JAN 17/GOLD DOWN $1.10 TO $1292.80/SILVER DOWN 9 CENTS//PALLADIUM HITS A RECORD 1400.00 PER OZ/ TO $15.51/ANOTHER MASSIVE 3.895 MILLION OZ OF SILVER LEAVES THE SLV/ THE DOW RISES 163 POINTS ON FALSE TRADE NEWS: NASDAQ RISES 50 POINTS/CHINA INJECTS A MASSIVE STIMULUS INTO THE MARKETS (OVER ONE TRILLION YUAN)/HONG KONG FLASH CRASHES LAST NIGHT/ANOTHER SCANDAL BREWING IN CHINA AS DEFAULTS ARE ESCALATING/CHINA’S SHIPPING RATES PLUMMET AS DOES THE BALTIC DRY INDEX AS THE GLOBAL ECONOMY CONTRACTS/HUGE SWAMP STORIES FOR YOU TONIGHT!!//

 

 

 

GOLD: $1292.80 DOWN $1.10 (COMEX TO COMEX CLOSINGS)

Silver:   $15.51 DOWN 9 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1292.30

 

silver: $15.53

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 0 NOTICE(S) FOR nil OZ (0.000 tonnes)

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

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

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

 

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

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3571: DOWN 19

 

Bitcoin: FINAL EVENING TRADE: $3606 UP   $17 

 

end

 

XXXX

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

today 0/0

 

 

 

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST ROSE BY AN FAIR SIZED 989 CONTRACTS FROM 191,922 UP TO 192,911 DESPITE YESTERDAY’S  0 CENT PERFORMANCE  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:

1396 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1396 CONTRACTS. WITH THE TRANSFER OF 1396 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 1396 EFP CONTRACTS TRANSLATES INTO 6.981 MILLION OZ  ACCOMPANYING:

1.THE 0 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 5.625 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: 28,974 CONTRACTS (FOR 12 TRADING DAYS TOTAL 28,974 CONTRACTS) OR 144.870 MILLION OZ: (AVERAGE PER DAY: 2415 CONTRACTS OR 12.073 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  144.87 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 20.69% 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:           144.87    MILLION OZ.

 

 

 

RESULT: WE HAD A STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 989 DESPITE THE 0 CENT FALL IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1396 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 STRONG SIZED: 2385 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1396 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 989 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 0 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: 124 NOTICE(S) FOR 620,000 OZ OF SILVER

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

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

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ  AND NOW JANUARY AT  5.625 MILLION OZ.
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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

 

IN GOLD, THE OPEN INTEREST FELL BY A TINY SIZED 392 CONTRACTS DOWN TO 501,213 DESPITE THE GAIN IN THE COMEX GOLD PRICE/(A RISE IN PRICE OF $5.40//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A GOOD  SIZED 7276 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 7276 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 501,213. 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 GOOD SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 6,884 CONTRACTS: 392 OI CONTRACTS DECREASED AT THE COMEX AND 7276 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN:  6,884 CONTRACTS OR 688400 OZ = 21.41 TONNES. AND ALL OF THIS STRONG DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF   $5.40

 

 

 

 

 

YESTERDAY, WE HAD 11,496 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 98,201 CONTRACTS OR 9,820,100 OZ  OR 305.45 TONNES (12 TRADING DAYS AND THUS AVERAGING: 8183 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 12 TRADING DAYS IN  TONNES: 305.45 TONNES

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

THUS EFP TRANSFERS REPRESENTS 305.45/2550 x 100% TONNES = 11.97% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     305.45  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 TINY SIZED DECREASE IN OI AT THE COMEX OF 392 DESPITE THE GAIN IN PRICING ($5.45) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7276 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 7276 EFP CONTRACTS ISSUED, WE HAD ANOTHER GOOD GAIN OF 6,884 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

7276 CONTRACTS MOVE TO LONDON AND 392 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 21.41 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE RISE OF $5.40 IN YESTERDAY’S TRADING AT THE COMEX??????????.  THIS IS THE 4TH STRAIGHT DAY THAT WE RECORDED STRONG RISES IN OI ON BOTH EXCHANGES!

 

 

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

 

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

GLD...

 

WITH GOLD DOWN $1.10 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 DOWN 9 CENTS IN PRICE  TODAY:

 

 

A HUGE CHANGE IN SILVER INVENTORY/

 

WE HAD A MASSIVE WITHDRAWAL OF 3.895 MILLION OZ ON SUCH A TINY LOSS IN PRICE??/

GLD AND SLV ARE MASSIVE FRAUDS

 

 

 

 

/INVENTORY RESTS AT 307.110 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 GOOD SIZED 989 CONTRACTS from 191,920 UP TO 192,911  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:

 

1396 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1396 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 989 CONTRACTS TO THE 1396 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN  OF 2385  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 11.93 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 5.625 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 0 CENT PRICING FALL THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A GOOD SIZED 1396 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 10.79 PTS OR 0.42% //Hang Sang CLOSED DOWN 146.47 POINTS OR 0.54% /The Nikkei closed DOWN 40.48  PTS OR .20%/ Australia’s all ordinaires CLOSED UP 0.27%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7709 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 51.28 dollars per barrel for WTI and 60.21 for Brent. Stocks in Europe OPENED /RED 

//ONSHORE YUAN CLOSED DOWN AT 6.7709 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7805: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

 

 

i)North Korea/South Korea/USA/CHINA

 

 

 

b) REPORT ON JAPAN

 

 

 

3 C/  CHINA

 

 

 

i)CHINA

for three days in a row, China has unleashed massive liquidity:  the total sum  1.1 trillion yuan or 162.96 billion dollars worth of stimulation..and that is huge.

( zerohedge)

 

ii)This is unbelievable:  Hong Kong stocks suddenly plummet in an avalanche of flash crashes and that spread to other stocks.  Nobody knows what was going on to cause this flash crash

( zerohedge

 

 

iii)This is a fascinating story.  The following Chinese company defaulted on a bond even though their reported cash by 15 times the entire due debt.  Obviously the accounting was fraudulent and most likely we will begin many of these

( zerohedge)

 

4/EUROPEAN AFFAIRS

i)EUROPE/

 

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

We have been pointing this out to you for quite a while:  Russia’s resilience in the face of sanctions.

It’s economy is set to overtake Germany in the next decade, albeit that they have a lot more citizens than Germany

( zerohedge)

 

 

 

6. GLOBAL ISSUES

Shipping data, into China and out flashes red as Chinese shipping rates collapse along with the Baltic dry index

( zerohedge)

7. OIL ISSUES

 

 

 

 

8 EMERGING MARKET ISSUES

 

 

 

 

 

9. PHYSICAL MARKETS

i)The turmoil in the markets is drawing investors into gold
( London’s Financial Times/Sanderson/GATA)
ii)Seems that Newmont CEO’s Goldberg is very unenthusiastic about the prospects for gold. Chris Powell believes that he is quite content with central bank intervention in his medium.( TomDiChristopher/CNBC/GATA)

iii)A good history lesson today as Konig describes the affinity to gold for early Californians

( JPKonig/GATA)

iv)A very important read.  Tom Luongo is not a gold bug.  However he notes that gold in euro terms is rising and breaking out along with Gold/Br Pound.  He is stating that Europeans are now turning to gold as a safe haven.
a must read..
( Tom Luongo)

v)Palladium hit $1400.00 per oz on supply problems.  The demand for Palladium rose to 8.5 million oz with production at 7.5 million oz.  Thus above ground palladium must be used to satisfy demand.  Very shortly will be Platinum use in cars increase because of the lack of Palladium.

two commentaries

(Scrap register and Bloomberg)

vi)Sam Zell is the real estate king on Wall Street. He has never bought any gold in his 77 year old life. His gives his reasons why he is buying gold.

( zerohedge)/Sam Zell)

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

 

 

MARKET TRADING

They should throw these guys into jail:  first stocks rise then fade after the treasury denies reports that the uSA is weighing lifting Chinese tariffs to calm markets

( zerohedge)

ii)Market data/

i)It seems that most of the big boys are having trouble in the fixed income department. Now, it is 5 out of 5 big investment banks have reported disappointing FICC revenue.(MORGAN STANLEY)

( zerohedge)

ii)Soft data, USA’s Bloomberg Confidence Index collapsed and the biggy was economic hope
( zerohedge)
iii)the housing sector is a big part of GDP in the uSA. Sales are plunging and home prices are rising at the slowest pace in 6 years

(courtesy zero hedge)

iii)USA ECONOMIC/GENERAL STORIES

a)Goldman Sachs warns of a big hit to the economy as the rich cut their spending once they see how badly they are doing with their stocks.

( zerohedge)

b)My goodness!  This did not take long:  for the second time in only two years, children’s clothing retailer Gymboree Group has filed for chapter 11 as the bloodbath in the retail space continue! They reported that they had poor holiday sales.  Also dept store Shopko filed.

(courtesy zerohedge)

c)Sears accepts a $5.2 billion dollar rescue package from its big owner/investor Eddie Lampert

( zerohedge)

iv)SWAMP STORIES

This is quite a story…John Solomon receives tips from committee members concerning the Bruce Ohr testimony. Bruce Ohr warned the FBI of the Clinton connection with respect to the Steele dossier as well as its possible bias.  Ohr told the FBI a lot earlier than thought..well before Steele was fired..and well before the FISA warrants were issued. Not only that but Ohr meet with Mueller’s top lieutenant Weissmann and briefed him on the issues well before the Mueller investigation started. The key point here is that the FBI knew that the Steele dossier was suspect and not verified but they went ahead and filed with the FISA court anyway.  A lot of people will be going to jail on this.

(courtesy zerohedge)

b)funny: Trump cancels Pelosi’s foreign trip (using a military plane) because of the shutdown.  However if she wants to fly commercial that is up to her but she has to pay for it.

(courtesy zerohedge)

c)This is getting crazier by the minute:  We now have a Belarus hooker arrested in Moscow and she claims to be the Trump-Russia missing link
(zerohedge)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  FELL BY AN TINY SIZED 392 CONTRACTS DOWN TO A LEVEL OF 501,213 WITH THE GAIN IN THE PRICE OF GOLD ($5.40) 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 GOOD SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 7276 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  7276 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  7276 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:  6,884 TOTAL CONTRACTS IN THAT 7276 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A TINY SIZED 392 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 6884 contracts OR 688,400  OZ OR 21.41 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 51 contracts as we LOST 3 contracts. We had 3 notices filed on yesterday so we gained 0 contracts or NIL ADDITIONAL oz will stand for delivery as these guys refused to morph into London based forwards as well as negate a fiat bonus.

 

 

The next active delivery month is February and here the OI lost by 5593 contracts DOWN to 234,776 contracts.  After February, March LOST 10 contracts to stand at 701.  After March, the next big delivery month is April and here the OI rose by 2816 contracts up to 170,906 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 0 NOTICES FILED AT THE COMEX FOR NIL OZ. (0..0000 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BY A FAIR SIZED 989 CONTRACTS FROM 191,922 UP TO 192,911(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 0 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 481 CONTRACTS HAVING LOST 3 CONTRACTS FROM YESTERDAY.  WE HAD 7 NOTICES FILED ON YESTERDAY, SO WE GAINED 4 CONTRACTS OR  20,000 ADDITIONAL OZ OF SILVER WILL STAND FOR SILVER AS THESE GUYS REFUSED TO  MORPH INTO LONDON BASED FORWARDS AS WELL AS NEGATING A FIAT BONUS. QUEUE JUMPING IS THE NORM AT THE SILVER COMEX AS THE DEALERS SCRAMBLE FOR WHATEVER PHYSICAL THEY CAN OBTAIN.

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH IS FEBRUARY AND HERE THE OI FELL BY 1 CONTRACT DOWN TO 459. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI ROSE BY 1983 CONTRACTS UP TO 144,533 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 2385 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  989 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1396 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  2385 CONTRACTS...AND ALL OF THIS STRONG DEMAND OCCURRED WITH A 0 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 124 notice(s) filed for 620,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  189,559 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  211,768  contracts

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

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 17/2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
160.75 oz
Scotia
5 kilobars
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
0 notice(s)
 NIL 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 1 kilobar entries

 

we had 0 deposits into the customer account

 

total gold customer deposits;  NIL oz

 

we had 1 gold withdrawals from the customer account:

i) Out of Scotia: 160.75 oz

 

 

 

total gold withdrawing from the customer;  160.75 oz

 

we had 1  adjustments….
i) Out of Brinks:
we have 192.453 oz adjusted out of the customer and this landed into the dealer account of Brinks

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 0 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 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. (51 contract) minus the number of notices served upon today (0 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)  + {51)OI for the front month minus the number of notices served upon today (0 x 100 oz )which equals 59,200 oz standing OR 1.841 TONNES in this NON  active delivery month of JANUARY.

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

.

 

 

 

 

 

THERE ARE ONLY 23.11 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:  743,019.277 oz or   23.11 tonnes
total registered and eligible (customer) gold;   8,408,064.737 oz 261.52 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 17, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
1,332,764.878 oz
Brinks
CNT
Scotia

 

 

Deposits to the Dealer Inventory
600.651.900 oz
Brinks
CNT
Deposits to the Customer Inventory
299,711.270 oz
Brinks
No of oz served today (contracts)
124
CONTRACT(S)
620,000 OZ)
No of oz to be served (notices)
357 contracts
1,785,000 oz)
Total monthly oz silver served (contracts) 768 contracts

(3,840,000 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 2 inventory movement at the dealer side of things

i) Into Brinks:  15,187.500 oz

ii) Into CNT: 587,464.400 oz

total dealer deposits:  600,651.900  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 Brinks:  299,711.270 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 299,711.270   oz

we had 3 withdrawals out of the customer account:
i) Out of Brinks:  600,171.674 oz
ii) Out of CNT: 91,624.840 oz
iii) Out of Scotia; 640,964.840 oz

 

 

 

 

 

total withdrawals:  1,332,764.878   oz

 

we had 2 adjustments and  both of these are settlements

i) Out of CNT:  19,523.520 oz was adjusted out of the dealer and this landed into the customer account of CNT

ii) Out of Scotia 34,323.290 oz was adjusted out of the dealer and this landed into the customer account of Scotia

 

 

total dealer silver:  84.831 million

total dealer + customer silver:  292.725 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 124 contract(s) FOR 680,000  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 768 x 5,000 oz = 3,840,000 oz to which we add the difference between the open interest for the front month of JAN. (481) and the number of notices served upon today (124x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 768(notices served so far)x 5000 oz + OI for front month of JAN( 481) -number of notices served upon today (124)x 5000 oz equals 5,625,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 4 contracts or an additional 20,000 oz will  stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

 

 

 

 

 

 

 

 

 

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TODAY’S SILVER VOLUME:  51,806 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 66,965 CONTRACTS… 

volumes at the comex now increasing for silver

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 66,965 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 FALLS TO -3.58% (JAN 17/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.34% to NAV (JAN 17 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.58%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.12/TRADING 12.64/DISCOUNT 3.59

END

And now the Gold inventory at the GLD/

JAN 17/WITH GOLD DOWN $1.10: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

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

 

 

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JAN 17/2019/ Inventory rests tonight at 797.71 tonnes

*IN LAST 536 TRADING DAYS: 137.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 436 TRADING DAYS: A NET 22.55 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 17/WITH SILVER DOWN 9 CENTS TODAY:ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV; A MASSIVE WITHDRAWAL OF 3.895 MILLION OZ./INVENTORY RESTS AT 311.005 MILLION OZ/

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 17/2019:

 

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 2.28/ and libor 6 month duration 2.86

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

G0LD LENDING RATE: + .58

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.58%

LIBOR FOR 12 MONTH DURATION: 3.03

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.45

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Political Turmoil in UK & US Sees Gold Hit 2 Week High

For first time in over 16 years, palladium futures settle at a premium to gold futures

Gold futures on Wednesday resumed their climb toward the psychologically important price of $1,300 an ounce, settling at their highest in nearly two weeks on the back of political turmoil in the U.K. and U.S.

