeks will reveal more.”

Alternatively, it may also indicate that the entire narrative about the “recovery” is quietly unraveling on America’s roads.

Finally, as we have been pounding the table since last year, no matter what is the driver, so to say, behind the decline in gasoline demand, it will have broad implications on both the equilibrium price of crude oil, and supply: and as Bloomberg similarly concludes, any impact on US gasoline demand this year, perhaps causing trend growth of 100-200,000 b/d to transform into a reduction of say 250,000 b/d, would force the oil market into having to find that net 350-450,000 b/d demand from elsewhere.

“And that seems unlikely given the trends in Europe and China toward more conservative fuel policies, and non-gasoline technologies.”

Which means that all those hedge funds who currently have record long WTI positions and who have been ignoring the troubling fundamental data from America’s roads, will sooner or later be forced to close out, resulting in one of the biggest oil price drops in history, in the process perhaps unleashing the next deflationary shock.




none today

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



GBP/USA 1.2494 UP .0045 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT/LOWER HOUSE PASSES BILL TO BEGIN THE BREXIT PROCESS)


Early THIS THURSDAY morning in Europe, the Euro ROSE by 17 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0569; 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 MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 9.84 POINTS OR 0.30%     / Hang Sang  CLOSED DOWN 87.10 POINTS OR 0.36%    /AUSTRALIA  CLOSED DOWN 0.30%  / EUROPEAN BOURSES ALL MIXED 

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 THURSDAY morning CLOSED DOWN 8.41 POINTS OR 0.04% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 87.10 POINTS OR 0.36%       / SHANGHAI CLOSED DOWN 9.84   OR 0 .30%/Australia BOURSE CLOSED DOWN 0.30% /Nikkei (Japan)CLOSED DOWN 8.41 POINTS OR 0.01%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1243.00


Early THURSDAY morning USA 10 year bond yield: 2.395% !!! DOWN 2 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.026, DOWN 1 IN BASIS POINTS  from TUESDAY night.

USA dollar index early THURSDAY morning: 101.14 DOWN 19 CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING


And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.97% UP 1  in basis point yield from WEDNESDAY 

JAPANESE BOND YIELD: +.084%  UP  1/10  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.686%  DOWN 1 IN basis point yield from  WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.225 UP 3 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.





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

Euro/USA 1.0581 UP .0015 (Euro UP 81 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.71 DOWN: 0.690(Yen UP 69 basis points/ 

Great Britain/USA 1.2556 up 0.0105( POUND up 105 basis points)

USA/Canada 1.3104 down 0.0059(Canadian dollar up 59 basis points AS OIL ROSE TO $54.43


This afternoon, the Euro was up by 31 basis points to trade at 1.0581


The POUND ROSE 105  basis points, trading at 1.25560/

The Canadian dollar ROSE  by 50 basis points to 1.3104,  WITH WTI OIL RISING TO :  $54.43

The USA/Yuan closed at 6.8621/
the 10 yr Japanese bond yield closed at +.084% UP 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 4 IN basis points from WEDNESDAY at 2.390% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.024 DOWN 1 in basis points on the day /

Your closing USA dollar index, 100.94 DOWN 36 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 30.88 OR 0.42% 
German Dax :CLOSED DOWN 50.76 POINTS OR 0.42%
Paris Cac  CLOSED DOWN 4.59 OR 0.09%
Spain IBEX CLOSED UP 16.20 POINTS OR 0.17%
Italian MIB: CLOSED DOWN 65.41 POINTS OR 0.35%

The Dow closed UP 34.72 OR 0.17%

NASDAQ WAS closed down 25.12 POINTS OR 0.43%  4.00 PM EST
WTI Oil price;  54.43 at 1:00 pm; 

Brent Oil: 56.55  1:00 EST




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: $56.46


USA 30 YR BOND YIELD: 3.014%

EURO/USA DOLLAR CROSS:  1.0579 up .0030

USA/JAPANESE YEN:112.66   down 0.743

USA DOLLAR INDEX: 100.97  down 36  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.25552 : up 101   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.233%


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


Gold Jumps Most In 2017 As ‘Mnuchin Moment’ Sparks Dollar Dump; Dow Tops 20,800

Mnuchin hit the reset button and then asset gatherers spent the day like this…


The Dow topped 20,800 shrugging off any fears from Mnuchin…thanks to a VIX slam…


Total panic bid right athe close to ensure 20,800 and to get the S&P green…


Making the 10th record close in a row – something that has only happened once before in the 100-year-plus history of The Dow…1987


The Value Line Geometric Composite Index has officially broken out…

Dana Lyons explains The Value Line Geometric Composite (VLG), as we have explained many times in these pages, is an unweighted average that tracks the median stock performance among a universe of approximately 1800 stocks. Thus, in our view, it serves as perhaps the best representation of the true state of the U.S. equity market. Additionally, it has historically been very true to technical analysis and charting techniques, which is quite remarkable considering there are no tradeable vehicles based on it. And, as noted, the VLG is testing a monumental level at the moment, going back several decades.

