NOV 26/GOLD DOWN 65 CENTS TO $1222.55/SILVER DOWN ONE CENT TO $14.26 AS THE CROOKS KEEP GOLD/SILVER CONSTANT/GENERAL MOTORS A HUGE 14,000 NORTH AMERICAN AND ABROAD JOB CUT/CANADA SHUTTERS ITS 100 YR OLD OSHAWA PLANT WHICH WILL BE A DEATH BLOW TO CANADA/UK AND THE EU SIGN OFF ON A DIVORCE PLAN WHICH WILL ABSOLUTELY DESTROY ENGLAND IF ALLOWED TO PERSIST/SUPPOSEDLY SALVINI BLINKS AS IT DEALS WITH ITS 2.4 % OF BUDGET DEFICIT/TARGET 2 IMBALANCES CLIMB NOW ABOVE 1.3 TRILLION EUROS LEAD BY SPAIN AND ITALY: ITALIAN DEPOSITORS ARE MOVING THEIR CASH OUT OF ITALY AND INTO GERMANY AND/SWITZERLAND/RUSH CONFLICT BETWEEN RUSSIAN AND THE UKRAINE AS RUSSIA SEIZES 3 BOATS: UKRAINE CALLS ON MARTIAL LAW TO DEAL WITH THIS./MEXICO DENIES MAKING A DEAL WITH TRUMP TO DETAIN ASYLUM SEEKERS WAITING FOR THEIR CASE TO BE HEARD/HUGE AMOUNT OF IMPORTANT SWAMP STORIES FOR YOU TONIGHT/

 

 

 

 

GOLD: $1222.55 DOWN  $0.65 (COMEX TO COMEX CLOSINGS)

Silver:   $14.26 DOWN  1 CENT (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1222.25

 

silver: $14.24

 

 

 

 

 

 

 

 

For comex gold and silver:

NOV

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  NOV CONTRACT: 1 NOTICE(S) FOR 100 OZ

Total number of notices filed so far for NOV:  215  for 21500 OZ  (0.6687 TONNES)

 

 

 

 

 

FOR NOVEMBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

2 NOTICE(S) FILED TODAY FOR

10,000 OZ/

Total number of notices filed so far this month: 1487 for 7,435,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $4054: down 34

 

Bitcoin: FINAL EVENING TRADE: $3784  down $304.00 

 

end

 

XXXX

 

China is controlling the gold market

WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY A CONSIDERABLE 6639 CONTRACTS FROM 216.066 DOWN TO  209,427  WITH FRIDAY’S 25 CENT FALL IN SILVER PRICING AT THE COMEX. TODAY WE ARRIVED FURTHER FROM  AUGUST’S  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY(WELL OVER 30 MILLION OZ AT THE COMEX FOR JULY , 6 MILLION OZ FOR AUGUST AND NOW JUST LESS THAN 31 MILLION OZ STANDING IN SEPTEMBER. AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD A STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

EFP’S FOR NOV.  1849 EFP’S FOR DECEMBER AND 0 FOR MARCH AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1849 CONTRACTS. WITH THE TRANSFER OF 1849 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. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24-48 HRS IN THE ISSUING OF EFP’S. THE 1849 EFP CONTRACTS TRANSLATES INTO 9.245 MILLION OZ  ACCOMPANYING:

1.THE 25 CENT LOSS IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR THE JUNE/2018 COMEX DELIVERY MONTH. (5.420 MILLION OZ);  30.370 MILLION OZ  STANDING FOR DELIVERY IN JULY, FOR AUGUST: 6.065 MILLION OZ AND  39.505 MILLION  OZ STANDING  IN SEPT.  2,520,000 OZ STANDING IN OCTOBER. AND NOW SO FAR A HUGE 7,435,000 OZ STANDING FOR NOVEMBER

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF NOV: 42,304 CONTRACTS (FOR 17 TRADING DAYS TOTAL 42,304 CONTRACTS) OR 211.520 MILLION OZ: (AVERAGE PER DAY: 2488 CONTRACTS OR 12.44 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF NOV:  211.520 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 30.21% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:           2,628.35    MILLION OZ.

ACCUMULATION FOR JAN 2018:                                              236.879     MILLION OZ

ACCUMULATION FOR FEB 2018:                                               244.95       MILLION OZ

ACCUMULATION FOR MARCH 2018:                                        236.67       MILLION OZ

ACCUMULATION FOR APRIL 2018:                                           385.75        MILLION OZ

ACCUMULATION FOR MAY 2018:                                             210.05        MILLION OZ

ACCUMULATION FOR JUNE 2018:                                           345.43         MILLION OZ

ACCUMULATION FOR JULY 2018:                                            172.84          MILLION OZ

ACCUMULATION FOR AUGUST 2018:                                      205.23          MILLION OZ.

ACCUMULATION FOR SEPTEMBER 2018:                                 167,05          MILLION OZ

ACCUMULATION FOR OCTOBER 2018:                                     224.875        MILLION OZ

RESULT: WE HAD A HUGE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 6639 WITH THE 25 CENT LOSS IN SILVER PRICING AT THE COMEX //FRIDAY AS THE BOYS CONTINUE WITH THEIR CUSTOMARY MIGRATION OVER TO  ETFS AT THE START OF AN ACTIVE DELIVERY MONTH. THE CME NOTIFIED US THAT WE HAD A VERY GOOD SIZED EFP ISSUANCE OF 1722 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

TODAY WE LOST A GOOD SIZED: 4790 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1849 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 6639 OI COMEX CONTRACTS. AND ALL OF THUS DEMAND HAPPENED WITH A 25 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.27 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THE BIG JULY DELIVERY MONTH OF SLIGHTLY OVER 30 MILLION OZ, IN AUGUST ANOTHER BIG 6.065 MILLION OZ IN A NON ACTIVE MONTH  IN SEPTEMBER A FINAL MONSTROUS 39.05 MILLION OZ OF SILVER STANDING FOR DELIVERY, WITH HUGE DELIVERIES OF OVER 2 MILLION OZ IN OCTOBER (A NON DELIVERY MONTH) AND NOW  7.435 MILLION OZ IN NOVEMBER….... NOBODY IS PAYING ATTENTION TO THE HUGE NUMBER OF PHYSICAL OUNCES STANDING FOR SILVER THESE PAST SEVERAL MONTHS.

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.048 BILLION OZ TO BE EXACT or 149% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 2 NOTICE(S) FOR 10,000 OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.  

AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  AN INITIAL HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz AND NOW NOV AT 7.435 MILLION OZ.
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT).

IN GOLD, THE OPEN INTEREST FELL BY A HUGE  SIZED 12,417 CONTRACTS DOWN TO 508,842 WITH THE  LOSS  IN THE COMEX GOLD PRICE/(A FALL IN PRICE OF $4.25//.FRIDAY’S TRADING) AS THESE GUYS JOINED SILVER IN THE ROUTINE MIGRATION OVER TO ETF’S AS WE APPROACH AN ACTIVE DELIVERY MONTH.

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 5072 CONTRACTS:

 

 

NOVEMBER HAD EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 5072 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 508,842. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . 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  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A VERY LARGE SIZED LOSS IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 7345 CONTRACTS:  12,417 OI CONTRACTS DECREASED AT THE COMEX AND 5072 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI LOSS: 7345 CONTRACTS OR 734500 OZ = 22.84 TONNES. AND ALL OF THIS LACK OF  DEMAND OCCURRED WITH A  FALL IN THE PRICE OF GOLD/ FRIDAY TO THE TUNE OF $4.25.

 

 

 

 

YESTERDAY, WE HAD 5812 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF NOV : 121,331 CONTRACTS OR 12,133,100 OZ OR 377.39 TONNES (17 TRADING DAYS AND THUS AVERAGING: 7137 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 17 TRADING DAY IN  TONNES: 377.39 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 377.39/2550 x 100% TONNES =  14.79% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,594.19  TONNES   *SURPASSED ANNUAL PROD’N

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018:           653.22  TONNES (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018:         649.45 TONNES  (20 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR MARCH 2018:             741.89 TONNES  (22 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR APRIL 2018:                 713.84 TONNES  (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR MAY 2018:                   693.80 TONNES ( 22 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR JUNE 2018                      650.71 TONNES  (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR JULY 2018                       605.5 TONNES     (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR AUG. 2018                      488.54  TONNES  (23 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR SEPT 2018                       470.64 TONNES   (19 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR OCT. 2018                        543.92 TONNES  (23 TRADING DAYS)

 

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

Result: A HUGE SIZED DECREASE IN OI AT THE COMEX OF 12,417 WITH THE LOSS IN PRICING ($4.25) THAT GOLD UNDERTOOK FRIDAY) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5072 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX.  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 5072 EFP CONTRACTS ISSUED, WE HAD AN VERY LARGE LOSS OF 7345 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

5072 CONTRACTS MOVE TO LONDON AND 12,417 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the LOSS in total oi equates to 22.84 TONNES). ..AND ALL OF THIS LACK OF  DEMAND OCCURRED WITH A LOSS OF $4.25 IN FRIDAY’S TRADING AT THE COMEX

 

 

we had: 1 notice(s) filed upon for 100 oz of gold at the comex.

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

GLD...

 

WITH GOLD DOWN 0.55 TODAY: / 

 

NO CHANGE IN GOLD INVENTORY AT THE GLD/

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   762.92 TONNES

Inventory rests tonight: 762.92 tonnes.

TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD.  IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY

SLV/

WITH SILVER DOWN 1 CENT TODAY

 

 

 

NO CHANGE IN SILVER INVENTORY AT THE SLV

 

 

 

 

 

 

/INVENTORY RESTS AT 325.019 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER FELL BY A HUGE 6639 CONTRACTS from 216,066 DOWN TO 209,427  AND MOVING A LITTLE FURTHER FROM THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..

 

.

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

i) 0 EFP’s for November… and

 

1849 CONTRACTS FOR DECEMBER. 0 CONTRACTS FOR MARCH AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1849 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 6639 CONTRACTS TO THE 1849 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A CONSIDERABLE  NET LOSS  OF 4790 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE  LOSS ON THE TWO EXCHANGES: 23.955 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER., AND NOW 7.435 MILLION OZ STANDING IN NOVEMBER.

 

 

RESULT: A HUGE DECREASE IN SILVER OI AT THE COMEX DESPITE THE 25 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// FRIDAY.BUT WE ALSO HAD ANOTHER GOOD SIZED 1849 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 3.67 POINTS OR0.14% //Hang Sang CLOSED UP 448.50 POINTS OR 1.72% //The Nikkei closed UP 165/45 OR 0.76%/ Australia’s all ordinaires CLOSED  DOWN 76%  /Chinese yuan (ONSHORE) closed UP  at 6.9403 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER /Oil DOWN to 51.18 dollars per barrel for WTI and 60.02 for Brent. Stocks in Europe OPENED GREEN//.  ONSHORE YUAN CLOSED UP AT 6.9403AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9403: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING  WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

b) REPORT ON JAPAN

 

3 C/  CHINA

China’s plunge protection team has been inexplicably dumping stocks and this has been with the wishes of the Government and POBC

( zerohedge)

 

 

4/EUROPEAN AFFAIRS

i)Spain/UK

Spain reaches a deal on Gibraltar and now the Brexit summit will now go ahead with a meeting on Sunday.  Here is a summary of what will happen next:

( zerohedge)

ii)Italy/Saturday

Salvini threatens Brussels again that if the EU does not approve the 2.4 %deficit, then he will call for elections.  Since his popularity is increasing, this is probably a good move for Salvini

( zerohedge)

iii)Italy blinked….or did they?  Monday

( zerohedge)

iv)Sunday/Italy

This is a must read…we have been pounding the table for the past few decades on the criminal nature of Goldman Sachs.  Now these guys are in serious trouble with their exposure to a crime of helping a crooked Prime Minister steal from his country.  I would agree with martin Armstrong and Tom Luongo that Salvini  knows the true exposure to Goldman if Italy leaves.  Salvini seems ready to battle with Brussels as he is taunting them to raise Italian rates.  We would start to witness dead bodies exposed with a rising rate.
a great read…

(courtesy Tom Luongo)

iv  bIt seems that Goldman Sachs was warned by the New York Fed to improve their compliance controls after the issuance of the lMDB bond offerings.  it is going from bad to worse for Goldman Sachs the perennial “squid”

( zerohedge)

iv  c,,    EU/Target 2 imbalances

Last month you will recall that the southern club med boys owed the north around .97 trilllion euros.  Well the number seems to have rise and the new imbalance owed to the North is 1.318 trillion euros with the bulk of that owed by Spain and Italy. It looks like bank depositors in Italy are taking their hard earned euros and depositing them in either Germany or Switzerland
(courtesy zerohedge)
v) UK-EU draft of Brexit
The EU and UK approve the Brexit divorce deal.  Now comes the hard sell: Parliament must approve the deal and it does not look likely.  The Europeans really stuck it to the Brits with huge divorce fees etc.  It would be far better for a hard Brexit and do not pay any fees.  The UK should make their own trade deals and stop Europeans etc fishing in their territorial waters.
( zerohedge)

vi)Seems that the UK is behind corned by the crooks.  The French Macron has threatened with a perpetual

temporary customs union, unless the UK gives the EU fishing rights.
my goodness….
( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Russia/Turkey/USA

 

The following is very important as now Russia and Turkey have started building Turkstream One.  This will initially supply Turkey with all of their gas needs.  Once phase two is completed all of Eastern Europe will be supplied at 1/3 the cost of the previous distribution.  You will note that Turkey is turning quite aggressively to the East.

( Tom Luongo)

ii)Syria/Al Qaeda
Not good:  a massive chemical; Al Qaeda gas attack on pro government forces in Aleppo
(courtesy zerohedge)

iii)Russia/Ukraine

This came out of nowhere:  Russia rammed a tugboat after it entered into Russian waters at the Kerch strait.
Now Russia is refusing to hand over the boats to the Ukraine as they declare Martial law.
(zerohedge)

6. GLOBAL ISSUES

i)Canada

This should give you an idea as to the global slowdown.  Now the Bank of Canada is buying mortgage bonds as the Canadian housing market cools dramatically

(courtesy zerohedge)

ii)A death blow to Canada as GM closes the 100 yr old Oshawa Ontario plant.  This will affect thousands of jobs in Ontario.  If Congress refuses to pass the trade deal with Canada and Mexico then the entire auto global business will be in chaos.

(courtesy zerohedge)

iii)MEXICO

Mexico denies striking a deal with the USA administration to “remain in Mexico” while the judicial process is ongoing

(courtesy zerohedge)

iv)Now Trump threatens to permanently close the Southern border if no deal with Mexico ensues.

( zerohedge)

7. OIL ISSUES

Traders are confused with Goldman Sachs who states that you must buy oil despite Saudi’s huge record production of 11 million barrels per day.

(courtesy zerohedge)

 

 

8 EMERGING MARKET ISSUES

 

 

 

9. PHYSICAL MARKETS

i)Pakistan is returning to its inflation ways, as the gold price shot up to 63,700 rupees per tola bar  (11.66 gms ).  The price per oz:  119,341. Pakistani rupees per oz. Citizens are seeking gold to protect them from the ravages of inflation.
(courtesy Siddiqui/Express tribune)

ii)These guys think that there is a huge gold mine sitting underneath the hills of Wales, in an area known as the Dolgellau gold belt.( Bourne/BBCnews/GATA)

iii)Why the floor of gold is around $1220.  The reason:  that is the cost to mine gold.
(courtesy Steve St Angelo/SRSRocco report)

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

 

 

MARKET TRADING

 

ii)Market data/

 

 

 

iii)USA ECONOMIC/GENERAL STORIES

i)Although denied there must be some truth It is Mnuchin who picked Jerome Powell and Trump hates Powell because he is raising rates

(courtesy zerohedge)

ii)For your interest:  the largest ever oversea real estate investment scam fleeces investors out of 100 million dollars
( zerohedge)
iii)Another indicator of poor global growth:  GM announces that 14,000 workers will be laid off in the uSA and abroad.  As we mentioned above, the huge  100 yr old Oshawa plant in Canada is being shuttered.  That would be a huge death blow to Canada. Trump tells GM to stop making cars in China despite the fact that it is cheaper to make over there.
Also Trump highlights the huge problem in the UKraine where Russia seized 3 boats belonging to the Ukraine in the Strait of Kerch
(courtesy zerohedge)

iv)SWAMP STORIES

a)MI6 are scrambling because they do not want the world to know that they meddled in the 2016 uSA election.  They should release the documents because already everybody has been named

( zerohedge)

b)Comey will answer to a subpoena only in the open and not behind closed doors.   He can then refuse to answer on the grounds that “everything is classified”

what a crooooook!!
( zerohedge)
c)This is nuts…there is absolutely no way that Mueller can prove that Corsi has lied.
This witch hunt is a terribly travesty!!
(zerohedge)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT
Friday and Monday

Let us head over to the comex:

 

The total gold comex open interest FELL BY A HUGE SIZED 12,417 CONTRACTS DOWN to an OI level 508,842 WITH THE LOSS IN THE PRICE OF GOLD ($4.25 IN FRIDAY’S COMEX TRADING). FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF NOV..  THE CME REPORTS THAT THE BANKERS ISSUED A  STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 5072 EFP CONTRACTS WERE ISSUED:

NOV: 0 EFP’S AND DECEMBER:  5072 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  5072 CONTRACTS.

THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES:  7345 TOTAL CONTRACTS IN THAT 5072 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A HUGE 12,417 COMEX CONTRACTS.

NET LOSS ON THE TWO EXCHANGES: 7545 contracts OR 754,500 OZ OR 22.84 TONNES.

 

We are now in the non active contract month of November. For the November contract month, we have 4 notices standing so we LOST 5 contracts. We had 5 notices served WEDNESDAY so we gained 0 contracts or an additional NIL oz of gold will stand for gold at the comex and these guys refused to morphed into London based forwards as well as negate receiving a fiat bonus for the trouble.

 

 

 

 

 

The next delivery month after November is the very big December contract month and here the OI FELL by 24,196 contracts  to 208,425 contracts.  January saw a RISE TO 3879 FOR A GAIN OF 347 CONTRACTS.  February gained 10,547 contracts to stand at 218,789 contracts.

FOR COMPARISON TO THE 2017 CONTRACT MONTH:

ON NOV 27/2017 WE HAD 127,659 OPEN INTEREST CONTRACTS (WITH 3 DAYS LEFT BEFORE FIRST DAY NOTICE) COMPARED TO THIS YEAR: 208,425.( COMPARED TO 4  READING DAYS BEFORE FIRST DAY NOTICE)

IT NOW LOOKS LIKE WE ARE GOING TO HAVE A DANDY AMOUNT OF GOLD STANDING FOR DELIVERY IN DECEMBER.

ON FIRST DAY NOTICE DEC 1/2017: 37.035 TONNES STOOD FOR DELIVERY

EVENTUALLY BY DEC 31.2017:  28.592 TONNES STOOD AND THE REST MORPHED INTO LONDON BASED FORWARDS.

AS A REMINDER WE HAVE ONLY 4.000 TONNES OF REGISTERED GOLD READY TO SERVE UPON OUR DEC LONGS.

 

 

 

 

WE HAD 1 NOTICES FILED AT THE COMEX FOR 100 OZ.

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI FELL BY 6639 CONTRACTS FROM 216,066 DOWN TO 209,427 (AND FURTHER FROM NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S GOOD  OI COMEX GAIN  OCCURRED WITH A 25 CENT LOSS IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF NOVEMBER AND, WE WERE  INFORMED THAT WE HAD A GOOD SIZED 1849 EFP CONTRACTS:  FOR NOVEMBER:  0 CONTRACTS AND FOR …

 

FOR DECEMBER: 1849 CONTRACTS, FOR MARCH 0 CONTRACTS, AND ZERO FOR ALL OTHER MONTHS.  THESE EFPS WERE ISSUED TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  THE TOTAL EFP’S ISSUED: 1849.  ON A NET BASIS WE LOST 4790 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  6639 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1849 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:   4790 CONTRACTS...AND ALL OF THIS LACK OF  DEMAND OCCURRED WITH A 25 CENT LOSS IN PRICING// FRIDAY

 

 

 

 

We are now in the non active delivery month of NOVEMBER and here we now have 2 notices  standing for a loss of 26 contacts.  We had 26 notices served on Friday so we gained 0 contracts or an additional nil oz will  stand for delivery as these longs refused to  morph into London based forwards as well as not accepting a fiat bonus for their efforts.

 

 

 

 

After November, we have a December contract and here we LOST 14,509 contracts DOWN to 74,026.  January saw a GAIN of 189 contracts up to 1637 contracts.   March, the next big delivery month after December saw a gain of 6714 contracts  up to 109.834

FOR COMPARISON TO THE COMEX 2017 CONTRACT MONTH:

ON NOV 27. 2017 WE HAD STILL  43,560 (3 days before first day notice) OPEN  INTEREST CONTRACTS LEFT TO BE SERVED UPON AND THIS COMPARES TO TODAY: 74,026 CONTRACTS (4 days before first day notice)

IT ALSO LIKES LIKE WE ARE GOING TO HAVE A DANDY AMOUNT OF SILVER STANDING FOR DELIVERY AT THE COMEX.

ON FIRST DAY NOTICE DEC 1.2017 WE HAD A RATHER LARGE: 19.47 MILLION OZ STAND FOR DELIVERY

BY THE END OF DECEMBER:  33.295 MILLION OZ AS QUEUE JUMPING WAS THE NAME OF THE GAME IN SILVER.

.

 

 

 

 

 

 

 

 

We had 2 notice(s) filed for 10,000 OZ for the NOV, 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 391,642 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  308,024  contracts..

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  NOV/GOLD

NOV 26-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 21,873.290  oz
Brinks
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

 

 

21,873.290

 

oz

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
1 notice(s)
 100 OZ
No of oz to be served (notices)
3 contracts
(300 oz)
Total monthly oz gold served (contracts) so far this month
215 notices
21500 OZ
0.6687 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 dealer entry:

 

total gold entering dealer:  0 oz

total gold withdrawing from the dealer;  0 oz

 

we had 0 kilobar transaction/
we had 1 withdrawal out of the customer account:
i) Out of Brinks:  21,873.290 oz
total customer withdrawals:  21,873.290 oz
and this landed in Scotia;s account:
we had 1 customer deposits
i) Into Scotia: 21,873.290 oz
total customer deposits 21,873.290 oz
we had 0  adjustments..

FOR THE NOV 2018 CONTRACT MONTH)

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 1 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.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the NOV/2018. contract month, we take the total number of notices filed so far for the month (215) x 100 oz , to which we add the difference between the open interest for the front month of NOV. (4 contracts) minus the number of notices served upon today (1 x 100 oz per contract) equals 21,800 OZ OR 0.6781 TONNES) the number of ounces standing in this non active month of NOV

 

Thus the INITIAL standings for gold for the NOV/2018 contract month:

No of notices served (215 x 100 oz)  + {4)OI for the front month minus the number of notices served upon today (1 x 100 oz )which equals 21800 oz standing OR 0.6781 TONNES in this NON active delivery month of NOVEMBER.

WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL STAND AT THE COMEX AS THESE LONGS REFUSED TO MORPH INTO LONDON BASED FORWARDS AS WELL AS RECEIVE A FIAT BONUS. QUEUE JUMPING IN GOLD DID RETURN AS THE DEALERS QUEUE JUMPING OBTAINING GOLD AS THEY TRY AND PUT OUT FIRES ELSEWHERE.

 

 

 

 

 

THERE ARE ONLY 3.995 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 0.6781 TONNES STANDING FOR NOVEMBER  

 

 

 

total registered or dealer gold:  128,451.881 oz or   3.995 tonnes
total registered and eligible (customer) gold;   8,015,760.647 oz 249.32 tonnes
 I BELIEVE THAT THIS IS THE LOWEST REGISTERED GOLD READING IN THE COMEX HISTORY..AS WELL AS THE LONGEST WE HAVE SEEN THE REGISTERED COLUMN AT 5 TONNES OR LESS. WE HAVE NOW BROKEN THE 4 TONNES BARRIER TO READ; 3.995 TONNES OF DEALER (REGISTERED) GOLD.

IN THE LAST 27 MONTHS 108 NET TONNES HAS LEFT THE COMEX.

LADIES AND GENTLEMEN: THERE IS NO GOLD AT THE COMEX..AS THE CROOKS SEEMS TO BE FORCING LONGS TO TAKE DELIVERY OF LONDON FORWARDS AND NOT TAKE POSSESSION OF ANY GOLD AT THE COMEX/

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

NOV INITIAL standings/SILVER

NOV 26, 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
627,941.826 oz
jpmorgan
I .D.

 

 

Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
nil oz
hsbc
No of oz served today (contracts)
2
CONTRACT(S)
10,000 OZ)
No of oz to be served (notices)
0 contracts
(nil oz)
Total monthly oz silver served (contracts) 1487 contracts

(7,435,000 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 0 inventory movement at the dealer side of things

 

total dealer deposits: nil oz

total dealer withdrawals: 0 oz

we had 0 deposits into the customer account

i) Into JPMorgan: nil oz

*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.

JPMorgan now has 151.7 million oz of  total silver inventory or 52.09% of all official comex silver. (152.0 million/292 million)

ii)Into everybody else:  zero

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: nil  oz

we had 2 withdrawal out of the customer account:
i) Out of JPM: 597,805.710  oz
ii) Out of Int. D:  29,236.115 oz

 

 

 

 

 

total withdrawals: 627,041.826 oz

 

we had 0 adjustments

 

 

total dealer silver:  80.551 million

total dealer + customer silver:  292.437  million oz

The total number of notices filed today for the NOV 2018. contract month is represented by 2 contract(s) FOR 10,000 oz. To calculate the number of silver ounces that will stand for delivery in NOV., we take the total number of notices filed for the month so far at 1487 x 5,000 oz = 7,435,000 oz to which we add the difference between the open interest for the front month of NOV. (2) and the number of notices served upon today (2 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the NOV/2018 contract month: 1487(notices served so far)x 5000 oz + OI for front month of NOV( 2) -number of notices served upon today (2)x 5000 oz equals 7,435,000 oz of silver standing for the NOV contract month.  This is a gigantic number of oz standing for an off delivery month. Somebody is after a large supply of physical silver. We GAINED 0 contracts or an additional nil OZ will  stand at the comex as these longs refused to accept a London based forwards as well as negating the right to receive a fiat bonus. As we explained above somebody was in urgent need of physical silver today.

