Nov 28/Gold rises by 55 cents but silver is clobbered by 17 cents as options expiry ends on Thursday/North Korea launches a ballistic missile/Japan has another fake data scandal with materials giant Taray Industries admitting to falsifying reports/A USA government shutdown on Dec 8 looks increasingly possible/Our good friends over at Wells Fargo are being investigated again/

GOLD: $1295.40  UP $0.55

Silver: $16.88 DOWN 17 cents

Closing access prices:

Gold $1293.65

silver: $16.85

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: $1299.89 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1293.15

PREMIUM FIRST FIX: $6.19

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SECOND SHANGHAI GOLD FIX: $1299.89

NY GOLD PRICE AT THE EXACT SAME TIME: $1293.15

Premium of Shanghai 2nd fix/NY:$6.19

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LONDON FIRST GOLD FIX: 5:30 am est $1293.90

NY PRICING AT THE EXACT SAME TIME: $1293.90

LONDON SECOND GOLD FIX 10 AM: $1291.85

NY PRICING AT THE EXACT SAME TIME. 1291.85

For comex gold:

NOVEMBER/

 NUMBER OF NOTICES FILED TODAY FOR NOVEMBER CONTRACT:  0 NOTICE(S) FOR nil 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: 886 for 4,430,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $9893/OFFER $9933 up $168 (morning) 

BITCOIN : BID $9882 OFFER: $9922 // UP $160 (CLOSING)

end

 

For the past eight years or so I have had a very good relationship with the U.S. Commodity Futures Trading Commission. My desire was always to keep the channels of communication open though I knew that the Comex was manipulated on a daily basis.

Always the CFTC, through Mathew Hunter (Bart Chilton’s hand-picked protege), communicated with me on all issues. My deal was not to repeat anything said. I honored that. After learning about the exchange-for-physicals mechanism on the Comex, I raised with the CFTC some important issues about them and initially Hunter responded. However, my last two letters to him have not been acknowledged.

I would like to point out the huge difference in deliveries between New York and London. November is a non-active delivery month in gold and we generally witness around 1.5 tonnes delivered upon. However, when you note the amount of contracts transferred it is a whole different story:  Last month we had approximately 8,000 contracts of gold open interest transferred to London per day or 180,000 contracts or 1.8 million ounces  (560 tonnes). This month it looks like we will have around 9,500 contracts transferred per day or 2 million ounces transferred (620 tonnes). It certainly shows that Comex has a lack of physical metal.

 

Here are my two letters to the CFTC:

 

 

 

 

Dear Mathew:

As you are aware, we have been conversing for the past few years on the subject of gold (and to a lesser extent silver) open interest contraction once we approached an active delivery month.  You originally offered no apparent reason for this phenomena citing confidentiality to which you were not allowed to divulge to me. You never brought up the use of EFP’s to me as I had no idea that they existed.
When I brought up the “newly discovered”  Exchange for Physical” vehicle, you stated that you were well versed in them and not only that but you monitor the private contracts.  You stated that it was quite legal to offer an EFP to a long in a private deal for cash and a deliverable verifiable physical product  and I have since discovered that almost all of our precious metal EFP’s get transferred over for a London Forward.
I was speaking to James Turk who told me that almost all of these EFP’s remain in London seeking whatever physical they can get a hold of.  He informs me that gold and silver are in deep backwardation in price in London and further to that, it is taking 6 weeks- 10 weeks for actual delivery.  He suggests that it is most likely that further payments are issued due to the length of time it takes to deliver the physical gold to our longs.
It would be quite easy for a long to sell in London and buy back a new comex gold position in NY and start the same operation again.  However this is not happening:.
The average EFP on a daily basis or gold is around 8,000 contracts or so PER DAY. So in one month. one would see 180,000 EFP contracts issued .  Over two years,  the transferred comex OI volume would be enormous.  If these were to come back to NY then the comex OI would be enormous and this is not happening
Thus almost all of these gold EFP longs are staying in London trying to obtain whatever gold/silver is available.
However, while this is going on, the bankers continue to supply massive amounts of paper gold/silver knowing with 100% certainty that there is not any physical to supply.
Obviously we have a huge conflict here coupled with zero transparency.  Why are the bankers knowingly supplying huge amounts of paper shorts, influencing the price southbound, knowing full well that they could never deliver upon longs standing.
Why has the CFTC allowed JPMorgan the right to acquire over 600 million oz of physical silver, knowing full well that they are the biggest short at the comex.
The CFTC has stated that the comex is a price discovery mechanism.  Do you still believe that you are reporting on transparency in the gold/silver market?
Gold and silver have higher prices in Shanghai vs NY at the fixes.  With the fact that bullion bank payments pay our comex longs a fiat bonus, one can suggest that the price of spot comex gold/silver is higher that future prices.  The offering of extra cash in London to delay delivery is also indicative of further backwardation and thus scarcity of metal.
I would like the CFTC to address this major issue:
if EFP’s are being used for emergency use (and that emergency use has morphed in a daily occurrence) how do they explain the massive increase in short supply by the bankers knowing full well that they have no metal to supply longs.  It is also obvious that the traditional mantra of the banker hedging is out the window
can you please address this for us
Sincerely
Harvey Organ BScPhm MBA

end

Here is my second letter to the CFTC where I am reporting late entries:
Dear Mathew:
Following my email to you a few days ago, I have noticed strange readings at the Comex.
For example, on November 22 [????] Comex gold reported a loss of 18,949 contracts with a corresponding gain in price of $10.70.
There was also a CME report of 8,101 contracts for exchange for physicals, which give Comex longs a deliverable product that is no doubt a London-based forward. I have been stressing to you that I have witnessed long delays in the reporting of data. It seems that we are having either:
1) Late reporting of open interest even after an exchange-for-physicals has been issued.
Or 2) late reporting of EFPs after final open interest reporting.
You will see what I mean: Here are the last three confirmed comex/CME data reports:
Nov 22:     Comex loss of OI front Month (Gold)    Nov 22: EFP issued       Price gain(loss)
                   -18,949                                               +8101                             $10.70 gain
Nov 21        -9227                                                   +21,428                         $5.10 gain
Nov 20        +28,707                                               +12,711                       _ $19.70 loss 
 
 
average:      481 gain                                             42,240 transfer                 net loss $4.20                                     
Now Silver:
Nov 22:       +1919                                                 +1231                             13 cent gain
Nov 21       -7611                                                    +2998                             7 cent gain
Nov 20       +5,388                                                  + 1078                            45 cent loss
average:     309 gain                                                5307                             25 cent net loss 
If we take an average of the three days, it makes sense. This would be why they are slow in their reporting
The issuance of EFPs does not exactly correspond to a loss in open interest in the front month as the CME is lazy in  reporting.
But eventually the reporting of each side of the transaction is done.
This is a big issue and that is why I asked if the CFTC would consider writing an article on this so that transparency can rule. You stated that you would take that under advisement.
As of yet there have been no CFTC comments on the EFP issue.
all the best
Harvey B Organ BScPhm MBA
end
We have concluded with the Comex options expiry.  We now have the bigger OTC/London’s LBMA options expiry to deal with and they generally expire at around 11 am Thursday Nov 30/2017 which is also First Day Notice.

Let us have a look at the data for today

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In silver, the total open interest FELL BY  A CONSIDERABLE 4033 contracts from 195,118 DOWN TO 191,085 WITH RESPECT TO YESTERDAY’S TRADING  WHICH SAW SILVER REMAIN FLAT AND STILL WELL BELOW THE HUGE $17.25 SILVER RESISTANCE.   WE HAD CONSIDERABLE LONG COMEX LIQUIDATION.   HOWEVER WE WERE ALSO NOTIFIED THAT WE HAD ANOTHER LARGE NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE : 618 DECEMBER EFP’S WERE ISSUED ALONG WITH 209 EFP’S FOR MARCH FOR A TOTAL ISSUANCE OF 827 CONTRACTS.   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. FRIDAY WITNESSED  1670 EFP’S FOR SILVER ISSUED.

RESULT: A SMALL SIZED FALL IN OI COMEX WITH THE FLAT  PRICE.   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 820 EFP’S  WERE ISSUED FOR TUESDAY FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS. IN ESSENCE THE  DEMAND FOR SILVER PHYSICAL INTENSIFIES GREATLY. WE REALLY ONLY LOST  3213 OI CONTRACTS i.e820 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 4033 OI COMEX CONTRACTS.

In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.955 BILLION TO BE EXACT or 136% 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  4425 CONTRACTS WITH THE FAIR SIZED RISE IN PRICE OF GOLD ($6.45) WITH RESPECT TO YESTERDAY’S TRADING.  HOWEVER  THE TOTAL NUMBER OF GOLD EFP’S ISSUED MONDAY FOR TUESDAY  TOTALED ANOTHER 10,304 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 9,579 CONTRACTS AND FEB SAW THE ISSUANCE OF 725 CONTRACTS. ??? (EMERGENCY??)   The new OI for the gold complex rests at 538,796. DEMAND FOR GOLD INTENSIFIES GREATLY. 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 14,729 OI CONTRACTS: 4425 OI CONTRACTS GAINED AT THE  COMEX OI  AND 10,304 OI CONTRACTS NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 9547 EFP’S ISSUED.

Result: A HUGE SIZED INCREASE IN OI  WITH THE FAIR SIZED RISE IN PRICE IN GOLD YESTERDAY ($6.45). WE  HAD AN LARGE  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,304. 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 FOR DELIVERY PURPOSES.  IF YOU TAKE INTO ACCOUNT THE 10,304 EFP CONTRACTS ISSUED, WE HAD A NET GAIN OPEN INTEREST OF 14,729 contracts10,304 CONTRACTS MOVE TO LONDON AND  4425 CONTRACTS ADDED AT  THE COMEX.

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

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

GLD:

Today, no change in gold inventory at the GLD

Inventory rests tonight: 842.21 tonnes.

SLV

TODAY WE HAD NO CHANGES IN SILVER INVENTORY AT 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 4033 contracts from 195,118 DOWN  TO 191,085 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE NO GAIN IN PRICE OF SILVER PRICE (A LOSS OF 0 CENTS ). HOWEVER, OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER HUGE  618  PRIVATE EFP’S FOR DECEMBER (WE DO NOT GET A LOOK AT THESE CONTRACTS)  AND 209 EFP’S FOR MARCH FOR A TOTAL OF 827 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 CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE ADD THE OI LOSS AT THE COMEX (4033 CONTRACTS)   TO THE 827 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A NET LOSS OF  3213  OPEN INTEREST CONTRACTS,

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 0 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). NOT ONLY THAT BUT  WE ALSO  HAD ANOTHER 827 EFP’S ISSUED.. TRANSFERRING OUR COMEX LONGS OVER TO LONDON .  YESTERDAY WE EXPERIENCED 1670 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 MONDAY night/TUESDAY morning: Shanghai closed UP 11.43 points or .34% /Hang Sang CLOSED DOWN 5.34 pts or 0.02% / The Nikkei closed DOWN 9.75 POINTS OR 0.04%/Australia’s all ordinaires CLOSED DOWN 0.06%/Chinese yuan (ONSHORE) closed UP at 6.5987/Oil DOWN to 57.86 dollars per barrel for WTI and 63.23 for Brent. Stocks in Europe OPENED GREEN.    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5987. OFFSHORE YUAN CLOSED DOWN AGAINST  THE ONSHORE YUAN AT 6.5994 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.(MARKETS  WEAK)

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/China/ Japan/Hawaii

The the first time since World War II, Hawaii is preparing to reinstate warning signals to its citizens as they prepare for a North Korean atttack

 

( zero hedge)

ii)As promised, North Korea fires a ballistic missile. Surprisingly the response has been muted

 

( zerohedge)

 

iii)This is not good: the latest North Korean missile test was an intercontinental ballistic missile capable of reaching Washington DC or just about anywhere in the USA

( zerohedge)

 

b) REPORT ON JAPAN

My goodness!! We have another scandal in Japan related to falsifying data as Internet Post exposes the fraud at Toray Industries a huge materials manufacturing giant. The products were sold to tire companies and automobile operations. This is becoming all to frequent as its Chairman bowed his  head in shame as many of their products were used in the manufacture of important products.

 

( zero hedge)

 

c) REPORT ON CHINA

Early last night, a rout on the Shanghai exchange started in earnest only to saved at the bell by their plunge protection team.  The Government has basically banned the selling of large scale number of shares.

( zerohedge)

4. EUROPEAN AFFAIRS

i)Global warming?? Looks like the El Nina effect:  Temperatures will drop to -12 degrees Celsius or 10 degrees F.in Great Britain

( Mac Slavo/SHFTPlan.com)

 

ii)Interesting: Mark Carney states that a “disorderly Brexit” needs a tiny 6 billion pounds added to the banking sector but he is concerned about British bank’s exposure to 35 trillion in derivatives.  Probably 2/3 of these derivatives are interest rate products but no doubt gold/silver paper shorts are high up on the ladder as well

( zerohedge)

 

iii)Italy/Italian banks

My goodness!! A huge 23% of Italian banks  (114 banks) have non performing loans that exceed their tangible assets

( Mish Shedlock/Mishtalk)

 iv)At first there were rumours of a settlement in England’s divorce from the EU. This caused cable (GrBritain Pound/USADollar) to rise.  However the Government denied the UK Telegraph report and down went the pound( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Syria/Israel Russia

This is fascinating:  Putin is mediating a secret deal between Assad and Israel Prime Minister Netanyahu.  The deal is that Israel demands that there will be a 40 kilometer no fly zone from the Golan Heights.  Israel does not want to see any Iranian factory built to manufacture missiles and weapons.

 

( zerohedge)

 

ii)Turkey/USA

I have highlighted this story to you many times due to the presence of gold. In 2014 the uSA stated that nobody could trade with Iran.  Then we heard that a Turkish individual traded Iranian oil for gold to which the Iranians then sold that gold to purchase other stuff. The uSA arrested the trader and now are charging the Turkish banking sector of violating USA sanctions.  This could have a devastating effect on Turkey and its banking sector.  This is the reason why the Turkish lira plummeted today.

(courtesy zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

9. PHYSICAL MARKETS

 

i a) Gold trading this morning; Crime scene

(courtesy zerohedge)

i b)Interesting:  GoldMoney is now expanding into China as they now have a joint venture with large Zhaojin Mining

( GoldMoney/GATA)

ii)Bitcoin is trading at $9900 per coin.  Max Keiser thinks that Bitcoin can rise to 25,000 dollars per coin. He states that it is global currencies that are lowering in value. He states that central governments cannot stop its growth. He think he is wrong..wait until the futures market begins

( Max Keiser/RT/GATA)

iii)Canepa is correct:  central bankers fear cryptos could cost them control of the world’s money supply and they will now try desperately to stop its ascent

( Canepa Reuters)

iv)A good look at Bitcoin’s meteoric rise to $10,000 per coin.  My number two son is proud of owning 1/3 of a Bitcoin and he is ready to sell once the futures market begins

 

( zero hedge)

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

i)This is going to hurt Trump:  wholesale inventories plunge unexpectedly in October and no doubt we will hear from the NY Fed and the Atlanta Fed in their lowering of Q4 GDP

( zerohedge)

 

ib)This came out of the blue:  we now have T Bill anxiety as we may have no deal on a government shutdown on Dec 8.

( zerohedge)

i c)Top Democrats abruptly pull out of the White House meeting with Trump after Trump refuses to back down on his wall.  He wants funding as well to beef up security against illegal aliens

 

( zerohedge)

 

i d)My goodness:  a 16 standard deviation beat in the soft data Richmond Fed manufacturing survey..

go figure.

( zerohedge)

ii)We are witnessing this globally:  today USA home prices are surging at their fastest pace since July 2014.  Is it inflation that is kicking in?

( zerohedge)

iii)These 8 senators do not like the looks of the tax bill.