The S&P Tech sector finally had a losing day in Feb…

Ending the record winning streak…


Construction stocks tumble most since June on Trump infrastructure plan timing doubts


Tesla tumbled…


WalMart took a spill late on after Trump raise the border tax again…


As did the rest of the Retail sector…


VIX and VXV have entirely decoupled from stocks…


Mnuchin’s comments sparked reflexive buying in bonds and stocks but that soon broke with stocks tumbling to recouple with bond yields drop…


Rates dropped notably on Mnuchin’s comments (with the long-end underperforming) – now all lower in yield on the week…


ED/FF Futures indicate that March rate hike odds are tumbling as hawks shift out to May…


The USD Index tumbled on Mnuchin comments – the biggest drop since January. NOTE – no bounce in the USD after Trump brought up the BAT again (and tanked retail stocks)


With Cable and yen strength the biggest driver…


Gold topped $1250 (best day for Gold since December) – erasing most of the Trump losses – and Silver broke above its 200DMA…


Bitcoin reached a new record high in USD terms…


Copper dumped on end of strike chatter and US infrastructure doubts






More contradictions as Mnuchin in an interview expresses his praise for a strong dollar:

(courtesy zero hedge)

Mnuchin Praises Strong Dollar, Adds To Currency Confusion

Following today’s more dovish than most expected minutes, the dollar tumbled and its main carry counterpart, the yen spiked. However, shortly after 4pm, the USDJPY resumed its levitation, a time when the traditional trust bank intervention on behalf of the BOJ was not yet in play. The reason for the updraft in the dollar was the publication of an interview in the WSJ with Treasury Secretary Steven Mnuchin, his first since being sworn in as Treasury Secretary last week, in which he appeared to advocate a “strong dollar”, and said the strong U.S. currency “is a reflection of confidence in the U.S. economy”, adding that its performance compared with the rest of the world and was a “good thing” in the long run.

“I think the strength of the dollar has a lot to do with kind of where our economy is relative to the rest of the world, and that the dollar continues to be the leading currency in the world, the leading reserve currency, and a reflection of the confidence that kind of people have in the U.S. economy,” Mr. Mnuchin said.

Mnuchin’s remarks are notable because like in his confirmation hearing in January, he contradicts many other White House officials, including not only Trump’s key trade advisor Peter Navarro, but President Donald Trump himself, both of whom have suggested in the past that they favored a weaker currency to support the U.S. trade position.

The dollar has appreciated by 23% over the past three years and added to those gains since Mr. Trump’s November election; recent US export weakness and numerous disappointing corporate earnings results have been blamed on the stronger dollar. A stronger dollar goes against the very basis of Trump’s desire to make the US into an export powerhouse.

“For longer-term purposes, an appreciation of the dollar is a good thing, and I would expect longer-term, as you’ve seen over periods of time, the dollar does appreciate,” Mr. Mnuchin added.

It was the short term, however, that was far more interesting to FX traders whose P&L is updated on a daily, not decade basis

“In the short term, there are certain aspects [of a strong currency] that are positive about the dollar for our economy and there are certain aspects that are not as positive,” Mr. Mnuchin said. “A lot of the appreciation of the dollar since the election in particular is a sign of confidence in the Trump administration and the economic outlook for the next four years.”

It is unclear if that statement was a veiled pitch to begin selling the dollar.

As reported yesterday, perhaps it was the “short term” that Mnuchin was discussing when he held his first phone call with Christine Lagarde, and told the IMF’s managing director that he expects the IMF to provide “frank and candid” analysis of exchange rate policies.

As the WSj adds, the Treasury Department traditionally has been the leading voice from the U.S. on foreign exchange policy and notes that “the past several administrations have for the most part signaled support for a strong currency, even though at times an appreciation of the currency has hurt exports.” Of course that ignores the fact that it was the historic debasement of the dollar with the Fed’s various QE programs that provided the US with an extensive trade advantage for years against its main trading peers, who only joined the currency devaluation race far later.

Mnuchin deferred when asked about China’s currency and said he looked forward to “healthy bilateral relations” with the world’s second largest economy.

“There’s trade issues that will make sense to look at, and I think there’s investment issues that will make sense to look at,” he said. “There are many things that we will need to collaborate on.” Previously Trump said he would label China a currency manipulator on his first day as president, although he may have since changed his mind upon learning that for the past two years China was intervening to strengthen, not weaken, its currency in order to mitigate and prevent China’s historical capital outflows, which have so far resulted in over $1 trillion in capital flight.




