JAN 11/GOLD UP $2.30/SILVER UP 4 CENTS AS THE BANKERS DO EVERYTHING POSSIBLE TO CONTAIN OUR TWO PRECIOUS METALS/ALASDAIR MACLEOD: A GREAT COMMENTARY ON THE UPCOMING DEMISE OF THE EU/ERDOGAN PUTS HIS FORCES ON THE BORDER WITH SYRIA: AN ATTACK IS IMMINENT/MORE SWAMP STORIES FOR YOU TONIGHT

 

 

GOLD: $1289.30 UP $2.30 (COMEX TO COMEX CLOSINGS)

Silver:   $15.63 UP 4 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1287.85

 

silver: $15.60

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 45 NOTICE(S) FOR 4500 OZ (0.1399 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  525 NOTICES FOR 525 OZ  (1.6329 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

142 NOTICE(S) FILED TODAY FOR  710,000  OZ/

 

total number of notices filed so far this month: 586 for 2,930,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $3584:  UP 2

 

Bitcoin: FINAL EVENING TRADE: $3612 up   43 

 

end

 

XXXX

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

today 32/45

BUSINESS DATE: 01/10/2019 DAILY DELIVERY NOTICES RUN DATE: 01/10/2019
PRODUCT GROUP: METALS RUN TIME: 20:28:07
EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,284.700000000 USD
INTENT DATE: 01/10/2019 DELIVERY DATE: 01/14/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
323 C HSBC 45
624 C MERRILL 2
657 C MORGAN STANLEY 4
661 C JP MORGAN 32
737 C ADVANTAGE 7
____________________________________________________________________________________________

TOTAL: 45 45
MONTH TO DATE: 525

 

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total OPEN INTEREST ROSE BY AN TINY SIZED  212 CONTRACTS FROM 188,613 UP TO 188,825 DESPITE YESTERDAY’S  11 CENT DROP IN SILVER PRICING AT THE COMEX. TODAY 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 GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

2171 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 2171 CONTRACTS. WITH THE TRANSFER OF 2171 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 2171 EFP CONTRACTS TRANSLATES INTO 10.855 MILLION OZ  ACCOMPANYING:

1.THE 11 CENT LOSS 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 5.300 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: 23,854 CONTRACTS (FOR 8 TRADING DAYS TOTAL 23,843 CONTRACTS) OR 119.27 MILLION OZ: (AVERAGE PER DAY: 2981 CONTRACTS OR 14.908 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  119.27 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 17.02% 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:           119.27    MILLION OZ.

 

 

 

RESULT: WE HAD A TINY SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 221 DESPITE THE 11 CENT LOSS IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A GOOD SIZED EFP ISSUANCE OF 2171 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 CONSIDERABLE SIZED: 2383 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 2171 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 212 OI COMEX CONTRACTSAND ALL OF THIS  DEMAND HAPPENED WITH A 11 CENT LOSS IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.59 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: 142 NOTICE(S) FOR 7100,000 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  5.300 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 HUMONGOUS 12,902 CONTRACTS UP TO 477,845 DESPITE THE LOSS IN THE COMEX GOLD PRICE/(A FALL IN PRICE OF $4.00//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 6128 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 6128 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 477,845. 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 (FOR THE SECOND STRAIGHT DAY) IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 18,220 CONTRACTS: 12,902 OI CONTRACTS INCREASED AT THE COMEX AND 6128 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN:  18,220 CONTRACTS OR 1,822,000 OZ = 56.67 TONNES. AND ALL OF THIS VERY HUMONGOUS DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF  $4.00??????????

 

 

 

 

YESTERDAY, WE HAD 7454 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 67,405 CONTRACTS OR 6,740,500 OZ  OR 209.65 TONNES (8 TRADING DAYS AND THUS AVERAGING: 8425 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 8 TRADING DAYS IN  TONNES: 209.65 TONNES

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

THUS EFP TRANSFERS REPRESENTS 209.65/2550 x 100% TONNES = 7/47% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     209.65  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 HUMONGOUS SIZED INCREASE IN OI AT THE COMEX OF 12,902 DESPITE THE LOSS IN PRICING ($4.00) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A VERY HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6128 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 6128 EFP CONTRACTS ISSUED, WE HAD AN ATMOSPHERIC GAIN OF 18,220 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

6128 CONTRACTS MOVE TO LONDON AND 12,902 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 56.67 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE LOSS OF $4.00 IN YESTERDAY’S TRADING AT THE COMEX??????????

 

 

we had: 45 notice(s) filed upon for 4500 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $2.30 TODAY 

ANOTHER BIG CHANGE IN GOLD INVENTORY AT THE GLD/

A WITHDRAWAL OF 1.47 TONNES OF GOLD WHICH WAS USED TODAY TO SUPPRESS GOLD’S RISE

 

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   797.71 TONNES

Inventory rests tonight: 797.71 tonnes.

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

SLV/

WITH SILVER UP 4 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 TINY SIZED 212 CONTRACTS from 188,613 UP TO 188,825  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:

 

2171 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2171 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 335 CONTRACTS TO THE 2171 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GOOD GAIN  OF 2383  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 11.92 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 5.300 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A TINY SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 11 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER STRONG SIZE 2171 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 18.78 PTS OR 0.74% //Hang Sang CLOSED UP 145.84 POINTS OR 0.55% /The Nikkei closed UP 195.90 POINTS OR 0.97% / Australia’s all ordinaires CLOSED DOWN 0.33%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7427 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.98 dollars per barrel for WTI and 61.92 for Brent. Stocks in Europe OPENED /MIXED 

//ONSHORE YUAN CLOSED UP AT 6.7427 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7473: 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/POLAND

It does not get any worse of Huawei.  Poland arrests a key Huawei executive based in Poland on espionage as well as a high executive in the Polish government.

( zerohedge)

ii(the POBC not excited seeing the rise in the yuan so it jawboned it lower:

( zerohedge)

 

4/EUROPEAN AFFAIRS

i)FRANCE

The yellow vest movement urges supporters to break the bank by causing a bank run.  The yellow vest movement is moving also to England

(courtesy zerohedge)

ii) the history of the Euro and how it will influence the destruction of the euro project

A super commentary from Alasdair Macleod on the euro as it stands today.  It gives a terrific history of how we got to this position today.  As i have pointed out to you on several occasions, the ECB has stopped purchasing of all Euro based countries on Dec 31.2018.  This will lead to the collapse of Europe as there will be nobody around to purchase the bonds of Italy, Portugal, France and Belgium

( zerohedge)

 

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)TURKEY/USA

Erdogan refuses  Washington’s ultimatum to abandon the huge arms deal negotiated with Moscow

( zerohedge)

ii)Erdogan tells Trump to leave Syria now as he has an itchy finger ready to annihilate the Syrian Kurds on his northern border.
( zerohedge)

iii)This morning:  US withdraws some of its troops from Syria contrary to what Bolton and Pompeo stated

( zerohedge)

iv)It did not take Turkey long to establish tanks along the Syrian border with news that some USA troops were already leaving Syria.  The Turkish lira tumbles as we have a new threat in Syria

( zerohedge)

v)RUSSIA

Russia de dollarizes again as the government shifts 100 billion dollars to yuan yen, the euro and the Canadian dollar

( Mac Slavo/SHFTPlan.com)

 

6. GLOBAL ISSUES

 

 

7. OIL ISSUES

 

 

 

8 EMERGING MARKET ISSUES

i)Brazil

 

 

 

9. PHYSICAL MARKETS

i)For your interest:

4 on trial for the theft of the largest Cdn gold coin ever minted:  221 pounds from the Berlin museum]

( APnews/GATA)

 

ii)Barrick’s new CEO dismisses the media’s obsession that they will move their headquarters from Canada as sheer hysteria

( Bochove/Bloomberg/GATA)

iii)Yellow vest protesters are aiming to crash the French banking system by removing their euros from the banks.  Also the yellow vest protests are moving to London where we will see protests there on the weekend

( AP/GATA)

this was brought to your attention yesterday but it is worth repeating:

( Ted Butler/GATA)

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

 

 

MARKET TRADING

Late morning trading: dollar spikes, gold and crude rise, bond yields tumble
(zerohedge)

ii)Market data/

The all important CPI comes in at the slowest growth since August 2017 at 1.9% y/y

( zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)Earnings season has got off to a dismal start with a huge number of warnings, guidance cuts and mass layoffs

( zerohedge)

b)Moody’s downgrades P G and E and that triggers a 800 million dollar collateral call against the company. It has only 400 million of liquid cash.

( zerohedge)
c)The shutdown will certainly cause some hardship but it is not the end of the world
( Michael Snyder)

iv)SWAMP STORIES

This was long overdue;  Trump is now planning to ease immigration restrictions on skilled workers such as IT programmers and doctors.  This will appease both Democrats who desire increase immigration and Republicans

( zerohedge)

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

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  ROSE BY A HUMONGOUS SIZED 12,902 CONTRACTS UP TO A LEVEL OF 477,845 DESPITE THE LOSS IN THE PRICE OF GOLD ($4.00) IN YESTERDAY’S COMEX TRADING).FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE  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 6128 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  6128 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  6128 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:  18,220 TOTAL CONTRACTS IN THAT 6128 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A HUMONGOUS SIZED 12,902 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 18,220 contracts OR 1,822,000  OZ OR 56.67 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 96 contracts as we LOST 36 contracts. We had 36 notices filed on yesterday so we gained 0 contract or NIL ADDITIONAL oz will stand for delivery as these guys refused to morph into London based forwards as well as negate a fiat bonus.

 

 

The next active delivery month is February and here the OI lost by 8068 contracts DOWN to 264,960 contracts.  After February, March GAINED 89 contracts to stand at 533.  After March, the next big delivery month is April and here the OI rose by 17,579 contracts up to 126,189 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 45 NOTICES FILED AT THE COMEX FOR 4500 OZ. (0..1399 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BY A TINY 212  CONTRACTS FROM 188,613 UP TO 188,825 (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 DESPITE A 11 CENT LOSS IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JANUARY AND THE  AMOUNT OF OPEN INTEREST READY TO STAND IS 616 CONTRACTS HAVING LOST  102 CONTRACTS FROM YESTERDAY.  WE HAD 124 NOTICES FILED ON YESTERDAY, SO WE GAINED 22 CONTRACTS OR  110,000 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. QUEUE JUMPING IS THE NORM AT THE SILVER COMEX AS THE DEALERS SCRAMBLE FOR WHATEVER PHYSICAL THEY CAN OBTAIN.

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH IS FEBRUARY AND HERE THE OI FELL BY 3 CONTRACTS DOWN TO 475. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI FELL BY 1051 CONTRACTS DOWN TO 144,101 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 2383 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  212 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 2171 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  2383 CONTRACTS...AND ALL OF THIS HUGE DEMAND OCCURRED WITH A 11 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 142 notice(s) filed for 710,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  239,335 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  303,098  contracts

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

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 11/2019.

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

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
45 notice(s)
 4500 OZ
No of oz to be served (notices)
51 contracts
(5100 oz)
Total monthly oz gold served (contracts) so far this month
525 notices
52,500 OZ
1.6329 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 1 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:  128.60 oz of gold was withdrawn from the customer account of Scotia

4 kilobars

 

total gold withdrawing from the customer;  128.60 oz

 

we had 0  adjustments….

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 45 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 32 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/2019. contract month, we take the total number of notices filed so far for the month (525) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (96 contract) minus the number of notices served upon today (45 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/2019 contract month:

No of notices served (525 x 100 oz)  + {96)OI for the front month minus the number of notices served upon today (45 x 100 oz )which equals 57,600 oz standing OR 1.7910 TONNES in this NON  active delivery month of JANUARY.

Today we gained 0 contracts or an additional NIL oz will stand in this non active month of January

.

 

 

 

 

 

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

LAST MONTH WE HAVE 23.37 TONNES OF GOLD SUPPOSEDLY DELIVERED UPON BUT THIS AMOUNT OF GOLD DID NOT LEAVE THE REGISTERED GOLD CATEGORY AT THE COMEX.

