DEC 14/DOW MELTS BY ALMOST 500 POINTS/THE NASDAQ DOWN 159 POINTS/GOLD HIT FOR A LOSS OF $5.60 DOWN TO $1237.40/SILVER HIT FOR A LOSS OF 21 CENTS/GOLDMAN SACHS AND JPMORGAN CONTINUE TO TAKE THE MAJORITY OF COMEX GOLD CONTRACTS/CHINA CONTINUES TO TANK WITH THE TWO BIGG REPORTS; CPI AND INDUSTRIAL PRODUCTION BOTH FALTERING/THERESA MAY LEAVES BRUSSELS EMPTY HANDED/FRANCE IS ON EDGE FOR WEEK 5 OF YELLOW JACKET REVOLTS/A VERY BIG STORY: A HUGE NUMBER OF USA BONDS LOWERED TO BBB FROM A BONDS…ANYTHING LOWER THAN BBB IS JUNK AND THIS WOULD SET OFF A MASSIVE SELL OFF IN BONDS/HUGE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

GOLD: $1237.40 DOWN $5.60 (COMEX TO COMEX CLOSINGS)

Silver:   $14.56 DOWN 21 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1238.50

 

silver: $14.57

 

 

 

 

 

 

 

For comex gold and silver:

DEC

Again, we have Goldman Sachs dealer and JPMorgan customer account stopping (receiving the gold) 38/53 contracts.

EXCHANGE: COMEX
CONTRACT: DECEMBER 2018 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,242.700000000 USD
INTENT DATE: 12/13/2018 DELIVERY DATE: 12/17/2018
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 H GOLDMAN 27
323 C HSBC 3
661 C JP MORGAN 11
737 C ADVANTAGE 48 12
800 C RCG 2
905 C ADM 3
____________________________________________________________________________________________

TOTAL: 53 53
MONTH TO DATE: 7,261

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  DEC CONTRACT: 53 NOTICE(S) FOR 5300 OZ (0.1648 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  7261 NOTICES FOR 726100 OZ  (22.584 TONNES)

 

 

SILVER

 

FOR DECEMBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

26 NOTICE(S) FILED TODAY FOR  130,000  OZ/

Total number of notices filed so far this month: 3899 for 19,495,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $3302:  up 2

 

Bitcoin: FINAL EVENING TRADE: $3207  down  94 

 

end

 

XXXX

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total OPEN INTEREST FELL BY A TINY SIZED 630 CONTRACTS FROM 175,076 DOWN TO 174,446 WITH YESTERDAY’S 2 CENT GAIN 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 AS WE NOW HAVE JUST LESS THAN 20 MILLION OZ STANDING IN DECEMBER. AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD A  STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

1410 EFP’S FOR DECEMBER AND 0 FOR MARCH AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1410 CONTRACTS. WITH THE TRANSFER OF 1410 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 1410 EFP CONTRACTS TRANSLATES INTO 7.05 MILLION OZ  ACCOMPANYING:

1.THE 2 CENT GAIN 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 20.730 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: 17,804 CONTRACTS (FOR 10 TRADING DAYS TOTAL 17,804 CONTRACTS) OR 89.02 MILLION OZ: (AVERAGE PER DAY: 1780 CONTRACTS OR 8.900 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF DEC:  89,02 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 12.71% 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:           2,766.08    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 SMALL SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 630 DESPITE THE 2 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 STRONG SIZED EFP ISSUANCE OF 1410 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

TODAY WE GAINED A SMALL SIZED: 780 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1410 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 630 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 2 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.77 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. .875 BILLION OZ TO BE EXACT or 125% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT DEC MONTH/ THEY FILED AT THE COMEX: 26 NOTICE(S) FOR 130,000 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 20.880 MILLION OZ
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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

 

IN GOLD, THE OPEN INTEREST FELL BY A CONSIDERABLE SIZED 3998 CONTRACTS DOWN TO 400,737 WITH THE FALL IN THE COMEX GOLD PRICE/(A LOSS IN PRICE OF $2.00//.YESTERDAY’S TRADING) 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 9668 CONTRACTS:

 

DECEMBER HAD AN ISSUANCE OF 9668 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 400,737. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A GOOD SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 5670 CONTRACTS:  3988 OI CONTRACTS DECREASED AT THE COMEX AND 9668 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 5670 CONTRACTS OR 567,000 OZ = 17,63 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A LOSS IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $2.00

 

 

 

 

YESTERDAY, WE HAD 11080 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF DEC : 85747 CONTRACTS OR 8,574,700 OZ OR 266.70 TONNES (10 TRADING DAYS AND THUS AVERAGING: 8574 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 10 TRADING DAYS IN  TONNES: 266.70 TONNES

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

THUS EFP TRANSFERS REPRESENTS 266.70/2550 x 100% TONNES =  9.27% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     7031.08  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 CONSIDERABLE SIZED DECREASE IN OI AT THE COMEX OF 3988 WITH THE LOSS  IN PRICING ($2.00) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A HUMONGOUS SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9668 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 9668 EFP CONTRACTS ISSUED, WE HAD AN GOOD GAIN OF 5670 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

9668 CONTRACTS MOVE TO LONDON AND 3988 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 17.63 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE LOSS OF $3.05 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had: 53 notice(s) filed upon for 5300 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $5.60 TODAY

 

NO CHANGE IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   763.56 TONNES

Inventory rests tonight: 763.56 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 22 CENTS  TODAY:

 

NO CHANGE IN SILVER INVENTORY AT THE SLV

 

 

 

/INVENTORY RESTS AT 318.735 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 SMALL SIZED 630 CONTRACTS from 175,076 DOWN TO 174,446  AND MOVING 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:

 

1410 CONTRACTS FOR DECEMBER. 0 CONTRACTS FOR MARCH AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1410 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 630 CONTRACTS TO THE 1410 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A FAIR GAIN  OF 780 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 3.90 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 20.880 MILLION OZ  STANDING IN DECEMBER.

 

 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 2 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER GOOD SIZED 1440 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)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED DOWN 40.31 POINTS OR 1.53% //Hang Sang CLOSED UP 429.46 POINTS OR 1.62% //The Nikkei closed DOWN 441.36 OR 2.02%/ Australia’s all ordinaires CLOSED DOWN 0.98%  /Chinese yuan (ONSHORE) closed UP  at 6.9008 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.16 dollars per barrel for WTI and 60.91 for Brent. Stocks in Europe OPENED RED// ONSHORE YUAN CLOSED UP AT 6.9008AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9015: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF 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

 

 

i

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

b) REPORT ON JAPAN

 

 

3 C/  CHINA

i)You now have proof that China’s economy is plummeting:  today the big duo reports: retail sales and industrial production both plummet

( zerohedge)

ii)China is trying to appease Trump:  they are rolling backing their new auto tariffs for 3 months.

( zerohedge)

4/EUROPEAN AFFAIRS

i)UK

Theresa May leaves Brussels empty handed after considerable contentious talks.  As promised the EU will not give in.  The UK should leave the EU without any deal and without paying a nickel.

( zerohedge)

ii) GERMANY

Jeffrey Snider asks a very good question:  why the rush to combine the two big German banks?

(courtesy Jeffrey Snider/Alhambra Investments

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

 

 

6. GLOBAL ISSUES

CANADA

 

7. OIL ISSUES

 

 

 

 

8 EMERGING MARKET ISSUES

i)Venezuela

 

 

 

9. PHYSICAL MARKETS

I)Paulson wins control of Canadian miner Detour Mines
( GATA)
ii)Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
( zerohedge/Chris Powell)
iii)Alasdair Macleod outlines how the uSA dollar will weaken in 2019 and that will be very favourable to gold
( Alasdair Macleod/GATA)

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

 

 

MARKET TRADING

 

ii)Market data/

a)USA manufacturing output disappoints again for the 2nd straight month.  Trump does not like this as tariffs are suppose to help manufacturing

(courtesy zerohedge)

b)We are continually receiving poor economic data especially faltering global data.  Today it was USA PMI which plunged
( zerohedge)

c)This is a very big story.  I have always highlighted to you events on this very important story.  The last remaining investment grade of bonds that corps are allowed to hold are BBB rated bonds.  Once you enter below this level at BB or less, then corporations are now longer allowed to carry these bonds on their books as they must be sold.  There are approx 3/4 of a trillion dollars worth of BBB bonds trading.  You will recall that we commented on the A graded bonds and how it was likely that a huge number would be downgraded to the BBB level and sure enough a massive 176 billion A rated bonds have been downgraded to BBB.  Once considerable amount of BBB bonds are downgraded, then we are on the verge of a massive crisis as nobody is capable of holding these bonds.

( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)This is interesting:  banks are unable too offload loans and outflows multiply

( zerohedge)

( zerohedge)

iv)SWAMP STORIES

a)If Trump used his own personal  money as hush money, I cannot see what is wrong and why the markets are reacting so badly to this

( zerohedge)

b)Explosive interview where Cohen says Mueller has “substantial evidence” against Trump
( zerohedge)

c)The GOP says there is no plan for the wall…Trump will hold out for the wall as there is only 3 weeks left before the Democrats take over.

( zerohedge)

 

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

Let us head over to the comex:

 

The total gold comex open interest FELL BY A CONSIDERABLE SIZED 3998 CONTRACTS DOWN to an OI level 400,737 WITH THE LOSS IN THE PRICE OF GOLD ($2.00) IN YESTERDAY’S COMEX TRADING).FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE  ACTIVE DELIVERY MONTH OF DEC..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 9668 EFP CONTRACTS WERE ISSUED:

FOR DECEMBER:  9668 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  9668 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:  5,670 TOTAL CONTRACTS IN THAT 9668 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A CONSIDERABLE SIZED 3998 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 5670 contracts OR 567000 OZ OR 17.63 TONNES.

 

We are now in the active contract month of December and we now have a total of 484 contracts stand in December so we had a loss of 116 contracts.  We had 71 notices served yesterday, so we lost   45 contracts or 4500 oz will not stand as these guys morphed into London based forwards and as well as accepting a fiat bonus.

 

 

The next delivery month after December is January which saw it FALL TO 2717 FOR A LOSS OF 166 CONTRACTS.  February LOST A CONSIDERABLE 4694 contracts to stand at 296,675 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 53 NOTICES FILED AT THE COMEX FOR 5300 OZ. (0.1648 tonnes)

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI fell BY 630 CONTRACTS FROM 175,076 DOWN TO 174,446 (AND FURTHER FROM THE 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 GAIN  OCCURRED WITH A 2 CENT RISE IN PRICING.

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF DECEMBER AND, WE WERE  INFORMED THAT WE HAD A STRONG SIZED 1410 EFP CONTRACTS:

 

FOR DECEMBER: 1410 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: 1410.  ON A NET BASIS WE GAINED 854 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  630 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1410 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   780 CONTRACTS...AND ALL OF THIS STRONG DEMAND OCCURRED WITH A 2 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 303 contracts standing for a LOSS of 249 contracts.  We had 279 contracts stand for delivery yesterday so we gained 30 contract or an additional 250,000 oz will not stand for delivery as these guys morphed into London based forwards as well as  accepting a fiat bonus.

 

After  December we have the non active  January contract month and here we saw a LOSS of 28 contracts up to 1881 contracts.  February saw its another 9 contract gain to stand at 107. March, the next big delivery month after December saw a LOSS of 863 contracts down to 143.803

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 26 notice(s) filed for 130,000 OZ for the DEC, 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 183,424 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  167,370  contracts

volumes at the comex for both gold and silver are much less than usual.

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  DEC/GOLD

DEC 14-/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

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
53 notice(s)
 5300 OZ
0.1648 TONNES
No of oz to be served (notices)
431 contracts
(43100 oz)
Total monthly oz gold served (contracts) so far this month
7261 notices
726100 OZ
22.584 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;  nil oz

 

we had 0 gold withdrawals from the customer account:

 

total gold withdrawing from the customer;  nil oz

 

we had 0  adjustment..

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 53 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 11 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 27 notices by the squid  (Goldman Sachs)

 

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 (7261) x 100 oz , to which we add the difference between the open interest for the front month of DEC. (484 contract) minus the number of notices served upon today (53 x 100 oz per contract) equals 769,200 OZ OR 23.925 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 (7261 x 100 oz)  + {484)OI for the front month minus the number of notices served upon today (53 x 100 oz )which equals 769,200 oz standing OR 23.925 TONNES in this  active delivery month of DECEMBER.

WE LOST 45 CONTRACTS OR 4500 OZ WILL NOT  STAND AT THE COMEX AS THEY  MORPHED INTO A LONDON BASED FORWARDS AS WELL AS  ACCEPTING A FIAT BONUS.

 

 

 

 

 

THERE ARE ONLY 22.597 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 23.87 TONNES STANDING FOR DECEMBER

 

 

total registered or dealer gold:  726,494.203 oz or   22.597 tonnes*
total registered and eligible (customer) gold;   8,339,015.231 oz 259.37 tonnes
*however we have 22.419 tonnes of gold ALREADY SERVED UPON against dealer inventory of 22.597 tonnes and so far we have had no settlements  as of yet.  We generally get a settlement when we see an adjustment from the dealer side to the customer side..
we have a total of 23.925 tonnes of gold standing for metal against only 22.597 tonnes of dealer gold and nothing has been settled so far…

IN THE LAST 27 MONTHS 95 NET TONNES HAS LEFT THE COMEX.

 

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

DEC INITIAL standings/SILVER

DEC 14, 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
613,945.140 oz
CNT
Delaware

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,189,997.611
oz
CNT
HSBC
No of oz served today (contracts)
26
CONTRACT(S)
130,000 OZ)
No of oz to be served (notices)
277 contracts
1,385,000 oz)
Total monthly oz silver served (contracts) 3899 contracts

(19,495,000 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 CNT:  600,025.311 oz

 

ii) Into HSBC: 589,972.300 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1.189,997.611  oz

we had 2 withdrawals out of the customer account:
i) Out of CNT:  594,948.249 oz
ii) Out of Delaware: 18,996.891 oz

 

 

 

 

 

total withdrawals: 613,945.140  oz

 

we had 1 adjustments

i) Out of Scotia 10,535.270 oz was adjusted out of the customer and this landed into  the dealer account of Scotia

 

total dealer silver:  89.487 million

total dealer + customer silver:  297.943  million oz

 

 

 

 

The total number of notices filed today for the DEC 2018. contract month is represented by 26 contract(s) FOR 130,000 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 3899 x 5,000 oz = 19,495,000 oz to which we add the difference between the open interest for the front month of DEC. (552) and the number of notices served upon today (26 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DEC/2018 contract month: 3899(notices served so far)x 5000 oz + OI for front month of DEC( 552) -number of notices served upon today (26)x 5000 oz equals 20,8800,000 oz of silver standing for the DEC contract month.  This is a strong number of oz standing for an off delivery month.

We gained 95 contract or 475,000 additional oz will stand and these guys refused to accept a London based forward as well as negate receiving a fiat bonus. The EFP route is nothing but a cash settlement process and it is done in London to avoid detection. It is becoming quite obvious that the bankers are in urgent need of silver as we witness the constant queue jumping in silver these past 20 months.

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 64,461 CONTRACTS  … 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 54,647 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 54,647 CONTRACTS EQUATES to 273 million OZ  39.00% 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 -3.93-% (DEC 14/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.71% to NAV (DEC 14 /2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.93%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.50/TRADING 12.01/DISCOUNT 3.93

END

And now the Gold inventory at the GLD/

DEC 14/WITH GOLD DOWN $5.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 13/WITH GOLD DOWN $2.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 12/WITH GOLD UP $3.05 A HUGE DEPOSIT OF 3.24 TONNES OF GOLD INTO THE GLD/SOMETHING IS BURNING…/INVENTORY RESTS AT 763.56 TONNES

DEC 11/WITH GOLD DOWN $4.85 A SMALL DEPOSIT OF .59 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.32 TONNES

DEC 10/WITH GOLD DOWN $3.05 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.73 TONNES

DEC 7/WITH GOLD UP $8.35/A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.51 TONNES/INVENTORY RESTS AT 759.73 TONNES

DEC 6/WITH GOLD UP $1.60: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 758.21 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

DEC 14.2018/ Inventory rests tonight at 763.56 tonnes

*IN LAST 516 TRADING DAYS: 171.60 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 416 TRADING DAYS: A NET 11.60 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

DEC 14/WITH SILVER DOWN 22 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 13/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 12/WITH SILVER UP 22 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ

DEC 11/WITH SILVER UP ONE CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY ESTS AT 318.735 MILLION OZ/

DEC 10/WITH SILVER DOWN 8 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 7/WITH SILVER UP 16 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 6/WITH SILVER DOWN 5 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.817 MILLION OZ//INVENTORY LOWERS TO 318.735 MILLION OZ/

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 14/2018:

 

Inventory 318.735 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 2.51/ and libor 6 month duration 2.90

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

G0LD LENDING RATE: + .39

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.73%

LIBOR FOR 12 MONTH DURATION: 3.11

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.38

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

 

Brexit and Global Growth Risks Sees Gold Gains In Euros, Pounds and Other Currencies

‘Hard’ Brexit Risk Sees Gold Gain In Euros and Pounds – Nears £1,000/oz & €1,100/oz

Gold was lower today in dollars but saw slight gains in pounds and euros. It was supported by increasing concerns about the likelihood of a ‘hard’ Brexit, about global economic growth and uncertainty around the Fed’s interest rate policies in 2019.


