JAN 10/ALGOS JUICE THE DOW: UP 122 POINTS AND THE NASDAQ UP 29 POINTS/GOLD DOWN $4.00 TO $1287.00/SILVER DOWN 11 CENTS TO $15.59/QUEUE JUMPING RETURNS TO THE COMEX FOR BOTH GOLD AND SILVER AS THE CROOKS NEED TO FIND PHYSICAL /HUGE ESCALATION WITH THE CHINESE AS THE USA SLAPS AN EXPORT BAN ON A HUAWEI SUBSIDIARY/POOR NUMBERS FROM CHINA SHOWING DEFLATION GRIPPING THE NATION/CHINA REPORTS A HUGE DOWNDRAFT IN CAR SALES FOR THE FIRST TIME/ITALY’S SALVINI MEETS WITH POLISH LEADER TO FORM AN ALLIANCE OF EUROSCEPTICS/FORD INTERNATIONAL TO SHUT DOWN PLANTS AND LET GO THOUSANDS OF JOBS/BRAZIL IN CHAOS TODAY/MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

GOLD: $1287.00 DOWN $4.00 (COMEX TO COMEX CLOSINGS)

Silver:   $15.59 DOWN 11 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1286.20

 

silver: $15.55

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 36 NOTICE(S) FOR 3600 OZ (0.1119 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  480 NOTICES FOR 48000 OZ  (1.493 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

124 NOTICE(S) FILED TODAY FOR  620,000  OZ/

 

total number of notices filed so far this month: 444 for 2,220,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $3582:  DOWN 382

 

Bitcoin: FINAL EVENING TRADE: $3582  down 382 

 

end

 

XXXX

JPMorgan or Goldman Sachs are taking a huge issuance (stopping) of gold at the comex.

today 26/36

EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,289.300000000 USD
INTENT DATE: 01/09/2019 DELIVERY DATE: 01/11/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
624 C MERRILL 1
657 C MORGAN STANLEY 3
657 H MORGAN STANLEY 5
661 C JP MORGAN 26
737 C ADVANTAGE 19 6
800 C RCG 12
____________________________________________________________________________________________

TOTAL: 36 36
MONTH TO DATE: 480

 

 

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST ROSE BY AN CONSIDERABLE SIZED  2107 CONTRACTS FROM 186,506 UP TO 188.613 WITH YESTERDAY’S  4 CENT GAIN IN SILVER PRICING AT THE COMEXTODAY WE ARRIVED SLIGHTLY CLOSER TO  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 22 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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

4419 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 4419 CONTRACTS. WITH THE TRANSFER OF 4419 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 4419 EFP CONTRACTS TRANSLATES INTO 22.09 MILLION OZ  ACCOMPANYING:

1.THE 4 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

 21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

AND NOW: INITIALLY 5.190 MILLION OZ STAND IN JANUARY.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY: 21,683 CONTRACTS (FOR 7 TRADING DAYS TOTAL 21,683 CONTRACTS) OR 108.41 MILLION OZ: (AVERAGE PER DAY: 3097 CONTRACTS OR 15.488 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  108.41 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 15.42% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2019 TO DATE SILVER EFP’S:           108.41    MILLION OZ.

 

 

 

RESULT: WE HAD A CONSIDERABLE SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 2107 WITH THE 4 CENT GAIN IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 4419 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 GIGANTIC SIZED: 6526 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 4419 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 2107 OI COMEX CONTRACTSAND ALL OF THIS  DEMAND HAPPENED WITH A 4 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.70 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. .896 BILLION OZ TO BE EXACT or 128% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED AT THE COMEX: 124 NOTICE(S) FOR 620,000 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./ DEC. AT 21.925 MILLION OZ  AND NOW JANUARY AT  5.190 MILLION OZ.
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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

 

IN GOLD, THE OPEN INTEREST ROSE BY A HUGE 9,711 CONTRACTS UP TO 464.943 WITH THE GAIN IN THE COMEX GOLD PRICE/(A RISE IN PRICE OF $6.00//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 7454 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 7454 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 464.943. 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 AN ATMOSPHERIC SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 17,165 CONTRACTS: 9711 OI CONTRACTS INCREASED AT THE COMEX AND 7454 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN:  17165 CONTRACTS OR 1,716,500 OZ = 53.39 TONNES. AND ALL OF THIS VERY GOOD DEMAND OCCURRED WITH A GAIN IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF  $6.00

 

 

 

 

YESTERDAY, WE HAD 8444 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 61,277 CONTRACTS OR 6,127,700 OZ  OR 190.59TONNES (7 TRADING DAYS AND THUS AVERAGING: 8753 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 7 TRADING DAYS IN  TONNES: 190.59 TONNES

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

THUS EFP TRANSFERS REPRESENTS 190.59/2550 x 100% TONNES = 7/47% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     190.59  TONNES

 

 

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

Result: A HUGE SIZED INCREASE IN OI AT THE COMEX OF 9711 WITH THE GAIN IN PRICING ($6.00) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A VERY HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7454 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 7454 EFP CONTRACTS ISSUED, WE HAD A GIGANTIC GAIN OF 17,165 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

7454 CONTRACTS MOVE TO LONDON AND 9711 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 53.39 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE GAIN OF $6.00 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had: 3notice(s) filed upon for 3600 oz of gold at the comex.

 

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

GLD...

 

WITH GOLD DOWN $4.00 TODAY 

NO CHANGES IN GOLD INVENTORY AT THE GLD/

 

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   799.18 TONNES

Inventory rests tonight: 799.18 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 11 CENTS  TODAY:

 

 

NO CHANGES IN SILVER INVENTORY/

 

 

 

/INVENTORY RESTS AT 313.632 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER ROSE BY A CONSIDERABLE SIZED 2107 CONTRACTS from 186,506 UP TO 188,613  AND MOVING CLOSER TO 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:

 

4419 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 4419 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 2107 CONTRACTS TO THE 4419 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A HUGE GAIN  OF 6526  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 32.63 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.  21.925 MILLION OZ  STANDING IN DECEMBER AND 5.190 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A CONSIDERABLE SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 4 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER STRONG SIZE 4419 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)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 9.25 PTS OR 0.36% //Hang Sang CLOSED UP 59.11 POINTS OR 0.22% /The Nikkei closed DOWN 263.26 POINTS OR 1.29% / Australia’s all ordinaires CLOSED UP 0.27%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7851 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 50.91 dollars per barrel for WTI and 59.71 for Brent. Stocks in Europe OPENED GREEN 

//ONSHORE YUAN CLOSED UP AT 6.7851 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7861: 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

 

 

i)North Korea/South Korea/USA/CHINA

 

 

 

b) REPORT ON JAPAN

 

 

 

3 C/  CHINA

i)CHINA/USA

Huge escalation:  the USA slaps an export ban on a Huawei Silicon Valley subsidiary (Futurewei). The USA is continuing in its effort to extradict Meng to the USA to face charges.  She is hopelessly guilty of selling to Iran etc.

( zerohedge)

ii)CHINA/USA

If Trump’s attack on China, we now witness Chinese money flee starts up in the uSA tech industry
( zerohedge)

iii)Another indicator of poor growth in China:  car sales collapse to its first annual drop in 20 years

( zerohedge)

iv)CHINA
As expected, deflation is ripping China apart.  Chinese factory price gains plunge the most since 2010 as their economy grinds to a halt.
(courtesy zerohedge)

v)Another indicator of poor growth in China:  car sales collapse to its first annual drop in 20 years

( zerohedge)

vi)Graham Summers gives a short but excellent analysis of what is going on inside China right now with their huge debt.  It is a black swan and nobody is talking about it except Kyle Bass and Summers
a must read..
( Graham Summers

 

 

4/EUROPEAN AFFAIRS

 

i)ITALY/POLAND

this is big:  Salvini is set to meet Poland’s leader Kaczynski with the possibility of creating an “eurosceptic alliance” that will participate in the European Parliamentary elections in May

(courtesy zerohedge)

ii)HUNGARY/FRANCE/ITALY

Hungary’s Orban slams Macron in his bid in bringing in Muslims into Europe. Orban will fight him tooth and nail

( zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)TURKEY/USA/RUSSIA

Turkey now seeks co ordination with Iran and Russia on the USA exit.  Bolton is humiliated

( zerohedge)

 

 

 

6. GLOBAL ISSUES

i) Ford /global

 

Another indicator of global growth stuttering:  Ford is to cut thousands of European jobs and close factories in a major restructuring

( zerohedge)

ii)Canada/China

Canada has certainly got itself into a mess dealing with China on the Meng (Huawei affair). There is no doubt that Huawei did conduct operations with Iran selling USA technology to Iran.  China has arrested two Canadian diplomats and these guys will not be released.  Now China is accusing the Canadians of “white supremacy” over the prosecution of Meng

( zerohedge)

7. OIL ISSUES

The Nord Stream 2 is losing support in Germany.  Is Germany turning to the uSA for expensive LNG?

or will Germany go the TurkStream project

(courtesy Nick Cunningham/OilPrice.com)

 

 

8 EMERGING MARKET ISSUES

i)Brazil

Brazil in complete chaos

( zerohedge)

 

 

9. PHYSICAL MARKETS

i)USA gold sees that the environment for gold is improving

( USAgold/GATA)

 

ii)the Tanzania’s President Magufuli saw the light and ordered his central bank to create a gold reserve by buying the gold they produce and also buying gold form foreign sources.

(Agence France-Press/GATA)

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

 

 

MARKET TRADING

ii)Market data/

iii)USA ECONOMIC/GENERAL STORIES

a)Jeffrey Snider catches the key phrases in the minutes of the FOMC in contrast to the verbiage spilled by Powell.  They are polar opposite. Inflation expectations are muted and the economy is not strong at all.  As Snider pounds the table:
” Policymakers really have no idea what they are doing and that’s what’s being exposed. I expect that over the coming months policymakers here and elsewhere are going to really regret overhyping 2017’s small economic uptick. Market reaction, more than what’s already at stake, might not be muted.”
always pay special attention to what Jeffrey says:
(courtesy Jeffrey Snider/Alhambra Investment Partners)

b)BRICK AND MORTAR operations continue to plummet.  Today Macy’s plummets 17% after cutting guidance.(courtesy zerohedge)

c)we have been highlighting this to you on several occasions.  It seems that the next crisis will occur when the high yield bond portfolio’s blow up with nobody out there willing to buy the crap

a must read…
(courtesy James Rickards/Daily Reckoning)

iv)SWAMP STORIES

a)Trump is showing no signs of retreat:  He accuses Shumer of lying.  He also states that there is great unity in the republican party for border security

( zerohedge)

b)The Democrats are set to grill Mnuchin over Russian oligarch Deripaska who is an FBI asset.

totally nuts…

(courtesy zerohedge)

c)One complete joke:  Michael Cohen to publicly testify before congress about his work for Trump
(courtesy zerohedge)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  ROSE BY A GIGANTIC SIZED 9711 CONTRACTS UP TO A LEVEL OF 464,943 WITH THE GAIN IN THE PRICE OF GOLD ($6.00) 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  NON ACTIVE DELIVERY MONTH OF JANUARY..  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 7454 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  7454 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  7454 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:  17,165 TOTAL CONTRACTS IN THAT 7454 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A CONSIDERABLE SIZED 9711 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 17,165 contracts OR 1,716,500  OZ OR 53.39 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 132 contracts as we GAINED 33 contracts. We had 46 notices filed on yesterday so we gained 79 contract or A HUGE ADDITIONAL  7900 oz will stand for delivery as these guys refused to morph into London based forwards as well as negate a fiat bonus. QUEUE JUMPING RETURNS IN EARNEST TO THE COMEX GOLD COMPLEX.

 

 

The next active delivery month is February and here the OI lost by 3979 contracts DOWN to 273,028 contracts.  After February, March LOST 28 contracts to stand at 444.  After March, the next big delivery month is April and here the OI rose by 9918 contracts up to 108,610 contracts.

 

 

 

FOR COMPARISON TO THE  January 2018 contract month

 

 

ON JANUARY 1/2018: 1.297 TONNES STOOD FOR DELIVERY  (Jan 1 2019 initial standing 1.306 tonnes)

EVENTUALLY ON JAN 31.2018: 2.17 TONNES STOOD FOR DELIVERY AS QUEUE JUMPING STARTED IN EARNEST AT THE GOLD COMEX

 

 

WE HAD 36 NOTICES FILED AT THE COMEX FOR 3600 OZ. (0..1119 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BY A CONSIDERABLE 2107  CONTRACTS FROM 186,506 UP TO 188,613 (AND CLOSER TO 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 4 CENT GAIN IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JANUARY AND THE  AMOUNT OF OPEN INTEREST READY TO STAND IS 718 CONTRACTS HAVING LOST  18 CONTRACTS FROM YESTERDAY.  WE HAD 22 NOTICES FILED ON YESTERDAY, SO WE GAINED 4 CONTRACTS OR  20,000 ADDITIONAL OZ OF SILVER WILL STAND FOR SILVER AS THESE GUYS REFUSED TO MORPH INTO LONDON BASED FORWARDS AS WELL AS NEGATING A FIAT BONUS

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH IS FEBRUARY AND HERE THE OI ROSE BY 14 CONTRACTS DOWN TO 478. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI FELL BY 1073 CONTRACTS UP TO 145.152 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 6675 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  2260 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 4419 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  6675 CONTRACTS...AND ALL OF THIS HUGE DEMAND OCCURRED WITH A 4 CENT GAIN IN PRICING// YESTERDAY

 

 

 

 

 

FOR COMPARISON TO THE COMEX 2017 CONTRACT MONTH AND JANUARY 2018 CONTRACT MONTH

 

 

 

ON FIRST DAY NOTICE JAN 1/2018 CONTRACT MONTH WE HAD A GOOD 2.695 MILLION OZ STAND FOR DELIVERY’

AT THE CONCLUSION OF JAN/2018 WE HAD 3.650 MILLION OZ STAND AS QUEUE JUMPING WAS THE NORM FOR SILVER

.

 

 

 

 

 

 

 

 

We had 124 notice(s) filed for 620,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  178,047 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  296,601  contracts

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

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 10/2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
5477.52 oz
scotia
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
36 notice(s)
 3600 OZ
No of oz to be served (notices)
96 contracts
(9600 oz)
Total monthly oz gold served (contracts) so far this month
480 notices
48,000 OZ
1.4930 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 1 gold withdrawals from the customer account:

i) Out of Scotia:  5477.52 oz of gold was withdrawn from the customer account of Scotia

 

total gold withdrawing from the customer;  5477.52 oz

 

we had 1  adjustment….and this is what I want to see:
i) out of HSBC:  8587.106 oz was adjusted out of the dealer and this landed into the customer and this is no doubt 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 36 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 26 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JANUARY/2018. contract month, we take the total number of notices filed so far for the month (480) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (132 contract) minus the number of notices served upon today (36 x 100 oz per contract) equals 57,600 OZ OR 1.7910 TONNES) the number of ounces standing in this NON  active month of JANUARY

 

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

No of notices served (484 x 100 oz)  + {99)OI for the front month minus the number of notices served upon today (36 x 100 oz )which equals 57,600 oz standing OR 1.7910 TONNES in this NON  active delivery month of JANUARY.

We gained 79 contracts or an additional 7900 oz will stand in this non active month of January as queue jumping resumes at the gold comex.

 

 

 

 

 

THERE ARE ONLY 23.105 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.7910 TONNES STANDING FOR JANUARY

 

 

total registered or dealer gold:  742,826.824 oz or   23.105 tonnes
total registered and eligible (customer) gold;   8,426,283.393 oz 262.09 tonnes

IN THE LAST 27 MONTHS 92 NET TONNES HAS LEFT THE COMEX.

 

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

JAN INITIAL standings/SILVER

JAN 10, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
1,856,441.546oz
CNT
Brinks
HSBC
Scotia

 

 

Deposits to the Dealer Inventory
600,186.700 oz
CNT
Deposits to the Customer Inventory
603,553.600  oz
JPM
No of oz served today (contracts)
124
CONTRACT(S)
620,000 OZ)
No of oz to be served (notices)
594 contracts
2,970,000 oz)
Total monthly oz silver served (contracts) 444 contracts

(2,220,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

we had 0 inventory movement at the dealer side of things

 

total dealer deposits:  nil oz

total dealer withdrawals: 0 oz

we had 1 deposits into the customer account

 

i) Into JPMorgan: 603,553.600  oz

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

JPMorgan now has 147.7 million oz of  total silver inventory or 50.51% of all official comex silver. (147.7 million/293 million)

ii) Everybody else;  zero

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 603,553.600  oz

we had 4 withdrawals out of the customer account:
i) Out of CNT: 595,076.233 oz
ii) Out of Brinks: 600,186.700 oz
iii) Out of HSBC: 603,553.600 oz
iv) Out of Delaware:  57,625.013 oz

 

 

 

 

 

total withdrawals: 1,856,441.546   oz

 

we had 0 adjustment

 

 

 

total dealer silver:  84.233 million

total dealer + customer silver:  292.555 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 124 contract(s) FOR 620,000  oz

To calculate the number of silver ounces that will stand for delivery in JAN., we take the total number of notices filed for the month so far at 444 x 5,000 oz = 2,220,000 oz to which we add the difference between the open interest for the front month of JAN. (718) and the number of notices served upon today (124x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 444(notices served so far)x 5000 oz + OI for front month of JAN( 718) -number of notices served upon today (124)x 5000 oz equals 5,190,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 4 contracts or an additional 20,000 oz will  stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus. QUEUE JUMPING IS NOW THE NORM FOR THE BOTH GOLD AND SILVER AS SUPPLIES DIMINISH.