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 124.521 CONTRACTS  … 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 140,838 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 140,838 CONTRACTS EQUATES to 704 million OZ  100.4% 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.

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 

1. Sprott silver fund (PSLV): NAV RISES TO -4.47-% (NOV 26/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -1.49% to NAV (NOV 26/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -4.47%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):

NAV 12.27/TRADING 11.73/DISCOUNT 4.10

END

And now the Gold inventory at the GLD/

NOV 26/WITH GOLD DOWN 65 CENTS: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 762.92 TONNES

 

NOV 23/WITH GOLD DOWN $4.25/A HUGE DEPOSIT OF 2.06 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 762.92 TONNES

NOV 21/WITH GOLD UP $6.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 760.86 TONNES

NOV 20/WITH GOLD DOWN $3.95: A BIG CHANGE: A GOOD SIZED DEPOSIT OF 1.18 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.86 TONNES

NOV 19/WITH GOLD UP $2.05: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.68 TONNES

NOV 16/WITH GOLD UP $8.00: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.48 TONNES/INVENTORY RESTS AT 759.68 TONNES

NOV 15/WITH GOLD UP $5.35/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.16 TONNES

NOV 14/WITH GOLD UP $8.15: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.16 TONNES

NOV 13/WITH GOLD DOWN $1.75: A HUGE DEPOSIT OF 6.77 TONNES AT THE GLD/THAT SHOULD END THE WHACKING OF GOLD FOR NOW AND A SMALL WITHDRAWAL OF 84 TONNES: INVENTORY RESTS AT 761.16 TONNES

NOV 12/WITH GOLD DOWN $4.65: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 755.23

NOV 9/WITH GOLD DOWN $16.80: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 755.23 TONNES

NOV 8/WITH GOLD DOWN $3.30: A WITHDRAWAL OF 1.47 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 755.23 TONNES

NOV 7/WITH GOLD UP $2.60″ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 756.70 TONNES

NOV 6/WITH GOLD DOWN $5.80 A SMALL WITHDRAWAL OF .58 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 756.70 TONES

NOV 5/WITH GOLD DOWN $1.05 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.77 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 757.29 TONNES

NOV 2/WITH GOLD DOWN $5.05: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.76 TONNES FROM THE GLD INVENTORY//INVENTORY RESTS AT 759.06 TONNES

NOV 1/: 2 TRANSACTIONS:WITH GOLD UP $23.85,A SMALL WITHDRAWAL OF .80 TONNES OF GOLD TO PAY FOR FEES, INSURANCE AND STORAGE: INVENTORY AT THE GLD RESTS AT 754.06 TONNES THEN A DEPOSIT OF 6.76 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.82

OCT 31: WITH GOLD DOWN $11.35: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RE3STS AT 754.94 TONNES

OCT 30/WITH GOLD DOWN $2.00: A HUGE DEPOSIT OF 5.30 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 754.94 TONNES

OCTOBER 29/WITH GOLD DOWN $7.75 TODAY/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCTOBER 26/WITH GOLD UP $3.65 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCT 25/WITH GOLD UP $1.15: A DEPOSIT OF 1.76 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS AT 749.64 TONNES. FROM ITS LOW POINT AT THE BEGINNING OF OCTOBER THE GLD HAS ADDED.19.47 TONNES OF GOLD

OCT 23/WITH GOLD UP $11.85 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 747.88 TONNES

Oct 22/WITH GOLD DOWN $3.90 TODAY: A WITHDRAWAL OF 2.97 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 745.82

AND THEN: A DEPOSIT OF 2.06 TONNES SUCH THAT THE FINAL RESTING INVENTORY IS 747.88 TONNES

OCT 19/WITH GOLD DOWN $1.70 : NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 748.76 TONNES

OCT 18/WITH GOLD UP $2.80/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RSTS AT 748.76 TONNES

OCT 16/WITH GOLD UP BY ONLY $1.00/WE HAD ANOTHER 4.12 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 748.76 TONNES

OCT 15/WITH GOLD UP $8.45/ANOTHER 5.65 TONNES OF GOLD WAS ADDED TO THE GLD INVENTORY/INVENTORY RESTS AT 744.64 TONNES

OCT 12/WITH GOLD DOWN $4.35/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 738.99 TONNES

OCT 11/WITH GOLD UP $35.20 TODAY: A HUGE PAPER GOLD INVENTORY GAIN OF 8.82 TONNES/INVENTORY RESTS AT 738.99 TONNES

OCT 10/WITH GOLD UP $2.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17 TONNES

OCT 9/WITH GOLD UP $2.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17

OCT 8/WITH GOLD DOWN $18.60 NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17 TONNES

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

NOV 26.2018/ Inventory rests tonight at 762.92 tonnes

*IN LAST 502 TRADING DAYS: 172.23 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 402 TRADING DAYS: A NET 12.23 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

NOV 26/WITH SILVER DOWN ONE CENT: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.019 MILLION OZ

NOV 23/WITH SILVER DOWN 25 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.019 MILLION OZ.

NOV 21/WITH SILVER UP 23 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.019 MILLION OZ/

NOV 20/WITH SILVER DOWN 14 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 563,000 OZ INTO THE SLV/INVENTORY RESTS AT 325.019 MILLION OZ/

NOV 19/WITH SILVER UP 3 CENTS TODAY:NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 324.456 MILLION OZ/

NOV 16/WITH SILVER UP 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 324.456 MILLION OZ/

NOV 15/WITH SILVER UP 21 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 324.456 MILLION OZ

NOV 14/WITH SILVER UP 10 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 324.456 MILLION OZ

NOV 13/WITH SILVER DOWN 15 CENTS; A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 328,000 OZ FROM THE SLV/INVENTORY RESTS AT 324.456 MILLION OZ/

NOV 12/WITH SILVER DOWN 10 CENTS/ A SMALL CHANGE IN SILVER INVENTORY A THE SLV: A WITHDRAWAL OF 940,000 OZ/INVENTORY RESTS AT 324.784 MILLION OZ

NOV 9/WITH SILVER DOWN 29 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.724 MILLION OZ/

NOV 8/WITH SILVER DOWN 15 CENTS: A SMALL WITHDRAWAL OF 281,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.724 MILLION OZ.

NOV 7: WITH SILVER UP 8 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.005 MILLION OZ/

NOV 6/WITH SILVER DOWN 14 CENTS: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.005 MILLION OZ/

NOV 5/WITH SILVER DOWN 9 CENTS TODAY: ANOTHER BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.315 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 326.005 MILLION OZ/

NOV 2/WITH SILVER DOWN 6 CENTS TODAY: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 143,000 OZ/INVENTORY RESTS AT 327.320 MILLION OZ/

NOV 1/WITH SILVER UP 54 CENTS TODAY: A BIG CHANGE IN SLV” A WITHDRAWAL OF 1.033 MILLION OZ FROM THE SLV. /INVENTORY RESTS AT 327.463 MILLION OZ.

OCT 31/WITH SILVER DOWN  18 CENTS: NO CHANGES IN SLV INVENTORY/INVENTORY RESTS AT 328.496 MILLION OZ/

OCT 30/WITH SILVER UP 4 CENTS TODAY: NO CHANGES IN SLV INVENTORY/INVENTORY RESTS AT 328.496 MILLION OZ

OCTOBER 29/WITH SILVER DOWN 27 CENTS NO  A HUGE CHANGE IN SILVER INVENTORY AT THE SLV” A WITHDRAWAL OF 1.879 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 328.496 MILLION OZ.

OCTOBER 26/WITH SILVER UP 7 CENTS NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 330.375 MILLION OZ

OCT 25/WITH SILVER DOWN 7 CENTS: ANOTHER HUGE WITHDRAWAL OF 1.315 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 330.375 MILLION OZ/

OCT 23/WITH SILVER UP 22 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.819 MILLION OZ /INVENTORY RESTS AT 331.690 MILLION OZ.

OCT 22/WITH SILVER DOWN 8 CENTS: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 470,000/INVENTORY RESTS AT 334.509 MILLION OZ/

OCT 19/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INV. RESTS AT 334.039 MILLION OZ

OCT 18/WITH SILVER DOWN 6 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.127  MILLION /RESTS AT 334.039 MILLION OZ/

OCT 16/WITH SILVER DOWN 2 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 15/WITH SILVER UP 10 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 12/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 11/WITH SILVER UP 25 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 10/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 9/WITH SILVER UP 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY: SLV INVENTORY RESTS AT 332.912 MILLION OZ

OCT 8/WITH SILVER DOWN 33 CENTS, A GOOD SIZE WITHDRAWAL OF 563,000 OZ/INVENTORY RESTS AT 332.912 MILLION OZ.

 

 

NOV 26/2018:

 

Inventory 325.019 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

SMALL JUMP IN LIBOR RATES TODAY./

 

 

THE RISE IN LIBOR IS CREATING A SCARCITY OF DOLLARS BECAUSE FOREIGN EXCHANGE SWAPS (COSTS) ARE SIMPLY PROHIBITIVE

YOUR DATA…..

6 Month MM GOFO 2.45/ and libor 6 month duration 2.89

Indicative gold forward offer rate for a 6 month duration/calculation:

G0LD LENDING RATE: + .44

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.74%

LIBOR FOR 12 MONTH DURATION: 3.12

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.38

end

 

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

 

 

NOV 26.2018

Risk of Lower Lows in Gold Remains Prior to Spectacular Rally to Follow

By David Brady, CFA

Last week, I provided the fundamental background for why I believe the risk of lower lows in Gold remains, based primarily on USD/CNY breaking the critical 7 threshold. I also provided the rationale for the enormous rally to follow, driven by a reversal in policy by the Fed following a stock market crash and the subsequent ultimate peak in the dollar, including USD/CNY.

This week, let’s take a look at the technicals, sentiment, and positioning in Gold to see if it counters or complements the fundamental thesis.

TECHNICALS

Gold is currently heading higher in a bearish flag pattern. It could continue higher to resistance between 1251-1255 before heading lower again. Support is at 1200, also the previous closing low. A break down could open up a move down to 1184, 1160, or even 1124 next.

1251 is the key resistance area on the upside. It is the 38.2% retracement of the closing peak at 1360 in April and the closing low of 1184 in August. It is also the 50% retracement of the decline from the peak at 1377 in July 2016 and the December 2016 low of 1124. We have to take out 1251 in order to become any way bullish.

Then there is the 200-day moving average, at 1266 currently. A level watched closely by the Bullion Banks and the Algos. Through there, and the path back to new highs since 2016 becomes clearer.

I am already long ‘physical’ Gold (and Silver bullion) since August 2015 and have been adding ever since. I’m waiting to add more on a break of key resistance or at lower lows. However, if you don’t hold any Gold (or Silver), I recommend you buy “some” now, because it is only a matter of time before Gold heads multiples higher, in my humble opinion. (By “time” I mean within the next 1-3 years, but I believe it will start rallying in earnest in 2019, perhaps as early as next month.)

You can check out the full story here.

We also discussed the finer details and the thought process of our clients in a special episode of The Goldnomics Podcast which you can view here:

 

News and Commentary

Gold prices flat amid stronger dollar, investors look to G20 summit (Reuters.com)

Tensions rise as Russia fires on Ukrainian naval ships (MarketWatch.com)

Gloomy forecasts slash tech valuations as Silicon Valley chokes on smoke (MarketWatch.com)

Bitcoin’s haven claim is destroyed amid broad pummeling of riskier assets (MarketWatch.com)

How Will the Rollback of Dodd-Frank Affect Gold? (24HGold.com)

Gold prices shoot up to historic high at Rs63,700 per tola (Tribune(Pakistan))

GATA chairman discusses confession by ex-JPM trader (Gata.org)

Gold Is Setting Up For A Nice First-Half Rally (GoldSeek.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

23 Nov: USD 1,222.15, GBP 951.69 & EUR 1,075.13 per ounce
22 Nov: USD 1,228.25, GBP 950.42 & EUR 1,074.72 per ounce
21 Nov: USD 1,224.00, GBP 957.29 & EUR 1,075.04 per ounce
20 Nov: USD 1,223.10, GBP 951.45 & EUR 1,069.97 per ounce
19 Nov: USD 1,223.55, GBP 951.07 & EUR 1,070.97 per ounce
16 Nov: USD 1,215.80, GBP 948.93 & EUR 1,073.07 per ounce

Silver Prices (LBMA)

23 Nov: USD 14.26, GBP 11.12 & EUR 12.56 per ounce
22 Nov: USD 14.52, GBP 11.26 & EUR 12.72 per ounce
21 Nov: USD 14.42, GBP 11.26 & EUR 12.65 per ounce
20 Nov: USD 14.44, GBP 11.24 & EUR 12.63 per ounce
19 Nov: USD 14.36, GBP 11.21 & EUR 12.57 per ounce
16 Nov: USD 14.29, GBP 11.15 & EUR 12.61 per ounce


Recent Market Updates

– Gold and Silver Hold Firm as Stocks and Oil Lower in to US Holiday Weekend
– Is Brexit a Massive Threat to Globalisation?
– Stock Markets Remains Extremely Overvalued – Hussman
– Stocks are Now in ‘Complete Bitcoin Territory,’ Asset Manager Says
– Brexit’s Safe Haven Is a Dangerous Place
– Gold and Silver Rise As Stocks Fall On Valuation Concerns, Italy and Brexit Risks
– Pound Falls 2.5% Against Gold as UK Government in Turmoil Over Brexit
– GoldCore Capitalising On Brexit With Dublin Gold Vault
– Store Gold In The Safest Vaults In Ireland
– Investors Set To Store Gold In Dublin Due To Brexit Risks
– Investors Start Buying Gold ETFs In October In Bullish Shift

Mark O’Byrne
ii) GATA stories
Pakistan is returning to its inflation ways, as the gold price shot up to 63,700 rupees per tola bar  (11.66 gms ).  The price per oz:  119,341. Pakistani rupees per oz. Citizens are seeking gold to protect them from the ravages of inflation.
(courtes Siddiqui/Express tribune)

Gold price hits record high in Pakistan as inflation looms

 Section: 

Gold Prices Shoot Up to Historic High at Rs63,700 Per Tola

By Salman Siddiqui
The Express Tribune, Karachi, Pakistan
Saturday, November 24, 2018

KARACHI — Gold prices in Pakistan shot up to a record high at 63,700 rupees per tola (11.66 grams) on Friday as people turned to the precious yellow metal, which is considered a safe haven for investment, ahead of likely return of inflationary pressures in the country.

Karachi Saraf and Jewellers Association Secretary Ghulam Hussain Deedar said the association revised gold prices upwards by Rs800 to Rs63,700 per tola on Friday despite a drop of $7 to $1,222 per ounce in the international market.

“This price is a historic high. The new price broke the previous record of Rs63,600 per tola reached on October 5, 2012,” he added. “Cumulatively, the bullion price has soared by a total of Rs2,000, or 3.2 percent, in the last two days.” …

… For the remainder of the report:

https://tribune.com.pk/story/1853172/2-gold-prices-shoot-historic-high-r…

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

These guys think that there is a huge gold mine sitting underneath the hills of Wales, in an area known as the Dolgellau gold belt.

(courtesy Bourne/BBCnews/GATA)

Are these north Wales hills sitting on a gold mine?

 Section: 

By Nick Bourne
BBC News, London
Saturday, November 24, 2018

Experts think there’s potential for a gold rush in north Wales as Alba Mineral Resources is carrying out research across a 20-mile area known as the Dolgellau gold belt in Gwynedd.

A survey has been conducted around the site of Clogau St David’s gold mine at Bontddu, Dolgellau, which shut in 1989.

Boss George Frangeskides said the plan is to seek permission to open the mine.

The company has acquired a 90 percent stake in Gold Mines of Wales, which has permission from the Crown to prospect and mine in the area as they search for new sites. …

… For the remainder of the report:

https://www.bbc.com/news/uk-wales-46179570




iii) Other Physical stories
Why the floor of gold is around $1220.  The reason:  that is the cost to mine gold.
(courtesy Steve St Angelo/SRSRocco report)

ANALYSTS TOTALLY WRONG ABOUT GOLD: Top Gold Miners Production Cost Still Provides Floor In The Market Price

by SRSrocco on November 24, 2018

While the debate on the dynamics of the gold market continues, at least the top gold miners production cost provides us with a floor price.  Or rather, a basic minimum price level.  I get a good laugh when I read analysts suggesting that the gold price will fall back to $450-$700.  For the gold price to fall back to $450, then we would need to lose 95+% of global gold mine supply.

Due to two factors of rising energy prices and falling ore grades in the gold mining industry, COSTS WILL NEVER go back to where they were a decade ago.  Again, the only way for that to happen is if a large percentage of gold mine production was shut down.

Furthermore, analysts continue to wrongly forecast the gold price based mainly on gold supply and demand forces.  This is a NO-NO.  The overriding factor that has determined the gold market price has been the gold mining industry cost of production.  I proved this point by showing the increase in the gold production cost at Homestake Mining (the United States largest gold mine 1970’s) from 1971-1979:

Homestake Mining was producing gold at the cost of $42 an ounce in 1971 when the average price was $40.80.  Thus, Homestake Mining lost money producing gold in 1971.  However, as energy-driven inflation ravaged throughout the economy as the price of a barrel of oil increased from $2.24 in 1971 to $31 in 1979, this impacted the cost to produce gold significantly.  By 1979, Homestake Mining’s gold production cost jumped to $247 an ounce.

While it is true that the tremendous demand for gold by investors also drove the gold price to new highs in the 1970s, we can see that at least 80+% of the increase in the gold price from 1971-1979, in the case of Homestake Mining, was due to higher production costs.

So, what is taking place currently in the top gold mining industry as it pertains to production costs?

The Top 5 Gold Miners Total Production Cost Remains Above $1,200 An Ounce

According to my analysis of the estimated adjusted income breakeven of the top five gold miners, the average weighted cost was $1,204 an ounce for the first nine-months of 2018:

As we can see, Goldcorp has had a horrible year as their adjusted breakeven gold production cost was the highest in the group at $1,281.  AngloGold had the second highest cost at $1,257, followed by Barrick ($1,207), Kinross ($1,186) and Newmont ($1,144).  Now, the weighted average breakeven price of $1,204 was based on an average gold price of $1,282 for Q1-Q3.  So, the top five gold miners average profit for the group was about $78 an ounce during the first nine months of 2018.

However, gold production costs increased by Q3 2018 as the oil price jumped to $70 a barrel during the quarter while the gold price fell.  So, profits declined in the third quarter.  Regardless, we can see that the total production cost of the top gold miners at $1,204 provides a base for the current market price of $1,221.

Now, some analysts, investors, and readers may disagree with my “estimated break-even gold price,” but if we use another metric, we see similar results.  Because the gold mining industry is extremely capital intensive, it takes a massive amount of capital funds to sustain production; we can look at the Free Cash Flow as a guide.

To arrive at Free Cash Flow, we subtract the gold mining company’s CAPITAL EXPENDITURES (CAPEX) from their CASH FROM OPERATIONS.  Here is an example of Barrick’s Free Cash Flow by looking at the Cash Flow Statement in their Q3 2018 Report.  Barrick reported cash from operations of $1,354 million while spending $1,026 million on CAPEX during Q1-Q3 2018, netting $328 million in positive free cash flow:

In the first nine months of 2018, the top five gold miners combined net Free Cash Flow was $542 million.  While that is a nice chunk of change, the five gold mining companies produced 13.2 million oz of gold.  By dividing the $542 million in free cash flow by the 13.2 million oz of gold production, the group made a net $41 of free cash flow per ounce:

So, my estimated profit for the group Q1-Q3 2018 was $78 per ounce while their Free Cash Flow per ounce was $41.  While it’s not an exact science, we can see that the gold miners aren’t making money HAND-OVER-FIST producing the best quality store of value and money on the planet.

Of course, some analysts would suggest that some of the CAPEX the gold miners are spending are for replacing reserves and adding new projects-mines.  Maybe this is true, but if so… SOMEONE NEEDS TO TELL THE GOLD MINING INDUSTRY.  Why?  Well, if we look at the next two charts, the CAPEX the gold miners are spending most certainly isn’t replacing or growing production.

As we can see, production from the top four gold miners has continued to decline even though they are supposedly spending money to replace and grow production.  The gold mining industry separates CAPEX spending into two categories:

  1. Sustaining CAPEX
  2. Expansionary CAPEX

Well, we can clearly see that the “Expansionary CAPEX” that these gold miners publish in their financial reports doesn’t seem to be expanding production.  Now, if we look at what is taking place in the top five gold miners over the past three-quarters, the trend continues:

Total gold production from Barrick, Newmont, AngloGold, Kinross, and Goldcorp fell from 14.9 million oz Q1-Q3 2017 to 13.2 million oz during the same period this year.  That is an 11% decline in production in just one year.  So, what’s going on with all the expansionary CAPEX spending?  Ah??

Now that we have an idea of what it costs to produce gold from the top gold miners, why are the forecasts of $450-$700 incorrect?

Harry Dent’s $450 Gold Price Neglects The Number One Factor Of Price

Harry Dent became famous due to a few forecasts that he got right out of 1oo.  However, his ongoing predictions for $450-$700 will never come true because Harry neglects to incorporate one of the most important factors in determining the gold price… COST OF PRODUCTION.

While Harry continues to write about the coming deflation and why the gold price would not do well, Charles Nenner has stated that the gold price actually does well during deflationary periods.  So, which is it?  Well, in the future, past analysis won’t matter as much due to the collapse of global oil production and its impact on the value of most assets.

But, if we look at Harry Dent’s chart on the future gold price, we can see that something has gone horribly wrong with his forecast:

Harry Dent’s forecast of the gold price made back in April 2017 is shown in the small white graph at the upper left corner of the chart.  According to Harry, the gold price should have dropped to $700 by the middle of 2018, corrected higher and then was projected to continue falling to $450 by 2020.  So far, the gold price has remained above $1,200 an ounce, even reaching $1,350 at the beginning of 2018.

Dent used technical analysis and the popping of a TYPICAL BUBBLE to arrive at his gold price targets of $700 and $450.  Unfortunately, basing one’s forecasts on technical analysis only is a huge mistake because you have left out the most important ingredient… ENERGY.

My chart shows that the gold price has increased since the low at the beginning of 2016, due to HIGHER ENERGY PRICES:

The oil price fell to a low of $43.29 a barrel in 2016, thus pulling down the cost to produce gold.  However, as the oil price increased to $67.55 in 2018, it impacted the gold miners production cost.  But, there is something even more important if we compare the oil price and gold production cost in 2004 versus 2016.

Here is a chart of the top two gold miners, Barrick and Newmont, estimated break-even cost since 2000:

In 2004, the top two gold miners estimated total production cost was $366 based on a market price of $410.  However, by 2016, Barrick and Newmont’s combined production cost increased to $1,123 per ounce.  What is quite fascinating is that the oil price in 2016 at $43.29 wasn’t much higher than the 2004 average oil price of $41.51.  So… WHY WAS THE  GOLD PRODUCTION COST THREE TIMES HIGHER in 2016 versus 2004, while the oil price was only a few bucks higher???

While it is impossible to understand all the valuables why it cost so much more to produce gold today than it did 10-15 years ago, I believe the Falling EROI – Energy Returned On Invested is the main factor as it has THUNDERED throughout the entire economy.  It doesn’t matter if the oil price falls back to $30, it will not lower the overall cost to produce gold all that much.

So… HARRY DENT, it’s time to update your analysis.

In future articles I will explain with the gold price will likely decouple from the ENERGY COST ANALYSIS due to the collapse in the value of most assets as global oil production plummets. 

Lastly… as forecasted the CRYPTO MARKET Continues to drop to new lows.

__________________________________________

 

 

 

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 TO 6.9403/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER NOW ON //OFFSHORE YUAN:  6.9385   /shanghai bourse CLOSED DOWN 3.67 POINTS OR 0.14%

. HANG SANG CLOSED UP 448.50 POINTS OR 1.72%

 

 

2. Nikkei closed UP 165.45 POINTS OR 0.76%

 

3. Europe stocks OPENED ALL GREEN

 

 

 

 

/USA dollar index FALLS TO 96.74/Euro RISES TO 1.1363

3b Japan 10 year bond yield: FALLS TO. +.09/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113/24/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 51.18 and Brent: 60.02

3f Gold UP/JAPANESE Yen DOWN CHINESE YUAN:   ON -SHORE UP/OFF- SHORE: UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.35%/Italian 10 yr bond yield UP to 3.42% /SPAIN 10 YR BOND YIELD UP TO 1.64%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 3.07: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.39

3k Gold at $1225.90 silver at:14.34   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 84/100 in roubles/dollar) 67.05

3m oil into the 51 dollar handle for WTI and 60 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/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.24DESTROYING 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 0.9975 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1329 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 +0.36%

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 3.07% early this morning. Thirty year rate at 3.31%

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

6.  TURKISH LIRA:  UP  TO 5.2330

 

Futures, Global Stocks Surge As Italy, Fed Optimism Halts Rout

After last week’s market woes, stocks have started the new week in a sea of green, with equity markets rising around the globe, buoyed by renewed optimism over trade and easier financial conditions ahead of this week’s Feed speeches and key G-20 summit between Trump and Xi, while European shares surged as Italian officials adopted a more conciliatory tone resulting in hopes Italy’s populist government is willing to concede in the long-running standoff with Brussels.

S&P futures rose 1.2%, erasing losses from the latter part of last week, after decent Black Friday retail sales data, boosted by strong Asian and European risk sentiment.