Gold in GBP – 1 Month (GoldCore)

Gold has consolidated on last week’s 2% gains in dollar terms and is essentially flat in dollars but has seen gains in euros and pounds today and this week.

Gold is down 0.3 percent for the week in dollars but has seen gains in not just pounds and euros, but also Australian dollars, New Zealand dollars and other fiat currencies.

Concerns about trade wars have abated in the short term but the risk has not gone away completely and will support gold.


Gold in EUR – 1 Month (GoldCore)

Other risks will also support gold. These include the fallout from a ‘hard’ or ‘no deal’ Brexit on UK and EU economic growth and indeed increasing concerns of another global financial crisis. This has been warned of by ex Fed Chair Yellen and indeed the IMF this week (see below).

Silver fell 0.6% today to $14.65 per ounce but is up about 0.4 percent for the week and is building on last week’s 3% gain.

The Fed is expected to hike interest rates next week which could lead to short term weakness for gold. However, with the Fed likely to pause interest rate hikes in 2019, gold will be supported and should indeed see gains in the medium term and in 2019.

The risk of a recession in the U.S. in the next two years has risen to 40 percent, according to a poll of economists by Reuters. There is also a significant shift in expectations toward fewer Fed interest rate rises next year due to concerns regarding U.S. and global economic growth.

Among other precious metals, spot palladium was down 0.5 percent at $1,254.50 per ounce, having hit an all-time high of $1,269.25 yesterday. Palladium is on track to mark it’s third week of gains with prices up another 2 percent this week.

Gold will be a valuable portfolio diversification in what looks set to be a volatile 2019.

As the business and economic cycle turns, risk assets such as bonds and stocks look increasingly vulnerable. Many property markets globally also appear vulnerable and gold will hedge investors exposures.

 

News, Commentary and Market Updates This Week

Yellen Warns Another Financial Crisis Is Brewing

Gold Krugerrand Coin Worth $1,200 Donated To Charity

EU Recession Imminent – Euro Disunion as Brexit, Italy and End of QE Loom

Irish Central Bank Refuses To Discuss Gold Reserves In Bank of England Vaults

Gold and Silver Gained 2% and 3% Last Week While Stocks Dropped Nearly 5%

Germany Accelerates Plans For Deutsche Bank-Commerzbank Megamerger

South African Gold Output Collapse Continues – Drops 13th Straight Month in October

 

Secure Storage Ireland – Click here for information

 

News and Commentary

Gold prices steady on Fed policy outlook uncertainty (Reuters.com)

US budget deficit hits record $204.9 billion for November (APNews.com)

Wall Street edges lower as trade-fueled rally loses steam (Reuters.com)

Dow gives up 200-point gains as digests latest US-China trade developments (CNBC.com)

India and United Arab Emirates to stop using U.S. dollars in trade (GulfNews.com)

U.S. Leveraged Loan Funds Lose Cash at Fastest Pace Ever (Bloomberg.com)


Source: Bloomberg

Leveraged Loan Market Collapsing: U.S. Banks Unable To Offload Loans Amid Record Outflows (ZeroHedge.com)

Brexit isn’t the only geopolitical risk to stocks – Rebalance your portfolio (GoldSeek.com)

What does May’s victory mean for markets? (MoneyWeek.com)

How to prepare your portfolio for a “bare-bones” Brexit (MoneyWeek.com)

CFTC refuses to address GATA’s questions about gold and silver market rigging (Gata.org)

Australia’s House Of Cards Is Collapsing: Recession Coming Up (ZeroHedge.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

13 Dec: USD 1,244.45, GBP 982.87 & EUR 1,093.62 per ounce
12 Dec: USD 1,244.75, GBP 993.31 & EUR 1,098.24 per ounce
11 Dec: USD 1,248.25, GBP 988.99 & EUR 1,096.59 per ounce
10 Dec: USD 1,246.80, GBP 980.61 & EUR 1,092.57 per ounce
07 Dec: USD 1,241.20, GBP 972.98 & EUR 1,091.51 per ounce
06 Dec: USD 1,236.45, GBP 971.48 & EUR 1,091.66 per ounce

Silver Prices (LBMA)

13 Dec: USD 14.68, GBP 11.60 & EUR 12.90 per ounce
12 Dec: USD 14.66, GBP 11.68 & EUR 12.93 per ounce
11 Dec: USD 14.64, GBP 11.62 & EUR 12.85 per ounce
10 Dec: USD 14.53, GBP 11.48 & EUR 12.73 per ounce
07 Dec: USD 14.49, GBP 11.34 & EUR 12.73 per ounce
06 Dec: USD 14.38, GBP 11.28 & EUR 12.68 per ounce


Recent Market Updates

– Yellen Warns Another Financial Crisis Is Brewing
– Gold Krugerrand Coin Worth $1,200 Donated To Charity Again
– EU Recession Imminent – Euro Disunion as Brexit, Italy and End of QE Loom
– Gold and Silver Gained 2% and 3% Last Week While Stocks Dropped Nearly 5%
– Irish Central Bank Refuses To Discuss Gold Reserves In Bank of England Vaults
– “Fake Markets” To Lead to Global Financial Crisis? – Goldnomics Podcast
– Gold Is “Coiled” and Looks Set To Surge Like Natural Gas — Bloomberg Intelligence
– “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

Watch on Youtube here

Mark O’Byrne
Executive Direct
 
END
 
ii) GATA stories
Paulson wins control of Canadian miner Detour Mines
(courtesy GATA)

Paulson wins control of Detour board in key shareholder vote

 Section: 

By Scott Deveau and Danielle Bochove
Bloomberg News
Thursday, December 13, 2018

Paulson & Co. has convinced shareholders of Detour Gold Corp. to overthrow the bulk of the Canadian miner’s board of directors, including its interim CEO, ending a nasty six-month proxy battle.

Five of the Paulson-backed nominees were chosen, while Detour Chairman Alex Morrison and interim Chief Executive Officer Michael Kenyon were removed from the board during a special shareholders meeting today in Toronto, the miner said in a statement.

… 

 

Kenyon has resigned as CEO and James Gowans, who was one of three new directors appointed in August, will become the chairman, Detour said. The board will be fixed at nine members.

Marcelo Kim, a partner at Paulson who was on the hedge fund’s slate of board nominees, was not elected.

“Seven out of eight directors have changed since we started this campaign,” Kim said at the 18-minute shareholders’ meeting that was closed to media. “But it’s not about who won or who lost. It’s about what’s best for the company.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-12-13/detour-gold-sharehold…

* * *




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.

Alasdair Macleod outlines how the uSA dollar will weaken in 2019 and that will be very favourable to gold
(courtesy Alasdair Macleod/GATA)

Alasdair Macleod: Gold — a perfect storm for 2019

 Section: 

4:27p ET Thursday, December 13, 2018

Dear Friend of GATA and Gold:

In his new essay, “Gold — A Perfect Storm for 2019,” GoldMoney research director Alasdair Macleod itemizes the factors likely to favor gold and weaken the U.S. dollar and other currencies in the year ahead, especially as central banks engage in another frenzy of currency creation to stave off the next recession and sharp declines in stock and housing prices.

Of course the more that fundamentals favor gold against government currencies, the more governments may be inclined to use the futures markets to suppress the prices of gold, silver, and commodities generally. So GATA may have to keep working on that problem.

Macleod’s analysis is posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/gold-a-perfect-sto…

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

Gold – A Perfect Storm For 2019

Authored by Alasdair Macleod via GoldMoney.com,

This article is an overview of the principal factors likely to drive the gold price in 2019. It looks at the global factors that have developed in 2018 for both gold and the dollar, how geopolitics are likely to evolve, the economic outlook and how it is worsened for the dollar by President Trump’s tariff war against China, the availability and likely demand for bullion, and the technical position in paper markets. Taken together, the outlook is bullish for gold.

2018 reprise

For gold bulls, 2018 was disappointing. From 11 December 2017, when gold made a significant bottom against the dollar at $1243, it has ended virtually unchanged today, after being 4.2% up. Gold had to struggle against a rising dollar, whose trade-weighted index rose a net 3.7% over the same period, and as much as 9.4% from its mid-February low.

Dollar strength has been driven less by trade imbalances and more by interest rate differentials. A speculating bank for its own book or for a hedge fund client can borrow 3-month Euro Libor at minus0.354% and invest it in 3-month US Treasury bills at 2.36%, for a round trip of over 2.7%. Gear this up ten times or more, either on a bank’s capital, or through reverse repos for annualised returns of over 27%. To this can be added the currency gain, which at times has added enough to overall returns for an unhedged geared position to double the investment.

Not that these forex returns have been guaranteed, but you get the picture. The ECB and the Bank of Japan have been frozen into inactivity, reluctant to raise rates to correct this imbalance, and the punters have known it.

Financial commentators have routinely misunderstood the fundamental reason for the dollar’s strength, attributing it to foreigners’ desperate need for dollars. In fact, non-US holders of dollars hold it in record amounts, with over $4 trillion in deposits in correspondent bank accounts alone, and a further $930 billion in short-term debt. This $5 trillion of total liquidity was the last reported position, as at end-June 2017. Speculative dollar demand since then, driven by interest rate differentials, will have added significantly to these figures. The continuing US trade deficit, currently running at close to a trillion dollars annually, is both an associated and additional source of dollar accumulation in foreign hands.

Meanwhile, the same US Government data source reveals that US residents’ holdings of foreign securities was $6.75 trillion less than the foreign ownership of US securities, and the US Treasury reports that major US market participants (i.e. the US banks and financial entities operating in the spot, forwards and futures contracts) sold a net €2.447 trillion in the first nine months of 2018. Assuming these sales were not absorbed by official intervention on the foreign exchanges or by contracting bank credit, they can only have added to foreign-owned dollar liquidity.

To summarise the point; far from there being a dollar shortage, as market participants believe, the world is awash with dollars to an extraordinary degree.

The great dollar unwind is now overhanging markets, which will remove the principal depressant on the gold price. And when it begins, as a source of supply these hot-money dollars will be seen as the continuation of escalating supply, with the prospect of future US trade and budget deficits to be discounted. These dynamics are a duplication of those that led to the failure of the London gold pool in the late-sixties, which led to the abandonment of the Bretton Woods gold-dollar relationship in 1971. And as I argue later in this article, the supply of physical liquidity in bullion markets to satisfy demand arising from dollar liquidation is extremely tight.

Geopolitics and gold in 2018

It is likely that at a future date we will look back on 2018 as a pivotal year for both geopolitics and gold. Russia has moved to a position whereby it has substantially replaced its dollar reserves with physical gold. It is now able, if it should care to, to do away with the dollar entirely for its energy exports payments. It is even possible for it to link the rouble to gold.

China took the seemingly innocuous step of launching an oil contract denominated in yuan. It had prevaricated since at least 2014 before making this move, presumably conscious that it was an in-your-face threat to the monopoly of the dollar in pricing energy.

There was expectation that the oil-yuan futures contract would be a segway into a yuan-gold futures contract either in Hong Kong or Dubai, allowing countries such as Iran to avoid receiving dollars entirely. And indeed, a number of gold exchanges and interests in Asia have banded together to open a 1500-tonne vault in Qianhai to facilitate gold storage resulting from pan-Asian trade flows.

These include the China Gold and Silver Exchange Society, the Hong Kong Gold Exchange, and gold market interests in Singapore, Myanmar and Dubai. The objective is to give Hong Kong the opportunity to coordinate Asian gold markets and develop a “gold corridor” for the countries along China’s Belt and Road initiative. Therefore, both private and public sectors will be able to accumulate the oldest form of money as a backstop to local currencies, as an alternative to accumulating those of their trading partners.

Geopolitics evolved from fighting proxy wars in the Middle East and Ukraine, which were effectively won by Russia, to the less obvious war of trade tariffs. President Trump has styled himself as “A Tariff Man”. We have presumed that he is ignorant of economics, but that is no longer the point. Tariffs have evolved from a policy to make America great again to bankrupting China. China is seen as the greatest economic threat to America, and in this duel, tariffs are Trump’s weapon of choice.

The objective is to impede China’s technological development. It was tolerated when China, to steal a line from Masefield’s Cargoes, was the world’s supplier “…of firewood, iron-ware and cheap tin trays”. But China is moving on, creating a sophisticated economy with a technological capability that is arguably overtaking that of America. The battle for technological supremacy came out into the open with the detention on 1 December in Vancouver of Meng Wanzhou, the CFO of Huawei. Huawei is China’s leading developer of 5G mobile technology, installing sophisticated equipment around the world. 5G’s capability will make internet broadband redundant and will become widely available from next year.

Ms Meng’s arrest represents such an escalation of deteriorating relations between China and America that many assume it was ordered by rogue elements in America’s deep state. Maybe. But these things are difficult to reverse: does America tell the Canadian authorities to just let her go? It would uncharacteristic for America to admit a mistake, and it would probably need President Trump to personally intervene. This is difficult for him because application of the law is not in his hands.

If Ms Meng is not released, we will enter 2019 with the Chinese publicly insulted. They will realise, if they haven’t already, that ultimately there can be no accommodation with America. Fighting tariffs with more tariffs is a policy that will achieve nothing and damage China’s own economy.

It therefore becomes a matter of time when, and not if, China deploys financial weapons of its own. These will be targeted at the US’s obvious weaknesses, including her dependency on China for maintaining and increasing holdings in US Government debt. The increasingly compelling use of physical gold to both protect the yuan from attack in the foreign exchanges and limit the rise of yuan interest rates would serve to insulate China from the fall-out of a collapsing dollar.

The economic outlook, and the effect on the dollar

For market historians, the economic situation rhymes strongly with 1929, when the Smoot-Hawley Tariff Act was being debated. Eighty-nine years ago, the first round of votes in Congress was passed on 30 October, and Wall Street fell heavily that month in anticipation of the result. Following the G20 meeting two weeks ago, where it was vainly hoped there would be progress in the tariff negotiations between the US and China, markets fell heavily, reminding market historians of the 1929 precedent.

When President Hoover stated his intention to sign Smoot-Hawley into law on 16 June 1930, Wall Street crashed again. The lesson for today is that equity markets are likely to crash again if Trump continues with his tariff policies. Smoot-Hawley raised import tariffs on over 20,000 imported raw materials and goods, increasing the average tariff rate from 38% to over 60%. The difference today is that instead of tariffs being used only for protectionism, they are being targeted specifically against China.

There will be two likely consequences. The first is the the undermining of financial markets, which in the 1930s led to the virtual collapse of the US banking system and the global depression. And secondly, there is the escalation of a wider financial war raging between China and the US. These two factors are potentially very serious, with stock markets already on shaky ground.

This is not the uppermost reason for market weakness in investors’ minds, who worry about the economic outlook more generally. The conventional credit cycle features rising interest rates as a consequence of earlier monetary expansion, and the exposure of malinvestments. Markets discount the phases of the credit cycle when they become apparent to far-sighted investors, and only indirectly contribute to the collapse itself. But when valuations have become wildly optimistic, the fall in markets becomes a crisis on its own, contributing to the collapse in business that follows. This was the point taken up by Irving Fisher in the wake of the 1929-32 bear market.

In any event, the global economy appears to be at or close to the end of its expansionary phase, and is heading for recession, or worse. As well as the potential impact from an unanchored reserve currency, price inflation in the US will be boosted by Trump’s tariffs, which amount to additional consumer taxes. Price inflation pressures will then call for further rises in interest rates, while economic prospects will point to easing monetary conditions.

We have yet to see how this will be resolved. A further problem is that an economic downturn will increase government welfare commitments and therefore borrowing requirements. Bond yields will tend to rise and therefore borrowing costs, driving spendthrift governments into a debt-trap, just when price inflation is likely to demand higher interest rates. The most likely outcome will be further losses of fiat currencies’ purchasing power.

The 1930s depression saw a rising purchasing power for the dollar, with all commodity and consumer prices declining. The dollar was on a gold standard, and prices were effectively measured in gold, the dollar acting as a gold substitute. This is no longer true, and the purchasing power of the dollar, along with all other fiat currencies will at best remain stable measured against consumer products, or more likely will decline. In other words, a severe recession which looks increasingly likely on cyclical grounds, will lead to higher gold prices, irrespective of fiat currency interest rates.

The gold-fiat relationship and monetary inflation.

According to the World Gold Council, central bank gold reserves total 33,757 tonnes, worth $1.357 trillion at current prices. Global fiat money is estimated to total about $90 trillion, which suggests there’s 66 times as much in global cash and bank deposits as there is gold to back it.[iii] Admittedly, issuers have different gold-to-currency ratios, but overall this suggests the gold price would be far higher if a sustainable level of currency convertibility is to return.

