Jan 8/GOLD CONTINUES TO REBOUND DESPITE CONSTANT CARTEL WHACKING: GOLD DOWN $1.40/SILVER IS DOWN 11 CENTS. GOLD WITNESSES ANOTHER BIG 6,000 PLUS GOLD EFP/SILVER HAS 1723 EFP NOTICES/GOOD NUMBER OF SWAMP STORIES TONIGHT/

Glad to be back as I was in Israel over the holidays.

I will resume my normal detailed commentary

 

GOLD: $1319.50 DOWN $1.40

Silver: $17.12 DOWN 11 cents

Closing access prices:

Gold $1320.50

silver: $17.11

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: $1323.92 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1320.00

PREMIUM FIRST FIX: $3.92

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SECOND SHANGHAI GOLD FIX: $1323.92

NY GOLD PRICE AT THE EXACT SAME TIME: $1318.25

Premium of Shanghai 2nd fix/NY:$5.67

SHANGHAI REJECTS NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1380.80

NY PRICING AT THE EXACT SAME TIME: $1318.75

LONDON SECOND GOLD FIX 10 AM: $1268.85

NY PRICING AT THE EXACT SAME TIME. 1268.50??

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR: 242 FOR 24200 OZ (0.7527 TONNES),

For silver:

jANUARY

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 507 for 2,535,000 oz

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Bitcoin: BID $15,392/OFFER $15,512 DOWN $1155 (morning)

 Bitcoin: BID   14,763/OFFER  $14,871 DOWN  $1800(CLOSING)

end

Let us have a look at the data for today

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In silver, the total open interest  ROSE BY TINY  165 contracts from 194,264 RISING TO 194,429 WITH FRIDAY’S TINY 4 CENT RISE IN SILVER PRICING.  WE HAD ZERO COMEX LIQUIDATION BUT WITHOUT A DOUBT WE WITNESSED ANOTHER MAJOR BANK SHORT- COVERING OPERATION. NOT ONLY THAT , WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A CONSIDERABLE 1721 EFP’S FOR MARCH (AND ZERO FOR OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 1721 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE A MAJOR PLAYER TAKING ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 1721 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. YESTERDAY WITNESSED  EFP’S FOR SILVER ISSUED. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. I BELIEVE THAT WE MUST HAVE HAD SOME MAJOR BANKER SHORT COVERING AGAIN TODAY.

ACCUMULATION FOR EFP’S/SILVER/ STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY:

17,931 CONTRACTS (FOR 6 TRADING DAYS TOTAL 17,931 CONTRACTS OR 89.66 MILLION OZ: AVERAGE PER DAY: 2988 CONTRACTS OR 14.94 MILLION OZ/DAY)

RESULT: A SMALL SIZED GAIN IN OI COMEX DESPITE THE TINY 4 CENT RISE IN SILVER PRICE WHICH USUALLY INDICATES HUGE BANKER SHORT-COVERING. WE ALSO HAD A FAIR SIZED  EFP ISSUANCE OF 1721 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS.  FROM THE CME DATA 1721 EFP’S WERE ISSUED FOR TODAY (FOR MARCH EFP’S AND NONE FOR ALL OTHER MONTHS) FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 1886 OI CONTRACTS i.e. 1721 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 165 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE TINY RISE IN PRICE OF SILVER BY 4 CENTS AND A CLOSING PRICE OF $17.23 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A GOOD AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.9720 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

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

In gold, the open interest ROSE BY AN HUGE SIZED 9,128 CONTRACTS UP TO 551,441 WITH THE SMALL RISE IN PRICE OF GOLD WITH FRIDAY’S TRADING ($1.40). IN ANOTHER HUGE DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY AND IT TOTALED A GOOD SIZED  6115 CONTRACTS OF WHICH THE MONTH OF FEBRUARY SAW 6115 CONTRACTS AND APRIL SAW THE ISSUANCE OF 0 CONTRACTS.  The new OI for the gold complex rests at 551,441. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR JANUARY. 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 APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON 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 (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE ANOTHER HUMONGOUS GAIN OF 15,243 OI CONTRACTS: 9.128 OI CONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED 6115 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

FRIDAY, WE HAD 17,213 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 57,605 CONTRACTS OR 5.760 MILLION OZ OR 179.16 TONNES (6 TRADING DAYS AND THUS AVERAGING: 9,600.8 EFP CONTRACTS PER TRADING DAY OR 960,000 OZ/DAY)

Result: A STRONG SIZED INCREASE IN OI WITH THE SMALL SIZED RISE IN PRICE IN GOLD TRADING ON YESTERDAY ($1.40). WE HAD ANOTHER FAIR SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6115. THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 6115 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 15,243 contracts:

6115 CONTRACTS MOVE TO LONDON AND  9128 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the gain in total oi equates to 47.40 TONNES)

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: with gold up for 11 consecutive days, we still have no changes in gold inventory

Today, with gold down a tiny $1.40 after rising for 12 straight days, gold inventory declines by a huge 1.44 tonnes today/

Inventory rests tonight: 834.86 tonnes.

SLV/ 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

INVENTORY RESTS AT 318.423 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A SMALL 165 contracts from 194,264 UP TO 194,429 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY RISE IN PRICE OF SILVER TO THE TUNE OF 4 CENTS  ON FRIDAY.  WE HAD WITHOUT A DOUBT ANOTHER MAJOR SHORT COVERING FROM OUR BANKERS AS THEY HAVE CAPITULATED. NOT ONLY THAT BUT OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 1721 PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD NO COMEX SILVER COMEX LIQUIDATION. BUT, IF WE TAKE THE SMALL OI GAIN AT THE COMEX OF 165 CONTRACTS TO THE 1721 OI TRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A GAIN OF 1886 OPEN INTEREST CONTRACTS DESPITE THE MAJOR BANKER SHORT COVERING. WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ: 9.43 MILLION OZ!!!

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE TINY SIZED RISE OF 4 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER 1721 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR JANUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(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 SUNDAY night/MONDAY morning: Shanghai closed UP 17.73 points or 0.53% /Hang Sang CLOSED UP 84.89 pts or 0.28% / The Nikkei closed UP 208.20 POINTS OR 0.89%/Australia’s all ordinaires CLOSED UP 0.11%/Chinese yuan (ONSHORE) closed UP at 6.4974/Oil UP to 61.90 dollars per barrel for WTI and 67.85 for Brent. Stocks in Europe OPENED MOSTLY GREEN.   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.4974. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.4943 //ONSHORE YUAN  STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS  HAPPY TODAY.(GOOD MARKETS)

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/South Korea

 Huge crypto carnage as the South Korean government launches a probe into their use

( zerohedge)

b) REPORT ON JAPAN

3 c CHINA

4. EUROPEAN AFFAIRS

 i)EU

The end of QE in Europe will cause peripheral bonds to collapse in price (rise in yield)

( zerohedge)

UK Political cabinet shuffle:

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Saudi Arabia

Eleven more Saudi royals have been arrested for protesting against MBS’s austerity measures

( zerohedge)

ii)  Iran
Strange:  former President Mahmoud Ahmadinajad arrested for inciting those Iranian protests
(courtesy zerohedge)
iii)So far the following has no real explanation: an Iranian tanker collided with a Chinese vessel off the coast of China.  The Chinese sailors were rescued.  Nobody on the Iranian vessel was rescued.  It is no burning out of control and in danger of exploding and sinking

( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

Venezuela

Chaos in Caracas as mobs surround shops after a government mandated price cuts,

( zerohedge)

9. PHYSICAL MARKETS

i)Eric Sprott comments on my work  (and Ronan Manly/Koos Jansen) in the extra-ordinary use of ERFP’s  (exchange for physicals).  Sprott suggests (as do I) that there is  little metal available for delivery in New York.  His final comment is worth noting:  “Maybe the whole fraud at the comex is unwinding”

( Eric Sprott/Craig Hemke/Harvey Organ/Koos Jansen/Ron Manly)

ii)Ed Steer comments on the latest COT report. However he does not address the huge EFP transfers which distorts this report greatly

( Ed Steer/GATA)

iii)GATA is hosting another conference in March and a Hong Kong conference in April

( Chris Powell/GATA)

iv)This is how the major banks are going to cause a massive fall in Bitcoin pricing:  they are already building up a huge short position in the futures markets

( zerohedge)

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

i)the White House is now asking for a down payment on the wall:  18 billion dollars to rebuild 700 miles

( zerohedge)

ii)It looks like it will be a battle in Congress over the next 2 weeks.  The Democrats wants a permanent DACA ie. permanent status for illegal immigrants that were children when they arrived years ago vs the Republican wall

should be quite a battle

( zerohedge)

iii)SWAMP STORIES

a)The SEC is now probing Jared Kushner companies over the use of immigrant visa programs i.e. E. B. -5

( zerohedge)

b)As we reported to you on Friday, Fusion GPS did hand over all bank records after a Federal judge struck down the firm’s attempt to conceal the records form the Intelligence Committee.   We will now learn first hand who financed the report

( zerohedge)

c)Wikileaks publishes the entire Michael Wolff book Fire and Fury as a PDF

( zerohedge)

d)we are going to receive shortly the Office of the Attorney General’s report on the Clinton email scandal as well as the Lynch tarmac affair and the Clinton Foundation.  This will likely trigger the use of a second special counsel to investigate those crimes
( zerohedge)
e)they are going after Dr Jane Sanders and Bernie Sanders in a 10 million dollar fraud probe.  That may end Bernie’s chances at becoming President in 2020( zerohedge)

iv) Stockman takes on Wall Street and the false narrative of a growing economy

( David Stockman/ContraCorner)

v)We have been harping on this for quite a while:  the death spiral for shopping malls.  The following suggests that many of the malls are in worse shape than many think

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY HUGE 9128 CONTRACTS UP to an OI level of 553,240 WITH THE SMALL SIZED RISE IN THE PRICE OF GOLD ($1.40 GAIN WITH RESPECT TO FRIDAY’S TRADING).  OBVIOUSLY WE HAD ZERO COMEX GOLD LIQUIDATION WITH ANOTHER STRONG GAIN IN TOTAL OPEN INTEREST AS WE WITNESSED ANOTHER HUMONGOUS COMEX TRANSFER THROUGH THE EFP ROUTE. THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. THE CME REPORTS THAT 6115 EFP’S WERE ISSUED FOR FEBRUARY AND 0 EFP’s  FOR APRIL:  TOTAL  6115 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS.

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 15,243 OI CONTRACTS IN THAT 6115 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 9,128 COMEX CONTRACTS. NET GAIN: 15,243 contracts OR 1,524,300 OZ OR 47.409 TONNES

Result: A STRONG SIZED INCREASE IN COMEX OPEN INTEREST WITH THE SMALL RISE IN THE PRICE OF FRIDAY’S GOLD TRADING (1.40.) WE HAD NO GOLD LIQUIDATION ANYWHERE. TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 15,243 OI CONTRACTS…

We have now entered the active contract month of JANUARY. The open interest for the front month of JANUARY saw it’s open interest FALL by 4 contracts DOWN to 179.  We had 4 notices served on Friday so we GAINED 0 contracts or NIL additional oz of gold will  stand in this non active month

FEBRUARY saw a GAIN of 869 contacts UP to 371,302.  March saw a gain of 34 contracts up to 101.  April saw a GAIN of 7,257 contracts UP to 83,725.

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

PRELIMINARY VOLUME TODAY ESTIMATED; 329,333

FINAL NUMBERS CONFIRMED FOR YESTERDAY: 412,858

comex gold volumes are RISING AGAIN

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And now for the wild silver comex results.

Total silver OI ROSE BY A TINY 165  CONTRACTS FROM 194,264 UP TO 194,429 DESPITE YESTERDAY’S TINY 4 CENT RISE  AGAIN WE MUST HAVE HAD SOME BANKER SHORT COVERING.   NOT ONLY THAT, WE HAD ANOTHER GOOD SIZED 1721 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (ZERO FOR ALL OTHER MONTHS) TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON: THE TOTAL EFP’S ISSUED: 1721. IT SURE LOOKS LIKE THE SILVER BOYS HAVE STARTED TO MIGRATE TO LONDON FROM THE START OF DELIVERY MONTH AND CONTINUING RIGHT THROUGH UNTIL FIRST DAY NOTICE JUST LIKE WE ARE WITNESSING TODAY. USUALLY WE NOTED THAT CONTRACTION IN OI OCCURRED ONLY DURING THE LAST WEEK OF AN UPCOMING ACTIVE DELIVERY MONTH. THIS PROCESS HAS JUST BEGUN IN EARNEST IN SILVER STARTING IN SEPTEMBER. HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS. WE HAD ZERO LONG COMEX SILVER LIQUIDATION BUT A RISE IN TOTAL SILVER OI AS IT SEEMS THAT WE ARE WITNESSING SOME MAJOR BANKER SHORT-COVERING. WE ARE ALSO WITNESSING A FAIR AMOUNT OF SILVER OUNCES STANDING FOR COMEX METAL IN THIS NON ACTIVE JANUARY AS WELL AS THAT CONTINUAL MIGRATION OF EFPS OVER TO LONDON. ON A PERCENTAGE BASIS THERE ARE MORE EFP’S ISSUED FOR GOLD THAN SILVER AS IT SEEMS THAT A MAJOR PLAYER WISHES TO TAKE ON THE CROOKED COMEX SHORTS. ON A NET BASIS WE GAINED 1886 OPEN INTEREST CONTRACTS:

165 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1721 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN: 1886 CONTRACTS

We are now in the poor non active delivery month of January and here the OI LOSS by 2 contracts DOWN to 39.  We had 2 notices served upon yesterday, so we GAINED 0 contracts or an additional NIL oz will  stand for delivery

February saw a GAIN OF 0 OI contracts REMAINING AT 182. The March contract LOST 1424 contracts DOWN to 149,964.

We had 0 notice(s) filed for NIL oz for the January 2018 contract for silver

INITIAL standings for JANUARY

Jan 8/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
nil  oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
nil oz
No of oz served (contracts) today
0 notice(s)
NIL OZ
No of oz to be served (notices)
179 contracts
(17,900 oz)
Total monthly oz gold served (contracts) so far this month
242 notices
24200 oz
0.7527 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
We had 0 inventory movement at the dealer accounts
total inventory movement at the dealer accounts:  nil
we  had no inventory movement at the customer accounts
total customer account:  nil oz
total registered or dealer gold:  568,449.373 oz or 17.681 tonnes
total registered and eligible (customer) gold;  287.22 tones

For JANUARY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s) of which 0 notices were stopped (received) by 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 JANUARY. contract month, we take the total number of notices filed so far for the month (242) x 100 oz or 24200 oz, to which we add the difference between the open interest for the front month of JAN. (179 contracts) minus the number of notices served upon today (0 x 100 oz per contract) equals 42,100 oz, the number of ounces standing in this active month of JANUARY

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

No of notices served (242 x 100 oz or ounces + {(179)OI for the front month minus the number of notices served upon today (0 x 100 oz which equals 42,100 oz standing in this active delivery month of JANUARY (1.303 tonnes). THERE IS 33.29 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL STAND IN THIS NON ACTIVE DELIVERY MONTH OF JANUARY

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ON FIRST DAY NOTICE FOR JANUARY 2017, THE INITIAL GOLD STANDING: 3.904 TONNES STANDING

BY THE END OF THE MONTH: FINAL: 3.555 TONNES STOOD FOR COMEX DELIVERY AS THE REMAINDER HAD TRANSFERRED OVER TO LONDON FORWARDS.

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Total dealer inventory 568,449.373 oz or 17.681 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 9,243,329.256 or 287/22 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 67 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

DECEMBER FINAL standings

Jan 58 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 nil  oz
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 nil oz
No of oz served today (contracts)
0
CONTRACT(S)
(10,000 OZ)
No of oz to be served (notices)
39 contract
(195,000 oz)
Total monthly oz silver served (contracts) 509 contracts

(2,535,000 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

we had no inventory movement at the dealer side of things

total inventory movement: nil oz

we had no inventory movement at the customer side of things

total inventory movement; nil

total dealer silver:  45.466 million

total dealer + customer silver:  245.527 million oz

The total number of notices filed today for the JANUARY. contract month is represented by 0 contract(s) FOR 10,000 oz. To calculate the number of silver ounces that will stand for delivery in JANUARY., we take the total number of notices filed for the month so far at 507 x 5,000 oz = 2,535,000 oz to which we add the difference between the open interest for the front month of JAN. (39) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY contract month: 507(notices served so far)x 5000 oz + OI for front month of JANUARY(39) -number of notices served upon today (0)x 5000 oz equals 2,730,000 oz of silver standing for the JANUARY contract month. This is VERY GOOD for this NONACTIVE delivery month of JANUARY.  WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL  OZ WILL  STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JANUARY. 