In Europe, banking and automaker shares led the Stoxx Europe 600 Index higher, with all sectors in the green, after stocks rose in most of Asia except for China and Australia. Italy’s sovereign bond yields tumbled after the Deputy Premier Matteo Salvini signaled a new openness to alter the country’s budget deficit target for next year; BTPs rally through the 100-DMA and short-dated futures push above September highs ahead of this evening’s “decisive” budget talks as the Bund/BTP spread tightened ~19bps to 286bps.

Europe’s Stoxx 600 Banks Index surged on Monday as news on Brexit and Italian developments lifted the broader market: banks advance 2.6%, topping the European benchmark’s 1.3% gain after Italy’s populist cabinet suggested he is willing to change the nation’s budget deficit target for next year. Greek markets also rallied as Eurobank revealed a plan to deal with troubled loans.

Italy’s FTSE MIB surged up as much as 3.2%, its biggest one-day gain since June, and outperforms its peers as Italian Banks benefited from the positive BTP price action amid reports that the country’s coalition government is discussing reducing the 2019 deficit target to 2.0%-2.1% from 2.4%. In turn hinting that Italy are willing to be flexible on the budget after the European Commission rejected it earlier this month. Italian PM Conte and Deputy PM Salvini have since declined to comment on specific numbers. As such, Italian banks UBI +6.1%, UniCredit +6%, BPM +5.3%, Intesa Sanpaolo +5.3%, were among the top performers in the index, while

The Italian Government is to meet Monday evening to discuss a potential reduction of the deficit goal; Il Messaggero also reported that Italian Finance Minister Tria will bring various simulations on budget changes to top-level Italian government this evening in Rome. Additionally, are discussing reducing the 2019 deficit target to 2.0-2.1% from the current 2.4% target.

Elsehwhere, Italian Deputy PM Di Maio says budget deficit target reduction is not a problem as long as budget measures remain the same. Adding that the government remains committed to reform, and there can be a dialogue with the EU on the deficit target; also seeking to talk to the EU regarding more investments. Says there can be dialogue with the EU on the deficit target; also wants to talk to the EU regarding more investments.Additionally, Salvini said they’ve had “positive feedback” form Brussels when asked about lowering their 2019 deficit target, but refuses to talk about numbers. Italy’s PM Conte has declined to comment about the specific numbers on the budget.

Elsewhere, UK banks have also received a lift after the European Council endorsed UK PM May’s Brexit deal, which still has to pass through parliament, with Dec 12th touted as the possible date for a vote, hence RBS (+2.6%) and HSBC (+2.6%) and Barclays (+2.6%) shares are higher. Gilts will be focused on PM May’s speech to Parliament at 3:30pm London time.

Credit-default swap indexes for both European high-grade and high-yield debt fell in tandem amid the general risk-on mood, with the cost of insuring against default retreating from a two-year high

Earlier, Asian stocks began the week broadly positive as stock markets picked themselves up from the Thanksgiving holiday lull, but with upside capped amid ongoing commodity weakness. ASX 200 (-0.8%) and Nikkei 225 (+0.8%) were mixed with Australia dampened by losses in miners after the broad weakness across energy and metals in which crude slipped nearly 8% on Friday, while the Japanese benchmark was propped up by favorable currency moves. Elsewhere, Hang Seng (+1.8%) and Shanghai Comp. (-0.1%) conformed to the broad rebound in sentiment, but with the mainland less decisive as Chinese commodity prices followed suit to their global peers in which Dalian iron ore futures dropped around 6% at the open and China oil futures hit limit down. Finally, 10yr JGBs saw mild gains amid the BoJ’s presence in the market for JPY 680bln of JGBs in the belly to super-long end and which coincided with a decline in the Japanese 10yr and 20yr yields to their lowest in 3 months.

The yen and dollar were broadly weaker, Treasuries edged lower with the 10Y TSY at 3.05%, while high-beta currencies gained as global equities advanced. The euro followed Italy’s stocks and bonds higher as the nation’s government signaled it was looking to lower its 2019 budget deficit target. Sterling advanced after EU leaders agreed to the Brexit deal and as Theresa May prepared to sell her Brexit deal to U.K. lawmakers Monday, while oil attempted to form a short-term base.

In geopolitical news, Ukraine accused Russia of an act of war after the latter fired at Ukrainian ships and seized 3 vessels off Crimea, while Russia said the Ukrainian ships entered its territorial waters near Crimea. Furthermore, Ukrainian President Poroshenko has reportedly asked Parliament to meet on Monday to discuss martial law. On Monday, Russia reopened the Kerch Strait near Crimea for shipping according to sources.

In overnight central bank speak, ECB’s Praet said that recent developments indicate some loss of growth momentum, with factors related to protectionism, financial market volatility and vulnerabilities in emerging markets are creating headwinds that are becoming increasingly noticeable. And the underlying strength of the euro area economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed. Also says that they will need to clarify, possibly in the December meeting, what the ECB means by reinvesting for an extended period of time. Adds that they need big changes in scenarios to not follow rate guidance, it is clear that risks to the downside have increased noticeably.

Looking ahead, investors will turn their focus this week to Federal Reserve speeches and policy-meeting minutes that may give clues on the 2019 rates outlook, and a key sit-down between Presidents Xi Jinping and Donald Trump ahead of the next scheduled escalation in tariff hikes. With bond traders having reduced expectations for the pace of U.S. monetary policy tightening, Fed Chairman Jerome Powell has the opportunity of shedding light on prospects for a pause in a speech Wednesday.

“The market will be looking for potentially some signs of dovish overtures coming through” from the Fed this week, John Lockton, head of investment strategy in Sydney at Wilsons Advisory & Stockbroking, told Bloomberg TV. On trade, investors “are looking for a pathway. I am not sure we are going to see a detailed agreement. A pathway to success, a pathway to an outcome will be highly supportive of equities globally,” he said.

WTI (+1.1%) and Brent (+1.8%) have retraced recent losses as the USD eases from highs and market risk-sentiment improves after the complex plummeted almost 8% on Friday amid concerns of a supply glut and lower January oil demand. This comes as Saudi Arabia reported that crude production stands at an all time high at 11.1-11.3mln BPD. WTI flirts with the USD 51.00/bbl handle while Brent hovers around USD 60.00/bbl in early European trade, with traders keeping an eye on any hints to next year’s oil production from OPEC+ countries, with the Dec 6th meeting looming. However, we may get some sort of direction just before December with the Saudi Crown Prince and Russian president meeting on the side lines of the G20 summit this coming weekend. Furthermore, some traders are noting that hedge funds haven’t been this pessimistic in regard to global oil prices for almost three years. Finally, Shanghai International energy Exchange said they will raise the margin requirement for crude oil futures to 10% from 7%, effective Nov 28th.

In metals, gold (+0.2%) is higher as the yellow metal moves conversely to USD actions, while silver (+1.0%) outperforms with markets gearing up for the FOMC minutes release later this week. Elsewhere, base metals hover near last-week’s lows with the global growth slowdown weighing on investors’ minds.

Expected data include Dallas Fed Manufacturing Outlook. StoneCo is among companies reporting earnings

Market Snapshot

  • S&P 500 futures up 1.3% to 2,663.25
  • STOXX Europe 600 up 1.2% to 358.30
  • MXAP up 0.5% to 151.35
  • MXAPJ up 1% to 485.39
  • Nikkei up 0.8% to 21,812.00
  • Topix up 0.2% to 1,632.20
  • Hang Seng Index up 1.7% to 26,376.18
  • Shanghai Composite down 0.1% to 2,575.81
  • Sensex up 1% to 35,332.84
  • Australia S&P/ASX 200 down 0.8% to 5,671.57
  • Kospi up 1.2% to 2,083.02
  • German 10Y yield rose 1.9 bps to 0.359%
  • Euro up 0.4% to $1.1380
  • Italian 10Y yield fell 4.6 bps to 3.036%
  • Spanish 10Y yield fell 3.0 bps to 1.602%
  • Brent futures up 1.8% to $59.85/bbl
  • Gold spot up 0.3% to $1,227.10
  • U.S. Dollar Index down 0.3% to 96.68

Top Overnight News

  • Theresa May will begin selling her Brexit agreement to skeptical politicians in Britain on Monday with a warning that “there is not a better deal available.” Macron’s fish fight offers May a glimpse of Brexit battles ahead
  • The British Parliament will probably reject May’s Brexit deal, but then approve it on a second attempt amid market pressure, according to UBS Wealth Management’s chief economist Paul Donovan. He reckons that prediction is now the consensus view in financial markets
  • Deputy Premier Matteo Salvini signaled a new openness to change Italy’s budget deficit target for next year. Asked whether a 2.4 percent target is set in stone, Salvini told newswire AdnKronos: “I think nobody is fixated on this, if there is a budget which makes the country grow, it could be 2.2 percent or 2.6 percent”
  • Switzerland overwhelmingly rejected a plan that could have caused a worsening of relations with the European Union by forcing the government in Bern to renegotiate international treaties
  • Oil traded below $51 a barrel on concerns record output by Saudi Arabia may exacerbate a supply glut, and as President Donald Trump continues to call for lower prices
  • Russia fired on Ukrainian warships and injured some of their crew members, marking a dramatic renewal of tensions between the ex-Soviet neighbors near the peninsula of Crimea that President Vladimir Putin annexed four years ago
  • ECB Chief Economist Peter Praet said the end of the institution’s bond-buying program this year doesn’t mean policy is being tightened, as he pointed to “increasingly noticeable” headwinds for the economy

Asian equities began the week mostly positive as stock markets picked themselves up from the Thanksgiving holiday lull, but with  upside capped amid the ongoing commodity rout. ASX 200 (-0.8%) and Nikkei 225 (+0.8%) were mixed with Australia dampened by losses in miners after the broad weakness across energy and metals in which crude slipped nearly 8% on Friday, while the Japanese benchmark was propped up by favourable currency moves. Elsewhere, Hang Seng (+1.8%) and Shanghai Comp. (-0.1%) conformed to the broad rebound in sentiment, but with the mainland less decisive as Chinese commodity prices followed suit to their global peers in which Dalian iron ore futures dropped around 6% at the open and China oil futures hit limit down. Finally, 10yr JGBs saw mild gains amid the BoJ’s presence in the market for JPY 680bln of JGBs in the belly to super-long end and which coincided with a decline in the Japanese 10yr and 20yr yields to their lowest in 3 months.

Top Asian News

  • Kuroda: BOJ Can Shrink Balance Sheet at Suitable Pace at Exit
  • Hong Kong’s Hottest IPOs Bring Worst Returns to Investors
  • Asia-Based Macro Hedge Funds Stumble in October Amid Sell-Off
  • Hong Kong Stocks Rise on Expectations Fed May Slow Rate Hikes
  • Japan Life Insurers Cut Dollar Hedges Below 50%: Deutsche Bank

European equities started the week on the front foot (Eurostoxx 50 +1.1%) following the upbeat performance experienced over in Asia, with moves exacerbated as US participants re-enter the market following the long Thanksgiving weekend. Italy’s FTSE MIB (+2.8%) largely outperforms its peers as Italian Banks benefit from the positive BTP price action amid reports via government sources that the country’s coalition government are discussing reducing the 2019 deficit target to 2.0%-2.1% from 2.4%. In turn hinting that Italy are willing to be flexible on the budget after the European Commission rejected it earlier this month. Italian PM Conte and Deputy PM Salvini have since declined to comment on specific numbers. As such, Ubi Banca (+5.9%), Unicredit (+5.9%), Bper Banca (+5.7%), Banco BPM (+5.1%) and Intesa Sanpaolo (+5.1%) all rest at the top of the Italian benchmark.  Elsewhere, UK banks have also received a lift after the European Council endorsed UK PM May’s Brexit deal, which still has to pass through parliament, with Dec 10th, 11th, or 12th touted as the possible dates for a meaningful vote, hence RBS (+2.6%) and HSBC (+2.6%) and Barclays (+2.6%) shares are higher. In terms of sectors financials are largely outperforming amid Brexit and Italian budget developments, whilst consumer staples underperform. Looking at stock specifics, Melrose (-5.0%) shares dropped after Sky News reported that the company is weighing options for GKN Powder Metallurgy division with a “low-ball” offer valuing the business at GBP 1.6bln, below analyst expectations. On the flip side Eurofins Scientific rose to the top of the Stoxx 600 after the company confirmed their guidance.

Top European News

  • Russian Assets Retreat as Ukraine Tension Adds to Sanctions Risk
  • Greece’s Eurobank Plots Revival in $8 Billion Bad-Loan Sale
  • Vectura Plunges After Asthma-Device Failure Raises Concern
  • Saint-Gobain to Sell German Building Unit in Post-Sika Overhaul

In FX, the Usd and DXY have drifted down from highs amidst the all the above (Yen aside of course), with the DXY holding just above 96.500 vs a whisker over 97.00 at one stage and nearest tech support and resistance coming in at 96.318 and 97.055 respectively.

  • AUD/NZD/CAD – A broad risk revival and commodity comeback of sorts has lifted the Antipodean Dollars alongside their Canadian counterpart that is benefiting from the recovery in oil prices especially. Aud/Usd is firmly back above 0.7250, while the Kiwi has managed to climb over 0.6800, albeit only just after a knee-jerk downturn in wake of weaker than forecast NZ Q3 retail sales overnight and ahead of trade data later today. Meanwhile, the Loonie has pared losses from 1.3200+ to circa 1.3190-85, but may struggle to get beyond 1.3180 where heavy supply is reported. Note also, a major US bank has entered a long Usd/Cad position at 1.3192, targeting 1.3450 with a 1.3075 stop.
  • EUR – Also encouraged by the aforementioned upturn in risk appetite, but the single currency has appreciated independently on the latest Italian budget headlines indicating that the coalition Government may be ready to revise the 2019 deficit target, and significantly from 2.4% to 2.1% ore even 2%. This, ahead of a meeting in Rome tonight where Finance Minister Tria is expected to lay out several compromises for top officials to consider. Eur/Usd has bounced towards 1.1400 vs the low 1.1300 area, but not quite as far as its 30 DMA at 1.1394. 
  • GBP – The Pound has derived some support from official EU approval for the Brexit withdrawal agreement, with Cable back above 1.2800 and trying to clear 1.2850, but not convincingly as UK PM May begins the arduous task of selling the deal to her party and parliament before a meaningful vote on December 12 (or perhaps 1-2 days earlier if the roadshow goes well).
  • JPY – The G10 loser and underperformer as safe-haven demand/flows wane and Usd/Jpy clears 113.00 with a bit more vigour to a 113.35 peak and fleetingly, but not sustainably thus far, a 50% Fib at 113.25.

In commodities, WTI (+1.1%) and Brent (+1.8%) are retracing recent losses as the USD eases from highs and market risk- sentiment improves after the complex plummeted almost 8% on Friday amid concerns of a supply glut and lower January oil demand. This comes as Saudi Arabia reported that crude production stands at an all time high at 11.1-11.3mln BPD. WTI flirts with the USD 51.00/bbl handle while Brent hovers around USD 60.00/bbl in early European trade, with traders keeping an eye on any hints to next year’s oil production from OPEC+ countries, with the Dec 6th meeting looming. However, we may get some sort of direction just before December with the Saudi Crown Prince and Russian president meeting on the side lines of the G20 summit this coming weekend. Furthermore, some traders are noting that hedge funds haven’t been this pessimistic in regard to global oil prices for almost three years. Finally, Shanghai International energy Exchange said they will raise the margin requirement for crude oil futures to 10% from 7%, effective Nov 28th. In the metals complex, gold (+0.2%) is higher as the yellow metal moves conversely to USD actions, while silver (+1.0%) outperforms with markets gearing up for the FOMC minutes release later this week. Elsewhere, base metals hover near last-week’s lows with the global growth slowdown weighing on investors’ minds.

On today’s calendar, it’s a fairly quiet start to the week for data on Monday with the Chicago Fed’s October National activity index and the Dallas Fed’s November manufacturing activity index. Away from the data, it’s a busy day for central bank speak, with the ECB’s Draghi, Praet, Nowotny and Coeure all speaking at different times along with the BoE’s Carney and former Fed Governor Greenspan.

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, est. 0.2, prior 0.2
  • 10:30am: Dallas Fed Manf. Activity, est. 24.5, prior 29.4

DB’s Jim Reid concludes the overnight wrap.

Yesterday marked a month until Christmas and there’s a lot to resolve before we can overeat, drink too much, watch bad TV and argue with our families.

In terms of major events, in reverse order we have a FOMC meeting on December 19th (will we be debating an imminent pause by then?), the ECB equivalent on the 13th (surely QE to end… but the recent data…), the House of Commons vote on the Brexit WA likely earlier that week (and all the associated consequences), a big OPEC meeting on December 6th (after a 31% slump in 7 weeks since the peak), and a crucial G20 meeting in Buenos Aires this weekend where US/China trade stands at a major fork in the road with the ramifications likely to be significant for years to come. We will also learn more about the future relationship between the EC and Italy over the next month so plenty of opportunity for the financial world to look very different over Turkey and Xmas pudding than it does today – for better or for worse.

As for this week the G20 meeting on Friday and Saturday looms over us and headlines will start as leaders start to gather in Buenos Aires from today onwards. To be honest the G20 overall is a sideshow to the sideline meeting between US President Trump and Chinese President Xi Jingping to discuss trade. Recent comments (per Bloomberg) from White House economic advisor Kudlow have been mixed, however Kudlow has said that Trump is trying to “inject a note of optimism into trade talks with China” while Trump himself has been reported as saying that “China wants to have a deal”, suggesting that the President has been siding with the more pro-free trade advisers in the White House recently. Since then, the news that China hawk Navarro will not be attending the meeting also lends some support to the view of possible progress at the meeting. That being said, it’s still extremely difficult to predict the outcome but expect plenty of headlines and hints through this week.

Elsewhere Fed Chair Powell’s speech at the Economic Club of New York on Wednesday evening which will likely be closely watched in light of what has been greater discussion in recent weeks from officials on downside risks to the outlook and softer inflation. In addition to that, Vice-Chair Clarida speaks tomorrow and will be closely watched in light of his dovish remarks 10 days which seemed to signal a notable repricing of Fed expectations. The FOMC minutes on Thursday may be a touch backward looking but are always interesting. The data highlights are US PCE (Thursday) and European flash inflation (Thursday/Friday). Watch out for Black Friday and Cyber Monday sales data as well for a barometer on the consumer.

In terms of weekend news, seeing a Sunday EU leaders summit brought back memories of the crisis years and fraught midnight statements. However yesterday’s Brexit summit saw EU leaders sign off the Withdrawal Agreement in 38 minutes and before lunch! Many quipped on social media that for EU leaders to sign it off that quickly it must be a bad deal for the UK. Joking aside we are at a crossroads as European leaders yesterday warned that there was no better deal on offer. However the Parliamentary arithmetic still points to this deal being firmly rejected in the House of Commons. Interestingly PM May refused to answer a question on ruling out resigning if her deal failed to pass.

It seems all outcomes are possible here. Personally I can’t help thinking that a second referendum is getting closer and closer to being the most likely of 3 or 4 outcomes. However whether that’s a good or bad idea I cant help worry that the unintended consequence of this if “remain” win is that British politics will be thrown into chaos for many years. Interestingly the Brexit referendum in 2016 led to the general election in 2017 seeing the two mainstream parties (Conservatives and Labour) with their largest combined support for several decades as UKIP saw their vote collapse. This is in sharp contrast to the other big three EU countries. France saw both established parties fail to make it into the second round of the election last year for their first time in 60 years of the current set-up. Germany has seen the ruling CDU and CSU at their lowest levels of support over a similar period and in Italy as we know we now have two populist parties in Government.

If the UK votes a second time to stay in the EU then we could see a renewed surge in support for UKIP or maybe even more extremist parties. So whatever the outcome it does feel a bit like “whack-a-mole” with unintended consequences from all sides.

Asian markets have started the week on a positive footing with the Nikkei (+0.57%), Hang Seng (+1.69%), Shanghai Comp (+0.29%) and Kospi (+1.16%) all up. Elsewhere, futures on the S&P 500 (+0.45%) are pointing towards a positive start and oil prices are showing signs of stabilizing (WTI prices up +1.03% and Brent +1.62%) this morning. In terms of data releases, Japan’s preliminary November manufacturing PMI softened to 51.8 from 52.9 in the previous month. Elsewhere in a sign of escalating geo-political tensions Ukraine’s Navy said that Russian warships opened fire on Sunday on a group of its military vessels in neutral waters near the peninsula of Crimea while adding that three of its ships were captured by the Russian military. The UN Security Council is all set to hold an emergency meeting at 11 a.m. today in New York to discuss the situation. The Russian ruble is down -0.57% in early trade this morning.

In other news, Italy’s Deputy Premier Matteo Salvini has showed willingness to change next year’s budget deficit target in an interview with newswire AndKronos where he said nobody is fixated on 2.4% deficit target. He said “if there is a budget which makes the country grow, it could be 2.2 percent or 2.6 percent.” In the meantime, Repubblica reported over the weekend that the EC President Juncker has told Italian Premier Conte that spending cuts of €6bn-7bn may be sufficient to trim Italy’s planned 2019 deficit. This indicates that both the sides are now showing some openness to find some common ground. Italian Deputy Premiers Salvini and Di Maio are due to meet Italian Prime Minister Giuseppe Conte to discuss the budget this evening. Elsewhere, the PBoC’s Deputy Govenor Zhu Hexin said over the weekend that the PBoC will increase the oversight of financial holding companies due to an increasing number of risks to their operations with potential measures likely to include implementing stricter controls on market access and closer supervision of sources of funding and capital-adequacy ratios, amongst others.

Focus on Friday centered on preliminary November PMI data from Europe, which continued to point to softening macro momentum. The composite euro area PMI printed down -0.7pts at 52.4, compared to consensus expectations for 53.0. The German figure was 52.2, as the manufacturing index fell -0.6pts to 51.6 and services declined -1.4pts to 53.3. Somewhat worryingly, the readings indicated softening external demand (new export orders down -1pt to 46.6) and internal demand (services dropping faster than manufacturing). French figures came in slightly stronger, with the composite index at 54.0, actually +0.1pts higher than expected. We won’t get the Italian readings until December 3 and 5, but our economists estimate that the non-core countries must be down around -0.5pts on average, indicating that the slowdown from October is not completely transitory.

Given the US Thanksgiving holiday (US markets were open on Friday but trading volumes were thin and exchanges closed early), the European data drove price action. An MNI article said that the ECB may change its assessment of the balance of risks to its economic outlook, raising the potential spectre of an extension to QE beyond December. The euro shed -0.58% to trade -0.68% lower on the week, and German Bunds rallied -3.0bps (-2.7bps on the week). European equities ended the week lower with the Stoxx 600 down -1.04% (though it rallied +0.40% on Friday, boosted by the weaker euro).

Other risk markets ended the weak lower, as oil continued to slide, with Brent crude oil down -11.92% (-6.07% Friday) to $58.80 on the combination of the strong supply outlook and the softer demand data. Credit continued to be pressured, with HY CDX indexes widening +17.2bps and +17.0bps in the US and Europe, respectively on the week. Emerging market equities shed -2.84% (-1.17% Friday), with Chinese bourses underperforming as the Shanghai Composite retreated -3.72% (-2.49% Friday). As mentioned, US markets lacked major drivers, but the S&P 500 still ended the week -2.54% (-0.66% Friday) and the FANG index underperformed -6.67% (-1.47% Friday). The dollar rallied +0.47% (+0.21% Friday) as Treasuries rallied -2.4bps on the week (all of which came on Friday)

It’s a fairly quiet start to the week for data on Monday. In Europe, we get Germany’s November IFO survey, while in the US, we get the Chicago Fed’s October National activity index and the Dallas Fed’s November manufacturing activity index. Away from the data, it’s a busy day for central bank speak, with the ECB’s Draghi, Praet, Nowotny and Coeure all speaking at different times along with the BoE’s Carney and former Fed Governor Greenspan.

 

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 3.67 POINTS OR0.14% //Hang Sang CLOSED UP 448.50 POINTS OR 1.72% //The Nikkei closed UP 165/45 OR 0.76%/ Australia’s all ordinaires CLOSED  DOWN 76%  /Chinese yuan (ONSHORE) closed UP  at 6.9403 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER /Oil DOWN to 51.18 dollars per barrel for WTI and 60.02 for Brent. Stocks in Europe OPENED GREEN//.  ONSHORE YUAN CLOSED UP AT 6.9403AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9403: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING  WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

North Korea/South Korea/USA/China

3 b JAPAN AFFAIRS

END

3 C CHINA

China’s plunge protection team has been inexplicably dumping stocks and this has been with the wishes of the Government and POBC

(courtesy zerohedge)

A Beijing Mystery: China’s Plunge Protection Team Has Been Inexplicably Dumping Stocks

One of the great unknowns surrounding the outlook for both risk and the global economy, is why China has not been more successful in stimulating both its economy and its stock market. On the first one can point to the collapse in Chinese credit creation, which as we discussed two weeks ago, just posted its lowest growth on record

…which some have attributed to local banks’ unwillingness to inject new credit as a result of the surge in Chinese corporate defaults coupled with Beijing’s lukewarm willingness to flood the system with another debt tsunami.

But what about local Chinese stocks? While not nearly as important for the local wealth effect as in the US – in China financial assets are at most 30% of household net worth compared to 70% in the US – the continued deterioration in the Shanghai Composite has been welcome by president Trump who frequently highlights the pain in Chinese risk assets as confirmation that  he is winning the trade war with Beijing.

What is even more surprising, is that it now appears that this is precisely what Beijing wants.

According to Goldman, which has analyzed fund flows into and out of Chinese stocks in Q3, the bank finds that overseas investors continued to raise exposure in A shares, perhaps fueled by speculation that Chinese stocks are now sharply undervalued. In fact, China’s A-share ETFs received Rmb80bn inflows in the past 3 months, with both onshore and offshore A-share ETFs seeing net subscription. Also, 28 new passive equity funds (64 ytd) have been set up since July, raising Rmb60bn.