The reason we must consider this relationship is that in the light of all the foregoing, the gulf between the two quantities is set to accelerate from the currency side.

In the early 1930s, dollar prices of raw materials and commodities fell heavily, bankrupting farmers and miners world-wide. The purchasing power of the dollar rose, because it acted as a gold substitute. Today there is no convertibility between the dollar and gold at all, so the effect of a global economic depression is bound to see the gulf between the dollar and gold widen, as central banks expand the quantity of money in an attempt to fight recession and keep their governments solvent. There can be no doubt the policy response from the Fed and all the other welfare-state central banks will be neo-Keynesian, exploiting all the freedoms of unsound money.

In fact, the increase in the money quantity is not new, dating from the Lehman crisis. This is shown in the chart below, of the fiat money quantity, compared with its long-term pre-Lehman growth path.

FMQ is basically the sum of true (Austrian) money supply and commercial bank reserves held at the Fed. Even though its growth has recently stalled, the gap between the pre-Lehman crisis growth path still stands at $5.55 trillion.

Now imagine what will happen when the global economy stalls. The Fed, along with other central banks, will be forced to make yet more currency available to support the banks, finance government spending and encourage consumption. The injection in the US last time was roughly $10 trillion, or 55% of GDP. Next time, with interest rates needing to be maintained in order to support the currency, it will almost certainly require more aggressive quantitative easing, with central banks substantially increasing their purchases of government bonds.

Gold is already close to all-time lows, relative to the money quantity. This is shown in the next chart.

It was from similar indexed levels that gold bottomed in the late sixties. A return to the level set by President Roosevelt in January 1934 implies a price of $53,250 today. This is not a forecast, and its only relevance is to illustrate the potential for an upward adjustment in the gold price, based on the degradation of the dollar since 1934.

Physical factors

Demand for physical gold consistently exceeds mine supply. Central banks are accumulating bullion, adding 425 tonnes in the year to September 2018. Chinese private sector demand continues at a steady pace, which measured by withdrawals from the Shanghai Gold Exchange, is running at a 1,900-tonne annualised rate. India’s total gold imports were 919 tonnes in the year to end-September (according to the World Gold Council), so adding identified central bank demand to private sector demand from India and China, these three sources account for 3,344 tonnes annually, which is the same as global mine supply.

The supply/demand balance is more complicated than these figures suggest. Some of the mine supply is not available to markets. For example, China, which is the largest mine supplier by far, severely restricts gold exports. Official reserves at central banks are only what are declared and includes gold out on lease or swapped, and therefore not in possession of the central bank. They are therefore short of actual possession, exposing them to potential counterparty and price risk.

Net demand from the rest of the world and from unrecorded categories is satisfied from the existing above-ground stock of bullion, which we estimate to be about 175,000 tonnes. Only an unknowable fraction of this is available for market liquidity. The most identifiable swing-factor is ETF demand, which saw outflows of 103 tonnes in the three months to September[iv]. Looking back over recent years, another substantial ETF outflow was in 2016 Q4, when the gold price bottomed, and in 2015 Q2 to Q4 saw net outflows every quarter. It appears that ETF demand is acting as a contrary indicator of future price trends.

This fits in with market theory, which based on investor psychology predicts investors are at best trend-chasers, investing most heavily at market tops and liquidating positions at price lows. The peak of net ETF liquidation in 2018 was in June and August. In June the gold price breeched the psychologically important $1300 level, and in August the market turned higher at $1160. ETF net selling tells us therefore the gold price may have recently indicated a turning point.

Supply from ETFs at market lows satisfies demand from those that have a continuing demand. We have seen the pattern of central banks increasing their buying on lower prices, but there is also some evidence commercial banks are accumulating bullion for their own books, possibly for risk purposes.

Under the new Basel III standard, physical gold held on an allocated basis is now classified as cash and has the advantage of zero risk weighting, compared with a 15% haircut under Basel II. Besides physical cash notes (which in practice banks try to minimise in their branches), the only other alternative to cash is balances held on the bank’s account at a central bank. The ECB and the Bank of Japan charge negative interest rates on these balances, which for commercial banks in the EU and Japan leaves only physical gold as an alternative.

For the thinking banker, it makes sense to hedge fiat currency exposure (which is the entirety of his business) with some physical bullion. The opportunity cost in the form of lost interest is not a factor, with overnight money-market rates in euros and yen negative. And the regulatory cost of holding gold is being removed.

A brief analysis of the availability of physical supply points to acute shortages on any expansion of demand. Seasonal factors can have a significant impact, with the Diwali festival in India a month ago, and the Chinese New Year in early February leading to an accumulation of bullion inventories.

The absorption of available liquidity from mine supply and scrap recycling tells us the physical market has become extremely tight. Instability in fiat currencies, particularly weakness developing in the dollar’s trade-weighted index, could therefore have a disproportionate effect on the gold price as a wide range of investing institutions and commercial banks try to correct their almost zero asset allocation to gold.

Paper markets for gold

As the chart below shows, gold bottomed in December 2015, since when it has been in a narrowing consolidation. Within this pattern, there is a seasonal effect, whereby gold sells off in early December and subsequently rallies. This is shown by the three black arrows on the chart.

There are reasons why this is so. The December contract is the last active contract to expire before the year end, when many hedge funds and bullion banks make up their accounts. Hedge fund managers want to present a balance sheet with less risk exposure than they normally run, and banks will wish to present shareholders and regulators with a sanitised version of their risk exposure as well.

This exposure cycle has had an extra twist this time, because market speculators in futures markets have shorted a wide range of futures in order to capture a strong dollar. In the case of the Comex gold future, this has led to an unprecedented technical position, shown in the next chart.

Over the last twelve years, hedge funds (which are represented in this category of speculator) have only been net short of Comex gold contracts twice. The first time was in late-2015, which marked the end of the 2011-15 bear market, and the second was recently, marking the sell-off to $1160. The only reason it has partially corrected is due to the expiry of the December contract.

Market sentiment is still markedly pro-dollar and anti-everything else, including gold. The underlying assumption appears to be that foreigners require dollars and the dollar has the highest interest rates of the major currencies. This being the case, the first supposition is an error. There is a growing expectation that the US economic growth will slow next year, and the Fed is under pressure not to raise rates any further.

When these changing factors are taken into account, the dollar is likely to be sold, and hedge fund speculators will take the other tack. The market-makers, traditionally the bullion banks, are bound to be aware of this possibility and will therefore try to maintain an even book.

Conclusion

All factors examined in this article point to higher gold prices in 2019. They can be summarised as follows:

  • The world is awash with dollars at a time when markets act as if there is a shortage. When the truth emerges, the dollar has the potential to fall substantially against other currencies, leading to a rise in the price of gold.
  • The move towards gold and against the dollar in Asia accelerated in 2018, with Russia having replaced the dollar with gold as its principal reserve currency. China has laid the foundation with an oil-yuan futures contract, which can be a bridge to yuan-gold contracts in both Hong Kong and Dubai. This is a direct challenge to the dollar as a reserve currency, and likely to be attractive to oil suppliers, such as Iran, seeking to circumvent use of the dollar and accumulate gold instead.
  • America’s trade war against China appears to be less about unfair trade practices and more about stopping China from evolving into a serious technological competitor against the US. In 2019, there is a strong possibility the tariff war will escalate into a wider conflict, with China selling down its exposure to the dollar and US Treasury debt. That would create significant difficulties for the US Government and the dollar itself.
  • With the credit cycle turning and the addition of American tariffs, markets are at a growing risk of replicating the 1929-32 crash and the economic depression that followed. This time, instead of commodities and consumer products effectively priced in gold through a gold standard, they will be priced in fiat currency. Monetary policies will ensure liquidity is freely available to support the commercial banks, government spending and economic activity. This is a recipe for higher gold prices.
  • Demand for physical gold continues to outstrip mine supply. In 2019, risk-weighting rules in Basel III open up the opportunity for commercial banks to augment their liquidity with allocated bullion, attractive to euro- and yen-based banks who face negative interest rates on short-term cash alternatives.
  • The technical position in the paper markets looks favourable, with close to record levels of bearishness, and an established pattern of December rallies in the gold price.

_________________

end

A must watch interview of Andrew Maguire as he talks to Bart Chilton about the gold/silver manipulation

start at 19.20

Andrew Maguire

7:14 AM (15 minutes ago)
to Midasnh@aol.comChrisme

All,

This from My live RT America interview last night with Commissioner Bart Chilton who starts by validating my gold and silver manipulation evidence which was provided to the CFTC that JPM has been manipulating silver and Gold  & goes as far as to also validate the JPM /Bear Sterns manipulation event which we better get downloaded before JPM demand to have it pulled. 

https://www.youtube.com/watch?v=Bf8HMgSH050 it commences at the 19.20 min point .

Unfortunately , there was so little time and he kept throwing other questions at me but he has agreed to have me in the studio to talk nothing but silver & gold at some point. At least this counters all the naysayers like Christian etc. who still deny any form of manipulation.

Chris I am getting you a time slot with Bart, would you be able to actually travel to the NY or DC studio?

Warmest regards

Andrew

here is the big interview:

 

//mail.google.com/mail/u/0/#inbox/FMfcgxvzLhjckJqvWHthfWldjdXRHbzj?projector=1

END

Your early FRIDAY 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 6.9008/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.9015   /shanghai bourse CLOSED DOWN 40.31 POINTS OR 1.53%

HANG SANG CLOSED DOWN 429.46 POINTS OR 1.62%

 

 

2. Nikkei closed DOWN 441.36 POINTS OR 2.02%

 

3. Europe stocks OPENED ALL RED

 

 

 

 

 

/USA dollar index RISES TO 97.57/Euro FALLS TO 1.1287

3b Japan 10 year bond yield: FALLS TO. +.04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.62/ 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:: 52.16 and Brent: 60.91

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 UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.26%/Italian 10 yr bond yield UP to 2.97% /SPAIN 10 YR BOND YIELD UP TO 1.40%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.71: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 4.25

3k Gold at $1237.95 silver at:14.60   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 31/100 in roubles/dollar) 66.52

3m oil into the 52 dollar handle for WTI and 60 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.62DESTROYING 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 0.9973 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1257 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 2.88% early this morning. Thirty year rate at 3.15%

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

6.  TURKISH LIRA:  UP  TO 5.3840

 

Global Stocks Tumble On Poor Econ Data From China To Europe

It’s a sea of red to end the week as world stocks and US futures tumbled on Friday after weak economic data from China to Europe raised global recession fears and left investors nervous over the impact of a still-unresolved Sino-U.S. trade dispute even as China announced it would roll back retaliatory auto tariffs by 3 months; Treasuries and the dollar jumped amid a renewed flight to safety.

Growth concerns came back into focus after European Central Bank President Mario Draghi said economic risks were moving to the downside, while in China retail sales and industrial production figures for November fell significantly short of estimates. The lackluster readings from Europe on car sales and manufacturing simply added to the gloom.

The MSCI All-Country World Index was down half a percent, with all major markets deep in the red. Europe’s Stoxx 600 Index headed for a weekly loss, dragged lower by automakers after regional sales slumped in November for the third month in a row.

Euro zone business ended the year on a weak note, expanding at the slowest pace in over four years as new order growth all but dried up, hurt by trade tensions and the Yellow Vests” movement. The France PMI survey showed French business activity plunged unexpectedly into contraction this month, retreating at the fastest pace in over four years with the slowdown largely blamed on the recent violent anti-government protests.

Elsewhere, Germany’s private sector expansion slowed to a four-year low, suggesting growth in Europe’s largest economy may be weak in the final quarter as Mfg PMI declined from 51.8 to 51.5 (exp. 52.0) while the Services PMI dropped from 53.3 to 52.2, also missing expectations for a rebound to 53.4.

Adding to the ECB’s gloomy outlook, the Bundesbank lowered German growth projections, warning of downside risks: the German central bank today revelaed its updated growth projections, which cut back the GDP forecast to just 1.5% this year from 2.0% expected previously, hardly a surprise after the -0.2% q/q contraction in Q3. The forecast for 2019 was cut to 1.6% from 1.9% and for 2020 and 2021 the Bundesbank expects rowth of 1.6% and 1.5% respectively.

Stock markets in Europe opened sharply lower, with Germany’s DAX index falling 1.5% while the pan-European STOXX 600 index was down 0.9%, paring some losses as European automakers saw their losses cut in half on the China tariff news.

The data out of Europe added to weak readings from China, where November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years, underlining risks to the world’s second-largest economy as Beijing works to defuse a trade dispute with the United States.

A Chinese statistics bureau spokesman said the November data showed downward pressure on the economy is increasing.

The data “means that the worst is yet to come and policymakers will be very worried, particularly with consumption growth falling off a cliff,” said Sue Trinh, head of Asia FX strategy at RBC Capital Markets in Hong Kong. “So I expect further support measures including rate cuts will come in coming weeks, although these data would indicate measures to date aren’t really working.”

The Chinese yuan weakened 0.4% to 6.9063 per dollar in offshore trade following the data.

As a result, equities slumped across Asia, with shares in Hong Kong and Japan leading the retreat. MSCI’s index of Asia-Pacific shares ex Japan fell 1.5%. Japan’s Nikkei, also dragged down by the country’s weak tankan sentiment index, dropped 2.0%. China’s benchmark Shanghai Composite and the blue-chip CSI 300 closed down 1.5 percent and 1.7 percent, respectively, and Hong Kong’s Hang Seng was off 1.5 percent.

“The data this morning out of France really hasn’t helped the mood. You look at China data, you look at the flash PMIs out of France and Germany and they’ve really sort of reinforced concerns that the global economy is slowing down,” said CMC Markets chief markets analyst Michael Hewson. “Ultimately, I think it rather questions the wisdom of the ECB ending its asset purchase program at the end of this month. You’ve got Mario Draghi basically tightening into a downturn.”

Over in the US, S&P 500 futures also pointed to a drop at the open, though both declines were tempered somewhat on news that China will temporarily remove a retaliatory duty on U.S.-imported automobiles.

“Although hopes of progress in U.S.-China talks and cheap valuations are supporting the market for now, we have lots of potential pitfalls,” said Mizuho’s Nobuhiko Kuramochi. “If U.S. shares fall below their triple bottoms hit recently, that would be a very weak technical sign.”

In the currency market, the euro was down 0.7 percent after the weak PMIs, last changing hands at $1.1288. The Bloomberg Dollar Spot Index headed for its best week in four months, rising to 1,215 and just shy of 2018 highs. Antipodean currencies led losses in the Group-of-10 basket.

Sterling’s rally fizzled as signs that the British parliament was headed towards a deadlock over Brexit prompted traders to take profits from its gains made after Prime Minister Theresa May had survived a no-confidence vote.

GBP

The European Union has said the agreed Brexit deal is not open for renegotiation even though its leaders on Thursday gave May assurances that they would seek to agree a new pact with Britain by 2021 so that the contentious Irish “backstop” is never triggered.

In overnight Trump-related news, Federal prosecutors are investigating whether US President Trump’s inaugural committee misspent some of the record amount of funds it raised, while there were later comments from White House Press Secretary Sanders that President Trump had limited engagement with the inauguration committee. President Trump is also said to be considering Kushner for Chief of Staff, while there were separate reports that US President Trump is said to have met with Chris Christie to discuss Chief of Staff position. Axios reported that US President Trump sees Chris Christie as a top contender to replace John Kelly as Chief of Staff

Oil prices gave up some of their Thursday’s gains following inventory declines in the United States and expectations that the global oil market could have a deficit sooner than they had previously thought. U.S. crude futures edged down 0.5% to $52.32 per barrel and Brent crude slipped 0.6 percent to $61.09, after both gained more than 2.5 percent on Thursday. Gold (-0.3%) is set for is biggest weekly fall in five weeks due to a firmer USD as traders focus on next week’s tabled Fed rate hike. Looking at base metals, copper is on track for a third consecutive weekly drop with downside exacerbated by the downbeat Chinese industrial production translating into weaker demand as the red metal faces a 15% yearly decline.

