Nov 24 A/Gold falls $4.00 down to $1288.40//silver falls 8 cents down to $17.05/Gold comex OI rises by 7600 contracts and then the CME reports a massive 1297 EFP;s for a huge gain in total oi demand of almost 29000 contracts/Another product scandal(Mitsubishi Materials) in Japan with faulty altered data/2nd richest royal in Saudi Arabia arrested and will be extorted/tragedy in El Arish Egypt as gunmen kill many worshipers/

GOLD: $1288.40  DOWN $4.00

Silver: $17.05 DOWN 8 cents

Closing access prices:

Gold $1288.50

silver: $17.03

SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)

SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1299.04 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1292.20

PREMIUM FIRST FIX: $6.84

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SECOND SHANGHAI GOLD FIX: $1299.04

NY GOLD PRICE AT THE EXACT SAME TIME: $1290.90

Premium of Shanghai 2nd fix/NY:$8.14

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LONDON FIRST GOLD FIX: 5:30 am est $1289.15

NY PRICING AT THE EXACT SAME TIME: $1289605

LONDON SECOND GOLD FIX 10 AM: $1290.50

NY PRICING AT THE EXACT SAME TIME. 1290.30

For comex gold:

NOVEMBER/

 NUMBER OF NOTICES FILED TODAY FOR NOVEMBER CONTRACT:  11 NOTICE(S) FOR 1100 OZ.

TOTAL NOTICES SO FAR: 1053 FOR 105,300 OZ (3.375 TONNES)

For silver:

NOVEMBER

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 885 for 4,425,000 oz

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Bitcoin: BID $8228/OFFER $8253 up $231 (morning) 

BITCOIN : BID $8215 OFFER: $8240 // UP $218 (CLOSING)

end

Let us have a look at the data for today

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In silver, the total open interest FELL BY  1530 contracts from 199,402 DOWN TO 197,872 WITH RESPECT TO WEDNESDAY’S TRADING  WHICH SAW SILVER RISE BY 13 CENTS AND STILL WELL BELOW THE HUGE $17.25 SILVER RESISTANCE.   WE HAD MINOR LONG COMEX LIQUIDATION.   HOWEVER WE WERE ALSO NOTIFIED THAT WE HAD  ANOTHER HUMONGOUS NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE : 1204 DECEMBER EFP’S WERE ISSUED ALONG WITH 93 EFP’S FOR MARCH FOR A TOTAL ISSUANCE OF 1297 CONTRACTS. (THE ISSUANCE FOR MARCH THAT WE HAVE SEEN THESE PAST SEVERAL DAYS BOTHERS ME A LOT AS THIS IS SUPPOSE TO BE FOR EMERGENCY USES ONLY IN AN UPCOMING DELIVERY MONTH).  I GUESS WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. YESTERDAY WITNESSED  1231 EFP’S ISSUED.

RESULT: A SMALL SIZED FALL IN OI COMEX WITH THE 13 CENT PRICE RISE.  WE HAD SOME COMEX LONGS  EXITED OUT OF THE SILVER COMEX BUT MOST OF THEM TRANSFERRED THEIR OI TO LONDON THROUGH THE EFP ROUTE:  FROM THE CME DATA 1297 EFP’S  WERE ISSUED FOR FRIDAY FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS. IN ESSENCE THE  DEMAND FOR SILVER PHYSICAL INTENSIFIES GREATLY. WE REALLY ONLY LOST IN OI 233 CONTRACTS i.e1297 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 1530 OI COMEX CONTRACTS.

In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.989 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 0 NOTICE(S) FOR nil OZ OF SILVER

In gold, the open interest ROSE BY 7688 CONTRACTS WITH THE GOOD SIZED RISE IN PRICE OF GOLD ($10.40) WITH RESPECT TO WEDNESDAY’S TRADING.THIS IS IN TOTAL CONTRAST TO THE HUGE 18,000 COMEX LOSS ON TUESDAY. WE THUS HAD NO COMEX LONGS EXIT THE ARENA.  HOWEVER  THE TOTAL NUMBER OF GOLD EFP’S ISSUED THURSDAY FOR TODAY (FRIDAY)  TOTALED  ANOTHER 14,179 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 13,599 CONTRACTS AND FEB SAW THE ISSUANCE OF 580 CONTRACTS.  WE WITNESSED A TOTAL OF 21,428 EFP’S ISSUED THURSDAY FOR FRIDAY.  The new OI for the gold complex rests at 539,300. DEMAND FOR GOLD INTENSIFIES DESPITE THE CONSTANT RAIDS.  EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK  TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD.  THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX  HAVE JUST STATED THAT THEY HAVE NO METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NOT BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND ON TOP OF THAT IT IS TAKING A FURTHER 6 TO 10 WEEKS TO OBTAIN PHYSICAL FROM THE POINT WHEN FORWARDS BECOME DUE. IN ESSENCE WE HAD A NET GAIN OF 21,867 OI CONTRACTS: 7688 OI CONTRACTS ADDED TO THE  COMEX OI  AND 14,179 OI CONTRACTS NAVIGATE OVER TO LONDON.

ON WEDNESDAY, WE HAD 8101 EFP’S ISSUED.

 

 

 

Result: A HUGE SIZED INCREASE IN OI  WITH THE GOOD SIZED RISE IN PRICE IN GOLD ON YESTERDAY ($10.40). WE  HAD AN LARGE  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 14,179. THERE OBVIOUSLY DOES NOT SEEM TO BE ANY PHYSICAL GOLD AT THE COMEX AND YET WE ARE APPROACHING THE HUGE DELIVERY MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS NO GOLD PRESENT AT THE GOLD COMEX.  IF YOU TAKE INTO ACCOUNT THE 14,179 EFP CONTRACTS ISSUED, WE HAD A NET GAIN OPEN INTEREST OF 21,86714,179 CONTRACTS MOVE TO LONDON AND 7688 CONTRACT GAIN AT THE COMEX.

we had:  11  notice(s) filed upon for 1100 oz of gold.

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

GLD:

No change in gold inventory at the GLD/

Inventory rests tonight: 843.39 tonnes.

SLV

TODAY WE HAD A  BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 944,000 OZ OF SILVER FROM THE SLV

INVENTORY RESTS AT 317.130 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FELL BY 1530 contracts from 199,402 DOWN  TO 197,960 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE RISE IN SILVER PRICE (A GAIN OF 13 CENTS ). HOWEVER, OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER HUGE  1204  PRIVATE EFP’S FOR DECEMBER (WE DO NOT GET A LOOK AT THESE CONTRACTS)  AND 93 EFP’S FOR MARCH FOR A TOTAL OF 1297 EFP CONTRACTS.  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  WE ARE NOW GETTING CLOSE TO FIRST DAY NOTICE AND THIS IS THE SCENE WHERE IN THE PAST WE DID SEE MASSIVE COMEX OI CONTRACTION ALTHOUGH IT WAS MORE PRONOUNCED IN GOLD THAN WITH SILVER. IT STILL CONTINUES UNABATED AND WE NOW KNOW THE REAL REASON FOR THE CONTRACTION:  THE TRANSFER OF OI TO LONDON. TODAY WE HAD MINIMAL COMEX SILVER COMEX LIQUIDATION. IF WE ADD THE OI LOSS AT THE COMEX (1530 CONTRACTS)   TO THE 1297 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A NET LOSS OF ONLY  233  OPEN INTEREST CONTRACTS,

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 13 CENT RISE IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). NOT ONLY THAT BUT  WE ALSO  HAD ANOTHER 1297 EFP’S ISSUED.. TRANSFERRING OUR COMEX LONGS OVER TO LONDON .  ON WEDNESDAY WE EXPERIENCED 1231 EFP’S ISSUED FOR TRANSFER TO LONDON.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 1.90 points or .06% /Hang Sang CLOSED UP 158.38 pts or 0.53% / The Nikkei closed UP 27.70 POINTS OR 0.12%/Australia’s all ordinaires CLOSED DOWN 0.07%/Chinese yuan (ONSHORE) closed UP at 6.605-/Oil UP to 58.79 dollars per barrel for WTI and 63.76 for Brent. Stocks in Europe OPENED GREEN.    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6050. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.65972 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.(MARKETS STRONG)

 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/China

 

b) REPORT ON JAPAN

My goodness, we have another scandal from Japan.  This time Mitsubishi Materials altered data similar in fashion as to what Kobe steel did

 

( zerohedge)

 

c) REPORT ON CHINA

i)Thursday trading /Shanghai

 

The Shanghai stock exchange fell 2.3% on Thursday with the 10 yr bond climbing to 4% and top rated corporate bonds yielding 5.2%. The total of all debt in China is 40 trillion USA dollars with the problematic shadow banking sector at 10 trillion.  It is an accident waiting to happen

( zero hedge)

 

ii)FRIDAY

China slashes import tariffs on consumer goods in a move to bolster Trump and other Western exporters

( zerohedge)

 

 

 

 

4. EUROPEAN AFFAIRS

i)Europe trading/Thursday

Strong PMI numbers sends the Euro higher as well as all European bourses

( zerohedge)

 

ii)I enjoy reading Bill Blain’s focus on the global economy. He is bang on.  Today he discusses China’s meltdown Wednesday night and how inflation is beginning to rear its ugly head throughout the globe.  He is concentrating on the USA high yield market.

( Bill Blain/Mint Partners)

 

iii)Friday/Merkel’s poll numbers tank as she heads into discussions with it’s former coalition partner SPD headed by Schultz.  This will be troublesome as German citizens are angry at the huge influx of migrants.

( zerohedge)

 

iv)This is a dumb move on the part of Schultz: he is ready to negotiate with Merkel. If the SPD join with Merkel and Merkel remains Chancellor then in the next election the citizens of Germany will throw out Schultz

( zerohedge)
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Saudi Arabia

 ( zerohedge)

ii)Saudi Arabia arrests its second richest man in their kingdom and MBS will try and extort his wealth to enrich his faltering treasury( zerohedge)

iii)New footage seems to suggest that the extortion by MBS is working

( zerohedge)

iv)In a war of words, MBS calls Iran’s Ayatollah Khamenei  a “New Hitler of the Middle East” and must be confronted:

(courtesy zerohedge)
v)Egypt

So sad!! Another attack and this time near the Northern Sinai town of El Arish, militants stormed a mosque and murdered at least 235 worshipers

( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

The author believes strongly that anything above 58 dollars per barrel brings on huge supply from shale.  We should also be cognizant of the huge amount of oil that China is bringing far above what it needs.  It is continually adding to its SPR.  That that stops demand will falter:

 

(courtesyParaskova/OilPrice.com)

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)this fund manager states that Bitcoin is paving the way for gold’s return as true money and a global currency

 

(courtesy Pakiam/Bloomberg/GATA)

 ii)Persson gives us 28 reasons why we should buy physical gold(Persson/Bullionstar/GATA)

iii)Alasdair’s lesson for this week:  deflation

( Alasdair Macleod/GoldMoney)

10. USA stories which will influence the price of gold/silver

i)Soft data USA PMI’s tumble to a 4 month low and this signals just at most a 2% annual growth, not what Trump is stating at 3%

 

( zerohedge)

 

ii)Another dandy from David Stockman how the huge overvalued stockmarket

(David Stockman/ContraCorner)

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY  ROSE BY A LARGE 7,688  CONTRACTS UP to an OI level of 539,300 WITH THE  GOOD SIZED RISE IN THE PRICE OF GOLD ($10.40 GAIN WITH RESPECT TO WEDNESDAY’S TRADING).  WE EXPERIENCED NO GOLD COMEX  LIQUIDATION. HOWEVER  WE DID HAVE ANOTHER LARGE COMEX EXIT THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED  A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. THE CME REPORTS THAT 13,599 EFPS WERE ISSUED FOR DECEMBER AND 580 WERE ISSUED FOR MARCH FOR A TOTAL OF 14,179 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS.  THE CONSTANT BANKER RAIDS HAVE NOT BEEN TOO SUCCESSFUL IN GETTING  OUR MATHEMATICAL PAPER LONGS IN GOLD TO LIQUIDATE THEIR POSITION. IT HAS FAILED MISERABLY IN SILVER.

ON A NET BASIS IN OPEN INTEREST WE GAINED: 21,867 OI CONTRACTS IN THAT 14,179 LONGS WERE TRANSFERRED AS LONGS TO LONDON AS A FORWARD AND WE GAINED 7688 COMEX CONTRACTS.  NET GAIN: 21,867

Result: a HUGE INCREASE IN COMEX OPEN INTEREST WITH THE GOOD SIZED GAIN IN THE PRICE OF GOLD ($10.40.)  ON TOP OF THAT WE HAD 14,179 EFP’S ISSUED FOR A FIAT BONUS AND A DELIVERABLE FORWARD GOLD CONTRACT IN LONDON. WE HAD NO  COMEX GOLD LIQUIDATION.

.

We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A GAIN OF 3 CONTRACT(S) RISING TO  12. We had 1 notices filed YESTERDAY so GAINED 4 contracts or 400 additional oz will stand for delivery AT THE COMEX in this non active month of November.