Adding to the confusion, in the third quarter, Goldman counted the largest buybacks in China A shares (Rmb15bn) and 2nd largest for HK (US$2.3bn) on record. At least in the US, this would be sufficient for stocks to if not surge, then at least post modest gains, and yet in Q3, the Shanghai Composite was effectively unchanged.

The reason for this may be in what the Chinese National Team, i.e. Beijing’s Plunge Protection Team, was doing in Q3. And that, in a word, is “selling.”

According to Goldman, the “National Team” was a net seller in 3Q18; the bank says that its bottom-up estimates suggest the “National Team” net sold Rmb104BN in 3Q. This was the biggest quarterly sale by the National Team since the Chinese stock bubble popped in late 2015, and perhaps on record.

Putting the National team’s holdings in context, as of Sept. 30 they accounts for close to 7% of the A-share market, translating into Rmb3 trillion. worth of market cap.

Furthermore, as Goldman calculates, in Q3 the Chinese plunge protectors reduced their holdings in all sectors, dumping financials the most.

Looking at specific names, here is a list of the Top 5 names which saw the most buying and selling in Q3.

Which begs the question: why would Beijing add to its stock market turmoil and embarrassment, if only from a purely political perspective in the ongoing trade war with the US, by not only keeping the price-indescriminate plunge protectors out of the market, but also actively dump a near record amount of shares, making any Chinese stock market gains virtually impossible?

The answer to this very important question may prove elusive, especially since according to Goldman, the National Team may have started buying the market in early/mid Oct. That said, with the Shanghai Composite now below where it was on Sept 30, Beijing may need to double down on its efforts to levitate local stocks… if indeed that is what it hopes to do.

 

4.EUROPEAN AFFAIRS

Spain/UK

Spain reaches a deal on Gibraltar and now the Brexit summit will now go ahead with a meeting on Sunday.  Here is a summary of what will happen next:

(courtesy zerohedge)

Spain Reaches Deal On Gibraltar, Brexit Summit To Go Ahead: Here’s What Happens Next

Heading into Sunday’s EU summit on Brexit, Spain had emerged as an unexpected last-minute hurdle, standing between Theresa May and a Brexit deal as it threatened to boycott the summit and veto the deal if it does not get new assurances that Madrid would have a strong say on how any post-Brexit treaty with London would apply to Gibraltar.

The Rock of the British overseas territory of Gibraltar, historically claimed by Spain.That appears to have been resolved after a long night of negotiations, when according to Reuters reportsSpain reached a deal with the EU on Gibraltar, clearing the way for the EU summit on Sunday to approve a Brexit deal with British Prime Minister Theresa May.

“Negotiations went on through the night with Spain and Britain. In a telephone conversation just now (European Council President Donald) Tusk and (Spanish Prime Minister Pedro) Sanchez reached an agreement on Gibraltar,” the source said. “The summit will go ahead.”

Separately, Bloomberg reports that according to draft agreement it has seen, “after the United Kingdom leaves the Union, Gibraltar will not be included in the territorial scope of the agreements to be concluded between the Union and the United Kingdom,” the EU leaders will say in statement on Sunday. That, however, “does not preclude the possibility to have separate agreements between the Union and the United Kingdom in respect of Gibraltar.”

“Without prejudice to the competences of the Union and in full respect of the territorial integrity of its Member States as guaranteed by Article 4(2) of the Treaty on European Union, those separate agreements will require a prior agreement of the Kingdom of Spain.”

Faisal Islam

@faisalislam

NEW: UK ambassador to EU publishes letter clarifying that Withdrawal Agreement Article 184 “imposes no obligations regarding territorial scope” – ie doesn’t prejudge Gibraltar requiring separate bilateral UK-Spain discussion

View image on Twitter

Faisal Islam

@faisalislam

“no obligation or presumption” that Article 184 of the Withdrawal Agreement (on future relationship negotiations) “to have the same territorial scope” as the Withdrawal Agreement Article 3 [ie which includes Gibraltar] pic.twitter.com/KEzCDdcLop

View image on Twitter

Finally, just in case there is still any confusion, the Gibraltar government said it will “stick with Britain” in the future.

The Spanish Prime Minister is now fully on board:

  • *SPANISH PM PEDRO SANCHEZ SPEAKS IN MADRID NEWS CONFERENCE
  • *SANCHEZ: SPAIN REACHES GIBRALTAR ACCORD
  • *SANCHEZ: SUMMIT TO GO AHEAD
  • *SANCHEZ: SPAIN TO VOTE FOR BREXIT
  • *SPAIN IS PILLAR OF GIBRALTAR RELATION WITH GIBRALTAR: SANCHEZ
  • *SPAIN’S POSITION HAS BEEN REINFORCED: SANCHEZ
  • *SPAIN HAS SEALED NEW WAY TO DEAL WITH GIBRALTAR: SANCHEZ

Ahead of the report, Spanish Prime Minister Pedro Sanchez said he was ready to thwart Theresa May’s hopes of seeing EU leaders sign off on promises of close ties with London after Britain leaves the bloc in March if he did not get his way. According to Reuters, Brussels diplomats and representatives of other governments across Europe had said they did not believe Madrid would upset the “careful choreography of Sunday’s summitry”, when the UK prime minister and her 27 EU peers fly in for a couple of hours in the morning.

But they also heard strong words from Spanish ministers that left them unwilling to call Sanchez’s bluff without further talks.

Late on Friday, Sanchez had warned that “the guarantees are still not enough and Spain maintains its veto to Brexit. If there is a deal, then it will be lifted. If there is no deal … the European Council will most likely not take place.”

In the end, Spain – which appears to have gotten what it wanted following the all-night negotiations, with details still pending – the Sunday summit will now go ahead.

Just ahead of the report on the Gibraltar agreement, on Saturday EU summit chair Donald Tusk said that the Brexit summit was now closer to going ahead as planned after he spoke to the Spanish prime minister. “After the phone call between (European Council President Tusk) and (Spanish Prime Minister Pedro Sanchez) a few minutes ago, we are closer to tomorrow’s (European Council),” Tusk’s spokesman said on Twitter.

Following the report of the Gibraltar deal, Tusk tweeted again that he will “recommend that we approve on Sunday the outcome of the #Brexit negotiations. No one has reasons to be happy. But at least at this critical time, the EU27 has passed the test of unity and solidarity.”

Donald Tusk

@eucopresident

I will recommend that we approve on Sunday the outcome of the #Brexit negotiations. No one has reasons to be happy. But at least at this critical time, the EU27 has passed the test of unity and solidarity. https://europa.eu/!rb87Jr

* * *

So now that the Gibraltar hurdle has been overcome, it’s important to remember that Spain’s threats about opposing the Brexit plan (and France, the Netherlands and Belgium’s threats about opposing it over access to UK fisheries) were always merely a temporary distraction.

As we reported overnight, the EU doesn’t need unanimity to approve the final Brexit treaty and accompanying ‘political statement’ (though the EU parliament will need to approve the deal after the UK, and any final trade deal reached at the end of the post-Brexit transition period would require unanimous approval by the member states), and while the EU has placed tremendous emphasis on presenting a united front, it’s doubtful that the negotiators and sherpas who have put so much effort into hammering out the current 580+ page draft deal (and the accompanying 26 page framework for negotiations on a post-Brexit trade relationship) would let all of that work go to waste.

And now that the Brexit plan appears set to be finalized on Sunday at the planned weekend summit – with Spain’s blessing – on Monday the focus will shift back toward Theresa May and her increasingly fraught relationship with Brexiteers within her own party.

May’s internal opposition is already near the threshold needed to force a leadership challenge within the conservative party. Most of their objections are related to the wording of the ‘Irish backstop’, which has caused a lot of trouble for a piece of the agreement that’s designed to, under ideal circumstances, never come into effect. According to the current terms, if no deal is reached, the UK would remain in a customs union with the EU until both sides sign off. That, according to the Brexiteers, would risk leaving the UK stuck as a “vassal state” under the thumb of a possibly vengeful EU.

And with the March 29 ‘Brexit Day’ looming ever closer, May is quickly running out of options (even her attempt to win Tories over with the so-called “fantasy unicorn” option of possibly replacing the backstop with a commitment to leverage technology that hasn’t even been invented yet to prevent a hard border on the island of Ireland failed to placate her Brexiteer colleauges). The EU, for its part, has said it is done negotiating, and it’s unclear what, if anything (aside from an imminent no-deal Brexit), could entice them to return to the table.

Time

With that in mind, May and her Continental counterparts have probably already started looking at the different permutations of what could happen in Parliament over the next week. Before we embark on this treacherous journey through the minutiae, here is Citi’s “simplified” flowchart for the next steps…

Chart

 

To that end, Bloomberg has created a handy guide, which we have augmented with some additional commentary and charts. Here are some of the most probable outcomes assuming May can’t get the draft Brexit plan passed during a vote expected next month.

Go Back to Parliament

By now, anybody who has been paying attention to the increasingly tedious Brexit drama probably understands that the only person who believes that the draft plan can pass Parliament is the prime minister. If she brings it up for a vote in the House of Commons next month, she will probably lose. If she does, she could wait for what many expect will be an “adverse market reaction” to effectively threaten her rebellious Tory colleagues into falling in line (in a scenario that has been compared with the passage of the TARP package in the US back in 2008). May’s line would be: “The EU has closed the door on future talks. This is the deal. It’s not changing. It’s this, or a “no deal” Brexit that would risk total unmitigated chaos.”

Chart

However, a plan that is entirely reliant on an adverse market reaction could be thwarted by markets just as easily.

Mike Bird

@Birdyword

The problem with the whole TARP/Brexit thing is that expectations are difficult. If people believe voting against the deal will cause the pound to drop, and people in markets think that will cause the deal to pass the second time, then the pound won’t drop in the first place.

Go Back to the EU

Parliament has sent a message: This doesn’t work for us, we want more. So May goes back to Brussels, hat in hand, and asks for more. It’s possible Brussels could try and sweeten the deal. But the likelihood that a dramatic change surrounding the backstop can be made is low.

May Quits

She’s had enough. So much for the “national interest”, May has given this thing her all, and has decided to quit while she’s ahead. The Tories would hold an instant leadership election. Whoever wins would be faced with much the same options. May has said she has no intention of resigning.

As a reminder, here’s a chart showing the most popular politicians in the UK (courtesy of Statista).

Conservative Confidence Vote

Rebellious Tories came close last week to securing the 48 letters of no confidence needed to force an intraparty leadership challenge.

If they succeed in securing that number, a leadership election will be called. It’s widely expected that May would win. But if for whatever reason the vote count turns against her, it’s likely she would resign. If she wins, her grip on power will be secure – Tories won’t be able to call another no confidence vote for a year. But nothing material will have changed.

Government Confidence Vote

Now we’re starting to get into the more extreme possibilities. Only seven Tory turncoats would be needed to join with the opposition to call a general government-wide confidence vote. The Fixed Term Parliaments Act says that if the government loses a confidence vote in Parliament, it has 14 days to win one. If it doesn’t, another general election must be held. That could take months. Members of May’s government have said in the past that if they lost the Brexit vote, they could call a confidence vote. However, Brexiteers have said in response that, while they’d be happy to kill the draft Brexit plan, they wouldn’t risk voting down the government. By rebelling against the government, turncoat Tories would risk being expelled from the party. Then again, the 10 DUP MPs who have repeatedly expressed their frustration with the deal could also bring down the government.

The failure of May’s government, and an ensuing general election, would likely mean chaos in markets as the ‘uncertainty’ that May often speaks about would be ratcheted up to absurd new heights.

Second Referendum

If Parliament can’t decide, then give the people another shot. May has repeatedly insisted that there won’t be another referendum under any circumstances. But Wall Street has put the probability of a second referendum as high as 30%.

Even if another referendum was called, it would take months to hold a vote. So the EU would need to extend Britain’s negotiating period. And Parliament would need to make certain considerations.

No Deal

If May’s fractious Tory caucus can’t get behind the deal, then ‘no deal’ it is. That would be a hard sell politically. The country is believed to be woefully unprepared for food and medicine shortages that economists have warned about. There has been talk of traffic jams in both the EU and UK as customs barriers rise. Then again, it’s also possible that the pain would be transitory, and it would only create further incentive for both sides to hammer out a trade agreement, maybe one similar to the ‘SuperCanada’ deal that Brexiteers have been trying to sell. While members of May’s cabinet, and May herself, have insisted that no deal won’t happen, it’s not clear how it would be prevented.

Go For Norway

Parliament doesn’t want No Deal, so let’s got for the closest possible relationship to the EU instead. Some Tories have been pushing this approach recently. However, as Open Europe points out, given the wording of the leaked political statement draft, a Norway-style trade agreement is unlikely.

A leaked version of the declaration sets out a spectrum of possibilities for the future partnership, ranging from a “Canada-plus” comprehensive Free Trade Agreement, to what might be termed a “Chequers-minus” deal. Where the final agreement falls on this scale will depend broadly on how far the UK is willing to align with EU rules, and, correspondingly, how much it would accept in terms of level playing field obligations and an indirect role for the European Court of Justice.

The text does not provide a clear path to a Norway-plus agreement, where the UK remains integrated in the four freedoms of the EU single market.

It’s also unlikely to garner the support among the Tories that would be needed to make it a suitable alternative to the current deal.

Call a General Election

There’s already legislation in play to call for a general election. But Tories are too fearful of relaxing their already tenuous grip on power and losing control to Labour. It’s more likely that a general election would follow a vote of no confidence in the government.

Government of National Unity

What many Americans don’t realize about the Brexit situation is that there already is a comfortable majority in Parliament to support the deal – it’s just spread between different parties. And Labour MPs who break ranks to back May’s plan could risk expulsion from the party, as party leader Jeremy Corbyn has come out against it.

Assuming ‘no deal’ is averted, negotiations over the future trade relationship between the EU and the UK would begin. Given the fraught nature of the Brexit treaty talks, this will almost certainly be another trainwreck requiring the squaring of many opposing interests.

As it stands, here’s a chart of some of the most likely scenarios for the future trade deal, compared with what the UK has now.

Deals

The non-binding withdrawal agreement that’s still being hammered out in Europe is supposed to set a framework for these negotiations.

The 26-page document that leaked yesterday includes many stipulations, all of which are non-binding. Here’s a rundown of the big points, courtesy of Open Europe.

Movement of goods

  • Both sides “envisage comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation.” The objective is for a relationship that is “as close as possible,” rather than the “frictionless” trade the Prime Minister had previously suggested. Nor is there any reference to the government’s Chequers proposal for a “common rulebook.”
  • The latest version of the declaration suggests the UK and EU would “build and improve on” the single customs territory set out in the backstop as regards tariffs, “in line with the Parties’ objectives and principles above.” The reference to the Parties’ principles refers back to “respecting the integrity of the Union’s single market and the customs union” and “recognising the development of an independent trade policy by the United Kingdom.” This is an adjustment from the previous draft that suggested only that the future customs arrangement would “build on” the backstop – a provision that former Brexit Secretary Dominic Raab felt went too far.
  • Elsewhere, the declaration also notes, “The Parties envisage making use of all available facilitative arrangements and technologies” as part of the future customs agreement, including in order to address the Irish border. This leaves open the possibility of considering a deep customs facilitation agreement, or a modified version of the UK government’s Maximum Facilitation proposal, in negotiations on the future relationship.
  • Similarly, it notes that the future economic partnership should “ensure the sovereignty of the UK and the protection of its internal market…including with regard to the development of its independent trade policy.” This is seemingly in tension with a long-term UK-EU customs union.
  • On regulation, the document notes the potential for UK alignment with EU rules in relevant areas, in particular to allow for cooperation with the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency.
  • In all, the declaration notes a “spectrum of different outcomes” for checks and controls on bilateral trade in goods is possible. While a Chequers-style agreement on goods is not signposted, the declaration suggests that that the UK and EU could ensure fewer barriers to market access if the UK agrees to align with EU rules.

The backstop and customs

  • It is not clear whether the proposals for an economic partnership set out in this document would meet the criteria necessary to supersede the backstop – and therefore whether the future economic partnership would be available to the whole of the UK, including Northern Ireland.
  • The document states both sides’ “determination to replace the backstop solution on Northern Ireland by a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” The language has strengthened slightly – the previous outline declaration noted both sides’ “intention” to replace the backstop. It also states that trade and investment facilitation should respect the integrity of the UK’s internal market.
  • It notes that “facilitative arrangements and technologies will also be considered in developing any alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” The leaves a path for the UK to offer technological solutions, in the vein either of its Maximum Facilitation proposal or its Facilitated Customs Arrangement, to ensure an open Irish border – potentially offering a route away from the backstop arrangement on customs. However, this is unlikely to offer sufficient reassurances to Unionists in Northern Ireland that they would not be treated differently to the rest of the UK under the future partnership.
  • No further role is set out for Northern Ireland institutions in determining whether or not the conditions for replacing the backstop have been met.

Services

  • As expected, the Political Declaration broadly sets out traditional third country arrangements in services. It states both sides’ intention to “[build] on recent Union Free Trade Agreements,” but is thin on detail.
  • In financial services, both sides commit to assessing equivalence before the end of June 2020 – the intention is therefore for an equivalence regime to be ready to be phased in at the end of the transition.
  • The declaration allows for a data adequacy decision for the UK, and aims to ensure this can be adopted by the end of 2020 – again allowing for this framework to be phased in at the end of the transition.
  • Both sides commit to establishing a Comprehensive Air Transport Agreement, ensuring “comparable market access” for road transport, and agreeing bilateral agreements on rail transport.

Level playing field

  • Provisions included in the outline political declaration to “build on” the level playing field commitments agreed in the Withdrawal Agreement have been maintained. It notes that these commitments should “have regard to the scope and depth of the future relationship” – this allows a route for the EU to scale up level playing field obligations if the UK pursues deeper regulatory alignment.

Fishing

  • A future agreement on fisheries, covering access to waters and quota shares, will be established “within the context of” the overall economic partnership. However, this does not mean that fishing rights will be negotiated as part of the trade agreement, and falls short of the “no fish, no deal” commitment that some EU member states were reportedly pushing for.
  • The declaration notes that the UK and EU will “use their best endeavours” to conclude the fisheries agreement by July 2020 – the same deadline as is required for a decision to extend the transition period, as per the Withdrawal Agreement.

Law Enforcement and Police Cooperation

  • The document states, “The closer and deeper the partnership, the stronger accompanying obligations” for the UK. It notes that the UK has agreed to remain a party of the European Convention of Human Rights (ECHR), and to respect the jurisdiction of the ECJ in the interpretation of EU law.
  • Both parties are aiming for continued UK operational cooperation with Europol. The government’s previous proposals sought to go beyond such an operational agreement, which would not grant the UK a direct access to Europol databases. The Political Declaration does not make it clear whether this is possible or not.
  • The document mentions maintaining cooperation in relation to exchanging Passenger Name Records (PNR) and Prüm databases (to which currently non-Schengen countries do not have access). But there is nothing on possible UK access to Schengen Information System (SIS II), or the European Criminal Records Information System (ECRIS), which the Prime Minister indicated would be addressed in further negotiations.
  • In line with previous EU statements, the UK will no longer be a part of the European Arrest Warrant, but both sides state their commitment to a streamlined and time-limited extradition procedure.

Foreign policy, security and defence

  • Both parties plan for the future relationship to “enable the UK to participate on a case by case basis in CSDP missions” through a Framework Participation Agreement (FPA).This would allow the UK to second staff to missions/headquarters, but not take part in decision-making.
  • The UK will also be allowed to take part in projects of the European Defence Agency (EDA), the European Defence Fund and the Permanent Structured Cooperation (PESCO) on “an exceptional basis.” It is important to note that the conditions for third party participation in PESCO have not been yet agreed. European diplomats have reportedly decided to postpone the decisions until negotiations over the terms of the UK’s withdrawal are concluded.
  • Both parties agree to consider “appropriate arrangements” for the UK’s participation in the EU’s space satellite programmes, reflecting continued disagreement over the UK’s access to Galileo’s secure system.

Free movement of people

  • The declaration specifically notes “the ending of free movement of people between the Union and the United Kingdom.”
  • The provisions on mobility remain thin, recalling commitments to “non-discrimination” between member states, and “full reciprocity.” The Common Travel Area between the UK and Ireland remains protected, however.
  • The declaration also aims to ensure “the temporary entry and stay of natural persons for businesses purposes in defined areas.”
  • Both sides aim to provide visa-free travel for short-term visits, and consider different conditions to entry for study, research and youth exchanges.

Governance

  • The document states that the overarching institutional framework for the UK-EU partnership could be an Association Agreement – this was a clear ambition of the European Parliament. The declaration leaves open the possibility that some discrete bilateral agreements could sit outside this structure, subject to other governance arrangements.
  • The governance architecture of the future relationship is broadly expected to follow that set out within the Withdrawal Agreement.
  • The bilateral relationship will be supervised by a UK-EU Joint Committee. Both parties can also refer to the Joint Committee for dispute resolution.
  • Where the Joint Committee cannot decide a dispute, it may refer this to an independent arbitration panel, whose decisions are binding on the UK and EU. However, if a dispute raises a question of EU law, the interpretation of the EU law should be decided only by the ECJ – not independent arbitration.
  • This governance structure was largely to be expected. In any economic relationship with the EU, the UK cannot expect fully to insulate itself from the role of the ECJ, given the EU’s stated legal autonomy. However, under this system, the ECJ would not have direct jurisdiction in the UK, and would only have authority to decide in areas where the UK agreed to apply EU law. The less regulatory integration between the UK and EU, the more restricted the role of the ECJ.

The upshot, is that the document envisions a strong free-trade relationship between the UK and the EU, but one that’s far less integrated than what exists today.

And as a bonus for making it through all that, here is the simplest flow chart of ‘what happens next’ (and the odds of it happening) we have come across so far, courtesy of SocGen, which happens to have an optimistic outlook, suggesting deal odds are as high as 75%.

Outcomes

end

Italy/Saturday

Salvini threatens Brussels again that if the EU does not approve the 2.4 %deficit, then he will call for elections.  Since his popularity is increasing, this is probably a good move for Salvini

(courtesy zerohedge)

 

Salvini Threatens To Collapse Italy’s Government If Deficit Target Is Changed

Italy’s Deputy Prime Minister Matteo Salvini escalated the ongoing standoff between the EU and Italy, saying he would bring down the government if the coalition’s budget deficit target was changed.

The remarks by Salvini, Italy’s de facto leader who has been enjoying a steady climb in public opinion polls as he has continued his hardline negotiating approach with the European establishment, were quoted by newspaper La Repubblica hours before the country’s prime minister, Giuseppe Conte, was scheduled to make an attempt in Brussels to convince the European Commission that the country’s budget is sound. That, as is widely known by now, include the 2.4% deficit goal for 2019 that has become a lightning rod for Commission objections.

“The 2.4 percent deficit target can’t be touched, otherwise I will bring down the government,” Repubblica quoted Salvini as saying in a telephone call to Conte. The report said Salvini was willing to make only minor concessions in next year’s spending plan.

For Savlini the threat of new elections poses little downside risk: according to a recent poll, most Italians view Salvini, the outspoken leader of the anti-immigrant League party, as the real head of government, with just one in six casting Prime Minister Giuseppe Conte in that role. The monthly survey in La Repubblica newspaper showed 58% considered Salvini the leader, while 16 percent picked Conte and 14 percent chose Luigi Di Maio, who heads the anti-establishment 5-Star Movement and is the co-head of the coalition government. Salvini and Di Maio are deputy prime ministers in Conte’s coalition government, which took office in June and which the Demos poll found that 58 percent of respondents support.

Since then, Salvini has continued to pull ahead of Luigi Di Maio, the country’s other deputy premier, as the public face of hardline opposition to the EU. Salvini’s League party rose to 36.2% in voter intentions in November, the fourth straight poll showing an increase, according to an Ipsos survey in newspaper Corriere della Sera. Five Star, which emerged as the biggest single party in March’s general election, slipped to 27.7% this month, from 28.7% in October.

New elections would therefore only further entrench the anti-establishment Salvini, cementing his negotiating position vis-a-vis Brussels.

In an attempt to boost his approval Di Maio, meanwhile, ruled out shrinking the number of people who would benefit from the government’s welfare and pension reforms, though he reiterated the government would look at ways to cut more waste and raise money by selling some key assets, according to Bloomberg citing news agency Ansa. According to La Repubblica, he is in agreement with Salvini on possibly shifting up to 4 billion euros ($4.5 billion) from other parts of the budget for more investments.

Meanwhile, Italy’s budget plans and spat with the European Union have roiled its bond and stock markets in recent weeks. Some, such as Fitch, have warned that Salvini’s threat is in fact the biggest risk facing Rome, namely that Italy’s government may not survive.

Early in November, the head of Fitch’s sovereign ratings, James McCormack, warned that uncertainty involving Italy’s coalition government is as great a risk for BTP investors as the budget for the simple reason that the government may not survive as its members are “too  different.”  Speaking on Bloomberg TV, the Fitch strategist said that there are not many things that the coalition partners agree on, and that raises questions about the government’s survival.

“We are not convinced that this coalition government is actually going to survive. It has very different coalition partners” and there are “not many things that they agree on”, McCormack said.

Then the question becomes: what happens then? Political uncertainty is not finished in Italy,” he added, expecting Italian political fireworks to continue well into 2019. As a reminder, there is a November 30 deadline for the Italian budget to be approved by European Commission, which then has to pass Italy’s parliament by December 31, with an April 30 “Plan B” extended deadline for Italian approval.

.

The Fitch analyst also said that if yields on Italian bonds go higher – whether with the active involvement of the ECB, which can be quite convincing as Berlusconi recalls all too well, or without – “this could force the Italian government to think of a different strategy.” Unless, of course, the contemplated strategy is precisely that of government collapse, which would fall right into Salvini’s hands.