Expected data include retail sales, industrial production, and PMIs. No major companies are reporting earnings

Market Snapshot

  • S&P 500 futures down 0.9% to 2,626.25
  • STOXX Europe 600 down 1.4% to 344.61
  • MXAP down 1.4% to 149.12
  • MXAPJ down 1.5% to 481.32
  • Nikkei down 2% to 21,374.83
  • Topix down 1.5% to 1,592.16
  • Hang Seng Index down 1.6% to 26,094.79
  • Shanghai Composite down 1.5% to 2,593.74
  • Sensex up 0.03% to 35,940.82
  • Australia S&P/ASX 200 down 1.1% to 5,602.00
  • Kospi down 1.3% to 2,069.38
  • German 10Y yield fell 3.4 bps to 0.251%
  • Euro down 0.6% to $1.1292
  • Italian 10Y yield fell 4.3 bps to 2.594%
  • Spanish 10Y yield fell 0.8 bps to 1.416%
  • Brent futures little changed at $61.42/bbl
  • Gold spot down 0.2% to $1,239.08
  • U.S. Dollar Index up 0.5% to 97.53

Top Overnight News

  • European leaders rebuffed Theresa May’s pleas to help her sell the Brexit agreement to a skeptical U.K. Parliament, toughening their stance as they stepped up planning for a chaotic no-deal divorce
  • The euro-area economy is closing out 2018 on a gloomy note, with a measure of activity unexpectedly dropping to its lowest in just over four years
  • China’s economy slowed again in November as retail sales and industrial production weakened, creating a challenging backdrop for policy makers who gather next week to set the tone for the year at their annual Economic Work Conference in Beijing
  • As Japanese government bond yields slide, some Bank of Japan officials see no problem with them dropping to zero or even below, according to people familiar with the matter
  • In Washington and Beijing, the idea that China is willing to water down its plans for high-tech industrial dominance to appease President Donald Trump is already meeting with skepticism

Asian equity markets were negative across the board as sentiment in the region soured following the lacklustre lead from Wall St and as region digested disappointing data from China. ASX 200 (-1.1%) and Nikkei 225 (-2.0%) both declined from the open with Australia led lower by tech, telecoms and the largest weighted financials sector, while the Japanese benchmark was subdued amid a firmer JPY and mixed Tankan data despite the headline Large Manufacturers Index and Large All Industry Capex topping estimates. Elsewhere, Hang Seng (-1.6%) and Shanghai Comp. (-1.5%) were also pressured after Chinese Industrial Production and Retail Sales data both fell short of estimates, with underperformance seen in Hong Kong as this year’s run of lacklustre stock market debuts continued in the domestic exchange. Finally, 10yr JGBs were higher as they tracked gains in T-notes and with prices underpinned by safe-haven demand which saw 10yr JGBs print the highest since November 2016.

Top Asian News

  • Some at BOJ Are Said to Be Fine With Yields Going to Zero
  • Thailand’s Richest Man Said to Tap BofA, UBS for $1.5b AWC IPO
  • SoftBank IPO Said to See 2-3 Times Demand From Big Investors
  • Not Such a Happy Friday for Asia’s Beleaguered Stock Traders
  • Japan Post Is in Talks to Buy Minority Stake in Aflac

European equities are poised to finish the week on the backfoot (Eurostoxx 50 -0.9%) following the weak lead from Asia as sentiment turned sour amid the release of disappointing Chinese industrial production and retail sales, highlighting weakness in the Chinese economy. As such, around 75% of the Stoxx 600 (-0.9%) are in the red, Switzerland’s SMI (-1.4%) marginally lags peers with all 20 stocks in negative territory. In terms of sectors, IT names underperform alongside auto names (seen as trade proxies due to heavy exports) as a result of the aforementioned Chinese retail sales signalling an impact from ongoing trade disputes. However, European auto names spiked higher following reports that China are to lift retaliatory tariffs on US autos for 3-months from January 1st next year (i.e. suspending the 40% tariff plan and sticking to 15%). In terms of individual movers GVC Holdings (+8.8%) shares rose to the top of the UK benchmark with Citi citing next week’s Parliament vote on FOBT stakes being “significantly positive” as shareholders will be paid out GBP 676mln if the legislation is not passed by 28th March 2019.

Top European News

  • Sweden Moves Step Closer to New Election as Lofven Loses PM Vote
  • How Ireland Outmaneuvered Britain on Brexit
  • Italian Bonds Get No Favors From Draghi’s Reinvestment Plans
  • European Car Sales Slump in November With No Sign of Rebound

In currencies, The Antipodean Dollars have derived some scant support from reports that China will freeze and backtrack on a proposed increase in US auto tariffs w/e January 1 next year, in line with recent speculation, but the Aussie and Kiwi remain on the backfoot and significantly weaker than their G10 counterparts following sub-forecast Chinese data overnight and RBNZ consultations about lifting high grade bank capital requirements by 100%. Aud/Usd is holding just off a fresh December low around 0.7155 after breaching 0.7200 and tech supports below the figure at 0.7186 (55 DMA) and 0.7163 (Fib), while Nzd/Usd has lost grip of 0.6800 as the Aud/Nzd cross pivots 1.0550.

  • EUR/GBP: Also major underperformers, as the single currency extended post-ECB losses on the back of further declines in EZ PMIs (French readings especially dire as manufacturing, services and composite all tumbled into sub-50 contractionary territory) and through recent support just ahead of 1.1300 vs the Greenback to 1.1286 before finding some bids. Note, a decent 1 bn option expiry at the 1.1300 strike may provide some traction. Meanwhile, Brexit remains the big bane for Sterling and given the ongoing impasse between UK PM May and EU leaders on the back-stop, Cable has retreated sharply towards 1.2570 and chart-wise back below the 10 DMA circa 1.2660.
  • JPY: As usual, demand for the safe-haven Yen is just keeping Usd/Jpy depressed within a tight 113.70-40 range, along with 1.4 bn expiries at 113.75.
  • EM: An unexpected, though far from total surprise ¼ point CBR rate hike has underpinned the Rub against the grain of overall regional currency weakness on risk-off flows, with the Rouble comfortably above 66.5000 vs the Usd.

In commodities, WTI (-0.7%) and Brent (-0.9%) swings between gains and losses following an uneventful overnight session as prices consolidated after yesterday’s rally.  The complex saw some upside in recent trade after Libya’s NOC chairman was pessimistic about reopening its 300k BPD El-Sharara after an armed group halted production at the oilfield. Traders will be eyeing this evening’s Baker Hughes rig count as fresh catalyst. Note, WTI Jan’19 options expire today at 19.30GMT. Elsewhere, gold (-0.3%) is set for is biggest weekly fall in five weeks due to a firmer USD as traders focus on next week’s tabled Fed rate hike. Looking at base metals, copper is on track for a third consecutive weekly drop with downside exacerbated by the downbeat Chinese industrial production translating into weaker demand as the red metal faces a 15% yearly decline. Finally, Shanghai steel extended gains for a third day in a row after two major steelmaking cities (Tangshan and Xuzhou) demanded mills to curtail production amid worries that they will not meet pollution reduction targets this year. For context, Tangshan accounts for 10% of China’s total steel output while Xuzhou is in the number two steelmaking province.

Looking at the day ahead, in the US there should be plenty of focus on the November retail sales report where expectations is for a +0.4% mom ex auto and gas print and +0.5% mom control group reading. A reminder that the latter is a direct input into the GDP accounts. Also due out across the pond is the November industrial production print (+0.3% mom expected) and October business inventories. Meanwhile we’re due to get comments from the ECB’s Guindos and Lautenschlaeger this morning before Angeloni speaks this afternoon.

US Event Calendar

  • 8:30am: Retail Sales Advance MoM, est. 0.1%, prior 0.8%; Retail Sales Ex Auto MoM, est. 0.2%, prior 0.7%
    • Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.3%; Retail Sales Control Group, est. 0.4%, prior 0.3%
  • 9:15am: Industrial Production MoM, est. 0.3%, prior 0.1%; Manufacturing (SIC) Production, est. 0.3%, prior 0.3%
  • 9:45am: Bloomberg Dec. United States Economic Survey
  • Markit US Composite PMI, prior 54.7
    • Markit US Manufacturing PMI, est. 55, prior 55.3;
    • Markit US Services PMI, est. 54.6, prior 54.7
  • 10am: Business Inventories, est. 0.6%, prior 0.3%

DB’s Jim Reid concludes the overnight wrap

With just ten business days left in 2019 now, after the Brexit shenanigans earlier this week markets were always hoping that the ECB would be a less eventful affair. Indeed, luckily there was no sign of a scrooge surprise from Mario Draghi in what proved to be a fairly non-eventful policy meeting yesterday.

As expected we got confirmation that net asset purchases were to cease by the end of the year while the dovish tightening that we expected was affirmed with an endorsement of the short end rally and a hint that a replacement for TLTRO2 is in the pipeline. In line with the views of our economists (link here ), the reinvestment programme retains a lot of flexibility over the purchases. There was no twist of the portfolio, and the ECB’s preference was for a revision to the guidance on the period of full reinvestment, implying this could last longer. “Continuing confidence with increasing caution” was Draghi’s new mantra our colleagues highlight. That said there was one surprise and that was the suggestion that the ECB is starting to rethink the structural impact of negative deposit rates on the banking system. This increases the possibility of a technical deposit rate hike – a hike for non-cyclical/non-monetary policy purposes – in 2019. Draghi said the reductions to the staff GDP growth forecasts take the economy on a path “closer to potential”. This could be an admission that the window to raise rates to address structural bank profitability is getting narrower.

So where does that leave us? In their 2019 outlook our economists delayed the timing of lift-off of the policy rate tightening cycle from September 2019 to March 2020 given the deteriorating expectations for growth and inflation. However they also mentioned the risk of a technical, one-off deposit hike and the team believe that March 2019 is perhaps the best time for the technical hike now.This is arguably when the replacement for TLTRO2 will be due. It is also six months before the current time commitment to unchanged policy rates expires, meaning March is the appropriate time to consider an extension of the commitment if they are right about the outlook for the economy. Something to consider then.

The market also seemingly viewed the meeting as a bit of a non-event. The euro initially declined and hit as low as -0.33% versus the dollar intraday but ended up closing -0.07%. The STOXX 600 flipped between gains and losses with no real conviction and eventually closed a shade in the red with a -0.17% decline. Meanwhile, 10y Bund yields did nudge to an intraday low of 0.254% at one stage but also reversed into the close to finish at 0.281% and +0.5bps on the day. A remarkable statistic about Bund yields is that they are currently lower than they were when QE started in March 2015, when Draghi supersized QE and cut the depo rate in March 2016, and when Draghi outlined plans to end QE this December and set guidance for a rate hike at the June meeting earlier this year.

Also keep in mind that the ECB’s balance sheet has increased by €2.5tn since QE started. In that time it has cost the ECB about €119bn for each one-tenth of a percent to get the year-on-year headline CPI number to where it is now although Eurozone CPI hasn’t risen by that different an amount to US CPI over the same period. More startling is the fact that it has cost the ECB €625bn for each tenth of a percent increase in core CPI which has been in a fairly narrow range over the whole period. The gap between Eurozone and US core CPI has also stayed pretty constant. In addition, while Bund yields have in essence moved sideways, 10y BTP yields are 171bps higher and eurozone banks have lost €152bn in market cap. We will never know the counterfactual but there’s been a huge financial cost to the program but with inconclusive evidence about its success.

As for Wall Street yesterday, well there wasn’t really much to write home about however once again we saw a fairly familiar story with a solid open quickly giving way to a more lacklustre finish in the afternoon. Indeed the S&P 500, DOW and NASDAQ ended -0.02%, +0.29% and -0.39%, respectively, while US HY cash spreads also closed little changed. Treasuries were +0.4bps higher in yield at the 10y point while the 2s10s curve steepened +1.2bps. More exciting was WTI oil climbing off the day’s lows to end +2.80% following the reports about Saudi Arabia slashing supply on shipments to the US.

To be fair there wasn’t a great deal of newsflow outside of the ECB so maybe headline fatigue played a bit of a factor. There wasn’t much of a reaction to the news that China had detained a second citizen from Canada while advisors to President Trump warned the President to stay out of the Huawei case according to the WSJ.

That being said, overnight sentiment in Asia has turned decidedly more negative following a slew of soft data in China. The the Nikkei (-1.83%), Hang Seng (-1.55%), Shanghai Comp (-0.68%) and Kospi (-1.35%) all down along with S&P 500 futures (-0.69%). China’s November retail sales came at +8.1% yoy (vs. +8.8% yoy expected) while November industrial production stood at +5.4% yoy (vs. +5.9% yoy expected). There was better news for YtD November fixed assets ex. rural which came at +5.9% yoy (vs. +5.8% yoy expected) however the focus has been on the former two big misses with retail sales actually now growing at the slowest rate since 2003. You’d have to assume that this data would up the stimulus talk again and interestingly, it comes after PBoC Governor Yi Gang said yesterday that monetary policy will remain supportive in the face of China’s economy faltering. In other news Japan’s preliminary December manufacturing PMI came in at 52.4 (vs. 52.2 in last month) while this morning the BoJ trimmed purchases of 5-10yr (JPY 430bn today vs. JPY 450bn in previous operation) at a regular operation today for the first time since June. JGBs are actually slightly stronger despite that.

Moving on. With the ECB out the way we can now turn over to the flash December PMIs which are out in both Europe and the US today. With the Italian budget situation stabilising and the ECB keeping to the script for the most part yesterday, will today’s PMIs in Europe help cement a festive cheer into year-end for European risk assets? The good news is that expectations are now fairly low following three consecutive monthly declines in the Euro Area composite to 52.7 in November. As a result the consensus is for a very modest 0.1pt increase to 52.8 with no real deviation from the manufacturing (51.8) or services (53.4) prints expected. In terms of timing we’ll get the data for Germany and France just after 8am GMT this morning followed by the broader Euro Area prints at 9am GMT.

In other news, with UK PM May boarding a plane for Brussels yesterday there wasn’t a great deal of Brexit newsflow to follow the confidence vote. There were some headlines on Bloomberg suggesting that EU leaders were mulling publishing a new declaration on the Irish backstop issue which helped Sterling (+0.11%) to climb slightly but it’s hard to know how substantial this was. DB’s Oliver Harvey, in a report published yesterday, noted that although there was no clear direction from the PM about her Brexit strategy in her statement on Tuesday night, reports have suggested that the UK government is now seeking legally binding commitments from the EU27 over the Temporary Customs Arrangement in the Withdrawal Agreement. In Oliver’s view, the prospect of substantively changing the existing Withdrawal Agreement is limited, other than by replacing a whole UK backstop with a Northern Ireland specific one. As May has ruled out any Brexit deal that does not gain the support of the DUP, the latter seems unlikely. In summary, should the UK stance continue to centre on iterations of the current agreement, it is unlikely to pass a parliamentary vote late this year or, more likely, in January with the UK government now committed to a vote by January 21st. On the basis of May surviving the confidence vote, Oli’s view was that May would pivot towards a cross party approach to Brexit, in particular softening the stance on the future relationship to gain Labour Party support however this thesis is now about to be tested. So it should be an interesting and long few week ahead.

Before we look at the day ahead, quickly wrapping up the data that was out yesterday. In Europe there were no revision changes in the final November CPI prints for Germany (+0.1% mom/+2.2% yoy) and France (-0.2% mom /+2.2% yoy). Across the pond there was a bit of focus going into the latest weekly claims print but in the end it fell back towards the record lows at 206k (vs. 227k expected). Assuming it’s not a one-off, that suggests then that the noise around Thanksgiving and also perhaps the Hurricanes in the US were the reason for the move higher. Meanwhile, we also learned that import prices fell 1.6% mom in November, largely reflecting a drop in energy prices, lowering annual inflation to just 0.7% yoy from 3.3% yoy previously, while a federal budget deficit of USD204.9bn was recorded in November – USD66.4bn larger than in the same month last year and rising the 12-month running deficit to USD883bn.

As for the day ahead,the aforementioned PMIs out in Europe and the US will almost certainly be the main data highlight. Away from that in Europe we also get the November wholesale price index for Germany, November new car registrations for the EU, Italy’s final November CPI revisions and QE labour costs data for the Euro Area. This afternoon in the US there should be plenty of focus on the November retail sales report where expectations is for a +0.4% mom ex auto and gas print and +0.5% mom control group reading. A reminder that the latter is a direct input into the GDP accounts. Also due out across the pond is the November industrial production print (+0.3% mom expected) and October business inventories. Meanwhile we’re due to get comments from the ECB’s Guindos and Lautenschlaeger this morning before Angeloni speaks this afternoon.

 

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED DOWN 40.31 POINTS OR 1.53% //Hang Sang CLOSED UP 429.46 POINTS OR 1.62% //The Nikkei closed DOWN 441.36 OR 2.02%/ Australia’s all ordinaires CLOSED DOWN 0.98%  /Chinese yuan (ONSHORE) closed UP  at 6.9008 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.16 dollars per barrel for WTI and 60.91 for Brent. Stocks in Europe OPENED RED// ONSHORE YUAN CLOSED UP AT 6.9008AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9015: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF 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

You now have proof that China’s economy is plummeting:  today the big duo reports: retail sales and industrial production both plummet

(courtesy zerohedge)

 

China Retail Sales, Industrial Production Growth Plummet In November

With yuan unable to sustain its PBOC-inspired squeeze higher and currency volatility at three-year highs, hopes remain high that some stability can be reasserted in China’s macro-economic data.

However, policymakers face two challenges…

Internally, policymakers’ efforts to constrain the growth of shadow banking and reduce financial risks worked almost too well. Financial regulations introduced in 2017 and early 2018 led to a meaningful contraction in shadow banking, which slowed overall credit growth and tightened credit conditions, particularly for private companies.