Mnuchin is interviewed by CNBC and again fails to disclose the Trump tax plan:and more confusion as to what they are going to do!

(courtesy zero hedge)

Steven Mnuchin Speaks To CNBC, Fails To Give Trump Tax Plan Details: Key Highlights

Following his first interview since being confirmed yesterday with the WSJ, US Treasury Secretary Steven Mnuchin spoke to CNBC’s Becky Quick and repeated some of the key points he made yesterday, among which his hope to get tax reform done by the August Congress recess, however he again confirmed that there are too many moving pieces at this point saying it is “too early to give details” of the Trump tax plan.

Treasury Secretary Mnuchin: We’re committed to ‘very significant’ tax reform by August recess http://cnb.cx/2lO8VYh 

He also reiterated that “we’re primarily focused on a middle-income tax cut and simplification for business”

Treasury Secretary Mnuchin to CNBC: “We’re primarily focused on a middle-income tax cut and simplification for business”

As a reminder, on February 9th stocks surged after President Trump promised a “phenomenal” tax plan to be unveiled in “two or three weeks.” It appears that this will not happen, and instead in his State of the Union address, where the market expects more clarity on Trump’s economic policies to be unveiled, Trump will be forced to speak in broad generalities as he juggles not only passage of his tax plan in Congress, but also the process of “repeal and replace” (and rename and repair) of Obamacare which similarly has gotten bogged down in negotiations in Congress. Overnight we laid out an extensive primer of how Trump’s tax policies will likely be impacted by the stalled negotiations over Obamacare.

As a reminder, yesterday in his WSJ interview, Mnuchin said the administration was working with House and Senate Republicans to smooth over differences among them on tax policy, with the aim of passing major legislation before Congress leaves for its August recess. He added, “that’s an ambitious timeline. It could slip to later in the year.” He also said the administration is “looking seriously” at the House plan that includes border adjustment and was well aware of concerns raised by specific industries. The Treasury Department had its own concerns, he added, “about what the impact may be on the dollar” from a border-adjusted tax.

On another hot button topic, despite Trump previous vows to name China a currency manipulator, Mnuchin said “we’re not making any judgments” at this time.

Despite Trump’s campaign vow to name China a currency manipulator, Treasury Sec. Mnuchin says “we’re not making any judgments” at this time.

Overall, Mnuchin avoided most “hot button” topics, and reiterated the same vague WSJ talking points to CNBC. In addition to the punchline, namely that it is “too early to give details of tax plans” here are some other notable mentions by Mnuchin in the interview:

  • “Most important thing for growth is the tax plan; tax reform is mostly focused on the middle class”
  • “Tax reform will be significant”
  • “High income tax cuts should be offset; the dollar and stocks are reflecting confidence in the US economy”
  • “Isn’t focused on day to day market moves”
  • “Looking closely at border adjustment tax” although he added that there are some issues with it.
  • “3% growth is very achievable, could be late 2018 before we see 3% growth”
  • “Not making judgments on China currency policy; Treasury has a process for reviewing foreign-exchange policies”
  • “Trump admin’s growth forecast is likely to be higher that Congress”
  • “Regulatory relief is also important to boost growth”
  • “We’re looking at significant economic changes, we’re reaching out to businesses”

Finally, while he denied to provide details on plans for a 50 year bonds, he conceded that the “idea of issuing 50-year or 100-year U.S. Treasuries worth a serious look.”




Gold is the big winner as the dollar retreats on the Mnuchin confusion

(courtesy zero hedge)

Gold Spikes As Dollar Dumps After Mnuchin Comments

Confirming President Trump’s concerns about US national debt levels, and that new policies will likely have limited impact in 2017, Treasury Secretary Mnuchin’s comments this morning have sparked buying in bonds, bullion, and marginally in stocks as the dollar gets monkey-hammered.

After the WSJ article overnight provided some USD strength, his comments this morning seemed to dull any strong dollar hype…

Which is helping spark gold gains…

And Bitcoin back to record highs…

But investors are buying both stocks and bonds this morning… (10Y back below 2.40% and 30Y at 3.00%)




As David Stockman warned us;  Infrastructure stocks are belted today on a report that Trump may (will) delay the infrastructure bill until 2018)

(courtesy zero hedge)

Infrastructure Stocks Tumble On Report Trump May Delay Infrastructure Bill Until 2018

Construction, engineering and materials stocks are underperforming the market on sudden concerns that in addition to tax reform and Obamacare repeal, another core aspect of Trump’s fiscal stimulus, Infrastructure spending, may be delayed by at least two years.