ON FIRST DAY NOTICE FOR THE JANUARY 2017 CONTRACT WE HAD 3,790 MILLION OZ STAND.

THE FINAL STANDING: 3,730 MILLION OZ

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ESTIMATED VOLUME FOR TODAY: 81.496

CONFIRMED VOLUME FOR FRIDAY: 92.059 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 92,059 CONTRACTS EQUATES TO 460 MILLION OZ OR 65.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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: 59.182 million
Total number of dealer and customer silver: 240.232 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 2.5 percent to NAV usa funds and Negative 2.5% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.8%
Percentage of fund in silver:37.0%
cash .+.2%( Jan 8/2018)

2. Sprott silver fund (PSLV): NAV RISES TO -1.15% (Jan 5/2018)??????????????????????????????
3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.58% to NAV (Jan 45/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.15%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.58%/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

Jan 8/with gold falling by a tiny $1.40 and this being after 12 consecutive gains, today they announce another 1.44 tonnes of gold withdrawal from the GLD/

Jan 5/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.32 TONNES

Jan 4/2018/no change in gold inventory at the GLD/Inventory rests at 836.32 tonnes

Jan 3/a huge withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 836.32 tonnes

Jan 2/2018/no changes in gold inventory at the GLD/inventory rests at 837.50 tonnes

Dec 29/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.50 TONNES

Dec 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.50 TONNES

Dec 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/ INVENTORY RESTS AT 837.50 TONNES

Dec 26/no change in gold inventory at the GLD

Dec 22/ A DEPOSIT OF 1.48 TONNES OF GOLD INTO GLD INVENTORY/INVENTORY RESTS AT 837.50 TONNES

Dec 21′ NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.02 TONNES

Dec 20/DESPITE THE GOOD ADVANCE IN PRICE TODAY/THE CROOKS RAIDED THE COOKIE JAR TO THE TUNE OF 1.18 TONNES/INVENTORY RESTS AT 836.02 TONNES

Dec 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.20 TONNES

Dec 18 SHOCKINGLY AFTER TWO GOOD GOLD TRADING DAYS, THE CROOKS RAID THE COOKIE JAR BY THE SUM OF 7.09 TONNES/INVENTORY RESTS AT 837.20 TONNES

Dec 15/NO CHANGES IN GOLD INVENTORY/RESTS AT 844.29 TONNES.

Dec 14/a good sized gain of 1.48 tonnes of gold into the GLD/inventory rests at 844.29 tones

Dec 13/no changes in gold inventory at the GLD/inventory rests at 842.81 tonnes

Dec 12/SURPRISINGLY NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 11/SURPRISINGLY NO CHANGES IN GOLD INVENTORY AT THE GLD DESPITE THE CONSTANT RAIDS ON GOLD/INVENTORY RESTS AT 842.81 TONNES

Dec 8/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 7/A BIG WITHDRAWAL OF 2.66 TONNES FROM THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 6/No changes in GOLD inventory at the GLD/Inventory rests at 845.47 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Jan 8/2018/ Inventory rests tonight at 836.32 tonnes

*IN LAST 306 TRADING DAYS: 106.09 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 241 TRADING DAYS: A NET 51.22 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 210.31TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

jan 8/no change in silver inventory at the SLV/Inventory rests at 318.423 million oz/

Jan 5/DESPITE NO CHANGE IN SILVER PRICING, WE HAD A HUGE WITHDRAWAL OF 2.026 MILLION OZ/INVENTORY RESTS AT 318.423 MILLION OZ.

Jan 4.2018/a slight withdrawal of 180,000 oz and this would be to pay for fees/inventory rests at 320.449 million oz/

Jan 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.629 MILLION OZ.

Jan 2/WITH SILVER UP DRAMATICALLY THESE PAST 4 TRADING DAYS, THE FOLLOWING MAKES NO SENSE: WE HAD A WITHDRAWAL OF 2.83 MILLION OZ FROM THE SLV

INVENTORY RESTS AT 320.629 MILLION OZ/

Dec 29/no changes in silver inventory at the SLV/inventory rests at 323.459 million oz/

Dec 28/DESPITE THE RISE IN SILVER AGAIN BY 13 CENTS, WE LOST ANOTHER 1,251,000 OZ OF SILVER FROM THE SILVER.

Dec 27/WITH SILVER UP AGAIN BY 17 CENTS, WE LOST ANOTHER 802,000 OZ OF SILVER INVENTORY/WHAT CROOKS/INVENTORY RESTS AT 324.780 MILLION OZ/

Dec 26/no change in silver inventory at the SLV./Inventory rests at 325.582

Dec 21/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.227 MILLION OZ/

Dec 20/INVENTORY REMAINS CONSTANT AT 326.337 MILLION OZ (COMPARE WITH GLD)

Dec 19/SILVER INVENTORY REMAINS CONSTANT AT 326.337 MILLION OZ

Dec 18.2017//SILVER INVENTORY CONTINUES TO REMAIN PAT./INVENTORY REMAINS AT 326.337 MILLION OZ/

INVENTORY RESTS AT 326.337 TONNES

Dec 15/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.337 MILLION OZ/

Dec 14/a small withdrawal of 377,000 oz and that usually means to pay for fees./inventory rests at 326.337 million oz/

Dec 13/no change in silver inventory at the SLV/Inventory rests at 326.714 million oz/

Dec 12/WOW!ANOTHER STRANGE ONE: SILVER HAS BEEN DOWN FOR 10 CONSECUTIVE DAYS, YET THE SLV ADDS ANOTHER 1.415 MILLION OZ TO ITS INVENTORY. IN THAT 10 DAY PERIOD, SLV ADDS 9.584 MILLION OZ/

INVENTORY RESTS AT 326.714 MILLION OZ

Dec 11/WOW!! ANOTHER STRANGE ONE: SILVER DESPITE BEING DOWN FOR 9 CONSECUTIVE TRADING DAYS ADDS ANOTHER 944,000 OZ TO ITS INVENTORY. FROM NOV 30 UNTIL TODAY SILVER HAS BEEN DOWN EVERY DAY. HOWEVER THE INVENTORY OF SILVER HAS RISEN 8.169 MILLION OZ.

Dec 8/A HUGE DEPOSIT OF 2.642 MILLION OZ/INVENTORY RESTS AT 324.355 MILLION OZ/

Dec 7/strange!! with the continual whacking of silver, no change in silver inventory at the SLV/Inventory rests at 321.713

Dec 6/no change in silver inventory at the SLV/Inventory remains at 21.713 million oz.

Jan 8/2017:

Inventory 318,423 million oz

end

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

+ 1.69%
12 Month MM GOFO
+ 1.95%
30 day trend

end

Major gold/silver trading /commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

10 Reasons Why You Should Add To Your Gold Holdings

10 Reasons Why You Should Add To Your Gold Holdings

– Gold currently undervalued
– Since 2000, the gold price has beaten the S&P 500 Index
– A ‘a once-in-a-decade opportunity’ as gold-to-S&P 500 ratio is at its lowest point in 10 years.
– Reached ‘peak gold’ as exploration budgets continue to tighten
– $80 trillion sits in global equities, a ‘ticking time bomb’
– Gold remains an appealing diversifier in the current environment of high valuations and uncertainties


by Frank Holmes via Forbes.com

It’s important to remember that the precious metal has historically shared a low-to-negative correlation with many traditional assets such as cash, Treasuries and stocks, both domestic and international. This makes it, I believe, an appealing diversifier in the event of a correction in the capital and forex markets.

Need more reasons to add to your gold holdings? Below are 10 charts that show why the yellow metal is undervalued right now:
1. The gold price has crushed the market so far this century.
Investors are invariably surprised to see the top chart whenever I show it at conferences. Believe it or not, since 2000, the gold price has beaten the S&P 500 Index, which has undergone two 40 percent corrections so far this century.

2. Compared to stocks, gold looks like a bargain.

As of this month, the gold-to-S&P 500 ratio is at its lowest point in 10 years. For mean reversion to occur, either the gold price needs to appreciate or share prices need to fall. Either way, consider this a once-in-a-decade opportunity.

3. Exploration budgets keep getting slashed.

One of the reasons why gold is so highly valued is for its scarcity. There’s a possibility it could get even scarcer as explorers continue to trim exploration budgets and uncover fewer and fewer large deposits. The time between initial discovery and day one of production is also expanding. This has led many experts in the field to wonder if we’ve finally reached “peak gold.”

4. Gold stocks could be just getting started.

Last year marked a turnaround in gold prices and gold stocks, and according to analysts at Incrementum Capital Partners, a Swiss financial management firm, they’re just getting warmed up.When charted against past gold bull markets, the present one looks as if it still has a lot of room to run.

5. Is too much money going into equities?

More than $80 trillion sits in global equities right now, a monumental sum that’s likely to surge even more as we venture further into the bull market. Some worry this is a ticking time bomb just waiting to go off. Another correction similar to the one 10 years ago would wipe out trillions of dollars around the world, and it’s then that the investment case for gold would become strongest.

6. Higher debt could mean higher gold prices.

The yellow metal has historically tracked global debt, which stood at $217 trillion as of the first quarter of this year. Looking just at the U.S., debt is expected to continue on an upward trend, driven not just by new, and largely unfunded, spending but also underlying interest. By most estimates, President Donald Trump’s historic tax cuts, although welcome, will contribute to even higher debt as a percent of gross domestic product (GDP).

7. The Fed’s about to take away the punch bowl.

“My opinion is that business cycles don’t just end accidentally. They end by the Fed. If the Fed tightens enough to induce a recession, that’s the end of the business cycle.” That’s according to MKM Partners’ chief economist Mike Darda, who was referring to the Federal Reserve’s efforts to unwind its $4.5 trillion balance sheet after it bought vast quantities of government bonds and mortgage-backed securities to mitigate the effects of the Great Recession. There’s definitely a huge amount of risk here: Five of the previous six times the Fed has similarly reduced its balance sheet, between 1921 and 2000, ended in recession.

8. Rate hike cycles have rarely ended well.

Rate hike cycles also have a mixed record. According to Incrementum research, only three such cycles in the past 100 years have not ended in a recession. Obviously there’s no guarantee that this particular round of tightening will have the same outcome, but if you recognize the risk here, it might be prudent to have as much as 10 percent of your wealth in gold bullion and gold stocks.

9. Trillions of dollars of global bonds are guaranteed to lose money right now.

As of May of this year, nearly $10 trillion of bonds around the world were guaranteed to cost investors money, as more and more central banks instituted negative interest rate policies (NIRPs) to spur consumer spending. Instead, it encouraged many savers to yank their cash out of banks and convert it into gold. That’s precisely what households in Germany did, and by 2016, the European country became the world’s biggest investor in the yellow metal.

10. The Love Trade is still driving gold demand.

The chart above, based on data provided by Moore Research, shows gold’s 30-year seasonal trading pattern. Although it’s changed over the past few years, the pattern reflects the Love Trade in practice. According to the data, the gold price rallies early in the year as we approach the Chinese New Year, then dips in the summer. After that it surges on massive gold-buying in India during Diwali, in late October and early November. Finally, it ends the year at its highest point during the Indian wedding season, when demand is high. The pattern isn’t always observed exactly how I described, but it happens frequently enough for us to make educated, informed decisions on when to trade the precious metal.

This post was published here.

Related reading

Gold Has Longest Winning Streak Since 2011

Gold Has Best Year Since 2010 With Near 14% Gain In 2017

98,750,067,000,000 Reasons to Buy Gold in 2018

LISTEN: What Peak Gold, Interest Rates And Current Geopolitical Tensions Mean For Gold in 2018

News and Commentary

Gold prices firm amid higher U.S. rate hike environment (Reuters.com)

Asia Stocks Rise as Earnings Awaited, Won Weakens (Bloomberg.com)

Will 2018 mirror 2011 as a landmark year for precious metals? (TheNational.ae)

7 reasons why investors should go for gold in 2018 (MarketWatch.com)

Japan’s Abe urges central bank’s Kuroda to keep up efforts on economy (Reuters.com)


Source: Frank Holmes

Bombay Stock Exchange plans oil and gold futures (IndiaTimes.com)

Eric Sprott: Maybe the whole fraud of the Comex is unwinding (SprottMoney.com)

Why Trump Is Probably to Blame for the Weak Dollar (Bloomberg.com)

U.K. Consumer Pullback Sees Worst Year for Spending Since 2012 (Bloomberg.com)

Ghost of Weimar Looms Over German Politics (Bloomberg.com)

Gold Prices (LBMA AM)

08 Jan: USD 1,318.80, GBP 974.33 & EUR 1,099.09 per ounce
05 Jan: USD 1,317.90, GBP 973.40 & EUR 1,094.25 per ounce
04 Jan: USD 1,313.70, GBP 969.77 & EUR 1,090.24 per ounce
03 Jan: USD 1,314.60, GBP 968.20 & EUR 1,092.96 per ounce
02 Jan: USD 1,312.80, GBP 968.85 & EUR 1,087.52 per ounce
29 Dec: USD 1,296.50, GBP 960.84 & EUR 1,082.45 per ounce
28 Dec: USD 1,291.60, GBP 960.43 & EUR 1,082.75 per ounce

Silver Prices (LBMA)

08 Jan: USD 17.17, GBP 12.68 & EUR 14.33 per ounce
05 Jan: USD 17.15, GBP 12.66 & EUR 14.24 per ounce
04 Jan: USD 17.13, GBP 12.64 & EUR 14.20 per ounce
03 Jan: USD 17.12, GBP 12.63 & EUR 14.25 per ounce
02 Jan: USD 17.06, GBP 12.59 & EUR 14.15 per ounce
29 Dec: USD 16.87, GBP 12.48 & EUR 14.07 per ounce
28 Dec: USD 16.74, GBP 12.46 & EUR 14.02 per ounce


Recent Market Updates

– Spectre, Meltdown Highlight Online Banking and Digital Gold Risks
– Palladium Prices Surge To New Record High Over $1,100 On Supply Crunch Concerns
– Gold Has Best Year Since 2010 With Near 14% Gain In 2017
– Happy 2nd Birthday Bail-in Tool! We Suggest Gold As The Perfect Gift
– 98,750,067,000,000 Reasons to Buy Gold in 2018
– Gold, Bitcoin and the Blockchain Replaces the Banks – Realists Guide To The Future
– It’s A Wonderful Life Is A Wonderful Lesson To Hold Gold Outside of The Banking System
– Goldnomics Podcast – Gold, Stocks, Bitcoin in 2018. Everything Bubble Bursts?
– What Peak Gold, Interest Rates And Current Geopolitical Tensions Mean For Gold in 2018
– New Rules For Cross-Border Cash and Gold Bullion Movements
– ‘Gold Strengthens Public Confidence In The Central Bank’ – Bundesbank
– WGC: 2018 Set To Be A Positive Year For Price of Gold and Investors
– Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

janskoyles

end

Eric Sprott comments on my work  (and Ronan Manly/Koos Jansen) in the extra-ordinary use of ERFP’s  (exchange for physicals).  Sprott suggests (as do I) that there is  little metal available for delivery in New York.  His final comment is worth noting:  “Maybe the whole fraud at the comex is unwinding”

(courtesy Eric Sprott/Craig Hemke/Harvey Organ/Koos Jansen/Ron Manly)

Eric Sprott: Maybe the whole fraud of the Comex is unwinding

 Section: 

3:12p ET Friday, January 5, 2018

Dear Friend of GATA and Gold:

Weakness in the U.S. dollar is pushing gold and silver up along with commodities generally, mining entrepreneur Eric Sprott tells interviewer Craig Hemke in the weekly wrapup for Sprott Money News.