And externally, the escalation in US tariffs raised questions about China’s export growth and damaged confidence in the economic outlook. As a result, our China Current Activity Indicator (CAI) has fallen nearly two percentage points from its 1H2018 average of over 7%.”

And as Goldman’s Andrew Tilton (Chief Asia Economist) warns

There are reasons to be concerned [that easing is becoming less effective]. Local government officials who typically implement infrastructure spending and other forms of stimulus are facing conflicting pressures. The emphasis in recent years on reducing off-balance-sheet borrowing, selecting only higher-value projects, and eliminating corruption has made local officials more cautious. But at the same time, the authorities are now encouraging local officials to do more to support growth, like accelerate infrastructure projects. President Xi himself recently acknowledged the incentive problems and administrative burdens facing local officials.”

So where did tonight’s economic data deluge print?

  • China Retail Sales YoY Big Miss +8.1% (vs +8.8% exp)
  • China Industrial Production YoY Big Miss +5.4% (vs +5.9% exp)
  • China Fixed Assets Investment YoY Beat +5.9% (vs +5.8% exp)
  • China Property Investment YoY +9.7%
  • China Surveyed Jobless Rate Fell to 4.8%

Retail sales growth is at its slowest since the peak of the crisis in Nov 2008 and industrial production is at its slowest since 2003…

 

And don’t forget China’s unsold car inventory is at a record high as car sales plunged for a sixth consecutive month, plummeting 18 percent in November, which would be the first annual decline since 1990 based on CAAM estimate.

It seems the crackdown on the shadow-banking system is hard to overcome it seems with even the most finely tuned hammer of monetary policy…

Albeit a stronger-than-estimate aggregate financing and new yuan loans released earlier this week, the slowdown of M1 money supply growth underscores worries over economy, which may prompt authorities to start doing more to support growth.

But, as a reminder, it is not like Chinese authorities have been sitting on their hands as the economy, currency, and stock markets slump. As we noted previously, they have aggressively loosened monetary and fiscal policies…

But as the Current Activity Indicator above shows, it’s not working.

Economic data aside, Bloomberg’s Ailing Tan points out one notable change from previous month’s political environment is the ease of trade tensions, which more progress are now seen on China’s end right after the talk with U.S. in Argentina:

  • Resume large purchase of U.S. soybeans after a drastic reduction this year
  • Delay ambitious program in tech industry, known as ‘Made in China 2025’
  • Reduction of import duties on vehicles from U.S.
  • Stepping up punishments for IP thefts

As Bloomberg’s Enda Curran notes, while the numbers reinforce what we already know, that the economy is under pressure, the soft numbers indicate that there’s a way to go yet before growth turns a corner. It may be one reason why China is appearing to play ball in the trade talks…

And finally, before American investors crow that Trump’s trade war is working and China’s economy is suffering – the fact is that the US economic data is as dismal and disappointing as China’s has been…

END
China is trying to appease Trump:  they are rolling backing their new auto tariffs for 3 months.
(courtesy zerohedge)

China To Roll Back Retaliatory Auto Tariffs For 3 Months; Stocks Pare Losses

After China dashed hopes that a raft of macroeconomic data released last night would help reassert stability in markets, the Communist Party has, at the very least, finally confirmed post-G-20-summit headlines proclaiming that China’s Ministry of Finance would roll back the retaliatory tariffs on US-made autos imposed over the summer.

The rollback was first teased by President Trump after he returned from Argentina last week, before Treasury Secretary Steven Mnuchin hedged the president’s claim by saying rolling back auto tariffs had merely been “discussed.” But as many analysts have pointed out, most of the cars sold in China are made there already, which means that rolling back the tariff is a largely symbolic gesture. Also, the move is only temporary: tariffs will be suspended for three months, which means they could be reimposed if the US and China fail to strike a lasting trade pact. Tariffs will fall from 40% to 15%, back to their pre-trade levels.

The cuts will take effect on Jan. 1.

  • CHINA LIFTS RETALIATORY TARIFF ON U.S. CARS FROM JAN. 1
  • CHINA TO LIFT RETALIATORY TARIFF ON U.S. CARS FOR 3 MONTHS
  • CHINA HAD IMPOSED 25% RETALIATORY TARIFF ON U.S. CARS

Still, shares of carmakers – particularly European carmakers, which build more of their cars of the Chinese market in the US – rallied on the news. Meanwhile, US stock futures pared their China-inspired losses from earlier in the day. In Europe, the Stoxx 600 Automobiles & Parts index was trading 1.4% lower after the announcement, paring earlier losses of as much as 2.8% that, ironically, were triggered after new car registrations fell for the third straight month.

In a statement accompanying the announcement, the Chinese Finance Minister said it  hopes “China and the US can speed up talks to remove tariffs on all additional US goods.”

 

end

4.EUROPEAN AFFAIRS

UK

Theresa May leaves Brussels empty handed after considerable contentious talks.  As promised the EU will not give in.  The UK should leave the EU without any deal and without paying a nickel.

(courtesy zerohedge)

May Leaves Brussels Emptyhanded After Contentious Talks

Both cable and the FTSE slumped on Friday after Prime Minister Theresa May returned from Brussels emptyhanded following a tour of European capitals where she pleaded for “assurances” that the bloc was not seeking to trick the UK into unwittingly becoming a “vassal state” – as Brexiteers have warned. Objections over the backstop forced May to cancel a Commons vote on the ‘finalized’ draft Brexit withdrawal agreement.

May

Not only did EU leaders refuse to yield during what was a hastily called EU summit, they insisted that negotiations over the deal could not be reopened, and also berated May for putting the onus on them to change the deal to placate May’s fractious Tory caucus. One senior EU source accused May of trying to force the bloc to “solve her problem for her.”

May had asked for a legally binding assurance that the Irish backstop wouldn’t become an “inescapable trap”. But while EU leaders offered informal “clarifications”, they insisted that the text of the deal would not be reopened.

Cable tumbled below $1.26 again, erasing much of the currency’s Wednesday advance.

GBP

May’s critics in the DUP seized the opportunity to bash May for failing to follow through on her promise to secure “legally binding changes” and for signing off on a deal which she knew had no chance of passing in the Commons, according to the Daily Telegraph.

The DUP leader said: “The Prime Minister has promised to get legally binding changes. The reaction by the EU is unsurprising.”

“They are doing what they always do. The key question is whether the Prime Minister will stand up to them or whether she will roll over as has happened previously.”

“This is a difficulty of the Prime Minister’s own making. A deal was signed off which the Prime Minister should have known would not gain the support of Parliament.”

“If the Prime Minister had listened to our warnings and stood by her public commitments, we would not be in this situation.”

Even Irish Prime Minister Leo Varadkar refused to back up his neighbor, saying he was “very satisfied” with the summit conclusions on Brexit which made clear the Withdrawal Agreement was not “up for renegotiation.”

“As Europe we reaffirmed our commitment for the need for a backstop. An open border between Northern Ireland and Ireland can’t be a backdoor to the single market,” he said.

“That’s why European countries also very strongly support backstop. It is not just an Irish issue, it is very much a European issue as well.

“It is very much a case of in the European Union being one-for-all and all-for-one.”

The Prime Minister of Luxembourg urged May to take the deal back to Westminster and make clear to rebellious MPs that they had a choice between this deal or no deal (virtually ensuring that negotiations will come to the wire, as the EU waits until the last possible moment to hand May the concessions she needs):

“Theresa May did the best possible job. She did the best possible deal and now the MPs in London should be responsible and know if they want to have the best possible deal or to go in the direction where they don’t know what will come out.”

May’s de facto deputy David Lidington refused to rule out resigning if the government authorized a “no deal” Brexit.

Asked again if he would be prepared to take the UK out of the bloc without a deal, he said: “That is not the policy of the Government or the Prime Minister who I support and work for.”

“The policy of the entire Cabinet, which includes colleagues who both campaigned to leave and campaigned to Remain, is that we do not want no deal, we want to have a deal, that is what we are continuing to work towards.”

In other news, the bloc clarified that, beginning in 2021, UK vacationers will need to pay a €7 for visa-free travel.

Natasha Bertaud

@NatashaBertaud

Yes #ETIAS will apply to the #UK as 3rd country post-Brexit – 7 euros for a 3 year pre-travel authorisation. Simple form, like #ESTA to the US, but way cheaper. #Brexit #EUCO

226 people are talking about this

In a scene that attracted considerable attention in the British press, May was filmed during what was described as a “contentious” confrontation with European Commission head Jean Claude Juncker after Juncker “personally attacked” May.

Embedded video

Philip Sime@PhilipSime

This doesn’t exactly look like an exchange of pleasantries between Theresa May and Jean-Claude Juncker as the Brexit summit gets underway. #EUCO

With the impasse looking more intractable by the day, the EU said late Thursday that it would call an emergency ‘no deal’ summit for January to beginning contingency planning for the UK to leave the bloc without a trade deal. After surviving an intraparty ‘no confidence’ vote earlier this week by a less-than-enthusiastic margin, May is expected to struggle to whip up the votes for her plan. And in what sounded like No. 10 trying to “put on a happy face”, a spokesman for May accused the EU of playing “hardball” and assured the public that a deal would eventually be struck.

May

…which means the odds of a “hard” Brexit – or, more likely, “no Brexit at all” – are rising by the day.

GERMANY

Jeffrey Snider asks a very good question:  why the rush to combine the two big German banks?

(courtesy Jeffrey Snider/Alhambra Investments

Alhambra Questions The “Curious Rush To Combine German Banks”

Authored by Jeffrey Snider via Alhambra Investment Partners,

Markets this week celebrated more bad news out of Germany. Misunderstanding especially in stocks is par for the course, not that it’s much better outside of them. German officials are laying the groundwork to change the nation’s banking laws so that it’s two largest banks, really “banks”, can more easily combine. If it should ever come to that.

The major sticking point seems to be legal structure, no surprise. DB would have to convert to a holding company triggering revaluation of assets and then the tax consequences of those. Unless, of course, auditing the bank’s standing book reveals other malformities taking things in a different direction.

It’s not just the rush toward marriage, it’s more so who with. DB is both the target and the presumptive acquirer, an already odd situation. And if there is a healthy counterpart to DB’s sickening status it’s surely not Commerzbank, the institution being whispered up for combination.

The only thing, the only thing, CBK has going for it at the moment is its largest current shareholder – while around 55% of shares are held by institutional investors, including vehicles like hedge funds and mutual funds, the most concentrated in any single owner is the ~15% stake held by the Federal Republic of Germany. It would certainly combine risks, wouldn’t it?

One way to open the door to emergency “capital” would be if the government was already a significant sponsor.

But that’s not what this is about, officials claim. They keep saying this is all the other way around – that a strong German banking giant will therefore be in position to bail out Germany should it ever require it! Belatedly recognizing the dangers of financing an export-led economy during these sorts of troubles, authorities are getting only half the picture (only somewhat on purpose).

A funding problem for global markets isn’t solved by global banking giants of any national flavor, it begins there. More dispassionate analysis even recently begins to make the incestuous connection:

Discussions of a tie up of two banks with large overlapping businesses signal dwindling hope that Deutsche Bank will be able to break out of a vicious circle of declining revenue and sticky expenses. The stock has dropped more than 50 percent this year and broken through multiple record lows on the way down, while funding costs have continued to rise.

All of these things are related, furthermore connected to Germany’s vulnerable external financing requirements (“dollar short”). DB’s, as Commerzbank’s, declining revenues and overall position indeed have led to a great contribution to the global “dollar shortage.” The “dollar short” persists regardless, meaning that rock has met hard place; “funding costs have continued to rise” because these things become self-reinforcing.

The eurodollar system is complicated, of course, but the plight of Germany’s financial elephant really isn’t. We’ve chronicled the sordid tale for going on half a decade now. DB’s big sin was in 2014 they listened to Ben Bernanke and Janet Yellen.

The bank raised significant capital early on in that year ostensibly to complete its comeback from the 2008 break. Having been fixed, and compliant with new regulations in full, what did DB’s management decide was its best course? Unlike most of its other peers who were actively retreating, Deutsche plunged headlong into the riskiest assets – global junk, including US corporates as well as US$ EM junk (Eurobonds).

It’s all right there in their May 2014 Capital Presentation. At almost the very top in both classes that was when the bank decided it was best to proceed:

The Leveraged Debt Capital Markets (LDCM) franchise combines a premier high yield bond market business with diverse debt financing capabilities.

LDCM is a leader in European leveraged finance and is at the forefront of innovation in all aspects of the leveraged debt capital markets and is one of the few franchises that can price, structure, underwrite and distribute senior, mezzanine and high yield transactions on both sides of the Atlantic.

It seems as if the world’s Eurobond binge of 2016 and 2017 was only enough to stabilize the bank’s position, and stock price, until that market turned violently wrong starting last December. By January 2018, it was clear another EM crisis was on deck and the Eurobond market was going to be front and center in it.

But that’s not what anyone talks about, simply because it can’t be. The global economy is recovering in a virtuous circle started by the genius of technocratic central bankers; banks do better for monetary policy and therefore invest like DB in the various required facets of the global economy, which does better for the resources and so on. Globally synchronized growth would have meant this bet paying off spectacularly. Why?

As I wrote four and a half years ago:

As DB makes plain, there are only “5-6 FIC players left” and there exist exceptional barriers to entry ensuring smaller banks stay smaller. This oligarchical structure is perfect for DB in “attractive products”, such as high yield and leveraged lending (both can fairly be termed the modern incarnation of junk).

FIC, or FICC as its alternately known, is the guts of global money dealing in the eurodollar game. Most of the big banks had shed as much of it as they could over the years of this “recovery” – again, self-reinforcing whereby the less banks participate in money dealing the less likely the economy can grow constrained by lack of (credit-based) monetary growth alongside.

This explains why DB and other banks have struggled despite constant claims of successful recovery.

DB saw opportunity to be one of the few left even more exposed to US and EM junk and the FICC plumbing, if you will, behind it. We’ll likely never know the full details, including potential collateral transformations and the risks of them, but we can easily and reasonably connect how if US and EM junk are having a bad year (or four), “funding costs have continued to rise” makes perfect sense in a way legal troubles, DoJ fines, or this particular bank being in anything like a reasonable position to rescue the largest economy in Europe never could.

Officials can’t say that, though, because things are booming. Aren’t they? Being in a sort of rush to change German law isn’t quite consistent with all that, though. Prudent government planning wouldn’t be limited to just the one scenario. 

end

5.RUSSIAN AND MIDDLE EASTERN

AFFAIRS

RUSSIA/USA

 

6. GLOBAL ISSUES

CANADA

 

end

 

7  OIL ISSUES

 

8. EMERGING MARKETS

Venezuela

 

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

Euro/USA 1.1377 UP .0005 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 MIXED

 

 

 

 

 

USA/JAPAN YEN 113.44  UP 0.040 (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 1.2664 UP   0.0040  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3363  UP .0014 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 FRIDAY morning in Europe, the Euro ROSE by 5 basis point, trading now ABOVE the important 1.08 level RISING to 1.1377/ Last night Shanghai composite CLOSED DOWN 40.31 POINTS OR 1.53%

 

//Hang Sang CLOSED DOWN 429.46 POINTS OR 1.62%

 

/AUSTRALIA CLOSED DOWN  0.98% /EUROPEAN BOURSES RED 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED  DOWN 441.36 POINTS OR 2.02%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 429.46 POINTS OR 1.62% 

 

 

/SHANGHAI CLOSED DOWN 40.31  POINTS OR 1.53%

 

 

 

Australia BOURSE CLOSED DOWN  .98%

Nikkei (Japan) CLOSED DOWN 441.36POINTS OR 2.02%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1238.40

silver:$14.60

Early FRIDAY morning USA 10 year bond yield: 2.88% !!! DOWN 3 IN POINTS from THURSDAY’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 3.15 DOWN 1  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 97.57 UP 50 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing FRIDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.67% DOWN 1    in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: +.04%  DOWN 2  BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…

 

SPANISH 10 YR BOND YIELD: 1.40% DOWN 2  IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.94 DOWN 2     POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 153 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.25%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.69% 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 FRIDAY

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

Euro/USA 1.1299 DOWN  .0063 or 63 basis points

 

 

USA/Japan: 113.33 DOWN  0 .244 OR 24 basis points/

Great Britain/USA 1.2569 DOWN .0080( POUND DOWN 80  BASIS POINTS)

Canadian dollar DOWN 29 basis points to 1.3381

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed DOWN AT 6.9076-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.8997(  YUAN DOWN)

TURKISH LIRA:  5.3823

the 10 yr Japanese bond yield closed at +.04%

 

 

 

Your closing 10 yr USA bond yield DOWN 3 IN basis points from THURSDAY at 2.88 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.14 DOWN 2 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, 97.52 UP 52 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 FRIDAY: 4:00 PM 

London: CLOSED DOWN 32.33 POINTS OR 0.47%

German Dax : CLOSED DOWN 58.93 POINTS  OR 0.54%
Paris Cac CLOSED DOWN 43.22 POINTS OR 0.88%
Spain IBEX CLOSED DOWN 40.20 POINTS OR 0.45%

Italian MIB: CLOSED DOWN: 138.04 POINTS OR 0.72%/

 

 

WTI Oil price; 51.32 1:00 pm;

Brent Oil: 60.16 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.73  THE CROSS HIGHER BY .52 ROUBLES/DOLLAR (ROUBLE LOWER BY 52 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3823 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.25 FOR THE 10 YR BOND 1.00 PM EST EST

END

 

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

Closing Price for Oil, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM :51.04

 

BRENT:60.20

USA 10 YR BOND YIELD: 2.89%..