As Kalex Advisors wrote in a note “Time for Plan B?” this morning, while no decisions have been made, Axios reports that the Trump is considering pushing off its call for Congress to pass an infrastructure bill until 2018, given the full slate of other top-tier items on Congress’s plate this year including healthcare and tax reform, Supreme Court fight, and potential debt ceiling / government shutdown battles.

The idea would be to take up infrastructure in an election year and make it very difficult to oppose money for home-state roads, bridges and other projects that lawmakers can take credit for. It also would make sense procedurally given we expect the money to pay for infrastructure will largely come through tax reform and deemed repatriation of overseas earnings with a one-time tax.

Again the legislative strategy is still evolving and such a timeline would run counter to what GOP leaders laid out last month in their Philadelphia retreat, but the calendar is beginning to look crowded and infrastructure has always been less of a priority for Republican leaders on Capitol Hill than it has been for Trump.

Next Tuesday’s speech to Congress by Trump will hopefully address the issue and provide further clarity as to where infrastructure is in the food chain.

As a result of the report, the S15CSTE index of construction and engineering companies, which has rallied 21% since President Trump’s election Nov. 8, fell as much as 3.2% Companies down more than 3% include GVA, AEGN, ACM, DY, MYRG.

CAT is the biggest decliner in Dow Jones Industrial, down as much as 2.6%




The border tax is back on and that caused retailers to tumble. Intersetingly the dollar did not rally when this was announced:

(courtesy zero hedge)

Retailers Tumble After Trump Says He Is “In Favor Of Border Tax”, Hints At Nuclear Arms Race

Moments ago retailers stumbled on one single Reuters headline: Trump says he supports “some form” of border tax.

As Reuters adds, President Donald Trump on Thursday spoke favorably about an export-boosting border adjustment tax proposal being pushed by Republicans in the U.S. Congress, but did not specifically  endorse it. Trump had previously sent mixed signals on the proposal at the heart of a Republican plan to overhaul the U.S. tax code for the first time in more than 30 years.

It could lead to a lot more jobs in the United States,” Trump told Reuters in an interview, using his most positive language to date on the proposal.

Trump had sent conflicting signals about his position on the border adjustability tax in separate media interviews in January, saying in one interview that it was “too complicated” and in another that it was still on the table.

“I certainly support a form of tax on the border,” he told Reuters on Thursday.

“What is going to happen is companies are going to come back here, they’re going to build their factories and they’re going to create a lot of jobs and there’s no tax.” Trump also said his administration will tackle tax reform legislation after dealing with Obamacare, the health insurance system put in place by his predecessor, President Barack Obama.

Trump’s latest U-turn means that the BAT debate, having been largely assumed to be over, following vocal opposition from both senators and the retail lobby, is again back front and center. And since “some form” of border adjustment would force retailers to pass on rising import costs to consumers, it promptly sent the retail sector tumbling to day lows:

In separate comments to Reuters, Trump also appeared to revive the second coming of the nuclear arms race – something he hinted at several months ago – when he said that he wants to build up the U.S. nuclear arsenal to ensure it is at the “top of the pack,” saying the United States has fallen behind in its atomic weapons capacity. Trump also complained about Russian deployment of a cruise missile in violation of an arms control treaty and said he would raise the issue with Russian President Vladimir Putin when and if they meet.

In his first comments about the U.S. nuclear arsenal since taking office on Jan. 20, Trump said the United States has “fallen behind on nuclear weapon capacity.” “I am the first one that would like to see everybody – nobody have nukes, but we’re never going to fall behind any country even if it’s a friendly country, we’re never going to fall behind on nuclear power.


“It would be wonderful, a dream would be that no country would have nukes, but if countries are going to have nukes, we’re going to be at the top of the pack,” Trump said. The new strategic arms limitation treaty, known as New START, between the U.S. and Russia requires that by February 5, 2018, both countries must limit their arsenals of strategic nuclear weapons to equal levels for 10 years.


The treaty permits both countries to have no more than 800 deployed and non-deployed land-based intercontinental and submarine-launched ballistic missile launchers and heavy bombers equipped to carry nuclear weapons, and contains equal limits on other nuclear weapons.

Analysts have questioned whether Trump wants to abrogate New START or would begin deploying other warheads. In the interview, Trump called New START “a one-sided deal.  “Just another bad deal that the country made, whether it’s START, whether it’s the Iran deal … We’re going to start making good deals,” he said.

The United States is in the midst of a $1 trillion, 30-year modernization of its aging ballistic missile submarines, bombers and land-based missiles, a price tag that most experts say the country cannot afford.