The very big active December contract month saw it’s OI LOSS OF 40,909 contracts DOWN to 164,753.  January saw its open interest GAIN OF 103 contracts UP to 1061. FEBRUARY saw a gain of 45,124 contacts up to 288,583. DEMAND FOR GOLD VERY STRONG

We had 11 notice(s) filed upon today for 1100 oz

 

 

PRELIMINARY VOLUME TODAY ESTIMATED;  422,124

FINAL NUMBERS CONFIRMED FOR TODAY:  508,914

 

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And now for the wild silver comex results.

Total silver OI SURPRISINGLY FELL  BY 1530 CONTRACTS (WHEN COMPARED TO GOLD) FROM 199,402 DOWN TO 197,872 DESPITE WEDNESDAY’S 11 CENT RISE IN PRICE. HOWEVER WE DID HAVE ANOTHER STRONG 1204 PRIVATE EFP’S ISSUED FOR DECEMBER AND 93 EFP’S FOR MARCH BY OUR BANKERS TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.THE TOTAL EFP’S ISSUED: 1297.  IT SURE LOOKS LIKE THE BOYS HAVE STARTED TO MIGRATE TO LONDON FROM THE START OF DELIVERY MONTH AND CONTINUING RIGHT THROUGH UNTIL FIRST DAY NOTICE.  USUALLY WE NOTED THAT CONTRACTION IN OI OCCURRED ONLY DURING THE LAST WEEK OF AN UPCOMING ACTIVE DELIVERY MONTH. IT HAS JUST STARTED IN EARNEST IN SILVER.  HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS.  WE HAD MINIMAL  LONG SILVER COMEX LIQUIDATION AS DEMAND FOR PHYSICAL SILVER INTENSIFIES AGAIN

The new front month of November saw its OI FALL by 1 contract(s) and thus it stands at 0. We had 0 notice(s) served YESTERDAY so we gained 0 contracts or an additional NIL oz will stand in this non active month of November. After November we have the big active delivery month of December and here the OI FELL by 9536 contracts DOWN to 56,169. YET WE HAD 1297 EFP’S ISSUED WHICH MEANS A GOOD   PERCENTAGE OF THE ROLLOVERS LANDED IN LONDON AS A TRANSFER OF OI FOR A FORWARD.  January saw A GAIN OF 244 contracts RISING TO 1532.

We had 0 notice(s) filed for nil oz for the NOV. 2017 contract

INITIAL standings for NOVEMBER

 Nov 24/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
 6,012.05
SCOTIA
 oz
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
56,146.845
oz
HSBC
No of oz served (contracts) today
 
11 notice(s)
1100 OZ
No of oz to be served (notices)
1 contracts
(100 oz)
Total monthly oz gold served (contracts) so far this month
1064 notices
106,400 oz
3.309 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     xxx oz
Today we HAD  0 kilobar trans

WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz

We had nil dealer withdrawals:
total dealer withdrawals: nil oz

we had 1 customer deposit(s):

i) into HSBC: 56,146.845 oz

total customer deposits 56,146.845 oz  oz

We had 1 customer withdrawal(s)

i) Out of Scotia:  6,012.05 oz

Total customer withdrawals: 6012.05 oz

we had 0 adjustment(s)

For NOVEMBER:
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 11 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the NOVEMBER. contract month, we take the total number of notices filed so far for the month (1064) x 100 oz or 106,400 oz, to which we add the difference between the open interest for the front month of NOV. (12 contracts) minus the number of notices served upon today (11 x 100 oz per contract) equals 106,500 oz, the number of ounces standing in this NON active month of NOV

Thus the INITIAL standings for gold for the NOVEMBER contract month:

No of notices served (1064) x 100 oz or ounces + {(12)OI for the front month minus the number of notices served upon today (11) x 100 oz which equals 106,500 oz standing in this active delivery month of NOVEMBER (3.312 tonnes)

WE GAINED 4 ADDITIONAL CONTRACTS OR 400 OZ OF ADDITIONAL GOLD STANDING FOR METAL AT THE COMEX

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THE COMEX GOLD CONTRACT AT AROUND THE SAME TIME AS LAST YEAR:  (NOV 25) WE HAD 106,069 GOLD CONTRACTS STANDING AND THIS COMPARES TO 165,772 TODAY . THIS YEAR THERE HAPPENS TO BE  4 DAYS LEFT BEFORE FDN.  LAST YEAR THERE WERE 3 DAYS BEFORE FDN WITH THE ABOVE READINGS WERE TAKEN.

ON FIRST DAY NOTICE FOR DECEMBER,  THE INITIAL  GOLD STANDING:  39.038 TONNES STANDING

BY THE END OF THE MONTH:  FINAL: 29.791 TONNES STOOD FOR COMEX DELIVERY AS THE REMAINDER HAD TRANSFERRED OVER TO LONDON FORWARDS.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Total dealer inventory 514,112.106 or 15.999 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,876,397.995 or 276.09 tonnes

I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.

IN THE LAST 14 MONTHS 78 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE NOVEMBER DELIVERY MONTH

NOVEMBER INITIAL standings

AND NOW THE NOVEMBER DELIVERY MONTH
 Nov 24/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 987.000 oz  ???
Delaware
Deposits to the Dealer Inventory
 598,157.07 oz
Brinks
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
0 CONTRACT(S)
(nil,OZ)
No of oz to be served (notices)
0 contract
(NIL oz)
Total monthly oz silver served (contracts) 885 contracts(4,425,000 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

today, we had 1 deposit(s) into the dealer account:

i) Into Brinks:  598,152.07 oz

total dealer deposit: 598,152.07 oz

we had nil dealer withdrawals:
total dealer withdrawals: nil oz

we had 1 customer withdrawal(s):

i) Out of Delaware

TOTAL CUSTOMER WITHDRAWAL  987.0000 oz

We had 0 Customer deposit(s):

 

***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver

total customer deposits: nil oz

we had 0 adjustment(s)

 

The total number of notices filed today for the NOVEMBER. contract month is represented by 0 contracts FOR nil oz. To calculate the number of silver ounces that will stand for delivery in NOVEMBER., we take the total number of notices filed for the month so far at 885 x 5,000 oz = 4,425,0000 oz to which we add the difference between the open interest for the front month of NOV. (1) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the NOVEMBER contract month: 885 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(1) -number of notices served upon today (0)x 5000 oz equals 4,425,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.

We gained 0 contract(s) or an additional NIL oz will stand for metal in the non active delivery month of November.

AS I MENTIONED ABOVE, WE HAVE BEEN WITNESSING QUEUE JUMPING IN SILVER FROM MAY 1 2017 ONWARD. IT IS NOW COMFORTING TO SEE CONSIDERABLE QUEUE JUMPING OCCURRING CONTINUALLY IN GOLD FOR THE FIRST TIME SINCE RECORDED TIME AT THE GOLD COMEX!!(1974). QUEUE JUMPING CAN ONLY OCCUR ON PHYSICAL METAL SHORTAGE. THE TRANSFER OF EFP’S TO LONDON FURTHER INTENSIFIES THE DEMAND FOR PHYSICAL METAL!!

AT THIS TIME LAST YEAR WE HAD 40,393 NOTICES STANDING FOR DELIVERY FOR SILVER.  THIS YEAR  65,705 BUT WITH ONE EXTRA TRADING DAYS LEFT.

ON FIRST DAY NOTICE FOR THE DECEMBER CONTRACT WE HAVE 15.282 MILLION OZ STAND.

THE FINAL STANDING: 19.900 MILLION OZ AS QUEUE JUMPING INTENSIFIED.

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ESTIMATED VOLUME FOR TODAY: 122,269
CONFIRMED VOLUME FOR YESTERDAY: 119,938 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 119,938 CONTRACTS EQUATES TO 597 MILLION OZ OR 85.2% OF ANNUAL GLOBAL PRODUCTION OF SILVER

THE COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION.  THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

Total dealer silver: 44.653 million
Total number of dealer and customer silver: 233.085 million oz

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 1.5 percent to NAV usa funds and Negative 1.4% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.2%
cash .+.3%( Nov 24/2017)

2. Sprott silver fund (PSLV): NAV FALLS TO -0.92% (Nov 24 /2017)
3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.76% to NAV (Nov 24/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.92%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.76%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

END

And now the Gold inventory at the GLD

Nov 24/no change in gold inventory at the GLD/Inventory rests at 843.09 tonnes

Nov 22/no change in gold inventory at the GLD/Inventory rests at 843.39 tonnes

Nov 21/no change in gold inventory at the GLD/inventory rests at 843.39 tonnes

NOV 20/no change in gold inventory at the GLD/Inventory rests at 843.39 tonnes

Nov 17/no change in gold inventory at the GLD/inventory rests at 843.39 tonnes

Nov 16./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 843.39 TONNES

Nov 15./no change in gold inventory at the GLD/inventory rests at 843.09 tonnes

NOV 14/a small deposit of .300 tonnes into the GLD inventory/Inventory rests at 843.39 tonnes

Nov 13/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 843.09 TONNES

Nov 10/no change in gold inventory at the GLD/Inventory rests at 843.09 tonnes

Nov 9/no changes in inventory at the GLD/Inventory rests at 843.09 tonnes

NOV 8/ANOTHER HUGE WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD DESPITE GOLD’S RISE TODAY. INVENTORY RESTS AT 843.09

Nov 7/a huge withdrawal of 1.48 tonnes of gold from the GLD/Inventory rests at 844.27 tonnes

NOV 6/ a tiny withdrawal of .29 tonnes to pay for fees etc/inventory rests at 845.75 tonnes

Nov 3/no change in gold inventory at the GLD/Inventory rests at 846.04 tonnes

NOV 2/STRANGE!!! WE HAD ANOTHER WITHDRAWAL OF 3.55 TONNES FROM THE GLD DESPITE GOLD’S RISE OF $6.60 YESTERDAY AND $1.55 TODAY/INVENTORY RESTS AT 846.04 TONNES

Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes

OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes

Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES

Oct 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES

Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES

Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES

Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes

OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES

OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES

oCT 19/NO CHANGE/853.13 TONNES

Oct 18 /no change in gold inventory at the GLD/ inventory rests at 853.13 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Nov 24/2017/ Inventory rests tonight at 843.39 tonnes

*IN LAST 279 TRADING DAYS: 97.56 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 214 TRADING DAYS: A NET 59,72 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 28.61 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Nov 24/A WITHDRAWAL OF 944,000 OZ OF SILVER FROM THE SLV//INVENTORY RESTS AT 317.130 MILLION OZ

Nov 22/no change in silver inventory at the SLV/Inventory rests at 318.074 million oz.

Nov 21/no change in silver inventory at the SLV/inventory rests at 318.074 million oz/

NOV 20/no change in silver inventory at the SLV/inventory rests at 318.074 million oz

Nov 17/no change in silver inventory at the SLV/inventory rests at 318.074 million oz/

Nov 16./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ/

Nov 15./no change in silver inventory at the SLV/inventory rests at 318.074 tones

NOV 14/no change in silver inventory at the SLV/Inventory rests at 318.074 tonnes

Nov 13/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ

Nov 10/no change in silver inventory at the SLV/Inventory rests at 318.074 million oz/

Nov 9/no change in silver inventory at the SLV/inventory rests at 318.074 million oz.

NOV 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ

Nov 7/a huge withdrawal of 944,000 oz from the SLV/inventory rests at 318.074 million oz/

NOV 6/no change in silver inventory at the SLV/Inventory rests at 319.018 million oz/

Nov 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 319.018 MILLION OZ.

NOV 2/A TINY LOSS OF 137,000 OZ BUT THAT WAS TO PAY FOR FEES LIKE INSURANCE AND STORAGE/INVENTORY RESTS AT 319.018 MILLION OZ/

Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/

Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz

Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/

Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ

Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/

Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ

Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/

oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/

OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ

oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ

Oct 18 no change in silver inventory at the SLV/inventory rest at 322.271 million oz

Nov 24/2017:

Inventory 317.130 million oz

end

6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration

+ 1.58%
12 Month MM GOFO
+ 1.81%
30 day trend

end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

Goldcore:  Thursday’s commentary

Brexit Budget – Grim Outlook As UK Economy Downgraded

GoldCore's picture

Brexit budget – Grim outlook as UK economic forecasts downgrade

UK Chancellor uses housing market policy as smoke-screen for deteriorating economy
– UK budget matters more than ever due to BREXIT risks

– Policy on stamp duty will fail to aid worsening housing market
Real GDP expected to grow by just 1.5%, 40% less than projections 2 years ago
Households now face an unprecedented 17 years of stagnation in earnings
Critics claim Budget failed to calm Brexit uncertainty
– UK and especially London property market at “breaking point”

Editor: Mark O’Byrne

Martin Wolf Budget chart

Source: FT

Yesterday UK Chancellor Philip Hammond’s long-awaited Autumn Budget was delivered to the Houses of Parliament. He was praised for a ‘good budget in political terms’ and for talking up the UK economy, telling his contemporaries that that it is “confounding those who talk it down” and that “those who underestimated the UK, do so at their peril”.

