DEC 5/GOLD DOWN $4.25 TO $1236.95/SILVER DOWN 6 CENTS TO $14.49/PALLADIUM FOR THE FIRST TIME RISES ABOVE THE PRICE OF GOLD CLOSING AT $1239.00/CHINA STATES THAT THEY WERE QUITE SATISFIED WITH THE TALKS WITH TRUMP AND INDICATE THAT THERE COULD BE A DEAL/THE GATESTONE INSTITUTE SLAMS THE BREXIT DEAL WITH THE EU/

 

 

 

GOLD: $1236.95 DOWN $4,25 (COMEX TO COMEX CLOSINGS)

Silver:   $14.49 DOWN 6 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1237.00

 

silver: $14.49

 

 

 

 

 

 

 

For comex gold and silver:

DEC

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  DEC CONTRACT: 73 NOTICE(S) FOR 7300 OZ (0.227 tonnes)

Total number of notices filed so far for DEC:  4125  for 4012500 OZ  (12.830 TONNES)

 

 

 

 

 

FOR DECEMBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

245 NOTICE(S) FILED TODAY FOR  1,225,000  OZ/

Total number of notices filed so far this month: 3027 for 15,135,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $4043: DOWN 59

 

Bitcoin: FINAL EVENING TRADE: $3812  DOWN 138 

 

end

 

XXXX

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY A FAIR SIZED 828 CONTRACTS FROM 180,737 DOWN TO 179,909 DESPITE YESTERDAY’S 10 CENT RISE 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 FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

746 EFP’S FOR DECEMBER AND 0 FOR MARCH AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 721 CONTRACTS. WITH THE TRANSFER OF 746 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 746 EFP CONTRACTS TRANSLATES INTO 3.730 MILLION OZ  ACCOMPANYING:

1.THE 10 CENT RISE 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 18.685 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: 4475 CONTRACTS (FOR 3 TRADING DAYS TOTAL 1994 CONTRACTS) OR 22.38 MILLION OZ: (AVERAGE PER DAY: 1491 CONTRACTS OR 7.46 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF DEC:  22.38 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 3.19% 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:           2,699.40    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 FAIR SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 828 DESPITE THE 10 CENT GAIN 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 746 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

TODAY WE LOST A TINY SIZED: 82 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 746 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 828 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 10 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.55 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. .9050 BILLION OZ TO BE EXACT or 129% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT DEC MONTH/ THEY FILED AT THE COMEX: 245 NOTICE(S) FOR 1,225,000 OZ OF SILVER

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

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

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./AND NOW DEC. AT 18.685 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 ROSE BY CONSIDERABLE  SIZED 4121 CONTRACTS UP TO 399,919 WITH THE GAIN IN THE COMEX GOLD PRICE/(A RISE IN PRICE OF $7.25//.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 GOOD  SIZED 5233 CONTRACTS:

 

DECEMBER HAD AN ISSUANCE OF 5233 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 401,110. 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 STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 9,354 CONTRACTS:  4121 OI CONTRACTS INCREASED AT THE COMEX AND 5233 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 9,354 CONTRACTS OR 935,400 OZ = 29,09 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $7.25

 

 

 

 

YESTERDAY, WE HAD 11677 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF DEC : 25,948 CONTRACTS OR 2,594,800 OZ OR 80.71 TONNES (3 TRADING DAYS AND THUS AVERAGING: 6487 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 3 TRADING DAYS IN  TONNES: 80.71 TONNES

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

THUS EFP TRANSFERS REPRESENTS 80.71/2550 x 100% TONNES =  3.16% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,845.09  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 INCREASE IN OI AT THE COMEX OF 4121 WITH THE GAIN IN PRICING ($7.25) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A HUMONGOUS SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5233 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 5233 EFP CONTRACTS ISSUED, WE HAD A STRONG GAIN OF 9,354 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

5233 CONTRACTS MOVE TO LONDON AND 4121 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 29,09 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE GAIN OF $7.25 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had: 73 notice(s) filed upon for 7300 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $4.25 TODAY

 

NO CHANGE IN GOLD INVENTORY

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   758.21 TONNES

Inventory rests tonight: 758.21 tonnes.

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

SLV/

WITH SILVER DOWN 6 CENTS  TODAY:

 

 

NO CHANGE IN SILVER INVENTORY AT THE SLV

 

 

 

/INVENTORY RESTS AT 321.552 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 FAIR SIZED 828 CONTRACTS from 180,737 DOWN TO 179,909  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:

 

746 CONTRACTS FOR DECEMBER. 0 CONTRACTS FOR MARCH AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 746 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 828 CONTRACTS TO THE 746 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A TINY LOSS  OF 82 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 0.4100 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 18.685 MILLION OZ  STANDING IN DECEMBER.

 

 

RESULT: A FAIR SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 10 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER GOOD SIZED 746 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)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED DOWN 16.15 POINTS OR 0.61% //Hang Sang CLOSED DOWN 440.76 POINTS OR 1.62% //The Nikkei closed DOWN 116.72 OR 0.52%/ Australia’s all ordinaires CLOSED DOWN 0.84%  /Chinese yuan (ONSHORE) closed DOWN  at 6.8570 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 52.99 dollars per barrel for WTI and 61.95 for Brent. Stocks inEurope OPENED RED//.  ONSHORE YUAN CLOSED DOWN AT 6.8570AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8581: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING  STRONGER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER 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

Last night China dismisses the confusion by saying the meeting with Trump was very successful.  However the difficult part of the deal will be how China and the uSA handle intellectual property theft.

(courtesy zerohedge)

4/EUROPEAN AFFAIRS

i)ECB

This is going to hurt USA hegemony:  the ECB just launched a better than blockchain instant payment system. Now will the big banks play along?

( Don Quijones/WolfStreet)_

ii)ITALY/EU

Tria is probably the “sole” adult  in the room of Italian ministers.  His departure will be a death blow to the Italian economy

( zerohedge)

iii) UK

The all important Gatestone Institute has now come out and is pounding the table that Theresa May surrendered completely to the EU.  As I have stated in previous commentaries this is a horrible deal.  England should just have no deal and walk on the 29th of March 2019 and save 60 billion euros.  England will sign trade deals immediately after leaving the EU
(courtesy/Gatestone zero hedge)

iv)After yesterday’s historic contempt vote, JPMorgan now raises the odds of a “no Brexit” had 40%. I believe it is higher than that.( zerohedge)

v)FRANCE

Trump mocks Macron that French citizens (protesters) got it right that ordinary citizens should not have to pay the bill for cleaning the environment.  Instead it should be corporations and wealthy shareholders who should
( zerohedge)

vi)This ought to ruffle the feathers of the wealthier citizens of France:  In order to calm our yellow vests ahead of the Saturday riots, Macron stated that he might institute a “wealth tax” to pay for climate change.  I think the last time he proposed that many wealthy left the country.( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)SAUDI ARABIA/USA

Many senators have seen the evidence and conclude that the Crown Prince MbS orchestrated the murder.  Let us see how this will play out in the future.

( zerohedge)

ii)Israel/Lebanon Hezbollah
Hezbollah is now on high alert as Israel begins an operation to destroy tunnels heading into Israel from Lebanon
( zerohedge)

iii)Turkey

I have been highlighting the problems for Turkey for quite some time now.  The chief problem was the country’s reliance on cheap USA money during the 2006-2012 period.  Households borrowed huge amounts of money and now we are witnessing huge non performing loans similar to what we see in Italy.  This is a house of cards and no doubt we will see a huge debt crisis emerging here.

( zerohedge)

6. GLOBAL ISSUES

Canada

this is not good!! The Bank of Canada folds on its economic enthusiasm highlighting a poor housing sector and low crude prices. They have decided to keep interest rates unchanged and will not raise rates in 2019

( zerohedge)

7. OIL ISSUES

i)Day one and no firm commitment to lower production.  Oil dumps after initially gaining on the day

( zerohedge)

ii)On no!! this is going to be a disaster for Canada.  Already reeling from giving huge discounts because of bottlenecks..now Canada is legislated that sulfur content in the oil must be reduced to .5 % from 3.5%.  That is going to add 7 to 8 dollars of cost onto the already all price that they are receiving  (as low as 16 dollars cdn/barrel).  This will knock Canada out of the oil business.

( Irina Slav/OilPrice.com

 

8 EMERGING MARKET ISSUES

 

 

 

9. PHYSICAL MARKETS

i)Jay Taylor proves gold market rigging by buying the afternoon fix and selling the morning fix.  For years this has been extremely profitable and if he can do this everyday, it proves rigging
( Jay Taylor/GATA)

ii)There is now a shortage of Palladium. Normally cars would switch back to Platinum but changes to the automobile to accept palladium has made it almost impossible to switch back to Platinum unless the auto makers undergo huge costs to accept the cheaper Pt. The shortage of Palladium will be a forerunner to the shortage of gold and silver( Craig Hemke/GATA)

iii)Spanish speaking Univision quotes Bullion star Ronan Manly on the expropriation of Venezuelan gold.

( GATA/Univision/Ronan Manly)

iv)My goodness: Sudan is Africa’s second leading gold producer and this is all due to artisanal miners.  They mine primitively using mercury and it is extremely poisonous to those miners engaging in that activity.

( GATA/France 24)

v)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)

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

 

 

MARKET TRADING

 

 

 

ii)Market data/

Mish explains the meaning of the inversion of the yield curve.  It generally signals a recession.  However you can still enter a recession without the inversion

(courtesy Mish Shedlock)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Seems that our good friends over at Goldman lost 800 million dollars during a trade with an indicted 1 MDB linked bank, Singapore’s Falcon bank

( zerohedge)

b)This is going to be a lots of fun:  The USA charges 4 men responsible for the Panama Papers operations

They will sing and this will lead to many arrests

(courtesy Adam Klasfeld and special thanks to Robert H for sending this to us)

iv)SWAMP STORIES

Many were expecting some detail from Mueller in his sentencing memorandum issued last night.  There is nothing on the issue of whether Trump or his election people where involved with Russians in fixing the USA election

(courtesy zerohedge)

 

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

Let us head over to the comex:

 

The total gold comex open interest ROSE BY A CONSIDERABLE SIZED 4121 CONTRACTS UP to an OI level 399,919 WITH THE GAIN IN THE PRICE OF GOLD ($7.25 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 CONSIDERABLE SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 5233 EFP CONTRACTS WERE ISSUED:

FOR DECEMBER:  5233 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  5233 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:  9,354 TOTAL CONTRACTS IN THAT 5233 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A CONSIDERABLE SIZED 4121 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 9,354 contracts OR 935,400 OZ OR 29.09 TONNES.

 

We are now in the active contract month of December and we now have a total of 3562 contracts stand in December so we had a loss of 658 contracts.  We had 440 notices served yesterday, so we lost 218 contracts or 21800 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 4058 FOR A LOSS OF 609 CONTRACTS.  February GAINED  3935 contracts to stand at 301,362 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 73 NOTICES FILED AT THE COMEX FOR 7300 OZ. (0.227 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI FELL BY 828 CONTRACTS FROM 180,737 DOWN TO 179,909 (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 OI COMEX LOSS  OCCURRED WITH A 10 CENT GAIN IN PRICING???.

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF DECEMBER AND, WE WERE  INFORMED THAT WE HAD A GOOD SIZED 746 EFP CONTRACTS:

 

FOR DECEMBER: 746 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: 746.  ON A NET BASIS WE LOST 82 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  721 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 746 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:   82 CONTRACTS...AND ALL OF THIS DEMAND OCCURRED WITH A 10 CENT GAIN IN PRICING// YESTERDAY

 

 

 

 

We are now in the non active delivery month of DECEMBER and here in this front month of December we now have 976 contracts standing for a loss of 248 contracts.  We had 269 contracts stand for delivery yesterday so we gained 21 contracts or an additional 105,000 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 32 contracts down to 1938 contracts.  February saw its another 9 contract gain to stand at 35. March, the next big delivery month after December saw a loss of 601 contracts  down to 146,933

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 245 notice(s) filed for 1,225,000 OZ for the DEC, 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 104,275 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  229,850  contracts..

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  DEC/GOLD

DEC 5-/2018.

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

 

Deposits to the Customer Inventory, in oz  

 

 

NIL

 

 

oz

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
73 notice(s)
 7300 OZ
No of oz to be served (notices)
3489 contracts
(348,900 oz)
Total monthly oz gold served (contracts) so far this month
4125 notices
412500 OZ
12.830 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 entries:

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: 0 oz

We had 0 kilobar entries

 

we had 0 deposits into the customer account

total gold customer deposits;  zero

 

we had 0 gold withdrawals from the customer account:

 

total gold withdrawing from the dealer;  0 oz

 

we had 0  adjustments..

we still have not had any adjustments out of the dealer to the customer account to signify a settlement

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 73 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 16 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 (4125) x 100 oz , to which we add the difference between the open interest for the front month of DEC. (3562 contract) minus the number of notices served upon today (73 x 100 oz per contract) equals 761,400 OZ OR 23.682 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 (4125 x 100 oz)  + {3562)OI for the front month minus the number of notices served upon today (73 x 100 oz )which equals 761,400 ozstanding OR 23.682 TONNES in this  active delivery month of DECEMBER.

WE LOST 218 CONTRACTS OR 21800 OZ WILL NOT STAND AT THE COMEX AS THEY MORPHED INTO LONDON BASED FORWARDS AND RECEIVED A GOOD FIAT BONUS FOR THEIR EFFORTS.

 

 

 

 

THERE ARE ONLY 15.179 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 23.682 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.