While the standoff between Italy and Europe remains in the jawboning phase for now, the upcoming sequence of events will necessitate actions, and should the refusal to compromise by either Salvini of the EU continue, it is likely that the Italian “bond vigilantes” will have no choice but to send the spread between Italian and German bonds beyond 400bps, which the government has previously warned would be the “red line” for local banks, potentially triggering a deposit run among the Italian population which while entertained and enjoying the standoff between Savlini and Brussels, may soon grow more concerned about the safety of money it has saved in the bank.

end

Italy blinked….or did they?  Monday

( zerohedge)

Italian Yields Tumble, Bank Stocks Soar As Populists Blink In Showdown With EU

 

Two days after boldly threatening to take down Italy’s populist-led government should lawmakers try to change the 2.4% projected budget deficit that has locked Italy into a geopolitical staring contest with the European Commission, Deputy Prime Minister Matteo Salvini has become the first to blink.

Italy

Salvini, the deputy minister who is effectively in charge of Italy’s government (a view confirmed by opinion polls), told Italian media for the first time on Monday that his government would be “open” to a lower deficit spend after an anonymous official said the government was looking at changes to the budget plan’s deficit target. Last week, the European Commission roiled Italian markets when it issued an unprecedented rejection of Italy’s 2019 budget planned and started preparing for an “Excessive Debt Procedure” against its third-largest economy – a proceeding that could lead to billions of euros of fines against the already-struggling Italian government.

As a reminder, here’s how the EDP would play out if members of the Eurogroup decide to approve the proceeding:

Italy

Salvini told AdnKronos that “nobody is fixated” on the deficit target, and that it was more important to pass a budget that would fund the social-welfare expansions that the Italian government is planning – from increases to pension benefits to the controversial “citizen’s income” that would put up to 780 euros a month into the pockets of the poorest Italians.

Earlier, Deputy Premier Matteo Salvini told AdnKronos that next year’s shortfall in finances could be lower than the government’s target. Asked about the 2.4 percent target, Salvini reportedly told the newswire: “I think nobody is fixated on this, if there is a budget which makes the country grow, it could be 2.2 percent or 2.6 percent.”

Salvini spoke ahead of a budget meeting set for 7:30 pm Rome time (1:30 pm ET) where he would discuss the budget plan with Prime Minister Giuseppe Conte, Five Star Movement leader and fellow Deputy PM Luigi Di Maio and Economy Minister Giovanni Tria.

In a sign that Salvini’s comments weren’t just idle rhetoric meant to placate markets, Di Maio echoed the idea that the deficit target could be reduced as part of the final budget plan, so long as “not even a single person is kept out of the core measures.”

“If as part of the negotiation, we need to reduce the forecast deficit slightly, that’s not important to us. The issue is not the conflict with the EU on deficit at 2.4%, what’s important is that not even a single person is kept out of the core measures,” Di Maio said.

“What’s important is that this budget contain our main goals,” which include pension reform, citizens’ income, lower taxes, “things which we cannot give up,” Di Maio said.

Italian markets embarked on a torrid relief rally following Salvini’s remarks. The euro climbed as Italy capitulated and the UK and EU managed to put their differences aside and hammer out a final draft budget plan.

Italian bond yields dropped 17bps to 3.23%, with the spread between the 10-year BTP and 10-year German bund falling below 300 basis points, while shares of battered Italian banks soared, notching their largest intraday gain since early June.

The FTSE-MIB index of bank shares jumped 3.2%, the most since June 11 while shares of Intesa Sanpaolo SpA and UniCredit SpA climbed more than 5% each.

However, given that a weekend meeting between Conte and EC President Jean-Claude Juncker failed to produce any progress on the issue, analysts said the Italian news should be view skeptically. Bloomberg pointed out that the rhetorical shift followed a lackluster auction of Italian bonds, which has risked tightening financial conditions to the point where they would wipe out any benefits from the fiscal stimulus.

“Today’s news should be treated with caution,” said Antoine Bouvet, a strategist at Mizuho International. “The reports that the budget target would be lowered to 2-2.1 percent is emanating from League officials. It is far from sure Five-Star ministers would agree to such a cut, as it would likely compromise their flagship policy: the citizen’s income. So, in the short term, the optimism might be disappointed but the trend is still toward lower Italian yields.”

And while the remarks have instilled hope in markets, this won’t last unless these words are followed up with actions.

“Markets will hope this is a first sign that the government is blinking in the staring contest” with investors and the European Commission, said Aila Mihr, an analyst at Danske Bank. “Eventually, the government will have to back up their conciliatory remarks with actions, or the current positive market sentiment risks being reversed.”

With ratings agencies, including Fitch, still exerting pressure on the Italians with threats of a downgrade, the populists are facing significant pressure to do something that would help placate the bond vigilantes who have punished their debt, as fears of a fiscal collapse triggered by surging sovereign yields have never been far from investors’ minds.

Italy

Given the soaring poll numbers that Salvini has enjoyed thanks largely to his stand against the EU, he only has so much wiggle room. The EU is still calling for the Italians to cut their deficit target below 0.8% to put it in line with the bloc’s budget rules. But that would force the populists to cut most of the social-welfare expansion that they ran on, which helped them win popular support in an unprecedented election back in March.

At the end of the day, roughly 60% of Italians still believe the EU is bad for Italy. As such, any perceived surrender to Europe would have serious political repercussions.

end
Sunday/Italy
This is a must read…we have been pounding the table for the past few decades on the criminal nature of Goldman Sachs.  Now these guys are in serious trouble with their exposure to a crime of helping a crooked Prime Minister steal from his country.  I would agree with martin Armstrong and Tom Luongo that Salvini  knows the true exposure to Goldman if Italy leaves.  Salvini seems ready to battle with Brussels as he is taunting them to raise Italian rates.  We would start to witness dead bodies exposed with a rising rate.
a great read…
(courtesy Tom Luongo)

Salvini Takes Control Of Europe’s Future (And The Goldman Angle)

Authored by Tom Luongo,

Deputy Prime Minister Matteo Salvini just declared himself the leader of the Europe’s future.He refuses to budge one inch in negotiations with the European Union over Italy’s budget now threatening to take down the government.

And in doing this he not only speaks for Italians, he is now speaking for that growing part of the European population who sees what the EU is morphing into and recoiling in horror.

Protests in France over Emmanuel Macron’s new tax on diesel have turned violent.  The British leadership has completely betrayed the people over Brexit.  They may win this battle but the animosity towards the Britain’s leadership will only grow more virulent over time.

As the core leadership in France and Germany fades in popularity, held in place because of domestic political squabbling, Angela Merkel and Macron are ratcheting up the rhetoric against the rising nationalism Salvini represents and are now pushing hard for their Federation of Europe before both of them leave the scene in the next few years, at best.

If they lose their battles with Salvini and Hungary’s Viktor Orban they may be run out of office with pitchforks and firebrands.

Bernard Connelly, author of the brilliant expose The Rotten Heart of Europe (which should be required reading) asks the salient question about Brexit no one associated with Project Fear can confront.

If separation from the EU is so complicated, why was no one talking about blockades and economic catastrophe before the Scottish Independence referendum in 2014?

The answer is simple. No one in power expected the referendum to pass and when it didn’t the issue ended.

Now, back to Italy.

Salvini can  make these bold threats because his Lega keeps rising in opinion polls every time he makes them.

From Zerohedge:

Since then, Salvini has continued to pull ahead of Luigi Di Maio, the country’s other deputy premier, as the public face of hardline opposition to the EU. Salvini’s League party rose to 36.2% in voter intentions in November, the fourth straight poll showing an increase, according to an Ipsos survey in newspaper Corriere della Sera. Five Star, which emerged as the biggest single party in March’s general election, slipped to 27.7% this month, from 28.7% in October.

And that puts Salvini exactly where he wants to be, in the driver’s seat, directing the show down with Brussels over Italy’s future.

But it’s not just Italy’s future he’s playing for anymore.  He knows that Italy is now the standard bearer for resistance to the EU’s particularly odious strain of technocracy.   He soft-pedaled the issue of Italeave on the campaign trail because it was good politics.

Once in office he and his partner M5S’s Luigi Di Maio then went full-steam ahead with an economic package that was equal parts campaign promises fulfilled and a thumb in Merkel’s eye.

Salvini declared with Orban to develop a “League of Leagues” to storm the Bastille of the European Parliament in May’s elections.

And the more he does this the more popular he becomes.

But, more importantly, the more he and Di Maio stick to their guns the more Italians come to see Brussels as the enemy of their future.  And make no mistake, they are looking at how Theresa “Gypsum Lady” May is delivering a Brexit of everyone’s nightmares to Britons and becoming more willing to face the dreaded ‘uncertainty’ breaking with the EU represents.

So Salvini threatening to take down the government he is currently the de facto leader of is a declaration of war against Brussels and the rest of the Italian political establishment who will try to work against him in budget and debt talks.

Lega is currently the junior partner in Italy’s government.  Snap elections could easily see the party top 40% of the vote and have an almost insurmountable popular mandate for taking the confrontational approach to Brussels while scaring his coalition partners, M5S, into following him.

This is a major gambit by Salvini, and if he is successful he will become a lightning rod for Euroskeptics across Europe to break with Merkelism and the consolidation of power around Germany within the EU.

Italy’s debt problems are not solvable within the euro.  Salvini understands this. The biggest impediment to his plans are the Italian people themselves.  They have to come to the conclusion that the short-term pain of leaving the euro is worth the long-term benefits.

I don’t know if Salvini has made that case clearly enough for them to this point, but this is absolutely what he will have to do.  It is something Theresa May refused to endorse any version of which is why she allowed Brexit talks to produce an agreement that was worse than the one Britain already has as a full-member of the EU.

The Goldman Angle

And here is where I’m going to shift gears on you a bit.  Because it’s something we have to keep an eye one.  There’s something serious brewing within Goldman-Sachs.  Martin Armstrong has been all over the potential wipeout of Goldman as part of the European sovereign debt crisis.

Because we have 3 countries now bringing charges and/or suits against Goldman Sachs, it appears that this will mark the beginning of the end for the firm. When the Euro cracks, they will also be blamed for their role in Greece and the rest of Europe.Don’t forget that Mario Draghi is also ex-Goldman Sachs. When the Euro cracks, there will be a microscope applied to every communication that was ever carried out between Draghi and Goldman Sachs. Every trade they have pulled off will be inspected with its tentacles into the European bond market.

The now multi-country scandal involving Malaysia’s 1MDB fund and senior members of Goldman leaving positions of power, from former CEO Lloyd Blankfein to former Trump economic advisor Gary Cohn Europe’s future is tied directly to Goldman’s access to and abuse of power over the past generation.

And now the resignation of Andrea Vella Goldman’s co-head of Asian Investment Banking. The rot within Goverment Goldman Sachs runs deep.  The destruction of Greece was all about protecting Goldman.

And even if there is no Goldman angle directly related to Italy’s debt and banking situation, which I very much doubt, remember former Prime Minister Mario Monte, who was installed to stop Silvio Berlusconi from taking Italy out of the euro back in 2011.

I agree with Armstrong that it would be good for President Trump to rid his cabinet of any vestiges of Goldman’s gang, especially Treasury Secretary Steve Mnuchin, lest he get caught up in this, guilt-by-association style.

Because don’t think for one second that Salvini doesn’t know what the real story behind Italy’s debt is and who is hurt worst by exposing it to the vicissitudes of the market.  At this point he’s daring Draghi to stop supporting Italian bond yields.

Let yields rise. Let’s find out who is behind the insolvent Italian banks swimming naked  as the tide rolls out, liquidity dries up and the whole European debt market seizes up.

And if it’s Goldman again then  expect the biggest fight yet for the future of the EU.  If Salvini plays it right, Italeave not Brexit becomes the clarion call for ending the Davos Crowd’s push for global control.

*  *  *

Join my Patreon to declare your own independence.

 end
EU/Target 2 imbalances
Last month you will recall that the southern club med boys owed the north around .97 trilllion euros.  Well the number seems to have rise and the new imbalance owed to the North is 1.318 trillion euros with the bulk of that owed by Spain and Italy. It looks like bank depositors in Italy are taking their hard earned euros and depositing them in either Germany or Switzerland
(courtesy zerohedge)

EU’s TARGET2 Imbalances Are Rising Again. Goldman Fears Italy Capital Flight Looms

The ECB sovereign systemic risk indicator – capturing pressures on government funding – is approaching the levels seen at the peak of the 2011-12 Euro crisis, as Italian spreads over German yields rise.

And as risk soars, the European Union’s TARGET 2 (im)balances increased further in October.

As a reminder on TARGET2 liabilities (and assets), Norbert Häring  wrote for Handelsblatt earlier in the year,

…Hans-Werner Sinn, the former head of Ifo Institute for Economic Research, a leading economic think tank, told Handelsblatt the figure was basically worthless – an “unsecured credit against the euro system, which cannot be called in and which debtor countries pay no interest on.” A private company would simply write off the amount, he added.

No one quite knows would happen to the Target2 system in the event of a high-deficit country leaving the euro system. Last year, ECB president Mario Draghi told the European parliament that any deficits would have to be repaid. But it appears that countries have no binding legal obligation to do so; it is simply “guidance” from the ECB.

…If Italy were to withdraw from the euro zone, its banks’ assets and liabilities would be redenominated in its new currency, which would probably see a steep fall in value. The question then would not only be whether Italy should pay its Target2 deficit, but how it possibly could. The Bank of Italy would almost certainly default on a bill for half a trillion euros.

The latest data shows TARGET 2 claims of (core) northern Euro countries (Germany, Netherlands, Luxembourg and Finland) reached a new high level of EUR1.318 trillion (70% of which represents the German claims), very close to the historical peak of June 2018. In parallel,TARGET 2 liabilities of the southern peripheral countries (Italy, Spain and Portugal) also increased further to EUR957 billion.

In contrast with Spain and Portugal, Italy’s TARGET 2 liabilities increased in each month since the market tensions associated with the emergence of the new Italian government last May.

As Goldman Sachs explains, the evolution of Euro area TARGET 2 (im)balances owes to two different underlying driving forces.

  • A ‘malign driver’reflecting a “flight to quality”, whereby deposits flee the banks of weaker peripheral countries for the relative safety of banks in stronger core countries. Concerns about the financial soundness of the domestic banking system (and/or perceived risks of an EMU breakup) may lead to deposit outflows and/or shifts in asset holdings from a country perceived as vulnerable towards another country in which assets are considered to be safer, reflecting a flight to quality.
  • A ‘benign driver’, whereby central bank asset purchases from banks that hold their liquid balances in other Euro area countries (for example, a non-Euro area bank with its continental European subsidiary in Germany or the Netherlands) would lead countries’ TARGET 2 liabilities to increase.

And ‘malign’ strains are starting to show.

In contrast with domestic deposits (namely from residents in Italy) at the aggregated level – mostly reflecting the behaviour of households and non-financial corporations (Exhibit 11) – deposits from pension/insurance companies and other financial institutions have gradually decreased since last May amid greater volatility (Exhibit 12).

 

The optimistic assumption is that the magnitude of the ‘malign driver’ behind Italy’s TARGET 2 liabilities is relatively contained at present at around EUR100bn (information available until the end of October 2018).

But, more ominously, as Goldman concludes, the reduction of the credit exposure of both foreign investors and non-bank financial institutions (until September) – part of which have been transformed in cash deposits still in Italy – is already a warning signal.

And the latest available data reported in this analysis is prior to the tensions between Italian and EU authorities about the 2019 draft budget. In our view therefore there is a real risk that in the coming months we will observe Italy’s TARGET 2 liabilities being driven more by ‘malign’ than ‘benign’ forces.

Since deposits are more easily transferable than any other financial asset, the ‘malign’ driving force could be rapidly strengthened should political uncertainties and the likely upcoming confrontational debate between Italian and European authorities on the 2019 budget increase substantially.

In this respect, the EC recommendation to launch the EDP in response to Italy’s 2019 budget increases this risk, having in turn the potential to create additional political tensions.

We give the last word to Mike Shedlock who sums up the ignorance of the ever-growing situation succinctly:

Claims that none of this matters and that there would be no consequences if Italy left the Eurozone and defaulted are as ridiculous as ever…

The harder people attempt to come up with reasons that none of this matters, the sillier they look.

It seems that Goldman Sachs was warned by the New York Fed to improve their compliance controls after the issuance of the lMDB bond offerings.  it is going from bad to worse for Goldman Sachs the perennial “squid”
(courtesy zerohedge)

NY Fed Demanded Goldman Improve Compliance Controls After 1MDB Bond Offerings

Apparently, Malaysian Prime Minister Mahathir Mohamed isn’t the only one who thinks Goldman Sachs’s compliance controls “don’t work very well.”

As more details emerge about Goldman’s efforts to win deals to underwrite $6 billion in bonds for the doomed Malaysian sovereign wealth fund 1MDB, which was ransacked by former Prime Minister Najib Razak and his cronies to the tune of $4.5 billion, senior bankers’ ignorance of red flags is appearing increasingly deliberate.

To wit, a report in the New York Times published on Thanksgiving Day revealed that, in addition to attending meetings with Malaysian Prime Minister Najib Razak and a group of senior Goldman bankers in 2009 and 2013, former Goldman CEO Lloyd Blankfein also welcomed disgraced Malaysian financier Jho Low into Goldman’s opulent 200 West Street headquarters in December 2013 for a “one-on-one” sit-down, effectively confirming that the CEO was instrumental in helping suspend the bank’s compliance controls to ensure that the bank won the business to underwrite three bond offerings for Malaysian sovereign wealth fund 1MDB regardless of obvious evidence of corruption. This has made his departure at the end of September, just weeks before the DOJ charged  two senior Goldman bankers who helped bring in the business, appear increasingly suspect.

Malaysian Prime Minister Mahathir Mohamed isn’t alone in thinking that Goldman Sachs’ compliance controls “don’t work very well.”

In the latest indication of just how blatantly the bank flouted compliance best practices in pursuit of the deal, the Financial Times reported overnight that the New York Fed approached the bank in 2013, after the three bond deals – which netted a staggering $600 million fee for the bank on $6 billion of business – had been closed, to demand that Goldman tighten its compliance controls. What’s more, the changes demanded by the New York Fed weren’t directly linked to 1MDB, but instead were the result of a “wider questioning of controls,” the first indication that the bank may have repeatedly bent its own rules to win other business around the same time as 1MDB. This suggests that more shady deals could eventually come to light.

The changes reportedly affected all of the Goldman’s investment committees around the world after the Fed asked why so few deals had been rejected on grounds that they were too risky or inappropriate. 

Goldman implemented sweeping changes to how the powerful internal committees that oversee how its operations work, under pressure from the New York Federal Reserve. The reforms were agreed in 2013 after the Fed pressed Goldman to be more transparent, but were not publicly disclosed.

[…]

The changes, which included rewriting of the charters of Goldman committees that approved three 1MDB bonds, were not directly linked to those deals. They resulted from a wider questioning of controls, including concerns that committee minutes did not record debate in sufficient detail.

All of Goldman’s company-wide and regional committees were affected by the reforms, which were introduced shortly after the bank financed the last of the 1MDB bonds in March 2013, receiving a total of $600m in fees. They included its capital and client suitability committees, which oversaw the 1MDB financing, and approve all such deals.

One person close to its Asia Pacific capital committee, which initially reviewed the first 1MDB deal in 2012, said that the Fed questioned why committees seemed to reject very few deals as being too risky or inappropriate. The bank then instructed its committees to record proposals that it had turned down at earlier stages.

One example of how these lax controls played out, according to the FT, is the fact that Tim Leissner, the former Goldman partner who pleaded guilty and has agreed to cooperate in the DOJ’s investigation of Goldman, was allowed to remain in the room during a meeting of the bank’s Asian investment committee where it eventually approved one of the bond offerings. Leissner stayed in the room, even as the minutes of the meeting recorded him as having recused himself. This was reportedly standard practice at Goldman before it implemented the changes requested by the NY Fed.

Goldman

The report also offered more previously unreported details about the role that former senior Goldman dealmkaer Andrea Vella played in winning the business. Vella also remained in the room with Goldman’s investment committee while the 1MDB deal was being pitched. Vella has been put on leave at Goldman following revelations that he had been caught up in the DOJ’s probe.

In other 1MDB-related news, Bloomberg reported that Malaysia’s former finance minister scrubbed the presence of Low, who is believed to have facilitate the siphoning of more than $2.5 billion from 1MDB money to pay bribes and for other purposes, from an 1MDB board meeting where members expressed concerns about “anomalies” in 1MDB’s accounts (which is a kind term for a black hole purportedly larger than $4 billion).

Low

Jho Low

The scrubbing of Low’s attendance, as well as alterations meant to mask the questions about 1MDB’s financial accounts raised by a team of auditors. These changes were justified by Razak, who argued that both details could be used as ammunition by his political enemies.

The rationale was that mentioning Low would be sensitive, and omitting the information would prevent the opposition from using it against the government, Madinah said. Najib also ordered that paragraphs containing two versions of 1MDB’s financial statements for the year ending 2014 be removed from the document, which was prepared by Madinah’s predecessor Ambrin Buang.

The previous administration categorized the 1MDB audit report as a crisis, Madinah said, which led to a meeting between the audit team and representatives of the government and 1MDB, including then president and CEO Arul Kanda, in late February 2016. A number of changes were made to the report as a result of those discussions.

The final report was presented to a select parliamentary committee in March of that year but it remained protected by the Official Secrets Act until Najib was defeated at the May 2018 general election. Days after he was sworn in as prime minister, Mahathir Mohamad ordered a renewed probe in 1MDB and declassified the document.

The report showed investigators expressed concern about anomalies in 1MDB’s accounts, and that officers on several occasions undertook investments without the full knowledge of the board and at other times acted against their advice.

Today, Low is a fugitive from justice who is waging an expensive PR battle to clear his name even as he hides from prosecutors from multiple continents. If anybody still believed Goldman CEO David Solomon (who is looking increasingly like a patsy who was set up to take the heat for the scandal) and his claims that the 1MDB scandal “isn’t us” – these latest details should quickly disabuse readers of that notion.

The EU and UK approve the Brexit divorce deal.  Now comes the hard sell: Parliament must approve the deal and it does not look likely.  The Europeans really stuck it to the Brits with huge divorce fees etc.  It would be far better for a hard Brexit and do not pay any fees.  The UK should make their own trade deals and stop Europeans etc fishing in their territorial waters.
(courtesy zerohedge)

EU, UK Approve Brexit Divorce Deal; Now Comes The Hard Part

After Spain withdrew its objections to the terms of the Brexit agreement after it received guarantees on the trade treatment of Gibraltar early on Saturday morning, today’s emergency UK summit was merely a formality. And so, culminating a seemingly interminable two year period of back and forth negotiations, on Sunday the European Union, U.K. Prime Minister Theresa May and the leaders of the remaining EU members finally approved a deal on the UK’s departure from the EU during an emergency summit in Brussels.

Donald Tusk

@eucopresident

EU27 has endorsed the Withdrawal Agreement and Political Declaration on the future EU-UK relations.

And now comes the hard part: the agreement has to be endorsed – or more likely rejected – by British MPs.

* * *

The agreement, which was earlier approved earlier by the UK government, consists of two key documents. The first, a 585-page withdrawal paper, will guide both sides all the way up to Britain’s departure from the bloc, which is set for March 29, 2019. This legally binding text covers the UK’s “divorce bill,” citizens’ rights, and various measures ensuring there is no hard border between Northern Ireland and EU member state Ireland. Starting from March 2019, Britain will enter a transition period set to last until December 2020.

EC President Donald Tusk and British PM Theresa May attend a round table meeting at an EU summit in Brussels on SundayAs part of the agreement, Britain has agreed to pay around $50 billion to the EU mainly to cover commitments it had made to the bloc’s budget. The U.K. will guarantee a broad swath of legal rights to the roughly 3 million EU citizens living in the U.K., and the EU will reciprocate with respect to an estimated 1.3 million U.K. citizens in its member states. The agreement also seeks to ensure that no physical border will re-emerge between Northern Ireland, which is part of the U.K., and the Republic of Ireland—an EU member.

The second, a non-binding document, is a political declaration that outlines aspirations for the future, including maintaining trade relationships, common foreign and defense policies, as well as close ties in law enforcement and criminal justice.

In a press conference following the endorsement, European Commission President Jean-Claude Juncker, Tusk, and EU Brexit negotiator Michel Barnier stressed that the deal is absolutely the best one possible, and that the EU will remain friends with the United Kingdom.

“This is the best deal possible, this is the only deal possible,” Juncker said. That remark was echoed by Barnier, who also noted that the EU has “worked constructively with the UK, never against the UK, and the UK worked constructively with us.”

However, Juncker said the biggest part of the work in the “tragic moment” of divorce still lies ahead. “Payments have to be made but the future understanding is one that has to be constructed.”

British Prime Minister Theresa May held a press conference in which she again declared the deal was the best one available, while still coming across as trying to launch a last ditch attempt to safeguard the agreement. In doing so, the PM did not mince her words, stating that the UK can have a “bright future” with the deal or more time of “uncertainty” if it fails to pass through the British government.

UK Prime Minister

@10DowningStreet

WATCH LIVE: PM @Theresa_May makes a statement following EU Council #BackTheBrexitDeal https://www.pscp.tv/w/bsqKEzIyOTU1OTR8MXlwS2RPV1JPbEx4V8w2kXmkrLYiKf9dHwtFyQ8Q6qv5_MdUof0vbkfIqsu6 

UK Prime Minister @10DowningStreet

WATCH LIVE: PM @Theresa_May makes a statement following EU Council #BackTheBrexitDeal

pscp.tv

Promising to make the case for the deal “with all my heart,” May announced that British MPs will have their say on it before Christmas. That vote has been labelled by the UK PM as the “most significant” one that parliament has held in years.

To be sure, May has reasons to worry about the agreement as it had received a far more stern pushback from British politicians. Several parliamentarians resigned over the plan – from Brexit Secretary Dominic Raab to Work and Pensions Secretary Esther McVey. Former Foreign Secretary Boris Johnson also quit back in July, after previously referring to May’s Brexit deal as “polishing a turd.”

