DEC 3/GOLD ROSE BY $13.25 TO $1233.95/SILVER UP 9 CENTS TO $1445./DOW RISES BY 288 POINTS (NASDAQ BY 111 POINTS) ON A CHINA/USA TRUCE ON TARIFFS: WE ARE TO COME TO A FINAL DEAL IN 90DAYS//THE BOND MARKET DID NOT BUY THE GAIN AS THE 10 YR BOND YIELDS SLUMPED/ALSO THE 3 AND 5 YR INVERTED FOR THE FIRST TIME/FRANCE CONTINUES TO BURN AND THAT WILL HURT THEIR GDP./ITALY BACKTRACKS AND WILL COME UP WITH A 1.9-2.0% DEFICIT TO GDP FOR THEIR BUDGET/

 

 

 

 

GOLD: $1233.95 UP $13,25 (COMEX TO COMEX CLOSINGS)

Silver:   $14.45 UP 29 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1230.50

 

silver: $14.38

 

 

 

 

 

 

 

For comex gold and silver:

DEC

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  DEC CONTRACT: 1529 NOTICE(S) FOR 152,900 OZ (4.755 tonnes)

Total number of notices filed so far for DEC:  3612  for 361,200 OZ  (11.234 TONNES)

 

 

 

 

 

FOR DECEMBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

1050 NOTICE(S) FILED TODAY FOR  5,250,000  OZ/

Total number of notices filed so far this month: 2513 for 12,555,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $4144: DOWN 111

 

Bitcoin: FINAL EVENING TRADE: $4013  down $269 

 

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 TINY SIZED 134 CONTRACTS FROM 184,693 UP TO 184,565 DESPITE FRIDAY’S 17 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:

1994 EFP’S FOR DECEMBER AND 0 FOR MARCH AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1944 CONTRACTS. WITH THE TRANSFER OF 1944 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 1944 EFP CONTRACTS TRANSLATES INTO 9.97 MILLION OZ  ACCOMPANYING:

1.THE 17 CENT FALL IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST SIX MONTHS:

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING FOR NOVEMBER AND

NOW 18.560 INITIALLY STAND FOR DECEMBER.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF DEC: 1994 CONTRACTS (FOR 1 TRADING DAYS TOTAL 1994 CONTRACTS) OR 9.97 MILLION OZ: (AVERAGE PER DAY: 1994 CONTRACTS OR 9.97 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF DEC:  9.97 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 1.42% 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:           2,686.87    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

ACCUMULATION FOR NOVEMBER /2018:                                 247.18         MILLION OZ

RESULT: WE HAD A TINY SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 134 DESPITE THE 17 CENT LOSS IN SILVER PRICING AT THE COMEX //YESTERDAY 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 1994 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 GAINED A GOOD SIZED: 186TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1994 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 134 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 17 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.16 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST UNDER 1 BILLION oz i.e. .9220 BILLION OZ TO BE EXACT or 131% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT DEC MONTH/ THEY FILED AT THE COMEX: 1050 NOTICE(S) FOR 5,250000 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:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./AND NOW DEC. AT 18.560 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 GOOD  SIZED 1989 CONTRACTS DOWN TO 388,910 WITH THE LOSS IN THE COMEX GOLD PRICE/(A FALL IN PRICE OF $4.00//.YESTERDAY’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 9038 CONTRACTS:

 

DECEMBER HAD AN ISSUANCE OF 9038 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 388,910. 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 GOOD SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 7049 CONTRACTS:  1989 OI CONTRACTS DECREASED AT THE COMEX AND 9038 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 7049 CONTRACTS OR 704,900 OZ = 21.92 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $4.00

 

 

 

 

FRIDAY, WE HAD 16141 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF DEC : 9038 CONTRACTS OR 903800 OZ OR 28.11 TONNES (1 TRADING DAYS AND THUS AVERAGING: 9038 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 1 TRADING DAY IN  TONNES: 28.11 TONNES

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

THUS EFP TRANSFERS REPRESENTS 28.11/2550 x 100% TONNES =  1.10% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,792.50  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)

ACCUMULATION OF GOLD EFP FOR NOV 2018:                        552.88 TONNES (21 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 GOOD SIZED DECREASE IN OI AT THE COMEX OF 1989 WITH THE LOSS IN PRICING ($4.00) THAT GOLD UNDERTOOK FRIDAY) //.WE ALSO HAD A HUMONGOUS SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9038 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 9038 EFP CONTRACTS ISSUED, WE HAD A GOOD GAIN OF 6569 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

9038 CONTRACTS MOVE TO LONDON AND 1989 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 21.92 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE LOSS OF $4.00 IN FRIDAY’S TRADING AT THE COMEX

 

 

we had: 1529 notice(s) filed upon for 152,900 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $13.25 TODAY: / 

 

NO CHANGES IN GOLD INVENTORY AT THE GLD/

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   761.74 TONNES

Inventory rests tonight: 761.74 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 UP 29 CENTS TODAY

 

 

 

NO CHANGES IN SILVER INVENTORY AT THE SLV

 

 

 

/INVENTORY RESTS AT 321.686 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 TINY 134 CONTRACTS from 184693 UP TO 184,565  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:

 

1994 CONTRACTS FOR DECEMBER. 0 CONTRACTS FOR MARCH AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1944 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 134 CONTRACTS TO THE 1994 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN  OF 1860 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 9.30 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.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER. AND NOW 17.705 MILLION OZ  STANDING IN DECEMBER.

 

 

RESULT: A TINY DECREASE IN SILVER OI AT THE COMEX DESPITE THE 17 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING// FRIDAY.BUT WE ALSO HAD ANOTHER GOOD SIZED 1994 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 UP 66.61 POINTS OR 2.57% //Hang Sang CLOSED UP 675.29 POINTS OR 2.55% //The Nikkei closed UP 223.70 OR 1.00%/ Australia’s all ordinaires CLOSED UP 1.86%  /Chinese yuan (ONSHORE) closed UP  at 6.8897 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.90 dollars per barrel for WTI and 61.41 for Brent. Stocks in Europe OPENED GREEN //.  ONSHORE YUAN CLOSED UP AT 6.8897AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8853: 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

i)Markets are expected to roar, Monday but nothing substantive was agreed at the Xi/Trump meeting on Saturday.  Basically there is a truce for 90 for 90 days in which trump will not raise tariffs of 200 billion dollars worth of Chinese goods.  In return China will buy a huge portion of the autumn harvest of soybeans.  The main points from the USA going into the meeting were not addressed:

  1. subsidies for state own enterprises
  2. stealing of USA technology
  3. forced transfer of technology when USA enters into a joint venture with China.
  4. China agrees to crack down on the huge fentanyl exports to the west.

ii)Peter Tchir gives his take on the “deal” with China..basically it was a nothing burger.

( Tchir/Academy Securities)

 

iii)Goldman Sachs pours cold water on the trade war truce as it does not deal with the most importance issues.  They give the chance of a comprehensive deal in 3 months at 20%

( Goldman Sachs/zerohedge)
iv)The USA is aware of these internment camps and they do nothing??? A Muslim woman describes her detainment, degrading and electroshock torture inside one of these internment camps( zerohedge)

4/EUROPEAN AFFAIRS

i)GREAT BRITAIN/EU

Amazing:  most Brits realize that the divorce from the EU is a bad deal for the uK. Probably the best deal would be for a Norway plus sort of deal with the UK joining the EEC as well as some sort of pre arranged customs union.  Theresa May has ruled that out

( mish Shedlock/Mish talk)

ii)WOW@@ Theresa May is caught in a massive lie as she refuses to publish the complete legal analysis done on the agreement she signed.  She left two two major points which would have destroyed Great Britain

1,  it is quite likely that Britain could not sign trade deals with Europe or others

2. Great Britain could not set subsidies on agriculture something that Europe could do..plus others major points.

she has been caught in a massive lie

( Mish Shedlock/Mishtalk.

iii)FRANCE

Throughout the weekend, France burns as Macron is thinking about a state of emergency.  Huge “yellow vest protests.

( zerohedge)

iv)France’s meltdown as a country and Macron’s disdain for his countrymen

( Guy Milliere/Gatesonte Institute)

v)According to Bloomberg’s Msika, France’s riots are a far bigger problem than Brexit or Italy( zerohedge)

vi)ITALY

Supposedly, Italy back down and will gun for a deficit target of 2.0%
( zerohedge)
vii) EU

Seems that the EU has had enough of USA hegemony:  they are proposing widespread de dollarization initiatives

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

IRAN/USA

Iran has tested a medium ranged ballistic missile capable of carrying multiple warheads.  The range: anywhere in the middle east as well as parts of Europe.

Trump will not be happy with this

( zerohedge)

6. GLOBAL ISSUES

Alasdair Macleod discusses  the background noise on the G20 financial war and possible outcomes:

( Alasdair Macleod)

7. OIL ISSUES

Tom Luongo discusses the new Israeli pipeline which will travel underneath the Mediterranean, supply gas to Cyprus and then onto Italy. The problem is the deep cost. Germany and Russia are OK with this as the the Norstream nO 2 is much cheaper.  Germany is happy to receive the cheaper gas and let Italy have the more expensive East Med pipeline gas.

( Tom Luongo)

 

 

8 EMERGING MARKET ISSUES

 

 

 

9. PHYSICAL MARKETS

i)Trump:  “A much bigger problem than China is Jerome Powell, Chairman of the Fed”
(courtesy New York Sun)
ii)Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
( zerohedge/Chris Powell)

iii)Interesting:  The Venezuelan opposition leaders urge the Bank of England not to give its gold back to Maduro who will confiscate it( Associated Press/GATA)

iv)Lots of talk about gold but no hint on manipulation

( GATA)

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

 

 

MARKET TRADING

last night trading from China/futures New York:

(zerohedge)

then this morning

(zerohedge)

then this afternoon

(zerohedge)

 

 

ii)Market data/

Bad Omen worsens: yield curve inverts for the first time since 2007:

very ominous: the 3 yr yield overtakes the 5 yr yield.

also ominous:  the 2 yr yield is one basis pts above the 5 yr

(zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Is the Dallas housing market trying to tell us something? The Wall Street Journal has now called the housing boom is coming to an end…and it starts in Dallas…

( zerohedge)

ii)New home sales collapse and remember that home sales are a big part of the GDP

(courtesy Layman/IRD)

iii)Looks like Ford is doing exactly what GM is doing and the are said to announce  25,000 job cuts of which many will occur in the money losing venture over in Europe.(courtesy zerohedge

iv)SWAMP STORIES

I guess a pardon is out of the question:  Trump demands that Cohen serve a full prison sentence for “lying and making up stories”

( zerohedge)

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

The total gold comex open interest FELL BY A GOOD SIZED 1989 CONTRACTS DOWN to an OI level 388,565 WITH THE LOSS IN THE PRICE OF GOLD ($4.00 IN YESTERDAY’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  ACTIVE DELIVERY MONTH OF DEC..  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 9038 EFP CONTRACTS WERE ISSUED:

FOR DECEMBER:  9038 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  9038 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 GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES:  7049TOTAL CONTRACTSIN THAT 9038 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A GOOD SIZED 1989 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 7049 contracts OR 704,900 OZ OR 21.92 TONNES.

 

We are now in the active contract month of December and we now have a total of 5798 contracts stand in December so we had a loss of 3066 contracts.  We had 2083 notices served on Friday, so we lost 983 contracts or 98,300 oz will not stand as these guys morphed into London based forwards and as well they received a fiat bonus for their efforts.

The next delivery month after December is January which saw it FALL TO 4742 FOR A LOSS OF 23 CONTRACTS.  February GAINED  358 contracts to stand at 289,349 contracts.

FOR COMPARISON TO THE 2017 CONTRACT MONTH:

 

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 1529 NOTICES FILED AT THE COMEX FOR 152,900 OZ. (4.755 tonnes)

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI FELL BY 134 CONTRACTS FROM 184,693 DOWN TO 184,565 (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 GIGANTIC  OI COMEX LOSS  OCCURRED WITH A 17 CENT LOSS IN PRICING???.

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF DECEMBER AND, WE WERE  INFORMED THAT WE HAD A STRONG SIZED 1677 EFP CONTRACTS:

 

FOR DECEMBER: 1677 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: 1994.  ON A NET BASIS WE GAINED 2001 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  134 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1994 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   1860CONTRACTS...AND ALL OF THIS DEMAND OCCURRED WITH A 17 CENT LOSS IN PRICING// FRIDAY

 

 

 

 

We are now in the non active delivery month of DECEMBER and here in this front month of December we now have 2239 contracts standing for a loss of 1268 oz.  We had 1463 contracts stand for delivery on Friday so we gained 195 contracts or an additional 9755,000 oz will stand for delivery as these guys refused to morph into London based forwards as well as negating to accept a fiat bonus. We continue where we left off last month as queue jumping in silver is the norm for at least 20 months.

After  December we have the non active  January contract month and here we saw a LOSS of 5 contracts up to 1983 contracts.  February saw its initial 13 contract gain to stand at 13. March, the next big delivery month after December saw a gain of 399 contracts  up to 150,759

FOR COMPARISON TO THE COMEX 2017 CONTRACT MONTH:

 

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 1050 notice(s) filed for 5,250,000 OZ for the DEC, 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 230,390 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  180,860  contracts..

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  DEC/GOLD

DEC 3-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
600.628
oz  HSBC
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

 

 

NIL

 

 

oz

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
1529 notice(s)
 152,900 OZ
No of oz to be served (notices)
4269 contracts
(426,900 oz)
Total monthly oz gold served (contracts) so far this month
3612 notices
361200 OZ
11.234 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 HSBC:  600.628 oz
total customer withdrawals:  600.628 oz
we had 0 customer deposits
total customer deposits NIL oz
we had 1  adjustments..
i) Out of HSBC:  31,295.685 oz was removed out of the customer account and adjusted back to the dealer account
this is 0.97 tonnes.  We still have not witnessed any settlement notices which is generally when adjustments from the dealer back into the customer account occurs

FOR THE DEC 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 1529 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 297 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 DEC/2018. contract month, we take the total number of notices filed so far for the month (3612) x 100 oz , to which we add the difference between the open interest for the front month of DEC. (5798 contract) minus the number of notices served upon today (1529 x 100 oz per contract) equals 788,100 OZ OR 24.513 TONNES) the number of ounces standing in this  active month of DECEMBER

 

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

No of notices served (3612 x 100 oz)  + {5798)OI for the front month minus the number of notices served upon today (1529 x 100 oz )which equals 788,100 ozstanding OR 24.513 TONNES in this  active delivery month of DECEMBER.

 

 

 

 

THERE ARE ONLY 11.183 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 24.510 TONNES STANDING FOR DECEMBER

THE CROOKS NOW HAVE TO RESORT TO CASH SETTLING GOLD CONTRACTS THROUGH THE EFP ROUTE AS THERE IS NO APPRECIABLE GOLD AT THE COMEX.

WE LOST 984 CONTRACTS OR 98,400 OZ THROUGH THIS ILLEGAL CASH SETTLEMENT VEHICLE.

 

 

 

total registered or dealer gold:  359,553.817 oz or   11.183 tonnes
total registered and eligible (customer) gold;   8,020.709.744 oz 249.512 tonnes

IN THE LAST 27 MONTHS 107 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

DEC INITIAL standings/SILVER

DEC 3, 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
753,072.610 oz
Brinks
CNT
Delaware
Int . Delaware

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
599,942.330
oz
Scotia
No of oz served today (contracts)
1050
CONTRACT(S)
5,250,000 OZ)
No of oz to be served (notices)
1189 contracts
5,945,000 oz)
Total monthly oz silver served (contracts) 2513 contracts

(12,555,000 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 1 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 Scotia:  599,942.330 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 599,942.330  oz

we had 4 withdrawal out of the customer account:
i) Out of CNT: 65,760.394  oz
ii) Out of Brinks:  633,632.203 oz
iiii) Out of Delaware: 4229.398 oz
iv) Out of Int. Delaware:  48,450.628 oz

 

 

 

 

 

total withdrawals: 753,072.610 oz

 

we had 0 adjustments

i

 

total dealer silver:  86.585 million

total dealer + customer silver:  295.014  million oz

The total number of notices filed today for the DEC 2018. contract month is represented by 1050 contract(s) FOR 5,250,000 oz. To calculate the number of silver ounces that will stand for delivery in DEC., we take the total number of notices filed for the month so far at 2513 x 5,000 oz = 12,555,000 oz to which we add the difference between the open interest for the front month of DEC. (2251) and the number of notices served upon today (1050 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DEC/2018 contract month: 2513(notices served so far)x 5000 oz + OI for front month of DEC( 2239) -number of notices served upon today (1050)x 5000 oz equals 18,500,000 oz of silver standing for the DEC contract month.  This is a strong number of oz standing for an off delivery month.

We gained 195 contracts or 975,000 additional oz will stand and these guys refused to accept a London based forward as well as negating to accept a fiat bonus. The EFP route is nothing but a cash settlement process and it is done in London to avoid detection.

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 94,516 CONTRACTS  … 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 85,992 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 85,992 CONTRACTS EQUATES to 429 million OZ  61/4% 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 FALLS TO -3.85-% (DEC 3/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.69% to NAV (DEX 3/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.85%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.36/TRADING 11.83/DISCOUNT 4.28

END

And now the Gold inventory at the GLD/

DEC 3/WITH GOLD UP $13.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 30/WITH GOLD DOWN $4.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 29/WITH GOLD UP $1.30: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 28/WITH GOLD UP $9.45 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 27/WITH GOLD DOWN $8.60 A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 761.74 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

DEC 3.2018/ Inventory rests tonight at 761.74 tonnes

*IN LAST 507 TRADING DAYS: 173.41 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 407 TRADING DAYS: A NET 13.41 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

DEC 3/WITH SILVER UP 29 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.686 MILLION OZ/

NOV 30/WITH SILVER DOWN 17 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.22 MILLION OZ FROM THE SLV /INVENTORY RESTS AT 321.686 MILLION OZ/

NOV 29/WITH SILVER DOWN 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 322.906 MILLION OZ.

NOV 28/WITH SILVER UP 23 CENTS TODAY: A DEPOSIT OF 188,000 OZ/INVENTORY RESTS AT 322.906 MILLION OZ/

NOV 27/WITH SILVER DOWN 14 CENTS TODAY: A HUGE WITHDRAWAL OF 2.301 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.718 MILLION OZ/

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/

 

 

DEC 3/2018:

 

Inventory 321.686 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

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

YOUR DATA…..

6 Month MM GOFO 2.40/ and libor 6 month duration 2.89

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

G0LD LENDING RATE: + .49

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.69%

LIBOR FOR 12 MONTH DURATION: 3.12

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.43

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Deutsche Bank May Cause The Next Global Crisis

By Greg Hunter’s USAWatchdog.com

The International Monetary Fund (IMF) previously deemed Deutsche Bank as the most systemically dangerous bank in the world.

Professor of Economics and Law, William Black, knows why and contends:

“Deutsche Bank (DB) poses as what is called a ‘National Champion’ bank and the largest bank by far in Germany,but it’s actually the largest criminal enterprise in GermanyThis is quite a statement because VW is such a massive fraud…

It is insane that we allow Deutsche Bank to go from fraud to fraud to fraud…

They cheat on everything else you can possibly imagine and, typically, they are getting caught, which is also not a very good sign in terms of their competence even as thieves. Even in the United States, there has been reluctance to crack down on Deutsche Bank…

When the New York Commissioner tried to crack down, the Office of the Comptroller of the Currency, the premier banking regulator, actually sought to impede that. He disparaged the New York folks and said there really wasn’t that big of problems and such, and all of that proved to be lies.”