 

 

 

total registered or dealer gold:  488,008.987 oz or   15.179 tonnes
total registered and eligible (customer) gold;   8,149,264.362 oz 253.476 tonnes

IN THE LAST 27 MONTHS 103 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

DEC INITIAL standings/SILVER

DEC 5, 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
51,587.289 oz
oz
Delaware
Scotia

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,208,092.730
oz
CNT
Scotia
No of oz served today (contracts)
245
CONTRACT(S)
1,225,000 OZ)
No of oz to be served (notices)
731 contracts
3,655,000 oz)
Total monthly oz silver served (contracts) 3027 contracts

(15,135,000 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 2 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 150.55 million oz of  total silver inventory or 51.03% of all official comex silver. (152.0 million/292 million)

ii)Into Scotia:  601,046.130 oz

ii) Into CNT: 607,046.600 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1,208,092.730  oz

we had 2 withdrawal out of the customer account:
i) Out of Delaware: 3002.25 oz
ii) Out of Scotia:  48,585.039 oz

 

 

 

 

 

total withdrawals: 51,587.289  oz

 

we had 1 adjustments

i) Out of CNT:  96,815.859 oz was adjusted out of the customer and this landed into the dealer account of CNT

 

total dealer silver:  87.795 million

total dealer + customer silver:  295.022  million oz

 

 

 

 

The total number of notices filed today for the DEC 2018. contract month is represented by 245 contract(s) FOR 1.225,000 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 3027 x 5,000 oz = 15,135,000 oz to which we add the difference between the open interest for the front month of DEC. (976) and the number of notices served upon today (245 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DEC/2018 contract month: 3027(notices served so far)x 5000 oz + OI for front month of DEC( 976) -number of notices served upon today (245)x 5000 oz equals 18,790,000 oz of silver standing for the DEC contract month.  This is a strong number of oz standing for an off delivery month.

We gained 21 contracts or 105,000 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: 31,247 CONTRACTS  … 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 79,769 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 79,769 CONTRACTS EQUATES to 398 million OZ  56.9% 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 -3.95-% (DEC 5/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -2.46% to NAV (DEC 5 /2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.95%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.44/TRADING 11.93/DISCOUNT 4.27

END

And now the Gold inventory at the GLD/

DEC 5/WITH GOLD DOWN $4.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 758.21 TONNES

DEC 4/WITH GOLD UP $7.25: A HUGE WITHDRAWAL OF 3.53 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 758.21 TONNES

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

 

 

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DEC 4.2018/ Inventory rests tonight at 758.21 tonnes

*IN LAST 509 TRADING DAYS: 176.94 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 409 TRADING DAYS: A NET 16.94 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

DEC 5/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 321.552 MILLION OZ.

DEC 4/WITH SILVER UP 10 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV:A WITHDRAWAL OF 134,000 OZ//INVENTORY RESTS AT 321.552 MILLION OZ/

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 5/2018:

 

Inventory 321.552 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 2.47/ and libor 6 month duration 2.90

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

G0LD LENDING RATE: + .43

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.72%

LIBOR FOR 12 MONTH DURATION: 3.13

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.41

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Is “Coiled” and Looks Set To Surge Like Natural Gas — Bloomberg Intelligence

– Gold’s “setup” is “similar to natural gas before its big rally”
– Gold is gaining favour over stocks, bitcoin and cryptos
– Metals may be primary beneficiaries of imminent greenback peak
– Silver “appears ready for a potential longer-term recovery”
– GoldCore editors note: Natural gas is 56% higher year to date

by Bloomberg Intelligence (appeared first on the Bloomberg Terminal)

Metals should be primary beneficiaries of an imminent greenback peak, with normalization in U.S. stock-market out performance, Federal Reserve tightening near a finish and the trade-weighted broad dollar approaching multiyear highs.

Though the dollar tops the list of this year’s best performing major assets, gold and copper show divergent strength. Industrial metals appear to be at a discount in a bull market with favorable demand vs. supply conditions.

Indications from precious metals, notably gold, offer a setup that’s similar to natural gas before its big rally.

Bound to historically compressed trading ranges with many typical pressure factors nearing multiyear extremes, precious metals appear close to a maximum loss of faith vs. the strong stock market and greenback.

Gold is low vs. stocks if dollar has peaked
Gold should shine vs. stocks, particularly if the dollar stops advancing. Our graphic illustrates that the gold-to-stocks ratio is potentially bottoming from a good support level despite a resilient greenback. A declining U.S. equity market is a primary force to pressure the dollar, supporting metals. Mean-reversion risks in the trade-weighted broad dollar near the 2002 and 2016 highs may outweigh further appreciation potential.

Reversion in stock prices and Bitcoin toward their means is more than a coincidence, in our view. They’ve rallied together in the past few years with a common support factor — global quantitative easing.

Cryptocurrencies, considered alternatives to fiat currencies such as the dollar, gained plenty of advocates as global central banks rapidly increased money supply to offset deflationary forces.

Gold ETFs to prevail vs. record short futures
Gold ETF inflows appear unstoppable absent a severe bear market, which is unlikely with inflation picking up, an extended stock market and the dollar near multiyear highs. Resolute gold ETFs are focusing on portfolio hedging and have greater upside vs. downside potential, in our view. Representing about 70% of all commodity ETFs, total known gold holdings have increased about 10x the rate of change in the spot price since the start of 2015. In this rate-hike cycle, ETF holdings are up about 50% vs. 15% for spot gold. ETFs’ gold positions continue to increase despite this year’s lower spot price.

Buy-and-hold-focused ETFs are facing off with more-speculative futures. Managed-money net gold positions haven’t recovered much from the record-short levels reached in October, which is providing a bid below the market.

Gold ready to follow the lead of natural gas 
Much like natural gas earlier this year, gold has the drivers in place to rally from its compressed range. Increasing inflation and debt levels are positive companions, as is gold’s divergent strength to the dollar, which is vulnerable as it nears a good resistance level.

GoldCore editors note: Natural gas is 56% higher YTD

Since the start of the current Federal Reserve tightening cycle, and despite rallies in the metal’s traditional adversaries — the greenback (up 5% on a trade-weighted basis) and the stock market (S&P 500 up 36%), the dollar price of gold is up 14%.

With rate hikes nearing a potential end-game, gold is ripe to rally. The narrowest 24-month Bollinger bands for the longest period in 16 years indicate the metal’s upside. For gold to decline, it would likely need the dollar to remain above multiyear highs, plus a decline in equity-market volatility.

Silver backed to key support, dollar resistance
The trade-weighted broad dollar is near a peak and silver a bottom, in our view, and the potential for mean reversion should outweigh continuing-the-trend risks. Silver, among the most negatively correlated to the dollar and positively to industrial metals, appears ready for a potential longer-term recovery. For it to stay down — about 15% this year — we’d need to see sustained dollar strength and weakness in industrial metals and gold. That’s unlikely. Near multiyear highs, dollar risks are tilting toward reversion, notably if U.S. equities keep sagging.

Rate-hike expectations have begun to ease, stalling the greenback rally. Significant for silver — often called leveraged gold — would be a peak in the dollar. If silver catches up some to industrial metals, it would be closer to $20 an ounce, vs. about $14.50 today.

Silver backed to key support, dollar resistance
The trade-weighted broad dollar is near a peak and silver a bottom, in our view, and the potential for mean reversion should outweigh continuing-the-trend risks. Silver, among the most negatively correlated to the dollar and positively to industrial metals, appears ready for a potential longer-term recovery. For it to stay down — about 15% this year — we’d need to see sustained dollar strength and weakness in industrial metals and gold. That’s unlikely. Near multiyear highs, dollar risks are tilting toward reversion, notably if U.S. equities keep sagging.

Rate-hike expectations have begun to ease, stalling the greenback rally. Significant for silver — often called leveraged gold — would be a peak in the dollar. If silver catches up some to industrial metals, it would be closer to $20 an ounce, vs. about $14.50 today.

Access the full Bloomberg article here & the full Bloomberg Commodity Outlook (December 2018 Edition) here

 

Secure Storage Ireland info here

News and Commentary

Gold futures tally highest finish since July (MarketWatch.com)

Gold prices steady as dollar edges higher (Reuters.com)

What President Bush’s day of mourning means for stock, bond & commodity traders (MarketWatch.com)

Palladium at record high, with prices at their closest to gold in 16 years (MarketWatch.com)

Dow plunges nearly 800 points on rising fears of an economic slowdown (CNBC.com)

European Stocks Slump on Trade Woes as Banks to Miners Slide (Bloomberg.com)


Source: Bloomberg

This signal is the closest you’ll get to a sure thing in economics (MoneyWeek.com)

During stock-market volatility, how would you invest $100,000? (MarketWatch.com)

GATA has proved gold market manipulation, and here’s more proof -Taylor (Gata.org)

Macron Blinks: France Suspends Fuel Tax Hike After “Yellow Vest” Riots… But It’s Not Enough (ZeroHedge.com)

Europe Plays With Fire on Italy Contagion (Bloomberg.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

04 Dec: USD 1,239.25, GBP 966.74 & EUR 1,086.45 per ounce
03 Dec: USD 1,231.05, GBP 966.00 & EUR 1,084.92 per ounce
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

Silver Prices (LBMA)

04 Dec: USD 14.55, GBP 11.35 & EUR 12.77 per ounce
03 Dec: USD 14.39, GBP 11.31 & EUR 12.69 per ounce
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


Recent Market Updates

– “Collapse Of Civilisation Is On The Horizon” – Attenborough Warns World Leaders
– 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

Mark O’Byrne
Executive Director

 

ii) GATA stories
Jay Taylor proves gold market rigging by buying the afternoon fix and selling the morning fix.  For years this has been extremely profitable and if he can do this everyday, it proves rigging
(courtesy Jay Taylor/GATA)

Jay Taylor: GATA has proved gold market manipulation, and here’s more proof

 Section: 

11a ET Tuesday, December 4, 2018

Dear Friend of GATA and Gold:

In his November 16 edition, our old friend Jay Taylor, publisher of Jay Taylor’s Gold, Energy, and Tech Stocks newsletter —

https://www.miningstocks.com/

— wrote extensively about gold market manipulation and credited GATA for proving it.

Taylor went on to present a chart of morning and afternoon gold price fixes from the London Bullion Market Association showing that the gold price has nearly always been knocked down during London trading, so much so that buying on the afternoon fix and selling on the morning fix long has been spectacularly profitable, while doing the opposite long has been spectacularly unprofitable.

… 

 

Taylor asks: “How can it be that skimming profits every day by buying the PM fix and selling the AM fix the next day is possible if the LBMA paper market isn’t rigged?”

With Taylor’s kind permission, his November 16 letter’s section on manipulation is posted in PDF format at GATA’s internet site here:

http://www.gata.org/files/JayTaylorLetter-11-16-2018.pdf

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

END

There is now a shortage of Palladium. Normally cars would switch back to Platinum but changes to the automobile to accept palladium has made it almost impossible to switch back to Platinum unless the auto makers undergo huge costs to accept the cheaper Pt. The shortage of Palladium will be a forerunner to the shortage of gold and silver. Today Palladium rose to $1239.00 per oz and thus for the first time ever, it is higher than gold.

(courtesy Craig Hemke/GATA)

 

Craig Hemke at Sprott Money: What is Mr. Palladium

telling us?

 Section: 

5p ET Tuesday, December 4, 2018

Dear Friend of GATA and Gold:

A shortage of palladium and a squeeze in the London market for the metal may hint at similar squeezes soon in the monetary metals, the TF Metals Report’s Craig Hemke writes today at Sprott Money.

Hemke writes that back in the 1960s “physical gold shortages created an inability to manage price, and this led to the inevitable demise of the London Gold Pool in 1968. A true global palladium shortage that forces the hand of the banks and exposes their schemes to the light of day could be the first step to ending the ongoing LBMA/Comex gold pool 50 years later.”

Hemke’s analysis is headlined “What Is Mr. Palladium Telling Us?” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/what-is-mr-palladium-telling-us-craig-h…

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

END

Spanish speaking Univision quotes Bullion star Ronan Manly on the expropriation of Venezuelan gold.

(courtesy GATA/Univision/Ronan Manly)

Univision quotes Bullion Star’s Manly on expropriation

of Venezuelan gold

 Section: 

9:10p ET Tuesday, December 4, 2018

Dear Friend of GATA and Gold:

Univision, the big Spanish-language television network in North America, yesterday quoted Bullion Star gold market analyst Ronan Manly in a report about the Bank of England’s refusal to repatriate Venezuela’s gold.

In an English version of Univision’s reporting, Manly says “the more logical and likely explanation” for the expropriation of Venezuela’s gold “is that the United States, through the White House, U.S. Treasury, and State Department has been liaising with the British Foreign Office and Her Majesty’s Treasury to put pressure on the Bank of England to delay and push back on Venezuela’s gold withdrawal request.”

The Univision report is posted here:

https://www.univision.com/univision-news/latin-america/dont-let-venezuel…

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

END

My goodness: Sudan is Africa’s second leading gold producer and this is all due to artisanal miners.  They mine primitively using mercury and it is extremely poisonous to those miners engaging in that activity.

(courtesy GATA/France 24)

Sudan becomes second leading gold producer in

Africa on backs of artisanal miners

 Section: 

10p ET Tuesday, December 4, 2018

Dear Friend of GATA and Gold:

If you think Western investors in the monetary metals have had a tough few years, take a look at Helene Renaux’s report for France 24 about artisanal gold miners in Sudan, who help make the country the second-largest producer of gold in Africa and the ninth in the world at the expense of practically bathing themselves in liquid mercury every day without much awareness of its poisonous effects on their health.

.