Already this morning the Sunday Times reports that May is facing a fresh cabinet mutiny after “remain” ministers began secret talks behind her back to force her to adopt a new plan B for Brexit. Senior ministers are also in private discussions with the Democratic Unionist Party (DUP) to draw up an alternative Brexit blueprint in the event that her deal is voted down by parliament.

May met with EU officials earlier this week to secure their backing ahead of the summit. Back at home, she faces strong opposition to her Brexit deal, which she claims is the best available. She urged lawmakers to back the Brexit pact. “If people think there is another negotiation to be done, that is not the case,” she said in her press conference. “This is the only possible deal” she said.

Embedded video

Theresa May

@theresa_may

I will take this deal back to the House of Commons confident we have achieved the best deal available and full of optimism about the future of our country.

In fact, as the WSJ notes, May now “faces the political fight of her life” to win backing of own Parliament, which is expected to vote on the deal in early December. However, dozens of her fellow Conservative party members, the SNP, and the DUP, as well as the opposition Labour Party, have all vowed to reject the deal. If May loses, she will be racing against the clock to renegotiate the pact—and secure its approval—before the U.K. is due to leave the bloc March 29.

Jeremy Corbyn

@jeremycorbyn

This is a bad deal for the country and Labour will oppose it in Parliament.

In fact, as the Sunday Times writes, a majority of cabinet ministers believe she will lose the meaningful vote pencilled in for December 12 and are plotting to force her to change tack. Five remainer ministers — Philip Hammond, David Lidington, Amber Rudd, Greg Clark and David Gauke — have agreed they will try to get May to adopt a softer Brexit if she cannot get her plan through the Commons.

Anticipating such an outcome, EU leaders warned that if the British parliament votes down the agreement, better conditions won’t be offered.

If British politicians reject the agreement, the UK will have to leave the EU with no deal as the departure date cannot be altered. Other options proposed by MPs include holding another referendum or a snap general election if May becomes overwhelmed by motions of no-confidence.

Even if the Brexit deal wins parliamentary approval, the U.K. will next spring kick off negotiations—likely to last years—to hash out comprehensive new trade and security relations with the EU. That’s because when Britain voted to leave the EU, it effectively decided to unravel four decades of common decision making—on regulations covering everything from sharing information on criminals to food regulations and value-added taxes—that govern the U.K.’s relationship with its biggest trading partner.

As a result, less than four months from Britain’s departure from the EU, Brexit remains a leap into the unknown, with businesses, banks and households unsure how to prepare.

Already May has started a political offensive to sell the deal to her reticent lawmakers. On Sunday Mrs. May published a “letter to the nation” proclaiming the deal as “a new chapter in our national life” in an effort to rally the British people behind her.

View image on TwitterView image on Twitter

Theresa May

@theresa_may

My letter to the nation. #BackTheBrexitDeal

She writes: “I want that to be a moment of renewal and reconciliation for our whole country. It must mark the point when we put aside the labels of ‘leave’ or ‘remain’ for good and we come together again as one people. To do that we need to get on with Brexit now by getting behind this deal. I will be campaigning with my heart and soul to win that vote.”

U.K. government officials have meanwhile planned a public relations blitz in the coming days to warn of the economic blow to the U.K. leaving the bloc with no deal at all.

Still, analysts expect Mrs. May to return to Brussels to seek further concessions if the Brexit agreement is voted down by Parliament.

According to the WSJ, European officials privately say the possibility of fresh talks hasn’t been discarded and some believe the negotiation period could be extended beyond March. A timeline of upcoming events is shown below:

The key date is March 30, when the U.K. will enter a standstill transition period until December 2020 where EU rules will continue to apply. That period is meant to give both sides time to hammer out new trading and security ties. The agreement, recognizing the difficulties of securing accords in such a short space of time, includes the possibility of extending the transition until as late as December 2022.

The promise to avoid a hard border with Ireland could mean that after the transition, the U.K. will stay inside the EU’s customs area for an indefinite period, eliminating the need to collect tariffs on cross-border trade in goods. That would be good news for businesses, says Ross Denton, an EU trade expert at law firm Baker McKenzie. “Staying in a customs union is a no-brainer for business,” he said.

For the future, U.K. and EU officials must fill in enormous gaps across a broad swath of issues, covering matters such as trade but also issues such as British access to European criminal databases, whether a U.K. customer’s data can be shared in the EU and a London banker’s ability to market French government bonds.

At the heart of the talks will lie a trade-off: to what extent is the U.K. willing to cede sovereignty to the EU in return for access to customers in its 27 member states? The closer Britain follows the EU’s rules, the fewer obstacles its firms will encounter in exporting to the country’s main trading partner.

Britain’s continued membership of the EU’s customs area and any future decisions to follow EU rules to ease trade with the bloc would complicate the U.K.’s desire to build a future outside the bloc,for example by striking its own trade deals with countries such as the U.S.—a priority of pro-Brexit campaigners.

The EU has ruled out “frictionless” access to the EU’s single market, which entails following the bloc’s rulebook in areas such as food safety, product standards and allowing free movement of labor from the EU, which will stop once the transition period has ended.

Indeed, Brussels has told the May government that while the U.K. remains inside the EU’s customs union—and if it wants a close future trade relationship—it must continue to follow the bloc’s rules on state aid, environmental, labor and social standards, something that is anathema to hard-line Brexiters.

“There are big areas of ambiguity,” says Stephen Adams, a trade expert at Global Counsel, a consulting firm.

In other areas, there is already agreement. The U.K. has agreed to protect the EU’s 3,000 geographical denominations on products like Champagne or Gorgonzola cheese.

As it stands, here’s a chart of some of the most likely scenarios for the future trade deal, compared with what the UK has now.

Deals

The depth of cooperation will mostly rest on British willingness to accept EU courts’ interpretation of the bloc’s rules and laws in this field, something hard-line Brexiters oppose.

Even fishing, which accounts for 0.04% of the British economy, threatens to morph into fractious trade fight. Until now, EU fishing waters are effectively pooled, allowing boats from any EU country into another’s waters. After Brexit, British control of its territorial waters will be restored and it will control access to those waters.  The U.K. wants an annual agreement with the EU setting fishing quotas but has warned that will reduce EU fleets’ access.

Yet EU governments are challenging this with France and Spain pushing to make a future trade deal contingent on continued access to British waters along current lines. Britain’s fishing industry, while small, is politically vocal. Sunday’s agreement says the U.K. and EU should make best efforts to settle the issue by July 2020.

In short, the real fight for May only now begins, although as we showed previously, at least one bank is optimistic: as the following SocGen decision tree of all the possible upcoming permutations shows, the odds of a deal are as high as 75%. Whether that proves to be an overly optimistic assessment will be revealed in the coming weeks.

Outcomes

end
Seems that the UK is behind corned by the crooks.  The French Macron has threatened with a perpetual
temporary customs union, unless the UK gives the EU fishing rights.
my goodness….
(courtesy zerohedge)

Macron Threatens Perpetual “Temporary” Customs Union Backstop

Authored by Mike Shedlock via MishTalk,

Macron threatens the UK with perpetual delays unless the UK gives the EU fishing rights.

Today’s story from France is exactly what I have predicted about Theresa May’s acceptance of a kluge backstop that is unlikely to end without escalating demands from the EU.

French president Emmanuel Macron’s Blunt Brexit Warning to UK Over Fishing Rights is precisely what I had in mind.

Several EU leaders highlighted fishing as a particularly sensitive issue. German Chancellor Angela Merkel said talks on fisheries were “undoubtedly going to be an area where negotiations are going to be tough”.

But the bluntest warning came from the French President Emmanuel Macron, who suggested that if the UK was unwilling to compromise in negotiations on fishing, which would need to make rapid progress, then talks on a wider trade deal would be slow.

“We as 27 have a clear position on fair competition, on fish, and on the subject of the EU’s regulatory autonomy, and that forms part of our position for the future relationship talks,” he said.

“I can’t imagine that the desire of Theresa May or her supporters is to remain for the long term in a customs union, but (instead) to define a proper future relationship that resolves this problem.”

Temporary Permanence

Theresa May already sold the farm for a pittance.

The EU agreed to an Irish backstop but it’s temporary. Details will follow.

Trust me, there will be lots of following details. Here are three key blackmail items.

  1. Fishing rights
  2. Gibraltar
  3. Corporate tax rates
  4. Climate change

It won’t stop there.

I Tweeted about this on November 18 before Macron’s fishing threat.

Not the Final Deal

France Has More Demands Already

That’s just France!

Wait till Germany and Spain and all 27 EU nations get into the act.

Theresa May supports the stupidest trade deal in history.

Brexit Musical Tribute

The 585-page Brexit deal was so one-sided that 6 UK ministers resigned and Parliament openly laughed at PM Theresa May.

On November 16, I offered a musical tribute: Smiling Faces Show No Traces of Evil That Lurks Within

It’s fitting that I ended with this comment “The UK should take a pass on this rotten kettle of fish.”

And here we are, talking about fish on top of climate change demands.

This admission of the obvious truth from Macron may very well tip the UK parliament into rejecting the deal.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia/Turkey/USA

The following is very important as now Russia and Turkey have started building Turkstream One.  This will initially supply Turkey with all of their gas needs.  Once phase two is completed all of Eastern Europe will be supplied at 1/3 the cost of the previous distribution.  You will note that Turkey is turning quite aggressively to the East.

(courtesy Tom Luongo)

Forget Nordstream 2, Turkstream Is The Prize

Authored by Tom Luongo,

While the Trump Administration still thinks it can play enough games to derail the Nordstream 2 pipeline via sanctions and threats, the impotence of its position geopolitically was on display the other day as the final pipe of the first train of the Turkstream pipeline entered the waters of the Black Sea.

The pipe was sanctioned by Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan who shared a public stage and held bilateral talks afterwards.  I think it is important for everyone to watch the response to Putin’s speech in its entirety.  Because it highlights just how far Russian/Turkish relations have come since the November 24th, 2015 incident where Turkey shot down a Russian SU-24 over Syria.

When you contrast this event with the strained and uninspired interactions between Erdogan and President Trump you realize that the world is moving forward despite the seeming power of the United States to derail events.

And Turkey is the key player in the region, geographically, culturally and politically.  Erdogan and Putin know this.  And they also know that Turkey being the transit corridor of energy for Eastern Europe opens those countries up to economic and political power they haven’t enjoyed in a long time.

The first train of Turkstream will serve Turkey directly.  Over the next couple of years the second train will be built which will serve as a jumping off point for bringing gas to Eastern and Southern Europe.

Countries like Bulgaria, Hungary, Italy, Greece, Serbia and Slovakia are lining up for access to Turkstream’s energy.  This, again, is in stark contrast to the insanely expensive Southern Transport Corridor (STC) pipeline set to bring one-third the amount of gas to Italy at five times the initial cost.

Turkstream will bring 15.75 bcm annually to Turkey and the second train that same amount to Europe.  The TAP – Trans Adriatic Pipeline  — will bring just 10 bcm annually and won’t do so before 2020, a project more than six years in the making.

Political Realities

The real story behind Turkstream, however, is, despite Putin’s protestations to the contrary, political.  No project of this size is purely economic, even if it makes immense economic sense.  If that were the case then the STC wouldn’t exist because it makes zero economic sense but some, if not much, political sense.

No, this pipeline along with the other major energy projects between Russia and Turkey have massive long-term political implications for the Middle East.  Erdogan wants to re-take control of the Islamic world from the Saudis.

This is why they have the Saudis on a residual-poison-type drip feed of information relating to the death of Jamal Khashoggi to extract maximal value from the situation as Erdogan plays the U.S. deep state against the Trump/Mohammed bin Salman (MbS) alliance.

The U.S. deep state wants Trump weakened and MbS removed from power.  Trump needs MbS to advance his plans for securing Israel’s future and prolong the dollar’s long-term health.  Erdogan is using this rift to extract concessions left and right while continuing to do whatever he wants to do vis a vis Syria, Iran and his growing partnership with Russia.

Erdogan is in a position now to drive a very hard bargain over U.S. involvement in Syria, which neither faction in the U.S. government (Trump and the deep state) wants to give up on.

By controlling the oil fields in the eastern part of Syria and blocking the roads leading from Iraq the U.S. is playing a game it can’t win because ultimately the Kurds will either have to be betrayed by the U.S. to keep Erdogan happy or cut a deal with the Syrian government for their future alienating the U.S.

This has been the ultimate end-game of the occupation of eastern Syria for months now and time is on both Putin’s and Erdogan’s side.  Because the U.S. can’t pressure Turkey to stop growing closer to Russia and Iran.

Eventually the U.S. troops in Syria will be nothing more than an albatross around Trump’s neck politically and he’ll have to announce a pull out, which will be popular back home helping his re-election campaign for 2020.

The big loser in this is Israel who is now having to circle the wagons politically since Putin put the screws to Benjamin Netanyahu for his part in the deaths of 15 Russian airmen back in September by closing the Syrian airspace and allowing mostly free movement of materiel to Lebanon.

Netanyahu, as I talked about last week, is now in a very precarious position after Israel was forced to sue for peace thanks to the unprecedentedly strong response by the Palestinians in Gaza.

Elijah Magnier commented recently that it this was the net result of Trump’s unconditional support of Israel which united the Arab resistance rather than dividing and conquering it.

But the US establishment decided to distance itself from the Palestinian cause and embraced unconditionally the Israeli apartheid policy towards Palestine: the US supports Israel blindly. It has recognised Jerusalem as the capital of Israel, suspended financial aid to UN institutions supporting Palestinian refugees (schools, medical care, homes), and rejected the right of return of Palestinians. All this has pushed various Palestinian groups, including the Palestinian Authority, to acknowledge that any negotiation with Israel is useless and that also the US can no longer be considered a reliable partner. Moreover, the failed regime-change in Syria and the humiliating conditions place on Arab financial support were in a way the last straws that convinced Hamas to change its position, giving up on the Oslo agreement and joining the Axis of the Resistance.

Project Netanyahu, as Alistair Crooke termed it, was predicated on keeping the support of the Palestinians split with Hamas and the Palestinian Authority at odds and then grinding out the resistance in Gaza over time.

Trump’s plans also involved the formation of the so-called “Arab NATO” the summit for which has been put off until next year thanks to Erdogan’s deft handling of the Saudi hit on Khashoggi.   There are still a number of issues outstanding — the financial blockade of Qatar, the war in Yemen, etc. — that need to be resolved as well before any of this is even remotely possible.

At this point that plan has failed and the clash with Israel last week proved it is unworkable without tacit approval of Turkey who is gunning for the Saudis as the leaders of the Sunni world.

Show me the Money

But, more importantly, over time, a Turkey that can ween itself off the U.S. dollar over the next decade is a Turkey that can survive politically the upheaval to the post-WWII institutional order coming over the next few years.

Remember, all of this is happening against the backdrop of a U.S. and European political order that is failing to maintain the confidence of the people it governs.

The road to dollar independence will be long and hard but it will be possible.  Russia is the model for this  having successfully removed the dollar from a great deal of its trade and is now reaping the benefits of that stability.

And projects like Turkstream and the soon to be completed Power of Siberia Pipeline to China will see the gas from both trade without the dollar as the intermediary.

If you don’t think this de-dollarization of the Russian economy is happening or significant, take one look at the Russian ruble versus the price of Brent crude in recent weeks.  We’ve had another historic collapse in oil prices and yet the ruble versus the dollar hasn’t really moved at all.

The upward move from earlier this year in the ruble (not shown) came from disruptions in the Aluminum market and the threat of further sanctions.  But, as the U.S. puts the screws even tighter to Russia’s finances by forcing the price of oil down, the effect on the ruble has been minimal.

With today’s move Brent is off nearly $30 from its October high ( a massive 35% drop in prices) just seven weeks ago and the Ruble hasn’t budged.  The Bank of Russia hasn’t been in there propping up its price.  Normally this would send the ruble into a tailspin but it hasn’t.

The other so-called ‘commodity currencies’ like the Canadian and Australian dollars have been hit hard but not the ruble.

Set the Way Back Machine to 2014 when oil prices cratered and you’ll see a ruble in free fall which culminated in a massive blow-off top that required a fundamental shift in both fiscal and monetary policy for Russia.

This had to do with the massive dollar-denominated debt of its, you guessed it, oil and gas sector.  Today that is not a point of leverage.

Today lower oil prices will be a forward headwind for Russian oil companies but a boon to the Russian economy that won’t experience massive inflation thanks to the ruble being sold to cover U.S. dollar liabilities.

Those days are over.

And so too will those days come for Turkey which is now in the process of doing what Russia did in 2015, divest itself of future dollar obligations while diversifying the currencies it trades in.

Stability, transparency and solvency are the things that increase the demand for a currency as not only a medium of exchange but also as a reserve asset.  Russia announced the latest figures of bilateral trade with China bypassing the dollar and RT had a very interesting quote from Prime Minister Dmitri Medvedev.

No one currency should dominate the market, because this makes all of us dependent on the economic situation in the country that issues this reserve currency, even when we are talking about a strong economy such as the United States,” Medvedev said.

He added that US sanctions have pushed Moscow and Beijing to think about the use of their domestic currencies in settlements, something that “we should have done ten years ago.”

Trading for rubles is our absolute priority, which, by the way, should eventually turn the ruble from a convertible currency into a reserve currency, the Russian prime minister said.

That is the first statement by a major Russian figure about seeing the ruble rise to reserve status, but it’s something that many, like myself, have speculated about for years now.

Tying together major economies like Turkey, Iran, China and eventually the EU via energy projects which settle the trade in local currencies is the big threat to the current political and economic program of the U.S.  It is something the EU will only embrace reluctantly.

It is something the U.S. will oppose vehemently.

And it is something that no one will stop if it makes sense for the people on each side of the transaction.  This is why Turkstream and Nordstream 2 are such important projects they change the entire dynamic of the flow of global capital.

*  *  *

Join my Patreon if you like asking tough questions.

 end
Syria/Al Qaeda
Not good:  a massive chemical; Al Qaeda gas attack on pro government forces in Aleppo
(courtesy zerohedge)

Massive Al-Qaeda Gas Attack On Pro-

Government Aleppo Leaves Over 100 Hospitalized

Over 100 civilians were hospitalized, including dozens of women and children, after anti-Assad militants unleashed a wave of mortars filled with poison gas on government controlled Aleppo Saturday evening

Syrian state-run SANA published multiple photos and video of victims in the city’s hospitals being treated for what’s reported to be chlorine gas exposure. Though it’s not the first time that ‘rebels’ seeking to topple the Assad government have conducted a chemical attack on pro-government areas according to United Nations findings, it is the first time that mainstream American outlets like CNN and Reuters have featured coverage of such events.

Image source: Syrian state media. via CNNCrucially, pro-rebel media has now confirmed the poison gas attack, specially the Syrian Observatory for Human Rights (SOHR), which western media have long relied upon as a go-to source of anti-Assad opposition reporting. According to Reuters:

In Aleppo city which the government controls, the shells had spread a strong stench and caused breathing problems, the Syrian Observatory for Human Rights also said.

In total official Syrian government sources reported 107 people were injured, a sizable portion of them children, after al-Qaeda terrorists linked to the Hayat Tahrir al-Sham alliance (HTS, the main al-Qaeda group that controls Idlib) attacked three Aleppo districts with poison filled projectiles.

Initially the death toll approached 12 according to early reports, however, it now appears there were no fatalities resulting from gas exposure, though many remain in the hospital in what international reports say is the highest casualty toll since the Syrian Army liberated Aleppo two years ago.

“The explosive (shells) contain toxic gases that led to choking among civilians,” Aleppo police chief Issam al-Shilli told SANA.

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

هادي نصرالله@HadiNasrallah

Outrageous!
Western backed “rebels” have targeted residential areas in Aleppo with chlorine gas!
Dozens of civilians and children suffocated and were taken to nearby hospitals.
Where is the international outrage? Or is the world only provoked by fake “regime chemical attacks”?

Russian jets quickly began pounding HTS positions — the group military officials said was responsible for the attack  in retaliation. The Russian foreign ministry has called on the international community to definitely condemn the attacks carried out by opposition armed groups.

The Reuters report continues:

“We can not know the kinds of gases but we suspected chlorine and treated patients on this basis because of the symptoms,” Zaher Batal, the head of the Aleppo Doctors Syndicate, told Reuters.

Patients suffered difficulty breathing, eye inflammation, shivering and fainting, he said. Hospitals had discharged many people overnight.

Ironically a Syrian and Russian joint offensive to liberate Idlib from HTS was delayed in September after the United States threatened military action over what western intelligence agencies claimed were preparations by Assad’s forces to unleash a chemical attack.

However, with what now appears a large-scale attempt by the western-backed armed groups to gas civilians in government areas, it will be interesting to see if there’s any condemnation whatsoever from Washington, London, or Paris.

* * *

end
Russia/Ukraine
This came out of nowhere:  Russia rammed a tugboat after it entered into Russian waters at the Kerch strait.
Now Russia is refusing to hand over the boats to the Ukraine as they declare Martial law.
(zerohedge)

Ukraine Declares Martial Law As Russia Refuses To

Release Captured Ships

Seemingly out of nowhere, a diplomatic crisis has erupted between Ukraine and Russia after Russia detained three Ukrainian ships which it said had been “maneuvering dangerously” near the Kerch Strait – a crucial choke point controlled by Russia which separates the Sea of Azov From the Black Sea. In response to what he decried as unprovoked Russian aggression, increasingly unpopular Ukrainian President Petro Poroshenko signed a declaration on Monday to declare martial law for 60 days through Jan. 26. He also started mobilizing the Ukrainian army despite the martial law order still needing approval by the country’s Parliament, according to RT.

Russia

Ratcheting up the anxieties of NATO commanders, who are probably fearful of being drawn into a potential military conflict with Russia, Ukraine has put its troops on full combat alert (though it isn’t a member of NATO, Ukraine has become closely allied with the defense alliance after shelving plans for membership a decade ago). Poroshenko met with the country’s military leaders Sunday night to discuss imposing martial law.

As the UN calls an emergency meeting of the Security Council (of which Russia is a permanent member) to be held on Monday, Russia is resisting international demands to release the two Ukrainian artillery boats and the tugboat, which it seized after firing on the ships and ramming one of them. A spokeswoman for the Kremlin said Russia is opening a criminal case into what it claimed was the ships’ illegal entry into Russian waters surrounding the narrow Kerch Strait, according to Reuters.

Russian newswire Interfax reported that Russian border guards had detained 24 Ukrainian sailors accused of taking part in the border provocations.

Russia

Kiev has maintained that Russia was notified ahead of time that the ships were approaching the strait, and denied its ships had done anything wrong. Russia says the ships disobeyed orders to halt.

Moscow has accused Ukraine of staging the armed provocation, presumably to allow Poroshenko to impose martial law and possibly delay a March election that the president, who is reeling from corruption scandals and failed economic policies, is widely expected to lose.

Fortunately for Ukraine, declaring martial law won’t jeopardize its $1 billion IMF bailout.

“The Fund has no formal legal prohibitions that prevent continued cooperation in such conditions,” a source close to the fund reportedly told UNIAN.

A bilateral treaty allows both Russia and Ukraine to use the Sea of Azov, access to which is tightly controlled by Russia, which built a land bridge over the Kerch Strait, the only egress from the sea, after the annexation of Crimea in 2014. Ukraine is still bitter over the annexation, and has accused Russia of supporting a pro-Russian insurgency in the country’s east. After briefly closing the strait following the incident, Russia has again opened it to traffic. Meanwhile, Russian security agency the FSB has said three Ukrainian sailors had been wounded when Russian ships fired on and rammed their Ukrainian counterparts, though none of these injuries were said to be life threatening. Men dressed in Russian navy uniforms could be seen guarding the ships on Monday as they were being held at a Russian port near Crimea, not far from where Russia’s mighty Black Sea fleet is stationed.

Regardless of what happens, the incident could provoke more western sanctions against Russia, which will only further dampen relations between Russia and the West at a time when Russia is building its own financial infrastructure to challenge the dollar-dominated global trade system.

And while European officials have urged both sides to exercise restraint, the incident shows just how easily Russia and the West could be drawn into a military conflict over Ukraine. While it appears a shooting war has been averted – for now, at least – the mobilization of Ukrainian troops on its border with Russia certainly doesn’t bode well for peace. The incident has sent the Russian ruble sliding against the dollar, as the sanction fears join concerns about the recent dramatic slump in global oil prices.

That would be quite an escalation for an incident that began with the ramming of a tugboat.

Embedded video

Babak Taghvaee@BabakTaghvaee

#BREAKING: This is the moment when #KerchStrait crisis started after #Russia Coast Guard boats Sobol, Don, Mangust, Suzdalets attacked an #Ukraine Navy tug boat & 2 Gurza-M class boats escorting it during passage to #AzovSea. Don rammed into the #Ukrainian tug boat.

 

6. GLOBAL ISSUES

Canada

This should give you an idea as to the global slowdown.  Now the Bank of Canada is buying mortgage bonds as the Canadian housing market cools dramatically

(courtesy zerohedge)

Bank Of Canada To Start Buying Mortgage Bonds As Canadian Housing Market Cools

Ten years ago this week, the Federal Reserve announced it would start buying agency MBS. Asset purchases are now arguably a  standard non-standard monetary policy tool, as all three major central banks have since embarked in some form of asset purchases, and are currently in different stages of implementation.

And on Friday, the Bank of Canada became the latest to join the parade, when it announced for the first time plans to buy government-backed mortgage bonds in an attempt to boost its balance sheet and arguably, to stabilize Canada’s flagging housing market.

The move, part of a decision to include government-guaranteed debt issued by federal Crown corporations, will allow Canada’s central bank to offset continued growth in bank notes, the central bank said in an statement Friday. It will also give it flexibility to further reduce its participation at primary auctions of Canadian government bond “to help increase the tradeable float of those benchmark securities and hence support their secondary market liquidity.”