Deutsche Bank was raided by German regulators last week on more allegations of fraud and money laundering.

DB is the epitome of “Too Big To Fail.”

So, it will never be allowed to fail, and regulators will not be allowed to regulate them properly. Professor Black says, “Why you should care is Deutsche Bank impedes effective regulation everywhere and because God only knows the next thing they are going to do…”

“This is going to continue until something dramatic changes. Eventually, they can cause the next crisis…

There will be a bailout in these circumstances, but that could help trigger another economic crisis. When the largest bank in the third largest economy in the world is completely dysfunctional, then the German economy is more likely to go into recession as well. That is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon. Relatively could be two years.”

Professor Black, who was a top regulator in the S&L crisis, says,

“The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.”

In closing, Professor Black says,

I am going to give you the advice you get after the recession before the recession. Pay off your debt, all that you can. Do not keep borrowing except in certain circumstances like you are going to buy a home, and it is prudent purchase. Buy a car when you can buy it with cash whenever possible…and always try to be a net saver.”

Join Greg Hunter of USAWatchdog.comas he goes One-on-One with Dr. William Black, Professor of Economics and Law at University of Missouri Kansas City.

via ZeroHedge

 

 

News and Commentary

 

Gold posts a second straight monthly gain (MarketWatch.com)

Asia-Pacific stocks jump on U.S.-China trade truce (MarketWatch.com)

G20 sealed landmark deal on WTO reform by ducking ‘taboo words’ (Reuters.com)

Fed Chair Jerome Powell survives a critical week, faces bigger tests (CNBC.com)

Trump hails trade deal with China as one of the largest ever made (CNBC.com)

NYSE and Nasdaq to close Wednesday for Bush mourning day (FNLondon.com)


Source: Bloomberg

Setup for gold is getting better and better, particularly due to the uncertain economic outlook – GoldCore (CNBC.com)

Risks “to impact risk assets and should see the return of safe haven gold demand” said GoldCore (MarketWatch.com)

Here’s the silver lining in traders’ outlook for gold (MarketWatch.com)

The Mythical Problem of Finding ‘The Right Gold Price’ (Forbes.com)

This Scholar Says the Government Should Buy Stocks When They Plunge (Bloomberg.com)

France In Chaos; Macron Mulling State Of Emergency Amid “Yellow Vest” Protests; “All Options” Considered (ZeroHedge.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

30 Nov: USD 1,220.45, GBP 956.95 & EUR 1,073.75 per ounce
29 Nov: USD 1,226.25, GBP 960.03 & EUR 1,077.87 per ounce
28 Nov: USD 1,213.20, GBP 949.69 & EUR 1,074.77 per ounce
27 Nov: USD 1,225.05, GBP 959.70 & EUR 1,082.21 per ounce
26 Nov: USD 1,226.65, GBP 954.58 & EUR 1,079.33 per ounce
23 Nov: USD 1,222.15, GBP 951.69 & EUR 1,075.13 per ounce

Silver Prices (LBMA)

30 Nov: USD 14.24, GBP 11.16 & EUR 12.52 per ounce
29 Nov: USD 14.26, GBP 11.17 & EUR 12.55 per ounce
28 Nov: USD 14.15, GBP 11.06 & EUR 12.54 per ounce
27 Nov: USD 14.28, GBP 11.20 & EUR 12.61 per ounce
26 Nov: USD 14.38, GBP 11.18 & EUR 12.65 per ounce
23 Nov: USD 14.26, GBP 11.12 & EUR 12.56 per ounce


Recent Market Updates

– Deutsche Bank May Cause The Next Global Crisis
– Ireland’s Mr Gold Reveals Nuggets Of Wisdom For When The Next Crash Comes
– BREXIT May Lead to UK Property Crash and Depression
– General Motors And General Electric Highlight The Ponzi Scheme That Is The US Economy
– A Worldwide Debt Default Is A Real Possibility
– Risk of Lower Lows in Gold Remains Prior to Spectacular Rally to Follow
– 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

Mark O’Byrne
Executive Director
 
ii) GATA stories
Trump:  “A much bigger problem than China is Jerome Powell, Chairman of the Fed”
(courtesy New York Sun)

New York Sun: ‘A much bigger problem than China’

 Section: 

From the New York Sun
Friday, November 30, 018

Before enplaning for the G20 meeting at Argentina, President Trump gave an eye-opening interview to the Wall Street Journal. The focus was trade, tariffs, and Communist China. Toward the end the Journal’s reporter, Bob Davis, asked Mr. Trump about the Federal Reserve chairman, Jay Powell. Responded Mr. Trump: “I think the Fed right now is a much bigger problem than China.”

What a remarkable thing for the — or any — president to say enroute to a sit-down dinner with the Chinese party boss (Messrs. Trump and Xi seem set to sup Saturday), and we, for one, were delighted to hear the president make the point. It’s not that the Sun is dug in one way or another on interest rates, even if Mr. Trump is irked at the Fed chairman for raising them. It’s that it opens up the monetary debate.

… For the remainder of the commentary:

https://www.nysun.com/editorials/a-much-bigger-problem-than-china/90479/

END

Interesting:  The Venezuelan opposition leaders urge the Bank of England not to give its gold back to Maduro who will confiscate it

(courtesy Associated Press/GATA)

Venezuelan opposition leaders urge Bank of England not to give gold to Maduro

 Section: 

From the Associated Press
via Tacoma News-Tribune, Tacoma, Washington
Friday, November 30, 2018

CARACAS, Venezuela — A pair of Venezuelan opposition leaders today urged the Bank of England not to hand over $550 million worth of gold sought by President Nicolas Maduro, saying officials in the South American country would either steal the gold or use it to finance its dictatorial government.

In a letter to the bank, former National Assembly president Julio Borges and opposition party leader Carlos Vecchio said Maduro’s socialist administration would pocket the last 14 tons of the Venezuelan gold in the bank’s vaults or use it to illegally imprison and kill its opponents.

It reminded the bank that the United States, United Kingdom, and many European countries consider Maduro’s government illegitimate following his re-election this year in what was widely considered a fraudulent vote. …

… For the remainder of the report:

https://www.thenewstribune.com/news/business/article222445475.html

END

Bullion star gold market charts look bullish

(Bullionstar/GATA)

Bullion Star’s gold market charts for November look bullish

 Section: 

9:45p ET Friday, November 30, 2018

Dear Friend of GATA and Gold:

Bullion Star’s gold market charts for November seem bullish, with strong accumulation in China, Russia, and Switzerland, even as the London gold “market” seems to be mostly unallocated paper. The charts and accompanying commentary are posted at Bullion Star here:

https://www.bullionstar.com/blogs/gold-market-charts/gold-market-charts-…

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

END

Bloomberg rationalizes that governments must control the world’s financial markets..good grief..

(courtesy Bloomberg)

Bloomberg rationalizes government’s commandeering

the financial markets

 Section: 

This Scholar Says the Government Should Buy Stocks When They Plunge

By Peter Coy
Bloomberg / Business Week, New York
Friday, November 30, 2018

Last week my Bloomberg colleague Moxy Ying in Hong Kong wrote a fascinating QuickTake headlined, “When Stocks Crash, China Turns to its ‘National Team.'”She explained that government-related entities in China, known informally as the national team, step in to buy shares of mainland-based companies on a large scale to stop market routs. “Worry not, Chinese stockholders, the ‘national team’ is here to (try to) save the day,” she wrote.

… 

 

Economist Roger E.A. Farmer thinks other nations need to emulate China, and even go beyond it. He has been banging this drum for years, as I have written in previous stories. Now he thinks it’s bound to happen. After I emailed him Moxy Ying’s story, he wrote back, “Asset price stabilization policies are coming to a central bank near you. It’s just a question of when.”

Added Farmer: “My best guess is that it will take another stock market crash” to induce governments to actively stabilize their stock markets. “That crash will happen, most likely within the next five years,” he added, “but its timing is unpredictable.” …

… For the remainder of the commentary:

https://www.bloomberg.com/news/articles/2018-11-28/this-scholar-says-the…

END

Lots of talk about gold but no hint on manipulation

(courtesy GATA)

Lots of talk about gold but only a hint about manipulation

 Section: 

6:04p ET Saturday, December 1, 2018

Dear Friend of GATA and Gold:

A tiny bit of progress in the struggle to expose gold market manipulation by central banks can be found today at Forbes, where asset manager and economist Nathan Lewis contemplates mechanisms for restoring a gold standard.

In an essay headlined “The Mythical Problem of Finding ‘The Right Gold Price'” —

https://www.forbes.com/sites/nathanlewis/2018/12/01/the-mythical-problem…

— Lewis writes that in recent years “central banks have engaged in other kinds of macroeconomic manipulation (negative interest rates!) to a degree never before seen. Probably they have done some heavy-handed bullying of the gold market itself.”

… 

 

\But there’s nothing to be cheery about over at Barron’s, which, in a report headlined “Is It Time to Hold Gold?” —

https://www.barrons.com/articles/the-case-for-gold-pro-and-con-154361074…

— asks James Grant of Grant’s Interest Rate Observer to outline the reasons for gold as an investment and fund manager Daniel Wiener to outline the reasons against it.

Grant notes that as money without counterparty risk, gold may compare favorably with government currencies that pay little interest. But Grant offers no argument against Wiener’s observation that the gold price in recent years has not been keeping up with inflation.

Of course a response to that criticism is always available from GATA’s research —

http://www.gata.org/node/14839

http://www.gata.org/taxonomy/term/21

— which details the constant and usually surreptitious intervention by central banks against gold, particularly through the creation of a vast imaginary supply of the monetary metal in the futures markets.

But this weekend it seems that no one will get closer to that point than Lewis’ timid hint at Forbes.

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

END

 




iii) Other Physical stories
Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
(courtesy zerohedge/Chris Powell)

US seeks halt in civil lawsuit accusing JP Morgan of manipulating metals market, citing criminal case

  • The U.S. wants a federal judge to halt a civil lawsuit accusing J. P. Morgan of manipulating precious metals markets. The Justice Department cited an ongoing criminal case as its reason for the request.
  • A former J. P. Morgan trader pleaded guilty in Connecticut last month to manipulation charges.
  • In the guilty plea, the trader said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors.

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

Amr Alfiky | Reuters
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

The Justice Department is asking a judge to put the brakes on a civil lawsuit against J. P. Morgan Chase, citing an ongoing probe into a “related criminal case” that involves alleged manipulation of precious metals markets.

The department wants a six-month postponement in the proceedings of the civil lawsuit, which was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders. The government also says it could ask for a longer delay in the case, according to a court filing on Monday.

The move comes days after Shak’s lawyer, David Kovel, sought permission to reopen questioning of two former J. P. Morgan traders and the bank’s current global head of base and precious metals trading.

Kovel, in making the request with the Manhattan federal judge in the civil case, cited last month’s guilty plea by one of those former traders, John Edmonds, in federal court in Connecticut.

Edmonds admitted making bogus bids on precious metals contracts while working at the bank from 2009 to 2015.

Neither J. P. Morgan Chase nor Kovel’s clients have opposed the Justice Department’s request.

In arguing for a delay, the Justice Department said Shak’s lawsuit is “related” to Edmonds’ criminal case and that Edmonds has “pleaded guilty and acknowledged his own participation in such conduct, as well as that of other traders.”

“Edmonds awaits sentencing, but the broader investigation is ongoing,” the Justice Department said. The U.S. wants to delay the civil case “to protect the integrity of its ongoing criminal investigation,” it said.

J. P. Morgan did not respond to a request for comment by CNBC. Kovel declined to comment.

Tuesday night, after this story first was published, Judge Paul Engelmayer ordered the federal prosecutors to explain in detail by Monday why postponing proceedings in the civil lawsuit would not harm those involved, and why reopening questioning “would be detrimental to the Government’s ongoing criminal investigation.”

Englemayer also wrote that he regards Edmonds’ guilty plea “as potentially highly consequential” to the civil case.

In his guilty plea, the 36-year-old Edmonds said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors. He admitted to working with “unnamed co-conspirators” at J. P. Morgan, according to the Justice Department.

Kovel wants to question Edmonds again as well as Michael Nowak, the bank’s global head of base and precious metal trading, and former J. P. Morgan Chase Managing Director Robert Gottlieb. The three had previously answered questions under oath in the civil case.

Kovel said in court filings that Nowak was the immediate supervisor of Edmonds, while Gottlieb was Edmonds’ mentor.

In his prior deposition, Edmonds said that Gottlieb sat only a “couple feet” away from him for about five years, and that he was “somebody [he] looked up to in the business,” who helped guide and train him.

Nowak is described by Edmonds as his direct supervisor, with whom he would sometimes discuss trading strategies. Nowak was also the person responsible for overseeing the performance and risk of Edmonds’ portfolio, according to the deposition.

Edmonds also stated in his prior deposition that he would enter precious metals trades for both Nowak and Gottlieb, among others.

The civil lawsuit claims Shak and his fellow plaintiffs lost tens of millions of dollars as a result of actions by J. P. Morgan’s traders.

__

 

end

________________________________________

 

 

 

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 6.8897/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.8853   /shanghai bourse CLOSED UP 66.61 POINTS OR 2.57%

. HANG SANG CLOSED UP 675.29 POINTS OR 2.55%

 

 

2. Nikkei closed UP 223.70 POINTS OR 1.000%

 

3. Europe stocks OPENED ALL GREEN

 

 

 

 

 

/USA dollar index RISES TO 967.06/Euro RISES TO 1.1329

3b Japan 10 year bond yield: RISES TO. +.09/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.52/ 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:: 52.90 and Brent: 61.94

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 UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.32%/Italian 10 yr bond yield DOWN to 3.15% /SPAIN 10 YR BOND YIELD UP TO 1.50%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.83: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.21

3k Gold at $1230.10 silver at:14.45   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 60/100 in roubles/dollar) 66.86

3m oil into the 52 dollar handle for WTI and 61 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 113.58DESTROYING 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 0.9990 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1324 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 +0.32%

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 3.03% early this morning. Thirty year rate at 3.33%

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

6.  TURKISH LIRA:  UP  TO 5.2430

 

World Stocks, US Futures, Crude Soar As Trump, Xi Deliver Early Christmas Rally

The Grinch may have stolen Thanksgiving profits, but Christmas came early for markets with world stocks rising over one percent and pushing emerging currencies higher against the dollar, as S&P futures jumped as much as 2%…

… and the Shanghai Composite soared 2.9% after the U.S. and China agreed to halt new tariffs for 90 days. Commodities spiked and the dollar rebounded from session lows. The MSCI’s all-country world index rose 0.9% in its sixth straight day of gains and hit its highest level since Nov. 9 while emerging equities rose 2.1% and were set for their strongest day in a month.

The gains came after China and the United States agreed during a Saturday dinner at the G-20 in Argentina to halt additional tariffs on each other. The deal prevents their trade war escalating as the two sides try to bridge differences with fresh talks aimed at reaching a deal within 90 days. If no deal is reached, Trump warned that the US will resume escalation, and hike tariffs to 25% from 10%.

“We have a deal. That’s wonderful news for global financial markets and signaling the start for a year-end rally in risky assets,” said Bernd Berg global macro strategist at Woodman Asset Management. “We are going to see a rally in emerging market and U.S equities, EM currencies and China-related assets like Australia. I expect the rally to last until year-end.”

Oil soared 4% higher after dipping below $50 briefly last Friday, jolted by efforts across the globe to support prices as Saudi Arabia and Russia extended their pact to keep production low (although without providing details ahead of this week’s OPEC+ meeting, while Canada’s largest producing province ordered unprecedented supply cuts. Optimism was dented slightly after Qatar said it was quitting OPEC, just as the group prepares to meet this week.

The risk-on mood initially drove the U.S. dollar as much as 0.4% lower against a basket of currencies before trimming some losses. The greenback was already under some pressure from the recent shift in the Fed’s policy communication to a slightly more dovish stance. Comments by Federal Reserve Chair Jerome Powell were interpreted by markets as hinting at a slower pace of rate hikes.

Emerging currencies were among the main beneficiaries of dollar weakness, with an MSCI index up 0.6 percent. It was led by China’s yuan which rose one percent for its biggest daily gain since Feb. 2016.

The euro pared a gain after data showing manufacturing activity slowed, with factory growth stumbling again in November, as business confidence remains the weakest in 6 years.

“Such positive sentiment won’t fade very soon … (the 90-day) period is not short, it’s long enough to soothe market sentiment,”  trader at a foreign bank in Shanghai told Reuters.

Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee but his hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Saturday.

While some have speculated that the trade war truce would bring back more hikes on the table, others disagreed: Florian Hense, economist at Berenberg, said the market rally would not bring a return to a more hawkish Fed stance. “We would need to see some rebound in economic activity to lift expectations of more rate hikes,” he said.

Maybe not: in a Bloomberg TV interview, Fed Vice Chairman Richard Clarida said the US economy is in “good shape” and the outlook is “very solid” as the central bank is focused on meeting its dual mandate. He added that the concept of a “Powell Put” isn’t a useful concept, noting that the Fed could operate somewhat above 2% inflation goal.

More importantly, Clarida said that the dot plot of Fed interest-rate forecasts “is not going anywhere”, though it may evolve.

* * *

Back to markets, where Asian shares kicked off the gains, with Chinese mainland markets rising more than 2.5% while Japan’s Nikkei gained as much as 1.3% to a six-week high.

European equities followed Asia’s response higher with miners and automakers leading gains in the Stoxx Europe 600 Index after President Donald Trump said in a late-night tweet that China agreed to “reduce and remove” tariffs on imported American-made cars. The tweet sent the Dax 2.5% higher as auto stocks were set for best day in 2-1/2 yrs on Sino-US trade truce. Just before midnight on Sunday, Trump tweeted that China had agreed to remove car import tariffs, even though in a briefing in Beijing a few hours later China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.

Donald J. Trump

@realDonaldTrump

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.

Trump gave no other details in his late-night tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina.  Shares of German carmakers Daimler AG and BMW AG rallied Monday morning after the U.S. trade deal with China. Trump’s comments, if ratified, would also hand automakers like Tesla a potential reprieve after higher levies hit sales in the world’s biggest car market.

In EMs, South Africa’s stock market was on course for its best day in four years, while Russian stocks climbed with the ruble as oil-production curbs spurred the biggest jump in Brent crude in two years. The peso advanced after a report that the new government was ready to re-purchase bonds issued to build Mexico’s City new airport.

Meanwhile, in rates, ten-year Treasury yields rose back above 3 percent; the Australian curve bear steepens with 10-year yield three basis points firmer. Mexican peso rallies 1.3%, rand 1.1% stronger; won rose to its strongest since October.  Germany’s 10-year government bond, the benchmark for the euro area, was set for its biggest one-day yield jump in a month, rising four basis points to a high of 0.347%. Yields on riskier southern European bonds fell across the board, with Italian yields sliding as much as 10 bps to new two-month lows.

Italian

As noted above, WTI (+4.1%) and Brent (+3.9%) were both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January.

Gold (+0.7%) was firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high. Elsewhere in commodities, Chicago soybeans rally as much as 3.2%. Base metals gain with LME copper up 2%; Dalian iron ore 3.4% stronger.

In other news, Italian PM Conte stated they are examining several options for a budget deal with the EU in which a solution could be made within days. Later it was reported, that Italian PM Conte is reportedly preparing for a deficit of 1.9%-2.0%, while Italian Deputy PMs Salvini and Di Maio are said to be ready to accept new target, according to Messaggero.  Italy’s Deputy PM Salvini says that the EU cannot ask for a 1.9% target.