Trump also complained that the Russian deployment of a ground-based cruise missile is in violation of a 1987 treaty that bans land-based American and Russian intermediate-range missiles.


“To me it’s a big deal,” Trump said.  Asked if he would raise the issue with Putin, Trump said he would do so “if and when we meet.” He said he had no meetings scheduled as of yet with Putin.


Speaking from behind his desk in the Oval Office, Trump  declared that “we’re very angry” at North Korea’s ballistic missile tests and said accelerating a missile defense system for U.S. allies Japan and South Korea was among many options available.

“There’s talks of a lot more than that,” Trump said, when asked about the missile defense system. “We’ll see what happens. But it’s a very dangerous situation, and China can end it very quickly in my opinion.




Trump reverses another Obama gem:  private prisons are back in!

(courtesy zero hedge)


DOJ Reverses Obama-Era Decision To Phase Out Private Prisons

Another day, another reversal of a legacy Obama policy.

Moments ago, US Attorney General Jeff Sessions reversed an Obama-era memo to phase out the use of private prisons, signalling his support for federal use of such facilities and advising that the Bureau of Prisons will “return to its previous approach to the use of private prisons.”

Sessions issued a new memo Thursday replacing one issued last August by Sally Yates, the deputy attorney general at the time, in which he said the Obama decision “impaired” the ability to meet the needs of the correctional system.

That Yates memo told the Bureau of Prisons to begin reducing and ultimately end its use of privately run prisons. She said the facilities were less well run than those managed by the Bureau of Prisons, and were less necessary given declines in the overall prison population.

But Sessions says in his memo Thursday that Yates’ directive contradicted longstanding Justice Department policy and “impaired the Bureau’s ability to meet the future needs of the federal correctional system.”

In light of Trump’s aggressive push to round up as many as 11 million illegal aliens currently residing in the US, we can venture the reason behind this expansion of US incarceration facilities.

Meanwhile, the market reaction was quick, with the private prison REITs jumping following the DOJ announcement. Among individual stocks, CoreCivic rose 2.9% post-market while GEO Group was up 0.7%.


The all important Fed’s National activity index drops in January.  It draws on 85 economic indicators:

(courtesy zero hedge)


Fed’s National Activity Index Drops In January

Despite all the exuberant ‘soft’ survey data, The Fed’s National Activity Index dropped in January and missed expectations as 49 of the 85 subcomponents deteriorated.

The Chicago Fed national index, which draws on 85 economic indicators, was minus 0.05 in January versus 0.18 in December.

A reading below zero indicates below-trend-growth in the national economy and a sign of easing pressures on future inflation.

36 of the 85 monthly individual indicators made positive contributions, and 49 of the 85 monthly individual indicators made negative contributions.

This real activity index confirms the decline in the ‘hard’ data post election…

It now looks like Dallas taxpayers are going to bailout the deficient Dallas Police and Firefighter Pension fund

(courtesy zerohedge)

Dallas Police Pension Board Approves Benefit Cuts; Asks For More Taxpayer Money To Avoid Collapse

For the past several months we’ve warned that the taxpayers of the City of Dallas, despite all of the tough talk coming out of their elected city council members, would ultimately be forced to bail out the failing Dallas Police and Fire Pension (DPFP) system.  And just last night the DPFP board voted 9-0 to approve a plan that would do just that.

The plan to save the DPFP was proposed by Dan Flynn, chair of the pensions committee in the Texas House of Representatives, and calls for Dallas taxpayers to contribute 34.5% of police and firefighter salaries each year into the failing pension system, up from 27% in 2015, plus an incremental $11 million per year.  In total, the adopted plan will cost Dallas taxpayers an extra $22 million per year.

That said, the plan also calls for pensioners to grant concessions, including the following:

  • Increase in retirement age to 58 from 55
  • Increase in employee contributions to 13.5% of payroll from 8.5%
  • Elimination of COLAs in the near term
  • Elimination of exorbitant interest payments made on employees DROP accounts

Of course, the $7 billion shortfall in the DPFP triggered downgrades to Dallas’s credit rating from Moody’s and S&P in recent months which has wreaked havoc on the city’s bond yields. (chart per Bloomberg).


Meanwhile, no amount of incremental taxpayer funding will ever be sufficient to stop angry pensioners from playing the victim card when the realities of their pension ponzi schemes are exposed for all to see.  Per NBC 5:

There was a whirlwind of emotions at the meeting, from clapping, to tears and obvious tension, both from board members and from those whose futures hang in the balance.

“I think we’re being treated like animals to a certain degree, and I was hesitant to even come down here today,” said Frank Varner, a retired Dallas firefighter.

“How do you fix broken promises? These people deserve better. The firefighters and officers working today deserve better,” said Mike Mata, a Dallas police officer and president of the Dallas Police Association.