Citing the work of gold researchers Harvey Organ and Ronan Manly, Sprott and Hemke also discuss the extraordinary increase in the use of the “exchange for physicals” procedure for clearing gold and silver contracts on the New York Commodities Exchange, which suggests that little metal is available for delivery in New York. “Maybe the whole fraud of the Comex is unwinding,” Sprott says.

We can only hope.

The interview is 12 minutes long and can be heard at the Sprott Money internet site here:

https://www.sprottmoney.com/Blog/maybe-the-whole-fraud-of-the-comex-is-u…

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

end

Ed Steer comments on the latest COT report. However he does not address the huge EFP transfers which distorts this report greatly

(courtesy Ed Steer/GATA)

Ed Steer’s Gold & Silver Digest: Another unhappy COT report

 Section: 

8p ET Sunday, January 7, 2018

Dear Friend of GATA and Gold:

GATA board member Ed Steer’s Gold & Silver Digest letter for Saturday, headlined “Another Unhappy COT Report,” is posted in the clear at GoldSeek here:

http://news.goldseek.com/GoldSeek/1515360227.php

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

end

GATA is hosting another conference in March and a Hong Kong conference in April

(courtesy Chris Powell/GATA)

Join GATA at Singapore conference in March and Hong Kong conference in April

 Section: 

8:40p ET Sunday, January 7, 2018

Dear Friend of GATA and Gold:

Your secretary/treasurer will make presentations again at this year’s Mining Investment Asia conference in Singapore, to be held Monday through Wednesday, March 26-28, and the Mines and Money Asia conference in Hong Kong, to be held Tuesday through Friday, April 3-6.

Among the speakers at the Mining Investment Asia conference in Singapore will be:

— Ronald-Peter Stoferle, managing partner of Incrementum AG in Liechtenstein, co-author of the annual “In Gold We Trust Report.”

— Thomas Puppendahl, managing partner of Cartesian Royalty Holdings in Singapore

Jayant Bhandari, mining and minerals expert for Anarcho Capital.

— And mining industry leaders, investment company representatives, and government officials from around the world.

Mining Investment Asia will be held at the Marina Bay Sands hotel and conference center. To learn more about the conference and to register, visit:

https://www.mininginvestmentasia.com/

Speakers at the Mines and Money Asia conference will include:

— Frank Holmes, chief executive officer of U.S. Global Investors.

— Grant Williams of the Things That Makes You Go Hmmm letter and Real Vision.

— Jayant Bhandari, mining and minerals expert for Anarcho Capital.

— Juerg Kiener of Swiss Asia Capital in Singapore.

— Mining entrepreneur and geologist Keith Barron.

— Rick Rule of Sprott U.S. Holdings.

— Mining entrepreneur Robert Friedland.

— Thomas Puppendahl, managing partner of Cartesian Royalty Holdings in Singapore.

— And mining industry leaders, investment company representatives, and government officials from around the world.

The Mines and Money Asia conference will be held at the Hong Kong Convention and Exhibition Centre. To learn more about the conference and to register, visit:

https://asia.minesandmoney.com/

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

end

This is how the major banks are going to cause a massive fall in Bitcoin pricing:  they are already building up a huge short position in the futures markets

(courtesy zerohedge)

Bitcoin Futures Traders Are Quietly Building A Big Short Position

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event: while it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000.

And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

We discussed previously  that Bitcoin futures were off to a slow start in the first week of trading, with volumes of CBOE Bitcoin futures averaging just around $40MM per day, despite intense media hype helping fuel heavy trading when both contracts launched, at least in the first hours of trading.

Since then, volumes spike briefly in the following week coinciding with the launch of the CME futures, with volumes of on both exchanges at relatively similar levels.

Then, as JPM’s Nikolaos Panagirtzoglou shows, after a spike in volumes to around $200mn on 22 December, which saw sharp swings in underlying Bitcoin prices, volumes have averaged around $50mn and $60mn per day on the CBOE and CME futures, respectively.

sdf

One month after their launch, futures trading volumes remain very modest compared to average Bitcoin trading volumes of around $15bn per day since futures contracts were launched according to coinmarketcap.com data. While open interest in both the CBOE and CME contracts has risen steadily, it too remains rather modest at around $60mn and $70mn, respectively.

Putting futures volumes in context, on Friday, the combined size of the bitcoin-futures markets at the two exchanges was roughly $150 million, measured in terms of the value of outstanding contracts, while the total value of all bitcoins in existence was around $290 billion. 

asd

Another factor behind the slow volume growth may be the reluctance of many Wall Street banks to touch bitcoin futures. Firms such as JPMorgan Chase & Co. and Bank of America Merrill Lynch haven’t offered their clients access to bitcoin futures.

Another notable observation: with both volumes and open interest between the two sets of futures contracts converging, it suggests that a large degree of arbitraging of price differentials has taken place between the contracts which initially showed significant divergence. As JPM further notes, when trading in the CBOE futures initially started, a striking feature was the wide basis between the futures contract and the underlying bitcoin prices, which intraday exceeded $2000 or more than 12% of the underlying price at the time. While traders provided numerous explanation for the spread, since then the difference between futures prices on both the CBOE and CME contracts and underlying bitcoin prices has narrowed significantly (chart below), and even turned negative briefly last week.

asd

That covers bitcoin futures volumes, but what about positioning? Well, as many traders expected, it appears that institutions are using the futures product to slowly but surely build a short position in bitcoin. According to the CFTC Commitment of Traders report (available CBOE futures), non-commercial traders held a net short position of around $30mn as of Tuesday Dec 26, or around half of the total open interest.

Separately, the Traders in Financial Futures breakdown provided by the CFTC show that the leveraged funds category that consists largely of hedge funds and various money managers had a short of around $14mn, or around a quarter of the total open interest.

In other words, spec investors have used the futures contracts to establish Bitcoin shorts.

How does this compare with other asset classes typically used as a store of wealth such as gold and silver? As JPMorgan explains, for gold futures, non-commercial investors held as of Dec 26 a net long position of around 30% of open interest, of which the managed money category held around 80%, while in silver futures both the non-commercial and managed money categories were close to zero.

asd

* * *

An analysis by the Wall Street Journal  confirms that while hedge funds and other large traders are betting that bitcoin will fall, small investors remain convinced that bitcoin prices will keep on rising.

As the WSJ reports, for traders who hold fewer than 25 of Cboe’s bitcoin futures contracts—a category that likely encompasses many retail investors—bullish bets are 3.6 times more common than bearish ones, according to the latest Commodity Futures Trading Commission data that cover trading through Tuesday.

Meanwhile, the big CBOE players in bitcoin futures tend to be short. For instance, among “other reportables”—large trading firms that don’t necessarily manage money for outside investors—short bets outweighed bullish “long” bets by a factor of 2.6 last week.

asd

The historical data will probably not come as a big surprise: many skeptics on Wall Street have called bitcoin a bubble and would be more apt to bet on its decline. In a sign of how more conservative firms are keeping their distance, the CFTC data show near-zero trading in Cboe’s bitcoin futures by banks and asset managers.

There is probably more optimism in the retail segment than there is in the institutional segment,” said Steven Sanders, an executive vice president at Interactive Brokers Group Inc., an electronic brokerage firm that offers its customers access to bitcoin futures.

And sure enough, presenting JPM’s data in a slightly different context, COT data shows that hedge funds and other money managers had placed almost 40% more short bets than long bets last week.

Curiously, it is worth noting that that represented a less bearish outlook than they had in late December, when such funds had more than four times as many short bets as long bets.

To be sure, shorting bitcoin futures doesn’t necessarily mean a trader expects bitcoin to crash. In a natural hedge, a cryptocurrency trading firm with significant holdings of bitcoin might go short to hedge those inventories against a price fall. That would make the firm indifferent as to whether bitcoin goes up or down.

As the WSJ further notes, shorting futs could also be part of certain sophisticated trading strategies, such as betting that rival cryptocurrencies will outperform bitcoin. One such rival, Ethereum, rose above $1,000 for the first time last week, more than double its value from the beginning of December.

With the CFTC data, “you’re not seeing the full picture,” said James Koutoulas, chief executive of hedge-fund firm Typhon Capital Management, which trades futures in bitcoin as well as commodities. Typhon has swung back and forth, being long and short bitcoin futures at various times, Mr. Koutoulas said.

Of course, it’s not just bitcoin.

As JPM writes, any given cryptocurrency faces competition from other cryptocurrencies, posing risks to their individual valuations. Indeed, the market capitalisation of Bitcoin has risen by around $100bn to around $270bn since late November, while other cryptocurrencies have seen a significant increase in market cap from around $130bn to nearly $500bn currently.

sdf

Other cryptocurrencies – mostly ethereum and ripple – have benefited from the increased interest in Bitcoin amid the listing of exchange traded futures, as well as the sharp rise in Bitcoin average transaction costs from around $6 per transaction in early December to nearly $60 per transaction on Dec 22, before settling in a $25-$30 range in recent days.

sdf

By contrast, average transaction fees in Ethereum reached a high of $1.50 in early December and were around $1 on Jan 4, while average transaction fees in Ripple measure a few cents according to bitinfocharts.com. The one-third share of Bitcoin of the total cryptocurrency market cap of around $770bn represents a new low. In contrast, the market of $770bn for the total cryptocurrency market represents a new high.

* * *

And while we await futures contracts to be announced on other cryptos, most likely ethereum and ripple next, events which we believe will be catalysts for substantial price upside in both cryptocurrencies, the question for bitcoin is who will be right: institutions, who are short, or retail investors (especially those in Japan and South Korea) who remain fervently long. If the past 7 years – in which retail has consistently trounced “smart money” returns are any indication, bitcoin is about to soar as yet another major short squeeze develops in the coming weeks and months.

 end
Cryptocurrencies stage a dramatic comeback after a huge flash crash
(courtesy zerohedge)

Cryptocurrencies Stage Dramatic Comeback After Flash Crash

Update (1050ET): Ripple crashed down over 30% after the initial headlines then exploded back higher… and Ethereum is now unchanged on the day…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto28.png

*  *  *

Amid headlines that South Korean regulators are inspecting 6 banks, including Industrial Bank of Korea, that provide virtual accounts to companies related to cryptocurrency, has sparked selling pressure across the entire space with Ripple down almost 20% today.

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto22.png

Bloomberg reports that South Korea’s Financial Services Commission Chairman Choi Jong-ku said in a speech text:

  • There’s high possibility cryptocurrency transactions could be used in money laundering.
  • South Korea to suspend virtual account– related operations of banks if they are found to have broken laws related to cryptocurrency.
  • Regulator also strengthen probe into cryptocurrency exchanges over price manipulation, money laundering, pyramid scheme.
  • Side effects of cryptocurrency “serious”; regulator will consider all measures including shutdown of cryptocurrency exchanges.
  • Cryptocurrency fever in S. Korea is much stronger than other countries; regulator won’t let S. Korea take the lead in abnormal cryptocurrency trading.

And the last few days have seen that Korean exuberance being smashed out of cryptos.

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto23.png

Ethereum remains the YTD winner for now, but as is clear Ripple quickly went from hero to zero as the volatile trading continues.

Bitcoin is back below $15,000…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto21.png

Ethereum is holding above $1000 for now…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto25.png

and Ripple is testing significant support…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto24.png

As CoinTelegraph reports, as speculative investments into Bitcoin and altcoins continue to trouble regulators worldwide, Korea has taken a hardline stance in recent months.

New legislation will seek to place heavy restrictions on how cryptocurrency exchanges can operate in the country, as well as who can use them and to what extent.

South Koreans will likely only be able to hold one exchange account linked to their real name, while tax obligations are also being overhauled regarding profits.

Reporting on the inspection, Yonhap News Agency appeared to forecast a predatory climate for exchanges.

“They (the FIU and FSS) are seeking to cut off fund inflows into cryptocurrency exchanges and shutter cryptocurrency exchanges that have loopholes in their system,” it claims.

What these “loopholes” might entail remains vague, yet the security setup of principal exchanges has come into the spotlight following an organized hacking attempt by a Korean news agency.

Using private white-hat hackers, the agency successfully gained entry into exchange accounts it set up maliciously, bypassing even two-factor authentication, it reported last month.



Your early MONDAY 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 6.4975 /shanghai bourse CLOSED UP AT 17.73 POINTS 0.53% / HANG SANG CLOSED UP 84.89 POINTS OR 0.28%
2. Nikkei closed UP 208.20 POINTS OR 0.89% /USA: YEN RISES TO 113.11

3. Europe stocks OPENED MOSTLY GREEN   /USA dollar index RISES TO 92.27/Euro FALLS TO 1.1988

3b Japan 10 year bond yield: FALLS TO . +.060/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.11/ 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:: 61.90  and Brent: 67.85

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.414%/Italian 10 yr bond yield UP to 1.977% /SPAIN 10 YR BOND YIELD UP TO 1.487%

3j Greek 10 year bond yield FALLS TO : 3.747?????????????????

3k Gold at $1320.20 silver at:17.19: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 17/100 in roubles/dollar) 57.09

3m oil into the 61 dollar handle for WTI and 67 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 HUGE SIZED REVALUATION NORTHBOUND

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.35 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 0.9772 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1717 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.414%

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 2.467% early this morning. Thirty year rate at 2.801% /

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

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

Euphoria Sends Global Stocks To New Record Highs, Korean Won Boosts Dollar With Overnight Fireworks

Every day is “deja vu all over again” for global stock markets which hovered close to all-time highs on Monday as the best start to a year in eight years showed little sign of running out of steam, thanks to “goldilocks” – the combination of global growth and low inflation – which has sent risk appetites into overdrive

For traders returning from holiday, Wall Street last week posted its best start to a year in more than a decade; In yet another case of “bad news is again good news”, Friday’s disappointing jobs report, while weaker than expected, encouraged hopes that “brisk growth and low inflation can be sustained this year.” The MSCI world index was flat, just below record highs. It has gained 2.5% in the first five trading sessions of the year, its best start since 2010, according to Thomson Reuters data.

After surging every day last week, U.S. equity futures are little changed while European stocks followed Asian markets higher before the start of another earnings season that’s expected to produce strong profit outlooks. The euro and the pound retreated against the dollar which snapped a two-day drop as traders unwound stale short positions, while the euro slid under 1.20 after it failed to find support from data showing speculative long positioning on the common currency reached a record even as Euro-area economic confidence rose to a two-decade high; euro-area bonds and Treasuries were steady, with U.S. two-year yields within sight of psychological 2% level

European stocks climbed for a fourth day, rising to the highest levels since August 2015 and poised for their longest winning streak in two months. Europe’s Stoxx Europe 600 Index added 0.2%, following a weekly gain of 2.1%, the best start to a year since 2013 and its biggest weekly advance since April. Miners and carmakers lead gains, with the latter poised for the highest level since May 2015. Novo Nordisk shares pushed marginally higher after they said they had made a bid for Belgian rival Ablynx, whose shares are yet to open but were indicated higher by as much as 45%. Commerzbank and Deutsche Bank are propping up the DAX after Cerberus said they oppose a merger between the two lenders.

Earlier, Asian markets inched towards all-time peaks. Australia’s ASX 200 (+0.1%) and KOSPI (+0.4%) were positive ahead of inter-Korean talks which begin tomorrow. The tone for the rest of the Asia-Pac region was mostly reserved throughout the day amid the absence of Japanese participants due to public holiday. Chinese shares continued their strong start to the year, with property developers and energy stocks among the top gainers amid optimism over real estate sales and after the government said it would support mergers in the coal sector. The MSCI China Index climbed 0.7%, taking its advance this year to 6.3%; the gauge is at its highest in 10 years. The Hang Seng Index rises 0.3% for 10th straight gain, its best run since October 2012, while the Hang Seng China Enterprises Index rose +0.2%. The Shanghai Composite Index rose +0.5%; its seventh day of gains and the longest streak since March 2016. Real estate companies accounted for five of top 10 advancers on Hang Seng Index, as China developers listed in H.K. build on their best week since January 2015, while property subgauge outperforms in Shanghai. Of note: the PBoC refrained from liquidity operations for the 11th consecutive day, draining a net 40bn yuan in liquidity, amid reports of tighter shadow banking regulations, as well as PBoC researcher comments regarding scope for higher rates.

In an otherwise quiet FX session, South Korea’s won sharply dropped  after the government warned it would take action to stem one-sided moves in the currency, which spurred speculation of central bank intervention.