( zerohedge)

iv)Such fine and upstanding USA citizens:  Wells Fargo is under investigation again for gouging clients

( zerohedge)

v)This is interesting; An Obama appointee, Federal Inspector McCullough has stated on Fox news that he has been threatened by the Clinton campaign over the Email investigation

( ZeroPointnow)

 

vi)

Let us head over to the comex:

The total gold comex open interest RISE BY  4425  CONTRACTS UP to an OI level of 538,796 WITH THE  FAIR SIZED RISE IN THE PRICE OF GOLD ($6.45 GAIN WITH RESPECT TO YESTERDAY’S TRADING).   AS YOU WILL SEE WE DID NOT EXPERIENCE ANY GOLD  LIQUIDATION.  WE DID HAVE ANOTHER LARGE COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED  A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. THE CME REPORTS THAT 9579 EFPS WERE ISSUED FOR DECEMBER AND 725 WERE ISSUED FOR MARCH FOR A TOTAL OF 10,304 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 SUCCEEDED IN ONLY A TINY FRACTION IN SILVER.

ON A NET BASIS IN OPEN INTEREST WE GAINED: 14,729 OI CONTRACTS IN THAT 10,304 LONGS WERE TRANSFERRED AS LONGS TO LONDON AS A FORWARD AND WE GAINED ANOTHER 4425 COMEX CONTRACTS.  NET GAIN: 14,729 contracts or 1,472,900 oz (45.78 tonnes)

Result: a HUGE INCREASE IN COMEX OPEN INTEREST WITH THE FAIR SIZED GAIN IN THE PRICE OF GOLD ($6.45.)   WE HAD THAT NO REAL GOLD LIQUIDATION. TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 14,729 CONTRACTS.

.

We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF 0 CONTRACT(S) REMAINING AT  1. We had 0 notices filed YESTERDAY so WE GAINED 0 contracts or NIL 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 34,627 contracts DOWN to 93,032.  January saw its open interest GAIN OF 303 contracts UP to 1665. FEBRUARY saw a gain of 37,233 contacts up to 348,899. DEMAND FOR GOLD VERY STRONG

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

PRELIMINARY VOLUME TODAY ESTIMATED;  228,760

FINAL NUMBERS CONFIRMED FOR FRIDAY:  473,854

 

comex gold volumes are increasing dramatically

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And now for the wild silver comex results.

Total silver OI FELL  BY 4033 CONTRACTS  FROM 195,118 DOWN TO 191,085 WITH YESTERDAY’S 0 CENT LOSS IN PRICE. HOWEVER WE DID HAVE ANOTHER STRONG 618 PRIVATE EFP’S ISSUED FOR DECEMBER AND 209 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: 827.  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. THIS PROCESS HAS JUST STARTED IN EARNEST IN SILVER.  HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS.  WE HAD CONSIDERABLE  LONG SILVER COMEX LIQUIDATION YET DEMAND FOR PHYSICAL SILVER REMAINS STRONG AS MANY MORE CONTRACTS MIGRATE OVER TO THE PHYSICAL HUB OF OUR PRECIOUS METALS, LONDON. ON A NET BASIS WE LOST 3213 OPEN INTEREST CONTRACTS:  4033 CONTRACTS LEAVE THE COMEX BUT OF THAT 827 NAVIGATE OVER TO LONDON.

The new front month of November saw its OI RISE by 1 contract(s) and thus it stands at 2. We had 1 notice(s) served YESTERDAY so we gained 2 contracts or an additional 10,000 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 13,643 contracts DOWN to 31,952.   January saw A GAIN OF 29 contracts RISING TO 1656.

We had 0 notice(s) filed for 5,000 oz for the NOV. 2017 contract

INITIAL standings for NOVEMBER

 Nov 28/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
 1607.500 oz
HSBC
50 kilobars
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
40,054.496
oz
HSBC
No of oz served (contracts) today
 
0 notice(s)
NIL 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  1 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:  40,054.496 oz

total customer deposits 40,054.496  oz

We had 1 customer withdrawal(s)

 

i) out of Scotia:  1607.500 oz

Total customer withdrawals: 1607.500 oz

we had 1 adjustment(s)

Out of HSBC: 1,162.798 oz was adjusted out of the dealer account and this landed into the customer account of HSBC

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 0 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 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. (1 contracts) minus the number of notices served upon today (0 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 + {(1)OI for the front month minus the number of notices served upon today (0) x 100 oz which equals 106,500 oz standing in this active delivery month of NOVEMBER (3.312 tonnes)

WE GAINED 0 ADDITIONAL CONTRACTS OR NIL 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 28) WE HAD 77,556 GOLD CONTRACTS STANDING AND THIS COMPARES TO 93,032 TODAY . THIS YEAR THERE HAPPENS TO BE  2 DAYS LEFT BEFORE FDN.  LAST YEAR THERE WERE 2 DAYS BEFORE FDN WITH THE ABOVE READINGS WERE TAKEN. THE OPEN INTEREST FOR DECEMBER IS EXTREMELY HIGH. ON NOV 29.2016 WE HAD 30,773 CONTRACTS REMAIN WITH ONE TRADING DAY BEFORE FDN. DECEMBER 2017 REMAINS HIGHLY ELEVATED AT THIS TIME IN THE DELIVERY CYCLE.

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 512,949.308 or 15.954 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,914,844.991 or 277.28 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 77 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 28/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil
Deposits to the Dealer Inventory
 nil oz
Deposits to the Customer Inventory 
 599,629.400 oz
HSBC
No of oz served today (contracts)
0 CONTRACT(S)
(NIL,OZ)
No of oz to be served (notices)
2 contract
(10,000 oz)
Total monthly oz silver served (contracts) 886 contracts(4,430,000 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 0 deposit(s) into the dealer account:

total dealer deposit: nil oz

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

we had 0 customer withdrawal(s):

TOTAL CUSTOMER WITHDRAWAL  nil oz

We had 1 Customer deposit(s):

i) Into HSBC: 599,629.400 oz

***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: 599,629.400 oz

we had 1 adjustment(s)

i) From HSBC: 4,079,310.292 oz was adjusted out of the customer account and this landed into the dealer account.

 

The total number of notices filed today for the NOVEMBER. contract month is represented by 0 contract(s) 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 886 x 5,000 oz = 4,430,0000 oz to which we add the difference between the open interest for the front month of NOV. (2) 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: 886 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(2) -number of notices served upon today (0)x 5000 oz equals 4,440,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.

We gained 2 contract(s) or an additional 10,000 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 27,148 NOTICES STANDING FOR DELIVERY FOR SILVER(NOV 28).  THIS YEAR 29,917 BUT WITH ONE EXTRA TRADING DAYS LEFT.  ON NOV 29/2016 WE HAD 11,855 CONTRACTS STANDING WITH ONE DAY LEFT IN TRADING.

ON FIRST DAY NOTICE FOR THE DECEMBER 2016 CONTRACT WE HAD 15.282 MILLION OZ STAND.

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 77,556
CONFIRMED VOLUME FOR YESTERDAY: 126,738 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 126,738 CONTRACTS EQUATES TO 634 MILLION OZ OR 90.5% 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: 48.233 million
Total number of dealer and customer silver: 233.685 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 2.4 percent to NAV usa funds and Negative 2.3% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.3%
cash .+.3%( Nov 28/2017)

WILL UPDATE LATER TONIGHT

2. Sprott silver fund (PSLV): NAV RISES TO -0.77% (Nov 28 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.63% to NAV (Nov 28/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.77%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.63%/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 28

Nov 27 Strange!! we gold up by $6.40 today, we had a good sized withdrawal of 1.18 tonnes from the GLD. Here is something that is also strange: we have had exactly 1.18 tonnes of gold withdrawn from the comex on 5 separate occasions in the past 30 days..explanation?

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 28/2017/ Inventory rests tonight at 842.21 tonnes

*IN LAST 281 TRADING DAYS: 98.74 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 216 TRADING DAYS: A NET 58.54 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 27.43 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

 

Nov 28/no change in silver inventory at the SLV/Inventory rests at 317.130 million oz.

Nov 27/NO CHANGE IN SILVER INVENTORY DESPITE A ZERO GAIN IN PRICE /QUITE OPPOSITE TO GOLD WHICH SAW 1.18 TONNES OF GOLD WITHDRAWN DESPITE A RISE IN PRICE OF $6.40

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 28/2017:

Inventory 317.130 million oz

end

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

+ 1.63%
12 Month MM GOFO
+ 1.84%
30 day trend

end

 

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Goldcore:

Bitcoin $10,000 – Huge Volatility of Cryptocurrencies and Risky Fiat Making Gold AttractiveNovember 28

– Bitcoin tops $10,000, soaring more than 850% since beginning of 2017
– Irrational exuberance arguably main driver of price performance
– Google Trends shows search for ‘Bitcoin Bubble’ hit highest level this morning

– Buyers need to be aware of hacking and security risks
– Other primary risks to widespread adoption is volatility and liquidity risk
– World’s largest online trading platform IG Markets suspends BTC trading

– Volatility of cryptocurrencies and risky world of fiat make gold attractive

Bitcoin topped $10,000 on some exchanges yesterday to much fanfare and animal spirits internationally.

With a 850% surge in less than a year, bitcoin has seen gains that are four times more than dot-com stocks gains at their height in the late 1990s. This is making the first and arguably the best cryptocurrency look like it is an ever-growing bubble which will no doubt hurt many speculative punters when it finally goes ‘pop’.

Bitcoin’s market cap is over $160 billion and more than that of General Electric, a company that has been in existence since 1892 and has nearly 250,000 employees.

When you look on Google Trends and see the search for ‘Bitcoin Bubble’ reach a peak as the price probes $10,000 then you know that many owners and non owners of the cryptocurrency are beginning to get worried. Although a contrarian might say that the widespread concerns of a bubble mean that we may be in the early stages of the bubble.

Bitcoin has many factions concerned. Central bankers are worried about its impact on financial markets, merchants are confused if they should be accepting it or not, exchanges are terrified they’ll get a large sell order and some gold investors are even wondering if they should have invested in Nakamoto’s invention rather than the world’s oldest form of money.

Jitters are seriously beginning to show and yet the price keeps climbing. However high price does not necessarily equal validation. High price in this case is partly a sign of irrational exuberance. It is a sign of a market that is playing a short-game, blinkered by the mounting risks to which the bitcoin and cryptocurrency markets are exposed.

Bubblecious Bitcoin

Dr Constantin Gurdgiev, finance professor, respected market commentator and former non-executive adviser to GoldCore warned of a speculative bubble:

…at this point in time, bitcoin price can be potentially driven solely by expectations held by its enthusiasts, plus the incentives by the predominantly China-based investors to avoid extreme risks of capital controls and expropriations. If so, both drivers would make it a speculative bubble.

The problem with bitcoin is not that they are worth nothing. They are clearly worth something, if anything just because of the work that goes into creating them but also because there are people willing to make an economic exchange for them.

The problem with bitcoin is that while adoption is surging, it is still amongst a tiny section of the population – primarily the tech community and millennials. There are varied estimates but is believed that some 0.01% of the world’s population holds a bitcoin wallet (not even bitcoin as many have wallets and accounts but have not bought).

The case for its potential is utterly compelling but it is as yet unproven with many potential competing digital currencies – state and private.

So what we are left with is a cycle of irrational exuberance, speculation and FOMO (fear of missing out).

There is some value to bitcoin and the tech is excellent and compelling. The dot com bubble did not burst because dot com stocks were completely useless, it burst because everyone became overexcited and a highly speculative “get rich” scheme. The same can be send for tulip mania.

As evidenced by our publishing and trading online and the growth of social media and e- commerce in recent years, there was some value and great tech in the dot com era. The same will be seen with bitcoin, but most likely once the bubble has burst and the FOMOs have scarpered and moved onto the next great think … possibly gold and silver bullion. Only then will we see it’s true potential.

As Michael J.Casey explained, the current bitcoin market has the hallmarks of a bubble now because of its immaturity. It needs to grow up quickly in order to move past this bubble phase.

The problem I have with the immaturity of bitcoin’s investing culture is not that it’s setting the market up for a correction. It’s that it constrains progress toward attaining the technology’s more fundamental social value.

Speculation is unavoidable, even useful in bootstrapping innovation. But if bitcoin is to change billions of lives, it needs to become a more mainstream asset class, one that’s connected to the real world that those people occupy. As much as we might all love this quirky, abnormal “honeybadger of money,” bitcoin needs to become more normal.

It needs more stability. It needs a two-way market.

The lack of a two-way market means there is increased volatility and a significant lack of liquidity. This can even create security risks for even the most professional of platforms.

On Monday IG Group told the Financial Times it had ‘suspended trading of some of its bitcoin derivatives on Monday after roaring demand for the products left the company facing a high security risk.’

This is an asset-class which does not have years of data for analysts and investors to find support and understanding for their trading decisions. This makes the market nervous especially with such low liquidity. Hence this is a speculators game at present and one which makes even the most professional of platforms run scared.

Should gold investors be crying themselves to sleep?

Inevitably, bitcoin’s performance results in many commentators declaring that gold is dead and bitcoin has replaced it. This is only based on the cryptocurrency’s price action. In reality there is little to compare between the two.

If the bitcoin price action and its mere existence have any impact on gold then it can only be a good thing.

The birth of cryptocurrency in the last decade has caused many to realise that fiat currency does not have to be the only way in which one stores their wealth. Indeed it is not an optimal way to save for the long term – especially in these era of low to negative interest rates.

Like gold, bitcoin threatens central bankers’ control of the banking system and money supply, which could undermine the monetary policies they use to manage inflation. These same policies which so many savers and investors lose out from.

It has also made people aware of the risks they are exposed to when investing. These means they are looking for further diversification in their portfolios, to be found with both gold and cryptocurrencies.

It is probably a good idea to have a small exposure to bitcoin, after all it is proving to be a worthy hedge against geopolitical upset this year. If nothing else, it makes sense as the technology is powerful and will be used in some form in the coming years and it makes sense to get familiar with the technology.

The main sources of concern and risks with bitcoin are the low liquidity and the high security risks. Neither of these exist with physical, allocated and segregated gold bullion bars and or coins. Current gold investors are well aware of this. Soon others will be too.

Many who get out of bitcoin as the bubble springs a leak will be putting that capital into gold as they seek an alternative to the volatility of cryptocurrencies and the dangerous world of fiat.

This is not an unhackable bubble

Low liquidity and security risks are at the forefront of the bitcoin bubble. IG Group’s decision to suspend trading of bitcoin derivatives was a direct result of these two issues.

The more cryptocurrency IG, or any broker. holds, the greater the security risk for them. They are exposed on two fronts.

Firstly hackers are circling such exchanges like sharks around a dying whale calf. Secondly, in order to meet bids, exchanges have to go out into the market and buy the underlying asset. This exposes them to often unregulated exchanges given the lack of availability of bitcoins.

So suddenly you have two major counterparty risks. Two risks that bitcoin (as a ‘digital gold’) was apparently designed to avoid.

With risks such as these one has to ask if investors are holding them for security of diversification out of the fiat system, or for speculation. If it is the latter, as we suspect, then we are facing bubble with very significant security risks.

We have seen multiple hacking attempts and successes in the bitcoin space. There have been some major disasters and some major saves. However, this bubble is growing which arguably exposes the exchanges to the risk of low liquidity and counterparties, more than it does security.

Markets could go haywire once sellers realise they can no longer exit their positions, i.e. this is not a two-way system.

Buy gold and bitcoin, but only expect the grown-up to protect you

When you invest in physical, allocated and segregated gold you can be sure that the above scenario is not the case. The gold market is a several- century old set-up. One which has moved with the times in terms of security but kept to old-school beliefs when it comes to keeping counterparties to an absolute minimum.

We often discuss the risks of ‘digital gold‘, pooled gold which is exposed to risks on a number of levels. Bitcoin has different but similar risks – how to own it in a safe way.

It is these risks which should stop people from rushing into bitcoin and from comparing it to gold.

As we concluded in our recent coverage of the ongoing bitcoin versus gold debate:

The debate is not about bitcoin versus gold but instead about investors and savers protecting themselves from the rapid devaluation of fiat currencies.

Bitcoin is new and volatile, with much to prove. Gold has been in existence as money and a store of value for millennia, not to mention all of it’s other roles.

Investors should continue to pay attention to the bitcoin chatter due to the narrative it offers around changing attitudes to money and the economy. However, they must remember that the debate is about security of savings and value. This is where gold is currently the only real contender for protecting your diversified portfolio.

