JAN 25 A/TRUMP TEMPORARILY CAVES ON THE BORDER WALL: GIVES CONGRESS 3 WEEKS TO PROVIDE HIS WALL..IF NOT THEN WE WILL EXERCISE EMERGENCY MEASURES/GOLD UP $17.90 TO $1298.80/SILVER UP 40 CENTS TO $15.70/CHINA ENGAGES IN A QUASI QE AS ITS ECONOMY IS MORIBUND/THE WALL STREET JOURNAL SURPRISES THE STREET AS THEY STATE THAT THE FED WILL END ITS ROLL OFF OF ITS BALANCE SHEET MUCH QUICKER THAN THOUGHT/

 

 

 

 

GOLD: $1298.80 UP $17.90 (COMEX TO COMEX CLOSING)

Silver:   $15.70 UP 40 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1303.10

 

silver: $15.75

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 5 NOTICE(S) FOR 500 OZ (0.0155 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  555 NOTICES FOR 55100 OZ  (1.7262 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

3 NOTICE(S) FILED TODAY FOR 15,000  OZ/

 

total number of notices filed so far this month: 814 for 4,070,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3555: DOWN 18

 

Bitcoin: FINAL EVENING TRADE: $3558 DOWN   $6 

 

end

 

XXXX

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

today 2/5

EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,279.100000000 USD
INTENT DATE: 01/24/2019 DELIVERY DATE: 01/28/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
323 C HSBC 4
657 C MORGAN STANLEY 1
661 C JP MORGAN 2
737 C ADVANTAGE 2
905 C ADM 1
____________________________________________________________________________________________

TOTAL: 5 5
MONTH TO DATE: 560

 

Starting Monday we generally see a contraction in open interest once we approach first day notice in an active month.  This usually begins 4 days prior to first day notice. The fall is due to spreaders who generally must liquidate. The contraction in OI never effects price because each trade has a buy and a sell of gold at the exact same price..i.e. a buy order and a sell order.

 

However while this is going on, we had a huge gain in gold price today and that should have caused our bankers to supply endless paper.  It will be interesting to see the OI for comex gold for Monday.

Also remember that we are 4 days away from options expiry from London/OTC gold/silver. These expire at around 12 noon on the 31 st of January.  So expect the crooks to take advantage of the higher price as they continue to supply unlimited non backed paper.

 

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY A FAIR SIZED 1296 CONTRACTS FROM 187,993 DOWN TO 186,697 DESPITE YESTERDAY’S 7 CENT LOSS  IN SILVER PRICING AT THE COMEX. TODAY WE ARRIVED SLIGHTLY FURTHER FROM  AUGUST’S  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WE NOW HAVE JUST LESS THAN 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 FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

731 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 731 CONTRACTS. WITH THE TRANSFER OF 731 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 731 EFP CONTRACTS TRANSLATES INTO 2.555 MILLION OZ  ACCOMPANYING:

1.THE 7 CENT LOSS IN SILVER PRICE AT THE COMEX AND

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

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

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

 21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

AND NOW: INITIALLY 5.805 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: 35,145 CONTRACTS (FOR 17 TRADING DAYS TOTAL 35,145 CONTRACTS) OR 175.73 MILLION OZ: (AVERAGE PER DAY: 2067 CONTRACTS OR 10.336 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  175.73 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 25.10% 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:           175.73    MILLION OZ.

 

 

 

RESULT: WE HAD A FAIR SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1296 WITH THE 7 CENT FALL IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A FAIR SIZED EFP ISSUANCE OF 731 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 LOST A SMALL SIZED: 565 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 731 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 1296 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 7 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.30 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: 13 NOTICE(S) FOR 65,000 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  5.825 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 FAIR SIZED 1574 CONTRACTS DOWN TO 523,228 WITH THE LOSS IN THE COMEX GOLD PRICE/(A FALL IN PRICE OF $3.70//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 7069 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 7069 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 523,228. 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 STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 5495 CONTRACTS: 1574 OI CONTRACTS DECREASED AT THE COMEX AND 7069 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 5495 CONTRACTS OR 549,500 OZ = 17.09 TONNES. AND ALL OF THIS STRONG DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $3.70???

 

 

 

 

 

YESTERDAY, WE HAD 6530 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 132,737 CONTRACTS OR 13,272,700 OZ  OR 412.86 TONNES (17 TRADING DAYS AND THUS AVERAGING: 7854 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 17 TRADING DAYS IN  TONNES: 412.86 TONNES

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

THUS EFP TRANSFERS REPRESENTS 412.86/2550 x 100% TONNES = 16.19% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     412.86  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 FAIR SIZED DECREASE IN OI AT THE COMEX OF 1574 WITH THE LOSS IN PRICING ($3.70) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7069 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 7069 EFP CONTRACTS ISSUED, WE HAD ANOTHER STRONG GAIN OF 5495 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

7069 CONTRACTS MOVE TO LONDON AND 1574 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 17.09 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE LOSS OF $3.70 IN YESTERDAY’S TRADING AT THE COMEX??????????.  THIS IS THE 8TH STRAIGHT DAY THAT WE RECORDED STRONG RISES IN OI ON BOTH EXCHANGES!

 

 

we had: 5 notice(s) filed upon for 500 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $17.90 TODAY 

 

NO CHANGES IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

/GLD INVENTORY   809.76 TONNES

Inventory rests tonight: 809.76 tonnes.

 

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

 

SLV/

WITH SILVER UP 40 CENTS IN PRICE  TODAY:

 

 

NO CHANGES IN SILVER INVENTORY/

 

 

 

 

 

 

/INVENTORY RESTS AT 307.251 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER FELL BY A FAIR SIZED 1296 CONTRACTS from 187,993 DOWN TO 186,697  AND MOVING FURTHER FROM THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..

 

.

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

 

731 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 731 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 1296 CONTRACTS TO THE 731 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A SMALL LOSS  OF 565  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 2.825 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 5.825 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A GOOD SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 7 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A GOOD SIZED 731 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

)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 10.03 PTS OR 0.39% //Hang Sang CLOSED UP 448.21 POINTS OR 1,65% /The Nikkei closed UP 198.93  PTS OR 0.97%/ Australia’s all ordinaires CLOSED UP 0.68%

/Chinese yuan (ONSHORE) closed UP  at 6.7595 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.04 dollars per barrel for WTI and 60.73 for Brent. Stocks in Europe OPENED /GREEN 

//ONSHORE YUAN CLOSED UP AT 6.7595 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7665: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

 

 

i)North Korea//USA/Sweden

 

 

b) REPORT ON JAPAN

 

 

3 C/  CHINA

 

 

 

i)CHINA/USA

Our resident expert on Chinese affairs, Gordon Chang offers a good look at China’s ambitions and the continuing hostility showed by Chinese generals and admirals

( Gordon Chang)

ii)Futures rally on a report Vice Ministers are heading to Washington for trade talks.  Nothing is going to happen in these talks unless Meng is released from a Cdn jail and the USA must stop its extradition of her

( zerohedge)

iii)Very quietly PBOC announces a quasi QE by allowing the swapping of worthless Perpetual bonds for Treasuries.  The Chinese hope to keep the Ponzi scheme alive

( zerohedge)

iv)China threatens to pull money from Silicon Valley unless the Huawei affair ends.  The former Governor of the POBC also states that he feels the trade war will become a tech war and he is right

( zerohedge)

 

v)Scary! USA warships enter the Taiwan strait but this time, up above are Chinese bombers

( zerohedge)

4/EUROPEAN AFFAIRS

FRANCE/BELGIUM, HUNGARY ETC

Why the protests in these countries are different this time

an excellent presentation by Claudio Grass of Mises

(Grass/Mises)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)/Russia/Venezuela/USA

This will certainly escalate the situation:  Russia sends in security contractors to protect Maduro.  Venezuela is in the uSA sphere of influence.  The problem is that billions of dollars was loaned to Venezuela by Russia and China invested large sums of money as well

( zerohedge)

 

6. GLOBAL ISSUES

Asian exports, the life-blood for their economies is tumbling and as such confirms a global earnings recession.  The Low M1 growth certainly suggests that global industrial production is negative and that will prove that we have an earnings recession.  No wonder China decided to do a quasi QE this morning.

(courtesy zerohedge)

7. OIL ISSUES

Tom Luongo discusses the truth behind what the USA wants to do with respect to Venezuela and its oil

(courtesy Tom Luongo

 

 

 

8 EMERGING MARKET ISSUES

i)VENEZUELA

 

USA orders non emergency government employees out of Venezuela

(courtesy zerohedge)

 

 

9. PHYSICAL MARKETS

Ambrose Evans Pritchard warns that this time, the Fed will not bail out Europe when the next crisis comes.  Remember that the globe is dollar short having borrowed vast sums of dollars when rates were zero.  Investors took those dollars (borrowed at short term rates) to invest long term.  Investors believe that their investments are liquid but they are not.  This is when the class bomb blows up as liquidity disappears
( Ambrose Evans Pritchard)

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

 

 

MARKET TRADING

 

ii)Market data/

Another Bellwether stock reports revenue misses and disappointing earnings..and they cut outlook. Obviously the meatheads are looking at the Chinese trade delegation coming as a reason to buy stocks.

( zerohedge)

 

 

 

iii)USA ECONOMIC/GENERAL STORIES

a)Eliz. Warren now proposes a 2% tax on citizens with a wealth of 50 million dollars.  This is an annual tax. She also proposes a 3% annual tax on assets worth 1 billion dollars. She wants an annual audit on all citizens with a wealth of over 50 million dollars.