In the latest Brexit developments, UK PM May was reportedly under renewed pressure as the DUP threatened to abandon support for her in a confidence vote if she failed to get her Brexit deal approved in Parliament. May’s chief Brexit adviser Oliver Robbins secretly warned her the PM that customs backstop is a “bad outcome” for the UK which will see regulatory checks in the Irish Sea and put security co-operation at risk, according to the Telegraph. UK Secretary of State for Environment, Food and Rural Affairs Gove, has told Conservative rebels that there was a “real risk” of a second Brexit referendum if they don’t back PM May’s deal with Brussels.

In geopolitical news, South Korean President Moon and US President Trump agreed to revive momentum regarding negotiations for North Korea denuclearization. In related news, South Korean President Moon said a visit by North Korean Leader Kim to Seoul is still open and possible this year, while US President Trump is said to be targeting a summit with North Korean leader early 2019.

Expected data include manufacturing PMI and construction spending. Finisar, Coupa Software, RH and Smartsheet are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures up 1.7% to 2,805.50
  • STOXX Europe 600 up 1.8% to 363.80
  • MXAP up 1.9% to 156.55
  • MXAPJ up 2.3% to 502.97
  • Nikkei up 1% to 22,574.76
  • Topix up 1.3% to 1,689.05
  • Hang Seng Index up 2.6% to 27,182.04
  • Shanghai Composite up 2.6% to 2,654.80
  • Sensex up 0.05% to 36,210.60
  • Australia S&P/ASX 200 up 1.8% to 5,771.16
  • Kospi up 1.7% to 2,131.93
  • Brent futures up 5.3% to $61.79/bbl
  • Gold spot up 0.8% to $1,230.66
  • U.S. Dollar Index down 0.5% to 96.84
  • German 10Y yield rose 1.1 bps to 0.324%
  • Euro up 0.4% to $1.1362
  • Italian 10Y yield rose 0.9 bps to 2.846%
  • Spanish 10Y yield fell 1.1 bps to 1.491%

Top Overnight News

  • U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs on American cars from 40 percent currently. He gave no other details in the late-night tweet, which came shortly after he agreed with President Xi Jinping to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. In a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes
  • Oil rebounded from the biggest monthly loss in a decade after Russia and Saudi Arabia agreed to extend their deal to manage the crude market into 2019 and Canada’s largest producing province ordered an unprecedented output cut
  • Leaders of the world’s largest economies agreed the global system of rules that’s underpinned trade for decades is flawed, in a post-summit statement Saturday that the White House quickly claimed as a win for Donald Trump’s protectionist agenda
  • U.K. Prime Minister Theresa May faces yet another grueling battle this week as members of Parliament sink their teeth into her Brexit deal ahead of a crucial vote. On Monday, politicians on all sides will ratchet up the pressure on May to justify the terms she’s agreed to with the European Union by demanding she publish the government’s internal legal advice underpinning the accord
  • France’s “Yellow Vest” anti-government demonstrations intensified Saturday. More than 400 people were arrested and at least 133 injured after rioters in Paris burned cars, looted stores and restaurants, and sprayed graffiti on the Arc de Triomphe. Emmanuel Macron convened an emergency cabinet meeting amid demands to alter his environmental and budget policies
  • As the Brexit deadline approaches, about 50 banks and other financial institutions are having or have had talks with the Dutch central bank about setting up shop in the Netherlands
  • The compromise to safeguard the euro is set to underwhelm supporters of the sweeping vision of an integrated and assertive Europe set out by French President Emmanuel Macron last year as the banking union, bailout plans and euro budget are all bogged down

Asian equity markets were higher across the board with global risk appetite boosted following the US-China trade truce at the G20. News of the tariff ceasefire spurred a rally in US equity futures in which the Emini S&P and DJIA futures reclaimed the 2800 and 26000 levels respectively, with the blue-chip index up nearly 500 points. ASX 200 (+1.8%) and Nikkei 225 (+1.1%) advanced with Australia led by commodity-related sectors as energy benefitted from the positive trade developments and Russia-Saudi agreement to extend the OPEC+ accord, while the JPY-risk dynamic was very much in play for Tokyo trade. Elsewhere, Hang Seng (+2.4%) and Shanghai Comp. (+2.6%) outperformed on the easing of trade tensions, with sentiment also supported by better than expected Chinese Caixin Manufacturing PMI and after the CFFEX relaxed domestic stock index futures trading conditions. Finally, 10yr JGBs initially saw a bout of weakness at the open amid the heightened risk appetite, although prices later recovered amid the BoJ’s presence in the market for JPY 800bln of JGBs with maturities of up to 5yrs.

Top Asian News

  • Trump’s Auto Tariff Tweet Boosts Stocks, Leaves Beijing Silent
  • Goldman Sachs-Funded Group Bids A$2.4 Billion for GrainCorp
  • Macau Casinos Rise as J.P. Morgan Calls November Beat Impressive
  • Saudi Prince Finds Both Friends and Disapproval at G-20 Summit
  • India Is Said to Seek Seizure of IL&FS Officials’ Properties

European equities (Eurostoxx 50 +1.8%) trade with firm gains as markets react to the fallout of the G20 summit which saw US President Trump and Chinese President Xi Jinping agree to delay hiking tariffs on USD 200bln of Chinese goods to 25% for 90 days  to allow for trade discussions between the two nations. In terms of sector specifics, mining names have been the main beneficiary  from the trade optimism thus far with price action in metals markets giving a lift to Antofagasta (+8.0%), Arcelormittal (+6.6%),  Anglo American (+6.3%), Glenore (+6.5%) and many more. Elsewhere, luxury names are also seeing some reprieve from the US-China developments with the sector previously hampered by tensions between the two nations; as such, Swatch (+6.1%), Kering (+5.5%), LVMH (+4.3%) and Burberry (+3.3%) all trade with firm gains. Auto names are also seen higher amid the spillover from US President Trump tweeting that China has agreed to reduce and remove tariffs on cars coming into China from the US which are currently at 40%; BMW (+6.1%), Daimler (+6.2%), Volkswagen (+3.9%). Finally, tech names have also been supported by the weekend’s developments with tech a key focus for negotiations, subsequently, STMicroelectronics (+7.3%), Infineon (+5.8%) and Wirecard (+4.4%) are also near the top of the Stoxx 600 leaderboard.

Top European News

  • U.K. Manufacturing Growth Recovers From 27-Month Low in November
  • Spanish Establishment Suffers Another Fracture in Andalusia
  • Sewing’s Options Dwindle as Fresh Scandals Hit Deutsche Bank
  • Albert Frere, Belgian Billionaire Investor, Dies at 92
  • $80 Billion Locked in a ‘Golden Cage’ in Austria May Be Set Free

FX: DXY, CNY, JPY – An optimistic end to the G20 summit with Trump and Xi agreeing on a 90-day tariffs ceasefire until a trade deal can be negotiated (with sticking points such as IP remaining). As such DXY fell to lows of 96.710 vs. last week’s low of 96.622, though the index is nursing losses in an attempt to take another jab at 97.000. USD/CNY fell below the key 6.90 level despite a higher USD/CNY fix by the PBOC overnight, while JPY unwound some risk premium with USD/JPY stopping just shy of 114.00, but the headline pair supported just ahead of a downside tech-level (Tenken at 113.34).

  • AUD, NZD, CAD – Major high-beta beneficiaries in the aftermath of the G20, with AUD/USD within striking distance of 0.7400 (where 1.365bln in option expiries lie) ahead of its 200DMA at 0.7418, while the Kiwi holds above 0.6900, marginally hampered by weaker than expected Q3 terms of trade and softer export volumes. Meanwhile, CAD also takes advantage of the rising oil prices after Russia and KSA extended their OPEC+ pact, on top of the tactical 325k BPD production cut at Canada’s Alberta refinery. USD/CAD currently sub-1.3200 but off post-G20 lows of 1.3160.
  • GBP, EUR – Little reaction in the pound and the single currency following mixed manufacturing PMIs with Cable back down below 1.2750 (after having breached its 10DMA at 1.2800 where stops were reportedly tripped) and through the Raab-low at 1.2724 to test bids ahead of 1.2700, while EUR/USD couldn’t sustain gains to 1.1400 before retreating through 1.1350 and towards 1.1300. Note, the single currency was supported earlier on Italian press reports that PM Conte is said to be preparing for a deficit/GDP target in the range of 1.9%-2.0%, with the Deputy PMs apparently ready to accept the new target but has eased back in wake of the ECB’s announcement of Capital Key changes, including a perhaps surprisingly lower Italian ratio. In terms of option expiries, EUR/USD sees 1.32bln around 1.1380-90 ahead of reported offers at 1.1400.
  • EM – TRY back in focus with softer than expected Turkish CPI helping the Lira retest recent highs around 5.1500 vs. the buck at one stage, but unable to breach resistance as the USD stage a broad comeback.

In commodities, WTI (+4.1%) and Brent (+3.9%) are both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January. Gold (+0.7%) is firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high.

US Event Calendar

  • 6:30am: Fed Vice Chairman Clarida Interviewed on Bloomberg TV & Radio
  • 8am: Fed’s Quarles speaks at Council on Foreign Relations in NYC
  • 9:15am: Williams Speaks at a NY Fed Conference on Treasury Market
  • 9:45am: Markit US Manufacturing PMI, est. 55.4, prior 55.4
  • 10am: Construction Spending MoM, est. 0.35%, prior 0.0%
  • 10am: ISM Manufacturing, est. 57.5, prior 57.7
  • 10:30am: Brainard Gives Keynote at NY Fed’s Treasury Market Conference
  • 1pm: Fed’s Kaplan Speaks at Community Forum in Laredo, Texas
  • Wards Total Vehicle Sales, est. 17.2m, prior 17.5m

 

 

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED UP 66.61 POINTS OR 2.57% //Hang Sang CLOSED UP 675.29 POINTS OR 2.55% //The Nikkei closed UP 223.70 OR 1.00%/ Australia’s all ordinaires CLOSED UP 1.86%  /Chinese yuan (ONSHORE) closed UP  at 6.8897 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.90 dollars per barrel for WTI and 61.41 for Brent. Stocks inEurope OPENED GREEN //.  ONSHORE YUAN CLOSED UP AT 6.8897AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8853: 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

Markets are expected to roar, Monday but nothing substantive was agreed at the Xi/Trump meeting on Saturday.  Basically there is a truce for 90 for 90 days in which trump will not raise tariffs of 200 billion dollars worth of Chinese goods.  In return China will buy a huge portion of the autumn harvest of soybeans.  The main points from the USA going into the meeting were not addressed:

  1. subsidies for state own enterprises
  2. stealing of USA technology
  3. forced transfer of technology when USA enters into a joint venture with China.
  4. China agrees to crack down on the huge fentanyl exports to the west.

“I’ll Eat My Hat If This Means Anything Substantive”:

Why The Trump-Xi Truce Achieves Little

The most important, and much-anticipated dinner date between Trump and Xi in years, which concluded amid loud applause and brief celebrations by both sides, ended in a three-month truce to the ongoing trade war between the two superpowers, with the US agreeing to postpone a planned tariff hike on January 1 and to keep the rate on existing tariffs at 10% for another 90 days in return for greater purchases of American goods.

While the arrangement provides breathing space to both leaders as they face slumping stock markets and economic warning signs, and will likely result in a brief jump in the market in the coming days, the two sides failed to make any tangible progress on the fundamental divide and core issues separating the world’s biggest economies.

“You blink first!”… “No, you blink first.”As Bloomberg recaps this morning, “negotiations have long been stuck over U.S. demands for deep structural reforms such as stopping forced technology transfers, enforcing intellectual property rights and ending state subsidies for strategic industries – all of which China sees as an American strategy to thwart its rise as a global power.” It is on these most thorny of issues that there was no real progress during the Trump-Xi dinner.

In fact, as Michael Every, head of Asia financial markets at Rabobank said overnight, “I will eat my hat if this means anything substantive” as “neither side is fully ready for the war, but neither side will budge.

Despite the lack of material progress on the fundamental divide, the market will cheer that the deal helps to alleviate immediate concerns that trade tensions would further stoke geopolitical tensions, a prospect that has raised worries of a new Cold War. The White House emphasized that Xi agreed to continue pushing for a nuclear-free North Korea, while Beijing said Trump would respect the One-China policy regarding relations with Taiwan — one of the biggest potential flashpoints between the nations.

More importantly, the summit showed that both sides could be pragmatic when needed, and refuted Goldman’s bearish forecast that more escalation would be the immediate conclusion.

Here’s the breakdown:

Xi won at least another three months before punitive tariffs on $200 billion in goods rise to 25 percent, allowing Chinese policy makers more time to offset the blow as growth slows. That said, all Xi got was a reprieve, because as SCMP editor Chungyan Chow writes, “Xi Jinping hasn’t really defused the Trump bomb. He just bought 3 month breathing space. Interesting to see what will happen next before the Chinese national congress sessions in March.”

Chungyan Chow

@ChungyanChow

Xi Jinping hasn’t really defused the Trump bomb. He just bought 3 month breathing space. Interesting to see what will happen next before the Chinese national congress sessions in March. https://sc.mp/04uq5

Trump and Xi agree trade war truce and no extra tariffs, Chinese officials say

US and Chinese presidents agree to trade truce, Chinese officials confirm.

scmp.com

Trump, meanwhile, got China to buy more American agricultural, energy and industrial goods while still maintaining the leverage of a tariff increase to pressure Xi into making greater concessions on structural issues. China also pledged action to clamp down on the synthetic opioid fentanyl, and Trump said Xi was open to approving a possible $44 billion deal for Qualcomm Inc. to purchase NXP Semiconductors NV if the companies are still interested.

So what does the truce achieve?

With less than a month left in the year, the one most likely outcome is the greenlight of a strong Santa Rally, both in the US and China, where overnight the China Financial Futures Exchange sent a strong hint to investors to get back in the market by cutting margin requirements for stock index trading to 10% for the CSI300 and SSE50 and 15% for the CSI500, the first such cut since Sept. 2017.

Global Times

@globaltimesnews

From Monday, CSI 300, SSE 50 index futures trading margin requirements will be adjusted to 10%, 15% for CSI 500, China Financial Futures Exchange said on Sunday.

“The presidents want the markets to enjoy Santa rallies first,” Junheng Li, the founder of the China-focused research company JL Warren Capital told Bloomberg. “And when February comes we can start worrying again.”

“This is a strongly market positive result for the short term, since over the past few days markets have been nursing hopes that a tariffs pause of this kind would happen,” Evercore ISI head of political analysis Terry Haines wrote in a note. “But it is not a ceasefire as some already are touting.”

The bottom line as Michael Pillsbury, a senior fellow at the Hudson Institute, said, “Neither side got their maximum demands and it’s not the first time in U.S.-China relations that both sides claim victory. Both sides avoided the worst-case scenario.”

* * *

In addition to traders, another immediate beneficiary from the truce is the US business community as well as US farmers, particularly those growing soybeans in states he needs to win to get re-elected in 2020. As Bloomberg notes, Trump hailed the “incredible deal” on Air Force One while heading back to the U.S., telling reporters that China will buy “a tremendous amount” of agricultural goods.

“Trump doesn’t give up much by a short pause and gets a chance to ship the soybean harvest to China while the negotiations are ongoing,” said Brad Setser, a former Treasury official and now a senior fellow at the Council on Foreign Relations in Washington. “The hard part is finding the basis for a real deal that settles the broader issues rather than agreeing on a pause.”

It is there that little progress is expected absent a material deterioration in markets and economies.

Meanwhile, signs of discord continued, and the most notable was the failure to issue a joint statement laying out the framework for talks. Each side gave its own readout of the outcome, and they contained key differences: China, for instance, made no mention of the 90-day time frame, while the U.S. didn’t reference the One-China policy regarding Taiwan ties.

China’s omission on the deadline indicates it has reservations on how to handle U.S. demands, according to Wang Peng, an associate research fellow of the Chongyang Institute for Financial Studies, Renmin University of China.

Making the type of domestic reforms sought by the U.S. is “extremely difficult as such moves involve the country’s reputation, the party’s authority and the structure of the domestic economy,” he said.

But the biggest hurdle and the crux of Trump’s deeper concerns with China is found in the 53-page report issued by Trade Representative Robert Lighthizer’s office about 10 days before the Trump-Xi meeting. It accused China of continuing a state-backed campaign of intellectual property and technology theft, downplayed its moves to ease foreign investment restrictions and raised alarm about its “Made in China 2025” policy to lead the world in sectors such as artificial intelligence and robotics.

Meanwhile, Chinese officials have repeatedly countered by saying moves to ease rules on foreign ownership of financial firms and automakers show they are opening up to the world, when in reality Beijing is merely looking for international bagholders as China suffered a burst of record defaults which has made local investors shy away from risky local assets. At the same time, they also strictly rule out dropping government support for companies in strategic Made in China industries over fears that would undermine China’s future economic prospects and threaten the power of the ruling Communist Party.

The bottom line is that despite much fanfare, the divergence in worldviews makes any lasting solution difficult to achieve unless either Trump or Xi backs down and neither is willing or ready to do so. Still, given the emerging risks to the global economy, and the political costs that entails for each leader, it is likely that both will be motivated enough to concede just enough to keep dragging out the talks without handing the other side a victory.

“Growth is going to slow in both countries,” said TCW analyst David Loevinger,. “While it doesn’t remove the the sword of Damocles hanging over trade, having blinked tonight you’d have to guess that the U.S. will blink again in March.”

* * *

Finally, what does the truce mean for the markets? According to one “base case” which correctly predicted that a Truce – in which existing tariffs stay in place – is the most likely outcome (with a 70% chance), while also accurately predicting a 3 month ceasefire, the agreement will be enough to get the S&P to 2,800…

… so look for a burst of buying in the S&P over the next 24 hours which pushes the stock index higher, but not much higher as trader concerns will next revert back to the Fed which now that trade tensions have been temporarily removed, may promptly revert back to its hawkish bias and resume rising rates well into 2019 which in turn will be the next bearish event-risk to put a damper on any substantial Christmas rally.

end

 

Peter Tchir gives his take on the “deal” with China..basically it was a nothing burger.

(courtesy Tchir/Academy Securities)

 

 

It’s Either Tied in Bottom of 9th or in Extra Innings

I guess we should continue with Friday’s T-Report theme of treating the President Trump and President Xi meeting as though it was a baseball game.

From Friday

We walk in a run.  The game goes on, possibly to extra innings.  The real-world equivalent is some promise by China to reduce the trade deficit, us putting on hold any new or increased tariffs and both sides agreeing that Intellectual Property rights are important and that both sides agree to focus on…

This is my highest probability scenario.

As far as I can tell from the press coverage I’ve seen

  • China agreed to buy more agricultural and commodity goods (as we’ve been suggesting all along is part of the ‘easy’ deal)
  • We agreed not to go ahead with the scheduled tariff increases (which were hurting us as well)
  • Both sides have agreed to talk more with what seems like a 90 day target for progress (though a timeline that could easily be extended again)

Is this ‘Deal’ Good Enough for Markets?

It seems like this should be good enough for markets to continue with the rally that took S&P 500 and Nasdaq up 4.9% and 5.6% respectively on the week.

I think the outcome is marginally better than what people were pricing in and took some of the disaster scenarios off the table.