 

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

TODAY’S SILVER VOLUME:  33,741 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 88,525 CONTRACTS… 

volumes at the comex now increasing for silver

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 88,525 CONTRACTS EQUATES to 442 million OZ  63.2% 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 -3.56-% (JAN 10/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.70% to NAV (JAN 10 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.56%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.09/TRADING 12.63/DISCOUNT 3.49

END

And now the Gold inventory at the GLD/

JAN 10/WITH GOLD DOWN $4.00/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 799.18 TONNES

JAN 9/WITH SILVER UP $6.00/ TWO TRANSACTIONS: a) A TINY WITHDRAWAL OF .25 TONNES TO PAY FOR FEES ETC b) A HUGE DEPOSIT OF 2.65 TONNES INTO THE GLD INVENTORY./INVENTORY RESTS AT 799.18 TONNES

JAN 8/WITH GOLD DOWN $3.70 TODAY, A WITHDRAWAL OF 1.47 TONNES AND THIS GOLD WAS USED IN THE RAID/INVENTORY RESTS AT 796.78 TONNES

JAN 7/WITH GOLD UP $4.45 TODAY: A HUGE DEPOSIT OF 2.94 TONNES OF GOLD ENTERED THE GLD/INVENTORY RESTS AT 798.25 TONNES

JAN 4/WITH GOLD DOWN $8.65 TODAY; NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.31 TONNES

JAN 3/2019/WITH GOLD UP $10.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 795.31 TONNES

JAN 2.2019/WITH GOLD UP $3.35 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 7.64 TONNES/INVENTORY RESTS AT 795.31 TONNES

DEC 31/WITH GOLD DOWN $2.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 28/WITH GOLD UP $2.20 STRANGELY A WITHDRAWAL OF 2.35 TONNES FROM THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 27/WITH GOLD UP $8.65: A MASSIVE 15.88 TONNES WAS ADDED INTO THE GLD/INVENTORY RESTS AT 790.02 TONNES

DEC 26/WITH GOLD UP $0.15: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 24/WITH GOLD UP $15.15: A HUGE DEPOSIT OF 5.00 TONNES INTO THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 21/WITH GOLD DOWN $10.15 TODAY: A HUGE WITHDRAWAL OF 2.65 TONNES/INVENTORY RESTS AT 769.14 TONNES

DEC 20/WITH GOLD UP $11.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY AT 771.79 TONNES

DEC 19/WITH GOLD UP $3.15 TODAY: A HUGE DEPOSIT OF 8.23 TONNES OF GOLD ENTERED THE GLD/INVENTORY RESTS AT 771.79 TONNES

DEC 18/WITH GOLD UP $1.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC  17 WITH GOLD UP $10.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JAN 10/2019/ Inventory rests tonight at 799.18 tonnes

*IN LAST 531 TRADING DAYS: 135.98 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 431 TRADING DAYS: A NET 24.02 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 10/WITH SILVER DOWN 11 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

JAN 9/WITH SILVER  UP 4 CENTS TODAY; A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.126 MILLION OZ/INVENTORY LOWERS TO 313.632 MILLION OZ/???

JAN 8/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.758 MILLION OZ

JAN 7/WITH SILVER DOWN ONE CENT: A HUGE WITHDRAWAL OF 2.347 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 314.758 MILLION OZ/

JAN 4/WITH SILVER DOWN 3 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 317.105 MILLION OZ

JAN 3/2019/WITH SILVER UP 22 CENTS A SMALL CHANGE TODAY: A WITHDRAWAL OF 118,000 OZ TO PAY FOR FEES:  INVENTORY RESTS AT 317.105 MILLION OZ/

JAN 2/2019/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 31/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 28/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 27/WITH SILVER UP 22 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: AN ADDITION OF 94,000 OZ/INVENTORY RESTS AT 317,233

DEC 26/WITH SILVER UP 27 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ

DEC 21/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ/

DEC 20/WITH SILVER UP 4 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.408 MILLION OZ OF SILVER FROM THE SLV/ INV. RESTS AT 317.139 MILLION OZ/

DEC 19/WITH SILVER UP 10 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 751,000 OZ INTO THE SLV./INVENTORY RESTS AT 318.547 MILLION OZ/

DEC 18/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/

DEC 17/WITH SILVER UP 13 CENTS TODAY/ A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 939,000 OZ FROM THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/.

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/

 

 

JAN 10/2019:

 

Inventory 313.632 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 2.34/ and libor 6 month duration 2.87

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

G0LD LENDING RATE: + .53

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.63%

LIBOR FOR 12 MONTH DURATION: 3.03

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.40

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Blackrock Say G

 

* * *

GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER

USA gold sees that the environment for gold is improving

(courtesy USAgold/GATA)

USAGold’s January letter sees environment supporting gold prices

 Section: 

12:39p ET Wednesday, January 9, 2019

Dear Friend of GATA and Gold:

USAGold’s News & Views newsletter notes that even as two of the three top gold-producing countries are withholding their production for domestic reserves, gold production in the rest of the world is declining and demand is increasing.

Meanwhile financial markets around the world are engulfed by volatility.

This, News & Views observes, is an environment that seems likely to be supportive of the monetary metal’s price.

The January edition of the newsletter is posted at USAGold here:

http://www.usagold.com/publications/NewsViewsJaN19.html

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

END

GATA is a wonderful organization as they are doing their utmost to expose the criminality with the banks.

Of you can, please donate!

(courtesy Chris Powell/GATA)

Will you help GATA reach 100 donors?

 Section: 

1:33p ET Wednesday, January 9, 2019

Dear Friend of GATA and Gold:

GATA’s New Year’s Week fundraising campaign has prompted donations from 96 of the nearly 7,800 people receiving our daily dispatches. That’s a response rate of about 1 percent, which may not be bad for charitable solicitations in this cynical and demoralized age but it might not quite strike terror in the hearts of the central banks that are authorized to create infinite money and deploy it secretly to defeat markets.

Still, we know that central banks are afraid of exposure, because they refuse to answer the critical and specific questions GATA has put to them about their secret interventions. Their market rigging will fail if it is documented and publicized well enough and if news organizations and others in charge of public forums gain the courage to share the documentation and grasp what it means.

… Dispatch continues below

The documentation is available at GATA’s internet site here —

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

— and is always being supplemented. But simply compiling it is not enough. It must be spread by constant agitation and confrontation, and that requires the financial support GATA asks for.

Despite the power of the market-rigging central banks, this struggle is not hopeless. A few million dollars properly deployed in the publicity that mainstream financial news organizations refuse to provide might explode the deception and cheating. But GATA will keep finding ways to make an impact whatever our resources.

So if you have not already contributed, please consider doing so now. As GATA is recognized by the U.S. Internal Revenue Service as a tax-exempt 501-c-3 educational and civil rights organization, contributions are federally tax-deductible in the United States.

Please help us get to 100 donors this week. Visit the donation page of our internet site here:

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

Your donation will go farther still if, whether you donate by check or credit card, you include an e-mail address so we can thank you personally without resorting to stationery and postage.

No contribution is too small. Any contribution will be greater than the indifference GATA has received from Newmont Mining and Barrick Gold, which couldn’t care less how much markets are rigged against their product and their shareholders.

With your help GATA will keep advancing the cause of free and transparent markets, limited and accountable government, and fair dealing among nations.

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

end

the Tanzania’s President Magufuli saw the light and ordered his central bank to create a gold reserve by buying the gold they produce and also buying gold form foreign sources.

(Agence France-Press/GATA)

Tanzania’s president orders central bank to create gold reserve

 Section: 

From Agence France-Presse
via The East African, Nairobi, Kenya
Wednesday, January 9, 2019

Tanzanian President John Magufuli today ordered the central bank to create a gold reserve, as he urged the government to better control mineral exports from the country, Africa’s fourth largest gold producer.

… 

 

We should start buying gold,” Magufuli said at a ceremony in Dar Es Salaam. “The central bank must invest in this. We must have our reserves in dollars but also our reserves in gold, because gold is money.”

Magufuli is intent on regulating his country’s mining sector, which has faced allegations of fraud and underreporting of production and profits, and has locked horns with foreign mining companies. …

… For the remainder of the report:

https://www.theeastafrican.co.ke/business/Tanzania-john-magufuli-orders-…

* * *





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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

-END-

Ted Butler..

 

Questions Only the DOJ Can Get Answered

Theodore Butler | January 10, 2019 – 8:30am

Reasonable questions should be answered reasonably. When such questions cannot be answered reasonably or at all, particularly by those with a responsibility for answering, something is wrong. A good number of such questions remain unanswered in silver and those not providing answers include the federal commodities regulator (the CFTC), the designated self-regulator (the CME Group), as well as the most important bank in the US, JPMorgan.

What constitutes a reasonable question in silver? I would define questions to be reasonable if they encompass occurrences known to be unprecedented either in silver or in any other market and in which the questions have been repeatedly asked, yet remain unanswered. To be sure, there are several such unanswered questions in silver that date back as long as a decade; each one of which stands out in terms of potential significance, but taken together point to something being seriously out of kilter in the silver market.

Standing in the way of the questions being answered is that those who know, or should know the answers, just won’t provide the answers. But now the Department of Justice has burst upon the silver scene by virtue of its Nov 6 announcement of a criminal guilty plea for manipulation on the COMEX by a long time former trader for JPMorgan, as well as its clear statement that it is immersed in an ongoing investigation. Overnight, the prospects for the previously unanswered questions finally being addressed have greatly improved. Make no mistake, if the Justice Department asks the right questions, the ongoing silver manipulation will come to a screeching halt.

https://www.justice.gov/opa/pr/former-precious-metals- trader-pleads-guilty-commodities-fraud-and-spoofing- conspiracy

But if the Justice Department doesn’t ask the right questions, it may miss the financial crime of all time. In order to prevent what would be a great miscarriage of justice, allow me to suggest the questions that should be asked by the Justice Department of those who hold the answers, but have refused to answer, namely, the CFTC, the CME Group and JPMorgan, along with others.

1. How could it be legitimately possible for JPMorgan to never have taken a loss and only achieved profits when adding to COMEX silver short futures positions since March 2008? All told, since then, JPMorgan has amassed at least $3 billion in cumulative realized profits in trading COMEX silver futures from the short side. Is such an unprecedented feat possible in a market that wasn’t rigged?

2. How could it be legitimately possible for JPMorgan to amass, since April 2011, the largest physical stockpile of silver in history while at the same time being the predominant and controlling short holder of COMEX futures contracts? All told, JPMorgan has accumulated 150 to 180 million ounces of silver in its own and other COMEX- approved silver warehouses and as much as 650 million ounces away from the COMEX warehouse system.

3. Was JPMorgan the biggest buyer, either directly or through intermediators, of US Silver Eagles from the US Mint from 2011 through 2016, completely misusing the bullion coin program intended for retail coin collectors to its own advantage? Was JPMorgan the biggest buyer of Canadian Silver Maple Leafs over this time?

4. Was JPMorgan the architect and initiator of the unprecedented physical movement of metal that commenced in April 2011 and that has continued to this day in the COMEX-approved silver warehouses? Why does this physical movement exist only in COMEX silver warehouse inventories and in no other commodity? Since April 2011, more than 1.5 billion ounces of silver have been physically moved in and out from six COMEX-approved silver warehouses. Why?

5. Has JPMorgan used its position as custodian of the largest silver Exchange Traded Fund, SLV, as well as the leading Authorized Participant of the trust to accumulate physical silver clandestinely through share for metal conversions? Physical metal holdings are not required to be publicly disclosed and, in addition, JPMorgan is the master at concealing that which it doesn’t wish to be disclosed. Only the Justice Department can determine what JPMorgan holds or doesn’t hold in terms of physical silver.

You’ll note that all five questions involve JPMorgan’s dealings in silver and it’s no secret that is why I believe the bank is the prime manipulator of silver. Not being able to elicit responses from the bank or its primary regulators, the CFTC or the CME, it would be easy and highly appropriate for the Justice Department to demand answers. After all, the Justice Department is investigating JPMorgan’s role in a silver manipulation (by virtue of its Nov 6 announcement) and it would be a shame if the only focus was on spoofing, which is just a tool of the manipulators.

At a minimum, if I am falsely maligning JPMorgan for alleging that it is manipulating the silver market, I should be made to stop. But if my allegations are close to being accurate (as I know them to be), then the bank has been involved in the most egregious market manipulation of all time. Either way, the Justice Department can settle the issue once and for all time by demanding that these questions be answered.

It has now been two months since the DOJ’s announcement on Nov 6 of the guilty plea and ongoing investigation and three months since the plea was first recorded and sealed on Oct 9. Obviously, the Justice Department had to be pursuing the matter for several months prior to the sealed guilty plea. Therefore, the Justice Department has spent the better part of 2018 looking into the matter of a COMEX silver manipulation. No entity is better equipped for such a task than the Justice Department.

Having raised the issue of a silver manipulation for more than 30 years and the specific allegation that JPMorgan was the main manipulator since 2008, there would be something wrong if I didn’t feel the involvement of the Justice Department was the most important development I have seen over both time periods. I have petitioned the CFTC and the CME for decades to no avail. It may turn out that I am putting too much faith in the Justice Department for confirming my allegations, but it is at the very pinnacle of a regulatory food chain that doesn’t go any higher. It would be unreasonable not to have faith that the DOJ will do the right thing.

Ted Butler

January 10, 2019

www.butlerresearch.com

 

 

 

Your early THURSDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

i) Chinese yuan vs USA dollar/CLOSED UP TO 6.7851/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.7861   /shanghai bourse CLOSED DOWN 9.25 PTS OR 0.36%

 

HANG SANG CLOSED UP 59.11 POINTS OR 0.22%

 

 

2. Nikkei closed DOWN 263.26 POINTS OR 1.29%

 

 

 

 

3. Europe stocks OPENED ALL RED EXCEPT SPAIN

 

 

 

 

 

 

/USA dollar index RISES TO 95.29/Euro FALLS TO 1.1535

3b Japan 10 year bond yield: FALLS TO. +.02/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.91/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 51.96 and Brent: 61.20

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.26%/Italian 10 yr bond yield UP to 2.91% /SPAIN 10 YR BOND YIELD DOWN TO 1.45%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.65: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.29

3k Gold at $1294.40 silver at:15.75   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 37/100 in roubles/dollar) 67.34

3m oil into the 51 dollar handle for WTI and 61 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.08 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9771 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1272 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 2.70% early this morning. Thirty year rate at 3.01%

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

6.  TURKISH LIRA:  UP  TO 5.4464

 

 

 

Stock Rally In Peril As Markets Slide On Lack Of Trade Deal, Dismal Data

The sharpest stock market rally in the past decade, which started with the Steve Mnuchin call to the Plunge Protection Team on Christmas Eve and resulted in a 10% gain in two weeks, is in danger of falling apart this morning as a result of disappointment from the failure of the latest round of US-China trade talks to reach any tangible agreement coupled with dismal Chinese inflation numbers released overnight.

With S&P futures sliding 0.5%, and European and Asian markets sliding, it is a day of reversals in global markets as the new-year rally has stalled, while the dollar rebounded and oil dropping for the first time in two weeks.

Today’s decline follows four consecutive daily gains for the S&P 500 which is something the index hasn’t seen since September, and the rally of +5.60% over that stretch is the best such four-day performance since August 2015. Buying continued to be broad based, with 68% of S&P 500 companies advancing, though equities did fade off their intraday highs as acrimony between President Trump and Congressional Democrats intensified. In a highly-anticipated meeting between the two sides, President Trump walked out of the meeting, calling it “a total waste of time.” So the federal shutdown is set to continue.

Following a vague statement from the USTR after the conclusion of trade talks in Beijing, China said the three days of talks in Beijing had established a “foundation” to resolve the two country’s differences, but gave virtually nothing in the way of details on key issues at stake.  The “nothingburger” was confirmed when China’s Mofcom issued a statement on trade talks in which it stated that China and US agree to continue close communication on trade and that sides had “broad, deep and detailed” communication. Furthermore, Mofcom said that talks promoted mutual understanding and established a foundation for resolution of each other’s concerns, while both sides agreed to maintain close contact.

Additionally, a slew of weak data also dampened the mood when China reported the lowest wholesale inflation in more than two years, the 6th consecutive month of declines…

while worse-than-expected industrial figures in France provided more proof that Europe is spluttering again.

After last Friday’s surprisingly dovish Powell statement, the Fed Chair takes to the podium for the second time in a week when he addresses the Economic Club of Washington later today; separately, Richmond Fed President Thomas Barkin (non-voter, moderate hawk), St. Louis Fed President James Bullard (voter, dove), Chicago Fed President Charles Evans (voter, moderate dove) and Minneapolis Fed President Neel Kashkari (alternate voter, dove) speak.