I guess that would redistribute the wealth in a hurry.

( zerohedge)

b)This Wall Street Journal report caught everybody of guard and was the principal reason for gold’s rise. The Journal is reporting that the Fed wants to end its QT much earlier than expected. This goes against what Brandon Smith believes

(courtesy zerohedge)

iv)SWAMP STORIES

Trump is now ready to proclaim an National Emergency and put 7 billion dollars for building the wall.  This will be done without congressional approval

( zerohedge)

Ridiculous!! Trump advisor Roger Stone arrested for lying to Congress on his alleged contacts with Wikileaks
( zerohedge)

 

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

 

 

 

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN FELL BY AN FAIR SIZED 1574 CONTRACTS DOWN TO A LEVEL OF 523,228 WITH THE FALL IN THE PRICE OF GOLD ($3.70) IN YESTERDAY’S COMEX TRADING).FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE  NON ACTIVE DELIVERY MONTH OF JANUARY..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 7069 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  7069 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  7069 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:  5495 TOTAL CONTRACTS IN THAT 7069 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A FAIR SIZED 1574 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 5495 contracts OR 549,500  OZ OR 17.09 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 53 contracts as we LOST  3 contracts. We had 4 notices filed on yesterday so we GAINED 1 contract or 100 ADDITIONAL oz will stand for delivery as these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

The next active delivery month is February and here the OI LOST  27,989 contracts DOWN to 159,801 contracts.  After February, March GAINED 41 contracts to stand at 1006.  After March, the next big delivery month is April and here the OI rose by 23,602 contracts up to 256,302 contracts. We have 4 days left before first day notice.

AT THIS TIME OF THE DELIVERY CYCLE LAST YEAR WE HAD FEB 2018 OPEN INTEREST OF 157,333 CONTRACTS.( vs today:  159,801 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 5 NOTICES FILED AT THE COMEX FOR 500 OZ. (0..0155 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI FELL BY A FAIR SIZED 1296 CONTRACTS FROM 188,674 DOWN TO 186,697(AND FURTHER FROM THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S OI COMEX GAIN  OCCURRED DESPITE A 7 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 356 CONTRACTS HAVING LOST  3 CONTRACTS FROM YESTERDAY.  WE HAD 4 NOTICES FILED ON YESTERDAY, SO WE GAINED 1 CONTRACTS OR  5,000 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 19 CONTRACTS DOWN TO 445. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI FELL BY 1969 CONTRACTS DOWN TO 135,792 CONTRACTS.

AS A COMPARISON TO LAST YEAR WITH 4 DAYS TO GO BEFORE FIRST DAY NOTICE WE HAD 146 CONTRACTS STANDING FOR DELIVERY (VS 445 TODAY).

 

 

ON A NET BASIS WE LOST 565 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 1296 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 731 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:  565 CONTRACTS...AND ALL OF THIS OCCURRED WITH A 7 CENT GAIN IN PRICING// YESTERDAY

 

 

 

 

 

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

 

 

 

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

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

.

 

 

 

 

 

 

 

 

We had 3 notice(s) filed for 15,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  363,578 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  306,722  contracts

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 25/2019.

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

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

1999.97

 

OZ

Delaware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
5 notice(s)
 500 OZ
No of oz to be served (notices)
48 contracts
(4800 oz)
Total monthly oz gold served (contracts) so far this month
560 notices
56,000 OZ
1.7418 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

We had 0 kilobar entries

 

we had 1 deposits into the customer account

i) Into Delaware;  1999.97 oz

 

total gold customer deposits;  1999.97 oz

 

we had 0 gold withdrawals from the customer account:

 

 

 

total gold withdrawing from the customer;  nil oz

 

we had 0  adjustments….

FOR THE JAN 2019 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 5 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JANUARY/2019. contract month, we take the total number of notices filed so far for the month (560) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (53 contract) minus the number of notices served upon today (5 x 100 oz per contract) equals 60,800 OZ OR 1.891 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 (560 x 100 oz)  + {53)OI for the front month minus the number of notices served upon today (5 x 100 oz )which equals 60,80oz standing OR 1.891 TONNES in this NON  active delivery month of JANUARY.

Today we GAINED 1 contract or an additional 100 oz will stand in this non active month of January

.

 

 

 

 

 

THERE ARE ONLY 23.055 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.891 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:  741,224.637 oz or   23.055 tonnes
total registered and eligible (customer) gold;   8,423,042.017 oz 261.99 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 25, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
649,199.849 oz
int delaware
CNT

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,471,963.823 oz
HSBC
Brinks
CNT
No of oz served today (contracts)
3
CONTRACT(S)
15,000 OZ)
No of oz to be served (notices)
353 contracts
1,765,000 oz)
Total monthly oz silver served (contracts) 814 contracts

(4,070,000 oz)

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

we had 0 inventory movement at the dealer side of things

 

 

total dealer deposits:  nil  oz

total dealer withdrawals: 0 oz

we had 3 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 50.77% of all official comex silver. (149.787 million/295 million)

ii) into HSBC:  593,629.800 oz

iii) Into Brinks: 277,498.463 oz

iv) Into CNT: 600,835.560 oz

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1,471,963.823   oz

we had 3 withdrawals out of the customer account:
i) Out of I Delaware:  28,800.468 oz

ii) Out of CNT: 620,399.381 oz

 

 

 

 

 

total withdrawals: 649,199.849    oz

 

we had 0 adjustments..and all settlements, dealer to customer:

 

 

total dealer silver:  86.112 million

total dealer + customer silver:  296.147 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2019. contract month is represented by 3 contract(s) FOR 15,000  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 814 x 5,000 oz = 4,070,000 oz to which we add the difference between the open interest for the front month of JAN. (356) and the number of notices served upon today (4x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2019 contract month: 814(notices served so far)x 5000 oz + OI for front month of JAN( 356) -number of notices served upon today (3)x 5000 oz equals 5,835,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 1 contracts or an additional 5,000 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:  78,975 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 50,139 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 50,139 CONTRACTS EQUATES to 250 million OZ  35.8% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.69% (JAN 25/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.36% to NAV (JAN 25 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.69%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.25/TRADING 12.73/DISCOUNT 3.97

END

And now the Gold inventory at the GLD/

JAN 25/WITH GOLD UP $17.90: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

jAN 24/WITH GOLD DOWN $3.70?: NO CHANGES AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 23/WITH GOLD UP 50 CENTS: NO CHANGES AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 22/WITH GOLD UP A TINY $.85 A MASSIVE PAPER DEPOSIT OF 12.06 TONNES OF GOLD INTO THE FRAUDULENT GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 18/WITH GOLD DOWN $9.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

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 25/2019/ Inventory rests tonight at 809.76 tonnes

*IN LAST 541 TRADING DAYS: 125.39 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 441 TRADING DAYS: A NET 34.64 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 25/WITH SILVER UP 40 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 307.251 MILLION OZ/

JAN 24/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY

JAN 23/WITH SILVER UP 4 CENTS: A HUGE LOSS OF 938,000 FROM THE SLV/INVENTORY RESTS AT 307.251 MILLION OZ/

JAN 22/WITH SILVER DOWN 5 CENTS: A HUGE DEPOSIT OF 1.179 MILLION OZ INTO THE SLV/SLV IS A FRAUDULENT VEHICLE/INVENTORY RESTS AT 308.189 MILLION OZ/

JAN 18/WITH SILVER DOWN 13 CENTS: NO CHANGE IN SILVER INVENTORY/NO DOUBT THE MASSIVE WITHDRAWAL OF PAPER SILVER WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 307.110

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 307.110 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 25/2019:

 

Inventory 307.251 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 2.22/ and libor 6 month duration 2.85

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

G0LD LENDING RATE: + .63

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.55%

LIBOR FOR 12 MONTH DURATION: 3.03

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.48

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Bullion Will Protect From Politicians, Brexit and Increasing Market Volatility In 2019

by Mark O’Byrne in Business and Finance

Historically, gold has proven to be a very safe investment – could it remain so in times of a massive global debt bubble, Brexit, trade wars and an uncertain world economy?

“You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect for these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”

The words of the witty Irish playwright and philosopher George Bernard Shaw, will resonate with investors in Ireland , the UK and internationally today given the UK government’s handling of Brexit and the rise of Trump and other radical politicians on the left and right.

Populist politicians are creating increasing political, economic and financial risks for us all. This is clearly seen in the complete mess that is Brexit – for Ireland, the UK and indeed the EU.

Shaw was a keen student of history and saw the economic problems that monarchies and governments have created over the years. Only the most foolhardy investor would claim that the coming years will be any different than our past.

Gold’s safe-haven historical status

A massive global debt bubble, Brexit, the risk of Italy leaving the EU, an increasingly fractured EU, aggressive Trump foreign and economic policies and an increasingly polarised and uncertain world cast shadows over our economies and financial markets.

There are very real risks posed by the gigantic global debt bubble – the world is nearing $250 trillion in debt and the global debt to GDP ratio has risen to 320%.

Shaw was also alluding to gold’s safe-haven status throughout history. Paper currency devaluations and indeed stock, bond and property market crashes are much more common throughout history than many people realise.