The KRW climbed against the dollar early Monday before sharply reversing to sink as much as 0.7% as traders speculated that the government was in the market. In response to a request for comment from Bloomberg News on the move, an official at the nation’s FX authority said that South Korea will take steps “sternly” in the case of one-sided moves in the won as the dollar weakens globally.  The currency had dropped to an intraday low of 1,069.80 per dollar, reversing an earlier gain to 1,058.80, with traders speculating that the swing was due to central bank intervention.

;'

The won was Asia’s best-performing currency last year, climbing almost 13 percent, as its economy benefited from thriving exports and the central bank raised interest rates for the first time since 2011. The Korean government may find that room to act against further advances will increasingly be limited as talks to revise a free-trade agreement with the U.S. proceeds, according to Schroder Investment Management.

Losses in most other emerging Asian currencies accelerated through the trading day.

As emerging market assets advanced this year, other Asian governments including Thailand and the Philippines have also flagged that they would act to smooth volatility if needed. “Since the start of the year, Asian currencies backed by strong trade and current account surpluses, particularly the TWD, THB and KRW have continued to strengthen,” said Heng Koon How, head of markets strategy, global economics and markets research at United Overseas Bank Ltd. “It’s not surprising that local authorities may act to stabilize FX markets in the interim and prevent excessive strength.”

The dollar index rose for the first time in three days as the rally in the euro faded and options signaled bets on a weaker common currency according to Bloomberg; support also came from the Fed’s Williams who said in Reuters interview that three rate hikes in 2018 “makes sense”. The dollar rose against all G10 peers on Monday, even as gains failed to push the Bloomberg Dollar Spot Index markedly away from a three-month low reached during Asian hours.

The greenback has been pressured since the start of the year amid doubts on the strength of the U.S. economic recovery and its impact on the pace of Federal Reserve policy tightening. Market players are focusing on riskier assets such as stocks, while persistent political worries in the U.S. have also weighed on the greenback.

“The dollar may recover in the short-term due to stale short positions and lack of any meaningful catalysts in other currencies to take the dollar another leg lower,” said Viraj Patel, a currency strategist at ING Bank NV. “But this doesn’t mask the structural problems — we think these political and protectionist risks for the dollar could be more evident ahead of President Trump’s State of the Union speech on Jan. 30.” Elsewhere, the Australian dollar reverses gains made since Friday’s U.S. non-farm payroll miss as macro accounts short spot against both kiwi and dollar. The MSCI EM Asia Index gained for a fifth day.

In commodity markets, many commodities paused after the recent run-up in prices, supported by a broadly weak U.S. dollar and the rise in global growth expectations. WTI and Brent crude futures both modestly in the green near 3-year highs that were hit late last week as the rig count last week showed that drillers lowered the number of rigs by 5 in the latest week. Precious metals were slightly lower with silver falling from 6-week highs and gold pulled back 0.1% after rising for its fourth straight week last week.

Attention in the U.S. will turn to the quarterly earnings season, which kicks off this week with the Street expecting solid growth of around 10 percent. Analysts at Bank of America Merrill Lynch said that the global economy had entered 2018 “firing on all cylinders”. “This growth is keeping our quant models bullish and driving earnings revisions to new highs,” they added. “We stay long outside the U.S., with Asia ex-Japan and Nikkei our growth plays, Europe still for yield.”

Meanwhile, in Europe attention is returning to Germany’s struggle to form a government, restraining the single currency. The pound fell and U.K. stocks were flat following weak economic data and reports that Prime Minister Theresa May is considering creating a position for a minister in charge of contingency planning for a no-deal Brexit.

Expected data today includes only US consumer credit. Other things to watch this week include U.S. inflation data; Fed spearkers including San Francisco Fed President John Williams and head of the New York Fed Bill Dudley; China producer and consumer prices data are due Wednesday, while a reading on the country’s money supply is expected in coming days;  U.S. firms announcing earnings this week include JPMorgan Chase & Co., Wells Fargo & Co. and BlackRock Inc.

Market Snapshot

  • S&P 500 futures little changed at 2,742.75
  • STOXX Europe 600 up 0.2% to 398.28
  • MSCI Asia Pacific up 0.2% to 179.67
  • MSCi Asia Pacific ex Japan up 0.3% to 589.26
  • Nikkei up 0.9% to 23,714.53
  • Topix up 0.9% to 1,880.34
  • Hang Seng Index up 0.3% to 30,899.53
  • Shanghai Composite up 0.5% to 3,409.48
  • Sensex up 0.6% to 34,370.28
  • Australia S&P/ASX 200 up 0.1% to 6,130.37
  • Kospi up 0.6% to 2,513.28
  • German 10Y yield fell 1.1 bps to 0.428%
  • Euro down 0.3% to $1.1989
  • Italian 10Y yield fell 0.9 bps to 1.737%
  • Spanish 10Y yield fell 2.0 bps to 1.502%
  • Brent futures up 0.3% to $67.80/bbl
  • Gold spot down 0.2% to $1,317.11
  • U.S. Dollar Index up 0.4% to 92.27

Top Overnight News

  • Stephen Bannon’s apology for his comments trashing Donald Trump’s family did little to tamp down the president’s anger at his former chief strategist, as aides describe the president demanding a stark choice from supporters of both men: you are either with Bannon, or with me
  • Angela Merkel’s own party bloc is making her life more difficult as hard-liners seek to force the German chancellor to shift to the right in talks on setting up a government, while she is also seeking a commitment this week from the rival Social Democrats to start formal negotiations on extending their governing alliance
  • U.K. PM Theresa May is starting the new year with a Cabinet reshuffle which will see her move her education and health ministers and create a post for a no-deal Brexit minister, according to newspaper reports
  • Berlusconi could end up holding the aces after Italy’s election
  • Merkel calls for deal as make-or-break government talks begin
  • China’s foreign-currency holdings rose $129 billion in 2017, posting the first annual gain since 2014 amid tighter capital controls, a stronger yuan and resilient economic growth
  • Euro-area January Sentix investor confidence at 32.9 vs 31.1 in December
  • Germany November factory orders fall 0.4% m/m; estimate unchanged m/m

Asia equity markets traded mostly higher as the positive tone seeped through from last Friday’s record performance on Wall Street where all major indexes printed at all time high levels despite the NFP miss, while the DJIA extended above the 25,000 level and posted its best start to the year in over a decade. As such, ASX 200 (+0.1%) and KOSPI (+0.4%) were positive in which with the latter outperformed ahead of inter-Korean talks which begin tomorrow. The tone for the rest of the Asia-Pac region was mostly reserved throughout the day amid the absence of Japanese participants due to public holiday, while Shanghai Comp. (+0.4%) and Hang Seng (-0.1%) were choppy after the PBoC refrained from liquidity operations and amid reports of tighter shadow banking regulations, as well as PBoC researcher comments regarding scope for higher rates. Opining in the China Daily, PBoC Deputy Head of Research Ji Min stated that there is room for a rate increase in the short-term, although he later reversed himself. On Monday, the PBoC skipped open market operations again today citing relatively high bank liquidity.

Top Asian News

  • China’s Currency Reserves Bounced Back Last Year Amid Cash Curbs
  • China Insurer Up $101 Billion Trades Like a Technology Stock
  • Aramco Joins Saudi Companies Boosting Pay After Royal Orders
  • Won Swings to Loss as Korean Government Warns of Stern Steps
  • Won’s Whipsaw May Be a Warning to Emerging-Market Currency Bulls
  • Asia Stocks Extend Rally on Earnings, Korea Talks Outlook
  • Macron Calls for China-EU Relationship to ‘Enter 21st Century’
  • China’s Richest Woman’s Wealth Rose by $2 Billion in 4 Days

European equity markets continued their march higher on Monday with all the major indices trading in positive territory. With little major macro news over the weekend, equity markets continued where they left off in the US where all the major indices closed at record highs. In individual equity news, Novo Nordisk shares pushed marginally higher after they said they had made a bid for Belgian rival Ablynx, whose shares are yet to open but were indicated higher by as much as 45%. Commerzbank and Deutsche Bank are propping up the DAX after Cerberus said they oppose a merger between the two lenders. A firm rebound in core bonds, and the recovery started on Eurex where Germany’s 10 year debt future caught a bid ahead of nearest chart support below 161.50. Market contacts noted light buying amidst a paring of Dax gains and then more of an intraday short squeeze once the opening peak was breached. Bunds have now been up to 161.80 (+21 ticks vs -20 ticks at worst), and last
Friday’s 161.87 session high is next on the radar, although firmer than forecast Eurozone retail sales may stall further upside. Gilts have also reversed early Liffe losses to trade at 124.82 (+17 ticks vs -24 ticks at one stage), awaiting news from UK PM May on her new Cabinet Ministers/posts.

Top European News

  • German Factory Orders Dip But Economy Continues Upward Trend
  • May Emerges Stronger in 2018, Ready to Finally Reshuffle Cabinet

In FX markets, the USD is higher against most of its major counterparts after initially trading lower at the beginning of Asia-Pac trade. The turnaround appeared to be intervention from South Korea who were said to buying dollars to weaken the KRW. GBP/USD trades lower as markets await a cabinet reshuffle from UK PM Theresa May although no major changes are expected. AUD/USD is back down below 0.7850, with the AUD undermined by a marked slowdown in Australia’s construction index and Government forecasts for a sharp 20% decline in iron ore prices this year.

In commodities, WTI and Brent crude futures both trade relatively flat and near 3-year highs that were hit late last week as the rig count last week showed that drillers lowered the number of rigs by 5 in the latest week. Precious metals were slightly lower with silver falling from 6-week highs and gold pulling back after rising for its fourth straight week last week. Markets will be looking out for comments from Fed speakers later in the session on the future path of Fed policy given the its sensitivity to rate hikes. Australia’s government sees iron ore prices dropping 20% this year to an average USD 51.50/ton, due to increasing global supply and moderating Chinese demand.

Looking at the day ahead, the November consumer credit numbers are due. The Fed’s Williams and Rosengren speak at an Inflation targeting conference, while the Fed’s Bostic will also speak on monetary policy and the US economic outlook. Elsewhere, France’s President Macron arrives in China today for a three day state visit.

US Event Calendar

  • 3pm: Consumer Credit, est. $18.0b, prior $20.5b
  • 12:40pm: Fed’s Bostic Speaks on Economic Outlook in Atlanta
  • 1:35pm: Fed’s Williams Speaks at Inflation Targeting Conference
  • 4pm: Fed’s Rosengren Speaks at Inflation Targeting Conference

DB’s Jim Reid concludes the overnight wrap

If you’ve just come back to work from holidays today, you’ve missed a bit of a melt up in risk assets so far in 2018 with US equities climbing every day this year (S&P500 +2.60% so far) and Europe increasingly getting in on the act (Stoxx +2.10% YTD) after a hesitant start on an initially surging Euro. Basically the year has started as a turbo charged version of 2017 with many of the same themes still present. Data on both sides of the Atlantic has generally been strong but we’re yet to see signs of elevated inflation pressures with Friday’s US average hourly earnings ‘only’ in-line and with a 0.1ppt downward revision to the prior month.

In a relatively quiet week for data the main highlight has to wait until Friday with the latest US CPI report due. Last month’s release was another miss (the 7th in 9 months) with one of the standout contributors a 1.3% fall in apparel prices, the third largest drop in history and the largest since 1998. Our economists expect the change in apparel prices to largely unwind and, as such, core CPI (+0.2% forecast, +0.2% consensus vs. +0.1% previously) should come in relatively healthy as a result. A print in line with DB’s expectation would see YoY core CPI slip two basis points to 1.69% but the six-month annualised change would rise about 17 basis points to 2.08% and the three month annualised change would rise almost twice that to 2.19%, providing some evidence of core inflation firming. With the price of most refined energy products falling in December, headline CPI (+0.1% vs. +0.4% previous) should moderate correspondingly.

A reminder that our credit view is positive in Q1 based on assumption of still subdued inflation and still contained government yields in the early part of the year. However we think both will move higher from around Q2 and exhibit more volatility and will thus create more headwinds for credit from then, albeit at tighter spreads than today’s levels. If we’re wrong on inflation though the carry trade will likely last longer as growth looks very solid at the  moment.

Staying with inflation, we also see US PPI data on Thursday and China CPI and PPI on Wednesday. Outside of the data, US Q4 earnings kicks off from Tuesday, with Friday seeing results from Wells Fargo, JP Morgan and Blackrock.

Back to credit, as mentioned at the top, on Friday my team produced the review of 2017 in Euro HY (link) and a report “Capitalising on the CDS-Bond Basis and Term Structure of Credit Spreads” which analyses the CDS-bond basis and curve steepness in EUR and USD corporate credit. Cash bonds have richened to CDS meaningfully since the ECB announced corporate bond purchases in early 2016. Michal Jezek expects this to reverse as they prepare for exit in 2018. At the same time credit curves are too steep and are expected to flatten, particularly in the CDS space as structured credit activity intensifies. The report provides macro credit trade ideas to take advantage of these dislocations and discusses the implications for hedging bond portfolios.

Over in China, December foreign exchange reserves rose for the 11th consecutive month to US$3.14trn (vs. $3.13 trn expected) amid tighter capital controls and resilient economic growth. This morning in Asia, markets are trading modestly higher. The Kospi and China’s CSI 300 are up 0.47% and 0.65% respectively, while the Nikkei is closed for a national holiday. The Hang Seng and China’s RMBUSD are marginally lower as we type with the former looking to extend a winning run to a tenth day.

Moving on now to the various central bankers speak from Friday and over the weekend. On rates, the Fed’s Williams expects unemployment to fall to 3.7% this year, but he is “not worried about inflation suddenly taking off” and suggested that “something like three rate hikes makes sense to me”. Conversely, the Fed’s Harker who is not a FOMC voter this year, believes two rate hikes will be appropriate in 2018 and “want to be slow and steady with any additional rate increases”. Although he sees the flat yield curve “worries so far have been a little inflated and don’t think the situation we’re in now is analogous to the inversion…. (seen) in the 70’s and ‘80’s”.

On potential impacts from the tax cuts, Mr Williams expect it to have a “modest, positive effect” on GDP growth and that the US economy will be in a very positive place two years from now, with “inflation at 2% and around 4% unemployment”.

Similarly, Mr Harker didn’t expect tax cuts to have a large impact on US economic growth. Elsewhere,the White House Chief economist Kevin Hassett noted the administration’s own analysis suggests the tax cuts should not alter the Fed’s projection of three rate hikes in 2018, in part as “if you have supply side stimulus, then it doesn’t put upward pressure on prices”. Finally, the Fed’s Bullard was more optimistic, he noted “there is some possibility that (tax cuts) could light a fire under investment and really drive growth higher…I have some sympathy for this idea…”

Following on, the Bundesbank’s Weidmann reiterated his views that setting a clear end for ECB’s QE bond buying program is justifiable and that “even after the end of net purchases, monetary policy will remain very expansive”. Elsewhere, the Fed’s Mester said US monetary policy should remain focused on price stability and maximum employment and “not be given a third objective of financial stability”.

Now recapping other markets performance from Friday. The S&P rose 0.70% to fresh highs with only two sectors marginally in the red (energy and utilities). European markets were all higher, with the Stoxx 600 up 0.93% back near its 2.5 year high and all sectors in the green. Across the region, gains were by led the DAX (+1.15%) and CAC (+1.05%), while the FTSE was the relative laggard (+0.37%).

Government bonds weakened with core 10y bond yields up c1-2bp (Bunds +0.4bp; Gilts +1.1bp; UST +2.4bp). Across the pond, Canada’s 10y bond yields rose 7.2bp after its December unemployment rate came in below expectations at 5.7% (vs. 6%) and to the lowest since 1976. In currencies, the US dollar index and Sterling gained 0.10% and 0.15% respectively, while the Euro weakened 0.32%. Elsewhere, precious metals softened (Gold -0.26%; Silver -0.04%) and other base metals also fell modestly (Zinc -0.06%; Aluminium -0.76%; Copper  -0.98%).