I would expect VIX to collapse now that the biggest wildcard is either off the table or at least postponed.  (Brexit and Italy while moving Europe around seem to have lost their ability to whip U.S. markets back and forth – for now).  We have Mueller and the change in the House in January to deal with on the domestic front – but that seems to be a few weeks away, which in this choppy market, can seem like a lifetime.

The biggest driver could be the market’s view, which we share,that Powell is trying to walk back a little on the dogmatically hawkish side (though part of this apparent change makes perfect sense for a data dependent Fed that is seeing the data weaken).

Corporate bonds were noticeably weak and an outlier on Friday.  Despite the S&P 500 and Nasdaq both gaining about 0.8%, the CDX IG index was a ½ bp wider on the day, high yield was down roughly a ¼% depending on whether you looked at CDX HY or the big HY ETFs.  The leveraged loan market bounced a little (at least BKLN did) but floating rate IG corporate bonds continued to trade poorly.

The Bloomberg Corporate bond OAS moved out 2 on Friday to 137 (from 109 in the middle of October), and it probably understates the weakness as the bond indices tend to lag their traded Beta counterparts when tracking moves to the downside (for example, corp bond spreads widened according to the index on Wednesday while CDX IG gapped 5 bps tighter and even the often ignored LQDH rallied).

If VIX can come down and the new issue calendar can show signs of slowing into year-end, credit should be able to turn around – but since its weakness on Friday was noteworthy, across the board, we will be watching that closely.

Bottom Line

Assuming the reporting we have seen so far is accurate, this deal, coupled with some oversold technicals and generally favorable seasonality, I’d expect a moderate risk-on move to begin. 

But, since I am already trying to think about what could derail this move, and when to start cutting back on risk again, I think the rally won’t be as big or long lasting as I’d like to see.

end
Goldman Sachs pours cold water on the trade war truce as it does not deal with the most importance issues.  They give the chance of a comprehensive deal in 3 months at 20%
(courtesy Goldman Sachs/zerohedge)

Goldman Pours Cold Water On Trade War Truce: “The

Odds Of A Comprehensive Deal In 3 Months Are 20%”

Heading into this weekend’s historic Trump-Xi dinner date, Goldman was skeptical, stating that it was “too soon for a deal” and while it said the odds of a truce were just under 40%, it gave better than even odds of further escalation stating that “it is slightly more likely that the talks end with an optimistic tone but that there is no immediate commitment to delay the step-up in the tariff rate to 25%.” Goldman did hedge, however, saying that “we view this as a reasonably close call.”

And with one look at futures this morning following a summit conclusion that kicked the can on new tariffs and rate hikes by 90 days, it’s a good thing it did (unlike JPM which correctly predicted truce odds were 70%, forecasting that the market’s most likely reaction would be to send the S&P to 2,800 which is precisely where the ES is stuck now).

So what does Goldman think happens next? Perhaps not surprisingly, while the central banker incubating hedge fund tacitly admits its gloomy forecast was misplaced and praises the near-term can-kicking, the bank retains its overall pessimism and in its post-mortem writes that “this outcome is closest to the “pause” scenario we outlined in recent comments although the length of the pause is fairly short” and notes that while “the result shows the willingness of the two sides to reach a deal” Goldman still thinks that finding a mutually agreeable compromise that leads to a comprehensive rollback of tariffs will be challenging.”

As part of its hot take, Goldman lists the tentative agreements that were reached on a “few less controversial issues” including:

  • Chinese purchases of US products. The US press release stated “China is to purchase a very substantial amount of agricultural,  industrial and energy products” from the US. The White House appears to expect purchases of agricultural products to start  immediately. No quantity or specific commodities were mentioned, but purchases are likely to involve more meat, especially pork,  products, given there has been an ongoing swine flu outbreak in China which led to the slaughtering of large amount of pigs and  higher demand for alternative protein sources. Soybean purchases also seem likely, as they have been among the most politically  important aspects of China’s retaliatory tariffs on US exports. This could also signal a partial unwinding of China’s retaliatory tariffs, which targeted agricultural products in earlier rounds.
  • China will make fentanyl a controlled substance. China’s drug control is concentrated in traditional substances and awareness  of use of such substances as drugs among the general public and officials is low. Traders have been arbitraging this regulatory gap and exporting this substance to the US. This is not viewed as a big issue in China and given the US focus it is easy to understand that President Xi agreed make this move.
  • The US press release quoted President Xi as saying that, should the Qualcomm NXP merger request be presented to him, he is open to approving it. Official Chinese media reports did not mention this issue.
  • Reporting from Xinhua suggests that the US agreed to continue to welcome Chinese students in the US. This comes following recent reporting in the US media that the White House could soon announce new restrictions. The US statement does not mention this. Xinhua also states that the US has pledged to continue to respect the “One China” policy regarding Taiwan as part of this understanding, though the US statement does not mention this.

That said, Goldman echoes our own take from Sunday, specifying that there appears to have been no concrete progress on the other important issues of market access, IPR protection, cyber attacks, and forced technology transfer (the latter two US concerns have always been denied by Chinese policymakers) which are left for working level officials to work out in the next 90 days.

So, as Goldman’s political analyst Alec Phillips summarizes, “the actual amount of concrete progress made at this meeting appears to have been quite limited, as expected.

Furthermore, Goldman also notes that “while the Xi-Trump dinner has clearly improved the tone of the US-China relationship for the time being, and we would expect an initial positive market reaction” – correctly, with the S&P set for another torrid surge this morning – the “pause” prolongs the period of uncertainty around the eventual structure of trade relations between the two countries. Specifically, Goldman warns that “the specter of higher and broader US tariffs remains, and the underlying issues clouding the trade relationship are deferred to further negotiations. With additional time to pursue negotiations, we think the chance of a comprehensive deal that involves rollback of tariffs is slightly higher than before, but still not our base case—perhaps a 20% probability over the next three months.” And, notably, Goldman points out that while the Chinese statement referred to both sides agreeing to “work toward scrapping all tariffs”; the US did not.

So with a comprehensive deal unlikely to be announced some time in late March, Goldman believes that “the two most likely outcomes in our view continue to be a continuation of the “pause” that was just announced— i.e. a partial agreement that forestalls further escalation but does not eliminate existing tariffs—or incremental escalation, involving the eventual step-up to the 25% tariff rate on $200bn of imports already subject to 10%.”

While it is a close call which of these is more likely, at the margin it seems slightly more likely (just over 50% probability) that the talks will falter when they reach more difficult issues and that the step-up to 25% will still occur in March or beyond.

Even so, the bank concedes that its initial skepticism may have been overdone, and adds that between the possibility of a continued “pause” and the possibility that an agreement is reached after the step-up to 25% occurs (if it occurs), the probability of tariffs on imports from China beyond the $250bn already affected has decreased in our view.

One final point: the outcome of the 90-day negotiations will likely be affected by how the markets and domestic political sentiment react, as the response “may influence the willingness of both sides, particularly President Trump, to reach a deal in the future.”

On the other hand, Goldman hedges one more time, cautioning that “to the extent either country sees the other as particularly keen to make a deal, its policymakers may try to drive a harder bargain, making an eventual compromise more difficult.”

The bank concludes that regardless of the near-term outcome, “the US-China announcements send a constructive signal regarding the eventual outcome of these talks, and strengthen our view that President Trump is likely to want to conclude an agreement—even if it does not include a full rollback of tariffs—well ahead of the 2020 presidential election.”

END

The USA is aware of these internment camps and they do nothing??? A Muslim woman describes her detainment, degrading and electroshock torture inside one of these internment camps

(courtesy zerohedge)

“I Begged Them To Kill Me”: Muslim Woman Describes Degrading, Electroshock Torture In Chinese Internment Camp

A Uighur Muslim woman claims she was tortured and abused at a Chinese internment camp where hundreds of thousands of religious minorities are being kept, according to the Independent.

29-year-old Mihrigul Tursun told reporters during a Washington press conference that she was subjected to a degrading four-day interrogation which included no sleep, having her head shaved, electrocution and “an intrusive medical examination,” after her second arrest in China in 2017. Tursun claims that the abuse got worse when she was arrested a third time.

“I thought that I would rather die than go through this torture and begged them to kill me,” Tursun told journalists at a National Press Club meeting.

China has come under fire in recent months over their treatment of Muslims known as Uighurs – of which as many as two million have been incarcerated in “reeducation camps” in the country’s far west to reprogram them for what the government has called “ethnic unity.”

Chinese authorities routinely deny any ethnic or religious repression in Xinjiang. They say strict security measures – likened by critics to near martial law conditions, with police checkpoints, the detention centers, and mass DNA collection – are needed to combat the influence of extremist groups.

After initial blanket denials of the detention facilities, officials have said that some citizens guilty of “minor offences” were sent to vocational centers to improve employment opportunities. –Reuters

Raised in China, Tursun moved to Egypt to study English at a university where she met her husband. Together they had triplets. In 2015, she traveled back to China to visit family and was immediately detained and separated from her infant children. After her release three months later, Tursun found that one of her children had died and the other two had health issues. She claims the children had been operated on.

Tursun was arrested around two years later for a second time – while several months later she was detained for a third time where she spent three months in a cramped prison cell along with around 60 other women. The group had to take turns sleeping, and toilets were situated in front of security cameras. She says that the women were forced to sing propaganda songs praising China’s Communist Party.

Ms Tursun said she and other inmates were forced to take unknown medication, including pills that made them faint, and a white liquid that caused bleeding in some women and loss of menstruation in others. She said nine women from her cell died during her three months there.

One day, Ms Tursun recalled, she was led into a room and placed in a high chair, and her legs and arms were locked in place.

The authorities put a helmet-like thing on my head, and each time I was electrocuted, my whole body would shake violently and I would feel the pain in my veins,” she said in a statement read by a translator.

“I don’t remember the rest. White foam came out of my mouth, and I began to lose consciousness,” Ms Tursun said. “The last word I heard them saying is that you being an Uighur is a crime.” –Independent

She was later released in order to take her children to Egypt, but says that she was ordered to return to China. Instead, she phoned US authorities from Cairo and was allowed to settle in Virginia in September.

Tursun joined over 270 scholars from 26 countries last week in a published statement condemning China’s “mass human rights abuses and deliberate attacks on indigenous cultures.”

China has hit back against the criticism, stating last month that 15 foreign ambassadors who wrote a letter expressing their concerns over the incarcerations “should not interfere in the internal affairs of other countries.” Meanwhile, reports have emerged that over half a million Han Chinese citizens have moved into the homes of Highur Muslim families in order to report on whether they “display Islamic or unpatriotic beliefs,” according to the Independent.

The informants, who describe themselves as “relatives” of the families they are staying with, are said to have received specific instructions on how to get them to let their guard down, including offering them cigarettes and alcohol.

China has claimed the Uighur Muslims are grateful to be detained in mass internment camps, saying it makes their lives more “colourful”. –Independent

Beijing added that it’s simply trying to bring Muslims into the “modern, civilized” world.

In September, the Trump administration weighed sanctions against Chinese senior officials and companies in order to punish Beijing’s detention of ethnic Uighurs and other minority Muslims. Beijing, in response, said it would retaliate “in proportion” if Washington levies the sanctions.

China’s ambassador to the United States, Cui Tiankai, said late last month that while the United States was using missiles and drones to kill terrorists, “we are trying to re-educate most of them, trying to turn them into normal persons (who) can go back to normal life.

“Can you imagine (if) some American officials in charge of the fight against ISIS would be sanctioned?,” Cui said – adding that “if such actions are taken, we have to retaliate.”

end

4.EUROPEAN AFFAIRS

 

GREAT BRITAIN/EU

Amazing:  most Brits realize that the divorce from the EU is a bad deal for the uK. Probably the best deal would be for a Norway plus sort of deal with the UK joining the EEC as well as some sort of pre arranged customs union.  Theresa May has ruled that out

(courtesy mish Shedlock/Mish talk)

Mish Blasts Hypocrite May: Chastises British

Parliament While In Bed With EU

Authored by Mike Shedlock via MishTalk,

Theresa May chastised the UK parliament to “listen to constituents.” She should do just that, herself.

The Prime Minister said in her recent statement to Parliament that MPs in the House of Commons had a “duty to listen to their constituents before taking a decision in the national interest”.

What an excellent idea!

With that, let’s turn our attention to New Polling Shows the Public Kicking Back Against Theresa May’s Brexit Deal.

The first question asked: “Whether or not you agree that the only options open to the UK now are Theresa May’s deal, no deal or no Brexit, out of those options only, which would you prefer as the outcome for Britain’s negotiations with the EU?” The responses were 25% for Theresa May’s deal; 32% for No Deal and 41% for No Brexit with the UK staying in the EU, with 3% Don’t Knows.

<When next asked to choose between Theresa May’s Deal or No Deal – and No Brexit– the responses hardened, delivering 57% for Leaving deal or no deal and 41% for No Brexit, with again 3% Don’t Knows.

Bottom Line

  • Only 41% favored staying in the EU.
  • Only 25% favored Theresa May’s plan.
  • Only 32% favored hard Brexit.

Clearly, those polled do not want to stay in the EU. But they also do not like May’s plan.

Some Labour and some Tory MPs want a Norway or Canada option but the poll did not allow that.

Why? May ruled it out.

Binary Options

The Guardian reports Theresa May rules out Norway-style Brexit compromise with Labour.

Theresa May has ruled out any plan B involving a Norway-style compromise deal with the Labour party in order to deliver a parliamentary consensus on Brexit, saying the opposition party’s refusal to accept the backstop arrangement put the UK on a course for no deal.

Influential backbenchers, including former Tory minister Nick Boles and Labour’s Stephen Kinnock, have been developing a compromise proposal based on membership of the European Economic Area plus a negotiated customs union, believing it is the only version of Brexit that could attract enough Labour and Tory votes to deliver a parliamentary majority.

Some cabinet ministers are understood to be attracted to the plans as an alternative if May’s negotiated deal fails to pass the House of Commons.

In Bed with the EU

Meanwhile it is clear May has been in bed, politically speaking, with the EU. They both press for the same binary option. “No changes” to the deal.

Hypocrite of First Magnitude

May accuses Labour of doing anything to force another election.

Meanwhile, she is willing to screw her own constituents while hopping in bed with Michel Barnier and the EU to not have one.

Is there a practical difference?

Rotten Kettle of Fish

May tells the House of Commons they have a “duty to listen to their constituents before taking a decision in the national interest”.

This deal is such a rotten kettle of fish that even the public sees clearly sees it.

What an amazing hypocrite.

end

WOW@@ Theresa May is caught in a massive lie as she refuses to publish the complete legal analysis done on the agreement she signed.  She left two two major points which would have destroyed Great Britain

1,  it is quite likely that Britain could not sign trade deals with Europe or others

2. Great Britain could not set subsidies on agriculture something that Europe could do..plus others major points.

she has been caughtin a massive lie

(courtesy Mish Shedlock/Mishtalk.

Theresa May Caught In Massive Lie

Authored by Mike Shedlock via MishTalk,

Theresa May refused to publish the complete legal analysis of the agreement she signed. Leaked analysis proves she lied.

Great Deal for the EU, Not the UK

On November 26, Trump proclaimed the Brexit Agreement ‘Sounds Like a Great Deal for the EU’.

“I think we have to take a look at seriously whether or not the U.K. is allowed to trade. Because, you know, right now if you look at the deal, they may not be able to trade with us and that wouldn’t be a good thing.”

May Refuses to Publish Brexit Deal Legal Advice

Theresa May has refused for over a week to post the legal review of the Brexit agreement she signed. Instead she posted allegedly “sufficient” excerpts on which Parliament could make a decision.

According to the Guardian, the excerpts “will be sufficient information for any MP to make up their mind on the legal aspects of the deal before the upcoming five-day debate, and that it keeps to the protocol that full advice is seen as confidential between lawyer and client.”

Thus, Trump made an educated guess. And he guessed correctly. Because the leaked document proves May is a bald-faced liar.

Leaked Document

Here is the Complete Withdrawal Agreement leaked document.

I salute the person responsible for the leak.

Damning Assessment of May’s Lies

BrexitCentral offers this assessment: Leaked Commons legal analysis of Brexit deal vindicates Trump, contradicts May and adds to Brexiteers’ concerns.

The Government is already on the rack over its refusal to publish the legal advice provided on the Brexit deal by Attorney General, Geoffrey Cox, despite a parliamentary motion ordering it to be done. But ministers now face further questions as it emerges that a confidential analysis of the Withdrawal Agreement by the House of Commons’ own expert legal team comes to the same conclusion as President Trump – that Theresa May’s Brexit deal would prevent the UK from entering trade deals with countries such as the US.

The bombshell is contained in a 27-page legal note prepared by the House of Commons EU Legislation Team, which is headed by Arnold Ridout, its Counsel for European Legislation. A highly respected specialist in EU Law, he has previously worked for the EC Commission’s Legal Service and advised the European Secretariat of the Cabinet Office and prior to taking up his current role in 2014, he was Deputy Legal Adviser to the House of Lords EU Select Committee.

The note – marked ‘not for general distribution’ and obtained by BrexitCentral – is dated 26th November and states that the UK-EU customs union which would come into effect if the backstop is triggered “would be a practical barrier to the UK entering separate trade agreements on goods with third countries”.

This is in direct contradiction to the Prime Minister who has insisted that her deal will allow the UK to have an entirely independent trade policy.

The legal note also appears to suggest that the Prime Minister’s claim (also repeated last Monday) that her deal “takes back control of our laws” by ending “the jurisdiction of the European Court of Justice in the UK” with “our laws being made in our Parliament, enforced by our courts” does not entirely stand up to scrutiny.

Another section in the document which caught my eye concerns what happens when the proposed Joint Committee (of representatives of both the EU and UK) which supervises the Withdrawal Agreement and the backstop cannot reach a consensus on certain issues:

“Both UK and EU are represented on the Joint Committee, so no decision may be made without the UK’s agreement. This may not be the same thing as the two parties having equal power, as the aims of the parties will matter. If the Joint Committee is unable to reach a decision, in some circumstances, that will block next steps. The party that wants those next steps to occur, will then be at a practical disadvantage. By way of example, i) the Joint Committee sets the limits of state aid that can be authorised by the UK for agriculture. If limits are not agreed, state aid may not be authorised.”

In other words, in those circumstances the UK would not be free to set levels of subsidy for UK agriculture, but the EU would remain free to adjust its Common Agricultural Policy however it liked. EU products would therefore have open access to the UK market via the customs union, while Brussels could stop us subsidising agriculture at all unless it was agreed in the Joint Committee.

Lies Exposed

With that, May’s lies are exposed to all in full view. Was she that stupid to think this was a good deal? Was she that stupid to think this would not be exposed?

Apparently so. Never underestimate the arrogance or stupidity of politicians.

Hypocrite Theresa May in Bed With the EU While Chastising the UK Parliament

This was crystal clear long ago. On November 30, I wrote Hypocrite Theresa May in Bed With the EU While Chastising the UK Parliament.

“Rotten Kettle of Fish”

May tells the House of Commons they have a “duty to listen to their constituents before taking a decision in the national interest”.

This deal is such a rotten kettle of fish that even the public sees clearly sees it. What an amazing hypocrite.

Demands Will Never End

On November 18, I noted Opposition Mounts to Brexit Deal but France Has Still More Demands Already.

Flashback November 16

Mike Mish Shedlock@MishGEA

No it’s not the “final deal”

The “final deal will be worse”
This interim deal keeps the UK tied with one hand behind its back until the “final” humiliation.