END

Tuesday morning :9:30 /Gold trading

 

Your usual and customary crime scene which is totally ignored by our regulators

 

(courtesy zerohedge)

 

It’s 930amET, Do You Know Where Your Gold Slammer Is?

Right on time, a heavy volume seller struck the precious metals complex right as the US equity market opened…

 

 

Of course the real driver of this is the JPY-pair that is pumped higher to juice the equity open…

 

And Silver was slammed back below $17.00…

 

end

 

Gold trading: 130 pm immediately after North Korea fires another ballistic missile;

 

(courtesy zerohedge)

 

Gold Jumps, Nasdaq Dumps Into Red After North Korean Missile Launch

Following headlines that North Korea test-fired its first ICBM since September, US equity markets have stumbled (Nasdaq now red for the day), gold jumped (spot testing towards $1300) while the dollar and bond yields drop…

Gold and bonds bid as stocks and the dollar are offered…

 

And Nasdaq is now red…

 

Interesting:  GoldMoney is now expanding into China as they now have a joint venture with large Zhaojin Mining

 

(courtesy GoldMoney/GATA)

GoldMoney expands into China in venture with Zhaojin Mining subsidiary

 Section: 

Goldmoney Announces Joint Venture Letter of Intent with Zhaojin Mining to Launch Goldmoney® China

Company Announcement
Thursday, November 23, 2017

TORONTO — Goldmoney Inc. (TSX:XAU), a gold-based financial service and technology company, today announced that following several months of negotiations and planning, founders Roy Sebag and Josh Crumb have signed a non-binding letter of intent in Zhauyuan, Shandong Province, China, at the headquarters of Zhaojin Mining, formalizing a joint venture framework whereby Goldmoney, Taojinyn, and Zhaojin will together launch and operate a local version of Goldmoney in mainland China that will be named Goldmoney China.

The framework agreement outlined in the letter follows an extensive period of analysis of the local market by Goldmoney, leading to the architecture of a local version of Goldmoney that will comply with all local rules and regulations for the ownership of gold and precious metals, while introducing the Goldmoney brand, software innovation, intellectual property, and thought leadership through Goldmoney Insights to the world’s largest precious metals market. A definitive agreement and official founding of the joint venture is expected to close by the end of the year.

While further details will be provided at or near the official launch date, scheduled for February 2018, the Goldmoney China framework agreement calls for the local Goldmoney business to be operated by a 20-person team in a new office in Beijing’s Chao Yang Technology district adjacent to the Taojinyn offices. Taojinyn, which is China’s first digital gold service, and its founder Yuming Zhao will run the operation and will own a 51-percent share of the Joint Venture. Zhaojin Mining is Taojinyn’s largest shareholder. …

… For the remainder of the announcement:

https://www.goldmoney.com/corporate/news/goldmoney-announces-joint-ventu.

END

Bitcoin is trading at $9900 per coin.  Max Keiser thinks that Bitcoin can rise to 25,000 dollars per coin. He states that it is global currencies that are lowering in value. He states that central governments cannot stop its growth. He think he is wrong..wait until the futures market begins

(courtesy Max Keiser/RT/GATA)

Bitcoin could devour the whole financial world, RT’s Max Keiser suspects

 Section: 

Bitcoin Crushing US Dollar and Governments Can Do Nothing to Stop It: Max Keiser

From Russia Today, Moscow
Monday, November 27, 2017

While some have suggested bitcoin’s meteoric rise signals a potential cryptocurrency bubble, RT’s Max Keiser says fiat currencies like the U.S. dollar are collapsing against it.

“I think we are seeing fiat currencies in a hyperinflationary collapse against bitcoin,” he said, adding that we’ll see a major price correction somewhere at the $25,000 per bitcoin level. “Up until that price is achieved, it looks like we’ll see a pretty strong upward move.”

On Monday the digital currency smashed another all-time high, trading above $9,700 on growing signs of mainstream adoption by institutional investors.

According to Keiser, there is a huge market for other cryptocurrencies but bitcoin has an entrenched network that is now growing exponentially. It is beyond the reach of any competition, of any nation-state, and any cooperation to defeat it, the host of “Keiser Report” said.

“Bitcoin is a perfect currency, something that is utterly changing the global finance and market and is putting banksters and the central banks out of business,” which, according to Keiser, “should be applauded because they’ve been horribly bad actors. We need to get rid of them and let bitcoin transform our world.”

He also suggested an interesting scenario that bitcoin could become “something of a financial black hole” with all cash that is currently invested in stocks and bonds moving into bitcoin. That will lead to a stock or bond market crash, or both, as “we see the price of bitcoin move into that $25,000 range.”

“That’s something that no central bank or country will be able to stop, and it’s becoming a real scenario, a real threat.” …

… For the remainder of the report:

https://www.rt.com/business/411058-bitcoin-fiat-money-keiser/

END

Canepa is correct:  central bankers fear cryptos could cost them control of the world’s money supply and they will now try desperately to stop its ascent

 

(courtesy Canepa Reuters)

 

Central bankers fear cryptos could cost them control of the world

 Section: 

Bubble or Breakthrough? Bitcoin Keeps Central Bankers on Edge

By Francesco Canepa
Reuters
Monday, November 27, 2017

FRANKFURT, Germany — Central bankers say the success of bitcoin and other cryptocurrencies is just a bubble.

But it keeps them awake at night because these private currencies threaten their control of the banking system and money supply, which could undermine the monetary policies they use to manage inflation.

With bitcoin smashing through the $8,000 level for the first time this week after a 50 percent climb in eight days, they are also worried they will be blamed if the market crashes.

This is why several central banks are advocating regulations to impose control. Others are even looking at whether to introduce their own digital currency and are testing payment platforms.

“The problem with bitcoin is that it could easily blow up and central banks could then be accused of not doing anything,” European Central Bank policymaker Ewald Nowotny told Reuters.

“So we’re trying to understand whether bank activity in relation to cryptocurrency trading needs to be better regulated.” …

… For the remainder of the report:

https://uk.reuters.com/article/uk-bitcoin-cenbank-banks/bubble-or-breakt..

end

A good look at Bitcoin’s meteoric rise to $10,000 per coin.  My number two son is proud of owning 1/3 of a Bitcoin and he is ready to sell once the futures market begins

 

(courtesy zero hedge)

Visualizing The Journey To $10,000 Bitcoin

It has been a breakthrough year for the world’s original cryptocurrency. At time of publication, the bitcoin price is at $9,650 – about 10X higher than how the cryptocurrency started the year. Further, as Visual Capitalist’s Jeff Desjardins notes, bitcoins are now on the brink of passing the important psychological barrier of $10,000, and it could do so at any moment based on current momentum.

Today’s infographic from Blockchain Intelligence Group helps to visualize the ups and downs of the cryptocurrency on its journey to $10,000.

Courtesy of: Visual Capitalist

Note: once the price hits the $10,000 barrier, we’ll do a final update on this graphic to make sure that’s represented.

THE JOURNEY TO $10,000 BITCOIN

Here are some of the key events that transpired over the last 11 months:

And here is how long it took bitcoins to hit each $1,000 barrier:

Note: These time periods are calculated based on closing prices for the Bitcoin Price Index on Coindesk.

THE YEAR OF THE ICO

While the journey to $10,000 bitcoin is an incredible one, it is part of a wider story as well.

Initial Coin Offerings (ICOs) for other cryptocurrencies have also boomed, and more than 92% of all funds raised through ICOs happened in this year alone. With this mechanism hitting the mainstream, about $3.8 billion have been raised through ICOs in total.

Further, they’ve been profitable as well for speculators. A report from Mangrove Capital last month noted that the average return across 204 ICOs it was tracking was 1,320%.

Despite being temporarily banned in China and South Korea, ICOs have not been slowing down. So far in this month (up to Nov 26, 2017), ICOs have already hit new highs with $743.2 million raised, surpassing the earlier record-holding month of September 2017 ($662.9 million).

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Your early TUESDAY 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 6.5987/shanghai bourse CLOSED UP AT 11.43 POINTS .34% / HANG SANG CLOSED DOWN 5.34 POINTS OR 0.02%
2. Nikkei closed DOWN 9.75 POINTS OR 0.04% /USA: YEN RISES TO 111.33

3. Europe stocks OPENED GREEN  /USA dollar index RISES TO 93.07/Euro FALLS TO 1.1893

3b Japan 10 year bond yield: FALLS TO . +.04/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.15/ 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:: 57.66  and Brent: 63.23

3f Gold UP/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 DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.343%/Italian 10 yr bond yield DOWN to 1.772% /SPAIN 10 YR BOND YIELD DOWN TO 1.461%

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

3k Gold at $1295.60 silver at:17.12: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 19/100 in roubles/dollar) 58.30

3m oil into the 57 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 111.33 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 0.9827 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1674 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 FALLING to +0.350%

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 2.339% early this morning. Thirty year rate at 2.772% /

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

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

European Stocks, US Futures Rise, Dollar Steady Ahead Of Powell Hearing, Tax Debate

 

US equity futures in the green ahead of critical Senate debate on US tax reform and a much anticipated testimony from Yellen replacement Jerome Powell for Fed’s current policy approach.  European stocks advance, led by oil and gas stocks after Shell fully restored its cash dividend and unveiled a bullish outlook. Asian shares slide despite the reappearance of the Chinese “National Team” which stabilized the SHCOMP selloff in the last hour. USD recovers gradually from overnight lows against G-10, pushing GBP/USD and EUR/USD to session lows, while oil and treasuries edged lower.

In a rerun of Monday’s overnight trading, it has been another choppy session without key catalysts to set market direction according to Bloomberg. While the dollar rebounded, commodity FX was pressured by a consistent grind lower in copper and oil futures, while reports of Russia not committing to OPEC cut extension coupled with a Goldman report warning the OPEC meeting this week may disappoint weighed on crude. U.S. equity futures approach yesterday’s highs in early trading while core fixed income product hold in a tight range, as peripheral EGB spreads are marginally tighter. The flattening Treasury curve pivots around 7Y sector before today’s auction.

After an early selloff, European equities traded higher across the board (Eurostoxx 500 +0.4%) in what has been a relatively light session thus far in terms of macro newsflow. On a sector specific basis, energy names are the notable outperformers with oil & gas heavyweight Shell (+3.0%) top of the FTSE 100 after restoring its full cash dividend as it emerges from the crude-oil slump with investor sentiment spurred by the company lifting their guidance for free organic cash flow and the company’s intention to carry out at least $25bln in share buybacks between 2017 and 2020. Meanwhile, miners lagged as metal prices continued to slide while material names lag given the movements in metals markets during Asia-Pac trade which has subsequently capped gains in the mining-heavy FTSE100.

Most of Asia was in the red, with Hong Kong’s China Enterprises Index leading the losses. Shares drifted from decade highs as Chinese stocks stumbled for a second straight session, with confidence dented by rising bond yields as Beijing intensified a crackdown on risky financing, threatening to squeeze corporate profits. Additionally, Chinese shares traded in Hong Kong fell amid concerns the country’s regulators will limit the flow of mainland funds into the city’s stocks, while mainland equities rebounded after the National Team made a long-awaited reappearance. The MSCI Emerging Market index was up 0.2 percent

The CSI300 index has jumped 22 percent in 2017 so far, with the gains concentrated in a handful of large index-weighted stocks. “The question is whether further downside in Chinese mainland equities continues in the session ahead and will there be a spillover into Hong Kong and potentially even Japan, Korea and Australia?” asked Chris Weston, Melbourne-based chief strategist at IG Markets.

The yen reversed gains after a rally partly fueled by a Kyodo News report that Japan detected radio signals suggesting North Korea is preparing for a missile launch. 10yr JGBs were mildly supported at the open after gains in T-notes and as Japanese markets began on a cautious note, although upside was capped as sentiment briefly improved and after an uninspiring 40yr auction result.

The Bloomberg Dollar Spot Index swings between losses and gains as intraday traders dominate price action; leveraged accounts are waiting for Powell testimony and tax plan developments before adding positions according to Bloomberg.  The USD Index recovered some lost ground after Monday’s slide, but remains heavy just under the 93.000 handle as bearish sentiment persist (mostly over US tax reform uncertainty, ‘lowflation’ and Fed policy implications beyond December). EUR back to pivoting the 1.1900 level vs the USD, but underpinned on pull-backs below the big figure with bulls still positioned for a test of 1.1961 ahead of 1.2000 and 1.2033 before September 8’s YTD peak at 1.2092. Elsewhere, sterling drifted and Ireland’s bonds rose despite controversy engulfing the Irish government and threatening Brexit talks escalated.

The BoE said none of Britain’s major lenders would need to raise extra capital if the country crashed out of the European Union, the first time it had come to such a conclusion since it started stress-testing banks in 2014. But the chances of a hard Brexit were increased by the prospect of a snap election in Ireland which could be called as early as Tuesday, and which would complicate a key Brexit summit next month.

Euro zone government bond yields were pinned to recent lows as the Irish government teetered, with 10-year German yields – the regional benchmark – dropping to 0.33%, barely 2 basis points of the November lows.  “If we have snap elections and then if a Brexit deal is in jeopardy then it will have a major impact,” said DZ Bank analyst Sebastian Fellechner. “It could lead to a risk-off environment and be a disruptive factor in this very calm market.”

The yield on 10-year Treasuries was unchanged at 2.33% while the UST yield curve flattens.

On the commodities front, copper and nickel led industrial metals lower as weakening Chinese macro data and slowing home sales increase concern about the outlook for demand in the world’s top user. WTI was down 55 cents at $57.56 amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts. Brent crude futures were down 54 cents to $63.30. Spot gold inched lower to $1,293.11.

Today, investors will turn their focus to the U.S. where the Fed Chair nominee Jerome Powell faces his Senate confirmation hearing in Washington. In a statement to the Senate Banking Committee ahead of the meeting, he signaled broad support for how the Fed operates, regulates and guides the economy.

“His opening comments support current market expectations that his appointment as Fed Chair is likely to maintain monetary policy continuity. The Fed’s recent comments have signaled more concern over persistently low inflation, which has been weighing on the US dollar,” wrote MFUG currency analyst Lee Hardman.

Meanwhile, the Senate tax bill is headed for a marathon debate this week with the aim to hold a floor vote as early as Thursday.

Scheduled earnings include Bank of Nova Scotia, Autodesk. Economic data include wholesale inventories, consumer confidence. Jerome Powell is set for his confirmation hearing to head the Federal Reserve.