Away from the markets and onto Germany, where Ms Merkel and the SPD have begun exploratory talks on Sunday to form the next coalition government. Rhetoric appears to be cautiously optimistic, with SPD leader Mr Schulz noting “we aren’t laying down any red lines”, while Ms Merkel noted “I’m going into these talks with optimism, though it’s clear to me that a huge amount of work lies ahead”. Both sides want to finish initial talks by Thursday and if there are enough common grounds, formal negotiations could start from late January.

We wrap up with other data releases from Friday. In the US, the macro data was mixed. The December change in nonfarm payrolls was lower than expectations at 148k (vs. 190k), but the six-month average gain of 166k was still slightly ahead of the 12-month average of 161k. The labour market remains tight with the unemployment rate in line at 4.1% and steady mom at a record 17 year low. The growth in average hourly earnings was in line at 2.5% yoy. Elsewhere, the ISM non-mfg composite was below market at 55.9 (vs. 57.6 expected) but still above the long term average, while the headline November factory orders was above market at 1.3% mom (vs. 1.1% expected). Finally, the final reading for November durable and capital goods orders was broadly in line at 1.3% mom and -0.2% mom respectively, while the November trade deficit was slightly wider than expectations at -$50.5bln (vs. – $49.9bln). Factoring in the above, the Atlanta Fed’s GDPNowestimate of 4Q GDP growth is now at 2.7% saar, down from 3.2% previously.

In Europe, the macro data ranged from broadly in line to above market expectations. Firstly on the CPI, the Eurozone’s headline CPI was in line at 1.4% yoy, but core was a tad softer at 0.9% (vs. 1.0%) – steady for the third consecutive month. Across the countries, France’s CPI was in line at 1.3% yoy but Italy was below at 1% yoy (vs. 1.1% expected). Elsewhere, Germany’s November retail sales was materially above market at 4.4% yoy (vs. 2.3% expected), along with France’s December consumer confidence at 105 (vs. 103 expected) – a level exceeded in only two months in the last 15 years. Finally, the Eurozone’s November PPI was also above market at 2.8% yoy (vs. 2.5% expected).

Looking at the day ahead, Germany’s November factory orders will be out as this note hits inboxes. Then we get a range of confidence indicators for the Eurozone, including the January Sentix investor confidence along with the December economic, consumer and business confidence stats. Elsewhere, the Eurozone’s retail sales and the UK’s December Halifax house price index are due. Over in the US, the November consumer credit numbers are also due. Onto other events, the Fed’s Williams and Rosengren speak at an Inflation targeting conference, while the Fed’s Bostic will also speak on monetary policy and the US economic outlook. Elsewhere, France’s President Macron arrives in China today for a three day state visit.

end

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 17.73 points or 0.53% /Hang Sang CLOSED UP 84.89 pts or 0.28% / The Nikkei closed UP 208.20 POINTS OR 0.89%/Australia’s all ordinaires CLOSED UP 0.11%/Chinese yuan (ONSHORE) closed UP at 6.4974/Oil UP to 61.90 dollars per barrel for WTI and 67.85 for Brent. Stocks in Europe OPENED MOSTLY GREEN.   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.4974. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.4943 //ONSHORE YUAN  STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS  HAPPY TODAY.(GOOD MARKETS)

3 a NORTH KOREA/USA

NORTH KOREA/SOUTH KOREA

Huge crypto carnage as the South Korean government launches a probe into their use

(courtesy zerohedge)

Rippled Recked Amid Crypto Carnage As South Korea Launches Probe

Update (1015ET): Ripple crashed down over 30% after the initial headlines then exploded back higher…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto27.png

*  *  *

Amid headlines that South Korean regulators are inspecting 6 banks, including Industrial Bank of Korea, that provide virtual accounts to companies related to cryptocurrency, has sparked selling pressure across the entire space with Ripple down almost 20% today.

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto22.png

Bloomberg reports that South Korea’s Financial Services Commission Chairman Choi Jong-ku said in a speech text:

  • There’s high possibility cryptocurrency transactions could be used in money laundering.
  • South Korea to suspend virtual account– related operations of banks if they are found to have broken laws related to cryptocurrency.
  • Regulator also strengthen probe into cryptocurrency exchanges over price manipulation, money laundering, pyramid scheme.
  • Side effects of cryptocurrency “serious”; regulator will consider all measures including shutdown of cryptocurrency exchanges.
  • Cryptocurrency fever in S. Korea is much stronger than other countries; regulator won’t let S. Korea take the lead in abnormal cryptocurrency trading.

And the last few days have seen that Korean exuberance being smashed out of cryptos.

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto23.png

Ethereum remains the YTD winner for now, but as is clear Ripple quickly went from hero to zero as the volatile trading continues.

Bitcoin is back below $15,000…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto21.png

Ethereum is holding above $1000 for now…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto25.png

and Ripple is testing significant support…

https://www.zerohedge.com/sites/default/files/inline-images/20180108_crypto24.png

As CoinTelegraph reports, as speculative investments into Bitcoin and altcoins continue to trouble regulators worldwide, Korea has taken a hardline stance in recent months.

New legislation will seek to place heavy restrictions on how cryptocurrency exchanges can operate in the country, as well as who can use them and to what extent.

South Koreans will likely only be able to hold one exchange account linked to their real name, while tax obligations are also being overhauled regarding profits.

Reporting on the inspection, Yonhap News Agency appeared to forecast a predatory climate for exchanges.

“They (the FIU and FSS) are seeking to cut off fund inflows into cryptocurrency exchanges and shutter cryptocurrency exchanges that have loopholes in their system,” it claims.

What these “loopholes” might entail remains vague, yet the security setup of principal exchanges has come into the spotlight following an organized hacking attempt by a Korean news agency.

Using private white-hat hackers, the agency successfully gained entry into exchange accounts it set up maliciously, bypassing even two-factor authentication, it reported last month.

end

 

3 b JAPAN AFFAIRS

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

The end of QE in Europe will cause peripheral bonds to collapse in price (rise in yield)

(courtesy zerohedge)

6. GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

Venezuela

Chaos in Caracas as mobs surround shops after a government mandated price cuts,

(courtesy zerohedge)

 end

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

Euro/USA 1.1988 DOWN .0038/ 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 MOSTLY GREEN

USA/JAPAN YEN 113.11 UP 0.0751(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 1.3539 DOWN .0023 (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 1.2410 UP .0004 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro FELL by 38 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1853; / Last night the Shanghai composite CLOSED UP 17,73 POINTS OR 0.53% / Hang Sang CLOSED UP 84.89 POINTS OR 0.28% /AUSTRALIA CLOSED UP 0.11%EUROPEAN BOURSES MOSTLY GREEN 

The NIKKEI: this MONDAY morning CLOSED UP 208.20 POINTS OR 0.89%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 84.89 POINTS OR 0.28% / SHANGHAI CLOSED UP 17.73 POINTS OR 0.53% /Australia BOURSE CLOSED UP 0.11`% /Nikkei (Japan)CLOSED UP 208.20 POINTS OR 0.89%

INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1320.60

silver:$17.18

Early MONDAY morning USA 10 year bond yield: 2.467% !!! DOWN 2 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield 2.801 DOWN 2 IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)

USA dollar index early MONDAY morning: 92.87 UP 32 CENT(S) from YESTERDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.867% UP  3  in basis point(s) yield from FRIDAY/DEC 22

JAPANESE BOND YIELD: +.063% UP 2   in basis point yield from FRIDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.482% UP 1  IN basis point yield from FRIDAY/DEC 22

ITALIAN 10 YR BOND YIELD: 1.984 UP 7 POINTS in basis point yield from FRIDAY/DEC 22

the Italian 10 yr bond yield is trading 43 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.431%  UP 1 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/4:00 PM

Euro/USA 1.1965 DOWN.0059 (Euro DOWN 59 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.10 UP 0.059 Yen UP 6 basis points/

Great Britain/USA 1.3565 UP 0.0002( POUND UP 2 BASIS POINTS)

USA/Canada 1.2421 UP  .0016 Canadian dollar DOWN 16 Basis points AS OIL ROSE TO $61.79

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This afternoon, the Euro was DOWN 59 to trade at 1.1965

The Yen FELL to 113.10 for a GAIN of 6 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND ROSE BY 2 basis points, trading at 1.3565/

The Canadian dollar FELL by 16 basis points to 1.2421/ WITH WTI OIL RISING TO : $61.79

The USA/Yuan closed AT 6.499
the 10 yr Japanese bond yield closed at +.063% UP 2 FULL   BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1   IN basis points from FRIDAY at 2.478% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.810 UP  1  in basis points on the day /

Your closing USA dollar index, 92.37 UP 42 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 MONDAY: 1:00 PM EST

London: CLOSED DOWN 27.71 POINTS OR 0.36%
German Dax :CLOSED UP 48.54 POINTS OR 0.36%
Paris Cac CLOSED UP 16.87 POINTS OR 0.30%
Spain IBEX CLOSED DOWN 13.00 POINTS OR 0.12%

Italian MIB: CLOSED UP 83.40 POINTS OR 0.37%

The Dow closed DOWN 12,87 POINTS OR 0.05%

NASDAQ WAS  UP 20.83 Points OR 0.29% 4.00 PM EST

WTI Oil price; 61.97 1:00 pm;

Brent Oil: 67.79 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 57.14 UP 37/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 37 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.431% FOR THE 10 YR BOND 1.00 PM EST EST

END

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

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

WTI CRUDE OIL PRICE 4:30 PM:$58.30

BRENT: $65.01

USA 10 YR BOND YIELD: 2.481%   THE RAPID ASSENT IN YIELD IS VERY DANGEROUS/ANYTHING OVER 2.70% AND THE ENTIRE DERIVATIVES BLOW UP

USA 30 YR BOND YIELD: 2.8381%

EURO/USA DOLLAR CROSS: 1.1863 up .0011

USA/JAPANESE YEN:113.27 down 0.039

USA DOLLAR INDEX: 93.32 up 4 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3356 : down 20 POINTS FROM LAST NIGHT

Canadian dollar: 1.2716 UP 23 BASIS pts

German 10 yr bond yield at 5 pm: +0.431%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Ripple Rebounds After Rout As S&P Gains ‘Guarantee’ 2018 Up-Year For Stocks

It’s official – 2018 is a lock for stock investors.

Thanks to today’s gains, the S&P 500 is up 2.5% – doubling the gains in gold – as bonds are suffering so far…which means, as Ryan Detrick notes, “since 1950, when the first 5 days are up over 2%, the S&P 500 is higher for the year 15 out of 15 times with an average return of +18.6%. ”

https://www.zerohedge.com/sites/default/files/inline-images/20180108_EOD5.png

Unless, of course, this time is different.

On the day, The Dow managed to scramble back to unchanged then stick there before closing lower… Trannies (blue) were best, Nasdaq continued higher with more record highs…

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This is the first day of the year so far that we did not gap higher at the open.

There has been a notable regime shift from December as late-day buying returns…

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The Smart Money Flow Index is calculated by taking the action of the Dow in two time periods: the first 30 minutes and the close. The first 30 minutes represent emotional buying, driven by greed and fear of the crowd based on good and bad news. There is also a lot of buying on market orders and short covering at the opening. Smart money waits until the end and they very often test the market before by shorting heavily just to see how the market reacts. Then they move in the big way. These heavy hitters also have the best possible information available to them and they do have the edge on all the other market participants.

But while stocks remain notable, it was the chaos in cryptocurrencies that caught many eyes. Ripple crashed over 30% on the day, before ramping back…

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One apparent reason for the sudden plunge: an adjustment from a popular website on its digital-currency price quotes. A website called coinmarketcap.com on Monday removed data from some South Korean exchanges from its price quotes for a range of virtual currencies including bitcoin, Ethereum and Ripple’s XRP. The move followed a South Korean government crackdown on cryptocurrencies.

And while everyone sees cryptos as being in a bubble, we couldn’t help but note the crisis in ‘camera on a stick’ as it crashed 30%, ripped back on rumors, then dumped on denials… and is now down 95% from its post-IPO highs (now that sounds like a burst bubble)…

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Additionally, SeaGate soared after rumors it was working with Ripple…

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Treasuries were unchanged today – literally – after a small dip in yields early ramped back to unch (Tokyo on holiday again)… (the entire curve is around 7-8bps higher on the year)

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The Dollar Index bounced most in 3 weeks

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Crude was higher on the day and copper lower once again as the industrial metal has not had a great 2018 so far…

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Finally, the longest win streak in the history of gold futures… is over…

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On Friday, 11 straight days higher beat the 10-day streak from 1994 but today’s 12th day loser ends the streak.

end

The USA consumer was a spending spree as they increased their burgeoning debt load by another 28 billion dollars.

REVOLVING CREDIT NOW STANDS AT 1.023 TRILLION

NON REVOLVING CREDIT: STUDENT  + AUTO LOANS: 2.805 TRILLION

Credit Card Debt Hits All Time High As Consumers Unleash Historic Shopping Spree

It’s official: the reason behind the recent rebound in the economy can be explained with two words: “charge it.”

Readers may recall that one month ago, we reported that with Republicans in Washington on the verge of passing their first major piece of legislation in the form of comprehensive tax cuts that will allow Americans across the income spectrum to keep a little more of their hard earned cash in 2018, it appeared that U.S. consumers already “pre-spent” their savings using their credit cards.

And now we have confirmation that this is precisely what happened, because in the month of November, between revolving, or credit card, and non-revolving debt, largely student and auto loans, according to the latest Fed data, total consumer debt rose by $28 billion, or the most since November 2001, to $3.827 trillion, an annualized increase of 8.8%, or roughly 4 times faster than the pace of overall GDP growth.

asd

Broken down, consumer credit rose by $11.2 billion in revolving credit, or credit card debt, which pushed it a record $1.023 trillion, the highest credit card amount outstanding on record. This was also the second highest monthly increase in credit card debt on record.

asd

Meanwhile, non-revolving credit – or auto and student loans – rose by $16.8 trillion to $2.805 trillion. Nonrevolving lending to consumers by the Federal government, which is mainly student loans, rose to $1.142t, on a non-seasonally adjusted basis.

This was to be expected: as we showed last month, US consumers appear to be tapping out, and as a result the Personal savings rate dropped to 2.9%, the lowest since November 2007.

So, in addition to all the usual holiday trinkets that US consumers buy year after year, what hot new Christmas gadget has Americans suddenly willing to max out their credit cards?  Well, if Google search trends are any clue, it might not be a gadget, or anything tangible for that matter, at all.

END

the White House is now asking for a down payment on the wall:  18 billion dollars to rebuild 700 miles

(courtesy zerohedge)

White House Asks For $18 Billion To Build 700 Miles Of Border Wall

After yesterday’s meeting with the Senate Working Group on Immigration, Trump told reporters that before agreeing to any legislation enshrining DACA protections into law, Republicans would need to secure more resources for immigration officers, provisions to stop visa overstays and – crucially – legislation limiting chain migration, a topic that Trump has tweeted about regularly since the Halloween terror attack on Manhattan’s West Side Highway.

And as the administration braces for the upcoming battle over US immigration policy, they’re asking Congress for $18 billion to build 700 miles of new and replacement barrier along the southern border over the coming decade.

Construction on the prototypes for Trump’s wall has been completed, and the Department of Homeland Security is ready for next steps: If approved, that would be a major expansion from the 654 miles of barrier now, bringing the total to nearly 1,000 miles, about half of the entire southwest border.

Border

According to the Wall Street Journal, the plans are laid out in a document prepared by the Department of Homeland Security for a group of senators who asked the administration to detail its request for border security. The document was described to The Wall Street Journal by two people who had seen it. Presumably, WSJ’s sources attended Thursday’s working group meeting.

In total, the administration details about $33 billion in desired new border-security spending,including funding for technology, personnel and roads. The document refers to this as “critical physical border security requirements.”

President Trump’s proposed border wall was in many ways the essence of the 2016 Trump campaign. In many ways, it factored into his rhetoric from the beginning, almost immediately after Trump descended the golden escalator in Trump Tower to declare his intention to run way back in June 2015.

Trump routinely described his pet infrastructure project as a “big, beautiful wall” that would rise over the southern border, preventing illegal immigration and drug trafficking. Furthermore, Trump promised that the project – some estimates placed the cost at close to $70 billion – would be paid for by Mexico. Yet so far, Congress hasn’t agreed to spend any money on the project, and Mexico has repeatedly said it won’t fund it.