Sudan’s government seems interested in transitioning the country’s gold-mining industry to modern methods but also seems to be unaware of the international gold price suppression scheme, which makes all developing countries less attractive for foreign investment.

So if you have any connections with the Sudanese government, please let them know that GATA would be glad to send a representative to Khartoum to explain how the country is getting screwed but doesn’t have to remain another rich country insisting on being poor.

The France 24 report is headlined “Sudan’s Gold Rush Driven by High-Risk, Unregulated Mining,” is five minutes long, and can be viewed here:

https://www.france24.com/en/20181204-focus-sudan-unregulated-gold-rush-h…

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 WEDNESDAY 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 DOWN TO 6.8570/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.8581   /shanghai bourse CLOSED DOWN 16.15 POINTS OR 0.61%

. HANG SANG CLOSED DOWN 440.76 POINTS OR 1.62%

 

 

2. Nikkei closed DOWN 116.72 POINTS OR 0.53%

 

3. Europe stocks OPENED ALL RED

 

 

 

 

 

/USA dollar index FALLS TO 96.89/Euro RISES TO 1.1296

3b Japan 10 year bond yield: FALLS TO. +.07/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.96/ 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:: 52.99 and Brent: 61.95

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.26%/Italian 10 yr bond yield DOWN to 3.06% /SPAIN 10 YR BOND YIELD UP TO 1.45%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.79: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.17

3k Gold at $1237.45 silver at:14.49   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 14/100 in roubles/dollar) 66.74

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 112.96DESTROYING 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 0.9978 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1327 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.26%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.91% early this morning. Thirty year rate at 3.17%

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

6.  TURKISH LIRA:  UP  TO 5.3408

 

US Futures, Global Stocks Pare Losses After China,

“Tariff Man” See Deal

While U.S. cash markets will be closed to mark the death of President George H. W. Bush, S&P futures were open and rebounded modestly from yesterday’s furious selloff, rising 0.5% after yesterday’s 3.2% drop, as “Tariff Man” Trump said he sees a China trade deal coming “either now or into the future”…

… while European and Asian stocks trimmed losses after China pledged to start delivering on trade agreements reached with America, provide a modest risk backstop.

China’s announcement, another twist in the trade war saga, was a much-needed dose of positive news, as it ended days of silence from the Asian nation following a weekend meeting between Presidents Donald Trump and Xi Jinping. Upbeat statements from Trump had not been immediately matched by Beijing, helping fuel the equity tumult which sent US stocks plunging over 3% on Tuesday.

On Wednesday morning, a happy Trump tweeted an excerpt from a Bloomberg article according to which “China officially echoed President Donald Trump’s optimism over bilateral trade talks” and noting that “Chinese officials have begun preparing to restart imports of U.S. Soybeans & Liquified Natural Gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start “immediately” buying U.S. products.”

Donald J. Trump

@realDonaldTrump

“China officially echoed President Donald Trump’s optimism over bilateral trade talks. Chinese officials have begun preparing to restart imports of U.S. Soybeans & Liquified Natural Gas, the first sign confirming the claims of President Donald Trump and the White House that……

Global markets were left reeling after Tuesday’s steep sell-off in New York, but nerves steadied after China’s Commerce Ministry said on Wednesday morning that Beijing will start to “quickly implement” specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map.”

Asian stocks slid across the board on Wednesday, dragged down by Wall Street’s tumble as sharp declines in long-term U.S. Treasury yields and resurgent trade concerns stoked investor worries about global economic growth. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3 percent.  The Shanghai Composite Index slipped 0.6% and Japan’s Nikkei dropped 0.5 percent, but rebounded from session lows. Australian stocks lost 0.8%, pressured by global losses. The mood further soured after data showed Australia’s third-quarter growth fell short of expectations. The Australian dollar D4 was down 0.7 percent at $0.7288.

Worries about U.S. bond markets signaling an impending recession, and a still rumbling trade war between the world’s top two economies, sent European shares to a 2 week low, yet while the Stoxx Europe 600 Index slumped as much as 1.2%, hitting the lowest since Nov. 23, and traded down 0.7% last, that was far less than the 3.2% plunge recorded by the S&P 500 a day earlier. Financials were the biggest drag on European shares as investors dumped sectors highly sensitive to economic growth. Europe’s bank index fell 1.7%, while oil and mining sectors fell 1.5 percent each.

“Cyclicals are really dependent upon accelerations in growth, they’re very real economy sensitive for higher revenues,” said John Ricciardi, CEO and lead portfolio manager at Kestrel Investment Partners. The inversion of parts of the U.S. yield curve means investors are beginning to panic about future growth and inflation, Ricciardi added.

Chipmakers AMS, STMicroelectronics and Infineon fell 1.2 percent to 4.5 percent following a sharp drop in Apple and chip stocks on Wall Street, while German carmakers outperformed the DAX as investors digested what seemed a relatively positive outcome from auto executives’ meeting at the White House. President Trump pressed carmakers to increase investments in the United States, something the executives said they planned to do but wouldn’t be able to if the administration went ahead with threatened tariffs.

Concerns about slowing U.S. growth have accelerated the flattening of the yield curve, which has preceded the last seven US recessions. “The market decline in the U.S. overnight and the flattening of the yield curve reflect that economic growth momentum is taking over as the primary concern for investors, even as the latest ISM manufacturing data is holding up well,” wrote Tai Hui, market strategist at J.P. Morgan Asset Management. On Wednesday, the Treasury cash/futures will remain closed.

The German curve steepened slightly, yields lower by ~1bp across the curve and touching the lowest since mid-2017 amid the risk-off mood, while Italian bonds jumped. UK Gilt yields rose by ~4bps as the curve bear flattens, widening 4.5bps to Germany after yesterday’s Brexit votes. BTPs push higher, supported by decent demand at the Spanish bond auctions and a turnaround in FTSE MIB off the lows.

The dollar initially advanced versus all major peers before reversing and turning slightly lower on the day. The Aussie dollar led losses among majors after 3Q GDP data missed forecasts, adding to fears of a global slowdown. The pound climbed as investors digested legal advice over Prime Minister Theresa May’s Brexit deal, which confirmed that the so-called customs backstop could remain “indefinitely.”

In the latest Brexit news, legal advice has been published states “backstop could mean the UK is subject to protracted and repeating rounds of negotiations”; according to BuzzFeed. Adding that “these talks could still be taking place years later, and the UK would be breaking the law if it left the backstop without the EU’s agreement”. Sky News reported that the UK does not need to pass legislation to revoke Article 50. Telegraph’s Rothwell Tweets “EU sources adamant that there can be no Withdrawal Agreement without a fully legally operational backstop…even if MPs reject the deal and/or May resigns”. UK Trade Secretary Fox states that in the wake of last night’s vote in Parliament, there is a chance that there might not be a Brexit.

In commodities, WTI (-0.2%) and Brent (-0.3%) bounced off lows as the latest OPEC+ meeting goes underway, with the Omani Oil Minister hinting at a 3-6 month production cut ahead of tomorrow’s key OPEC meeting. Furthermore, The WSJ reports that OPEC delegates are concerned that Saudi and Russia are making output agreements without input from OPEC; it was also stated that the Russia-Saudi relationship was a key factor in Qatar’s withdrawal. Markets will be looking ahead to the postponed EIA weekly data coming out tomorrow following the unexpected API build, alongside the OPEC meeting with emphasis on any decision to cut oil production that may arise. Reports today by RIA stating that OPEC wants Russia to reduce oil output by a minimum of 300k BPD. However, TASS has reported that Russia is only seeking a symbolic production cut which follows previous reports that they would only agree to a 140k BPD cut. Elsewhere, Libya’s NOC stated that all port terminals are shut due to bad weather, with storage capacity at Zawiya (usual production of 120k BPD) affected and the 300k BPD Sharara oil field production to be cut by 50% tomorrow morning.

Gold has weakened from the 5-week high reached in the previous session, as the dollar is marginally firmer. The majority of base metals have fallen due to being weighed on by US-China trade tensions following US President Trump commenting that there will have a real deal or no deal at all with China.

Treasury markets are closed for a day of mourning in the U.S. in honor of ex-President George H.W. Bush. Below is a schedule of US market closure on Dec. 5

  • CME Globex trading hours for Interest rate products will close at their regular time on Tuesday Dec 4th and will not reopen until their regularly scheduled time on Wednesday Dec 5th 2300GMT/1700CST.
  • Both the open outcry and CME Globex trading session for FX products will have normal trading hours on Wednesday Dec 5th
  • CME Globex trading hours for CME Group U.S.-based equity products on Wednesday Dec 5th will include an abbreviated
  • session, closing after overnight trading at 1430GMT/0830CST and reopening at their regularly scheduled time on Wednesday Dec 5th at 2300GMT/1700CST
  • New York Stock Exchange, NYSE American, NYSE National, NYSE Arca and NASDAQ have announced that they will be closed for trade on Wednesday Dec 5th
  • ICE Futures U.S is open for trading, Wednesday Dec 5th will be a regular ICE Clear US business day

Market Snapshot

  • S&P 500 futures up 0.4% to 2,713.75
  • STOXX Europe 600 down 0.7% to 355.78
  • MXAP down 1% to 153.65
  • MXAPJ down 1.3% to 495.24
  • Nikkei down 0.5% to 21,919.33
  • Topix down 0.5% to 1,640.49
  • Hang Seng Index down 1.6% to 26,819.68
  • Shanghai Composite down 0.6% to 2,649.81
  • Sensex down 0.8% to 35,836.22
  • Australia S&P/ASX 200 down 0.8% to 5,668.35
  • Kospi down 0.6% to 2,101.31
  • German 10Y yield fell 0.8 bps to 0.255%
  • Euro down 0.02% to $1.1341
  • Italian 10Y yield rose 1.0 bps to 2.789%
  • Spanish 10Y yield fell 1.0 bps to 1.475%
  • Brent Futures down 1% to $61.45/bbl
  • Gold spot down 0.2% to $1,236.00
  • U.S. Dollar Index up 0.03% to 97.00

Top Overnight News

  • China said Wednesday the trade meeting with the U.S. was “very successful” and is “confident” of implementing the results agreed upon at the talks, but didn’t provide any further details on the outcome
  • Federal Reserve Bank of New York President John Williams gave an optimistic review of the U.S. economy, reiterated his support for further gradual interest-rate increases and expressed no concern that market participants have dialed back expectations for policy tightening in 2019
  • Australia’s economy slowed last quarter as commercial construction fell and household spending slowed, casting doubt on the central bank’s outlook and all but ruling out an interest-rate increase next year
  • Bank of Japan Deputy Governor Masazumi Wakatabe gave a more cautious view on the outlook for prices as economists increasingly see inflation weakening over the next year
  • With less than 48 hours to go before a critical OPEC gathering, Saudi Arabia and Russia are set to meet in Vienna for a make-or-break preparatory meeting on Wednesday that’s going to set the direction for the oil market
  • Italy’s Di Maio says ’climate is changing’ in budget talks with EU
  • U.K. Trade Sec Fox says possibility of no Brexit if parliament rejects deal
  • Trump believes will make China deal ’either now or into the future’
  • China calls U.S. trade meeting ’very successful’; will quickly implement
  • OPEC+ nations didn’t yet discuss proposals to cut production: Kuwait Min

Asian stock markets were pressured following the sell off on Wall Street where doubts regarding a US-China trade deal saw all US majors drop over 3% in which the S&P 500 fell below its 200DMA and DJIA lost near 800 points on the day. This weighed heavily on the China-sensitive sectors in the US such as Industrials, Materials and Tech, while Financials took the biggest hit amid a slump in yields and ongoing yield-inversion. ASX 200 (-0.8%) was led lower by tech and financials with disappointing Q3 GDP adding to the downbeat tone, while Nikkei 225 (-0.5%) also finished negative albeit off worse levels as USD/JPY attempted to nurse losses. Elsewhere, Hang Seng (-1.6%) and Shanghai Comp. (-0.6%) conformed to the downbeat tone but with the declines in the region less drastic than the bloodbath observed stateside following stronger than expected Chinese Caixin Services PMI which jumped to a 5-month. Furthermore, there was a seemingly concerted effort by some officials to dispel the trade-related doubts in which White House Trade Adviser and ‘China hawk’ Navarro suggested to give talks a chance and that it is premature to lose faith in US-China discussions, while Mofcom also declared the US-China trade meeting was successful although Trump remained unrelenting and reiterated his threat of tariffs if they fail to reach a deal. Finally, 10yr JGBs initially rose to levels last seen over 2 years ago amid safe-haven demand and as they tracked the upside in T-notes. However, prices then pulled back to return flat after the BoJ’s bond buying operation in which it upped purchases in the 10yr-25yr maturities by JPY 20bln, as the bank is on course to reduce monthly purchases of superlong JGBs by JPY 150bln if it continues at the current pace given the previously announced reduction of operations for December.

Top Asian News

  • India’s Sensex Extends Decline as RBI Holds Rates, Policy Stance
  • IPhone Lens-Maker Largan Warns of December Sales Slide
  • India Holds Interest Rates After Inflation Undershoots Forecast
  • Japan Eases Changes for Tariffs on Delayed Solar Projects

European bourses (Eurostoxx -0.9%) have followed suit from their US and Asia-Pac counterparts to trade lower across the board as the trade-inspired optimism seen at the start of the week continues to dissipate. China’s Mofcom declared the USChina trade meeting as successful, although were said to be puzzled and irritated by the Trump administration’s triumphant rhetoric. This came after Trump yesterday branded himself as a ‘Tariff Man’ and also tweeted that the US will either have a real deal with China or no deal at all and that the US will levy major tariffs against imports of Chinese products if a deal is not made with China. In terms of sector specifics, all ten majors trade in the red with IT, materials and industrials lagging their peers. Downside in financial names has also been hampered by the current yield environment as markets continue to speculate over the Fed’s 2019 rate hike plans in lieu of recent comments from Fed Chair Powell and with the German 10yr yield briefly slipping below 0.25%. UK homebuilders have seen some reprieve this morning (Berkeley Group +8.1%, Taylor Wimpey +6.3%, Barratt Developments +6.5%) after Barclays highlighted the sector as a potential major beneficiary of a Brexit deal being passed in Parliament. Individual movers include Shire (+2.6%) who stand near the top of the Stoxx 600 after amid shareholder approval for their merger with Takeda Pharmaceutical. Elsewhere, broker downgrades have placed weight on names such as Hargreaves Lansdown (-3.3%), Saint Gobain (-3.2%) and Osram Licht (-1.7%).