Overnight Bulletin Summary from RanSquawk

  • A slew of central bank speak from the likes of Powell, Dudley and Kashkari has done little to move the USD with all eyes now on Powell’s hearing
  • European equities enter the North American crossover in positive territory with energy names the outperformers due to gains in Royal Dutch Shell
  • Looking ahead, highlights include US Wholesale Inventories, Fed’s Powell and Harker

Markets Snapshot

  • S&P 500 futures up 0.12% to 2,604.75
  • STOXX Europe 600 up 0.3% to 386.15
  • MSCI Asia down 0.1% to 172.10
  • MSCI Asia ex Japan up 0.1% to 564.24
  • Nikkei down 0.04% to 22,486.24
  • Topix down 0.3% to 1,772.07
  • Hang Seng Index down 0.02% to 29,680.85
  • Shanghai Composite up 0.3% to 3,333.66
  • Sensex down 0.3% to 33,620.80
  • Australia S&P/ASX 200 down 0.08% to 5,984.25
  • Kospi up 0.3% to 2,514.19
  • German 10Y yield fell 0.5 bps to 0.337%
  • Euro down 0.03% to $1.1894
  • Italian 10Y yield fell 2.7 bps to 1.519%
  • Spanish 10Y yield fell 0.8 bps to 1.465%
  • Brent Futures down 0.8% to $63.35/bbl
  • Gold spot down 0.08% to $1,293.45
  • U.S. Dollar Index up 0.1% to 93.00

Top Overnight News

  • The U.S. Senate tax bill faces a crucial committee vote Tuesday as Republicans try to push it through to full Senate passage by the end of the week. Two top members of the Senate’s budget panel may block tax bill if no changes are made.
  • All OPEC members support extending their oil production cuts until the end of 2018, although Russia hasn’t yet committed to the proposal before Thursday’s meeting in Vienna, said people familiar with the matter
  • OPEC’s in a quagmire, foreshadowing disappointment for oil bulls counting on the group and its allies extending output curbs by nine months, according to Goldman Sachs
  • Fed’s Dudley says the U.S. economy is finally in the vicinity of full employment, and, as a consequence of that, the Fed is removing monetary accommodation
  • BOE Governor Mark Carney doubled down on his warning that a Brexit transition period is needed to avoid disruption to the financial industry, saying a period of 18-24 months would be the minimum required; Brexit May Mean BOE Ramps Up Buffer for U.K.’s Banks Again
  • The controversy engulfing the Irish government and threatening Brexit talks escalated, as the release of a cache of emails threatened to further undermine the nation’s deputy leader and bring an election closer
  • The China Securities Regulatory Commission is suspending approvals for some mutual funds that plan to allocate more than 80% of their portfolios in Hong Kong-listed shares, according to people briefed on the matter; the Hang Seng China Enterprises Index pared losses after retreating as much as 1.8%
  • Shell Restores Full Cash Dividend as It Emerges From Slump
  • Temasek Is Said to Prepare $1 Billion Zuellig Pharma Stake Sale
  • Roark Is Said to Reach $2.4 Billion Buffalo Wild Wings Deal
  • Powell Defends Status Quo at Fed Before His Confirmation Hearing
  • EPA to Hold Its One Hearing on Climate Rollback in Coal Country
  • Chinese Rival to Elon Musk Is Said to Face Crunch at Car Startup
  • Credit Suisse CEO Says Very Positive About U.S., World Growth
  • Cyber Monday Largest Online Sales Day Ever at $6.59b: Adobe
  • USDA Beef Graders Given More ‘Flexibility’ to Override Cameras
  • Manafort Bankers, Associates Summoned to Talk to Manhattan D.A.

Asia stocks were downbeat on what was a choppy session amid a lack of drivers and a humdrum lead from Wall St. ASX 200 (-0.1%) and Nikkei 225 (-0.1%) were indecisive with the Japanese benchmark at the whim of currency swings, while Toray shares were among the worst performers after the Co. fell afoul of ethical standards and became the latest to admit to product data falsification. Shanghai Comp. (+0.3%) and Hang Seng (Unch) were intiially subdued, with underperformance in the latter following reports that the CSRC are to postpone approval of ‘south-bound’ funds which plan to invest over 80% in the Hong Kong stock market. However, both bourses pared losses heading into their respective closes. Finally, 10yr JGBs were mildly supported at the open after gains in Tnotes and as Japanese markets began on a cautious note, although upside was capped as sentiment briefly improved and after an uninspiring 40yr auction result. PBoC injected CNY 130bln via 7-day, CNY 110bln via 14-day and CNY 10bln via 63-day reverse repos. PBoC set CNY mid-point at 6.5944

Top Asian News

  • Hong Kong’s China-Fueled Equity Rally Is Now at Beijing’s Mercy
  • Bitcoin ‘Arms Race’ Proves a Boon for These Asian Companies
  • Malaysia Names New Central Bank Deputy as Analysts See Rate Hike
  • Chinese Bank Said to Seek Insolvency Proceedings for RCom
  • Noble Group Foe Iceberg Makes Fresh Attack on Embattled Trader
  • S.Korea Says Chance of N.Korea Declaring Nuke Completion in 2018
  • China Bond Rout Is ‘Early Warning Signal’ to Global Debt Market

European equities trade higher across the board (Eurostoxx 50 +0.3%) in what has been a relatively light session thus far in terms of macro newsflow. On a sector specific basis, energy names are the notable outperformers with oil & gas heavyweight Shell (+3.0%) top of the FTSE 100 despite scrapping their scrip dividend programme (as previously touted) with investor sentiment spurred by the company lifting their guidance for free organic cash flow and the Co.’s intention to carry out at least USD 25bln of share buybacks between 2017 and 2020. To the downside, material names lag given the movements in metals markets during Asia-Pac trade which has subsequently capped gains in the mining-heavy FTSE100. The main stock specific mover has been Ocado (+18.25%) amid investor relief that the Co. has finally been able to strike an international partnership. Bunds appear to have settled down somewhat after some volatile trade in decent volumes (turnover 120k+) that saw the German benchmark bond extend both sides of the range. Market contacts noted offers around 163.21-22 resistance (encompassing yesterday’s session high), with the sellers looking for a pull-back to 163.11, which was duly achieved via what looks like some spread positioning for the Dec17 expiry and roll into Mar18. Indeed, the lows so far is 163.07 and presumably intraday shorts covered or at least booked some profits before the subsequent rebound to a fresh 163.32 peak. Technically, 163.30 and 163.40 are still preventing further upside and protecting this month’s 163.63 high, so far, while bears will note that a 50% retracement of Monday’s move equates to 162.98, with stops said to be in place if 162.95 fails to hold – hence, the 10 year debt future is still ensconced within the broader parameters. Elsewhere, UK Gilts have been mostly outperforming between 125.24- 50 vs Monday’s 125.21 close with today’s DMO tender in the long-end being well-received by the market with a 2.1b/c. USTs have also seen more heavy rolls activity with over 60k lots of the Dec17/Mar18 spread said to have been sold on top of 300k+ contracts late yesterday.

Top European News

  • BOE Says Stress Test Shows Banks Can Withstand Disorderly Brexit
  • SocGen to Take Fourth-Quarter Charges of as Much as $678 Million
  • Siemens Gamesa Gets 950MW Turbine Order from Vattenfall
  • Vestas Wins 100 MW Order in U.S. With 4 MW Platform

In FX markets, the USD Index has recovered some lost ground after Monday’s slide, but remains heavy just under the 93.000 handle as bearish impulses persist (ie ongoing US tax reform uncertainty, ‘lowflation’ and Fed policy implications beyond December). EUR back to pivoting the 1.1900 level vs the USD, but underpinned on pull-backs below the big figure with bulls still positioned for a test of 1.1961 ahead of 1.2000 and 1.2033 before September 8’s YTD peak at 1.2092. Nearest support seen at 1.1837. JPY has been very volatile trade vs the Dollar amidst risk-on/off sentiment swings overnight, with the headline pair back above 111.00, but still relatively close to yesterday’s 110.90 approx 10 week lows.

In commodities, WTI and Brent crude futures have continued to drift lower in European trade after breaking below the prior session’s lows where prices dropped over 1.0% to below USD 58/bbl. Energy newsflow remains light, however, Goldman Sachs have suggested that oil risks are skewed to the downside as a 9-month OPEC/non-OPEC extension seems to be already priced in. In metals markets, gold trade has been relatively uneventful in tandem with a flat greenback whilst copper extended this week’s pullback amid the dampened risk tone. Additionally, Chinese metals trade was hampered by concerns related to steel demand which saw Shanghai nickel prices drop over 3.5%.

Looking at the day ahead, the most significant event today will likely be the Fed Chair nominee Jerome Powell’s confirmation hearing (10am EST / 3pm GMT). Also worth noting is a likely meeting between President Trump and Democratic and Republican congressional leaders with the discussion expected to focus on a federal spending plan to prevent a partial government shutdown post funding expiring on December 8th. Away from this, the Fed’s Dudley speaks overnight while later in the day the Fed’s Harker is due to speak. In the US the October advance goods trade balance, October wholesale inventories, September FHFA house price index, September S&P/CoreLogic house price index, November consumer confidence and November Richmond Fed manufacturing index prints are all due.

US Event Calendar

  • 8:30am: Advance Goods Trade Balance, est. $64.9b deficit, prior $64.1b deficit, revised $64.1b deficit
  • 8:30am: Wholesale Inventories MoM, est. 0.4%, prior 0.3%; Retail Inventories MoM, prior -1.0%
  • 9am: FHFA House Price Index MoM, est. 0.5%, prior 0.7%; House Price Purchase Index QoQ, prior 1.6%
  • 9am: S&P CoreLogic CS 20-City MoM SA, est. 0.3%, prior 0.45%; YoY NSA, est. 6.04%, prior 5.92%
  • 10am: Conf. Board Consumer Confidence, est. 124, prior 125.9; Present Situation, prior 151.1; Expectations, prior 109.1
  • 10am: Richmond Fed Manufact. Index, est. 14, prior 12

DB’s Jim Reid concludes the overnight wrap

This week will rest on what comes out of the Senate. The tax bill was on track for a full Chamber vote by the end of the week, potentially as early as this Thursday. However, late in the evening, two members of the Senate Budget Committee (Senator Johnson & Corker) noted they may not agree to vote the bill out of the committee and send it for debate. Once this is sorted, the GOP need at least 50 votes to approve the bill in the Senate (GOP control 52 seats). Of the half dozen undecided Republican Senators, Mr Rand Paul has now publicly given support to the bill, but Senator Johnson and Senator Daines have both said they’re against the current bill, instead seeking more generous treatment for partnerships and limited liability companies. In response, Senate Finance Chairman Hatch noted “we’re going to make them happy, but we’re not sure we can do exactly what they want to do”. The Senate Majority Whip Mr Cornyn confirmed yesterday he is still confident he will get the 50 votes. Expect the tension on tax to build as the week progresses.

Staying with the US, in his prepared remarks for the confirmation hearing before the Senate Banking Committee, the new Fed Chair Mr Powell broadly conveyed a message of continuity, he noted that “we expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink” and our aim is to sustain a strong jobs market with “inflation moving gradually to  toward our target”. On reforms, he said “we will…consider appropriate ways to ease regulatory burdens while preserving core reforms”.

Over in Germany, progress to form the new coalition government appears to be heading in the right direction. Ms Merkel took a conciliatory tone, noting “we are ready to start talks with the SPD” and “know such talks require compromise”. She stressed that the starting point was that partners should support a balanced budget and broadly pro-business policies. This was echoed by CDU board member Jens Spahn, who noted “of course we have to move toward each other…make compromises”, but “no one (should) make demands that the other party definitely can’t meet”. On the other side, the leader of the SPD Mr Schulz has also softened his resistance to forming a grand coalition with Merkel’s party as he noted “no option is off the table”, but added “we’re entering into talks and we don’t know where they’ll lead”. Looking ahead, Ms Merkel and Mr Schultz are expected to formally meet with President Steinmeier this Thursday to discuss next steps.

Moving to the US holiday season shopping tally, early feedback suggests Cyber Monday is on track to become the biggest US online shopping day ever. Adobe analytics (which measures 80% of transactions at the largest 100 web retailers) noted that as of 4:30pm (local time), US$3.4bn has been spent online and total sales is on track to reach US$6.6bn (+16% yoy) by midnight. The use of  mobile phones for online shopping have set a new record, accounting for 45% of website visits. For those looking for gift ideas, Adobe found that the top online selling items on Black Friday included: Nintendo Switch, Hatchimals, L.O.L surprise and ride-on cars for kids.

This morning in Asia, we are digesting the latest North Korea news. Kyoto news and TBS reported late in the European session that Japan have detected radio signals that suggest a missile launch is being prepared. Markets are broadly lower, with the Nikkei (-0.30%), Hang Seng (-0.89%) and China’s CSI 300 (-0.72%) all modestly down, while the Kospi is up 0.22% as we type.

Now recapping market performance from yesterday. US equities were little changed, with the S&P 500 (-0.04%) and Nasdaq (-0.15%) marginally down while the Dow rose 0.10%. Within the S&P, modest gains in the utilities and telco sectors were broadly offset by losses from energy (-1.03%) and material stocks following weakness in oil. European markets pared back gains and closed modestly weaker following the North Korean news that came out before the close. The Stoxx 600 and the DAX both fell -0.46%, impacted by mining and energy stocks, while the FTSE was down -0.35%.

Government bonds were firmer with core yields down 1-2bp, in part driven by the North Korean headlines above. The UST 10y was down 1.1bp, while Gilts were flattish (+0.3bp) and Bunds & OATs both fell c2bp. Turning to currencies, the US dollar index gained 0.13% while Euro and Sterling weakened 0.29% and 0.13% respectively. The JPYUSD rose 0.38% back to mid-September levels.  Elsewhere, the South Africa’s Rand rebounded 2.92% after Moody’s declined to follow S&P in downgrading the local currency debt to junk status.

In commodities, WTI oil retreated -1.88% from its two year high, in part as some investors are concerned whether OPEC members will extend production cuts this month given the oil price has risen back near levels that could induce more onshore shale production in the US. Elsewhere, precious metal were little changed (Gold +0.46%; Silver -0.02%) while other base metals softened following weaker Chinese macro data (Copper -0.61%; Zinc -0.91%; Aluminium -0.30%).

Away from the markets and onto central bankers commentaries. The Fed’s Kaplan noted a rate hike “in the near future….will likely be appropriate”, although reiterated that the removal of monetary policy support should be in a gradual manner and that the neutral interest rate is likely c2.5%. On inflation, he noted some downward factors are transitory, but some are due to structural forces, which “are limiting the pricing power of businesses and are likely to have a muting effect on wage pressure for certain type of workers”. On regulation, he favours a “prudent review of Dodd-Frank and the Volcker rule” and regulatory relief for “small and mid-sized banks”, but cautioned that maintaining strong macroprudential policies for big banks is very important. Elsewhere, he reiterated several labour market indicators suggests the US economy is “at or near full employment”. Finally, the Fed’s Kashkari noted the Fed can “put the brakes on” when inflation starts rising. The implied odds of a December rate hike per Bloomberg is currently 96% (+4ppt from Friday).

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November Dallas Fed Manufacturing survey was lower than expectations but remained solid at 19.4 (vs. 24 expected), while the new orders index eased 4.8pts to 20.0. Elsewhere, the October new home sales were above market at 685k (vs. 625k expected) and grew 6.2% mom (vs. -6.3% expected), which has led to annual growth of 18.7% yoy – the highest in a decade. Given new home sales are recorded at contract signing, the recent uplift should bode well for permits in the coming months.

In Italy, the November confidence indicators retreated from its decade high in October and were slightly lower than expectations. Consumer (114.3 vs. 116.5 expected) and manufacturing confidence (110.8 vs. 111.8 expected) were both slightly below market, while economic sentiment came in at 108.8, marginally below last month’s reading (vs. 109.1).

Looking at the day ahead, the most significant event today will likely be the Fed Chair nominee Jerome Powell’s confirmation hearing (10am EST / 3pm GMT). Also worth noting is a likely meeting between President Trump and Democratic and Republican congressional leaders with the discussion expected to focus on a federal spending plan to prevent a partial government shutdown post funding expiring on December 8th. Away from this, the Fed’s Dudley speaks overnight while later in the day the Fed’s Harker is due to speak. Economic releases in Europe include October money and credit aggregates data for the Euro area and German and French consumer confidence. In the US the October advance goods trade balance, October wholesale inventories, September FHFA house price index, September S&P/CoreLogic house price index, November consumer confidence and November Richmond Fed manufacturing index prints are all due.

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 11.43 points or .34% /Hang Sang CLOSED DOWN 5.34 pts or 0.02% / The Nikkei closed DOWN 9.75 POINTS OR 0.04%/Australia’s all ordinaires CLOSED DOWN 0.06%/Chinese yuan (ONSHORE) closed UP at 6.5987/Oil DOWN to 57.86 dollars per barrel for WTI and 63.23 for Brent. Stocks in Europe OPENED GREEN.    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5987. OFFSHORE YUAN CLOSED DOWN AGAINST  THE ONSHORE YUAN AT 6.5994 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.(MARKETS  WEAK)

3 a NORTH KOREA/USA

NORTH KOREA/CHINA/Japan/Hawaii

The the first time since World War II, Hawaii is preparing to reinstate warning signals to its citizens as they prepare for a North Korean atttack

 

(courtesy zero hedge)

 

Hawaii Reinstates Cold-War Era Warning To Prepare For North Korean Attack

Authored by Mac Slavo via SHTFplan.com,

The previously retired air raid warning sirens from the Cold War era in Hawaii will be wailing again come December. Only this time, it’s due to the rising tensions between the United States and North Korea.

Hawaii has long been a military defense outpost, sparking fears that North Korea could target the island.