Don’t worry dear pensioners, there is no problem too large for taxpayers to bail out.

A summary of the plan adopted by the DPFP board can be viewed below:




It looks like Bannon is out of the National Security Council and McMaster is in.It sure looks like the Trump administration is in turmoil;’

(courtesy zero hedge)

Bannon Out Of NSC? McMaster Prepares To Reorganize Foreign Policy Team

The arrival of Mike Flynn’s replacement, Gen. H.R. McMaster as Trump’s new national security advisor could mean sweeping changes of the White House foreign policy team, giving him control of Homeland Security and guarantee full access to the military and intelligence agencies. In a report by the NYT, Mr. McMaster is said to be weighing changes to an organization chart that generated consternation when it was issued last month.

According to one proposal, McMaster would restore the director of national intelligence and the chairman of the Joint Chiefs of Staff to full membership in a cabinet-level committee.

Another likely change would involve the Homeland Security Council which would reform under the National Security Council, the way it was during the administration of President Barack Obama. The NYT notes that they were only left out because the Trump team copied a Bush-era organizational chart without realizing that President Obama had made both positions full members of the committee: “Mr. Trump’s team did not intend to reduce the role of the intelligence director or Joint Chiefs chairman, officials said. In crafting their organization order, the officials said, Mr. Trump’s aides essentially cut and pasted language from Mr. Bush’s organization chart, substituting the national intelligence director for the C.I.A. director, who back then was the head of the nation’s spy agencies.”

The decision to separate the Homeland Security staff, they said, was primarily a way to diminish the power of McMaster’s predecessor, Michael T. Flynn, who resigned last week. Now that Flynn is out and Mr. McMaster is in, both councils may report to him.

But the most notable proposed change has to do with the fate of Steve Bannon on the NSC, who may be removed from the principals committee: “Under the original organization plan last month, Mr. Bannon was invited to attend any National Security Council meeting led by the president and was made a regular member of the so-called principals committee of cabinet secretaries. One senior official supportive of Mr. Bannon’s position said it would not change under any reorganization. Sean Spicer, the White House press secretary, said this week that Mr. McMaster would have full authority to organize his staff, but that any change in Mr. Bannon’s status would have to be approved by the president.”

However, the NYT notes, that veterans of past administrations and members of Congress from both parties criticized the decision to put Mr. Bannon on the principals committee, saying that it risked injecting politics into national security. President George W. Bush’s senior adviser, Karl Rove, was generally kept out of sensitive national security meetings. Mr. Obama’s senior adviser, David Axelrod, attended some national security meetings but was not given formal status.

But Mr. Trump was surprised by the intensity of the blowback to the initial order, and complained that Mr. Flynn had not made him understand the significance of the changes or how they would be perceived, according to senior officials.

The NYT explains that White House officials were talking about revising the organization chart even before Mr. McMaster’s appointment, but the issue came to a head after Mr. Trump asked for Mr. Flynn’s resignation last week because Mr. Flynn had misled Vice President Mike Pence and other White House officials about what he discussed with Russia’s ambassador in a December phone call.

Since arriving this week, Mr. McMaster has made a point of going door to door through the Eisenhower Executive Office Building, where most national security aides work, to introduce himself and build relations, current and former officials said. He is planning an all-hands staff meeting on Thursday.

As for Bannon, who may be cut from the NSC, Trump’s decision will be carefully watched as such a move would be potentially perceived as a relaxation of Bannon’s influence over Trump, a topic which has been of material focus for the press in recent weeks.




O’Keefe delivers the undercover footage of CNN trying to manipulate data

(courtesy zero hedge)

O’Keefe Drops “Bombshell” Undercover Footage From Within CNN

As promised two days ago on the Sean Hannity radio show, James O’Keefe and his team at Project Veritas just released covertly captured, previously unheard audio footage from within the CNN newsroom.  But unlike his usual undercover sting operations, this footage was allegedly sourced from a CNN insider who apparently grew frustrated with the perpetually biased reporting of the “fake news” media outlet.

Per O’Keefe’s website, today’s release includes 119 hours of secretly recorded raw footage from an inside source at CNN with another 100 hours of footage still to be released.  Given the volume of footage to be released, O’Keefe is asking for help to transcribe and investigate the recordings and encourages users to provide tips on interesting discoveries here.

The audio was secretly recorded in 2009 by an anonymous source inside CNN’s Atlanta headquarters who we are identifying as Miss X. The tapes contain soundbites from current and previous CNN employees Joe Sterling, Arthur Brice, and Nicky Robertson, as well as numerous others. 