Top European News

  • Weak Euro-Area Growth Is Here to Stay as Italy Recession Looms
  • U.K. Services Unexpectedly Weaken to Worst Since July 2016
  • Yandex Starts Selling $270 Smartphone to Rival Google in Russia
  • Telia Sells Uzbek Unit That Cost It Almost $1 Billion in Fines

In FX, AUD,NZD – AUD the major G10 underperformer in light weaker-than-expected Q3 Aussie GDP (slowest pace of growth in two years, and well below consensus) which dragged AUD/USD to sub-0.7300 levels vs. highs of 0.7356 and not far from 0.7400 in recent sessions. Meanwhile, AUD/NZD slumped through 1.0600 to circa 1.0525, to the benefit of the Kiwi that managed to maintain 0.6900+ vs. the buck.

  • GBP – Choppy trade for the Pound amid ongoing Brexit pandemonium after UK PM May suffered a hat-trick of defeats, giving more power to Parliament if her deal is voted down in next week’s meaningful vote. Cable currently trying to recover having slumped to a new YTD low yesterday at 1.2659 (ahead of the psychological 1.2650), with a rebound through 1.2700 and 1.2750, albeit amidst a generally softer USD and despite a worryingly weak services PMI (headline just above 50). Similarly, Sterling has regained composure against the EUR, with the cross back down below 0.8900 even though the single currency has pared losses elsewhere amid ECB sourced talk about discussions over further policy normalisation next year. Indeed, EUR/USD is back above 1.1350 from close to 1.1300 at one stage.
  • CAD – USD/CAD is within striking distance of 1.3300 (vs. yesterday’s lows of 1.3160) as retreating oil prices weigh on the Canadian currency with traders also eyeing the BoC interest rate decision later today. No change in the policy is expected though focus will be on the tone of the statement given the recently battered energy complex. For a more detailed preview, refer to our research suite or headline feed.
  • EM – Lira trades around the middle of a 5.4518-.3345 range vs. the Greenback after the CBRT set their inflation target at 5% (vs. November CPI at 21.62%) and pledged to do more to bring consumer prices back down, cushioning the TRY from wider bearish and risk averse sentiment.
  • DXY – Given all the above, the broad Dollar and index have handed back some of Tuesday’s pronounced gains made amidst the Wall St. selloff, and ahead of today mark of respect day for passed President George H.W Bush. DXY pivoting 97.000 within a range 97.206-96.827.

In commodities, WTI (-0.2%) and Brent (-0.3%) bounced off lows as the JMMC meeting goes underway, with the Omani Oil Minister hinting at a 3-6 month production cut ahead of tomorrow’s key OPEC meeting. Furthermore, The WSJ reports that OPEC delegates are concerned that Saudi and Russia are making output agreements without input from OPEC; it was also stated that the Russia-Saudi relationship was a key factor in Qatar’s withdrawal. Markets will be looking ahead to the postponed EIA weekly data coming out tomorrow following the unexpected API build, alongside the OPEC meeting with emphasis on any decision to cut oil production that may arise. Reports today by RIA stating that OPEC wants Russia to reduce oil output by a minimum of 300k BPD. However, TASS has reported that Russia is only seeking a symbolic production cut which follows previous reports that they would only agree to a 140k BPD cut. Elsewhere, Libya’s NOC stated that all port terminals are shut due to bad weather, with storage capacity at Zawiya (usual production of 120k BPD) affected and the 300k BPD Sharara oil field production to be cut by 50% tomorrow morning. Gold has weakened from the 5-week high reached in the previous session, as the dollar is marginally firmer. The majority of base metals have fallen due to being weighed on by US-China trade tensions following US President Trump commenting that there will have a real deal or no deal at all with China. Separately, China’s construction steel rebar is up

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 5.5%
  • 2pm: U.S. Federal Reserve Releases Beige Book

 

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED DOWN 16.15 POINTS OR 0.61% //Hang Sang CLOSED DOWN 440.76 POINTS OR 1.62% //The Nikkei closed DOWN 116.72 OR 0.52%/ Australia’s all ordinaires CLOSED DOWN 0.84%  /Chinese yuan (ONSHORE) closed DOWN  at 6.8570 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 52.99 dollars per barrel for WTI and 61.95 for Brent. Stocks inEurope OPENED RED//.  ONSHORE YUAN CLOSED DOWN AT 6.8570AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8581: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING  STRONGER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER 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

Last night China dismisses the confusion by saying the meeting with Trump was very successful.  However the difficult part of the deal will be how China and the uSA handle intellectual property theft.

(courtesy zerohedge)

China Dismisses Confusion Claims, Says “Very Successful” Meeting With Trump

Following a story from The Washington Post quoting a former U.S. government official who was said to have been in contact with Chinese officials, claiming Beijing are “puzzled and irritated” by the Trump administration’s behavior, and widespread confusion across media claiming the ‘truce’ as a nothingburger; China’s Ministry of Finance has denied any confusion or negativity exists.

The WaPo report went to claim the unknown former US official said:

“You don’t do this with the Chinese. You don’t triumphantly proclaim all their concessions in public. It’s just madness,” the former official, who asked for anonymity to describe confidential discussions, told the Post.

While President Trump’s dinner with Chinese leader Xi yielded a cease-fire in the trade war between the world’s two biggest economies,judging by the market’s moves today, the details are proving less than satisfying to those hungering for a lasting truce.

 

But, tonight, China says trade meeting with U.S. is “very successful” and is “confident” to implement the results agreed upon at the talks, according to a statement on Ministry of Commerce website.

A reporter asked: We know that the Chinese economic and trade team has returned to Beijing. What is your comment on this meeting?

A: The meeting was very successful and we have confidence in the implementation. 

Q: How is China prepared to promote the next economic and trade consultation?

A: The economic and trade teams of the two sides will actively promote the consultation work within 90 days in accordance with a clear timetable and road map. 

Q: What are the priorities for China?

A: China will start from implementing specific issues that have reached consensus, and the sooner the better.

Of course, as Torsten Slok, chief international economist at Deutsche Bank AG said:

“The market wants to see more details before it can make up its mind,

It remains unclear for the market whether the trade war will escalate or deescalate from here.”

And, as Axios reports, Mike Pillsbury is worried Trump’s negotiations with China are unraveling. The hawkish former Pentagon official — who Trump has called “probably the leading authority on China” and who reportedly huddled with Trump in the Oval the day before Trump left for his G20 meeting with President Xi — said “there’s a risk the deal will come undone.”

Pillsbury said he’s “getting warnings from knowledgeable Chinese about the American claims of concessions” that the Chinese have said they never made. These contradictions include U.S. claims that the Chinese agreed to “immediately” address their most egregious industrial behavior, to “immediately” restart purchases of U.S. agriculture, and to slash tariffs on American cars.

“I have advised the president’s team that for the past 40 years the American side avoids disclosing Chinese concessions before the final agreed written statement is released,” Pillsbury told me in a phone interview today.

Sounds an awful lot like WaPo’s anonymous source? And is the opposite of the official word from China.

Pillsbury’s comments were rapidly followed by White House trade adviser Peter Navarro who told Fox News that it would be premature for people to “lose faith” in the trade discussions the U.S. is holding with China.

“The Chinese haven’t even gotten back to China yet,” Navarro tells Fox in an interview;

“Let’s give it some time”

Navarro says he is bullish on the economy and “I’m bullish on this deal”

Navarro also noted he is optimistic about progress being made over market access and structural changes with China during the 90 day-period in which the talks will be held.

However, Navarro did admit that communication by the administration over the outcome of the talks perhaps could have been better,pointing out, echoing Mnuchin’s earlier comments, that the market may be “trying to parse whether the Fed’s going to raise interest rates again,” which Navarro says would be a mistake.

Nevertheless, President Trump would have the last word once again,

insisting, as he did earlier that “We are either going to have a REAL DEAL with China, or no deal at all…”

Donald J. Trump

@realDonaldTrump

We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal – either now or into the future….

Donald J. Trump

@realDonaldTrump

…..China does not want Tariffs!

Which some may interpret as Trump giving himself an ‘out’ if things don’t work out – although “Tariff Man” has been consistently hawkish.

end

4.EUROPEAN AFFAIRS

 

ECB

This is going to hurt USA hegemony:  the ECB just launched a better than blockchain instant payment system. Now will the big banks play along?

(courtesy Don Quijones/WolfStreet)_

 

 

ECB Just Launched “Better Than Blockchain”

Instant Payments System

But will the big banks play along?

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

On Friday the ECB launched, with minimal fanfare, a brand new system aimed at enabling banks to settle payments instantaneously across Europe, helping them to compete with PayPal and other global tech giants. Developed in little over a year, the ECB’s not-for-profit TARGET Instant Payment Settlement (TIPS) system will let people and businesses in Europe transfer euros to each other almost instantly, at extremely low cost, and irrespective of the opening hours of their local bank.

The first ever payment via TIPS took place on Friday between a customer of Spain’s CaixaBank and one of French bank Natixis. The payment went through in a matter of seconds.

“In launching TIPS, the Eurosystem is acknowledging the changing reality that digitization is erasing the borders between wholesale and retail,” said ECB Executive Board Member Yves Mersch at the TIPS launch event, in Rome. Mersch was one of the senior European central bankers who oversaw the new payment system’s roll out, work on which began in June 2017.

Earlier this year he bragged to Bloomberg that the new system would leave blockchain in the dust. “TIPS is 10 seconds, 0.2 cents. DLT transactions are at best 30 euros and take at least one hour,” Mersch said. “We have a mandate for efficient payment systems, and we go for efficiency. We are not bound to a technology, we are bound to results.”

TIPS was developed as an extension of TARGET2, the ECB’s real-time gross settlement platform for euro payment transactions, and settles payments in central bank money. The newly launched system currently only settles payment transfers in euros, the ECB says on its website, but “in case of demand, other currencies could be supported as well.”

According to Mersch, the TIPS system has put in place “three strong building blocks” for unleashing the potential for retail payments innovation in Europe:

  1. The standardization and harmonization of business rules: One year after its launch, more than 2,000 payment service providers from 16 different countries — roughly half of all of Europe’s payment service providers — have joined the TIPS scheme, “proving their commitment by following the Euro Retail Payments Board guidance on instant payments.”
  2. A state-of-the-art market infrastructure: TIPS is a “truly domestic market infrastructure for pan-European instant payments” with settlement in central bank money. Using TARGET2 as a basis, TIPS “can provide wide reach and scale, tapping into an established network of over 1,700 participants and more than 51,000 addressable Business Identifier Codes (BICs).”
  3. A sound legal basis: “The revised Payment Services Directive (PSD2) provides the legal framework for retail payments innovation by setting rules for third-party payment service providers. PSD2 enhances consumer protection and increases security for payment services.” But it is still not fully implemented.

One major obstacle holding TIPS back is the low number of banks that have agreed to participate in the scheme. So far, just eight mostly medium- or small-sized banks from Spain, Germany and France have signed up, with Spain’s BBVA the only A-league banking giant to have joined so far. The other participants are Spain’s CaixaBank, Abanca Corporación Bancaria, Banco de Crédito Social Cooperativo and Caja Laboral Popular Cooperativa de Crédito, French bank Natixis and Germany’s Berlin Hyp and Teambank.

“We need to address the reasons for the scarcity of major European players in the payments market,” ECB director Yves Mersch said. “If there is a lack of investment capacity…we should not shy away from pooling resources and volumes and creating bigger players.”

The lack of participation in the initiative is not due to a lack of interest in instant payment (IP) solutions. During a poll conducted by the ECB itself at a banking event in February, 61% of the banks in attendance said they are actively preparing for the roll out of IP; 15% of the audience believe IP will be the new norm within one year; 63% expect a take-up in the coming five years; and 21% believe that regulation is necessary to drive IP adoption.

As we reported a year ago, big banks on both sides of the Atlantic are all over blockchain technology and have been pouring money into developing their own “digital currencies.” They include European too-big-to-fail giants like Santander, Deutsche and UBS, which, alongside New-York based BNY Mellon, have been working together to create a digital currency known as Utility Settlement Coin (USC), which will facilitate payment and settlement for institutional financial markets.

It’s easy to see the lure blockchain holds for alpha lenders such as these: Combining shared databases and cryptography, the technology offers multiple parties simultaneous access to a constantly updated digital ledger that cannot be altered. With it, banks could offer a safer, faster, cheaper, more transparent service to their customers, while doing away with the need for a central operator.

Settlements could be executed almost instantaneously on a bank-by-bank basis rather than having to be netted at the end of each working day by the respective central bank. The subsequent cost savings could be huge.

But now the ECB may have stolen their thunder, by launching a cross-continental instant payments system. By doing so, it has become the first major global central bank to try to offer an alternative to the payment systems offered by tech giants such as Apple, Google, PayPal and Amazon that currently dominate Europe’s digital payment industry.