 “I suppose that’s necessary as a precaution,” said Ted Tsukiyama, a Hawaiian resident, and WWII veteran.

 

“But I don’t think North Korea is gonna attack,” Tsukiyama said. “They’d be foolish to threaten South Korea or Japan or the United States.”

But the concerns are growing as North Korean leader Kim Jong-un has repeatedly threatened to drop a bomb over the Pacific Ocean, and President Donald Trump has threatened North Korea with “fire and fury” and designated North Korea as a state sponsor of terrorism.  In turn, North Korea has continually failed to abide by the United Nations sanctions placed on them, as they advance their weapons of mass destruction.

Sirens were installed around Hawaii after the second world war started, according to Tsukiyama, and there would be periodic tests.

“I remember hearing the sirens going off. The radio would give us a warning: ‘This is only a test, don’t get alarmed,’” said Tsukiyama, who was born and raised in Hawaii.

According to Vern Miyagi, administrator of the Hawaii Emergency Management Agency (HI-EMA), which is part of the state’s Department of Defense, the chances North Korea will act are unlikely, but making sure Hawaii is prepared is still vital. 

“If North Korea launches against us or our allies, the retaliation would be complete and they would defeat North Korea’s ambition to continue its regime. The regime would probably end,” explained Miyagi.

He notes Hawaii is protected under the U.S. Pacific Command’s defensive umbrella, the anti-ballistic missile system, and it is home to the Pacific Command, the military’s headquarters for the Asia-Pacific region.

Miyagi has pointed out that “Hawaii is a likely target because we’re closer to North Korea than most of the continental United States…As we track the news and see tests, both missile launches, and nuclear tests, it’s the elephant in the room. We can’t ignore it. People of Hawaii need to know what Hawaii is doing in preparation for this.”

Hawaii has been ramping up their preparations in advance for a potential nuclear attack by North Korea.

The Aloha State is currently attempting to educate its 1.4 million residents, as well as its visitors, on how to prepare for a nuclear attack.  Hawaii has become one of the first states in the nation to initiate a nuclear preparedness campaign and starting December 1, it will reinstate the “attack warning” siren, which it hasn’t tested since the Cold War. The siren will follow the monthly “attention alert” signal, which warns people of an incoming tsunami or hurricane.

The state has also been holding community meetings and broadcasting public service announcements on TV and the radio to prepare people for a possible attack.  Gone are the days of “duck and cover” during the Cold War; today, the mantra is “shelter in place,” preferably in a concrete structure. Officials also recommend having enough food and water to survive for 48 hours and being prepared with supplies to last up to 14 days.

If North Korea launches a missile, officials estimate it would only take 20 minutes to reach its destination.  It would take about five minutes for the United States government to determine where the missile is going, which would leave about 12 to 15 minutes to warn the public.

end

As promised, North Korea fires a ballistic missile. Surprisingly the response has been muted

 

(courtesy zerohedge)

b) REPORT ON JAPAN

 

My goodness!! We have another scandal in Japan related to falsifying data as Internet Post exposes the fraud at Toray Industries a huge materials manufacturing giant. The products were sold to tire companies and automobile operations. This is becoming all to frequent as its Chairman bowed his  head in shame as many of their products were used in the manufacture of important products.

 

(courtesy zero hedge)

Japan, Inc. Rocked Again: Toray Admits To Falsifying Data After Internet Post Exposes Fraud

Corporate Japan’s credibility, already teetering after a barrage of corporate fraud and falsification scandals in recent months, hit another low after Toray Industries, one of Japan’s biggest materials manufacturers, joined a list of companies admitting to falsifying data. On Tuesday, Toray announced it had uncovered 149 cases of data fabrication at its subsidiary, Toray Hybrid Cord, in three products sold to tire companies and autoparts makers: tire cords, cords for car hose belts and cords for paper making. According to Nikkei Asian Review, the subsidiary made the products look as though they met customer requirements. The company admitted that 13 domestic and overseas companies, including at least one South Korean company, are affected.

In a statement issued roughly around the time president Akihiro Nikkaku was bowing to news reporters as Japanese management tends to do when caught engaging in criminal activity, Toray maintained that the “amount by which the data was adjusted to fit customer contract standards was insignificant.” The company believed there were no safety issues involved. Toray Hybrid Cord discovered the problem during a July 2016 internal compliance check, with Toray president Akihiro Nikkaku being informed of the matter the following October.


Toray President Akihiro Nikkaku bows at a news conference in Tokyo on Nov. 28

Explaining why it took more than a year to disclose the falsification, Nikkaku said at a news conference in Tokyo on Tuesday morning that the company would usually not have revealed such data falsification, as there were no safety concerns or violations of law. He added that Toray would normally settle the matter with customers privately.

But it was what he said next that was truly, and  sublimely bizarre moment: “We found a post on the internet in early November [2017] that said our subsidiary was falsifying data, and we had some of our shareholders and customers contacting us about the issue. In order to clarify the situation, we decided it was best to go public.”

Yes, when you are exposed is usually a good time to go public…

Nikkaku also revealed that Toray was in the midst of conducting a group-wide investigation into other possible malpractices, and that there were still 137 cases remaining to be examined. As well as supplying fabrics to casualwear manufacturer Uniqlo, Toray also provides carbon fiber to Boeing. “I believe that there are no irregularities in our products to big customers like Boeing or Fast Retailing,” Nikkaku said, referring to the U.S. aircraft maker and Uniqlo’s parent.

Toray’s admission of fraud is only the latest in a series of data falsification scandals that have rocked Japan’s materials manufacturers in recent months. Kobe Steel admitted to falsifying data in early October, while Mitsubishi Materials came forward last week and said it had been doing the same at three of its subsidiaries.

But Toray’s admission may have wider repercussions since the company is home to Sadayuki Sakakibara, current chairman of the Japan Business Federation, or Keidanren, Japan’s biggest business lobby.

And in a moment of sublime irony, it was only on Monday during a regular news conference that Sakakibara had said he was “very disappointed” by Mitsubishi Materials’ data rigging, and that the string of scandals was “a serious situation that could affect trust in Japanese companies.” Meanwhile, Toray’s data falsification started in 2008 while Sakakibara was president of the company.

Oops.

Nikkaku noted that Sakakibara was made aware of Toray’s falsification after Monday’s news conference, and that he was requested to “deal with the situation sincerely.” Toray’s shares plunged on Tuesday, ending the day at around 1,046, down 5.3% from Monday’s close.

 

c) REPORT ON CHINA

 

Early last night, a rout on the Shanghai exchange started in earnest only to saved at the bell by their plunge protection team.  The Government has basically banned the selling of large scale number of shares.

(courtesy zerohedge)

4. EUROPEAN AFFAIRS

Global warming?? Looks like the El Nina effect:  Temperatures will drop to -12 degrees Celsius or 10 degrees F.in Great Britain

 

(courtesy Mac Slavo/SHFTPlan.com)

(courtesy zerohedge)

UK Banks Can Withstand “Disorderly Brexit” But Need Additional £6BN; $35 Trillion In Derivatives Affected

For the first time since it (belatedly) began conducting stress tests in 2014, none of the UK’s major banks need to raise additional capital. More importantly, the Bank of England and the system could withstand a disorderly Brexit. As Bloomberg recaps, “the stress-test scenario therefore encompasses a wide range of U.K. macroeconomic risks that could be associated with Brexit,” the BoE said. As a result, it “judges the U.K. banking system could continue to support the real economy through a disorderly Brexit.”

This year’s stress tests, described as the toughest ever, were outlined by the Financial Times as follows:

In the stressed scenario, which the BoE said included a 50 per cent drop in US equity markets, a rise in UK unemployment to 9.5 per cent and a 33 per cent fall in British house prices, the capital levels of the country’s seven biggest banks fell from 13.4 to 8.3 per cent of risk-weighted assets. But the BoE said that since the start of the year, the banks have increased their average capital levels to 14.4 per cent. It added that capital levels have more than trebled since the 2008 financial crisis.

The stress test estimated that the UK banking system in aggregate would incur losses of £50bn within the first two years in this scenario. A decade ago, this would have wiped out its entire capital base. The tests assumed that the banks stopped paying bonuses, dividends and additional Tier 1 debt coupons. Five of the seven major banks, HSBC, Lloyds Banking Group, Santander UK, Standard Chartered and the Nationwide Building Society passed without reservations. As expected, the weakest banks were Royal Bank of Scotland and Barclays. While both failed the stress tests based on end-2016 data, they had increased capital via disposals during the current year.

The BoE did acknowledge that tough as they were, the stress tests did not reflect a worst-case scenario. Indeed, a hard Brexit in combination with “a severe global recession and stressed misconduct costs” could force them to drawn down their capital buffers substantially more – in which case lending to the broader UK economy would be damaged.

The BoE confirmed that would go ahead with an increase in the counter cyclical capital buffer in a year’s time when it will become binding. The 0.5% increase to 1.0% is a broader defence against macroeconomic risks. According to the FT.

The Bank of England is forcing UK banks to hold an extra £6bn in capital to guard against risks beyond that of Brexit, as it called on the UK and the European Union to introduce legislation to avoid a post-Brexit crisis in derivatives and insurance markets.

The BoE said on Tuesday that it is raising a special buffer half a percentage point, to 1 per cent, to lock in capital that banks are currently holding voluntarily. The aim is for lenders to better withstand against “material” macroeconomic risks beyond Brexit, such as global debt levels, asset valuations and misconduct costs.

The idea of the buffer is to force lenders to put aside more capital during good times to draw down upon in bad. At 1 per cent — which is the level the BoE considers to be the right level in a “standard” risk environment — lenders need to hold around £11.4bn in aggregate.

The banks have sufficient capital to cover the £6 billion increase, but will need to incorporate this new requirement within their regulatory capital buffers. The BoE’s Financial Policy Committee will review the adequacy of the capital buffer again during the first half of 2018 and the central bank warned that it could be raised again.

Turning to the tricky subject of Brexit, BoE Governor Mark Carney noted that if the UK left in a “sharp and disorderly” way, there would be “an effect on households and businesses; there will be some pain associated with that. This is about minimising that, dampening that.”

Carney also flagged other potential risks from Brexit. For example, the collection of insurance premiums from six million UK customers who have insurance policies with EU companies and 30 million European policy holders sending payments the other way. Then there’s the mind boggling £26 trillion ($34.6 trillion) of notional uncleared OTC derivative contracts, about a quarter of which the BoE says could be difficult for “financial firms to service”. The central bank estimates that about £12 trillion of these contracts mature after 1Q 2019. According to the BoE, there is no precedent for moving such huge volumes of contracts into new legal entities.

“Each major dealer will have several thousand counterparties, with whom contracts will require renegotiation, potentially impacting tens of thousands of underlying clients. There are no precedents for these large-scale novations within an 18-month period. Effective mitigation of the risk, other than through a bilateral agreement, would require EEA states to legislate to protect the long-term servicing of existing contracts with UK counterparties and the UK government.”

The FT commented on Carney’s plea for a transitional agreement.

Mr Carney told the press conference a transitional arrangement should be agreed — “the sooner the better”. The BoE would like an implementation period of at least 24 months, he added. Pushing a four-point action plan, the BoE repeated calls for lawmakers on both sides of the Brexit negotiations to agree a transitional arrangement. Regulators have previously said that an agreement needs to be in place by Christmas otherwise financial companies will start to launch their worst-case contingency plans.

He said the point of the check list was to “catalyse” action and to ensure that secondary legislation can be drafted and approved to deal with the vast amounts of derivatives contracts and insurance policies that are facing legal uncertainty. Both UK and EU legislation would be needed to ensure continuity, he added.

The BoE also warned that UK lawmakers needed to get a legal and regulatory framework in place so that after the so-called Withdrawal Bill, secondary legislation can be swiftly agreed, which deals with much of the detailed financial regulation on which the system depends.

So, Brexit and OTC derivative uncertainties notwithstanding, it all sounds rather reassuring with the BoE benchmarking the banks against its “toughest ever” stress tests. However, we are finding it difficult to overcome a couple of nagging doubts. Regulators are always backward looking and fighting the last crisis, rather than the next one. Furthermore, thanks to the intervention of Mark Carney and his colleagues, this credit bubble is considerably larger and more global than the previous one. Carney can worry about that another day, if he’s still in the UK.

end

 

Italy/Italian banks

My goodness!! A huge 23% of Italian banks  (114 banks) have non performing loans that exceed their tangible assets

(courtesy Mish Shedlock/Mishtalk)

114 Italian Banks (Roughly 23%) Have NPLs Exceeding Tangible Assets

Authored by Mike Shedlock via www.themaven.net/mishtalk,

114 Italian banks have non-performing loans that exceed tangible capital. Ratios above 100% are signs of severe stress…

The headline image is from the from ilsole24ore.com. The article is dated March 25, 2017. The translated headline reads “Here are the 114 Italian banks at risk for suffering

The image shows 24 banks where non-performing loans total 200% or more of tangible assets.

The image title “Texas Highest Rate” refers to a measure of banking stress called the “Texas Ratio“.

The Texas Ratio was developed by Gerard Cassidy and others at RBC Capital Markets. It is calculated by dividing the value of the lender’s non-performing assets (NPL + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves.

In analyzing Texas banks during the early 1980s recession, Cassidy noted that banks tended to fail when this ratio reached 1:1, or 100%. He noted a similar pattern among New England banks during the recession of the early 1990s.

Texas Ratio Analysis

In 2012, the Dallas Fed did an article on the So-Called Texas Ratio.

“So-called” pertains to a discussion as to whether or not the measured should be renamed the “Georgia Ratio”.

Georgia Ratio?

US vs Italy (6% vs 23%)

At the peak of the SNL crisis in the 1980s, just over 5% of US banks had Texas ratios over 100%.

In the Great Financial crisis the number approached but did not top 6%.

In Italy, 114 of “almost” 500 banks have NPLs that exceed tangible capital.

If were to add real estate owned (bank-owned real estate) to the Italian banks, they would be in even worse shape.

2015 Data

The caveat in this analysis is the article’s numbers are from 2015. But are Italian banks better or worse today?

I suspect worse.

Target2 Analysis

Meanwhile, Target2 imbalances from Italy continue to mount.

In case you missed it, please consider my November 9 article Italy Target2 Imbalance Hits Record €432.5 Billion as Dwindling Trust in Banks Plunges.

It is no coincidence that Target2 imbalances are on the rise as faith in banks collapses. Target2 is a measure of capital flight, despite the ECB’s assurances to the contrary.

Italy owes creditors (primarily Germany), a record €432.5 Billion that will never be paid back except by an ECB emergency bailout.

end

At first there were rumours of a settlement in England’s divorce from the EU. This caused cable (GrBritain Pound/USADollar) to rise.  However the Government denied the UK Telegraph report and down went the pound

(courtesy zerohedge)

Cable Crumbles After Government Denies Telegraph Report On Brexit Divorce Bill Agreement

Update: That did not last long. Shortly after The Telegraph report hit the wires, AP reports that Brexit talks between the UK and European Union are continuing as officials played down suggestions that a deal has been reached on the so-called divorce bill.

 Reports suggested an agreement in principle has been reached which would see Theresa May increase her offer and pay between £40 and £49 billion (45-55 billion euro).

A British source said they did not recognise the figure in the Daily Telegraph and stressed that talks were ongoing in Brussels.

Cable has reverted back lower after tagging intraday highs…

*  *  *

As we detailed earlier, The Telegraph is reporting that British and EU negotiators have reached a deal over the so-called ‘Brexit bill’, opening the door to a potential breakthrough in the talks this December.  According to the report, that the final figure, which is deliberately being left open to interpretation, “will be between €45bn and €55bn, depending on how each side calculates the output from an agreed methodology.

Telegraph quotes sources on both sides who have confirmed that “an agreement-in-principle has now been reached” over the EU’s demand for a €60bn financial settlement ahead of a crucial lunch meeting next Monday between Theresa May and Jean-Claude Juncker, the European Commission president.  As a result of the breakthrough on money, only two major obstacles are left open to overcome in order to make progress when the European Council meets on December 14-15. These are defining the role of the European Court of Justice in governing the agreement on the rights of 3.2m EU expats in the UK after Brexit, and the continued row between London and Dublin over avoiding a return of a hard border in Northern Ireland.