But the document cited by WSJ is perhaps the first comprehensive vision of what the wall will look like, if completed.

The document, from the Customs and Border Protection agency at the Department of Homeland Security, envisions the border-wall project unfolding over 10 years. If carried out as described, by 2027, about 970 miles of the 2,000-mile southwest border would have some sort of fencing or wall separating the U.S. from Mexico.

It comes as lawmakers and the White House negotiate an immigration package that would legalize young undocumented immigrants brought to the U.S. as children, a group known as Dreamers. The White House has demanded that border security be included in the legislation, and last month a group of GOP senators asked for details of what the White House is seeking.

Of course, the document isn’t a complete representation of the administration’s immigration demands – which also include changes in laws and policy. The paper also cautioned that support for the border wall is tepid, even among Republicans.

The document isn’t meant to be a complete outline of the administration’s requests, which also involve changes to the legal immigration system and other enforcement measures, an administration official said. Rather, it details only the border-security elements.

Congressional support for the border-wall idea is tepid, with Democrats and even many Republicans opposed on either financial or symbolic grounds. But lawmakers in both parties support other types of increased border security.

In addition to the wall-related funding requests, the White House and its partners in Congress are also seeking $5.7 billion over five years to pay for towers, surveillance equipment, unmanned aerial vehicles and other technology; $1 billion over five years for road construction and maintenance; and $8.5 billion over seven years for 5,000 new Border Patrol agents and other personnel. The administration has already requested $1.6 billion for 60 miles of a new barrier in Texas and 14 miles of replacement fencing in San Diego for the current fiscal year. Congress hasn’t passed the spending bills for 2018, and wall funding is one of the hang-ups.

The administration’s new document doesn’t detail where the additional miles of barrier would be constructed beyond 2018. It refers to the barrier as a “wall system,” though Trump and lawmakers have at times said they would accept “a fence” or a “see-through wall.”

As we noted late last year, by leaving several controversial provisions – including an immigration deal – out of the continuing resolution passed just before Christmas, Republicans effectively set themselves up for a grueling legislative calendar early this year, as the battle over DACA, the re-authorization of a controversial surveillance program and the long-term fate of a popular children’s health-insurance program must be resolved in the coming months.

Aside from that, Trump is pushing to pass his $10 trillion infrastructure plan which was whispered about late last year – before the mid-term elections.

end

It looks like it will be a battle in Congress over the next 2 weeks.  The Democrats wants a permanent DACA ie. permanent status for illegal immigrants that were children when they arrived years ago vs the Republican wall

should be quite a battle

(courtesy zerohedge)

Congress Braces For “Political Bomb Cyclone” As Immigration, Funding Debates Flare

As Fox News and Bloomberg  pointed out today, since returning from their holiday break last week, Congress has been bracing for a “political bomb cyclone” as a series of high-profile confrontations loom regarding the future of DACA protections and Republicans’ ability to keep the federal government operational.

According to Bloomberg, Republicans and Democrats in Congress are once again far apart on a government spending bill with less than two weeks to go before a partial shutdown. They also need to come to an agreement on an immigration package that will preserve protections for undocumented immigrants who were brought to the US as children while also probably allocating some money to Trump’s border wall. The continuing resolution passed shortly before holiday break expires on Jan. 19. And what’s worse for Republicans, Alabama Sen. Doug Jones has taken his seat, paring the GOP’s Senate majority to just one vote. Realistically, Republican and Democratic leaders need to hash out a solution this week, so they can bring the bills to the floor next week.

McConnell

But these aren’t the only issues. Increasing spending for the Pentagon, reauthorizing (or killing) a controversial surveillance program, providing permanent provisions for a popular children’s health-insurance program, putting in place some stopgap to keep Obamacare from collapsing, disaster-relief funding and a two-year agreement to raise budget caps.

As always, the threat of a shutdown is ever-present, as Republicans defy Democrats to take a stand on DACA. Meanwhile, the question of whether Democrats will allow another continuing resolution to pass without first securing DACA protections remains an open one.

“If the Democrats want to shut down the government because they can’t get amnesty for illegal immigrants, then they’re going to have to defend those actions to the American people,” Republican Senator Tom Cotton of Arkansas said Sunday on ABC’s “This Week” program.

If both parties can agree this week on raising budget limits, Congress may be able to pass a short-term spending bill, known as a continuing resolution, said Muftiah McCartin, a former spending panel staff member for House Democrats and now at Covington & Burling LLP.

“If they don’t get a deal, will the Democrats allow another CR to go forward? I’d kind of be surprised,” McCartin said.

Trump has insisted that money to begin construction on his signature border wall be included in any bill authorizing DACA.
“We want the wall,” Trump said Saturday at Camp David. “The wall is going to happen or we’re not going to have DACA.”

Top congressional leaders from both political parties huddled last Wednesday in the office of House Speaker Paul Ryan, with White House budget Director Mick Mulvaney and White House Director of Legislative Affairs Marc Short. Everyone spoke in positive terms following the conclave.

“All those talks, I think, are going well,” said Senate Majority Leader Mitch McConnell, “Nobody wants to shut the government down on either side. We’re in intense talks about trying to deal with all of these issues.”

Senate Minority Leader Chuck Schumer, and House Minority Leader Nancy Pelosi, said in a joint statement following the hour-long session: “We had a positive and productive meeting, and all parties have agreed to continue discussing a path forward to quickly resolve all of the issues ahead of us.”

As Fox  points out, the biggest issue will be the battle over immigration policy, as Republicans push for the construction of a border wall and Democrats a fix for DACA. DACA is a President Barack Obama-era policy that granted some persons the right to remain in the US legally if they arrived as minors with parents.

The White House last week asked for $18 billion as the administration braces for the upcoming battle over US immigration policy. The money would be used to build 700 miles of new and replacement barrier along the southern border over the coming decade.

But funding isn’t the only issue that’s important to Trump. During a weekend summit with GOP Congressional leaders, Trump said he wants Congress to work out a solution to “chain” migration for family members entering the US while eliminating a diversity lottery system.

Of course, the battle over DACA was widely expected. Mitch McConnell said late last year that DACA would be a major legislative issue in the new year as Republicans engage in the latest installment of political brinksmanship over funding the federal government.

Trump reiterated his sympathy for the Dreamers, and told Fox “we all want DACA to happen.” But he added that “we also want great security for our country.”

“We have a commitment on a bipartisan basis to address the DACA issue,” McConnell said. “We’ll devote floor time to that in January.”

As of now, North Carolina Sen. Thom Tillis said the plan is to keep the immigration package separate from the government spending bill.

Expect to hear more about where negotiations are heading after a mid-week meeting between Republican and Democratic leaders.

SWAMP STORIES

The SEC is now probing Jared Kushner companies over the use of immigrant visa programs i.e. E. B. -5

(courtesy zerohedge)

SEC Probing Kushner Companies Over Use Of Immigrant Visa Program

The SEC has launched an investigation into the real-estate company run by White House senior adviser (and Trump’s son-in-law) Jared Kushner for its use of the “green cards for money” Federal visa program, according to the WSJ. Specifically, the SEC is probing Kushner Companies over its use of the investment-for-visa EB-5 program, which provides green cards to immigrants who invest at least $500,000 in U.S. businesses.

While the WSJ explains that “the precise nature of the SEC’s inquiry isn’t clear, nor is whether the subpoena identified particular projects” it notes that in May 2017, Kushner Cos. received a subpoena from the Securities and Exchange Commission requesting information about its use of the program. That month the company also received a separate subpoena from New York federal prosecutors asking for information about development projects financed in part by the EB-5 program.  Kushner had been running the real estate business until last year, but resigned from the company to join the White House staff.

The SEC probe, which hasn’t been previously reported, is being conducted out of the commission’s Texas office and in collaboration with federal prosecutors from the Brooklyn U.S. attorney’s office, according to another person familiar with it.

By way of background, the EB-5 program offers green cards to aspiring immigrants who invest at least $500,000 in certain U.S. businesses that have been determined to create at least 10 jobs per investor. A green card permits a foreign national to live and work in the U.S. The majority of EB-5 visas go to wealthy Chinese individuals, according to DHS data.

The federal and SEC subpoenas came shortly after the company drew attention for a marketing campaign in Beijing and Shanghai that solicited Chinese investors for One Journal Square, saying that as many as 300 individuals who invested $500,000 each into the project could be eligible for green cards under the EB-5 program, the Journal reported.

The Kushner Companies has had a controversial history with Chinese investors, following reports that the company’s prize real estate jewel, the flagship skyscraper at 666 Fifth Avenue, was in financial dire straits and was scrambling to finalize an investment for redevelopment from troubled Chinese conglomerate Anbang.

The federal subpoena, which included a request for email correspondence, concerned at least one specific project: a Jersey City, N.J., development of twin, 66-floor commercial-and-residential towers called One Journal Square, the Journal reported.

But why is the SEC involved in a non-public company matter?

Well, although Kushner Cos. isn’t a publicly traded company, EB-5 investments are considered securities offerings, and the SEC has previously examined other companies in relation to the EB-5 program.

In April, the SEC reached a settlement with an Idaho man it accused of misappropriating some of the $140 million he raised through EB-5 offerings to acquire and develop luxury real estate. Instead, the defendant spent some of the funds on personal expenses and other operations unrelated to the advertised project, the SEC said.

The news of the SEC probe is only the latest in a series of federal inquiries that have emerged in recent months concerning Kushner Companies. In mid-November, federal prosecutors requested documents from the company pertaining to a $285 million loan the firm received from Deutsche Bank AG , the Journal reported last month.

A spokeswoman for Kushner Cos. referred to a previous comment provided by the company’s general counsel, Emily Wolf, who said of the Brooklyn-based inquiry that “Kushner Cos. utilized the program, fully complied with its rules and regulations, and did nothing improper. We are cooperating with legal requests for information.”

END

As we reported to you on Friday, Fusion GPS did hand over all bank records after a Federal judge struck down the firm’s attempt to conceal the records form the Intelligence Committee.   We will now learn first hand who financed the report

(courtesy zerohedge)

Fusion GPS Bank Records Handed Over; May Shed Light On Payments From Russian Embezzler

The bank for opposition research firm Fusion GPS handed over financial records on Friday, after a Federal judge struck down the firm’s attempt to conceal the records from the House Intelligence Committee the previous day.

At issue are 70 financial transactions from 2016, however Committee Chairman Devin Nunes (R-CA) demanded “complete” records going all the way back to Aug. 2015 Fusion filed for an injunction – claiming Nunes issued the subpoena illegally, it was overly broad, and it was a violation of the 1st amendment.

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The request also covers a period in which Fusion was paid $523,651 by a law firm for a Russian businessman whose company, Prevezon Holdings, Ltd. settled with the U.S. Justice department for $5.9 million in a money laundering an embezzlement scheme involving high level Russian officials. The Russian’s attorney was none other than Natalia Veselnitskaya of Trump Tower meeting fame.

Federal District Court Judge Richard Leon, a George W. Bush appointee, wrote a scorching denial to Fusion’s request – concluding that Nunes legally issued the subpoena, it wasn’t overly broad, and that the transactions are not covered by the first amendment.

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“Unfortunately for the plaintiff, I cannot agree,” Judge Leon wrote on the basis that Fusion’s commercial relationship with its clients does not provide Fusion with “some special First Amendment protection from subpoenas,” since it would allow “any entity that provides goods and services to a customer who engages in political activity to resist a subpoena on the ground that its client engages in political speech.” 

While we don’t know what the 70 financial transactions cover, Nunes’ Subpoena was broad, demanding complete records going back to August, 2015…

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In late November, The Daily Caller‘s Chuck Ross reported that heavily redacted Fusion GPS bank records unsealed Tuesday reveal DNC law firm Perkins Coie paid Fusion a total of $1,024,408 in 2016 for opposition research on then-candidate Donald Trump – including the 34-page dossier.

Ross also reported that law firm Baker Hostelter paid Fusion $523,651 between March and October 2016 on behalf of a company owned by Russian businessman and money launderer Denis Katsyv to research Bill Browder, a London banker who helped push through the Magnitsky Act – named after deceased Russian lawyer Sergei Magnitsky.

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Katsyv was busted for a high level embezzlement and money laundering scheme, sanctioned by Russian Officials, in which large sums of money were stolen from the Russian government and invested in New York real estate. Some of the missing funds were traced to Katsyv‘s firm, Prevezon Holdings Ltd., which settled with the Justice Department in 2017 – paying $5.9 million in fines.

And again, what does Nunes’ Subpoena cover? Banking records from the period in which Katsyv utilized Fusion GPS services. 

Enter Natalia

Katsyv’s attorney, Natalia Veselnitskaya – a John McCain fan who hates Trump and uses Democrat lobbyists, was initially denied entry into the United States, only to be allowed in under “extraordinary circumstances” by Obama’s Homeland Security Department and approved by former AG Loretta Lynch so she could represent Fusion GPS client Denis Katsyv’s company, Prevezon Holdings – and attend the meeting at Trump Tower with Donald Trump Jr. – arranged by Fusion GPS associate Rob Goldstone.

Let’s Review:

  • Russian businessman Denis Katsyv was a key figure in an embezzlement and money laundering scheme involving New York real estate, uncovered by Russian lawyer and accountant Sergei Magnitsky. Magnitsky reportedly died in Moscow’s Butyrka prison after a year of inhumane treatment.
  • Katsyv settled with the U.S. Justice department in 2017, paying a paltry $5.9 million in 2017 to settle the case – less than 3% of the amount originally sought by federal prosecutors.
  • Fusion GPS was paid $523,651 by Katsyv to investigate London Banker Bill Browder who pushed for the Magnitsky Act, while Katsyv’s attorney, Natalia Veselnitskayawas in the United States actively lobbying to remove the sanctions imposed by the Magnitsky Act.
  • Fusion GPS associate Rob Goldstone set up the infamous meeting at Trump Tower between Donald Trump Jr., Katsyv’s lawyer Natalia Veselnitskaya and various associates. The meeting was pitched to Trump Jr. as a “discussion on adoption”(not opposition research on Hillary Clinton) and was shut down by Trump Jr. after it became clear Veselnitskaya wanted to discuss the Magnitsky Act – which Don Jr. apparently didn’t realize was linked to the adoption issue. Others present at the meeting include Jared Kushner, Paul Manafort, and Rob Goldstone.
  • Hours before the Trump Tower meeting, Fusion GPS founder Glenn Simpson met with Veselnitskaya.

Meanwhile…

  • Fusion GPS was paid $1,024,408 by DNC law firm Perkins Coie, which acted as an intermediary for Hillary Clinton and the DNC, to create the salacious 34 page dossier.
  • Fusion paid former British spy Christopher Steele $168,000 to assemble the document (which had the cooperation of two senior Kremlin officials).
  • Clinton campaign manager John Podesta met with Fusion CEO Glenn Simpson the day after the 34 page dossier was made public.

For their efforts, Fusion GPS was paid over $1.5 million dollars between Hillary Clinton, the DNC, and the holding company owned by pro-Kremlin businessman Denis Katsyv.

Also recall that Fusion GPS hired Nellie Ohr, the CIA-linked wife of demoted DOJ official, Bruce Ohr, to help with investigation Trump, and that Bruce Ohr was demoted after meeting with Simpson and Christopher Steele, the former MI6 spy who assembled the dossier for Fusion.

https://www.zerohedge.com/sites/default/files/inline-images/oHRSG_0.png

House investigators have determined that Ohr met shortly after the election with Glenn Simpson, the founder of Fusion GPS the opposition research firm that hired Steele to compile the dossier with funds supplied by the Hillary Clinton campaign and the Democratic National Committee.

…evidence collected by the House Permanent Select Committee on Intelligence (HPSCI), chaired by Rep. Devin Nunes, R-Calif., indicates that Ohr met during the 2016 campaign with Christopher Steele, the former British spy who authored the dossier.   –Fox News

Let’s also remember Fusion’s failed effort to link the President to billionaire pedophile Jeffrey Epstein:

Since you asked, yes, they helped me with that, Mr. Silverstein said. But as you can see, I could not make a strong case for Trump being super close to Epstein, so they could hardly have been thrilled with that story. [In my humble opinion], that was the best story written about Trumps ties to Epstein, but I failed to nail him. Trumps ties were mild compared to Bill Clintons.