Caution among traders had deepened “ahead of a no-confidence vote on British Prime Minister Theresa May’s government and other geopolitical risks, including the U.S. government shutdown, loom large in investors minds,” said Mark O’Byrne, research director at GoldCore.

“Physical demand for gold coins and bars has picked up in the U.K. and Ireland, due to Brexit and U.K. political uncertainty,” he added.

Excerpt of article and full article can be accessed on MarketWatch here.

Watch Our Latest Video Updates On YouTube Here

 

News and Commentary

Gold at highest in nearly 2 weeks on political turmoil in the U.K., U.S. (MarketWatch.com)

Palladium prices hit record on supply deficit, gold firm on rate views (Reuters.com)

Theresa May’s government survives a no-confidence vote after its crushing Brexit defeat (CNBC.com)

Shutdown could delay trade talks with EU, Japan, Grassley warns (MarketWatch.com)

Pessimism About U.K. Housing Is at Its Worst in Two Decades (Bloomberg.com)

Turkey set to refine more Venezuelan gold as Maduro sends committee (AhvalNews.com)

South African Gold Output Has Longest Losing Streak Since 2012 (Bloomberg.com)

Geopolitical risks, including the U.S. government shutdown, loom large in investors minds,” said GoldCore
(MarketWatch.com)

Goldman Says Rich People Will Drag Down the U.S. Economy by Spending Less (Bloomberg.com)

London house prices:Brexit ‘horror show’ provokes fears of steeper decline (HomesAndProperty.co.uk)

‘Patron Saint’ of the Investing Business: Remembering Jack Bogle (Bloomberg.com)

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

Polgar: “World Is Comfortably Unaware Of Approaching Disaster” (ZeroHedge.com)

The Newmont-Goldcorp Deal Is Positive News for Gold Sector (GoldSeek.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

16 Jan: USD 1,290.50, GBP 1,002.46 & EUR 1,130.99 per ounce
15 Jan: USD 1,289.35, GBP 1,002.99 & EUR 1,127.67 per ounce
14 Jan: USD 1,293.70, GBP 1,007.02 & EUR 1,129.27 per ounce
11 Jan: USD 1,298.80, GBP 1,012.91 & EUR 1,123.96 per ounce
10 Jan: USD 1,292.40, GBP 1,012.98 & EUR 1,121.54 per ounce
09 Jan: USD 1,281.30, GBP 1,006.41 & EUR 1,118.32 per ounce
08 Jan: USD 1,291.90, GBP 1,006.71 & EUR 1,121.62 per ounce

Silver Prices (LBMA)

16 Jan: USD 15.54, GBP 12.09 & EUR 13.66 per ounce
15 Jan: USD 15.60, GBP 12.13 & EUR 13.65 per ounce
14 Jan: USD 15.61, GBP 12.13 & EUR 13.61 per ounce
11 Jan: USD 15.68, GBP 12.23 & EUR 13.60 per ounce
10 Jan: USD 15.70, GBP 12.33 & EUR 13.63 per ounce
09 Jan: USD 15.62, GBP 12.27 & EUR 13.64 per ounce
08 Jan: USD 15.64, GBP 12.24 & EUR 13.64 per ounce

Recent Market Updates

– Gold Holds Steady Over €1,100/oz – Increased Possibility Of A Disorderly Brexit
– Turbulence and Brexit Make Safer Options Like Gold and Cash Essential
– 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

Mark O’Byrne
Executive Director
GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER
The turmoil in the markets is drawing investors into gold
(courtesy London’s Financial Times/Sanderson/GATA)

Wary investors drawn to gold’s allure

 Section: 

By Henry Sanderson and Neil Hume
Financial Times, London
Monday, January 15, 2019

If gold is anything to go by, investors are increasingly anxious about the state of the world.

Volatile equity markets and fears of a global economic slowdown have helped gold rally 10 per cent from its August lows, putting it among the best performing metals over that period.

It is a sharp contrast to much of the past two years, when rising US interest rates, a strong dollar, and buoyant equity markets hurt gold bugs and the shares of miners such as Barrick Gold, Newmont Mining and Goldcorp. And when there was a correction in US stocks in early 2018, the gold price failed to benefit.

… 

 

Almost a year on, the big question is whether 2019 could prove a profitable year to own gold, which is typically bought as hedge or haven by investors.

The amount of physical gold in exchange traded funds has risen to 71.9 million ounces, close to the record high of 72 million touched in May 2018.

“We haven’t seen flows like this since the first half of 2016, when the gold market really took off,” says Joe Foster, a portfolio manager at VanEck in New York.

“There seems to be a change in sentiment and investor psychology. People are waking up to the fact that we are late in the economic cycle and we could be ending it in the next year or two. That brings more risk into the system. That’s why gold is moving up.” …

Some investors believe rising concerns over US debt levels could sharpen gold’s allure, according to John Hathaway, a senior portfolio manager at Tocqueville Asset Management in New York.

Last week Fitch Ratings warned that a continued government shutdown in the US could lead to a credit downgrade on the country’s debt, which is rated AAA by the agency.

“The US is beginning to sport a debt-to-GDP ratio worthy of any banana republic,” says Mr Hathaway. “We believe that exposure to gold is both timely and potentially rewarding.”

Higher levels of debt will also make it hard for the Fed to raise rates and tighten monetary policy, adds Trey Reik, a senior portfolio manager at Sprott Asset Management in Connecticut.

“I do think the dollar is in the midst of a long-term weakening,” he says. “You cannot raise rates with that much debt in the system without causing economic collapse.”

The buying of gold by central banks is also at its highest level since 2015, as many authorities remain keen to diversify away from the dollar. …

For the remainder of the report:

https://on.ft.com/2FutTpl

* * *

Help keep GATA going:

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

end

Seems that Newmont CEO’s Goldberg is very unenthusiastic about the prospects for gold. Chris Powell believes that he is quite content with central bank intervention in his medium.

(courtesy TomDiChristopher/CNBC/GATA)

Newmont CEO is unenthusiastic about prospects for gold price

 Section: 

He sounds content with central bank intervention against monetary metal.

* * *

Newmont Mining CEO Says Goldcorp Deal is Designed to ‘Survive’ a Drop in Gold Price

By Tom DiChristopher
CNBC, New York
Wednesday, January 16, 2019

Newmont Mining’s $10 billion purchase of Goldcorp does not mean the metals miner is making a bullish call on gold, according to CEO Gary Goldberg.

Instead, the global gold and copper miner is seeking to optimize Goldcorp’s assets during a period when the cost of the yellow metal has flat-lined and the industry is undergoing significant consolidation.

We’re designing our business to survive through the cycles in prices. We’re not predicting an up or down,” Goldberg told CNBC.

“As we go through our longer-term plans, we use a $1,200 gold price and we’re really focused on returns and making sure that any project, any business” can justify going forward. …

… For the remainder of the report:

https://www.cnbc.com/2019/01/16/newmont-says-goldcorp-deal-designed-to-s…

* * *

… 

END

A good history lesson today as Konig describes the affinity to gold for early Californians

(courtesy JPKonig/GATA)

J.P. Koning: How California stayed with gold when the rest of the U.S. adopted fiat money

 Section: 

9:15p ET Wednesday, January 16, 2019

Dear Friend of GATA and Gold:

Bullion Star’s J.P. Koning tonight reviews early California’s attachment to gold as money and its rejection of the U.S. national government’s fiat currency “greenbacks” during the Civil War. Koning concludes that the primary determinant of currency use is whatever most people are using, even if the majority’s currency is steadily devaluing.

Koning’s analysis is headlined “How California Stayed with Gold When the Rest of the U.S. Adopted Fiat Money” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/jp-koning/how-california-stayed-with-g…

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.

A very important read.  Tom Luongo is not a gold bug.  However he notes that gold in euro terms is rising and breaking out along with Gold/Br Pound.  He is stating that Europeans are now turning to gold as a safe haven.
a must read..
(courtesy Tom Luongo)

Euro-Gold Ratio Is A Canary In The Monetary Coalmine

Authored by Tom Luongo,

For weeks I’ve been telling my subscribers that something changed in the gold market. Since Donald Trump’s election there was a pretty clear pair trade between the U.S. dollar and gold.

And that trade was most manifested in the price of gold in euros.

During last summer gold experienced its worse (in terms of time) downtrend of the seven-year bear market.

But since bottoming in October it has rallied, albeit weakly. It is still mired in that bear market, gamely trying to push through the $1300 barrier. The important zone is the $1365-75 post-Brexit vote area.

And with Brexit very much up in the air at this point, despite the best efforts to project otherwise by The Davos Crowd and their political/media quislings, gold’s relative weakness is a real worry for long-suffering gold bulls.

While the currently monthly chart is a mildly-bullish uptrend, and has been since December 2015, it is a counter-trend withing a broader bear market that has not finished.

But, we know all this. Nothing about gold has been interesting for months. Newmont Minng (NYSE:NEM) and Goldcorp (NYSE:GG) announced a huge merger the other day, funds are scrubbing gold from both their names and their portfolios, investors have lost all interest.

That is because the real story is not what’s happening in the U.S., and consequently the dollar, it is Europe.

And this is reflected in the euro.

As I said at the beginning, the election of Donald Trump created a very strong pair trade between the euro and gold. Since the October bottom, however, that trade is breaking down.

Look at the strength of the move by gold in euros since the October low. This is now challenging the 2018 high — a triple top breakdown — and hinting at a push towards €1200.

This is a far more bullish move than we saw in dollars. And it says that the breakdown in gold last summer may very well be the false move to get everyone on the wrong side of the trade.

New bull or bear markets happen only when a significant majority of actors are betting with the current trend which has played out. Once everyone is a bull there are no more buyers and vice versa.

It also screams that investors are now looking at gold as a safe-haven play again and it is not purely trading as a currency pair. There is a new dynamic at play that hasn’t been there, frankly, since the run up to Brexit.

Moreover, it has been plainly obvious watching the day-to-day trading of both gold and the euro that there is a concerted effort to manage this price level.

Gold isn’t breaking out in Japanese Yen or Swiss Francs, at this point only the euro and the British pound.

So despite the Project Fear mongers, gold is making the right noises about where things are heading. Gold’s primary role is as a check on the public’s confidence of political institutions.

A secular bull market only happens when Gold is rising against every government currency. Given the importance of the EU to the global trade and financial status quo a breakdown there politically has the potential to turn a localized bull market into a secular one.

end

An email from Nicholas B to Bill Murphy and myself: an excellent analogy to gold/silver

Building Sand

Good Morning Bill/Harvey,

The availability and supply of quality building sand will soon become a headline issue: building sand is a very thick, heavy, wet sand, and the dredging of sea and river beds in respect of its procurement is creating even more ecological problems. On the other hand, surface desert sand has been refined and thinned by millennia of exposure to the elements and is quite useless, although its supply is theoretically almost infinite. Imagine an off -the- scale powerful cabal, in an attempt to control the price of building sand constructed a futures market for 99% of the trade in all types of sand, but the market was styled as merely a market for generic sand. Prices were perpetually suppressed by short sellers providing an infinite supply of desert sand contracts and the market made no distinction between these vaporous, useless promises and the true ability to supply real building sand. One day a powerful building contractor instituted a market for price discovery in respect of building sand only and participants had to prove that any sell side contract was backed by immediately deliverable inventory. The headline price of building sand consequently climbed 50 fold in the next few months. It was then also realized that the market for generic sand was ,in fact, only a market for desert sand and was therefore totally discredited and immediately became irrelevant.

If you are currently fretting because the COT report is not produced during this shutdown period, ask why you are troubled. Do you believe that you have the ability to examine this COT data for a previous Tuesday but only released to you on Friday (whilst the cabal has real time access to all data-including where every single stop order is positioned) and that somehow you will have the skills to front run the forthcoming inevitable wash and rinse cycle. Wake up and prepare for the inevitable re entry of physical gold into the monetary system, when every one rapturously understands the distinction between physical gold and undeliverable paper promises backed by absolutely nothing at all..

Regards
Nicholas

end

Russia’s gold & foreign currency reserves surge for third consecutive year

Published time: 16 Jan, 2019 11:08

The Central Bank of Russia reports that foreign exchange reserves saw a significant boost of 8.3 percent over the 12 months through January 1 of the current year.

Reserves reportedly grew to over $468 billion from $432 billion at the beginning of last January. According to the regulator, reserves grew for the third consecutive year. In 2017, growth totaled $55 billion, while 2016 saw an increase of $9.3 billion.

The value of gold in the reserves increased by nearly five percent to $86.9 billion in December, with the share of the precious metal surging to 18.5 percent. Last year, saw the value of gold in Russia’s reserves grow by over $10 billion, marking an increase of 13 percent.

The aggregate value of the national reserves grew by 0.6 percent to $381 billion in December, and showed an increase of 7.2 percent last year.

Russia’s growing reserves in the last three years seem to point to an adjustment to economic sanctions imposed by the US and the European Union in 2014. Western penalties had a significant initial impact on Russia’s reserves, which saw a decrease of $124 billion in 2014 and a $17 billion contraction the following year.

Russia’s international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies and Special Drawing Right (SDR) assets, which are at the disposal of the Central Bank of Russia and the government.

Earlier this month, Russia’s central bank reported that it cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating a reliance on the greenback.

-END-

Palladium hit $1400.00 per oz on supply problems.  The demand for Palladium rose to 8.5 million oz with production at 7.5 million oz.  Thus above ground palladium must be used to satisfy demand.  Very shortly will be Platinum use in cars increase because of the lack of Palladium.

two commentaries

Scrap register and Bloomberg

 

Long-term outlook remains strong for Palladium

NEW YORK (Scrap Register): Metals Focus looks for palladium to remain strong in the long term although it may be due for a profit-taking pullback after hitting recent record highs.

Analysts reported that palladium demand for automotive catalysts has risen from 5.8 million ounces in 2010 to an estimated 8.5 million last year.

“Coupled with constrained mine production growth, this has resulted in palladium demand outpacing global supply over much of this decade,” the consultancy said, noting that last year’s supply/demand deficit was an estimated 1.1 million ounces, meaning above-ground stocks have been falling.

“Looking ahead, we believe palladium’s fundamentals remain strong,” Metals Focus said.

In the short-term, however, some profit-taking seems likely. This could be triggered by further indications of a global economic slowdown or bad news from the auto industry. A further loosening of the leasing market could also contribute to such a move.

Still, Metals Focus added, any correction lower in prices is likely to be short-lived and treated as a buying opportunity. Overall, therefore, following a brief price downturn, we forecast further upside for palladium later this year, Metals Focus added.

Indeed, we believe that this trend will continue into 2020 and beyond, as persistent deficits push the palladium price through new record highs, the firm added.

-END-

Palladium Reaches Another Record as JPMorgan Sees More Upside

Bloomberg

January 17, 2019, 5:48 AM CST Updated on January 17, 2019, 10:10 AM CST

Near-term supply shortage has driven metal to fresh highs
Price in uncharted territory, led by technicals: JPMorgan

Palladium held gains after rocketing through $1,400 an ounce for the first time, extending its gravity-defying rally even amid signs that global vehicle sales are slowing.

The precious metal, primarily used in the auto industry for catalytic converters, has surged more than 65 percent since the middle of August. The bull run has been driven by an acute shortage of immediate supply as car manufacturers scramble to get ahold of the metal to meet more stringent emission controls.

-END-

Sam Zell is the real estate king on Wall Street. He has never bought any gold in his 77 year old life. His gives his reasons why he is buying gold.