Unlike cryptocurrencies, TIPS is highly centralized. It is also largely untested, at least at the sort of levels the ECB aspires to achieve, offers zero anonymity and is extremely low-cost, with a transaction fee of just 0.2 cents and no entry or account maintenance fees, which is great news for bank customers but not such great news for banks themselves.

This may help explain why only eight out of thousands of European lenders have so far signed up to the system. But rest assured that in the coming months the ECB will do everything it can within its not insignificant power to change that dynamic.

 

end

 

ITALY/EU

Tria is probably the “sole” adult  in the room of Italian ministers.  His departure will be a death blow to the Italian economy

(courtesy zerohedge)

Italian Economy Minister Said Close To Resigning Over

Rift With PM

As Italy’s ruling populists hint that they would be open to lowering their budget deficit target (on the condition that they have enough left over to fulfill their campaign promises for generous tax cuts and social welfare programs), investors in Italian bonds are happier than they have been in months. Yields on Italian bonds declined to their lowest level in five months, having erased the entirety of their budget conflict-inspired rise, on reports that the EU might be willing to shelve its “Excessive Debt Proceedings” if the Italians agree to a meaningful reduction.

But amid the sudden shift in the relationship between the EU and the leaders of the bloc’s third largest economy, one Italian newspaper appeared determined to spoil the fun. La Corriere della Sera published a story on Wednesday claiming that Economy Minister Giovanni Tria – who is still viewed by investors as the adult in the room, despite having set aside his concerns about fiscal prudence by comparing a budget-deficit reduction to “suicide” – might be looking to leave the government before the new year, according to Bloomberg.

Conte

According to the report, Tria is “more tempted” to leave than before, and is privately said to be contemplating departing his post during the period between Christmas and New Year’s, after the budget has (hopefully) been approved by the EU. Tria is said to be “tired” of attacks on his credibility and has become increasingly dissatisfied with Prime Minister Giuseppe Conte, who recently told the Italian press that he would be “in charge” of talks with Brussels. According to media reports, Conte is preparing to deliver another budget draft to the EU that would shrink the projected deficit to 2%. Conte told the newspaper La Repubblica that he believes the government can shave 2 billion euros off the cost of its “citizens income”. But since Conte has taken on the role of lead negotiator, Tria has felt “paralyzed” and is struggling to find a new place in the government. The economy minister skipped a Q&A with lawmakers that followed the government’s trip to negotiate with Brussels because Conte handled it.

Yesterday, Tria told reporters following a meeting with EU finance ministers that the government’s pension reform plans would be preserved, adding that talks were “collegial”, though he declined to say what specifically had been discussed, according to Reuters.

When asked by reporters, Deputy Prime Minister Matteo Salvini denied the rumors and claimed that Tria and Conte “get along well.”While Italy appears to be making progress, Tria’s departure could easily spoil the recovery in Italian assets by adding to concerns about the Italian economy, which contracted during the three months through September. And “soft” data – specifically the November PMI – released since then suggest that the slowdown will only continue. Manufacturing shrunk at its fastest pace in four years last month, according to the data.

suicide

If Tria leaves, expect investors to worry that the populists’ recent flirtations with a more disciplined budget deficit could fizzle after the departure of the one “adult in the room.”

end
UK
The all important Gatestone Institute has now come out and is pounding the table that Theresa May surrendered completely to the EU.  As I have stated in previous commentaries this is a horrible deal.  England should just have no deal and walk on the 29th of March 2019 and save 60 billion euros.  England will sign trade deals immediately after leaving the EU
(courtesy/Gatestone zero hedge)

“The Worst Deal in History?”: Theresa May’s Surrender

Authored by David Brown via The Gatestone Institute,

  • This Brexit “deal” is anything but good for the nation.
  • This “deal” will cost the British taxpayer £60 billion; require that the British still comply with EU rules without having any say in what those will be, and worst of all, it permits the British to leave the EU only if the EU agrees.It commits the British effectively to subjugation by the EU in perpetuity, with no recourse should the British change their mind. It is a prison. It is also the first step of the EU toward its dream of global governance: unaccountable, untransparent, unelected by the public, and with no way out.
  • There is still a way out of this mess; an easy alternative. The solution is No Deal. Without any further action, the UK’s membership of the EU will lapse on March 29, 2019, and unless that majority can unite around a viable alternative, we will leave. Even better, according to a House of Lords report, there would be no legal obligation for the UK to make any payment as part of a financial settlement.

But, we have nearly left the EU haven’t we? After all, we keep hearing about this deal. We must be nearly there by now, surely?

Just because some of us are immersed in this stuff, many of us are not. Back in the real world where people are trying to find their bus passes, generally keep warm, or asking who will do the school pick-up, Brexit is not everyone’s first and overwhelming thought.

In the margins, there are the headlines on the six o’clock news telling you Theresa May has a “deal” agreed to by Brussels — and she is off to sell it to the nation.

A “deal” implies you got more than what you bargained hard or hoped for, or that someone threw in an extra bottle of Fairy Liquid for free.

Theresa May is misusing the term “deal”. What she is calling a “deal” is a literal deceit to the nation. This “deal” is anything but good for Great Britain.

This “deal” will cost the British taxpayer, £60 billion; require that the British still comply with EU rules without having any say in what those will be, and worst of all, it permits the British to leave the EU only if the EU agrees. As Nigel Farage, former UKIP leader and one of creators of Brexit, asks, “Why should it?”

This “deal” effectively commits the British to subjugation by the EU in perpetuity, with no recourse should the British change their mind. It is a prison. It is also the first step of the EU toward its dream of global governance: unaccountable, non transparent, unelected by the public, and with no way out.

The French will still be able to fish in British waters, and the Spanish will claim that the UK will have to open talks on the sovereignty of Gibraltar. As Spain’s Prime Minister Pedro Sánchez has said, “Once the UK has left the EU, Gibraltar’s political, legal and even geographic relationship with the EU will go through Spain…

New trade barriers would also be put in place between Northern Ireland and Great Britain, fundamentally undermining the constitutional and economic integrity of the United Kingdom.

This “deal” is, in reality, a sell-out. Farage has described it as “The worst deal in history”; even more wretched, as he points out, is that — as one cannot leave it without the EU’s permission — it offers Britain even less sovereignty than it has now.

Theresa May and her Remainers are counting on this deceit as well as the utter fatigue of Conservative constituents — an understandable impatience of voters for Brexit to be “over” with it — to push her sordid “deal” over the line.

We must not allow this to happen.

There must be no “deal” — apart from the one for which the British voted and were repeatedly promised (falsely as it turns out) would be honoured.

The “deal” as it now stands is nothing more than a surrender to the EU, the Germans, the French and the Spanish. We shall remain in the Customs Union; the transition period could be extended beyond two years; the “backstop” can only end with EU agreement; the EU will still control our laws and there will be customs checks in the Irish Sea; Northern Ireland will be treated differently, and we will be paying £60 billion to be able not to walk out the door.

May’s offer is a surrender. “Leave” voters need to look at this surrender to the EU and dig deep, to June 23, 2016, and what you voted for: To take back control of our country, our laws and our British people first.

There is still, however, a way out of this mess; an easy alternative. Theresa May’s Surrender is not the only deal possible — no matter how many times you hear May and European Commission President Jean-Claude Juncker repeat each other’s scripted talking points.

The solution is No Deal. Without any further action, the UK’s membership of the EU will lapse on March 29, 2019, and unless that majority can unite around a viable alternative, we will leave, and be free of the EU.

Even better, the UK would be out of the EU with no strings attached and no agreement in place. According to a House of Lords report, there would be no legal obligation for the UK to make any payment as part of a financial settlement.

With no new trade agreement with the EU, the rules of the World Trade Organization would apply and Great Britain would be free to sign trade agreements around the world as soon as it could finalise them.

Those peddling confusion — including the BBC — will talk in terms of “crashing out” with no deal — invoking images of cars overturned, planes ablaze and people screaming.

They are wrong. We will not crash anywhere. We are British. We will leave politely, without a deal, and apologise when someone else stands on our foot.

We will not run out of drinking water, bacon sandwiches, insulin or ferries. Online marketers would smell an opportunity and in an instant fill it for profit. There is whole world market out there, not just Europe. Leaving is our golden opportunity to take a cue from our economically savvy friends across the Pond and “Make Britain Great Again.”

So, dig in deep for a No Deal Brexit. Do not let your MP capitulate to May’s Surrender.

A No Deal Brexit is exactly what most of us voted for. All we need now is a leader prepared to deliver it.

END

After yesterday’s historic contempt vote, JPMorgan now raises the odds of a “no Brexit” had 40%. I believe it is higher than that.

(courtesy zerohedge)

 

After Historic Commons Contempt Vote, JPM Raises

Odds Of ‘No Brexit’ To 40%

Just when Theresa May’s supremely unpopular Brexit deal was beginning to gain traction among recalcitrant Tory leaders, yesterday’s disastrous Commons vote to hold May in contempt (and the accompanying Grieve Amendment, which effectively wrested control over deal negotiations away from May) has rendered the ‘finalized’ draft deal DOA just six days before a planned vote.

Following May’s historic defeat, cable slid to its weakest level in 18 months; but in an amusing twist, traders have apparently reconsidered the significance of yesterday’s developments. Rather than increasing the possibility of a ‘no deal’ Brexit – a scenario that faces broad opposition in Parliament – markets believe that the odds of Brexit being called off (which Deutsche Bank put at 30% just a few weeks ago) have risen, as JP Morgan suggested in a research note, according to Reuters.

Brexit

“The UK now appears to have the option of revoking unilaterally and taking a period of time of its own choosing to decide what happens next,” J.P. Morgan economist Malcolm Barr wrote in a note to clients.

JPM raised the odds of ‘no Brexit’ from 20% to 40%, while lower the possibility of a ‘no deal’ Brexit to just 10%.

Which would explain Wednesday’s sudden surge in the pound…

GBP

…while six-month GBPUSD vol climbed to its highest level since 2016, reflecting a level of uncertainty that hasn’t been priced in since before Article 50 had been triggered, when many still suspected that Parliament would find a way to invalidate the referendum.

Futures

Theresa May herself has repeatedly said the options facing Parliament are a) her best possible deal, b) no deal or c) no Brexit. And while most traders appear to be betting on option c, at least one futures trader has placed a massive bet on a “disastrous” option b opening a massive position (7,000 contracts) in out-of-the-money FTSE puts with a 6,500 strikeprice (offering a expression of an investment thesis put forward by Steve Eisman, of “Big Short” fame).

Brexit

This bet jives with an analysis of market reactions to various scenarios published by Barclays.

Barclays

By publishing the AG’s legal advice in full, May has been caught in a blatant cover up (since the “summary” of the legal advice didn’t include the AG’s most consequential finding, at least as far as Brexiteers are concerned). Furthermore, the advice has legitimized Brexiteer warnings about the UK being reduced to a “vassal state” should negotiations over a new trade deal fail and the Irish backstop is triggered.

The most important text from the six-page legal advice is excerpted below, where the AG clearly explains that there is a “legal risk” that the backstop – which would leave the UK trapped in the customs union with no representation – could “endure indefinitely.”

“Despite statements in the [withdrawal agreement] protocol that it [the backstop] is not intended to be permanent, and the clear intention of the parties that it should be replaced by alternative, permanent arrangements, in international law the protocol would endure indefinitely until a superseding agreement took its place.”

The backstop would carry on “even when negotiations have clearly broken down” on a future trading relationship, Mr Cox’s paper said.

“In the absence of a right of termination [on the backstop], there is a legal risk that the United Kingdom might become subject to protracted and repeating rounds of negotiations,” it added.

Meanwhile, remainers’ cries to revoke Article 50 (which an EU court conveniently suggested could be accomplished unilaterally by May’s government) are growing louder on social media.

nbinsider@nbinsider63

Stop the clock, put power back into UK’s hands by revoking article 50. Replace PM. Have vote on the deal or remain. UK needs to be in a financial strong position to clean Brexit. Better luck next time.

Though given the magnitude of May’s vote-counting blunder on Wednesday, we can’t help but suspect that this is actually an example of ‘controlled chaos’ intended to force a second referendum, which polls suggest remainers would win (though they have been wrong before).

END
FRANCE
Trump mocks Macron that French citizens (protesters) got it right that ordinary citizens should not have to pay the bill for cleaning the environment.  Instead it should be corporations and wealthy shareholders who should
(courtesy zerohedge)

Trump Mocks Macron: Glad “Yellow Vest” Protesters

Agree With Me

President Trump indulged in some amicable schadenfreude as Paris, the capital city of his one-time “friend” Emmanuel Macron, is rocked by violent and sometimes deadly protests over proposed gas tax increases.

With the memory of Macron’s subtle diss last month during a speech to world leaders at the Arc de Triomphe still clearly fresh in his mind, Trump gloated on twitter that he was glad that my friend @EmmanuelMacron and the protestors in Paris have agreed with the conclusion I reached two years ago. The Paris Agreement is fatally flawed because it raises the price of energy for responsible countries while whitewashing some of the worst polluters.”Trump famously withdrew the US from the Paris Accord last year over terms that he said benefited China’s economy at the expense of the US.

Macron

In a follow-up tweet, Trump said US taxpayers “shouldn’t pay to clean up other countries’ pollution.”

“…in the world. I want clean air and clean water and have been making great strides in improving America’s environment. But American taxpayers – and American workers – shouldn’t pay to clean up others countries’ pollution.”

Donald J. Trump

@realDonaldTrump

I am glad that my friend @EmmanuelMacron and the protestors in Paris have agreed with the conclusion I reached two years ago. The Paris Agreement is fatally flawed because it raises the price of energy for responsible countries while whitewashing some of the worst polluters….