As part of this expansion, a “small portion” of its purchases will be Canada Mortgage Bonds, which are guaranteed by Canada Mortgage and Housing Corp.  Purchases of mortgage bonds will be conducted in the primary market starting later this year or early 2019, the central bank said. The key excerpt from Friday’s statement is blow:

As part of these changes the Bank plans to allocate a small portion of its balance sheet for acquiring federal government guaranteed securities by purchasing Canada Mortgage Bonds. These purchases will be conducted in the primary market, on a non-competitive basis, and are expected to commence in the latter part of 2018 or in the first half of 2019. The Bank will continue to adhere to its principles of neutrality, prudence and transparency and conduct its transactions in a manner that limits market distortions and minimizes impact on market prices.

According to Bloomberg, the federal Crown corporation has an issuance limit of C$40 billion ($30 billion) for 2018.

“In terms of CMBs, we need a little more detail on how the BoC will be participating, but it does look to be supportive of spreads,” said Mark Chandler, head of fixed-income research at RBC Capital Markets. “I would suggest only a modest impact until we learn more.”

The Bank of Canada held C$78.2 billion of Canadian government bonds and C$22.2 billion of treasury bills for balance sheet management purposes as of Nov. 21, according to its website.

While the central bank said that expanding the list of eligible assets “is for balance-sheet management purposes only and has no implications for monetary policy and financial stability objectives of the Bank”, some couldn’t help but wonder if – like 10 years ago in the US – this is just another implicit backstop of Canada’s housing market.

While that is debatable, there is no doubt that 2018 has marked a turning point in Canada’s closely-watched housing market, which can no longer count itself among the countries with the world’s hottest residential real estate. While that is good news for the housing bubbles in Toronto and Vancouver which has priced out most local residents out of the market for a new house, it’s bad news for everyone else who has come to count on steady house price growth to boost their wealth (or their ability to borrow more money).

As Daniel Tencer noted recently, Canada tumbled to 37th place in the latest global ranking of housing markets from commercial real estate firm Knight Frank, from fourth place in the same survey a year earlier. That places us firmly in the bottom half of 57 countries surveyed.

With average price growth falling to 2.9 per cent in the latest survey, from 14.2 per cent a year ago, Canada actually fell behind the U.S. on price growth — a rare occurrence since the U.S.’s housing bubble burst a decade ago.

“The rising cost of finance, an uncertain political and economic climate and currency instability in some markets is likely to be tempering demand,” the Knight Frank report noted, and that certainly seems to be the case in Canada, where rising mortgage rates and tougher new mortgage rules have reduced the maximum buying price that homebuyers can afford.

Furthermore, recent data from the Teranet/National Bank house price index, showed prices in Canada rising at their slowest pace since the financial crisis in August, up just 1.4%, with prices posting a modest improvement in the past two months.

“This is mostly a reflection of Toronto and Vancouver, the two most important real estate markets in Canada,” National Bank economist Marc Pinsonneault wrote in a client note. Indeed, Toronto house prices grew 0.3% in August, but Pinsonneault says this reflects the usual rise in prices seen in spring and summer months. Strip out the seasonality, and Toronto house prices have been falling for five months.  Meanwhile, Vancouver’s house price index fell 0.4% in the month, though the index is still up 7.6 per cent from a year ago. But the momentum is gone: Adjusted for seasonality, Vancouver prices have fallen for the past three months, Pinsonneault said.

And now, the Bank of Canada seems to be taking preemptive steps, just in case this localized slowdown spreads to all other markets.

end

A death blow to Canada as GM closes the 100 yr old Oshawa Ontario plant.  This will affect thousands of jobs in Ontario.  If Congress refuses to pass the trade deal with Canada and Mexico then the entire auto global business will be in chaos.

(courtesy zerohedge)

GM To Close 100-Year-Old Oshawa Plant, Affecting Thousands Of Jobs

With car sales in the US and China locked in a precipitous slowdown that is only expected to worsen, GM on Monday is expected to announce the closure of one of its Canadian plants as the company hopes to move more production to Mexico and (hopefully) bolster its lagging shares, Reuters reported. The company’s plant in Oshawa, Ontario – the plant in question – produces slow-selling Chevrolet Impala and Cadillac XTS sedans, while also completing final assembly of the better-selling Chevy Silverado and Sierra pickup trucks, which are shipped from Indiana.

GM

The outcry from the union and local officials is already causing political pressure on GM to mount after the carmaker accepted billions of dollars in subsidies from the Canadian and US governments after filing for bankruptcy nearly a decade ago. But the company must weigh these considerations against the demands of Wall Street analysts, who believe that GM has too many plants in North America. Signaling the start of the carmaker’s latest cost-cutting initiative, the company said on Oct. 31 that about 18,000 of its 50,000 salaried employees in North America would soon be eligible for buyouts.

Two sources told Bloomberg that the announcement of the plant’s closure is expected on Monday.

The closure is not unexpected. In a message to employees last month, GM CEO Mary Barra cited the stagnant share price as a reason for tougher restructuring measures.

Unifor, the Canadian autoworkers union that represents the plant’s employees, told Bloomberg that it has been told there is no car production planned at the factory beyond next year, raising the prospect of talks to preserve jobs. Unifor National President Jerry Dias said back in April that the Oshawa complex had been slated for closure in June of this year. But he added that one top GM Canada executive had vowed that it wouldn’t close on his watch.

“We have been informed that, as of now, there is no product allocated to the Oshawa assembly plant past December 2019,” Unifor said in a written statement Sunday night. “Unifor does not accept this announcement and is immediately calling on GM to live up to the spirit” of a contract agreement reached in 2016, the union said.

[…]

The survival of the factory was a key issue in the automaker’s 2016 labor talks with Unifor, the union that represents tens of thousands of autoworkers in Canada. As part of that settlement, GM had agreed to spend some C$400 million ($302 million) in the Oshawa operations, Bloomberg News reported at the time. The union hailed the agreement as part of an effort to stem the loss of jobs to Mexico.

During its latest earnings call, GM CEO Mary Barra said at the New York Times DealBook conference earlier this month that the company had negative cash flow for the first nine months of the year and it needed to cut costs, according to the Detroit News.

Canadian lawmakers said they’re fighting to keep the plant open because thousands of jobs are on the line.

“We are aware of the reports and we will be working in the coming days to determine how we can continue supporting our auto sector and workers,” a Canadian government official said.

“The jobs of many families are on the line,” said Colin Carrie, a Member of Parliament for Oshawa. “Communities all over Ontario would be devastated if this plant were to close.”

Oshawa Mayor John Henry told CBC that he hopes the planned closure is “just a rumor”, and that he had not spoken to anyone from GM. According to the carmaker’s website, the Assembly plant in Oshawa employs roughly 2,800 workers – down from ten times that number in the early 1980s. Production at the plant began in November 1953.

“It’s going to affect the province, it’s going to affect the region…the auto industry’s been a big part of the province of Ontario for over 100 years,” Henry said.

As the CBC pointed out, the Oshawa plant was a talking point during the negotiations for Trump’s USMCA (Nafta 2.0) deal. “Every time we have a problem…I hold up a photo of the Chevy Impala,” Trump once said about the negotiations.

In a tweet, one conservative Canadian lawmaker lamented the news of the closure.

Andrew Scheer

@AndrewScheer

This is terrible news tonight for thousands of auto workers and their families. My heart goes out to all those affected by this devastating decision. Conservatives will monitor this closely and stand up for those affected.

CTV Toronto

@CTVToronto

MORE: General Motors to shut down all operations in Oshawa http://ctv.news/eV9YOSH

View image on Twitter

And while this closure would certainly be bad news for Canada, the situation could always get worse – particularly if Congress refuses to pass Trump’s USMCA trade deal, raising the possibility that the US, Canada and Mexico would revert to WTO rules, potentially throwing GM’s foreign North American operations into chaos.

end

MEXICO

Mexico denies striking a deal with the USA administration to “remain in Mexico” while the judicial process is ongoing

(courtesy zerohedge)

 

Mexico’s Incoming Government Denies Striking “Remain In Mexico” Deal With Trump

Mexico’s incoming government has denied striking a “Remain in Mexico” deal with President Trump which would require migrants applying for US asylum to wait in Mexico, according to Reuters.

There is “no agreement of any type between the future government of Mexico and the United States,” said Olga Sanchez Cordero, Mexico’s incoming interior minister and top domestic policy official for president-elect Manuel Lopez, who takes office on Dec. 1. The statement contracts a Saturday report in the Washington Post.

Embedded video

The Epoch Times

@EpochTimes

The line for food just outside the camp confines. Free meals are served at 10am and 5pm. There are 5,150 migrants now at the camp in Tijuana.

Cordero told Reuters that the incoming government was in talks with the Trump administration, but made clear that they could not make any agreement since they are not yet in power.

Sanchez ruled out that Mexico would be declared a “safe third country” for asylum claimants, following a Washington Post report of a deal with the Trump administration known as “Remain in Mexico,” which quoted her calling it a “short-term solution.”

The plan, according to the newspaper, foresees migrants staying in Mexico while their asylum claims in the United States are being processed, potentially ending a system Trump decries as “catch and release” that has until now often allowed those seeking refuge to wait on safer U.S. soil. –Reuters

Meanwhile, Mexico’s incoming deputy interior minister Zoe Robledo said that the details of the “Remain in Mexico” plan were still under discussion. Robledo told Reuters, adding that the incoming government sought to find jobs for Central American migrants which are understaffed – such as maquila assembly plants where multinational corporations take advantage of cheap labor for the final stages of production.

“What we’re aiming for is that people leaving their countries due to security issues or violence can find a place to stay in Mexico if that is their decision,” Robledo added.

In a Saturday Tweet, Trump declared: “Migrants at the Southern Border will not be allowed into the United States until their claims are individually approved in court. We only will allow those who come into our Country legally. Other than that our very strong policy is Catch and Detain. No “Releasing” into the U.S.,” adding “All will stay in Mexico” in a second tweet in which he threatened to close the southern US border if necessary.

Donald J. Trump

@realDonaldTrump

Migrants at the Southern Border will not be allowed into the United States until their claims are individually approved in court. We only will allow those who come into our Country legally. Other than that our very strong policy is Catch and Detain. No “Releasing” into the U.S…

Donald J. Trump

@realDonaldTrump

….All will stay in Mexico. If for any reason it becomes necessary, we will CLOSE our Southern Border. There is no way that the United States will, after decades of abuse, put up with this costly and dangerous situation anymore!

Trump’s plan is “outright illegal” according to Jenna Gilbert, managing attorney for the Los Angeles office of Human Rights First, adding “I’m sure the administration will once more see itself in court.”

Sanchez, who said the situation of migrant caravans was “very delicate,” did not explicitly rule out that Mexico could keep caravan migrants on its soil while their U.S. asylum claims are processed. But she told Reuters that plans to assume “safe third country” status were “ruled out.” –Reuters

Asylum seekers would be required to claim refugee status in Mexico if it were to assume “safe third country” status, however migration activists have long argued that Mexico’s is too dangerous to offer safe haven for migrants fleeing Central American violence.

 

END

Now Trump threatens to permanently close the Southern border if no deal with Mexico ensues.

(courtesy zerohedge)

Trump Threatens To Permanently Close Southern Border If Needed

Migrant caravan drama returned to the headlines over the weekend after several violent clashes broke out at the US-Mexico border, prompting US troops to fire tear gas at migrants who tried to rush the border, while one migrant who attacked border agents with stones after crossing into Arizona was taken into custodyAfter the incoming Mexican government denied reports that it had agreed to hold asylum applicants from Central American while they awaited their asylum hearings, Mexico said it would deport some 500 migrants who tried to rush the US border on Sunday.

Embedded video

emma murphy

@emmamurphyitv

Hundreds try to storm the border. Expect significant US response #tijuana

Given all that is happening, it’s hardly surprising that President Trump, who just returned from a holiday weekend at Mar-a-Lago, escalated his threats to close the US-Mexico border after a series of angry tweets about a 60 Minutes story about his administration’s controversial “child separation” policy where he (correctly) pointed out that the Trump administration’s policy was merely a continuation of policies from the Bush and Obama administrations.Trump said that he tried to keep families together, but that “when you do that, vast numbers of additional people storm the border.”

Donald J. Trump

@realDonaldTrump

.@60Minutes did a phony story about child separation when they know we had the exact same policy as the Obama Administration. In fact a picture of children in jails was used by other Fake Media to show how bad (cruel) we are, but it was in 2014 during O years. Obama separated….

Donald J. Trump

@realDonaldTrump

….children from parents, as did Bush etc., because that is the policy and law. I tried to keep them together but the problem is, when you do that, vast numbers of additional people storm the Border. So with Obama seperation is fine, but with Trump it’s not. Fake 60 Minutes!

Trump closed his rant by demanding that Mexico move “stone-cold criminal” migrants back to their home countries “do it by plane, do it by bus, do it any way you want but they are NOT coming into the U.S.A!” Failing this, Trump added “we will close the border permanently if need be” before demanding that Congress “fund the WALL.”

Donald J. Trump

@realDonaldTrump

Mexico should move the flag waving Migrants, many of whom are stone cold criminals, back to their countries. Do it by plane, do it by bus, do it anyway you want, but they are NOT coming into the U.S.A. We will close the Border permanently if need be. Congress, fund the WALL!

Of course, Trump will have a chance to do just that next month, where he will have the opportunity to threaten a shutdown if Congress doesn’t agree to funding for his border-strengthening initiatives like the wall.

7  OIL ISSUES

Traders are confused with Goldman Sachs who states that you must buy oil despite Saudi’s huge record production of 11 million barrels per day.

(courtesy zerohedge)

Saudis Confuse Traders By Pumping A Record Amount

Of Oil As Goldman Top Trade Says “Buy”

After crashing by a dramatic 8% on Friday, and tumbling to one year lows, crude is attempting a feeble rebound this morning on hopes the OPEC meeting next week will result in new production curbs by OPEC+. However, trader optimism has been dented by overnight news that  Saudi Arabia raised oil production to an all-time high in November, boosting its output well beyond the quota that had been agreed upon in the Vienna 2016 OPEC summit, and prompting fresh doubts if Riyadh is sincere about cutting output.

Reuters cited an industry source, who said Saudi crude oil production hit 11.1-11.3 million barrels per day (bpd) in November, an all time high. That levels is up around 0.5 million bpd – equal to 0.5% of global demand – from October and more than 1 million bpd higher than in early 2018, when Riyadh was curtailing production together with other OPEC members.

Saudi Arabia agreed to raise supply steeply in June, in response to calls from consumers, including the United States and India, to help cool oil prices and address a supply shortage after Washington imposed sanctions on Iran. However, the move backfired on Riyadh after Washington imposed softer than expected sanctions on Tehran. That promptly triggered worries of a supply glut and Brent collapsed to below $60 per barrel on Friday from as high as $85 per barrel in October.

Russia, which teamed up with Saudi Arabia in the first OPEC joint production cuts since 2016, also raised production steeply in recent months to a post-Soviet high of 11.4 million bpd, as the world suddenly found itself awash in excess oil, and leading to a spike in oil inventories.

Ironically, Saudi oil industry sources have signaled they wanted prices to stay above $70 per barrel and Saudi energy minister Khalid al Falih said this month global oil supply could exceed demand by over 1 million bpd next year, requiring OPEC to take action. Yet as so often happens, it was Saudi Arabia – OPEC’s swing producer – that was instrumental for much of the excess production that has sent oil prices tumbling.

And while Falih said earlier this month that state oil giant Saudi Aramco would ship 0.5 million bpd less crude in December than in November as demand from customers was lower, he now faces a formidable adversary to any stated production cut: US president Trump.

As a reminder, Trump has stood behind Saudi Crown Prince Mohammed bin Salman despite calls from many U.S. politicians to impose stiff sanctions on Riyadh following the crisis around the killing of journalist Jamal Khashoggi at Riyadh’s consulate in Istanbul last month. Needless to say, Trump’s kind words do not come without a price, and that is for Saudi Arabia to keep pumping oil, resulting in lower prices.

On Sunday, Trump thanked himself for lower oil prices and compared it to a big tax cut for the U.S. economy.  “So great that oil prices are falling (thank you President T),” Trump tweeted, referring to himself. Last week, Trump tweeted: “Oil prices are getting lower… Thank you Saudi Arabia but let’s go lower”.

Meanwhile, also overnight, Goldman Sachs Group – which has been urging its client to keep buying oil all the way down from its recent highs and well into the current bear market – remains undaunted by the sell-off in raw materials and is forecasting returns of about 17 percent in the coming months, describing the current situation as unsustainable and touting this week’s G-20 meeting in Buenos Aires as a potential turning point; specifically the bank expects an OPEC supply cut and its announcement will lead to a recovery in prices. It advises going long on short-dated Brent.

“Given the size of dislocations in commodity pricing relative to fundamentals — with oil now having joined metals in pricing below cost support — we believe commodities offer an extremely attractive entry point for longs in oil, gold and base,” Goldman’s chief commodity strategist Jeffrey Currie said in a report. The note listed its top 10 trade ideas for 2019, including a rebound in Brent as OPEC cuts supply.

“Many of the political uncertainties weighing on commodity markets have a significant chance of being addressed in Buenos Aires. This includes some improvement on the China-U.S. relationship and, like in the 2016 G-20 meetings, some greater clarity on a potential OPEC cut.”

Amusingly, Goldman also is clutching to its “negative gamma” thesis which while maybe explaining the first rout in oil two weeks ago, fails to capture the subsequent two 7%+ drops:

 Exacerbating the situation was a negative gamma event as we discussed two weeks ago. At $50/bbl WTI, however, we are now on the other side of the largest number of puts struck at $55/bbl (see Exhibit 7) which creates the need for swap dealers who are delta hedging the producer puts to begin to buy again. This is why we feel the time is right to start recommending a long position in oil at these levels.

In recent years, the performance of Goldman’s “Top trade” recommendations has been mixed at best, although with oil plunging to record oversold territory, it is likely due for at least a modest rebound.

 

8. EMERGING MARKETS

 

 

END

 

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

Euro/USA 1.1365 UP .0030 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES ALL GREEN

 

 

 

 

 

USA/JAPAN YEN 113.24  UP 0.319 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL

GBP/USA 1.2846 UP   0.0050  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.304  DOWN .0025 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS MONDAY morning in Europe, the Euro ROSE by 30 basis point, trading now ABOVE the important 1.08 level RISING to 1.1363/ Last night Shanghai composite CLOSED DOWN 3.67 POINTS OR 0.14%

 

//Hang Sang CLOSED UP 448.50 POINTS OR 1.72% 

 

/AUSTRALIA CLOSED DOWN  0.76% /EUROPEAN BOURSES GREEN

 

 

 

 

The NIKKEI: this MONDAY morning CLOSED  UP 165.45 POINTS OR 0.76%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED GREEN

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 448.50 POINTS OR 1.72% 

 

 

/SHANGHAI CLOSED DOWN 3.67  POINTS OR 0.14%

 

 

 

Australia BOURSE CLOSED DOWN .76%

Nikkei (Japan) CLOSED UP 165.45 POINTS OR 0.76%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1224.80

silver:$14.34

Early MONDAY morning USA 10 year bond yield: 3.07% !!! UP 2 IN POINTS from FRIDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.31 UP 0  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 96.74 DOWN 18  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.89% DOWN 5    in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.09%  DOWN 1  BASIS POINTS from FRIDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…

 

SPANISH 10 YR BOND YIELD: 1.56% DOWN 7  IN basis point yield from FRIDAY

ITALIAN 10 YR BOND YIELD: 3.27 DOWN14   POINTS in basis point yield from FRIDAY/

 

 

the Italian 10 yr bond yield is trading 171 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.36%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.91% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1337 UP .0003 or 3 basis points

 

 

USA/Japan: 113.57 UP, .656 OR 66 basis points/

Great Britain/USA 1.2809 UP .0013( POUND UP 13 BASIS POINTS)

Canadian dollar DOWN 9 basis points to 1.3238

 

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This afternoon, the Euro was ROSE BY 3 BASIS POINTS  to trade at 1.1337

The Yen FELL to 113.57 for a LOSS of 66 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 GAINED 13 basis points, trading at 1.2809/

The Canadian dollar LOST 9  basis points to 1.3238

 

 

The USA/Yuan,CNY closed UP AT 6.9408-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.9400(  YUAN UP)

TURKISH LIRA:  5.2509

the 10 yr Japanese bond yield closed at +.09%

 

 

 

Your closing 10 yr USA bond yield UP 2 IN basis points from FRIDAY at 3.07 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.32 UP 1 in basis points on the day /

THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS

Your closing USA dollar index, 96.99 UP 8 CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 4:00 PM 

London: CLOSED UP 83.14 POINTS OR 1.20%

German Dax : CLOSED UP 162.03 POINTS  OR 1.45%
Paris Cac CLOSED UP 48.03 POINTS OR 0.97%
Spain IBEX CLOSED UP 174,50 POINTS OR 1.96%

Italian MIB: CLOSED UP: 518,55 POINTS OR 2.77%/

 

 

WTI Oil price; 51.69 1:00 pm;

Brent Oil: 60,56 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    67.18  THE CROSS HIGHER BY .97 ROUBLES/DOLLAR (ROUBLE LOWER by 97 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.2509 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.36 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, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:51.70

 

BRENT:60.50

USA 10 YR BOND YIELD: 3.07%..

 

 

USA 30 YR BOND YIELD: 3.32%/.

 

 

 

EURO/USA DOLLAR CROSS: 1.1333 ( down 0 BASIS POINTS)

USA/JAPANESE YEN:113.599 UP .681 (YEN DOWN 58 BASIS POINTS/ .

 

USA DOLLAR INDEX: 97.05 DOWN 14 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2810 UP 14 POINTS FROM YESTERDAY

the Turkish lira close: 5.2522

the Russian rouble:  67.16 DOWN 95 Roubles against the uSA dollar.( DOWN 95 BASIS POINTS)

 

Canadian dollar: 1.3253 DOWN 25 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9408  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9421 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.36%

 

The Dow closed  UP 1354.29 POINTS OR 1.48%

NASDAQ closed UP 142.87  points or 2.06% 4.00 PM EST


VOLATILITY INDEX:  18.74 CLOSED DOWN  2.78

LIBOR 3 MONTH DURATION: 2.6912%  .LIBOR  RATES ARE RISING/GIGANTIC JUMP today

 

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

TRADING IN GRAPH FORM FOR THE DAY/WEEKLY SUMMARY/FOLLOWED BY TODAY

 

Stocks Bounce On Biggest Short Squeeze In A Month

Chinese stocks gave up early gains in the afternoon session to close modestly lower…

 

European stocks surged (led by FTSEMIB) on the heels of hope for an Italian budget deal…

 

US Futures show the ramp around the European open and again at the US open, weakness around the European close, and then an afternoon of low volume bids…

 

On the cash side, Nasdaq was the biggest gainer in the squeeze, Trannies and Small Caps underperformed…

 

S&P high stalled just ahead of the 2017 closing level of 2673.61.

That keeps the index in the red for the year. I know it is somewhat random. Why is the last day more important than the 1st day or the 50th day or the 100th day. But it is. It makes a difference.

Volume was 30% below recent average…

Some context for the bounce…

 

Another ramp ‘funded’ by another ‘short squeeze’…but the squeeze ran out of fuel shortly after the European close…

 

GM was halted on terrible news and soared 7%!! 

GE hit new cycle lows…

Apple, however, tumbled on bad news – dropping below MSFT market cap for the first time since May 2010…

 

Credit market compressed on the day, but VIX compression is outpacing them for now…

 

Treasury yields rose on the day with the long-end outperforming (up 1bps vs 2-3bps across the curve)…

 

The dollar extended its gains, rallying to 2-week highs…

 

Cable gave up early gains to fall back to pre-“deal” levels once again…

 

Offshore Yuan also roundtripped today, selling off since the European open after rallying through the Asia session…

 

Cryptocurrencies bounced back a little today after the bloodbath of the weekend…

 

Dollar strength weighed on copper and PMs but crude managed to bounce…

 

Another dead cat bounce in crude…

 

Gold continues to be pegged around 8500 Yuan… (or is it vice versa?)

 

Finally, courtesy of Bloomberg’s Michael McDonough, we suggest the global economy is not doing so great after all…

The biggest collapse in global auto sales since the financial crisis??!! Not exactly reassuring.

And in case you were hoping for this bad news to be good news – forget it – as Morgan Stanley explained:

…we think that a major challenge for US assets next year is that [The Fed] is ‘boxed in’ – better-than-expected growth will simply mean more Fed tightening, while weaker-than-expected growth will raise slowdown risks, with limited scope for policy support. In a major change from the last 10 years, both good news and bad news create problems for US markets.

Retail investors in U.S. stocks are now the most bearish on the market’s direction since February 2016, according to the American Association of Individual Investors weekly survey.

 

 

end

market trading

 

market data/

USA ECONOMIC STORIES OF INTEREST

Although denied there must be some truth It is Mnuchin who picked Jerome Powell and Trump hates Powell because he is raising rates

(courtesy zerohedge)

“If He’s So Good, Why Is This Happening?”: Trump Reportedly Blames Mnuchin For Market Carnage

President Trump’s volatile temper and readiness to blame members of his cabinet for defying him or making decisions that hurt the president’s image has been well-documented. And as a handful of Trump’s cabinet members are reportedly facing the possibility of being fired or otherwise ousted before the end of the year – and Jeff Sessions has already been fired – we can now add yet another name to that list: Treasury Secretary Steven Mnuchin.

According to the Wall Street Journal, President Trump has been expressing dissatisfaction” with Mnuchin, as the falling stock market has helped sour the president’s attitude toward a key member of his administration who has previously been seen as relatively secure in his standing.