(courtesy zerohedge)/Sam Zell

Billionaire Investor Sam Zell Says He’s Buying Gold “For The First Time In My Life”

Amid a cresting wave of consolidation in the gold mining space as spending on new mines has dried up since 2011, billionaire investor Sam Zell is buying the shiny metal “for the first time in his life” because he sees opportunities stemming from an expected shortage in supply.

https://www.bloomberg.com/multimedia/api/embed/iframe?id=1733008a-ecd9-4e73-8654-73a51ce30c2f

Gold notably didn’t perform as well as many might have expected during the eruption of market volatility during Q4, but some investors see scope for the shiny metal to embark on its strongest rally since the crisis after years of lackluster returns as global economic growth slows and investors look for somewhere to hide.

That, and the impending supply crunch that Zell envisions from the drop in new mining capacity – the capacity of unmined gold still buried in existing mines shrank by 40% in 2017 – are the two reasons why Zell has been buying.

“For the first time in my life, I bought gold because it is a good hedge,” Sam Zell, the founder of Equity Group Investments, said in a Bloomberg TV interview. “Supply is shrinking and that is going to have a positive impact on the price.”

“The amount of capital being put into new gold mines is a most nonexistent,” Zell said. “All of the money is being used to buy up rivals.”

And though official rate of inflation has started to decelerate once again in recent months, signs that the actual rate of inflation in the underlying economy is higher than it might appear could also be a positive for the shiny metal.

end

 

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.7709/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.7895   /shanghai bourse CLOSED DOWN 10.79 PTS OR 0.42%

 

HANG SANG CLOSED DOWN 146.47 POINTS OR 0.54%

 

 

2. Nikkei closed DOWN 40.48  POINTS OR .20%

 

 

 

 

 

3. Europe stocks OPENED ALL RED 

 

 

 

 

 

 

 

/USA dollar index FALLS TO 98.02/Euro FALLS TO 1.1401

3b Japan 10 year bond yield: FALLS TO. +.01/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.74/ 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:: 51.28 and Brent: 60.21

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.22%/Italian 10 yr bond yield DOWN to 2.73% /SPAIN 10 YR BOND YIELD DOWN TO 1.35%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.51: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.22

3k Gold at $1292.55 silver at:15.53   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 22/100 in roubles/dollar) 66.51

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 108.74 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 0.9922 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1312 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.22%

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

4. USA 10 year treasury bond at 2.71% early this morning. Thirty year rate at 3.06%

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

6.  TURKISH LIRA:  UP  TO 5.3706

 

 

 

US Futures, European Stocks Slide As Trade Fears Return

US equity futures and European markets fell after a mixed session in Asia as a better than expected start to earnings season was overshadowed by resurfacing trade tensions between the U.S. and China amid a federal investigation into Huawei Technologies for allegedly stealing trade secrets, as fears about profits and global economic headwinds returned on news Apple plans to cut back hiring for some divisions while Singapore exports unexpectedly fell. Treasuries and the dollar were mixed.

Europe’s Stoxx 600 Index was down 0.2%, dragged lower by autos and leisure stocks, although defensive food and drink stocks rebound from Wednesday’s drop. After being the top performing sector Wednesday, the Stoxx 600 Bank Index declined 1.5% in early trading, making it the worst performing industry group in Europe on the day, and erasing nearly half of Wednesday’s gain after French bank Societe Generale warned it now sees a 20% trading revenue drop on challenging markets, dragging its stock as much as 4% lower. The Stoxx 600 Automobiles & Parts index slumped, hitting Germany’s auto and export-heavy DAX, after Senate Finance Committee Chairman Chuck Grassley said President Donald Trump was inclined to impose tariffs on European cars to win better terms on agriculture.

“There is some focus on the Grassley comments in relation to auto trade tariffs and also reference to there not being much progress in the U.S. China negotiations last week,” said Bank of Tokyo Mitsubishi strategist Derek Halpenny. “There has obviously there has been a lot of optimism (in markets) since the start of the year and risk appetite has had a pretty good run, but this will place a few question marks over that.”

In the UK, the FTSE 100 Index underperformed despite a stable pound, as Prime Minister Theresa May began talks with her political rivals to try deliver a Brexit deal.

Fresh news was thin as European trading got underway, but traders had more than enough to digest from last 24 hours to follow Asia’s overnight dip into the red. China’s blue-chip index ended down 0.55%, led lower by a decline in the country’s second-largest home appliances maker, Gree Electric, after it warned of slower profit growth as the economy loses steam. Chinese Premier Li Keqiang promised increased government investment this year and the country’s central bank injected more cash into the financial system, bringing the amount for the week to 1.14 trillion yuan ($168.74 billion).

Shares in Hong Kong tumbled, and some companies dropped more than 75 percent without obvious explanations.

Stoking some caution was news that U.S. lawmakers introduced bills on Wednesday that would ban the sale of U.S. chips or other components to Huawei or other Chinese telecommunications companies that violate U.S. sanctions or export control laws. That came shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from U.S. businesses. Separately, Handelsblatt reported the German government is actively considering stricter security requirements and other ways to exclude Huawei from a buildout of fifth-generation (5G) mobile networks.

Also lurking were worries that the U.S. government shutdown – now in its record 27th day – was starting to take a toll on its economy. White House economic adviser Kevin Hassett said the shutdown would shave 0.13% off quarterly economic growth for each week it goes on.

A better-than-expected start to the earnings season has so far not been enough to spur an extended rally, and on Thursday S&P futures were down 0.3%, the sames as Dow futures while Nasdaq fuitures were 0.4% lower. The VIX was trading 1.5% higher.

As Bloomberg writes this morning, risk assets are showing fresh signs of fatigue after a stronger start to 2019 than 2018’s (and the January meltup), when optimism about trade tensions and central bank support overshadowed a litany of concerns as the global economy slowed. Now with both the U.S. government shutdown and Brexit impasse dragging on, and lingering stress between America and China, there are plenty of reasons for caution.

Over in Brexit-land, as expected, British Prime Minister Theresa May narrowly won a confidence vote overnight and invited other party leaders for talks to try to break the impasse on a Brexit agreement. An outline for Plan B is due by next Monday. Markets assume the exit date will be extended past March 29.

“Nothing has happened in the last 24 hours to dissuade us from the view that we are headed in the direction of an Article 50 delay, a softer Brexit or no Brexit,” said Ray Attrill, head of FX strategy at NAB. This left the pound steady at $1.2872, though still short of Monday’s peak at $1.2929. It reached a seven-week low against the euro before steadying at 88.50 pence

UK PM May said there is now an opportunity to find a way forward on the Brexit and that she intends to deliver on Brexit which she believes it is her duty to do so. PM May also said we must work out what lawmakers want and that she spoke to several parties although the Labour party leader has yet to take part in discussions, while there were comments from Labour Party leader Corbyn who declared there will be no talks with PM May until a no-deal Brexit is off the table.

BBC’s Political Correspondent Nick Eardley tweets “Tory sources predict majority of Conservatives in Commons would refuse to back permanent customs union and several ministers would quit.” Subsequently reported that the EU are to condition any potential delay to Brexit on an agreement being struck between UK PM May and opposition leader Corbyn, according to El Pais.

In central bank news, Fed’s Kashkari (Non-Voter, Dove) said Fed has less room to cut rates in future downturn but has other tools, while he repeated that he wants to see wage growth and inflation before backing a rate hike.

In the ongoing shutdown drama, President Trump signed bill to give Federal workers back pay from the shutdown, while there was also reports that the White House threatened to veto the stopgap bill the House is preparing, while US Senate Finance Committee Chairman Grassley said Trump administration’s trade negotiations may be delayed due to government shutdown.

In currencies, the U.S. dollar was mixed, easing against the yen to 108.79 but flat versus the euro at $1.1396. The dollar index was up at 96.088. The yen led G10 gains following a U.S. probe into China’s Huawei and as equities and emerging-market currencies drifted lower. The dollar rose on supportive early London flows yet lost steam as the session progressed and the euro and sterling eventually erased modest losses. Commodity currencies were under pressure as risk sentiment waned, with Treasuries edging up and oil lower.

In commodities, oil traded lower, with U.S. crude remaining close to $52 a barrel as traders worried about the strength of demand in the United States after its gasoline stockpiles grew last week more than analysts had expected. Brent (-1.0%) and WTI (-1.2%) prices hover under $61/bbl and $52/bbl respectively, weighed on by the record EIA US crude production figure of 11.9mln BPD for the previous week, an increase from the prior of 11.7mln BPD; a level which was already the largest national output globally. Elsewhere, it has been reported that Russian Energy Minister Novak and Saudi Energy Minister Al Falih are to meet at next weeks Davos summit. Separately, Libyan oil ports Es Sider, Zueitina and Hariga have reportedly reopened following weather improvements. Palladium hit record highs thanks to increasing demand and lower supply. Spot gold was little changed at $1,294.91 per ounce.

The publication of housing starts and building permits is postponed because of the government shutdown. U.S. initial jobless claims are expected to be little changed against last week, while the Philadelphia Fed Business Outlook and the Bloomberg Consumer Comfort will be watched.

Morgan Stanley, PPG Industries and Fastenal are among companies reporting earnings before the market opens, while Netflix and American Express will report after the close.

Markets Snapshot

  • S&P 500 futures down 0.4% to 2,604.00
  • STOXX Europe 600 down 0.2% to 349.81
  • MXAP up 0.06% to 152.46
  • MXAPJ down 0.1% to 494.41
  • Nikkei down 0.2% to 20,402.27
  • Topix up 0.4% to 1,543.20
  • Hang Seng Index down 0.5% to 26,755.63
  • Shanghai Composite down 0.4% to 2,559.64
  • Sensex up 0.3% to 36,415.78
  • Australia S&P/ASX 200 up 0.3% to 5,850.05
  • Kospi up 0.05% to 2,107.06
  • German 10Y yield rose 0.3 bps to 0.227%
  • Euro up 0.07% to $1.1400
  • Italian 10Y yield fell 11.7 bps to 2.396%
  • Spanish 10Y yield fell 1.4 bps to 1.361%
  • Brent futures down 0.7% to $60.92/bbl
  • Gold spot little changed at $1,293.94
  • U.S. Dollar Index little changed at 96.10

Asian equity markets were choppy throughout the session but eventually followed suit to the gains on Wall St, where financials led after strong earnings from banking powerhouses Goldman Sachs and Bank of America. ASX 200 (+0.3%) and Nikkei 225 (-0.2%) were mixed as resilience in financials and commodity-related sectors kept the Australian benchmark afloat, while Tokyo trade was hampered again by currency effects. Hang Seng (-0.5%) briefly surmounted the 27,000 level for the first time since early December where it then met resistance and Shanghai Comp. (-0.4%) swung between gains and losses as participants digested another substantial liquidity operation by the PBoC, as well as US-China concerns after reports that US prosecutors are to pursue criminal charges against Huawei over theft of trade secrets. Finally, 10yr JGB futures recovered from the prior day’s lows but with price action kept range-bound on the session alongside the indecisive risk tone in the region and a relatively tepid Rinban announcement by the BoJ.

Top Asian News

  • China Confirms Vice Premier Liu to Attend Trade Talks in U.S.
  • China’s Coffee Unicorn Is Burning Millions to Overtake Starbucks
  • Debt-Laden Indian Airline Jet Working With Banks on Bailout Plan
  • Erdogan Gets Emergency Powers to Use If Turkish Economy at Risk
  • Time to Sell Rally in Developed Market Stocks: Credit Suisse

Major European equities (ex-SMI) are mostly in the red, albeit off worst levels [Euro Stoxx 50 -0.3%]. The DAX (-0.3%) is the underperforming index weighed on by the poor performance in the auto sector (-0.9%), following US Senate Finance Committee Chairman Grassley commenting that he believes US President Trump is inclined to impose new US auto tariffs; with Daimler (-1.4%), Volkswagen (-1.4%) and BMW (-0.6%) in the red as a result. Sectors are broadly in the red, with financials underperforming due to Societe Generale (-4.0%) being firmly in the red after stating that Q4 2018 was impacted by disposals. Other notable movers include Sage Group (+5.7%) towards the top of the Stoxx 600 after the Co reiterated their full year 2019 guidance. Elsewhere, ITV (-6.8%) and Voestalpine (-6.2%) are at the bottom of the Stoxx 600 following a broker downgrade and profit warning respectively.

Top European News

  • Alstom Warns Siemens Rail Deal Could Be Blocked by Europe
  • Italy’s League Said to Seek Far-Right Ally to Box In Five Star
  • U.K. Nuclear Plans Ditched as Hitachi Sees $2.8 Billion Charge
  • Primark Owner Gains After Holiday Rebound From Tough November

In FX, it has been a choppy day for the Dollar as the index fluctuated in a range of 96.021-250 with upside triggered by rising tensions between US and China regarding Huawei. In terms of the latest, US prosecutors are to pursue criminal charges against the company over trade secret theft, while separate reports noted that US lawmakers are looking to pass a bill which bans chip sales to Huawei and ZTE. In response, the Chinese Foreign ministry urged US lawmakers to stop this bill. On the technical front the index sits just above its 100 DMA at 96.045 ahead of its 50 DMA at 96.639, just below the 2019 peak at 96.960.

  • JPY–  The Yen firmer on the back of safe-haven demand amid the aforementioned Huawei-related US-Sino tensions. USD/JPY retreats further below the recently-claimed 109.00 level to a low of 108.72 as the pair is underpinned by its 50 HMA around the intraday low. In terms of option expiries, nothing major to report today, however tomorrow sees some USD 3bln between 109.00-10.
  • EUR – The Euro was largely unreactive to the in-line December inflation figures as the single currency continues to move in tandem with the Dollar, thus EUR/USD has experienced a relatively choppy session in the range of 1.1372-1.1404 ahead of comments from ECB-hawk Lautenschlager who is due to speak in Dublin at 1100GMT following a recently published interview in which she said she will wait for the March projections before changing her view about a rate hike this year. In terms of option expiries, tomorrow sees 4bln scattered between 1.1400-25.
  • GBP – Sideways action following PM May’s victory at last night’s Labour-tabled vote of no confidence in which the Premier defeated the motion via 325 vs 306 votes, as expected. Sterling sold off with Cable re-testing 1.2700 to the downside in the run up to the results before spiking higher to levels just shy of 1.2900 upon the announcement. In terms of the latest, Spanish press reported that the EU are to condition any potential delay to Brexit on an agreement being struck between UK PM May and opposition leader Corbyn, though Sterling was unreactive to this as Corbyn already made it clear that he will not hold talks with the Premier until a no-deal Brexit is off the table. GBP/USD action is largely dominated by Dollar fluctuation as the pair remains choppy sub-1.2900 and below its 100 DMA at 1.2893.

In commodities, Brent (-1.0%) and WTI (-1.2%) prices hover under USD 61/bbl and USD 52/bbl respectively, weighed on by the record EIA US crude production figure of 11.9mln BPD for the previous week, an increase from the prior of 11.7mln BPD; a level which was already the largest national output globally. Elsewhere, it has been reported that Russian Energy Minister Novak and Saudi Energy Minister Al Falih are to meet at next weeks Davos summit. Separately, Libyan oil ports Es Sider, Zueitina and Hariga have reportedly reopened following weather improvements. Gold has traded within a narrow USD 4/oz range, as the dollar has also traded largely unchanged due to a lack of catalysts. Elsewhere, the US Senate voted to reject legislation to keep sanctions on companies linked to Oleg Deripaska, including Rusal. Separately, steel company Voestalpine have issued their second profit warning in 4 months; citing US plant operating problems and cartel investigation provisions as the cause. OPEC monthly report: OPEC crude production fell 751k bpd in December to average 31.58mln bpd, according to secondary sources with cuts led by Saudi Arabia, Libya.

Looking at the day ahead, we get more housing market data with December housing starts and building permits numbers although these will likely be delayed due to the govt shutdown. There should also be some focus on the Philly Fed business outlook print in light of the weak empire manufacturing reading earlier this week, while the other data due is the latest weekly initial jobless claims reading. It’s worth noting that Japan’s December CPI reading is also due out late this evening. Away from all that the ECB’s Lautenschlaeger is due to speak this morning in Dublin while the Fed’s Quarles speaks this afternoon at an insurance forum. Meanwhile the OPEC monthly report is due out while earnings wise it’s the turn of Netflix and Morgan Stanley today.