Donald J. Trump

@realDonaldTrump

….in the world. I want clean air and clean water and have been making great strides in improving America’s environment. But American taxpayers – and American workers – shouldn’t pay to clean up others countries’ pollution.

Reeling from demonstrations that have morphed into what’s essentially an uprising against Macron’s administration, the French President on Tuesday announced that he would suspend the planned tax hikes – though more “yellow vest” demonstrations are still being planned.

And Trump has a point: Demonstrators have condemned Macron for adopting a climate change solution that puts too much of the burden for reducing emissions on ordinary French citizens, and not enough on the corporations – and the wealthy shareholders who control them – responsible for the pollution.

end

This ought to ruffle the feathers of the wealthier citizens of France:  In order to calm our yellow vests ahead of the Saturday riots, Macron stated that he might institute a “wealth tax” to pay for climate change.  I think the last time he proposed that many wealthy left the country.

(courtesy zerohedge)

Macron Dangles “Wealth Tax” Fix To Calm Yellow Vests Ahead Of Saturday Riots

After France’s six-month moratorium on fuel tax hikes failed to impress the so-called Yellow Vest movement, French President Emmanuel Macron is considering amending a wealth which some say goes too easy on the rich, according to Reuters.

In other words; the average French citizen will still suffer from crippling taxes in the name of fighting climate change, but hey – the rich will feel the sting too.

Government spokesman Benjamin Griveaux said all tax-related policies needed to be periodically evaluated and, if deemed not to be working, should be changed. He said the wealth tax could be reassessed in the autumn of 2019. –Reuters

“If a measure that we have taken, which is costing the public money, turns out not to be working, if it’s not going well, we’re not stupid – we would change it,” said Griveaux.

To be clear, a French government official has claimed Macron’s administration is “not stupid” while said administration has also managed to guide France into a nationwide meltdown over ill-conceived tax policies.

Meanwhile, recent OECD data just placed France ahead of Denmark as the most taxed country in 2017, as the country’s tax-to-GDP ratio is the highest of any advanced nation.

Saturday violence anticipated

As the Yellow Vest protests enter their fourth week, French authorities are expecting a day of “great violence on Saturday, as “a hard core of several thousand people” are expected to come to Paris “to break and kill,” according to FranceInfo.

The government warning comes amid a wholesale rejection of Macron’s six-month suspension of planned fuel hikes earmarked to fight climate change.

“The French are not sparrows and don’t want the crumbs the government is giving them. They want the baguette,” Yellow Vest leader Benjamin Cauchy told BFM TV, adding ” We didn’t want a suspension, we want the past increase in the tax on fuels to be canceled immediately.”

Cauchy then told La Depeche that “The Yellow Vests wish to act on Saturday,” when asked if the violent protests will continue – though he added that the movement needs to become “pacifist and non-violent” – as it began three weeks ago.

Decidedly not pacifists are thousands of high school students who have begun to join the Yellow Vest movement – violently clashing with police as they begin to protest over their own causes; primarily the rising cost of education.

Police in front of a high school blocked in Toulouse (Haute-Garonne), December 4, 2018. (MAXPPP)

In some places, Marseille and Toulouse, we see the strongest problems and especially with violence that has never been seen,” said Jean-Michel Blanquer, France’s Minister of Education.

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

SAUDI ARABIA/USA

Many senators have seen the evidence and conclude that the Crown Prince MbS orchestrated the murder.  Let us see how this will play out in the future.

(courtesy zerohedge)

Senators Convinced By CIA’s “Smoking Saw” Evidence

Crown Prince Orchestrated Khashoggi Murder

Trump’s attempt to keep the Saudi Crown Prince away from the spotlight – and keep pumping as much oil as possible to keep the price of oil low – just suffered a major blow when US senators said a classified CIA memo convinced them that Saudi Crown Prince Mohammed bin Salman played a role in dissident columnist Jamal Khashoggi’s dismemberment, with one describing the evidence as “a smoking saw.”

Foreign Relations Chairman Bob Corker of Tennessee rejected Jared Kushner’s Donald Trump’s efforts to downplay the prince’s role, and according to Bloomberg said that if a jury were to consider a case against Prince Mohammed, he’d be convicted of murder in 30 minutes.

“There is zero question in my mind that the crown prince directed the murder and was kept apprised of the situation all the way through,” Corker said Tuesday after the closed-door briefing with CIA Director Gina Haspel and a handful of senators. “Zero question in my mind.”

And so with “zero questions” on their minds about MbS’ guilt, senators are already preparing their retaliation which according to Bloomberg will be to hit Trump where it hurts, namely a resolution that would restrict U.S. support for the Saudi military campaign in Yemen, which has resulted in a humanitarian disaster.

And since the debate is likely to evolve into a virtual trial over Prince Mohammed’s responsibility for Khashoggi’s murder at the Saudi consulate in Istanbul and Trump’s effort to downplay it, senators could add additional amendments to further punish the kingdom.

While the Senate’s mind appears to be made up, the House hasn’t yet indicated how it plans to move forward, as it still has not seen the evidence. House members are scheduled to receive a briefing from Defense Secretary Jim Mattis and Secretary of State Michael Pompeo on Dec. 13.

What was perhaps most surprising was the condemnation from Lindsey Graham, one of Trump’s closest allies in the Senate, who echoed Corker saying that the only conclusion was that Prince Mohammed is responsible for the killing.

“There’s not a smoking gun, there’s a smoking saw,” Graham said referring to reports that the WaPo columnist was beheaded, dismembered and his fingers were severed.

And in what amounted to a jab at Trump’s reluctance to point a (non-severed) finger at the Saudi de facto ruler, Graham said that “you have to be willfully blind not to come to the conclusion and that this was orchestrated and organized by people under the command of MBS and that he was intricately involved in the demise of Mr. Khashoggi.” And like some of his Senate peers, Graham said he won’t support arms sales to Saudi Arabia while Prince Mohammed is in power.

Meanwhile, senators who weren’t invited to Tuesday’s briefing, including Rand Paul of Kentucky, Chris Murphy of Connecticut and Tim Kaine of Virginia, said more senators should also get the same briefing.

Still, while it appears that diplomatic ties between Washington and Riyadh will be severely limited as long as MbS is in charge, Corker said it’s going to be difficult to determine what measure the Senate can pass with overwhelming support.

To be sure, while there is a chance the whole diplomatic scandal blows over, Bloomberg writes that lawmakers are likely to use the debate to call for Saudi Arabia to be held accountable for its behavior and reject the Trump administration’s policy of keeping close ties with the kingdom, counting on its leaders to keep oil prices down as he ramps up sanctions on the kingdom’s rival, Iran. Senators have also demanded the White House be more forthcoming about intelligence gathered on the Khashoggi killing and have signaled they may back broader sanctions against the kingdom.

While the UN has said as many as 14 million people could be at risk in coming months as the Yemen humanitarian disaster and famine unfolds, the White House has threatened a veto of the legislation, and leaders in the Republican-controlled House haven’t shown any interest in taking it up so far.

Finally, should the Senate actively challenge Trump on his posture vis-a-vis Saudi Arabia and should Saudi Arabia then cut oil output in a rerun of the 1973 oil embargo, an infuriated Trump will look for – and find – a scapegoat, which in this case will most likely be Mike Pompeo’s CIA director replacement, Gina Haspel. Here why, from Bloomberg:

The administration last week sent Mattis and Pompeo to the Capitol, but senators emerged angrier than before, in part because Haspel didn’t participate. Graham said Tuesday the difference between the Haspel briefing and the one last week was “like darkness and sunshine” in terms of shedding light on MBS’s involvement in Khashoggi’s killing.

So if Trump wants a culprit for the upcoming collapse in ties with his closest middle eastern friend, he will find one in the current  CIA director. Should she be fired, the already open warfare between the CIA and the White House is set to get even worse.

end
Israel/Lebanon Hezbollah
Hezbollah is now on high alert as Israel begins an operation to destroy tunnels heading into Israel from Lebanon
(courtesy zerohedge)

Hezbollah On High Alert As Israel Begins ‘Operation

Northern Shield’ Along Lebanese Border

Hezbollah is on full alert in Lebanon and Syria, calling on its forces to be ready for war if Israel initiates attacks on Lebanon, according to Middle East war correspondent Elijah Magnier. This measure came following Israel’s Tuesday morning launch of “Operation Northern Shield” to “destroy Hezbollah tunnels on the Israeli border.” The Lebanese Army, though significantly weaker than Hezbollah, has also been placed on high alert and soldiers have been deployed to the border.

Israeli vehicles are seen at the Lebanon border Tuesday, via Reuters.The Israeli Defense Forces (IDF) announced its new operation to “expose and thwart” tunnels stretching from Lebanon into northern Israel which it says were built by the Hezbollah militant group. Amid soaring tensions in the region due to the Syrian war and US-led attempts to choke Iran’s economy, Israeli military officials were quick to name Iran as a culprit behind Hezbollah acts of aggression, including infrastructure like the tunnels.

Lt. Col Jonathan Conricus, an Israeli military spokesman, said, “We see Hezbollah’s activities as a flagrant and blatant violation of Israeli sovereignty” and of U.N. resolutions. He added, “This activity is another example of the negative effects of Iranian entrenchment in the region.”

The IDF announced that operations have commenced via official social media accounts:

Embedded video

Israel Defense Forces

@IDF

BREAKING: We have just launched Operation Northern Shield to expose and neutralize cross-border attack tunnels dug by Hezbollah from #Lebanon to #Israel. #NorthernShield

For now the IDF has said it plans only to work toward neutralizing the tunnels as they exist inside Israeli territory and says they are not currently being used. But announcement of the operation has already sent tensions soaring, as Lebanese troops and intelligence were immediately deployed to the southern border on Tuesday, alongside U.N. peacekeeping officials.

According to the AP, which photographed the first tunnels being destroyed:

Israel has been using earthmovers and other large machinery to build a massive wall along its northern border, saying the barrier is needed to protect civilians from Hezbollah attacks. While the construction has prompted complaints from the Lebanese army, Hezbollah has not responded, an indication it could remain restrained amid the new operation.

“Operation Northern Shield” began early Tuesday. Image source: APOperation Northern Shield began a mere hours after Israeli Prime Minister Benjamin Netanyahu met with Secretary of State Mike Pompeo in which the leaders discussed “ways to halt together Iranian aggression in the region,” notably in Lebanon.

Hezbollah is seen as Iran’s most powerful proxy force, which has only been made stronger coming off the victory of the Syrian war in defense of the government under Bashar al-Assad. This despite Israeli air raids having targeted Hezbollah positions and weapons store houses hundreds of times since 2013.

end

Turkey

I have been highlighting the problems for Turkey for quite some time now.  The chief problem was the country’s reliance on cheap USA money during the 2006-2012 period.  Households borrowed huge amounts of money and now we are witnessing huge non performing loans similar to what we see in Italy.  This is a house of cards and no doubt we will see a huge debt crisis emerging here.

(courtesy zerohedge)

Turkey’s Economy Is A House of Cards – Consumer

Debt Crisis Emerges

Turkey’s soaring inflation, plunging currency, surging interest rates, and a collapsing stock market, has ended almost two decades of stable economic growth and the “good life” for Turkish consumers that started in 2001. Now, the greatest threat facing Turkey is a structural one: its desperate need for foreign financial resources. 

A stable economic environment combined with easy access to global liquidity provided Turkey with abundant foreign resources.

The decade of expansionist monetary policies of the Federal Reserve and the European Central Bank enabled countries like Turkey to obtain cheap foreign resources and endowed Turkey with a rate of about 5% stable growth.

From 2003-2008, Turkey registered an annual growth of 5.9%. From 2009-2017, the rate of growth was 4.9% per year.

However, after 2014, there were signs the stable growth party was coming to an end. External expansionist policies were nearing an end and interest rate hike cycle was imminent.

From 2014 to the end of 2017, Turkey was able to prolong the business cycle but was severely damaged in the emerging market meltdown of 2018. 

According to the Central Bank of the Republic of Turkey’s balance of payments figures, in the first three quarters of 2018, there were no financial resources available from abroad, while $4.2 billion of foreign funds fled the country.

During the high growth period, about one-fourth of foreign resources were used in the form of mortgages, auto loans, and credit cards, according to Al-Monitor.

Consumer loans were the economic miracle that kept domestic consumption alive, but it forced low-income families into insurmountable debts.

In 2004, consumer credit and borrowing on credit cards constituted 4.6% of the annual national income, which was 24% of total bank credits. By 2013,  the percentage jumped to 18% of the national income, making up 31% of total bank credits. Al-Monitor explains the debt crisis brewing in Turkey:

“After 2014, household debts began to broadcast serious warning signs, as banks were not able to collect on the loans. The AKP regime realized it had to impose some restrictions and insurance rates went up. Until 2017, growth based on domestic demand was the most prominent leverage of the system. It enabled about 19 million unorganized, non-unionized workers to live on loans. According to the Confederation of Revolutionary Labor Unions, or DISK, 66% of workers were earning below $365 a month. Since it would be practically impossible to survive on that income, it was obvious that households were adding to their incomes with easily available credit.

This way of balancing the family budget became more difficult in mid-2018. Consumer inflation was amplified by a rapid increase in foreign currency parity and abnormal tensions with the United States. It became imperative to increase Turkish currency interests, thus further increasing consumer credit and credit card borrowing. The interest rate for housing loans went from 13% in the first quarter of 2018 to 29% in November. More importantly, more households were taking out bank loans to pay credit card debts, with interest rates reaching 37%. According to the Financial Stability Report issued by the central bank in May 2018, bank debts and credit card borrowing had reached about $153 billion, making up 56% of household debts.