Gold has protected people from war, recession, depressions, inflation and currency devaluations. History clearly shows this. There have been numerous stock and property bubbles in the last 100 years. When they collapsed those that did not have all their eggs in the one basket and had diversified and owned some physical gold protected and indeed grew their wealth.

It has not been enough to simply own gold as on occasion, desperate governments have enacted draconian legislation that allowed them to confiscate their citizen’s gold. Roosevelt in 1933 and Mao in 1949 are the two primary examples of this.

Movement towards owning physical gold in safe jurisdictions

This precedent and many others involving property and land confiscation, ‘bank holidays’ and nationalisation of strategic assets have seen a trend towards risk averse investors opting for physical gold rather than digital gold in the form of ETFs and “platform gold” or “.com gold” in recent years.

This and the precarious debt position of the U.S., the UK and other large debtor nations has also seen a movement towards owning physical gold in safer jurisdictions.

Investors have been showing a preference for owning gold in wealthy creditor nations that also respect wealth and property rights. Switzerland, Singapore and Hong Kong have been the primary beneficiaries of these gold flows and they remain the favoured jurisdictions of our clients and gold investors internationally.

However, more recently we have had both UK and Irish clients asking us to provide secure storage in Dublin in Ireland and we are now delighted to be able to provide that option for the first time.

Gold’s purchasing track record

Gold has an excellent track record in maintaining its purchasing power relative to currencies and other assets.

Besides history, there is also a significant body of empirical evidence in the form of academic research and research from independent asset allocation experts which shows that gold is an important diversification for investors which reduces portfolio volatility and enhances returns.

Gold is a hedge and financial insurance in an uncertain political and economic world. Gold stored in safe vaults in Dublin and other safe jurisdictions will again act as a safe haven asset when it is needed in 2019 and the coming years.

Courtesy of Business and Finance

 

News and Commentary

Continuing partial shutdown of the U.S. government and risk that the trade wars with China deepen should support gold – GoldCore (MarketWatch.com)

Gold steadies on U.S. government shutdown, trade jitters (Reuters.com)

US Mint sales bounce back with bumper January (BullionByPost.co.uk)

Why Goldman’s commodities chief is bullish on oil and gold right now (MarketWatch.com)

EU ministers reject easing of liquidity rules for gold trading (Reuters.com)

Gold Will Protect From Increasing Market Volatility in 2019 (BusinesAndFinance.com)

IMF Fears Political Rage Will Block Rescue by Fed in Next Crisis (Gata.org)

Palladium’s Slide Accelerates on Dollar’s Rise; Gold Down Too (Investing.com)

Blockchain to shake up mining and precious metals sector (ING.com)

Chemical elements which make up mobile phones placed on ‘endangered list’ (St-Andrews.Ac.UK)

Listen on iTunes,Blubrry & SoundCloud  & watch on YouTube above

Gold Prices (LBMA PM)

24 Jan: USD 1,279.75, GBP 981.70 & EUR 1,128.36 per ounce
23 Jan: USD 1,284.90, GBP 990.14 & EUR 1,131.74 per ounce
22 Jan: USD 1,284.75, GBP 994.14 & EUR 1,130.58 per ounce
21 Jan: USD 1,278.70, GBP 995.08 & EUR 1,124.11 per ounce
18 Jan: USD 1,285.05, GBP 993.34 & EUR 1,126.86 per ounce
17 Jan: USD 1,294.00, GBP 1,004.92 & EUR 1,135.87 per ounce
16 Jan: USD 1,290.50, GBP 1,002.46 & EUR 1,130.99 per ounce

Silver Prices (LBMA)

24 Jan: USD 15.30, GBP 11.75 & EUR 13.48 per ounce
23 Jan: USD 15.38, GBP 11.80 & EUR 13.54 per ounce
22 Jan: USD 15.26, GBP 11.84 & EUR 13.44 per ounce
21 Jan: USD 15.26, GBP 11.86 & EUR 13.42 per ounce
18 Jan: USD 15.47, GBP 11.96 & EUR 13.56 per ounce
17 Jan: USD 15.57, GBP 12.08 & EUR 13.66 per ounce
16 Jan: USD 15.54, GBP 12.09 & EUR 13.66 per ounce

Recent Market Updates

– Brexit – The Pin That Bursts London Property Bubble
– Davos: David Attenborough Warns We Are Damaging The World ‘Beyond Repair’
– Gold May Return 25% In 2019 Given Brexit, Trump and Other Risks – IG TV Interview GoldCore
– Brexit, EU, Germany, China and Yellow Vests In 2019 – Something Wicked This Way Comes
– Three Reasons Gold May Embark On An Extended Rally
– Political Turmoil in UK & US Sees Gold Hit 2 Week High
– 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

Mark O’Byrne
Executive Directo
GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER
Ambrose Evans Pritchard warns that this time, the Fed will not bail out Europe when the next crisis comes.  Remember that the globe is dollar short having borrowed vast sums of dollars when rates were zero.  Investors took those dollars (borrowed at short term rates) to invest long term.  Investors believe that their investments are liquid but they are not.  This is when the class bomb blows up as liquidity disappears
(courtesy Ambrose Evans Pritchard)

Ambrose Evans-Pritchard: IMF fears political rage will block rescue by Fed in next crisis

 Section: 

By Ambrose Evans-Pritchard
The Telegraph, London
Thursday, January 24, 2019

https://www.telegraph.co.uk/business/2019/01/24/imf-fears-political-rage…

The International Monetary Fund has warned that the system of global cooperation that saved world finance in the 2008 crisis may break down if there is another major shock or a deep recession.

David Lipton, the IMF’s second-highest official, said it is unclear whether the US Federal Reserve would again be able to extend $1 trillion of dollar “swap lines” to fellow central banks — the critical measure that halted a dangerous chain-reaction after the collapse of Lehman Brothers and AIG.

… 

 

I fear that if at any time we have a worse than garden variety recession there will be anger and limitations in the way governments can respond,” he told a group at the World Economic Forum in Davos today.

“If there is a substantial crisis we may need central banks to act again in an extraordinary way. For the Fed this requires a fiscal backstop from the US Treasury, and at the beginning there may be some reluctance. I wonder whether they will be so willing to extend the swap lines,” Mr Lipton said.

It is a polite way of saying that the Trump administration might ask why it should “bail out” the Europeans who have been less than friendly to this White House, and why they should rescue the rest of the world. By the time the explosive consequences became clear it would be too late.

“So we have got to be very careful. There must not be unforced errors. We must ensure that the next recession when it comes is a garden variety,” said Mr Lipton, a leading figure in regulatory circles.

The lines are vitally needed because the world has built up $12.8 trillion of offshore dollar debt outside the Fed’s jurisdiction.

European, Japanese, and Canadian banks, among others, borrow on the capital markets at short-term maturities for worldwide lending in dollars. These markets can freeze up suddenly, as they discovered in October 2008.

Their own central banks are unable to print dollars and mostly have insufficient dollar reserves to provide emergency liquidity and stabilize the financial system in such circumstances. Only the Fed can act as the ultimate lender-of-last resort to the globalised dollar economy.

Mr Lipton said there was deep residual anger from the 2008 crisis. “People are hurt and they are less impressed than we that we did a clean-up afterwards,” he said.

He fears a nasty cocktail in the next downturn because much of the damage is likely to come from hidden leverage in asset management companies, with asset slumps hitting household wealth directly.

Mark Carney, the governor of the Bank of England, said at a separate Davos session that banks were now much safer than a decade ago, but risks of potentially systemic scale were building up elsewhere.

He raised a red flag over the money that has flooded into asset management, driven by a hunger for high yields after quantitative easing and low interest rates made it hard to generate returns.

The Achilles’ heel is the buildup of $30 trillion of assets held in funds, which are supposed to offer daily liquidity to investors but are invested heavily in underlying assets that not liquid. These assets are hard to sell “even in good times and very illiquid in bad times,” Mr Carney warned.

It is a classic example of borrowing short to invest long — the perennial cause of crises over the ages. There may also be further icebergs hidden from view. “Is there additional leverage in these entities that may add to the dynamics? That’s one of the big issues in global finance at the moment,” he said.

* * *

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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.

GOLD TRADING/THIS MORNING

Gold Surges Above $1300 As Dollar Dumps

The dollar is nosediving this morning, tumbling to 10-day lows, having stumbled initially on the Stone news. As the dollar dumps, gold is spiking…

…trading back at $1300 at 7-month highs

Gold is getting very close to a ‘Golden Cross’…

Gold futures show very heavy volume on this surge…

 

 
END

 

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

i) Chinese yuan vs USA dollar/CLOSED UP TO 6.7593/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.7665   /shanghai bourse CLOSED UP 10.03 PTS OR 0.39%

 

HANG SANG CLOSED UP 448.21 POINTS OR 1.65%

 

 

2. Nikkei closed UP 198.93  POINTS OR 0.97%

 

 

 

 

 

3. Europe stocks OPENED ALL GREEN 

 

 

 

 

 

 

 

/USA dollar index RISES TO 96.32/Euro RISES TO 1.1345

3b Japan 10 year bond yield: FALLS TO. +.09/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.86/ 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:: 53.04 and Brent: 60.73

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

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

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

3h Oil 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 +.18%/Italian 10 yr bond yield DOWN to 2.66% /SPAIN 10 YR BOND YIELD DOWN TO 1.22%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.48: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 4.16

3k Gold at $1283.90 silver at:15.38   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 41/100 in roubles/dollar) 66.17

3m oil into the 53 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 109.86 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 0.9968 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1308 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 +0.18%

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

4. USA 10 year treasury bond at 2.73% early this morning. Thirty year rate at 3.05%

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

6.  TURKISH LIRA:  UP  TO 5.2743

 

Stocks Rally After Shrugging Off Trade Concerns, Dismal German Data

It’s a sea of green across global markets, which resumed their rally overnight with European stock and US equity futures following Asian peers higher, shrugging off softer numbers from tech giant Intel and weaker German IFO data, buoyed by strong earnings and optimism from some positive trade-related comments by U.S. officials ahead of next week’s meeting, while tech shares rallied. Gold and oil climbed, while the dollar hit session lows following news Trump advisor Roger Stone was arrested for witness tampering.

European markets opened higher, led by automakers and tech stocks which rose 1.5% and 1%, respectively. Europe’s STOXX 600 index hit its highest since Dec. 4, up 0.8% on the day.  Trade optimism received a fresh boost of optimism after Bloomberg reported that a Chinese delegation including deputy ministers will arrive in Washington on Monday to prepare for high-level trade talks led by Vice Premier Liu He.

The euro gained even as German business sentiment measured by the IFO Survey fell for the 5th month in a row to 99.1 its weakest level in almost three years, while the expectations component tumbled to the lowest level since 2012; confirming a recession in Europe’s biggest economy is closer than most expect; core European sovereign bonds stabilized after rallying for most of the week.

On Thursday, the euro fell to its lowest in six weeks following Thursday’s European Central Bank meeting in which Mario Draghi painted an increasingly downbeat picture of the European economy.

Europe’s gains came as stocks rose overnight in Asia and the United States on the back of strong earnings from U.S. tech firms. The MSCI All-Country World Index was up 0.3% on the day, but the gauge was set to break a four-week winning streak as weak economic data and cautious soundings from central banks pulled the index half a percent down on the week. Chipmaker and software stocks led the way in Asia, shrugging off weaker 2019 forecasts from Intel, which fell in pre-market trading.

Global stocks are poised for their first weekly drop of 2019, with investors questioning the validity of the post-Christmas rally as the earnings season rolls on. Traders are grasping at straws for hints at progress on trade ahead of discussions next week in Washington, while also assessing the economic impact of the 35-day government shutdown that’s hampering the normal flow of official data: “I’m reasonably positive,” Axel Merk, chief investment officer at Merk Investments LLC in San Francisco, told Bloomberg TV. “I don’t think we have an imminent recession which is usually one of the key ingredients to a real bear market, but it’s prudent to diversify.”

Markets reversed losses from earlier in the week even though according to the latest Reuters polls of hundreds of economists from around the world, a synchronized global economic slowdown is underway and any escalation in the U.S.-China trade war would trigger a sharper downturn, and despite a downgrade of US stocks to Neutral by Citi.

Offsetting the economic gloom, in a note to clients, UBS Global Wealth Management’s CIO Mark Haefele said that rhetoric on U.S.-China trade has become more positive, and that Beijing has taken steps to stimulate its economy.

“While economic and earnings growth is slowing, we believe it is unlikely that growth will drop far below trend,” he said. “At the same time, there are reasons to be cautious about policymakers’ ability to follow through on their rhetoric.”

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the next round of trade negotiations with Washington. The two sides are “miles and miles” from resolving trade issues but there is a fair chance they will get a deal, U.S. Commerce Secretary Wilbur Ross said on Thursday.

In US political news, President Trump said he wants a prorated down payment on the wall in any short-term government funding bill and that if Senate Majority Leader McConnell and Minority Leader Schumer can reach an agreement on government funding, he would support it. However, US House Speaker Pelosi said the idea of including a down payment on wall is a non-starter and Democrats were said to not support any kind of border wall funds which was made clear to McConnell, while Pelosi was later reported to postpone a press conference concerning counter offer to President Trump.

In central bank news, ECB dove Benoit Coeure said he sees a lot of political uncertainty and that economic slowdown is a surprise to the ECB, adds jury still out on how persistent slowdown will be and that rate guidance may have to be adjusted at some point. While, ECB’s Villeroy (Dovish) stated they remain committed to keeping interest rates low and ECB will probably downgrade the GDP forecast in March. Finally ECB’s Vasiliauskas (Hawkish) stated that there is no reason to change ECB guidance at the moment.

In currencies, the dollar fell 0.2%, hitting session lows shortly after news that Trump advisor Roger Stone had been arrested by the FBI. The euro rebounded 0.36% at $1.1345, recovering from a six-week low hit in the wake of ECB President Mario Draghi’s downbeat comments on Thursday. The ECB’s post-meeting statement for the first time since April 2017 alluded to “downside risks” to growth.

The British pound was also higher, rising 0.2 percent to $1.3076 after brushing a two-month high of $1.3140, lifted after The Sun reported on Thursday that Northern Ireland’s Democratic Unionist Party has privately decided to back May’s Brexit deal next week if it includes a clear time limit to the Irish backstop.

10-year U.S. Treasurys yields were slightly higher at 2.729% after dropping to a one-week low as pessimism over global growth supported safe-haven government debt.

In commodities, Brent (-0.1%) and WTI (+0.2%) prices are mixed and off of session highs, just under USD 62/bbl and USD 54/bbl respectively; in spite of yesterday’s unexpected EIA crude inventory build of 7.97mln vs. Exp. -0.042mln draw. Elsewhere, Russia was China’s largest crude oil supplier for December and 2018; with Russia being the largest crude supplier to China for the third year in a row. Gold (+0.3%) is marginally higher on the weakness in dollar, in spite of the positive risk sentiment reducing safe haven demand for the yellow metal. Copper prices are benefiting from market sentiment, whilst palladium has lost over 8% since reaching a high of just under USD 1400/oz last week.

Today’s publication of durable goods orders and new home sales is postponed by government shutdown. AbbVie and Colgate-Palmolive are reporting earnings.

Market Snapshot

  • S&P 500 futures up 0.6% to 2,650.75
  • STOXX Europe 600 up 0.7% to 358.16
  • MXAP up 1% to 154.44
  • MXAPJ up 1.2% to 503.03
  • Nikkei up 1% to 20,773.56
  • Topix up 0.9% to 1,566.10
  • Hang Seng Index up 1.7% to 27,569.19
  • Shanghai Composite up 0.4% to 2,601.72
  • Sensex down 0.6% to 35,985.79
  • Australia S&P/ASX 200 up 0.7% to 5,905.61
  • Kospi up 1.5% to 2,177.73
  • German 10Y yield rose 0.8 bps to 0.188%
  • Euro up 0.2% to $1.1330
  • Italian 10Y yield fell 9.1 bps to 2.303%
  • Spanish 10Y yield fell 2.0 bps to 1.22%
  • Brent futures little changed at $61.13/bbl
  • Gold spot up 0.2% to $1,283.61
  • U.S. Dollar Index down 0.2% to 96.43

Top Overnight News

  • A Chinese delegation including deputy ministers will arrive in Washington on Monday to prepare for high-level trade talks led by Vice Premier Liu He, according to people briefed on the matter
  • Commerce Secretary Wilbur Ross said the U.S. and China are eager to end their trade war, but the outcome will hinge on whether Beijing will deepen economic reforms and further open up its markets. “We’re miles and miles from getting a resolution,” he said in an interview on CNBC on Thursday
  • U.K. Chancellor of the Exchequer Philip Hammond warned that leaving the European Union without a deal would betray voters who were promised a “more prosperous future” if they chose Brexit. EU ties itself in knots on Irish border amid Brexit tension
  • Senators began a new effort to end the 34-day partial government shutdown after blocking two rival spending bills. The White House signaled President Donald Trump was open to a plan to reopen agencies for three weeks, but at a price
  • The Greek parliament’s historic vote on the agreement with the Republic of Macedonia over the latter’s name, was pushed to Friday, with not enough time for all listed lawmakers to speak Thursday
  • Oil rose for a third day as a deepening crisis in Venezuela that threatens to complicate OPEC’s task of balancing world oil supplies outweighed a surprise jump in U.S. crude inventories
  • Bank of England Governor Mark Carney said threats of jail for bankers are just a bluff and the real weapon to improve behavior is hitting pay packets
  • U.K. Chancellor of the Exchequer Philip Hammond suggested he could quit the government in protest if the U.K. plunges out of the European Union with no-deal in nine weeks’ time
  • Benoit Coeure and Francois Villeroy de Galhau — two of the top contenders to become the next ECB president — said they don’t know if the institution will be able to raise interest rates this year

A jubilant tone was observed across the Asia-Pac majors heading into the weekend, which followed the mostly positive performance of their global peers amid firmer US PMI data and a dovish tone from the ECB. ASX 200 (+0.7%) and Nikkei 225 (+1.0%) were buoyed by broad gains across the sectors and with Japanese exporters supported by favourable currency flows, although not all was rosy as healthcare lagged in Australia and steep losses in AMP Capital. Elsewhere, Hang Seng (+1.6%) and Shanghai Comp. (+0.4%) advanced as the 2nd phase of the PBoC’s RRR cut took effect and with outperformance seen in tech names including Tencent after regulators approved 2 of the Co.’s mobile phone games. However, gains in the mainland were initially capped after the PBoC‘s continued inaction resulted to a net weekly drain of CNY 770bln, in which it cited high liquidity levels due to the RRR cut. Finally, 10yr JGBs remained close to this week’s best levels after the prior day’s extended gains and with the BoJ also present in the market for government bonds with 5yr-10yr maturities, although prices have slightly eased with demand for bonds subdued by the risk appetite.

Top Asian News

  • Goldman, Morgan Stanley Are Said to Ask to Cancel Jardine Trades
  • Sinopec Says It Lost $688m on ‘Misjudged’ Oil Prices
  • It’s Happy Friday Mode for Asia Traders as Stock Rally Lives On
  • Yuan- Free FX Strategies for Betting on China. Or Against It

Major European indices are in the green [Euro Stoxx 50 +1.1%], the FTSE 100 (+0.4%) is the underperforming index given the impact of yesterday’s dovish ECB, alongside overnight sterling strength following reports that the DUP may agree to PM may’s deal if the Irish backstop has a time limit. The index is also weighed on by poor performance in Vodafone (-2.2%) who missed on their Q3 service revenue. Sectors are in the green, with underperformance in telecom names given the aforementioned earnings from Vodafone. Other notable movers include Telia (-3.3%) who are at the bottom of the Stoxx 600 after the Co. missed on Q4 revenue and adjusted EBITDA. Similarly, Givaudan (-3.3%) are near the bottom of the Stoxx 600 following a miss on Q4 revenue and adjusted EBITA.

Top European News

  • ECB Presidential Contenders Wary on Chance of 2019 Rate Hike
  • German Business Confidence Deteriorates Amid Heightened Risks
  • Maersk Ready to Move Ahead With Drilling Unit IPO, CEO Says
  • EU Ties Itself in Knots on Irish Border Amid Brexit Tension
  • Russia Central Bank to Boost FX Buying as Ruble Steadies

In FX, the Dollar and overall index retraced some of yesterday’s trade and ECB-induced gains in which DXY reached highs just shy of 96.700. The index fell back below its 50 DMA at 96.549 and through the 96.500 level to currently hover nearer the bottom of a 96.300-530 range, with a 96.680 Fib also keeping the upside capped. Meanwhile, the US government shutdown is set to notch its 35th day after the US Senate blocked two competing proposals (although this was expected) and as a result today’s US building permits, durable goods and new home sales data will be postponed.

  • EUR – Staging a recovery from post-ECB lows, when EUR/USD briefly lost the 1.1300 handle. Back above the level now, the single currency was largely unreactive to unsurprising narratives from ECB’s Coeure and Villeroy, while the release of an overall downbeat German ifo survey and downgrades in the ECB SPF also did little to wobble the Euro. EUR/USD now close to the top of a 1.1300-50 range ahead of a Fib level at 1.1351. In terms of option expiries, the pair sees EUR 1.96bln scattered around 1.1300-25, EUR 1.5bln between 1.1350-60 and EUR 2.8bln between 1.1375-1.1400.
  • CAD – Rising oil prices and an easing buck sent USD/CAD back below its 50 DMA at 1.3350 to an intraday low of 1.3311 ahead of the psychological 1.3300 level with reported bids around the figure. A marginal pullback in energy sent USD/CAD back up to around the middle of a 1.3311-3361 band ahead of the Canadian budget balance release later today.
  • GBP –Tumultuous day for the Pound after a Sun article provided Cable with the fuel to sky rocket past the 1.3100 handle to a high just shy of 1.3140, well above the December low of 1.2477. The article reported that PM’s coalition party, the DUP, are willing to back her Brexit deal if the Premier can get an expiry date to the backstop, though is widely expected to be rejected by the EC. Nonetheless, the idea of unity in the government aided the Pound to set fresh yearly highs vs. the buck. However, Cable has pared back most of the overnight gains, albeit holding just above its 200 DMA (1.3055-60) and closer to the bottom of 1.3057-3139 parameters.
  • JPY – Choppy session thus far, but overall back on a decline amid the broad upturn in risk appetite around the market after USD/JPY rose above its 30 DMA at 109.79 to reach intraday highs of 109.91 (vs. low of 109.52) ahead of USD 1.2bln of option expiries at the 110.00 strike for the NY cut.

In commodities, Brent (-0.1%) and WTI (+0.2%) prices are mixed and off of session highs, just under USD 62/bbl and USD 54/bbl respectively; in spite of yesterday’s unexpected EIA crude inventory build of 7.97mln vs. Exp. -0.042mln draw. Elsewhere, Russia was China’s largest crude oil supplier for December and 2018; with Russia being the largest crude supplier to China for the third year in a row. Looking ahead we have the Baker Hughes rig count, where last week total rigs decreased by 25 to 1050. Gold (+0.3%) is marginally higher on the weakness in dollar, in spite of the positive risk sentiment reducing safe haven demand for the yellow metal. Copper prices are benefiting from market sentiment, whilst palladium has lost over 8% since reaching a high of just under USD 1400/oz last week.

US Event Calendar

  • 8:30am: Durable goods orders data postponed by govt shutdown
  • 10am: New home sales data postponed by govt shutdown

DB’s Jim Reid concludes the overnight wrap

As I finish this off I’m on the earliest train out of Davos and back to Zurich before travelling home. We had a DB drinks reception for our clients last night and one said to me that in 11 years of coming here the best advice would be to trade in the opposite direction to the main theme of the conference over the next 12 months. If you believe that then you should trade if favour of a return to globalisation trends in 2019 as the conference was generally concerned about its immediate path. Our CEO overheard this and said that on the main panel he was on, the head of the WTO was the contrarian. He said that 2019 will end up being around the lowest tariff year on record and an improvement on 2018. Clearly this relies on China and US either sorting out their differences or at least announcing a truce. However, it’s a reminder that although global trade has come off the peak, tariffs are still historically low outside of the main dispute. Personally, I think globalisation is in reverse but whether it’s a soft landing or not depends on policy. All to play for.

Back to the real (financial) world and yesterday lived up to the billing of being a busy day in markets with much weaker-than-expected European PMIs initially setting the tone. Draghi and the ECB then played for time – given March is where they get their latest staff forecasts – but acknowledged that risks were now to the downside. Elsewhere, Wilbur Ross downplayed expectations that a US-China trade deal is any closer, US jobless claims hit the lowest since around the time man first walked on the moon, and it was also a day where the government shutdown looked likely to continue for some time yet, even if there have been overnight attempts to find a deal to temporarily open government. So plenty to discuss.

However, by the end of play the main US equity indices hadn’t moved much as the S&P 500 eked out a +0.14% gain while the DOW dropped -0.09%. More positively, tech stocks rallied with the NASDAQ up +0.68%. The Philadelphia Semiconductor index advanced +5.73% on the back of strong earnings from Texas Instruments, Lam Research, and Xilinx. The STOXX 600 pared gains of as much as +0.49%, heading into negative territory after the ECB before closing +0.22%. Rates fell across the continent, as 10y Bunds and OATs finished -4.4bps and -5.0bps lower. BTPs outperformed, with yields down -9.3bps, to 2.66% and to the lowest level since last July. Treasuries rallied as well, with 10-year yields ending -2.5bps lower while the dollar rallied +0.45%.

The euro experienced sharp moves amid the data and ECB meeting. First, the single currency weakened around -0.44% following the soft PMI data (details below). It then held its level around 1.1340 as the ECB policy statement kept policy unchanged, which maintained forward guidance (“interest rates to remain at their present levels at least through the summer”) and said reinvestments will continue for an extended time beyond the first rate hike.

The euro then took another leg lower to 1.1307 after Draghi said the risks to the outlook have “moved to the downside.” However, this shift was ultimately viewed as somewhat incremental and the euro retraced all its moves to return to flat on the session as the press conference continued. Draghi confirmed that the Council decision was unanimous on changing the outlook but that the Council “didn’t discuss policy implications”. There was apparently “unanimity” among the council supporting the view that the “likelihood of recession is low”, but DB’s Mark Wall thinks the Governing Council is divided on the outlook, between one camp who expect uncertainties (Brexit, trade, etc.) to be resolved positively and another who is more worried about European domestic demand. The tension between these two views will probably not be resolved until the ECB publishes new staff forecast at its March meeting. Mark’s full thoughts are available here.

On other policy questions, there was also no decision made on TLTRO, although it was mentioned by several officials and clearly talked about, while the positive side effects were talked up by Draghi later on. That perhaps leaves the option open for March but didn’t provide any insight beyond that. The issue of negative rates and their impact on banks was also posed to Draghi, however, it was mostly a repeat of the line he used in December. Draghi specifically said that “we have to see how the continuation of negative rates will affect this balance” in response to a question on if the ECB would have to do something about it. Again a non-committal answer.

As highlighted earlier, in the midst of Draghi speaking, headlines also hit the wires from across the pond and specifically comments from US Trade Secretary Ross. He said that the US and China were “miles and miles” away from a resolution, which caused a kneejerk reaction in markets but then followed by saying that there is a “fair chance” that the two countries would arrive at a trade deal. He also added that it was “unlikely” that next week’s meetings between the two sides would result in a final solution. Crystal clear then. Later on, Director of the National Economic Council Larry Kudlow said that President Trump was optimistic about talks with China, so no shortage of noise on the trade front.

President Trump himself tweeted later in the session about the ongoing government shutdown, saying “We will not Cave!” and escalating the tension. The senate voted on two bills to reopen government, but neither received enough support to pass. Overnight, the debate has seemingly moved on as to whether government could reopen for three weeks if Mr Trump received a down payment for the wall. Pelosi has already poured cold water on the idea but it perhaps shows that negotiations aren’t completely breaking down. In the background, the Washington Post reported that White House Chief of Staff Mick Mulvaney has asked all executive departments and agencies for lists of their highest-impact programs which could be negatively affected if the shutdown continues into March or April. Probably always good to prepare for the worst, but such a long shutdown, if realised, would have serious implications for the US economy.

In Asia this morning, technology stocks are leading markets higher, with the Nikkei (+1.06%), Hang Seng (+1,34%), Shanghai Comp (+0.57%) and Kospi (+1.49%) all moving upwards. Other significant news overnight has come from the UK, where sterling rose 0.5% against the dollar to its highest level in over two months, after the Sun reported that the DUP would be prepared to back Prime Minister May’s Brexit deal if there were a time limit to the Irish backstop. The news comes ahead of Tuesday’s debate in the House of Commons, where Parliament will have the opportunity to vote on a variety of amendments put forward by MPs to May’s Brexit plan.

Back to the details of the PMIs, which actually ended up requiring a bit of digging through such was the disparity between sectors and countries. However, the bottom line is that momentum is certainly weaker. The composite reading for the Euro Area for instance came in at 50.7 compared to expectations for 51.4. That’s also down 0.4pts from the soft December reading and is the lowest now since July 2013. The data is also consistent with GDP growth of just +0.1% qoq, which paints downside risks to the consensus forecast for 2019 growth of around 1.3% (DB 1.2%). In terms of sectors, manufacturing slumped more, by 0.9pts to 50.5 (vs. 51.4 expected) while the services reading fell 0.4pts to 50.8 (vs. 51.5 expected). As you can see though both were much softer than expected.

What was interesting was the split between Germany and France. In France the services reading tumbled further by 1.5pts to 47.5 (vs. 50.5 expected) and to the lowest in nearly 5 years. The manufacturing reading bounced back in contrast to 51.2 (vs. 50.0 expected) from 49.7, however, the extent of the drop in the services reading left the composite at 47.9 versus 48.7 in December. So rather worryingly there was little sign of a rebound after recent protests. In Germany the pain was reserved for the manufacturing sector, which tumbled to 49.9 from 51.5. That’s the first sub-50 reading since November 2014. The services reading did, however, rise 1.4pts to 53.1, which left the composite at 52.1 and up 0.5pts from December. Our economists also highlight that the implied non-core PMI numbers aren’t pretty with the implied non-core composite down 1pt equally, shared by the manufacturing and services sectors. Manufacturing PMIs for Italy and Spain will print next Friday alongside the final readings across the globe.

The associated statement with the PMIs highlighted “ongoing auto sector weakness, Brexit worries, trade wars and the protests in France” as reasons dampening growth in both sectors but also that the survey responses “indicate that a deeper malaise has set in at the start of the year” and that “companies are concerned about a wider economic slowdown gathering momentum, with rising political and economic uncertainty increasingly affecting risk appetite and demand”. With the manufacturing reading for the Euro Area and Germany now down in 12 of the last 13 months, a quick refresh of our equity versus PMI regression analysis shows that the STOXX and DAX are still around 14% and 17% ‘cheap’ respectively and that implied PMIs are actually more like 46.0 for the Euro Area and 43.7 for Germany based on equity markets. France looks 16% ‘cheap’ by the same measure. So despite the decline in PMIs, equity markets have oversold by this basic measure in Europe. However, for there to be a sustainable rebound, the PMIs need to find a base. Something they have struggled to do for over a year now.

In the US, initial jobless claims fell to 199k, the lowest level since 1969, as the US labour market continues to strengthen. Continuing claims fell from 1,737k to 1,713k, near the cyclical and multi-decade lows. The US PMIs, while not as significant as the European vintages, showed some improvement with the manufacturing index up to 54.9 from 53.8. The services reading fell 0.2pts to 54.2, while the composite print ticked up to 54.5 from 54.4. The Kansas City Fed’s manufacturing index rose to 5 from 3, though the anecdotal details suggested some concerns over both tariffs and the government shutdown. Altogether, the PMIs and KC Fed index did not move the needle for our expectations of next Friday’s ISM manufacturing report.

Finally, the day ahead will feature the January IFO survey in Germany this morning along with the January CBI reported sales survey in the UK. The US session is meant to feature the December durable and capital goods orders data, as well as the January new home sales print, however, the government shutdown will delay that once more. The earnings calendar features AbbVie and Colgate-Palmolive, as well as Ericsson in Europe.

 

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 10.03 PTS OR 0.39% //Hang Sang CLOSED UP 448.21 POINTS OR 1,65% /The Nikkei closed UP 198.93  PTS OR 0.97%/ Australia’s all ordinaires CLOSED UP 0.68%

/Chinese yuan (ONSHORE) closed UP  at 6.7595 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.04 dollars per barrel for WTI and 60.73 for Brent. Stocks in Europe OPENED /GREEN 

//ONSHORE YUAN CLOSED UP AT 6.7595 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7665: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

 

 

 

i)North Korea//USA/Sweden

 

end

3 b JAPAN AFFAIRS

3 C CHINA

i)CHINA/USA

Our resident expert on Chinese affairs, Gordon Chang offers a good look at China’s ambitions and the continuing hostility showed by Chinese generals and admirals

(courtesy Gordon Chang)

Opposing China’s Dangerous Ambitions

Authored by Gordon Chang via The Gatestone Institute,

  • Admiral John Richardson is apparently worried about a lack of communication. Communication is not the problem. The problem is that Chinese generals and admirals have been and continue to be hostile, belligerent, and bellicose.
  • We do not want war. This is how you prevent it. Remember, show overwhelming power not indecision or weakness. Some Chinese will read the smoke signals correctly.” – Arthur Waldron, University of Pennsylvania.
  • The best way to avoid conflict in the Taiwan Strait is to make it clear to Beijing that America will defend Taiwan.
  • In the first half of 2012, the U.S., despite firm obligations to defend the Philippines, did nothing when China took over Scarborough Shoal in the South China Sea. When Chinese generals and admirals saw Washington’s failure to act, they turned the heat on other Philippine reefs and islets, went after Japan’s islands in the East China Sea, and began reclaiming and militarizing features in the Spratly chain. Feebleness only emboldens Chinese aggression. There will be no good endings in Asia until Washington disabuses Beijing of the arrogant belief that it can take whatever it demands.

The sharp downturn in ties between the world’s two most fearsome militaries was evident when America’s highest naval officer, Chief of Naval Operations Admiral John Richardson, went to Beijing this month. Pictured: Admiral Richardson (right) is greeted by senior Chinese defense officials at the People’s Liberation Army Naval Research Academy in Beijing, on January 14, 2019 (U.S. Navy photo)

The sharp downturn in ties between the world’s two most fearsome militaries was evident when America’s highest naval officer, Chief of Naval Operations Admiral John Richardson, went to Beijing this month.

Chinese officers were ready for Richardson: they issued hostile words, especially about U.S. relations with Taiwan. In response, CNO Richardson stuck to Washington’s decades-old script of cooperation.

It is time for American policymakers to change that script by, among other things, dropping themes of engagement, introducing notions of reciprocity, and showing resolve of their own.

Richardson struck an upbeat note as he left China on his second official visit as America’s top admiral.

“I very much appreciate the hospitality I received in China,” he tweeted on January 16.

“I had some great discussions with my counterparts and I look forward to strengthening our relationship as we move forward.”

The admiral’s words were in sharp contrast to those of the Chinese counterparts. They threatened military action against the United States. Moreover, Global Times, the tabloid controlled by the Communist Party’s People’s Daily, in an editorial, made veiled threats directed at Richardson.

“Beijing needs to take practical action to help the U.S. correct its vision,” the paper noted, after referring to military action to enforce Beijing’s expansive territorial claims.

“China must have the ability to make rivals pay unbearable costs.”

The mismatch in the tone of the American and Chinese messaging suggest that something might possibly be wrong.

For a start, something definitely seems wrong at the top of the People’s Liberation Army. Twice last month, senior Chinese officers publicly urged unprovoked attacks on the U.S. Navy. In the second of the outbursts, on January 20, Rear Admiral Luo Yuan said he wanted to use Dong Feng-21D and Dong Feng-26 ballistic missiles to sink two aircraft carriers and create 10,000 American “casualties.”

Although these bellicose statements do not represent official policy, they can nonetheless be seen as reflecting thinking in senior officer ranks. In any event, they should be deeply troubling.

The proper American response was not Richardson’s “I look forward to continuing our dialog as we seek common ground and opportunities for cooperation.” Richardson’s response should have been, “I am cancelling my trip to China.”

Richardson, prior to the China trip, defended his visit:

“A routine exchange of views is essential, especially in times of friction, in order to reduce risk and avoid miscalculation. Honest and frank dialogue can improve the relationship in constructive ways, help explore areas where we share common interests, and reduce risk while we work through our differences.”

“Common interests”? We hear not only unacceptably belligerent words from Luo and others; we have been seeing, and still see, dangerous Chinese actions in the global commons.

On September 30, the Lanzhou, a Chinese destroyer, came within 45 yards of the USS Decatur as it crossed the bow of the American warship near Gaven Reef in the South China Sea. The Decatur had to swerve to avoid a collision. The U.S. Navy diplomatically called the Lanzhou’s maneuverings “unsafe and unprofessional.”

Despite the risky conduct — and despite Beijing’s denial of a requested Hong Kong port call for the USS Wasp for October — the U.S. Navy sought permission for the Ronald Reagan Strike Group to pay a port call in Hong Kong, a special administrative region of People’s Republic of China, just weeks after the Decatur-Lanzhou incident.

James Fanell, a leading commentator on U.S. Navy interactions with China, told Gatestone that the port-call request undermined President Trump’s tougher policy line:

“What seems clear is that the PRC has successfully convinced generations of Pentagon leaders that ‘mil-to-mil’ relations are important for promoting security, despite the overwhelming empirical evidence proving otherwise.”

Fanell, who as a captain served as the chief intelligence officer for the Pacific Fleet, is correct about the evidence. Over time, the Chinese military has conducted a series of dangerous intercepts of the U.S. Navy and Air Force on and over the South China Sea and East China Sea.

Admiral Richardson is apparently worried about a lack of communication. Communication is not the problem. The problem is that Chinese generals and admirals have been and continue to be hostile, belligerent, and bellicose.

Moreover, no amount of talking is going to make these flag officers less so. In fact, American efforts at dialogue are making matters worse. U.S. Navy admirals may think they are acting responsibly and constructively, but the Chinese are obviously perceiving weakness and acting accordingly. The most likely explanation for Luo’s comments last month is that he thought America can be intimidated into leaving the region.

General Li Zuocheng, a member of the Communist Party’s Central Military Commission, also attempted intimidation. He told Richardson in Beijing that the People’s Liberation Army would bear “any cost” to prevent foreign interference in Taiwan matters.

After leaving China, Richardson, to his great credit, suggested sending a carrier strike group through the Taiwan Strait. “We don’t really see any kind of limitation on whatever type of ship could pass through those waters,” he told reporters in Tokyo.

The next step for the U.S. is to drive a carrier through the Strait, as the Navy last did in 2007 after the Chinese denied a port call in Hong Kong.

Why stop with just one carrier strike group? Arthur Waldron of the University of Pennsylvania told Gatestone that, to make a lasting impression on Beijing, the U.S. should arrange a Taiwan Strait passage with not only the supercarrier Ronald Reagan but also a flotilla of “some Japanese subs and the Izumo; any British, French, or Australian ships available; and the Taiwan navy shadowing it.” He also recommends sending along planes to add to the effect.

“We do not want war,” Waldron wrote in a message to defense professionals last week.

“This is how you prevent it. Remember, show overwhelming power not indecision or weakness. Some Chinese will read the smoke signals correctly.”

The best way to avoid conflict in the Taiwan Strait, as Waldron suggests, is to make it clear to Beijing that America will defend Taiwan. In the last two months, Beijing has been making threats to invade. Unfortunately, as Joseph Bosco, a former China desk officer in the Office of the Secretary of Defense, points out, the best Washington can do at the moment is issue “mushy diplomatese” that the Chinese can interpret as a lack of American resolve.

“You can bet,” Bosco told Gatestone last week, “China’s calculations would change dramatically if President Trump or Secretary Pompeo or the new SecDef or John Bolton were to utter these words publicly to Beijing: ‘We will defend Taiwan under any circumstances.'”

That would, he said, “effectively reconstitute the 1954 U.S.-Taiwan mutual defense treaty” and “alter the strategic dynamic in Washington’s and Taipei’s favor.”

Some — actually a lot — of “altering” is absolutely necessary, and now is not a moment too soon. In the first half of 2012, the U.S., despite firm obligations to defend the Philippines, did nothing when China took over Scarborough Shoal in the South China Sea. When Chinese generals and admirals saw Washington’s failure to act, they turned the heat on other Philippine reefs and islets, went after Japan’s islands in the East China Sea, and began reclaiming and militarizing features in the Spratly Islands chain. Feebleness only emboldens Chinese aggression.

There will be no good endings in Asia until Washington disabuses Beijing of the arrogant belief that it can take whatever it demands.

How to do that? Perhaps, in addition to sailing through the Taiwan Strait, Admiral Richardson can arrange for a few U.S. Navy vessels to make a port call on the island and linger for a while.

end

Futures rally on a report Vice Ministers are heading to Washington for trade talks.  Nothing is going to happen in these talks unless Meng is released from a Cdn jail and the USA must stop its extradition of her

(courtesy zerohedge)

Futures Rally On Report Chinese Vice Ministers Heading To Washington For Trade Talks

Given that algos aren’t widely regarded for their ability to detect nuance, Wilbur Ross’s comment yesterday that the US and China remained “miles and miles” apart on trade (though he clarified that this “shouldn’t be too surprising” since the most important talks had yet to take place) ignited a selloff that prompted one of the worst daily selloffs in US stocks since the earliest trading days of the year.

It was only the latest example of Trump administration officials seemingly taking turns talking up – and talking down – the prospects for a trade deal. But with the administration fearful of a sustained selloff – particularly when trade optimism is seemingly the only bulwark against more market chaos – the White House has found a way to reassure investors once again that everything is as it should be with the deadline for a trade agreement looming in the not too distant future.

Wang

And ironically, the news that’s sparking optimism in the equity space on Friday is confirmation that a delegation led by two senior Chinese ministers would head to Washington next week to prime the pump for a visit by Liu He, China’s top trade negotiator, and a group of other senior officials later this month.

Though they would seem to undermine the credibility of all future trade-related denials, the report published by Bloomberg, which follows denials by both the White House and Beijing of an  FT report claiming that the US had cancelled the meeting (which sent markets into a tailspin early this week), has helped renew optimism in the trade-talk process on Friday.

A Chinese delegation including deputy ministers will arrive in Washington on Monday to prepare for high-level trade talks led by Vice Premier Liu He, according to people briefed on the matter.

Vice Commerce Minister Wang Shouwen and Vice Finance Minister Liao Min will arrive in the U.S. on Jan 28, according to two of the people who asked not to be named as the discussions aren’t public. China’s central bank governor Yi Gang will join the talks, one of the people said. It wasn’t immediately clear which other officials will attend.

Liu will arrive in the US on Jan. 30 to meet with Trade Rep Robert Lighthizer for talks that the US has billed as “very, very important”. At that point, with only five weeks remaining until the deadline for escalating tariffs on $200 billion in Chinese goods, investors should start to get an idea of the likelihood of an amicable outcome.

As of Friday, the US and China did not appear close to agreement on a range of key issues, from China’s handling of intellectual property to China’s trade surplus with the US. It’s unclear what other Chinese officials will accompany Liu, but what China threatening to crash US markets if Trump doesn’t make a deal, one thing is clear: The situation is growing more dire every day.

end

Very quietly PBOC announces a quasi QE by allowing the swapping of worthless Perpetual bonds for Treasuries.  The Chinese hope to keep the Ponzi scheme alive

(courtesy zerohedge)

China Quietly Announces Quasi QE To “Keep Ponzi Scheme Afloat”

On Thursday, to little fanfare, China’s central bank announced its latest liquidity injection scheme, which many analysts saw as a quasi Quantitative Easing program and a potential precursor to full-blown QE.

Just like QE in the US, where financial system liquidity was boosted by the Fed injecting reserves into banks in exchange for sales of Treasurys and MBS, which fungible liquidity was then used for a variety of purposes including directly investing in risk assets as the JPM London Whale fiasco demonstrated, the PBOC announced that it will allow China’s primary dealers to swap their holdings of perpetual bonds for central bank bills, and directly use those bonds as collateral to access certain PBOC liquidity operations.

By directly intermediating in the market, and effectively backstopping securities issued by local banks, this measure will increase the appeal of perpetual bonds to be issued by banks making them riskless for all intents and purposes, which can then be used to bolster capital cushions and thereby help relax a key current constraint on credit supply.

In other words, the PBOC just unveiled a roundabout way of injecting even more “risk-free” liquidity directly into the system, or as Rabobank’s Michael Every (more below) writes “Chinese banks, desperate for cash to keep the Ponzi scheme afloat, can issue perpetuals that nobody in their right mind would want to hold; and the PBOC will swap them for its bills.”

* * *

First, some background: In December, China’s financial authorities permitted banks to issue perpetual bonds as a way to bolster their capital base, and on Thursday Bank of China, the country’s fourth largest lender, launched the first ever batch of perpetual bonds – which are the functional equivalent of preferred equity as they never have to be repaid – issued by Chinese banks, with an officially approved quota at 40 billion yuan and yielding 4.5%. These bonds count toward banks’ (non-core) tier 1 capital, thereby boosting the bank’s capital cushion and allowing the bank to issue more loans into China’s increasingly cash-starved system.

Why did Beijing take this aggressive step? Because as Goldman explains, banks’ increased consideration of their capital cushion had weighed on monetary policy transmission and loan extension. So, by adding to the banking system’s capital buffer, the issuance of perpetual bonds should in turn help ease a main current constraint on credit supply.

But that wasn’t enough, and just to make sure there is sufficient demand for “perpetual bonds” issued by banks, the PBOC launched the Central Bank Bill Swap (CBS), which just like QE, is an asset swap where the central bank injects high powered liquidity to backstop bank balance sheets, enabling them to pursue riskier credit transformation operations, in this particular case, issue more loans with the intention of reflating the system.