The upshot of the report is that Trump is blaming Mnuchin for picking Jerome Powell to lead the Federal Reserve. Powell isn’t very popular in the West Wing right now, as Trump has made abundantly clear with his repeated attacks on the Fed.Trump has blamed Powell for insisting on raising interest rates, and even hinted at times that he could be open to making a change at the central bank, something that has evoked nothing short of abject horror on Wall Street.

Mnuchin

It’s also worth noting that Trump had said earlier in his term that he would prefer the dollar to weaken; instead, it has strengthened, driven by the same expectations about higher interest rates that are rattling stocks. Mnuchin’s early resistance to Trump’s trade war also reportedly helped sour their relationship (though Trump’s repeated attempts to foil Mnuchin-led talks with the Chinese have only contributed to the market’s dyspepsia over the past few months).

In conversations with his advisors, Trump has reportedly expressed regrets about picking Mnuchin and mused about whether he should have tapped some one else, possibly Jamie Dimon, which is surprising considering some of Dimon’s more recent comments.

Of course, as WSJ makes clear, just because Trump is frustrated with Mnuchin right now doesn’t mean that Mnuchin will be fired.

In conversations with advisers in recent weeks, Mr. Trump has also voiced displeasure with Mr. Mnuchin over the turbulent stock market and the Treasury chief’s skepticism toward the sort of punitive trade actions the White House has taken against China, the people said.

Looking back to his appointment of Mr. Mnuchin in 2016, Mr. Trump has mused to advisers about whether he should have tapped someone else, mentioning JPMorgan Chase & Co. Chief Executive Jamie Dimon as an alternative. A spokesman for Mr. Dimon declined to comment.

Aides fall in and out of favor in a White House known for high turnover, and Mr. Trump’s pique doesn’t necessarily mean Mr. Mnuchin is in danger of losing influence or being replaced. As Mr. Trump prepares for a meeting with Chinese leader Xi Jinping at the Group of 20 summit on Nov. 30, he has relied on Mr. Mnuchin in sounding out Beijing on a trade deal.

The White House denied the rumors in a statement to WSJ, instead insisting that Mnuchin’s relationship with the president remains on solid footing.

“The president has long been clear about his views on the Fed,” said White House spokeswoman Lindsay Walters in a statement.

“He has a good relationship with Secretary Mnuchin and is thankful for all the work he does on behalf of his administration and the American people,” she added.

But WSJ’s sources reportedly said that Trump has continued to criticize Mnuchin both to his face and in private as stocks have entered correction territory.

In a conversation with someone who praised Mr. Mnuchin’s performance, Mr. Trump mentioned the volatile stock market. Aides have said he views the market as a barometer of his White House performance every bit as important as his poll ratings.

“If he’s so good, why is this happening?” Mr. Trump said of Mr. Mnuchin, according to a person familiar with the matter.

Trump has also reportedly made cutting remarks about Mnuchin’s free-trade leanings during meetings, while also bashing the secretary because his efforts to negotiate a trade deal have come up short. Consider this particularly memorable exchange.

“The secretary fell into a Chinese trap, becoming the advocate of compromise and accommodation – and Trump saw that,” said Mr. Trump’s former chief strategist, Steve Bannon.

Mr. Trump has made note of Mr. Mnuchin’s trepidation about tariffs. At a meeting to discuss China trade policies in the past month, Mr. Mnuchin at one point mentioned that “our trade strategy with China is working really well.” He then used the word “we” in reference to the administration’s tough-on-China trade practices.

“What do you mean ‘we’, Steve?” Mr. Trump said, people familiar with the meeting said.

But while the Fed is probably reluctant to risk looking like it is bowing to presidential pressure, rumors have been circulating that the central bank could cut back on rate hikes next year. And comments from Fed Vice Chairman Richard Clarida during a recent CNBC interview seemed to suggest that the central bank could be changing its views on our proximity to the neutral rate. Several important investors have warned that the Fed should reconsider further hikes.

And even as Trump sees the market’s performance as a gauge of his own effectiveness in office, the president could just as easily blame the market’s performance on the Democrats. After all, Trump warned voters before the election: “If you want stocks to sink, vote Democrat.”

end
For your interest:  the largest ever oversea real estate investment scam fleeces investors out of 100 million dollars
(courtesy zerohedge)

“Largest-Ever Overseas Real-Estate Investment Scam” Fleeced Investors For $100 Million 

The Federal Trade Commission (FTC) under the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), has recently announced that it seeks law-enforcement action against a residential resort development in Belize, calling it “the largest-ever overseas real-estate investment scam” the agency has ever seen.

At a recent press conference in Washington, D.C., the agency said the development known by names that include Sanctuary Bay, Sanctuary Belize, Buy Belize, Buy International, and Buy Paradise, fleeced 1,000 American investors, out of more than $100 million.

Scheme Video: Belize Real Estate – Belize Property – Belize Homes – Buy Belize 

According to court documents filed by the FTC in the US D

According to court documents filed by the FTC in the US District Court of Maryland, 24 individuals and shell companies falsely claimed to be constructing a luxurious resort community that would feature a hospital, hotels, a golf course, a spa, a casino, high-end boutiques, cafes, restaurants, and an “American-style” supermarket.

Video: American National Sues Over “Sanctuary Belize” Multimillion-Dollar Scam

 

The agency said investors were fooled into believing the lots, which sold

The agency said investors were fooled into believing the lots, which sold for between $150,000 and $500,000 each, would dramatically increase in value.

Scheme Video: Sanctuary Belize Real Estate

On page three of the court document, it said defendants sol

On page three of the court document, it said defendants sold “lots primarily to Americans looking to retire abroad or seeking investment opportunities. They target small business owners and couples nearing retirement. Among other things, they claim the lots are low-risk investments that consumers can resell easily and enjoy 200%-300% appreciation.

The Wall Street Journal has been following the developments of the scheme for more than a year.

More than ten years after sales started, the FTC said most of the Manhattan-sized development is still unfinished. Only twelve homes and part of the marina have been completed, many of which are occupied by people with close ties to the development

The FTC said investors were supposed to hire a builder to construct their Central American home, but many did not, because they saw the overall property was not fully developed and there was no real estate market for the lots.

As a decade went by, investors started to panic and sold their lots back to the developers at a giant loss, while many stopped making payments.

Some investors even tried to unload the lots themselves but found a developer-tied brokerage did not operate in “good faith,” and local real estate agents refused to touch any lots in the development.

The FTC has frozen the assets of the defendants and will seek to recoup money lost in the real estate scheme. James Kohm, associate director of the agency’s enforcement division, declined to say whether the case would be referred to law enforcement so that criminal charges can be pursued, but said that is the usual process in “cases of hardcore fraud,” said The Wall Street Journal.

As the global credit cycle rolls over, more and more fraudulent schemes will come out of the woodwork.

Just last month, the Securities and Exchange Commission and the Department of Justice uncovered the largest-ever Ponzi scheme in Baltimore-Washington metropolitan area, totaling $345 million. 

end
Another indicator of poor global growth:  GM announces that 14,000 workers will be laid off in the uSA and abroad.  As we mentioned above, the huge  100 yr old Oshawa plant in Canada is being shuttered.  That would be a huge death blow to Canada. Trump tells GM to stop making cars in China despite the fact that it is cheaper to make over there.
Also Trump highlights the huge problem in the UKraine where Russia seized 3 boats belonging to the Ukraine in the Strait of Kerch
(courtesy zerohedge)

Trump “Not Happy” About GM News, Tells Company To Stop Making Cars In China

Following news of GM’s mass layoffs affecting over 14,000 workers and widespread plant shutterings in the US and abroad, it was only a matter of time before President Trump chimed in with many expecting that today’s news that the icon of US business is not doing well would prompt a less than excited response from Trump. That’s precisely what happened moments ago when Trump, speaking to reporters as he was leaving the White House, said he “wasn’t happy” about the General Motors news, noting that the country has done a lot for GM.

Trump, who said he spoke with CEO Mary Barra on Sunday night according to the WSJ, and said that he does not like’s GM’s decision on North American auto production, said that GM needs to find a replacement for the Chevy Cruze, which isn’t selling, and said he expects that GM will put something else in Ohio. “We have a lot of pressure on them,” Trump told reporters as he left the White House for Mississippi.

Trump also said that he told GM to stop making cars in China, and that he told GM “they better get back in there soon.”

Embedded video

CBS News

@CBSNews

“They better put something else in”: President Trump expresses his disappointment in GM’s announcement of plant closures and mass layoffs https://www.cbsnews.com/news/gm-to-close-canadian-plant-and-may-shed-more-jobs/ 

Finally, Trump said GM’s announcement has nothing to do with tariffs, even though GM’s biggest competitor in September said that tariffs will cost the company over $1 billion in profits. (Harvey:  Ford)

Trump also addressed the sharp escalation in tensions between Russia and Ukraine, where the seizure of three Ukraine vessels which allegedly violated Russian territorial waters near the Kerch Strait led Ukraine’s parliament to back president Poroshenko’s proposal to institute a 30-day Martial law on the border with Russia. Trump said that he “doesn’t like” the situation between Ukraine and Russia, and said that the US is working with Europe to resolve it.

Aaron Rupar

Trump deflects from his family separation policy by falsely claiming Obama “had a separation policy.” (He didn’t.)

Embedded video

Aaron Rupar

@atrupar

Trump frames Russia’s aggression in Ukraine as a #bothsides issue: “We don’t like what’s happening either way. We don’t like what’s happening.”

Embedded video

As reported earlier, martial law is scheduled to be in place from November 26 to January 26, with the Ukrainian army put on full combat alert even before the martial law was declared amid Ukraine rumors that Russia was preparing for a land invasion.

SWAMP STORIES

MI6 are scrambling because they do not want the world to know that they meddled in the 2016 uSA election.  They should release the documents because already everybody has been named

(courtesy zerohedge)

MI6 Scrambling To Stop Trump From Releasing

Classified Docs In Russia Probe

The UK’s Secret Intelligence Service, otherwise known as MI6, has been scrambling to prevent President Trump from publishing classified materials linked to the Russian election meddling investigation, according to The Telegraph, stating that any disclosure would “undermine intelligence gathering if he releases pages of an FBI application to wiretap one of his former campaign advisers.”

Trump’s allies, however, are fighting back – demanding transparency and suggesting that the UK wouldn’t want the documents withheld unless it had something to hide.

The Telegraph has talked to more than a dozen UK and US officials, including in American intelligence, who have revealed details about the row.

British spy chiefs have “genuine concern” about sources being exposed if classified parts of the wiretap request were made public, according to figures familiar with discussions.

It boils down to the exposure of people”, said one US intelligence official, adding: “We don’t want to reveal sources and methods.” US intelligence shares the concerns of the UK.

Another said Britain feared setting a dangerous “precedent” which could make people less likely to share information, knowing that it could one day become public. –The Telegraph

The Telegraph adds that the UK’s dispute with the Trump administration is so politically sensitive that staff within the British Embassy in D.C. haver been barred from discussing it with journalists. Theresa May has also “been kept at arms-length and is understood to have not raised the issue directly with the US president.”

In September, we reported that the British government “expressed grave concerns” over the material in question after President Trump issued an order to the DOJ to release a wide swath of materials, “immediately” and “without redaction.”

Trump walked that order back days later after the UK begged him not to release them.

Mr Trump wants to declassify 21 pages from one of the applications. He announced the move in September, then backtracked, then this month said he was “very seriously” considering it again. Both Britain and Australia are understood to be opposing the move.

Memos detailing alleged ties between Mr Trump and Russia compiled by Christopher Steele, a former MI6 officer, were cited in the application, which could explain some of the British concern. –The Telegraph

The New York Times reported at the time that the UK’s concern was over material which includes direct references to conversations between American law enforcement officials and Christopher Steele,” the former MI6 agent who compiled the infamous “Steele Dossier.” The UK’s objection, according to former US and British officials, was over revealing Steele’s identity in an official document, “regardless of whether he had been named in press reports.”

We noted in September, however, that Steele’s name was contained within the Nunes Memo – the House Intelligence Committee’s majority opinion in the Trump-Russia case.

Steele also had extensive contacts with DOJ official Bruce Ohr and his wife Nellie, who – along with Steele – was paid by opposition research firm Fusion GPS in the anti-Trump campaign. Trump called for the declassification of FBI notes of interviews with Ohr, which would ostensibly reveal more about his relationship with Steele. Ohr was demoted twice within the Department of Justice for lying about his contacts with Fusion GPS.

Perhaps the Brits are also concerned since much of the espionage performed on the Trump campaign was conducted on UK soil throughout 2016. Recall that Trump aid George Papadopoulos was lured to London in March, 2016, where Maltese professor Joseph Mifsud fed him the rumor that Russia had dirt on Hillary Clinton. It was later at a London bar that Papadopoulos would drunkenly pass the rumor to Australian diplomat Alexander Downer (who Strzok flew to London to meet with).

Also recall that CIA/FBI “informant” (spy) Stefan Halper met with both Carter Page and Papadopoulos in London.

Halper, a veteran of four Republican administrations, reached out to Trump aide George Papadopoulos in September 2016 with an offer to fly to London to write an academic paper on energy exploration in the Mediterranean Sea.

Papadopoulos accepted a flight to London and a $3,000 honorarium. He claims that during a meeting in London, Halper asked him whether he knew anything about Russian hacking of Democrats’ emails.

Papadopoulos had other contacts on British soil that he now believes were part of a government-sanctioned surveillance operation. –Daily Caller

In total, Halper received over $1 million from the Obama Pentagon for “research,” over $400,000 of which was granted before and during the 2016 election season.

Papadopoulos, who was sentenced to 14 days in prison for lying about his conversations with a shadowy Maltese professor and self-professed member of the Clinton Foundation, has publicly claimed he was targeted by UK spies, and told The Telegraph that he demands transparency. Trump’s allies in Washington, meanwhile, have suggested that the facts laid out before us mean that the ongoing Russia investigation was invalid from the start.

In short, it’s understandable that the UK would prefer to hide their involvement in the “witch hunt” of Donald Trump since much of the counterintelligence investigation was conducted on UK soil. And if the Brits had knowledge of the operation, it will bolster claims that they meddled in the 2016 US election by assisting what appears to have been a set-up from the start.

Steele’s ham-handed dossier is a mere embarrassment, as virtually none of the claims asserted by the former MI6 agent have been proven true.

Steele, a former MI6 agent, is the author of the infamous and unverified anti-Trump dossier. He worked as a confidential human source for the FBI for years before the relationship was severed just before the election because of Steele’s unauthorized contacts with the press.

He shared results of his investigation into Trump’s links to Russia with the FBI beginning in early July 2016.

The FBI relied heavily on the unverified Steele dossier to fill out applications for four FISA warrants against Page. Page has denied the dossier’s claims, which include that he was the Trump campaign’s back channel to the Kremlin. –Daily Caller

That said, Steele hasn’t worked for the British government since 2009, so for their excuse focusing on the former MI6 agent while ignoring the multitude of events which occurred on UK soil, is curious.

END
Comey will answer to a subpoena only in the open and not behind closed doors.   He can then refuse to answer on the grounds that “everything is classified”
what a crooooook!!
(courtesy zerohedge)

Comey Subpoenaed, Will Resist Unless Testimony Is Public

Former FBI Director James Comey announced over Twitter on Thursday that he has been subpoenaed by House Republicans.

He has demanded a public testimony (during which legislators would be unable to ask him questions pertaining to classified or sensitive information), saying that he doesn’t trust the committee not to leak and distort what he says. 

“Happy Thanksgiving. Got a subpoena from House Republicans,” he tweeted “I’m still happy to sit in the light and answer all questions. But I will resist a “closed door” thing because I’ve seen enough of their selective leaking and distortion.  Let’s have a hearing and invite everyone to see.”

James Comey

@Comey

Happy Thanksgiving. Got a subpoena from House Republicans. I’m still happy to sit in the light and answer all questions. But I will resist a “closed door” thing because I’ve seen enough of their selective leaking and distortion. Let’s have a hearing and invite everyone to see.

end
This is nuts…there is absolutely no way that Mueller can prove that Corsi has lied.
This witch hunt is a terribly travesty!!
(courtesyzerohedge)

“I’m Not Going To Agree That I Lied”: Corsi Rejects

Mueller’s Plea Deal, Plans To Sue

Roger Stone associate Jerome Corsi said on Monday that he is refusing to sign a plea deal offered by special counsel Robert Mueller.

Corsi, who fell under suspicion as an intermediary between Stone and WikiLeaks during the 2016 US election, said he was offered a deal to plea on one count of perjury. According to the New York Times, Mueller presented Corsi with evidence that he had lied when investigators asked him beforehand if WikiLeaks was going to publish stolen DNC emails during the campaign, while Corsi ostensibly served as the conduit.

Among other issues, investigators have been asking about an Aug. 21, 2016, Twitter message in which Mr. Stone predicted that John D. Podesta, Mrs. Clinton’s campaign chairman, would soon face his “time in the barrel.” Mr. Stone posted his message six weeks before WikiLeaks began releasing tens of thousands of Mr. Podesta’s emails, throwing the Clinton campaign on the defensive a month before the November election. –NYT

“Having reviewed my records, I am now confident that I am the source behind Stone’s tweet,” Corsi wrote in an early 2017 article on Infowars.

While Corsi told the Times two weeks ago that he had told investigators the truth, the special counsel’s office “has decided that his text messages and emails contradict some of his statements” concerning the WikiLeaks release, according to people familiar with those discussions.

The 72-year-old Corsi says it’s BS;

They want me to say I willfully lied. I’m not going to agree that I lied. I did not. I will not lie to save my life. I’d rather sit in prison and rot for as long as these thugs want me to,” Corsi said.

Anna Schecter@annaschecter

Corsi tells me he’s been offered plea deal on one count of perjury. “They want me to say I willfully lied. I’m not going to agree that I lied. I did not. I will not lie to save my life. I’d rather sit in prison and rot for as long as these thugs want me to.”

356 people are talking about this

“They can put me in prison the rest of my life. I am not going to sign a lie,” Corsi told CNN.

According to OANN Host Jack Posobic, Corsi plans to sue Mueller.

Jack Posobiec 🇺🇸

@JackPosobiec

#BREAKING @OANN: Dr Jerome Corsi to file lawsuit on Special Counsel Robert Mueller

267 people are talking about this

Jack Posobiec 🇺🇸

@JackPosobiec

BREAKING on @OANN: Jerome Corsi confirms he knew Wikileaks had John Podesta’s emails before they were released. Claims he had no contact with Assange and figured it out on his own. Watch: https://www.pscp.tv/w/bsv70TF4ZUtXeEdWcnJhalB8MVJER2xxRHBEb3pKTCbZqeHRhKSlehxtZX_-Qz5tNDL2hG0a1NBW2CcyJ_NL 

JackPosobiec @JackPosobiec

Corsi LIVE — Washington, DC, United States

pscp.tv

220 people are talking about this

Corsi also told the Times that he expected to be indicted.

“I took that to mean they were planning to indict me” on charges of lying to federal authorities,” said Corsi, after spending around 40 hours with prosecutors. “I still believe I’ve told them the truth, and to the best of my ability and the best of my recollection,” he added, but “my memory of 2016 is not perfect, by any means.”

Although Mr. Corsi apparently had no direct connection to the Trump campaign, he was in touch with Mr. Stone, a former campaign adviser who communicated with senior campaign officials through the election. Mr. Stone claimed during the campaign that he had a back channel to WikiLeaks, but now says he was merely bluffing to unsettle Mrs. Clinton’s team. Mr. Stone also communicated with Guccifer 2.0, the online persona used by one or more Russian intelligence operatives who hacked the Democratic systems. –NYT

On Monday President Trump raised the question of Mueller’s impartiality – tweeting:

“When Mueller does his final report, will he be covering all of his conflicts of interest in a preamble, will he be recommending action on all of the crimes of many kinds from those “on the other side”(whatever happened to Podesta?), and will he be putting in statements from hundreds of people closely involved with my campaign who never met, saw or spoke to a Russian during this period? So many campaign workers, people inside from the beginning, ask me why they have not been called (they want to be). There was NO Collusion & Mueller knows it!

Donald J. Trump

@realDonaldTrump

When Mueller does his final report, will he be covering all of his conflicts of interest in a preamble, will he be recommending action on all of the crimes of many kinds from those “on the other side”(whatever happened to Podesta?), and will he be putting in statements from…..

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SWAMP STORIES/MAJOR STORIES//THE KING REPORT
Friday
MI6 battling to stop Donald Trump releasing classified Russia probe documents
The UK is warning that the US president would undermine intelligence gathering if he releases pages of an FBI application to wiretap one of his former campaign advisers.  However Trump allies are fighting back, demanding transparency and asking why Britain would oppose the move unless it had something to hide [Apparently, the UK via MI6 was part of the conspiracy that spied on Team Trump.]
Daily Telegraph US Editor @benrileysmith: The row centres on Trump’s wish to release 22 pages of an FBI application to wiretap Carter Page, one of his former campaign advisers… The problem for Britain is many of the figures / meetings that triggered the probe were located in the UK…
@GeorgePapa19: I NEVER flipped against the president. What I did do, however, is expose the corruption of this “investigation” for the world to see… America: I implore you to reach out to your members of congress and demand declassification of FISA abuse. The British and Australians were actively seeking to undermine Trump and his associates in 2015-2016-2017. I lived this.
@JackPosobiec: At one point Mueller asked Trump for clarification on something he said at a campaign rally about Russia and Trump just responded by sending a YouTube link to the rally
@1776Stonewall: It’s hilarious that one of Mueller’s questions for Trump was about the obvious joke that Trump made about Russia finding Hillary’s missing emails. He was mocking them. This really does show that Mueller has absolutely nothing. This is below the bottom of the barrel
Supreme Court Chief Justice Roberts, a Bushie & Establishment guy, has created an enormous political problem that has profound implications.  Calls for his resignation or recusal on some cases are likely.  If he votes against a DJT-related issue, people will be suspicious of Roberts’ motive. 
Roberts on Wednesday, responding to DJT’s complaint about ‘an Obama judge’ ruling against his immigrant asylum policy, claimed the US doesn’t have “Obama judges or Trump judges, Bush judges or Clinton judges…”  This is an intelligence-insulting assertion, particularly after the venomous fight over Kavanaugh.  The absurd claim, however, suggests that Roberts harbors enmity toward DJT.  Roberts’ action invited reproaches – and he got them.
Roberts apparently forgot about this: Justice Ruth Bader Ginsburg calls Trump a ‘faker,’ he says she should resign   https://www.cnn.com/2016/07/12/politics/justice-ruth-bader-ginsburg-donald-trump-faker/index.html
Moreover, after Obama slammed the Supreme Court in a State of the Union Address, Roberts, in remarks to students at U of Alabama, called Obama’s rebuke “very troubling” and added. “To the extent the State of the Union has degenerated into a political pep rally, I’m not sure why we’re there.”
Gloves come off after Obama rips Supreme Court ruling
Lyle Denniston… who has covered the Supreme Court for five decades, told CNN he could not recall ever seeing a president rebuke the high court in such a high-profile forum… http://www.cnn.com/2010/POLITICS/01/28/alito.obama.sotu/index.html
Mild-mannered Senator @ChuckGrassley: Chief Justice Roberts rebuked Trump for a comment he made abt  judge’s decision on asylum   I don’t recall the Chief attacking Obama when that Prez rebuked Alito during a State of the Union
@horowitz39: Chief Justice Roberts shows that he’s part of the swamp. If you believe his bs about judges, I have a bridge to sell you. The Obama judge is a leftwing extremist, and the son of a lefwing extremist who was a well-known communist classmate of mine at Berkeley in the 1960s.
@realDonaldTrump: Sorry Chief Justice John Roberts, but you do indeed have “Obama judges,” and they have a much different point of view than the people who are charged with the safety of our country. It would be great if the 9th Circuit was indeed an “independent judiciary,” but if it is why are so many opposing view (on Border and Safety) cases filed there, and why are a vast number of those cases overturned. Please study the numbers, they are shocking. We need protection and security – these rulings are making our country unsafe! Very dangerous and unwise!
Obama warns ‘unelected’ Supreme Court not to strike down healthcare law [Roberts obeyed him.]
Justice Roberts’ attack against President Trump was blatantly political and wrong
The spectacle of the ostensibly nonpolitical chief justice engaged in a dispute with the president of the United States is insulting to the Supreme Court and to our system of justice…  What he did is unforgivable, especially after the corrosive Senate confirmation battle over now-Supreme Court Justice
Monday
Trump, Xi Signal Readiness for Trade Talks Ahead of G-20 Meeting
China “wants to make a deal and we’re very happy with that,” Trump said. “I’m very prepared, I’ve been preparing for it all my life.”… China hopes to meet the U.S. halfway in addressing trade issues, Vice Minister of Commerce Wang Shouwen said…
The WSJ’s @Kate_OKeeffe: The U.S. has launched an extraordinary campaign to get foreign allies to block Chinese telecom giants Huawei and ZTE on national security grounds. It will be a tough sell:
WSJ: Washington Asks Allies to Drop Huawei
U.S. worried about potential Chinese meddling in 5G networks, but foreign carriers may balk
FT: G20’s draft statement omits anti-protectionism pledge
WTI oil tumbled 7.5% on Friday; the January futures contract hit a low of 50.53.
Oil Slumps below $60 in London for First Time since October 2017
Saudi oil minister says output is higher than 10.7 million b/d       https://bloom.bg/2R95HuL
Worst Crypto Week Since Bubble Burst Takes Loss to $700 Billion
Bloomberg index tracking major coins has plunged 23% this week
The US stock market made its low on the opening of Friday’s abbreviated session.  Almost the entire post-opening rally was rescinded by the end of the first hour of trading.  The standard rally into the European close appeared; but it peaked fifteen minutes before the session ended.
The ensuing decline ended with the last-hour (noon ET to 13:00 ET) rally.  Then, the new trend of the last-hour rally reversing into a decline near the end of the session surfaced.  US stocks closed a tad above their opening lows.
Positive aspects of previous session
The DJTA rallied on oil’s plunge
\end
I HOPE TO SEE YOU ON TUESDAY IF ALL GOES WELL
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