And while Cable has surged on the news…

…. what is far more interesting is that it took FX algos nearly 10 minutes after the Telegraph report was published and distributed, before they reacted.

It appears that all FX “trades” now desperately need a Bloomberg headline to scan, such as this one…

  • UK, EU SAID TO REACH AGREEMENT ON BREXIT DIVORCE BILL:TELEGRAPH

… in order to make the decision to buy.

If anything, today’s Brexit “breakthrough” more than anything demonstrates again just how devoid of human traders the market has become, and how reliant on central news platforms such as Bloomberg, the algos have become.

From The Telegraph.

British and EU negotiators have reached a deal over the so-called ‘Brexit bill’, opening the door to a potential breakthrough in the talks this December, the Telegraph has learned. Sources on both sides confirmed that an agreement-in-principle has now been reached over the EU’s demand for a €60bn financial settlement ahead of a crucial lunch meeting next Monday between Theresa May and Jean-Claude Juncker, the European Commission president.

 

Two sources confirmed that the terms were agreed at a meeting in Brussels late last week after intense back-channel discussions led by Oliver Robbins, the UK’s chief Brexit negotiator. The Telegraph understands that the final figure, which is deliberately being left open to interpretation, will be between €45bn and €55bn, depending on how each side calculates the output from an agreed methodology.

Prior to this news, it had been thought that the UK was prepared to offer about 40 billion Euros, although its bargaining position was perceived to be relatively weak given the internal divisions within May’s government and growing pressure to reach a deal from UK-based businesses. As The Telegraph notes, there are still two further sticking points which will need to be resolved before the European Council will sanction the next phase of negotiations, e.g. resolving trade issues.

Although it remains true that ‘nothing is agreed until everything is agreed’, sources said the breakthrough on money effectively now leaves only two major obstacles to overcome in order to make progress when the European Council meets on December 14-15. These are defining the role of the European Court of Justice in governing the agreement on the rights of 3.2m EU expats in the UK after Brexit, and the continued row between London and Dublin over avoiding a return of a hard border in Northern Ireland.

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

 

This is fascinating:  Putin is mediating a secret deal between Assad and Israel Prime Minister Netanyahu.  The deal is that Israel demands that there will be a 40 kilometer no fly zone from the Golan Heights.  Israel does not want to see any Iranian factory built to manufacture missiles and weapons.

 

(courtesy zerohedge)

Putin Is Mediating A Secret Deal Between Assad And Netanyahu, Bombshell Report Reveals

A bombshell report that Israeli Prime Minister Benjamin Netanyahu has threatened to attack all Iranian facilities and assets within 40 kilometers (25 miles) of Israel’s Golan Heights is circulating in Israeli media. The story, first picked up by The Jerusalem Post based on Israeli and Arab sources, also indicates that intense and potentially breakthrough back channel diplomacy between Assad and Netanyahu is currently being mediated via Vladimir Putin.

Though unconfirmed, what appears to be an ultimatum by Netanyahu could be the catalyst that finally pushes the Levant either toward broader war, or in the direction of de-escalation and regional stability after months of intensifying and provocative Israeli airstrikes on Syria and a corresponding war of words. The report also follows on the heels of a rare and unexpected visit of Assad to Sochi, Russia where he met with Putin just prior to trilateral talks between Russia, Iran, and Turkey over the future of Syria.


SAM defense system (Image Source: Iran Review)

Netanyahu himself recently met with Putin in a reportedly contentious summit in August where the Israeli prime minister declared, “We cannot forget for a single minute that Iran threatens every day to annihilate Israel. Israel opposes Iran’s continued entrenchment in Syria. We will be sure to defend ourselves with all means against this and any threat.”

And now after months of Israel issuing threats of “red lines” concerning Iranian troop and militia presence in Syria, The Jerusalem Post reveals the following:

Kuwaiti newspaper Al Jarida revealed on Sunday that an Israeli source disclosed a promise from Jerusalem to destroy all Iranian facilities within 40 kilometers (25 miles) of Israel’s Golan Heights.

 

The source, who remains unnamed, said that during Syrian President Bashar Assad’s surprise visit to Russia last week, Assad gave Russian Premier Vladimir Putin a message for Prime Minister Benjamin Netanyahu: Damascus will agree to a demilitarized zone of up to 40 kilometers from the border in the Golan Heights as part of a comprehensive agreement between the two countriesbut only if Israel does not work to remove Assad’s regime from power.

It appears that Netanyahu may have accepted the deal while holding it up as future justification for any attack it might initiation on Syria from across the Golan. The Jerusalem Post continues:

The report also claims that Putin then called Netanyahu to relay the message, and that the Israeli prime minister said he would be willing to accept the deal, but that Israel’s goal of eradicating Iran and Hezbollah from the country would remain. 

 

According to the source, Jerusalem sees Assad as the last president of the Alawite community, indicating that a change of regime in Syria – at least towards a government less-linked to Iran – would be favorable for Israel.

Clearly, Israel remains deeply uncomfortable with the Syrian Army’s overwhelming momentum of late, especially after the liberation of Deir Ezzor and Abu Kamal from ISIS and seeks to keep the fires burning in Syria, at least enough to bog down Assad and Iran, while bringing pressure to bear designed to force an Iranian and Hezbollah exit from the theater (especially now that Israel finds itself in a weakened position regarding its desire for full on regime change in Syria). Worse for Netanyahu, Hezbollah seems stronger than ever, along with the ‘resistance axis’ that stretches from Tehran to South Lebanon, with Israel’s worst nightmare – the so-called “Iranian land bridge” being connected for the first time in recent history.

According to a dubiously sourced BBC report from earlier this month, Syria stands accused of hosting a sizable Iranian military base south of Damascus, which Israel utilized to ratchet up rhetoric in preparing its case for strikes on supposed Iranian targets inside Syria before the international community. Israel has long justified its attacks inside Syria by claiming to be acting against Hezbollah and Iranian targets.


2017 map via Institute for the Study of War

And as we’ve consistently highlighted, Israeli officials have gone so far as to declare their preference for Islamic State terrorists on their border rather than allies of Iran. But as we’ve also explained, Israel is acting from a position of weakness and desperation as all that Netanyahu can hope for now is that an Israeli provocation leads to a direct Syrian military response, but Assad never took the bait which could have led toward massive regional war – even after multiple Israeli provocations – and Netanyahu is now forced to negotiate via Moscow. 

Concerning Israeli policy and the Islamic State, The Jerusalem Post makes an astounding and surprising admission which further confirms that official Israeli policy prefers ISIS in Syria rather than Assad or Iran:

The source also commented that after the defeat of the Islamic State, the conflict in Syria would become ”more difficult,” likely pointing towards a vacuum that would be left without the group. Russian, Syrian and Iranian-backed forces have been fighting against ISIS, while also seeking to knock out rebel groups that oppose the current regime. Russia’s stated interests have been in line with Iran’s in wanting to keep Assad in power.

Furthermore, the Israeli media report provides confirmation that Israel continues to openly provide direct support to anti-Assad and al-Qaeda linked fighters in the south (in contradiction to Netanyahu’s claim of “humanitarian” medical support to civilians, the IDF continues to evacuate and assist active militants):

Over the course of the war, Israel has operated several field hospitals near the Syrian border, where those injured from the war are treated and subsequently returned to Syria. Some of those who have been treated have been rebels fighting against the Assad regime, leading some to say that Israel is assisting the rebels to unseat Assad.

It’s certainly no secret that Israel has aggressively pursued regime change in Syria for years (perhaps even decades), but recent provocations, even while Russia maintains a significant presence in the air over Syria, has created an explosive mix which could blow up at any moment. Things have been especially tense along the contested Golan Heights region as each time Israel claims it’s shelled from the Syrian territory bordering the country, the IDF retaliates for the attacks it inevitably blames on Damascus, despite the fact that terrorist groups have been controlling parts of those very bordering territories.

Should reports of the Assad-Netanyahu deal be confirmed, it could actually be a positive step towards the continued winding down of the Syrian proxy war; however, it is also entirely plausible and even likely that Netanyahu will use the deal as an excuse to escalate Israeli military action in the Golan and elsewhere in Syria. After all, he can now hold out the “no Iranian facilities within 40 kilometers” as a red line up for his interpretation. And international media and Western governments have already demonstrated a penchant for towing the Israeli line anytime Iran can be blamed as a culprit – evidence or no evidence.

6 .GLOBAL ISSUES

7.OIL ISSUES

8. EMERGING MARKET

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

Euro/USA 1.1893 DOWN .0020/ 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 all GREEN 

USA/JAPAN YEN 111.33 UP 0.198(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 1.3286 DOWN .0033 (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 1.2790 UP .0032(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro FELL by 20 basis points, trading now ABOVE the important 1.08 level RISING to 1.1865; / Last night the Shanghai composite CLOSED UP 11.43. POINTS OR .34% / Hang Sang CLOSED DOWN 5.34 POINTS OR 0.02% /AUSTRALIA CLOSED DOWN 0.06% / EUROPEAN BOURSES OPENED ALL GREEN 

The NIKKEI: this TUESDAY morning CLOSED DOWN 9.75 POINTS OR 0.04%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 5.34 POINTS OR 0.02% / SHANGHAI CLOSED UP 11.43 POINTS OR .34% /Australia BOURSE CLOSED DOWN 0.06% /Nikkei (Japan)CLOSED DOWN 9.75 POINTS OR 0.04%

INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1294.85

silver:$17.07

Early TUESDAY morning USA 10 year bond yield: 2.339% !!! DOWN 0 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield 2.774 DOWN 0 IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)

USA dollar index early TUESDAY morning: 93.07 UP 16 CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.923% UP 1 in basis point(s) yield from MONDAY

JAPANESE BOND YIELD: +.04% DOWN 3/10  in basis point yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.460% DOWN 1  IN basis point yield from MONDAY

ITALIAN 10 YR BOND YIELD: 1.779 DOWN 1 POINTS in basis point yield from MONDAY

the Italian 10 yr bond yield is trading 32 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.339% DOWN  1 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1878 DOWN.0026 (Euro DOWN 26 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.19 UP 0.051(Yen DOWN 5 basis points/

Great Britain/USA 1.3231 down 0.089( POUND down 89 BASIS POINTS)

USA/Canada 1.2894 UP  .0046 Canadian dollar DOWN 46 Basis points AS OIL FELL TO $57,83

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This afternoon, the Euro was DOWN 26 to trade at 1.1878

The Yen fell to 111.19 for a loss of 5 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 fell BY 89 basis points, trading at 1.3333/

The Canadian dollar FELL by 46 basis points to 1.2804 WITH WTI OIL FALLING TO : $57.83

The USA/Yuan closed AT 6.6078
the 10 yr Japanese bond yield closed at +.040% down 3/10  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 2 IN basis points from MONDAY at 2.310% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.7470 down 2  in basis points on the day /

Your closing USA dollar index, 93.14 UP 24 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 TUESDAY: 1:00 PM EST

London: CLOSED UP 76.75 POINTS OR 1.04%
German Dax :CLOSED UP 59.33 POINTS OR 0.46%
Paris Cac CLOSED UP 30.39 POINTS OR 0.57%
Spain IBEX CLOSED UP 81.80 POINTS OR 0.81%

Italian MIB: CLOSED UP 115.07 POINTS OR 0.52%

The Dow closed UP 255.93 POINTS OR 1.01%

NASDAQ WAS closed UP 33.84 Points OR 0.49% 4.00 PM EST

WTI Oil price; 57.83 1:00 pm;

Brent Oil: 63.62 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 58.33 DOWN 12/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 12 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.339% 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:$57.88

BRENT: $63.23

USA 10 YR BOND YIELD: 2.326% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.755%

EURO/USA DOLLAR CROSS: 1.1842 DOWN .0062

USA/JAPANESE YEN:111.39 UP 0.251

USA DOLLAR INDEX: 93.22 UP 32 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3359 : UP 38 POINTS FROM LAST NIGHT

Canadian dollar: 1.2820 DOWN 62 BASIS pts

German 10 yr bond yield at 5 pm: +0.339%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Hit Record Highs As Tax Hype Trumps Nuclear Doomsday Fears

Wholesale inventories plunge and Kim shoots off some missiles… but Powell panders to TBTF banks and GOP pushes tax bill = so buy mortimer buy…

 

Overnight saw The National Team step in and save China…

 

But today’s market action was dominated by the usual opening idiocy, tax-reform headlines, Jerome Powell comments, and North Korea – of course, all of that meant record high stocks.

Well that de-escalated quickly. After snapping higher on a North Korean ICBM launch, gold was pummeled lower (and stocks higher) and stocks soared after the GOP tax bill was advanced to the senate floor…

 

Nasdaq briefly went red on NK Nukes headlines but then the panic-buying kicked in and Trannies and Small Caps ended best…

 

On the day, Retailers and Banks screamed higher…

 

Financials (XLF) soared most in 8 months back up bear record highs after Powell claimed ‘Too-Big-To-Fail’ is over and that regulations are too tough.

NOTE – XLF bounced perfectly off its 50DMA

High Tax companies notably outperformed…

 

Today was another huge short-squeeze – the 8th day in a row that “Most Shorted” have risen…(the biggest short-squeeze since the election)

 

The question is – did the ammo for the squeeze just run out?

 

Stocks and VIX were not partying together…

 

Stocks remain massively decoupled from FX carry…

 

And entirely decoupled from bonds…

 

Bonds were very marginally higher in yield across most of the curve with 30Y actually ending lower (in yield)…

 

The Dollar Index gained for the second day in a row…

 

Weakness in EUR, CAD, and JPY helkped offset cable’s strength…

 

Cable surged to the highs of the day after headlines that the EU had agreed on the Brexit divorce bill (despite plunging early on Carney’s comments about how hard it will be)

 

Bitcoin was up again and according to some exchanges did pass above $10,000. However, our preferred soruces showed it just short…

 

WTI slipped back and closed below $58 (Jan 18 contract) ahead of tonight’s API data…

 

And copper was clubbed like a baby seal…

 

Gold futures (Fed 18) topped $1300 (spot did not) on North Korean headlines but were unable to hold it after the tax bill…

END

 

This is going to hurt Trump:  wholesale inventories plunge unexpectedly in October and no doubt we will hear from the NY Fed and the Atlanta Fed in their lowering of Q4 GDP

 

(courtesy zerohedge)

Q4 GDP Shocker – Wholesale Inventories Unexpectedly Plunge In October

Against expectations of a 0.4% MoM rise – supporting continued growth in GDP into the fourth quarter – October saw a 0.4% plunge in wholesale inventories.

After five straight months of building inventories, October saw a big GDP-stunting slump…

The biggest drop was in Motor Vehicles & Parts Dealers which saw a 1% drop in October following a 2.4% decline in September.

We suspect Goldman, Atlanta Fed, and New York Fed GDP forecasts will slump for Q4 after this big disappointment.

 

end

 

We are witnessing this globally:  today USA home prices are surging at their fastest pace since July 2014.  Is it inflation that is kicking in?

 

(courtesy zerohedge)

US Home Prices Surge At Fastest Pace Since July 2014

As the latest housing data shows an uptick in sales, Case-Shiller’s 20-City Composite index surged 6.19% YoY in September – the fastest rate of gain since July 2014.

As Bloomberg notes, the residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices.

Eight cities have surpassed their peaks from before the financial crisis, according to the report.

All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and a 9 percent advance in Las Vegas (slowest gains in Washington area at 3.1 percent, Chicago at 3.9 percent)

In the past few years, growth in property values has been consistently outpacing wage gains, crimping affordability for younger, first-time buyers.

That could eventually become a headwind to faster price appreciation. For now, though, rising property values are also helping to boost home equity and support consumer spending, the biggest part of the economy.

“Most economic indicators suggest that home prices can see further gains,” David Blitzer, chairman of the S&P index committee, said in a statement.

 

“One dark cloud for housing is affordability – rising prices mean that some people will be squeezed out of the market.

 

 

end

 

 

This came out of the blue:  we now have T Bill anxiety as we may have no deal on a government shutdown on Dec 8.