I offer this musical tribute:https://moneymaven.io/mishtalk/economics/brexit-musical-tribute-smiling-faces-show-no-traces-of-evil-that-lurks-within-II6NGM3D7UWCjUlYaW8AOg/ 

Phil Dobbie@phildobbie

I have watched too many BBC interviews with people upset about the Brexit deal. In each case there is no clarification that this is the BACKSTOP DEAL not the FINAL DEAL. So the media is doing a grand job of reinforcing misinformation.

See Mike Mish Shedlock’s other Tweets

Those seeking a musical tribute to this mess can find it here: Brexit Musical Tribute: Smiling Faces Show No Traces of Evil That Lurks Within

Macron Threatens to Keep EU in Perpetual “Temporary” Customs Union Backstop

On November 26, I noted Macron Threatens to Keep EU in Perpetual “Temporary” Customs Union Backstop

Macron added to his climate change demand, upping the ante to include fishing rights.

“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,” said Macron.

Clearly, Macron understood what was in the agreement that May signed.

May Purposely Lied

May not only knew what she signed, she lied about it.

And this was all easily predictable. The moment she refused to release the legal document, anyone with an ounce of common sense knew she was hiding something.

It was even worse than I speculated.

End of Theresa May

This is the political end of Theresa May. She deserves to have this agreement crammed down her throat in 100% dissent.

That won’t happen, but the margin should be so huge, that she resigns.

Even if she does not resign, her days are numbered.

end

FRANCE

Throughout the weekend, France burns as Macron is thinking about a state of emergency.  Huge “yellow vest protests.

(courtesy zerohedge)

France In Chaos; Macron Mulling State Of Emergency

Amid “Yellow Vest” Protests; “All Options” Considered

French President Emmanuel Macron will hold an emergency meeting of senior ministers on Sunday following the worst unrest Paris has seen in decades on Saturday.

Government spokesman Benjamin Griveaux told France’s Europe 1 radio that a state of emergency may be imposed to prevent “serious outbursts of violence” after thousands of masked “Yellow Vest” protesters fought with police, and set fires to cars, houses and banks in the worst disturbances France’s capital has seen since 1968, when Macron’s wife was fifteen – the same age the French president was when they met.

Griveaux had indicated the Macron administration was considering imposing a state of emergency. The president was open to dialogue, he said, but would not reverse policy reforms.

“We won’t change course. We are certain of that,” he told Europe 1 radio. –Reuters

On Saturday riot police were overwhelmed as protesters embarked on their destructive crime spree. Macron, meanwhile, denied that a state of emergency had been disccussed.

A French presidential source said Macron would not speak to the nation on Sunday despite calls for him to offer immediate concessions to demonstrators, and said the idea of imposing a state of emergency had not been discussed.

Arriving back from the G20 summit in Argentina, Macron had earlier rushed to the Arc de Triomphe, a revered monument and epicenter of Saturday’s clashes, where protesters had scrawled “Macron resign” and “The yellow vests will triumph”. –Reuters

Embedded video

Peter Allen@peterallenparis

The Jeu de Paume – one of best art galleries in Paris – is on fire. A mob is storming through the Tuleries Garden.

Instead, Macron ordered his interior minister on Sunday to hold talks with political leaders and demonstrators, according to Reuters.

Griveaux said that around 1,000 and 1,500 protesters joined Saturday’s demonstrations “only to fight with the police, to break and loot,” and that the violent element “have nothing to do with the yellow vests” (aside from wearing yellow vests?).

Demonstrators on Saturday were filmed destroing a police van and other vehicles, while other videos showed burning cars and police firing some 10,000 tear gas canisters as well as stun grenades to break up the protests.

Macron says the fuel hikes are necessary to combat climate change – a move which has tappped into the deep dissatisfaction toward his many liberal reforms which many French voters feel favor big business and the wealthy.

Macron’s plight illustrates a conundrum: How do political leaders’ introduce policies that will do long-term good for the environment without inflicting extra costs on voters that may damage their chances of re-election?

His unyielding response has exposed him to charges of being out of touch with common folk outside of France’s big cities who worry about the squeeze on household budgets and job security.

The protests have driven Macron’s popularity to record lows and left him facing a lose-lose situation, said Gael Sliman, president of the Odoxa polling institute said. –Reuters

As Sliman notes, Macron can either cave to the protesters and face criticism by his opponents, or he can put down the dissent by force. “In the second scenario, Macron will still come out loser, because what everyone will remember is that he wrestled with the popular classes. He would be victorious, but at the cost of having crushed them,” Sliman said.

Macron was flanked by heavy security on Champs Elysees boulevard before heading into Sunday’s meeting, as bystanders both cheered and jeered him – with many calling for his resignation.

So too did Jean-Luc Melenchon, head of hard-left party La France Insoumise (France Unbowed) and far-right leader Marine Le Pen, who both demanded the government unwind its fuel tax hikes. They called for parliament to be dissolved and snap elections held.

Such an outcome is unlikely, however. Macron has 3 1/2 years left of his five-year mandate and a strong majority in parliament, albeit with signs of simmering unease on the backbenches over his response to the protests. –Reuters

The reported size of the protest has varied between 36,000 and 75,000 yellow vests, while last week saw over 110,000 protesters at the Champs-Elysées in central Paris. Over 400 arrests were made and 113 injured in Saturday’s unrest which began on November 17 over a hike in diesel taxes, but has grown to a general protest of Macron and his government. Macron’s popularity rating has plummeted to just 26%, while opinion polls for the 2019 parliament elections predict that right-wing Marine Le Pen’s Nationall Rally party will be level – or far ahead– from Macron’s La République En Marche.

“The violence is increasing at an exponential rate,” said Claude, a resident in the affluent 16th district according to Reuters. “The state is losing control, it is scary. They cannot let this happen. Maybe the army should intervene.”

Meanwhile, Paris burns…

END
France’s meltdown as a country and Macron’s disdain for his countrymen
(courtesy Guy Milliere/Gatesonte Institute)

France’s Meltdown, Macron’s Disdain

Authored by Guy Milliere via The Gatestone Institute,

On November 11th, French President Emmanuel Macron commemorated the 100th anniversary of the end of World War I by inviting seventy heads of state to organize a costly, useless, grandiloquent “Forum of Peace” that did not lead to anything. He also invited US President Donald Trump, and then chose to insult him. In a pompous speech, Macron — knowing that a few days earlier, Donald Trump had defined himself as a nationalist committed to defending America — invoked “patriotism”; then defined it, strangely, as “the exact opposite of nationalism”; then called it “treason”.

In addition, shortly before the meeting, Macron had not only spoken of the “urgency” of building a European army; he also placed the United States among the “enemies” of Europe. This was not the first time Macron placed Europe above the interests of his own country. It was, however, the first time he had placed the United States on the list of enemies of Europe.

President Trump apparently understood immediately that Macron’s attitude was a way to maintain his delusions of grandeur,as well as to try to derive a domestic political advantage. Trump also apparently understood that he could not just sit there and accept insults. In a series of tweets, Trump reminded the world that France had needed the help of the USA to regain freedom during World Wars, that NATO was still protecting a virtually defenseless Europe and that many European countries were still not paying the amount promised for their own defense. Trump added that Macron had an extremely low approval rating (26%), was facing an extremely high level of unemployment, and was probably trying to divert attention from that.

Trump was right. For months, the popularity of Macron has been in free fall: he is now the most unpopular French President in modern history at this stage of his mandate. The French population has turned away from him in droves.

Unemployment in France is not only at an alarmingly high level (9.1%); it has been been alarmingly high for years. The number of people in poverty is also high (8.8 million people, 14.2% of the population). Economic growth is effectively non-existent (0.4% in the third quarter of 2018, up from 0.2% the previous three months). The median income (20,520 euros, or $23,000, a year,) is unsustainably low. It indicates that half the French live on less than 1710 euros ($1946) a month. Five million people are surviving on less than 855 euros ($ 973) a month.

When Macron was elected in May 2017, he promised to liberate the economy; however no significant measures, were taken. In spite of some cosmetic reforms– such as limits on allowances for unfair dismissal or the slightly increased possibility that small businesses could negotiate short work contracts — the French labor code, still one of the most rigid in the developed world, expertly blocks job creation. The tax burden (more than 45% of GDP) is the highest in the developed world. Even if some taxes were abolished since Macron became President, many new taxes were created. Public expenditure still accounts for about 57% of GDP (16% above the OECD countries average) and shows no signs of waning.

Macron also promised, when he was elected, to restore security. Lack of security, however, has been exploding; the number of violent assaults and rapes has been steadily on the rise. No-go zones are as widespread as a year ago and fiercely out of control. The influx of unvetted illegal immigrants into the country has sadly turned entire neighborhoods into slums.

In May, Macron warned that in many suburbs, France has “lost the fight against drug trafficking”.

When Minister of the Interior Gérard Collomb resigned in on October 3, he spokeof a “very degraded situation” and added that in many areas “the law of the strongest — drug-traffickers and radical Islamists — has taken the place of the Republic.” He was simply confirming the chilling assessments of “out of favor” commentators such as Éric Zemmour, author of Le Suicide Français, and Georges Bensoussan, author of Une France Soumise (A Submissive France).

Riots are frequent; they indicate the growing inability of the government to maintain order. Public transport strikes, which took placeduring the entire spring of 2018, were accompanied by demonstrations and an enthusiastic looting of banks and shops. France’s victory at the soccer World Cup in July was followed by jubilation, which quickly gave way to violence by groups who broke store windows and attacked the police.

Since entering political life, Macron’s remarks have not only revealed a contempt for the French population, but also have multiplied. That has not helped. As early as 2014, when Macron was Minister of the Economy, he said that the women employees of a bankrupt company were “illiterates“; in June 2017, just after becoming president, he distinguished between “those who succeed and those who are nothing”. More recently, he told a young man who spoke of his distress at trying to find a job, that he only had to move and “cross the street”. During a visit to Denmark, he announced that the French were “Gauls resistant to change”.

One of the few issues Macron did seem eager to work on was Islam. He stressed several times his determination to establish an “Islam of France“. What he failed to take into account werethe concerns ofthe rest of the population about the rapid Islamization the country. In June 20, 2017, he said (not quite accurately, for example hereherehereherehere and here), “No one can make believe that (Muslim) faith is not compatible with the Republic”. He also seems to have failed to take into account the risks of Islamic terrorism, which he hardly ever calls by its name. He seems to prefer using the word “terrorism“, without an adjective, and simply acknowledges that “there is a radical reading of Islam, whose principles do not respect religious slogans”).

The current Minister of the Interior, Christophe Castaner, whom Macron appointed to replace Collomb, dismissed the concerns raised by his predecessor, and described Islam as “a religion of happiness and love, like the Catholic religion”.

Another area in which Macron has acted relentlessly is the “fight about climate change”, in which his targeted enemy are cars. On vehicles over four years old, mandatory technical controls were made more costly and failure to comply with them more punitive, evidently in the hope that an increasing number of older cars could be eliminated. Speed ​​limits on most roads were lowered to 80 km/h (50 mph), speed control radars multipled, and tens of thousands of drivers’ licenses were suspended. Gas taxes rose sharply (30 cents a gallon in one year). A gallon of unleaded gas in France now costs more than $7.

The small minority of French people who still support Macron are not affected by these measures. Surveys show that they belong to the wealthy layers of society, that they live in affluent neighborhoods, and almost never use personal vehicles. 

The situation is painfully different for most other individuals, especially the forgotten middle class.

A recent decision to increase gas taxes was the final straw. It sparked instant anger. A petition demanding that the government roll back the tax increase received almost a million signatures in two days. On social networks, people discussed ​​organizing demonstrations throughout the country and suggested that the demonstrators wear the yellow safety jackets that drivers are obliged to store in their cars in case of roadside breakdowns. So, on November 17, hundreds of thousands of protesters blocked large parts of the country.

The government ignored the protesters’ demands. Instead, officials repeated the many unproven imperatives of “climate change” and the need to eliminate the use of “fossil fuels” – but refused to change course.

After that, another national protest day was selected. On November 24, the demonstrators organized a march on Paris. Many, it seems, decided, despite a government ban, to head for the Champs Elysées and continue toward the presidential Elysée Palace.

Clashes took place, barricades were erected and vehicles were torched. The police responded harshly. They attacked non-violent protesters and used thousands of tear gas grenades and water cannons, which they had never done in the past. Although many of the protestors were holding red flags, indicating they were from the political left, the newly appointed Minister of the Interior Castaner said that the violence had come from a fractious and seditious “far right”. One member of the government fueled the fire by equating the French “yellow vests” with the German “brown shirts” of the 1930s. Macron declared that those who try to “intimidate officials” should be “ashamed“.

Finally, on November 25, Macron ended up recognizing, with visible reluctance, the suffering of the “working classes”. Two days later, Macron delivered a solemn speech, announcing that he would create a “high council for the climate”, composed of ecologists and professional politicians, and that his aim was to savethe planet and avoid “the end of the world”. He still did not utter a single word about the economic grievances that had poured forth during the previous ten day

 

end

According to Bloomberg’s Msika, France’s riots are a far bigger problem than Brexit or Italy

(courtesy zerohedge)

There Is Suddenly A Far Bigger European Problem Than Brexit Or Italy

Authord by Bloomberg’s Michael Msika

Forget Brexit and Italian populists for a second. It’s worth paying attention to what’s going on in France.

For more than two weeks, the country has been disrupted by an unusual protest: the so-called “Gilets Jaunes” or “Yellow Vests.” France is used to labor unrest and chaos affecting transport of course, with strikes something of a national pastime.

But this time it’s different.

Some 100,000 people blocking toll roads, petrol stations and crossroads is creating major disruption to transport and retail. It’s also proving to be extremely tricky to defuse, as there’s no single protest leader to negotiate with.

For investors, the question is whether it could derail the outperformance of French equities in 2018. One thing is clear. These protests are a real threat to the country’s retailers, including Carrefour and Casino, which are already busy battling a price war and trying to fend off Amazon.com’s efforts to penetrate their home market. Big-box retailers have been hurt by the demos and blockages throughout the country, with customers denied access to some hypermarkets and supermarkets for entire days at a time. They recorded an average fall in consumer-good sales of 35 percent on Nov. 17 and of 18 percent the following Saturday, according to Nielsen data.

All this is adding to the perception of shrinking purchasing power in France, in particular among people on lower incomes. And that “doesn’t bode well” for the year-end holiday retail season, which needs a boost after the unseasonably hot weather of the previous months, according to Invest Securities. In fact, consumer confidence has been depressed since the summer, and this might be the final straw.

The impact on toll roads is harder to quantify, as demonstrators have been regularly opening them to let cars pass freely. Vinci is the largest operator in France and although motorway concessions only account for about 13% of its 2017 revenue, they generated more than 59 percent of its Ebitda. So brace yourself for an impact on earnings if the unrest gains traction.

The protests started on Nov. 10 with thousands of demonstrators demanding lower gasoline prices and taxes. Demonstrators marched on Paris’s Avenue des Champs-Elysees two weeks later, triggering social unrest. Surprisingly, the protest is benefiting from a significant backing, with 84 percent of the French public calling it “justified,” according to Odoxa-Dentsu poll for Le Figaro.

Further rioting over the weekend shows the movement is spinning out of control.

If this movement snowballs like we’ve seen in Italy with the Five Star Movement, Macron will have his hands full handling a crisis at home and have less time for the matters of the euro zone. After Greece, Brexit and Italy, this is another front that Europe didn’t need.

This is something to keep in mind, although today, the market will be focused on positive developments coming out from the G-20 meeting, with markets rallying globally

end
ITALY
Supposedly, Italy back down and will gun for a deficit target of 2.0%
(courtesy zerohedge)

Italy Backs Down: Yields Slide As Populists Cave On

Deficit Target

It’s only Dec. 3, but international investors already have a lot to be grateful for this holiday season. In what was perhaps the most important development for global markets this weekend, President Trump and his Chinese counterpart, Xi Jinping, helped soothe investors’ trade war fears by agreeing over the weekend to a truce – essentially a three-month detente in the US-China trade war that will put the next round of tariffs on hold while the two countries try to forge an agreement on some of the US’s more contentious demands (like putting an end to IP theft by Chinese companies).

Conte

The deal inspired shouts of jubilation from Wall Street. But while sell side analysts were busy cranking out bullish sell-side notes with corny titles – as was to be expected, regardless of which way the Trump-Xi dinner broke…

Paul McNamara

@M_PaulMcNamara

inevitable from Citi after the Buenos Aires summit

… Italy has taken some serious strides toward calming fears about the “beginning of the end” of Europe by reportedly agreeing to work with the EU to lower its budget deficit target.

According to Bloomberg, Italian with a duration longer than 5 years climbed, sending yields to a two-month low, after the coalition government said it is ready to accept new budget deficit targets, according to Messaggero. Meanwhile, German bunds have pared losses which followed a trade truce between Presidents Donald Trump and Xi Jinping.

It was only weeks ago that Italian Deputy Prime Ministers Luigi Di Maio and Matteo Salvini, as well as the country’s ‘moderate’ economy minister, Giovanni Tria, had claimed that capitulating to the EU would be tantamount to “suicide” for the Italian people.However, that position softened a couple weeks later when Salvini, followed by the rest of the Italian populist establishment, told reporters that Italy would consider a lower deficit target, so long as the populists could still pay for all of the generous social programs promised in their platform. After consulting with Prime Minister Giuseppe Conte, the populists said they were ready “to accept new targets”, with Tria predicting that the EU will suggest a deficit of 2% rather than 2.4%. Such a number seems like a happy medium, that would allow the populists to save face (and preserve their popular mandate) while allowing the EU to crow about preserving fiscal discipline. Conte, who has emerged as the most moderate voice in the Italian government (even surpassing Tria in recent weeks), will lead negotiations with the EU, instead of Tria.

Though the yield on the Italian 10-year has climbed off its lows, it remains down 4.5 basis points on the day.

Italian

Last week, Italy’s European peers took the first step toward punishing it as representatives from the EU governments agreed to back the European Commissions call for an “Excessive Debt Proceeding” against Italy. While any sanctions likely wouldn’t materialize until the spring, the anxiety-inducing climb in Italian bond yields, and the ever-present threats of a downgrade from the world’s ratings agencies, has apparently convinced the populists that it would be better for the country – if not politically advantageous – to try and avert a banking crisis.

end

Seems that the EU has had enough of USA hegemony:  they are proposing widespread de dollarization initiatives

(courtesy zerohedge)

EU Proposes Widespread ‘De-Dollarization’ Initiatives

In the most blatant and transparent reaction to Washington’s continued vassal-ization, the European Commission has reportedly formulated a plan to reduce the role of the dollar in international trade.

Amid increasing tensions between Trump and various European leaders (cough Macron cough) and the ongoing threats of sanctions and tariffs, the European Commission plans to outline initiatives to develop the international role of the euroaccording to a draft document obtained by Bloomberg.

As Viktoria Dendrinou reports, the plan has three dimensions including the European financial sector, the international financial sector and key strategic sectors such as energy…

Member states should promote wider use of the euro in relations with third countries in field of energy, including in contracts within the framework of bilateral and multilateral international agreements,”

“The Commission calls on member states to include in their intergovernmental agreements with third countries a model clause, developed by the Commission, related to the use of the euro as default currency

“Participants in European energy markets should use more energy-related contracts denominated in euro

“Price reporting agencies should facilitate the launching of euro-denominated price benchmarks for crude oil

“Commodity exchanges should facilitate the further development of euro-denominated derivative contracts on crude oil and refined products

With Russia actively de-dollarizing, along with Iran, and China slowing its Treasury purchases (while publicly proclaiming support) but promoting its petroyuan contracts, Europe’s shift away from the petrodollar could be more posturing or could be the end of the beginning of the end as the dollar’s reign as reserve currency ends slowly at first then all at once.