In order to expose media malfeasance within CNN, we need your help transcribing, investigating and connecting the dots on these 200+ hours of audio. Leave comments, upload transcriptions or contact us with your tips below.


Among other things, the audio recordings reveal CNN attempting to misrepresent polling data…

Miss X: “I read a CNN poll that was taken on June 26 and 28th, and I know that the hearing for the case, the fire fighters case was on the 29th, so the poll was done right before it, and those are still the poll results we’re reporting, so I asked someone in DC who does the poll results about why we hadn’t updated it, and said there were a few newer polls from last week and the week before and there’s CBS news polls and a Rasmussen poll, and he said we don’t use Rasmussen, and I said does CNN plan to do another poll if we’re only using that. He said we’re not going to be doing another poll, those are the results we’ll be using. So I don’t see how that’s reporting all sides because that poll said hold for release until Friday the 10th.”


Arthur Brice: “Who did you talk with?”


Miss X: “Paul [CNN’s Deputy Political Director Paul Steinhauser].”


Arthur Brice: “Yeah, he’s your director. Yeah, he’s pretty high up in the food chain. I agree. I think it’s dishonest to use outdated information if new information shows something that is in variance with what you’re reporting. It’s just, it’s dishonest.”

…and again with polling data related to Supreme Court Justice Sotomayor:

Miss X: “This wasn’t released until two weeks after. So can we say a newly released poll?”


Joe Sterling: “No, you can’t say that. You can’t say that at all. This isn’t a newly released.”


Miss X: “But it says newly released on Friday.”


Joe Sterling: “I know, how did we write about this? Did we write a wire about this? “I don’t think we stand to change how people think of her [Sotomayor]. Geez, I mean if someone picked this up it’s not going to change – it’s not going to change anybody’s opinion.”

And, admitting what we all knew already, here is CNN’s former News Desk Editor, Joe Sterling, revealing his clear bias for Obama.

Joe Sterling, once News Desk Editor @CNN admits he has a clear bias in favor of @POTUS44. Doesn’t claim to be “most trusted?”


With that brief intro, here is O’Keefe’s latest work.

The full 119 hours of audio footage will eventually be available here, but for now PV’s servers seem to be having a difficult time keeping up with the overwhelming demand from supporters eager to hear first-hand accounts of CNN’s bias.

Meanwhile, noting that this is just the “beginning of the end for the MSM”, O’Keefe also announced that he will pay a $10,000 award to anyone who comes forward with legally obtained audio or video footage exposing media malfeasance.

If you are an employee in a newsroom and hear or see something unethical, record it. If it’s good enough I’ll pay you $10k.

I want to start exposing the media and their flaws. This is the beginning of the end for the MSM. And it starts today. @CNN

Have video inside a newsroom? I will go to jail to protect your name. We will defend you. Come to me. Come to us. I will protect you.




I will close with this terrific commentary from Pam Martens and Russ Martens on the criminal actions of JPMorgan and Citigroup and how their CEO’s have kept their jobs quite distinct from Wells Fargo’s upper management who were fired for their transgressions.


special thanks to Mark W. for sending this down for us

(courtesy WallStreetOnParade/Russ and Pam Martens)


What JPMorgan and Citigroup Have in Common When It Comes to Crime

By Pam Martens and Russ Martens: February 23, 2017

Jamie Dimon, Chairman and CEO of JPMorgan Chase, Testifying Before Congress on the London Whale Trading Losses at His Bank

On September 8, 2016, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $185 million following an investigation that found that its employees had engaged in a widespread practice of “secretly opening unauthorized deposit and credit card accounts” in order to meet sales quotas or qualify for bonuses. An estimated 2 million accounts were involved. One month later, the Chairman and CEO of Wells Fargo, John Stumpf, was gone.

Consider that swift action to acknowledge and punish egregious abuse of clients with how the Boards of Directors of JPMorgan Chase and Citigroup have responded to criminal felony charges and seemingly endless regulatory fines for abusing clients’ trust. The Boards have kept their CEOs in place, paid the monster fines and moved on to the next settlement.

Jamie Dimon became the CEO of JPMorgan Chase on January 1, 2006. At that point, the bank was more than a century old and had never been charged with a criminal felony. In 2014, the Justice Department charged JPMorgan Chase with two felony counts in connection with their role in facilitating the Madoff Ponzi scheme. The bank was given a two-year deferred prosecution agreement.

The very next year, in May 2015, JPMorgan Chase was hit with a new felony count for its role in rigging foreign currency markets as part of a banking cartel. That’s three felony counts in two years and yet Jamie Dimon kept his job. Before the felony counts there was a $13 billion settlement with the Justice Department and Federal and State regulators in 2013 for JPMorgan Chase’s role in selling toxic mortgage investments to investors as worthwhile products when the bank had good reason to believe they would blow up.