As well as a fabricated story that a secret email server existed between Trump Tower and Moscow’s Alpha Bank – which was debunked by internet sleuths who traced the IP address to a marketing server located outside Philadelphia.

Fusion is currently being sued for libel in two separate cases by three Russian businessmen-bankers in US District Court for their inclusion in the Dossier, along with the ‘secret server’ story pushed by Glenn Simpson. Alfa bank executives Mikhail Fridman, Petr Aven and German Khan filed suit in early October, claiming their reputations were harmed by the largely unsubstantiated document.

Given that Fusion GPS appears to have had their ‘investigative’ hands in several pots related to ongoing investigations on Capitol Hill, it’s no wonder they penned a desperate self-defense last week, as if to leave people with some sort of positive impression of the company before the storm truly arrives.

END

Wikileaks publishes the entire Michael Wolff book Fire and Fury as a PDF

(courtesy zerohedge)

Wikileaks Publishes Michael Wolff’s Entire Sold Out Trump Book As A PDF

Considering that Wikileaks made its name by leaking confidential and/or hard to find documents and information, and also considering the reversal in the Trump administration vis-a-vis Julian Assange, whom it first lauded only to threaten with incarceration in recent months, it is perhaps not surprising that moments ago the official Wikileaks twitter account published Michael Wolff’s controversial – and largely sold out – book, “Fire and Fury” in pdf format.

Since, somewhat ironically, WikiLeaks picked a google drive to host the leaked pdf, it will unlikely remain available for an extended period, as it would mean substantial lost revenue for book published Henry Holt and Company. So for those who wish to read what all the hoople is about – for free – they are advised to do so sooner rather than later.

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 end
we are going to receive shortly the Office of the Attorney General’s report on the Clinton email scandal as well as the Lynch tarmac affair and the Clinton Foundation.  This will likely trigger the use of a second special counsel to investigate those crimes
(courtesy zerohedge)

Upcoming OIG Report Likely To Trigger Second Special Counsel; Comey, Lynch And Clinton In Crosshairs

While most of the MSM fixated last week on whether or not President Trump eats McDonald’s in bed while watching Gorilla TV, a flurry of investigative bombshells involving Hillary Clinton, the Clinton Foundation, and conduct by the FBI’s top brass during the 2016 election splashed across the headlines. As a quick review:

  • The DOJ is “taking a fresh look” into the Hillary Clinton email ‘matter’ 
  • The FBI has launched a new investigation into the Clinton Foundation the day after the Clinton’s Chappaqua property catches fire
  • Former FBI Director James Comey’s full Clinton memo was released, revealing felony evidence of changes which “decriminalized” Hillary Clinton’s behavior. Oh, and every one of the memos he leaked to his Cornell professor buddy was classifiedper a sworn statement by the FBI’s “chief FOIA officer” in a sworn declaration obtained by Judicial Watch.
  • The House Intelligence Committee will be granted access to “all remaining investigative documents,” unredacted, along with all witnesses sought per a deal reached between Deputy Attorney General Rod Rosenstein and Nunes
  • Opposition research firm Fusion GPS was forced to hand over banking records detailing various clients and their intermediary law firms, including the Clinton Campaign and a Russian money launderer whose lawyer was none other than Natalia Veselnitskaya of Trump Tower meeting fame

Most of these wheels which appear to be in motion are the result of corresponding groundwork laid on Capitol Hill you may not be aware of, including what might be the most important document in the entire process, expected in a little over a week.

On January 15, the DOJ’s internal watchdog – the Office of the Inspector General (OIG), is expected to present their findings to Congressional investigators regarding a wide variety of alleged bias and malfeasance by the FBI, the Clinton campaign, and the Obama Administration – both during and after the 2016 election. Moreover, the man heading up the OIG investigation, Michael Horowitz,fought the Obama Administration to regain investigative powers which were restricted by former Attorney General Eric Holder during the Fast and Furious scandal. 

As you will read below, this highly anticipated report is likely to be the legal impetus behind a second Special Counsel – as detailed by an independent researcher from New York who goes by the Twitter handle “TrumpSoldier” (@DaveNYviii). His reporting, conveyed below, is a deep dig into the OIG’s ongoing investigation, how Congress and the OIG have worked in tandem to pave the way for a Special Counsel, and how Michael Horowitz went to war with the Obama Administration to restore the OIG’s powers.

Who is Michael Horowitz? 

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Michael Horowitz testifies before the Senate Judiciary Committee.

Horowitz was appointed head of the Office of the Inspector General (OIG) in April, 2012 – after the Obama administration hobbled the OIG’s investigative powers in 2011 during the “Fast and Furious” scandal. The changes forced the various Inspectors General for all government agencies to request information while conducting investigations, as opposed to the authority to demand it. This allowed Holder (and other agency heads) to bog down OIG requests in bureaucratic red tape, and in some cases, deny them outright.

What did Horowitz do?As one twitter commentators puts it, he went to war

In March of 2015, Horowitz’s office prepared a report for Congress  titled Open and Unimplemented IG Recommendations. It laid the Obama Admin bare before Congress – illustrating among other things how the administration was wasting tens-of-billions of dollars by ignoring the recommendations made by the OIG.

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After several attempts by congress to restore the OIG’s investigative powers, Rep. Jason Chaffetz successfully introduced H.R.6450 – the Inspector General Empowerment Act of 2016 – signed by a defeated lame duck President Obama into law on December 16th, 2016cementing an alliance between Horrowitz and both houses of Congress. 

1) Due to the Inspector General Empowerment Act of 2016, the OIG has access to all of the information that the target agency possesses. This not only includes their internal documentation and data, but also that which the agency externally collected and documented.

See here for a complete overview of the OIG’s new and restored powers. And while the public won’t get to see classified details of the OIG report, Mr. Horowitz is also big on public disclosure:

View image on TwitterView image on Twitter

13) Horowitz in 2017 took his organization to a new level via public disclosure. He no longer wants his findings hidden from us by the media. In May he created the twitter account @OversightGov. On October 1st his website https://www.oversight.gov  went live.

Horowitz’s efforts to roll back Eric Holder’s restrictions on the OIG sealed the working relationship between Congress and the Inspector General’s ofice, and they most certainly appear to be on the same page. Moreover, brand new FBI Director Christopher Wray seems to be on the same page as well. Click here and keep scrolling for that and more insight into what’s going on behind the scenes.

Here’s a preview:

13) “UNRING THAT BELL” reveals the IG Sword’s power to re-open investigations. After a tangled legal exchange that runs out the clock he puts the Hillary investigation back on the table almost as an afterthought. Easily my favorite moment.

Which brings us back to the OIG report expected by Congress a week from Monday.

On January 12 of last year, Inspector Horowitz announced an OIG investigation based on “requests from numerous Chairmen and Ranking Members of Congressional oversight committees, various organizations (such as Judicial Watch?), and members of the public.”

The initial focus ranged from the FBI’s handling of the Clinton email investigation, to whether or not Deputy FBI Director Andrew McCabe should have been recused from the investigation (ostensibly over $700,000 his wife’s campaign took from Clinton crony Terry McAuliffe around the time of the email investigation), to potential collusion with the Clinton campaign and the timing of various FOIA releases.

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Courtesy @DaveNYviii

On July 27, 2017 the House Judiciary Committee called on the DOJ to appoint a Special Counsel, detailing their concerns in 14 questions pertaining to “actions taken by previously public figures like Attorney General Loretta Lynch, FBI Director James Comey, and former Secretary of State Hillary Clinton.” 

The questions range from Loretta Lynch directing Mr. Comey to mislead the American people on the nature of the Clinton investigation, Secretary Clinton’s mishandling of classified information and the (mis)handling of her email investigation by the FBI, the DOJ’s failure to empanel a grand jury to investigate Clinton, and questions about the Clinton Foundation, Uranium One, and whether the FBI relied on the “Trump-Russia” dossier created by Fusion GPS. 

View image on TwitterView image on Twitter

19) 14 Questions for the IG!
This powerful letter is a thing of beauty that expands the scope and establishes the legal framework for a special counsel. Read in it’s entirety to see where we are headed. (Steel Dossier, Uranium One, Clinton Foundation)
PDF> https://judiciary.house.gov/wp-content/uploads/2017/07/072717_HJC-Letter-to-AG-DAG.pdf 

19) 14 Questions for the IG!
This powerful letter is a thing of beauty that expands the scope and establishes the legal framework for a special counsel. Read in it’s entirety to see where we are headed. (Steel Dossier, Uranium One, Clinton Foundation)
PDF> https://judiciary.house.gov/wp-content/uploads/2017/07/072717_HJC-Letter-to-AG-DAG.pdf pic.twitter.com/VjXjwGRkr8

20) 14 Questions Summary
1-5 clinton email investigation
6-8 Clinton Foundation Uranium One
9 DNC Election Rigging
10 -14 Weaponized DOJ/FBI SteeleDoss Russian HOAX

23) The July 27th letter is the key document. Everything needed to appoint a special counsel is contained within it. The letters preceding it were precursors and the ones after are add ons. All the IG has to do is reinforce that letter and a special counsel will be appointed.

On September 26, 2017, The House Judiciary Committee repeated their call to the DOJ for a special counsel, pointing out that former FBI Director James Comey lied to Congress when he said that he decided not to recommend criminal charges against Hillary Clinton until after she was interviewed, when in fact Comey had drafted her exoneration before said interview.

View image on TwitterView image on TwitterView image on Twitter

21) ‘s Lies are catching up to him.
September 26th, 2017 continues the call for a special counsel as well as targets Comey’s lie to Congress. They have Comey dead to rights. PDF>>https://judiciary.house.gov/wp-content/uploads/2017/09/092617_Special-Counsel-Follow-Up-Letter.pdf 

And now, the OIG report can tie all of this together – as it will solidify requests by Congressional committees, while also satisfying a legal requirement for the Department of Justice to impartially appoint a Special Counsel.

As illustrated below by TrumpSoldier, the report will go from the Office of the Inspector General to both investigative committees of Congress, along with Attorney General Jeff Sessions, and is expected on January 15. 

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DOJ Flowchart, Courtesy TrumpSoldier (@DaveNYviii)

2) Congress will receive the Inspector General Report on January 15th, 2018. We learned this on December 13th, 2017 at The House Judiciary Committee hearing with Deputy AG Rod Rosenstein.

Once congress has reviewed the OIG report, the House and Senate Judiciary Committees will use it to supplement their investigations, which will result in hearings with the end goal of requesting or demanding a Special Counsel investigation. The DOJ can appoint a Special Counsel at any point, or wait for Congress to demand one. If a request for a Special Counsel is ignored, Congress can pass legislation to force an the appointment.

And while the DOJ could act on the OIG report and investigate / prosecute themselves without a Special Counsel, it is highly unlikely that Congress would stand for that given the subjects of the investigation.

The OIG report could be in the hands of the DOJ as soon as January 8 for review, however it is unclear whether their response will be included in the copy of the report issued to Congressional investigators on January 15. Their comments are key. As TrumpSoldier points out in his analysis, the DOJ can take various actions regarding “Policy, personnel, procedures, and re-opening of investigations. In short, just about everything (Immunity agreements can also be rescinded).

10) The DOJ response is critical! Here Wray discusses actions that can be taken based upon the OIG Report. Policy, personnel, procedures, and re-opening of investigations. In short, just about everything. (Immunity agreements can also be rescinded)

Meanwhile, recent events appear to correspond with bullet points in both the original OIG investigation letter and the 7/27/2017 letter forwarded to the Inspector General: 

With the wheels set in motion last week seemingly align with Congressional requests and the OIG mandate, and the upcoming OIG report likely to serve as a foundational opinion, the DOJ will finally be empowered to move forward with an impartially appointed Special Counsel with a mandate to investigate whether or not we should “lock her up” (along with members of her motley crew). Maybe that’s why Sessions has been sitting on his hands?

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they are going after Dr Jane Sanders and Bernie Sanders in a 10 million dollar fraud probe.  That may end Bernie’s chances at becoming President in 2020

(courtesy zerohedge)

Grand Jury Empaneled In $10 Million Fraud Probe Involving Jane And Bernie Sanders

An FBI probe into a 2010 property deal orchestrated by Jane Sanders, wife of Sen. Bernie Sanders (I-VT), has escalated after a report by VTDIGGER reveals that a grand jury has been empaneled, and at least one witness has given sworn testimony in the case.

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Jane and Bernie Sanders

According to VTDigger, “Former Burlington College board member Robin Lloyd says she testified for about an hour on Oct. 26 before a grand jury at the federal courthouse in Burlington.”

Paul Van de Graaf, chief of the criminal division for the U.S. attorneys office in Vermont, questioned Lloyd about her role as the development chair of the colleges board of trustees during a period when Sanders was collecting donations and pledges for the purchase of a $10 million city lakefront property. –VTDigger

The Grand Jury will decide whether or not indictments should be handed down over a $10 million loan orchestrated by Jane Sanders purchase a 33 acre property for the now defunct Burlington College – allegedly obtained through a ‘fraudulent scheme.’ Mrs. Sanders is accused of having lied about funding for transaction, while the FBI has also been looking into claims thatBernie Sanders’ office pressured the bank to approve the loan.

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Burlington College 33-acre property

In June 2017, Politico confirmed that Bernie Sanders and his wife Jane had retained high powered DC lawyers amidst the investigation.

The original request for an investigation into Federal bank fraud was sent in a January 2016 letter to the Vermont District Attorney as well as the FDIC by Brady Toensing – an attorney and chair of Donald Trump’s Vermont campaign. The letter detailed the mechanics of the alleged fraud, which is what reportedly launched official investigations. Toensing told Politico on in June; “The investigation was started more than a year ago under President Obama, his Attorney General Loretta Lynch, and his United States Attorney, all of whom are Democrats.”

A brief history of Jane Sanders and Burlington College

In 2004, Jane Sanders left her position as her husband’s congressional chief of staff to become president of the unaccredited and struggling Burlington College – founded in 1972 and operated out of a former grocery store. When Sanders took over as a “turnaround” president, she set out to rapidly grow the college – announcing a $6 million plan to expand the campus in 2006 which never came to fruition.

Meanwhile, Sanders was rapidly earning a reputation for her “toxic and disruptive” leadership style, and in late 2008, according to a 2016 essay on the college written by a former teacher Greg Guma, “Nearly half of the students and faculty members signed a petition demanding a meeting about the “Crisis in leadership,” while Jane Sanders’ salary rose to $150,000 in 2009 amidst a tuition hike from $5,000 to $22,407 in 2011. Meanwhile, enrollment dropped by almost 25%.

In 2008, literature professor Genese Grill wrote to the school’s academic affairs committee, describing Sanders’ “harassment and unethical treatment of other faculty and staff members, many of whom have since left the college disgruntled and angry.”

And in 2010, Jane Sanders announced a plan to move the tiny underfunded Burlington college onto a 33 acre parcel of valuable lakefront real estate in Northern Burlington. “It was the last piece of undeveloped, prime property on the lake shore,” according to Guma.

The property was owned by the Roman Catholic Diocese, which was strapped for cash after recently settling over two dozen sexual abuse lawsuits for $17.76 million. The 33 acre property hit the market for $12.5 million, and the church agreed to take Jane Sanders’ offer of $10 million.

Scheming for loans

When Jane Sanders made the offer to the Roman Catholic Diocese, Burlington College was nearly broke – with an annual budget just below $4 million. In order to finance the property, Sanders secured a $6.5 million loan from People’s United Bank in the form of a tax exempt bond purchase, and the Catholic Church agreed to carry a $3.65 million second mortgage on the property. Sanders told both institutions that Burlington college had $5 million in likely donor pledges and $2.4 million in confirmed pledges to be used to pay off the debt.

Unfortunately, that was just for the land. Sanders apparently didn’t plan for the $6 million or so required to actually build out the campus on the property to include green space, athletic fields, lecture halls, and walkways.

Compounding an already dire situation, Sanders’ original claim of $2.4 million in confirmed donor pledges was quickly reduced to $1.2 million according to documents filed in the first fiscal year after the purchase – yet in records obtained by VTDiggerBurlington College received only $279,000. Despite hopes by Sanders and college trustees that they could boost enrollment and expand the student body, nothing changed – and the school failed at raising the money to satisfy it’s loans.