 

(courtesy zerohedge)

 

 

T-Bill Anxiety Builds As Trump Tells ‘Chuck And Nancy’: “No Deal” On Government Shutdown

Anxiety appears to be building in the Treasury Bill market once again as the yield spread between 12/7 and 12/21 widens to 12bps after President Trump cast doubt on whether he and congressional leaders can agree to keep the government funded.

As AP reports, Trump is meeting with Democratic and Republican congressional leaders at the White House on Tuesday to discuss budget and immigration issues.

But, in a tweet, Trump cast doubt on whether they can agree to fund the government beyond a Dec. 8 deadline.

Says Trump: “I don’t see a deal!”

Trump says Democrats “want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes.

Meeting with “Chuck and Nancy” today about keeping government open and working. Problem is they want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes. I don’t see a deal!

Better add this potential event risk to the reasons to sell vol…

end

Top Democrats abruptly pull out of the White House meeting with Trump after Trump refuses to back down on his wall.  He wants funding as well to beef up security against illegal aliens

 

(courtesy zerohedge)

Top Democrats “Abruptly” Pull Out Of White House Meeting After Trump Twitter Attack

Following this morning’s tweet, in which Trump said that he was meeting with top Democrats Chuck Schumer and Nancy Pelosi to keep the government open, but because “they want illegal immigrants flooding into our Country unchecked”, he “doesn’t see a deal“, and which sent the T-Bill market turmoiling as mid-December government shutdown odds surged, moments ago the top two Democratic leaders in Congress pulled out “abruptly” (in AP’s words) of the previously scheduled meeting with President Donald Trump.

Instead of meeting Trump, Schumer and Pelosi shot back with a statement asking for talks with top GOP leaders in Congress. The top democrats said they’d skip a “show meeting” at the White House and instead ask for a meeting with their Republican counterparts, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.

“Given that the President doesn’t see a deal between Democrats and the White House, we believe the best path forward is to continue negotiating with our Republican counterparts in Congress instead,”House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement.

Some Democrats have called for any year-end spending deal to include legislation that would codify an Obama administration policy providing protection against deportation for young undocumented immigrants brought to the country as children. Trump, who announced in September he was ending the program, has said any deal protecting the so-called “Dreamers” should be paired with funding for a border wall and legislation that would reduce legal immigration.

If Democrats and Republicans do not reach a deal on spending by Dec. 8, the federal government could face a partial shutdown. Trump’s meeting with the Congressional leaders, which will also include Republicans House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, is scheduled for 3 p.m.

As a reminder, the Dec. 8 deadline was set in a deal Schumer and Pelosi struck with Trump – against the wishes of Ryan and McConnell – to avoid a government shutdown and debt default in September. They agreed to fund the government at current levels and suspend the debt limit for three months.

As Bloomberg reminds us, since that deal was struck, Congress has focused mostly on a tax overhaul and has made little progress reaching a spending deal to keep the government open. Other issues have also piled up, including the fate of cost-sharing subsidies that help defray deductibles and coinsurance payments for low-income patients with Obamacare insurance policies. Trump stopped paying the subsidies.

The negotiations also include efforts to lift legislative caps on military spending, raise the debt limit, provide more funding for disaster assistance, and extend a children’s health insurance program and an intelligence surveillance program. Several of those issues face year-end deadlines and may end up in a huge spending plan that requires votes from both Republicans and Democrats.

The Trump administration does not want to include immigration as part of the year-end spending deal to keep the government open, White House spokeswoman Sarah Huckabee Sanders said on Monday. “We hope that the Democrats aren’t going to put our service members abroad at risk by trying to hold the government hostage over partisan politics, and attaching that,” Sanders told reporters on Monday.

Markets reacted favorably to the news, with stocks jumping on speculation that a meeting between the top Democrats and Republicans will be more productive than the “show meeting” between Trump and the democratic duo.

While stock euphoria is predictable, those curious if the government’s shutdown odds are rising are urged to look at the Dec. 7-Dec. 21 Bill spread which, ominously, continues to blow out.

 

 

My goodness:  a 16 standard deviation beat in the soft data Richmond Fed manufacturing survey..

go figure.

(courtesy zerohedge)

Richmond Fed Survey Unexpectedly Spikes To Record High – Beats By 16 Standard Deviations

WTF!

While other ‘soft’ survey data has been disappointing recently, The Richmond Fed  Manufacturing Outlook did not… in fact, against expectations of a 14 print, following a 12 print in October, November printed 30! – 16 standard deviations above expectations.

 

This is an all-time record high for the survey…

 

Despite a major spike in 6 of the 8 sub-indices (with shipments and new orders and workweek soaring), Wages tumbled? Perhaps the reason is simple – Shipments and New Order Volume expectations for six months ahead tumbled.

 

If Trump enacts the SALT provision in the new tax bill, could this trigger a mass exodus of NY hedge funds to Florida?

 

(courtesy zerohedge)

Could Trump’s Tax Bill Trigger A Mass Exodus From Manhattan? Goldman Seems To Think So…

New York’s billionaire hedge fund managers have blazed the trail south in recent years with the likes of David Tepper, Paul Tudor Jones and Eddie Lampert all ditching the Empire State for Florida…a state which brings not only pristine beaches and year-round golf weather but also the added benefit of a 0% personal income tax rate.

Meanwhile, as Bloomberg once again points out this morning, the decision to ditch the over-taxed states of New York, New Jersey and Connecticut will be even easier if Trump’s tax plan succeeds in eliminating the state and local income tax deduction…a deduction which could cost a New Yorker making $1,000,000 a year a cool $21,000 in extra taxes. 

The problem for the Connecticut hedge-fund set — and, more broadly, for a lot of the Wall Street crowd — is that Republican proposals in both the House and Senate would drive up taxes for many high-earners in the New York City area. By eliminating the deduction for most state and local taxes, an individual making a yearly salary of $1,000,000 — a figure not uncommon in the financial industry — would owe the Internal Revenue Service an additional $21,000, according to a preliminary analysis by accounting firm Marcum LLP.

 

“It would almost be irresponsible if you weren’t thinking about moving,” he said.

 

Not surprisingly, Miami is exploiting the potential tax change to woo Manhattan’s most successful “millionaire, billionaire, private jet owners” (to cite Obama) as Miami’s luxury real estate agents say they’re having a hard time keeping up with the sudden surge in demand.

The Miami Downtown Development Authority is throwing a party next month during the annual Art Basel show, and Nitin Motwani, a real estate developer, has invited wealthy Northeasterners who’ve expressed interest in moving to the area. Because the proposed tax changes are practically begging them to relocate, Motwani expects a crowd.

 

State and local taxes, also called SALT, “can and should be a major catalyst,” said Motwani, a development authority board member. Tax reform will “certainly be something we’re highlighting” at the party, in the Perez Art Museum. “Inertia is a tough thing, but you add on another tax bill and maybe that pushes you over the edge.”

 

Jeff Miller, director of luxury sales for Brown Harris Stevens in the Miami area, said he’s fielded a half-dozen calls from clients motivated by higher taxes to step up their search for South Florida property.

 

Two clients who work at New York City financial firms have scheduled tours of a newly completed 7,000-square-foot (650-square-meter) home on the Venetian Islands, Miller said. The $22.5 million asking price buys views of Biscayne Bay and a spot to moor a yacht.

 

“Usually it’s a snowstorm that would push them to pick up the phone,” Miller said. “The tax plan has the same effect.”

So what does this mean for the overall impact on domestic migration patterns?  Well, Goldman figures that the changes currently contemplated on the Senate bill could ultimately result in 2-4% of Manhattan’s top earners relocating to lower taxing jurisdictions…

The increased effective tax differential between high- and low-tax areas may increase movement from the former to the latter. Exhibit 4 shows the increase in effective tax rate differentials for a few relevant pairs of states. For instance, we estimate that the TCJA would increase the gap between the combined S&L income tax rates in New York City vs. Connecticut by about 2pp to 5-6%. States with zero income tax such as Texas and Washington would experience the largest gains in relative tax competitiveness. The simple median increase in the tax gap across the six illustrative pairs is a bit above 1.5pp.

 

For our initial analysis of the potential migration effects, we review the academic literature on taxes and mobility. The reviewed studies shown in Exhibit 5 focus on high-income earners, because the literature tends to ?nd only small tax effects among lower- and middle-income earners. The studies are mixed, but the median study suggests a 2% decline in the number of top-income earners after 3-10 years per percentage point increase in the tax rate gap. Combining this median 2% mobility estimate with the 1-2 percentage point increase in the tax gap between New York City and New Jersey/Connecticut suggests that the TCJA would eventually lower the number of top-income earners in New York City by 2-4%, for example.

…and if that’s not at least somewhat concerning to legislators in Albany, Trenton and Sacramento…it should be.

Tepper, who heads Appaloosa Management, relocated to Miami Beach in 2015 from Short Hills, New Jersey. Jones kept Tudor Investment Corp. in Greenwich, Connecticut, when he moved to Palm Beach, Florida, last year. In 2012, Lampert, best known as Sears Holdings Corp.’s chief executive officer, took his hedge fund to Miami from the same tony Connecticut town.

 

State budgets feel the impact. When Tepper moved his firm to Florida, forecasters warned it could jeopardize New Jersey’s budget because the firm generated more than $100 million in state income tax. In 2013, state income tax generated by residents of seven of the wealthiest towns in Fairfield County amounted to $1.8 billion, according to the Hartford Courant, or about 9 percent of the Connecticut state budget.

 

“There is a certain amount of burying one’s head in the sand and naivete in Hartford,” Connecticut’s capital, McGuire said. “I don’t think they believe it can happen.”

Oh well, it’s not as if New Jersey is teetering on the edge of solvency courtesy of a massively underfunded public pension ponzi

end

 

These 8 senators do not like the looks of the tax bill.

(courtesy zerohedge)

“Make Or Break”: Senators Push For Sweeping Changes To Tax Bill As GOP Leaders Struggle To Vote It Out Of Committee

With roughly 14 sessions of Congress left before the New Year break, the GOP’s chances of passing comprehensive tax reform by the end of the year – as the White House has promised to do – are looking increasingly remote. So far, the biggest obstacle – as with the Republicans disastrous failure to repeal and replace Obamacare – is the Senate, where disparate groups of lawmakers are opposing the bill for different, and sometimes contradictory, reasons.

In what has been called a “make or break” marathon negotiating session, at least two Senators have come out against the bill in its current form, sending the administration scrambling to hammer out a compromise on the pass-through rate that would entice Wisconsin’s Ron Johnson and Montana’s Steve Daines to vote ‘yes’.

But according to Bloombergthe bill could get held up in committee, largely thanks to the opposition of the two senators named above, who are working to block it even as the leadership desperately tries to secure passage by end-of-day. To keep up with Mitch McConnell’s timetable, which would see a floor vote on Thursday, Republicans must successfully shepherd it through the budget committee by early Wednesday at the very latest.

As Bloomberg explains, normally the Senate Budget Committee vote on the tax legislation would be a mere formality. However, given Republicans’ razor-thin majority on the committee a single dissenting senator could block the bill. So far, two of the 12 Republicans on the committee have expressed serious reservations about the bill that they say will prevent them from voting on it. Senator Ron Johnson of Wisconsin wants a deeper tax cut for pass-through businesses – and says he won’t vote for the bill as written. Senator Bob Corker of Tennessee wants a provision that would impose tax increases if the bill doesn’t generate enough economic growth to cover the $1.4 trillion in revenue losses it’s estimated to produce over 10 years.

“I’m not exactly sure what’s going to happen in committee, we’re working diligently to fix the problem,” Johnson told Wisconsin reporters on Monday, according to his office. “If we develop a fix prior to committee, I’ll probably support it but if we don’t, I’ll vote against it.”

As of Monday night, no deal had emerged. “We’re still negotiating, let’s put it that way,” said Senator John Thune, the chamber’s third-ranking Republican leader.

In a last-ditch attempt to whip up votes, President Trump will lunch with Republican senators today just before the committee convenes to debate the bill, and possibly hold a vote.

But even if the bill manages to clear the budget committee on Tuesday, there appears to be enough opposition to render a floor vote dead in the water, as the WSJ reports.

One group, including Ron Johnson (R., Wis.) and Steve Daines (R., Mont.), wants deeper tax cuts for so-called pass-through businesses such as partnerships and S corporations that pay taxes on individual rather than corporate tax returns. Both said they want to prevent large corporations from deducting state and local taxes, freeing up money to drive down rates for pass-through firms. They said they would like to support a tax bill but can’t do so yet.

 

Another group, including Bob Corker (R., Tenn.), Jeff Flake (R., Ariz.) and James Lankford (R., Okla.), is concerned about the $1.4 trillion addition to budget deficits the bill would cause, and these senators are wary that it won’t generate enough economic growth to pay for itself.

 

A third group, including Susan Collins (R., Maine) and John McCain (R., Ariz.), helped kill the Republican health-care bill earlier this year and could pose resistance over a variety of provisions, including plans to repeal the Affordable Care Act’s health-insurance mandate as part of the tax bill. Mr. McCain said Monday that he is still undecided and had “a lot of things” he is concerned about.

As we noted yesterday, without a single major legislative victory for the Trump administration and its Congressional allies, it is hard to understate just how critical a victory on tax bill is with year-end fast approaching – especially amid concerns that the Democrats could triumph in the Alabama election, which has given the fight an added sense of urgency. Passing tax reform is enough to keep Republicans occupied until year end. Unfortunately, they’re also facing a “nightmare” list of legislative priorities that could great serious problems for the administration – including a federal government shutdown – if they aren’t handled accordingly.

Of course, even if the senate does pass the bill, the reconciliation process presents another grueling challenge because the House and Senate plans have many major differences.

Back door deals aside, here are the next steps:

  • On Tuesday, the Senate Budget Committee is scheduled to meet on the tax legislation at 2:30 p.m. The panel, which has 12 Republicans and 11 Democrats, could decide to send the tax bill to the Senate floor. Trump is also scheduled to attend the regular policy lunch held by Senate Republicans.
  • If all goes well for GOP leaders, the Senate may begin floor debate, which would culminate perhaps Wednesday or Thursday in a “vote-a-rama” – a chaotic session in which any senator can offer an amendment to the bill. Democrats would be expected to offer a variety of amendments designed to damage, delay or derail the measure – which may lead to some political fireworks. The voting would probably take place overnight.
  • If Republicans have the 50 votes they need, Senate leaders may call for a floor vote on Thursday or Friday.
  • That said, at least one group of Wall Street strategists believes the Senate could still pass their version of the bill by the end of the week. The team at Goldman Sachs, led by chief economist Jan Hatzius, maintained in a research note published Tuesday that tax reform legislation looks likely to pass the Senate by the end of the week.
  • “In a preliminary step, we expect the Senate Budget Committee to pass the bill tomorrow (11/28), with a procedural vote on the Senate floor Wednesday (11/29), votes on amendments on Thursday (11/30), and a vote on final passage Friday (12/1).”

However, even Goldman – which has persistently touted strong odds of passage (perhaps in a nod to their former leader, Gary Cohn, who has helped manage the bill and who will likely shoulder some of the blame if it fails) – admits that if the Senate can’t pass it by the end of the week, “enactment by year end will become more difficult.”

If that happens, Republicans will probably be forced to table the issue until next year. Luckily, President Donald Trump has already tested a few excuses, after all “it took the Reagan administration months to pass tax reform.”

But will investors accept Trump’s reassurances in good faith, given the administration’s embarrassing failure to repeal and replace Obamacare? Indeed, if investors pull the rug out from under the Trump administration, it will likely become even more desperate to pass the bill.  At that point, we wouldn’t be surprised if Trump offers Democrats major concessions to try and win a handful of votes from the opposition – even if it’s ultimately a bluff to coax intransigent Republicans to fall in line.

end

Such fine and upstanding USA citizens:  Wells Fargo is under investigation again for gouging clients

 

(courtesy zerohedge)

Here We Go Again: Wells Fargo Is Under Investigation For Gouging Clients

After reporting last month that Wells Fargo’s foreign-exchange unit was being investigated by regulators and that the bank had fired four employees – and demoted another – after discovering certain unspecified improprieties in its FX shop, more details about the exact nature of the bank’s latest scandal – which follows revelations that the bank’s retail division created millions of fake customer accounts, and its auto lending unit overcharged borrows – have finally been unearthed by the Wall Street Journal.