Hammond’s comments suggest the economy is doing better than its critics said it is. This isn’t the case. The Office of Budget Responsibility (OBR) delivered some depressing statistics yesterday which suggest the recovery post-crisis and post-referendum is still a long way off.

Hammond was praised for his ‘cheery’ budget. His head had been very close to the block ahead of yesterday with many criticising his negative views on Brexit negotiations and general lack of optimism.

In reality this really was a political budget. One designed for some quick-wins and support from the House and the media. It was hardly economic. Brexit was barely addressed, economic growth was referred to as ‘stubborn’ and the housing market was treated with a patronising cut in stamp duty. A band-aid on a haemorrhaging artery.

Is the UK economy proving its critics wrong?

The government statistics agency cut the UK’s projected growth forecast for 2017 from 2% to 1.5%. The OBR believes the economy can only now grow sustainably at a rate of 1.5 per cent, 40 per cent lower than it estimated as recently as two years ago.

On an international level we are expected to fall down the leaderboard of G7 countries in 2017 and into 2018. Just last year we were second only to Germany in terms of growth. Data from both the OBR and the IMF suggest lower forecasts for the UK’s GDP and output.

This does not bode well for workers who have not only failed to see their wage levels increase for nearly a decade but are also worried about the impact of Brexit.

 

 

Brexit boost?

Hammond was praised for drawing attention away from the ongoing Brexit-saga. He mentioned the allocation of a further £3bn to help any outcome of the talks. For London May Sadiq Khan this was not enough:

“At a time when there’s uncertainty, at a time where we are being told by the EU we’re going down the road of an extreme, hard Brexit because of the response of this Government, businesses will think ‘you know what? We’re far better going off to Frankfurt, or going to Berlin, or going to Paris.

“This is not me talking down London, it’s me being frustrated by this budget today. This, I think, is the most anti-London budget for a generation.

“…At a time when businesses are frustrated by the lack of Londoners with the skills for the jobs of tomorrow, no rule news in relation to investing in young Londoners.

“This was a chance for the Chancellor to have a big, bolder budget. He’s blown it.”

Khan’s right. Businesses will be looking at yesterday’s budget feeling as much in the dark as they were beforehand. There has been little guidance as to how the UK will work to make the capital city attractive post-Brexit and the incentives there will be to keep people employed here.

It isn’t just infuriating from a business perspective, but also for the London housing market which is nearly impossible for new entrants to join.

“At a time when Londoners can’t afford to rent in London, let alone buy, no new rule news in relation to building affordable homes in London.”

Hammond couldn’t even figure out that this wasn’t an area that could be a quick policy announcement.

The smoke-screen of stamp duty 

The media jumped on Hammond’s pièce de résistance – removal of stamp duty for first time buyers. Which in reality is just a massive smokescreen designed to make us believe there is hope for the UK economy and housing market.

The main headline-grabbing announcement from Hammond in his Brexit budget was the removal of stamp-duty for first-time buyers purchasing houses under £300k.

This is unlikely to make any difference to either first-time buyers or the overall property market.

As the OBR concluded from the Chancellor’s announcement, the tax break was likely to push property prices up by about 0.3%, with most of the increase coming in 2018.

“The main gainers from the policy,” said the forecasting group, “are people who already own property, not the FTBs [first-time buyers] themselves.”

It explained that whilst some potential FTBs, with smaller deposits, would now be able to borrow a little more “allowing them to buy properties that they otherwise could not afford” this would now be “more expensive”.

So who is helping who out here, Chancellor? Is the government yet again encouraging citizens to go up and buy things they can’t afford, thus pushing themselves further into debt?

“I welcome the chancellor’s announcement of £15bn of new support for housing but it doesn’t reflect the government’s ambition to solve the housing crisis and, crucially, it’s unclear about how it will help ordinary people to find a truly affordable home,” Lord Kerslake.

The fact is people cannot afford to buy houses right how, not because of stamp duty but because house prices are far beyond the reach of those who have not seen wages and therefore their savings increase in nearly ten years. This is not set to change. Households now face an unprecedented 17 years of stagnation in earnings.

A misunderstood market used as a political puppet

The barrier to entry for first-time buyers is not the prospect of a few thousand pounds extra in tax. It is the near impossibleness of being able to save enough for the initial deposit. This is the main barrier as found in a recent Halifax bank survey. For those who can manage a deposit, that small amount of tax wasn’t particularly prohibitive to them in the first place.

The government seems to be on yet another false-path to trying to prop up the ailing housing market, strong in the belief that it is the elixir of life for the UK economy. Why the constant encouragement to get on a housing ladder that is neither affordable, nor stable?

How can a housing market solve all of the problems when the demand side just cannot afford to get involved? The new figures from the OBR suggest that the downward revisions mean pay will not reach its 2008 level until the mid 2020s.

So with rising inflation, plus expected rising interest rates and now further stagnation in wages it’s not looking as though Hammond’s solution is going to do much at all.

The housing market is long past a quick fix in the Autumn budget. A recent Halifax bank survey recorded the weakest reading for consumer expectations since October 2012. The bank told the Guardian:

“Housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market.”

This is what terrifies Hammond and the UK government.  A housing market is seen as a measure for the health of an economy. With growth and productivity ‘stubbornly’ refusing to budge, the Chancellor has had to turn his attention to an area he can have a slightly more direct impact on – the housing market.

However there is little evidence that such policies play out well in the long-term. For decades the UK government has worked to try bubble up the UK housing market. It has arguably worked very well. But a financial crisis, wage stagflation and stealth inflation means that it is at breaking point.

This was being seen even before the UK voted for the biggest economic upset (Brexit) seen in modern history.

A depressing yet timely reminder

Yesterday’s Brexit budget was a depressing yet timely reminder of the way politicians can manipulate economies and policies to suit their targets and save their jobs.

It was a reminder for savers  and investors everywhere, not just in the UK.

Hammond’s distraction technique using the stamp-duty announcement, as well as the allocation of funds to Brexit, may have worked for the mainstream media but anyone hoping to protect the value of their portfolios should stay alert.

As we explained recently:

The government needs to stop being so irresponsible and no longer constantly peddle arguments for home ownership. However it is difficult politically to sell that story. Especially when all parties have realised the youth vote has major housing concerns and believes they have the right to own property.

For those who are not susceptible to the war-cry to the youth vote they would be wise to remember that there are other real assets out there, ones that cannot be manipulated by policy announcements and are less vulnerable to the machinations of career politicians.

Physical gold coins and bars are like housing. If owned as a diversification, in the safest ways, precious metals are tangible, safe stores of value.

However, they do not come with a massive debt burden, owners do not have to live in fear of rising interest rates and unprecedented uncertainties in both political and economic spheres as we alluded to yesterday

end

 

Buy Gold As Fed Shows Uncertainty And Concern Over Financial ‘Imbalances’

– FOMC minutes show uncertainty and concern about markets are affecting officials’ decision-making
– Officials were cautious when evaluating market conditions and the ‘damaging effects on the economy’
– Worry about ‘potential buildup of financial imbalances’ and a sharp reversal in asset prices’
– Members seem oblivious to impact of inflation on households and savings
– Physical gold and silver remain the only assets for real diversification and safety

After nearly a decade of pumping up the US and global markets, Janet Yellen and team are now starting to show some concern for financial market prices. The FOMC is concerned that they are getting out of hand and are a danger to the US economy.

The minutes of the Fed’s October meeting show that the committee is largely optimistic about the US economy:

“In their discussion of the economic situation and the outlook, meeting participants agreed that information received since the FOMC met in September indicated that the labor market had continued to strengthen and that economic activity had been rising at a solid rate despite hurricane-related disruptions.”

But caution was the name of the game when it came to looking at overall market conditions:

“In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances…They worried that a sharp reversal in asset prices could have damaging effects on the economy.”

There isn’t a huge amount you can say in response to the FOMC minutes. There was no surprise, they practically telegraphed a December rate hike. And, when it comes down to ‘financial imbalances’, you really just want to tweet them with ‘…no shi*t sherlock’.

Why the sudden concern?

Really, why the sudden concern about financial imbalances? After all the FOMC has been pumping asset prices for the last decade. They are overjoyed to see the S&P500 regularly breaking through new highs.

The ‘imbalance’ committee members refer to is likely in regard to the risk/reward profile in the price of equity markets. This is somewhat ironic given almost the exact same thing happened with bond markets thanks to QE and the Fed’s balance sheet expansion. Just consider that their own yield curve lies at the heart of the current equities bull market.

The fear seems to be that in the last decade there has been such an expansion of credit that we are now faced with an unprecedented bubble. The Fed has no idea how this can be managed across central banks. They are concerned not only how the bubble will burs but what the contagion will be.

Since the Fed started hiking rates up, markets and financial conditions have not tightened. At all. One could speculate that this shows the market is convinced that the moment equities suffer a selloff, the Fed will either stop hiking altogether, or (worse) revert to the status quo and announce QE4.

At the moment the market is pricing in the risk of further rate hikes into next year. The chart below from HSBC shows “the market has been pricing in more and more 2018 hiking risk. The maroon line in the chart below shows the increase in hiking expectations in recent weeks, with investors pricing in more than 1 1/2 hikes for the first time since April.”

No matter market predictions of Fed rate rises no one can prepare for the aftermath of a $50 trillion debt build-up since the financial crisis of 2008. Nothing like this has been seen before.

In this year alone we have hit a new record when it comes to money printing by central banks. Of course no one knows what we are dealing with. What is more concerning is that the world’s most powerful central bank is only now wondering about financial imbalances in the market.

It’s a fix

As has been the case in many Western countries, central banks have expressed frustration at the stubbornly low levels of inflation. What’s interesting about this is that many of them have spent a long time ensuring that the means by which inflation is calculated gets them closer to their target.

The basket of goods used to calculate the level of price inflation is continuously manipulated.Very often ‘volatile’ food and fuel is not included in the US measure. Why does this matter? Because these are the two main items that affect household finances.

So far this year US inflation has averaged 1.6% so far this year (when you exclude food and fuel) and it came in at just 1.3% in September. This (artificial) low level of inflation appears to have almost baffled FOMC members, with much disagreement amongst them.

For those who believe inflation is low this “might reflect not only transitory factors, but also the influence of developments that could prove more persistent,” according to the minutes. However there were also a few members who expressed concern that it could begin to climb due to “increasing upside risks” to inflation as the labor market continues to tighten.

It was then suggested by ‘a couple’ of members that the Fed tweak its approach to inflation, moving away from the current 2% target and toward a “gradually rising path” in prices instead. A nebulous approach.

We continue to see a divided FOMC, with neither side getting our vote. As they continue to debate inflation and how to manage it, they are failing to do anything about it or even acknowledge what is really going on.

It is concerning enough that the current inflation measures do not reflect the impact on households, savings and the depreciation of the US dollar. It is even worse when the FOMC is discussing whether they should even try and target inflation at all.

Bill Blain of Mint Partners published an email from a reader expressing these very concerns with the FOMC:

On the inflation theme, I got an absolutely classic email y’day from a reader whom I don’t actually know, but had picked up my comments on some financial wire. Thank’s Geoff! His thesis is the global authorities have been spinning us a line when it comes to inflation – pointing out in 1971 it would have taken a low wage worker 2 hours and 10 mins to afford a ticket to the then new Disneyland. Disney prices have experienced 8% y-o-y inflation since the park opened. The same ticket will now require 7 hours and 20 mins work – and they are still playing that damn tune. (The lyrics would almost be profound if the tune wasn’t so inane!)

Geoff went on to point out: “The Indians shamefacedly admit their inflation is 9-13% – they are the only honest country on the planet!”

Not just a nervous Fed

The FOMC’s nervousness should be a cause for alarm but it should not be a feeling alien to market participants. They have long been concerned with the impact of central banks’ planned unwinding of balance sheets.

A shift in monetary tightening has been identified in global surveys as the most likely cause of the next recession. These concerns are based in history.

In 1994 the Fed began boosting rates, in a similar transition to today. The tightening triggered one of the worst corporate bond slides in two decades. The biggest loser was the suddenly devalued Mexican peso.

Adding to this, three of the four most powerful central bank chiefs are set to be replaced. Expectations are that their successors will not want to be seen hanging around delaying monetary tightening. They will most likely continue to set aside inflation concerns in a drive to curb the financial excesses that they have encouraged for a decade.

This will likely come with some problems, ones which the FOMC seems to be blind too. Yellen famously described balance sheet tightening as uneventful as ‘watching paint dry’. However, when one considers that more than half the gains in the S&P 500 from 2008 until the end of 2015 (when the FOMC began raising rates) came on days the Fed announced policy decisions then we should prepare for some harsh market reactions.