With allies like these, who needs enemies?

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

IRAN/USA

Iran has tested a medium ranged ballistic missile capable of carrying multiple warheads.  The range: anywhere in the middle east as well as parts of Europe.

Trump will not be happy with this

(courtesy zerohedge)

Pompeo, Bolton Say Iran Test-Launched Ballistic

Missile Capable Of Striking Europe, Violated UN Ban

U.S. Secretary of State Mike Pompeo on Saturday condemned what he described as Iran’s testing of a medium-range ballistic missile capable of carrying multiple warheads as a violation of the international agreement on Tehran’s nuclear program.

As Haaretz reports, amid tension between Washington and Tehran over ballistic missiles, Pompeo warned in a statement released on Twitter that Iran is increasing its “testing and proliferation” of missiles and called on the Islamic Republic to “cease these activities.”

Full State Department Statement:

Iran Test Launches Ballistic Missile Violating UN Security Council Ban

The Iranian regime has just test-fired a medium range ballistic missile that is capable of carrying multiple warheads.

The missile has a range that allows it to strike parts of Europe and anywhere in the Middle East.

This test violates UN Security Council resolution 2231 that bans Iran from undertaking “any activity related to ballistic missiles designed to be capable of delivering nuclear weapons, including launches using such ballistic missile technology . . .”

As we have been warning for some time, Iran’s missile testing and missile proliferation is growing. We are accumulating risk of escalation in the region if we fail to restore deterrence. We condemn these activities, and call upon Iran to cease immediately all activities related to ballistic missiles designed to be capable of delivering nuclear weapons.

And national Security Advisor John Bolton was quick to jump on this ‘violation’ warning that “this provocative behavior cannot be tolerated.”

John Bolton

@AmbJohnBolton

Iran just test-fired an INF range ballistic missile capable of reaching Israel and Europe. This provocative behavior cannot be tolerated. https://www.state.gov/

Iran Test Launches Ballistic Missile Violating UN Security Council Ban

state.gov

end

6. GLOBAL ISSUES

Alasdair Macleod discusses  the background noise on the G20 financial war and possible outcomes:

(courtesy Alasdair Macleod)

G-20 & The Financial War

Authored by Alasdair Macleod via GoldMoney.com,

This weekend, the G20 nations meet at Buenos Aires. The most important issue will be America’s use of trade policy, ostensibly to bring an end to China’s unfair trade practices. Rather, it could mark a significant milestone in the cold war against China and drive the global economy into a slump.

Introduction

President Trump initiated the trade war with China. There is a widespread assumption he is pursuing his “art of the deal”, coming into negotiations aggressively to get a satisfactory compromise. Therefore, the script goes, China will be forced to climb down on its restrictive practices, technology and patent theft, and modify its Made in China 2025 (MiC2025) initiative to open it to American corporations. Trade negotiators from both sides have been working in the background to achieve some sort of progress before Presidents Trump and Xi meet at the G20 this weekend, which buoys up hopes of a positive outcome.

If so, it will be the start of a more public process, perhaps with threatened trade tariffs deferred. Meanwhile, the rhetoric on tariffs has escalated in recent weeks, as is often the case in negotiations when President Trump is involved, and particularly when deadlines loom. But there are concerns the situation is more serious than this optimistic version of events would have us believe.

This article briefs readers about the bigger picture behind this trade spat, which is just one battle in an ongoing financial conflict between China and America. Worryingly, it takes place against a deteriorating economic outlook for the world’s largest trading bloc, the EU.

The trade tariff position

American sources have been upping the rhetoric against China’s trade ahead of the G20 both generally and specifically. For example, the US has accused China’s Huawei of planting spyware in electronic equipment. Huawei is a major global telecoms manufacturer and a leader in the development of 5G mobile technology, set to become more important to data transfer technology than broadband, and the Americans obviously want to shut them out of this market.

It was widely believed the Trump administration pursued a tough stance against China’s unfair trade practices to maximise the Republican’s success in the mid-term elections. If so, it was a policy that failed, with the Democrats gaining 38 seats in Congress. In any event, the mid-terms are no longer relevant to American trade policy, if they ever were.

The wider trade concerns expressed by America are over access to China’s markets for American corporations, the protection of intellectual property, and exclusion from MiC2025. But with MiC2025, it is a case of the American pot calling the Chinese kettle black, because America is also increasingly protectionist. However, there are small adjustments China can make to seek a trade resolution, for example modifying or dropping clauses limiting foreign involvement in key industries. Furthermore, there are pressures on the American side to seek an accommodation with China from both American-based multinationals with cost-effective supply chains in China, and from financial markets which have nose-dived in recent weeks. Add to that the soya farmers in the US, and resolving trade disputes should be a no-brainer.

Assuming a positive outcome, we can then expect that China’s economy, which has become a material driver for global economic growth, will have significant negative pressures lifted from it. The yuan will then rally, and with it a decent recovery in US stockmarkets will surely follow. US stockmarkets are important to Trump, having hitched his wagon to them. Surely, he would like to see higher stock prices. China would also welcome a trade deal. In China, the uncertainty is affecting the availability of bank finance for private sector manufacturers and undermining consumer sentiment.

With MiC2025, China wants to catch up with the West when it comes to manufacturing technologically-advanced products. Its objective is reasonable. MiC2025 has singled out ten sectors for government support, from robotics to transport, to new-generation IT, to bio-pharma. By encouraging development in industrial sectors, China is doing what all other governments do, including the US, and the US surely knows it.

Therefore, if trade is the genuine concern, all reason suggests a positive outcome from this weekend’s G20 will occur, the yuan will rally as will Wall Street. And President Trump will be praised by American industry and financial markets for his successful negotiating strategy.

But…but…

There is a deep problem with this analysis, which was exposed at the Asia-Pacific Economic Cooperation summit in Port Moresby, capital of Papua New Guinea two weeks ago. For the first time ever, APEC broke up without a joint communiqué. It was also reported that the police were called after Chinese diplomats tried to force their way into PNG’s foreign ministry. Geopolitics overshadowed trade issues with tensions boiling to the surface. US Vice-President Mike Pence accused China of debt diplomacy, whereby China was creating debt slaves of the smaller nations.

It was in short, a diplomatic disaster. It was also a timely reminder that there is a bigger picture, with America determined to limit Chinese expansion. The politics included criticism of China’s annexation of reefs in the South China Sea as well as the “debt slave” issue. The US, in conjunction with Australia, promised to develop a naval base at Lombrum on Manus Island, about 350 km north of PNG. Furthermore, the US has agreed with Australia and Japan to spend some $2bn improving PNG’s infrastructure, including electricity.

Doubtless, the US feels it has now bought PNG’s cooperation in its cold war against China and prevented China’s exploitation of PNG’s resource potential. It hopes to have called a halt to China’s economic expansion into the South Pacific. Australia will also have greater security from her largest customer, if it is needed in future.

Another delicate issue is Taiwan, with America sending two warships through the Taiwan Strait in a move seemingly designed to provoke China. So those hoping for a positive outcome from the G20 might like to note that it is at odds with the way America is moving on the Pacific chessboard.

The world is changing

In any attempt to divine the economic future, it is a mistake to think only in terms of China and America. The largest economic bloc by GDP is the EU, and it has also been cast into a trade and political never-never land by President Trump. The EU is losing its security blanket, which has always been provided by the US through NATO. It is now planning its own army, which will almost certainly take over from NATO in the longer term. Trade differences with the US have been put on ice but are still there.

The EU’s approach to trade is deeply protectionist, having imposed over 12,500 tariffs on imports into the EU. Additionally, Brussels regulates to the micro level what products can be sold within the EU. So, in the case of Huawei’s 5G technology referred to above, the battle in Europe is less about security issues (though they are always there) but more about influencing or responding to the regulatory regime, which is effectively controlled by its European competitors based in the EU.

In this context, Britain losing all her power to restrain protectionist instincts in the EU is crucial. The UK has been the driving force in supporting liberal trade policies against protectionist France and Germany, and following Brexit that is now no longer the case. The EU is bound to become increasingly inward-looking as a consequence of Brexit, increasing both tariffs and regulations. Add to this a developing euro crisis, with interest rates stuck below the zero bound, and it is hard to see how the EU will not resort to increasing state control of both money and trade.

From China’s point of view, the time when her export business drove her economy must be in its sunset phase. Even if a trade agreement with the US is achieved in the coming months, there’s no guarantee Trump will not renege on a deal. China’s leadership had planned for this some time ago, with a state-induced shift of economic emphasis away from export dependency. Instead, there is a strategic move towards a more service-oriented economy, with better infrastructure and improved living standards for a rapidly growing middle class. But the pace of this strategic change is being swiftly overtaken by events. Therefore, China’s leadership needs to accelerate its plans in the light of both President Trump’s trade and security policies, and the knock-on effects of Brexit on EU trade policy.

The implications for global growth are undoubtedly negative, even dire. If China accelerates her plans towards a service and technologically driven economy, it is bound to lead to a temporary rise in unemployment from its redundant export industries before labour is transitioned to the new. The social consequences could become destabilising.

In the US, the problem is a potentially stagnating economy coupled with rising prices, fuelled in part by tariffs on imported goods. Only this week, Trump made it clear not only is he prepared to increase tariffs from 10% to 25% on $200bn of Chinese imports from 1 January but is prepared to extend tariffs to all Chinese imports. The walking shadows of Smoot and Hawley once more strut and fret upon the global stage.

It may be the art of the deal, and President Trump displays the bravado of someone who has his opponent on the run. If so, he risks the enjoyment of the chase while ignoring the collateral damage. But the threat of tariff-inflated prices cannot be ignored by the Fed. If President Trump refuses to find a means whereby China can save face, which is rapidly becoming the single most important issue this coming weekend, the prospects for not only China’s economy, but that of the US and the EU as well, will rapidly deteriorate.

end

7  OIL ISSUES

Tom Luongo discusses the new Israeli pipeline which will travel underneath the Mediterranean, supply gas to Cyprus and then onto Italy. The problem is the deep cost. Germany and Russia are OK with this as the the Norstream nO 2 is much cheaper.  Germany is happy to receive the cheaper gas and let Italy have the more expensive East Med pipeline gas.

(courtesy Tom Luongo)

The Ins And Outs Of Israel’s Pipeline To Europe

Authored by Tom Luongo,

Israel announced a major pipeline project from the gas fields off its shore involving four countries, terminating in northern Italy. The EastMed Pipeline could be one of the longest in history as well as one of the most technically difficult to pull off.

The deal was announced on World Israel News a few days ago and has been in negotiation for a couple of years now.

It’s being billed as a counter to both Arab and Russian power but that’s not really true.  This will supposedly deliver 20 bcm annually to Cyprus, Greece and Italy and come at a significant cost because of the challenge of it.  But the first train will be 10 bcm according to IGI Poseiden’s website, the company building the pipeline.  10 bcm is similar in size to the Southern Gas Corridor bringing gas in from Azerbaijan.

The agreement has been some two years in the works, with the four countries’ energy czars signing a memorandum of understanding regarding the pipeline in December 2017. It is considered a technically difficult project to complete not only because of the depth of the undersea route, but also because it will have to pass through a volcanic area in the ocean bottom between Cyprus and Greece.

No discussion of cost was in the announcement.

It was all about the politics.  But, the politics of this is Kabuki theatre.  The Russians don’t care about more pipelines to Italy, now that Turkstream is ongoing and Europe’s gas needs are accelerating.

This is a European Union project developed by IGI Poseidon under the auspice of the EU’s Connecting Europe Facility program.  The EU is footing a lot of the bill for this.

For all the talk about Russia’s monopoly on the European gas market, it’s simply untrue.  Russia supplies between 35% – 40% of Europe’s gas.  That share has increased because of rising demand and no new pipeline developments.

And for Europe, the most economical gas is that delivered by Russian pipes.  Both the STC and EastMed pipelines will be profitable but only after the EU portion of the funding is written off, which it will be.

EastMed, like the STC, has been in development for nearly ten years.  Turkstream went from idea to reality in two.

These are projects force-fed onto European consumers for political purposes, not economic ones.  Diversification of supply is fine if it makes economic sense.  But if it doesn’t all it’s doing it lengthening the time to profit for the people who paid for the project in the first place, the consumers through their taxes.

Moreover, if these projects were fundamentally economic they wouldn’t require such a long time to negotiate.  The negotiations stem from none of the principles wanting to pay for the uneconomic part of the costs.  And that’s where the EU steps in to provide that cost which is then passed onto the consumer.

In the end, none of this will truly matter since the need for gas into Europe is so high and unlikely to be replaced by anything else in the foreseeable future.  Europe is wedded to bad environmental ideas which, in turn, become bad energy policy.

The latest of which is the announcement by French President Emmanuel Macron that France would be shutting down 14 of its 58 nuclear reactors by 2035.  The only thing keeping France’s insanely Marxist economy functioning is its cheap nuclear-generated electricity.

Macron wants to drop this from 72% of current power needs to 50% and spin up unreliable sources like solar and wind.

But, back to Israel and the politics of EastMed, this pipeline, like the SCT from Azerbaijan, doesn’t threaten Russian market share because of its ultimate cost.  Transport costs money, even for piped gas.  And the longer the pipeline the more transport costs matter.

And if Israel finally getting its pipeline to Europe is the price Russia has to pay to help stabilize the region a little bit, then it’s a small one in the end.  The smarter play for Israel, of course, is to develop a pipeline that goes east to Syria rather than northwest to Italy, but don’t hold your breath there.

What I think is interesting is the dichotomy between what Germany gets and what Italy gets in terms of gas supply.  Germany gets the massive Nordstream 2 bringing in more than twice what Italy gets from the more expensive EastMed and SCT will bring.


The Now Dead Southstream Pipeline Project

Remember, SouthStream’s original plan was to go through Bulgaria, across to Austria and a second stream across Greece to Italy.  That was quashed because of U.S. interests in keeping Russia down.  And because Israel wanted EastMed and the Saudis were working for a pipeline through Turkey through Syria.

And Angela Merkel was only too happy to oblige to keep Greece and Italy from accessing cheap Russian gas.

No, they can have expensive Azeri and Israeli gas instead.

This is yet another reason why Italy needs to be done with the EU.  It is obvious  Germany and France want control over energy inflows to ensure political as well as economic dominion over any state that thinks about getting uppity to their rule.

This latest win for European Energy Security is exactly that.

*  *  *

Join my Patreon if you don’t like the EU

end

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 1.1329 UP .0019 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 113.52  UP 0.101 (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 1.2758 DOWN   0.0026  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3314  UP .0039 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 FELL by 27 basis point, trading now ABOVE the important 1.08 level FALLING to 1.1366/ Last night Shanghai composite CLOSED UP 66.61 POINTS OR 2.57%

 

//Hang Sang CLOSED UP 675.29 POINTS OR 2.55%

 

/AUSTRALIA CLOSED UP  1.86% /EUROPEAN BOURSES DEEPLY IN THE GREEN 

 

 

 

 

 

The NIKKEI: this MONDAY morning CLOSED  UP 233.70 POINTS OR 1.00%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED GREEN 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 675.29 POINTS OR 2.55% 

 

 

/SHANGHAI CLOSED UP 66.61  POINTS OR 2.57%

 

 

 

Australia BOURSE CLOSED UP  1.86%

Nikkei (Japan) CLOSED UP 223.70 POINTS OR 1.00%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1229.10

silver:$14.41

Early MONDAY morning USA 10 year bond yield: 3.04% !!! UP 3 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 3.33 UP 2  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 97.06 DOWN 22  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: 1.80% DOWN 3    in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.09%  UP 0  BASIS POINTS from FRIDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…

 

SPANISH 10 YR BOND YIELD: 1.49% DOWN 1  IN basis point yield from FRIDAY

ITALIAN 10 YR BOND YIELD: 3.15 DOWN 6    POINTS in basis point yield from FRIDAY/

 

 

the Italian 10 yr bond yield is trading 165 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.31%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.83% 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 1.1354 UP .0043 or 43 basis points

 

 

USA/Japan: 113.64 UP  0 .224 OR 22 basis points/

Great Britain/USA 1.2735 DOWN .0002( POUND DOWN 2 BASIS POINTS)

Canadian dollar UP 63 basis points to 1.3216

 

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The USA/Yuan,CNY closed UP AT 6.8830-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.8775(  YUAN UP)

TURKISH LIRA:  5.2525

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

 

 

 

Your closing 10 yr USA bond yield DOWN 2 IN basis points from FRIDAY at 2.99 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.18 DOWN 3 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, 96.97 DOWN 30 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 82.17 POINTS OR 1.18%

German Dax : CLOSED UP 208.22 POINTS  OR 1.85%
Paris Cac CLOSED UP 50.06 POINTS OR 1.00%
Spain IBEX CLOSED UP 102.40 POINTS OR 1.13%

Italian MIB: CLOSED UP: 433.39 POINTS OR 2.26%/

 

 

WTI Oil price; 52.63 1:00 pm;

Brent Oil: 61.22 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.57  THE CROSS LOWER BY .52 ROUBLES/DOLLAR (ROUBLE HIGHER by 52 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.2525 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.31 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 :53.14

 

BRENT:61.91

USA 10 YR BOND YIELD: 2.98%..

 

 

USA 30 YR BOND YIELD: 3.26%/.

 

 

 

EURO/USA DOLLAR CROSS: 1.1348 ( UP 37 BASIS POINTS)

USA/JAPANESE YEN:113.64 UP .231 (YEN DOWN 23 BASIS POINTS/ .

 

USA DOLLAR INDEX: 97.06 DOWN 22 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2730 DOWN 5 POINTS FROM YESTERDAY

the Turkish lira close: 5.2486

the Russian rouble:  66.55 DOWN .54 Roubles against the uSA dollar.( DOWN 54 BASIS POINTS)

 

Canadian dollar: 1.3207 UP 73 BASIS pts

USA/CHINESE YUAN (CNY) : 6.8830  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.8738 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.31%

 

The Dow closed  UP 287.97 POINTS OR 1.13%

NASDAQ closed UP 110.98  points or 1.51% 4.00 PM EST


VOLATILITY INDEX:  16.49 CLOSED DOWN  1.58

LIBOR 3 MONTH DURATION: 2.736%  .LIBOR  RATES ARE RISING/

 

 

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

 

Gold, Yuan, & Stocks Gain On Trump-Trade-Truce But Yield Curve Crashes

The alternative ending for last night’s Trump-Xi dinner……

Chinese stocks soared after the trade truce, but like US, leaked back in the afternoon session with no follow-through…

Chinese stocks soared after the trade truce, but like US, leaked back in the afternoon session with no follow-through…

But it was China’s currency that really surged – jumping around 1.1% -the biggest daily gain since August…

 

Similar picture in Europe – big gap open and euphoria fades…

Is France weighing on sentiment?

Neil Clark

@NeilClark66

The elites have gone too far. The costs of the 2008 financial crash have been met by ordinary people, not the greedy bankers & financial spivs who caused it. The people have had enough of austerity & falling/stagnant wages. What’s happening in #France now is only the start.