And then Jane Sanders was fired, with a $200,000 severance package.

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In order to try and avoid bankruptcy, Burlington college sold off pieces of the 33 acre property to a local developer – which allowed the institution to pay off some of the debt Jane Sanders had accumulated, however in April 2016 the bank called it’s loan – and on May 28th, the college closed it’s doors after 44 years in operation.

As part of its bankruptcy, the Roman Catholic Diocese of Burlington lost at least $1.5 million and perhaps as much as $2 million on the $3.65 million loan.

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Enter the FBI

Politico revealed in their June report that [F]ederal investigators and FBI agents started to pull apart the $10 million financial arrangementThey showed up at Burlington College to sift through hard drives, audit reports and spreadsheets. They began to interview donors, board members and past president Carol Moore. I was contacted and spoke with an FBI agent numerous times last spring, again last summer, Moore told Vermont Public Radio in May 2017, and recently, maybe a month ago.

With a Grand Jury now empaneled and interviewing witnesses in the Burlington College saga, one can imagine the outcome of their investigation will largely determine whether Bernie Sanders is a viable candidate in 2020should he wish to challenge Oprah Winfrey of course.

end

Stockman takes on Wall Street and the false narrative of a growing economy

(courtesy David Stockman/ContraCorner)

 

Stockman: Forget Trump, The Real “Dopes & Idiots” Are On Wall Street

Authored by David Stockman via Contra Corner blog,

Suddenly it’s all Fire And Fury, and according to its author, Michael Wolff, no less than 100% of his sources in the White House told him the Donald is a “dope” or an “idiot” and is a “child” who has tantrums if he doesn’t get what he wants and get it right now.

We are pretty sure Mr. Wolff exaggerates. After all, Ivanka is apparently still trundling around 1600 Pennsylvania Avenue, yet how would she know?

More to the point, the Donald doesn’t have the Deep State and its collaborators in the media and among the Dems and establishment Republicans lathered-up in a Salem-style witch-hunt hysteria because he’s stupid. What he is is reckless, impetuous, undisciplined, glandular, petty, megalomaniacal, mendacious and uninformed—–and also in so deep over his head that even his signature orange comb-over will soon be fading from sight.

Yet there is something about Michael Wolff’s tirade that deeply resonates, albeit on the other end of the Acela Corridor.

We are referring, of course, to the “idiots” who are buying the S&P 500 at 2735 and earnestly debating the pros and cons of bitcoin at $16,000; and to the “boys and girls” (nee “children”) on Wall Street who have a hissy fit every time Washington—either via its central banking branch or statutory and fiscal tools—-even vaguely mutters about financial discipline or eventually cutting off all the fiscal and monetary free-stuff.

This morning, in fact, we heard one of the street’s permabulls describing the current madness as a state of stock market “nirvana” that will carry the S&P average to 3,100 in the near future.

That’s right. While that particular figure would equate to 29X LTM earnings for the S&P 500 and about 150Xfor the Russell 2000, it makes no never mind.

That’s because we have reached the ultra-FOMO (fear of missing out) stage of the bubble mania, where the only thing that matters is the price action. That is, what is being bought in the casino is what is going up, and for the sole reason that it is going up.

All else is just after the fact rationalization, such as the meme-of-the-moment holding that the US economy is “strong” and the global economy is being powered by “synchronized growth”; or it constitutes studied insouciance, such as the flippant dismissal of the unprecedented crisis of governance shaping up in Washington as being essentially irrelevant to the outlook for the economy and financial markets.

As to the studied insouciance part and the unfolding collapse of governance in the Imperial City and meltdown in the Oval Office, we can only profess utter amazement. During exactly 50 years of closely observing the beasts of the beltway, we have seen nothing remotely like Wolff’s expose—-exaggerated or not—of the sheer dysfunction, incompetence, intrigue, fratricidal conflict and egomaniacal impetuousness that pervades the Trump White House.

We actually had a window into the Nixon White House back in the day, and it amounted to a Sunday school picnic by comparison to the Wolff narrative.

Indeed, there is absolutely no doubt that the Donald is sui generis, and not in a good way as it bears upon the stock market outlook. In fact, he is not simply the Great Disrupter; Trump may eventually prove to be the Terminal Disrupter.

Under the Donald’s watch, the Imperial City is being turned into one giant kick-the-can-alley. And that includes the asinine tax bill the Hill Republicans passed—- sight-unseen and with fiscal recklessness aforethought.

Its Christmas Eve passage was not an act of governance at all; it was a desperate political maneuver designed to distance Congressional Republicans from Trump and to establish the predicate for a 2018 campaign pitch touting the GOP majority’s accomplishments on Capitol Hill—-Donald Trump to the contrary notwithstanding.

Yet this reckless tax bill gambit is only going to turn the existing fiscal vice into a virtual legislative torture rack. As we have explained, staring Washington in the face at the next CR deadline on January 19th is upwards of $500 billion of add-on spending for FY 2018-2019.

Needless to say, there is absolutely no consensus within the GOP, virtually no route to bipartisan resolution, and therefore no way foreword except for stop-gaps and temporary patches that will soon have Congress tied in knots and pulsating with bitter partisan and factional conflict.

For instance, the GOP hawks (that’s most of them) are insisting on a $120-$160 billion add-on for defense during the next two years. At the same time, the Dems and the RINOs (Republicans in name only), who control a veto bloc within the tenuous GOP majority in both houses, are demanding “parity” for domestic add-ons above the sequester ceilings (i.e. above the levels the GOP forced down Obama’s throat to rebuke his horrible fiscal profligacy).

That adds up to about $300 billion over two years and it may well finally get there, but only after several more temporary CRs or other legislative slights-of-hand (such as putting baseline defense and domestic spending in the so-called “Overseas Contingency” which is exempt from the ceilings).

And then you have to toss into the red ink pool another $100 billion for disaster aid, $20 billion plus per annum for the ObamaCare insurance bailouts and state high cost patient pools, compromise money for border control/Wall and a lot more interest expense than currently projected. The latter will be far more than considerable when you recall that the revenue loss from the tax bill in FY 2018 and FY 2019 alone amounts to $416 billion.

Stated differently, the debt ceiling is now frozen again at $20.456 trillion and the Treasury’s cash drawer has only a few weeks of reserves. What that means is that when you add the two year impact of the tax bill and the GOP’s spending spree to the baseline deficits, it appears that to get through FY 2019 the debt ceiling will have to be raised to upwards of $22.5 trillion.

Needless to say, it’s not going to happen—at least on a calm, workmanlike Friday afternoon. A raucous, continuing battle over temporary debt ceiling suspensions of a few weeks or months, or small increases that only kick the can a few quarters down the road, is now guaranteed to be the order of the day. And that will be happening—even as the Fed begins to drain cash out of Wall Street at a $600 billion rate next October and as the expected German successor to Draghi says “nichts” on any further extension of QE next fall.

Indeed, the QT (quantitative tightening) pivot is already ramping up in the here and now. During the current quarter ECB bond and other securities purchases will drop from EUR 60 billion per month to just EUR 30 billion, while the Fed’s bond dumping rate will rise from $10 billion to $20 billion per month (on the way to $50 billion per month in October).

In all, a $46 billion swing toward monetary stringency is commencing this month—–or to drive the point home, a nearly $500 billion annualized reduction in the monetary free stuff being injected into the casinos.

In this context, we are hard pressed to understand how the Wolffian White House will cope with the Washington political mayhem and the bond market crunch heading straight down the pike. And its going to get worse, not better.

That’s because Trump and the House GOP conservatives have finally screwed up there backbones in the face of the RussiaGate hysteria and our opening up investigations of the Clinton Foundation pay-to-play scandal and the egregious political abuse at the top of the Justice Department, FBI and CIA/DNI that launched the whole bogus Russian meddling and collusion story in the first place.

Folks, our Madisonian forefathers were no admires of big government and its purported good works; and had a deep skepticism about democracy in the raw.

So they designed a government contraption riddled with checks, balances and stalemates in order to throttle any tendency toward tyranny; and to insure that even under ideal conditions the Federal government would only function slowly and in the fits and starts inherent in clearing all the decision hurdles that were hard-wired at the Philadelphia convention.

In that context, we are more than willing to believe that Donald Trump will indeed prove to be the Terminal Disrupter. But even if you have considerably more confidence than your editor—and perhaps less cynicism, too—there is no way that the coming fiscal and political conflagrations are going to leave Wall Street unscathed in its splendid insouciance of the current moment.

The proverbial Swan is coming, and in the wake of the Wolff Affair and all it portends, we are pretty sure that this time it will be an Orange one.

And that gets us to the stupid part. That is, the silly claim that the US economy is somehow reaching escape velocity and cruising into a sustain period of 3.0% or better growth and that the combined boost from accelerating growth and the tax bill will send earnings soaring—-as high as $170 per share on the S&P by the lights of Wall Street more enthusiastic hockey stick jockeys.

But here’s the thing. The US economy is not strong; it’s stuttering—–starting and stopping under the weight of $67 trillion of public and private debt; and fatally impaired by a financial bubble induced speculative mania that has turned the C-suites of corporate America into financial engineering joints dedicated to cycling most available cash and debt capacity, not into long-term investment and productivity, but into the near-term goosing of stock prices via buybacks, excessive dividends and unproductive M&A empire building.

The 3.0% growth meme is just a risible canard.  Two quarters of 3.0% annualized, seasonally maladjusted real GDP growth are hardly worth the paper they are printed on in the context of today’s structurally impaired economy. Indeed, we had two back-to-back 4.0% plus growth quarters back in 2014 and they promptly disappeared from sight as the Red Ponzi induced commodity mini-boom rapidly cooled sharply in 2015-2016.

The chart below strains out the inventory stocking/destocking noise implicit in today’s credit driven global economy, and shows that the current expansion rate of real final sales is 2.39% on an LTM basis. Yet that’s exactly the same 2.39% rate of gain posted 22 quarters ago in Q1 2012.

In the interim, of course, the US economy’s path undulated more or less in line with global credit, commodity and trade impulses. Yet during the five quarters of 2014-15 when real final sales growth exceeded 3.0%, the Wall Street bulls were noisily pronouncing that “escape velocity” had been obtained and that the economy was off to the races.

Not by a long shot. By early 2016 the growth rate dipped under 2.0% and has been struggling to rise materially above that level ever since.

So  the real question is not why this time is any different. The obvious reality is that it is just another cycle of the same. That is, the 19th Party Congress is over, and Mr. Xi has been coronated as the absolute ruler of the Red Ponzi.

Accordingly, even he recognizes that now is the time to wrestle down China’s tottering $40 trillion house of debt cards before the whole scheme comes crashing down on Beijing’s ruling elites. As shown in the chart below, the rate of China’s credit growth has already come to a near standstill, and with the usual 6-month lag it will be cascading through world trade and production in short order.

So much for “synchronized growth”.

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Alas, the orange bars above are not fixing to erupt above the 3.0% line, but are being pulled downward by the global mini-cycle, and the sheer old-age of a business expansion that will soon equal the 119 month record posted during the far more beneficent conditions of the 1990s.

In the meanwhile, LTM S&P 500 earning stand at $107 pre share. That’s the same level as three years ago in September 2014, and represents a mere 2.0% annual growth rate since the last cyclical peak 10 years ago.

It appears that Michael Wolff has a talent for exposing idiots and dopes. So we think he might well write his next book without leaving his Manhattan airy—save for an occasional Uber to Wall Street.

In the canyons down there he will find plenty of material.

END

We have been harping on this for quite a while:  the death spiral for shopping malls.  The following suggests that many of the malls are in worse shape than many think

(courtesy zerohedge)

“Anticipating Death Spirals”: Here’s Why Shopping Malls Are In Worse Shape Than You Think

For the past several months, we’ve written frequently about the epic collapse of the centerpiece of the 1980’s retail model: the shopping mall.  With the growth of online sales finally starting to take a toll on brick-and-mortar retailers, shopping malls have faced a tidal wave of store closures and have been forced to backfill empty square footage with everything from libraries to doctors offices (see: America’s Desperate Mall Owners Turn To Grocers, Doctors & High Schools To Fill Empty Space).

Alas, a new report from property-research firm Green Street Advisors, which analyzed 950 mall locations over 2017, 230 of which were collateralized within commercial mortgage-backed securities (CMBS) loans, the financial troubles for American mall owners might be even worse than feared due to organic tenant losses from lease expirations. 

First, just to put the mall economic model into perspective, Green Street points out that while massive department store closures tend to dominate headlines, they represent a very small portion of mall income.  The real financial losses for mall owners come via the ancillary traffic impact on national and regional tenants which pay of the majority of mall lease income.

Facing widespread department store closure announcements over the last year and a dark prognosis from most industry experts, mall landlords have been doing their best to redevelop vacant boxes and prepare for a future with fewer anchor tenants. Although department store struggles have dominated headlines, they provide only a small portion of a mall’s net operating income (NOI) because many anchor tenants own their stores or pay little-to-no rent.

In-line tenants therefore have an outsized impact on mall NOI, and their performance offers a preferred indicator of mall health. With shorter lease terms and a higher rent burden, many tenants are making decisions in real time within each mall. The best in-line tenants to track are the ~300 national tenants who have at least 50 mall locations nationwide and are constantly judging the performance and cost of occupying space within any given mall.

“While the department stores take up a lot of space, they don’t generate much revenue for the mall owner,” Sullivan said. “The mall owner makes most of its money from the in-line tenants.”

Malls

Of course, many large national tenants (e.g. Wet Seal, The Limited, etc.) have openly announced store closures which have presumably already been digested by investors.  That said, Green Street says the far more pressing issue for mall investors is to analyze which stores are quietly shrinking their mall footprints organically by simply choosing to forego lease renewals.  As Jim Sullivan of Green Street told Bloomberg, “when leases expire, they just don’t renew them, as opposed to breaking leases and doing something a bit more aggressive.”

First, roughly 70% of the 950 malls studied experienced a decrease in national retailer in-line tenants. Second, while the average amount of net closures increased materially at lower-quality malls, there was a wide dispersion of net closures impacting malls across the quality spectrum. Third, while half of the top 25 net closing retailers have publicly announced store closures, the other half are closing relatively quietly and thus present significant risk to the sector.

As reported in the media, a wide range of retailers have been downsizing or closing their entire brick-and-mortar footprint (e.g., Wet Seal, The Limited). While some of these brands have publicized their closures, others have been doing so more quietly by choosing not to renew expiring leases. Given that in-line tenants have a higher rent per square foot burden and have shorter lease terms, these trends will often occur long before any anchor store closing announcements. The challenge for market participants is to not only track the closures, but also to assess the quality of new tenants backfilling the space.

Malls

Meanwhile, even though lower quality malls are bearing the brunt of store closures, Green Street notes that A-grade malls are also experiencing significant closures as well.

Across the 950 malls studied, over two-thirds saw a net decrease in the number of national tenants. While ‘A’ malls performed relatively well, they have not fully escaped the closures due to some retailers shuttering all their locations regardless of mall quality. Furthermore, most top-quality centers already have more of the national retailers as tenants, limiting their ability to find other national tenants to replace those that leave. Conversely, many lower-quality centers are seeing significant changes in their ability to retain and attract national retailers despite already housing fewer national retailers on average than ‘A’ malls. This trend demonstrates the challenge that many malls are now facing as they fill vacancies with more local and regional tenants.

In conclusion, the key takeaway is that it’s hard to assess what real estate is worth in the retail sector today. In-line tenant activity can provide a window into individual mall health. The Advisory & Consulting group’s analysis concludes that ~70% of malls have suffered a recent decline in the number of national tenants. Understanding which malls are most at risk in a timely fashion is key to anticipating possible “death spirals,” where malls can lose as much as 90% of their value (much more than other property types).

mall

But we’re sure it will all work out just fine and wall street will go on buying those mall reits with reckless abandon…you know, because dividend yields.

I will  see you TUESDAY night

HARVEY

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One comment

  1. “Total silver OI ROSE BY A TINY 165 CONTRACTS FROM 194,264 UP TO 194,429 DESPITE YESTERDAY’S TINY 4 CENT RISE AGAIN WE MUST HAVE HAD SOME BANKER SHORT COVERING.”

    Why would this indicate a bank covered its short position?

    Like

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