A pantomime farce

In the United Kingdom we have a very odd tradition at Christmas of ‘going to the pantomime’. The pantomime to those who haven’t been always seems to be a peculiar way to be entertained. It is not a pantomime as in a mime, as the word means in other countries, but instead it is a form of slap-stick musical entertainment.

One of the ‘hilarious’ parts to every pantomime is when the hero is trying to catch the baddie of the show. The baddie keeps appearing behind the hero, but our protagonist always seems to not notice or just miss him. Meanwhile the audience’s calls for ‘He’s behind you!!’ grow louder and more raucous as the show goes on.

The joke is, of course, that it seems to be near impossible that someone could miss a baddie looming so close and so obviously in the background.

The same can be said of the FOMC and their apparent ignorance of the threat of ‘financial imbalances’ for the last decade. For years we have watched incredulously as the FOMC along with other central bank committees pump away at markets. It is as if we have come nearly to the end of the pantomime where the ‘hero’ is finally getting wise to the baddie’s tricks and is close to catching him.

The only difference between a central bank pantomime and a real one is that there is unlikely to be a happy ending, as it will be the baddie who gets the better of the so-called ‘hero’.

In this pantomime we do not know how it is supposed to end. How can we?

Once again we conclude that this comes down to uncertainty. Whilst we have long-advocated for investors to line their portfolios with assets that offer true diversification and safety, it now seems more pertinent than ever.

Central banks rarely admit that they are confused about the state of markets. This latest statement was the beginning of them starting to scratch their heads and admit they don’t have all the answers. As this uncertainty and confusion seeps through and grows, investors should be prepared for panic in both policy making and financial decisions.

It is times like this when holding allocated, segregated gold in your portfolio makes even more sense. With a central bank wondering how to manage things, you can rest assured that your wealth is out of the reach of central bankers and their reactionary monetary policies.

Related reading

Gold Investment “Compelling” As Fed Likely To Create Next Recession

“This Is Where The Next Financial Crisis Will Come From” – Deutsche Bank

Gold Price Reacts as Central Banks Start Major Change

News and Commentary

Gold steadies as dollar weakens further (Reuters.com)

Japanese Stocks Decline, China Slide in Focus (Bloomberg.com)

Dollar poised for weekly losses, Fed’s inflation caution drags (Reuters.com)

Russian central bank: Gold holdings support national security (Reuters.com)

Putin orders Russian companies to be ready for urgent transition to war-time operations (RT.com)

Kremlin pledges to stand up for Russian billionaire arrested in France (Reuters.com)

Bank Deposits No Longer Off Limits as ECB Seeks Power to Freeze (Bloomberg.com)


Source: Bloomberg

The Party Is Over for Australia’s $5.6 Trillion Housing Frenzy (Bloomberg.com)

China’s Debt Surge May Increase Risk of Financial Crisis (Bloomberg.com)

What Germany’s Political Crisis Means for Your Money (MoneyWeek.com)

Three things you should know about rich people (StansBerryChurcHouse.com)

Guggenheim CIO Warns “Everything Is Liquid Until You ‘Need’ To Sell” (ZeroHedge.com)

Bitcoin Paving Way for Gold’s Return as Global Currency – Ned Naylor-Leyland (Gata.org)

Gold Prices To Quadruple To $5,000 On ‘Money Tsunami’ – McEwen (Bloomberg.com)

Gold Prices (LBMA AM)

24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce
22 Nov: USD 1,283.95, GBP 969.25 & EUR 1,092.51 per ounce
21 Nov: USD 1,280.00, GBP 967.04 & EUR 1,090.69 per ounce
20 Nov: USD 1,292.35, GBP 974.82 & EUR 1,096.43 per ounce
17 Nov: USD 1,283.85, GBP 969.31 & EUR 1,088.19 per ounce
16 Nov: USD 1,277.70, GBP 969.01 & EUR 1,085.53 per ounce

Silver Prices (LBMA)

24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce
22 Nov: USD 16.97, GBP 12.81 & EUR 14.44 per ounce
21 Nov: USD 17.00, GBP 12.85 & EUR 14.50 per ounce
20 Nov: USD 17.15, GBP 12.94 & EUR 14.56 per ounce
17 Nov: USD 17.09, GBP 12.95 & EUR 14.49 per ounce
16 Nov: USD 17.04, GBP 12.92 & EUR 14.48 per ounce


Recent Market Updates

– Brexit Budget – Grim Outlook As UK Economy Downgraded
– Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
– Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
– Money and Markets Infographic Shows Silver Most Undervalued Asset
– Is New Fed Chief A “Swamp Critter Extraordinaire”?
– Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
– UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off
– Protect Your Savings With Gold: ECB Propose End To Deposit Protection
– Internet Shutdowns Show Physical Gold Is Ultimate Protection
– Gold Coins and Bars Saw Demand Rise 17% to 222T in Q3
– Prepare For Interest Rate Rises And Global Debt Bubble Collapse
– Platinum Bullion ‘May Be One Of The Only Cheap Assets Out There’
– World’s Largest Gold Producer China Sees Production Fall 10%

 

end

this fund manager states that Bitcoin is paving the way for gold’s return as true money and a global currency

 

(courtesy Pakiam/Bloomberg/GATA)

 

Bitcoin is paving the way for gold’s return as global currency, fund manager says

 Section:

This Gold Fund Is Joining the Bitcoin Frenzy

By Ranjeetha Pakiam
Bloomberg News
Wednesday, November 22, 2017

The Old Mutual Gold & Silver Fund, which manages $220 million of mostly precious metal equities, is jumping on the bitcoin wagon.

The fund started buying in April with a mandate to allocate as much as 5 percent to cryptocurrencies, according to its manager, Ned Naylor-Leyland. The idea is to take profits from bitcoin as it advances and reinvest them in gold and silver assets, he said in an interview on Nov. 16.

“Bitcoin was explicitly designed to be digital gold,” said Naylor-Leyland. “So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point. It’s about bringing the ownership of disciplined money into the modern world. Bitcoin is paving the way for the reintroduction of gold as global money.”

Bitcoin is up more than eight times this year to top $8,000 as entrepreneurs in the field say its value lies in proof of concept for a new kind of payment system not reliant on third parties like governments, big banks, or credit-card companies. By contrast, gold has held in a tight range since February, with a short break upward in September as U.S. and North Korea tensions spiraled. …

* * *

[And fortunately for all other currency issuers, including bitcoin itself, nobody in authority or financial journalism, including Bloomberg News, ever asks WHY “gold has held in a tight range since February” — or, really, has BEEN held.]

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-11-22/gold-fund-joins-bitco..

 

END

Persson gives us 28 reasons why we should buy physical gold

(Persson/Bullionstar/GATA)

 

 

Torgny Persson: 28 reasons to buy physical gold

 Section: 

10:48a ET Thursday, November 23, 2017

Dear Friend of GATA and Gold:

Bullion Star proprietor Torgny Persson today offers “28 Reasons to Buy Physical Gold,” all of them excellent — and all of them also reasons why governments strive to prevent gold’s use as money by individuals and to push the monetary metal out of the world financial system. Persson’s analysis is posted at Bullion Star here:

https://www.bullionstar.com/blogs/bullionstar/reasons-buy-gold/

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

 

END

Alasdair’s lesson for this week:  deflation

 

(courtesy Alasdair Macleod/GoldMoney)

Alasdair Macleod: Deflation must be embraced

 Section: 

By Alasdair Macleod
GoldMoney.com, Jersey, Channel Islands
Thursday, November 23, 2017

There are two problems with understanding deflation: it is ill-defined, and it has a bad name. This article puts deflation into its proper context. This is an important topic for advocates of gold as money, who will be aware that sound money, in theory, leads to lower prices over time and is often criticixed as an objective, because it is not an inflationary stimulation.

The simplest definition for deflation is that it is when the quantity of money contracts. This can come about in one or more of three ways. The central bank may reduce the quantity of base money, commercial banks may reduce the amount of bank credit, or foreigners, in possession of your currency from an imbalance of trade, sell it to the central bank.

The link with prices is far from mechanical, because the most important determinant of the general price level is the relative appetite for holding money, and not changes of the quantity in issue, as the monetarists would have it. All else being equal, a deflation of the money quantity can be offset by a decline in the public’s desire for cash and deposits in hand, so that the general level of prices is unaffected.

Alternatively, a fall in the general price level can occur without a corresponding monetary deflation. This happens if a general preference for holding money increases. A further consideration is a population might collectively decide, based on increased uncertainty about the future perhaps, to hoard cash instead of leaving their savings in a bank. The resulting mismatch between production on the one side, and consumption (both immediate and deferred) on the other, caused by changes in physical cash withheld from circulation, can have a noticeable effect on prices. …

… For the remainder of the commentary:

https://www.goldmoney.com/research/goldmoney-insights/deflation-must-be-…

 

https://www.goldmoney.com/research/goldmoney-insights/deflation-must-be-…

* * *


Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

i) Chinese yuan vs USA dollar/CLOSED UP AT 6.6150/shanghai bourse CLOSED UP AT 1.90 POINTS .06% / HANG SANG CLOSED UP 158.38 POINTS OR 0.53%
2. Nikkei closed UP 27.70 POINTS OR 0.12% /USA: YEN RISES TO 111.41

3. Europe stocks OPENED GREEN  /USA dollar index FALLS TO 93.07/Euro RISES TO 1.1865

3b Japan 10 year bond yield: RISES TO . +.029/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.09/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 58.79  and Brent: 63.76

3f Gold DOWN/Yen DOWN

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

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

3h Oil 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 +.362%/Italian 10 yr bond yield UP to 1.792% /SPAIN 10 YR BOND YIELD DOWN TO 1.467%

3j Greek 10 year bond yield RISES TO : 5.372???

3k Gold at $1288.35 silver at:17.05: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 6/100 in roubles/dollar) 58.39

3m oil into the 58 dollar handle for WTI and 63 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.41 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9813 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1645 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.362%

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 2.342% early this morning. Thirty year rate at 2.766% /

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

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

S&P Futures Hit Record High As European Euphoria Takes Over Forgotten China Rout

Yesterday’s China stock market rout, in which the Shanghai Composite tumbled the most since June 2016 to three month lows, and which prompted traders to question the dedication of Beijing’s plunge protection team, appears to have been forgotten, with the Composite closing unchanged on Friday after some early session weakness, as Chinese yields declined broadly across the board from 3 years highs. As a result, world stocks hovered just below record highs, and set to reverse two straight weeks of losses, and with Asian markets mostly in the green, as MSCI’s Asia-Pacific ex Japan index rose 0.2%, the optimism spread to Europe where Germany’s IFO Business Climate hit a new record high…

… and now points to a Y/Y GDP growth of 4%.

It is worth keeping in mind that while European business optimism has never been higher, 90% of the responses to the survey were submitted before Angela Merkel’s coalition talks collapsed. Still, the IFO print was in line with the latest November Markit PMIs, which also printed strong and beat consensus, with Eurozone’s flash composite PMI rising to a 6.5 year high (57.5 vs. 56 expected) and is at a level that is broadly consistent with 3.5% yoy GDP growth, which Deutsche Bank called “a stunning figure for the continent.” In addition to the strong IFO data, there was more good news out of Germany where the SPD is now reportedly ready to negotiate with Merkel to form a government and end the political deadlock. In response to these two developments, the EURUSD rose to the highest level since October 13…

 

… and despite the strong currency European stocks which were in the red in early trading, turned positive, helped to an extent by news Asia would slash import tarfiffs in a boost for consumer goods companies, benefiting European exporters. The Stoxx Europe 600 advanced, also thanks to bank shares as Italian lenders were buoyed by a new proposal to deal with bad loans.

“It’s a bit of a Goldilocks situation (for economic growth). It is finely balanced and I think the European Central Bank has very much hinted at that in its actions, but at the moment I can’t really see how this is going to be up-ended,” said Ken Odeluga, market analyst at City Index.

Ironically, as Germany’s crisis appeared to easing, a new crisis emerged in Ireland, whose bond yields climbed to a 10-day high. The standoff over the Irish deputy leader may lead to an early election at a time when the government has to make key decisions on the Brexit process.

Finally, with the US coming back from Thanksgiving holiday for a half-trading Friday, S&P futures are up 6 points, in fresh record territory, with early optimism among merchants expected to benefit from strong Black Friday sales.

In FX, the US dollar remained under pressure after the minutes from the U.S. Federal Reserve’s latest policy meeting highlighted concerns over persistently low inflation, pushing the DXY 0.2% lower. The Bloomberg Dollar Spot Index headed for its third week of losses, the longest losing streak since July, and is down 1.6% this month.

While a drop in Treasuries supported the gauge initially, gains were capped by a rally in cable and demand for the yen after London open, although post-Thanksgiving volumes remained subdued. In Europe, bonds slipped as equities were mixed and crude oil rose. Indeed, as Bloomberg writes, a rebound in Treasury yields wasn’t enough for the dollar to sustain early gains as the London session started off with decent demand for the euro and the pound amid modest post-Thanksgiving flows. Downside Dollar risks prevail on the charts, with momentum driven by the dovish tone from Federal Reserve Chair Janet Yellen earlier in the week amid lack of progress on U.S. tax reform.