US Event Calendar

  • NOTE: Housing starts/bldg permits data postponed by govt shutdown
  • 8:30am: Philadelphia Fed Business Outlook, est. 9.5, prior 9.4
  • 8:30am: Initial Jobless Claims, est. 220,000, prior 216,000
  • 8:30am: Continuing Claims, est. 1.73m, prior 1.72m

DB’s Jim Reid concludes the overnight wrap

Watching the House of Commons over the last 48 hours has been a good appetiser for the final series of Game of Thrones out this April. Well we haven’t had dragons…….. yet! It seems that the new series is out on April 14th and I move in to my new house supposedly (builder permitting) on April 22nd. Given that the size and quality differential between the TV in my temporary rental accommodation and my new house is substantial I will likely be going off the grid and away from civilisation for 8 or 9 days from mid April to avoid spoiler alerts before I move in and watch two episodes back to back.

I wonder what difference going off the grid for 8 or 9 days now would mean in terms of progress on Brexit when you returned. Now PM May has won her confidence vote by 325-306 (ironically by a ratio of 52:48), things have to move fast to ensure she reports back to the house by Monday (as required) on the next steps. In her post-vote remarks, she continued her pivot toward a softer Brexit, saying “we must find solutions that are negotiable and command sufficient support in this House.” She said she planned to begin talks immediately with senior parliamentarians and leaders of all parties, which was encouragingly conciliatory. The latter point, indicating she would invite Corbyn and other opposition leaders to contribute was new and positive.

However, Mr. Corbyn and the LibDem’s both indicated that they will not meet unless and until May commits to removing the possibility of a “no-deal” outcome, a move that she has so far refused. In a late televised statement though, PM May said she had met with the LibDem leader already while expressing disappointment that Labour aren’t currently prepared to talk. Pressure is now building on the Labour Party to announce what their strategy is. Previously they have said that if they can’t force a general election then they will pivot towards a second referendum. We will wait and see. Four other opposition parties wrote a letter urging the Labour Party to back the second referendum with the implication that if they didn’t then these parties may not support any further confidence votes called by Labour in the Government. So it’s less likely that Labour can hide behind no firm policy and repeated try to bring the government down. Elsewhere the SNP’s Ian Blackford committed to working with May, but did reiterate their call for a “people’s vote” to be on the table. Finally, the DUP’s Nigel Dodds (whose 10 votes effectively provided May her majority in the confidence vote) called for the UK to leave the EU as one country, in a possible move to resist any regulatory divergence between Northern Ireland and the rest of the UK.

DB’s strategists still think the direction of travel is unequivocally toward a soft Brexit and a stronger pound. For them to be right, someone has to back down though and while I personally think there would be a cross party majority for staying in the customs union such a move could split the Conservative Party and as such be a poisoned chalice to them. What will Mrs May see as the priority? Keeping her party from the risks of a damaging split or trying to find a deal? The next stage of negotiations really feels like one ginormous game of “whac-a-mole”.

The pound was directionless yesterday (and this morning), bouncing around the $1.2870 level all day ahead of the vote, and ultimately closing in that region, up +0.14% on the day. The FTSE 100 dipped -0.47%, consistent with the prior rally in sterling after Tuesday’s vote.

The London Times reported late yesterday afternoon that the EU is considering offering a delay of Brexit until 2020. It comes from a credible source but whether it’s realistic is another matter. Many Conservative MPs would probably not be keen on the extension being that long. It wouldn’t do much to focus minds in the short-term and also allow more time to build more and more momentum for a second referendum which creates a more binary outcome and uncertainties. So interesting (if true) that the EU are prepared to offer a lot of road for the can to be kicked along but not too sure it will be that useful.

Earlier, the EU, via Barnier, confirmed that they would actively engage with a softer Brexit approach on the future relationship while late in the afternoon the Handelsblatt reported that the EU is ready to make further offers on the backstop, but that EU officials want the initiative to come from Ireland. So a lot of noise, some small steps in a positive direction but a long way to go to get this resolved.

Around all this, risk assets had US bank earnings to thank yesterday as the S&P 500, DOW, and NASDAQ notched up modest gains of +0.21%, +0.59%, and +0.15% respectively with the banks sector of the S&P rallying +2.72% and to the highest since early December. This followed results from Bank of America (+7.16%) and Goldman Sachs (+9.63%). Like what we’ve seen with the other US banks so far, there were much bigger-than-expected revenue declines in FICC trading however the market has instead focused on positive net interest income and investment banking fees, and to the rosier outlooks being painted by management.

Just before US markets closed, the Wall Street Journal reported that US federal prosecutors are close to indicting Chinese tech firm Huawei for allegedly stealing trade secrets from US businesses. The move could exacerbate economic tensions between the US and China, and the S&P 500 promptly surrendered half of its gains. Regardless, this year still ranks as the 10th best start to a year ever for the S&P 500 (out of the 92 years we have daily data) with a +4.35% YTD gain. In fact it’s the best start since 1987 based on data through to the 16th of January each year while the NASDAQ (+6.02%) has had its best start since the post-tech crisis rebound of 2003.

Credit also performed well yesterday with US HY cash spreads finishing -7bps tighter. That puts the rally back from the January 3rd wides this year at an impressive -92bps. US IG spreads were 2bps tighter and are now 12bps tighter over the same period while Treasury yields ticked +1.1bps higher to 2.722% and continue to be a bit of a sideshow at the moment. European bond markets weakened slightly as well, with Bund yields +1.8bps, though BTPs rallied -12.0bps. Sentiment around the Italian banking sector improved after Finance Minister Tria told reporters that banks are reducing NPLs in line with their plans, in a rebuke to reporting earlier this week that hinted at potential NPL problems. Italian bank stocks rallied +3.97%, back to flat on the week.

Oil continued its strong run, with WTI crude prices rising +0.48% for their 11th gain over the last 13 sessions, the best stretch since October 2017. US inventories data showed a 2.68million barrel draw in US stockpiles, though gasoline inventories continued to build. Saudi Arabia reportedly cut its crude shipments to US refineries, which could reflect either a reduction in Saudi supply or reduced demand from US refiners given the large stockpiles of refined products. Overall, the data did not give a clear signal on where prices are heading, though our strategists target further gains over the medium term.

Overnight in Asia markets are largely up with the Shanghai Comp (+0.46%) and Hang Seng (+0.37%) reversing early losses and leading the gains likely on overnight news that China is speeding up its investment law approval process that would create measures for the administration to protect the intellectual property of foreign investors and protect them from forced transfer of technologies. This is clearly a move towards addressing two of the thorniest issues in the US-China trade talks. The official Xinhua News Agency reported that the National People’s Congress Standing Committee has scheduled a special session for January 29-30 to consider the bill and a personnel reshuffle. Interestingly the closed door gathering will start just a day prior to China’s Vice Premier Liu’s expected travel to the US for trade talks. In the meantime, Kospi (+0.16%) is also up while the Nikkei (-0.09%) is trading flattish after a volatile start to today’s session on a strengthening yen (+0.08%). Elsewhere, futures on S&P 500 are down -0.28% while all the G10 currencies (except the yen) and most Asian currencies are trading weak against the greenback this morning. In commodities, crude oil prices (WTI -0.59% and Brent -0.51%) are heading lower today after the spectacular run described above.

In other news it’s been confirmed that US Secretary of State Pompeo will meet with a senior North Korean official overseeing nuclear talks this Friday with the view that this could lead to a second summit soon. The North Korean representative, Kim Yong Chol, will reportedly bring a new letter for President Trump from Kim Jung Un. In his New Year’s address, the dictator suggested that he may seek a “new path” if talks do not progress, potentially signaling more binary risks moving forward, toward either further reconciliation or a breakdown in discussions.

The Fed released its regular beige book, with anecdotal economic details. The report said that wages grew across skill levels, though the gains remain modest. The economy continues to grow but the report cited some weak spots emerging, and price gains remain “modest to moderate.” Overall, the report is consistent with slowing, but still positive growth, and since inflationary pressures remain muted, it should allow the Fed to maintain its stance of paused rate hikes.

As far as yesterday’s data was concerned, in the US the NAHB housing market index surprised to the upside at 58 versus expectations of 56. That was only the third monthly improvement since 2017, and it at least provides some relief from the recent fall which has seen the index drop from a peak of 74 at the end of 2017. The other data out in the US was the December import price index which fell slightly less than expected at a headline level (-1.0% mom vs. -1.3% expected) and rose a bit more than expected on the core measure (+0.3% mom vs. 0.0% expected). Here in the UK, we got the December inflation data and there was a small upside surprise in the core reading at +1.9% yoy (vs. +1.8% expected). The headline was on the money at +2.1% yoy with the overall message not really changing the narrative from our economists that inflation is slipping faster than expected and should settle below target this year.

To the day ahead now where this morning in Europe we’ll get the final December CPI revisions for the Euro Area (no change from +1.0% yoy expected) along with November construction output data. In the US this afternoon there’s more housing market data due with December housing starts and building permits numbers. There should also be some focus on the Philly Fed business outlook print in light of the weak empire manufacturing reading earlier this week, while the other data due is the latest weekly initial jobless claims reading. It’s worth noting that Japan’s December CPI reading is also due out late this evening. Away from all that the ECB’s Lautenschlaeger is due to speak this morning in Dublin while the Fed’s Quarles speaks this afternoon at an insurance forum. Meanwhile the OPEC monthly report is due out while earnings wise it’s the turn of Netflix and Morgan Stanley today.

3. ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 10.79 PTS OR 0.42% //Hang Sang CLOSED DOWN 146.47 POINTS OR 0.54% /The Nikkei closed DOWN 40.48  PTS OR .20%/ Australia’s all ordinaires CLOSED UP 0.27%

/Chinese yuan (ONSHORE) closed DOWN  at 6.7709 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 51.28 dollars per barrel for WTI and 60.21 for Brent. Stocks in Europe OPENED /RED 

//ONSHORE YUAN CLOSED DOWN AT 6.7709 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7805: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

 

 

i)North Korea/South Korea/USA/CHINA

 

end

3 b JAPAN AFFAIRS

3 C CHINA

i)CHINA

for three days in a row, China has unleashed massive liquidity:  the total sum  1.1 trillion yuan or 162.96 billion dollars worth of stimulation..and that is huge.

(courtesy zerohedge)

China Injects Gargantuan 1.1 Trillion In Liquidity This Week

Following what Bloomberg calculated was a record net reverse repo liquidity injection on Wednesday, when the PBOC injected a whopping 560 billion yuan of liquidity into the financial system via open market operations, the Chinese central bank has done it again and in Thursday’s open market operation, it sold 250BN yuan in 7 Day repos (slightly below yesterday’s record 350BN), and 150BN in 28 Day repos, which net of maturities resulted in a whopping net 380BN yuan ($56.2BN) liquidity injection.

This brings the net liquidity injection this week to a near record 1.14 Trillion yuan (Monday 20BN, Tuesday 180BN, Wednesday 560BN and Thursday 380BN) and the week is not even over yet – should tomorrow’s reverse repo be of similar magnitude, then this week will go down in history as China’s biggest liquidity injection on record.

As yesterday, today’s massive liquidity injection was 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, although why this year should be such a significant outlier, even when factoring in the liquidity needs ahead of the Lunar new year, to prior periods was not exactly clear.

There is, of course, a much simpler explanation: with Chinese economic and trade data turning from bad to worse with every passing day, Beijing’s response is increasingly one of a panicked “spasm”, as Nomura’s Charlie McElligott wrote today when he noted that with regard to the response of Chinese authorities in addressing their economic slowdown and credit crunch, “it had to get worse before it got better”—recently collapsing Chinese data has now clearly forced an escalation of easing-/stimulus-/liquidity- policies, as follows:

  • Two days ago in a press conference between the PBoC, the MoF and the NDRC, Beijing announced new tax cuts, fresh measures to stabilize auto consumption and an announcement that authorities are supportive of increasing issuance of local government “special bonds” to stimulate infrastructure spending were all made in a “stimulus” spasm.
  • Overnight Chinese Premier Li has called for more investments in infrastructure and services, while also voicing support for a “stepping-up” of targeted economic controls from authorities.

And, as discussed in this post and last night, the annual PBoC liquidity injection to offset the pre-Lunar New Year holiday-/pre-tax payment peak-/maturation of MLF funds- cash drain went full mental” last night, with the Chinese central bank injecting a record 560B Yuan ($84B USD) into the system using 7d reverse repo operations—the largest 1d cash injection in their history, and was followed by a not much smaller 380B Yuan injection today.

It is worth noting that this short-term liquidity injection adds to the larger “credit impulse” being re-engineered by Chinese authorities, which on the headline level came in as “better than consensus” estimates across new aggregate social financing & new loans.

Unfortunately for Chinese stock bulls, this week’s record liquidity injections have had no impact whatsoever on Chinese stocks, which were unchanged yesterday and are flat on Thursday, while S&P futures are fractionally lower, amid growing fears that the trade war storm is back on after the WSJ reported that  U.S. authorities are investigating Huawei for stealing trade secrets, while according to a separate report, Apple plans to cut back hiring for some divisions, and finally Singapore exports unexpectedly fell, a trifecta of news hitting the market’s three weakest points: trade, earnings and the slowing global economy.

The bigger issue is that if not even China can move the needle with short-term liquidity injections, and a long-term monetary intervention is out of the question for now due to China’s record debt, while fiscal stimulus takes months if not quarters to kick in, once the sugar rush from the current bear market rally is over, the hangover will be especially brutal.

end

This is unbelievable:  Hong Kong stocks suddenly plummet in an avalanche of flash crashes and that spread to other stocks.  Nobody knows what was going on to cause this flash crash

(courtesy zerohedge)

“No One Knows What’s Going On”: Hong Kong Stocks Suddenly Plummet In “Avalanche” Of Flash Crashes

By now virtually every trader has personally experienced or participated in a flash crash, whether in FX (most recently two weeks ago when numerous Yen carry pair suddenly tumbled), in stocks or in bonds. But few have observed a flash crash which sparks a domino effect of even more flash crashes.

Well, that’s precisely what happened in Hong Kong overnight, when a string of local stocks plunged without warning and without any news in afternoon trading, the second perfectly unpredictable flash crash in two weeks leaving investors nursing massive, and unexplained, losses in the world’s fourth-largest equity market.

Jiayuan International Group, Sunshine 100 China Holdings and Rentian Technology Holdings all plunged over 75% in a matter of minutes and at least 10 companies by at least 20% or more by the close, wiping out nearly $5 billion in market value. Most of that came from Jiayuan, which lost HK$26.3 billion on record volume according to Bloomberg.

The complete list of stocks that were “triggered” is shown below:

What made the latest Hong Kong flash crash episode unique is that it appeared to spark a domino effect, with the first sudden drop catalyzing subsequent collapses: “some of these companies might have cross-shareholdings in each other and when one of those starts to tumble, it brings down other related stocks, said Bocom strategist Hao Hong. “It’s likely more similar stock crashes could happen this year.A lot of share pledges in Hong Kong are underwater, and as soon as the positions are liquidated it triggers an avalanche.

This is not the first time Hong Kong has seen such a coordinated liquidation: in 2017, an “Enigma Network” of 50 stocks roiled the city’s markets triggering a crash in dozens of interlinked companies weeks after noted activist David Webb published a report. More recently, last November more than $1.4 billion was wiped from the value of five small-cap stocks as they tumbled.

“People should check the share pledges to see if a stock could suddenly be sold off,” Webb told Bloomberg, his warning falling on deaf ears, again.