 

 

USA 30 YR BOND YIELD: 3.14%/.

 

 

 

EURO/USA DOLLAR CROSS: 1.1302 ( DOWN 61 BASIS POINTS)

USA/JAPANESE YEN:113.36 DOWN 0.215 (YEN UP 22 BASIS POINTS/ .

 

USA DOLLAR INDEX: 97.43 UP 37 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2582 DOWN 71 POINTS FROM YESTERDAY

the Turkish lira close: 5.3628

the Russian rouble:  66.72 DOWN .50 Roubles against the uSA dollar.( DOWN 50 BASIS POINTS)

 

Canadian dollar: 1.3381 DOWN 30 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9076  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9028 (OFFSHORE)

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

 

The Dow closed  DOWN 496.87 POINTS OR 2.02%

 

NASDAQ closed DOWN 159.67 POINTS OR 2.26%

 


VOLATILITY INDEX:  22.25 CLOSED UP 1.60 

 

LIBOR 3 MONTH DURATION: 2.788%  .LIBOR  RATES ARE RISING/BIG RISE TODAY

 

 

 

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

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

 

Meltdown: Traders Tremble As Trump, Trade & Talc Trigger Turmoil

 

 

 

Despite The National Team’s efforts on Thursday, the week ended ugly in China…with CHINEXT (China’s small cap/tech heavy index) ending red after terrible economic data hit overnight…

 

European stocks ended the week higher, despite an ugly Friday…

 

And after a strong start which prompted every media type to claim the bottom is in, Thursday and Friday were a bloodbath…

 

The S&P 500 closed at its critical 2,600 support level…

 

US Small Caps broke to fresh 2018 lows – to their lowest since Sept 2017…

6th day of “sell the fucking rip” in a row…

 

Year-to-Date, all the majors except Nasdaq are back in the red…

All the major US equity indices are in correction (down 10%) or worse…

  • Dow -10.5% from highs
  • S&P -11.3% from highs – lowest weekly close since March 2018
  • Nasdaq Comp -14.6% from highs
  • Trannies -17.8% from highs – Nov 2017 lows, worst 2-week drop since Aug 2011
  • Russell 2000 -18.5% from highs – lowest since Sept 2017

The number of bulls in the AAII survey of U.S. retail investors suffered its biggest one-week decline since 2010 this week. In aggregate, sentiment is still nowhere near the overly pessimistic extremes that typically develop at major lows, but this freak out in the retail channel is a constructive development.

The S&P Banks and Financials indices are both down over 20% from their highs (in bear market)…

 

For The Big 4 Bulge Bracket Banks, December has been a bloodbath…

 

FANG stocks gave back the mid-week squeeze gains (down 23% from their highs)…

 

AAPL was hammered (down 29% from the highs)…so much for Monday afternoon’s panic-bid that CNBC crowed so loud about…

 

And JNJ crashed most since 2002 as cancer-causing talc headlines hammered the stocks down below its 200DMA (and dragged the Dow down 100pts alone). JNJ lost almost $35 billion market cap…

 

Tesla stock had another great week… but TSLA bonds didn’t – who do you believe?

 

Breadth is getting extremely weak with just 24% of all NYSE stocks now trading above thei 200DMAs…

 

And the S&P’s put/call ratio has crashed…

 

And the market’s implied correlation is soaring (implying traders using macro overlays to hedge and not being idiosyncratically careful)…

 

As soon as Tuesday/Wednesday’s short-squeeze ran out of ammo, the week went a little pear-shaped…

 

Credit markets actually rallied on the week in IG and HY spreads…

 

But Leveraged Loans were a bloodbath…

 

And stocks have a long way to catch down…

 

Treasuries rallied on the day as stocks stumbled with 30Y back to unchanged on the week…

 

And if equity markets are right, bond yields have a long way to fall…

2s5s remains inverted…

 

And as far as next week’s Fed meeting, odds of a hike have slumped (very weak this close to a meeting)…

And the market is now pricing in just 9.5bps of hikes in 2019, and a 10bps cut in rates in 2020…

 

The Dollar Index soared again today (best week since September) – touching its highest since May 2017 intraday…

 

Offshore Yuan roundtripped on the week

 

Cable plunged again (5th week in a row) to the lowest weekly close since April 2017… despite a rally on May’s confidence vote

 

Cryptos had another ugly week with Bitcoin Cash crashing 25% …

 

Despite the terrible China data, only copper ended the week higher in commodity-land as a strong dollar dragged down PMs and WTI algos went wild…

 

After two weekly gains (following 7 weeks straight down), WTI resumed its down trend this week testing back to a $50 handle…

 

Gold was lower in USDollars and in Yuan…

 

Finally, we note that after this week’s rounds of economic data disappointments, all of the major economies in the world are now in negative surprise territory (but ironically the US is least worst for now)… The Global macro surprise index is at 6-month lows

And this is probably nothing to worry about – the world’s most systemically important banks continue to collapse…

 

END

market trading

JNJ is having a bad hair day as they admit to knowing that their talc for many years contained asbestos

(courtesy zerohedge)

Dow Tumbles, Slammed By JNJ’s Worst Day In 16 Years On Asbestos Fears

The Dow Jones is down nearly 400 points, with consumer-staple giant Johnson & Johnson responsible for nearly a quarter of this plunge…

… as JnJ is suffering its worst drop since 2002…

… with the company wiping out as much as 11% of its value, or some $35BN in market cap…

… following a “powder keg” Reuters report that from at least 1971 to the early 2000s, Johnson & Johnson knew that asbestos lurked in its Baby Powder, and that its talc product “sometimes tested positive for small amounts of asbestos”, and that company executives, mine managers, scientists, doctors and lawyers were aware of the deadly threat, and “fretted over the problem and how to address it while failing to disclose it to regulators or the public.”

Curiously, the last time shares of the drugmaker came under this much pressure was due to asbestos concerns back in February, after traders circulated a blog post focused on worries about what might be uncovered during litigation Bloomberg reports. The shares fell as much as 11% that day, even as Wells Fargo – who else – called the concerns overblown. Analyst Lawrence Biegelsen said at the time that approximately 5,500 talc cases nationwide could create a total liability to the drugmaker of just $1.5 billion.

Fast forward to today when as noted above, the intraday move has wiped out $35 billion in market value, although as Susquehanna litigation analyst Tom Claps said “today’s Reuters story about JNJ’s talc litigation is not ‘new news.'” In July, a jury ordered the company to pay $4.69 billion to women who claimed asbestos in the products caused them to develop ovarian cancer

“JNJ has been facing talc/asbestos litigation for years,” Claps wrote in response to questions. He said there have been a number of trials where plaintiffs showed evidence suggesting the company knew and concealed the risks. “Interestingly,” he said, “JNJ’s stock has taken a bigger hit today than it did after that $4.7B verdict.”

And while it is debatable if the company’s talc problems are “news”, Bloomberg Intelligence litigation analysts Aude Gerspacher and Holly Froum estimate that the New Brunswick, NJ-based company could be on the hook for as much as $10 billion to $20 billion in settlements from an estimated 11,000 pending talc cases.

For now the market is even more skeptical and is hitting the AAA/Aaa rated company (a rating higher than that of the US itself) to nearly double that potential payout and resulting in broad pain for the Dow Jones as well.

 

market data/

USA manufacturing output disappoints again for the 2nd straight month.  Trump does not like this as tariffs are suppose to help manufacturing

(courtesy zerohedge)

US Manufacturing Output Disappoints, Stagnates For 2nd Month In A Row

On the heels of the dramatic slowdown in Chinese output, and after slowing in September and October, US Industrial Production was expected to rebound modestly in November and it did (but don’t get to excited yet).

The headline industrial production print rose 0.6% MoM (well above the 0.3% rise expected and a notable bounce back from the downwardly revised 0.2% drop in October)…

However, the gains were dominated by a surge in Utilities… (Utility output jumped 3.3 percent after rising 0.2 percent the prior month)

As Manufacturing growth stalled for the second month in a row…

Bloomberg notes that excluding autos, manufacturing output stagnated for the second time in three months. The industry may be settling into a somewhat cooler pace, consistent with projections that economic growth will moderate this quarter and into next year, as the boost from lower corporate and consumer taxes wanes.

The slowdown in factory output included a 0.2 percent decline in business equipment and a third-straight drop in construction supplies.

Notably, this ‘hard’ data is weaker than the signal from a separate report that showed the ISM’s factory index rebounded in November from a six-month low.

And finally, while INDUSTRIAL production has topped its previous peak, the gap between the INDUSTRIAL Average and production remains vast (but narrowing)…

end
We are continually receiving poor economic data especially faltering global data.  Today it was USA PMI which plunged
(courtesy zerohedge)

US PMI Plunge Confirms Near-Record Streak Of Disappointing Global Economic Data

 

Amid one of the longest streaks ever in disappointing global data surprises…

US ‘hard’ economic data continues to stagnate and ‘soft’ survey data begins to catch down…

 

After China’s dismal data overnight, and Europe’s PMI misses this morning, and following November’s slide, US flash PMIs for December notably disappointed, tumbling further…

  • Markit US Manufacturing plunged from 55.3 to 53.9 – the lowest since September 2017
  • Markit US Services dropped from 54.7 to 53.4 – the lowest since Jan 2018

It seems the ‘hard’ data was right after all…

 

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“Importantly, although growth remains relatively robust, momentum is being lost and is likely to continue to fade as we move into 2019. New order inflows hit the lowest since April of last year and expectations regarding future business growth have slipped to the lowest for two-and-a-half years.

“The surveys reveal greater caution in relation to spending amid uncertainty about the economic outlook, linked in part to growing geopolitical concerns and trade wars.”

“The weaker picture of current and future business growth has curbed appetite for hiring. Jobs growth inched down to the lowest for one and half years but remains consistent with non-farm payrolls rising in December by around 180,000.

“Price pressures have meanwhile cooled as lower oil prices feed through, yet rising tariffs remain a concern for many companies, keeping input cost inflation above the survey’s long-run average.”

And finally, Williamson notes,:

“The flash PMIs bring signs of the US economy ending 2018 on a softer note. With business activity expanding at the slowest rate for one and a half years, the surveys indicate that the pace of economic growth has faded to 2.0% in December, albeit closer to 2.5% for the fourth quarter as a whole.

 

 

end

This is a very big story.  I have always highlighted to you events on this very important story.  The last remaining investment grade of bonds that corps are allowed to hold are BBB rated bonds.  Once you enter below this level at BB or less, then corporations are now longer allowed to carry these bonds on their books as they must be sold.  There are approx 3/4 of a trillion dollars worth of BBB bonds trading.  You will recall that we commented on the A graded bonds and how it was likely that a huge number would be downgraded to the BBB level and sure enough a massive 176 billion A rated bonds have been downgraded to BBB.  Once considerable amount of BBB bonds are downgraded, then we are on the verge of a massive crisis as nobody is capable of holding these bonds.

(courtesy zerohedge)

 

Credit On Verge Of Crisis: $176 Billion A-Rated Bonds Downgraded To BBB In Q4

While the market’s frenzied attention has lately shifted to the cracks appearing in the leveraged loan market, which as we reported last night is seeing the wheels come off” following record outflows, a collapse in loan prices, massive original issue discounts, pulled deals, banks retaining loans on their books unable to find buyers and a general sense that the market is about to freeze, one should not forget the original bogeyman that many believe will be the cause of the next credit crisis when the upcoming recession finally hits: a wholesale downgrade of investment grade (or BBB) rated companies into the junk space as rating agencies finally wake up to the reality of what the combustible mix of record debt, declining cash flows and a contracting economy mean for US corporations.

And it is here that things are once again moving from bad to worse.

Recall that just two weeks ago we reported that no less than $90 billion in A-rated bonds had been downgraded to the lowest investment grade rating, BBB, below which companies become “fallen angels” as they move from investment grade to high yield, resulting in forced liquidations as countless vanilla funds are simply not permitted by their mandate to retain junk on their books.

Fast forward to today when Goldman reports that just two weeks after our original report, the number of A to BBB downgrades has doubled to a whopping $176 billion in the fourth quarter, just shy of the all time high hit in Q4 2015, and with several more weeks still left this quarter, it is likely that a new downgrade record will soon be hit.

As Goldman’s Lotfi Karoui writes overnight, there are good and bad news in the recent data.

The good news is that in the credit strategist’s opinion, the downgrade risk is higher among A-rated issuers than it is among their BBB-rated peers.

The bad news is that Goldman may have been “too” correct, as this view has continued to play out through 4Q2018, and “quarter to date, over $176 billion of debt has migrated into BBB territory from the A bucket; the highest amount since 4Q2015, which was a period characterized by a heavy wave of commodity-related “fallen angels”.

Meanwhile, as shown by Exhibit 2, $12 billion worth of bonds rated A- remain on downgrade watch, and while Goldman believes that this is a relatively modest number, “we think it is worth bearing in mind that downgrades can – and often do – occur when a rating has a stable outlook.”

Putting these trends in context, Goldman writes that over the long term, “we continue to believe the risk of negative rating action in the high end of IG remains elevated, more so than in the BBB bucket” and highlights one recent example from this week in which the announcement of a debt-funded share buyback – and the related deterioration in leverage – served as the catalyst for a downgrade into BBB territory.

We do not view this as a unique example. As we discussed recently, the willingness of many highly-rated IG firms to utilize their ample debt capacity for maintaining (or increasing) shareholder returns and pursuing M&A opportunities in 2019 is strong.

So yes, Goldman may be right, and it is likely that the even bigger risk of a “fallen angel” avalanche is the downgrade of A-rated names to BBB. But while rating agencies are clearly adding to the pre-fallen angel camp, there is no denying that the big threat is what happens if and when the BBB downgrade deluge begins. As Deutsche Bank calculated last month, when looking at those bonds most at risk of getting junked, $150bn of the $736bn of BBB- bonds are currently on negative watch/outlook with at least one rating agency, and in danger of imminent “junking.”

And while Goldman remains clearly complacent about the BBB space at least until a recession hits, as Deutsche Bank warned last week, even before we get to an economic slowdown – some time in 2020 – or even before the market start pricing the slowdown in, “it feels like the tide might be turning and we start to see fallen angels outpace rising stars over the next year.”

So there you have it: for those who believe a recession is either imminent or will soon be priced in, keep shorting the BBB space. Meanwhile, those who think it will take some more time before the rating agencies filter out the noise, the best place to be short is those “pre-fallen” A bonds which will first become BBBs, before they too join the deluge into the junk space, some time around late 2019/early 2020.

 

 

USA ECONOMIC STORIES OF INTEREST

This is interesting:  banks are unable too offload loans and outflows multiply

(courtesy zerohedge)

 

Wheels Come Off The Leveraged Loan Market: Banks Unable To Offload Loans Amid Record Outflows

To think it was less than three months ago that we wrote that “leveraged loan demand is off the charts as dangers mount.” Since then, a lot has happened in the credit market, with yields and spreads blowing out in credit in a much delayed response to said mounting dangers and turmoil in the equity market, eventually hitting the leveraged loan market too, where as we wrote last week, loan prices have fallen precipitously as loan funds suffered dramatic redemptions in recent days, most notably the Blackstone leverage-loan ETF, SRLN, which last week saw its largest ever one-day outflow since its inception.

Fast forward to today when while credit appears to have found a shaky, tentative floor over the last few days, leveraged loans – which started falling later than other markets this quarter – are still sliding, and as long as funds keep pulling money out, will probably keep falling.

While floating-rate loans tend to track bonds, they are often slower to react both to the upside and downside. Since Oct. 1, loans have lost about 2%, including a 1% drop this month, while both high-yield and investment grade bonds rose slightly. In fact, since we last checked in on the S&P/LSTA lev loan index last week it has fallen another full point, and is now down to 95.4, its lowest price in over two years.

“It’s a bit of a catch up,” James Schaeffer, deputy CIO at Aegon Asset Management told Bloomberg. “Aggressiveness – on terms and structure – has created more price volatility than in the high-yield market, now that we’ve seen demand for loans slow a bit.”

That’s putting it mildly: as we noted last week, JPMorgan had to slash the price on a $210 million loan to 93 cents on the dollar from par to sweeten investor demand and help finance a private jet takeover. This represented one of the steepest discounts seen in the leveraged loan market this year. And with the market on the verge of freezing, the size of the deal was cut by $70 million from the originally targeted amount. Meanwhile, in Europe, the market appears to have already locked up, as three loans were scrapped over the last two weeks. To wit, movie theater chain Vue International withdrew a 833 million pound-equivalent ($1.07 billion) loan sale. While the deal was meant to mostly refinance existing debt, around 100 million pounds was underwritten to finance the company’s acquisition of German group CineStar.