Meanwhile, “euro bulls added longs in the spot market, according to traders in Europe and London, albeit in low volumes, with some desks understaffed on Friday” Bloomberg added.  As we discussed earlier, the common currency rose to its strongest level in six weeks, with hedge funds and interbank accounts leading the move higher. The latter look more confident on euro gains after the latest European Central Bank account showed that a pickup in inflation isn’t a prerequisite for policy makers to end monetary stimulus.

The South African rand heavily underperforms as S&P and Moody’s are due to reassess South Africa sovereign rating and potentially cut further.

In commodities, crude futures hit a two-year high on the shutdown of Keystone pipeline, a major crude pipeline from Canada to the United States. WTI crude futures were up 0.9% at $58.53 a barrel from their last settlement. Brent was flattish at $63.46, down 0.1% on the day. In a sign of a tightening market, both crude benchmarks are in backwardation, making it unattractive for traders to store oil for later sale.

Iron ore climbed to a two-month high, while industrial metals headed for the best weekly gain in six. Crude oil surged as OPEC and Russia were said to have agreed on a framework to extend supply cuts.

Expected economic data include November PMIs. Canada’s Valener is reporting earnings.

Market Snapshot

  • S&P 500 futures up 0.1% to 2,597.25
  • STOXX Europe 600 up 0.2% to 387.68
  • MSCI Asia up 0.1% to 173.08
  • MSCI Asia ex Japan up 0.2% to 568.34
  • Nikkei up 0.1% to 22,550.85
  • Topix up 0.2% to 1,780.56
  • Hang Seng Index up 0.5% to 29,866.32
  • Shanghai Composite up 0.06% to 3,353.82
  • Sensex up 0.3% to 33,682.74
  • Australia S&P/ASX 200 down 0.06% to 5,982.55
  • Kospi up 0.3% to 2,544.33
  • German 10Y yield rose 2.3 bps to 0.37%
  • Euro up 0.1% to $1.1864
  • Italian 10Y yield rose 1.9 bps to 1.518%
  • Spanish 10Y yield rose 1.8 bps to 1.481%
  • Brent futures down 0.1% to $63.62/bbl
  • Gold spot down 0.1% to $1,290.27
  • U.S. Dollar Index down 0.1% to 93.10

Top Overnight News

  • Former national security adviser Michael Flynn’s lawyers have notified President Trump’s legal team in recent days they can no longer discuss special counsel’s investigation, NYT reports, adding it’s an indication that Flynn is cooperating with prosecutors or negotiating such a deal
  • China said it will further cut import taxes for a wide range of consumer goods in a bid to boost consumption
  • Germany’s biggest opposition party said it’s open to talks on backing a government led by Chancellor Angela Merkel. The move came after the Green party urged Merkel to forge a coalition with the SPD, while ruling out further attempts to gain a place in any alliance.
  • German Ifo business confidence rose to a record high of 117.5 in November vs estimate of 116.7 and 116.8 in October
  • BOE official Silvana Tenreyro said two more rate increases will probably be needed to get inflation back to target, but Brexit will be the real determinant of where policy goes next
  • The U.K. financial services regulator confirmed all 20 banks have agreed to support the London interbank offered rate until 2021 and will work toward developing an alternative benchmark
  • ECB executive board member Benoit Coeure said ECB deposit rate will stay at minus 0.4% for a long time
  • U.K. consumer confidence tumbled to 106.6 in November, the lowest level since the aftermath of the Brexit vote, according to a poll by YouGov and the Centre for Economics and Business Research
  • Ireland’s deputy PM is pressured to resign by opposition due to historical conduct; potential for fresh elections as PM support for deputy leads to standoff
  • In a Thanksgiving address to troops, Trump credited his policies for allowing progress in Afghanistan and against Islamic State, and warned about sending sophisticated weapons to American allies that one day could become the enemy.
  • U.K. Prime Minister Theresa May will meet European Union President Donald Tusk Friday as the country seeks guarantees that the bloc will allow stalled Brexit talks to make progress in exchange for new assurances over money.
  • Dalian Exchange cuts trading fees for some iron ore futures contracts
  • Noble Group Risks Equity Wipeout as Shares Retreat Yet Again
  • Credit Suisse-Backed WeLab Is Said to Plan $500 Million IPO
  • Temer Said to Agree on Brazil Pension Vote With House Chief

Asia equity markets traded higher albeit with an indecisive tone as markets lacked impetus with US away from market and mainland Chinese markets reeling from yesterday’ s late sell-off. ASX 200 (-0.1%) and Nikkei 225 (+0.1%) were negative at the open with the latter dampened by a firmer currency on return from holiday, while Mitsubishi Materials underperformed as its shares dropped nearly 10% after the Co. disclosed it had falsified product data. However, Japanese stocks then reversed losses in late trade underpinned by a mild rebound in USD/JPY. Hang Seng (+0.5%) and Shanghai Comp. (-0.1%) were mixed with the mainland index jittery after its 2.3% decline on Thursday which was attributed to tighter regulations and deleveraging concerns,  as well as a slump in the bond market. 10yr JGBs were subdued with demand weighed by a reserved BoJ Rinban announcement for only JPY 390bln and in which the central bank reduced  the amount of buying in 25yr+ maturities. This also coincided with overnight weakness in USTs which tripped through stops at 125.00 to the downside. PBoC injected CNY 30bln via 7-day reverse repos, CNY 10bln via 14-day reverse repos and CNY 10bln via 63-day reverse repos, for a net weekly injection of CNY 150bln vs. Prev. CNY 810bln net injection last week. PBoC set CNY mid-point at 6.5810. China Finance Ministry said it will lower import tariffs on some consumer products from December, with import duties to be cut to an average 7.7% from 17.3%.

Top Asian News

  • After Sudden Rout, China Stock Traders Question Beijing Put
  • China Approves Taiwan ASE-Siliconware Merger with Conditions
  • Hong Kong Finance Elite’s Gym of Choice Is Said to Near Sale
  • HNA Is Said to Get Nod From Malaysia for Deutsche Bank Stake
  • Banks Squeeze India Firms Harder in $207 Billion Bad Loan Fight

In European trading, it is a somewhat calmer end to the week, with the Euro Stoxx rising 0.3% thus far. The growing prospect of a grand coalition in Germany has helped lift the DAX above 13,000. Move higher in European consumer staples has been aided by the announcement from China that they are to cut tariffs on imported consumer goods. As such, Nestle, Danone and Diageo have been leading the charge, with products including baby formula to be impacted. Bunds holding just edging new and deeper sub-163.00 lows in wake of the stronger than expected German Ifo survey overall, with only current conditions unable to match consensus, albeit still robust. The 10 year benchmark has now recoiled to 162.72 from 163.03 at best, with near term or intraday supports at 162.61 looking attractive. Note, Eur/Usd has now moved a tad higher towards 1.1880 having eclipsed its previous MTD best (1.1761) pre-9.00GMT in what appeared to be a bit of front-running and buy the rumour/sell the fact initially. Back to debt futures, Gilts are largely tracking Bunds and have fallen in sympathy to 125.10 from 125.28 at one stage and from Thursday’s 125.31 close. BBA mortgage data up next in the UK.

Top European News

  • U.K. Consumer Confidence Hits Level Last Seen After Brexit Vote
  • Man Utd.’s Fellaini Sues New Balance Over Foot-Damaging Cleats
  • Clariant to Revise Strategy Yet Won’t Bow to Breakup Demands
  • Putin Peace Plan Gets Boost as Syria Opposition Unites for Talks

In FX, the the Dollar showing some signs of stabilisation, if not recovery across the board, as the Index holds in above 93.000 after Thanksgiving and ahead of another shortened US session, which will keep trading conditions thin and choppy. The pound was an early gainer and outerperformer (albeit marginal) on more Brexit headlines, as UK PM May and the EU’ s Juncker both claim progress made in negotiations ahead of more ‘crucial’talks. Cable back above 1.3300 as a result, and Eur/Gbp sub-0.8900. The Euro is still firm vs he Greenback, with the headline pair breaching its November peak (1.1861), while the next key chart resistance resides at 1.1880. EUR had been further bolstered by firm German IFO data, in which the Business Climate figure rose to a record high. The yen was off best levels vs the Usd, as strong technical support just above 111.00 is respected (for now), but 112.10 widely seen capping the upside within a new lower range

In commodities, iron ore prices continued its recent upward trajectory, with the spot price hitting its highest level since September 20th amid stronger steel prices. Copper also edging higher with support from the softer USD. The price of the red metal likely helped by a 24hr strike announced yesterday’ s at Chile’ s Escondida copper mine, the worlds largest mine. WTI and Brent crude futures up 0.9% and 0.1% respectively, with focus on next weeks OPEC and Non-OPEC meeting where expectations are for a 9-month extension

Looking at the day ahead, in Germany we received the November IFO survey, which printed at a new record high of 117.5. In the US, we get the flash November PMIs. Black Friday also marks the traditional start of the US holiday shopping season and any clues to footfall and overall sales will be closely watched. One other event potentially keeping an eye on is S&P and Moody’s scheduled sovereign rating reviews of South Africa, with the country at risk of losing its investment grade status. The ECB’s Supervisory chair Ms Nouy will also speak today.

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 55, prior 54.6
  • Markit US Services PMI, est. 55.3, prior 55.3
  • Markit US Composite PMI, prior 55.2

DB’s Jim Reid concludes the overnight wrap

Welcome to Boxing Thanksgiving Day or Black Friday as it’s commonly known these days. I must have about 10 emails in my inbox already this morning informing me of must have bargains. On the quiet holiday inspired session yesterday the most interesting story occurred after we went to print but before you read it. Chinese bourses weakened very late in the session and ended the day 2-3% lower. The CSI 300 index fell 2.96% – the biggest daily drop since June 2016. The exact cause of the sharp drop is still a bit unclear, but candidates included: the recent domestic govt. bond market sell-off and volatility, rising corporate yields, profit taking, concerns that the government may step up initiatives to cool down the strong gains in certain stocks and further reactions from the recent regulatory tightening in the asset management sector. This aside, we note that despite yesterday’s drop, the CSI index is still up c24% YTD.

This morning in Asia, markets are trading a bit mixed. Chinese bourses are down 0.4-0.5% but then again they were down a similar amount this time yesterday before the late sell-off. The Nikkei is up 0.13% after trading resumed from a holiday. Elsewhere, the Hang Seng (+0.25%) and Kospi (+0.09%) are slightly up as we type. The US markets will be open for half day trading today, with the UST 10y yields up c2bp this morning.

Staying with China, DB’s Zhiwei Zhang takes a closer look at potential macro risks from China . In his note, he tries to gauge the impact of tightening policies on tier 3 cities and finds policy tightening to be effective with a time lag of c3 months. Hence, the impact of the 1st round of tightening should have been reflected in today’s property prices, while the impact of the 2nd round is likely to be seen over the next few months. Overall, he reiterates his view that economic growth in China will slow in 4Q17 and 1H18, and that the government may have to loosen property market policy in 2Q18 to stabilise it.

Moving to Europe, the November Markit PMIs were strong and beat consensus which had anticipated a small pullback. The Eurozone’s flash composite PMI rose to a 6.5 year high (57.5 vs. 56 expected) and is at a level that is broadly consistent with c3.5% yoy GDP growth. A stunning figure for the continent. The strength was led by the manufacturing PMI, which rose 1.5pt to 60 (vs. 58.2 expected) – the highest in 17 years, while the Services PMI also slightly beat (56.2 vs. 55.2 expected). Across the region, the improvements in PMIs were broad based and driven by both core and peripherals (more later). So far, subdued core inflation has kept the pressure off the ECB to move more quickly towards tighter policy. With growth so above trend and the level of slack narrowing, the ECB may struggle to maintain expectations of a very gradual removal of easy policy. Overall, DB’s Peter Sidorov see the timing of the first rate hike at around 2020, as too far out.

Turning to Germany, there seems to be a glimmer of hope in the coalition talks to form the next government after a softening in the SPD’s position. Bloomberg reported that the Head of Germany’s biggest opposition party (SPD) Mr Schulz is now ready to hold talks with Merkel and is prepared to back her, but only for a minority led government at this stage. Notably, Ms Merkel has signalled she prefers a new election rather than a minority government. Elsewhere, other SPD members seem to be more accommodating, with SPD lawmaker Mr Lauterbach noting “…we want to help Germany and have not ruled out anything”, which includes the option of a renewed “grand coalition” with Merkel’s party, although did add this is a last resort.