Turkey’s low and middle income laborers, white collar workers and retirees were severely pressed in paying back their debts. Facing serious delinquencies in paying back the household credits, many debtors began facing legal actions because of their arrears. According to data issued by the Union of Banks of Turkey, 1.1 million people faced legal action in 2017. In the first nine months of 2018, this figure reached over 3.2 million debtors. Banks could not collect about $3.5 billion, or 21% of the debts.”

As of recent, headline economic indicators suggest the Turkish economy is set for a painful recession, despite the government asserting the economy is merely “rebalancing.” 

Turkish banks are now panicking that nonperforming consumer loans are set to explode in 2019.

Some debtors may lose their jobs in the next economic downturn. Those who keep their jobs may not make enough money to cope with high inflation, which means the consumer base, after a near two-decade party, is about to experience a horrible deleveraging period.

6. GLOBAL ISSUES

Canada

this is not good!! The Bank of Canada folds on its economic enthusiasm highlighting a poor housing sector and low crude prices. They have decided to keep interest rates unchanged and will not raise rates in 2019

(courtesy zerohedge)

Loonie Slumps As Bank Of Canada Folds On Economic

Enthusiasm

Amid near-record-low Canadian crude prices and a housing crisis, The Bank of Canada appears to have finally given up its narrative that ‘everything is awesome’.

The BoC walked back much of its enthusiasm about the nation’s outlook in a decision that kept interest rates unchanged, spinning bad news as good by saying that the economy may have “additional room for non-inflationary growth.” Of course, if the economy was growing faster, the BOC would simply say that the economy is growing… well, faster or “near potential.”

Instead, holding rates unchanged at 1.75%, the BOC cited almost everything that has gone wrong:

  • moderating global growth,
  • a “materially weaker” outlook for the oil sector,
  • a faster-than-expected deceleration of inflation,
  • a drop in business investment and downward historical revisions to output

Following the latest central bank dovish relent, the USDCAD jumped 0.8% to ~1.3374 after touching highest (i.e. the CAD dropping the most) in more than five months on the cautious language, a dovish outlook that could change expectations for 2019 BOC rate hikes.

Even with the dovish undertones, the statement reiterated that rates will need to rise to “neutral range” – which like the Fed it has no idea what it is – within its discussion of recent downside risks, to wit:

“Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target.”

Still, the generally less-confident tone is an acknowledgement of developments over the past few weeks that have cast doubt on the strength of the nation’s expansion and prompted investors to scale back the expected pace of future rate increases.

The final nail in the hawkish case coffin was the key shift in tone (red rectangle below) which notes that while the Canadian economy growing in line with expectations, “data suggest less momentum going into the fourth quarter.”

end

 

7  OIL ISSUES

Day one and no firm commitment to lower production.  Oil dumps after initially gaining on the day

(courtesy zerohedge)

Oil Pumps’n’Dumps After OPEC+ Day 1 Nears End

Without Firm Commitment

Despite the desperate headline-grabbing jawbone attempts (from Oman’s delegate more than others), WTI Crude prices are tumbling from earlier highs as day one of the OPEC+ meeting ends without a firm commitment to further production cuts.

The meeting of Saudi Arabia, Russia and other members of the OPEC+ group recommended a production cut, without a formal agreement on how much oil should be removed from the market.

Keeping track of the constant barrage of OPEC headlines was farcical today:

  • *NIGERIA OIL MIN: OPEC+ SHOULD CUT OUTPUT, NO GROUP DECISION YET
  • *OPEC+ AGREES TO RECOMMEND A CUT: OMAN ENERGY MINISTER
  • *OMAN MINISTER SAYS OPEC+ HAS CONSENSUS FOR OIL PRODUCTION CUT
  • *RUSSIA HAS AGREED TO OIL OUTPUT CUT: OMAN MINISTER

All sounds very bullish – except nothing was agreed at all as the Russian delegate confirmed, talks with fellow OPEC+ members were constructive but the result will be discussed at the OPEC conference in Vienna on Thursday. Any concrete moves will depend on the outcome of that meeting, the delegate says, asking not to be named because the talks were private.

Most likely for now is what Putin mentioned – an extension of the current production cuts. Additionally, Russian excuses have already begun, as Lukoil CEO Vagit Alekperov says in Vienna, that they may not be able to cut production immediately because the winter season makes it difficult to do so:

“The only limitation we have is weather, the cold climate in Siberia. We probably won’t be able to cut down immediately but within certain period of time we will meet the needs, the quota”

And uncertainty remains:

  • *ECUADOR OIL MIN SAYS OPEC+ CUT IS NEEDED, DOESN’T KNOW SIZE
  • *OMAN OIL MIN: OPEC+ COMMITTEE DIDN’T DISCUSS SIZE OF OUTPUT CUT

But, once that same Omani delegate suggested that the cuts – which have not been agreed – could be 1mm b/d only, crude prices began to tumble.

Expectations are for a cut of 1m-1.3m b/d, B. Riley FBR Chief Market Strategist Art Hogan says at Energy CFO Roundtable in Houston.

If daily output is only curbed by 750k b/d or less, the market will “come down”

“I don’t think this is a Saturday night massacre kind of thing that we went through in 2014 when we expected a cut and we didn’t get it…Saudi Arabia needs higher prices, for sure. As does Russia”

OPEC+ delegates know the stakes are high after prices suffered their largest monthly drop since the financial crisis in November, and weren’t helped by President Trump’s resumption of public pressure on the cartel, saying in a tweet that the “world does not want to see, or need, higher oil prices!”

end

On no!! this is going to be a disaster for Canada.  Already reeling from giving huge discounts because of bottlenecks..now Canada is legislated that sulfur content in the oil must be reduced to .5 % from 3.5%.  That is going to add 7 to 8 dollars of cost onto the already all price that they are receiving  (as low as 16 dollars cdn/barrel).  This will knock Canada out of the oil business.

(courtesy Irina Slav/OilPrice.com

Is This The Next Disaster For Canadian Drillers?

Authored by Irina Slav via Oilprice.com,

The government of Alberta this week took an unprecedented decision to enforce a crude oil production cut so excess inventories could be shrunk and the price of western Canadian grades could improve, but the industry’s problems are far from over. They will be among the hardest hit by the International Maritime Organization’s new emission rules, to enter into effect in two years, which will require a reduction of the sulfur content of bunkering fuel to 0.5 percent from 3.5 percent.

“We’ve got challenges with respect to pipelines, we’ve got challenges with respect to rail and now we’ve got challenges with respect to our demand market,” Bloomberg quoted the chief executive officer of the Canadian Energy Research Institute as saying at a presentation this week.

The emission rules will start affecting the price of Canadian crude next year, Allan Fogwill, along with other analysts, believes.

Canadian crude is heavy and sour, that is, high in sulfur content, which is the obvious reason why the IMO changes would affect prices, adding to already substantial pressure from pipeline bottlenecks and the rising amount of crude that is being transported by costlier rail.

According to IHS Markit analyst Kurt Barrow, the emission rules will make Canadian crude another $7-8 cheaper than West Texas Intermediate in 2019. Even the completion of the Line 3 replacement project won’t offset these losses, although it will add 375,000 bpd to daily pipeline capacity.

Another analyst, Wood Mackenzie research director Mark Oberstoetter, told Bloomberg Western Canadian Select will likely be US$20 cheaper than WTI for most of 2019, which is the cost of railway transportation for Albertan heavy crude. All in all, things are looking pretty bad. But how bad is bad?

For one thing, Canadian heavy is the main heavy crude feedstock for U.S. refineries. Canada is in fact the biggest exporter of crude to the United States, at a rate of over 4 million bpd as of September, according to data from the Energy Information Administration, which compares with around 3 million bpd from OPEC. There aren’t a whole lot of alternative sources of heavy crude, what with Venezuela spiraling down into a deeper crisis and production falling along with exports.

For another, the new emission rules will not eliminate demand for fuel oil, it will only reduce it. Reuters recently polled 33 refiners on their IMO 2020 plans and found that although as much as 40 percent planned to stop producing high-sulfur fuel oil, the rest had no plans to suspend production despite the expected drop in demand. Instead, they were upgrading their refineries to further process the residual petroleum product into more gasoline and diesel, and also banking on stable demand from the power generation sector: when fuel oil becomes cheap enough, it serves as an alternative to coal.

The new emission rules will definitely present a new challenge to Albertan producers on top of what they already have to deal with. However, the importance of their crude for U.S. refineries and the low prices that have opened up the Chinese refining market for more Canadian oil exports should serve as a cushion against major price and production shocks.

8. EMERGING MARKETS

 

 

END

 

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

Euro/USA 1.1355 UP .0012 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 RED

 

 

 

 

 

USA/JAPAN YEN 112.96  UP 0.266 (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 1.2771 UP   0.0052  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3278  UP .0022 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 WEDNESDAY morning in Europe, the Euro ROSE by 12 basis point, trading now ABOVE the important 1.08 level RISING to 1.1355/ Last night Shanghai composite CLOSED DOWN 16.15 POINTS OR 0.61%

 

//Hang Sang CLOSED UP 440.76 POINTS OR 1.62%

 

/AUSTRALIA CLOSED DOWN  0.84% /EUROPEAN BOURSES DEEPLY IN THE RED 

 

 

 

 

 

The NIKKEI: this WEDNESDAY morning CLOSED  DOWN 116.72 POINTS OR 0.53%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 440.76 POINTS OR 1.62% 

 

 

/SHANGHAI CLOSED DOWN 16.15  POINTS OR 0.61%

 

 

 

Australia BOURSE CLOSED DOWN  0.84%

Nikkei (Japan) CLOSED DOWN 116.72 POINTS OR 0.53%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1237.50

silver:$14.49

Early WEDNESDAY morning USA 10 year bond yield: 2.91% !!! DOWN 0 IN POINTS from TUESDAY’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 3.17 DOWN 0  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early WEDNESDAY morning: 96.89 DOWN 8  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing WEDNESDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.79% DOWN 2    in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.07%  DOWN 0  BASIS POINTS from TUESDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…

 

SPANISH 10 YR BOND YIELD: 1.46% DOWN 3  IN basis point yield from TUESDAY

ITALIAN 10 YR BOND YIELD: 3.06 DOWN 10     POINTS in basis point yield from TUESDAY/

 

 

the Italian 10 yr bond yield is trading 159 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.28%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.88% 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 TUESDAY

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

Euro/USA 1.1352 UP .0009 or 9 basis points

 

 

USA/Japan: 113.13 UP  0 .492 OR 49 basis points/

Great Britain/USA 1.2748 UP .0029( POUND UP 29 BASIS POINTS)

Canadian dollar DOWN 129 basis points to 1.3386

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed UP AT 6.8568-  ON SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.8620(  YUAN DOWN)

TURKISH LIRA:  5.3274

the 10 yr Japanese bond yield closed at +.07%

 

 

 

Your closing 10 yr USA bond yield UP 2 IN basis points from TUESDAY at 2.91 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.17 UP 13 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, 97.02 UP 5 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 WEDNESDAY: 4:00 PM 

London: CLOSED DOWN 100.92 POINTS OR 1.44%

German Dax : CLOSED DOWN 135.08 POINTS  OR 1.19%
Paris Cac CLOSED DOWN 68.29 POINTS OR 1.36%
Spain IBEX CLOSED DOWN 49.50 POINTS OR 0.55%

Italian MIB: CLOSED DOWN: 24.73 POINTS OR 0.13%/

 

 

WTI Oil price; 53.39 1:00 pm;

Brent Oil: 62.33 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.69  THE CROSS LOWER BY .18 ROUBLES/DOLLAR (ROUBLE HIGHER by 18 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3274 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.28 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 :53.39

 

BRENT:62.33

USA 10 YR BOND YIELD: 2.91%..

 

 

USA 30 YR BOND YIELD: 3.17%/.

 

 

 

EURO/USA DOLLAR CROSS: 1.1313 ( UP 9 BASIS POINTS)

USA/JAPANESE YEN:113.13 UP .442 (YEN DOWN 44 BASIS POINTS/ .

 

USA DOLLAR INDEX: 97.02 UP 5 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2748 UP 29 POINTS FROM YESTERDAY

the Turkish lira close: 5.3274

the Russian rouble:  66.69 UP .18 Roubles against the uSA dollar.( UP 18 BASIS POINTS)

 

Canadian dollar: 1.3386 DOWN 129 BASIS pts

USA/CHINESE YUAN (CNY) : 6.8568  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.8620 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.28%

 

The Dow closed

 

NASDAQ closed

 


VOLATILITY INDEX:  20.74 CLOSED 

 

LIBOR 3 MONTH DURATION: 2.739%  .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

 

not today/new york off today for Bush funeral/general markets closed

 

end

 

 

market trading

 

 

market data/

Mish explains the meaning of the inversion of the yield curve.  It generally signals a recession.  However you can still enter a recession without the inversion

(courtesy Mish Shedlock)

Why The Yield Curve Inverts In One Simple Picture

Authored by Mike Shedlock via MishTalk,

The yield curve inverts when the Fed keeps hiking in the face of a slowdown

Bianco research noted today There has not been one instance where the 2-year 5-year spread inverts and the 3-month 10-year spread didn’t.”

OK. But Why?

Answer: The Fed kept hiking in the face of a slowing economy as the chart I posted shows.

Thus, whether or not the 3-month to 10-year spread inverts may very well depend on how many more hikes the Fed gets in.

It’s possible that that the 3-month to 10-year spread will invert anyway, but it wouldn’t have at zero hikes.