Just like China, which has had a long-running problem with circular, rehypothecated stock pledges Hong Kong exchange rules say a controlling shareholder can borrow against stock and not disclose as long as it’s for personal finance reasons rather than loans, guarantees or other forms of support for the company

That said, in this latest crash there may have been a catalyst with some traders pointing to primary culprit Jiayuan’s $350 million of maturing debt. In the fourth quarter, Jiayuan sold $400 million of bonds that mature in October 2020. Those securities fell 30 cents to a record low of 70 cents on the dollar, indicating that some investors may have been worried about an imminent default. The turmoil rippled through to the market for investment-grade Chinese dollar bonds, where spreads were about 2 basis points wider, traders said.

However, in a statement Thursday, the company said “it has fully repaid the notes, its financial condition is healthy and operations are normal.” Bloomberg also noted another connection: Gu Yunchang is a board member for both Jiayuan and Sunshine 100, showing how deep the linkages between local stocks run.

As Bloomberg also observed, on Thursday Jiayuan Chuangsheng scrapped the sale of a 500 million yuan bond ($74 million), a company beneficially owned by the chairman of Jiayuan International.

Yet while everyone is blaming some variation of cross-asset holdings and interlinked collateral for the latest flash crash, the reality is that nobody really knows what happened as Castor Pang, head of research at Core Pacific-Yamaichi confirmed:

“No one really knows what’s going on here. For common investors, it’s a very surprising and tough situation as there was no time to get out.”

Investors, and not just in Hong Kong, may want to get used to such liquidation confusion because what happened overnight in Hong Kong is just a harbinger of the mess that will hit every market once volatility explodes during the next crisis as liquidity collapses to zero while everyone demands to get out of the market “right now.”

end

This is a fascinating story.  The following Chinese company defaulted on a bond even though their reported cash by 15 times the entire due debt.  Obviously the accounting was fraudulent and most likely we will begin many of these

(courtesy zerohedge)

Bankrupt Chinese Company Reported Cash 15 Times Greater Than Due Debt

That China has had a problem with rising defaults is not news: as we reported back in October, 2018 was already set to be a record year for Chinese bankruptcies. Things only got worse in November and December when defaults spiked to 20.4 billion yuan ($3 billion) confirming that the supportive policies from the People’s Bank of China announced more than a month ago have yet to yield the intended effect.

“Defaults will stay elevated [in 2019] because the Chinese economy is expected to slow and off-balance-sheet lending has been shrinking,” said Yang Hao, analyst at Nanjing Securities. The funding environment has yet to improve significantly for certain corporations, he added.

Predictably, just like in the US, Chinese investors have shunned lower-rated notes, and only relatively stronger firms were able to access the local bond market in recent months. Non-finance companies rated below AA publicly sold 1.27 trillion yuan of notes for the first 11 months of 2018, the lowest in four years. In contrast, companies with above AA+ ratings sold almost 3.28 trillion yuan bonds, up about 40 percent from last year.

None of this is news.

What is surprising however, is what happened when the latest Chinese corporate default took place on Tuesday: that’s when Jiangsu-based Kangde Xin Composite Material Group, failed to pay a 1 billion yuan ($148 million) local note due Jan. 15 due to a liquidity crunch, according to the company. The shocking punchline: as research analyst Tim Yup caught earlier this week,  as of end-September the company reported that it “had” 15.4 billion yuan in cash and equivalents, more than double the total amount of its short-term debt, and more than 15 times the amount of debt that it just defaulted on!

Tim Yip@timdayipper

$002450.SZ Kangde Xin just announced it has trouble repaying onshore RMB 1Bn bond maturing tomorrow, despite “having” RMB 15Bn cash on balance sheet in 3Q18.

It has a USD bond “listed in @HKEXGroup “, Moody’s & Fitch initiated Ba3 and BB not even 2 years ago. Quote at 40 now

32 people are talking about this

As so often happens in China (recall the Hanergy fiasco) the latest default was until recently one of the most beloved names by local hedge funds, with Kangde Xin’s stock soaring until late 2017 as not a single investor appeared to do any due diligence on their investment, and then it all came crashing down when its largest shareholder’s pledged stock loans blew up in early 2018.

Meanwhile, its bond were trading around par until mid-2018, when questions started to emerge about the company liquidity before collapsing to 35 cents currently.

Yet while the company’s collapse is a classic case of yet another overleveraged Chinese company keeling over once the money ran out, with the insolvency catalyst in this case being the massive stock loans taken out by management – a 5 trillion yuan “ticking time bomb” which we discussed previously  – the latest default raises far more troubling questions about the quality of financial reports from Kangde Xin, and Chinese companies in general, and also highlights risks of investing in junk-rated bonds from the country.

The consequence according to Manulife Asset Management, is that investors will tend to shun risky issuers even more, or simply demand a higher premium just when Chinese cash-strapped firms need funding the most. As noted above, liquidity crunch in China already sparked record local bond failures in 2018.

“There have been too many companies with poor credit quality tapping the bond market in recent years,” said Jimond Wong, senior portfolio manager for Asia fixed income at Manulife Asset Management.

And the bigger issue: “Very often, their problems are not easily captured by financial statements,” especially when companies openly fabricate their numbers while local auditors fail to (or are paid not to) notice any glaring misrepresentations.

Like pretending that you have 15 billion yuan in cash and being unable to pay a 1 billion debt maturity.

As Bloomberg elaborates, Kangde Xin caught the attention of Chinese regulators last May, when the Shenzhen Stock Exchange asked the company to elaborate on its cash holdings which had jumped to 18.5 billion yuan at the end of 2017 from 10.1 billion yuan two years earlier. In October, China Securities Regulatory Commission launched an investigation into Kangde Xin on inadequate information disclosure on dealings among its shareholders.

Then, once it became clear that the company’s cash was just smoke and mirrors, on Wednesday, Kangde Xin’s credit rating was cut to Ca from B3 by Moody to reflect the default and expectation of the “high economic loss for bondholders when compared to the original promises on payment.”

When Bloomberg reached Kangde Xin for comment, the company referred it to its public statements… which we now know were worthless. The company’s accounts receivable collection slowed since the start of October due to “unfavourable financial market conditions”, read the company’s clients are also experience a cash crunch, and then its liquidity ran into temporary difficulties the firm said on the Shenzhen Stock Exchange website on Jan. 15, in response to investor queries about its ability to repay the local bonds and whereabouts of its cash.

Kangde Xin “is a timely reminder that it is dangerous to stray too far into” lower rated Chinese names and private firms from the country still face rising default risks, said Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group.

To be sure, this is not the first time a Chinese company grossly misrepresented its liquidity: a month ago, investors had a similar encounter with another Chinese junk-rated borrower called Reward Science and Technology Industry Group. The detergent and dairy producer reported having 4.15 billion yuan in cash and equivalents at the end of September before reneging on a 300 million yuan local bond payment in early December. Calls to Reward’s official in charge of bond information disclosure went unanswered.

There are big issues with Chinese issuers’ financial disclosure and much more stringent regulation is need to change the situation,” said Lv Pin, a credit analyst at CITIC Securities.

The problem is that China’s regulators are often aligned with the companies and serve merely to perpetuate a lie that liquidity is ample and that insolvency is impossible… until one day the stock crashes.

“Right now, investors can’t rely on issuers’ financial statements at all and some have even disregarded them altogether.”

Which is to be expected: after all Chinese companies are merely doing what Beijing has been doing for years: fabricating, making up and generally reporting bullshit numbers. The problem for investors is that China, the country, can afford to do it to “represent” that it is stronger than is in reality; however when Chinese companies do it, it is only a matter of time before investors end up paying the price. Meanwhile, thanks to episodes like Reward Science and Kangde Xin, confidence and sentiment in Chinese corporations has now officially vaporized.

 

4.EUROPEAN AFFAIRS

/UK

Mish and Eurointelligence both agree that in the end, a hard no deal BREX-IT will happen

here is why!!

(courtesy Mish Shedlock))

May To Skip Davos, No-Deal Brexit Odds Greater Than Many Think

Authored by Mike Shedlock via MishTalk,

May survived a vote of no confidence and the EU might extend Article 50, but only with conditions. Nothing’s changed.

Yesterday added no clarification to the Brexit process.

With the backing of DUP MPs, Theresa May Survived a Vote of No Confidence 325-306.

Most expected that result, as did I. However, Labour leader Jeremy Corbyn is free to repeat the maneuver down the road, and he is nearly certain to do so. Thus, today’s vote changed nothing. If anything, the vote highlights the fragility of May’s predicament.

If May agrees to do anything that DUP doesn’t like, they will abandon her. At some point, a dozen or more Tories might decide the same thing for various reasons.

Corbyn Declines to Meet With May

Following the vote of no confidence, Theresa May declared a get together with all the parties to prepare a way forward. Corbyn rejected the invite unless May took hard Brexit off the table.

She couldn’t do that even if she wanted to because enough Tories would then abandon her in the next motion of no confidence.

See where this is headed? Same impasse.

Brexit Delay

The Financial Times reports EU Indicates it Could Accept a Delay to Brexit – With Conditions.

Some interpret this as an indication there will be a delay forever until May gets her way.

There are numerous problems with the notion.

It requires unanimous consent from all EU member countries. France in particular is leery of allowing that. DUP is unlikely to allow that. A sufficient number of Tories might also get tired of the tactics.

Moreover, France wants a commitment that the UK honor the Irish backstop for the duration. The backstop is precisely the problem for DUP and many Tories.

Finally, there are European Parliament elections in May. Is the UK in or out? No one has worked out a solution yet. They will likely work out a fudge, but this is the least of the problems with perpetual delay.

Opposing Views, Same Place

  1. Jeremy Warner says the Brexit dream is over, or so say the markets, and they are probably right
  2. Tim Stanley says Why are Remainers so happy? Right now, Britain is on course for a no-deal Brexit

Both articles are from the Telegraph, and both were posted today. They both cannot be correct.

I side with Stanley. And I posted numerous reasons yesterday.

No-Deal Odds Greater Than You May Think

Let’s tune in to today’s Eurointelligence report vs what I said yesterday in No-Deal Brexit is the Most Likely Outcome: 2nd Referendum the Least Likely

Eurointelligence: Looking at last night’s Brexit vote in the cold light of the morning, our first thought is that automatic departure from the EU on March 29 remains the law of the land. In that sense, yesterday’s vote has changed nothing. The financial markets concluded that the risks of a no-deal Brexit are reduced. We think the opposite is the case, but for reasons that may not be immediately obvious.

Mish: Forget about a 2nd referendum or an election saving the day. It’s far more likely proponents of “remain” actually cause a no-deal Brexit by clinging to ridiculous hopes.

Eurointelligence: After the 230-vote defeat in the House of Commons, we picked up two important pieces of information. The first is that Jeremy Corbyn’s strategy will consist of piling on one confidence vote after another – as opposed to supporting a second referendum. He will do so hoping that one of those votes will eventually succeed as the Brexit deadline approaches. The confidence vote scheduled for today will almost certainly fail. Barring some new developments, this also means that he will not support a second referendum. Corbyn, not Theresa May, will run down the clock.

Mish: Corbyn tabled a motion of no confidence. Unlike motions from within the party, there is no limit to the number of times he may try that tactic. The UK “Remainers” are cheering today’s vote as if they have a chance at a second referendum. It’s theoretically possible, but it’s the least likely outcome.

Reasons Against Second Referendum

  1. People don’t want it.
  2. MPs don’t want it.
  3. The EU is highly unlikely to wait for one
  4. Heck, no one even knows how to word it

Eurointelligence: The other piece of strategic information is that May will try to maintain her equidistance between no deal and no Brexit. If she were to rule out no Brexit and support no deal, her strategists fear a sufficient number of hardline Remain MPs might eventually support a no-confidence motion. At the same time, she cannot support a second referendum either. After yesterday’s crushing defeat, May’s deal as it now stands is off the table. What about Norway-plus? There is no great merit in a Norway-style deal compared to what May has negotiated, except to give MPs an opportunity to support the withdrawal agreement without loss of face. But we doubt that Norway-plus is going to be acceptable to Corbyn. For all his tactical prevarications, the Labour leader has a clearly-stated Brexit preference – membership of the customs union. But there is almost no support for this option in the Tory party, as it would preclude the UK negotiating third-party trade agreements.

Mish: If at some point a majority for a Norway deal surfaced, DUP [or Tories] could scuttle it by siding with Labour in a motion of no confidence. Corbyn would likely chomp at the bit.

EurointelligenceWe see no parliamentary majorities for outright revocation, or for a second referendum either – not by a long shot. What about a request to extend Art. 50 without a deal – as a sheer act of desperation? If there really is a firm majority to stop a no-deal Brexit, then surely this majority could at the very least come together to extend and pretend, and possibly do so indefinitely. We look at the EU side of such a Faustian bargain below, but we should ask ourselves first why Corbyn would support a blind extension when he has May on the ropes. He wants elections, and the surest way to get there is a looming cliff edge. One Berlin correspondent quoted a German politician calling for an unconditional, not time-limited extension of the Brexit deadline. But that person seems not to have read Art. 50: it would be have to be requested by the UK first. And, from the perspective of the EU, it would be political madness to go down this path as it would have severe implications for the balance of power within the EU itself.

Mish: Given what happened today, and based on the above analysis, a no deal Brexit is the most likely state of affairs, one way or another.

EurointelligenceWe could see a scenario in which May’s deal may survive, but not May herself. Another leader, capable of reaching out to the opposition, might be needed. May has lost too much trust during the last two years to be able to negotiate a cross-party compromise.

Mish: The above complications all point to May being outed and replaced by [Boris] Johnson, who wants a hard Brexit.

EurointelligencePro-Remain UK commentators have marveled at the unity of the EU during the negotiations, but this unity was critically premised on the assumption that the UK would never crash out of the EU without a deal. Once the realization sets in that this may not be so, expect divergent interests to come to the surface. From a simple perspective of political risk management, Germany has no interest in exposing its car industry to tariffs from the UK as well as to tariffs from the US, especially when the Germany economy may be on the verge of a recession.

Mish: No matter how one twists and turns, a no-deal Brexit is the default option. The only wildcard left is the EU. If the EU offered a hard guarantee there would be no permanent backstop, May’s deal could potentially garner enough support. A no deal Brexit is the most likely state of affairs, one way or another. Many paths lead to a no-deal outcome. There are too many possibilities to say no-deal is likely. Rather, it’s the most likely option of the bunch.

Standing With My Analysis

Counting of the financial markets to ascertain the outcome seems more than a bit silly. The Financial markets never thought people would vote for the referendum, but they did.

My comments in Mish vs. Eurointelligence were presented before the Eurointelligence report came out.

I am standing with my analysis and Eurointelligence reached a similar conclusion today. There may be an extension and an extension is needed, not to prevent Brexit but rather to better manage a WTO-Brexit.

Let’s stop the absurd fearmongering, without which there would likely be overwhelming support for a managed WTO-Brexit. The extension is necessary only because May wasted two years negotiating the worst trade deal in history.

*  *  *

Additionally, Prime Minister Theresa May cancels her trip to next week’s World Economic Forum meeting in Davos,Switzerland to handle Brexit talks in the U.K., her spokeswoman, Alison Donnelly, tells reporters in London.

 

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

We have been pointing this out to you for quite a while:  Russia’s resilience in the face of sanctions.

It’s economy is set to overtake Germany in the next decade, albeit that they have a lot more citizens than Germany

(courtesy zerohedge)

Russia To Overtake Germany As World’s Fifth-Largest Economy

The Russian economy is apparently more durable than many Western politicians imagined.

Despite years of international sanctions and low oil prices have dragged on Russia’s economy, which pushed the Russian economy into a recession during 2015, UK-based global bank Standard Chartered predicted in a report published this week that Russia will overtake Germany as the world’s fifth largest economy, possibly as early as next year, according to RT.

In a report outlining its projections for the global economy through 2030, StanChart projected that China would overtake the US a the world’s largest economy as explosive growth in Asia will eventually see some of the Continent’s largest economies unseat Western economies in the top rankings. By 2030, the bank expects seven of the world’s ten largest economies will be Asian economies.

Kremlin

Using a combination of PPP-inflected exchange rates and nominal GDP growth, the bank ranked the top five economies as China, the US, India, Japan, and Russia. Rounding out the top 10 countries will include Germany, Indonesia, Brazil, Turkey, and the UK.

“By 2020, a majority of the world population will be classified as middle class. Asia will lead the increase in middle-class populations even as middle classes stagnate in the West,” said Standard Chartered researcher Madhur Jha.

StanChart aren’t the only ones who are optimistic about Russia’s prospects. The World Bank said in its economic outlook that it expects GDP growth in Russia to accelerate to 1.8% in 2020 and 2021, compared with 1.6% last yearIt attributed this growth largely to “relatively low and stable inflation and increased oil production.” The IMF has also raised its forecast for Russia’s GDP growth in 2019 to 1.8%, with the fund anticipating that the impact of rising oil prices would outweigh the impact of sanctions.

Though when it comes to Russia’s overtaking of Germany, a slowing in the economic growth engine of Europe is also partly to blame. Germany slowed sharply in 2018, growing by 1.5%, its slowest rate since 2013.

And data released during the fourth quarter raised fears that Germany may have experienced a second straight quarterly contraction in Q4, raising anxieties about a possible recession.

But with the Russian economy ascendant again despite looming threats of more sanctions tied to the attack on former intelligence agent Sergei Skripal, one can’t help but wonder whether the media will point out that the economic rival is also Putin’s fault.

 

 

end

6. GLOBAL ISSUES

Shipping data, into China and out flashes red as Chinese shipping rates collapse along with the Baltic dry inex

(courtesy zerohedge)

Global Economy Flashes Red As China Shipping Rates Collapse

dramatic and sudden slowdown in the rate at which numerous commodities are being shipped to China suggests slowing demand for raw materials in the world’s second-largest economy, and signals a wider economic slowdown globally looms.

“Recent shipping data has turned negative with charter rates across all sectors notably weaker compared to late November levels,” Morgan Stanley analysts Fotis Giannakoulis, Qianlei Fan, and Max Yaras wrote.

“While such moves are common, the synchronized decline may be a warning for Chinese commodity demand.”

Morgan Stanley continues:

During the last six weeks almost all shipping sectors have seen charter rates move lower, raising concerns about the health of underlying demand.

  • The Baltic Dry Index is down 17% since mid-December (Exhibit 6) with all vessel types earning lower rates compared to a year agdespite the sharp drop in dry bulk supply growth.

  • Meanwhile, data from China Customs show that iron ore imports shrunk by 3.2% in the last three months through November (Exhibit 7), while steel margins have recently turned negative.

  • On the crude side, VLCC rates to Asia have also seen a notable decline, falling from $60 in November down to $30k currently (Exhibit 8) with crude flows to China showing signs of decelerating momentum. According to ClipperData, in 2018 crude flows to China remained strong, growing by 7.6%, but below the 10.1% growth rate seen in 2017. Over the last four weeks data shows further declines, although this is mostly attributed to the slowdown in supply due to the OPEC+ cuts, as well as delays at Chinese ports.

  • On the gas side, spot LNG charter rates have also been weaker, dropping from $190k in November to $80k currently (Exhibit 10). While in percentage terms the drop in LNG shipping rates seems dramatic, the chartering market remains relatively tight with vessels still earning above mid-cycle levels.

Of course, this data is just the latest in a long line of worrying news for the Chinese economy, but might just be the straw that breaks the ‘hope’ camels’ back.

end

 

.

 

7  OIL ISSUES

8. EMERGING MARKETS

 

END

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

Euro/USA 1.1401 UP .0001 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES RED

 

 

 

 

USA/JAPAN YEN 108;74  DOWN 0.302 (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 1.2906     UP   0.0019  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3287 UP .0029 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS THURSDAY morning in Europe, the Euro ROSE by 1 basis points, trading now ABOVE the important 1.08 level RISING to 1.1401/ Last night Shanghai composite CLOSED  DOWN 10.79 POINTS OR 0.42% 

 

 

//Hang Sang CLOSED DOWN 146.47 POINTS OR 0.54%

 

/AUSTRALIA CLOSED UP 0.27%  /EUROPEAN BOURSES RED

 

 

 

 

 

 

The NIKKEI: this THURSDAY morning CLOSED DOWN 40.48 POINTS OR .20%

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 146.47 POINTS OR 0.54% 

 

 

 

/SHANGHAI CLOSED DOWN 10.79 PTS OR 0.42%

 

 

 

 

Australia BOURSE CLOSED UP 0.27%

 

Nikkei (Japan) CLOSED  DOWN 40.48 PTS OR .20%

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1293.90

silver:$15.55

Early THURSDAY morning USA 10 year bond yield: 2.71% !!! DOWN 2 IN POINTS from WEDNESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.06 DOWN 1  IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)/

USA dollar index early THURSDAY morning: 96.02 DOWN 4 CENT(S) from  WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.76% DOWN 3    in basis point(s) yield from WEDNESDAY/

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

 

 

SPANISH 10 YR BOND YIELD: 1.36% DOWN 2   IN basis point yield from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 2.77 UP 2     POINTS in basis point yield from WEDNESDAY/

 

 

the Italian 10 yr bond yield is trading 131 points HIGHER than Spain.

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

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.52% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1388 DOWN   .0012 or 12 basis points

 

 

USA/Japan: 109.01 DOWN  0.023 OR 2 basis points/

Great Britain/USA 1.2942 UP .0055( POUND UP 55  BASIS POINTS)

Canadian dollar DOWN 40 basis points to 1.3299

 

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The USA/Yuan,CNY closed UP AT 6.7766-  ON SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.7884(  YUAN DOWN)

TURKISH LIRA:  5.3606

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

 

 

 

Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.73 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.06 DOWN 1  in basis points on the day /

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

Your closing USA dollar index, 96.12 UP 6  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 27.76 OR 0.40%

German Dax : DOWN 12.62 POINTS OR 0.12%

Paris Cac CLOSED DOWN 16.37 POINTS OR 0.34%

Spain IBEX CLOSED DOWN 4.10 POINTS OR 0.05%

Italian MIB: CLOSED DOWN 7.39 POINTS OR 0.04%

 

 

 

 

WTI Oil price; 51.76 12:00 pm;

Brent Oil: 60.85 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.35  THE CROSS HIGHER BY 0.75 ROUBLES/DOLLAR (ROUBLE LOWER BY 1 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3606 PER ONE USA DOLLAR.

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

END

 

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

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

WTI CRUDE OIL PRICE 4:30 PM :   52.36

 

BRENT :  61.20

USA 10 YR BOND YIELD: 2.75%…

 

 

USA 30 YR BOND YIELD: 3.07%/

 

 

 

EURO/USA DOLLAR CROSS: 1.1391 ( DOWN   9 BASIS POINTS)

USA/JAPANESE YEN:109.18 UP 0.147 (YEN DOWN 15 BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 96.07 UP  1 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2987 UP 147 POINTS FROM YESTERDAY

the Turkish lira close: 5.3393

the Russian rouble:  66.35 UP .01 Roubles against the uSA dollar.( UP 01 BASIS POINTS)

 

Canadian dollar: 1.3271 DOWN 18 BASIS pts

USA/CHINESE YUAN (CNY) : 6.7764  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.7733 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.24%

 

The Dow closed UP 162.94 POINTS OR 0.67%

 

NASDAQ closed UP 49.77 POINTS OR 0.71%

 


VOLATILITY INDEX:  17.91 CLOSED DOWN 1.13 

 

LIBOR 3 MONTH DURATION: 2.780%  .LIBOR  RATES ARE RISING/

 

FROM 2.773

 

 

 

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

 

China Drops, US Pops After Trillion Yuan Pump Trumps Morgan Stanley Dump

Another day, another wild ride…

Ugly night in China…

Despite over a trillion yuan in liquidity injections…

And before we move on Hong Kong was hit by some crazy flash-crashes overnight…

The UK’s FTSE continues to lag as Italy soars…

 

And then at around 1445ET, headlines hit that suggested US folding on China trade tariffs and stocks (and yuan) surged…and then retraced it all as TSY denied…but stocks tried valiantly to ignore the denial…

 

Futures show that the WSJ headlines over trade were so perfectly timed as The Dow managed to get back to unchanged… almost as if someone wanted the market to pop there and panted the story…

 

All the US majors pushed back above their 50DMAs…

 

Morgan Stanley – like every other major – saw terrible FICC performance, but had no redeeming features to spur a bounce and that rather spoiled the party for financials…

The big question is, what happens next?

 

Bond yields jumped on the day and did not retrace on the denials…

 

Pushing 10Y Yields to the 2019 highs…

 

The Dollar index popped and chopped once again to end the day almost unchanged… (up on the week)

 

Copper and crude spiked on the Trade headlines (but didn’t retrace on the denials)…

 

In other news, Palladium exploded to yet another new all-time record high above $1400 for the first time(up over 12% YTD)…

Pushing it higher than gold for first time since 2002…

 

Finally we note that US equities have now surged back near a record high valuation relative to Europe…

And of course, NFLX is up next… with quite a low barrier for a beat…

END

market trading/

They should throw these guys into jail:  first stocks rise then fade after the treasury denies reports that the uSA is weighing lifting Chinese tariffs to calm markets

(courtesy zerohedge)

Stocks Soar Then Fade After Treasury Denies Report US Weighs Lifting China Tariffs To “Calm Markets”

Update 2: Official denial now, this time from Bloomberg

  • TREASURY DENIES REPORT MNUCHIN PUSHED TO LOWER CHINA TARIFFS

Commenting on the WSJ report and subsequent denials, Calvin Tse, Citi’s North American head of G-10 foreign-exchange strategy, said “we have imperfect information right now, but based on what we know, I do not view this as relevant news,” noting that article says Treasury Secretary faces resistance from Trade Representative

Tse said that “it’s an idea” and not clear whether it’s “realistic right now”, adding that he wouldn’t be selling dollars here.

* * *

Update: CNBC’s Eamon Javers reports that a Treasury spokesman has offered this comment on the WSJ report: “Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China” and adds that “this an ongoing process with the Chinese that is nowhere near completion.”

Eamon Javers

@EamonJavers

I just spoke briefly to Treasury Secretary Steven Mnuchin in the West Wing. He appeared to be heading into the Oval Office. I asked him about the WSJ story that he has proposed lifting tariffs on China. He said he is not going to make any statements at this time.

Eamon Javers

@EamonJavers

The spokesman adds this: “This an ongoing process with the Chinese that is nowhere near completion.”

See Eamon Javers’s other Tweets

And as Bloomberg confirms: TREASURY DENIES TO WSJ ANY CHINA TARIFF RECOMMENDATIONS MADE

In kneejerk response to the denial, the S&P has faded about half of the initial gain but is still about 0.5% higher.

* * *

In stark reversal of the market action from the last hour of trading on Wednesday, stocks surged moments ago on a WSJ report that U.S. officials are weighing easing back tariffs on Chinese imports “as a way to calm markets and give Beijing an incentive to make deeper concessions in a trade battle that has rattled global economies.”

That said, nothing is assured as the push for concessions is split within the Trump camp: according to the WSJ, the idea of lifting some or all tariffs was proposed by Treasury Secretary Steven Mnuchin in a series of strategy meetings, with the intention “to advance trade talks and win China’s support for longer-term reforms.” However, Mnuchin is said to face resistance from U.S. Trade Representative Robert Lighthizer, who is concerned that “any concession could be seen as a sign of weakness.”

The debate is occurring as trade officials try to figure out the best way to pry concessions from China. It hasn’t yet reached President Trump, and the outcome of the discussions aren’t possible to forecast.

While in the past, Trump has sided with Lighthizer on tariffs, rather than Mnuchin, this time the president has made clear he wants a deal—and is pressing Lighthizer to deliver one, according to people familiar with the discussions.

While Lighthizer is leading the trade talks, Mr. Mnuchin has been active in formulating the administration’s strategy. In talks with members of the trade team, Mr. Mnuchin raised the possibility of offering to eliminate tariffs during discussions scheduled for Jan. 30 in Washington with top Chinese trade envoy Liu He—a month ahead of the target date to conclude the negotiations.

“It could be an arrow in the quiver” of U.S. negotiators, said one of the people tracking the talks.

It is not clear if Lighthizer will concede: the USTR has repeatedly taken his hard-line in trade talks, contending that China hasn’t lived up to past agreements and can’t be trusted to do so in the future. In the discussions with China, he has said the U.S. should remove tariffs only when China has shown it has carried out promises made during the talks.

But Mr. Lighthizer has shown some signs of easing his position, say people involved in the talks, including raising the possibility that some tariffs could be eliminated if the U.S. strikes a strong deal on March 1. A Treasury spokesman said bargaining positions “are all at the discussion stage” and that  “neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China.”

And even as the WSJ notes that talks are “nowhere near completion,” stocks exploded higher on the news, with the Dow surging 1% higher on the day…

… while the S&P rising above the 50DMA.

The news also sent the dollar sliding while the Aussie dollar and yuan both spiked on the report.

Finally, treasury futures fell to session lows with the cash 10-year yield touching a YTD high 2.756%.

end

market data/

It seems that most of the big boys are having trouble in the fixed income department. Now, it is 5 out of 5 big investment banks have reported disappointing FICC revenue.

(courtesy zerohedge)

Morgan Stanley Tumbles Following Huge Revenue, FICC Miss

After 5 out of 5 big investment banks reported disappointing FICC revenue results, hopes that Morgan Stanley would break the trend when it reported Q4 earnings this morning were subdued at best, and for good reason: moments ago the bank reported Q4 FICC revenue of just $564MM, a huge miss to the $823MM consensus expectation and a whopping 30% drop Y/Y which was also the biggest fixed income revenue drop on Wall Street.

The result was so bad, one has to go back to 2015 to find a lower fixed income print.

Had that been all, the bank may have scraped through unscathed like so many of its peers, but whereas other banks managed to cover up for FICC disappointment with the outperformance of other groups, Morgan Stanley did not, and as a result Q4 revenue printed at just $8.55BN, far below the $9.35BN expected and in fact below the lowest estimate in the range of forecasts of $8.97BN to $10.17BN.

This also resulted in a painful EPS miss, with the company reported 73 cents in Q4 EPS (thanks to a 16.2% effective tax rate), far below the 89 cents expected, a number which excluded a 7 cent per share tax benefit. And while net income more than doubled to $1.53 billion from $643 million a year earlier, that is because the firm took a $1 billion charge related to the U.S. tax overhaul last year.

Between the disappointing revenue and EPS prints, this was the first top and bottom line miss in over three years.

So alas whereas other banks could at least pretend the core business is doing well, MS had no such luxury, especially since equity sales and trading revenue of $1.93BN also missed expectations of $2.01BN; the number was “essentially unchanged from a year ago reflecting higher revenues in the financing business, partially offset by lower results in execution services.” As for the FICC plunge, the bank said that this is due to “unfavorable market making conditions that resulted from significant credit spread widening and volatile rate movements.”

The company’s key Wealth Management group also disappointed, reporting pre-tax income from continuing operations of $1.0 billion compared with $1.2 billion a year ago. Net revenues for the current quarter were $4.1 billion compared with $4.4 billion a year ago principally driven by losses related to investments associated with certain employee deferred compensation plans. Even so, total client assets were $2.3 trillion and client assets in fee-based accounts were $1.0 trillion at the end of the quarter.

There was a silver lining in the bank’s investment banking revenue of $1.49BN which while unchanged from a year ago, was better than the $1.35BN expected.

  • Advisory revenues of $734 million increased from $522 million a year ago on higher levels of completed M&A activity across all regions.
  • Equity underwriting revenues of $323 million decreased from $416 million a year ago reflecting lower revenues primarily on IPOs.
  • Fixed income underwriting revenues of $360 million decreased from $499 million a year ago driven by lower bond and loan issuances.

Alas, this was not enough to offset the broader gloom. To be sure, the bank tried to make up for the drop in revenue by slashing expenses, as compensation costs of $3.8 billion decreased from $4.3 billion a year ago on lower net revenues, partially offset by
a reduction in the portion of discretionary incentive compensation subject to deferral (non-compensation expenses of $2.9 billion increased from $2.8 billion a year ago).

Of course, CEO James Gorman was optimistic, saying that “In 2018 we achieved record revenues and earnings, and growth across each of our business segments – despite a challenging fourth quarter. We delivered higher annual returns, producing an ROE of 11.8% and ROTCE of 13.5%, as we continued to invest in our businesses. While the global environment remains uncertain, our franchise is strong and we are well positioned to pursue growth opportunities and serve our clients.”

Yet after the first truly dreadful bank results of the earnings season the market disagreed, and MS stock, which is a 0.2% contributors to the S&P, tumbled 5% and sent US equity futures near session lows and in danger of breaching 2,600 – the new key support – in the S&P500.

With today’s drop in MS stock, it appears that Goldman is about to regain the lead in the market cap race between the two banks.

end
Soft data, USA’s Bloomberg Confidence Index collapsed and the biggy was economic hope
(courtesy zerohedge)

Americans’ Economic Hope Has Collapsed

Which came first, the confidence or the stock market rally?

One thing is for sure, the crash in stocks in December has crushed the hope of Americans that their economic future is going to be better under President Trump.

Overall confidence dipped to 58.1 – a 4-month low, but, U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week.

Measures for sentiment among high school graduates and those 65 and older both fell to the lowest since July. The measure also fell across most income levels as well as for Democrats and independents; but confidence increased among Republicans, renters, and for workers earning more than $50,000.

Bloomberg notes that the faltering sentiment reflects a dimmer economic outlook among Americans amid the longest U.S. government shutdown on record. The monthly gauge also fell sharply during the last lengthy shutdown in October 2013, when the index dropped the most since the last recession; it rebounded the following month with the government open again.

END

the housing sector is a big part of GDP in the uSA. Sales are plunging and home prices are rising at the slowest pace in 6 years

(courtesy zero hedge)

US Home Prices Rise At Slowest Pace Since 2012 As Sales Plunge

In the latest indication of how weakness in the high end of the US housing market is beginning to seep into the lower rungs, growth in US home prices slowed in December as sales slumped, marking the smallest annual increase since 2012 – the end of the last housing crash, according to Bloomberg.

The median US home price rose 1.2% to $289,800 in December, the slowest monthly pace since March 2012, when the housing market was just beginning to climb out of the hole left by the collapse. Meanwhile, sales dropped by 11%, the biggest drop for any one month since 2016, according to a report released by real estate company Redfin said. This follows a drop in the hottest markets, like San Jose, California, where prices dropped 7.3%.

As BBG explains, the housing market is softening after years of rapidly rising prices as the shortage in homes is beginning to wane. With interest rates on the rise, mortgages are becoming more expensive, which is cutting in to demand.

Housing

The property market, which was surging for years as buyers fought for a limited supply of homes, is softening as inventories start to increase and buyers take more time. The jump in mortgage rates last year added to housing’s underlying affordability problem, putting an end to the era of rampant bidding wars.

Though, as one realtor put it, the cooling is expected after so many consecutive years of torrid growth (particularly since home-price appreciation has so dramatically outpaced wage growth).

“It was like hitting the brakes when you’re going over the speed limit,” Redfin Chief Economist Daryl Fairweather said of the slowdown. “You can’t have prices growing faster than wages year after year.”

But one question left open is whether the recent retreat in interest rates will swiftly translate into a rebound in purchases. If that happens, then buyers will know that interest rates are the biggest factor here. If not, that could be a signal that the worsening student debt crisis is finally taking its toll.

USA ECONOMIC STORIES OF INTEREST

Goldman Sachs warns of a big hit to the economy as the rich cut their spending once they see how badly they are doing with their stocks.

(courtesy zerohedge)

Goldman Warns Of Hit To Economy As Rich Cut Spending Once They See Their Brokerage Statements

In a world of record wealth inequality, many believe that one of the fringe benefits of the rich getting richer and the poor staying, well, poor is that consumption has become less sensitive to moves in stock prices because of the lower spending propensity of wealthy households, in other words, the “wealth effect” has become increasingly muted (after all remember, “The Rich Hold Assets, The Poor Have Debt“).

The claim, proposed for example by the NBER in 2013, is that declines in equity prices now translate into smaller declines in consumer spending than in the past, because wealthy households now bear a larger share of the losses and have lower propensities to spend. In other words, if the wealth effect has indeed fallen, it would be one reason to expect only a modest drag on consumer spending from the recent sell-off.

If this is correct, it would imply that the recent stock market sell-off is likely to weigh only modestly on consumption.

However, in a new report from Goldman’s economists, the bank disagrees with cheerful take and believes that once America’s rich see their latest, and sharply reduced brokerage statements, they too will cut back on spending, adversely impacting the broader economy, for two reasons:

First, while the share of equities owned by the wealthiest households has risen over the last three decades, equity holdings have more than tripled as a share of disposable income at the aggregate level and have also risen substantially for middle and upper-middle wealth groups. Therefore, a 1% move in stock prices now has a much larger impact on wealth levels for most groups.

To be sure there is no arguing that the rich have gotten richer, or as Goldman puts it, “stock ownership has become more concentrated.” Indeed, the wealthiest 0.1% and 1% of households now own about 17% and 50% of total household equities respectively, up significantly from 13% and 39% in the late 80s.

Furthermore, as the left panel of the next chart shows, household equity holdings have more than tripled as a share of disposable income at the aggregate level since the late 80s. Combining these aggregate holdings with the group-level ownership shares from the chart above, it emerges that equity holdings as a share of income have risen substantially for not only the upper-middle and upper wealth groups, but also the “middle”.

Therefore, according to Goldman, “the hit to the wealth level from a 1% decline in stock prices is now about 3 times larger than in the late 80s for the top-10% of households and a third larger for those in the 50-90th percentiles.” The hit is even greater if one includes household holdings through pension funds and life insurances, which now stand at 30% and 10% of disposable income respectively.

The Second reason why Goldman is concerned about the impact of sliding stock on the propensity to spend is that equity price moves also have a meaningful effect on the spending of wealthy households. Goldman finds evidence for this claim in that spending on luxury goods largely purchased by wealthy households is highly sensitive to stock prices.

As evidence, Goldman presents the next chart which shows that equity price moves do have a meaningful effect on the spending of wealthy households: the PCE share spent on jewelry and watches is highly correlated with moves in the stock market (left panel). Using regressions of spending growth on stock price changes, Goldman confirms this strong relationship more formally for jewelry and watches, pleasure boats and pleasure aircrafts (right panel). Intuitively, it does make sense that even the top 0.01% will spend less on “pleasure boats and pleasure aircrafts” if they are watching the market go down in flames. Curiously, this correlation has only increased in the past two decades when the market sprinted higher because when focusing on a sample since 1995, the bank found large effects of the stock market on luxury spending while the effects are actually weaker in earlier decades.

In other words, Goldman’s analysis suggests that the wealth effect from the stock market is unlikely to have fallen substantially over the past 30 years despite the rise in wealth inequality because i) equity holdings have risen sharply, and especially for the richest Americans, and ii) because equity price moves still have a meaningful effect on the spending of wealthy households.

As a result, Goldman summarizes that “a 1% move in stock prices now has a much larger impact on wealth levels for most groups” and finds that the since the wealth effect is alive and well – much to the delight of former Fed Chair Ben Bernanke who in an WaPo op-ed explicitly advocated artificially boosting the stock market to stimulate the “wealth effect” – and by implication, there is now a substantial negative wealth effect on real PCE, which Goldman expects to slow to 2¼-2½% this year, despite healthy labor income growth, an elevated saving rate, and cheaper oil.

As a result of this analysis, Goldman concludes that stock market wealth effects, i.e. a continued drop in equities, could subtract about 0.5% off real GDP growth this year, a number which will only grow as stocks continue to slide, and is – some could argue – the most salient reason why the Fed’s put was triggered at around 2,300 because any further drops would have had a significantly adverse impact on the economy.

end

My goodness!  This did not take long:  for the second time in only two years, children’s clothing retailer Gymboree Group has filed for chapter 11 as the bloodbath in the retail space continue! They reported that they had poor holiday sales.  Also dept store Shopko filed.

(courtesy zerohedge)

Children’s Clothing Retailer Gymboree Declares Bankruptcy For Second Time In Two Years

For the second time in two years, children’s clothing retailer Gymboree Group Inc. has filed for Chapter 11 bankruptcy protection, offering the latest sign of the looming bloodbath in the retail space following stagnant foot-traffic during the holiday sales season (which was dominated by e-commerce), and the strain from higher interest rates. Gymboree, which filed late Wednesday, wasn’t the only retailer to file within the last 24 hours: Department Store Shopko also filed on Wednesday.

Gymboree

As part of its restructuring plans, Gymboree will close 800 Gymboree– and Crazy 8-branded stores in the US and Canada. In its press release, the retailer said it’s planning to sell its high-end children’s fashion line Janie and Jack, its online platform and its intellectual property – though all of these will remain open for now as the restructuring continues. Gymboree Play & Music, which split from Gymboree in 2016, will not be impacted.

The filing comes after Gymboree said last month that it had begun to review “strategic options” including a “sale at the brand level”.

The company previously invoked Chapter 11 in the summer of 2017, leading to the closure of about 350 of its 1,281 locations. The company was founded in the 1970s as a company that offered classes for toddlers and parents in Northern California, before diversifying into making children’s clothing.

The filing notably followed by less than a day a deal struck by Eddie Lampert to save Sears from liquidation.

Read the full press release below:

* * *

SAN FRANCISCO, Jan. 16, 2019 /PRNewswire/ — Gymboree Group, Inc. (the “Company” or “Gymboree Group”), today announced that the Company and its U.S. subsidiaries have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia.

In addition, the Company’s Canadian subsidiary, Gymboree, Inc., intends to seek protection in proceedings pursuant to the Bankruptcy and Insolvency Act of Canada(“BIA”) in the Ontario Superior Court of Justice (Commercial List). Gymboree Group intends to use these proceedings to facilitate an orderly wind-down of all of its Gymboree® and Crazy 8® store locations and operations, while continuing to pursue a going-concern sale of its Janie and Jack® business and a sale of the intellectual property and online platform for Gymboree®. The Company has entered into an asset purchase agreement with Special Situations Investing Group, Inc. (“SSIG”), an affiliate of Goldman Sachs & Co. LLC, pursuant to which SSIG will serve as the stalking-horse bidder in a court-supervised sale process for Janie and Jack®.

Gymboree Group expects to conduct an auction pursuant to Section 363 of the U.S. Bankruptcy Code no later than February 25, 2019, pursuant to bid procedures to be approved by the Court. Pursuant to the asset purchase agreement, SSIG has agreed to acquire the Janie and Jack® business and the intellectual property and online platform for Gymboree®. The asset purchase agreement sets the floor for the auction, which is designed to achieve the highest or otherwise best offer, subject to approval by the Bankruptcy Court. Shaz Kahng, appointed in November 2018 as Gymboree Group CEO, said, “The Company has worked diligently in recent months to explore options for Gymboree Group and its brands, and we are saddened and highly disappointed that we must move ahead with a wind-down of the Gymboree and Crazy 8 businesses.

At the same time, we are focused on using this process to preserve the Janie and Jack business – a strong brand that is poised to grow – by pursuing a sale of the business as a going concern. As we move ahead, we are working to minimize the impact on our employees, customers, vendors and other stakeholders.”

Ms. Kahng continued, “We have tremendous appreciation for the hard work of our dedicated employees and their commitment to Gymboree Group and our customers. We are also incredibly grateful for the many years of support by our vendors. And, finally, we thank the customers of the Gymboree, Janie and Jack and Crazy 8 brands for their loyalty – our teams have been proud to serve you since Gymboree was first started as a provider of mom-and-baby classes in 1976.” Gymboree®, Janie and Jack® and Crazy 8® stores and online platforms are currently open and continuing to serve customers. The Company will provide an update on plans for its Janie and Jack® stores as the court-supervised sale process progresses.

Gymboree Group will provide more details about the plans for its Gymboree® and Crazy 8® going out of business sales in the near term. Gymboree Group has received a commitment for a debtor in possession financing, which consists of $30 million in new money loans to be provided by SSIG and Goldman Sachs Specialty Lending Holdings, Inc. and a “roll up” of all of Gymboree’s obligations under the prepetition Term Loan Credit Agreement in an amount not less than $89 million.

If approved by the court, the financing package is expected to support the Company’s operations during these proceedings. Gymboree Group has filed a number of customary motions with the U.S. Bankruptcy Court seeking authorization to support its operations during the process, including authority to continue payment of employee wages and maintain healthcare benefits and certain other relief customary in these circumstances. The Company has sought authorization from the Court to continue to honor customer gift cards for 30 days.

Gymboree Group has discontinued its GymBucks and Gymboree Rewards programs effective immediately. Additional information regarding Gymboree Group’s Chapter 11 filing is available at www.GymboreeGroupRestructuring.com. Court filings and information about the claims process are available at https://cases.primeclerk.com/gym or by calling the Company’s claims agent, Prime Clerk, at (929) 272-0801 (or toll-free at (844) 399-4163 for international calls), or by sending an email to gyminfo@primeclerk.com.

Additional information regarding the Canadian proceedings of Gymboree, Inc. under the BIA will be available on the website of KPMG Inc., as Proposal Trustee: home.kpmg/ca/gymboree, or by calling (416) 777-3520 or (833) 467-5379, or by sending an email to gymboree@kpmg.ca Gymboree Play & Music®, a separate entity, is not included in the court proceedings.

Milbank, Tweed, Hadley & McCloy LLP is serving as the Company’s legal counsel, Berkeley Research Group is serving as its restructuring advisor, and Stifel, Nicolaus & Co., Inc. and Miller Buckfire & Co., LLC are serving as its financial advisor. Norton Rose Fulbright Canada LLP is counsel to Gymboree Canada. KPMG Inc. is acting as Proposal Trustee and is represented by Osler, Hoskin & Harcourt LLP.

END

Sears accepts a $5.2 billion dollar rescue package from its big owner/investor Eddie Lampert

(courtesy zerohedge)

Sears Accepts $5.2 Billion Rescue Package From Eddie Lampert

Sears Holdings corporation announced on Thursday that it has accepted a $5.2 billion bid by Chairman Eddie Lampert’s ESL Investments, preserving approximately 45,000 jobs upon approval.

ESL will acquire “substantially all of the Company’s assets” assuming Lambert’s rescue package is approved at a February 1 hearing. Assuming closing conditions are satisfied, the transaction will close on or about Feburary 8.

“We are pleased to have reached a deal that would provide a path for Sears to emerge from the chapter 11 process,” said the Restructuring Committee of the Board of Directors in a statement. “Importantly, the consummation of the transaction would preserve employment for tens of thousands of associates, as well as the relationships with many vendors and suppliers who provide Sears with goods and services.”

Sears was pulled back from the brink of liquidation earlier this month after Lampert was allowed to amend a rejected bid that short of covering the company’s obligations.

Sears closed about 140 stores in October when it initially filed for Chapter 11 bankruptcy protection with $11.34 billion in debt. The retailer also announced in November that it would close an additional 40 unprofitable stores by February 2019.

SWAMP STORIES

This is quite a story…John Solomon receives tips from committee members concerning the Bruce Ohr testimony. Bruce Ohr warned the FBI of the Clinton connection with respect to the Steele dossier as well as its possible bias.  Ohr told the FBI a lot earlier than thought..well before Steele was fired..and well before the FISA warrants were issued. Not only that but Ohr meet with Mueller’s top lieutenant Weissmann and briefed him on the issues well before the Mueller investigation started. The key point here is that the FBI knew that the Steele dossier was suspect and not verified but they went ahead and filed with the FISA court anyway.  A lot of people will be going to jail on this.