754 people are talking about this

 

US Futures ramped instantly, with Dow futures gapping up almost 500 points before exuberance faded…

 

On the cash side, Trannies and Small Caps leaked into the red before a buying surge restarted (don’t forget it is the first trading day of the month too)…Nasdaq was the day’s best performer…

 

Dow dumped after tagging 26k overnight…

 

Critically, the S&P stalled exactly where we thought – around 2800…

 

Dow and S&P pushed well above the big technical DMA levels but Nasdaq found resistance…

 

FANG Stocks are up 6 days in a row…

 

AAPL, AMZN, and MSFT are chasing each other’s tale at the same market cap…

 

Credit markets compressed on the day, but after the initial gap tighter, spreads pushed wider all day…

 

Treasuries were mixed with the short-end higher in yield and long-end notably outperforming…

 

10Y yields plummeted after their initial gap higher overnight, ending lower on the day at 2.98%… (lowest since September)

 

The yield curve collapsed despite the trade truce hype… This is the biggest flattening in 2s30s since Dec 2017

 

With 3s5s inverting for the first time since 2007…

 

And 2s5s also inverting into the close…

 

The Dollar ended the day lower from Friday’s close but it ended at the high of the day and ramped non-stop from around 4amET…

 

Cryptos slid lower over the weekend…

 

With Bitcoin back below $4000…

 

Oddly mixed bag in commodities too – copper ended notably lower despite what might be seen as a positive for China, Crude flip-flopped around, and PMs managed gains on a weaker dollar…

 

Gold jumped to one-month highs at $1240, blowing above its 50- and 100-DMAs

 

WTI Crude surged out of the gate, back above $53.50, despite Putin confirming no new additional production cuts. But as reality and uncertainty loomed, WTI faded back…

 

Gold strengthened against Yuan back to its key 8500 level..

 

Finally, we ask, who are you going to believe, desperate politicians need a win or the bond market…

Makes you wonder?

David Rosenberg@EconguyRosie

Is the really big story today the fact that the Dow couldn’t hang on to that early 450 point gain which has since been cut in half? Or maybe it’s the 10-year T-note yield slipping back below 3%, which shouldn’t be happening in a real risk-on day.

43 people are talking about this

And then there’s this…

KSBW Action News 8

@ksbw

‘Mission complete’: Sully the service dog to accompany Bush one last time http://bit.ly/2QdxkGT 

See KSBW Action News 8’s other Tweets

 

end

 

 

market trading

last night trading from China/futures New York:

(zerohedge)

 

Yuan Surges In Early Trading, Signals 2800 Open For The S&P

For now, FX markets remain the only ‘liquid’ course of reflection on the Trump-Xi trade-truce ‘deal’ and China’s offshore yuan has spiked over 6 handles (back below 6.90/USD) implying a solid jump at the open for US equity futures…

A big jump for sure in offshore yuan but remains well below the early Nov spike highs…

On a side note, JPY has weakened, but remain unable to erase all of Powell’s dovish speech surge…

 

And extrapolating from last week’s moves, offshore yuan implies an open for S&P futures around 2800…

Which, as we noted earlier, is exactly in line with one “base case” which correctly predicted that a Truce – in which existing tariffs stay in place – is the most likely outcome (with a 70% chance), while also accurately predicting a 3 month ceasefire, the agreement will be enough to get the S&P to 2,800...

… so look for a burst of buying in the S&P over the next 24 hours which pushes the stock index higher, but not much higher as trader concerns will next revert back to the Fed which now that trade tensions have been temporarily removed, may promptly revert back to its hawkish bias and resume rising rates well into 2019 which in turn will be the next bearish event-risk to put a damper on any substantial Christmas rally.

And while spread-betting markets are signaling around a 250 point gain at the open for the Dow…

It is clear that there is little follow-through since the initial spike.

We await the algos open to see just what can be made of this so-called ‘truce’.

end
THEN:

US Equity & WTI Crude Futures Surge At The Open, Yuan Fades

After the best week for the S&P 500 since 2011, US equity futures are opening up notably (Dow +400) after the so-called ‘trade-truce’. WTI is also soaring but yuan is fading off pre-open highs

Up almost 500 points…

And back above 26,000…

Including Friday’s meltup FOMO, stocks are up 2.5-3%…

Notably, yuan is fading as futures open…

As stocks and yuan converge…

In line with one “base case” which correctly predicted that a Truce – in which existing tariffs stay in place – is the most likely outcome (with a 70% chance), while also accurately predicting a 3 month ceasefire, the agreement will be enough to get the S&P to 2,800…

… so look for a burst of buying in the S&P over the next 24 hours which pushes the stock index higher, but not much higher as trader concerns will next revert back to the Fed which now that trade tensions have been temporarily removed, may promptly revert back to its hawkish bias and resume rising rates well into 2019 which in turn will be the next bearish event-risk to put a damper on any substantial Christmas rally.

And that is exactly where S&P Futs are – 2800…

Meanwhile, WTI Crude futures are soaring 2.5% despite Putin’s confirmation that there will be no new oil production cuts…

Gold spiked but immediately faded back.

Treasury futures are implying around a 6-7bps spike in 10Y Yields…

end
then in the afternoon:

Small Cap Stocks Give Up Trade-Truce Gains, Yield Curve Tumbles

“we’re gonna need a bigger trade truce…”

The initial short-squeeze is over and there has been no follow-through…

As we warned this morning the “he said, Xi said” uncertainty (h/t Cameron Crise) of a potential pause in trade tensions is simply not enough to overcome a tightening Fed and fading economic hope.

The S&P stalled around the 2800 support level we suggested…

 

And Small Caps have given up their gains, leading the reversal…

 

And finally, the short-end of the yield curve has collapsed further with 2s5s back below 2bps…

And 10Y Yields have tumbled back to below 3.00%…

Crude is still higher but rolling over as gold extends its gains…

end

 

market data/

“Bad Omen Worsens” – Yield Curve Inverts For First Time Since 2007

very ominous: the 3 yr yield overtakes the 5 yr yield.

also ominous:  the 2 yr yield is one basis pts above the 5 yr

(zerohedge)

While not the media and academia’s preferred tracker of looming recessions, the front-end of the Treasury curve has now inverted…

 

…for the first time since June 2007.

All of this got Bloomberg’s Cameron Crise wondering what is the typical Fed policy move is in the year after 2s-5s inverts?

It turns out that there is some precedent for further tightening, but only by a maximum of 100 bps…a pretty modest pace by the standards of history.

More to the point, since 1985 the Fed funds rate has never risen (on a 1-year forward time horizon) when 2s-5s was inverted by more than 12 bps. Clearly we are some way from that, but it’s going to be hard to argue from an historical perspective that the apparently inevitable front-belly inversion won’t in some way mark the beginning of the end of the Fed policy cycle.

Yields remain very modestly higher on the day but are sliding rapidly from overnight highs…

And converging…

Additionally 2s5s is back below 1bps…

And Breakevens are collapsing…

And as we laid out in great detail before, this is a big deal.

As JPM’s Nikolaos Panigirtzoglou wrote, an inversion at the front end of the US curve is a significant market development, not least because it occurs rather rarely, and has happened only three times over the past two decades: in 2005, 2000 and 1998 – all periods in time preceding major market busts.

While redundant, JPM explained that “such inversion is also generally perceived as a bad omen for risky markets” and highlighted that the two potential explanations are either markets pricing in a Fed policy mistake, or pricing in end-of-cycle dynamics.

Fast forward to today, when 8 months later, Panigirtzoglou writes in his latest Flows and Liquidity commentary that since then, not only has this inversion worsened, but it has shifted forward, and since the middle of November, the forward curve is inverted between the 1-year and the 2-year forward points.

This shift forward in Fed policy reversal expectations is in line with historical experience. As JPM wrote back in April, the 3y-2y forward rate spread had historically led the 2y-1y one, and this has now occurred since mid-November.

What does this mean in practical terms? Simple: the latest curve inversion implies that markets are now pricing in a peak in the Fed policy rate in end-2019 rather than during 2020 previously. JPMorgan shows this in Figure 2, which depicts the forward curve of the 1-month dollar OIS curve currently vs. its snapshot at the beginning of October before the equity market correction.

Not only has the market-implied path of policy rate expectations shifted downward in the aftermath of the equity market correction, but the whole curve has shifted forward. And this week’s comments by the Fed Chairman appear to have reinforced these policy reversal expectations with the 2y-1y forward rate spread inverting further to below -3 basis points.

Of course, as we discussed extensively in April, such pronounced shifts forward in Fed policy rate reversal expectations has also traditionally been associated with end-phases of the US monetary policy cycle. In the 2000 monetary policy cycle, the 3y-2y forward rate spread of the 1-month OIS rate turned negative in February 2000. And as JPMorgan adds, the 2y-1y forward rate spread turned negative four months later in June 2000. The Fed delivered the last hike in May 2000.

In other words, from a timing point of view, the last hike of the Fed at the time almost coincided with the inversion of the 2y-1y rate forward spreadIncidentally that also marked the bursting of the dot com bubble, as the US equity market had started declining at roughly the same time in June 2000. The subsequent equity market correction induced the Fed to start cutting rates in 2001.

Fast forward to the next rate hike cycle, when in the 2006 monetary policy cycle, the 3y-2y rate forward spread of the 1-month OIS rate turned negative rather early in August 2005The 2y-1y forward spread turned negative ten months after in June 2006. Similar to the 2000 cycle, the last hike of the Fed at the time in June 2006 coincided with the inversion of the 2y-1y forward rate spread. There was one material diference to the 2000 cycle: the equity market had started declining much later in October 2007 when the Fed started cutting rates.

Rather concerningly, here JPM notes that although it is still early to draw conclusions, the lags from the 3y-2y inversion to the 2y-1y inversion and the September peak in the US equity market appear more consistent with the 2000 rather than the 2006 cycle.

Now as readers may recall, when the 3y-2y forward spread inversion first emerged last April, JPM argued that an inversion at the front end of the US curve “was a bad omen for risky markets.

So, perhaps not unexpectedly, the ensuing 2y-1y inversion and shift forward in Fed policy rate reversal expectations is, according to JPMorgan, “worsening this bad omen.

Why? Because in even more bad news for the BTFD crew, the lesson from the previous US monetary policy cycles is that a sustained recovery in equity and risky markets has tended to occur only after the inversion disappears and the front end of the US curve, in particular the 2y-1y forward rate spread, resteepens.

USA ECONOMIC STORIES OF INTEREST

Is the Dallas housing market trying to tell us something? The Wall Street Journal has now called the housing boom is coming to an end…and it starts in Dallas…

(courtesy zerohedge)

 

WSJ Calls It: “US Housing Boom Is Coming To An End,

Starting In Dallas” 

About two months after Bank of America rang the proverbial bell on the US real estate market, indicating existing home sales have peaked, reflecting declining affordability, greater price reductions and deteriorating housing sentiment. It now appears The Wall Street Journal has jumped on the bandwagon in calling the housing market top with a new piece that warns: “US Housing Boom Is Coming To An End, Starting In Dallas.”

In a piece published Tuesday, the WSJ hones in on Dallas to explain the national slowdown of the housing market alongside Trump’s “greatest economy ever.” Housing prices have risen far faster than wages, which has triggered an affordability crisis during the same time the Federal Reserve is undergoing monetary tightening – a perfect cocktail that could form a top in the market. More: 

“Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000. On one street alone, $4 million of new homes sat empty on a visit earlier this month. Some home builders are so desperate to attract interest they are offering agents the chance to win Louis Vuitton handbags or Super Bowl tickets with round-trip airfare, if their clients buy a home. Yet fresh-baked cookies sit uneaten at sparsely attended open houses.”

WSJ notes that affordability has gotten “out of whack with historical norms.” The median home price in Dallas now costs more than 50% than it did in 2007.

On Zillow’s website, the Dallas market is rated as “cold.” Plano, McKinney, and Allen are each rated cold, as well, while Frisco is “very cold.”

The WSJ interviewed a millennial family who purchased a home earlier this year in the Dallas metro area; they said the market “felt extremely hot,” but struggled to sell their previous home for five months as interest rates surged. In mid-October, they sold it for $16,000 less than their original asking price.

Mortgage rates positively correlate to 10-year Treasury notes, which have been all year because of growing inflation fears and massive deficit spending by the Trump admin.

“Some [buyers] are adjusting their budget. They’re shopping more for different mortgage companies,” said Amy Downs, a real-estate agent at Keller Williams Realty. “They still think they can find a lender that can get them a better rate, but it doesn’t really exist.”

Signs Of A Housing Slump: 

Housing Starts for single-family 

Three-month average sales, change from a year earlier 

Inventory, change from a year earlier in October 

Home values, change from a year earlier 

The Dallas market is one of the most sensitive regions in the country to volatility in mortgage rates. The average household finances 83% of its home purchase, slightly higher than the national average of 81%, according to Black Knight Inc., a mortgage data company.

“As mortgage rates rise, buyers increasingly look for less-expensive homes. That is pushing builders further out to the fringes in search of lower-cost land where they can try to build more homes priced at $300,000 or less. The median price for a new home in Dallas has dropped by some $3,000 this year compared with last year, according to Metrostudy, which suggests builders are building at lower price points.

That can be a risky strategy after the heat has already started to come out of the market. During the last downturn, it was precisely those exurban neighborhoods that got hit the earliest and the hardest as buyers migrated back to more desirable neighborhoods when prices fell.”

“Dallas has been the “canary in the mine shaft” this housing cycle,” said Paige Shipp, regional director for Metrostudy, a consultant to home builders. “Homes are taking longer to sell, bidding wars are rarer and price cuts are more common as buyers absorb the impact of higher rates.”

And Shipp could be right, new home-price gains data in 20 US cities grew in September at the slowest pace in almost two years, adding to signs that real estate has hit a cyclical peak.

“The 20-city index of property values increased 5.1% from a year earlier, the least since November 2016, after rising 5.5% in the prior month, according to S&P CoreLogic Case-Shiller data released Tuesday. The median estimate in a Bloomberg survey of economists called for a gain of 5.2%. Nationally, home prices were up 5.5% from September 2017,” said Bloomberg.

With BofA and WSJ months apart in calling the US housing top, it seems that the affordability crisis and higher interest rates could have pricked the bubble.

 end
New home sales collapse and remember that home sales are a big part of the GDP
(courtesy Layman/IRD)

The Cat Is Out Of The Bag: NEW HOME SALES

COLLAPSE

0 0

The carefully crafted narrative of an economic recovery we’ve been spoon fed for years is falling apart. Here’s the latest example with new home sales…

by Aaron Layman of AaronLayman.com via Investment Research Dynamics

Dave’s Note: New homes sales, based on the seasonally adjusted annualized rate metric, are down over 23% from their peak in November 2017. Pending home sales, which translate into existing home sales less canceled contracts (typically failed financing), are down on a year-over-year basis 11 out of the last 12 months. But it’s not just interest rates, which aren’t up much from their lows in the context of the last 20 years. A bigger factor is “market mortgage fatigue.” The Govt has tapped out the pool of potential mortgagees by continuously lowering the bar for qualifying for a FNM/FRE mortgage. In addition, the Government slashed the cost of PMI insurance. That plus the tax cut have offset the cost effect of slightly higher mortgage rates (up about 1% in the last year – big deal). The remaining pool of first time buyers largely will have trouble qualifying until the Government lowers the bar again…

Aaron Layman, who is one of the few honest realtors, wrote a worthwhile commentary, posted below, on the state of the housing market. You can visit Aarons’s site here: AaronLayman.com

*****************

The Census Bureau numbers for October new home sales posted at a seasonally adjusted annual rate (SAAR) of 544,000 units. This was way below expectations of a 575,000 print, and near a three-year low. As I have been detailing for much of the year, much of that “pent-up demand” that you hear real estate industry mouthpieces talking about is a giant work of fiction, a tired marketing ploy that the media, economists and Realtors have been using in attempt to justify grossly inflated home prices across the U.S.

Well, it appears the cat is officially out of the bag with the release of October home sales. While the previous months sales were revised higher, the miserable October print just corroborates my thesis that the Fed’s asset-bubble unwind is just getting started. There are plenty of other consequences in the pipeline. It’s important to remember that the housing market, thanks to the Federal Reserve’s failed policies, is more intricately tied to the financial markets than ever before. This was the Faustian bargain that Obama and the Fed made when they decided to bail out every Wall Street institution under the sun at the expense of American taxpayers, including the ones running obvious accounting control frauds. Of course the millions of homeowners who lost their homes to foreclosures (many of those executed in kangaroo courts with fraudulent robosigned documents) were deemed acceptable collateral damage to save the “system”.

The ultimate con was of course advertised as a salvation of the economy. In reality it just delayed the eventual reset with a new pile of debt that is larger than ever and spread among multiple asset classes rather than just housing. The big problem, one that the Fed’s economists remain willfully ignorant of, is the unfortunate reality that all of this speculative debt is more interest-rate sensitive than they would have you believe. The new home sales market is exposing this unfortunate dilemma very clearly.

According to Census numbers, new home sales in October collapsed 12 percent from the same time last year. Sales were down 8.9 percent from the revised September print. The median price of a new home contracted in October was 309,700, down $9800 or 3 percent. The average price of a new home contracted in October came in at $395,000, up $1,000 from October of last year. The supply of new homes for sale in October rose to 7.4 months, a 32 percent jump from October of last year! So if prices fell three percent and supply jumped higher, why the big collapse in sales? Can you spell “housing market bubble”. Aside from the swoon in the stock market during October, the other key ingredient for deflating an asset bubble was also present, as interest rates hit a multi-year high. We now have a good idea of what the breaking point for the housing market is, and it’s a lower threshold than many in the media were/are willing to admit. This is the result of years of rampant artificial asset price inflation courtesy of the Federal Reserve.

The swoon in new home sales is simply the reflection of moral hazard coming home to roost. While the media, the Fed and its army of economists have continued to tout the amazing bull market “recovery”, the sand (debt) upon which it was built is now shifting. That carefully crafted narrative that we have been spoon-fed for the last several years is looking more tenuous by the day.

Trump tweets that China will reverse auto tariffs and that sends all auto stocks climbing this morning
(courtesy zerohedge)

Carmaker Shares Surge After Trump Mysteriously

Tweets China Will Reverse Auto Tariffs

Long-suffering European auto stocks ripped higher on Monday as they headed for their best session in years following a late night tweet from President Trump claiming that China had agreed to lower its punishing 40% tariff on US-made cars. Ironically, shares of German companies like Daimler and BMW outperformed US auto stocks because many of the cars they export to China are manufactured in the US.

“China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” Trump said.

Donald J. Trump

@realDonaldTrump

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.

Bolstering the president’s claim, a top Chinese trade official declined to comment on the Trump tweet during a morning press conference, which only helped push shares higher. Trump tweeted after China and the US agreed to a “temporary” 90-day trade truce where China agreed to buy more US agricultural products to try and help narrow its trade surplus with the US while Trump agreed to suspend a planned increase and expansion for US tariffs.

Autos

Beijing raised tariffs on U.S. auto imports to 40 percent in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China last year. Last week, China called for a “negotiated solution” to the trade standoff, saying its tariffs on US-made cars would be only 15% if not for the trade spat (Chinese policy makers earlier this year had agreed to lower tariffs on US cars before the trade war erupted in the spring).

As Bloomberg pointed out, a reduction in Chinese tariffs would benefit Daimler and BMW more than US carmakers like General Motors Co. and Ford Motor Co., as the German luxury brands dominate the top 10 list of car imports to China.

Car

Meanwhile, Chinese carmaker shares pared their gains, while shares of Chinese car dealerships climbed, as the threat of increased competition weighed on carmakers’ shares.

Meanwhile, Angela Merkel said around midday in Europe that a planned meeting between Germany auto company leaders and Trump on Tuesday wouldn’t focus on tariffs.