Meanwhile, concern surrounding the partial government shutdown in America continues to weigh on sentiment ahead of earnings season: Trump stormed out a meeting with top Democrats on Wednesday, confirming that the current government shutdown episode is set to at least tie the longest on record when it hits 21 days tomorrow.

As Bloomberg notes, investors may well be catching their breath after recent rapid gains, while the lack of any concrete details from trade discussions between China and the U.S. meant there was no fresh catalyst to sustain momentum. Futures for the S&P 500, Dow Jones and Nasdaq all slumped after the four straight gains.

Stoxx Europe 600 Index erased most of Wednesday’s advance, and dropped 0.7%, led lower by carmakers as Germany’s trade-sensitive DAX dropped 0.8% and Britain’s FTSE 100 fell 0.5% on persistent Brexit concerns.

I am beginning to get a little concerned about the path of the European industrial data,” State Street Global Markets’ head of strategy, Michael Metcalfe, said. “It is raising the possibility of a technical recession in Europe. One of the big challenges is that if this is replicated in Italy’s data tomorrow, that potentially brings the budget questions back into the market’s thoughts.”

Earlier, Asian shares had edged up overnight on the weaker dollar and hopes of more economic stimulus in China following its latest data disappointment. But many stocks seesawed, and Tokyo and Shanghai both closed lower as markets finally grasped that the trade talks were a dud. Japanese stocks paced declines across much of Asia dragged lower by a sharp slide in the USDJPY, though the MSCI Asia Pacific Index was down only marginally.

The soured sentiment saw the normal move into safe-haven government bonds with yields on German and French and government bonds dropping again toward recent two-year lows.  U.S. Treasury yields last stood at 2.657 percent, down from 2.710 percent on Wednesday when Fed minutes showed policymakers were becoming more cautious about future rate hikes.

The dollar rebounded after hitting its lowest level since mid-October. The greenback was flat against the euro at $1.1525. The single currency gained 0.9 percent against the dollar during the previous session, its biggest one-day gain since late June. The pound weakened as British Prime Minister Theresa May mulled options for a Brexit “Plan B.” Gold fluctuated and emerging-market shares climbed.

China’s yuan also muscled higher, breaching the 6.8 per dollar level for the first time since August in both onshore and offshore trade in Asia. “This drop in the dollar is an overdue correction following a surprisingly robust few weeks despite the massive collapse in U.S. rate expectations,” said Ulrich Leuchtmann, currency strategist at Commerzbank.

After entering a bull market following a furious post-Christmas rally, crude fell back $1 having jumped overnight on signs of OPEC-led crude output cuts. Brent crude was last trading 1.4 percent lower at $60.58 a barrel and U.S. WTI was down 1.5 percent at $51.57 cents.

In US political news, the US House voted to approved bill to reopen Treasury Department and several other agencies without border wall money, although the White House had previously threatened to veto the bill. Elsewhere, there were reports that US Republican Senators are said to be planning on courting Democrat senators to reach a deal on border wall.

In the latest Brexit news, UK PM May was said to be mulling supporting an amendment that would keep EU regulations regarding pay and conditions, health and safety as well as environmental standards in an effort to garner support for her Brexit deal. A spokesperson for May later stated that the PM is attempting get further assurances from the EU on her Brexit deal before the conclusion of the debate in Parliament. Spokesperson added that PM is to consider backing Labour MP’s Brexit worker-rights plan. Meanwhile, the Times reported that May’s Brexit approach is seen as being in tatters after Conservative Rebels opened discussions with Labour regarding an alternative to her deal. Finally, UK Labour Leader Corbyn states that a general election should be the priority before a 2nd Brexit referendum and added “Labour will table a motion of no confidence in the government at the moment we judge it to have the best chance of success”.

In geopolitical news, South Korean President Moon said he expects a 2nd Trump-Kim summit soon, However, there were also comments from the South Korea Ambassador to US that US-North Korea nuclear talks have slowed and that it could take years to realize goals in North Korea.

Expected data include jobless claims, while the publication of wholesale inventories is being delayed by the government shutdown. Cogeco Communications and Synnex are reporting earnings

Market Snapshot

  • S&P 500 futures down 0.4% to 2,571.50
  • MXAP down 0.1% to 150.98
  • MXAPJ up 0.3% to 489.22
  • Nikkei down 1.3% to 20,163.80
  • Topix down 0.9% to 1,522.01
  • Hang Seng Index up 0.2% to 26,521.43
  • Shanghai Composite down 0.4% to 2,535.10
  • Sensex down 0.2% to 36,126.07
  • Australia S&P/ASX 200 up 0.3% to 5,795.27
  • Kospi down 0.07% to 2,063.28
  • STOXX Europe 600 down 0.5% to 346.04
  • German 10Y yield fell 1.7 bps to 0.262%
  • Euro down 0.2% to $1.1526
  • Italian 10Y yield fell 7.4 bps to 2.518%
  • Spanish 10Y yield fell 4.5 bps to 1.447%
  • Brent futures down 0.8% to $60.97/bbl
  • Gold spot little changed to $1,292.97
  • U.S. Dollar Index up 0.1% to 95.33

Top Overnight News

  • The Trump administration is pushing for a way to make sure China delivers on its commitments in any deal the two nations reach to defuse a trade war that has roiled financial markets and dimmed the outlook for global growth. China says Beijing talks lay foundation for trade resolution
  • The pound fell against all of its Group-of-10 peers as U.K. Parliamentary debate on May’s deal continues, with Labour leader Jeremy Corbyn due to call for an election if it fails in Jan. 15 vote; gilts rose as disappointing retail sales added to economic slowdown concerns
  • Theresa May is openly contemplating a Brexit “Plan B” amid growing signs the British Parliament will reject the deal she’s reached with the European Union and try to take charge of what happens next
  • U.S. central bankers could place interest rates on hold through March or longer as they wait for clarity on risks to global growth that could affect the U.S. economy. That’s the signal from recent comments by Fed officials, reinforced by minutes of their Dec. 18-19 meeting on Wednesday
  • Chinese policy makers are continuing their piecemeal approach to arresting the slowdown in the world’s second-largest economy, as further details emerged of measures to ensure credit to small businesses and ease their tax burden. China factory prices rise at slowest pace in more than two years
  • Oil stormed back into bull market territory, as investors who’d abandoned crude just a month ago were lured back by an OPEC-led campaign to bring runaway supplies in check
  • The woes for U.K. retailers are mounting as new report suggests that 2018 was their worst Christmas since the financial crisis. Shops saw no growth in sales in December vs year earlier, the worst performance in a decade
  • Norway’s krone advanced after faster-than-forecast inflation data
  • The yen lost some steam in the European session after earlier getting support from a slowdown in Chinese factory prices
  • Australia’s dollar gained for a second day after industry data showed iron ore exports improved last month; the Aussie earlier fell following the China data

Asian stocks were mixed as the equity rally somewhat stalled overnight which momentarily saw all regional bourses in negative territory, despite the gains in US where a dovish tone from the FOMC Minutes and several Fed speakers underpinned the US majors to their longest winning streak since September. ASX 200 (+0.3%) and Nikkei 225 (-1.3%) were subdued after sentiment in the region soured with BHP shares hit in Australia as it traded ex-dividend, while the Japanese benchmark underperformed as exporters took the brunt of detrimental currency moves. Hang Seng (+0.2%) and Shanghai Comp. (-0.4%) initially weakened as trade-related momentum began to wane, with sentiment also dampened after the PBoC drained another CNY 70bln from the interbank market and after soft Chinese inflation data added to the despondent tone. However, Chinese stocks then staged a gradual recovery throughout the session, while in terms of trade news, both US and China have issued separate statements in the aftermath of the trade discussions, although the sides refrained from a joint statement and there was also no mention of a timeline moving forward. Finally, 10yr JGBs were underpinned by the initial safe-haven demand which coincided with gains in T-notes in the wake of the Fed dovishness, although prices are off best levels as risk sentiment in the region began to recover, while mixed results at today’s 30yr JGB auction proved to be inconclusive for prices.

Top Asian News

  • China’s Rekindled Deflation Fears Add to Global Growth Concerns
  • Further Rally Seen for China’s Yuan as It Breaks Key Level
  • SBI Is Said to Select Arrangers for Institutional Share Sale
  • Time for ‘Reality Check’ on Trade as Asian Stock Rally Fades
  • Citic Securities Surges on $2 Billion Purchase of Rival

Major European equities are in the red [Euro Stoxx 50 -0.4%] following on from the mixed performance seen in Asia on the lack of US-China trade clarity. Some underperformance is seen in the CAC (-0.8%), weighed on by Safran (-3.6%) who were downgraded at JP Morgan Chase, and Airbus (-1.7%) in the red after posting fewer net orders than Boeing for the first time in 5 years. Sectors are similarly in the red, with slight outperformance seen in utility names. Other notable movers include Sodexo (+1.8%) who are up after posting an increase in Q1 revenue. Separately, Tesco (+1.0%) are positive after the Co say that they remain on track to deliver their FY outlook, similarly Marks and Spencer (+1.5%) are in the green after the Co saying their FY guidance remains unchanged; despite UK BRC retail sales for December missing with -0.7% vs. Exp. -0.3%.

Top European News

  • Tesco Bucks U.K. Holiday Retail Gloom as Small Chains Suffer
  • With Brexit Vote Approaching, Companies Make Plea to Cut a Deal
  • Ericsson Takes $687 Million Charge to Fix Digital Services Unit
  • Past Sins Forgiven at a Price as Saudi Arabia, Turkey Sell Bonds
  • Carige Leaders Resist Italy Populist Nationalization Push

In FX, the DXY is on a firmer footing in early EU trade despite yesterday’s dovish Fed speakers and FOMC Minutes which stated that many policymakers said the Fed could be patient about further tightening amid muted inflationary pressures. Additionally, policymakers stated that it was appropriate to hike rates in Dec 2018, though some members favoured no change. Furthermore, due to the recent stock rout, volatility in markets and global growth concerns, the extent and time of future policy tightening is “less clean than earlier.” As such the DXY tested 95.000 to the downside during Asia-Pac hours in a continuation of USD weakness from Wall St., though the index rebounded off the psychological level and marches closer towards 95.500 (intra-day high of 95.381) ahead of a plethora of Fed speakers including Chair Powell, Vice Chair Clarida and 2019 voters Bullard and Evans. It is also worth bearing in mind that US President Trump is to participate in a roundtable meeting on border security around 18:00 GMT as the government shutdown reaches its 20th day.

  • AUD – The G10 outperformer, albeit marginally after the Aussie was dented by the release of disappointing Chinese December inflation figures which briefly pressured the currency during the Asia-Pac session. An overnight rebound in copper prices however underpinned AUD/USD north of 0.7150, just below its 50 DMA at 0.7190 with options scattered around 0.7190-0.7220 (1.1bln).
  • NOK, CAD – Firmer than expected Norwegian CPI gave the Crown impetus to extend gains below 9.80 vs. the EUR, thought EUR/NOK saw volatile trade shortly post-release amid negative price action in the oil complex. Ultimately, the NOK regained composure as EUR/NOK sits below its 50 HMA at 9.7750 ahead of its 50 DMA at 9.7290. Meanwhile the Loonie bears the brunt of declining oil as USD/CAD trades just below its 50 HMA at 1.3250.
  • EUR,GBP – Both victimised by the firmer greenback, though the single currency was unfazed by dismal French industrial production numbers ahead of the ECB Minutes later today (full preview available on the Research Suite). EUR/USD is subsequently only marginally above 1.1500 with the next level to the downside at its 50 HMA (1.1490) ahead of its 100 DMA (1.1478). Large option expiries may cap upside in the pair with 1bln on the money at 1.1515-25 and 1.3bln around the psychological 1.1500. Moving on, Sterling suffers a similar fate as the strengthening buck sent cable further below 1.2800 to breach 1.2750 and test 1.2730. In terms of the latest, Opposition leader Corbyn is again call for a general election today amid the Brexit deadlock, if PM May’s deal does not pass the meaningful vote on January 15th. In light of this, the Premier is reportedly considering supporting an amendment in an attempt to court some Labour MPs into supporting her deal. Cable sits around the middle of a 1.2750-2800 range with its 100 DMA at 1.2746.
  • JPY – Marginally softer following overnight upside from the dovish Fed and FOMC minutes as the buck eased and the Yen appreciated on safe-haven demand. As the greenback gained traction in EU trade, USD/JPY reclaimed the 108.00 handle to the upside with the pair’s 100 and 50 DMA at 108.46 and 108.50 respectively with 800mln in option expiries around 108-40-50.

In commodities, Brent (-0.7%) and WTI (-0.7%) are in the red, though the benchmarks reclaimed USD 61/bbl and USD 52/bbl respectively in EU trade with no attributed fundamentals to the recent price action. Previous sessions EIA showed a smaller than expected draw in crude oil inventories of -1.68mln vs. Exp. -2.7mln. Elsewhere, Saudi Energy Minister Al Falih comments that he would not rule out additional OPEC+ action at some point in the future. Gold (Unch) was initial buoyed by the dovish FOMC minutes, although the yellow metal is now trading towards the bottom of today’s USD 6/oz range as the dollar modestly firms. Elsewhere, according to reports US Treasury Secretary Mnuchin is to meet Democrats today to discuss plans to end sanctions against Rusal; of note Democrats have asked for the removal of these sanctions to be delayed. In a vote on January 16th, EU countries are expected to approve a scheme limiting imports of steel into the bloc; placing a cap on steel imports for 3 years.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 226,000, prior 231,000; Continuing Claims, est. 1.74m, prior 1.74m
  • 9:45am: Bloomberg Consumer Comfort, prior 59.6
  • 10am: Wholesale inventories/sales data postponed by govt shutdown
  • 8:35am: Fed’s Barkin Speaks on Ensuring Long-Term Growth
  • 12pm: Fed’s Powell to Speak to The Economic Club of Washington
  • 12:40pm: Fed’s Bullard Speaks on Economy and Monetary Policy
  • 1pm: Fed’s Evans speaks at Economic Forecast Event
  • 1:20pm: Fed’s Kashkari Speaks on Immigration and Growth
  • 5:30pm: Fed’s Clarida Speaks to Money Marketeers in New York

DB’s Jim Reid concludes the overnight wrap

The opening para today is a little niche but if you like both music and comedy then I’m about to change your life forever. The highlight of my Xmas TV viewing was a documentary charting the recent comeback gigs of 1980s UK boyband “Bros”. For a brief period of time they were (for some reason) one of the biggest acts in the world. I’d not thought a lot about them since but this documentary is dynamite. For those familiar it is like Spinal Tap meets David Brent (The Office) but rather than fiction it is pure real life. It’s on the BBC iPlayer but also on YouTube for those outside the U.K. Its called “After the screaming stops”. Please, please hunt it down. You won’t regret it. Worryingly Bros consist of identical twins and I’m hoping mine end up with a more functional relationship in the years ahead.

When will I, will I be bearish? The answer is probably before mid-year again but we’d continue to ride the rally for now as things to us don’t look nearly as bad in the near-term as they were made out to be just before Xmas. Yesterday was another day of gains for risk with the VIX trading below 20 again (close 19.8) for the first time since 3 December. In Q4 2018 it traded above 20 for 58.7% of the time after not spending a singleday there between 4 November 2016 and 2 February 2018. How things can change. When the dust settled, the S&P 500, DOW and NASDAQ posted more modest gains yesterday than of late but climbed +0.41%, +0.39% and +0.87% respectively. Still, that is four consecutive daily gains for the S&P 500 which is something the index hasn’t seen since September, and the rally of +5.60% over that stretch is the best such four-day performance since August 2015. Buying continued to be broad based, with 68% of S&P 500 companies advancing, though equities did fade off their intraday highs as acrimony between President Trump and Congressional Democrats intensified. In a highly-anticipated meeting between the two sides, President Trump apparently walked out of the meeting, calling it “a total waste of time.” So the federal shutdown is set to continue.

Prior to this, the STOXX 600 had closed +0.53% in Europe while in credit HY spreads in the US and Europe finished -9bps and -11bps tighter respectively. That’s -85bps of tightening for US HY since last Thursday. One factor supporting US HY credit has been the move in the oil prices, which are up every day this year. In fact, WTI has risen for the last 8 sessions (for a cumulative gain of +17.15%) including a +4.98% move yesterday to take it over $52/bbl. That run is the longest winning streak since June-July 2017. You have to go back to December 2009-January 2010 to find the last time that we were up 9 days in a row. We’re also back in bull market territory as Oil is up over +20% from the lows. The continued slide in the dollar (-0.81%, more color below) certainly helped, while news from Saudi Arabia also buoyed prices. Energy Minister al-Falih told reporters that “we have to remain vigilant and agile and respond, so I would not rule out calling for further action of some kind.” These comments reiterating the Saudi’s commitment to cap production come as the kingdom plans to export 7.2m barrels per day this month, down from 7.7m in November and in-line with the 2018 average in an effort to support prices.

There was a steady drip of newsflow feeding the broader risk on moves yesterday. Initially there were some positive soundbites coming out of the US-China trade meetings after talks had wrapped up although later in the day the USTR published an official statement. At 192 words though it was lacking slightly in substance with the text confirming that talks “focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the US”. It also stated that “officials conveyed President Trump’s commitment to addressing our persistent trade deficit and to resolving structural issues in order to improve trade between our countries”. So not particularly ground-breaking, although the mention that any deal should include “ongoing verification and effective enforcement” was perhaps a reason for risk stalling a bit post the statement being released, as the likelihood of such a comprehensive agreement being reached in the next 50 days seems challenging. China for its part said that the meetings were “extensive, in-depth and detailed,” and laid the foundation for a resolution of the conflict.

Elsewhere we got a warning out of rating agency Fitch that the US could potentially lose its AAA credit rating later this year should the government shutdown continue to March and the issue of the debt ceiling is not resolved. Markets didn’t appear particularly bothered by that though, and the spotlight quickly jumped to the various Fedspeakers thereafter. The most interesting comments came from Boston Fed President Rosengren, Chicago President Evans, and Atlanta President Bostic.

Rosengren is slightly more hawkish than the committee’s median, and our economists had penciled him in as a supporter for three hikes this year. However, he cited “recent data from China, the potential for increased trade tensions, and heightened volatility” as an argument for policy to remain “flexible and patient.” He said that “there should be no particular bias toward raising or lowering rates until the data more clearly indicate the path for domestic and international economic growth.” So perhaps evidence that he wants to see more data before supporting another policy change, but he nevertheless remained confident overall, saying “the economic outlook is actually brighter than the outlook one might infer from recent financial-market movements.”

The second most interesting Fed official was Evans, whose views are roughly in-line with the center of the committee. He said that “developments in the first half of 2019 will be very important for making this assessment of our future monetary policy actions” and hinted at a six-month type of pace for rate hikes going forward. He mentioned tepid inflation data, which could be the key factor for him; recall that he dissented against the rate hike in December 2017, the last time he was a voting member of the committee. However he also flagged that “if the downside risks dissipate and the fundamentals continue to be strong, I expect that eventually the fed funds rate will rise a touch above its neutral level”.

The Atlanta Fed’s Bostic largely reiterated his Monday comments, though he indicated that he may view the hiking cycle as already over, depending on how data develops. He said “we are not locked into a particular trajectory for policy,” and answered “yes” when asked if the next move could be either a hike or a cut. So he’s taking data-dependency to a new level, prompting another leg lower in the dollar yesterday and drop in fed fund future-implied rates, which now see around an 20% chance of a hike by the June FOMC meeting.

Finally, St. Louis Fed President Bullard, a well-known uber-dove, said that the Fed is “bordering on going too far and possibly tipping the economy into recession” and that bond markets are “signalling that there might be some recession risk ahead”.

Capping yesterday’s busy session of Fedspeak, we also got the minutes of the December FOMC meeting. They mostly ratified what we already knew, saying “many participants” want “to be patient about further policy firming” and that “a number of participants” favour assessing “the risks that had become more pronounced in recent months.”

There wasn’t a huge reaction in bond markets to any of those communications. Benchmark 10y Treasuries traded in an intraday range of just over 4bps and eventually settled -1.8bps lower at 2.710%. Two-year yields fell -3.3bps, consistent with the move in fed funds futures, and the 2s10s curve steepened 1.5 bps to 15.3bps. As mentioned, the dollar slid another -0.81% and is now at the lowest since 16 October. The euro ended up +0.97% while for completeness bond markets in Europe yesterday were broadly unchanged with the exception of BTPs which rallied -7.6bps following recent underperformance.

Those comments out of the Fed will be followed by a heavy schedule of Fedspeak today. Indeed we count no fewer than six separate scheduled speakers. In order we’ve got Barkin (1.35pm GMT), Powell (5.00pm GMT), Bullard (5.40pm GMT), Evans (6.00pm GMT), Kashkari (6.20pm GMT) and Clarida (10.30pm GMT). Given that we’ve just heard from Evans, and it would be a surprise if Powell said anything different to his comments on Friday, the most interesting should be Vice-Chair Clarida. Seen as relatively dovish, the market should be on the lookout as to whether or not Clarida takes the opportunity to amplify the message sent by Powell last week. It’s worth noting that Clarida is expected to have prepared remarks while Powell is not expected to release a formal speech. Both are expected to feature Q&A.

This morning in Asia markets are trading mixed with the Nikkei (-1.30%) down while, the Hang Seng (+0.16%), Shanghai Comp (+0.23%) and Kospi (+0.14%) all up. China’s announcement of a package of tax cuts for small and micro-sized businesses worth CNY 200 bn ($29 billion) per year over the next three years is aiding sentiment even as China’s December CPI ( at 1.9% yoy vs. 2.1% yoy expected) and PPI (at +0.9% yoy vs. +1.6% yoy expected) data disappointed with the later continuing the slowdown for a sixth straight month to the weakest level since September 2016. Meanwhile, China’s onshore yuan is up +0.33% to 6.7937 – the highest since August 2018 on positive sound bites from the concluded US-China trade negotiations. Elsewhere, futures on the S&P 500 are down -0.34% while oil prices (WTI -0.95% and Brent -0.76%) are also trading lower this morning after the stunning run discussed earlier.

Moving on. The latest Brexit development was the confirmation yesterday that PM May had effectively lost control of the timetable for what happens should Parliament vote against her Brexit deal next week as expected. Downing Street will now be compelled to report to Parliament and hold a vote on how to proceed within three days of losing a vote on the Withdrawal Agreement. The government will also accept a Tory amendment to limit the backstop to one year, though it’s not clear if that will be acceptable from the EU’s perspective. Separately, Labour’s shadow Brexit minister said that extending Article 50 “may well be inevitable now.” Nevertheless, this chaos was outweighed by the dollar’s broad weakness, leaving cable +0.66% stronger versus the greenback, though the pound did slide -0.31% versus the euro. Elsewhere, Bloomberg reported that the Labour party leader, Jeremy Corbyn, is set to deliver a major speech on Brexit today, in which he’ll call for a general election if May loses next week’s vote. According to released extracts of his speech Corbyn will say, “a government that cannot get its business through the House of Commons is no government at all. So I say to Theresa May: if you are so confident in your deal, call that election, and let the people decide.”

Turning quickly to yesterday’s data, Germany’s November trade balance printed at $20.5bn as imports declined more than exports. So another signal of soft demand in Europe’s largest economy. French consumer confidence fell to 87 from 92, its lowest level since 2014. In the US, mortgage applications rose 23.5% last week, the fastest pace since October 2015, though the series is notoriously noisy.

To the day ahead now, where the aforementioned speeches by the Fed’s Powell and Clarida this evening are likely to be the main focus, alongside the raft of other Fedspeak. As for the data that is due out, this morning we’ll get the November industrial production report in France shortly, before we then get initial jobless claims and November wholesale inventories data in the US. Away from all that we’ll also get the ECB minutes of the December 12-13 meeting where the market will be on the lookout for any hints on the timing for the first rate hike, before the ECB’s Villeroy speaks this evening.

3. ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 9.25 PTS OR 0.36% //Hang Sang CLOSED UP 59.11 POINTS OR 0.22% /The Nikkei closed DOWN 263.26 POINTS OR 1.29% / Australia’s all ordinaires CLOSED UP 0.27%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7851 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 50.91 dollars per barrel for WTI and 59.71 for Brent. Stocks in Europe OPENED GREEN 

//ONSHORE YUAN CLOSED UP AT 6.7851 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7861: 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

 

 

i)North Korea/South Korea/USA/CHINA

 

end

3 b JAPAN AFFAIRS

3 C CHINA

i)CHINA/USA

Huge escalation:  the USA slaps an export ban on a Huawei Silicon Valley subsidiary (Futurewei). The USA is continuing in its effort to extradict Meng to the USA to face charges.  She is hopelessly guilty of selling to Iran etc.

 

(courtesy zerohedge)

 

Escalation: US Slaps Export Ban On Huawei’s Silicon Valley Subsidiary

Despite the first round of US-China trade talks reportedly reaching an “optimistic” conclusion as the two sides made progress on a number of issues – including China’s controversial officially-sanctioned IP theft – the Wall Street Journal reported on Thursday that the US is continuing its crackdown on Huawei Technologies by prohibiting a US-based Huawei subsidiary from exporting technologies developed in a Silicon Valley lab back to the mainland.

The escalation comes as the US is warning its allies to avoid Huawei’s telecoms equipment due to concerns about its vulnerability to infiltration by the Chinese government, to which Huawei reportedly maintains close ties (though Huawei insists that it is an independent company cooperatively owned by its employees). The US is also in the process of extraditing Huawei CFO Meng Wanzhou over charges that she knowingly lied to banks to try and conceal violations of US and EU sanctions against Iran.

Huawei

 

Commerce has handed down an ‘export ban’ to Futurewei – the name of Huawei’s US subsidiary – by signaling that it intends to deny Huawei’s application to renew its license. And while most of the technologies developed by Futurewei don’t require a license to export, the export ban will severely restrict its operations.

The license covered the export of telecommunications technology and software, including high-speed data-transfer technology, according to the documents. The technology had an operating budget of more than $16 million and involved more than 40 full-time-equivalent personnel.

The Commerce Department’s move isn’t a death blow to Futurewei because the majority of technologies the unit exports from the U.S. don’t require an export license, according to people familiar with the matter. The company continues to operate in the U.S.

Futurewei is contesting the decision, but the ban will remain in effect as the appeals process unfolds. The company is threatening to move its R&D division outside the US.

Wilbur Ross stressed in a statement that the Huawei export ban is “independent” of the trade negotiations (we imagine Beijing will see it that way, too).

“The process for granting export licenses is independent from our ongoing trade discussions with China,”Commerce Secretary Wilbur Ross said in a statement to the Journal.

The ban comes after Futurewei was accused in a lawsuit filed by CNEX Labs of trying to steal CNEX’s semiconductor technology.

Huawei maintains a modest presence in the US with some 1,200 employees despite being banned from selling its telecoms equipment in the US since 2012 due to being labeled a national security threat.

Huawei has been effectively blocked from selling its telecommunications equipment in the U.S. since a 2012 Congressional report labeled it a national security threat. Huawei has long denied that it is a threat, saying it is owned by its employees and operates independently of Beijing.

The company maintains a modest presence in the U.S., where it employs about 1,500 people. Many are involved in sales of telecom equipment to small carriers servicing rural areas. But the company has scaled back its public-relations outreach and curtailed efforts to communicate with Congress and federal agencies, people familiar with the matter have said. It has redirected its fight to the courts, hiring additional law firms to deal with potential challenges.

As a delegation of senior Chinese trade officials prepares to travel to Washington next week, the ban raises the question of whether the US’s treatment of Huawei will be a factor in trade talks going forward (will Beijing retaliate), or whether the Chinese will object to the US giving them a taste of their own medicine – after all, many suspect that the US’s scrutiny against Huawei is partly motivated by the race for dominance in 5G, where Huawei is facing off against Verizon and US carriers to become the preeminent purveyor of 5G technology.

end

CHINA/USA
If Trump’s attack on China, we now witness Chinese money flee starts up in the uSA tech industry
( zerohedge)

Chinese Money Flees Silicon Valley As Trump Clamps Down On Access To US Tech

Thanks to new policies from the Trump administration aimed at cracking down at Beijing’s access to strategic US technologies, China has all but halted investments in US-based tech startups, according to Reuters

Venture funding out of China peaked last year at a record $3 billion according to the Rhodium Group, a New York economic research firm. The spike in capital is thought to have been spurred by investors and tech companies rushing to complete deals before the new regulatory measures were approved in August.

Following the new policies which have expanded the government’s ability to block foreign investment in US companies, Chinese venture funding has all but collapsed according to Reuters, which interviewed over 35 industry players.

The new rules are still being finalized, but tech industry veterans said the fallout has been swift.

“Deals involving Chinese companies and Chinese buyers and Chinese investors have virtually stopped,” said attorney Nell O’Donnell, who has represented U.S. tech companies in transactions with foreign buyers.

Lawyers who spoke to Reuters say they are feverishly rewriting deal terms to help ensure investments get the stamp of approval from Washington. Chinese investors, including big family offices, have walked away from transactions and stopped taking meetings with U.S. startups. Some entrepreneurs, meanwhile, are eschewing Chinese money, fearful of lengthy government reviews that could sap their resources and momentum in an arena where speed to market is critical. –Reuters

US startups have also become cautious according to the report. San Francisco-based AI-powered training manual company Volley Labs, for example, declined offers from Chinese investors last year after initially accepting money from Beijing-based TAL Education Group amid a 2017 financing round.

“We decided for optical reasons it just wouldn’t make sense to expose ourselves further to investors coming from a country where there is now so much by way of trade tensions and IP tensions,” said Volley CEO Carson Kahn.

Meanwhile a Silicon Valley VC told Reuters that he is aware of at least ten deals – some of which he is exposed to, which fell apart since they would require approval from the Committee on Foreign Investment in the United States (CFIUS) – the regulatory body which rubber-stamped the controversial Uranium One deal.

CFIUS is the government group tasked with reviewing foreign investment for potential national security and competitive risks. The new legislation expands its powers. Among them: the ability to probe transactions previously excluded from its purview, including attempts by foreigners to purchase minority stakes in U.S. startups. –Reuters

China has been an aggressive investor in technology considered critical to US global competitiveness and military capabilities. Chinese investors have also been heavy investors in ride-hailing forms Uber and Lyft, along with companies that have more sensitive tech such as data center networking firm Barefoot Networks, speech recognition startup AISense and self-driving vehicle startup Zoox.

The withdrawal of Chinese money from Silicon Valley is unlikely to make a dent in the ability of startups to raise capital, as investors worldwide allocated some $84 billion into US startups during the first three quarters of 2017 – exceeding any prior full-year funding, according to data provider PitchBook.

That said, Chinese funding is also a pathway for US tech companies to gain access to the world’s second-largest economy,which will deprive startups of much needed revenue.

“Those of us who are operators and entrepreneurs feel the brunt of these tensions,” said Kahn.

The decline in Chinese investment comes amid heightened tensions between Beijing and Washington. Trump has blasted China for its enormous trade surplus and for what he claims are its underhanded strategies to obtain leading-edge American technology.

The nations have already levied billions in tariffs on each other’s goods. And Trump is considering an executive order to bar U.S. companies from using telecommunications equipment made by China’s Huawei and ZTE, which the U.S. government has accused of spying. –Reuters

The CFIUS, meanwhile, has emerged as a powerful tool for the Trump administration to intervene in foreign deals in the United States. Operated out of the US Treasury, the panel includes members from eight other government entities, including Homeland Security, the State Department and the Department of Defense. In its current annual report, the CFIUS said that Chinese investors had made 74 filings from 2013 through 2015 – the most of any country.

Washington, meanwhile, is also clamping down on Chinese investments. In March President Trump blocked a $117 billion hostible bid by Singapore-based Broadcom to acquire San Diego-based Qualcomm after the CFIUS said the takeover would weaken America’s wireless technology advantage.

And in November the CFIUS introduced a pilot program which requires foreign investors to notify the committee of any investments in “critical technologies” – the scope of which is still being defined. A working list, however, includes logistics technology, artificial intelligence, robotics and data analysis.

“What we are concerned about is a limited number of bad actors who are phenomenally clever about how they can access our intellectual property,” said VC Bob Ackerman, founder of San-Francisco and Maryland-based AllegisCyber.

Research firm Rhodium, meanwhile, said that an average of 21% of Chinese venture in the US from 2000 through 2017 came from state-owned funds, which are at least partially controlled by the Chinese government. In 2018, that figure spiked to 41 percent.

Two industry veterans, a startup adviser and a venture capitalist who declined to be identified because of the sensitivity of the matter, told Reuters they were recently cautioned by the FBI not to pursue deals with Chinese investors. The two people did not name the Chinese entities of interest to the FBI, but said the deals concerned U.S. companies building artificial intelligence and autonomous driving technologies.

Whether any of this deters China from reaching its goal of dominating advanced technologies remains to be seen. China can still invest in U.S. technology through layers of funds that obscure the money source. And Chinese investors are redirecting funds to promising companies in Southeast Asia and Latin America. –Reuters

In response to the clampdown, US startups are now writing deals in a way which would avoid CFIUS reviews – in particular, by adding provisions which would prevent foreign investors from obtaining proprietary technical data, as well as handcuffing their rights when it comes to board seats, veto rights or additional equity for future investment rounds.

According to Jeff Farrah, general counsel of the National Venture Capital Association, “People are rightfully concerned about making sure they are on the safe side of the fence.

end
CHINA
As expected, deflation is ripping China apart.  Chinese factory price gains plunge the most since 2010 as their economy grinds to a halt.
(courtesy zerohedge)

Deflation Looms As China Factory Price Gains Plunge Most Since 2010

Will “bad news” be “good news” for China’s markets? Or does this confirm what ‘censored’ economist Zhang Songzhou warned – that China’s real (as in not made-up) economic growth is dramatically lower than the official data?

To the consternation of Chinese censors, a presentation delivered by an economics professor at Renmin University in Beijing sparked a controversy last month when the professor claimed that a secret government research group had estimated China’s growth in gross domestic product could be as low as 1.67% in 2018, far below the official rate.

Unpossible, right?

Well given tonight’s almost unprecedented drop (and miss) in China’s inflation prints, maybe not.

China’s factory inflation slowed sharply in December, continuing the slowdown for a sixth straight month to the weakest level since late 2016 on softening demand and lower commodity prices.

China Producer Princes rose just 0.9% YoY – plunging from +2.7% YoY in November (and almost half the expected +1.6% YoY). This is the biggest MoM drop in PPI YoY since 2010…

As Bloomberg reports, the sharply decelerating pace brings back fears of a return of the deflation which ravaged corporate profits in 2012-2016. A return of slow or falling factory prices in China would squeeze corporate profitability and put pressure on global inflation, as export prices usually follow those at factory gate.

“Deflationary pressures are on the rise in China, driven by weakening domestic and export demand,” China International Capital Corp. economists Eva Yi and Liang Hong wrote in a note ahead of the data.

“Inflation tends to fall following an extended period of softening demand growth, which was in turn led by slower expansion of the broadly-defined credit cycle.”

Of course, in the new normal, this may be seen as ‘good’ news as it opens the door for PBOC to unleash some more serious monetary malarkey – because as we showed recently, stimulus efforts over the last six months have utterly failed…

Since June 2018, China has been loosening monetary and fiscal policies in an attempt to refloat the sinking red ponzi amid the shadow banking system’s deflation.

As the following chart from Goldman Sachs shows, it is not working as the Current Activity Indicator continues to slump…

It seems no matter what China throws at it, the economy (or the market) won’t behave as the text-books say it should.

“[Beijing] will soon have no choice but to launch massive stimulus,” says Alicia García Herrero, chief Asia Pacific economist at Natixis in Hong Kong. “They do not want to give away their credibility because they said they wouldn’t do it, but there is no time to be cautious any more. Not having growth is ultimately the worst outcome of all.”

He’s right, although as we discussed last night, a further complication for Beijing arises from the fact that China’s economy is in the middle of a “tectonic transition” as its formerly massive current account surplus is about to turn negative…

Four

… which in turn is creating serious disruptions in capital flows that could portend weakness beyond China’s borders, assuming the trade war continues to impede the foreign investments that China’s increasingly consumption-based economy needs to expand.

However, for now, the reaction is to buy Yuan not dump it…

But finally, we return to Ambrose Evans Pritchard’s recent ominous conclusion as China faces serious economic consequences (from a credit crackdown on the shadow banking system as well as trade turmoil), as he warned that the biggest tail risk is a Sino-American showdown ending in global economic slump, bitter recrimination, and a cycle of escalation “into the kinetic space”. Eurasia says relations have already deteriorated beyond the point of no return. Nor is there any workable common ground for compromise. At stake is 21st Century technology dominance, not trade.

“Rising nationalist sentiment makes it unlikely that Beijing will ignore US provocations,” it added.

The balance of probabilities is that the world will muddle through 2019 without any of these landmines detonating. Yet the drift of events is clear. The Western liberal order we took for granted at the end of the Cold War is under existential threat.

“We’re setting ourselves up for trouble down the road. Big trouble,” it said.

And tonight’s China data pushes Xi further into a corner.

END

Another indicator of poor growth in China:  car sales collapse to its first annual drop in 20 years

(courtesy zerohedge)

China Car Sales Collapse: First Annual Drop In Over 20 Years

After we previously reported that UK car registrations just fell at their sharpest rate since the financial crisis, the sharp plunge of auto sales in China has also continued: retail sales of passenger vehicles – which include sedans, MPVs, mini-vans and SUVs – in China fell a whopping 19% in 2018 to 2.26 million units.

In addition, SUV retail sales also fell 18.9% year over year to 965,772 units.

China is spearheading what is shaping up as a painfully anemic year for the industry around the world. The automobile industry in China has been crippled, partly as a result of this trade war, partly due to the ongoing domestic economic slowdown in the mainland, and absent major subsidies – which don’t appear to be coming – the outlook for 2019 is not promising.

We wrote back in early December, after reviewing November’s data, that the country was set for its first decline in decades. In November, passenger vehicle wholesales were down 16.1% on the year, according to the China Association of Automobile Manufacturers. November vehicle wholesales were also down well into the double digits, dropping 13.9% to 2.55 million units year-over-year. Total retail passenger vehicles fell 18% on the year and SUV sales fell 20.6% year-over-year to 854,289 units, according to the Passenger Car Association.

And as we reported more recently, registrations in the United Kingdom were down 6.8% to 2.37 million vehicles in 2018, according to the SMMT. Diesel vehicle sales were down a massive 30% and gasoline powered models were up 8.7%, showcasing a shifting trend. Electric cars and hybrids were up double digits, posting 21% gains for the year.

Confirming the gloomy picture for the auto sector, Morgan Stanley’s auto analyst Adam Jonas was the first to predict that global auto sales would be down 0.3% year over year in 2019 and that many consensus estimates across the industry are far too optimistic. In a note released last week, Jonas predicted “lower guidance” coming out of Detroit automakers at the same time that the global auto market sees its first volume drop since 2009. And despite consensus forecasts predicting revenue and margin growth across the board, Morgan Stanley generally defied the trend, reiterating its cautious view on the US auto sector.

Jonas expects global volume in 2019 to fall to 82.1 million units versus 82.4 million units in 2018. His team also expects higher input costs, combined with rising rates and rising R&D expense, to further pressure 2019 numbers. Aside from the obvious (lack of volume growth), he predicts tariff related costs will still be an overhang for automakers heading into the new year.

Here is a full chart showing Morgan Stanley’s predictions versus consensus estimates:

Morgan Stanley also believes that industry consensus for 2019 earnings is too bullish. Currently, the consensus is for all companies to grow revenues by 1% and EBITDA by more than 3%, which implies a 24 basis points EBITDA margin expansion. Instead, Morgan Stanley expects flat revenues and EBITDA down 1%, which would signify a 13 basis point contraction of EBITDA margins.

end
Graham Summers gives a short but excellent analysis of what is going on inside China right now with their huge debt.  It is a black swan and nobody is talking about it except Kyle Bass and Summers
a must read..
(courtesy Graham Summers)

The Black Swan So Ugly No One Will Talk About It

The biggest black swan facing the financial system is China.

China has been the primary driver of growth for the global economy since the 2008 Crisis. Despite only accounting for 15% of global GDP, China accounts for 25%-30% of GDP growth.

Put simply, from an economic perspective,  if China catches cold, the world gets sick…  and if China goes into a coma…

Which is why anyone paying attention should be truly horrified by the latest round of data from China’s economy.

In December, China’s Manufacturing PMI came in below 50, signaling a contraction is underway.

This is a massive deal because this was an OFFICIAL data point, meaning one that China had heavily massaged to look better than reality.

Let me explain…

Over the last 30 years China’s economic data has ALWAYS overstated growth. The reason for this is very simple: if you are an economic minister/ government employee who lives in a regime in which leadership will have you jailed or executed for missing your numbers, the numbers are ALWAYS great.

Indeed, this is an open secret in China, to the degree that former First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

With that in mind, we have to ask… how horrific is the situation in China’s financial system that even the heavily massaged data is showing a contraction is underway?

Think “systemic risk” bad.

I’ve already outlined how China is sitting atop 15% of all junk debt in the global financial system, resulting in the country’s “bad debt” to GDP ratio exceeding 80% (a first in history).

However, it now appears that even that assessment was too rosy.

Last Friday, China’s Central Bank, called the People’s Bank of China, or PBOC, released its Financial Stability Report for 2018. Nestled amidst the various accounting gimmicks was the following:

GPC11019real.jpg

H/T DT, IPOWhat you are looking at is a table in which China’s Central Bank admits that China has added $50 TRILLION in new financial assets to its financial system in the last FOUR years.

Bear in mind, China’s entire economy is only $12 trillion… so you are talking about it adding over 400% of its GDP in financial assets… in less than FIVE years. From 2013-2017, China added $25 in new financial assets for every $1 in GDP.

Never in history has a country done this. NEVER.

Oh and nearly all of this (78%) was in SHADOW financial assets… or assets that are completely unregulated with the WORST underwriting standards.

To put this into perspective, imagine if the US Federal Reserve revealed in 2007 that the banking industry had created $56 TRILLION in subprime mortgages from 2003-2007.

THAT is the equivalent of what China has done.

As I have maintained time and again, China is one gigantic financial fraud fueled by garbage debt. It is the #1 risk to the global financial system today. And by the look of things it’s about to Collapse.

The market knows it too. Take a look at the below chart:

GPC110193.png

A Crash is coming… and 99% of investors will panic when it hits…

Not me…

4.EUROPEAN AFFAIRS

ITALY/POLAND

this is big:  Salvini is set to meet Poland’s leader Kaczynski with the possibility of creating an “eurosceptic alliance” that will participate in the European Parliamentary elections in May

(courtesy zerohedge)

Italy’s Salvini Visits Poland To Discuss “Eurosceptic Alliance”

As an increasingly overbearing European Union tries to force its agenda and values on member states that have embraced a more conservative, populist or anti-immigration tact – be it through Article 7 threats against Hungary, a rule-of-law investigation into Poland’s ruling party or its threats of an excessive debt proceeding against Italy – leaders of these states are finally banding together to try and push back against Brussels.

According to Reuters, Italy’s far-right Deputy Prime Minister Matteo Salvini is planning to meet with the leader of Poland’s ruling party, Jaroslaw Kaczynski, on Wednesday to discuss the possibility of creating a “eurosceptic alliance” that will participate in the European Parliamentary elections in May.

Salvini

Matteo Salvini

The meeting is part of a broader plan by eurosceptic governments that Reuters said could “fundamentally shift the direction of the European Union after the elections.” Salvini’s visit to Warsaw was organized by Polish Interior Minister Joachim Brudzinski.

“(The election) will show whether the eurosceptic voices within Europe are on the rise or if the rise has been curtailed for the moment,” said Michal Baranowski, the head of the German Marshall Fund’s Warsaw office.

Salvini, the leader of Italy’s anti-immigrant League Party and one of two men who are effectively running the country (along with M5S leader Luigi Di Maio), has repeatedly criticized the EU and warned that the May elections are important for creating a “reformist” bloc that he hopes can change Brussels from within. He has even gone as far as to hint that he could be a candidate to lead the European Commission.

“Someone has betrayed the European dream,” Salvini told a League rally in Rome last month. “We will provide the blood for a new European community based on respect, work, growth and equality.”

Kaczynski has said that Poland (which, as Reuters notes, is the biggest beneficiary of EU infrastructure funding) should retain its membership in the bloc, which it joined in 2004. But he wants reforms to bring more power back from Brussels to national capitals.

As Reuters points out, should Poland join forces with a bloc of Eurosceptic parties united by Salvini, it could stand to benefit Poland. To be sure, Poland has recently backed down from some of its more controversial measures, including a law that forced judges into early retirement. That law had ignited widespread indignation across the bloc.

Salvini met other potential allies last year, including Hungary’s Prime Minister Viktor Orban, in an effort to form a cohesive eurosceptic grouping at the EU level.

Salvini could try to unite the Europe of Nations and Freedom bloc, to which his League belongs, with the European Conservatives and Reformists group which includes PiS to create a single, powerful eurosceptic force in the EU Parliament.

A tie-up with Salvini’s grouping could ensure a powerful voice for PiS in the next European Parliament,especially as Britain’s Conservatives will leave the European Conservatives and Reformists grouping after Brexit.

But PiS has also been trying to dilute its eurosceptic reputation ahead of Poland’s own parliamentary election due in the autumn, recently agreeing to reverse a law criticized by the EU that had forced Supreme Court judges into early retirement.

If there is one potential obstacle to closer ties between Italy and Poland, it would be their dramatically different views about Russia. Salvini is one of the most unabashedly pro-Kremlin leaders in Europe, while Poland’s ruling party remains deeply distrustful of Moscow.

Still, if eurosceptics find a way to organize to maximize their leverage in the European Union Parliament following the election, it could open the door to a forced rollback of the unpopular pro-immigration policies and austerity pushed by Brussels that have helped trigger the swell in populist support.

end

HUNGARY/FRANCE/ITALY

Hungary’s Orban slams Macron in his bid in bringing in Muslims into Europe. Orban will fight him tooth and nail

(courtesy zerohedge)

Hungary’s Orban Slams Macron As ‘Leader’ Of “Pro-Immigration Forces”, Vows “I Will Fight Against Him”

One day after Italy’s Matteo Salvini traveled to Poland to discuss forming an international, inter-party alliance of anti-immigration populist nations to contest the EU Parliamentary elections in May, on Thursday, another prominent eurosceptic leader lashed out at the European establishment.

Orban

After a reporter from the French paper Le Monde asked Hungarian Prime Minister Viktor Orban about his relationship with deeply unpopular French President Emmanuel Macron, Orban said that while he has nothing against Macron personally – in fact, the two get along well – he considers Macron to be the standard bearer for the EU’s globalist, “pro-immigration forces.”

And therefore, “I must fight him,” Orban said.

“There is no denying that Emmanuel Macron is an important figure, moreover, the leader of the pro-immigration forces,” Orban told a press conference.

“It is nothing personal, but a matter of our countries’ future. If what he wants with regards to migration materializes in Europe, that would be bad for Hungary, therefore I must fight him.”

Orban’s Fidesz party won a stunning parliamentary victory last year and remains supremely popular among Hungarians, particularly in more rural parts of the country. However, Orban’s refusal to bend to the EU’s mandates about member states accepting refugees and migrants prompted the EU Parliament to trigger Article 7 sanctions proceedings against Hungary back in September. This marked the first time the EU had ever invoked an Article 7 resolution.

For those who are unfamiliar, Article 7 of the EU Treaty was designed to protect the bloc’s “fundamental values” (because enforcing immigration laws and securing borders is apparently seen as a moral outrage in Brussels).

The Article 7 invocation could ultimately lead to a suspension of membership rights for Hungary.

end

UK

May Caves, Offers Brexit-Deal Concessions Following Dramatic Commons Defeats

After being effectively frozen in place since Prime Minister Theresa May survived a Tory no confidence vote late last year, the dynamics of the debate in Parliament are finally beginning to shift now that MPs have taken steps to seize control of the process from No. 10 Downing Street.

In a series of embarrassing defeats for May’s government earlier this week, MPs voted to limit the government’s ability to use the threat of a ‘no deal’ Brexit as a cudgel to coerce MPs into backing May’s deal, while the “Grieve Amendment” (sponsored by Tory MP and former Attorney General Dominic Grieve), passed on Wednesday, requires May to call a vote on a “Plan B” Brexit deal within three days should she lose a vote next week on her deal.

May

With her back against the wall as the debate on her Brexit plan enters a second day, it appears May has finally relented on her insistence that she would not yield to demands to change her deal, even as her Parliamentary archnemsis Jeremy Corbyn appeared to back away from threats to take down her government.

While Corbyn said during a speech on Thursday that he wouldn’t table a motion of no confidence in May’s government (which, if successful, would clear the way for a general election that would inject a fresh helping of chaos into the process) if the vote should fail, offering May some more room to maneuver, the Financial Times reported that the prime minister has put forward a “package” of concessions including granting Parliament power over whether the Irish backstop is triggered, implementing requirements to conclude a future UK-EU trade deal within one year should the backstop take effect, and offering a slate of ‘workers rights’ reforms and promising to work with the EU, according to the Financial Times.

May would also be required to obtain “further assurances” from the EU that the backstop will likely never take effect.

Still, as the FT pointed out, it’s unlikely that these concessions will win enough support to pass May’s deal on the first go-round.

The workers rights concessions were swiftly rejected as an obvious ploy to win over Labour votes when Corbyn delivered a major Brexit speech on Thursday speech, the Guardian reported. And union officials also warned Labour MPs not to take the bait. The Labour leader also downplayed a comment by his shadow Brexit secretary who said a delayed Brexit was no almost inevitable.

If May has one thing going for her, it’s that MPs haven’t formed a consensus on an alternative to her plan. Which means that May’s plan to pressure the EU into offering more concrete last-minute concessions must succeed if the prime minister wants to make sure that ‘Brexit Day’ means ‘Brexit Day’ – and that the UK’s exit isn’t delayed, which now appears more likely than a ‘no deal’ exit thanks to the votes this week (though a ‘no deal’ exit hasn’t been explicitly ruled out).

Whatever happens, both professional Wall Street analysts and armchair amateurs concede that what transpires between Thursday and Brexit Day is anybody’s guess.

According to a research note from HSBC, bettors online have no clue what the outcome of the process might be…

Bookies

…Though odds on online betting market PredictIt put the odds of May’s deal passing during the first go-round at just 3%.

Odds

If there is a consensus to be found, it’s that May might end up losing next week’s vote by a margin of well over 100 votes, according to a breakdown from HSBC.

Brexit

In what sounds like a doomed gambit, May is planning one final round of appeals to the EU ahead of the ‘meaningful vote’ on her Brexit deal, which is set for Tuesday. In a sign that the EU has softened its position somewhat, the FT reported that the EU would allow the concessions on the backstop, which we explained above, because they wouldn’t alter the UK’s treaty obligations.

And while she has certainly ceded some control over the process, May’s fundamental strategy remains intact: Hope that the EU will relent and offer last-minute concessions after the deal is defeated – assuming May can hang on to power long enough to push through a vote on the second go-round.

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

TURKEY/USA/RUSSIA

Turkey now seeks co ordination with Iran and Russia on the USA exit.  Bolton is humiliated

(courtesy zerohedge)

Bolton’s Continued Humiliation: Turkey Seeks Coordination With Iran And Russia On US Exit 

After Ankara slammed the door in John Bolton’s face during his trip to Turkey in which he expected to meet with Turkish President Erdogan, only to have Erdogan skip that meeting to criticize the US national security advisor in a speech to parliament, Turkey is now calling for Iran and Russia to step up coordination with Turkey in northern Syria as US troops withdraw.

Prior summit in Ankara, Turkey April 4, 2018. via ReutersIt’s but the next humiliation for Bolton, who flew out of Turkey on Tuesday, and for White House policy in the Middle East, after he announced preconditions to American troop draw down that emphasized Turkey agreeing to not attack the US-backed Kurds in Syria. Erdogan slammed this as a “serious mistake” and pro-government Turkish media painted the picture of a “soft coup” underway against Trump being orchestrated by Bolton and other subverters who had “rogue”.

But no doubt adding insult to injury, Turkish Foreign Minister Mevlut Cavusoglu issued further provocative words on Wednesday, noting that given “certain difficulties” of confused US policy, the American draw down should be coordinated with Iran and Russia to prevent a power vacuum and the reinvigoration of terrorists.

“The United States [has] been facing certain difficulties with the process of the troops’ withdrawal from Syria. We want to coordinate this process with Russia and Iran, with which we had arranged work in the framework of the Astana process,”the Turksih FM said.

This would involve Turkish forces conducting joint patrols with Russia amidst a US withdrawal of all troops from Syria, in accord with prior agreements reached during the Astana talks, set to continue further in Moscow at a future date. Cavusoglu also said bilateral talks are being prepared between Turkey and Iran, but gave no further specifics, according to Russian media.

Closer Turkish and Iranian coordination in Syria would be a huge red flag for Washington, which has long stated a policy goal of thwarting Iranian entrenchment in Syria as part of its reason for keeping forces in the country. Israel has also focused on the Iran issue to argue the White House must stay the course in Syria, or else cede the Middle East to the Tehran-Damascus-Hezbollah pro-Shia axis.

Erdogan, for this part, sought to articulate Turkey’s vision for a post-US pullout solution in northern Syria in a Monday New York Times op-ed asserting, “President Trump made the right call to withdraw from Syria,” while promising to protect Syrian Kurds not associated with terrorist groups. He made no mention of current talks and increased coordination between the Kurdish YPG and the Syrian Army, and proposed a Turkish-backed “stabilization force” on the ground to patrol former US-occupied zones.

Given Turkish FM Cavusoglu’s most recent statements, it appears Erdogan is seeking approval and coordination for such a plan from Moscow, which however is likely to back the ongoing talks between Assad and Kurdish representatives. Or the provocative statements could also merely be the latest Turkish thumb in Washington’s eye.

But as we mentioned previously, this is where the Syrian Kurds are actually headed: towards making a deal with Assad which would provide Syrian Army protection to Kurdish enclaves in the face of the invading Turks. This truly local solution, fast taking shapewill occur without the United States or Turkey, and in affirmation of Syrian sovereignty.

As Washington and Ankara feud, and as President Trump seeks to clamp down on the conflicting messages on Syria from within his own administration, the “solution” may come faster and more organically than anyone thought, namely a Russian-backed Syrian Army advance on Kurdish enclaves in coordination with the YPG/former SDF Kurdish fighters.

end

6. GLOBAL ISSUES

Another indicator of global growth stuttering:  Ford is to cut thousands of European jobs and close factories in a major restructuring

(courtesy zerohedge)

 

Ford To Cut Thousands Of European Jobs, Close Factories In “Major Restructuring”

In the latest confirmation that global auto sales are sliding and that US automakers are struggling to compete in the hypercompetitive European car market – something that President Trump might interpret as another reason to press ahead with auto tariffs presently being studied by the Commerce Department – Ford has announced a massive ‘restructuring’ of its European operations, following in the footsteps of GM’s much broader restructuring, that will entail thousands of job cuts and possibly factory closures.

The cuts are hardly a surprise after the carmaker’s foreign profits have plunged over the past two years thanks in part to exchange rate-related losses spurred by the strength of the dollar, as well as poor sales of its diesel models. According to the BBC, which broke the story, Ford will lay off ‘thousands’ of workers and contemplate factory closures. Ford’s decision to curtail its European operations comes two years after GM sold its European subsidiary to French carmaker Peugeot.

Ford

The FT reported that Ford employs 53,000 people in Europe (13,000 in the UK alone) across 15 factories, including two engines plants  in the UK at Bridgend and Dagenham. The Bridgend plant in particular could be in danger because Ford lost a major contract to build engines for Jaguar Land Rover in 2020. Meanwhile, Ford’s Dunton Technical Centre in Essex could potentially benefit from new investment in the commercial vehicles

Globally, the automaker is targeting $14 billion in cuts outside North America to try and revive its international business. Analysts have projected that the company could shed up to 24,000 of its international employees as it struggles to reach its 8% profitability target by 2020 (which would put Ford back ahead of Fiat Chrysler). In the region, Ford is targeting profitability of 6% after the restructuring (something it has never before achieved).

Ford

Its restructuring will focus on culling its offerings to only the most popular models while exiting markets where performance has lagged. The carmaker is also in discussions with unions to save costs, while planning to expand its profitable commercial vehicle business.

Every part of Ford’s business will face a review as the carmaker “tears up its strategy” for competing on the Continent (and in the UK).

“This is not about making the business today more efficient but completely redesigning it,” Ford’s European president Steve Armstrong told the Financial Times.

[…]

Mr Armstrong said Ford intended to stay in Europe, but that “everything is possible if we can’t get the reset done.”

News of the European restructuring follows the company’s decision to shutter most of its car brands in North America as it focuses on popular SUVs, pickup trucks and its Mustang sports car.

A similar pattern appears to be playing out in Europe, though the company said it intends to focus on the “mass market” segment. Its European arm will be subdivided into three segments: Commercial vehicles, passenger cars and imported vehicles. In a partnership expected to be announced next week, Ford plans to work with VW on commercial vehicles.

In Europe it has begun winding down the C-Max small minivan, and will “look at the line up, Fiesta, Focus, Mondeo, everything else,” said Mr Armstrong.

All new models sold in the region will come with an electric or hybrid option, as the carmaker tries to lower the CO2 output of its fleet ahead of stringent EU targets that come into force next year.

After a year of abysmal auto sales – and ahead of what’s expected to be another difficult year – Ford last week joined rival GM in saying it would no longer report monthly car sales after reporting a 9% drop for December. Despite the Trump tax cuts having goosed its bottom line, the underperformance of Ford’s shares last year portends more cuts ahead – likely in its flagship North American market, which would could potentially elicit blowback in Washington (see Trump’s furious response to GM’s decision to cut 15,000 jobs in North America).

end

Canada/China

Canada has certainly got itself into a mess dealing with China on the Meng (Huawei affair). There is no doubt that Huawei did conduct operations with Iran selling USA technology to Iran.  China has arrested two Canadian diplomats and these guys will not be released.  Now China is accusing the Canadians of “white supremacy” over the prosecution of Meng

(courtesy zerohedge)

 

China Accuses “Canadian Elites” Of “White Supremacy” Over Prosecution Of Huawei CFO

Justin Trudeau has already been accused of being a misogynist. Now his entire government is being accused of White Supremacy by the Chinese ambassador to Ottawa over its insistence that China release two Canadians – including a former diplomat who were detained by Chinese authorities last month, despite China’s insistence that both men “without a doubt” posed a threat to Chinese national security.

Meng

In the op-ed, published by Ottawa’s the Hill Times newspaper, ambassador Lu Shaye lashed out at Canadian “elites [who] completely dismissed China’s law and presumptuously urged China to immediately release their citizens.” He also accused Canada of enforcing a double standard by detaining Huawei CFO Meng Wanzhou despite her not having committed a violation of Canadian law. Canadians have shown intense concern over the wellbeing of their citizens, but Lu accused them of behaving thoughtlessly and cruelly toward Meng.

However, on the prior groundless detention of Chinese citizen Meng Wanzhou by Canada at the behest of the United States, these same people made utterly different comments. They insisted that Canada’s detention of a Chinese citizen who was transferring planes at the airport was “acting in accordance with law,” though Meng has not been charged with any violation of Canadian law.

It’s understandable that these Canadians are concerned about their own citizens. But have they shown any concern or sympathy for Meng after she was illegally detained and deprived of freedom?

Without violating any Canadian law, Meng was arrested last month and put in handcuffs just as she was changing planes at the Vancouver International Airport. It seems that, to some people, only Canadian citizens shall be treated in a humanitarian manner and their freedom deemed valuable, while Chinese people do not deserve that.

Lu pointed out the hypocrisy in Canadian officials’ insistence that Meng’s detention was just because Canada is a country that respects the “rule of law,” implying that China isn’t.

When China called on the Canadian side to release Meng and ensure her legal and legitimate rights and interests, those elites claimed in the media that Canada is a country of rule of law and has an independent judiciary, and therefore it must comply with the judicial proceeding. However, in the case of detention of Canadian citizens in China who violated China’s law, those elites completely dismissed China’s law and presumptuously urged China to immediately release their citizens. It seems that, to those people, the laws of Canada or other Western countries are laws and must be observed, while China’s laws are not and shouldn’t be respected.

In a repudiation of the US’s accusations that Huawei has helped the Chinese government spy on western rivals, Lu pointed out that while Canada has objected to Huawei, it hasn’t shown a similar level of concern about cyberespionage efforts carried out by the US – including those that were exposed in the sensitive NSA documents stolen by former contractor Edward Snowden.

Some people in Canada, without any evidence, have been hyping the idea that Huawei is controlled by the Chinese government and poses security threats to Canada and other Western countries, and that Chinese law requires China’s enterprises to collaborate with the government in espionage activities. However, these same people have conveniently ignored the PRISM Program, Equation Group, and Echelon—global spying networks operated by some countries that have been engaging in large-scale and organized cyber stealing, and spying and surveillance activities on foreign governments, enterprises, and individuals. These people also took a laissez-faire attitude toward a country that infringes on its citizens’ privacy rights through the Patriot Act. They shouted for a ban by the Five Eyes alliance countries (Australia, Canada, New Zealand, the United Kingdom, and the United States) on the use of Huawei equipment by these countries’ own enterprises, which is literally a government-controlled action.

When Canada creates its national security laws, Lu says, it seems espionage carried out by western governments is deemed essential to national security, while China’s espionage efforts are branded a threat.

When making laws for national security and intelligence, China has drawn references from the relevant laws of the U.S., Canada, and other Western countries. Something is considered as “safeguarding national security” when it is done by Western countries. But it is termed “conducting espionage” when done by China. What’s the logic?

Though Canada considers itself a bastion of liberal values, Lu claimed that double standards like this one stem from the same western “white supremacy” that has made “the rule of law” nothing more than a tool for political ends – despite the seemingly endless stream of virtue-signaling.

The reason why some people are used to arrogantly adopting double standards is due to Western egotism and white supremacy. In such a context, the rule of law is nothing but a tool for their political ends and a fig leaf for their practising hegemony in the international arena. What they have been doing is not showing respect for the rule of law, but mocking and trampling the rule of law.

Meanwhile, China has clearly indicated that it intends to prosecute Michael Kovrig and Michael Spavor for threatening national security – though they’ve offered the caveat that both cases are still “under investigation”, leaving an opening to release the two men, presumably if Canada decides to drop its prosecution of Meng. Both men have been denied access to legal representation.

end

 

.

 

7  OIL ISSUES

The Nord Stream 2 is losing support in Germany.  Is Germany turning to the uSA for expensive LNG?

or will Germany go the TurkStream project

(courtesy Nick Cunningham/OilPrice.com)

Nord Stream 2 Is Losing Support In Germany

Authored by Nick Cunningham via Oilprice.com,

The Nord Stream 2 pipeline is running into some trouble amid opposition from the Trump administration.

Support for the Nord Stream 2 pipeline in Germany is slipping, according to a report from Bloomberg. Some politicians in Chancellor Angela Merkel’s coalition are moving against the pipeline for geopolitical reasons,citing fears that the project would allow Russia a freer hand in Ukraine.

As it stands, Russia still needs to ship large volumes of gas to Europe via Ukraine. Nord Stream 2 would allow Russian gas to bypass Ukraine, giving Russia more leverage to meddle in Ukraine while still reliably delivering gas to Europe.

Merkel has been supportive of the project, not least because several major western European companies have stakes in the pipeline, including Royal Dutch Shell, as well as major German companies Wintershall and BASF. Last year, Merkel, under intense pressure from the Trump administration and some countries in Eastern Europe, acknowledged that the Nord Stream 2 had geopolitical ramifications and suggested that the project could face roadblocksif the end result was harm to Ukraine. Still, she seemed to want to push the project forward.

However, those efforts are starting to run into trouble. The recent seizure of Ukrainian sailors by Russia is starting to increase unrest within Merkel’s coalition, Bloomberg reports. A growing block of German politicians view the project is a geopolitical liability.   

The timing is not great for Nord Stream 2. The Trump administration hasaggressively opposed the project for quite some time.

There is not only Russian gas coming through the pipeline, but also Russian influence,”Richard Grenell, the U.S. ambassador to Germany, said in a statement to Bloomberg News.

Now is not the time to reward Moscow.”

In December, the U.S. House of Representatives approved a non-binding resolution opposing Nord Stream 2. The resolution passed with bipartisan support, calling the pipeline a “drastic step backwards for European energy security and United States interests.” The resolution also called upon President Trump to “use all available means to support European energy security through a policy of diversification to lessen reliance” on Russia.

The U.S. suggested several times last year that it could hit the project with sanctions, and Bloomberg says that such measures could be “imminent.” The U.S. Congress has at times vociferously opposed some of President Trump’s foreign policy goals, but if his administration moves forward with sanctions on Nord Stream 2, it is unlikely there will be a constituency in Washington to defend the project.

While American motivations for derailing Nord Stream 2 are influenced by fears of Russian influence in Europe, the U.S. administration is also undoubtedly trying to force American gas into the European market to benefit American companies. American politicians like to cite European energy security when campaigning against Nord Stream 2, but from the European vantage point, the U.S. government is blocking a reliable source of gas in order to benefit its own companies. To some, that doesn’t sound very much like enhancing energy security.

Last July, President Trump leaned very heavily on European allies at the NATO summit, essentially threatening them with a trade war unless they bought more American gas. European Commission President Jean-Claude Juncker agreed to take in more LNG, although his statements were sufficiently vague so as not to commit the EU to anything binding. “The European Union is ready to facilitate more imports of liquefied natural gas from the U.S. and this is already the case as we speak. The growing exports of U.S. liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply,” Juncker said in a statement last summer.

Russia still supplies about 40 percent of the European Union’s natural gas needs. To be sure, U.S. LNG shipments to Europe have been rising, but despite its recent growth, American gas is still a rounding error in Europe. In the short run, the possibility of severe cold sweeping over Europe could bolster the economics of important LNG from the United States.

Gas demand in Europe is flat, and has been for quite some time. But an array of policies aimed at shutting down nuclear and coal-fired power plants will serve to increase gas consumption in Europe. And with European gas supply not able to keep up, more imports are likely.

That’s exactly why the developers of Nord Stream 2, and its proponents, say a new pipeline is needed. But the Trump administration is hoping to block that project in order to bolster the case for U.S. LNG.

end

8. EMERGING MARKETS

BRAZIL

Brazil in complete chaos

(courtesy zerohedge)

“Complete Chaos” As Brazil’s Gangs Go Ballistic Over Bolsonaro Crackdown

Brazil has been swept with a rash of violence as gangs react to new President Jair Bolsonaro’s crackdown on crime – which includes military takeovers of Brazilian cities and shoot-to-kill orders carried out by teams of sharpshooters.

Five hundreds national guard troops have been deployed to the north-eastern town of Fortaleza in the state of Ceará, after authorities have been overwhelmed by more than a week of violence which saw more than 160 attacks, reports the Guardian.

Security forces say three rival drug gangs have come together to carry out more than 160 attacks in retaliation for a proposal to end the practice of separating gang factions inside Brazil’s prisons.

Buses, mail trucks and cars have been torched. Police stations, city government buildings and banks have been attacked with petrol bombs and explosivesOn Sunday, criminals blew up a telephone exchange, leaving 12 cities without mobile service. Other explosions have damaged a freeway overpass and a bridge. –Guardian

There have been 148 arrests linked to the attacks, while at least 20 prisoners suspected of ordering the attacks haver been transferred from state to federal prisons – where Bolsonaro’s administration says it won’t back down on its plan to combat gang activity.

Via The Guardian

Ross Dayton@rdayt_

Prison gangs launched 153 arson attacks in and around Fortaleza, Brazil since Wednesday night. Cars, buses, shopping centers, banks, and government buildings have been targeted. 148 have been detained, and 2 suspects have been killed.https://g1.globo.com/ce/ceara/noticia/2019/01/04/ataques-no-ceara-o-que-se-sabe-e-o-que-falta-saber.ghtml 

View image on TwitterView image on Twitter

Ross Dayton@rdayt_

Gang members detonated an IED on a viaduct support column, putting the viaduct structure at risk of collapse. https://g1.globo.com/ce/ceara/noticia/2019/01/03/viaduto-da-caucaia-atacado-com-explosivos-pode-desabar-a-qualquer-momento-diz-dnit.ghtml  pic.twitter.com/23udUoicpl

View image on Twitter

Homicide rates in Fortaleza and other north-eastern cities have soared in recent years, as a territorial wars have broken out between Brazil’s most notorious gangs; the First Capital Command (known as the PCC in Portuguese) from São Paulo and the Red Command (Comando Vermelho) from Rio de Janeiro, which have locked horns with the Fortaleza-based Guardians of the State and the Northern Family from Amazonas state.

The PCC and the Red Command are locked in a bitter fight to control Brazil’s drugs trade, and Fortaleza is seen as a strategic prize because it is the closest large port to Europe and Africa. –Guardian

We used to only see this kind of savagery on television in Rio de Janeiro. Things used to be mellow here,” said Carlos Robério, co-owner of a minibus co-op in Fortaleza who watched helplessly over a CCTV feed as a group of youths doused one of their kiosks before setting it on fire.

Robério said that the breakdown in civility has made him want to arm himself. “It’s complete chaos here and I feel like I’m in the middle of the ocean without a life raft”

To that end, Bolsonaro last week said over Twitter that he would issue a decree to ease gun laws, making it much easier for adults over 25 to obtain firearms, as long as they have no criminal record. Bolsonaro says that allowing “good” people to own guns will discourage criminals, as well as reduce Brazil’s homicide rate after nearly 64,000 murders last year.

Brazil’s security forces killed 5,000 people in 2017, an average of 14 a day.

Meanwhile, authorities in Rio de Janeiro have trained up to 120 sharpshooters which will acccompany the city’s police force into nearby slums to eradicate violent gun-toting criminals.

The marksmen will work in pairs; one shooter and one spotter who will monitor conditions and videotape the executions, according to Bloombergwith the two officers alternating roles.

“The protocol will be to immediately neutralize, slaughter anyone who has a rifle,” said Witzel – a former Brazilian marine and federal judge, on December 12. “Whoever has a rifle isn’t worried about other people’s lives, they’re ready to eliminate anyone who crosses their path. This is a grave problem, not just in Rio de Janeiro, but in other states.”

end

 

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

Euro/USA 1.1535 DOWN .0019 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES RED EXCEPT SPAIN

 

 

 

 

USA/JAPAN YEN 108;08  DOWN 0.101 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…DEADLY TO OUR YEN SHORTERS

GBP/USA 1.2736     DOWN    0.0062  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3221 UP .0002 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 THURSDAY morning in Europe, the Euro FELL by 19 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1535/ Last night Shanghai composite CLOSED  DOWN 9.25 POINTS OR 0.36% 

 

 

//Hang Sang CLOSED UP 59.11 POINTS OR 0.22%

 

/AUSTRALIA CLOSED UP 0.27%  /EUROPEAN BOURSES RED EXCEPT SPAIN

 

 

 

 

 

 

The NIKKEI: this THURSDAY morning CLOSED DOWN 263.26 POINTS OR 1.29% 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED EXCEPT SPAIN

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 59.11 POINTS OR 0.22% 

 

 

 

/SHANGHAI CLOSED DOWN 9.25 PTS OR 0.36%

 

 

 

 

Australia BOURSE CLOSED UP 0.27%

 

Nikkei (Japan) CLOSED DOWN 263.02 POINTS OR 1.29% 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1293.30

silver:$15.71

Early THURSDAY morning USA 10 year bond yield: 2.70% !!! DOWN 2 IN POINTS from WEDNESDAY’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 3.01 DOWN 0  IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)/

USA dollar index early THURSDAY morning: 95.29 UP 7 CENT(S) from  WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.72% DOWN 5    in basis point(s) yield from WEDNESDAY/

JAPANESE BOND YIELD: +.02%  DOWN 1   BASIS POINTS from WEDNESDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.45% DOWN 3   IN basis point yield from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 2.89 DOWN 3     POINTS in basis point yield from WEDNESDAY/

 

 

the Italian 10 yr bond yield is trading 134 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 2.64% 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 THURSDAY

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

Euro/USA 1.1517 DOWN   .0038 or 38 basis points

 

 

USA/Japan: 108.29 UP  0.110 OR 11 basis points/

Great Britain/USA 1.2766 DOWN .0032( POUND DOWN 32  BASIS POINTS)

Canadian dollar DOWN 25 basis points to 1.3239

 

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The USA/Yuan,CNY closed DOWN AT 6.7881-  ON SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.7881(  YUAN DOWN)

TURKISH LIRA:  5.4108

the 10 yr Japanese bond yield closed at +.02%

 

 

 

Your closing 10 yr USA bond yield DOWN 2 IN basis points from WEDNESDAY at 2.71 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.02 DOWN 1  in basis points on the day /

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

Your closing USA dollar index, 95.44 UP22 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 THURSDAY: 12:00 PM 

London: CLOSED UP 36.74 OR 0.52%

German Dax : CLOSED UP 28.77 POINTS OR 0.26%

Paris Cac CLOSED DOWN 7.92 POINTS OR 0.16%

Spain IBEX CLOSED DOWN 33.28 POINTS OR 0.38%

Italian MIB: CLOSED UP 121.58 POINTS OR 0.63%

 

 

 

 

WTI Oil price; 52.15 12:00 pm;

Brent Oil: 61.24 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    67.03  THE CROSS HIGHER BY 0.30 ROUBLES/DOLLAR (ROUBLE LOWER BY 30 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.4816 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 :52.46

 

BRENT :  61.40

USA 10 YR BOND YIELD: 2.74%…

 

 

USA 30 YR BOND YIELD: 3.06%/

 

 

 

EURO/USA DOLLAR CROSS: 1.1488 ( DOWN 55 BASIS POINTS)

USA/JAPANESE YEN:108.45 UP 0.269 (YEN DOWN 27 BASIS POINTS/..deadly to yen shorters

.

 

USA DOLLAR INDEX: 95.56 UP  34 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2745 DOWN 53 POINTS FROM YESTERDAY

the Turkish lira close: 5.4186

the Russian rouble:  66.86 DOWN .19 Roubles against the uSA dollar.( DOWN 19 BASIS POINTS)

 

Canadian dollar: 1.3237 DOWN 23 BASIS pts

USA/CHINESE YUAN (CNY) : 6.7885  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.7926 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.25%

 

The Dow closed UP 122.80 POINTS OR 0.51%

 

NASDAQ closed UP 28.99 POINTS OR 0.842%

 


VOLATILITY INDEX:  19.50 CLOSED DOWN 0.48 

 

LIBOR 3 MONTH DURATION: 2.799%  .LIBOR  RATES ARE RISING/

 

FROM 2.782

 

 

 

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

 

“Patient” Powell “Substantially” Spooks Stocks But Dip-Buyers Rescue Best Run In A Decade

Biggest short-squeeze since March 2009 lows and best 10-day rally since 2008 following Mnuchin’s invocation of the PPT? This just seemed appropriate…

..

 

 

Terrible inflation data from China overnight sent stocks lower after an initial jump (bad news is good)…

 

European stocks opened ugly after France IP unexpectedly plunged…then were panic-bid back to the highs of the day…

 

In the US, all eyes and ears were on Powell, he started well with “patient” being pushed but spooked stocks when he said the balance sheet would be “substantially” lower… of course that will never do and dip-buyer ran in quickly to rescue the record rebound…

 

 

By the close all the major US equity indices were up almost exactly the same amount on the day (probably nothing right?)…

 

Small Caps are now up 14% from the Mnuchin Massacre lows on Xmas Eve…

 

Macy’s puked (record drop) in the punchbowl of the consumer’s recovery and smashed retailer and department store stocks…

 

American Airlines crashed – also ruining the party that airline stocks had been having…but dip-buyers ran in aggressively…

 

Despite the ongoing compression in credit markets, this is the longest the market has gone without a junk bond issue in two decades…

 

And HYG started the day off ugly but was ebullient by the close…

 

Treasury yields surged on the day with the long-end dramatically underperforming after a dismal 30Y auction…

 

Notably, 30Y Yields are now back up to pre-Fed rate-hike levels…

 

Interestingly BE’s actually fell today despite oil’s gains…

 

The dollar rebounded modestly from yesterday’s dovish FOMC statement drop…

 

Ugly day for cryptos, slamming most of the majors into the red for 2019…

 

Dollar strength weighed on PMs, dismal China data dropped copper, but crude extended gains…

 

WTI extended gains pushing up towards $43…

 

Finally, a chart to consider before you buy another fucking dip…

Which makes you wonder if “you are here”…

And in case you needed a “worse since Lehman” chart, viola..

 

market trading/

Late afternoon:

like I said…Powell will increase rates and lower his balance sheet despite the poor economic USA performance

 

Stocks Slide As Powell Confirms Balance Sheet Will Be “Substantially” Smaller

Having initially popped as Fed Chair Powell used the word “patient” four times in the first few minutes of his Q&A today, stocks suddenly dropped as he addressed the size of the balance sheet…

Pump…

  • *POWELL: FED CAN WATCH PATIENTLY AND CAREFULLY
  • *POWELL SAYS FED HAS THE ABILITY TO BE PATIENT ON RATES
  • *POWELL SAYS FED IS IN A PLACE WHERE IT CAN BE PATIENT, FLEXIBLE
  • *POWELL: FED WAITING, WATCHING AND CAN BE PATIENT, FLEXIBLE

And Dump…

  • *POWELL: WE WANT TO RETURN BALANCE SHEET TO MORE NORMAL LEVEL
  • *POWELL: NOT SURE YET WHAT LONG-TERM SIZE OF B/SHEET WILL BE
  • *POWELL: B/SHEET TO BE SMALLER THAN NOW BUT LARGER THAN BEFORE

Markets did not like that…

Specifically, Powell said The Fed “balance sheet will be substantially smaller that it is now”, and is it that “substantially” that triggered the weakness.  

 

end

 

 

market data/

 

end

USA ECONOMIC STORIES OF INTEREST

 

Jeffrey Snider catches the key phrases in the minutes of the FOMC in contrast to the verbiage spilled by Powell.  They are polar opposite. Inflation expectations are muted and the economy is not strong at all.  As Snider pounds the table:
” Policymakers really have no idea what they are doing and that’s what’s being exposed. I expect that over the coming months policymakers here and elsewhere are going to really regret overhyping 2017’s small economic uptick. Market reaction, more than what’s already at stake, might not be muted.”
always pay special attention to what Jeffrey says:
(courtesy Jeffrey Snider/Alhambra Investment Partners)

Epic Flip-Flop: From Surefire Inflation To “Muted” In Three Weeks

Authored by Jeffrey Snider via Alhambra Investment Partners,

And just like that, it’s all different. For more than a year, two years, really, we’ve heard constantly about wage pressures. The US economy buoyed by several domestic factors as well as globally synchronized growth was in danger of getting too far out of hand. The unemployment rate said it was time – three years ago in 2015.

The lower the unemployment rate fell, the more likely the dangers of labor pressures. Orthodox thinking is consistent in its Phillips Curve rituals. This was the basis for “rate hikes” plus balance sheet normalization (what some call QT, or quantitative tightening).

The last hike was barely three weeks ago. In announcing it, the Federal Reserve’s Chairman Jay Powell played resoundingly confident. Not just in the view of economic risks, inflation, but also why. The economy was strong, stronger, and stronger still.

The minutes of that meeting, just released, curiously paint a very different picture of both the debate and offered result. This actually isn’t a surprise. Outwardly, officials project what they think is required. Monetary policy has no money in it, therefore what’s left is confidence and confident-sounding declarations. Powell featured exactly that.

Markets responded quite differently, of course, explaining the not-so-subtle change. The Chairman bluffed, eurodollar futures, oil prices, stocks and UST futures (pretty much everyone) called him on it.

The result is how the same FOMC meeting has produced very different interpretations of it. Powell says strong, the official minutes say “muted.” As in:

With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier. Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming. [emphasis added]

Wait a minute. Inflation was in danger of being a monster the Fed could ill-afford to delay in resisting. That was the whole “strong” economy thing. Now it’s muted?

Some participants cited a weaker near-term trajectory for economic growth or a muted response of inflation to tight labor marketconditions as factors contributing to the downward revisions in their assessments of the appropriate path for the policy rate. [emphasis added]

The highlighted parts give it all away; the labor market can’t have been “tight” if there aren’t any inflation pressures, and if it was and they failed to materialize in broader fashion among consumer prices the economy can’t have been “strong” else companies would most certainly have passed on the increased input costs.

Something big is clearly missing, and the official minutes admitted this fact (in their own muted fashion).

Of course, this is all theater. The only thing moving the CPI was WTI not wages. That didn’t stop the media from playing along with its constant, fatuous writings about the non-existent labor shortage. The LABOR SHORTAGE!!!! was nothing short of emotional projection (including the Beige Book).

The greatest boom in decades has turned out to be the most fragile boom ever; therefore, it wasn’t a boom.

This more than anything explains what happened in December, as well as all the escalating warnings leading up to it. It wasn’t financial market volatility so much as the curtain being pulled back exposing reality.

Globally synchronized growth would have benefited EM’s more than anyone after the beatdown they suffered in the last downturn three years ago. But Eurobonds and currencies reversed to begin last year, leaving the entire system a May 29 to puzzle over. Central bankers chose to pay it little mind, lip service suggesting “strong worldwide demand for safe assets” was somehow a mispricing of them (the FOMC should’ve consulted 2007 Bill Dudley about this first).

Rather than stay an EM crisis, or “overseas turmoil” in the parlance of 2015, after May 29 the cancer (contagion) spread inward. Late in the year, it became pretty obvious the disease was serious. If slight eurodollar futures inversion wasn’t enough to get your attention, then WTI contango. And if that wasn’t enough, broad UST and eurodollar inversions.

And like that, from inflation hysteria and a resistant strong economy to “muted” and “volatility in financial markets and the increased concerns about global growth.” Always behind, concern about global growth was January 2018 not January 2019; we’re way past that.

I can’t recall before ever seeing meeting minutes so opposed to the crafted message of the actual meeting they were taken from, and I don’t think on balance that’s a good sign. Bernanke wanted transparency but ambiguity benefits a central bank at times (the Montagu Norman doctrine). The difference is Bernanke (and his successors) believed the central bank was actually a powerful and accurate economic tool, becoming even more effective when opened up. He wanted the world to marvel in, and be reassured by, the technocratic prowess he was sure would always be on display.

We’ve been treated instead to the bumbling dissembling and absurd psychology of the emotionally desperate. 

Transparency in this latter case only confirms what people increasingly suspect. Policymakers really have no idea what they are doing and that’s what’s being exposed. I expect that over the coming months policymakers here and elsewhere are going to really regret overhyping 2017’s small economic uptick. Market reaction, more than what’s already at stake, might not be muted.

end

BRICK AND MORTAR operations continue to plummet.  Today Macy’s plummets 17% after cutting guidance.

(courtesy zerohedge)

Macy’s Plummets 17% After Cutting Guidance As Retailers Tumble

One week after Apple stock crashed when the company cut its revenue guidance for the first time in 16 years, today it’s the retailers fault to pull the rug from under investors when first Kohl’s then Macy’s slashed guidance following weak holiday spending, crushing the narrative of the “strong consumer.”

After this website repeatedly warned that the massive inventory buildup that helped boost Q3 GDP was unsustainable and would result in major liquidations and matched earnings drops not to mention a sharply weaker Q1 GDP…

… today Macy’s confirmed just that when the giant retailer cut its 2018 guidance, saying the company will continue to take necessary steps in January to “ensure a clean inventory position”. As a result, Macy’s now sees adjsuted year EPS $3.95 to $4.00, down from $4.10 to $4.30 previously.

Macy’s also reported that November and December owned comp sales were up 0.7%, also missing expectations.

As a result of the sales miss and guidance cut, Macy’s shares imploded in early trading, dropping as much as 17% premarket. This is what 16 years of buy and hold… and make no profits looks like.

Macy’s wasn’t alone. Because shortly after Target reported ok number, Kohl’s defecated all over the bed and its shares plunged 8% after the company reported Nov. and Dec. holiday-period comp sales rose 1.2% on a shifted basis, much lower than its prior year holiday sales growth of 6.9% and falling short of Wall Street est. of +1.5%, cut from +~2% on Jan. 4.

The abysmal numbers from M, L Brands and KSS dragged down the entire department sector space with J.C. Penney and Nordstrom also falling in pre-market trading, and even Target was down after earlier reported holiday comps. up 5.7%, stronger than expected, as suddenly the narrative of the strong US consumer is once again on the rocks.

In light of these disappointing spending numbers, it is almost as if the market not only leads the economy, but a sliding market crushes US consumer spending intentions.

 end
we have been highlighting this to you on several occasions.  It seems that the next crisis will occur when the high yield bond portfolio’s blow up with nobody out there willing to buy the crap
a must read…
(courtesy James Rickards/Daily Reckoning)

Here’s Where The Next Crisis Starts

Authored by James Rickards via The Daily Reckoning,

The case for a pending financial collapse is well grounded. Financial crises occur on a regular basis including 1987, 1994, 1998, 2000, 2007-08. That averages out to about once every five years for the past thirty years. There has not been a financial crisis for ten years so the world is overdue. It’s also the case that each crisis is bigger than the one before and requires more intervention by the central banks.

The reason has to do with the system scale. In complex dynamic systems such as capital markets, risk is an exponential function of system scale. Increasing market scale correlates with exponentially larger market collapses.

This means a market panic far larger than the Panic of 2008.

Today, systemic risk is more dangerous than ever because the entire system is larger than before. Due to central bank intervention, total global debt has increased by about $150 trillion over the past 15 years. Too-big-to-fail banks are bigger than ever, have a larger percentage of the total assets of the banking system and have much larger derivatives books.

Each credit and liquidity crisis starts out differently and ends up the same. Each crisis begins with distress in a particular overborrowed sector and then spreads from sector to sector until the whole world is screaming, “I want my money back!”

First, one asset class has a surprise drop. The leveraged investors sell the sinking asset, but soon the asset is unwanted by anyone. Margin calls roll in. Investors then sell good assets to raise cash to meet the margin calls. This spreads the panic to banks and dealers who were not originally involved with the weak asset.

Soon the contagion spreads to all banks and assets, as everyone wants their money back all at once. Banks begin to fail, panic spreads and finally central banks step in to separate winners and losers and re-liquefy the system for the benefit of the winners.

Typically, small investors (and some bankrupt banks) get hurt the worst while the big banks get bailed out and live to fight another day.

That much panics have in common. What varies in financial panics is not how they end but how they begin. The 1987 crash started with computerized trading. The 1994 panic began in Mexico. The 1997–98 panic started in Asian emerging markets but soon spread to Russia and the big banks. The 2000 crash began with dot-coms. The 2008 panic was triggered by defaults in subprime mortgages.

The problem is that regulators are like generals fighting the last war. In 2008, the global financial crisis started in the U.S. mortgage market and spread quickly to the overleveraged banking sector.

Since then, mortgage lending standards have been tightened considerably and bank capital requirements have been raised steeply. Banks and mortgage lenders may be safer today, but the system is not. Risk has simply shifted.

What will trigger the next panic?

Prominent economist Carmen Reinhart says the place to watch is U.S. high-yield debt, aka “junk bonds.”

I’ve also raised the same argument. We’re facing a devastating wave of junk bond defaults. The next financial collapse will quite possibly come from junk bonds.

Let’s unpack this…

Since the great financial crisis, extremely low interest rates allowed the total number of highly speculative corporate bonds, or “junk bonds,” to rise about 60% — a record high. Many businesses became extremely leveraged as a result. Estimates put the total amount of junk bonds outstanding at about $3.7 trillion.

The danger is that when the next downturn comes, many corporations will be unable to service their debt. Defaults will spread throughout the system like a deadly contagion, and the damage will be enormous.

This is from a report by Mariarosa Verde, Moody’s senior credit officer:

This extended period of benign credit conditions has helped many weak, highly leveraged companies to avoid default… A number of very weak issuers are living on borrowed time while benign conditions last… These companies are poised to default when credit conditions eventually become more difficult… The record number of highly leveraged companies has set the stage for a particularly large wave of defaults when the next period of broad economic stress eventually arrives.

If default rates are only 10% — a conservative assumption — this corporate debt fiasco will be at least six times larger than the subprime losses in 2007-08.

Many investors will be caught completely unprepared. Once the tsunami hits, no one will be spared. The stock market is going to collapse in the face of rising credit losses and tightening credit conditions.

But corporate debt is not the only dagger hanging over the economy. Credit conditions have already begun to affect the real economy. Student loan losses are also skyrocketing. Losses are also soaring on subprime auto loans, which has put a lid on new car sales. As these losses ripple through the economy, mortgages and credit cards will be the next to feel the pinch.

Have we already seen the beginning of the next crisis? No one knows for sure, but the time to prepare is now. Once the market falls apart, it’ll be too late to act.

That’s why the time to buy gold is now, while it’s cheap. When you need it most, once the crisis hits, it’ll cost a fortune.

Both the panics of 1998 and 2008 began over a year before they reached the level of an acute global liquidity crisis.

Investors has ample time to reduce risky positions, increase cash and gold allocations and move to the sidelines until the crisis abated. At that point there were bargains galore for those with cash.

An investor with cash in 2008 could have preserved wealth during the crisis and nearly quadrupled his money since then by buying the Dow Jones index at 6,550 (even with the recent turmoil, today it’s still around 23,600).

Relatively few investors did this. Instead they suffered from “fear of missing out” as markets rose until the panic began. They persisted in the mistaken belief that they could “get out in time” if markets reversed, not realizing that reversals happen much faster than rallies. They held onto losing positions hoping they would “come back” (they did after 10 years) and so on.

Simple behavioral biases stand in the way of doing the right thing almost every time.

For now, it’s not clear which way things will break next. Volatility is back and markets are still in a precarious position. Fed chairman Jay Powell threw markets a bone last Friday when he basically said all rate hikes are off until further notice and that he’s willing to scale back QT “if needed.” Markets have naturally rallied since Powell’s remarks.

If you still need proof that today’s rigged markets still require support from the Fed, here it is. But it’s far from clear the next crisis can be avoided at this point.

You don’t want to be heavily exposed to these markets. It’s far better to get out too early than too late. You should not be the last to be get ready. Start now to decrease equity allocations and increase your allocations to cash and gold so you can weather the coming storm.

Preparation means 10% percent of your investible assets in gold or silver and another 30% in cash. That allocation will preserve wealth and provide dry powder for bottom-fishing in the crisis to come.

 

SWAMP STORIES

 

Trump is showing no signs of retreat:  He accuses Shumer of lying.  He also states that there is great unity in the republican party for border security

(courtesy zerohedge)

Trump Slams Lying ‘Cryin Chuck’ Schumer, Says There’s “GREAT Unity” In GOP On Border Security

Following what was by all accounts (including the president’s) a contentious meeting over border security funding between the White House (Trump and VP Mike Pence) and the Democratic leadership (Schumer and Pelosi) on Wednesday, Dems seized on an opportunity to try and portray Trump as unstable and child-like by telling reporters that he stormed out of the meeting after 45 minutes, with Schumer saying that Trump threw a “tantrum” when he realized Democrats weren’t there to concede before “slamming the table and storming out.”

As is his nature, Trump can’t let these kinds of critical remarks go unchallenged. So in a Thursday morning tweet, Trump took a shot at “Cryin Chuck” and his “favorite lie”. Instead, Trump said he “politely” said “bye-bye” and “left” after Pelosi said the Dems woudn’t agree to funding for border security.

Donald J. Trump

@realDonaldTrump

Cryin Chuck told his favorite lie when he used his standard sound bite that I “slammed the table & walked out of the room. He had a temper tantrum.” Because I knew he would say that, and after Nancy said no to proper Border Security, I politely said bye-bye and left, no slamming!

In a second tweet, Trump again pushed back at reports that some Senate Republicans are preparing to throw their support behind a compromise that would end the partial shut down and leave border security funding for another time, instead warning that there is “GREAT unity with the Republicans in the House and Senate” and that the only obstacle to ending the partial shutdown are “the Opposition Party” (ie the media) and “the Dems”.

Donald J. Trump

@realDonaldTrump

There is GREAT unity with the Republicans in the House and Senate, despite the Fake News Media working in overdrive to make the story look otherwise. The Opposition Party & the Dems know we must have Strong Border Security, but don’t want to give “Trump” another one of many wins!

For what it’s worth, Trump’s version of events seems to jibe with reports that he offered Democratic leaders an array of candy at the meeting in a gambit appealing to their sweet tooth.

As of tomorrow, the partial shutdown will become the longest shutdown ever…

Donald J. Trump

@realDonaldTrump

“Great support for Border Security and the Wall.” @foxandfriends Even greater than anyone would know! “Presidents supporters do not want him to cave.” @SteveDoocy I won’t!

…but despite this, Trump is showing no signs of caving.

end

The Democrats are set to grill Mnuchin over Russian oligarch Deripaska who is an FBI asset.

totally nuts…

(courtesy zerohedge)

 

House Democrats To Grill Mnuchin Over Russian Oligarch Who Was FBI Asset

House Democrats have called on Treasury Secretary Steven Mnuchin to deliver a classified briefing Thursday regarding the Trump administration’s plans to end sanctions affecting several companies tied to Russian billionaire Oleg Deripaska, according to the New York Times.

In April, the Trump administration hit three companies Deripaska controls with sanctions over Russian interference in the 2016 US elections; EN+, Rusal and JSC EuroSibEnergo. Following the announcement, the Treasury Department delayed their implementation – eventually deciding in December that they would be lifted following an aggressive lobbying campaign by Deripaska’s network.

Democratic lawmakers sent Mr. Mnuchin a letter on Tuesday seeking an explanation for why the termination of the sanctions was justified. They expressed concern that Mr. Deripaska still maintained “significant ownership” of En+, the holding company that controls Rusal, while transferring shares to VTB, a sanctioned Russian bank. They also said that the government shutdown was hampering their ability to properly review the decision.

The solution approved by the Treasury Department lifts the sanctions against Mr. Deripaska’s companies in exchange for reducing his stake in EN+ from approximately 70 percent to less than 45 percent, and giving up control of that company and Rusal. –New York Times

Deripaska, who had business dealings with former Trump campaign chairman Paul Manafort, was rumored to be Donald Trump’s “back channel” to Russian President Vladimir Putin. The Russian oligarch hit back in September – admitting to “collusion” when he served as an FBI asset during the Obama administration.

Deripaska spent $25 million of his own money to bankroll an FBI-supervised operation to rescue a retired FBI agent – Robert Levinson, who was kidnapped in 2007 while working on a 2007 CIA contract in Iran.

FBI agents courted Deripaska in 2009 in a series of secret hotel meetings in Paris; Vienna; Budapest, Hungary, and Washington. Agents persuaded the aluminum industry magnate to underwrite the mission. The Russian billionaire insisted the operation neither involve nor harm his homeland. –The Hill

The FBI then tried to turn Deripaska into an FBI informant – an effort involving twice-demoted DOJ #4 official Bruce Ohr and Christopher Steele – the author of the largely unverified “Steele Dossier.”

The attempt to flip Mr. Deripaska was part of a broader, clandestine American effort to gauge the possibility of gaining cooperation from roughly a half-dozen of Russia’s richest men, nearly all of whom, like Mr. Deripaska, depend on President Vladimir V. Putin to maintain their wealth, the officials said. –NYT

Meanwhile, in a September 2016 meeting, Deripaska told FBI agents that it was “preposterous” that Paul Manafort was colluding with Russia to help Trump win the 2016 election. This, despite the fact that Deripaska and Manafort’s business relationship “ended in lawsuits, per The Hill – and the Russian would have every reason to throw Manafort under the bus if he wanted some revenge on his old associate.

So the FBI and DOJ secretly collaborated with Trump’s alleged backchannel over a seven-year period, starting with Levinson, then on Deripaska’s Visa, and finally regarding whether Paul Manafort was an intermediary to Putin. Deripaska vehemently denies the assertion, and even took out newspaper advertisements in the US last year volunteering to testify to Congress, refuting an AP report that he and Manafort secretly worked on a plan to “greatly benefit the Putin government” a decade ago.

Soon after the advertisements ran, representatives for the House and Senate Intelligence Committees called a Washington-based lawyer for Mr. Deripaska, Adam Waldman, inquiring about taking his client up on the offer to testify, Mr. Waldman said in an interview.

What happened after that has been in dispute. Mr. Waldman, who stopped working for Mr. Deripaska after the sanctions were levied, said he told the committee staff that his client would be willing to testify without any grant of immunity, but would not testify about any Russian collusion with the Trump campaign because “he doesn’t know anything about that theory and actually doesn’t believe it occurred.” –NYT

In short, Deripaska wanted it known that he worked with the FBI and DOJ, and that he had nothing to do with the Steele dossier.

Today, Deripaska is banned anew from the United States, one of several Russians sanctioned in April by the Trump administration as a way to punish Putin for 2016 election meddling. But he wants to be clear about a few things, according to a statement provided by his team. First, he did collude with Americans in the form of voluntarily assisting and meeting with the FBI, the DOJ and people such as Ohr between 2009 and 2016.

He also wants Americans to know he did not cooperate or assist with Steele’s dossier, and he tried to dispel the FBI notion that Russia and the Trump campaign colluded during the 2016 election. –The Hill

All of that said, the Russian billionaire will still remain on the US sanctions list, personally, despite the removal of his companies.

END
One complete joke:  Michael Cohen to publicly testify before congress about his work for Trump
(courtesy zerohedge)

Michael Cohen To Testify Publicly Before Congress About “Work For Trump”

Setting the stage for another circus-like public hearing the likes of which haven’t been seen on Capitol Hill since James Comey’s testimony in the spring of 2017, disgraced former Trump attorney Michael Cohen has agreed to “give a full and credible” account of his work for President Trump before the House next month, the New York Times reported.

While we think “credible” is a stretch (if Cohen’s own admission of guilt is to be believed), the former Trump Organization attorney pleaded guilty in august to charges of tax fraud, lying to Congress and campaign finance violations stemming from two payoffs he claims he arranged to two women who were threatening to share stories about their affairs with Trump.

Cohen

Cohen, who was sentenced to three years in prison in December and is working hard to get his sentence reduced by continuing to cooperate with federal prosecutors in Manhattan and Special Counsel Robert Mueller, said he felt that appearing at the public hearing was part of his “commitment to cooperate and provide the American people with answers.”

“In furtherance of my commitment to cooperate and provide the American people with answers, I have accepted the invitation by Chairman Elijah Cummings to appear publicly on February 7,” Mr. Cohen said in a statement. “I look forward to having the privilege of being afforded a platform with which to give a full and credible account of the events which have transpired.”

Since his guilty plea, Cohen has spent more than 70 hours meeting with federal prosecutors. Trump has repeatedly insisted he did nothing wrong and has accused Cohen of lying to prosecutors to spare himself and his family.

Cohen will testify before the House Oversight Committee at the invitation of its Chairman Elijah Cummings, who said late last year that he would request that Cohen appear at a public hearing. Cummings has repeatedly compared Cohen to John Dean, the White House counsel who implicated Nixon and other senior administration officials in the coverup of the Watergate break-in.

Cummings has said he will make sure questions don’t interfere with the Mueller probe, and that he is currently in talks with Mueller’s office.

“He’ll have a chance to tell his side of the story, and we’ll have a chance to question him. The American people deserve that,” Cummings said.

Intelligence Committee Chairman Adam Schiff also said he’s hoping to arrange closed-door testimony with Cohen about Trump’s business dealings in Russia – and presumably the Trump Tower Moscow project, which was the subject of Cohen’s earlier lie to Congress. Jerry Nadler, the newly installed head of the Judiciary Committee, has also said he’d like to speak with Cohen.

Once again, Cohen has managed to distract from one of his former boss, with news of the Cohen hearing drawing attention away from Trump’s photo-op at the Southern border.

Kyle Griffin

@kylegriffin1

Seems like Elijah Cummings and Michael Cohen may have pulled some focus from Trump’s photo-op at the border.

END
SWAMP STORIES/MAJOR STORIES//THE KING REPORT
and special thanks to Chris Powell of GATA for sending this down for us:

@realDonaldTrump: Just left a meeting with Chuck and Nancy, a total waste of time. I asked what is going to happen in 30 days if I quickly open things up, are you going to approve Border Security which includes a Wall or Steel Barrier?  Nancy said, NO. I said bye-bye, nothing else works!

 

@politico: [House Minority Leader] Kevin McCarthy gave his account of events leading to the abrupt ending of Trump’s meeting: “[Trump] turned to the speaker and politely asked her, ‘OK Nancy, if we open the government up, in 30 days could we have border security?’ She raised her hand and said ‘No, not at all’”

 

@ChadPergram: McCarthy says they need to bring cameras back to the meetings on the shutdown… McCarthy accuses Dems of not telling the truth about what happened in WH mtg. Says he was “disturbed” by Dems behavior in mtg

 

WSJ: Trump Nears Declaration of Crisis as Talks Collapse

https://www.wsj.com/articles/trump-says-bypassing-congress-still-an-option-on-wall-11547056461?mod=hp_lead_pos1

 

New York Times Makes Major Correction to Report on Manafort and Russian Oligarch

A previous version of this article misidentified the people to whom Paul Manafort wanted a Russian associate to send polling data. Mr. Manafort wanted the data sent to two Ukrainian oligarchs, Serhiy Lyovochkin and Rinat Akhmetov, not Oleg V. Deripaska, a Russian oligarch close to the Kremlin.

https://www.mediaite.com/print/new-york-times-makes-major-correction-to-report-on-manafort-and-russian-oligarch/

 

Mueller and [DJT’s AG Nominee] Bill Barr ‘Best Friends for 20 years’ – Wives Share a Bible Study – Mueller Attended the Weddings of Barr’s Daughters    https://www.thegatewaypundit.com/2019/01/mueller-and-bill-barr-best-friends-for-20-years-wives-share-a-bible-study-mueller-attended-the-weddings-of-barrs-daughters/

END

I WILL SEE YOU ON FRIDAY
H

One comment

  1. themagicbusguy · · Reply

    Have a great evening Harvey. Thanks as always

    Like

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