 

 

total registered or dealer gold:  742,826.824 oz or   23.105 tonnes
total registered and eligible (customer) gold;   8,426,154.73 oz 262.08 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 11, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
996,831.097oz
CNT
HSBC

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,581,348.861. oz
JPM
cnt
No of oz served today (contracts)
142
CONTRACT(S)
710,000 OZ)
No of oz to be served (notices)
474 contracts
2,370,000 oz)
Total monthly oz silver served (contracts) 586 contracts

(2,930,000 oz)

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

we had 0 inventory movement at the dealer side of things

 

total dealer deposits:  nil oz

total dealer withdrawals: 0 oz

we had 2 deposits into the customer account

 

i) Into JPMorgan: 396,380.820  oz (3rd day in a row)

*** 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) into CNT: 1,184,968.041

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1,581,348.861   oz

we had 2 withdrawals out of the customer account:
i) Out of CNT: 600,450.277 oz
iii) Out of HSBC: 396,380.830 oz
i

 

 

 

 

 

total withdrawals:  996,831.097   oz

 

we had 0 adjustment

 

 

 

total dealer silver:  84.818 million

total dealer + customer silver:  293.110 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 142 contract(s) FOR 710,000  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 586 x 5,000 oz = 2,930,000 oz to which we add the difference between the open interest for the front month of JAN. (616) and the number of notices served upon today (142x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 586(notices served so far)x 5000 oz + OI for front month of JAN( 616) -number of notices served upon today (142)x 5000 oz equals 5,300,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 22 contracts or an additional 110,000 oz will  stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

TODAY’S SILVER VOLUME:  66,601 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 69,613 CONTRACTS… 

volumes at the comex now increasing for silver

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 69613 CONTRACTS EQUATES to 348 million OZ  49.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.40-% (JAN 11/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.24% to NAV (JAN 11 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.40%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.11/TRADING 12.66/DISCOUNT 3.41

END

And now the Gold inventory at the GLD/

JAN 11/WITH GOLD UP $2.30 TODAY ANOTHER WITHDRAWAL OF 1.47 TONNES OF GOLD/INVENTORY RESTS AT 797.71 TONNES

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 11/2019/ Inventory rests tonight at 797.71 tonnes

*IN LAST 532 TRADING DAYS: 137.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 432 TRADING DAYS: A NET 22.55 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 11/WITH SILVER UP 4 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

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 11/2019:

 

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 2.86

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

G0LD LENDING RATE: + .52

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.60%

LIBOR FOR 12 MONTH DURATION: 3.01

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.41

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Outlook 2019: Uncertainty Makes Gold A “Valuable Strategic Asset” – WGC

Gold Outlook 2019 – World Gold Council

As we look ahead, we expect that the interplay between market risk and economic growth in 2019 will drive gold demand. And we explore three key trends that we expect will influence its price performance:

  • financial market instability
  • monetary policy and the US dollar
  • structural economic reforms.

Against this backdrop, we believe that gold has an increasingly relevant role to play in investors’ portfolios.


Gold Outperformed Most Assets In 2018

 

Why gold why now

Gold’s performance in the near term is heavily influenced by perceptions of risk, the direction of the dollar, and the impact of structural economic reforms. As it stands, we believe that these factors likely will continue to make gold attractive.

In the longer term, gold will be supported by the development of the middle class in emerging markets, its role as an asset of last resort, and the ever-expanding use of gold in technological applications.

In addition, central banks continue to buy gold to diversify their foreign reserves and counterbalance fiat currency risk, particularly as emerging market central banks tend to have high allocations of US treasuries. Central bank demand for gold in 2018 alone was the highest since 2015, as a wider set of countries added gold to their foreign reserves for diversification and safety.

More generally, there are four attributes that make gold a valuable strategic asset by providing investors:

  • a source of return
  • low correlation to major asset classes in both expansionary and recessionary periods
  • a mainstream asset that is as liquid as other financial securities
  • a history of improved portfolio risk-adjusted returns.

‘Outlook 2019: Global economic trends and their impact on gold’ – Full report from World Gold Council here

 

 

News and Commentary

Palladium hits record high on China impetus; lower dollar lifts gold (Reuters.com)

Gold lifted by weaker dollar as market ponders pace of Fed interest-rate hikes (MarketWatch.com)

Bank of England’s Carney sees China’s yuan as possible reserve currency (Reuters.com)

ISIS ‘kills’ five UK soldiers in Syria rocket attack (RT.com)

Stock Rally Takes a Break as Bonds Rise, Oil Drops: Markets Wrap (Bloomberg.com)

Tanzania’s president orders central bank to create gold reserve (TheEastAfrican.co.ke)

May Stares Into Brexit Abyss as Parliament Takes Control (Bloomberg.com)

These Nine Charts Show Just How Deeply Brexit Has Divided Britain (Bloomberg.com)

The EU In 2019 – The Problem Of Survival (ZeroHedge.com)

This Is A Completely Horrific Situation: What “Bond King” Gundlach Expects Will Happen In 2019 (ZeroHedge.com)

Outlook 2019: Economic trends and their impact on gold (Gold.org)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

09 Jan: USD 1,281.30, GBP 1,006.41 & EUR 1,118.32 per ounce
08 Jan: USD 1,291.90, GBP 1,006.71 & EUR 1,121.62 per ounce
07 Jan: USD 1,291.50, GBP 1,013.83 & EUR 1,129.03 per ounce
04 Jan: USD 1,290.35, GBP 1,016.80 & EUR 1,131.24 per ounce
03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce
02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce

Silver Prices (LBMA)

09 Jan: USD 15.62, GBP 12.27 & EUR 13.64 per ounce
08 Jan: USD 15.64, GBP 12.24 & EUR 13.64 per ounce
07 Jan: USD 15.75, GBP 12.35 & EUR 13.77 per ounce
04 Jan: USD 15.70, GBP 12.40 & EUR 13.76 per ounce
03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce
02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce

Recent Market Updates

– Blackrock Say Gold Will Be A “Valuable Portfolio Hedge” In 2019
– Financial Advice In 2019: Own Gold To Hedge $250 Trillion Global Debt Bubble – GoldCore In Irish Times
– China Adds 320,000 Ounces To Gold Reserves – First Central Bank Purchase Since October 2016
– Gold At 6 Month High At $1,300 and All Time Record Highs In Australian Dollars Over $1,870
– Gold Hedges Stock Market Falls In 2018 – Gains 2.7% In Euros and 3.8% In Pounds
– Hope For Best In 2019 But Prepare For Worst by Increased Allocations to Gold and Silver – Outlook 2019 Podcast
– Prepare For Global Debt Bubble Collapse – Outlook 2019
– Happy Christmas From All The Team in GoldCore
– Gold Prices Likely To Go Higher In 2019 After 4% Gain In Q4 2018
– Everything Bubble Started Bursting In 2018 – GoldCore Video

Mark O’Byrne
Executive Director

Gold and Silver Prices To Rise To $1,650 and $30 By 2020? Video Update

11, January
– Gold to outperform stocks again in 2019 as seen in 2018 and last 15 years
– 15% to 20% gains for gold and 30% to 40% gains for silver quiet likely
– Given scale of under valuation, strong fundamentals including robust demand and anemic supply and high level of risk, both precious metals are likely to surge in 2019 and 2020


– Gold and silver likely to reach highs over $1,650 and $28 per ounce
– On the high side, we may see a price increase of 30% for gold in 2019 as was seen in 2007 and 2010 and silver may surge 80% as it did in 2010 is possible (see table)
– Past performance is no guarantee of future returns but along with the positive supply and demand fundamentals and the uncertain economic backdrop, they give an indication of possible returns
– Currency reset would see gold to $5,000 to $10,000 and silver at over $250 per ounce as predicted by Rickards and others
 

Watch Latest Video Update On YouTube Here

Mark O’Byrne Executive Director

-END-

 

* * *

GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER

For your interest:

4 on trial for the theft of the largest Cdn gold coin ever minted:  221 pounds from the Berlin museum]

(courtesy APnews/GATA)

4 on trial in theft of huge gold coin from Berlin museum

 Section: 

From the Associated Press, New York
Thursday, January 10, 2019

https://www.apnews.com/783eafeee37b4eeeaf178534c465ae43

BERLIN — Four young men have gone on trial over the brazen theft of a 100-kilogram (221-pound) Canadian gold coin from a Berlin museum.

The “Big Maple Leaf” coin, worth several million dollars, was stolen from the Bode Museum in March 2017.

… 

 

Three men, identified only as Wissam R., Ahmed R., and Wayci R., are accused of stealing the coin during the night using a wheelbarrow to haul it away. The fourth suspect, Dennis W., worked as a guard at the museum for a private security firm and is accused of scouting out the scene.

German news agency DPA reported that the four men, aged between 20 and 24 years, went on trial today in Berlin district court.

Investigators believe that the suspects cut up the coin and sold the pieces.

* * *

end

Barrick’s new CEO dismisses the media’s obsession that they will move their headquarters from Canada as sheer hysteria

(courtesy Bochove/Bloomberg/GATA)

Barrick Gold’s new CEO dismisses Canada HQ debate as ‘hysteria’

 Section: 

By Dnaielle Bochove
Bloomberg News
Thursday, January 10, 2019

Barrick Gold Corp.’s new chief executive is surprised by the “hysteria” over whether the world’s largest gold miner will remain a Canadian company.

Barely a week after his Channel Islands-based Randgold Resources Ltd. merged with Barrick, Mark Bristow says he is determined to keep the global miner headquartered in Toronto — or at least as committed as he is to any head office.

Mining industries have to catch up with the reality of the times,” Bristow said in a phone interview from Jackson Hole, Wyoming, where he maintains a home. “We can’t sit in this massive corporate office — this old tradition — trying to run an organization that’s global by remote control.”

Bristow’s comments come in the wake of critical commentary by industry veteran Pierre Lassonde, who said Barrick’s reduced presence in Canada amounts to the kind of hollowing out of the country’s mining sector that Barrick’s late founder, Peter Munk, vigorously opposed. Lassonde particularly criticized that Barrick’s top company leaders — Bristow, Chief Financial Officer Graham Shuttleworth, and Executive Chairman John Thornton — aren’t based in Canada. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-01-10/barrick-gold-s-new-ce…

… end

Yellow vest protesters are aiming to crash the French banking system by removing their euros from the banks.  Also the yellow vest protests are moving to London where we will see protests there on the weekend

(courtesy AP/GATA)

Yellow vest protesters aim to crash French banking system

 Section: 

Yellow Vest Protesters to Withdraw All Their Euros in Massive Run on French Banks

From News Corp., Associated Press, and Agence France-Presse
via News Corp. Australia, Sydney
Thursday, January 10, 2019

Yellow vest activists are urging French citizens to empty their bank accounts and spark a massive run on the country’s banks in their longstanding fight with the government — which could lead to the collapse of its banking system.

The call for citizens to withdraw all their euros come as copycat protests are planned for Britain on the weekend.

The left-wing “People’s Assembly” activist group has invited thousands of people to wear yellow vests at an anti-austerity “Britain is broken” march in central London this weekend.

“See you on the streets and don’t forget your #YellowVests,” the group, which is demanding a general election to end the ruling Conservatives’ program of austerity, wrote on Facebook. …

… For the remainder of the report:

https://www.news.com.au/world/europe/yellow-vest-protesters-call-for-hug…

* * *

Help keep GATA going:

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

http://www.gata.org

To contribute to GATA, please visit:

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

… 

end

this was brought to your attention yesterday but it is worth repeating:

(courtesy Ted Butler/GATA)

Ted Butler: Questions only the Justice Department can get answered about silver manipulation

 Section: 

8:50p ET Thursday, January 10, 2019

Dear Friend of GATA and Gold:

Now that the U.S. Justice Department has induced a former trader for JPMorganChase to confess to manipulating the silver market, silver market watchdog Ted Butler writes today that the department should be pursuing several questions that go beyond the “spoofing” highlighted by the guilty plea. Butler helpfully spells them out.

… 

Butler concludes: “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 that the involvement of the Justice Department was the most important development I have seen over both time periods. I have petitioned the U.S. Commodity Futures Trading Commission and CME Group 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. It would be unreasonable not to have faith that the Justice Department will do the right thing.”

Butler’s commentary is headlined “Questions Only the Justice Department Can Get Answered” and it’s posted at GoldSeek’s companion site, SilverSeek, here —

http://silverseek.com/commentary/questions-only-doj-can-get-answered-175…

— and at 24hGold here:

http://www.24hgold.com/english/news-gold-silver-questions-only-the-doj-c…

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





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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

-END-

 

 

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

i) Chinese yuan vs USA dollar/CLOSED UP TO 6.7427/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.7473   /shanghai bourse CLOSED UP 18.78 PTS OR 0.74%

 

HANG SANG CLOSED UP 145.84 POINTS OR 0.55%

 

 

2. Nikkei closed UP 195.98 POINTS OR 0.97%

 

 

 

 

3. Europe stocks OPENED ALL MIXED 

 

 

 

 

 

 

 

/USA dollar index FALLS TO 95.35/Euro RISES TO 1.1522

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:: 52/98 and Brent: 61.98

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 +.24%/Italian 10 yr bond yield UP to 2.84% /SPAIN 10 YR BOND YIELD DOWN TO 1.44%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.60: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.29

3k Gold at $1292.10 silver at:15.69   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 9/100 in roubles/dollar) 66.95

3m oil into the 52 dollar handle for WTI and 61 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.28 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 0.9829 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1326 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 +0.24%

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 2.71% early this morning. Thirty year rate at 3.04%

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

6.  TURKISH LIRA:  UP  TO 5.4464

 

 

 

Futures Slide, Global Rally Fizzles; Oil Set For Longest Rally On Record

Powell seems to have improved at the art of Fedspeak, using many words but not saying anything substantively new”

Deutsche Bank

For the second day in a row, the S&P’s recent torrid post-Christmas rally which has seen the S&P up +10.44% over the last 11 sessions, the best such stretch since October 2011, is in danger of ending as U.S. stock futures edged lower 0.3%, while European shares were mixed and Asian markets rose at as sentiment was bolstered by continued dovish tone from the Federal Reserve and hopes for a breakthrough on trade. The dollar slide continued even as Treasuries finally advanced and the oil rally continued for a record 10th day, while the US government shutdown tied the longest ever, as it entered its 21st day.

With renewed promises of patience from Federal Reserve, as Fed vice chair Clarida followed Powell on Thursday evening saying the central bank should be ready to adjust monetary policy if headwinds to the economy from financial markets or global growth prove persistent, suggesting caution about moving ahead with interest-rate increases, while the ECB was mulling another dump of cheap money in the form of TLTRO and news that trade talks between Washington and Beijing are moving to higher levels, the Friday feeling was in full effect, even if it appeared to peak in the US where futures initially rose then dropped to session lows.

The Fed’s dovish stance also pushed down the dollar and nudged Treasury yields lower after five days of gains again. That cheered emerging markets and confidence more generally having been flattened during the brutal end to 2018: “Equities are having a good run after a pretty horrible end to last year,” said Rabobank quantitative analyst Bas Van Geffen. “It is the changing wording of the Fed, it seems to be making more and more room for an eventual pause (in the rate hike cycle)”.

Asia had crawled to a 5-week high overnight as shares rose in Shanghai, Tokyo, Seoul and Hong Kong while European stocks were on the edge of fourth straight day of gains and longest winning streak since September.  S&P 500 futures and Nasdaq indexes pointed to a slightly softer open in New York after jumping early in the session after Steven Mnuchin said Chinese Vice Premier Liu He will “most likely” visit Washington on Jan. 30 and 31 for further trade talksChina’s yuan, which slumped last year as trade tensions worsened, is heading for its best week since 2005, back when the country dropped a fixed peg to the dollar.

A pause to the recent massively overbought rally is to be expected: the S&P 500 is now up more than 10% from its Dec. 26 low – one day after Steven Mnuchin spoke to the Plunge Protection team. The S&P is also up on 6 out of the 7 sessions in 2019 so far and each of the last 5. That’s the best streak since September and if it rises again today, it will achieve in the second week of the year a feat that only occurred twice in all of 2018. The index is now up +10.44% over the last 11 sessions, the best such stretch since October 2011.

In Asia, the ASX 200 (-0.3%) and Nikkei 225 (+1.0%) were mixed with the initial upside in Australia clouded by weakness in the key financials and mining related sectors, while the Japanese benchmark outperformed as it coat-tailed on the recent USD/JPY moves. Elsewhere, Shanghai Comp. (+0.7%) and Hang Seng (+0.5%) conformed to the overall positive risk tone following the recent trade-related optimism with Vice Premier Liu He said to possibly visit the US later this month and amid hopes of further supportive measures as China may adopt more tax cuts for the manufacturing sector.

Failing to carry over Asian strength, European indices are mixed, having pared back some of the initial gains from the open. Some initial outperformance was seen in the FTSE 100 (+0.1%) jumped as much as 0.7 percent on the back of the latest slide in sterling against the euro on mounting Brexit uncertainty while UK housing names were higher after the sector was upgraded by BAML, with Persimmon (+4.4%), Taylor Wimpey (+4.8%) and Barratt Development (+2.6%) at the top of the index, however, the index was later pressured on currency effects as Sterling whipsawed on Brexit developments. Other notable movers include, Richemont (+2.3%) after the Co’s Q3 revenue of EUR 3.92bln was in line with the expected EUR 3.93bln and posting a 5% rise in constant currency sales for the October-December period.

The market’s bullish mood was supported by Fed Chairman Jerome Powell who underscored the message of patience with further interest-rate hikes, while saying the central bank will keep shrinking its balance sheet. At the Economic Club of Washington on Thursday, Fed chief Jerome Powell reiterated the U.S. central bank would be patient about hiking interest rates.

The word ‘patient’ is used often when the Fed’s policy direction is still tightening but its next rate hike can wait for a considerable time. So risk assets now enjoy support from what we can call Powell put,” said Tomoaki Shishido, economist at Nomura Securities. “Similarly, Trump also softened his stance on China after sharp falls in stock prices. He has offered an olive branch to China and there’s no reason China would not want to accept it,” he added.

In FX, the dollar was on course for its fourth straight weekly fall against other top world currencies having also hit a three-month low the previous day. The flip side was that the Japanese yen was a shade higher again at 108.29 per dollar and the euro was up at $1.1530 on course for its best week since August. But it is China’s yuan that has been the real mover though. Against the backdrop of the sensitive trade negotiations, the Chinese currency has risen 1.8 percent this week which is its biggest gain since July 2005 when Beijing abandoned the yuan’s peg to the dollar.

Yuan traders had started offloading dollars in their proprietary accounts on Thursday following the wrap-up of three-day U.S.-China trade talks in Beijing. Markets treated absence of any bad news from those negotiations as good news. “Some corporate clients were joining to sell their dollars,” said a trader at a foreign bank in Shanghai.

Bond markets have been turning too. U.S. Treasury debt prices erased early gains after a soft 30-year bond auction and in reaction to Powell’s comments on the Fed “substantially” reducing the size of its balance sheet. The 10-year U.S. Treasuries yield last stood over 2bps lower at 2.7168%.

Finally in commodities, the notable mover was crude as oil rose for a 10th consecutive day, heading for its longest run of gains on record, as OPEC cutbacks reined in supply while the plunging dollar boosted demand. Futures returned to a bull market this week after recovering more than 20% from the lows reached in December. Saudi Arabia gave assurances on Wednesday that the production cuts by OPEC and its partners that came into effect this month will be deep enough to prevent any surplus.

“Sentiment in the oil market has turned around this week,” said Jens Naervig Pedersen, senior analyst at Danske Bank A/S in Copenhagen. The reversal “is on the back of a combination of OPEC+ production cuts taking effect, a stabilization in risk sentiment in equity markets and a weaker dollar. In addition, the oil market will be monitoring trade talks, which seem to progress slowly.”

In us political news, President Trump said he will most likely declare an emergency if there is no border deal but added should be able to make a deal with Congress, while there were earlier reports that US President Trump had been briefed regarding plan to use Army Corps of Engineers funding to border wall construction. Also commented that he has the absolute right to declare a national emergency and is not doing it yet but will do if shutdown carries on.

In the latest Brexit news, it is looking increasingly likely to be delayed beyond March 29th amid a backlog of essential bills, according to Cabinet Ministers cited by the Evening Standard. However, this has been dismissed by a UK PM May spokesperson.  UK PM May launched an appeal to Britain’s biggest unions last night in an attempt to win Labour support for her Brexit deal.

The partial U.S. government shutdown threatens to extend into a fourth week with about 800,000 federal workers set to miss their first paychecks. Economic data include CPI inflation readings

Market Snapshot

  • S&P 500 futures down 0.3% at 2,588
  • STOXX Europe 600 up 0.3% to 350.07
  • MXAP up 0.5% to 151.74
  • MXAPJ up 0.4% to 491.54
  • Nikkei up 1% to 20,359.70
  • Topix up 0.5% to 1,529.73
  • Hang Seng Index up 0.6% to 26,667.27
  • Shanghai Composite up 0.7% to 2,553.83
  • Sensex down 0.3% to 36,012.53
  • Australia S&P/ASX 200 down 0.4% to 5,774.58
  • Kospi up 0.6% to 2,075.57
  • German 10Y yield fell 2.0 bps to 0.235%
  • Euro up 0.2% to $1.1522
  • Brent Futures up 1% to $62.30/bbl
  • Italian 10Y yield rose 0.9 bps to 2.527%
  • Spanish 10Y yield fell 2.4 bps to 1.427%
  • Brent Futures up 1% to $62.30/bbl
  • Gold spot up 0.5% to $1,293.34
  • U.S. Dollar Index down 0.2% to 95.38

Top Overnight News from Bloomberg

  • Chinese Vice Premier Liu He is said to be scheduled to visit Washington on January 30 and 31 for further trade talks
  • Fed Vice Chairman Richard Clarida said the central bank should be ready to adjust monetary policy if headwinds to the economy from financial markets or global growth prove persistent, suggesting caution about moving ahead with interest-rate increases
  • Japan’s Prime Minister Shinzo Abe told Theresa May the whole world wants to avoid a no-deal Brexit even as she faces likely defeat when Parliament votes on her plan next week
  • The Trump administration was said to have directed the U.S. Army Corps of Engineers to examine whether the wall could be funded using money from emergency funding. Trump cancels trip to Davos gathering as shutdown grinds on
  • The European Central Bank should wait until the spring before tweaking its policy and keep all options open amid economic weakness and a fragile global outlook, according to Governing Council member Francois Villeroy de Galhau
  • Fast-money traders seem to have lost their stomach for betting on an interest rate lift-off in the heart of Europe. They entered 2019 with the smallest value of short wagers against German bunds in more than two years, according to exchange- traded product data
  • A trader who wants BNP Paribas SA to pay him 163 million euros ($188 million) over a “fat-finger” mistake is betting that Paris judges will help him avoid having to give up most of the claim
  • Emmanuel Macron next week launches a three- month national debate that he hopes will dissipate the anger displayed in the recent violent protests, without derailing the reforms he insists France needs
  • An American military official tells AP the U.S.-led military coalition has begun the process of withdrawing troops from Syria

Asian equity markets traded mostly higher following the 5th consecutive session of gains on Wall Street as global sentiment remained underpined by perceptions of a more patient Fed approach. ASX 200 (-0.3%) and Nikkei 225 (+1.0%) were mixed with the initial upside in Australia clouded by weakness in the key financials and mining related sectors, while the Japanese benchmark outperformed as it coat-tailed on the recent USD/JPY moves. Elsewhere, Shanghai Comp. (+0.7%) and Hang Seng (+0.5%) conformed to the overall positive risk tone following the recent trade-related optimism with Vice Premier Liu He said to possibly visit the US later this month and amid hopes of further supportive measures as China may adopt more tax cuts for the manufacturing sector. Finally, 10yr JGBs were lacklustre on profit taking following recent gains and with demand also limited by the upside in riskier assets.

Top Asian News

  • Nissan Shunned in Bond Market on Ghosn But Banks Seen Supportive
  • Why Ghosn’s Still Jailed and What It Says About Japan: QuickTake
  • What India’s Top Three Mutual Funds Bought and Sold in December
  • Chinese Stocks Post Biggest Weekly Gain in Nearly Two Months

Major European indices are mixed [Euro Stoxx 50 Unch], having pared back some of the initial gains from the open. Some initial outperformance was seen in the FTSE 100 (+0.1%) which is lead by strong performances in UK housing names after the sector was upgraded by BAML, with Persimmon (+4.4%), Taylor Wimpey (+4.8%) and Barratt Development (+2.6%) at the top of the index, however, the index was later pressured on currency effects as Sterling whipsawed on Brexit developments. Sectors are similarly in the green with some slight outperformance seen in energy names. Other notable movers include, Richemont (+2.3%) after the Co’s Q3 revenue of EUR 3.92bln was in line with the expected EUR 3.93bln and posting a 5% rise in constant currency sales for the October-December period. Meanwhile, Suez (-3.1%), Veolia (-2.6%) and Sage Group (-2.6%) are all in the red after being downgraded.

Top European News

  • Crispin Odey Says Believes Brexit Will Not Happen: Reuters
  • Euro Bond Supply Avalanche Meets Wall of Cash From Fund Managers

In FX, the dollar session was choppy but ultimately on the backfoot after losing the 95.500 level in early Asia-Pac trade as the Fed signalled a more patient approach ahead of the US CPI release later today. Both Fed Chair Powell and Vice Chair Clarida noted the Central Bank has the ability to be patient and flexible on rates given the State-side inflation data. As such the DXY fell to an overnight session low of 95.322 (vs. high of 95.508) and currently hovers around the middle of the range with US CPI in sight. Lloyds notes that the sharp decline in energy will likely weight on the headline CPI as they forecast a fall to 1.9% from 2.2%, though they expect the core figure to remain steady at 2.2%.

  • AUD,NZD, CNY, CAD – The marked outperformers and major beneficiaries as the USD/CNY is poised for its best week since 2005 with aid from the dovish Fed and a sub-6.80 PBoC fix. AUD/USD currently resides north of 0.7200 (vs. low of 0.7183) and reached levels last seen mid-December as optimistic Australian retail sales also underpinned the Aussie currency. Meanwhile, the Kiwi stands at the G10 leader as tailwind from its antipodean counterpart boosted the NZD/USD above its 50 and 200 DMA at 0.6786 and 0.6799 respectively to test 0.6840 to the upside, with the DMAs also set to form a golden cross. Finally, the Loonie is on the front foot as it reaps its reward from the declining greenback and the rising oil price with USD/CAD now below 1.3200 (vs. high of 1.3245) ahead of its 100 DMA at 1.3169.

In commodities, Brent (+0.6%) and WTI (+0.8%) prices are in the green benefiting from the positive sentiment seen across US and Asian sessions after dovish comments from multiple Fed speakers. Russian oil output for January 1st-10th has dropped to 11.38mln BPD from 11.45mln BPD in December; additionally, Russian Energy Minister Novak is reportedly planning to attend the upcoming January 22nd-25th Davos summit. Gold (+0.5%) prices are just shy of USD 1295.2/oz, the sessions high, following dovish comments from the Fed applying downward pressure to the dollar. Copper prices are similarly higher on the positive market sentiment, in particular that Chinese Vice Premier He is to visit the US later on in the month. Elsewhere, India’s steel ministry is refusing to back down on tougher import rules on steel, pressuring automakers into using local steel instead.

US Event Calendar

  • 8:30am: US CPI MoM, est. -0.1%, prior 0.0%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.2%
  • US CPI YoY, est. 1.9%, prior 2.2%; CPI Ex Food and Energy YoY, est. 2.2%, prior 2.2%
  • 8:30am: Real Avg Weekly Earnings YoY, est. 1.2%, prior 0.54%;
  • 2pm: Treasury monthly budget statement postponed by govt shutdown

DB’s Jim Reid concludes the overnight wrap

Fortune continues to favour the brave in markets at the moment following another broadly positive last 24 hours for risk assets. It may have been a less convincing session on Wall Street last night compared to recent days with the S&P 500 for example passing between gains and losses no less than 19 times, however, a +0.45% closing move for the index does now mean it’s finished higher in 6 out of the 7 sessions in 2019 so far and each of the last 5. That’s the best streak since September and if it rises again today, it will achieve in the second week of the year a feat that only occurred twice in all of 2018. The index is now up +10.44% over the last 11 sessions, the best such stretch since October 2011.

There’s little doubt that sentiment over this period has been largely driven by communications from the Fed, and it’s no surprise that attention focused yesterday on Chair Powell’s public remarks. However, as we enter the 12th month of his Chairmanship, he seems to have improved at the art of Fedspeak, using many words but not saying anything substantively new. Markets were broadly unchanged during and immediately after his speech, and the S&P 500 rallied through the afternoon to ultimately close higher.

In terms of substance, Powell reiterated that the economy is “doing quite nicely” though he is attentive to “the financial markets expressing a view about the concern about downside risks associated with global growth and with trade.” To balance the divergent signals between strong data and tepid markets, Powell said he plans to “be patient and flexible and wait and see what does evolve.” So that’s consistent with our economists’ base expectations for two more rate hikes this year. Powell also repeated his guidance on the balance sheet runoff and the uncertainty over its terminal size, and he mentioned China as a key uncertainty to the global growth outlook.

After markets closed, Vice Chair Clarida presented a similar message. He referenced tighter financial conditions and global growth as key “crosswinds” affecting the US economy, and argued that “if these crosswinds are sustained, appropriate forward-looking monetary policy should respond.” He said the Fed would change its balance sheet policy if necessary, though any policy shifts would have to be consistent with their mandate. So, another Fed official seemingly in support of a pause in the rate hike cycle.

Back to markets where the DOW and NASDAQ also gained +0.51% and +0.42%, respectively yesterday. The VIX also ended at 19.50 which was down about half a point while 2y and 10y rates +2.3bps and +3.2bps respectively, meaning the curve was about 1bp higher at +16.5bps. The USD strengthened +0.32% while WTI oil closed up +0.44% to take its remarkable run of daily gains to 9 and the longest since January 2010. The price is up +17.89% during this current run which is the most over 9 sessions since March 2016.

Early on in the day there was some damage done by the US retail sector with Macy’s grabbing much of headlines with shares plummeting -17.69% for its worst-ever loss, after cutting its annual earnings forecast. Kohl’s also dropped -4.81% after reporting disappointing holiday period sales while Barnes & Noble dropped -15.76% in the wake of also downgrading earnings guidance. Target’s (-2.85%) holiday sales actually appeared more in-line with estimates however the company failed to escape the wider sector carnage. It was a similar story for retail CDS with spreads +36bps wider for Macy’s, +16bps wider for Kohl’s and +12bps for Nordstrom. The broader CDX IG index did however finish 2bps tighter while US HY cash spreads also tightened 2bps for its fifth consecutive rally, over which it has narrowed a remarkable -87bps.

Speaking of earnings, next week we’re due to get Q4 reports from 35 S&P 500 companies including the banks. So this should give investors something else to focus on other than the repetitive trade-related headlines of late. As an early preview, Q4 earnings growth is expected to be 11.4% which compares to around 25% growth reported in each of the prior three quarters according to data from Factset. Still, if Q4 comes in in-line this would be the fifth straight quarter of double digits earnings growth. It’s worth also noting that over the past five years on average, actual earnings have exceeded estimated earnings by nearly 5%. So history would suggest that there is upside to forecasts.

The partial government shutdown in the US is also busy repeating and has now entered its 21st day, tying the longest-ever shutdown, with around 800k federal workers expected to not receive their paychecks today. Indeed, there was a big uptick in jobless claims in DC last week, as furloughed workers are entitled to unemployment benefits until the shutdown is resolved, so we’re beginning to see the effects of the standoff in the macro data. Another side-effect of the shutdown is the delay to some of the GDP-sensitive data releases which is making life harder for economists to get a comprehensive read of how the US is tracking in the last couple months. With the Fed emphasizing data dependency this is clearly proving an issue. Today’s December CPI report won’t be affected however with the consensus expecting a +0.2% mom core reading which should be enough to hold the annual rate at +2.2% yoy. Our US economists expect the same which should keep Fed rate hikes in play this year if various uncertainties are resolved.

To Asia now where markets are largely tracking Wall Street’s gains last night with the Nikkei (+0.97%) leading the way, followed by the Hang Seng (+0.18%), Shanghai Comp (0.16%) and Kospi (+0.61%). Sentiment has also been given a boost by an overnight tweet from a WSJ journalist confirming that China’s Vice Premier Liu He is scheduled to visit US for trade talks on Jan 30 and 31st. Meanwhile, China’s onshore yuan is up +0.58% to 6.7495, the highest since July 2018 with the weakness in US dollar (-0.19%) also contributing to the rise. Futures in the US are however slightly down as we type (S&P 500 -0.11%).

Back to yesterday where in Europe the STOXX 600 more than fought off an early decline at the open to close up +0.34%. There were gains also for the DAX (+0.26%) and FTSE MIB (+0.63%) although the CAC (-0.16%) underperformed not helped by a soft French industrial production print (-1.3% mom vs. 0.0% expected). Bonds were a touch stronger (Bunds -2.2bps) with the ECB minutes confirming that the board did discuss changing the communication on language to acknowledge economic risks as tilting to the downside, although holding fire at the meeting. There was also a reference to TLTROs, which may have helped an index of bank stocks to outperform, gaining +0.75%.

In other news, PM May confirmed late afternoon yesterday that the UK is still in talks with the EU over the backstop and that government is still seeking support for a deal across parliament. Yesterday Labour leader Corbyn said that he would take a confidence motion when it can succeed (so not necessarily immediately after next week’s vote, should May lose) and also that his party would not rule out an Article 50 extension should Labour come to power. Overall though there wasn’t much new in Labour’s policy on Brexit yesterday and Sterling nudged down -0.33% by the end of play. Across the pond it’s worth adding that President Trump said that he will not attend Davos later this month as a result of the government shutdown. An indication maybe that the shutdown will continue for a while longer, or alternatively perhaps the ski conditions aren’t up to scratch yet.

Finally, looking at the rest of the day ahead, this morning and shortly after this hits your emails we’re due to get the December Bank of France industrial sentiment reading followed later by a data dump out of the UK which includes November trade balance, industrial and manufacturing production, construction output and monthly GDP data. This afternoon in the US the aforementioned US CPI report will no doubt be the big highlight, especially with the monthly budget statement postponed due to the partial government shutdown. Meanwhile, we’ll finally get a rest from all the Fedspeak with no speeches due however over at the ECB we are due to hear from Mersch and Visco.

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 18.78 PTS OR 0.74% //Hang Sang CLOSED UP 145.84 POINTS OR 0.55% /The Nikkei closed UP 195.90 POINTS OR 0.97% / Australia’s all ordinaires CLOSED DOWN 0.33%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7427 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.98 dollars per barrel for WTI and 61.92 for Brent. Stocks in Europe OPENED /MIXED 

//ONSHORE YUAN CLOSED UP AT 6.7427 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7473: 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/POLAND

It does not get any worse of Huawei.  Poland arrests a key Huawei executive based in Poland on espionage as well as a high executive in the Polish government.

(courtesy zerohedge)

Poland Arrests Huawei Executive On Espionage Charges

In the latest sign that the US’s western allies are heeding its warnings about the espionage threat posed by Huawei and its executives, the Wall Street Journal reported on Friday that Poland had arrested a Huawei executive based in the country and accused him of “conducting high-level espionage on behalf of a Chinese spy agency.”

Huawei

According to a source quoted by Reuters, the executive was well-known in local tech circles.

“The Chinese national is a businessman working for a major electronics company…the Pole is a person known in circles associated with cyber business,” Maciej Wasik, the deputy head of Poland’s special services, told PAP.

Officers from Poland’s counterintelligence agency have searched Huawei’s office, leaving with documents and electronic data. They also searched the executive’s home on Tuesday.

The executive’s name wasn’t released. A Chinese national, he was identified only as a graduate of one of China’s top intelligence colleges, as well as a former employee of the Chinese consulate in the port city of Gdansk.

But the Chinese national wasn’t the only person arrested in the crackdown: Polish police also arrested a citizen who was identified as a former top official in the Polish intelligence agency’s IT security department.

“Huawei is aware of the situation, and we are looking into it,” a spokesman for the company said.

Both suspects have been charged with espionage, a crime that carries up to 10 years’ imprisonment. They have reportedly pleaded not guilty. The arrest comes little more than a month after Huawei CFO Meng Wanzhou was arrested in Vancouver on charges of helping the company violate US and EU sanctions against Iran.

While little is known about this incident, we will be watching out for reports that Chinese authorities have arrested a handful of Polish nationals on vague “national security”-related violations.

end

the POBC not excited seeing the rise in the yuan so it jawboned it lower:

(courtesy zerohedge)

Yuan Slides After PBOC Reportedly Wary Of Recent Sharp Gains

As we detailed last night, the recent surge in the yuan has been almost unprecedented against a backdrop of dismal economic data, a still tightening Fed and an aggressively easing PBOC.

And it appears PBOC has had enough of it as MNI reports this morning that the central bank does not want a sharp appreciation by the yuan, citing a source close to the People’s Bank of China.

That prompted an immediate reversal of some of yesterday’s gains…

Not entirely a surprise, as  Michael Every, head of Asia financial markets research at Rabobank in Hong Kong, warned:

“The yuan can hold up fine” until the Fed hikes again, trade tensions resume and China “goes all-in on stimulus,”

“It’s a ‘when’ and not an ‘if’ for when it reverses direction again and we test new lows.”

It seems when is now. Will Yuan catch down to ‘fundamentals’?

 

4.EUROPEAN AFFAIRS

FRANCE

The yellow vest movement urges supporters to break the bank by causing a bank run.  The yellow vest movement is moving also to England

(courtesy zerohedge)

French Yellow Vest Protesters Urge Supporters To Spark Bank Run With Mass Withdrawals

Activists from the Gilets Jaunes (Yellow Vest) movement have vandalized nearly 60% of France’s country-wide speed camera network, according to Interior Minister Christophe Castaner, who said that the wilful damage was a threat to road safety and endangered lives, according to the BBC.

The BBC’s Hugh Schofield, in Paris, said evidence of the vandalism is visible to anyone driving around France, with radar cameras covered in paint or black tape to stop them working.

But the extent of the damage – now believed to affect more than half of all 3,200 speed cameras in the country’s network – was unknown until Mr Castaner’s statement on Thursday.

He said the devices had been “neutralised, attacked, or destroyed” by members of the protest movement. –BBC

Speed limits in France have become a hot-button topic, after the Macron government lowered the limit on many roads from 90 km/h (55 mph) to 80 km/h (50 mph) early last year.

Yellow Vest protesters upset over an increase in fuel taxes have also complained about the rising costs of commuting for those who can’t afford to live near urban centers where they work – citing speed cameras and toll roads in their complaints.

Bank run?

While the Yellow Vest movement has been taking to the streets for violent clashes with French police, activists from the movement are now recommending that French protesters empty their bank accounts to spark a bank run – in a move which one protester, Maxime Nicolle, called a “tax collector’s referendum.”

“We are going to get our bread back … You’re making money with our dough, and we’re fed up,” said Nicolle in a video message, as reported by the Associated Press.

The movement’s adherents said they hoped the banking action will force the French government to heed their demands, especially giving citizens the right to propose and vote on new laws. –Associated Press

And while outraged Yellow Vests continue their protests, the Macron government is scrambling to calm down the anti-government movement with a series of economic measures which have thus far proven ineffective.

Prime Minister Edouard Philippe gave details Wednesday of a “big debate” the government plans to start next week in all the regions of France.

“We want it to be rich, impartial and fruitful,” Philippe said.

The debates will focus on four main topics: climate change, democratic issues, taxes and public services, the prime minister said. Anyone can propose a local event and an internet platform will provide another venue for discussion, he said.

President Emmanuel Macron proposed the debate as a way for the government to hear and to respond to the movement’s central complaints.

Macron also announced 10 billion euros ($11.5 billion) worth of measures to boost the purchasing power of French households. –Associated Press

Around 200 Yellow Vest protesters – which included trade union members, gathered in the Paris suburb of Creteil, as Macron visited a handball facility turned into a handball gymnasium (what?).

Police used tear gas to keep angry protesters away from the French leader.

END
UK/BREXIT
the pound jumps on a report that Brexit day may be delayed
(courtesy zerohedge)

Pound Jumps On Report Brexit To Be Delayed

Brexit Day is less than three months away and never during the process has the UK’s fumbling attempt to organize an ‘orderly’ exit from the trade block looked more fraught with conflict and chaos. After returning from their holiday break this week, MPs promptly rebelled against the government, passing a series of amendments over objections from the government that will make it extremely difficult to run down the clock to force MPs to either hold their noses and accept the deal she negotiated with the EU, or risk the pandemonium that could follow a ‘no deal’ Brexit.

With circumstances finally starting to shift this week following months of deadlock, murmurs about the possibility of delaying Brexit Day have grown ever-louder. Which is why it’s hardly a surprise that, on Friday, an anonymously sourced report in the Evening Standard cited “senior cabinet officials” claiming Brexit Day would likely be delayed sparked a brief rally in the pound.

GBP/USD climbed as much as 0.8% to $1.2851, leaving it on track to strengthen for a fourth-straight week.

GBP

In the report, ES’s sources pointed out that the withdrawal treaty isn’t the only long-running controversy that must be brought to a conclusion before Brexit Day. There are at least “six essential bills” that must be passed before Britain leaves the European Union.

Here’s a quick rundown of that, and two other controversies that stand in the way of a workable Brexit:

  • Senior ministers told the Standard that a majority of the Cabinet now support the idea of staging indicative votes in the Commons to see if a different Brexit plan is supported, despite Theresa May publicly opposing the idea.
  • Work and Pensions Secretary Amber Rudd refused three times on live radio to deny she would resign if the Prime Minister attempted a disorderly departure from the EU without securing a withdrawal deal.
  • Foreign Secretary Jeremy Hunt warned that “Brexit paralysis” was a risk if MPs vote down Mrs May’s deal on Tuesday but lack a majority for a different deal. He said it was clear that a no-deal Brexit would be blocked by Parliament following the landmark votes earlier this week.

While a delayed Brexit deadline would be positive for the pound, it would not be a “big game changer” due to the lack of clarity around what Parliament wants, said Mikael Olai Milhoj, analyst at Danske Bank.

“Positive as it means lower probability of no-deal Brexit, but should not be a big game changer”.

The rally started to fade as Theresa May poured cold water on the reports, saying there is not such plan in place and that the government’s policy is not to delay the UK’s departure from the EU.

END

A super commentary from Alasdair Macleod on the euro as it stands today.  It gives a terrific history of how we got to this position today.  As i have pointed out to you on several occasions, the ECB has stopped purchasing of all Euro based countries on Dec 31.2018.  This will lead to the collapse of Europe as there will be nobody around to purchase the bonds of Italy, Portugal, France and Belgium

(courtesy zerohedge)

The Tragedy Of The Euro

Authored by Alasdair Macleod via GoldMoney.com,

After two decades, the euro’s minders look set to drive the Eurozone into deep trouble. December was the last month of the ECB’s monthly purchases of government debt. A softening global economy will increase government deficits unexpectedly. The consequence will be a new cycle of sharply rising bond yields for the weakest Eurozone members, and systemically destabilising losses in the bond portfolios owned by Eurozone banks

The blame-game

It’s the twentieth anniversary of the euro’s existence, and far from being celebrated it is being blamed for many, if not all of the Eurozone’s ills.

However, the euro cannot be blamed for the monetary and policy failures of the ECB, national central banks and politicians. It is just a fiat currency, like all the others, only with a different provenance. All fiat currencies owe their function as a medium of exchange from the faith its users have in it. But unlike other currencies in their respective jurisdictions, the euro has become a talisman for monetary and economic failures in the European Union.

Recognize that, and we have a chance of understanding why the Eurozone has its troubles and why there are mounting risks of a new Eurozone systemic crisis. These troubles will not be resolved by replacing the euro with one of its founding components, or, indeed, a whole new fiat-money construct. It is here to stay, because it is not in the users’ interest to ditch it.

As is so often the case, the motivation for blaming the euro for some or all the Eurozone’s troubles is to shift responsibility from the real culprits, which are the institutions that created and manage it. This article briefly summarizes the key points in the history of the euro project and notes how the mistakes of the past are being repeated without the safety-net of the ECB’s asset purchases.

The birth of the euro

To swap a number of existing currencies for a wholly new currency requires the users to accept that the purchasing powers of the old will be transferred to the new. This was not going to be a certainty, and the greatest reservations would come from the people of Germany. Germans saved, and therefore risked the security of their deposits in a new money and monetary system. They were reassured by the presence of the hard-money men in the Bundesbank, who had a mission to protect the mark’s characteristics against the weaknesses that would almost certainly be transferred into the new euro from more inflationary currencies.

These anxieties were assuaged to a degree by establishing the ECB in Frankfurt, close to the watchful eye of the Bundesbank. The other nations were sold the project as bringing greater monetary stability than offered by their individual currencies and the reduction of cross-border transaction costs. Borrowers in formally inflationary currencies also relished the prospect of lower interest rates.

It was clear at the outset that the new omnibus euro required new disciplines, and it was here that the system failed from the outset. Having sensibly set out the euro’s parameters in the Maastricht Agreement, political considerations then took over. The raison d’être of the euro, so far as the politicians were concerned, was to further the European Project and getting countries into the new Eurozone became more important than compliance with the terms.

The terms had been set in the Maastricht Treaty in February 1992, which was signed by the twelve members of the pre-existing European Community. To qualify, membership of the euro required an inflation rate no more than 1.5% higher than the average rate of the three lowest member states, a fiscal deficit of no more than 3% at the end of the preceding fiscal year, a ratio of gross government debt to GDP of no more than 60%, membership of the exchange rate mechanism for two years without devaluation, and long-term interest rates no more than 2% higher than the inflation rates of the three lowest inflation rates.

This was sensible stuff but was then ignored by the Maastricht signatories. Only Luxembourg fully qualified for membership under the Maastricht terms.

Even the EU’s sheet-anchor, Germany, failed. Her budget deficit in 1996 was 4% of GDP. France’s was managed (manipulated?) down to 4% from 5%. Greece’s budget deficit after some very creative accounting was shown as 8%, and Italy’s must have had a papal blessing, because it miraculously fell from 8% to 4%.

Germany’s government debt to GDP in 1996 embarrassingly just exceeded the 60% criteria level set at Maastricht. Belgium’s stood at 130%, Italy’s at 124%, and Greece’s (reportedly) at 110%. What debt? We see no debt. Of the original Maastricht signatories, only France and the UK squeezed through on this condition.

Despite this fudge, ten of the twelve Maastricht signatories went ahead and adopted the euro in 1999 and as circulating currency in 2002. The UK had dropped out of the EMU in September 1992, and Greece was so obviously non-compliant its entry was delayed by two years.

Until the Lehman crisis, national interest rates had converged towards Germany’s under the aegis of a common monetary policy. The ECB’s interest rate policy was necessarily a compromise. At one end of the spectrum were the low rates previously enjoyed by the economies with solid savings rates. These were Germany, Luxembourg, Finland, the Netherlands and Austria.

At the other end were the bad boys: notably Greece and Italy. In 1992, when Maastricht was signed, Greece’s overnight lending rate was 28%. By 1996, when the Commission released its first convergence report, it had fallen to 12.8%. When Greece joined the euro in 2001, it had fallen to 3.3%. Italy’s 3-month interbank rate fell from 13% to 9%, and then to 3.4% at these same times.

The ECB’s task was not helped by the careless assumption that savings rates were a drag on consumption. Capital which had originated as credit expansion instead of genuine savings migrated to nations with higher bond yields, first as a trickle but then in increasing quantities as confidence grew that monetary unification under the euro was there to stay. This being the case, it was believed by investors that investing in Italian and Spanish debt was as safe as investing in German and French debt for less return.

The capital flows into these savings-starved nations boosted their asset prices and GDPs. And the more that credit-originated capital flooded into them, the more asset prices and GDPs benefited. This meant that based on improving statistics, the euro was deemed a great success, lifting the Mediterranean nations out of poverty. The reality was that capital flows ended up in malinvestments and government profligacy. No one thought to complain, and Germany’s sound-money men were silenced by those who pointed to Germany’s growing exports to the high-spending euro members.

In this manner, the ECB’s monetary policy gave impetus to localised credit cycles, particularly for the PIGS and Ireland.[iv]Asset booms were turned into bubbles, which finally burst in the wake of the Lehman crisis. The EU’s monetary system was then saddled with trillions of euros of debt that could never be repaid, and the PIGS suddenly found further finance from the markets was unavailable. Interest rate convergence was reversing. Furthermore, the whole Eurozone banking system was threatened with collapse, which always happens when extreme credit bubbles go pop.

Member states had no realistic option but to bail out their banks, and public sector borrowing rocketed, funded by the EU, the ECB and the IMF. The crisis in Greece was worsened when in late 2009 the government was forced to admit it had lied about its budget deficit for years, and finally admitted to a far higher current-year deficit than previously disclosed. Greece’s 2009 budget deficit was doubled from about 7.5% to 15.1%. The rise in bond yields meant Greece was unable to continue to fund her deficits and roll over existing debt and capital fled to supposedly safer Eurozone jurisdictions.

Greece’s corrupt government was replaced in January 2015 by a far-left government, elected because it promised the voters it would reject onerous bailout terms. It turned out that as far as the ECB and Brussels were concerned, Greece’s problems were to stay in Greece, and any hopes that its troubles would be shared with the Eurozone were dashed.

In effect, it appeared that the expense of rescuing a very small member of the Eurozone risked destabilising the others. Yanis Varoufakis, the Greek finance minister, said the reason for the EU’s uncompromising approach was it was protecting the German banks from losses. A sensible compromise to help a member state struggling with debt had been dismissed out of hand.

Dealing with future financial crises

Commentators also argued that the EU and ECB had pursued a hard line on Greece in order to persuade other member states, who were clearly in similar difficulties, not to rely upon help from the centre. This argument makes sense. But worryingly, the Greek episode also exposed the lack of any mechanism to deal with the unexpected. There had been evidence of this at the outset, when the Maastricht conditions were enacted. Lawmakers made no allowance for economic and monetary cycles in 1992, but by 1999’s joining-date there had been three destabilising crises: Russian debt, the LTCM hedge fund crisis, and the Asian financial crisis. These combined to suppress global GDP growth and undermine assumptions about the predictability of national statistics. Dealing with future crises was obviously going to be a problem, and internal ones later arrived on cue, with Ireland, Cyprus, Spain and Portugal. Then there was and still is Italy.

Italy’s finances have many similarities with those of pre-crisis Greece, fueled by the suppression of borrowing costs until the music stopped in the wake of Lehman. Despite voter rebellions at successive general elections, Italy’s problems are yet to descend into a Greek-style crisis, but that is the direction of travel. And Italy is far more serious than Greece because of its sheer size.

Furthermore, the era of resolving funding problems in government finances by central banks simply printing more money has ended, and global base money worldwide is contracting. Monetary expansion was how the ECB kept bond prices up and deferred unresolved problems. From this month there will be no more asset purchases, so borrowing costs for Eurozone governments are sure to rise from extremely low interest rates.

The more one considers the outlook for the Eurozone, the riskier it appears. Until it ceased in December, about €2,500 bn has been invested in government bonds by the ECB. In effect, the ECB has engineered a second period of rate convergence, this time almost exclusively for Eurozone governments, while ignoring commercial interests. The lesson from the first period is it will be followed by a destructive period of rate divergence when the ECB’s steps out of the market, which it now has. Commercial banks have also been supporting their national governments despite artificially low yields, in the knowledge the ECB was underwriting bond prices.

Now that the ECB’s support for bond markets has ceased, either governments collectively stop running budget deficits, or they will have to be funded by other means. They are almost certainly not going to reduce their collective demand for more funds as the Eurozone slips into recession and rates rise against them.

Commercial banks will have to come to terms with the new reality. Having seen euro-bond yields converge then diverge in the first phase of the euro’s life, we are now seeing them diverge again. And as they diverge yet more, confidence that the Euro-system and the politicians at the centre have control of events will quickly erode, as they did last time.

In this context, the Eurozone’s track record of non-adaptability to changing market conditions is worrying. It leaves the prices of longer-term debt somewhat adrift, lacking natural buyers without a sharp steepening of yield curves. A buyers’ strike is beginning to look best-case, which brings us to the greatest risk of all, the pressure on bank credit to contract as banks attempt to reduce their exposure to falling government bond prices in order to preserve their capital.

Eurozone banks simply cannot afford to ride out the effect of falling prices on their core capital bases. The European Banking Commission and other regulators have introduced rules that make it impossible. Assuming a developing funding crisis begins to drive up bond yields, we can be sure that Eurozone banks will find it increasingly difficult to maintain their margins over minimum Tier 1 and Tier 2 capital requirements, as well as capital conservation buffers, countercyclical capital buffers and global systemically important institutions buffers.

There is therefore a growing probability that the withdrawal of the ECB as a buyer of government debt will bring forward the next Eurozone banking crisis, and it has the potential to escalate rapidly. Not only has the money-bubble through the ECB’s asset purchases gone, but there is a growing risk of contraction in the quantity of bank credit available for government bonds at a time when Italy, Spain, France and other smaller states will most need to issue new debt.

The removal of national currencies in 1999 reduced the status of Eurozone states to entities that can become bankrupt in every practical sense, even if not legally. And without the ECB financing them, they will rapidly become insolvent. Taking the Eurozone as a whole, government deficits last year needed a relatively modest €70bn or so increase in bond issuance. Assuming no deterioration in government finances, a similar level of funding could perhaps be achieved by the ECB keeping its deposit rate at minus 0.4% and relying on interest rate arbitrage plus coupon flows to create buyers willing to subscribe for very short-term government debt.

It allows no room for slippage. The signs are that the global economy is slowing, and the widening spreads on commercial loans confirms the process of central bank base money contraction is beginning to undermine business activity world-wide. At this time of the credit cycle the process of continuing debt expansion always falls entirely on the shoulders of governments and their central banks.

The emerging signs of a credit shock that will engulf public finances are everywhere. The Eurozone appears to be at the greatest systemic risk. The only way these dangers can be averted in the Eurozone is for the ECB to reinstate its asset purchase programmes to rig bond markets again. But having just stopped them, the ECB will need very good reasons to start them again. As usual, the order is crisis first QE second.

Following the last credit crisis, governments took over the banks’ liabilities through bail-outs. Since then, bail-in legislation has been enacted in all Eurozone member states. But if they try bail-ins to save just a few banks, they will likely collapse the whole system, because nervous bank bond holders and large depositors will flee the whole Eurozone banking system, rather than risk being forced to accept worthless bank equity.

Equally, the governments of Italy, Greece, Spain, France and others cannot afford the bail-out route, because they will be unable to fund them, and for a second time lifeboats will have to be launched by the EU, ECB and IMF. Only this time, the amounts will be far larger. It was funding failing Spanish banks that took Spain’s debt to GDP ratio from 35.6% in 2007 to 97% today. Just imagine where it goes to on the next credit crisis, and just imagine the demands on the Italians with their debt-to-GDP ratio already at 130%.

The Eurozone is now perilously on the edge of a financial and systemic abyss. The euro itself is not at fault. The institutions behind it failed to understand that converging interest rates in its first decade would lead to debilitating malinvestments, and that interest rate convergence would be followed by destructive divergence. National governments did not understand the full consequences of no longer being able to print their national currencies.

Don’t blame the euro. It is the victim of abuse by politicians who see it as a stepping-stone towards their grand objectives, and a hapless ECB, forced into increasingly destructive monetary policies. We must hope that the rest of the world is not destabilised by contagion from the Eurozone’s failure.

 

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

/RUSSIA

Russia de dollarizes again as the government shifts 100 billion dollars to yuan yen, the euro and the Canadian dollar

(courtesy Mac Slavo/SHFTPlan.com)

Russia De-Dollarizes Deeper: Shifts $100 Billion To Yuan, Yen, And Euro

Authored by Mac Slavo via SHTFplan.com,

Russia is continuing to ramp up its efforts to move away from the American dollar.  The country just shifted $100 billion of its reserves to the yuan, the yen, and the euro in their ongoing effort to ditch the dollar.

The Central Bank of Russia has moved further away from its reliance on the United States dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen, and Chinese yuan according to a report by RTThe share of the U.S. dollar in Russia’s international reserves portfolio has dramatically decreased in just three months between March and June 2018.  The holding decreased from 43.7 percent to a new low of 21.9 percent, according to the Central Bank’s latest quarterly report, which is issued with a six-month lag.

The money pulled from the dollar reserves was redistributed to increase the share of the euro to 32 percent and the share of Chinese yuan to 14.7 percent. Another 14.7 percent of the portfolio was invested in other currencies, including the British pound (6.3 percent), Japanese yen (4.5 percent), as well as Canadian (2.3 percent) and Australian (1 percent) dollars.

The Central Bank’s total assets in foreign currencies and gold increased by $40.4 billion from July 2017 to June 2018, reaching $458.1 billion. –RT

Russian and others have been consistently moving away from the dollar and toward other currencies.  Economic sanctions, which are losing their power as more countries move from the dollar, and trade wars seem to be fueling the dollar’s uncertainty.

Peter Schiff warns that as the supply of dollars is going to grow and grow, the demand for the American currency can fall, while the US Fed will be unable to stop the dollar’s demise. Schiff says that what is coming for Americans, is massive inflation.

“Eventually, what’s going to happen is it’s going to be the demand for those dollars is going to collapse, not the supply. And when the demand for dollars collapses, then the price of the dollar collapses. You get massive inflation. That is what is coming.”

Russia began its unprecedented dumping of U.S. Treasury bonds in April and May of last year. Russia appears to be moving on from the rise in tensions with the United States. The massive $81 billion spring sell-off coincided with the U.S.’s sanctioning of Russian businessmen, companies, and government officialsBut Russia has long had plans to “beat” the U.S. when it comes to sanctions by stockpiling gold.

The Russian central bank’s First Deputy Governor Dmitry Tulin said that Moscow sees the acquisition of gold as a “100-percent guarantee from legal and political risks.”

As reported by RT, the Kremlin has openly stated that American sanctions and pressure are forcing Russia to find alternative settlement currencies to the U.S. dollar to ensure the security of the country’s economy. Other countries, such as China, India, and Iran, are also pursuing steps to challenge the greenback’s dominance in global trade.

END

TURKEY/USA

Erdogan refuses  Washington’s ultimatum to abandon the huge arms deal negotiated with Moscow

(courtesy zerohedge)

Ankara Refuses Washington’s Ultimatum To Abandon Arms Deal With Moscow

Just days after President Erdogan insulted the White House by snubbing National Security Advisor John Bolton, Turkey has delivered its latest middle finger to the US by refusing to abandon its agreement to buy S-400 air defense systems from Moscow – a precondition for buying American-made Patriot air defense systems, according to RT.

If the US ties the sales to Ankara with Turkey tearing up its existing arms deal with Moscow, Ankara will have no choice but to choose the latter, said Foreign Minister Mevlut Cavusoglu, adding that the deal to buy the S-400s has already been finalized.

“The S-400 deal has already been finalized. We can agree with the US on the Patriot system, but not if there will be [a condition] to abandon the S-400s,” the minister said during an interview with state TV.

Cavusoglu added that Ankara had received the proposal to buy weapon and would consider the terms – but warned against Washington attempting to meddle in Ankara’s relationship with Moscow.

Moscow

The interview followed reports about the American ultimatum that circulated in Turkish media.

In a sign that relations between the US and Turkey were finally beginning to thaw (this was before Trump abruptly ordered the withdrawal of the 2,000 US troops from Syria), the State Department approved the sale of 80 Patriot missiles and 60 PAC-3 missile interceptors last month.

Ankara signed the deal to buy the S-400s last year, and the first batch is scheduled to be delivered later this year over vociferous objections from Washington. That came after Congress last year passed a law effectively blocking a shipment of 100 F-35 jet fighters to Turkey, which is a member of NATO along with the US.

The US similarly tried to pressure India out of buying S-400s as the transaction could potentially violate American laws on sanctions placed on Russia – though Washington proposed giving New Delhi a free pass if it also agreed to buy arms from the US.

Despite pressure from overseas, Turkey and India maintained that they can freely choose partners in the arms trade without interference from Washington or anybody else.

“We don’t need permission from anybody” to purchase the S-400s, said Turkish President Recep Tayyip Erdogan.

END
Erdogan tells Trump to leave Syria now as he has an itchy finger ready to annihilate the Syrian Kurds on his northern border.
(courtesy zerohedge)

Erdogan To Trump: Leave Syria Now Before We Strike

Turkey has threatened to strike the Syrian Kurdish YPG militia if the United States delays its troop withdrawal from the country, according to The Guardian.

“If the [pullout] is put off with ridiculous excuses like Turks are massacring Kurds, which do not reflect the reality, we will implement this decision,” said Turkish foreign minister Mevlüt Çavuşoğlu, referring to their threat to launch a military operation in Kurdish controlled Syria.

Speaking with broadcaster NTV, Çavuşoğlu said it was not realistic to assume that the United States will be able to collect weapons it gave to the YPG, which Turkish President Recep Tayyip Erdoğan considers a terrorist group.

Turkish officials had a tense meeting this week with Trump’s national security adviser, John Bolton, in Ankara aimed at coordinating the pullout process.

Erdoğan – who has welcomed the pullout plan –accused Bolton of a “grave mistake” by demanding that Ankara provide assurances on the safety of the Kurdish fighters before Washington withdraws its troops.

The US secretary of state, Mike Pompeo, who is on a regional tour, also said on Wednesday that Turkey had committed to protecting Washington’s Kurdish allies fighting Islamic State in Syria. –The Guardian

The United States has worked closely with the Syrian Kurdish People’s Protection Units (YPG) militia, which Ankara views as a “terrorist offshoot” of the Kurdistan Workers’ Party (PKK), reports The Guardian. The PKK has vowed to battle the Turkish state since 1984.

“We are determined on the field and at the table … We will decide on its timing and we will not receive permission from anyone,” Çavuşoğlu said of the plan to strike, adding that various officials in the Trump administration had tried to discourage Trump from the pullout plan – creating “excuses” such as Turkey massacring Kurds, referring to Pompeo’s comments.

Çavuşoğlu added that Turkey would fight the YPG whether or not the US withdraws from Syria, and that he and Pompeo would discuss over the phone on Thursday.

end

 

This morning:  US withdraws some of its troops from Syria contrary to what Bolton and Pompeo stated

(courtesy zerohedge)

“We Don’t Take Orders From Bolton”: US Withdrawal From Syria Begins

Contrary to assurances from Trump’s National Security Advisor, neocon John Bolton, and Secretary of State Mike Pompeo, who suggested earlier this week that US troops would remain in Syria for at least a little while longer, the Associated Press reported on Friday that the US has begun the process of removing the 2,000 soldiers based in northeastern Syria.

Citing information provided by activists with the Syrian Observatory for Human Rights, the withdrawal officially began Thursday night local time. A convoy of about 10 armored vehicles and some trucks left the town of Rmeilan into drove into Iraq. Col. Sean Ryan, spokesman for the coalition fighting the Islamic State group, later confirmed that the US has started “the process of our deliberate withdrawal from Syria.”

Withdrawal

Trump’s abrupt decision last month to order US troops out of Syria angered former Defense Secretary James Mattis, who resigned over the decision, and stoked fears that Trump was abandoning the Kurds to a massacre by Turkish forces, who have vowed to pick up the slack in Syria when it comes to fighting ISIS.

“These have been folks that have fought with us and it’s important that we do everything we can to ensure that those folks that fought with us are protected,” Pompeo said of the Kurds while visiting Irbil, the capital of Iraq’s semi-autonomous Kurdistan region, after talks in Baghdad.

After launching a campaign of airstrikes against ISIS in 2014, President Obama deployed troops on the ground the following year to combat ISIS, which at the time controlled large swaths of northeastern Syria. Since then, the group has been beaten back, and now control only 1% of their former territory.

Initially, Trump had said the pullout would be complete within a matter of weeks, but plans became murky after the Pentagon requested four months to complete the withdrawal. Last night, the Wall Street Journal reported that the withdrawal would begin immediately.

Scores of ground troops are headed toward Syria to help move troops out, and a group of naval vessels headed by the amphibious assault ship USS Kearsarge is headed to the region to back up troops at the vulnerable moment they are leaving the country, the officials said. The Kearsarge carries hundreds of Marines, helicopters and other aircraft.

“Nothing has changed,” one defense official said. “We don’t take orders from Bolton.”

To account for shifts in plans, the military will stage the personnel and equipment needed for a possible withdrawal, rather than move the U.S. forces out. Troops tasked to help with the eventual withdrawal already are in the area, in places like Kuwait and al-Asad air base in western Iraq.

After expressing his immense displeasure with the US’s walk-back of its withdrawal plans, Turkish President Recep Tayyip Erdogan – who recently resorted to threatening the US over their plans to linger in Syria – will no doubt be glad to hear about this.

end

It did not take Turkey long to establish tanks along the Syrian border with news that some USA troops were already leaving Syria.  The Turkish lira tumbles as we have a new threat in Syria

(courtesy zerohedge)

Turkish Lira Tumbles As Tanks Amass Along Syrian Border

After an already painful start for the Turkish lira this year, shedding more than 3.5% of its value against the dollar during the first three days of 2019 when it flash crashed after Mrs Watanabe puked on the carry trade after Apple shockingly guided lower, and after early this week the lira slid lower amid renewed tensions between the US and Turkey following hopes that the feuding NATO members might finally be setting aside their differences, dashed after Bolton’s snub heard round the worldby President Erdogan, the lira is now tumbling on fears of further military escalation in Syria.

Prior file phone, via ReutersOn Friday Turkey’s Anadolu news agency reported Turkey has deployed tanks on the border along Syria’s Idlib province. Turkey’s defense minister further announced preparations for an invasion of Syrian Kurdish enclaves east of the Euphrates continues intensely”

“We have Manbij, and the east of Euphrates ahead. Necessary planning was made regarding this. Our preparation continues intensely,” Defense Minister Hulusi Akar said while inspecting troops near the border with Syria, according to Anadolu.

The uncertainty and fears of another major flare-up following last year’s ‘Operation Olive Branch’ sent the lira diving to session lows, and is approaching levels last seen at the start of November.

Turkey has billed its plans as a “counter terror” op, with the defense minister noting dubiously, “We have no problems with our Kurdish brothers, Arab brothers in Syria, Turkmens and other ethnic and religious groups. Our only targets are terrorists Daesh and PKK/YPG.”

Turkey has for months stated plans to eradicate the presence of the Kurdish YPG, which it considers a terror extension of the outlawed PKK, from near Turkey’s borders.

The question is how will the US (and Israel/Iran/Russia) respond once Turkey follows though with the action so many had been expecting and invades, again.

end

6. GLOBAL ISSUES

 

.

 

7  OIL ISSUES

 

8. EMERGING MARKETS

BRAZIL

 

end

 

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

Euro/USA 1.1522 UP .0014 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 MIXED

 

 

 

 

USA/JAPAN YEN 108;28  UP 0.003 (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 1.2792     DUP   0.0032  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3199 DOWN .0040 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 14 basis points, trading now ABOVE the important 1.08 level RISING to 1.1522/ Last night Shanghai composite CLOSED  UP 18.78 POINTS OR 0.74% 

 

 

//Hang Sang CLOSED UP 135.84 POINTS OR 0.55%

 

/AUSTRALIA CLOSED DOWN 0.33%  /EUROPEAN BOURSES MIXED

 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED DOWN 195.90 POINTS OR 0.97% 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED MIXED

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 145.84 POINTS OR 0.55% 

 

 

 

/SHANGHAI CLOSED UP 18.78 PTS OR 0.97%

 

 

 

 

Australia BOURSE CLOSED DOWN 0.33%

 

Nikkei (Japan) CLOSED UP 195.90 POINTS OR 0.97% 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1292.15

silver:$15.70

Early FRIDAY morning USA 10 year bond yield: 2.71% !!! DOWN 3 IN POINTS from THURSDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.04 DOWN 2  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 95.35 DOWN 19 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.71% DOWN 1    in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: +.02%  DOWN 0   BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.45% DOWN 0   IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.85 DOWN 4     POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 130 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.24%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.61% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1479 DOWN   .0029 or 29 basis points

 

 

USA/Japan: 108.36 UP  0.080 OR 9 basis points/

Great Britain/USA 1.2844 UP .0091( POUND UP 91  BASIS POINTS)

Canadian dollar DOWN 18 basis points to 1.3256

 

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The USA/Yuan,CNY closed DOWN AT 6.7630-  ON SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.7616(  YUAN DOWN)

TURKISH LIRA:  5.4832

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

 

 

 

Your closing 10 yr USA bond yield DOWN 1 IN basis points from THURSDAY at 2.70 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.03 UP 1  in basis points on the day /

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

Your closing USA dollar index, 95.60 UP 6 CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 12:00 PM 

London: CLOSED DOWN 24.69 OR 0.36%

German Dax : DOWN UP 34.13 POINTS OR 0.31%

Paris Cac CLOSED DOWN 24.32 POINTS OR 0.51%

Spain IBEX CLOSED UP 20.30 POINTS OR 0.23%

Italian MIB: CLOSED DOWN 10.65 POINTS OR 0.06%

 

 

 

 

WTI Oil price; 51.97 12:00 pm;

Brent Oil: 60.67 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.95  THE CROSS HIGHER BY 0.09 ROUBLES/DOLLAR (ROUBLE LOWER BY 9 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.4832 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.24 FOR THE 10 YR BOND 1.00 PM EST EST

END

 

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

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

WTI CRUDE OIL PRICE 4:30 PM :51.68

 

BRENT :  60.57

USA 10 YR BOND YIELD: 2.70%…

 

 

USA 30 YR BOND YIELD: 3.03%/

 

 

 

EURO/USA DOLLAR CROSS: 1.1464 ( DOWN 44 BASIS POINTS)

USA/JAPANESE YEN:108.50 UP 0.219 (YEN DOWN 22 BASIS POINTS/..deadly to yen shorters

.

 

USA DOLLAR INDEX: 95.67 UP  14 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2842 UP 89 POINTS FROM YESTERDAY

the Turkish lira close: 5.41671

the Russian rouble:  66.92 DOWN.06 Roubles against the uSA dollar.( DOWN 6 BASIS POINTS)

 

Canadian dollar: 1.3267 DOWN 28 BASIS pts

USA/CHINESE YUAN (CNY) : 6.7630  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.7595 (OFFSHORE)

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

 

The Dow closed DOWN 5.97 POINTS OR 0.12%

 

NASDAQ closed DOWN 14.59 POINTS OR 0.21%

 


VOLATILITY INDEX:  18.17 CLOSED DOWN 1.33 

 

LIBOR 3 MONTH DURATION: 2.796%  .LIBOR  RATES ARE RISING/

 

FROM 2.799

 

 

 

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

 

BTFDove – Stocks Extend Best Run In 10 Years Off Mnuchin Massacre Lows

Slumping macro data, tumbling earnings expectations, and “substantial” Fed balance sheet run off to come, that explains why stocks at near-record levels of extension in the last few weeks…

Of course the algos had plenty to chew on still – Powell BTFDove, China RRR Cut, Trade talk optimism, Mnuchin calls PPT, and Saudis scramble to boost oil higher

Dove, China RRR Cut, Trade talk optimism, Mnuchin calls PPT, and Saudis scramble to boost oil higher

 

 

Big week for China stocks but it was all dominated by Wednesday morning’s rescue bid…

 

Italy was Europe’s outperformer on the week…

 

US Equity markets stalled today but once again that dip was bought…

…and extended the post-Mnuchin Massacre buying frenzy…

That is the greatest 12-day rally for the S&P since July 2009…

 

On the week, Small Caps surged almost 5% – its best week since Dec 2016…

 

Biotechs are back in a bull market – soaring over 22% from the Xmas Eve lows…

 

FANG Stocks are up over 26% from the Mnuchin Massacre lows…

 

Banks have bounced back but not as much as the high-momo sectors above…

 

And everything was looking awesome for department stores and retailers until yesterday…

 

The VIX Index has fallen from the open to the close for 12 consecutive sessions. (h/t @selling_theta) That’s tied for the longest such streak since 2009 (which, at 13, was the longest stretch on record according to data going back to 1992).

 

Credit spreads compressed further on the week but found some resistance today…

 

Treasury bond yields were all higher on the week with the long-end underperforming despite a rally into the weekend…

 

However, 10Y Yields fell back into their 30-year channel – somewhat disrupting the bears’ claims that the bull is over…

 

The Dollar fell for the 4th week in a row (breaking down to its weakest since September)…

 

This was the yuan’s best week since 2005!!

 

Ugly week for cryptos, leaving Bitcoin in the red for 2019…

 

PMs and Copper trod water on the week as crude prices exploded…

 

Things initially looked good for WTI’s record win streak early on (ten consecutive daily gains would have marked the longest rally since the contract started trading in 1988), but once $53 was tagged, WTI tumbled…

 

Gold fell against the dollar and even more so against the yuan on the week…

 

Finally, amid all this exuberant stock buying and proclamations that “the bottom is in” – recession risk is at a seven year high…

Don’t forget “you are here”…

 

 

market trading/

Late morning trading: dollar spikes, gold and crude rise, bond yields tumble
(zerohedge)

Dollar Spikes As Stocks, Crude, & Bond Yields Tumble

And just like that – with no catalyst – everything reverses…

As Richard Breslow noted earlier, The dollar has gone from chump to champ as Turkish troop movements on the Syrian border have caused a quick flight to safety.”

The dollar’s abrupt rally against the euro and the yen may have been fueled by investors trimming positions heading into the weekend, said Mazen Issa, senior foreign-exchange strategist at TD Securities.

“After a week that saw the dollar trade on its backfoot by an appreciable degree, there may be some lightening of positions,” Issa wrote in an email. “These markets are different, and carrying risk into the weekend may not be prudent — especially when obvious, though consequential, risks with unknown outcomes are around the corner.”

And it seems everyone is unwinding the momo trades across all assets too…

Stocks retested a critical resistance level…

And failed…

 

After a mini-bloodbath, bonds are suddenly panic-bid – double-topping at 2.75%

 

And WTI hit $53 and tumbled…

As Bloomberg’s Robert Cignarella notes, it starts in the crude pits than moves into the dollar and futures and eventually metals. Algo trade either buy or sell moves all assets only to likely revert later when the machines reverse to take profit. Only hard part is judging how far it will go before it turns. Trade has been going on since March lifting vol and likely to continue until some resolution on trade talks and a trend emerges.

 

Will Trump quickly tweet that “trade talks are going well”? Will A few head subtlety suggest QE5 is coming? Sadly, that is all that matters.

end

 

 

market data/

The all important CPI comes in at the slowest growth since August 2017 at 1.9% y/y

(courtesy zerohedge)

US Consumer Price Growth Slowest Since Aug 2017 As Gas Prices Plummet

Following China’s dismal CPI and PPI prints this week, and terrible data from core Europe, all eyes are on US consumer prices with the over-arching ‘goldilocks’ hope that it’s not too hot to prompt Powell to re-hawk and not too cold to prompt growth scares.

And it seems investors got what they wanted as CPI printed an exactly in line with expectations +1.9% YoY (still the weakest growth since August 2017), and ironically the same as China’s CPI.

Perhaps most critically headline CPI is now back below the Fed’s mandated 2.0% Maginot Line.

Under the hood, the index for all items less food and energy increased 0.2 percent in December. The shelter index increased 0.3 percent in December, the same increase as the prior month. The indexes for rent and owners’ equivalent rent both increased 0.2 percent, while the index for lodging away from home rose 2.7 percent.

The recreation index rose in December, increasing 0.6 percent. The medical care index rose 0.3 percent in December with its major component indexes mixed. The index for hospital services rose 0.5 percent, the physicians’ services index was unchanged, and the index for prescription drugs declined 0.4 percent. The index for household furnishings and operations rose 0.3 percent in December, and the education index rose 0.2 percent.

The index for airline fares fell 1.5 percent in December following a 2.4-percent decline in November. The index for used cars and trucks fell 0.2 percent after rising in October and November. The motor vehicle insurance index fell 0.2 percent, its second consecutive decline. Several indexes were unchanged in December, including those for new vehicles, apparel, and communication.

The biggest driver of the slowing in overall CPI is from the energy complex.

The energy index fell 3.5 percent in December following a 2.2-percent decline in November. The gasoline index fell 7.5 percent in December after a 4.2-percent decline the prior month.

And the other silver lining for Americans – the pace of growth in shelter costs is slowing…

 

end

USA ECONOMIC STORIES OF INTEREST

Earnings season has got off to a dismal start with a huge number of warnings, guidance cuts and mass layoffs

(courtesy zerohedge)

Earnings Season Off To Dismal Start: Warnings, Guidance Cuts, Mass Layoffs

Earnings season has yet to officially begin when the big banks report next week and it already looks like Wall Street is in for a rude awakening when it comes to corporate profits in both the last quarter of 2018 and the rest of 2019 just one quarter after the best earnings season in history.

The recent warnings, guidance cuts and layoff announcements to date have been nothing short of dismal. Here is a quick summary of what we have observed in just the last week:

  • Apple cut revenue guidance (for the first time in 16 years)
  • Macy’s cut profit guidance, sending its shares plunging the most on record
  • Barnes and Noble cut profit guidance
  • FedEx cut profit guidance
  • American Airlines cut guidance
  • Delta cut profit guidance
  • Kohl’s reported a plunge in comp store sales
  • Ford announced it will cut thousands of jobs in Europe
  • Jaguar announced it will cut 10% of its workforce
  • Blackrock announced it will cut 500 jobs
  • State Street announced it will cut 15% of its senior management
  • AQR announced it will cut dozens of jobs
  • United Technologies ended sale of Chubb fire-safety as bids were too low.

Virtually every single sector is telegraphing weakness, from transports to techs to autos to retail and finance. Here are some additional details courtesy of Bloomberg:

Transports

The outlook for the U.S. airline sector darkened notably as economic uncertainty threatens demand. American Airlines cut its estimate for a key gauge of pricing power on Thursday after a similar move by Delta at the beginning of the year. And that was before accounting for a partial government shutdown in the country.

Carriers also see a far bleaker 2019: FedEx cut its outlook a few weeks ago – just three months after raising it – reflecting an abrupt change in its view of the global economy. CEO Fred Smith cited trade tensions, especially between the U.S. and China, among its troubles, saying most of the problems he faced were due to “bad political choices.”

Cars

The first drop in Chinese passenger auto sales is reverberating across the globe as the gloom in the auto industry spreads, and within hours on Thursday, Jaguar and Ford Motor Co.announced major cost-cutting programs. Ford took the most aggressive action in Europe, warning it could close plants and fire thousands. It was followed by Jaguar, Britain’s biggest carmaker, which disclosed a plan for 4,500 layoffs, about 10% of its global workforce. The culprits, according to Jaguar: Brexit, flagging demand for diesel-powered vehicles and a downturn in China.

Retail, Luxury Brands

Before today’s retail crash, luxury retailers were already moaning about the Chinese economic slowdown, and none more so than brands like Tiffany and Louis Vuitton owner LVMH. Tiffany said last week that its weaker-than-expected sales highlighted a “clear pattern” of Chinese shoppers cutting back on spending when they’re overseas. Then on Thursday, Macy’s and Kohl’s gave the clearest indication so far that the U.S. holiday season might not have been the “record” smash hit many said it was just two weeks ago when “strong retail spending” was cited as the catalyst for the year-end rally. Macy’s darker outlook and Kohl’s disappointing sales compounded concerns that rising interest rates and Chinese trade turmoil could dent consumer spending, a backbone of the U.S. economy.

Finance

With banks on deck to report next week, we already know that asset managers have not been spared as volatility roils markets and investors have piled into funds with low fees. BlackRock was the latest company to announce a reduction in its workforce on Thursday, with a plan to dismiss 500 employees, or 3% globally, in the weeks ahead. That, according to Bloomberg, was  BlackRock’s largest headcount reduction since 2016. Quant hedge fund AQR Capital announced job cuts two days ago after a year of poor performance. State Street is also trimming its workforce with the bank cutting 15% of its senior management, as it new chief executive continues with a plan to whittle management ranks.

Industrials

Erratic markets have started to have an impact on financial plans at big corporations. Industrial giant United Technologies said Thursday it has halted the sale of its fire-safety and security business because of recent volatility. The company will focus instead on its broader plan to separate such disparate businesses as jet engines, elevators and climate controls.

Technology

The biggest shock to the upcoming earnings season was Apple’s sales forecast cut on Jan. 3, the first time in almost two decades that the company lowered its outlook. Apple blamed the economic slowdown in emerging markets, particularly in China for a major cut in its projected revenue even though it gave its latest forecast just three months ago. Of course, there were many warning signs, as several key Apple suppliers trimmed their own estimates in the previous months. While the Apple news rippled through the industry, the recent rally driven by a dovish Powell has helped Apple erase many of its recent losses.

* * *

While the rising gloom has already had an impact on analyst expectations, with consensus estimates showing an expectation that S&P profits will rise 7.7%, down from a forecast for a 20% plus increase for all of 2018, the real number may end up being much lower.

As Bloomberg notes, a market-based analysis of earnings using the dividend discount model suggests equity investors anticipate annual profit growth of 3.7% through 2023, according to Goldman strategists led by David Kostin. The question is just how bad will earnings in 2019, both in the first quarter and for the rest of the year, be if indeed this is the last year before the recession finally strikes?

END
Moody’s downgrades P G and E and that triggers a 800 million dollar collateral call against the company. It has only 400 million of liquid cash.
(courtesy zerohedge)

PG&E Gets AIG-ed: Moody’s Downgrade Triggers $800MM Collateral Call, Liquidity Crisis

For PG&E, just like for AIG ten years ago, this is the beginning of the end.

As we discussed on Tuesday, one of the biggest surprises involving the ongoing collapse of troubled California utility PG&E is how it was possible, that with the company reportedly contemplating a DIP loan ahead of a possible bankruptcy filing which sent PCG stock plunging and its bonds cratering to all time lows, that rating agencies still had the company rated as investment grade.

 

Late on Monday, this question got some closure after S&P became the first rating agency to take a machete to its rating for PG&E, when it downgraded the company by five notches, from BBB- to B, the fifth-highest junk rating while warning that more cuts are imminent. But while S&P slashed PG&E’s IG ratings, Fitch and Moody bizarrely had yet to do so, well over a month into the company’s death spiral. And when they do, both management, shareholders and bondholders would have nightmare on their hands because a similar “junking” by Moody’s to high-yield would result in a rerun of the AIG death sprial, as at least once cash collateral call for PG&E of at least $800 million – to guarantee power contracts – would be triggered according to a regulatory filing.

Well, PG&E’s AIG moment hit late on Thursday, when Moody’s did precisely what S&P did two days earlier, and cut the utility’s credit rating to junk citing the electric company’s potential wildfire liabilities. The credit grader lowered PG&E’s rating by five notches, to B2 from Baa3, and the utility Pacific Gas & Electric rating four levels to Ba3. Like S&P, the bond grader said it may (read: will) cut the company further, sending PG&E shares and bonds sliding after hours.

But it wasn’t the prospect of more downgrades that spooked the market: it was the fact that with two junk ratings,PG&E will now be required to use cash as collateral to guarantee power contracts, according to the company’s latest quarterly filing, which estimates the utility will have to fully collateralize as much as $800 million of positions.

That… is a problem because PG&E had only $430 million of cash on its books in September, precipitating what now appears to be an imminent liquidity crisis, one which as a result of some $30 billion in wildfire legal liabilities will quickly escalate into a solvency inferno, to use a term closely associated with California utility companies.

Meanwhile, assuming that PG&E somehow survives the upcoming insolvency, its junk credit ratings will assure that the company will have to pay more to borrow for years to come. In fact, the company’s 3.5% bonds due next year are currently yielding more than 9.9%, far above where most high-yield securities are paying and a level reserved for deeply distressed credits. As shown in the chart below, B-rated debt, the mid-tier of junk bonds, yields on average 7.5% as of Monday’s close, according to Bloomberg index data.

Of course, the above take assumes PG&E will survive a few quarters, which thanks to nearly $1 billion in cash collateral the company must somehow find and post immediately, it won’t.

Not even Moody’s could find a silver lining in this liquidity bonfire: “We see a much more challenging environment for PG&E,” said Moody’s analyst Jeff Cassella in the statement. “The company is increasingly reliant on extraordinary intervention by legislators and regulators, which may not occur soon enough or be of sufficient magnitude to address these adverse developments.”

Meanwhile, even as shareholders – among which bizarrely is value investing “god” Seth Klarman – hold on to hope, bondholders appear to have given up: with $18.4 billion of long-term debt, PG&E most actively-traded bonds plunged sharply after the downgrade: Pacific Gas & Electric bonds with coupons of 6.05 percent due in 2034 fell as much as 4.5 cents on the dollar to 85 cents, the lowest level since the financial crisis.

And speaking of the financial crisis, while Lehman was the spark, its was the bailout of AIG that really precipitated the most violent part of the 2008 crisis. While most analysts see PG&E as an isolated case, now that the biggest California utility is on the verge of insolvency and bankruptcy, and is about to have its own AIG moment, one wonders just how “contained” this particular shock to the system will be.

One thing is clear, however: the shock to California residents, or rather their wallets, will be most unpleasant, as their rates are about to surge one way or another.

END
The shutdown will certainly cause some hardship but it is not the end of the world
(courtesy Michael Snyder)

Mainstream Media Warns Of American “Economic Hellscape” If The Government Shutdown Continues

Authored by Michael Snyder via The Economic Collapse blog,

Is the mainstream media overhyping the economic impact of the government shutdown for political purposes? 

Of course they are. 

Once upon a time the mainstream media in the United States at least attempted to maintain a facade of objectivity, but those days are long gone.  In this case, they want to stir up as much public resentment against President Trump as possible in order to try to force him to end the government shutdown.  And when NBC News breathlessly declared that the U.S. “would face an economic hellscape” if this shutdown stretches on for an extended period of time, their article quickly went viral all over the Internet.

But will it really be “an economic hellscape”?

Here are some of the things that they say we will be facing in their “doomsday scenario”

  • 38 million low-income Americans lose food stamps
  • 6 million face an uncertain timetable for collecting tax refunds
  • 2 million without rental assistance and facing possible eviction
  • 800,000 paycheck-less federal employees plunged into dire financial straits
  • Shuttered parks and museums while overstressed airports cause tourism to tank
  • Federal court system slows to a crawl
  • Disaster relief money doesn’t get to storm-ravaged areas

Yes, things would certainly be unpleasant for a lot of people, and there would be a whole lot of anger around the country.

But such a scenario does not qualify as “an economic hellscape”.  I would encourage the folks over at NBC News to pick up a copy of The Beginning Of The End if they really want to know what the initial phases of a major economic crisis scenario could look like in this nation.

The most alarming item on their list is the fact that 38 million Americans could soon lose access to food stamps. According to the U.S. Department of Agriculture, that will officially happen by the end of February

By the end of February, the Supplemental Nutrition Assistance Program, or SNAP, run by the Department of Agriculture, would be out of funding — meaning almost 40 million low-income Americans could find themselves struggling to pay for food, said Joseph Brusuelas, chief economist for the accounting firm RSM US.

Things would certainly be tough for a lot of low income people, and there would be a lot more traffic at shelters and food banks, but nobody would starve to death.

The worst case scenario would be if mobs of angry people started taking to the streets and rioting in large urban areas.  That is definitely a possibility, especially if this shutdown lasts for several more months.

But for the moment, most of the focus is on the hundreds of thousands of federal workers that are not getting paychecks right now.  We are being endlessly bombarded with sob stories about how much these workers are suffering after missing one paycheck.

If people can’t handle going a couple of weeks without pay, how are they going to handle things when a real crisis erupts in this country?

With no end to the shutdown in sight, some lower paid federal workers have decided that it is time to find a new job

Transportation Security Agency officers forced to work without knowing when their next paycheck is coming are no longer just calling in sick. Now, 18 days into the partial government shutdown, some are resigning, according to Hydrick Thomas, who heads the TSA Council on the American Federation of Government Employees.

“Every day I’m getting calls from my members about their extreme financial hardships and need for a paycheck. Some of them have already quit and many are considering quitting the federal workforce because of this shutdown,”  the official said in a statement posted to the union’s website on Tuesday.

I can’t say that I blame TSA workers too much for quitting.  It is an absolutely miserable job, and the starting salary for TSA security officers is somewhere “between $25,000 to $30,000 a year”.

Of course we don’t actually need a TSA at all.  Many of us would love to go back to the days before 9/11 when we could get on flights without having someone inspect our private areas.

Another aspect of the shutdown that is horrifying NBC News is the fact that no new beers are being approved right now

The Alcohol and Tobacco Tax and Trade Bureau is out during the shutdown. That means the federal government will not approve beer labels or process permits, which translates into no new beers.

At this moment there are literally millions of people around the world that actually have nothing to eat and no clean water to drink, and this is what we are whining about?

I have an idea.  Why don’t we shut down the “Alchohol and Tobacco Tax and Trade Bureau” permanently and let people make beer without having to get permission from the federal government first?

As I have proposed, we could save enormous amounts of money by simply shutting down useless government agencies that we do not need.

But that would make far too much common sense to work in America in 2019.  We live at a time when the American people expect the federal government to protect them from just about every potential danger that you can possibly imagine.

Look, I don’t want to seem completely unsympathetic to the plight of all of these federal workers that are being used as pawns in this game of political brinkmanship.  Because 78 percent of all Americans are living paycheck to paycheck, that means that a lot of these federal workers are not going to be able to pay their bills, and that would be extremely stressful for anyone.  And at this point, thousands of federal workers have already begun filing for unemployment benefits

More than 4,700 federal employees filed for unemployment in the last week of December, compared with 929 the week prior, according to the Department of Labor. There is no federal data available yet for the first week of January. Unemployment rules vary by state; generally the government provides benefits to eligible workers who have lost a job “through no fault of their own,” for a maximum of 26 weeks.

But the mainstream media is blowing things way out of proportion when they start using phrases such as “economic hellscape”.

Yes, this shutdown is going to cause some significant pain for a lot of people, but it is definitely not the end of the world.

end

 

SWAMP STORIES

This was long overdue;  Trump is now planning to ease immigration restrictions on skilled workers such as IT programmers and doctors.  This will appease both Democrats who desire increase immigration and Republicans

(courtesy zerohedge)

Trump Planning To Ease Immigration Restrictions On Skilled Workers As Wall Battle Rages

Policy wonks in pro-business think tanks across Washington probably wet their pants Friday morning when President Trump hinted that an immigration policy that many of them have long advocated for could soon become a reality.

In a tweet, Trump said changes are coming to US immigration policy that would simplify the application process and clear a “pathway to citizenship” for H1-B visa holders – a cohort of workers, including doctors and software engineers, who are highly educated and work in highly specialized industries.

Trump

Trump has long claimed that he wants a larger share of immigrants coming to the US to consist of skilled workers. And by making it easier for skilled workers to stay and settle in the US, he can simultaneously placate Democrats and pro-business Republicans.

Donald J. Trump

@realDonaldTrump

H1-B holders in the United States can rest assured that changes are soon coming which will bring both simplicity and certainty to your stay, including a potential path to citizenship. We want to encourage talented and highly skilled people to pursue career options in the U.S.

18.7K people are talking about this

Health-care advocates have long complained that the H1-B visa program should be reformed to make it easier for more doctors to come to – and stay in – the US. Silicon Valley firms have long hired engineers from abroad and groaned when visa issues made it difficult for them to stay.

Should Trump follow through on this promise, it could also strengthen the president’s position in the border wall debate by making it more difficult for Trump’s opponents to paint him as irrationally opposed to immigration in a blanket sense.

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

Seattle TV Station Caught Doctoring Trump’s Face during National Address

https://www.zerohedge.com/news/2019-01-10/seattle-tv-station-caught-doctoring-trumps-face-during-national-address

 

Ex-federal prosecutor Sidney Powell: How Did the Wife of a Mueller Protégé End Up Hearing Muller’s Case? – If for no reason other than the obvious appearance of a serious conflict of interest and bias, Judge Friedrich should recuse herself. Concord is entitled to a vigorous defense, and the case should be heard by a judge who is not a creature of the Deep Lagoon — if there is such a thing in Washington…   https://dailycaller.com/2019/01/10/mueller-protege/

end

Debt Reset Begins, Global Banks Issue Dire Warnings, Trump Wall Showdown

By Greg Hunter On January 11, 2019 In Weekly News Wrap-Ups

According to renowned gold investor Jim Sinclair, the global debt reset that has been long predicted has begun. Lots of debt that will never be repaid will be written down around the world. Sinclair says gold and silver will be the last men standing when the dust settles.

The BIS, World Bank and the IMF have all issued dire warnings in the past few weeks of financial “storm clouds.” In other words, the biggest bankers in the world are warning of another financial meltdown coming in the not-so-distant future.

Nance Pelosi and Chuck Schumer are being beaten up so badly over the government shutdown and security funding for a wall on the southern border that even singer Cher is telling the Speaker of the House and the minority leader in the Senate to “Be the Hero” and cave in and put 800,000 government workers back to work. The U.S. has a $4 trillion budget (that’s $4,000 billion) and Nancy and Chuck are holding up the government for little more than $5 billion in funding for security that includes a wall. Even Democrat James Carville is making fun of Chuck and Nancy’s response to Trump’s network appeal for a border wall and security on the southern border.

Join Greg Hunter as he gives his take on the top stories of the past week in the Weekly News Wrap-Up.

(To Donate to USAWatchdog.com Click Here)

After the Wrap-Up:

Catherine Austin Fitts founder of Solari.com will be the guest for the Early Sunday Release. She will give us an update on the serious matter of $21 trillion in “missing money” at DOD and HUD and why it will soon affect every American.

-END-

I WILL SEE YOU ON MONDAY
H
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