In 2012, Dimon himself was hauled before Congress to explain why his bank was making speculative bets with depositors’ money in high risk derivatives in London. The bank eventually owned up to losing $6.2 billion in the wild trades. The scandal  became infamously known as the London Whale. In 2013, the Senate Permanent Subcommittee on Investigations released a damning 307-page report on the London Whale matter. The same year, the regulator of national banks, the Office of the Comptroller of the Currency (OCC), released the following statement regarding the London Whale trades:

“The credit derivatives trading activity constituted recklessly unsafe and unsound practices, was part of a pattern of misconduct and resulted in more than minimal loss, all within the meaning of 12 U.S.C. § 1818(i)(2)(B)”;  and “The Bank failed to ensure that significant information related to the credit derivatives trading strategy and deficiencies identified in risk management systems and controls was provided in a timely and appropriate manner to OCC examiners.”

Senator Carl Levin, Chair of the Senate Permanent Subcommittee on Investigations at the time, said that the bank “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”  And, unbelievably, Jamie Dimon continued his tenure as Chairman and CEO of JPMorgan Chase.

The crime spree at JPMorgan Chase became so surreal that two trial lawyers, Helen Davis Chaitman and Lance Gotthoffer, published a breathtaking book on the subject, comparing the bank to the Gambino crime family. In addition to the settlements noted above, the authors add more details as to what has occurred on Dimon’s watch, such as:

“In April 2011, JPMC agreed to pay $35 million to settle claims that it overcharged members of the military service on their mortgages in violation of the Service Members Civil Relief Act and the Housing and Economic Recovery Act of 2008.

“In March 2012, JPMC paid the government $659 million to settle charges that it charged veterans hidden fees in mortgage refinancing transactions.

“In October 2012, JPMC paid $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card interchange fees.

“On January 7, 2013, JPMC announced that it had agreed to a settlement with the Office of the Controller of the Currency (‘OCC’) and the Federal Reserve Bank of charges that it had engaged in improper foreclosure practices.

“In September 2013, JPMC agreed to pay $80 million in fines and $309 million in refunds to customers whom the bank billed for credit monitoring services that the bank never provided.

“On December 13, 2013, JPMC agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.

“In February 2012, JPMC agreed to pay $110 million to settle claims that it overcharged customers for overdraft fees.

“In November 2012, JPMC paid $296,900,000 to the SEC to settle claims that it misstated information about the delinquency status of its mortgage portfolio.

“In July 2013, JPMC paid $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.

“In December 2013, JPMC paid $22.1 million to settle claims that the bank imposed expensive and unnecessary flood insurance on homeowners whose mortgages the bank serviced.”

Michael Corbat has been CEO of Citigroup since October 2012. Below is just a sampling of the regulatory charges against the bank under Corbat’s reign, including a guilty plea to a felony count in May 2015 which covered conduct that continued after Corbat took the helm.

July 1, 2013: Citigroup agrees to pay Fannie Mae $968 million for selling it toxic mortgage loans.

September 25, 2013: Citigroup agrees to pay Freddie Mac $395 million to settle claims it sold it toxic mortgages.

December 4, 2013: Citigroup admits to participating in the Yen Libor financial derivatives cartel to the European Commission and accepts a fine of $95 million.

July 14, 2014: The U.S. Department of Justice announces a $7 billion settlement with Citigroup for selling toxic mortgages to investors. Attorney General Eric Holder called the bank’s conduct “egregious,” adding, “As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”

November 2014: Citigroup pays more than $1 billion to settle civil allegations with regulators that it manipulated foreign currency markets. Other global banks settled at the same time.

May 20, 2015: Citicorp, a unit of Citigroup becomes an admitted felon by pleading guilty to a felony charge in the matter of rigging foreign currency trading, paying a fine of $925 million to the Justice Department and $342 million to the Federal Reserve for a total of $1.267 billion.

May 25, 2016: Citigroup agrees to pay $425 million to resolve claims brought by the Commodity Futures Trading Commission that it had rigged interest-rate benchmarks, including ISDAfix, from 2007 to 2012.

July 12, 2016: The Securities and Exchange Commission fined Citigroup Global Markets Inc. $7 million for failure to provide accurate trading records over a period of 15 years.

President Donald Trump’s naïve (or willfully blind) notion that Wall Street will work better at raising capital if it is unleashed from strident Federal regulation is unhinged from the facts on the ground. Those facts, as illustrated above, are that the Boards of two of the largest banks in the U.S. are utterly spineless when it comes to holding their CEOs and employees accountable in the face of a tsunami of crimes.



Well that should do it for today

I will see you tomorrow night


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