Economy Poised to Weaken

Please consider DoubleLine’s Gundlach: Treasury curve inversion signal ‘economy poised to weaken’.

Jeffrey Gundlach, chief executive officer of DoubleLine Capital, says the U.S. Treasury yield curve inversion on short end maturities are signaling that the “economy is poised to weaken.”

Gundlach, known on Wall Street as the Bond King, said the Treasury yield curve from two- to five-year maturities is suggesting “total bond market disbelief in the Federal Reserve’s prior plans to raise rates through 2019.”

Bond Market Disbelief?

Gundlach’s first comment is accurate. His second comment is wrong.

Inversion does not imply in and of itself the Fed will not hike. It does suggest the Fed has already hiked more than the economy can take. Rate hike probabilities provide the proof.

Rate Hike Probabilities

As shown above, the market has a 69.6% chance of at least two more rate hikes in 2019. A month ago it was 87.4%. So the market has started to lesson the odds.

Rate Hike probabilities are from CME FedWatch. The anecdotes are mine.

Inversion Not a Recession Requirement

Let’s return to a statement I made at the top: Thus, whether or not the 3-month to 10-year spread inverts may very well depend on how many more hikes the Fed gets in.

Nearly everyone seems convinced the bond market will give its standard recession signal in a timely fashion. That is to say, nearly everyone is convinced the two-year to 10-year if not the 3-month to 10-year spread will invert.

Don’t count on it. Japan has had numerous recessions where its yield curve did not invert at all. The US could easily do the same.

Inversion is not a recession requirement.

 

USA ECONOMIC STORIES OF INTEREST

Seems that our good friends over at Goldman lost 800 million dollars during a trade with an indicted 1 MDB linked bank, Singapore’s Falcon bank

(courtesy zerohedge)

Goldman Nearly Lost $800 Million During A Trade With Indicted 1MDB-Linked Bank

If there was any doubt that Goldman Sachs’ compliance controls “don’t work very well”, as Malaysian Prime Minister Mahathir Mohamad wryly stated during an interview with CNBC last month, this should put it to rest. And as the Vampire Squid’s lax compliance standards (the bank’s compliance department was unwilling or unable to stop then-CEO Lloyd Blankfein from holding a one-on-one sit down with a shady Malaysian financier accused of stealing billions from the sovereign wealth fund, all in the name of landing a lucrative deal) have emerged as a focal point in a DOJ investigation into the bank’s conduct.

On Tuesday Bloomberg highlighted another troubling detail that raises questions about when the bank’s willingness to circumvent its own internal controls to win deals of placate valuable clients.

Goldmann

According to Bloomberg, investigators are looking into a mysterious transaction involving Goldman and Falcon Bank, a Singapore-based bank that was implicated by Singaporean authorities for allegedly helping to launder money stolen from 1MDB.

Goldman suffered “unexpected losses” during the trade after Singaporean regulators shuttered Falcon Bank over its role in the 1MDB theft.

An obscure Swiss bank implicated in Malaysia’s 1MDB corruption scandal was involved in another trade with Goldman Sachs Group Inc. in 2016 that exposed the Wall Street firm to unexpected losses. Falcon Private Bank had been a key player in the 1MDB drama since the end of 2015, when it first surfaced as a suspected conduit for hundreds of millions of dollars siphoned from Malaysia’s investment fund. By July of 2016, Singapore regulators found “substantial” breaches of money-laundering regulations at Falcon.

Yet even after Singapore accused Falcon during the summer of 2016 of helping to facilitate the 1MDB fraud, Goldman ignored the warnings and entered into a trade with the bank at the behest of a valuable client. But Falcon stiffed its Wall Street peer after regulators forced Falcon out of business, leaving Goldman with an $800 million hole. Investigators are trying to figure out why such a large trade with an obscure and tainted counterparty was allowed to be executed.

By July of 2016, Singapore regulators found “substantial” breaches of money-laundering regulations at Falcon. Yet weeks later, Goldman Sachs entered into a trade with Falcon at the urging of controversial businessman Lars Windhorst, people with knowledge of the matter said. Now, Falcon’s role in that trade is emerging at an uncomfortable time for Goldman Sachs. Regulators investigating 1MDB are said to be looking at how Goldman’s moneymakers allegedly dodged internal controls while helping the Malaysian fund amass more than $6 billion. The Falcon deal prompts a further question: why a sizable trade with an obscure firm mired in a money-laundering probe didn’t trip alarms.

Goldman was briefly exposed to massive losses as a result of the trade, and responded by firing a junior executive who later sued the bank, arguing that he was “scapegoated” by higher ups who had pressured him to make the deal. This is how the transaction became part of the public record.

Chris Rollins, the executive who was fired for his role in the trade, said Goldman’s compliance department wouldn’t allow traders to deal directly with Lars Windhorst, so Windhorst suggested that Rollins deal with Falcon instead. Singaporean authorities yanked Falcon’s license after its role in the scandal was exposed. Goldman has disputed Rollins’ account, saying that Rollins knew the bank had “misgivings” about the transaction.

But that still doesn’t explain how and why the transaction wasn’t blocked – which is particularly relevant after the New York Fed reportedly pressured Goldman to “tighten up” its internal controls after the first 1MDB deal closed.

With regulators breathing down its neck and the prospect of “significant” fines or sanctions looming over the bank, it is belatedly taking steps to “mitigated” its legal risks (and hopefully put a floor under spiraling Goldman shares) by intensifying oversight of “high risk” employees, according to the Financial Times.

Still, this is just one more sign that the “culture of corruption” alleged by Tim Leissner in his plea agreement is real, and that CEO David Solomon’s “outraged” was merely feigned for show.

END

This is going to be a lots of fun:  The USA charges 4 men responsible for the Panama Papers operations

They will sing and this will lead to many arrests

(courtesy Adam Klasfeld and special thanks to Robert H for sending this to us)

US Charges Four for Tax Dodges in Panama Papers Probe

MANHATTAN (CN) – Three years after the leak of the Panama Papers exposed a worldwide network of tax-avoiding shell companies, federal prosecutors brought charges Tuesday against four men tied to the law firm Mossack Fonseca.

Obtained by the German newspaper Suddeutsche Zeitung from an anonymous source, the 2015 data dump is considered history’s biggest leak, laying bare in 11.5 million files how people around the world, including world leaders of the U.K., Iceland and Russia, shuffled their assets into tax havens.

The nonprofit International Consortium of Investigative Journalists partnered with media companies in more than 70 countries to pick apart the once confidential documents, embarrassing among others the inner circles of Russian President Vladimir Putin and former British Prime Minister David Cameron.

In a tangled 67-page indictment, U.S. prosecutors charged four men tied to the firm. The ones captured by authorities are Dirk Brauer, a 54-year-old German investment advisor for Mossfon Asset Management; Richard Gaffey, a 74-year-old U.S. accountant; and Harald Joachim von der Goltz, an 81-year-old German-born client.

Mossack Fonseca attorney Ramses Owens, a 50-year-old from Panama, remains at large.

U.S. Attorney Geoffrey Berman said Tuesday that all are under indictment in New York.

“For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through off-shore accounts and created shell companies to hide fortunes,” Berman said in a statement. “In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes.”

Untangling the cases of five Mossack Fonseca clients – one named and four unnamed – court papers show how the firm created labyrinthine networks of shell companies to keep their clients’ assets from the tax authorities.

“Owens and Brauer created, marketed, sold, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands to conceal, from the IRS and others, the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts,” the 67-page indictment states.

In multiple cases, prosecutors say, Mossack Fonseca scrambled to pick up the pieces after the Panama Papers hit the public sphere.

One example from the indictment is the case of von der Goltz, a German national who grew up in Guatemala who has lived in the United States since 1984.

Prosecutors claim he dodged U.S. taxes with a series of shell companies to mask more than $30 million in assets placed in Revack Holdings Foundation via a shell company EMJO Investments Limited. Von Der Goltz is the founder and manager of the foundation, but prosecutors said he hid that fact through a complex corporate structure of other Revack entities listing his 102-year-old mother as the beneficial owner.

“She is a Guatemalan citizen and resident, and – unlike von der Goltz – she is not a U.S. taxpayer,” the indictment states, referring to the elderly mother.

After the exposure of the Panama Papers in May 2016, prosecutors said, a law firm contacted the Department of Justice on von der Goltz’s behalf to “correct” statements made about him to the press.

“The statement of facts further falsely represented, in substance and in part, that von der Goltz was not the beneficial owner of EMJO, that he had ‘signature only’ authority over the Swiss Bank EMJO Account, and that he had not used EMJO ‘to hide funds from the U.S. or other tax authorities,’” the indictment states.

Prosecutors say that a U.S.-businessman identified as Mossack Fonseca’s “Client-3” hid $8 million in offshore entities, including a condo at the Grand Bay Towers in Panama City, before he died in September 2017

After the Panama Papers story broke a year earlier, prosecutors said, “Client-3” scrambled with Brauer to hide the $7.3 million in those assets still in Mossack Fonseca’s accounts that had been unmasked.

“Brauer suggested the creation of a new sham foundation that would hold new shell companies, which in turn would hold new bank accounts,” according to the indictment.

In January 2017, “Client-3” started cooperating with the Department of Justice, and prosecutors said that they wiretapped a call between that client and Brauer about creating a new foundation to make sure “everything can go to my children tax-free.”

“We are basically closing to have such account at [a bank in the Bahamas] and we are also and [a bank in Andorra] we’re actually telling her so I think that at least the two,” Brauer is quoted as saying. “And when I have, once it gets ready I also am thinking about these guys in Antigua.”

In June 2017, prosecutors said that they “Client-3” and an undercover agent for a meeting with Bauer in Bermuda to talk about tax evasion – and a side project.

“The undercover also pitched to Brauer the idea of laundering money for U.S. clients who had been involved in a pump and dump securities fraud scheme,” the indictment states. “Brauer stated, in substance and in part, that he would be able to assist the undercover’s U.S. clients in setting up offshore companies and bank accounts to accomplish these goals.”

Prosecutors say Brauer and the undercover communicated about the arrangement over the next several weeks and that Brauer requested conversations over Skype and the encrypted platform WhatsApp, as being a “little more discrete (sic)” than the telephone.

Collectively, the men face 11 counts of wire fraud, tax evasion, money laundering and false statements – charges that carry the possibility of decades imprisonment.

end

SWAMP STORIES

Many were expecting some detail from Mueller in his sentencing memorandum issued last night.  There is nothing on the issue of whether Trump or his election people where involved with Russians in fixing the USA election

(courtesy zerohedge)

No Jail Time For Flynn; Mueller Says Former Trump Official Provided

“Substantial” Assistance

Special counsel Robert Mueller has recommended no jail time for former National Security Adviser Michael Flynn, writing in a late Tuesday sentencing memorandum that Flynn provided “substantial” assistance to his investigation after taking part in 19 interviews related to Mueller’s probe of the 2016 US election and any links between the Trump campaign and Russia, as well as Russian meddling.

While there is no indication that Flynn threw Trump under the bus, Mueller’s memorandum certainly suggests that the former Trump administration official provided the special counsel with information that they were pleased with.

Or, in the alternative, the FBI altered their “302” interview records with Flynn to set him up, and this is how the Department of Justice has chosen to carefully disentangle themselves from the situation.

To briefly review from a February report; Flynn and Russian Ambassador Sergey Kislyak had a phone conversation in late December, 2016. On its face, there was absolutely nothing wrong with an incoming National Security Advisor having a conversation with a Russian government official. Following the conversation, which was surveilled by the Obama administration and then leaked to the press,

The first thing to remember is that it appears Flynn did nothing wrong in having those talks. As the incoming national security adviser, it was entirely reasonable that he discuss policy with representatives of other governments and Flynn was getting calls from all around the world. –Washington Examiner

What happened next is strange; on January 12, WaPo columnist David Ignatius reported that Flynn and Kislyak had talked – implying some type of malfeasance. Days later, on January 15, Vice President-elect Mike Pence denied that Flynn had discussed sanctions with the Russian ambassador. The on January 24, Obama holdover and acting Attorney General Sally Yates sent two FBI agents to interview Flynn without a lawyer present.

Two days later, on January 26, Yates and a colleague visited the White House to tell White House counsel Don McGahn that Flynn may have violated the obscure logan act, and in fact discussed sanctions with Kislyak – possibly subjecting Flynn to blackmail.

Yates then explained to McGahn her theory that Flynn might be vulnerable to blackmail. The idea was that Flynn had discussed sanctions with Kislyak, which of course the Russians knew. And then if Flynn lied to Pence, and Pence made a public statement based on what Flynn had told him, then the Russians might be able to blackmail Flynn because they, the Russians, knew Flynn had not told the vice president the truth. –Washington Examiner

Meanwhile, on January 23, the Washington Post reported that they had “not found any evidence of wrongdoing or illicit ties to the Russian government,” after having reviewed the leaked conversation.

Interestingly, FBI investigators Peter Strzock and his partner who interviewed Flynn thought Flynn was telling the truth about his conversations with Kislyak, and that any inaccuracies in his answers were unintentional – according to accounts of a closed-door March 2017 briefing given to lawmakers by former FBI Director James Comey.

According to two sources familiar with the meetings, Comey told lawmakers that the FBI agents who interviewed Flynn did not believe that Flynn had lied to them, or that any inaccuracies in his answers were intentional. As a result, some of those in attendance came away with the impression that Flynn would not be charged with a crime pertaining to the January 24 interview. –Washington Examiner

SWAMP STORIES/MAJOR STORIES//THE KING REPORT
AND SPECIAL THANKS TO CHRIS POWELL OF GATA FOR SENDING THIS TO US:

 

I WILL YOU ON THURSDAY
H
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