More deals were pulled the prior week when diversified manufacturer Jason Inc. became at least the fourth issuer to scrap a U.S. leveraged loan. Additionally, Perimeter Solutions also pulled its repricing attempt, Ta Chen International scrapped a $250MM term loan set to finance the company’s purchase of a rolling mill, and Algoma Steel withdrew its $300m exit financing. Global University System in November also dropped its dollar repricing.

Worse, there is no sign the pain will end in the near term as there has been a significant exodus from loan mutual funds and ETFs in recent weeks, and the market is braced for more: on Thursday afternoon, Lipper reported that US Loan Funds just saw a record $2.5 billion outflow in the past week.

“Mutual funds may have more room to shed incrementally from here given their level of inflows YTD,” Bank of America said in a strategy note.

Citi agreed, saying that “despite the deep sell-off, we expect further weakness ahead. Recent outflows represent a small fraction of the inflows that occurred over the prior two years.”

Adding to the pricing pressure, demand from collateralized loan obligations, the biggest and until recently most reliable buyers in the $1.3 trillion leveraged loan market, is rapidly slowing.

“The market is turning for loans and CLOs,” said Maggie Wang, an analyst at Citi. “Both markets have struggled as people think the upside is now less because the Fed is getting close to the end of its rate hiking cycle.”

The difference between the interest rates on the highest-rated CLO tranches and three-month Libor has hit 121 basis points — the biggest risk premium since February 2017. As recently as November 2017, the spread was 90bp, according to the FT.

Lower-rated CLO tranches have also come under pressure as the spread between double-B tranches and three-month Libor rose 70bp in November to 675bp, the biggest monthly increase since early 2016, Citigroup said.

While many have voiced concerns about the risks inherent in a collapse in the loan market, among them the IMF, Fed, BIS, JPMorgan, Guggenheim, Jeff Gundlach, Howard Marks and countless others, concerns about leveraged lending were highlighted this week when Janet Yellen reiterated warnings that declining underwriting standards for corporate loans could lead to more bankruptcies and prolong the next economic downturn.

But as the FT notes, the current tremors in the CLO market seem more related to diminishing investor appetite than a deterioration of underlying credits. CLO issuance this year has hit a record $125 billion, officially eclipsing the all-time record of $124.1 billion set in 2014.

The recent activity has raised the total size of the CLO market in the U.S. to $600 billion, according to J.P. Morgan, which projects the market to grow to $700 billion by the end of 2019, after expected net issuance of $100 million next year, taking into account maturing CLOs and loans that are paid down.

Such optimism may be misplaced, however, as investors have abruptly curbed their enthusiasm and pulled $1 billion from the asset class for the week ending December 5, bringing outflows since mid-November to $4bn, according to the loan pricing unit at Refinitiv. The last time the leveraged loan market saw such large outflows was three years ago.

“The appeal of floating rate instruments has become less attractive,” said Tracy Chen, head of structured credit at Brandywine Global Investment Management. “The late-cycle credit concern, as well as the Fed’s more dovish tone, may weigh on both leveraged loans and CLOs going into 2019.”

Meanwhile, leveraged loans prices continue to slide: as shown above, the S&P/LSTA Leveraged Loan Price index has lost roughly 2 per cent this year and now sits at its lowest level since 2016. The price of Invesco’s Senior Loan ETF, by contrast, has declined 3.5 per cent. Meanwhile, the percentage of leveraged loans trading above par – an indication of demand in the secondary market – has collapsed to almost 0%, down from 70% as recently as two months ago according to Citi.

* * *

But the most vivid example of the freeze in the loan market came late on Thursday, when Bloomberg reported that in a flashback to the events that culminated in the 2008 financial crisis, Wells Fargo and Barclays took the rare step of keeping a $415 million leveraged loan on their books after failing to sell it to investors.

The banks now plan to wait until January to offload the loan they made to help finance Blackstone’s buyout of Ulterra Drilling Technologies, a company that makes bits for oil and gas drilling.

The reason the banks were stuck with hundreds of millions in unwanted paper is because they had agreed to finance the loan whether or not there was enough demand from investors, as the acquisition needed to close by the end of the year. The delayed transaction means the banks will have to bear the risk of the price of the loans falling further, as well as costs associated with holding loans on their books.

The loan market froze for at least this one deal after fund managers were reluctant to buy the loans after oil prices had fallen by around a third since early October, and resulted in the first major E&P bankruptcy in years, when Parker Drilling filed for bankruptcy yesterday as oil prices had fallen too far for its business model to remain viable, sending its bonds crashing.

* * *

With the leveraged loan market freezing up – as outflows accelerate to record levels – the recent weakness has raised concerns that other debt sales currently in the works may be sold at discounts that are so deep underwriters may have to book a loss if they can be sold at all, leading to strong pushback on new debt issuance. This is precisely what happened in late 2007 and early 2008 when underwriters found themselves with pipelines of debt sales that suddenly got blocked, and were forced to take massive haircuts to keep the credit flowing.

Still, optimists remain: “The downdraft in loans has been very orderly thus far,” said Chris Mawn, head of the corporate loan business at investment manager CarVal Investors. “We anticipate most managers will keep buying in this market trying to be opportunistic and those who don’t have to sell will just hold.”

Also, as a result of the recent selloff, leveraged loans are now returning 1.99% this year and some say they could outperform with a 6% gain in 2019. With the recent sell-off, some analysts say loans are looking cheaper compared to high-yield bonds.

Some CLO investors also remain upbeat, blaming the price deterioration on skittish retail investors and fund managers dialling back risk as the year comes to an end. They argue that a strong US economy is supportive of the market with rating agencies forecasting that company defaults will remain low next year (of course, if we learned anything from 2008 it is that rating agencies, and defaults, follow prices, not the other way around).

“There doesn’t seem to be a theme of sophisticated institutional investors being worried about near-term credit risk at this point,” said Tom Majewski, chief executive at Eagle Point Credit. “If anything, the cheaper prices have started to bring more investors into the market.”

Of course, speaking of flashbacks to 2007/2008 it was just this kind of investor optimism that died last.

(courtesy zerohedge)

SWAMP STORIES

If Trump used his own personal  money as hush money, I cannot see what is wrong and why the markets are reacting so badly to this

(courtesy zerohedge)

Futures Tumble On Report Trump Present During Enquirer Hush Money Meeting

Futures are tumbling on a report that Donald Trump was present at an August 2015 meeting to discuss hush money paymentsto shield him from potentially damaging allegations by two women.

According to court filings, Trump was present at the meeting with his former longtime personal attorney Michael Cohen, and David Pecker – chairman of The Enquirer parent company, American Media Inc. (AMI).

The plan involved Pecker flagging potentially negative stories about Trump’s relationships with women, then purchasing the rights to the allegations with no intention to publish them in a practice known as “catch-and-kill,” according to a non-prosecution agreement between AMI and Manhattan federal prosecutors made public Wednesday. 

Donald Trump and Karen McDougalAMI paid former Playboy model Karen McDougal $150,000, who claimed to have had a 10-month-long extramarital affair with Trump beginning in 2006 – a payment which Federal prosecutors have amounted to an effort to influence the 2016 US election, and a campaign finance violation.

This week’s court filing said that Cohen, Pecker and “one or more members of the campaign” met in August 2015, during which “Pecker offered to help deal with negative stories about that presidential candidate’s relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased, and their publication avoided.”

AMI has now admitted to “keep Cohen appraised” of negative reporting about Trump following the meeting.

The media company also helped facilitate a payment to adult film actress Stormy Daniels in the months leading up to the 2016 election.

While Pecker and AMI haven’t been charged with any crimes – and are now cloaked in an immunity deal, Cohen pleaded guilty to the campaign finance violations and seven unrelated crimes. Cohen claimed in court that the hush money payments were made at Trump’s direction.

END

The Clinton foundation whistleblowers testified that the charity did not operation like a normal charity but as an unregistered foreign agent.

(courtesy Sara Carter)

Clinton Foundation Whistleblowers Testify: “It Operated As An Unregistered Foreign Agent”

Via Sara Carter At saracarter.com

The Clinton Foundation operated as a foreign agent ‘early in its life’ and ‘throughout it’s existence’ and did not operate as a 501c3 charitable foundation as required, and is not entitled to its status as a nonprofit, alleged two highly qualified forensic investigators, accompanied by three other investigators, said in explosive testimony Thursday to the House Oversight and Government Reform Committee.

John Moynihan and Lawerence W. Doyle, both graduates of the Catholic Jesuit College of the Holy Cross and former expert forensic government investigators, gave their shocking testimony before congress based on a nearly two year investigation into the foundation’s work both nationally and internationally. They were assisted by three other highly trained experts in taxation law and financial forensic investigations. The forensic investigators stressed that they obtained all the documentation on the foundation legally and through Freedom of Information Request Acts from the IRS and other agencies.

Former Utah U.S. Attorney General John Huber, who resigned when he was appointed by former Department of Justice Attorney General Jeff Sessions to investigate the Clinton Foundation and the issues surrounding the approval to sell 20 percent of U.S. Uranium assets to Russia, declined to attend the hearing. Chairman Mark Meadows, R-NC, who oversaw the hearing stated that it was disappointment that Huber declined, leaving Congress in the dark regarding the DOJ’s investigation.

Investigations into the Clinton Foundation have always been plagued by politics but Moynihan wanted to make clear in his opening statement that this investigation was one of many his firm has conducted on nonprofits and had nothing to do with politics.

Doyle and Moynihan have amassed 6,000 documents in their nearly two-year investigation through their private firm MDA Analytics LLC. The documents were turned over more than a year and a half ago to the IRS, according to John Solomon, who first published the report last week in The Hill.  

The investigation clearly demonstrates that the foundation was not a charitable organization per se, but in point of fact was a closely held family partnership,” said Doyle, who formerly worked on Wall Street and has been involved with finance for the last ten years conducting investigations.

“As such it was governed in a fashion in which it sought in large measure to advance the personal interests of its principles as detailed within the financial analysis of this submission and further confirmed within the supporting documentation and evidence section.”

At the onset of the hearing, Moynihan wanted to make perfectly clear that the intention to look into the Clinton Foundation was not political but based on their work with the firm.

“At this point I’d like to answer two questions, who are we? We are apolitical,” Moynihan told the committee. “We have no party affiliation to this whatsoever, No one has financed us… we are forensic investigators that approached this effort in a nonpartisan profession, objective, and independent way…we follow facts, that’s all.”

“We have never been partisan,” he added, speaking on behalf of all five members of his group testifying to Congress. “We come from law enforcement and wall street where each of us has dedicated our entire lives and praised the rule of law doing the right thing pursuing facts. we follow facts. that’s all.”

“None of this is our opinion,” he went on state.

“I emphasize none of this is our opinion. These are not our facts. They are not your facts. They are the facts of the Clinton Foundation.”

He disclosed the reason his firm decided to take on the Clinton Foundation and the fact that they paid for the investigation out of their “own pockets.”

“Are you doing this for money,” said Moynihan to the committee. “Yes, this is how we make a living.”

Moynihan and Doyle swapped back and forth between there testimony and opening statement, making it clear they were working as a team. But the most shocking statements came from Moynihan’s statement as he read the laundry list of violations by the Clinton Foundation.

Moynihan stated “Foreign agent,” as he began to read from a long list of violations discovered during the course of their investigation.

The Clinton Foundation “began acting as an agent of foreign governments ‘early in its life’ and throughout its existence. As such, the foundation should’ve registered under FARA (Foreign Agents Registration Act),” he said. “Ultimately, the Foundation and its auditors conceded in formal submissions that it did operate as a (foreign) agent, therefore the foundation is not entitled to its 501c3 tax exempt privileges as outlined in IRS 170 (c)2.

Doyle, who was also outlining a litany of violations by the foundation, noted that currently there are approximately 1.75 million nonprofits in the United states that annually generate nearly 2 trillion dollars, which is 9 percent of the U.S. GDP.

Whose minding the store, looking out for the donors and minding the rule of law,” said Doyle.

“On that note, we followed the money so we made extensive spreadsheets of their revenues and expenses, we analyzed their income statements and we did a macro-review of all the donors, which its a very (jumbled) sort of foundation,” said Doyle. “Less than 1/10th of one-percent of the donors gave 80 percent of the money. So we follow the money.”

Moynihan added that the foundation “did pursue programs and activities for which it had neither sought nor achieved permission to undertake.”

Particularly, he noted the case of the Clinton Presidential Library in 2004. He noted that the foundation’s role before and after library was built was a misrepresentation to donors “of the approval organizational tax status to raise funds for the presidential library programs therein. In these pursuits the foundation failed the organizational and operational task 501c3 internal revenue code 7.25.3.”

Additionally Doyle stated that the foundation’s intentional “misuse of donated public funds.” He stated that the foundation “falsely attested that it received funds and used them for charitable purposes which was in fact not the case. Rather the foundation pursued in an array of activities both domestically and abroad.”

“Some may be deemed philanthropic, albeit unimproved, while other much larger in scope are properly characterized as profit oriented and taxable undertakings of private enterprise again failing the operational tests philanthropy referenced above,” Doyle said.

Philip Hackney, a tax law professor at Louisiana State University, who is a former Exempt Organizations lawyer at the IRS, and Tom Fitton, president of the conservative government watchdog group Judicial Watch also testified at the hearing. Judicial Watch has been at the forefront of fighting the Clinton Foundation in court to access documents requested by FOIA. Hackney and Fitton testified during the first panel of the hearing.

Tom Fitton

@TomFitton

Testimony suggests FBI open criminal investigation into Clinton Foundation.

end
Explosive interview where Cohen says Mueller has “substantial evidence” against Trump
(courtesy zerohedge)

In Explosive Interview, Cohen Says Mueller Has “Substantial” Evidence Against Trump

Former Trump attorney and purported “fixer” Michael Cohen kicked off his PR campaign to win a lighter sentence on Friday (two days after a federal judge sentenced him to three years in prison) with a long-winded interview with Cohen’s favorite daytime TV personality – ABC’s George Stephanopoulos – where he tried to convince the public to believe his testimony about President Trump by claiming that he ‘flipped’ on the president, not to save his own skin, but to do right by his family and his country.

 

Offering his most detailed accounting yet of the events that led up to his guilty plea, Cohen insisted that Trump had directed him to make the “hush money” payments to Stormy Daniels and Karen McDougal that have emerged as the center of the campaign finance allegations that prosecutors are seeking to trace back to the president.

Cohen: “Nothing at the Trump Organization was ever done unless it was run through Mr. Trump,” Mr. Cohen said. “He directed me to make the payments. He directed me to become involved in these matters.”

As one might expect given Stephanopoulos’s prior interviews with Cohen and other Trumpworld figures, interview was effectively set up to try and convince the audience that Cohen is a believable witness. But just in case some viewers still harbor doubts about Cohen’s integrity, he would like them to know that if they don’t believe him, the special counsel has “substantial” evidence corroborating his claims that has yet to be made public.

Embedded video

This Week

@ThisWeekABC

EXCLUSIVE: “The special counsel stated emphatically that the information that I gave to them was credible,” Michael Cohen tells @ABC.

“There’s a substantial amount of information that they possess that corroborates the fact that I am telling the truth.” https://abcn.ws/2EwBEL4

Cohen: “Because the special counsel stated emphatically that the information that I gave to them is credible and helpful. There is a substantial amount of information that they possessed that corroborates the fact that I am telling the truth.”

Asked why he was loyal to Trump in the beginning, Cohen said he “admired” Trump, and that his allegiance to the real estate developer was “a blind loyalty.”

Cohen: “No. No, it was a blind loyalty. It was to a man I admired, but I do not know the answer to it. And I am angry at myself. My family is disappointed that they’ve taught me, my mother, father, right from wrong. And I didn’t display good judgment.”

But that doesn’t excuse his actions, Cohen admitted, adding that he’s “angry with myself” because “I know what I was doing is wrong.”

Embedded video

Good Morning America

@GMA

FULL PART 1: “I’m angry at myself, because I knew what I was doing was wrong,” Michael Cohen tells @GStephanopoulos. http://gma.abc/2PDn3OO

More of the exclusive interview is just ahead on @GMA.

Despite facing a substantial federal prison term, Cohen said that he now feels like he has “his freedom back” (that doesn’t exactly inspire confidence in Cohen’s claims that he is being 100% truthful by resulting to such obviously ridiculous platitudes). Yet, he’s still afraid of the president.

Stephanopoulos: Are you afraid of him?

Cohen: “It’s never good to be on the wrong side of the president of the United States of America. But some how this task has fallen on my shoulders and I will spend the rest of my life trying to fix the mistake that I made.”

Do you think President Trump is telling the truth about Russia?

Cohen: No.