WSJ reports that the bank’s FX sales desk routinely gouged customers by charging them up to eight times as much as the industrywide standard. Furthermore, when confronted by clients about the high fees, traders and salespeople were encouraged to lie about the reasoning for them.

And once again, it appears Wells Fargo’s idiosyncratic incentives encouraged traders and salespeople on the bank’s foreign-exchange desk to take advantage of their clients’ ignorance and gouge them with exorbitant fees. Those who remember the cross-selling scandal that precipitated the resignation of CEO John Stumpf last year will recall that the 5,000 or so branch employees who were fired by the bank reportedly blamed management’s unrealistic quotas for their behavior.

Foreign-exchange employees got bonuses based solely on how much revenue they brought in, say more than a dozen current or former Wells Fargo employees. No other big bank in the U.S. calculated bonuses of currency traders in such a defined and individual way. Wells Fargo said Monday that it began making changes to those compensation plans earlier this year.

 

The bank also charged some of the highest trading fees around, according to current and former employees. For more than a decade, customers were sometimes charged anywhere from 1% to 4% on basic transactions such as converting euros to dollars and complicated trades like hedging.

 

Those percentages can be at least two to eight times higher than the industrywide average of 0.15% to 0.5%, depending on the trade, customer and volume, according to foreign-exchange bankers throughout the industry.

For what it’s worth, Wells Fargo contests WSJ’s description…

Wells Fargo disputes the descriptions of its foreign-exchange fees by current and former employees. The bank said Monday its fees in 2016 had a weighted average of 0.09 percentage point across all transaction sizes. Clients served by its middle-market banking team were charged a weighted average of 0.18 percentage point, according to Wells Fargo.

 

Some foreign-exchange bankers at Wells Fargo relied on the fact that customers often didn’t bother to double-check how much they were charged, fee levels weren’t straightforward, and complaints could be batted away, the current and former employees say.

As WSJ had previously reported, a “large trade” involving Restaurant Brands International – the food-service conglomerate that owns Tim Hortons, Burger King and Popeyes – initially aroused regulators’ suspicions.

Amazingly, the price-gouging on the trade was apparently so egregious it resulted in a loss to the company. The Ontario-based company complained about the size of its trading fee and…well…the rest is history.

While WSJ didn’t offer many details about the transaction, the restaurant chain has been on something of an M&A spree in recent years: First the company bought Tim Hortons in 2014, then famously purchased Popeyes Louisiana Chicken last year.

Apparently, none of the traders’ traditional tactics for dealing with customer complaints worked on RBI. One manager told WSJ the sales desk would tell customers – in a stunning feat of mendacity worthy of their rivals at Goldman Sachs – that the higher fee was due to a “time fluctuation” when the trade was executed, or some other such nonsense. The dispute was resolved when the bank refunded RBI nearly $1 million. Inside the bank, the incident even has its own nickname: “the Burger King trade”.

One former Wells Fargo manager says employees would tell customers who expressed surprise at the size of a trading fee that market prices were different at the moment when the transaction was executed and blame “time fluctuation” for any difference.

 

The bank’s foreign-exchange customers have included telecommunications firm CenturyLinkInc., vehicle-parts supplier Federal-Mogul Holdings Corp. and nonprofit groups such as the National Bone Marrow Donor Program.

 

Regulators have been investigating the foreign-exchange business at Wells Fargo, including a big trade involving Restaurant Brands International Inc., the owner of Burger King, Tim Hortons and Popeyes Louisiana Kitchen, according to people familiar with the matter.

 

The trade resulted in a loss to Restaurant Brands, people familiar with the matter have said, which led to a dispute between the Oakville, Ontario, company and the bank. The dispute centered on how bank employees handled the trade, rather than its pricing. Wells Fargo refunded about $900,000 to Restaurant Brands, people familiar with the refund say.

In addition to blaming market fluctuations, Wells Fargo traders devised another brilliant excuse: Blame the machines.

Wells Fargo’s foreign-exchange business also charged unusually high fees for trades with different currency conversions, known as “Bswift” transactions, current and former employees say.

 

“And if anybody did complain, it was an easy tap dance,” one former employee says. He says employees would say the pricing had been done automatically by the bank’s computer system so “there’s no accountability for the spread.”

 

Wells Fargo sent an internal email Nov. 2 detailing new guidelines for Bswift transactions, according to a copy of the email reviewed by the Journal. The guidelines include specific handling and pricing procedures for those trades.

According to WSJ’s account, it isn’t clear exactly how regulators became involved – presumably RBI tipped them off, but it’s possible senior executives at the bank, hoping to get out in front of the scandal, decided to come clean. Early this year, a restructuring at the bank moved its foreign-exchange desk from its international division into its capital markets division. Once the new management took over and began reviewing internal controls at the desk, they discovered malfeasance that apparently goes beyond the infamous RBI trade.

The business was moved in early 2017 from Wells Fargo’s international division into its investment-banking and capital-markets operation. Since then, executives have changed internal systems, added more stringent rules around pricing and required more frequent compliance checks, current and former employees say.

 

Issues with the Burger King trade were found following those checks and customer complaints, people familiar with the matter say. The continuing internal review of Wells Fargo’s foreign-exchange operation is separate from the review sparked by the sales scandal, some of the people said.

 

A compliance training session in early November detailed what Wells Fargo called “approved margins” for different volumes of foreign-exchange transactions, according to an internal document reviewed by The Wall Street Journal.

 

Employees say fee levels remain higher than industry norms, and some compensation practices aren’t due to change until next year.

Both the Fed and the Comptroller of the Currency are involved in investigating the Burger King trade. The US Attorney from the Northern District of California is also looking into it.

As WSJ explains, bonuses in Wells’ FX shop were based on a system that essentially allows salespeople to eat what they kill.

Current and former bank employees say its pricing practices were rooted in a culture and compensation system that looked to maximize revenue. Bonuses were defined as 10% of revenues exceeding revenue targets.

 

If a banker’s revenue target was $5 million and the person brought in $6 million, he or she would earn a $100,000 bonus, or 10% of the additional $1 million in revenue. Bankers typically received such bonuses twice a year in cash, rather than stock, as part of a signed contract, they added.

 

It’s rare among foreign-exchange groups in other banks to have so-called defined-bonus plans focused on individual earnings, according to people in the industry.

 

After Wells Fargo moved the foreign-exchange business into its investment bank earlier this year, managers began telling employees that bonuses would become “discretionary” by the end of 2017. Under this more typical arrangement, management would decide employee bonuses, and bankers wouldn’t know exactly how much they would receive. It would be based on a variety of factors, not just revenue.

 

Wells Fargo has 18 foreign-exchange sales and trading offices, including in New York, San Francisco, Charlotte, N.C., London and Hong Kong. A few hundred people work in the group world-wide.

Current and former employees say Wells Fargo’s foreign-exchange customers are largely midsize businesses that don’t trade often or in large volumes and therefore lack “market insight.”

However, RBI isn’t the only Wells client that has complained about gouging. In November 2016, Ecolab Inc., a water, hygiene and energy company based in St. Paul, Minn., complained after the bank took a hefty 1% fee on a $100 million swap deal. Like RBI, Ecolab also received a refund.

In another example, data-management firm Veritas Technologies LLC had a fee agreement already worked out with Wells. But after making one trade on behalf of Veritas, Wells Fargo bankers told Veritas that the bank’s fee was 0.05 percentage point higher than the agreed rate. Veritas was, understandably, not pleased.

One of the most damning details in the story – and something sure to draw the ire of regulators – is that one former employee who spoke out about the fee gouging was demoted and eventually pushed out of the bank.

During a meeting of foreign-exchange managers in the mid-2000s, Cathy Witt said it wasn’t right to celebrate high fees by ringing a bell, people familiar with the situation say. Ms. Witt, an employee in the bank’s Chicago foreign-exchange group, warned that Wells Fargo could become known as a “bucket shop,” a derisive term for a disreputable finance firm, some of the people say.

 

A few weeks later, Ms. Witt was summoned to a meeting in St. Louis, told that her comments had been offensive and demoted on the spot, according to people familiar with the matter. She also was told to apologize to other managers for her unprofessional behavior, the people say. She later left the bank.

For such a small shop, the Wells Fargo traders reportedly did quite a bit of celebrating. Management would publicly praise traders for locking in large fees in emails to the entire desk. Traders in San Francisco were reportedly encouraged to ring a brass bell every time they sealed a trade.

In what was perhaps the most hilarious detail in the story, the FX traders even charged exorbitant fees to other Wells Fargo businesses like Wells Fargo rail – all to help pad their bonuses.

The operation also charged high fees to other parts of Wells Fargo. Wells Fargo Rail, which leases locomotives and railcars, and the bank’s corporate-trust division are often charged 1% to 1.5% on currency transactions, according to current and former employees.

Of course, the timing of this revelation couldn’t be worse for Wells:It comes just as new CEO Tim Sloane – who recently appeared before a Congressional hearing, where he was told by Massachusetts Senator Elizabeth Warren that he should resign, just like she told his predecessor – has been making themedia rounds to try and rehabilitate the bank’s image after the cross-selling scandal. And the fact that its breaking only months after the bank was forced to refund customers whom it deceived into buying unnecessary auto insurance isn’t helping.

However, Wells has one thing going for it: Most of the working public don’t understand what the foreign exchange market – or even that there is a foreign exchange market – much less how it works and how one might go about cheating clients. The unceasing wave of FX scandals hardly did anything to dent the reputation of BNY Mellon, or Barclays, or DB in the eyes of the public.

But given Wells’ recent track record, retail customers might make an exception.

end

This is interesting; An Obama appointee, Federal Inspector McCullough has stated on Fox news that he has been threatened by the Clinton campaign over the Email investigation

 

(courtesy ZeroPointnow)

 

Report: Obama-Appointed Federal Inspector Threatened By Clinton Campaign Over Email Investigation

ZeroPointNow's picture

Former Intelligence Community Inspector General Charles McCullough III.Content originally published at iBankCoin.com

An Obama appointed government watchdog central to the Hillary Clinton email investigation says that he, his family and his office faced an ‘intense backlash‘ from Clinton allies, who threatened him over findings that Clinton mishandled classified information.

Former Inspector General Charles McCullough III told Fox News Chief Intel correspondent Catherine Herridge that he was under intense pressure from senior officials on the left – with one Clinton campaign official threatening that he and another government investigator would be immediately fired under a Hillary Clinton presidency:

It was told in no uncertain terms, by a source directly from the campaign, that we would be the first two to be fired — with [Clinton’s] administration. That that was definitely going to happen.” –Charles McCullough III

As a refresher, over 2,100 classified emails were sent over Clinton’s personal server, which was used exclusively for government business. Despite this, former FBI Director James Comey – who had drafted Clinton’s exoneration letter months before reviewing evidence in the case – recommended that the DOJ not prosecute the case.

McCullough was recommended to Obama by then-Director of National Intelligence, James Clapper, who told McCullough that Clinton’s conduct was “extremely reckless,” adding “the campaign … will have heartburn about that.”

Via Fox News: 

He [McCullough] said Clapper’s Clinton email comments came during an in-person meeting about a year before the presidential election – in late December 2015 or early 2016. “[Clapper] was as off-put as the rest of us were.

After the Clapper meeting, McCullough said his team was marginalized. “I was told by senior officials to keep [Clapper] out of it,” he said, while acknowledging he tried to keep his boss in the loop.

Egregious violations

In January 2016, McCullough told Republicans on the Senate Intelligence and Foreign Affairs committees that emails classified above “Top Secret” had been passed through the former secretary of state’s private, unsecure server – such as an email about Benghazi she sent to daughter Chelsea Clinton (using pseudonym Diane Reynolds) on the night of September 11th, 2012 from ‘@clintonemail.com’ which not only divulged highly classified military intel over a non-government server vulnerable to foreign surveillance – it also revealed that the Obama administration knew that an “Al Queda-like group” was responsible for the attack.

One wonders what Chelsea’s security clearance was at the time?

Instead of informing the American public that radical Islam was responsible for the attack, the Obama administration fabricated a story – peddling the lie that anger over an anti-Islamic YouTube video resulted in the attack, which led to the arrest and imprisonment of an innocent man.

If they had only done a second-by-second analysis of the Benghazi terror attack then maybe we’d all know why those patriots died. https://twitter.com/cnnpolitics/status/885888141806186496 

Hillary knew it was an “Al Qeda-like group” hours after it happened when she told Chelsea (“Diane Reynolds”) top secret information. pic.twitter.com/LiOJj3jck1

View image on Twitter


As one of a handful of people who reviewed the 22 Top Secret Clinton emails deemed too classified to ever see the light of day, McCullough says “There was a very good reason to withhold those emails … there would have been harm to national security,” adding “sources and methods, lives and operations” could be put at risk. According to Fox, some of those email exchanges were considered Special Access Privelage (SAP), or “above top secret.”

What’s interesting about that, is an anonymous 4chan poster known as “FBI Anon” – whose breadcrumbs of information have been largely correct, posted on July 2, 2016 that Clinton had “SAP level programs on her server, which if made public, would literally cause an uprising and possibly foreign declarations of war.”

Then, on October 16, 2016 – three weeks before former FBI Director Comey cleared Clintin, “FBI Anon” elaborated on SAP programs and made an unverified claim about Clinton:

A Special Access Program is an intelligence program classified above top-secret. They are held on closed servers at secret locations. The only way to get one is if you are specifically read on to a program, have a need to know, then you must physically go to a location and pass through several layers of security to even look at the program. A good example in non-classified terms would be the locations and operations of our intelligence operatives around the glove, or our missile silo locations. SAP is granted on a need to know basis, and Hillary did not have any need to know any of the programs on her server. All I can tell you about the SAPs is that Hillary had them, and she did not have proper authority to have any of themThey were leaked to her by someone, and she did sell them to overseas donors. Possessing them alone makes her guilty of treason.” –FBI Anon

Turncoat?

In response to McCullough’s findings, Democrats turned their backs on the Obama-appointed Inspector General for doing his job.

All of a sudden I became a shill of the right,” McCullough said, adding “And I was told by members of Congress, ‘Be careful. You’re losing your credibility. You need to be careful. There are people out to get you.’”

McCullough told Fox of “an effort… certainly on the part of the campaign to mislead people into thinking that there was nothing to see here.”

Damage Control

As the Clinton campaign geared up for the 2016 election, WikiLeaks documents reveal that Hillary’s inner circle was already starting to spin the investigation – writing in an August 2015 email that “Clinton only used her account for unclassified email. When information is reviewed for public release, it is common for information previously unclassified to be upgraded to classified.”

McCullough was critical of this response, telling Fox “There was an effort … certainly on the part of the campaign to mislead people into thinking that there was nothing to see here.”

In response to the Inspector General’s pushback, seven senior Democrats sent a letter to McCullough and his counterpart at the State Department, raising concerns over the impartiality of the Clinton email investigation. McCullough, however, was not arriving at any conclusions himself – he was simply passing along the findings of individual government agencies on appropriate classifications assigned to the emails.

Fox News reports:

McCullough described one confrontation with Democratic Sen. Dianne Feinstein’s office just six weeks before the election, amid pressure to respond to the letter – which Feinstein had co-signed.

“I thought that any response to that letter would just hyper-politicize the situation,” McCullough said. “I recall even offering to resign, to the staff director. I said, ‘Tell [Feinstein] I’ll resign tonight. I’d be happy to go. I’m not going to respond to that letter. It’s just that simple.

As Election Day approached, McCullough said the threats went further, singling out him and another senior government investigator on the email case.

Inquiries sent by Fox to both Feinstein and Clapper were not returned at the time of publication.

Watch:  

Herridge: “Was there an effort to deliberately mislead the public about [@HillaryClinton] classified emails?”
McCullough: “Absolutely.”

 

end

Well that about does it for today

I will see you Wednesday night

HARVEY

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One comment

  1. I find comment written in all caps to be a pain to read – in my opinion only an egoist would do so. Therefore I rarely read your material as I do not suffer idiots well.
    Thanks, jack

    Like

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