Onto the ECB minutes, which did not seem to be ground breaking as the range of views had already been highlighted in recent speeches. Although, at the margin, it made us feel the first rate hike that is currently priced in at the start of 2020 may need to be moved a bit earlier. In the details, the minutes showed “a large majority” of members supported QE tapering and its  nine months extension, but there were debates on whether to set a firm end date or not. Some concerns were that the “open ended nature of [QE]…might generate expectations of further extensions” post September 2018, which ‘from the current perspective, did not appear justified in the absence of major new shocks”. Conversely, others wanted a longer purchase horizon to provide more monetary support and expressed concern of setting a firm date on when the program will stop. Finally, several members suggested delinking the relationship between QE and the inflation outlook and moving to a reference to the monetary policy stance. Elsewhere, the ECB’s Villeroy noted the ECB is clearly making progress in boosting inflation, but “as we are not yet at our target, we must maintain ample degree of monetary stimulus”.

Over in government bonds, changes in 10y yields were fairly muted. Bunds dipped 0.2bp, while OATs rose 1.2bp and Gilts fell 2.6bp. Notably, peripherals slightly underperformed with yields up 1-2bp.

Now briefly recapping other markets performance for yesterday. With the US markets closed for Thanksgiving, European markets were mixed but little changed. The Stoxx 600 (+0.02%), DAX (-0.05%) and FTSE (-0.02%) were broadly flat. Notably, the CAC rose 0.50% and peripherals also slightly outperformed (Spain’s IBEX +0.19%; FTSE MIB +0.37%), partly buoyed by the solid PMIs.

Turning to currencies, the US dollar index and Sterling both dipped c0.11% while Euro gained 0.25%. In commodities, WTI oil edged up 0.93% to a fresh two year high, while iron ore jumped 3.87% back to a two month high (c8% up in two days), partly driven by supportive steel rebar prices and the ongoing steel production cuts in China.

Away from the markets and onto Brexit. It seems the 4th December may be an important turning point for Brexit talks or at least a focal point. The EU President Juncker has confirmed his meeting with UK’s PM May and noted from there “we will see whether we can move forward or whether we are stuck. My hope would be that we move forward”. The FT had previously reported PM May will present her improved financial settlement offer at this meeting. Elsewhere, the ECB’s Villeroy has cautioned that “all actors should as of now undertake…necessary preparations to avoid potential cliff-edge risk” from Brexit. Finally, DB’s Oliver Harvey notes the December EU Council is likely a crunch point for Brexit talks, but achieving the UK government’s hope of wrapping up key trade talks by early next year may be easier said than done, with potential agreement at the December EU summit representing only the end of the beginning of Brexit negotiations.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In Germany, the final reading for the 3Q GDP was unrevised at 0.8% qoq and 2.8% yoy. In the details, net exports have contributed to c50% of the growth with a rise in inventories contributing the remainder. Elsewhere, both the 3Q private consumption (-0.1% qoq vs. 0.2% expected), and capital investments (0.4% qoq vs. 1.4% expected) were lower than expected, but the softness was partly due to upward revisions to prior readings.

In the UK, the second reading of the 3Q GDP was unrevised at 0.4% qoq and 1.5% yoy. The 3Q private consumption slightly beat expectations (0.6% qoq vs. 0.4% expected) to the highest since 3Q16, but fixed capital formation (0.2% qoq vs. 0.4% expected) was a bit softer. Elsewhere, the November CBI’s distributive trade survey was more upbeat following a tough October, with a net 26% of respondents noting growth in sales over the past year and a net 24% expecting growth to continue next month. Finally, in France , both the November Business confidence (111 vs. 109 expected) and manufacturing confidence (112 vs. 111 expected) were above expectations, with business confidence almost at a decade high.

For completeness, following up on the aforementioned flash PMIs across the EU bloc. In Germany, the composite PMI (57.6 vs. 56.7 expected) and manufacturing (62.5 vs. 60.4 expected) were both higher than expected, with the latter at the highest since 2011, while the services PMI (54.9 vs. 55 expected) was a tad softer. In France, the composite (60.1 vs. 57.2 expected), services (60.2 vs. 57 expected) and manufacturing PMIs (57.5 vs. 55.9 expected) all beat expectations.

Looking at the day ahead, in Germany we’ll receive the November IFO survey. In the US, there is the flash November PMIs. Black Friday also marks the traditional start of the US holiday shopping season and any clues to footfall and overall sales will be closely watched. One other event potentially keeping an eye on is S&P and Moody’s scheduled sovereign rating reviews of South Africa, with the country at risk of losing its investment grade status. The ECB’s Supervisory chair Ms Nouy will also speak today.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 1.90 points or .06% /Hang Sang CLOSED UP 158.38 pts or 0.53% / The Nikkei closed UP 27.70 POINTS OR 0.12%/Australia’s all ordinaires CLOSED DOWN 0.07%/Chinese yuan (ONSHORE) closed UP at 6.605-/Oil UP to 58.79 dollars per barrel for WTI and 63.76 for Brent. Stocks in Europe OPENED GREEN.    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6050. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.65972 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.(MARKETS STRONG)

3 a NORTH KOREA/USA

NORTH KOREA/CHINA

3b) REPORT ON JAPAN

My goodness, we have another scandal from Japan.  This time Mitsubishi Materials altered data similar in fashion as to what Kobe steel did

 

(courtesy zerohedge)

 

Another One: Japan’s “Fake Data” Scandal Hits Mitsubishi Materials

So Kobe Steel was not an isolated incident and faking data on manufacturing quality in Japan is quite common, as other lower profile scandals at Nissan Motor and Takata proved. Today another culprit has come to light: Mitsubishi Materials – which may need to re-consider its corporate philosophy “For People, Society and the Earth” and Articles 2 and 3 of its code of conduct “Safety First” and “Compliance”.

The company has admitted to falsifying data on rubber seals, brass strips and aluminum products sold to more than 250 customers in the aerospace and auto sectors. Having hit a two year high earlier this month, Mitsubishi Materials’ share price plunged during the Tokyo trading session, closing 8.1% lower on the day at 3,760 Yen, having traded as low as 3,635 Yen.

More from Bloomberg:

Japan’s reputation for manufacturing prowess took another hit as Mitsubishi Materials Corp. admitted it faked data on some products just weeks after a similar scandal engulfed Kobe Steel Ltd. Buyers of Japanese industrial goods from Boeing Co. to Airbus SE were once again scrambling to confirm whether safety had been compromised after Mitsubishi Materials said three of its units had faked data on products that may have been delivered to more than 250 customers. Its shares plunged as much as 11 percent in Tokyo, the most in eighteen months.

Mitsubishi Cable Industries Ltd. falsified data on rubber seals, while Mitsubishi Shindoh Co. misreported the strength of brass strips for auto parts, according to a statement Thursday. The products may have been shipped to 229 Mitsubishi Cable clients and 29 customers of Mitsubishi Shindoh. A third unit, Mitsubishi Aluminum Co. Ltd., also supplied non-conforming products, although it has already confirmed with customers that they are safe, the company said, adding that its investigation hasn’t uncovered any cases that raise the possibility of legal violations or safety issues.

The number of scandals of this type is a growing embarrassment to Japan’s famed manufacturing excellence and quality control.

The revelation is the latest in a series of scandals to dent the image of Japanese manufacturers and closely resembles recent admissions by Kobe Steel that it falsified data on the strength and durability of its productsIn the auto sector, Nissan Motor Co. has said it conducted vehicle inspections that didn’t comply with regulations for almost four decades, while Subaru Corp. allowed uncertified workers to inspect vehicles before shipment. Takata Corp. filed for bankruptcy earlier this year because of faulty airbags.

A disconcerting feature of the breaking scandal at Mitsubishi is that like recent “incidents” at Equifax and Uber, the company was aware of the fake data problem at its Mitsubishi Cable subsidiary in February 2017, but failed to halt shipments until last month.

Japanese Trade Minister Hiroshige Seko called the matter “extremely regrettable” at a briefing Friday, and said the ministry has asked related departments to investigate its causes and is seeking an explanation from Mitsubishi Cable on why it took so long to report its problem. He added that he considers it a matter for the companies and not an industry-wide issue.

According to the statement, Mitsubishi Cable uncovered the misconduct in February and stopped shipping non-conforming products on Oct. 23; the company told its parent two days later. Mitsubishi Shindoh found out about its problem in October and stopped shipments on Oct. 18, alerting Mitsubishi Materials the following day.

As the Financial Times reports, the falsification of data stretches back to 2015 at Mitsubishi Cable and Mitsubishi Shindoh has a joint venture with Kobe Steel.

Mitsubishi Materials said in a statement that its Mitsubishi Cable Industries unit had falsified data since April 2015 on the quality level of rubber O-rings, which are used to prevent leaks in aircraft, cars and other industrial equipment. Another subsidiary, Mitsubishi Shindoh, was found to have delivered metal products with quality levels below that claimed by the company or requested by customers.

Mitsubishi Materials has a 45 per cent stake in a copper tube venture with Kobe Steel, stemming from a partnership formed in 1999 alongside affiliate Mitsubishi Shindoh. That joint venture includes the Hatano plant south-west of Tokyo that has become the focal point of Kobe Steel’s data falsification scandal, and been subsequently stripped of numerous Japanese and international quality certifications.

Mitsubishi Cable employs around 500 workers and Mitsubishi Shindoh over 1,000 out of a group workforce of some 25,000. In the year to March 2,017, group sales were $11.6 billion and net profit $252 million. “Even if Mitsubishi Shindoh and Mitsubishi Cable don’t make up a big portion of the company’s earnings, not just the short-term impact, but the mid and long-term impact on its orders is a cause of concern,” Keiju Kurosaka, senior analyst at Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg.

Naturally, when these “fake something” scandals relate to high precision engineering parts, attention immediately turns to the manufacturers of commercial aircraft. Airbus published a statement saying that it doesn’t directly procure parts from Mitsubishi Materials and is investigating its supply chain. Boeing said that it’s reviewing the matter. Whether it’s a precedent for Mitsubishi Materials, time will tell, but Bloomberg notes that none of Kobe Steel’s customers have reported a safety problem so far.

Kobe Steel’s crisis erupted in early October, collapsing its shares. Although 525 customers were affected, none has yet to report safety issues and no products have been recalled, allowing its stock to recover some of its losses. As of last week, shipments to 484 clients had been given the all-clear.

Kobe blamed lax controls and too much focus on profit for its short-comings, including unrealistically high standards that exceeded clients’ expectations, which encouraged staff to disregard quality guidelines for a decade or more. The company was forced to abandon its profit forecasts and has lost quality assurance certification — often demanded by customers as a condition of sale — at seven of its 20 plants.

Mitsubishi Materials has to explain itself to the Japanese government by tonight. Transport Minister, Keiichi Ishii, stated that Mitsubishi Materials will report to his Ministry later on Friday with details on products and customers affected. He said that he will instruct the company to put the highest priority on safety…too late. We are nervously awaiting the next “revelation” on Japanese manufacturing.

end

 

3c CHINA REPORT

 

Thursday trading /Shanghai

 

The Shanghai stock exchange fell 2.3% on Thursday with the 10 yr bond climbing to 4% and top rated corporate bonds yielding 5.2%. The total of all debt in China is 40 trillion USA dollars with the problematic shadow banking sector at 10 trillion.  It is an accident waiting to happen

 

(courtesy zero hedge)

Chinese Stocks Plummet: Shanghai Tumbles Most In 17 Months As Bond Rout Spreads

The euphoria from the year-end melt up in Europe and the US failed to inspire Chinese traders, and overnight China markets suffered sharp losses, with the Shanghai Composite plunging 2.3%, its biggest one day drop since June 2016, over growing fears that the local bond rout is getting out of control. Both the tech-heavy Chinext and the blue chip CSI 300 Index dropped over 3%, as the sharp selloff accelerated in the last hour, as Beijing’s “national team” plunge protection buyers failing to make an appearance. There were sixteen decliners for every one advancing share.

In addition to tech, consumer non-cyclical and health-care sectors, the hardest hit names were banks such as ICBC, Ping An Insurance and Kweichow Moutai. Over in Hong Kong, the Hang Seng Index slid 1 percent from a decade-high, one day after closing above 30,000.

Confirming our report from last week, that traders were stunned by an official warning from Beijing that some stocks – in this case Kweichow Moutai, one of the most popular stocks among investors  – had risen “too far, too fast”, Ken Peng, strategist at Citi private bank, told CNBC Thursday that over the weekend he had heard views about particular Chinese stocks having moved too fast. He also said that Thursday’s downward move was impacted by “relative tight liquidity conditions in financial markets overall, because of a more stringent liquidity policy by the central bank.”

“The decline in Moutai has triggered selloffs in some of this year’s best performing stocks,” said Zhengyang Shen, Shanghai-based analyst at Northeast Securities. “When those giant stocks fall, retail investors will follow to sell their holdings. The ChiNext stocks do not have much support from the national team, so they fell even more,” he said, referring to state-backed funds.

As Bloomberg adds, today’s tumble was especially jarring given this year’s relative placidity in the stock market – the world’s second-largest. Volatility on the Shanghai Composite Index fell to the lowest level in decades earlier this month amid signs the government was curbing speculation in the wake of 2015’s $5 trillion rout. For Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong, it’s too soon to talk about panic selling.

At the same time, just days after we warned that “A “New Era” In Chinese Regulation Means Turmoil For $15 Trillion In China’s “Shadows“, yields on sovereign debt and top-rated local corporate notes climbed to the highest level in three years as China’s deleveraging campaign accelerated (don’t worry, it will stop the moment one or more corp or sov issues go bidless). As Bloomberg adds, with more than $1 trillion of local bonds maturing in 2018-19, it will become increasingly expensive for Chinese companies to roll over financing.

“Cash is king now on the mainland,” Castor Pang, head of research at Core-Pacific Yamaichi HK told Bloomberg. “Rising bond yields will be negative for corporate profits, since it will increase financing costs. That’s very bad news for the stock market.”

Meanwhile, the yield on 10-year sovereign bonds rose above 4% on Wednesday, while yields on five-year top-rated local corporate notes have jumped about 33 basis points this month to a three-year high of 5.3 percent, according to data compiled by clearing house ChinaBond. That said, selling eased a little in the nation’s sovereign debt market on Thursday. The 10-year yield fell two basis points to 4.02%, after climbing 39 basis points this month, although the yield on five-year bonds rose three basis points to 4.04%.

Not even the PBOC’s generous 100Bn yuan net liquidity injection helped ease liquidity and deleveraging nerves.

There was some good news, if only in terms of narratives: “You can say this is a correction but I don’t think it’s a market meltdown,” Wong said. “Market sentiment is still okay but after recent gains it’s time to pull back.”

“The plunge in China’s bond market is driving mainland stocks lower, especially financial-related shares,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Most A-share investors believe there will be further tightening in financial markets. Investor sentiment has been quite cautious in China, even though Hong Kong kept hitting 10-year high. There’s a lack of further momentum to move up.”

END

FRIDAY

China slashes import tariffs on consumer goods in a move to bolster Trump and other Western exporters

 

(courtesy zerohedge)

China Slashes Import Tariffs on Consumer Goods In Boost For Trump And Western Exporters

China announced it is slashing import tariffs on 187 consumer products starting next month.

The Finance Ministry pointed to the cuts being concentrated in products in short supply domestically which, it believes, will prompt local producers to improve quality. The items in the list which, includes baby formula, diapers, electric toothbrushes, medicines, cosmetics, coffee machines and whisky, are part of the broader category of consumer goods which account for roughly 30% of total Chinese imports. Of all 187 tariff reductions, the biggest was on vermouth and similar alcohols, like Martini, which were cut from 65% to 14%. The strangest was the cutting tariffs on electronic toilet seats, where domestic production must be truly appalling from a quality perspective, or markedly insufficient.

Notwithstanding the Finance Ministry’s comments, it raises the question whether China is responding to loud and frequently repeated complaints from Donald Trump about the Middle Kingdom’s unfair trade practices. In 2016, the US trade deficit with China was $347 billion and is expected to rise to around $370 billion in the current year. In October 2017, the US accounted for 70% of China’s total trade surplus. More from Bloomberg:

China’s new plan to slash import taxes on a wide range of consumer goods promises to boost the prospects of multinationals in the Chinese market, with everything from Procter & Gamble Co.’s baby diapers to Diageo Plc’s whiskey becoming more affordable to local consumers. Tariffs for 187 product categories will drop from an average 17.3 percent to 7.7 percent after the cut on Dec. 1, the Ministry of Finance said in a statement Friday, citing the need to help consumers access quality and specialty products which aren’t widely produced locally.

The new policy follows President Xi Jinping’s call at the October Communist Party conclave to meet citizens’ demands for improved living standards and better quality products in the world’s largest consumer market. Foreign multinationals stand to benefit as middle-class consumers seek out goods stamped with foreign brands, while the cuts also encourage consumers to spend at home rather than on trips overseas.

This latest move might also reflect, in part, China’s need to rebalance the main driver of economic growth from investment to consumption. Bloomberg noted the consumer angle:

“It’s aimed at three things: helping boost consumption in China, reforming the Chinese economy by continuing to open it up, and sending a signal to the world and particularly to the U.S. that it is committed to advancing global trade,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney.

Robust consumption is an increasingly important stabilizer for the world’s second largest economy, as it shifts away from an investment- and export-led growth model. Domestic consumption contributed 64.5 percent of GDP in the first three quarters of 2017, according to the National Bureau of Statistics.

China is trying to encourage more foreign companies to sell locally and wants to give consumers more choice,” said Matthew Crabbe, Mintel International Group Ltd.’s director of Asia-Pacific research. “What it will do is help foreign products already within the market get more competitive.”

The South China Morning Post (SCMP) notes the growing preference among some Chinese consumers for foreign goods which they perceive to be of higher quality. This is likely to be an issue for the Chinese authorities.

The death of young children in a contaminated milk scandal in 2008 in China led to a huge increase in mainland Chinese buying baby milk powder overseas and particularly in Hong Kong. Meanwhile, 42 million Chinese bought foreign products online last year, spending about 1.2 trillion yuan (US$182 billion) , according to the Hangzhou-based China Electronic Commerce Research Centre. The number of shoppers is expected to reach 59 million this year and the value of purchases to rise to 1.85 trillion yuan, the industry consultancy said.

With tariffs on some types of baby formula cut to zero, there were sharp losses in Chinese dairy stocks. Inner Mongolia Yili retreated as much as 5.85 before closing 2.0% lower, China Modern Dairy Holdings also closed 2.0% down after losing as much as 2.6%. Chinese food stocks, such as Henan Shuanghui Investment & Development and Muyuan Foodstuff were sharply lower on the news but recovered later in the day, helped by the broader Chinese equity market.

Europe, a big exporter to China, saw its main consumer stocks respond favourably to the announcement on the open of trading.  The Stoxx 600 Food and Beverage index rose by 0.7% and was the biggest gainer in sector terms – with Danone +1.4%, Pernod Ricard +1%, Diageo +0.9% and Nestle +0.6%. While taxes for some medicines, such as antibiotic and insulin products, were reduced from 6%to 2%, major European pharmaceuticals stocks, like Novartis and Glaxo SmithKline ere marked lower in the morning session. As Bloomberg notes, some of the biggest overseas beneficiaries are expected to be P&G, Danone and Nestle.

Among the foreign companies poised to benefit is Procter & Gamble, which gets 8 percent of its sales from Greater China. P&G, the owner of brands such as Crest, Gillette and Tide, may get a lift from cuts to items including diapers, personal care products and dental products. For instance, the tariff on electric toothbrushes will fall from 30 percent to 10 percent.

The government’s plan to eliminate tariffs on some types of milk powder will help companies like Danone and Nestle SA that compete with local brands in the large market for infant formula. The country’s infant formula market will increase about 15 percent to 123 billion yuan ($18.7 billion) by 2020, according to a Goldman Sachs Group Inc. report in October. Chinese parents worried about a series of food-safety scandals often favor foreign brands.

While a welcome move, some commentators think that the impact on China’s trade balance will be fairly muted. Speaking to Bloomberg, Christopher Balding of the Peking University in Shenzhen said “it is unlikely to move the needle much on the trade balance but it is still a small, solid step forward. China is moving to a consumption economy and with so much cross-border commerce streaming in across these product segments, they are under pressure to lower tariffs.

The SCMP quoted Zhao Yang, chief China economist at the Japanese financial services group Nomura, who said the latest tariff cuts were largely symbolic and its boost to imports would be fairly limited. “Despite import tariffs being greatly slashed over the past several years, 17 per cent value added tax remains intact,” he said. Beijing, however, is keen to increase imports as it wants to reduce trade friction with other countries, said Zhao. China is due to hold its first import fair in Shanghai in November 2018.

4. EUROPEAN AFFAIRS

 

Europe trading/Thursday

 

Strong PMI numbers sends the Euro higher as well as all European bourses

 

(courtesy zerohedge)

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7.OIL ISSUES

The author believes strongly that anything above 58 dollars per barrel brings on huge supply from shale.  We should also be cognizant of the huge amount of oil that China is bringing far above what it needs.  It is continually adding to its SPR.  That that stops demand will falter:

 

(courtesyParaskova/OilPrice.com)

8. EMERGING MARKET

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

Euro/USA 1.1865 UP .0015/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES GREEN 

USA/JAPAN YEN 111.41 UP 0.153(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/

GBP/USA 1.3323 UP .0018 (Brexit March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2714 UP .00102(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 15 basis points, trading now ABOVE the important 1.08 level RISING to 1.1865; / Last night the Shanghai composite CLOSED UP 1.90. POINTS OR .06% / Hang Sang CLOSED UP 158.38 POINTS OR 0.53% /AUSTRALIA CLOSED DOWN 0.07% / EUROPEAN BOURSES OPENED ALL GREEN 

The NIKKEI: this FRIDAY morning CLOSED UP 27.70 POINTS OR 0.12%

Trading from Europe and Asia:
1. Europe stocks OPENED ALL GREEN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 158.38 POINTS OR 0.53% / SHANGHAI CLOSED UP 1.90 POINTS OR .06% /Australia BOURSE CLOSED DOWN 0.07% /Nikkei (Japan)CLOSED UP 27.70 POINTS OR 0.12%

INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1288.70

silver:$17.05

Early TUESDAY morning USA 10 year bond yield: 2.342% !!! UP 2 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield 2.766 UP 2 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 93.07 DOWN 14 CENT(S) from WEDNESDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.954% UP 4 in basis point(s) yield from WEDNESDAY

JAPANESE BOND YIELD: +.029% UP 2/5  in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.499% UP 5  IN basis point yield from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 1.825 UP 6 POINTS in basis point yield from WEDNESDAY

the Italian 10 yr bond yield is trading 33 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.360% DOWN UP 1 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1937 UP.0087 (Euro UP 87 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.55 UP 0.306(Yen DOWN 31 basis points/

Great Britain/USA 1.3348 UP 0.044( POUND UP 44 BASIS POINTS)

USA/Canada 1.2694 DOWN  .0018 Canadian dollar UP 18 Basis points AS OIL ROSE TO $58,65

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This afternoon, the Euro was UP 87 to trade at 1.1937

The Yen FELL to 111.56 for a LOSS of 31 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND ROSE BY 44 basis points, trading at 1.3348/

The Canadian dollar ROSE by 18 basis points to 1.2694 WITH WTI OIL RISING TO : $58.26

The USA/Yuan closed AT 6.6018
the 10 yr Japanese bond yield closed at +.029% UP 2/5  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 0 IN basis points from WEDNESDAY at 2.337% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.757 UP 1  in basis points on the day /

Your closing USA dollar index, 92.69 DOWN 53 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00

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

London: CLOSED DOWN 7.60 POINTS OR 0.10%
German Dax :CLOSED UP 51.29 POINTS OR 0.39%
Paris Cac CLOSED UP 10.92 POINTS OR 0.20%
Spain IBEX CLOSED UP 20.70 POINTS OR 0.21%

Italian MIB: CLOSED UP 18.53 POINTS OR 0.08%

The Dow closed UP 31.81 POINTS OR .14%

NASDAQ WAS closed UP 21.80 Points OR 0.32% 4.00 PM EST

WTI Oil price; 58.65 1:00 pm;

Brent Oil: 63.51 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 58.26 DOWN 20/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 20 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.360% FOR THE 10 YR BOND 1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$58.95

BRENT: $63.72

USA 10 YR BOND YIELD: 2.342% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.7630%

EURO/USA DOLLAR CROSS: 1.1938 up .0088

USA/JAPANESE YEN:111.55 UP 0.294

USA DOLLAR INDEX: 92.76 down 46 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3326 : UP 24 POINTS FROM LAST NIGHT

Canadian dollar: 1.2706 UP 6 BASIS pts

German 10 yr bond yield at 5 pm: +0.360%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Surge On Biggest Short Squeeze Since Election As Dollar Dumps To Worst Year Since 2009

Stocks are at record highs (so is debt) so get out and consume America…

 

Ugly week for China…

 

German stocks just could not decide what to do this week after Merkel’s mishaps…

 

But solid EU PMIs seemed to spur manic Euro buying…

 

Unsurprisingly on the most seasonally-bullish week of the year, US stocks were up…Small Caps outperformed (Dow/S&P lagged)

 

S&P closed above 2600 for the first as VIX flash crashed into the early close…

 

Close up shows the instant drop to 8.56 and right back up…

 

On the heels of the biggest short-squeeze since the election…

(shorts squeezed 6 days in a row)…

 

As the machines shrugged off FX carry weakness…

 

Treasury yields were mixed on the week with 2Y up 2bps and 30Y down 2bps…

 

With the yield curve continuing to collapse…

 

The Bloomberg Dollar Index fell for the 3rd straight week…

 

Despite 3 Fed rate hikes, the Bloomberg Dollar Index is having its worst year since 2009…

 

Despite dollar weakness, precious metals were lower on the week as copper and crude jumped…

 

Bitcoin made new record highs this week, but generally trade sideways (as Ether surged)…

 

END

 

Soft data USA PMI’s tumble to a 4 month low and this signals just at most a 2% annual growth, not what Trump is stating at 3%

 

(courtesy zerohedge)

 

US PMIs Tumble To 4-Month Lows, Signal Just 2% GDP Growth

After reassuringly positive Eurozone PMIs, US Manufacturing and Services disapointed with the composite PMI slumping to 5-month lows in November.

  • Flash U.S. Composite Output Index at 54.6 (55.2 in October). 4-month low.

  • Flash U.S. Services Business Activity Index at 54.7 (55.3 in October). 4-month low.
  • Flash U.S. Manufacturing PMI at 53.8 (54.6 in October). 2-month low.
  • Flash U.S. Manufacturing Output Index at 54.3 (54.6 in October). 2-month low.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“US businesses reported another month of solid growth in November, putting the economy on course for a reasonable, though by no means stellar, fourth quarter.

 

Current PMI readings are broadly consistent with GDP growing at an annualised rate of just over 2%.

 

 

“There was also good news on hiring, with a slight uptick in employment growth meaning the surveys are indicating non-farm payroll growth of just over 200,000 in November.

 

“Both input costs and selling price inflation picked up, suggesting the upturn is feeding though to higher price pressures, though some of the manufacturing price hikes were attributable to the short-term effects of the hurricane-related supply chain disruptions.

 

“An upturn in new order inflows means we can expect a strong end to the year, though prospects for 2018 remain more mixed. Although expectations about the year ahead slipped lower in the service sector, future optimism hit a two-year high in manufacturing, suggesting the goods-producing sector may start to make a stronger contribution to the economy in coming months.”

end

 

 

Another dandy from David Stockman how the huge overvalued stockmarket

(David Stockman/ContraCorner)

The Mother Of All Irrational Exuberance

Authored by David Stockman via Contra Corner blog,

You could almost understand the irrational exuberance of 1999-2000. That’s because everything was seemingly coming up roses, meaning that cap rates arguably had rational room to rise.

But eventually the mania lost all touch with reality; it succumbed to an upwelling of madness that at length made even Alan Greenspan look like a complete fool, as we document below.

So doing, the great tech bubble and crash of 2000 marked a crucial turning point in modern financial history: It reflected the fact that the normal mechanisms of honest price discovery in the stock market had been disabled by heavy-handed central bankers and that the natural balancing and disciplining mechanisms of two-way markets had been destroyed.

Accordingly, the stock market had become a ward of the central bank and a casino-like gambling house, which could no longer self-correct. Now it would relentlessly rise on pure speculative momentum—- until it reached an asymptotic top, and would then collapse in a fiery crash on its own weight.

That’s what subsequently happened in April 2000 when the hottest precincts of the stock market—the NASDAQ 100 stocks—-began a perilous 80% dive; and it’s also what happened in the broader markets—–including the S&P 500—in 2008-2009, when a thundering 60% plunge unfolded in a hardly a year’s time.

So with the market raging in self-fueling momentum at the 2600 mark on the S&P 500, we reflect back to the great dotcom crash for vivid reminders of what happens next. That earlier meltdown is especially pertinent because in many ways today’s stock market mania is far less justified than the one back then.

Moreover, the dotcom version was also the first great central bank fueled bubble of modern times—a creature that market participants understandably did not fully grasp. Yet to its everlasting blame, the Fed’s subsequent experiments in reflationary bailouts of the casino gamblers has only caused Wall Street’s muscle memory to atrophy further.

Indeed, after 30 years of Greenspan-style Bubble Finance and two devastating crashes, Wall Street is even more credulous today than it was on the eve of the tech crash. Back then, in fact, there was a considerable phalanx of Wall Street old-timers who warned about the dotcom insanity. Now almost no one sees this one coming.

 

Indeed, today’s nutty forecast by Goldman Sachs that the S&P 500 will hit 3,100 by the end of 2020 makes Greenspan’s earlier bubble blindness look clairvoyant by comparison.

In hindsight, Alan Greenspan did see it coming early on— when he broached the “irrational exuberance” topic in passing during a speech in December 1996. Unfortunately, he has mostly been dinged for being allegedly way too early in making the call.

In fact, we don’t think he was making much of a call at all—he’s was just musing out loud with no intention of reining-in the then rampaging bull. What he actually did was to conduct several gumming fests at subsequent Fed meetings and then diffidently raised interest rates a single time by a pinprick 25 basis point in April 1997.

After that the Maestro (so-called) apparently forgot all about “irrational exuberance” even as that very thing soon began infecting the entire warp and woof of the financial system.

In fact, Greenspan’s fatuous amnesia became so pronounced that by the very eve of the dotcom crash in April 2000, he proved himself blind as a bat when it comes to central bank created bubbles.

Said the Maestro to a Senate committee on April 8 when asked whether an interest rate increase might prick the stock market bubble:

That presupposes I know there is a bubble….I don’t think we can know there is a bubble until after the fact. To assume we know it currently presupposes we have the capacity to forecast an imminent decline in (stock) prices”.

At least he got the latter part right. After the NASDAQ had risen from 835 in December 1996 to 4585 on March 28, 2000—or to an out-of-this-world 5.5X gain in 40 months—-Greenspan wasn’t even sure he was seeing a bubble!

Accordingly, he apparently didn’t have that capacity to predict an imminent decline—although the 51% crash to 2250 by the end of the year would seem to have been exactly that.

Indeed, after unloading the above tommyrot at the tippy-top of the NASDAQ-100 bubble, Greenspan proved himself a clueless, pitiable fool when this giant bubble deflated by 81% over the next two years.

In fact, the index ended up in September 2002 almost exactly where it had been when Greenspan spoke the words “irrational exuberance” and then moved along with the Fed’s printing press at full speed—claiming there was nothing to see.

Still, back then you could almost have made a (lame) excuse for the Fed chairman’s bubble blindness. The Maestro was operating in the early days of monetary central planning and wealth effects management, and its potent capacity to unleash rampant speculation in the financial system was not yet fully understood—-even if the underlying monetary theory defied all the canons of sound finance.

Moreover, in addition to rampant bubbles in the financial market, the Fed’s money pumping during the 1990s did also seem to be producing some seemingly robust real world effects on main street and in the booming new tech part of the economy.

And, in turn, these positive macroeconomic developments were unfolding in a global political/strategic environment that had suddenly become more benign that at any time since June 1914.

Indeed, the outside world fairly buzzed with positive developments. These included the fact that the internet/tech revolution still exuded adolescent vigor, the government’s fiscal accounts were nearing balance for the first time in two decades, the vast market of China was convincingly rising from its Maoist slumber and the Committee To Save the World (Greenspan, Summers and Rubin) had just rescued Wall Street with alacrity from the Long-Term Capital Management (LTCM) meltdown.

Likewise, Europe was launching the single currency and expanding the single market. In place of the Soviet Union, which had disappeared from the pages of history in 1991, Russia, its breakaway republics and the former Warsaw Pact (captive) nations were all bursting out of their statist chains and experimenting with home grown capitalism and reaching out to the west via rising trade and capital flows.

In the US, the combination of the end of the cold war and the internet revolution contributed a doubly whammy to growth and prosperity. When defense spending fell from 7% of GDP on the eve of the Soviet collapse to under 4% by the year 2000, substantial domestic resources were released for private investment and a resulting substantial productivity uplift.

In fact, real private nonresidential investment grew at 7.3% per year from the 1990 pre-recession peak through 2000. That was more than double the still respectable 3.4% rate recorded between 1967 and 1990; and causes the anemic 1.4%real growth of fixed investment between the pre-crisis peak (2007) and 2016 to pale into insignificance.

Notwithstanding all of these positives, however, the great bull stock market of the late 1990s ended-up getting way ahead of itself. That was especially the case during the next 18 months after the Fed’s heavy-handed and somewhat panicked bailout of LTCM in September 1998 had confirmed to the newly energized casino gamblers that the Greenspan Put was most definitely operative.

In the Great Deformation we tracked 12 of the highest-flying big cap stocks (“Delirious Dozen”) during the period between Greenspan’s December 1996 speech and the April 2000 dotcom bust. During this 40-month period, the combined market cap of these 12 leading momo stocks—including Microsoft, Cisco, Dell, Intel, Juniper Networks, Lucent, AIG, GE  and four others—soared from $600 billion to $3.8 trillion.

That eruption did indeed give the notion of trees which grow to the sky an altogether new definition. To wit, the total market cap of the Delirious Dozen grew by 75% per annum for nearly 4 years running; and the future outlook was claimed to be even more fantastic.

For instance, as of mid-2000 Intel was valued at $500 billion and traded at 53X its $9.4 billion of LTM earnings. Yet it was argued that this nosebleed multiple was more than warranted because the company had grown its net income from $1 billion to $9.4 billion during the previous decade, and that there was nothing but blue sky ahead.

Here’s the thing, however. Intel was and is a great company that, in fact, has never stopped growing.

But during the 17 years since mid-2000, its net income growth rate has sharply slowed to just 1.79% per annum; and its $12.7 billion of LTM net income for September 2017 is valued at only 15.7X or $210 billion.

In short, at the peak of the tech bubble Intel’s market cap had vastly outrun its long run-earnings capacity. Even today it has only earned back 40% of its bubble peak valuation.

Likewise, Cisco was valued at $500 billion in July 200 and sported a 185X PE multiple on its $2.7 billion of LTM net income. And it, too, has continued to grow, posting LTM net income of $9.7 billion for September 2017.

Yet today’s earnings are accorded only a 19X multiple after 17 years of 2.4% per annum growth; Cisco’s current $181 billion market cap, in fact, sits at just 36% of its bubble peak.

Even the mighty Mr. Softie has experienced pretty much the same fate. Back in mid-2000, it posted $8.3 billion of LTM net income and was valued at $600 billion or 72X. Today its net income has tripled to $23.1 billion, but its PE multiple has receded to just 29X.

Stated differently, Microsoft’s net income has grown at 6.1% per annum since the company vastly outran it true value back in early 2000. Accordingly, its market cap gained just 0.4% per annum during the last 17 years. That is, it has taken one of the greatest tech companies of all time upwards of two decades to earn back its peak dotcom era bubble valuation.

And when it comes to the industrial and financial conglomerate empire that Jack (Welch) built, the story is even more dramatic. GE’s mid-2000 market cap of $500 billion stands at just $155 billion today; and its PE multiple of 60X has shrunk to just 22X.

In short, that was irrational exuberance back then, and it did not take long for the vast quantities of bottled air in the market cap of the Delirious Dozen to come rushing out. By the bottom in September 2002, four of these companies had vanished into bankruptcy and the market cap of the survivors had imploded to just $1.1 trillion.

That’s a fact and you can look it up in the papers. In less than 30 months, $2.7 trillion of market cap had literally ionized.  And these were the leading companies of the era.

None of them, it might be noted, were valued at 280X shrinking net income, as is Amazon today; or at infinite PE multiples like much of the biotech sector and momo hobby horses like Tesla.

More importantly, the promising macro-economic situation at the turn of the century has given way to a world precariously balanced on $225 trillion of debt and the tottering $40 trillion Red Ponzi of China.

Likewise, the benign geo-strategic environment of that era has long since disappeared into the madness of RussiaGate, endless wars in the middle east and Africa and the incendiary confrontation between the Fat Boy and the Donald on the Korean peninsula.

Finally, after 30 years of rampant monetary expansion the central banks of the world have been forced to reverse direction and begin to normalize interest rates and balance sheets.

And that now incepting and unprecedented experiment in massive demonetization of public debts is coming at a time when—-after 8 years of business cycle expansion—the US, Japan and most of Europe are running monumental “full-employment” budget deficits.

Even then, these reckless fiscal policies are happening in the teeth of a demographically driven tsunami of pension, medical and welfare spending.

For the period just ended, the S&P 500 companies earned $107 per share on an LTM basis—or just 2% more than the $105 per share posted back in September 2014; and also only modestly more than the $85 per share recorded way back at the June 2007 pre-crisis peak.

Stated differently, on a trend basis S&P 500 companies have grown their earnings at 2.33% per annum over the last decade. How that merits a 24.3X PE multiple on today’s 2600 index price is hard to fathom—let alone Goldman’s 3100target for 2020.

Indeed, just to retain today’s absurd PE multiple would require $130 per share of GAAP earnings by 2020 at the Goldman target price.

That’s right. By the end of 2020 we would be implicitly in the longest business expansion in recorded history at 140 months (compared to 118 months in the 1990s),

Furthermore, the term structure of interest rates will be 200-300 basis points higher according to the Fed’s current policies, while the US treasury will be running $1 trillion plus annual deficits and experiencing recurring debt ceiling and financial crises.

Even then you would need 7% annual earnings growth to hold onto today’s 24.2X PE multiple at the Goldman S&P 500 target.

As we said, relative to today’s casino madness and the Goldman fairy tale hockey stick, Alan Greenspan circa April 2000 looks like a model of sobriety by comparison.

So if that was Irrational Exuberance back in April 2000, what we have now is surely the mother thereof.

end

Well that about does it for today

I will see you Monday night

 

HARVEY

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