Trump has changed since the days of the Trump Organization, where Cohen said he “had a lot of fun” working with Trump. Cohen believes the “pressure” of running the country is eating away at Trump, and that this has soured his attitude on a fundamental level. He said he “doesn’t recognize” the Trump of today.

Embedded video

Good Morning America

@GMA

PART 2: Michael Cohen speaks out exclusively to @GStephanopoulos.
On if he felt Donald Trump was telling the truth about everything related to the special counsel’s Russia probe, Cohen says: “No.”

FULL @GMA STORY:http://gma.abc/2A848Hl

TRANSCRIPT:http://gma.abc/2PDn3OO

Cohen: You know, I can’t give you a specific time that it went from point A to point B. It was just a change. I will tell you that the gentleman that is sitting now in the Oval Office, 1600 Pennsylvania avenue, is not the Donald trump that I remember from Trump Tower.

Stephanopoulos: … how so?

Cohen: He’s a very different individual.

Stephanopoulos: What’s happened to him?

Cohen: I think the pressure of the job is much more than what he thought it was going to be. It’s not like the Trump organization where he would bark out orders and people would blindly follow what he wanted done. There’s a system here, he doesn’t understand the system, and it’s sad because the country has never been more divisive. And one of the hopes that I have out of the punishment that I’ve received, as well as the cooperation that I have given, I will be remembered in history as helping to bring this country back together.

If Cohen could offer one piece of advice to President Trump, it would be to make good on his post-midterms promise to usher in an era of “bipartisan good feeling”.

Embedded video

Good Morning America

@GMA

EXCLUSIVE: “Lay off Twitter. Run the country…bring the country together instead of dividing the country.”

Michael Cohen to Donald Trump, speaking out to @GStephanopoulos. http://gma.abc/2A848Hl

Cohen: “Lay off Twitter, run the country the way that we all thought that you would, be able to take the Democrats, Republicans, bring them together and bring the country together instead of dividing the country.”

Then again, placing the blame solely on Trump for the partisan divide in Washington isn’t exactly fair.

While Cohen offered only praise for Trump’s tenure as a New York real estate developer selling the “greatest product ever created”,

Turning to the subject of Cohen’s “legacy”, Cohen said he hopes that he will be “remembered in history” for helping to bring the country back together. Though President Trump’s tweets accusing him of being a  turncoat and a “rat” are much more memorable than Cohen’s claims that he is telling the truth for the first time in his life.

Embedded video

This Week

@ThisWeekABC

EXCLUSIVE: Michael Cohen to @GStephanopoulos: “One of the hopes that I have out of the punishment that I’ve received, as well as the cooperation that I have given—I will be remembered in history as helping to bring this country back together.” https://abcn.ws/2EwBEL4

Cohen: I think the pressure of the job is much more than what he thought it was going to be. It’s not like the Trump organization where he would bark out orders and people would blindly follow what he wanted done. There’s a system here, he doesn’t understand the system, and it’s sad because the country has never been more divisive. And one of the hopes that I have out of the punishment that I’ve received, as well as the cooperation that I have given, I will be remembered in history as helping to bring this country back together.

In comments to the Wall Street Journal, Rudy Giuliani called Cohen’s allegations “much ado about nothing.”

“Whether they talked about it or not, their talking about it can’t make it a crime,” Mr. Giuliani said of the hush-money payments, adding that “as far as I know, Cohen is not telling the truth.”

We now await an stream of angry tweets from President Trump.

end

The GOP says there is no plan for the wall…Trump will hold out for the wall as there is only 3 weeks left before the Democrats take over.

(courtesy zerohedge

“There’s No Plan”: GOP In Shutdown Turmoil As Trump Holds Out For Wall 

GOP lawmakers are fuming over a partial government shutdown set to hit just in time for Christmas, after President Trump put his foot down in a Tuesday meeting with Democratic leaders and demanded $5 billion in funding for a border wall – as opposed to the $1.3 billion which would otherwise be appropriated.

During the Tuesday meeting with House Minority Leader Nancy Pelosi (D-CA) and Chuck Schumer (D-NY), Trump said he could easily have a bill passed by the house – to which Pelosi shot back “Then do it!

Chuck Schumer later dug his heels in on the Senate Floor “I want to be crystal clear. There will be no additional appropriations to pay for the border wall. It’s done.

Instead, Schumer said Democrats would pass a yearlong stopgap bill which would fund the Department of Homeland Security – or a measure funding all the departments and agencies covered by seven unfinished appropriations bills; both options which would keep the border wall funding a $1.3 billion.

With the two sides at an impasse, it appears that the partial shutdown is a foregone conclusion unless someone blinks.

There is no discernable plan. None that’s been disclosed,” said #2 Senate Republican John Cornyn of Texas. “Everybody’s looking to [Trump] for a signal about what he wants to do. So far, it’s not clear.”

In a sign that the GOP is having issues coordinating a plan, majority Whip Steve Scalise (R-LA) announced on Thursday that the House would advance a bill with Trump’s $5 billion wall request – however House Majority Leader Kevin McCarthy (R-CA) didn’t seem to know anything about it. “I didn’t hear him say that. … Interesting,” said McCarthy when asked about it by a reporter.

Other Republicans expressed frustration with the impasse, with Senate Appropriations Committee Chairman Richard Shelby (R-AL) suggesting that the House’s failure to pass a bill was a significant problem. “That’s a central question,” said Shelby. “We’re at an impasse and at the moment it doesn’t look like things are getting any better.”

“This is a case where I think people are putting their political interests ahead of the best interests of the American people. The best interest of the American people is for the government to function smoothly,” said Rep. Tom Cole (R-OK), who sits on the House Appropriations Committee. “I personally don’t think a government shutdown will work,” he added.

Senate Majority Leader Mitch McConnell (R-KY), meanwhile, has expressed privately that he strongly wants to avoid a shutdown. “He has zero interest in going through a government shutdown,” said Sen. Shelley Moore Capito (R-WV) – chairwoman of the Senate Homeland Security Appropriations Subcommittee.

Rep. Patrick McHenry (R-N.C.), the chief deputy whip, asked whether the GOP would gain leverage by passing the funding bill with $5 billion in wall funding, said he wasn’t sure it was in the House GOP’s interest to send the bill to the Senate if it couldn’t get through that chamber.

Ok, so it’s December after the election. We shouldn’t be here for show, we should be here to get our work done and get out of here,” he told reporters Wednesday evening. “We have to look at where we are in this process and what is the additive piece here: Is it the stay and wait or is it to take action? So those two things matter for a call like this.” –The Hill

“We need to secure our borders, I support that, I support the president, but at some point and time we need to get things done,” said Rep. Paul Mitchell (R-MI)

The House held its last vote of the week Thursday and won’t be back until next Wednesday – two days before the government shutdown deadline.

With Congress and Trump already having approved funding bills for 75% of the $1.2 trillion operating budget for federal agencies, the remaining 25% would be subject to the shutdown.

Source: Congressional Budget Office

Notes: Based on House subcommittee allocations. Numbers reflect regular discretionary appropriations subject to spending caps and exclude overseas contingency operations funding. Via BloombergAs we noted on Wednesday, among the agencies which would be affected by the partial shutdown are Homeland Security – although several of the agency’s law enforcement components would continue to operate as usual as they are considered essential, according to Bloomberg.

At the Department of Homeland Security, the overwhelming majority of border patrol, emergency management and immigration enforcement staff would be able to keep doing their jobs, though with their pay delayed.

At the Department of Housing and Human Development, on the other hand, 87 percent of the agency’s 7,800 employees would be sent home. The Treasury Department is among agencies that would furlough workers. Its biggest component is the Internal Revenue Service and most of its employees wouldn’t report to work because it’s not tax season. Environmental Protection Agency employees would also be furloughed. –Bloomberg

National parks would remain open, however park staff would be sent home.

The Securities and Exchange Commission (SEC) would be forced to halt new investigations unless they are needed “for the protection of property.”

The Defense Department, of course, is fully funded and would operate as usual.

An estimated 400,000 federal employees would work without pay and 350,000 would be furloughed, according to a congressional Democratic aide. The essential employees who work during a shutdown are paid retroactively when the government reopens and payroll operations resume. After previous shutdowns, Congress also has passed legislation to retroactively pay furloughed workers. –Bloomberg

That said, it’s possible that lawmakers could agree on another short-term funding bill that would last into January, or perhaps they would reach a deal that allows all sides to prevail.

SWAMP STORIES/MAJOR STORIES//THE KING REPORT
AND SPECIAL THANKS TO CHRIS POWELL OF GATA FOR SENDING THIS TO US:
Law professor Margot Cleveland’s analysis shows someone at the FBI or SCO created multiple 302s for Flynn’s FBI interrogation, “which may indicate they’re hiding the truth.”
 
Specifically, on February 14, 2017, Strzok texted Page, “Also, is Andy good with F 302?” Page responded, “Launch on f 302.” Given Strzok’s role in the questioning Flynn, the date (three weeks from the interview), the notation “F 302,” and Page’s position as special counsel to Andrew McCabe, it seems extremely likely that these text exchanges concerned a February 2017, 302 summary of the Flynn interview.  Additionally, now that we know from the sentencing memorandum that the special counsel’s office has tendered a 302 interview summary dated August 22, 2017, we can deduce that an earlier 302 form existed from James Comey’s Friday testimony before the House judiciary and oversight committees…
    President Trump fired Comey on May 9, 2017, so the 302 of the Flynn interview Comey read must have been written before then. Why then was a new 302 drafted on August 22, 2017And by whom?…
     What motivated [Judge] Sullivan is unclear, but his experience in the Stevens’ case was a likely trigger. In that case, the government withheld 302s, didn’t include exculpatory statements in the 302s, and did not create a 302 for an interview that “didn’t go very well,” from the prosecution’s standpoint. Sullivan likely wants to assure himself that the Flynn case isn’t a copycat of the political targeting of Stevens from a decade ago…
    Of course, this all assumes that the special counsel’s office still has copies of the initial 302s created, which might not be the case given that when Mueller’s “pitbull,” Andrew Weissmann, led the Enron Task Force, his team, among other things, systematically destroyed draft 302s.
 
Margot Cleveland: Does Robert Mueller’s Lead Prosecutor Have a History of Ethics Violations?
Both The Federalist’s Mollie Hemingway and former federal prosecutor Sidney Powell have exposed Weissmann’s reckless win-until-reversed modus operandi that has destroyed countless lives. Weissmann’s tactics sent four Merrill Lynch executives to prison, until a federal appellate court overturned their convictions and freed the men—but not before upending their lives…
      Also, Weissmann’s prosecution of former accounting giant Arthur Andersen for its role in the Enron collapse shuttered the firm, leaving tens of thousands of people unemployed.Several years later the Supreme Court unanimously reversed the Arthur Andersen conviction, but it was too late by then to undo the harm Weissmann had caused…
    Given Weissmann’s role in the politically charged special counsel investigation, reports that he improperly spoke with reporters about the Manafort investigation, and information indicating that Ohr updated Weissmann about the Steele dossier, it is imperative to know whether Weissmann also has a history of prosecutorial misconduct. That is why I asked a federal court in the Southern District of Texas to unseal and unredact the relevant court records..
 
[DoJ] Report of Investigation: Recovery of Text Messages from Certain FBI Mobile Devices
The Department of Justice Office of the Inspector General (OIG) initiated this investigation upon being notified of a gap in text message data collection during the period December 15, 2016, through May 17, 2017, from Federal Bureau of Investigation mobile devices assigned to FBI employees Peter Strzok and Lisa Page relevant to a matter being investigated by the OIG’s Oversight and Review Division. Specifically, the OIG’s Cyber Investigations Office was asked to attempt recovery of these missing text messages for the referenced period from FBI issued mobile devices issued to Strzok and Page…
    The SCO [Mueller] obtained the iPhone from that individual and provided it to the 010. CYB ER obtained a forensic extraction of the iPhone previously assigned to Strzok; however.This iPhone had been reset to factory settings and was reconfigured for the new user to whom the device was issued. It did not contain data related to Strzok’s use of the device. SCO’s Records Officer told the 010 that as part of the office’s records retention procedure, the officer reviewed Strzok’s DOJ issued iPhone after he returned it to the SCO and determined it contained no substantive text messages…
    Through the extraction of text messages from the enterprise.db database, the OIG recovered 74,385 lines of text messages from Strzok’s phone and 52,39S lines of text messages from Page’s phone. These text messages included those between Stnok and Page as well as those that they had with other individuals…    https://oig.justice.gov/reports/2018/i-2018-003523.pdf
 
@julie_kelly2: Short version: Mueller’s Office scrubbed clean both Strzok and Page’s phones. Reset to factory settings. SCO also didn’t know who handled Page’s device after she left in July 2017. SCO records officer said she doesn’t recall whether there were ANY texts on Strzok’s phone…
     So SCO fires Strzok in August after DOJ finds biased texts btw Page and Strzok. A month later – presumably knowing Congress will investigate the text exchanges – Mueller’s office wipes clean Strzok’s phone and claims there were no texts contained on the device.
 
@JordanSchachtel: Peter Strzok was removed from the Mueller probe BECAUSE of his inappropriate and politically biased texts. Now Mueller is saying that they weren’t an issue and that’s why his people deleted all of his messages before OIG could see them. Not buying it.
 
Why would Mueller scrub/reset Page and Strzok’s phones?  What constitutes obstruction of justice and the destruction of evidence?  Can you say ‘cover up’?
 
@realDonaldTrump: They gave General Flynn a great deal because they were embarrassed by the way he was treated – the FBI said he didn’t lie and they overrode the FBI. They want to scare everybody into making up stories that are not true by catching them in the smallest of misstatements. Sad!……
 
@RealCandaceO: Congress has a slush fund, made up of tax dollars, that is used to pay off & silence their alleged sexual assaults and affairsTo date, over 200 million dollars in 200 settlements have been paid since 1998.  But tell us more about Trump’s possible campaign finance violations…
 
Financial Bounty Hunters Testify: Clinton Foundation Operated As Foreign Agent
The Clinton Foundation operated as a foreign agent ‘early in its life’ and ‘throughout its existence’ and did not operate as a 501c3 charitable foundation as required by its and is not entitled to its status as a nonprofit, stated two highly qualified forensic investigators, accompanied by three other investigators, said in explosive testimony Thursday to the House Oversight and Government Reform Committee…
    Utah Attorney General John Huber, appointed by former Department of Justice Attorney General Jeff Sessions to investigate the Clinton Foundation and the issues surrounding the approval to sell 20 percent of U.S. Uranium assets to Russia, declined to attend the hearing…
 
@gatewaypundit: HUGE! Clinton Foundation Witnesses Say Huber Team LOST THEIR Evidence — Had to Send It THREE TIMES — Only Interested Cuz of Today’s Hearing    https://www.thegatewaypundit.com/2018/12/huge-clinton-foundation-witnesses-say-huber-team-lost-their-evidence-had-to-send-it-three-times-only-interested-cuz-of-todays-hearing-video/
 
‘Give us $50,000 each to go home’: Caravan migrants march to the US consulate in Tijuana, Mexico, demanding US government let them in or pay them off
 
OMG! Now California wants to tax text-messaging? – State regulators say surcharge on text messaging would help fund programs that make phone service accessible to the poor

 

-END-

Let’s close out the week with this offering courtesy of Greg Hunter of USAWatchdog

(courtesy Greg Hunter)

Clinton Charity Not a Charity? Fed $ Trouble and USA Oil Boom

By Greg Hunter On December 14, 2018 In Weekly News Wrap-Ups

By Greg Hunter’s USAWatchdog.com (WNW 364 12.14.18)

In Congressional hearings on Capitol Hill today, financial experts testified about the wrongdoings of the Clinton Foundation. One of the many big bombs dropped was the fact that the original Clinton charity was only for the Clinton Library. The original function of that charity was never modified as required by law to remain a charity. So, it appears the “Clinton Global Initiative,” and everything else that was not library related, never did the proper filings to be a charity. There were also allegations of “pay to play” by foreign governments like Russia, and we also found out there was an ongoing FBI investigation into the Clintons and their “charity.”

The Federal Reserve has been hiking rates and, because of that, its $4.1 trillion in bonds lost a reported $66 billion. Does this mean trouble for the Fed? Are there going to be more calls to audit the Fed? Is the Fed going to do something about the flattening yield curve that is signaling recession? These are all good questions.

The USA is now a top oil and natural gas producer and is on its way to, not only energy independence, but will be a net oil and natural gas exporter. There was a huge oil and natural gas find in Texas and New Mexico recently that goes along with the good energy picture created by Trump Administration policies.

Join Greg Hunter as he looks at these stories and more in the Weekly News Wrap-Up.

(To Donate to USAWatchdog.com Click Here)

After the Interview:

Top former Fed official Danielle DiMartino Booth will be the guest for the Early Sunday Release. She will talk about the Fed raising interest rates and give her 2019 predictions for the global economy.

Video Link

https://usawatchdog.com/clinton-charity-not-a-charity- fed-trouble-and-usa-oil-boom/

I WILL YOU ON MONDAY
H
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: