JAN 16/GOLD UP $5.40 TO $1293.90//SILVER FLAT AT $15.60//USA GOVERNMENT LOOKING AT CRIMINAL CHARGES OF THEFT AGAINST HUAWEI/CHINA UNLEASHES HUGE STIMULATION AND THAT CAUSED MARKETS TO RISE/ECB IS ADDING TO ITS BALANCE SHEET INSTEAD OF CONTRACTING/MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

GOLD: $1293.90 UP $5.40 (COMEX TO COMEX CLOSINGS)

Silver:   $15.60 UP 0 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1293.45

 

silver: $15.59

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 3 NOTICE(S) FOR 300 OZ (0.0093 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  538 NOTICES FOR 53800 OZ  (1.6734 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

7 NOTICE(S) FILED TODAY FOR 35,000  OZ/

 

total number of notices filed so far this month: 644 for 3,220,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3614: UP 61

 

Bitcoin: FINAL EVENING TRADE: $3575 UP   $24 

 

end

 

XXXX

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

today 2/3

EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,286.200000000 USD
INTENT DATE: 01/15/2019 DELIVERY DATE: 01/17/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
661 C JP MORGAN 2
737 C ADVANTAGE 3 1
____________________________________________________________________________________________

TOTAL: 3 3
MONTH TO DATE: 541

 

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total OPEN INTEREST ROSE BY AN SMALL SIZED 553 CONTRACTS FROM 191,369 UP TO 191,922 DESPITE YESTERDAY’S  4 CENT FALL  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:

1421 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1421 CONTRACTS. WITH THE TRANSFER OF 1421 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 1421 EFP CONTRACTS TRANSLATES INTO 7.105 MILLION OZ  ACCOMPANYING:

1.THE 4 CENT FALL IN SILVER PRICE AT THE COMEX AND

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

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

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

 21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

AND NOW: INITIALLY 5.605 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: 27,578 CONTRACTS (FOR 11 TRADING DAYS TOTAL 27,158 CONTRACTS) OR 137.890 MILLION OZ: (AVERAGE PER DAY: 2507 CONTRACTS OR 12.535 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  137.89 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 19.69% 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:           137.89    MILLION OZ.

 

 

 

RESULT: WE HAD A SMALL SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 553 DESPITE THE 4 CENT FALL IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1421 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: 1974 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1421 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 553 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 4 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.60 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: 7 NOTICE(S) FOR 35,000 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  5.605 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 strong SIZED 6,777 CONTRACTS UP TO 501,605 DESPITE THE LOSS IN THE COMEX GOLD PRICE/(A FALL IN PRICE OF $1.45//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A HUGE  SIZED 11,496 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 11496 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 501,605. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A HUGELY ATMOSPHERIC SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 18,273 CONTRACTS: 11.496 OI CONTRACTS INCREASED AT THE COMEX AND 6777 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN:  18,273 CONTRACTS OR 1,827,300 OZ = 56.80 TONNES. AND ALL OF THIS HUMONGOUS DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF A TINY  $1.45??????????

 

 

 

 

YESTERDAY, WE HAD 6045 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 90,925 CONTRACTS OR 9,092,500 OZ  OR 282.81 TONNES (11 TRADING DAYS AND THUS AVERAGING: 8265 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 11 TRADING DAYS IN  TONNES: 282.81 TONNES

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

THUS EFP TRANSFERS REPRESENTS 282.81/2550 x 100% TONNES = 11.09% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     282.81  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 STRONG SIZED INCREASE IN OI AT THE COMEX OF 6777 DESPITE THE FALL IN PRICING ($1.45) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A VERY HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 11,496 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 11496 EFP CONTRACTS ISSUED, WE HAD AN UNBELIEVABLE GAIN OF 18,273 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

11496 CONTRACTS MOVE TO LONDON AND 8268 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 56.80 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE TINY FALL OF $1.45 IN YESTERDAY’S TRADING AT THE COMEX??????????.  THIS IS THE 3RD STRAIGHT DAY THAT WE RECORDED ATMOSPHERIC RISES IN OI ON BOTH EXCHANGES!

 

 

we had: notice(s) filed upon for 300 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $5.40 TODAY 

 

NO CHANGES IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

 

 

 

 

 

 

/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 FLAT IN PRICE  TODAY:

 

 

A HUGE CHANGE IN SILVER INVENTORY/

A WITHDRAWAL OF 2.158 MILLION OZ/

 

 

 

 

 

/INVENTORY RESTS AT 311.005 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 SMALL SIZED 553 CONTRACTS from 191.309 UP TO 1919227  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:

 

1421 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1421 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 553 CONTRACTS TO THE 1421 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A CONSIDERABLE GAIN  OF 1974  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 9.445 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 5.605 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 4 CENT PRICING FALL THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A TINY SIZED 1421 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 0.08 PTS OR 0.00% //Hang Sang CLOSED UP 71.81 POINTS OR 0.27% /The Nikkei closed DOWN 112.54  PTS OR .96%/ Australia’s all ordinaires CLOSED UP 0.37%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7620 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 51.68 dollars per barrel for WTI and 60.31 for Brent. Stocks in Europe OPENED /MIXED 

//ONSHORE YUAN CLOSED DOWN AT 6.7620 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7684: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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

China tries to rescue the globe with a massive liquidity injection

(courtesy zerohedge)

ii)CHINA had talks with the USA over the weekend where China is now becoming more belligerent.  They do not want USA ships to pass through the Taiwan strait.  It will no doubt, come shortly that Beijing demands the unification of Taiwan to the Mainland.

( zerohedge)

 

4/EUROPEAN AFFAIRS

i)EUROPE/

Meijer describes the European catastrophe perfectly

a must read…

( Raul Meijer)

ii)GREECE

Chinese gangs operating out of the port of Piraeus were engaged in tax fraud as they avoided import duties etc.  Greece has been fined over 200 million euros for not catching this sooner.  China owns the port of Piraeus

(courtesy zerohedge)

iii)GREAT BRITAIN
Here are two commentaries as to what to expect after May lost her initial vote on Brexit.
( zero hedge/two commentaries)

iv)GERMANY/DEUTSCHE BANK/BAFIN

Quite a story…BAFIN is the German regulator and they have been after a merger between Deutsche bank, the no 1 derivative player in the world and Commerzbank bank. Now the regulator states that both are too weak, and they are pushing for Deutsche bank to merger with one of their competitors in another sovereign country..to spread the pain of trillions of derivatives.

(courtesy zerohedge)

v) ECB/Fed/Bank of Japan

Strange indeed!! The ECB announced that it was cutting off all purchases of bonds starting Jan 1.2019: so what on earth is Draghi doing?  The ECB balance sheet is soaring and thus the reason why stocks are rising..it is not the economy..it is our crooked central banks

( zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

ISIS/SYRIA/USA

ISIS is not dead yet:  An ISIS attack in the northern section of Syria (Manbij)  killed two Americans while on patrol in Syria

(courtesy zerohedge)

 

 

 

6. GLOBAL ISSUES

 

7. OIL ISSUES

This is a huge story.  Israel arrived for the first time into Cairo since 2011.  Egypt and Israel have a an agreement where Israel is to export gas to Egypt and to create an “energy export hub”.  In this meeting were representatives for Italy, Greece, Cyprus, Jordan and the Palestinian authority. The Palestinian authority could benefit greatly from this alliance as gas has been found on their territory.  This hub will augment the huge East Med pipeline built from Israel via Cyprus and onto Greece/Italy and the rest of Europe

a big story.

( zerohedge)

 

 

 

8 EMERGING MARKET ISSUES

 

 

 

 

 

9. PHYSICAL MARKETS

Craig Hemke forecasts what he thinks gold/silver will do in 2019

( Craig Hemke)

 

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

 

 

MARKET TRADING

ii)Market data/

All data points seems to suggest that the world’s economy fell flat on its face.  Today USA import prices fell with the prime culprit being petroleum

( zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)This is interesting: the student debt crisis widens as the Florida Board of Health suspends licenses over student debt defaults.

( Mac Slavo./SHFTPlan.com)

b)Beige book confirms that the uSA economy is slowing

(courtesy zerohedge)

c)As I pointed out to you yesterday, the hawkest of all hawks states that the fed should pause.  It looks like the economy is really faltering

(courtesy Jeffrey Snider/Alhambra Investment Partners)

iv)SWAMP STORIES

a)My goodness: the FBI’s top lawyer is now under criminal investigation for being a central leaker to the press. He is James Baker.

( zerohedge)

b)This is a major victory for Judicial watch: a federal judge orders Ben Rhodes, Susan Rice and other obama officials to respond to the Clinton/Benghazi email scandal.

( zerohedge/judicial watch)
c)David Stockman attacks the foolish New York times for the Trump smear we learned about over the weekend.
a must read…
( David Stockman)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  ROSE BY AN STRONG SIZED 6777 CONTRACTS UP TO A LEVEL OF 501,605 DESPITE THE  LOSS IN THE PRICE OF GOLD ($1.45) 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 GIGANTIC SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 11496 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  11496 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  11496 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:  18,273 TOTAL CONTRACTS IN THAT 11,496 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A GIGANTIC SIZED 6777 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 18,273 contracts OR 1,827,300  OZ OR 56.8 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 54 contracts as we LOST 2 contracts. We had 5 notices filed on yesterday so we gained 3 contracts or 300 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 3954 contracts DOWN to 240,369 contracts.  After February, March LOST 11 contracts to stand at 711.  After March, the next big delivery month is April and here the OI rose by 10,017 contracts up to 168,090 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 3 NOTICES FILED AT THE COMEX FOR 300 OZ. (0..0093 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BY A SMALL SIZED 553 CONTRACTS FROM 191,309 UP TO 191,922(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 TINY 4 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 484 CONTRACTS HAVING LOST 14 CONTRACTS FROM YESTERDAY.  WE HAD 22 NOTICES FILED ON YESTERDAY, SO WE GAINED 8 CONTRACTS OR  40,000 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 ROSE BY 3 CONTRACTS UP TO 460. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI ROSE BY 277 CONTRACTS UP TO 143,550 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 1974 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  553 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1421 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  1974 CONTRACTS...AND ALL OF THIS STRONG DEMAND OCCURRED WITH A 4 CENT FALL 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 7 notice(s) filed for 35,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  194,464 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  280,017  contracts

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

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 16/2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
3,324.24 oz
Scotia
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
3 notice(s)
 300 OZ
No of oz to be served (notices)
51 contracts
(5100 oz)
Total monthly oz gold served (contracts) so far this month
541 notices
54100 OZ
1.6827 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

We had 0 kilobar entries

 

we had 0 deposits into the customer account

 

total gold customer deposits;  NIL oz

 

we had 1 gold withdrawals from the customer account:

i) Out of Scotia: 3324.24 oz

 

 

 

total gold withdrawing from the customer;  3324.24 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 3 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 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 (541) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (54 contract) minus the number of notices served upon today (3 x 100 oz per contract) equals 59,200 OZ OR 1.841 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 (541 x 100 oz)  + {56)OI for the front month minus the number of notices served upon today (3 x 100 oz )which equals 59,200 oz standing OR 1.841 TONNES in this NON  active delivery month of JANUARY.

Today we gained 3 contracts or an additional 300 oz will stand in this non active month of January

.

 

 

 

 

 

THERE ARE ONLY 23.105 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.841 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;   8,408,225.487 oz 261.53 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 16, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
niloz

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
2050.30 oz
Delaware
No of oz served today (contracts)
7
CONTRACT(S)
35,000 OZ)
No of oz to be served (notices)
477 contracts
2,385,000 oz)
Total monthly oz silver served (contracts) 644 contracts

(3,220,000 oz)

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

we had 0 inventory movement at the dealer side of things

 

total dealer deposits:  nil  oz

total dealer withdrawals: 0 oz

we had 1 deposits into the customer account

 

i) Into JPMorgan: nil  oz

 

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

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

ii) into Delaware:  2050.30 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 2050.30   oz

we had 0 withdrawals out of the customer account:

 

 

 

 

 

total withdrawals:  nil   oz

 

we had 2 adjustments and  both of these are settlements

i) Out of Delaware:  15,060.173 oz was adjusted out of the dealer and this landed into the customer account of Delaware

ii) Out of Scotia 316,478.786 oz was adjusted out of the dealer and this landed into the customer account of Scotia

 

 

total dealer silver:  84.284 million

total dealer + customer silver:  293.158 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 7 contract(s) FOR 35,000  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 644 x 5,000 oz = 3,220,000 oz to which we add the difference between the open interest for the front month of JAN. (484) and the number of notices served upon today (7x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 644(notices served so far)x 5000 oz + OI for front month of JAN( 484) -number of notices served upon today (7)x 5000 oz equals 5,605,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 8 contracts or an additional 40,000 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:  47,018 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 66,965 CONTRACTS… 

volumes at the comex now increasing for silver

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 66965 CONTRACTS EQUATES to 334 million OZ  47.8% 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 -3.53% (JAN 16/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.46% to NAV (JAN 16 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.53%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.14/TRADING 12.68/DISCOUNT 3.46

END

And now the Gold inventory at the GLD/

JAN 16/WITH GOLD UP $5.40 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

JAN 15/WITH GOLD DOWN $1.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71 TONNES

JAN 14/WITH GOLD UP $1.60/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JAN 16/2019/ Inventory rests tonight at 797.71 tonnes

*IN LAST 535 TRADING DAYS: 137.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 435 TRADING DAYS: A NET 22.55 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 16/WITH SILVER FLAT TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV

A WITHDRAWAL OF 2.158 MILLION OZ/INVENTORY RESTS AT 311.005 MILLION OZ/

JAN 15/WITH SILVER DOWN 4 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 469,000 OZ FROM ITS INVENTORY/INVENTORY RESTS AT 313.163 MILLION OZ/

JAN 14/WITH SILVER UP ONE CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

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/

 

 

JAN 16/2019:

 

Inventory 311.005 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 2.29/ and libor 6 month duration 2.85

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

G0LD LENDING RATE: + .56

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.58%

LIBOR FOR 12 MONTH DURATION: 3.01

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.43

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Turbulence and Brexit Make Safer Options Like Gold and Cash Essential

Turbulence and Brexit Make Safer Options Like Gold and Cash Essential

– Turbulent markets and Brexit mean it is essential to consider safer options like gold
– You need to take some risk in a portfolio – cash, gold and planning are essential
– To build a financial fortune & long-term wealth one must diversify assets & own gold
– “Physical gold (bars & coins) can be bought from an online bullion dealer –the likes of Goldcore” writes Jeff Prestridge for This Is Money UK
– Gold is considered by many to be a “safe haven in stormy times”



by Jeff Prestridge for This is Money:

Accumulating sufficient wealth to take us into – and through – retirement usually requires a near lifetime of patient saving and investing.

It involves putting money in the building society, buying a home (maybe a buy-to-let too), paying into the works pension, managing a share portfolio and taking out a tax-friendly Isa.

Often the journey is smooth but, on occasions, hiccups de-rail it – unexpected events such as redundancy and unnerving episodes such as sliding stock markets. Certainly, recent sharp falls in equity prices have unsettled many investors.

Excerpt of article and full article can be accessed on This Is Money here

 

Watch Our Latest Video Updates On YouTube Here

 

News and Commentary

May Faces Worst Government Defeat in 95 Years in Brexit Vote (Bloomberg.com)

Gold steady as dollar gains on fears of economic slowdown (Reuters.com)

Gold prices finish higher, but $1,300 remains just out of reach (MarketWatch.com)

Newmont takes top gold producer spot with $10 billion Goldcorp buy (Reuters.com)

Wall Street falls as China prompts global slowdown worries (Reuters.com)

Source: Marketwatch

Turbulent markets make it essential to consider safer options like gold (GoldCore in ThisIs Money) (ThisIsMoney.co.uk)

U.K. Economy Won’t Ride Out Brexit Uncertainty This Time (Bloomberg.com)

Germany – Europe’s biggest economy is in danger of entering a ‘technical’ recession (MarketWatch.com)

Explosion in U.S. debt foretells dollar’s devaluation against gold (Tocqueville.com)

2019 Will Be “Turbulent”: Gold and Silver To Outperform Most Assets (GoldSeek.com)

Gold and Commodities Set to Soar in 2019 (Forbes.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

 

Recent Market Updates

– Where Will The “Pending” Financial Crisis Originate?
– Gold and Silver Prices To Rise To $1,650 and $30 By 2020? Video Update
– Gold Outlook 2019: Uncertainty Makes Gold A “Valuable Strategic Asset” – WGC
– 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

Mark O’Byrne
Executive Director

* * *

Gold Holds Steady Near $1,300/oz As Geopolitical Risks Including Brexit Loom Large

Gold Holds Steady Over £1,000 – Increased Likelihood Of A Disorderly Brexit

– Gold supported near $1,300/oz ahead of important British Brexit no-confidence vote
– Gold is consolidating in range between $1,280 and $1,300/oz (over £1,000/oz and €1,100/oz) – A break of resistance at $1,300 will likely see gold rise rapidly in all currencies
– Physical demand for gold coins and bars has picked up in the UK and Ireland, aided by Brexit uncertainty


Gold in GBP (GoldCore.com)

Gold is holding steady today supported by a very tentative recovery in equities. Bullion should be supported as caution deepens ahead of a no-confidence vote on British Prime Minister Theresa May’s government and other geopolitical risks including the US government shutdown loom large in investors minds.

Physical demand for gold coins and bars has picked up in the UK and Ireland, due to Brexit and UK political uncertainty.

British opposition Labour Party leader Jeremy Corbyn called a vote of no confidence in the UK government, to be held at 1900 GMT today, after May’s Brexit deal was defeated by lawmakers on yesterday.

A Jeremy Corbyn government would not be good for the pound and would benefit gold in sterling terms.

The date set for Britain’s departure from the European Union is March 29, but as the deadline approaches quickly, markets are hoping that there will be an extension.

The increased likelihood of a disorderly Brexit and the extension of a U.S. government shutdown have helped keep gold which is well supported near a more than six-month high of $1,300 per ounce.

Most stock markets globally have stabilised after strong volatility and sharp falls at the end of last year. Rightly or wrongly they are taking much comfort from the resumption of China-U.S. trade talks.

The likelihood that the Fed will slow or indeed stop its interest rate hikes is also making gold increasingly attractive to investors.

end

GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER

Craig Hemke forecasts what he thinks gold/silver will do in 2019

(courtesy Craig Hemke)

Craig Hemke at Sprott Money: 2019 price forecast for gold and silver

 Section: 

2p ET Tuesday, January 15, 2019

Dear Friend of GATA and Gold:

Craig Hemke of the TF Metals Report, writing at Sprott Money, today details why 2019 should be a strong year for the monetary metals, even as the bullion banks will retard all rallies to keep gold and silver under control. Hemke’s analysis is headlined “Gold and Silver 2019 Price Forecast” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/gold-and-silver-2019-price-forecast-cra…

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

end





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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

 

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.7620/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.7684   /shanghai bourse CLOSED UP 0.08 PTS OR 0.00%

 

HANG SANG CLOSED UP 71.81 POINTS OR 0.27%

 

 

2. Nikkei closed DOWN 112.54  POINTS OR .55%

 

 

 

 

 

3. Europe stocks OPENED ALL MIXED 

 

 

 

 

 

 

 

/USA dollar index RISES TO 95.91/Euro FALLS TO 1.1422

3b Japan 10 year bond yield: FALLS TO. +.01/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.80/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 51.68 and Brent: 60.31

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.23%/Italian 10 yr bond yield UP to 2.80% /SPAIN 10 YR BOND YIELD DOWN TO 1.38%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.57: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.25

3k Gold at $1289.00 silver at:15.51   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 33/100 in roubles/dollar) 66.73

3m oil into the 51 dollar handle for WTI and 60 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.80 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 0.9897 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1269 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.23%

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 2.73% early this morning. Thirty year rate at 3.10%

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

6.  TURKISH LIRA:  UP  TO 5.3917

 

 

 

Global Stocks Rise, Pound Mixed Ahead Of May Confidence Vote After Record Liquidity Injection By China

Stocks in Europe gained along with U.S. futures while Asian stocks were muted as investors saw potential for legislative deadlock to force London to delay its departure from the EU following the heavy parliamentary defeat for British Prime Minister Theresa May’s Brexit deal. The pound fluctuated and gilts fell before a no-confidence vote in Prime Minister Theresa May’s government…

… while S&P futures rose initially then faded some of their gains.

The MSCI world equity index, which tracks shares in 47 countries, was flat, while MSCI’s main European Index gained 0.3 percent.  Europe’s Stoxx 600 Index was modestly in the green, led by banks and insurers following China’s plans to boost fiscal stimulus, cut taxes and shore up growth and President Mario Draghi’s comments that stimulus is still needed in the euro area. The U.K.’s FTSE 100 declined as investors contemplated May’s Brexit defeat and the pound squeeze higher continued.

Earlier in the day MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.2 percent, with South Korea’s Kospi and Hong Long’s Hang Seng both scaling six-week highs. Asian shares responded well to China’s central bank injecting a record amount of money into the country’s financial system. That underscored Chinese officials’ commitment to signal more measures to stabilize a slowing economy.

Global markets have drawn succor from the resumption of Sino-U.S. trade talks, though scepticism over the absence of detailed progress was underlined overnight as the U.S. trade representative that he did not see any progress made on structural issues during U.S. talks with China last week.

May’s government faces a no confidence vote on Wednesday after the shattering rejection left Britain’s exit from the European Union in disarray. May is expected to survive the vote but investors see little sign of breakthrough on the Brexit impasse. As a result, they are increasing betting on Britain being forced to postpone its planned March 29 exit, though few have any clarity on what that would mean for the country in the longer run.

Markets had largely priced in the overnight defeat, and in early trade major European bourses mirrored overall resilience in Asian markets. There, stocks were also lifted by signs that China will take more steps to bolster its slowing economy and the U.S. Federal Reserve may pause its run of interest rate rises.

“The evidence yesterday is that there is a quorum of (British) MPs who will do what’s required to avoid a no-deal Brexit,” said Chris Scicluna, head of economic research at Daiwa Capital Markets in London. “So there’s a strong probability of an extension of Article 50 and that means there’s an increased probability of a softer Brexit or no Brexit at all.”

With some expecting a delay to raise chances of a softer Brexit, for example based on the opposition Labour party’s idea of membership of a permanent customs union, sterling was flat against the dollar at $1.2860. “We do think it is unlikely that sterling will fall to fresh lows unless the current government falls, and that unlikely although the risk is not zero,” said Alvin Tan, an FX strategist at Societe Generale in London. “Volatility is expected to remain high, but we do think that there is upside for sterling. Sterling is very cheap on the long-term basis, partly because of the probability of the no-deal Brexit.”

Ahead of today’s May confidence vote, Sky Deputy Political Editor said up to 100 Labour MPs will pivot towards a second referendum this morning. Meanwhile, the UK Government minister told business leaders that there is a backbench motion being prepared to delay Article 50, also says no confidence motion will fail. Elsewhere, BBC’s Political Correspondent tweets “Boris Johnson tells me May should ditch backstop, withhold at least half money till free trade deal done, accelerate no deal preparations. Says a new agreement can be reached before March 29.” At the same time, Talk Radio’s Kempsell tweets, Shadow Chancellor John McDonnell tells me he is not ruling out repeated motions of no confidence contrary to suggestions earlier.

Investors are also betting that the U.S. Federal Reserve will slow its interest rate hikes. On Tuesday U.S. policymakers agreed the Federal Reserve should pause further rate hikes until it is clear how much the U.S. economy will be held back by larger risks like slowing growth in China. Investors “are mainly focused on the outcome of the U.S.-China trade negotiations, but it may take more than a month before it will become clear,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

Treasury yields slipped amid large-size selling of call spreads on 5-, 10-year notes and the 10Y yield rose to 2.738% up from 2.71%, while the dollar recovered as the London session progressed, trading in tight ranges. British government bonds underperformed versus their German peers in early trade, with March gilt futures opening 30 ticks lower at 122.90, underperforming German Bund futures by around 10 ticks.

The mood in markets remains fairly buoyant after China pledged to step up efforts to support growth and Draghi said the euro area will avoid a recession even though recent data signaled softening momentum. Still, there are plenty of worries to give investors pause before taking this month’s rally in equities further. The political impasse in Washington continues to leave swathes of the federal U.S. government shuttered, and the U.K.’s Brexit drama threatens to impair business confidence in the second-largest European economy.

Oil prices firmed after climbing about 3 percent in the previous session as expectations that OPEC-led supply cuts will tighten markets despite signs of a global economic slowdown. Brent crude oil futures were at $61.17 per barrel at 0904 GMT, 0.1 percent above their last close.

Expected data include mortgage applications. Bank of America, BlackRock, Schwab, and Goldman Sachs are among companies reporting earnings

Market Snapshot

  • S&P 500 futures up 0.2% to 2,610.25
  • STOXX Europe 600 up 0.07% to 348.96
  • MXAP down 0.05% to 152.37
  • MXAPJ up 0.2% to 494.28
  • Nikkei down 0.6% to 20,442.75
  • Topix down 0.3% to 1,537.77
  • Hang Seng Index up 0.3% to 26,902.10
  • Shanghai Composite unchanged at 2,570.42
  • Sensex up 0.08% to 36,348.11
  • Australia S&P/ASX 200 up 0.4% to 5,835.16
  • Kospi up 0.4% to 2,106.10
  • German 10Y yield rose 2.2 bps to 0.228%
  • Euro up 0.06% to $1.1420
  • Italian 10Y yield rose 3.0 bps to 2.513%
  • Spanish 10Y yield fell 0.9 bps to 1.381%
  • Brent futures little changed at $60.64/bbl
  • Gold spot little changed at $1,289.58
  • U.S. Dollar Index little changed at 95.96

Top Overnight News

  • The Trump administration has ordered thousands of furloughed federal employees back to work without pay to inspect planes, issue tax refunds, monitor food safety and facilitate the sale of offshore oil drilling rights
  • The EU is refusing to remove the Irish-border element that U.K. lawmakers most oppose
  • The European Union said it was horrified by the massive scale of the U.K. Parliament defeat of the Brexit deal agreed with PM May but said there was no option to renegotiate. Brexit pushes Britain to brink as government fights for survival
  • On an hour- long conference call following Parliament’s overwhelming rejection of the government’s deal to leave the EU, Chancellor of the Exchequer Philip Hammond floated the possibility of delaying the departure beyond the March 29 deadline, according to four people with knowledge of the call
  • China’s central bank injected a net 560b yuan ($83b) into the financial system through open-market operations, the biggest one-day addition on record
  • BOE Governor Mark Carney told lawmakers in London that the rebound in the pound after Prime minister May’s Brexit vote defeat would appear to reflect some expectation that the process of resolution would be extended and that the prospect of no deal may have been diminished; said the BOE is in discussions with the U.K. Treasury about the powers it needs to smooth any financial ructions if the country leaves the EU without a deal
  • The German government is planning to extend the contract of Bundesbank President Jens Weidmann by another eight years when it expires at the end of April, according to people familiar with the matter
  • The euro-area economy isn’t headed for a recession, even though softening momentum underscores the need for ECB stimulus, according to President Mario Draghi
  • China’s central bank boosted injections via open-market operations to the most on record to meet seasonal demand for cash due to tax payments and major holidays
  • Federal Reserve Bank of Kansas City President Esther George, who has been one of the most hawkish members of the central bank’s policy group, urged her peers to be patient and pause before considering additional rate increases.
  • Sweden’s Social Democratic leader Stefan Lofven is poised for another four years in power after convincing the Left Party to support his new centrist government, shutting out the nationalists from influence

Asian equity markets traded mixed as the region struggled for firm direction after the tech-led gains on Wall St. and PM May’s Brexit deal defeat in parliament. ASX 200 (+0.4%) finished positive as gains in tech and financials eventually outweighed the weakness across the commodity-related sectors, while Nikkei 225 (-0.6%) suffered the fallout from a firmer currency. Hang Seng (+0.3%) and Shanghai Comp. (Unch.) conformed to the indecisive tone but with the mainland kept afloat for most the session after stronger than expected Loans and Aggregate Financing data, while the PBoC also conducted its largest ever daily net liquidity injection heading into next month’s Chinese New Year celebrations in which it cited rapidly falling liquidity due to tax payments. Finally, 10yr JGBs eked only minimal gains despite the underperformance of riskier assets in Japan and firmer results in the latest 5yr JGB auction.

Top Asian News

  • BOJ Is Said to Cut Inflation Forecast on Cheaper Oil
  • Another Xiaomi Stock Sale Adds Grease to $32 Billion Rout
  • World’s Most Valuable Startup Takes a Hit From China’s Slowdown
  • China Injects Record Funds to Counter Tax, Holiday Cash Demand
  • Top China Fund Sees Bonds Trouncing Stocks Again This Year

Major European equities are mixed after trimming opening gains [Euro Stoxx 50 -0.1%] with outperformance seen in the FTSE MIB (+0.5%) where banking names are up, in particular UniCredit (+2.6%) at the top of the index following the Co. stating they consider their NPE coverage to be fully adequate. Sectors are largely in the green, with financial names outperforming; in particular the Stoxx 600 Banking sector is up by over 1% as some are interpreting the governments Brexit defeat as reducing the likelihood of Britain crashing out of the EU. Other notable movers include Hammerson (+1.7%) after being upgraded at Deutsche Bank and Ryanair (+2.1%) who are up in sympathy following United Continental Holdings posting a beat on their top and bottom line overnight; were subsequently up 6% after-market. Elsewhere, Deutsche Bank (+1.7%) and Commerzbank (+1.5%) are up following reports that German officials have spoken to watchdogs regarding a potential deal between the two.

Top European News

  • Reckitt CEO Kapoor to Leave After 8 Years Capped by Setbacks
  • BASF Is Said to Weigh Pigments Unit Sale as Rival Also Exits
  • Denmark’s DSV Bids $4 Billion for Swiss Freight Rival Panalpina
  • Banks Are Said to Seek Exemptions in Looming Romania ‘Greed Tax’
  • Cineworld Slips; CFO Notes Cost of ‘80s’ U.S. Cinemas Refurbs

In FX, the DXY was little changed following last night’s advances in which the index attempted, but failed to breach 96.000 to the upside, while it creeps closer to the top of a 95.850-96.080 range.  Impetus for the buck was initially provided following yesterday’s comments from US Senator Grassley who cited USTR Lighthizer as US-China talks showed little progress in key issues. The dollar then came off highs as Fed hawk (and voter) George noted that it might be a good time to pause on rate hikes. Subsequently DXY fell to around 95.850 amid the Fed member’s shift in stance before recouping losses. In terms of technical DXY eyes its 100 DMA at 96.03 to the upside, though looking ahead, US retail sales have been postponed amid the ongoing US government shutdown.

  • GBP – The calm after the storm as PM May’s deal was defeated by a historical 230 votes shortly before Labour leader Corbyn tabled a motion of no confidence (as expected), scheduled for 1900GMT today. The move higher came amid hopes that Article 50 will be extended past March 29th as PM May will attempt to conjure up a revised deal with the EU or face a hard-Brexit which is unfavoured by most UK MPs. However, the EU made it clear that renegotiations will not be open, while Commons leader Leadsom mentioned that the UK Government is not looking to postpone the Brexit date ahead of tonight’s vote of no confidence. The Pound was largely unreactive to Corbyn’s no confidence motion as the Conservative party and the DUP (alongside some Labour MPs) are likely to support the Government rather than amplify the chaos in Parliament. Moving on, on the data front, Sterling side-line the release of inflation figures which largely printed in-line with expectations. Cable currently resides just below 1.2900, just above its 100 HMA at 1.2857 after having tested the big figure to the upside on multiple occasions.
  • EUR, JPY- Meanwhile, the EUR is relatively flat against the buck as a lack of fresh catalysts (and all eyes on Brexit) largely shelved the single currency as it moves in tandem to the greenback. EUR/USD further extends losses below 1.1450 and fluctuates on either side of the 1.1400 level ahead of its 50 DMA at 1.1380. Of note, 950mln in options expiries are seen at strike 1.1380-1.1400. Similarly, with the Yen overnight safe-haven driven gains were largely neutralised by the strengthening dollar as USD/JPY rises to the top of a 108.38-73 range with almost 1.7bln in option expiries scattered between 108.75-109.00.
  • TRY – The Turkish Central Bank left rates unchanged at with their main rate at 24.00% while largely reiterating its tight stance, stating that the CB are to further monetary policy tightening will be delivered if needed. As such USD/TRY fell from 5.4134 to an intraday low of 5.3800 before pairing back a third of the move.

In commodities, Brent (-0.1%) and WTI (-0.5%) are drifting further into negative territory, with WTI losing the USD 52.00/bbl handle. As the positive market sentiment following yesterday’s 0.560mln draw in API crude inventories begins to fade; despite a 3% rally in the previous session on the back of this. Elsewhere, ARA region crude inventories rose 2.4mln/bbl to 51.3mln/bbl for the week ending January 11th. Markets will be looking ahead to today’s weekly EIA release, where crude stocks are expected to post a draw of 1.5mln. Gold (-0.1%) is relatively flat, but towards the bottom of it’s slim USD 4/oz range; as the dollar remains relatively uneventful and FX market reaction to the Brexit vote defeat is largely positive as the prospect of a no-deal has lessened. Separately, the US Senate has voted to advance a resolution which criticises sanctions on companies tied to Oleg Deripaska, which includes Rusal.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 23.5%
  • 8:30am: Retail sales data postponed by govt shutdown
  • 8:30am: Import Price Index MoM, est. -1.3%, prior -1.6%; 8:30am: Import Price Index YoY, est. -0.8%, prior 0.7%
  • 10am: Business inventories data postponed by govt shutdown
  • 10am: NAHB Housing Market Index, est. 56, prior 56
  • 2pm: U.S. Federal Reserve Releases Beige Book
  • 4pm: TIC Flows data postponed by govt shutdown

DB’s Jim Reid concludes the overnight wrap

I got back late last night from Brussels and I suspect that many more U.K. politicians and Brexit negotiators will be making the opposite journey in the days and weeks ahead. To cut to the chase the DB house view is that in spite of the biggest defeat for a U.K. government (432-202) on record in the big Brexit vote, last night’s news flow was very positive for the pound and very supportive of a soft Brexit.

We’ll come to why it was so positive but first the detail. Some 118 Tory MPs broke ranks to vote against the deal as did all 10 DUP members. PM May slightly outflanked the opposition and offered them the chance to hold a no-confidence vote today, which stole Mr Corbyn thunder a bit, but he promptly demanded one. This will likely be a non-event and actually gives the Government a chance to get a confidence-restoring win with the DUP and the hard Brexit ERG Conservative group almost immediately saying they’ll back the Government. Amusingly, the 6 hour debate and 7pm vote was scheduled to follow a short lunchtime bill today that asks for low letter boxes to be banned to save postmen’s backs and to stop them being attacked by cats and dogs. Hopefully this bill survives as it will be good to see that Parliament can still get other business done in the midst of such political turmoil.

The reason DB feels this was a positive night for Sterling was that PM May surprised by immediately agreeing to cross-party talks to determine a way forward on Brexit. The exact quote from May was “… if the House confirms its confidence in this government I will then hold meetings with my colleagues, our confidence and supply partner the DUP and senior parliamentarians from across the House to identify what would be required to secure the backing of the House. The government will approach these meetings in a constructive spirit, but given the urgent need to make progress, we must focus on ideas that are genuinely negotiable and have sufficient support in this House… if these meetings yield such ideas, the government will then explore them with the European Union”.

On the positive side, since there is a large parliamentary majority in favour of a soft Brexit outcome, possibly in the form of membership of the customs union, the odds of a market-friendly outcome have risen sharply. If you were looking for doubts though then you might say a) Mrs May comments were slightly vague in who she would have cross party talks with. Is senior Parliamentarians wide enough? Will it include Jeremy Corbyn?, b) is there a consensus for anything in Parliament that the EU would accept?, c) previously the Labour Party’s executive have said that if they can’t get a general election (they likely won’t after their first attempt tomorrow) they will move policy towards a second referendum. If such an outcome materialises it might confuse the issue. It would also result in a more binary outcome and increase the risk of leaving with no deal. It could be very positive or negative, and d) how will the Conservative Brexiters react to a softer Brexit? Do they have any power? So these and many more questions remain unresolved but on balance last night opened the way to much more benign Brexit.

On c) above, Sky News reported overnight that up to 100 Labour members will shift to calling for a second referendum today, in an apparent effort to pressure Corbyn into supporting one after the confidence vote likely fails. This might complicate cross-party talks as PM May made it quite clear when extending an olive branch that the U.K. is definitely leaving the EU, so we could reach an impasse very quickly if Labour adopts this strategy. Plus, May’s spokesman said that she remains committed to an independent trade policy, which would preclude a compromise deal that includes membership in the customs union. So it remains to be seen what sort of compromise could emerge from any cross-party negotiations.

DB’s Oliver Harvey has published a special report titled “It’s time to buy the pound,” available here . He outlines the current state of play and the main risks to the view, which are: a) May losing the confidence vote today, b) May reneging on her pledge to seek a cross-party compromise, or c) parliament’s deliberations resulting in a consensus for a second referendum. The last is probably the biggest risk, but Oli is still confident that the most likely scenario is a pivot toward a softer Brexit.

In market terms the pound had depreciated -1.31% ahead of the vote, as defeat for May looked likely, but it completely pared its losses versus the dollar after PM May’s speech and her apparent pivot toward cross-party compromise. This was helped by support announced in May’s favour in the confidence vote. Futures on the FTSE 100 traded -0.47% lower after the European close, reflecting the impact of the stronger pound. Sterling is trading largely flat (-0.06%) this morning.

In reaction from the EU to the Brexit vote, officials in Brussels ruled out the prospect of an extraordinary summit of the 27 EU leaders any time soon saying there’s little to discuss if lawmakers in the UK can’t decide what they want while most diplomats said they were stunned by the extent of the loss. Elsewhere, the EC President Jean-Claude Juncker told the UK, “Time is almost up” while, French President Emmanuel Macron said that the EU won’t offer any more concessions to the UK to solve “an internal UK politics problem” and added that ‘I will be very vigilant on that, we went as far as we could.”

Prior to last night’s main event it had for the most part already been a constructive session for risk assets, helped mostly by the China fiscal headlines from earlier in the morning. That said, there was some reasonable divergence across the main US equity markets with the NASDAQ (+1.71%) leading the way in part due to a price hike by Netflix which analysts deemed will be successful (+6.52%) while the NYSE FANG index (+2.72%) turned in its third >2% move of 2019 already. The S&P 500 finished +1.07% as banks lagged a bit (+0.78%) following JP Morgan’s results – more on that shortly – while the DOW closed up a more modest +0.65%. Earlier in the day we’d seen the STOXX 600 end +0.35% and the FTSE 100 +0.58% with the latter benefit from a weakening Pound during the European session.

Elsewhere credit markets were pretty quiet with US and European HY spreads ending -4bps and -2bps tighter respectively. Yesterday we published a short note detailing our updated spread forecasts in light of the moves in credit spreads since we published our 2019 outlook in mid-November. Our qualitative expectations of moderate spread widening by year end with a bear market rally in the first few months of the year still holds. Click here for the link to the report.

Treasuries ended up pretty much unchanged and appear to have finally found a floor for now in the 2.60% to 2.70% range. Bunds (-2.4bps) were a touch stronger although the reality is that they are still in the middle of the 12bps YTD range with ECB President Draghi doing little to shake things up – confirming that “recent economic developments have been weaker than expected and uncertainties remain prominent”. Elsewhere, BTPs (+3.1bps) actually underperformed despite reports of over €35bn of bids for Italy’s first syndicated deal this year (about 10% higher than a sale last year) and Italian bank stocks dropped -2.19% after Il Sole 24 Ore reported that the ECB is implementing new rules on non-performing loans. The banks will have seven years to fully provision for current and future potential losses. Gilts were down -3.9bps and tracked the Sterling move while the eye catching move in the commodity complex came once again from oil where WTI darted back up +2.93% following two days of declines.

Turning to Fedspeak, the most notable comments came from Kansas City Fed President George, who is a voter this year and has recently been the most hawkish member of the committee. She said that another hike “is not urgent” and that called for “patience in considering our policy actions.” So a definite shift away from the hawkish end of the spectrum and toward the center of the committee, which is consistent with no rate hikes until June. Separately, Politico reported that Liu He has formally accepted the invitation to meet with US officials in Washington on January 30-31, as expected. So the twin supports of a more dovish Fed and positive progress on the trade front continued to support markets yesterday.

This morning in Asia markets are trading mixed with the Nikkei (-0.58%) leading the decline on a strengthening yen (+0.18%) while the Hang Seng (-0.09%) and Shanghai Comp (-0.06%) are off their lows and trading flattish with the Kospi (+0.37%) up. Meanwhile, the PBoC injected CNY 560bn into the financial system on Wednesday, the biggest one-day addition on record, to meet seasonal demand for cash due to tax payments and major holidays. China’s onshore yuan is down -0.11% on the liquidity injection. In other overnight news, Bloomberg reported (citing sources) that the BoJ is almost certain to cut its inflation forecast for the fiscal year starting in April citing the sharp fall in oil prices, the government’s decision to make pre-school education free and looming cuts to mobile phone charges as the reasons. The BoJ’s next board meeting and policy decision is scheduled on January 23. Elsewhere, futures on S&P 500 are up +0.24%.

Coming back to yesterday and those JP Morgan earnings that we highlighted above, the bank’s share price opened -2.32% lower but rallied to close +0.73% after earnings missed. Similar to Citigroup the day prior, fixed income sales and trading revenues came in much weaker than expected and in fact down 18% yoy and the weakest Q4 revenue in a decade. This was partially offset by strong investment banking revenues, though loan provisions were larger than expected too. Wells Fargo shares fell -1.55% as revenues and expenses both disappointed and management said they expect to operate under the Federal Reserve-mandated asset cap through end-2019, rather than through June as previously expected. A reminder that today we get results from Bank of America and Goldman Sachs.

In other news, yesterday’s economic data in the US was softer than expected but didn’t appear to really phase markets. The January empire manufacturing reading printed at just +3.9 which compared to expectations for +10.0 and an upwardly revised +11.5 in December. That was actually the lowest reading since May 2017 while the expectations component (+17.8) also hit the lowest since February 2016. That also leaves the ISM-adjusted empire index at 51.9 and the lowest since January 2017. So a marked deterioration to start the year, but not a shift into contractionary or recessionary territory. It’ll be worth seeing if the Philly Fed district report conveys a similar message to this tomorrow.

In addition to that, the December PPI reading also aired on the disappointing side at both the headline (-0.2% mom vs. -0.1% expected) and core (-0.1% mom vs. +0.1% expected) levels. That said health care PPI was solid at +0.15% which therefore points to upside for the health care component of PCE inflation and therefore the broader core PCE, which our economists expect to print around 1.89% later this month (or later, depending on the US government shutdown).

Here in Europe the main data focus was Germany’s 2018 GDP reading which hit expectations at 1.5%. Importantly, that implies only modest growth for Q4 (but at least likely positive after recent fears of a negative print) and while our economists had expected some positive payback after the WLTP shock to push growth temporarily above trend in Q1 2019, they have seen very limited evidence of this so far and as such estimate Q1 GDP at around +0.25% qoq. The result of this is a downward revision to their 2019 growth forecast in Germany to 1% from 1.3% previously. Given the recent weakness in the Euro area macroeconomic data, the ECB President Draghi said in his address to the European parliament yesterday that the Euro-area economy is not heading towards recession but to a slowdown and “it could be longer than expected.”

Other than digesting the fallout from last night’s Parliament vote in the UK today and preparing for the confidence vote, we’ll also have the December inflation data docket here in the UK to keep an eye on this morning, while there’s also the final December CPI prints due in Germany and Italy. Given the government shutdown in the US the retail sales report is to be postponed along with business inventories, leaving the December import price index and January NAHB hosing market index data as the only releases due. The Fed’s Beige Book is also due out this evening. Meanwhile the Fed’s Kashkari is due to speak late this evening while the BoE’s Carney and ECB’s Nowotny speak this morning. Earnings wise it’s the turn of Bank of America and Goldman Sachs today.

 

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 0.08 PTS OR 0.00% //Hang Sang CLOSED UP 71.81 POINTS OR 0.27% /The Nikkei closed DOWN 112.54  PTS OR .96%/ Australia’s all ordinaires CLOSED UP 0.37%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7620 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 51.68 dollars per barrel for WTI and 60.31 for Brent. Stocks in Europe OPENED /MIXED 

//ONSHORE YUAN CLOSED DOWN AT 6.7620 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7684: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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

China tries to rescue the globe with a massive liquidity injection

(courtesy zerohedge)

Yuan Extends Slide After Massive PBOC Liquidity Injection

Having risen almost non-stop since the start of the year – despite dismal economic data, a still-tightening Fed, and an increasingly ‘easing’ PBOC – the last two days have seen offshore yuan start to fade.

Following stimulus headlines overnight (“but not a flood of liquidity” according to the PBOC), US Sen. Grassley admitted today that Sino-US trade talks had made “little progress” – both of which sent yuan notably lower.

This drop was interrupted by cable’s surprise surge (squeeze) after the Brexit vote (stronger pound, weaker dollar, stronger yuan), but yuan has reverted back down again to the lows after the PBOC injected a near-record amount of liquidity into the financial system.

China’s central bank injected a near-record amount of liquidity via open-market operations amid tax payments and the looming ‘annual’ year-end liquidity crisis.

The PBOC injects net 350b yuan into the banking system using 7-day reverse repo contracts – the largest one-day addition of 7-day money on record, according to data compiled by Bloomberg.

And the aggregate net 560 billion yuan liquidity injection is nearly the largest ever…

The move is aimed at “keeping reasonable and sufficient liquidity in banking system as liquidity falls relatively fast during peak season for tax payments,” according to a statement from the PBOC.

With the Lunar New Year falling on Feb 5th this year (two weeks earlier than last year), we suspect liquidity provisions will be a daily occurrence from here (the last 3 days have seen 340 billion yuan for a 28-day term injected – to cross the new year liquidity threshold).

Do not mistake this for ‘stimulus’ as it will be withdrawn or rolled and merely plugs a hole – that we suspect will grow larger as trade data suggested capital outflows are re-accelerating.

END

CHINA had talks with the USA over the weekend where China is now becoming more belligerent.  They do not want USA ships to pass through the Taiwan strait.  It will no doubt, come shortly that Beijing demands the unification of Taiwan to the Mainland.

(courtesy zerohedge)

China To US Navy Chief: Army Will Defend Taiwan Claims “At Any Cost”

A rare and under-reported tense exchange occurred between US and Chinese military commanders in Beijing on Tuesday. A high level Chinese military official, General Li Zuocheng, told the head of the United States Navy, Admiral John Richardson, in a face to face meeting that Beijing would defend its claim to Taiwan “at any cost”.

“The Taiwan issue is an internal matter of China, concerns China’s fundamental interests and the national feelings of the Chinese people, and no outside interference will be tolerated,” Li Zuocheng said in a statement released by the Ministry of Defense, cited by the AFP.

Admiral John Richardson traveled to China for talks aimed at reducing “risk and miscalculation”. 

After a series of recent instances involving US Navy warships making provocative passages through the Taiwan Strait — which the US says is its right according to freedom to navigate international waters, it appears China is going “gloves off” in direct statements challenging US military commanders.

Gen. Zuocheng, who is a powerful member of the Central Military Commission further told the US Navy chief:

If anyone wants to separate Taiwan from China, the Chinese army will defend the unity of the motherland at any cost.

Alarmingly this comes after President Xi Jinping provoked an angry rebuke from Taiwan’s pro-independence president when he demanded during a landmark speech on Jan. 2  that Taiwan submit to “reunification” with Beijing.

And in a follow-up speech days after this before military officials, Xi took his belligerent rhetoric one step further by issuing his first military command of 2019: that “all military units must correctly understand major national security and development trends, and strengthen their sense of unexpected hardship, crisis and battle.” Xi had essentially ordered the Chinese military to prepare for war as his first act of 2019.

Thus it appears top military officials have been emboldened, enough to deliver the uncompromising face-to-face message of an “at any cost” defense of China’s longtime claims over Taiwan in this week’s meeting with America’s highest naval officer.

China’s foreign ministry has consistently condemned US ships passing through the Taiwan Strait as an issue of “China’s sovereignty and territory” — to which the Pentagon has responded in multiple statements expressing commitment to “a free and open Indo-Pacific.” The Pentagon has pledged in repeat statements“The U.S. Navy will continue to fly, sail and operate anywhere international law allows,” he added.

Just the day prior to the Chinese military’s severe warning of non-interference, Admiral Johnson hailed the talks as a “constructive and candid” discussion with his Chinese counterpart. Richardson is meeting with senior leaders of the PLA, with the goal of “continuing a results-oriented, risk reduction-focused dialogue” between the two militaries, according to a US navy statement.

Or in other words, the two sides are working to prevent prospects of any “unintentional” series of “accidents” and provocations that could lead to a major US-China war that a number of analysts have predicted could resultfrom the current soaring Washington-Beijing tensions on many fronts.

 

4.EUROPEAN AFFAIRS

/EUROPE/

Meijer describes the European catastrophe perfectly

a must read…

(courtesy Raul Meijer)

Europe Is Burning

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

There will be elections for the European Parliament on May 23-26 2019They will likely change the face of Europe more than anything has done since the EU was founded. That is not some wild prediction. Many European countries have held elections since the last European elections in 2014, and just about all had outcomes that shook up domestic political ratios.

In most cases, countries went from traditional parties to newly founded ones. France erased the Socialists and center-right in 2017, and the final round of the presidential elections was between Marine Le Pen’s Front National and Emmanuel Macron’s brand-new En Marche. Macron won sort of by default, because France as a country would never have voted for Le Pen.

In Italy, M5S and Lega have taken over. In Germany, Merkel’s CDU/CSU coalition lost bigly though it remained the biggest party, but Angela lost her ‘socialist’ SPD partner which gave up so much it didn’t want to be in government anymore. In Spain, Mariano Rajoy’s center right lost enough to cede power to the Socialists who came up tops because they played a smart game, not because the Spanish wanted it to rule.

We don’t have to go through all 27/28 different countries to establish that there are almost tectonic shifts happening all over, away from traditional parties and towards whoever showed up without insanely extreme views. And if you think this move is now completed, you may want to think again.

It’s amusing to realize that the country with the biggest political shift, the UK, is the only one that still hangs on to its traditional parties, and seeks its protest voice in a different way, namely through Brexit. That is, Britain shows it can get no satisfaction from the EU, whereas in the other major EU nations the dissatisfaction is projected onto domestic parties.

The underlying thought is the same: people are fed up with incumbent politicians and their affiliation with the European project. And nobody in Brussels really appears to be willing to realize this: the only thing they talk about is more Europe. But all these changes will now be reflected in the power politics of the European parliament.

And they do know that. They just hope they can limit the damage through the model in which power is divided in Europe. And to get any of that power, national parties need to find partners from other countries to form European parties (blocks) with. You need parties from at least 7 other nations to run for the European Parliament.

There are really only two parties in that parliament that really matterthe center right European People’s Party (EPP) which has 217 MEPs (members of European Parliament), and the center-left Progressive Alliance of Socialists & Democrats (S&D) which has 190 MEPs. Then there are the European Conservatives and Reformists – 74 MEPs, the Alliance of Liberals and Democrats for Europe (ALDE) – 70 MEPs, the European United Left/Nordic Green Left (GUE) – 52 MEPs, and the European Greens/European Free Alliance – 50 MEPs.

These numbers, like the national ones, are set to change, a lot. How exactly is hard to predict, because it’s not clear which block which -relatively- new party will be part of. But it’s not a wild guess to think that at the end of May the division of powers will not be left vs right (both of which are pretty much fake anyway), but pro-EU and anti-EU. Or rather, More Europe vs Less Europe.

Germany’s up-and-coming real right-wing AfD at their conference this weekend voted in a resolution that calls for getting rid of the European Parliament itself, calling it undemocratic, and claiming the “competence to make laws is exclusively for nation states.” Similar sentiments play out in Italy, Poland, Hungary and many other member states.

Given the changes in vote ratios mentioned before, it’s hard to see the More Europe model survive the elections. But that of course doesn’t keep the main parties (blocks) from running outspoken pro-Europe candidates to replace Jean-Claude Juncker as head chief after the elections. The EPP has German Europe stalwart Manfred Weber as ‘Spitzenkandidat’, the so-called Socialists/Democrats have Dutch Frans Timmermans, Juncker’s right-hand man.

They think they will be able to continue business as usual, and accumulate more power and sovereignty in the process, while support for the EU crumbles more by the day. But that’s all in the far far future, that is a whole 4 months away. And who knows what Europe will look like by then? Brussels sure doesn’t seem to know, or want to.

In Germany, the entire political system will have to reinvent itself after Merkel. And as said before, with an entire new look as far as vote numbers go. Far right and the Greens are on their way to becoming new power blocks, the Christian center right CDU/CSU and the formerly left SPD are on their way to much less support.

This is a pattern that plays out all over Europe, but what happens in Germany is, because of the way the EU is set up, crucial for all EU member states. Nothing happens in Europe without approval from Berlin. And what will the other 26 remaining members do when that level of power moves towards the AfD?

Of even more immediate concern may be Germany’s economic performance. Because the latest signs are not encouraging. Germany and Holland have done very well, but that is because they have all the others as their ‘domestic’ market. And now not even that turns out to be enough. Germany’s numbers are going down fast:

Then again, for now, worries about Germany will be trumped by those about France and Britain. The numbers of Yellow Vests in the streets of France was much larger again the past weekend than the last few ones. Macron keeps on making ever bigger mistakes. This Saturday, his riot police was filmed carrying semi-automatic weapons with live ammo. As he claimed that many of his people want to get things without making any effort.

Macron all along has tried to drive a wedge between the protesters and the people. But a large majority of the people support the protests, even if they don’t don a yellow vest. Still, Paris claims that the protesters are not the Republic, and they’re trying to overthrow democracy. When the Yellow vests approached government buildings last weekend, government spokesman Benjamin Griveaux fled, saying: “It wasn’t me who was attacked, it was the Republic.” Ergo: Not the people are the Republic, the government is. That should sell well.

For a very large number of French this sounds like they are not actually considered French by their own government. And now Macron insists on holding a national debate, in which everyone can have their say, but at the same time he insists he will not change his policies, which are what the Yellow Vests are protesting in the first place.

What they see is that Little Napoleon hasn’t hardly appeared in public for a very long time (big no-no!), but he does try to dictate to them what democracy is, and then in the same breath that they only have the choices he gives them. Protests are only allowed if the government gives permission, Paris proclaims.

Macron has cancelled his spot in the upcoming Davos spectacle for the wealthy and powerful, and I bet you the thought has crossed his mind that if he went he wouldn’t be allowed back in to his country. Not decisive, but that thought surely counts. He’s seen the whole Let Them Eat Cake scenario play out in his mind’s eye. Before putting his hand over his heart while looking in the mirror.

Macron does everything wrong than he can. And in that France has a lot in common with our for now last topic, subject, victim, take your pick, the UK.

Theresa May has lost another vote, and more chaos is guaranteed. Both the Leave and the Remain camps, opposites as they are, are divided into countless other camps, and there is no way there will ever be an agreement. You’d have a hard time finding even just two people who think Brexit means the same, let alone millions.

I wrote earlier today I wondered how come Britain is so quiet in the face of that, with the Yellow Vests example just a few miles away. And I really don’t know. Maybe we’ll find out tomorrow. The EU has hinted Brexit may not happen until the summer, not on March 29. But that’s the EU, and that’s what the Brexit vote was meant to move away from, not let them dictate even more.

Theresa May basically sat on her hands for two years, and wanted to do the work in 6 months, but that was always going to be a pipedream. The UK, in 40-odd years of EU membership, signed up to thousands of pieces of legislation, which contain hundreds of thousands of pages of legalese. All that must be checked, if need be changed, negotiated about, voted on, etc.

Not something anyone can do in half a year, and that has nothing to do with liking the EU or not. May has held her country hostage for the entire time she’s been PM, and she does that even more now, as she’s saying it’s either her deal or no Brexit at all. She’s decided No Deal is not an option. Which may be wise in view of all those documents, but who is she to decide eth entire nation future for decades to come? She wasn’t even elected as PM.

We’ll know more tomorrow after that Parliament vote, which May lost. Or will we? If Brussels accepts a major delay in Brexit, chances are May will stay in office, and we’ll have 4-5-6 more months of the same road to nowhere. Second referendum, general election? Poisoned chalices all of them.

Nothing will change either. All possible outcomes are guaranteed to have a large group of people standing against them. All options will create the appearance of a small group of people dictating life-changing events for everyone else.

Where are the British Yellow Vests? The mayor of Poland’s second-biggest city, Gdansk, was stabbed to death in public on a stage where he held a speech, Is that where we’re going?

And lest we forget, what happens in Europe is not very different from what happens in the US; things merely play out slightly differently in different locations. In the US, as in the UK, there are no whole new parties taking over, no AfD and Macron and Yellow Vests and Salvini, but there is Trump and Brexit.

The common denominator is people’s anger with the economic models that leave them scrambling to make do, all the while seeing their lives being taken away from them bit by bit while whoever’s in power keeps bankers and other rich folk contented.

It’s not much use seeing all this as separate incidents or developments. It’s a big wave that will reshape the world as we know it. Let Them Eat Cake has gone global, and there’s not nearly enough cake to go round.

GREECE

Chinese gangs operating out of the port of Piraeus were engaged in tax fraud as they avoided import duties etc.  Greece has been fined over 200 million euros for not catching this sooner.  China owns the port of Piraeus

(courtesy zerohedge)

Greece Fined €200MM Over Chinese Tax Fraud Network

While president Trump is cracking down on Chinese technology theft “transfer” in the US, with Canada somehow caught in the middle of the ongoing crossfire (as random Canadians are now getting arrested on the mainland in retaliation for Trump’s aggressive practices), it has emerged that China’s Belt and Road initiative may be nothing more than one giant, global tax fraud/trade laundering operation.

Take Greece for example, where the European Union’s Anti-Fraud Office (OLAF) just issued a fine of more than 200 million euros to Greece for failing to stop a wide-scale tax fraud by Chinese criminal gangs importing ultra-cheap goods through the country’s largest port of Piraeus,Politico reported on Monday.

The Chinese criminal network, which took advantage of Greece’s arguably most valuable asset, the port of Piraeus which has been dubbed “China’s Gateway into Europe“, dodged import duties and value-added tax on imported footwear and clothing items, and represents merely the latest “loophole” that Chinese criminals utilize to bypass China’s draconian firewall.

“OLAF can confirm that it has concluded an investigation concerning the fraudulent import of undervalued textiles and shoes into Greece in the period 1 January 2015 to 31 May 2018,” OLAF was quoted as telling Politico in a statement when asked on the investigation it had conducted.

“Based on its findings, OLAF has issued a financial recommendation to Greek Customs to recover the sum of 202.3 million euros in lost customs duties related to the fraudulently under-declared values for such products,” it added.

Piraeus is part of China’s Belt and Road infrastructure project; it was acquired by China’s COSCO Shipping, the largest shipping company in the world, in 2016 when the Chinese shipping giant acquired a 51% stake. This cemented the entrepôt’s significance to the future of Sino-European trade and its critical position on China’s Maritime Silk Road as China’s critical hub into the Mediterranean Sea and from there, into the Atlantic Ocean and beyond.

As Altay Alti, associate professor at Turkey’s Koç University affirmed: ‘Piraeus has become a gate of entry into the European market for the Chinese.’ Indeed, this is no secret and is highlighted as a main priority in the port authority’s strategic plan.

The Port of Piraeus and the surrounding regions have long functioned as a Mediterranean gateway for peoples, goods, ideas and beliefs. And now Greece’s historic gateway is nothing more than an easy way for Chinese “criminal gangs” to avoid paying taxes. And with countless other such “Belt and Road” gateways…

… one should perhaps ask if China’s economy is in dire straits as a result of an unprecedented rise in China’s underground economy.

 end
GREAT BRITAIN
Here are two commentaries as to what to expect after May lost her initial vote on Brexit.
(courtesy zero hedge/two commentaries)

Theresa May Could Be Ousted After Wednesday ‘No Confidence’ Vote: Here’s What To Expect

By all accounts, a historic defeat like the one suffered by Prime Minister Theresa May Tuesday night when the Commons overwhelmingly rejected her Brexit withdrawal agreement by a margin of roughly 230 votes, would have prompted a British leader to resign in disgrace. But these are not normal times.

Instead, May has vowed to press ahead with another round of negotiations, pledging to reach across party lines to try and hammer out a deal that would have a chance of winning approval in the Commons. However, even if she is successful, it’s still unclear whether the EU27 leaders would accept it. After the vote, EU Chief negotiator Michel Barnier told the EU Parliament that the likelihood of a chaotic no-deal Brexit was “higher than ever” (though he hinted that a compromise could be reached if May would budge on some of her ‘red lines’ – like the size of any future payments made by Britain to the EU, or its restrictions on immigration, or membership in the customs union or single market), according to RT.

May

French Leader Emmanuel Macron and a handful of other European leaders were slightly less forgiving: Macron has said that the EU has “reached the maximum” of what it can offer the UK and will not sacrifice European interests to help the UK resolve its internal squabbles, RT said.

Analysts and members of Parliament reportedly now expect Article 50 to be delayed (though that hasn’t yet emerged as the official position of May’s government or the DUP, the tiny Irish party propping up her government), the path forward is looking increasingly unclear.

And to add one more layer of complication, May is expected to face another vote of no confidence on Wednesday. But this time, the motion has been tabled in Parliament by the Labour Party. A loss could open the door to another general election – the third in four years – which would inject a fresh helping of chaos into the Brexit process.

BBC

Courtesy of the BBC

Though Tories widely expect May to prevail, with the DUP in her corner, May’s margin, according to Bloomberg, is just 13 votes (assuming all of the DUP backs her during the vote, which the party’s leadership said they would). With this in mind, it’s hardly surprising that Bloomberg described the vote as the British government’s “most dangerous crossroads in decades”.

Here’s what would happen if May loses, according to the New York Times.

If a majority of Parliament votes on Wednesday that they have no confidence in the government, Mrs. May would have 14 days to win back the support of lawmakers. Without that, an early general election would be triggered. (The no-confidence vote on Mrs. May’s government differs from a vote she faced in December, when members of her own Conservative Party tried to unseat her as party leader. She survived that vote, 200 to 117.)

If the no-confidence measure passes, the opposition could take power. But Mr. Corbyn is unlikely to have enough votes for the measure to pass, a reality that Labour politicians have themselves admitted.

Labour is going into the vote expecting to lose. But winning isn’t the point, as Barry Gardiner, a Labour member of Parliament, explained during an interview with the BBC.

“It’s not about a one off thing…what the public will be looking at is this is a historic defeat…and they will be saying in that circumstance if a government can’t govern, surely they should resign.”

Making things even more awkward, May is facing pressure to invite her arch-nemesis to negotiate. Jeremy Corbyn has already refused her offer, but it’s still possible that May will end up negotiating with senior Labour leaders to see whether there’s anything she can do to win their support.

Meanwhile, dozens of Labour MPs are pushing for a second referendum, something May has repeatedly refused to consider.

“The time is now to pivot to support a public vote on whether we should accept the deal or remain in the EU,” said Mike Buckley, director of Labour for a People’s Vote. “If Labour doesn’t shift its position, pro-EU lawmakers in the party are planning to propose their own amendment to the next Brexit vote.”

The possibility that Brexit could be canceled has gotten currency strategists excited, with an analyst at Makor Capital Markets warning that the odds of a no Brexit scenario have “dramatically increased.”

“A most uncertain outcome though (both in the immediate future and down the road) and that may be the rationale behind GBP’s impressive resilience after a short-lived fall in the immediate aftermath of the vote,” wrote Stephane Barbier de la Serre, Macro Strategist for Makor Capital Markets. “But another much more fundamental reason could be that the odds of a second referendum have now objectively dramatically increased. Arguably, we may not go there in a straight line but, mutatis mutandis, keep buying dips on GBP and British domestic companies with a domestic bias.”

Of course, the EU27 would like nothing more than to see Brexit cancelled (it would deal a serious blow to the rising tide of populism that has so alarmed Brussels). By now, many suspect that, if the choice is between no Brexit and no deal, there would likely be more support in Parliament for the former.

With this in mind, what incentive does the EU have to accommodate May?

END

The Brexit Saga Is Far From Over – Here’s What Analysts Are Expecting Now

The uncertainty continues. The U.K. government faces a vote of no-confidence, while the shape of Brexit is still unknown after parliament rejected Prime Minister Theresa May’s deal (in the biggest defeat for any government in modern history).

So what now? Judging by the pound’s reaction, the outcome was treated as positive. Short-term accounts had trimmed shorts or put on small long positions on the currency ahead of the vote, according to two traders in London and Europe, as a more positive outcome for the pound was already steadily being priced in.

However, finance professionals are positioning for what’s next, with many believing there’s an increased chance Britons will get to vote again in a national ballot on Brexit – a repeat of the 2016 vote that triggered May’s rise to the helm in negotiating the U.K.’s exit.

Below, Bloomberg has collected insights from market strategists, investors and analysts on what happens now.

“The reason why the markets seem kind of calm about it all is it takes away the option of just crashing out,” David Blanchflower, a former policy maker at the Bank of England and now a professor at Dartmouth College in New Hampshire, told Bloomberg TV.

“They have to defer, they have to delay. The prospects of a second referendum are rising and prospects of no Brexit at all are rising.”

Evercore ISI, Krishna Guha

Near term this may mean higher volatility, higher uncertainty and therefore consistent with sterling, which fell earlier in the day, staying weak. Longer run, it increases the likelihood of a softer Brexit (via a new effort to find a cross party consensus) or no Brexit at all (via a second referendum) more than it increases the likelihood of a chaotic No Deal Brexit.

In the interim, Brexit delay looks likely. This could even end up being positive for U.K. risk. Put differently, the probability distribution is shifting toward more of a barbell, in which both upside and downside ‘tail’ risks now command most of the probability mass, but in our view the upside tail (better than May deal from a market perspective) has increased more.

Aberdeen Standard, Stephanie Kelly

I’d expect sterling to be volatile until the result of the no-confidence vote is known. With the DUP saying they’ll back the Conservatives, the no-confidence vote is dead in the water unless there’s a big rebellion within the Conservative party.
If May wins the no-confidence vote then we are going to essentially be in the same place as if the vote had happened four weeks ago but with a tighter timeline to Article 50 ending.

Markets will be choppy in coming days but it’s worth remembering that nothing fundamental has changed overnight. The wisest thing for investors to do in the short term is nothing.

Crossbridge Capital, Manish Singh

If she makes the mistake of going and forming a single market, customs union agreement with Labour, and tries to pass it that way, she might lose support of the Tories. My base case remains the same — the U.K. will leave with a deal, not without a deal. Right now, it comes back to the EU.

Manish Singh, chief investment officer of Crossbridge Capital, talks about the U.K.’s rejection of May’s Brexit deal.

Credit Suisse, Sonali Punhani

Our scenario remains that a soft Brexit deal is more likely than the U.K. exiting without a deal. But the path to such an outcome is likely to involve further U.K. domestic political stress and uncertainty in the next few days and weeks.

Merian Global Investors, Richard Buxton

If a deal can ultimately be agreed, we may see the Bank of England hike policy rates up to three times over the course of 2019. Conversely, if the U.K. does leave the EU without an agreement, I would expect the Bank’s Monetary Policy Committee to move rapidly to cut rates from their already-low levels. The resumption of monetary stimulus, in the form of quantitative easing would in my view, be a possibility.

Daiwa Capital Markets, Paul Kitney

The vote “actually wards off one of the existential risks that I had seen in equities, particularly in emerging markets. That would have been an ill-proposed deal being accepted, and then there being a flight to quality into the U.S. dollar as a result. That’s being put on hold at the very least.

What it also shows is that the focus is on the economics. We’re seeing a bipartisan approach to looking at the implications of Brexit on the U.K. economy. Particularly in the backdrop of a weaker Eurozone, a weaker U.K. economy, this has becoming much more important. And ultimately we’re likely to see a better outcome even if that outcome means no Brexit at all.”

Makor Capital Markets, Stephane Barbier de la Serre

“A most uncertain outcome though (both in the immediate future and down the road) and that may be the rationale behind GBP’s impressive resilience after a short-lived fall in the immediate aftermath of the vote,”

“But another much more fundamental reason could be that the odds of a second referendum have now objectively dramatically increased. Arguably, we may not go there in a straight line but, mutatis mutandis, keep buying dips on GBP and British domestic companies with a domestic bias.”

For now, Brexit remains a depressant on UK stocks against other major markets (in dollar terms)…

end

GERMANY/DEUTSCHE BANK/BAFIN

Quite a story…BAFIN is the German regulator and they have been after a merger between Deutsche bank, the no 1 derivative player in the world and Commerzbank bank. Now the regulator states that both are too weak, and they are pushing for Deutsche bank to merger with one of their competitors in another sovereign country..to spread the pain of trillions of derivatives.

(courtesy zerohedge)

Regulators Urge Deutsche Bank To Merge With European Rival (To Spread The Pain)

Throwing a monkey wrench in rumored plans to merge Germany’s two biggest banks, Bloomberg reports that Germany’s financial regulators would prefer for Deutsche Bank to merge with a European rival rather than local, and just as troubled, competitor Commerzbank, setting them apart from forces in the government keen on an all-German deal.

According to Bloomberg, the ECB is favoring a cross-border combination to drive integration in the region’s financial markets, while analysis by German regulator BaFin suggests a preference for a European deal because the two domestic banks – surprise – are currently too weak to benefit sufficiently from a merger.

In other words, merging one Too Big To Fail bank with another would only result in a teetering behemoth that will need an even greater bailout when the next financial crisis hits. And by “sharing” the combined liabilities of the combined entity – which would likely inherit Deutsche Bank’s tens of trillions in gross notional derivatives – with another sovereign, would at least ensure that German taxpayers would enjoy some dilution of the upcoming bailout pain with another European nation at some point in the coming years.

This cross-border merger strategy is also more aligned with the position of Deutsche Bank CEO Christian Sewing, who has asked for patience with his turnaround plan before embarking on any deal. The European preference, meanwhile, is at odds with some German government officials who patriotically want a “national banking champion.” Both banks are key partners of the companies that make up Germany’s export-oriented economy.

Following the report, DBK shares, which have plunged 48% over the past 12 months, jumped as much as 8.2% and were up 6.6% at 7.98 euros at 4:48 p.m. in Frankfurt trading. Commerzbank, inexplicably, also climbed as much as 6.7% even though the news was decidedly negative for it as it would mean it wouldn’t be “even bigger to fail.”

Some more details from Bloomberg:

Late last year, the Finance Ministry asked BaFin for its data on how different merger scenarios could play out for the German banks, said people familiar with the matter.

During a strategy retreat in September, Deutsche Bank executives concluded that a merger with Swiss competitor UBS Group AG was the most favorable option among potential European partners, though they determined that the time isn’t right due to the German lender’s weak share price, people familiar with the matter have said. BaFin’s analysis came to a similar conclusion, the people said.

Meanwhile, the German regulator BaFin has insisted that it would prefer to see both German banking titans improve profitability if they are to pursue a combination. Still, some at the banking watchdog are concerned that mergers could end up working against efforts to ensure banks are no longer too big to fail, which of course is the whole point: with both banks teetering on the verge of collapse, at least according to their stock price, the whole point of the exercise is to make sure someone picks up the tabs when both eventually keel over.

Now if only someone in Europe will volunteer to be on the hook for hundreds of billions when Deutsche Bank’s time finally comes…

end

ECB/FED/Bof J

Strange indeed!! The ECB announced that it was cutting off all purchases of bonds starting Jan 1.2019: so what on earth is Draghi doing?  The ECB balance sheet is soaring and thus the reason why stocks are rising..it is not the economy..it is our crooked central banks

(courtesy zerohedge)

Is This The Real Reason Why Stocks Are Surging?

Wondering why US equity markets are soaring at a pace not seen since the March 2009 lows? Confused by the massive swings higher despite weak macro data, and tumbling earnings expectations?

Well, the answer is simple once again, “it’s not the economy, it’s the central banks, stupid!”

Q4 2018 saw global stock markets finally wake up to the fact that the world’s central banks were withdrawing liquidity and played catch-down to an ugly tightening reality. December’s contagion to American stocks was the final straw for the world’s elites however  and after the Mnuchin Massacre, it appears the Plunge Protection was ordered back into battle and as the chart below shows – central bank balance sheets suddenly started to grow – aggressively so… and that is what is dragging stocks higher, squeezing shorts at an unprecedented pace, and economically irrationally levitating P/Es despite a wall of uncertainty ahead.

Just like in 2018, 2017, and 2016, the start of the year has prompted a resurgence in the size of global central bank balance sheets... and just like in 2018, 2017, and 2016, global stocks (with US being the most liquid attractor of that flow) are soaring…

And just remember, The ECB is supposed to be tapering, The Fed is still on ‘autopilot’ for now, and The BoJ is being forced to taper its buying size…

So WTF is Draghi doing? It’s been a month since The ECB was supposed to have halted QE and yet the balance sheet is surging still?

So the simple lesson once again is – watch what they do, not what they say!!

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISIS/SYRIA/USA

ISIS is not dead yet:  An ISIS attack in the northern section of Syria (Manbij)  killed two Americans while on patrol in Syria

(courtesy zerohedge)

Two Americans Killed After ISIS Suicide Attack Targets US Patrol in Syria

In an apparent terror attack targeting a US-led coalition patrol, a blast has rocked a restaurant in the northern Syrian city of Manbij on Wednesday. Conflicting reports say there are casualties among American soldiers as well as potentially a delegation of Syrian Kurdish leaders, as the bombing took place the moment a US military patrol passed by, and there may have even been coalition personnel inside the restaurant.

Scene of the attack in Manbij, northern Syria, according to local sources. 

“Six civilians were killed and 19 others wounded as a result of an explosion in the center of the city of Manbij, while a US military patrol was passing,” an Al-Jazeera broadcast said.

And a YPG-associated Manbij news organization, reporting from the ground, says that two US soldiers have died with 2 others evacuated to a hospital by military helicopter.

Embedded video

Riam Dalati

@Dalatrm

Coalition helicopter landing near blast sight amidst increasingly confirmed reports of US casualties involved.

Though unconfirmed, Al Jazeera in its early live broadcast has put the death toll at up to nine killed in the attack. A military helicopter was filmed landing near the scene to rescue survivors, which occurred just as American forces were reportedly making preparations to exit Syrian soil. Less than two hours later, the UK-based Syrian Observatory for Human Rights said the death toll has been raised to 14 people.”

Embedded video

Charles Lister

@Charles_Lister

: Local video footage shows U.S. military helicopter (possibly an S-92, likely on medevac mission) landed at football stadium.

The restaurant may have been a meeting place for a delegation of US and French soldiers and local Kurdish leaders. A source told Turkey’s TRT World, “The explosion took place inside a restaurant where US, French troops, and YPG militants were meeting.”

Embedded video

Mutlu Civiroglu

@mutludc

Warning! Graphic Video! Alleged video of the suicide attack in

Early reports say ISIS has claimed responsibility for the attack, according to a press release by ISIS-linked news source al-Amaq Agency. Consistent with local eyewitnesses, the terror group is claiming a successful suicide attack targeting a “foreign military patrol,” according to Reuters:

An Islamic State-affiliated web site, Amaq, said an attacker with an explosive vest had struck a foreign military patrol in a suicide attack.

Reuters could not independently verify a report by the UK-based Syrian Observatory for Human Rights that 14 people had been killed in the attack including two U.S. soldiers. The coalition could not be immediately reached for comment.

Manbij has been held by US-backed Kurdish forces since the YPG Kurdish militia took it back from ISIS in 2016.

It has for the past two years seen a significant US troop, special forces, and patrol presence, and has at least one known small American base.

Meanwhile, the blast scene has barely yet to be evacuated, and the finger pointing begins on Trump’s Syria pullout.

Peter R. Neumann@PeterRNeumann

By declaring victory over ISIS, Trump effectively challenged the group to prove him wrong. Terrible!

Shiraz Maher

@ShirazMaher

Islamic State claiming Manbij suicide attack, which some reports say hit U.S. troops.

View image on Twitter

developing…

 

 

end

6. GLOBAL ISSUES

 

.

 

7  OIL ISSUES

This is a huge story.  Israel arrived for the first time into Cairo since 2011.  Egypt and Israel have a an agreement where Israel is to export gas to Egypt and to create an “energy export hub”.  In this meeting were representatives for Italy, Greece, Cyprus, Jordan and the Palestinian authority. The Palestinian authority could benefit greatly from this alliance as gas has been found on their territory.  This hub will augment the huge East Med pipeline built from Israel via Cyprus and onto Greece/Italy and the rest of Europe

a big story.

(courtesy zerohedge)

Israel To Export Gas To Egypt In Bid To Create East Mediterranean “Energy Export Hub”

Israel has confirmed it is in extensive talks with Egypt to build a new sub-sea natural gas pipeline between the two countries as part of a previously agreed $15 billion deal to export Israeli gas to Egypt over a decade. Most significant is that the new line would hugely expand Israel’s export capacity to its southern Arab neighbor, taking it far beyond the maximum 7 billion cubic meters per year currently able to flow through the existing EMG pipeline to Sinai.

Theoretical map produced early in prior controversial talks to export Israeli gas to Egypt, via Middle East Eye

Israeli Energy Minister Yuval Steinitz proclaimed the ambitious project under negotiation to be part of broader “efforts to transform the eastern Mediterranean into an energy export hub on the doorstep of Europe,”according to Bloomberg.

“There’s no final decision yet, but there are talks,” Steinitz told Bloomberg while attending the Cairo-sponsored first East Mediterranean Gas Forum, a cooperative forum aimed at expanding east Mediterranean energy transformation and joint ventures.

Notably, oil ministers from Israel, Greece, Egypt, Cyprus, Jordan, Italy, and the Palestinian Authority took part, and are set to participate again at another meeting in April. Reporting from the conference, Bloomberg described a common agreed upon goal “to work together to monetize reserves by using existing infrastructure and adding more capacity.”

Also significant is that this marks the first time an Israeli energy minister has visited Egypt since 2011, when “Arab Spring” demonstrations eventually brought down Hosni Mubarak, ushering in uncertainty and chaos, including brief Muslim Brotherhood rule, which for the first time brought the future of Egypt’s peace treaty with Israel into question.

Steinitz described further to Bloomberg that, “Construction could begin as early as next year on the pipeline that would transport gas from Israel’s offshore Leviathan and Tamar fields to Egypt’s existing liquefied natural gas plants for processing and re-export.”

And separately, concerning the bigger project of the sub-sea East Med pipeline supplying energy-hungry Europe  first proposed by Greek energy minister Yannis Maniatis in 2014 — Steinitz confirmed it is moving forward, touting the ambitious project  as “the longest and deepest gas pipeline in the world,” and an initial estimated cost of $7 billion, to be financed by “private companies and institutional lenders,” according to the Israeli energy minister.

The separate, long in the works “East Med Pipeline” that could turn the region into an energy hotspot supplying Europe, via The Weekly Standard.

The underground, sub-sea pipeline is proposed to connect Israel, via Cyprus, to Greece and Italy, in a massive construction project estimated to take five or six years to complete, with work to begin as early as next year.

The transformation of the eastern Mediterranean into an “energy hotspot” could have huge global geopolitical implications, especially given that currently the E.U. relies on Russia for a third of its gas. It’s especially southeast Europe that’s been entirely reliant on Russian gas, given its lack of infrastructure.

In the past during shortages — or especially during a rare January 7, 2009 delivery shutdown by Gazprom – southeastern European countries experienced industrial shutdowns as well as broad swathes of residential areas without heat, victims of worsening tensions in Ukraine. No doubt the EU ministers that have driven the major East Med pipeline have as a prime motivator Europe’s energy independence, something Israel is keen to push forward as well, given its own delicate diplomatic dance with Russia in Syria and the broader Middle East.

8. EMERGING MARKETS

 

END

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

Euro/USA 1.1382 DOWN .0031 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;80  UP 0.122 (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 1.2844     DOWN   0.0027  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3271 UP .0009 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 31 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1382/ Last night Shanghai composite CLOSED  UP 0.08 POINTS OR 0.00% 

 

 

//Hang Sang CLOSED UP 71.81 POINTS OR 0.27%

 

/AUSTRALIA CLOSED UP 0.37%  /EUROPEAN BOURSES MIXED

 

 

 

 

 

 

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 112.54 POINTS OR .55%

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED MIXED

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 71.81 POINTS OR 0.27% 

 

 

 

/SHANGHAI CLOSED UP 0.08 PTS OR 0.00%

 

 

 

 

Australia BOURSE CLOSED UP 0.37%

 

Nikkei (Japan) CLOSED  DOWN 112.54 PTS OR .55%

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1288.20

silver:$15.51

Early WEDNESDAY morning USA 10 year bond yield: 2.73% !!! UP 3 IN POINTS from TUESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.10 UP 5  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early WEDNESDAY morning: 96.12 UP 8 CENT(S) from  TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.79% UP 13    in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.01%  DOWN 0   BASIS POINTS from TUESDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.38% DOWN 1   IN basis point yield from TUESDAY

ITALIAN 10 YR BOND YIELD: 2.75 DOWN 12     POINTS in basis point yield from TUESDAY/

 

 

the Italian 10 yr bond yield is trading 127 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.22%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.53% 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 WEDNESDAY

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

Euro/USA 1.1403 DOWN   .0012 or 12 basis points

 

 

USA/Japan: 108.84 UP  0.179 OR 18 basis points/

Great Britain/USA 1.2868 DOWN .0003( POUND DOWN 3  BASIS POINTS)

Canadian dollar UP 19 basis points to 1.3242

 

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The USA/Yuan,CNY closed UP AT 6.7568-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.7635(  YUAN UP)

TURKISH LIRA:  5.38489

the 10 yr Japanese bond yield closed at +.01%

 

 

 

Your closing 10 yr USA bond yield UP 1 IN basis points from TUESDAY at 2.72 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.07 UP 0  in basis points on the day /

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

Your closing USA dollar index, 96.01 DOWN 2 CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 32.34 OR 0.47%

German Dax : UP 39.45 POINTS OR 0.36%

Paris Cac CLOSED UP 24.57 POINTS OR 0.51%

Spain IBEX CLOSED UP 62.60 POINTS OR 0.71%

Italian MIB: CLOSED UP 312.29 POINTS OR 1.63%

 

 

 

 

WTI Oil price; 51.93 12:00 pm;

Brent Oil: 60.76 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.31  THE CROSS LOWER BY 0.75 ROUBLES/DOLLAR (ROUBLE HIGHER BY 75 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3489 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.23 FOR THE 10 YR BOND 1.00 PM EST EST

END

 

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

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

WTI CRUDE OIL PRICE 4:30 PM :   52.41

 

BRENT :  61.35

USA 10 YR BOND YIELD: 2.73%…

 

 

USA 30 YR BOND YIELD: 3.07%/

 

 

 

EURO/USA DOLLAR CROSS: 1.1395 ( DOWN   20 BASIS POINTS)

USA/JAPANESE YEN:109.03 UP 0.379 (YEN DOWN 40 BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 96.09 UP  5 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2886 UP 17 POINTS FROM YESTERDAY

the Turkish lira close: 5.3390

the Russian rouble:  66.35 UP.72 Roubles against the uSA dollar.( UP 72 BASIS POINTS)

 

Canadian dollar: 1.3256 UP 5 BASIS pts

USA/CHINESE YUAN (CNY) : 6.7568  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.7634 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.23%

 

The Dow closed UP 141.57 POINTS OR 0.59%

 

NASDAQ closed UP 10.86 POINTS OR 0.15%

 


VOLATILITY INDEX:  18.67 CLOSED UP 0.07 

 

LIBOR 3 MONTH DURATION: 2.773%  .LIBOR  RATES ARE RISING/

 

FROM 2.778

 

 

 

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

 

Small Caps Surge To Best Start In 30 Years After Record China Liquidity Injection

According to Bloomberg data this is the best start to a year for the Russell 2000 in at least 30 years…

And at the same time, top-down macro and bottom-up earnings are tumbling?

“Inconceivable?”

..

 

 

Despite a record liquidity injection ove

Chinese stocks flatlined…

 

The FTSE continues to lag in Europe as once again early dips were bought…

 

US equities surged at the cash open, as Goldman rebounded from initial weakness, surging massively on the day, but that ramp faded into the European close. Of course the EU close prompted a trend reversal and stocks shrugged higher for the rest of the day until Huawei headlines too the shine off…

 

Nasdaq futures slipped back to unchanged after the Huawei headlines hit tech firms more…

 

The S&P 500 is now five points away from hitting the top end of the resistance range cited by many market watchers: 2,630. What happens next is anyone’s guess. Will stops and short covering kick in, sending the rally into melt-up mode? Or will the bulls who are sitting on fat profits take some chips off the table?

All the majors pushed back above key technical levels today…

 

Goldman’s insane spike higher today accounted for half the Dow’s gains…

 

The Russell 2000 is leading in 2019 among the US majors up 8% YTD (double the 4% rise in the Dow)…

Energy and Retail continue to lead the year but Financials exploded in the last few days on dismal earnings… (Utes still in the red)

 

SNAP cracked…

 

Credit markets compressed notably today, recoupling with VIX…

 

The long-bond outperformed (very marginally lower in yield) with yield dropping back in line with the rest of the curve today…

 

The dollar ramped overnight as Europe opened then drifted back to end modestly higher…

 

Cable was quiet today with a very modest gain after May won her confidence vote…

 

USDJPY retraced its flash-crash…

 

Cryptos chopped around again…

 

Gold and copper gained on the day (China liquidity) and the machines ramped WTI back higher after a disappointing production, inventory print for the bulls…

 

WTI tumbled back near a $50 handle after DOE data then was ramped and double-ramped at the NYMEX close…

 

Gold in USDs was modestly higher but continues to flatline in Yuan…

 

Finally, we note that stocks have over-extended relative to the ‘dovishness’ or confidence in the economy that the market believes The Fed to represent…

If stocks are right, then why doesn’t the market price in at least ‘some’ hawkishness – some degree of rate-hike in 2019? Or could it be that stocks are wrong?

END

market trading/

trading late in the afternoon just before New York closed:

US Pursuing Criminal Investigation Of Huawei; Stocks Slide

Stocks were hit just after 3:30pm when the WSJ reported that Federal prosecutors are pursuing a criminal investigation of China’s Huawei Technologies – whose CFO was arrested late last year and is pending extradition to the US – for allegedly stealing trade secrets from U.S. business partners, “including the technology behind a robotic device called “Tappy” that T-Mobile US Inc. used to test smartphones.”

While the news dented stock prices, the impact was far less notable than it would have been had the news hit late last year when any turmoil in US-China relations would instantly vaporize 20 or more points from the S&P; in fact the market’s resilience in light of the report which is sure to aggravate any US-China trade negotiations, is perhaps the most remarkable observation.

As the WSJ reports, the criminal investigation grew in part out of civil lawsuits against Huawei, “including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile’s.”

The probe is said to be at an advanced stage and could lead to an indictment soon.

While Huawei declined to comment, the company previously contested the T-Mobile case, but conceded that two employees acted improperly.

The federal investigation puts added pressure on the Chinese technology giant, the world’s largest maker of telecommunications equipment and the No. 2 maker of smartphones worldwide. It comes amid a broader push by the Trump administration to aggressively pursue claims of intellectual property theft and technology transfer by Chinese companies.

While Huawei has repeatedly denied that it is a security threat, saying it is owned by its employees and operates independently of the Beijing government, the company has long been under scrutiny by the U.S., which has effectively blocked the Chinese telecom company from installing its equipment in major U.S. networks because of concerns that its gear could be used to spy on Americans.

U.S. pressure on Huawei has been building, culminating last month when Canadian authorities arrested Huawei CFO Meng Wanzhou at the request of U.S. authorities. Meng, the daughter of company founder Ren Zhengfei, was accused of misleading banks about the nature of Huawei’s business in Iran, leading to violations of U.S. sanctions on the country; she has denied the charges, and Huawei says it follows the law in all countries where it operates.

In a more recent development, Polish authorities last week arrested Huawei executive Wang Weijing and charged him with conducting espionage on behalf of the Chinese government. Huawei wasn’t accused of wrongdoing, and the company on Saturday terminated Wang’s employment.

end

market data/

All data points seems to suggest that the world’s economy fell flat on its face.  Today USA import prices fell with the prime culprit being petroleum

(courtesy zerohedge)

Deflation Strikes – US Import Prices Tumble In December As Petroleum Plunges

After a mixed picture from producer prices yesterday, import (and export) prices are expected to tumble MoM (as China’s deflationary impulse ripples across the globe).

US import prices tumbled 0.6% YoY in December – the weakest since Sept 2016 – and export price growth slowed to its weakest since July 2017.

Although MoM shifts were modestly better than expected (Import -1.0% vs -1.3% exp, and Export -0.6% vs -0.7% exp), the slowdown from November (extending the slowing trend of the last six months) has accelerated.

The biggest downbeat factor is the 11.6% plunge in Petroleum import prices (following a 16% drop in November) and export prices of industrial supplies tumbled 3.2% in December (after dropping 2.8% in November).

Interestingly, despite the recent China data, import prices from China flatlined in December – admittedly hovering near their lowest since 2007.

So, What Will Jay Powell Do?

USA ECONOMIC STORIES OF INTEREST

This is interesting: the student debt crisis widens as the Florida Board of Health suspends licenses over student debt defaults.

(courtesy Mac Slavo./SHFTPlan.com)

Student Debt Crisis Worsens: Florida Board Of Health Suspends Licenses Over Defaults

Authored by Mac Slavo via SHTFplan.com,

The Florida Board of Health has suspended thousands of healthcare licenses over defaults on student loans many used to earn their licenses. But many are concerned that the new crackdown may only worsen the student loan crisis.

The revocation of licenses came after the student loan industry lobbied the government to enact punishments for those who can’t or won’t repay the money they borrowed.According to ABC Action News, only Florida is enforcing this law as of right now. The state also has the power to garnish up to 100% of a worker’s wages until the loan is repaid and the license is reinstated. Under Florida law, once the state suspends a license for student loan default, the only way to get it back is to pay a fine equal to 10 percent of the balance, plus other costs.

Investigative Reporter Adam Walser uncovered the state’s Board of Health suspended more than 900 health care licenses – including professional certifications for registered nurses, Certified Nursing Assistants, pharmacists, and opticians – in the just the past two years alone.

The I-Team found 12 other states (Alaska, Arkansas, California, Georgia, Hawaii, Iowa, Kentucky, Massachusetts, Minnesota, Mississippi, Tennessee, and Texas) still have the power to take away health care licenses for unpaid student loans, but officials in those states told ABC Action News they have not suspended any licenses over loan defaults in the past two years. –ABC Action News

Tampa student loan attorney Christie Arkovich says Florida’s law goes too far.

“We’re not saying that people shouldn’t repay their loan,” said Arkovich.

“We’re just saying that getting them fired probably isn’t the best way to go about that.”

And anyone with a basic understanding of economics could comprehend this.  If they aren’t paying their loans while they have an income, what makes anyone think they’ll start paying the loans once they have no income?

“You take their license, you take their way of working, how are you going to get your lump sum?” said registered nurse Andrea Chandler.

“How are you going to get your payment? You’re already not getting your payment.”

Dr. Gabriel Picone, an economics professor at the University of South Florida, said the decision to suspend licenses for nonpayment of student loans puts a strain on both employers and patients. Health care workers are already in short supply and those who lose their licenses will likely go from earning paychecks to depending on taxpayer-funded welfare.

“It’s trying to take too much away,” Picone said.

“This person may end up on Medicaid, receive food stamps. All this is more money that we will have to pay.”

The United States Department of Education estimates more than 10 percent of student loan borrowers are in default. The federal government estimates Americans owe $1.2 trillion in student debt. That figure is now larger than all outstanding U.S. credit card and vehicle debt combined.

Florida law requires 45-days written notice before the state can suspend any licenses because of a default on student loan debt. Experts say if you get one of these notices,you should immediately contact your lender to try to negotiate a repayment plan.

end

Beige book confirms that the uSA economy is slowing

(courtesy zerohedge)

“Contacts Are Less Optimistic”: Fed’s Beige Book Confirms Economy Is Slowing

Ever since April, the otherwise drab and colorless Fed Beige Book, was notable for one specific trend: a rising frequency of the word “tariff” (and its variations) with every subsequent report, confirming that in addition to the usual concerns businesses voiced to the regional Fed such as labor and prices, one of the growing worries amid local companies was the impact of trade war on future business. And, as we noted back in November , with the Trump-Xi summit fast approaching, the Beige Book confirmed that with no less than 51 mentions of the word “tariff”, most companies were on edge over future trade prospects.

  • March Beige Book instances of word “tariff”: 0
  • April Beige Book instances of word “tariff”: 36
  • May Beige Book instances of word “tariff”: 22
  • July Beige Book instances of word “tariff”: 31
  • September Beige Book instances of word “tariff”: 41
  • October Beige Book instances of word “tariff”: 51

However, last month when the December Beige Book was released there was one notable development: we saw the first decline in mentions of “tariffs” since May, with the word tariff used only 39 times, a steep drop from October’s 51.

Fast forward to today when in the latest, just released January Beige Book we find that this trend has accelerated even more as there was just 20 mentions of “tariffs“, a stop drop from both December’s 39, and October’s record 51.

And while superficially this may be taken as a good sign, another, perhaps more ominous trend has emerged.

But first, a quick glimpse at what else today’s Beige Book revealed: a casual glance of the summary page revealed few surprises. Indeed, according to the Federal Reserve, most regions reported growth at an overall modest to moderate pace even as the still-strong U.S. economy showed signs of slowing in recent weeks amid declining optimism.

“Outlooks generally remained positive, but many districts reported that contacts had become less optimistic in response to increased financial market volatility, rising short-term interest rates, falling energy prices, and elevated trade and political uncertainty,” the report said in its summary of overall economic activity.

Additionally, and confirming the Fed’s recent dovish reversal, the Beige Book which is based on anecdotal information collected by the 12 regional Fed banks from late-November through Jan. 7, showed manufacturing and energy expanded at a slower pace in most districts, while non-financial services cooled in a few districts.

As Bloomberg notes, today’s report comes amid tension between the mostly positive outlook for the US among central bankers and many economists, and more pessimistic views expressed in recent weeks by investors. U.S. stocks had their worst December since the Great Depression, a view which is increasingly accepted by the Fed where even the biggest Hawk, Esther George recently admitted that it may be time to halt rate hikes for now.

In a potentially troubling development for markets – and those keeping tabs on wage inflation – the Fed pointed to continued strong jobs gains and robust consumer spending, suggesting more wage inflation may be imminent even as financial markets have been shaken by slowing global growth, a tightening of financial conditions caused by interest-rate hikes, trade disputes and the partial U.S. government shutdown.

The Beige Book offered something for both camps. “All districts noted that labor markets were tight and that firms were struggling to find workers at any skill level,” the report said adding that wages gained throughout the country and across skill levels, with most districts reporting moderate pay increases, the report said. A majority of districts reported “modest to moderate” increased in overall prices. At the same time, some districts reported that growth had slowed, while New York said “economic activity leveled off” and Kansas City reported activity as “flat.”

Curiously, the now record long government shutdown received just one specific mention in the report on the way it affected agricultural markets in the Chicago district, specifically noting that “a second round of payments from the Federal Government’s Market Facilitation Program also supported farm incomes (primarily for soybean producers), although payments have been disrupted by the government shutdown. The shutdown also slowed the release of government reports on agricultural market conditions, leading to greater uncertainty for market participants.”

Meanwhile, as noted above, while the use of the word “tariff” may have declined for the second time in the past year, another increasingly more prevalent word has taken its place: as shown in the chart below, the word “slow” and its variants appeared on 65 different occasions, a notable increase from 43 in December, 37 in October and 25 in September, which is the range it had been for most of 2018.

This explicitly clear hint from the Fed, or at least the various regional Fed constituent firms, that growth is “slowing” is not surprising, given that the economy is (still) growing above trend even as a slower expansion is embedded in the Fed’s forecasts. But, as we noted last month, the report points to a clear late cycle market in 2019, one marked by lower risk-adjusted returns and much higher volatility, and also explains why the Fed is now actively cutting its forecast of number of rate hikes even as the market is convinced that there will be no more and the Fed’s next move will be to cut rates as slowing observed in the chart above eventually becomes the next US recession some time in late 2019 and early 2020.  The balance of anecdotes continued to focus almost entirely on the ongoing profit concerns companies face as a result of rising wage pressures.

* * *

Finally, there were the usual memorable anecdotes from the various regional Feds, of which the Cleveland Fed’s observation that trucking demand may be fading is perhaps the most notable as it confirms the “pull-ahead of imports from China” is now over, something which the Richmond Fed also echoed noting that “a display case manufacturer had Chinese goods shipped through west coast ports in order to get goods to the country ahead of an anticipated tariff increase.”

Here are the other anecdotes (source: Bloomberg):

  • Boston: A tourism contact noted serious concern about ongoing labor shortages on Cape Cod that will be more severe in 2019 if limits on the J-1 and H-2B visa programs are not raised
  • New York: A number of business contacts in New York state, including a few manufacturers, expressed concern about the recent hike in New York’s minimum wage
  • Philadelphia: Existing home sales continued to decline moderately across most local markets — hampered by extremely low inventories
  • Cleveland: While most freight contacts reported stable demand during the period, some trucking contacts noted softer demand compared with that of the previous quarter because of the pull-ahead of imports from China
  • Richmond: A Virginia display case manufacturer had Chinese goods shipped through west coast ports in order to get goods to the country ahead of an anticipated tariff increase
  • Atlanta: A number of business contacts noted that announcements by large national companies to raise their minimum wage intensified pressure among similar jobs
  • Chicago: A second round of payments from the Federal Government’s Market Facilitation Program supported farm incomes (primarily for soybean producers), although payments have been disrupted by the government shutdown
  • St. Louis: An aluminum producer reported running at nearly full capacity and is considering additional expansion options
  • Minneapolis: A mall manager in southern Minnesota said foot traffic was up on Black Friday compared with a year earlier, and stayed strong though the holidays despite the loss of a major anchor tenant earlier in the year
  • Kansas City: One tourism respondent attributed some of the tumbling sales over the past six months to environmental factors, such as fires and drought seen throughout the summer in parts of the district
  • Dallas: Numerous contacts said workers were expecting higher pay, and many raised wages by 3-10 percent in response
  • San Francisco: Wages for lower-skilled workers rose moderately, due to brisk competition and, in some cases, in reaction to imminent minimum wage increases in the new year
end

This Isn’t The First “Fed Pause”

(courtesy Jeffrey Snider/Alhambra Investment Partners)

Authored by Jeffrey Snider via Alhambra Investment Partners,

And we come full circle back again. It’s not what they say, it’s what they do. Kansas City Fed CEO Esther George was at least consistent, unlike all the other voting FOMC members. Throughout 2015 and 2016, the rest of them would say the economy was strong but then vote the other way, no “rate hike.” December 2015 was the lone exception (and perfectly fitting).

President George, on the other hand, was almost irredeemably optimistic about the economy and voted that way, too. While the majority held steady, Esther was the one who would dissent against the then Fed Pause. The few times she didn’t was in early 2016 when the US economy approached recession conditions.

You knew it was serious when the hawkest of hawks stopped walking how she talked. In March 2015, George had said:

The U.S. economy is expanding at an above-trend growth rate, which I expect to continue through the end of the year. A strong dollar and certain aspects of the foreign outlook pose some risks, but the economy appears well positioned to withstand such headwinds…

Importantly, this improved outlook for consumers and businesses suggests that momentum in the labor market will likely continue going forward. The economy added more than 3 million jobs in 2014, the highest level since 1999, and the rapid pace of job creation has continued into the beginning of 2015.

Sounds very familiar, doesn’t it, especially how none of it was true – a fact George herself would confirm in January 2016 voting in unanimity forgoing a second hike immediately after the first (which was the original plan).

Can we stop with all the “rate hikes are causing this” nonsense? The upper boundary of federal funds is currently 2.50%, hardly any sort of hardship on anyone anywhere. If 250 bps is the cause of so much fright and angst, how in the world did the world function when risk-free was 6% or better? You might even notice that the economy did function so much better when interest rates were higher (interest rate fallacy).

Something big changed between 2017 (three rate hikes) and 2018 (four rate hikes) and it wasn’t the extra 25 bps. The global economy isn’t going to be sailing into globally synchronized growth with federal funds around 150 bps and then on the precipice of full downturn with the addition of just 100 bps more.

The strongest economy in decades would never have been cut off by another 1%, at least if it was actually strong in any realistic sense.

What I mean is therefore perfectly clear; the “rate hikes” didn’t cause this, therefore the Fed pause can’t fix it. The pause, however, is very real anyway and now for a second time. Here’s Esther George today:

A pause in the normalization process would give us time to assess if the economy is responding as expected with a slowing of growth to a pace that is sustainable over the longer run.

It’s this “slowing pace of growth” that has caught them offguard, more so markets’ reactions to it. Here’s what she said back in October, not quite as unhinged as Atlanta’s Raphael Bostic but similarly confident nonetheless.

By nearly every measure, the U.S. economy is performing well. With accommodative financial conditions, elevated levels of confidence and solid labor markets, it seems reasonable to expect economic growth slightly above trend with low and stable inflation for the next few years. Consumers are poised to continue to be the main force behind this expansion, and the recent pickup in business investment may continue as well.

Perhaps unconsciously, she was simply repeating her views from March 2015. Was it the lags of the last two or three (or four) rate hikes catching up with a truly robust economy that caused it to fall back? Does anyone really believe that? It’s what they’ll write in the Wall Street Journal.

The real problem is much deeper, a fact we are reminded of again with various banks putting up some eye-opening numbers for last quarter. In the textbooks they always say that dealers run matched books, market-makers picking up a few pennies on others trading. Volatility is good for business.

Supposedly, it was the Fed being so accommodative to the monetary system throughout the ZIRP period that killed off the dealer business. FICC shrank and according to conventional wisdom the lack of volatility was the reason. Thanks, Bernanke.

Except, whenever there was a serious bout of market volatility, like the end of 2015 and the beginning of 2016, FICC revenues would collectively plunge. Banks, it seems, can’t actually make money in money during volatile periods. I noted this actually consistent inconsistency almost three years ago during the last one:

In “low volatility” environments investment banks get smaller; in “high volatile” environments investment banks get smaller. You might just get the impression that investment banks reduce themselves regardless of the volatility environment, and thus are projecting some other concern or structural tendencies.

Rates are rising, the markets were volatile so dealers should be cleaning up. Instead, as they are beginning to report, in Q4 2018 they got cleaned out.

JPMorgan Chase reported fourth-quarter FICC sales and trading revenue that missed analysts’ estimates, just like Citigroup on Monday. JPMorgan’s adjusted earnings per share also trailed estimates.

Bond traders just suffered their worst quarter in a decade.

Revenue from fixed-income trading, typically the biggest contributor to the company’s markets business, plunged 18% in the fourth quarter to the lowest since the depths of the financial crisis as wild markets kept clients on the sidelines. The drop more than outweighed an increase in equity-trading revenue and advisory fees, making for the corporate and investment bank’s worst quarter in three years.

Citi’s FICC, “bond trading” numbers were even worse, down 39% in Q4 2018 from Q3, and off 21% year-over-year from a Q4 2017 that was far from fantastic.

It’s another few data points for why December especially in curves (liquidity hedges) was so bad. This renewed “overseas turmoil” has come home once more, a confirmation of sorts performed unintentionally by Esther George. Again.

SWAMP STORIES

My goodness: the FBI’s top lawyer is now under criminal investigation for being a central leaker to the press. He is James Baker.

(courtesy zerohedge)

Lawmakers Seek Updates As FBI’s Former Top Lawyer Undergoes Active Criminal Investigation

House Republicans revealed that the FBI’s former top lawyer, James Baker, has been under active federal investigation for leaking information to the media.

A Monday letter from GOP Reps. Jim Jordan and Mark Meadows to Connecticut US attorney John Durham asks for an update on the leak probe. The investigation was revealed to Jordan and Meadows during Congressional investigations, when Baker’s attorney, Daniel Levin, refused to let him answer lawmakers’ questions.

“I’m sorry, I’m going to cut – not let him answer these questions right now,” Levin interjected when Jordan asked about Baker’s interactions with reporters.

You may or may not know, he’s been the subject of a leak investigation which is still – a criminal leak investigation that’s still active at the Justice Department,” Levin continued.

Meadows cut in, asking “You’re saying he’s under criminal investigation? That’s why you’re not letting him answer?” to which Levin replied “Yes.”

While the subject of the media leaks is unknown, a confidential source told the Daily Caller‘s Chuck Ross that the leak investigation is a nothingburger.

“I’m 100 percent confident they did not find any wrongdoing,” said the source, adding that the investigation discussed during the hearing “is not a new or reopened investigation” separate of the one reported in December 2017 by the Washington Post.

Levin’s exchange with Republicans followed after Baker discussed interactions he had with Mother Jones reporter David Corn, who met with dossier author Christopher Steele prior to the 2016 election.

It is unclear what alleged leak Baker was under investigated for. A spokesman for Durham declined comment.

Jordan then asked Baker whether reporters Franklin Foer and Michael Isikoff ever reached out to him. Both of the journalists reported stories about the Russia investigation. Isikoff, who co-authored a book with Corn, also met with Steele prior to the 2016 election.

Levin blocked the line of inquiry about reporter contacts, saying: “I’m not going to have him answer any questions as asking about any interactions with the press.” –Daily Caller

In July of 2017, Circa reported that Baker was under investigation for a leak of classified information pertaining to technology Yahoo Inc. possessed to collect upstream data.

https://www.scribd.com/embeds/397528194/content?start_page=1&view_mode=scroll&show_recommendations=false&access_key=key-9cr2MZ80o0IuHSoJP4fU

END

This is a major victory for Judicial watch: a federal judge orders Ben Rhodes, Susan Rice and other obama officials to respond to the Clinton/Benghazi email scandal.
(courtesy zerohedge/judicial watch)

Federal Judge Orders Rhodes, Rice, & Other Obama Officials To Respond Over Clinton Benghazi/Email Scandal

In what Judicial Watch describes as a “major victory for accountability,” a federal judge ruled Tuesday that former national security adviser Susan Rice and former deputy national security adviser Ben Rhodes must answer written questions about the State Department’s response to the deadly 2012 terror attack in Benghazi, Libya, as part of an ongoing legal battle over whether Hillary Clinton sought to deliberately evade public record laws by using a private email server while secretary of state.

As Fox News’ Samuel Chamberlain reports, the judge’s order amounts to approval of a discovery plan he ordered last month. In that ruling, Lamberth wrote that Clinton’s use of a private email account was “one of the gravest modern offenses to government transparency” and said the response of the State and Justice Departments “smacks of outrageous misconduct.

Judicial Watch announced last night that United States District Judge Royce C. Lamberth ruledthat discovery can begin in Hillary Clinton’s email scandal. Obama administration senior State Department officials, lawyers, and Clinton aides will now be deposed under oath. Senior officials – including Susan Rice, Ben Rhodes, Jacob Sullivan, and FBI official E.W. Priestap – will now have to answer Judicial Watch’s written questions under oath. The court rejected the DOJ and State Department’s objections to Judicial Watch’s court-ordered discovery plan(The court, in ordering a discovery plan last month, ruledthat the Clinton email system was “one of the gravest modern offenses to government transparency.”)

Judicial Watch’s discovery will seek answers to:

  • Whether Clinton intentionally attempted to evade the Freedom of Information Act (FOIA) by using a non-government email system;
  • whether the State Department’s efforts to settle this case beginning in late 2014 amounted to bad faith; and
  • whether the State Department adequately searched for records responsive to Judicial Watch’s FOIA request.

Discovery is scheduled to be completed within 120 days. The court will hold a post-discovery hearing to determine if Judicial Watch may also depose additional witnesses, including Clinton and her former Chief of Staff Cheryl Mills.

Judge Lamberth ordered written responses under oath to Judicial Watch’s questions from Obama administration senior officials Rice, Rhodes and Sullivan, and former FBI official Priestap. Rice and Rhodes will answer interrogatories under oath on the Benghazi scandal. Rejecting the State and Justice Department objections to discovery on the infamous Benghazi talking points, Judge Lamberth reiterated:

Yet Rice’s talking points and State’s understanding of the attack play an unavoidably central role in this case: information about the points’ development and content, as well as their discussion and dissemination before and after Rice’s appearances could reveal unsearched, relevant records; State’s role in the points’ content and development could shed light on Clinton’s motives for shielding her emails from FOIA requesters or on State’s reluctance to search her emails.

Judicial Watch also may serve interrogatories on Monica Hanley, a former staff member in the State Department’s Office of the Secretary, and on Lauren Jiloty, Clinton’s former special assistant.

According to Lamberth’s order, regarding whether Clinton’s private email use while Secretary of State was an intentional attempt to evade FOIA, Judicial Watch may depose:

Eric Boswell, the former Assistant Secretary for Diplomatic Security.… Boswell’s March 2009 memo to Mills … discusses security risks Clinton’s Blackberry use posed more generally. And Boswell personally discussed the memo with Clinton. So, he plainly has relevant information about that conversation and about his general knowledge of Clinton’s email use. Judicial Watch may depose Boswell.

Justin Cooper. the Clinton Foundation employee who created the clintonemail.com server. In its proposal, Judicial Watch noted Cooper’s prior congressional testimony “appears to contradict portions of the testimony provided by Huma Abedin in the case before Judge Sullivan.” … Cooper repeatedly told Congress that Abedin helped set-up the Clintons’ private server, e.g., Examining Preservation of State Department Federal Records: [before a Congressional hearing] Abedin testified under oath she did not know about the server until six years later.… Judicial Watch may depose Cooper.

Clarence Finney, the former deputy director of State’s Executive Secretariat staff…. [T]his case’s questions hinge on what specific State employees knew and when they knew it. As the principal advisor and records management expert responsible for controlling Clinton’s official correspondence and records, Finney’s knowledge is particularly relevant. And especially given the concerns about government misconduct that prompted this discovery, Judicial Watch’s ability to take his direct testimony and ask follow-up questions is critical.

Additionally, Judicial Watch states that it seeks to go beyond cursory, second-hand testimony and directly ask Finney what he knew about Clinton’s email use. This includes asking about emails suggesting he knew about her private email use in 2014, and emails he received concerning a December 2012 FOIA request from Citizens for Responsible Ethics in Washington (CREW) regarding senior officials’ personal email use-topics State’s 30(b)(6) deposition in Judge Sullivan’s case never addressed. Judicial Watch may depose Finney.

4. Heather Samuelson. the former State Department senior advisor who helped facilitate State’s receipt of Hillary Clinton’s emails.… [T]his case turns on what specific government employees knew and when they knew it. Judicial Watch must be able to take their direct testimony and ask them follow-up questions. Judicial Watch may depose Samuelson.

5. Jacob Sullivan. Secretary Clinton’s former senior advisor and deputy Chief of Staff. The government does not oppose Sullivan’s deposition.

Regarding whether the State Department’s settlement attempts that began in late 2014 amounted to “bad faith,” Judicial Watch was granted depositions from the State Department under Rule 30(b)(6); Finney; John Hackett, the former deputy director of State’s Office of Information Programs & Services; Gene Smilansky, an attorney-advisor within State’s Office of the Legal Advisor; Samuelson; and others.

Judicial Watch was also granted interrogatories on whether the State Department adequately searched for responsive records, as well as several document requests.

“In a major victory for accountability, Judge Lamberth today authorized Judicial Watch to take discovery on whether the Clinton email system evaded FOIA and whether the Benghazi scandal was one reason for keeping Mrs. Clinton’s email secret,” said Judicial Watch President Tom Fitton.

“Today, Judicial Watch issued document requests and other discovery to the State Department about the Clinton email scandal. Next up, we will begin questioning key witnesses under oath.

The court-ordered discovery is the latest development in Judicial Watch’s July 2014 FOIA lawsuit filed after the U.S. Department of State failed to respond to a May 13, 2014 FOIA request (Judicial Watch v. U.S. Department of State (No. 1:14-cv-01242)). Judicial Watch seeks:

  • Copies of any updates and/or talking points given to Ambassador Rice by the White House or any federal agency concerning, regarding, or related to the September 11, 2012 attack on the U.S. consulate in Benghazi, Libya.
  • Any and all records or communications concerning, regarding, or relating to talking points or updates on the Benghazi attack given to Ambassador Rice by the White House or any federal agency.

The Judicial Watch discovery plan was in response to a December 6, 2018, ruling by Judge Lamberth.

Incredibly, Justice Department attorneys admit in a filing opposing Judicial Watch’s limited discovery that “Counsel for State contacted the counsel of some third parties that Plaintiff originally included in its draft discovery proposal to obtain their client’s position on being deposed.”This collusion occurred despite criticism from the Court that the DOJ engaged in “chicanery” to cover up misconduct and that career employees in the State and Justice Departments may have “colluded to scuttle public scrutiny of Clinton, skirt FOIA, and hoodwink this Court.

Judicial Watch countered that “[t]he government’s proposal, which is really nothing more than an opposition to [Judicial Watch’s] plan, demonstrates that it continues to reject any impropriety on its part and that it seeks to block any meaningful inquiry into its ‘outrageous misconduct.’”

As a reminder, this Judicial Watch FOIA lawsuit led directly to the disclosure of the Clinton email system in 2015.

end
David Stockman attacks the foolish New York times for the Trump smear we learned about over the weekend.
a must read…
(courtesy David Stockman)

Stockman Slams “Deep State Handmaid” NYTimes Over Trump Smear: “Are You F**king Kidding Me?”

Authored by David Stockman via The Ron Paul Institute for Peace & Prosperity,

The Donald has been on a red hot twitter rampage, and he’s completely justified. Actually, we didn’t think the Russian Collusion Hoax could get any stupider until we saw the New York Times’ Friday evening bushwhack.

The trio of authors, apparently self-tortured victims of the Trump Derangement Syndrome, actually had the gall to print a story in the once and former Gray Lady of journalistic rectitude which was nothing more than an ugly smear on the sitting President of the United States – one that would have done Joe McCarthy proud:

In the days after President Trump fired James B. Comey as FBI director, law enforcement officials became so concerned by the president’s behavior that they began investigating whether he had been working on behalf of Russia against American interests, according to former law enforcement officials and others familiar with the investigation.

The inquiry carried explosive implications. Counterintelligence investigators had to consider whether the president’s own actions constituted a possible threat to national security. Agents also sought to determine whether Mr. Trump was knowingly working for Russia or had unwittingly fallen under Moscow’s influence.

It doesn’t get lower than that. The only thing that they didn’t mention was presidential Treason, but it’s hard to say that “working in behalf of Russia against American interests” would constitute anything less.

So exactly what did the trio of wet behind the ears nincompoops at the New York Times—Adam Goldman, Michael Schmidt and Nicholas Fandos—dig up from the diarrhetic bowels of the FBI that warranted the above characterization?

Why, it is apparently the following, which is surely a red hot smoking gun. That is, one that condemns the FBI, not Trump; and shows that the NYT, which once courageously published the Pentagon Papers and had earned the above sobriquet for its journalistic stateliness, sense of responsibility and possession of high virtue, has degenerated into a War Party shill—not to say the journalistic equivalent of a comfort woman: Mr. Trump had caught the attention of FBI counterintelligence agents when…

…he called on Russia during a campaign news conference in July 2016 to hack into the emails of his opponent, Hillary Clinton. Mr. Trump had refused to criticize Russia on the campaign trail, praising President Vladimir V. Putin. And investigators had watched with alarm as the Republican Party softened its convention platform on the Ukraine crisis in a way that seemed to benefit Russia.

Well, for crying out loud!

Any journalist worth his salt would know that Trump’s July 2016 shout-out to the Russians was a campaign joke. At best, it was merely an attempt to cleverly state in one more way the running GOP theme about Hillary’s missing 30,000 emails. How many times before that had Sean Hannity delivered his riff about Hillary’s alleged hammer-smashing of 13 devices and acid-washing with BleachBit of the missing emails?

More importantly, how in the world of constitutional government, free speech, and contested elections does Trump’s refusal to criticize a foreign leader that we we’re not at war with constitute something worthy of a counter-intelligence investigation by the FBI?

Indeed, in the case of the Ukraine resolution at the GOP convention, the issue was about making the GOP’s prior pro-Ukraine platform even more hawkish, which Trump thought was a bad idea on policy grounds.

Besides, the Democratic platform ended up more dovish than the GOP’s final wording. And, no, the FBI didn’t think to investigate the Dems for being squishy soft on support for the crypto-Nazi’s who took control of Ukraine during an illegal, US funded/supported coup on the street of Kiev in 2014.

What we are saying is that the trio pictured  here—one of whom graduated from Harvard in 2015 and the other two not much older—don’t seem to even know that foreign policy is a debatable issue. Or that the American people actually voted into office a candidate who took the other side of Imperial Washington’s unwarranted demonization of Putin and made no bones about his desire for a rapprochement with Russia.

Actually, as to pursuing rapprochement, so did: 

  • JFK, after the near catastrophe of the Cuban Missile Crisis;
  • Lyndon Johnson, after the Seven Days War during his meeting with Kosygin at Glassboro NJ;
  • Richard Nixon, with the ABM Treaty, detente and his visit with Brezhnev in Moscow;
  • Jimmy Carter, when he signed the SALT-II agreement;
  • Ronald Reagan, when he went to Moscow to virtually end the Cold War; and
  • Bill Clinton, when he sent a multi-billion IMF aid package to Yeltsin to help him get re-elected in 1996.

The fact is, all of the above presidential policy initiatives were heatedly debated in Washington during a period when the US and Soviet Union each had roughly 9,000 nuclear warheads pointed at the other. But that did not lead to FBI counter-intelligence investigations of politicians—to say nothing of sitting Presidents—who took the “wrong” side of these thoroughly democratic debates.

And that includes the outright “peace” candidacies of Gene McCarthy and Bobby Kennedy in 1968 and George McGovern in 1972. Indeed, shortly thereafter it was the Church Committee in the US Senate that aggressively investigated the CIA and FBI, not the incipient Deep State which investigated the elected politicians of that era.

Stated differently, Senator Lloyd Bentsen would have to said to the trio pictured below, “I knew Neil Sheehan, David Halberstam and Seymour Hersh—and you are no Sheehan/Halberstam/Hersh!”

In that regard, your editor did not know the latter three personally back in the day. But those of us on the anti-war barricades during the Vietnam era read them assiduously; and we did not mistake their honest journalistic coverage of that calamitous foreign policy episode for Robert McNamara’s lie-filled talking points and genocidal “body counts”.

Indeed, back in those days mainstream journalists tended to be the nemesis of the Deep State (yes, it has existed ever since WWII), not it’s handmaid.

For instance, in the 1980s Congressman Ed Boland’s amendment stopped the effort of neocons in the Reagan Administration to undermine the duly elected “Sandinista” government of Nicaragua. But back then, the press went after the meddlers and interventionists in the national security bureaucracy, not Congressman Boland and the Congressional majority which voted to shackle the Deep State.

In fact, several of the Reagan meddlers went to prison—not to sinecures at CNN or NBC.

Moreover, the alleged “communist” threat in those days was on America’s doorstep in central America, not thousands of miles away on Russia’s doorstep, as in the case of the Ukraine and Crimea.

Have the three knuckleheads ever read a history book?

Do they not know, for instance, that there are virtually no Ukrainians in Crimea (the population is mainly Russian, Tartar etc.); that the latter was a integral province of Mother Russia for 171 years after it was purchased from the Ottomans by Catherine the Great in 1783; and that Crimea only was added as a territorial appendage to the Socialist Republic of the Ukraine in 1954 by the order of the Soviet Presidium as a door prize to the comrades in Kiev who had supported their favorite son, Nikita Khrushchev, in the bloody battle for Stalin’s succession?

Has it not occurred to them that when the scourge and historical anomaly of the Soviet Empire finally slithered off the pages of history that untangling the utterly artificial borders that had enslaved 350 million people might be a tad messy, and that the rump-state of Russia had a valid security interest in the manner in which it unfolded?

Likewise, did they perchance ever read the strident warnings of the father of Soviet containment and NATO, Professor George Kennan, about the foolishness of extending NATO to the very borders of Russia; and especially after Bush the Elder and his Secretary of State, James Baker, had promised Gorbachev in 1989 that in return for his acquiescence to unification of Germany that NATO would not be extended by “a single inch” to the east?

In fact, have they ever bothered to contemplate why NATO even exists any longer; or the anomaly of the North Atlantic Treaty Organization sending troops to the Hindu Kush to make war upon the Taliban tribesman who had actually defeated the Soviet Empire—and 27 years after the Soviet Union was no more?

That is to say, in the whole ragged to-and-fro of post-Soviet eastern Europe and Washington’s arrogant claim to sole superpower status, is it really so hard to see that there are two sides to the debate; and that dissent from Washington’s hegemonic claim to say what can and can’t happen in Kiev, the Donbas and Crimea is actually the more rational course, and certainly not tantamount to treason?

Or consider what happened to Ronald Reagan’s misbegotten infatuation with the Star Wars will-o-wisp of a nuclear shield. The latter had the military-industrial complex drooling over the implied trillions (in today’s $) of funding, and the Deep State giddy
with the thought that the putative Star Wars shield would unleash it from the bonds of MAD (mutual assured destruction) and thereby open the path t0 US global hegemony.

Needless to say, the intrepid mainstream journalists of the 1980’s still had the Sheehan/Halberstam/Hersh investigative spirit and courage about them. It did not take too many years for their exposes to make Star Wars the laughingstock it actually was, and for their rebukes to the Deep State narrative to embolden the bipartisan opposition on Capitol Hill to essentially shut it down.

At the end of the day, there is no other way to say it. The Goldman/Schmidt/Fandos types of the present era are not journalists at all; they are lazy, intellectually corrupted, mendacious stenographers of Imperial Washington’s oppressive group think.

After all, only a decade or two ago any journalist who typed the words “….whether Mr. Trump was knowingly working for Russia or unwittingly fallen under Moscow’s influence” would have suffered tremors and palpitations for the very phrasing of it.

Don’t these kids know them thar words is McCarthyite code for unmasking commie traitors?

Here’s the thing. Until the groupthink of the Imperial City congealed into what amounts to worship of the Warfare State after 9/11, any self-respecting journalist who discovered that the FBI had opened a counter-intelligence investigation of a sitting president for the preposterous reasons outlined in the NYT story would have been all over this insidious affront to constitutional government like a screaming banshee.

That is, under what imaginable constitutional scheme does a second tier law enforcement agency have the prerogative to investigate the duly elected President because he fired the FBI director for good cause; rejected the prevailing anti-Russia foreign policy for solid reasons of national interest; and knew that the Russian collusion meme was Democrat sour grapes for loosing the election and said so publicly, loudly and frequently, as is his prerogative?

In the old days, journalists often had the integrity and summoned the courage to speak truth to power. By contrast, the trio of sanctimonious brats pictured above were too lazy, stupid or mendacious to even connect the dots.

That is, this ballyhooed counter-intelligence investigation was launched the very next day after Comey was fired by two of the most compromised people in the entire Obama Administration posse of anti-Trump election meddlers–if not criminals—led by former CIA director John Brennan.

We are referring to the acting FBI director Andrew McCabe, later fired for leaking to the media and lying about it and his legal council, Lisa Page. After the release of literally tons of anti-Trump SMS messages with her lover-boy, the FBI agent Peter Strzok, over the past 12 months what kind of self-respecting journalists would not see the red flags flying in every direction?

By now any one who knows how to Google, also knows or should know that Strzok and Page sent text messages that suggest they were discussing opening up a counterintelligence investigation against Trump even before Comey’s firing. And when it happened, their exchanges left no doubt:

“And we need to open the case we’ve been waiting on now while Andy is acting,” Strzok wrote to Page on the day of Comey’s ouster.

So there you have it. McCabe, Strzok and Page are Deep Staters if the term has any meaning at all. Yet here is why Lisa Page thought Trump was such a threat to national security that she and her colleagues were justified in unilaterally suspending the constitution and prosecuting the elected President of the people because they disagreed with his foreign policy positions.

Indeed, by her own closed door testimony to the House committee (now leaked) it is obvious that Lisa Page is a light-weight numbskull when it comes to thinking about national security. For it turns out, she doesn’t even claim that Russia is a military threat to America or that Putin has aggressive intents for territorial conquest.

No, it seems his sin is that he doesn’t embrace Washington’s self-conferred role as the Indispensable Nation and may even be in mind of thwarting Washington’s noble effort to spread “our democratic ideals” and bring the blessings of Coca-Cola, long pants and the ballot box to the otherwise benighted peoples of the planet.

You only need a decent regard for the mayhem that the Washington War party has brought to the world—from the jungles of the Mekong Valley, to the Hindu Kush, to Mesopotamia, the Levant, North Africa and Latin America, too—to say are you f*cking kidding?

‘In the Russian Federation and in President Putin himself, you have an individual whose aim is to disrupt the Western alliance and whose aim is to make Western democracy more fractious in order to weaken our ability, America’s ability and the West’s ability to spread our democratic ideals,’ Lisa Page, a former bureau lawyer, told House investigators in private testimony reviewed by The Times….. ‘That’s the goal, to make us less of a moral authority to spread democratic values,’ she added. Parts of her testimony were first reported in the Epoch Times.

Many involved in the case viewed Russia as the chief threat to American democratic values.

‘With respect to Western ideals and who it is and what it is we stand for as Americans, Russia poses the most dangerous threat to that way of life,’ Ms. Page told investigators for a joint House Judiciary and Oversight Committee investigation into Moscow’s election interference.

As to the last bolded line, we will not bother to wonder how a pint-sized economy of $1.5 trillion compared to America’s $20 trillion and all of NATO’s $36 trillion, with a military budget of $61 billion compared to NATO $1.05 trillion, is going to do what Khrushchev failed to do—bury us!

So we fully appreciate why the Donald is on the rampage…

‘Wow, just learned in the Failing New York Times that the corrupt former leaders of the FBI, almost all fired or forced to leave the agency for some very bad reasons, opened up an investigation on me, for no reason & with no proof, after I fired Lyin’ James Comey, a total sleaze!’ the president tweeted.

‘Funny thing about James Comey,’ he continued. ‘Everybody wanted him fired, Republican and Democrat alike. After the rigged & botched Crooked Hillary investigation, where she was interviewed on July 4th Weekend, not recorded or sworn in, and where she said she didn’t know anything (a lie).’

‘the FBI was in complete turmoil (see N.Y. Post) because of Comey’s poor leadership and the way he handled the Clinton mess (not to mention his usurpation of powers from the Justice Department). My firing of James Comey was a great day for America.’

“He was a Crooked Cop,” Saturday’s tweetstorm concluded, “who is being totally protected by his best friend, Bob Mueller, & the 13 Angry Democrats – leaking machines who have NO interest in going after the Real Collusion (and much more) by Crooked Hillary Clinton, her Campaign, and the Democratic National Committee. Just Watch!”

, and in this instance, couldn’t more wholeheartedly agree.

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

 

US Trade Rep Lighthizer saw little progress in last week’s China trade talks, Sen Grassley says

https://www.cnbc.com/2019/01/15/us-trade-rep-lighthizer-saw-little-progress-in-last-weeks-china-trade-talks-sen-grassley-says.html

But Draghi and KC Fed President George rode to the rescue of expiry manipulators.

The Fed’s most hawkish official, Ester George, stated that the Fed should pause its rate hikes.  Draghi did his usual shtick.  The expiry upward manipulation and squeeze on the DPY 260 calls was a go!

The Fed’s Esther George indicates it’s time for a pause from rate hikes

https://www.cnbc.com/2019/01/15/the-feds-esther-george-indicates-its-time-for-a-pause-from-rate-hikes.html

Draghi Warns Lawmakers Eurozone Economy Is Weaker Than Expected

‘There is no room for complacency,’ ECB president says at European Parliament

    “A significant amount of monetary-policy stimulus is still needed to support the further buildup of domestic price pressures and headline inflation.”…

https://www.wsj.com/articles/draghi-warns-lawmakers-eurozone-economy-weaker-than-expected-11547571022

There was hiccup during the penultimate hour of US trading when May suffered a humiliating defeat on Brexit.  But the desire to manipulate ESH and stocks for expiration is extraordinarily strong.  So the rally resumed after a thirty minute stock downdraft on the rejection of May’s Brexit Plan.

Behold the power and glory of the expiry manipulation!  It happens for most expirations; but far too many Street denizens still ‘don’t get it’ or plan for it.

British Prime Minister Theresa May suffers devastating defeat on key Brexit vote

https://www.foxnews.com/world/british-prime-minister-theresa-may-suffers-devastating-defeat-on-key-brexit-vote

@rtenews: Jeremy Corbyn tells the EU reopening Brexit negotiations cannot be ruled out

Tech stocks led the rally because they are led by trading sardines, which are favored for the expiry manipulation – and traders buy them ahead of earnings releases – a daily double!

Lost in the expiry manipulated rally was this key provision in the Fed Beige Book: Most Fed Directors Saw Rising Downside Risks Ahead of Dec. FOMC.

 

Former top FBI lawyer James Baker subject of criminal media leak probe, transcript reveals

They understand it began during the Obama administration and not in the course of the Russia investigation… https://www.foxnews.com/politics/former-top-fbi-lawyer-james-baker-is-subject-of-federal-media-leak-probe-transcript-reveals

 

Byron York: What really happened with the GOP platform and Russia

In the end, nothing was taken out of the party’s original draft platform on Russia. At Denman’s behest, and with Trump’s approval, the platform was made tougher with language pledging ongoing and possibly increased sanctions. It was also made tougher with Denman’s reference to “NATO defense planning,” which had not been in the original draft…

    Some Democrats, Republican NeverTrumpers, and their allies in the press portrayed the platform meeting in Cleveland as Donald Trump selling out the GOP to Putin.  They were helped in their efforts by a July 18, 2016, story in the Washington Post with the headline, “Trump campaign guts GOP’s anti-Russia stance on Ukraine” — a blatantly false description of events [The FBI was corrupt or stupid.]

https://www.washingtonexaminer.com/byron-york-what-really-happened-with-the-gop-platform-and-russia

McCabe’s FBI Tried to Re-engage Christopher Steele after Comey Was Fired

Transcript of congressional testimony by DOJ official Bruce Ohr shows FBI went back to disgraced source between Comey’s firing and Mueller’s appointment

https://www.theepochtimes.com/mccabes-fbi-tried-to-re-engage-christopher-steele-after-comey-was-fired_2766822.html

Congressional Democrats boycott White House meeting to discuss border security, end to partial government shutdown      https://www.foxnews.com/politics/democrats-boycott-white-house-lunch-meeting

end

I WILL SEE YOU ON THURSDAY
H
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