(courtesy zerohedge)

Dossier Shocker: Top DOJ Official Sounded Alarm, Warned Of Clinton Connection And Possible Bias

The Justice Department was fully aware that the notorious Steele Dossier was connected to Hillary Clinton and might be biased – a crucial detail which was omitted just weeks later from the Foreign Intelligence Surveillance Act (FISA) warrant used to spy on the Trump campaign, reports John Solomon of The Hill

Bruce Ohr

According to Solomon’s sources – which have proven impeccable, the former #4 Department of Justice (DOJ) official, Bruce Ohr – who had extensive contact with Steele, briefed “both senior FBI and DOJ officials in summer 2016 about Christopher Steele’s Russia dossier, explicitly cautioning that the British intelligence operative’s work was opposition research connected to Hillary Clinton’s campaign and might be biased.” 

Ohr’s activities, chronicled in handwritten notes and congressional testimony I gleaned from sources, provide the most damning evidence to date thatFBI and DOJ officials may have misled federal judges in October 2016 in their zeal to obtain the warrant targeting Trump adviser Carter Page just weeks before Election Day. –The Hill

Ohr’s activities also contradict a key argument made by House Democrats in their attempts to downplay the significance of the Steele Dossier; that the FBI claimed it was “unaware of any derogatory information” about Steele, and that the former MI6 operative was “never advised … as to the motivation behind the research.” The FBI further “speculates” that those who hired Steele were “likely looking for information to discredit” Trump’s campaign.

There was no “speculation” going on by the FBI. Thanks to Ohr’s warning, they absolutely knew about Steele’s bias against Trump while working for a Clinton-funded project to gather harmful opposition research on him

Ohr had firsthand knowledge about the motive and the client: He had just met with Steele on July 30, 2016, and Ohr’s wife, Nellie, worked for Fusion GPS, the same firm employing Steele.

“I certainly told the FBI that Fusion GPS was working with, doing opposition research on Donald Trump,” Ohr told congressional investigators, adding that he warned the FBI that Steele expressed bias during their conversations.

I provided information to the FBI when I thought Christopher Steele was, as I said, desperate that Trump not be elected,” he added. “So, yes, of course I provided that to the FBI.” –The Hill

When lawmakers pressed Ohr as to why he would volunteer that information to the FBI, he answered “In case there might be any kind of bias or anything like that,” adding later “So when I provided it to the FBI, I tried to be clear that this is source information, I don’t know how reliable it is. You’re going to have to check it out and be aware.”

Ohr also says he told the FBI that his wife and Steele were working for Fusion GPS – the same firm hired by the Clinton campaign through intermediary law firm Perkins Coie, and that they were conducting Trump-Russia research at the behest of Clinton’s camp.

Glenn Simpson (left), Christopher Steele, Bruce and Nellie Ohr

“These guys were hired by somebody relating to, who’s related to the Clinton campaign and be aware,” Ohr told lawmakers, explaining how he warned the bureau.

Perkins Coie eventually admitted to paying Fusion GPS, disguising the payments as legal bills when it was in fact opposition research

When Ohr was asked if he knew of any connection between the Steele Dossier and the DNC, he said he thought the project was really connected to the Clinton campaignsaying: “I didn’t know they were employed by the DNC but I certainly said yes that they were working for, you know, they were somehow working, associated with the Clinton campaign.”

“I also told the FBI that my wife worked for Fusion GPS or was a contractor for GPS, Fusion GPS,” he added.

Ohr divulged his first contact with the FBI was on July 31, 2016, when he reached out to then-Deputy Director Andrew McCabe and FBI attorney Lisa Page. He then was referred to the agents working Russia counterintelligence, including Peter Strzok, the now-fired agent who played a central role in starting the Trump collusion probe.

But Ohr’s contacts about the Steele dossier weren’t limited to the FBI. He said in August 2016 — nearly two months before the FISA warrant was issued — that he was asked to conduct a briefing for senior Justice officials.

Those he briefed included Andrew Weissmann, then the head of DOJ’s fraud section; Bruce Swartz, longtime head of DOJ’s international operations, and Zainab Ahmad, an accomplished terrorism prosecutor who, at the time, was assigned to work with Lynch as a senior counselor.

Ahmad and Weissmann would go on to work for Mueller, the special prosecutor overseeing the Russia probe. –The Hill

In early 2018, Democrats on the House Intelligence Committee sought to downplay Ohr’s connections to Steele during their investigation – insisting Ohr only notified the FBI about Steele after Steele was fired by the FBI in November 2016 for improper contacts with the media. 

The memo from House Democrats – led by Rep. Adam Schiff’s (D-CA), says that Ohr’s contact with the FBI only began “weeks after the election and more than a month after the Court approved the initial FISA application.”

Ohr’s testimony refutes Schiff’s memomaking clear he was in contact with FBI and DOJ officials long before the FISA warrant or the 2016 US election

Not only that, Ohr explicitly told the FBI that Steele was desperate to defeat the man he was investigating and was biased, according to Solomon, and the FBI didn’t have to guess as to Steele’s motives.

Rudy Giuliani

@RudyGiuliani

The Hill article is a powerful piece of evidence that the Mueller investigation is the illegitimate offspring of a prior investigation based on a phony dossier paid for by the DNC. This was never revealed in false affidavits presented to FISA court. Mueller’s people implicated.

end

funny: Trump cancels Pelosi’s foreign trip (using a military plane) because of the shutdown.  However if she wants to fly commercial that is up to her but she has to pay for it.

(courtesy zerohedge)

Trump Tells Pelosi Her Trips Are Postponed Due To Shutdown Unless She Flies Commercial

Just one day after Speaker Pelosi chose to exercise her right to not invite the President to give his “State of the Union” address, Trump has responded.

In a letter to Nancy Pelosi, President Trump explains that he will be postponing her trip to various foreign countries due to the shutdown…

Dear Madame Speaker:

Due to the Shutdown, I am sorry to inform you that your trip to Brussels, Egypt, and Afghanistan has been postponed. We will reschedule this seven-day excursion when the Shutdown is over.

In light of the 800,000 great American workers not receiving pay, I am sure you would agree that postponing this public relations event is totally appropriate. I also feel that, during this period, it would be better if you were in Washington negotiating with me and joining the Strong Border Security movement to end the Shutdown.

Obviously, if you would like to make your journey by flying commercial, that would certainly be your prerogative.

I look forward to seeing you soon and even more forward to watching our open and dangerous Southern Border finally receive the attention, funding, and security it so desperately deserves!

Fox News reports that Speaker Pelosi was due to leave for her trip at 3pm!!

Judging by the level of rhetoric – we are absolutely nowhere near escaping the shutdown. Some overnight tweets from Trump say it all…

Donald J. Trump

@realDonaldTrump

It is becoming more and more obvious that the Radical Democrats are a Party of open borders and crime. They want nothing to do with the major Humanitarian Crisis on our Southern Border. #2020!

Donald J. Trump

@realDonaldTrump

The Left has become totally unhinged. They no longer care what is Right for our Countrty!

Donald J. Trump

@realDonaldTrump

So funny to watch Schumer groveling. He called for the firing of bad cop James Comey many times – UNTIL I FIRED HIM!

‘Tit’… meet ‘tat’

“It demeans the office is the presidency because it is so petty,” House Majority Leader Steny Hoyer says of Trump’s decision to deny Nancy Pelosi use of a military plane for a planned overseas trip (which we presume means he did not think Pelosi’s decision to rescind Trump’s SOTU speech invitation “demeaned the office of the Speaker”?)

end
This is getting crazier by the minute:  We now have a Belarus hooker arrested in Moscow and she claims to be the Trump-Russia missing link
(zerohedge)

Belarus Hooker Arrested In Moscow After Thailand Detention; Claims To Be Trump-Russia “Missing Link”

A prostitute from Belarus and three associates were arrested at Moscow’s Sheremetyevo airport on Thursday after being deported by Thailand following nearly a year in a Thai prison, according to Reuters. The four have been transferred to a police station, Interfax cited the Interior Ministry as reporting.

Anastasia Vashukevich

27-year-old Anastasia Vashukevich – known better by the alias Nasta Rybka – was arrested in Thailand after a raid on her $600/head “sex training” seminar after claiming to be the “missing link” who can provide recorded evidence of a connection between President Trump and Russian billionaire Oleg Deripaska – who the Trump administration slapped with harsh sanctions over Russian interference in the 2016 US election, along with three of his companies.

Deripaska agreed to partially divest from his companies, bringing his ownership below 50% in an agreement with the Treasury department which would see sanctions lifted on those entities – while remaining in place on Deripaska himself. The move has been met with sharp opposition in Congress, as 136 Republicans joined House Democrats to oppose the plan.

Oleg Deripaska

Deripaska, who had business dealings with former Trump campaign chairman Paul Manafort, was rumored to be Donald Trump’s “back channel” to Russian President Vladimir Putin. The Russian oligarch hit back in September – admitting to “collusion” when he served as an FBI asset during the Obama administration. He has denied that Vashukevich was his mistress and accused her of fabricating the claims.

Throughout her detention in Thailand, Vashukevich somehow posted to her instagram account about her ordeal. In one post, she is said to have fallen ill, has no bed to sleep on, and has “frostbitten kidneys.”

Now they are kept in worse conditions. Concrete floor. No beds available. Food is only what they bring. The doctor did not call for Nastya. She frostbitten her kidneys. The condition is very poor. According to our eyewitnesses, someone from the Russian consulate worked on the Thai police. –Instagram (translated)

Vashukevich claimed over Instagram that Moscow “will simply kill us if Thailand gives us to Russia.

https://www.instagram.com/p/BftWeUYjqBk/embed/captioned/?cr=1&v=12&wp=540&rd=https%3A%2F%2Fwww.zerohedge.com&rp=%2Fnews%2F2019-01-17%2Fbelarus-hooker-detained-moscow-after-thailand-detention-claims-be-trump-russia#%7B%22ci%22%3A0%2C%22os%22%3A2839.69999999681%7D

“I am the only witness and the missing link in the connection between Russia and the U.S. elections – the long chain of Oleg Deripaska, Prikhodko, Manafort, and Trump,” Vashukevich said in a live Instagram broadcast on last year, apparently filmed while being driven through the Thai resort city of Pattaya in an open-air police van. “In exchange for help from U.S. intelligence services and a guarantee of my safety, I am prepared to provide the necessary information to America or to Europe or to the country which can buy me out of Thai prison.

In March, CNN flew to Bankgkok to interview Vashukevich – with the network’s Ivan Watson reporting: ”

She described herself as a seductress. This woman claims to have evidence of Russian meddling in the U.S. election. The question, is this a desperate ploy to get out of jail, or as her friend claims, is this young woman truly in danger because she knows too much?”

“For days several Russian friends have been held at this jail in the capital of Thailand where visitors are not allowed to bring cameras,” Watson reports.

“I came out of this detention center. It was loud and hot and chaotic and talking through the bars she says she witnessed meetings between the Russian billionaire and three Americans who she refused to name. He claims they discussed plans to effect the U.S. elections but she wouldn’t give any further information because she fears she could be deported back to Russia.”

And now the “seductress” is sitting in a Moscow jail cell.

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

Federal Prosecutors Pursuing Criminal Case against Huawei for Alleged Theft of Trade Secrets

Probe involves allegations that Huawei stole robot phone-testing technology from T-Mobile

https://www.wsj.com/articles/federal-prosecutors-pursuing-criminal-case-against-huawei-for-alleged-theft-of-trade-secrets-11547670341

Rep. Maxine Waters pledges ‘many hearings’ into bank conduct and targets Trump’s chief of staff

“The committee has no chance of getting legislation enacted, but it has subpoena power and will make life miserable for industry execs with endless hearings,” Greg Valliere, chief global strategist for Horizon Investments, said in a note.

https://www.cnbc.com/2019/01/16/waters-pledges-many-hearings-into-bank-conduct-and-targets-mulvaney.html

Ocasio-Cortez to join House panel overseeing financial sector

Ocasio-Cortez spoke out against a GOP proposal to dismantle the 2010 Dodd-Frank Wall Street reform law in 2017 and supports reimposing a 1930s separation of investment and consumer banking. She’s also advocated for a drastic expansion of federal housing aid, a top priority for Waters..

https://thehill.com/policy/finance/425551-ocasio-cortez-to-join-house-panel-overseeing-financial-sector

Home sales plunge as price growth hits 6-year low

https://www.msn.com/en-us/money/realestate/home-sales-plunge-as-price-growth-hits-6-year-low/ar-BBSjwuB?ocid=ob-tw-enus-689

FT: Nordstrom shares drop after slow holiday sales

Off-price and digital sales jumped, but traffic was soft at department stores

https://www.ft.com/content/411e2b5a-1999-11e9-9e64-d150b3105d21

The Jerome Levy Forecasting Center’s @teasri: China is where Japan was in 1992. Nobody believed at that time, except for Christopher Woods, that Japan would have a prolonged slump. People just implicitly trusted the ability of Japanese mandarins to keep up perma growth. The current faith in China stimulus is similar.

John Solomon bombshell: FISA shocker: DOJ official warned Steele dossier was connected to Clinton, might be biased [Those who deceived the FISC judges for a warrant are in big-time trouble.]

   The FBI claimed it was “unaware of any derogatory information” about Steele, that Steele was “never advised … as to the motivation behind the research”…

     In testimony last summer to congressional investigators, Ohr revealed the FBI and Justice lawyers had no need to speculate: He explicitly warned them in a series of contacts, beginning July 31, 2016, that Steele expressed biased against Trump and was working on a project connected to the Clinton campaign… Ohr divulged his first contact with the FBI was on July 31, 2016, when he reached out to then-Deputy Director Andrew McCabe and FBI attorney Lisa Page. He then was referred to the agents working Russia counterintelligence, including Peter Strzok, the now-fired agent who played a central role in starting the Trump collusion probe… 

   Those he briefed included Andrew Weissmann, then the head of DOJ’s fraud section; Bruce Swartz, longtime head of DOJ’s international operations, and Zainab Ahmad, an accomplished terrorism prosecutor who, at the time, was assigned to work with Lynch as a senior counselor.  Ahmad and Weissmann would go on to work for Mueller, the special prosecutor overseeing the Russia probe…

https://thehill.com/opinion/white-house/425739-fisa-shocker-doj-official-warned-steele-dossier-was-connected-to-clinton#.XD_NjTFoICY.twitter

 

@RudyGiuliani: The Hill article is a powerful piece of evidence that the Mueller investigation is the illegitimate offspring of a prior investigation based on a phony dossier paid for by the DNC. This was never revealed in false affidavits presented to FISA court. Mueller’s people [Weissmann] implicated.

 

Senate Democrat: We’re ‘Moving toward Indictment and Charges’ against Trump

Sen. Sheldon Whitehouse added that they’re not “at the stage of actually being able to make the charge” yet – he still needs to see more evidence…

    “We are certainly in a mode, I believe, of moving toward indictment and charges of the president, but I do not believebased on what I know ― Mueller may know more ― that we’re at the stage of actually being able to make the charge.”… [Yet many Americans are okay with this!?!?]

https://www.huffingtonpost.com/entry/sheldon-whitehouse-trump-moving-toward-indictment_us_5c3ea604e4b0922a21d9d447?ncid=APPLENEWS00001

 

@paulsperry_: As Dems take the reins of key House committees & beef up staff to investigate Trump,Republicans chairing key committees in the Senate w oversight authority –including Judiciary & Governmental Affairs– are gearing up to investigate DOJ/FBI officials in Spygate scandal

 

John Podesta and the Russians – When did Clinton’s top aide stop doing business with Moscow?

https://www.wsj.com/articles/john-podesta-and-the-russians-1477262565

end

I WILL SEE YOU ON FRIDAY
H
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