END

CONFUSION GALORE

(courtesy zerohedge)

Mystery Of Chinese Auto Tariffs Deepens As Kudlow, Mnuchin Only Add To

Confusion

One of the catalysts bolstering the overnight rally, which sent auto stocks surging both in the US and across the Atlantic, was a late night tweet by Donald Trump according to which “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%” without giving any further details.

This however prompted even more questions about the outcome of his meeting with counterpart Xi Jinping as this was the first time that this aspect of the US-China trade agreement had been unveiled.

On Monday morning, Treasury Secretary Steven Mnuchin confirmed Trump’s tweet, saying that China has agreed to eliminate tariffs on imported automobiles but declined to give details.

“The first part was to reduce the surcharge, but yes there have been specific discussions on where auto tariffs will come down to, but I’m not prepared to talk about the specifics,” Mnuchin told reporters outside the White House, leaving the mystery intact.

A little later, Trump’s chief economic advisor, Larry Kudlow, told reporters that the Chinese are “going to roll back their auto tariffs,” adding “that’s got to be part of the deal” talking back Trump’s definitive assessment that China had agreed to “reduce and remove” (which is it?) auto tariffs.

Speaking later, Kudlow added some more confusion when he said that he “assumes” China will put car tariffs on the table right away, a statement that certainly does not imply China had “agreed” to anything.

Meanwhile, from the Chinese side, there was little mention of car tariffs being part of a deal. In fact, there was no mention at all: in a briefing in Beijing a few hours after the tweet, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.

As Bloomberg notes, the uncertainty about a deal on car tariffs stems from the unusual nature of the G-20 negotiation. The outcome of the talks wasn’t recorded in a joint statement, and so the two sides have instead emphasized different results. China hiked its tariff on U.S.-made cars to 40% earlier this year in retaliation for tariffs Trump imposed on Chinese imports, and Beijing has made no announcement about reducing the car tariff.

Last week, China said that tariffs on U.S. autos would be 15 percent if not for the trade dispute, and it called for a negotiated solution. Chinese officials discussed the possibility of lowering tariffs on U.S. car imports before Xi met Trump in Argentina. But the magnitude and timing of such a reduction were unclear, a Bloomberg source said.

The U.S. currently charges a 27.5 percent tax on imported cars from China.

Of course, any breakthrough in the auto tariff front would be widely cheered by the market: as both domestic and foreign carmakers have long pleaded for freer access to China’s auto market, while its own manufacturers are trying to expand abroad. In April, China announced a timetable to permit foreign automakers to own more than 50 percent of local carmaking ventures.

In summary, confusion continues to reign over whether the US and China struck some deal to “reduce and remove” tariffs, even if for now the S&P auto sector is happy to buy first and ask questions later.

END

Looks like Ford is doing exactly what GM is doing and the are said to announce  25,000 job cuts of which many will occur in the money losing venture over in Europe.

(courtesy zerohedge)

Ford To Announce 25,000 Job Cuts: Morgan Stanley

On a day when US and European auto stocks rallied (at the expense of shares of their Chinese competitors) following President Trump’s tweet (since complicated by comments from Kudlow and Mnuchin) that China might soon agree to reverse its tariffs on US-made cars, Morgan Stanley has published a report that further justifies the short-term bull case for autos while possibly infuriating President Trump.

BBG

After Ford successfully spun its latest “restructuring” as a jobs-neutral, union-endorsed shifting of employees from one factory to another, one analyst at Morgan Stanley is calling “bulls***”, writing in a report published Monday that the Detroit automaker could soon announce an even larger round of job cuts than rival GM, which famously incurred the wrath of President Trump last week when it announced that it planned to shutter five North American factories and fire 14,700 US workers (the job cuts would affect both hourly blue-collar workers as well as white-collar salaried workers).

Cars

MS analyst Adam Jonas said that as part of Ford’s $11 billion ‘restructuring’, Morgan Stanley expects the car maker could cut as many as 25,000 jobs (though the bulk of the cuts would likely focus on its profit-draining European operations).

“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”

Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.

“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”

Ford announced last week that it would be slashing shifts at 2 US factories and moving workers elsewhere.

Ford also is cutting shifts at two U.S. factories in the spring and transferring workers to plants building big SUVs and transmissions for pickups in moves that the automaker said will not result in job reductions.

But the biggest risk here for US workers is that these cuts will likely be self-reinforcing, as rival automakers scramble to shrink their staff amid intensifying pressure for cost cutting.

Jonas said other automakers will be forced to follow GM’s and Ford’s actions as the industry transforms, first to abandon factories building slow-selling sedans and ultimately to retool to build electric and self-driving vehicles.

“We believe existential business model risk will be prioritized over near-term profits and cash return,” Jonas wrote. “We still do not believe investor expectations have fully considered the near-term earnings risk.”

Of course, if China doesn’t lower tariffs (and instead the US imposes tariffs on cars made in Europe and Japan) this number wouldn’t come close: That scenario would be significantly worse.

END

SWAMP STORIES

I guess a pardon is out of the question:  Trump demands that Cohen serve a full prison sentence for “lying and making up stories”

(courtesy zerohedge)

Trump Demands Cohen Serve “Full Prison Sentence”

For “Lying And Making Up Stories”

Clearly excited after his trade deal detente triumph, President Trump has been spraying out tweets at a breakneck pace Monday morning, veering from hints about the forthcoming US-China trade accord (China will reverse some of its auto tariffs, Trump says) to his hopes for ending the US-China-Russia arms race.

Cohen

But by mid-morning, Trump had circled back to domestic issues – specifically his ongoing feud with Special Counsel Robert Mueller and his former personal attorney Michael Cohen, who pleaded guilty last week to one count of lying to Congress. Reports last week suggested that Cohen is asking to be spared jail time in exchange for his testimony against the president, which supports Trump’s claim that Cohen is lying about the president to save himself, Trump tweeted to demand that his former attorney be made to serve “the full sentence.” Trump seethed that Cohen could avoid punishment for his many crimes unrelated to the Trump campaign by “making up stories to get a GREAT & ALREADY reduced deal for himself and his wife and father-in-law (who has the money?) off Scott Free.”

“He lied for this outcome and should, in my opinion, serve a full and complete sentence.”

Donald J. Trump

@realDonaldTrump

“Michael Cohen asks judge for no Prison Time.” You mean he can do all of the TERRIBLE, unrelated to Trump, things having to do with fraud, big loans, Taxis, etc., and not serve a long prison term? He makes up stories to get a GREAT & ALREADY reduced deal for himself, and get…..

Donald J. Trump

@realDonaldTrump

….his wife and father-in-law (who has the money?) off Scott Free. He lied for this outcome and should, in my opinion, serve a full and complete sentence.

In his sentencing memo, Cohen’s lawyers claim that Cohen and his family have already suffered enough due to Cohen’s decision to cooperate. The memo also revealed new details about what Cohen told Mueller, including that Cohen personally kept “Client 1” (believed to be Trump) apprised of his discussions with the Russians through at least June 2016 (Cohen had previously told Congress that discussions about a possible Trump Tower Moscow had unraveled in January.

Cohen is expected to be sentenced Dec. 12.

Offering a positive contrast to Cohen’s betrayal, Trump praised former advisor Roger Stone, who has reportedly on the verge of being indicted by Mueller over purported contacts with Wikieaks, over Stone’s promise to “never testify against Trump.”

Donald J. Trump

@realDonaldTrump

“I will never testify against Trump.” This statement was recently made by Roger Stone, essentially stating that he will not be forced by a rogue and out of control prosecutor to make up lies and stories about “President Trump.” Nice to know that some people still have “guts!”

And as we suspected, Trump wasn’t quite done: After praising Stone, Trump returned to one of his favorite topics: bashing Mueller. He tweeted that Mueller “is a much different man than many people think” and that he and his “band of Angry Democrats don’t want the truth.”

Donald J. Trump

@realDonaldTrump

Bob Mueller (who is a much different man than people think) and his out of control band of Angry Democrats, don’t want the truth, they only want lies. The truth is very bad for their mission!

We’ll be keeping an eye out for more tweets, because by the looks of it, Trump is just getting started.
end
My goodness.  In Cohen’s guilty pleas Mueller who signed the documents leaves out a key passage that Cohen had no direct link to the Kremlin
what a farce…
(courtesy zerohedge)

Mueller Withheld “Details That Would Exonerate The

President” Of Having Kremlin Backchannel

It appears that special counsel Robert Mueller withheld key information in its plea deal with Trump’s former attorney, Michael Cohen, which would exonerate Trump and undermine the entire purpose of the special counsel, according to Paul Sperry of RealClearInvestigations.

Cohen pleaded guilty last week to lying to the Senate intelligence committee in 2017 about the Trump Organization’s plans to build a Trump Tower in Moscow – telling them under oath that negotiations he was conducting ended five months sooner than they actually did.

Mueller, however, in his nine-page charging document filed with the court seen by Capitol Hill sources, failed to include the fact that Cohen had no direct contacts at the Kremlin – which undercuts any notion that the Trump campaign had a “backchannel” to Putin.

On page 7 of the statement of criminal information filed against Cohen, which is separate from but related to the plea agreement, Mueller mentions that Cohen tried to email Russian President Vladimir Putin’s office on Jan. 14, 2016, and again on Jan. 16, 2016. But Mueller, who personally signed the document, omitted the fact that Cohen did not have any direct points of contact at the Kremlin, and had resorted to sending the emails to a general press mailbox. Sources who have seen these additional emails point out that this omitted information undercuts the idea of a “back channel” and thus the special counsel’s collusion case. –RCI

Page 2 of the same charging document offers further evidence that there was no connection between the Trump campaign and the Kremlin; an August 2017 letter from Cohn to the Senate intelligence committee states that Trump “was never in contact with anyone about this [Moscow Project] proposal other than me,” an assertion which Mueller does not contest as false – which means that “prosecutors have tested its veracity through corroborating sources” and found it to be truthful, according to Sperry’s sources. Also unchallenged by Mueller is Cohen’s statement that he “ultimately determined that the proposal was not feasible and never agreed to make a trip to Russia.”

“Though Cohen may have lied to Congress about the dates,” one Hill investigator said, “it’s clear from personal messages he sent in 2015 and 2016 that the Trump Organization did not have formal lines of communication set up with Putin’s office or the Kremlin during the campaign. There was no secret ‘back channel.’”

“So as far as collusion goes,” the source added, “the project is actually more exculpatory than incriminating for Trump and his campaign.” –RCI

The Trump Tower Moscow meeting – spearheaded by New York real estate developer and longtime FBI and CIA asset, Felix Sater, bears a passing resemblance to the June 2016 Trump Tower meeting between members of the Trump campaign and a Russian attorney (who hated Trump), and which was set up by a British concert promotor tied to Fusion GPS – the firm Hillary Clinton’s campaign paid to write the salacious and unverified “Trump-Russia Dossier.”

British concert promotor and Fusion GPS associate Rob Goldstone

“Specifically, we have learned that the person who sought the meeting is associated with Fusion GPS, a firm which according to public reports, was retained by Democratic operatives to develop opposition research on the president and which commissioned the phony Steele dossier” –Washington Post

In both the Trump Tower meeting and the Trump Tower Moscow negotiations, it is clear that nobody in the Trump campaign had any sort of special access to the Kremlin, while Cohen’s emails and text messages reveal that he failed to establish contact with Putin’s spokesman. He did, however, reach a desk secretary in the spokesman’s office.

What’s more, it was Sater – a Russian immigrant with a dubious past who was representing the Bayrock Group (and not the Trump Organization), who cooked up the Moscow Trump Tower project in 2015 – suggesting that Trump would license his name to the project and share in the profits, but not actually commit capital or build the project.

 

Felix Sater, FBI and CIA asset, real estate developer, ex-conSater went from a “Wall Street wunderkind” working at Bear Stearns and Lehman Brothers, to getting barred from the securities industry over a barroom brawl which led to a year in prison, to facilitating a $40 million pump-and-dump stock scheme for the New York mafia, to working telecom deals in Russia – where the FBI and CIA tapped him as an undercover intelligence asset who was told by his handler “I want you to understand: If you’re caught, the USA is going to disavow you and, at best, you get a bullet in the head.”

The Moscow project, meanwhile, fizzled because Sater didn’t have the pull within the Russian government he said he had. At best, Sater had a third-hand connection to Putin which never panned out.

Sources say Sater, whom Cohen described as a “salesman,” testified to the House intelligence panel in late 2017 that his communications with Cohen about putting Trump and Putin on a stage for a “ribbon-cutting” for a Trump Tower in Moscow were “mere puffery” to try to promote the project and get it off the ground.

Also according to his still-undisclosed testimony, Sater swore none of those communications involved taking any action to influence the 2016 presidential election. None of the emails and texts between Sater and Cohen mention Russian plans or efforts to hack Democrats’ campaign emails or influence the election. –RCI

As Tom Fitton of Judicial Watch noted of Mueller’s strategy: “”Mueller seems desperate to confuse Americans by conflating the cancelled and legitimate Russia business venture with the Russia collusion theory he was actually hired to investigate,” said Fitton. “This is a transparent attempt to try to embarrass the president.”

The MSM took the ball and ran with it anyway

CNN, meanwhile, said that Cohen’s charging documents suggest Trump had a working relationship with Putin, who “had leverage over Trump” due to the project.

“Well into the 2016 campaign, one of the president’s closest associates was in touch with the Kremlin on this project, as we now know, and Michael Cohen says he was lying about it to protect the president,” said CNN‘s Wolf Blitzer.

Jeffrey Toobin – CNN‘s legal analyst, said the Cohen revelations were so “enormous” that Trump “might not finish his term,” while MSNBC pundits said that the court papers prove “Trump secretly interacted with Putin’s own office.”

“Now we have evidence that there was direct communication between the Trump Organization and Putin’s office on this. I mean, this is collusion,” said Mother Jones‘s David Corn.

Adam Schiff, the incoming Democratic chairman of the House intelligence committee, said Trump was dealing directly with Putin on real estate ventures, and Democrats will investigate whether Russians laundered money through the Trump Organization. –RCI

As Sperry of RealClearInvestigations points out, however, “former federal prosecutors said Mueller’s filing does not remotely incriminate the president in purported Russia collusion. It doesn’t even imply he directed Cohen to lie to Congress.

“It doesn’t implicate President Trump in any way,” said former independent counsel Solomon L. Wisenberg. “The reality is, this is a nothing-burger.”

end
SWAMP STORIES/MAJOR STORIES//THE KING REPORT
Fresh violence in Paris as riot police use tear gas and batons
‘This is the start of a revolution’: Paris rioters steal police assault rifle, torch dozens of cars and vow to ‘stay in the streets until Christmas’ as fuel protests continue into the night and spread across France – and even to Holland..
“State of insurrection” as fuel tax riots engulf central Paris
Senator @ChuckGrassley [R-Iowa]: EU’s ambassador is trying to hurt American agriculture by saying we can’t negotiate w EU on ag in a new trade deal Sounds like they are trying to pull one over on Pres Trump to the detriment of American farmers Pres Trump/USTR Lighthizer R too smart 4 that!
Ex-federal prosecutor Andy McCarthy: Robert Mueller’s Plan [Best insight on probe we’ve read]
Special Counsel Mueller is building a report, not a case.
      No prosecutor builds a case the way Mueller is going about it. What prosecutor says, “Here’s our witness line-up: Michael Flynn, George Papadopoulos, Alex van der Zwaan, Rick Gates, Paul Manafort, Michael Cohen. And what is it that they have in common, ladies and gentlemen of the jury? Bingo! They’re all convicted liars.”?…
     From the beginning of the Trump-Russia investigation… we have stressed that the probe is a counterintelligence investigation, not a criminal investigation…
     The report will detail disturbing — and thus politically damaging — connections between Trump associates and Kremlin cronies. But there will be no collusion crime…and no need for witnesses…
     Mueller, the career Justice Department and FBI man, will deftly use this fact to argue that suspicions about these people, and hence the investigation, were fully justified even if — thankfully — there was no prosecutable Trump–Russia conspiracy. Trump’s Republican and conservative critics will cheer, figuring the president and his rogues’ gallery had it coming. Democrats will cheer, knowing this would never happen to Democrats…
 
[Democrat & Clinton strategist] Mark Penn: The Mueller investigation has come up empty on Russia — You won’t believe what’s coming next
    The pattern and purpose of Mueller’s investigation and the endgame is becoming clear, and yes, it’s clearly get the president at all costs. The team Mueller hired really foretold the story — Andrew Weissmann as the stop-at-nothing pit bull and a group of Democratic-leaning lawyers, including some who have represented the Clintons, had the obstruction of justice charge ready to go on day one…
    For those who thought Mueller would deliver a balanced and thoughtful report, these latest actions suggest that instead, we are seeing an all-out attack on the president and the presidency the likes of which we have never seen.  Get ready for the fight of the century coming soon and it will be about everything except collusion with the Russian government.

-END-

This is a must see

Prof Black takes on Deutsche bank

(courtesy Greg Hunter/USAWatchdog)

Deutsche Bank Crimes Can Cause Next Global Crisis – William Black

By Greg Hunter On December 2, 2018 In Market Analysis

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

The International Monetary Fund (IMF) has deemed Deutsche Bank as the most systemically dangerous bank in the world. Professor of Economics and Law, William Black, knows why and contends, “Deutsche Bank (DB) poses as what is called a ‘National Champion’ bank and the largest bank by far in Germany, but it’s actually the largest criminal enterprise in Germany. This is quite a statement because VW is such a massive fraud. . . .It is insane that we allow Deutsche Bank to go from fraud to fraud to fraud. . . .They cheat on everything else you can possibly imagine and, typically, they are getting caught, which is also not a very good sign in terms of their competence even as thieves. Even in the United States, there has been reluctance to crack down on Deutsche Bank. . . . When the New York Commissioner tried to crack down, the Office of the Comptroller of the Currency, the premier banking regulator, actually sought to impede that. He disparaged the New York folks and said there really wasn’t that big of problems and such, and all of that proved to be lies.”

Deutsche Bank was raided by German regulators last week on more allegations of fraud and money laundering.

DB is the epitome of “Too Big To Fail.” So, it will never be allowed to fail, and regulators will not be allowed to regulate them properly. Professor Black says, “Why you should care is Deutsche Bank impedes effective regulation everywhere and because God only knows the next thing they are going to do. This is going to continue until something dramatic changes. Eventually, they can cause the next crisis. . . .There will be a bailout in these circumstances, but that could help trigger another economic crisis. When the largest bank in the third largest economy in the world is completely dysfunctional, then the German economy is more likely to go into recession as well. That is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon. Relatively could be two years.”

Professor Black, who was a top regulator in the S&L crisis, says, “The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.”

In closing, Professor Black says, “I am going to give you the advice you get after the recession before the recession. Pay off your debt, all that you can. Do not keep borrowing except in certain circumstances like you are going to buy a home, and it is prudent purchase. Buy a car when you can buy it with cash whenever possible . . . and always try to be a net saver.”

Join Greg Hunter as he goes One-on-One with Dr. William Black, Professor of Economics and Law at University of Missouri Kansas City.

(Correction: Deutsche Bank has a market cap of $19.5 billion and not $1.5 billion as I mistakenly said at the beginning of the interview. Also, Germany’s GDP fell .2% recently and not 2% as I stated later in the interview.)

After the Interview:

Professor Black wrote the popular book “The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.” To get a copy of this book about one of the most fascinating times in U.S. banking history, click here.

Video Link

https://usawatchdog.com/deutsche-bank-crimes-can-cause- next-global-crisis-william-black/

-END-

I WILL YOU ON TUESDAY
H
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