Below we summarize some of the key features of these Bill Swaps:

  • The new tool works by giving primary dealers bills that can be used as high-quality collateral in exchange for perpetual bonds purchased from banks
  • China Banking and Insurance Regulatory Commission will also allow Chinese insurance firms to invest in banks’ tier 2 capital debt and capital bonds without fixed terms
  • Capital charges will be applied on perpetual bond holdings on Chinese banks’ balance sheet, even after they swap the securities for central bank bills using a new PBOC tool.

Regarding the PBOC’s measures, the duration of the central bank bill swap was initially set at three years.  While the swapped central bank bills cannot be directly converted into cash, and can only be used as collateral for borrowing from the PBOC (e.g., via OMOs) or other financial institutions, once said repo operation takes place, the proceeds from the CBS are effectively the equivalent of cash as banks face no further limitations on what to do with the funds received from the perpetual bonds issuance. There are some modest limitations on eligible collateral: the perpetual bonds that qualify for CBS need to be issued by banks that meet some minimum prudential requirements (such as CAR not lower than 8%) but generally this operation is meant to be inclusive and allow as many banks as possible to participate. As Goldman notes, more implementation details such as the risk weight of this new tool are still not released yet.

And just to make sure enough liquidity reaches the banks, the PBOC will also allow perpetual bonds that are rated AA or above to be used as collateral for MLF, TMLF, SLF, and relending monetary operations, i.e., once the bank issues the PBOC-backstopped perpetuals – which makes them the risk-equivalent of cash for downstream investors thanks to their central bank backstop – it can use the proceeds for pretty much anything.

Of course, this is not full-blown QE because the announced move are not monetary measures per se, in that they do not involve creation of money; they do however involve the central bank backstopping a bond-like instrument, which then has all the functional equivalents of money. Meanwhile, as Goldman also notes, the CBS “does not mean that the PBOC is indirectly providing capital to banks, as the CBS is of limited duration”, which while true, does provide banks with virtually risk-free capital for a period of three years, so the “limited duration” argument in a world where investors only care about day to day liquidity is somewhat naive.

* * *

Naturally, with China launching such a “novel” mechanism to boost liquidity in the system, there were quite a few analyst reactions, and courtesy of Bloomberg, we present some of these:

Ming Ming, head of fixed income research at CITIC Securities

  • The new policies addressed two issues that had been major obstacles for the development of banks’ perpetual bonds: the poor liquidity of perpetual bonds and the need to include insurance firms, who are key investors for long-term bonds, as eligible perp buyers
  • There could be three possible ways to boost bank perps liquidity:
    • Investors who buy bank perps can sell the securities to primary dealers, who are able to swap the perps into central bank bills
    • Primary dealers could use central bank bills as collateral for repurchase transactions with other institutions
    • Primary dealers can borrow from PBOC against perpetual bonds or central bank bills

Li Qilin, chief economist at Lianxun Securities

  • The introduction of Central Bank Bill Swap brings PBOC into the market as a buyer, boosting liquidity of perpetual bonds
  • The ultimate goal of such a new tool is to expand credit supply. Perpetual bonds can replenish banks’ capital, therefore helping expand their loan books
  • There are about 65 banks whose perpetual bonds can be eligible for central bank bill swap. The total loan size of the 65 banks makes up over 65% of that of all financial institutions

Ji Linghao, analyst at Huachuang Securities

  • It makes primary dealers more willing to buy perpetual bonds and ensures successful issuance of such debt
  • Allowing insurance firms to buy perpetual bonds helps diversify the investor base for such securities, making it easier to sell those notes
  • Allowing primary dealers to swap perpetual bonds into central bank bills effectively means that PBOC throws itself behind such securities, easing market concern over risks of perpetual bonds

Liu Li Gang, at Citigroup

  • The new Central Bank Bill Swap may make itself both a market player and a regulator, potentially leading to conflict of interests
  • It may be better for the PBOC to “play just a facilitating role together with other market players”
  • PBOC may have been “over reaching” in the market, and such interventions could make China’s monetary policy implementation extremely complex, monetary policy less transparent and policy transmission less effective

But the best, if also most cynical recap, of what quietly took place in China, comes from Rabobank’s Michael Every, which we present below:

China just announced “US banks can start operating there in six months.” I am sure useful-idiot headline-followers will say China is opening up. They probably won’t notice the PBOC also announced a Central Bank Bills Swap that will give primary dealers bills they can use as collateral in exchange for a flood of new perpetual bonds that Chinese banks are about to issue, following the lead of the Bank of China (which is offering CNy40bn at around 4.5% for people who never want to get their money back).

In other words, Chinese banks, desperate for cash to keep the Ponzi scheme afloat, can issue perpetuals that nobody in their right mind would want to hold; and the PBOC will swap them for its bills. Add that to MLF operations already underway and chatter of outright QE and one finds it hard to see where the real business model for Wall Street is in China, or to argue the part of Soros’ speech where he underlines how fragile China really is (which is why it needs that Wall Street cash-flow).

And, as Every hints, should the Bill Swap fail to boost credit creation and/or sentiment sufficiently, there is always good, old “outright QE” to fall back on…

END

China threatens to pull money from Silicon Valley unless the Huawei affair ends.  The former Governor of the POBC also states that he feels the trade war will become a tech war and he is right

(courtesy zerohedge)

China Threatens To Pull Money From Silicon Valley: “Trade War Will Become A Tech War”

In the span of a day, China has gone from threatening to crash US markets if President Trump doesn’t agree to a trade deal to helping the US rebut reports that trade talks weren’t going as smoothly as President Trump and the Wall Street Journal had let on. During a press conference on Thursday, Ministry of Commerce Spokesman Gao Feng denied reports that a meeting involving high-level trade officials in Washington had been cancelled (the FT had cited US frustrations with China’s reluctance to cave on demands relating to curbing IP theft and certain structural reforms) – backing up Larry Kudlow, who sparked a brief rally just before the close on Wednesday when he appeared on CNBC to deny these reports.

Kudlow said yesterday that the most important meeting, between a Chinese delegation led by Vice Premier Liu He, the country’s top economic official, was still slated to take place in Washington next week.

But in the latest sign that the simmering tensions over the US’s dispute with Huawei continue to spill over into trade talks, RTreported on Thursday that Beijing might cut off all Chinese funding to Silicon Valley after the US slapped an export ban on a Huawei subsidiary based in Silicon Valley.

The comments were made by Former PBOC Deputy Governor Zhu Min, who sat for an interview with CNBC.

https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=7000061394

His message was clear: The US’s push to drive Huawei out of Western markets would have a negative impact on the trade negotiations. In addition to his former role at the PBOC, Zhu is also a former official at the IMF.

“I can tell you, after the Huawei events, all the Chinese money into Silicon Valley stops. And no US money will want to invest into China either,” Zhu Min told CNBC on the sidelines of the World Economic Forum (WEF) on Tuesday. He did not elaborate on what should happen to bring about such an outcome.

Min’s comments followed remarks from Huawei Chairman Liang Hua, who told world leaders gathered in Davos that his company could shift away from Western countries if it continues to face restrictions.

Asked if it was possible for China to abruptly pull money from Silicon Valley, John Zhao, founder and chief executive of Hony Capital, said “by numbers, that seems to be the case.”

“But it really suggests something that is much deeper than the number has started to show. First of all, it shows the interdependency that the world has built with each other…But it also suggests that while there are some short-term pains to be resolved, we need to have a long-term view,” Zhao said, while speaking to CNBC’s Nancy Hungerford in Davos on Wednesday.

And just like that, Silicon Valley has once again found itself at the center of the trade war.

END
Scary! USA warships enter the Taiwan strait but this time, up above are Chinese bombers
(courtesy zerohedge)

US Warships Again Enter Taiwan Strait, But This Time With Chinese Bombers Overhead

For the first time this year the United States has sailed two warships through the Taiwan Strait Thursday in yet another challenge to the ‘One China’ policy and in accord with the US Navy’s “freedom of navigation” operations. It seems the US Navy is establishing this almost as “routine” given the number of times this provocative act has been done over the past number of months (3 times last year); however, this time China’s air force was busy overhead flying H6 strategic bombers and reconnaissance planes in the vicinity since Thursday.

“The ships’ transit through the Taiwan Strait demonstrates the US commitment to a free and open Indo-Pacific,” Lt. Cmdr. Tim Gorman told USNI News, referring to the guided missile destroyer USS McCampbell and the USNS Walter S. Diehl. “The US Navy will continue to fly, sail and operate anywhere international law allows.”

US Navy prior passage through the Taiwan Strait, file photo

Taiwan described the ships’ passage through the approximately 110-mile-wide strait as necessary to “ensure the security of the seas and regional stability” according to Reuters. China’s response was to warn US officials to abide by the ‘One China’ principle while reiterating “concern” over growing tensions caused by such actions, according to the Chinese Foreign Ministry.

But it appears China’s verbal threats are increasingly being boosted by putting potential deterrent assets in the air as there’s been an uptick in Chinese military aircraft conducting “drills”:

Beijing sent several bombers and aircraft through the Bashi Channel, which separates Taiwan from the Philippines, earlier on Thursday, Taiwan’s defense ministry said in a separate statement.

A similar Chinese operation was conducted on Tuesday, the ministry said, and both were monitored closely.

An H-6K, considered “China’s B-52” via War is Boring

This as the US Navy has recently stated it hasn’t ruled out sending an aircraft through the contested waters, which hasn’t happened in over a decade.

But it remains a significant potential flashpoint for escalation between Beijing and Washington, especially given the Pentagon’s latest declassified report published earlier this month highlighting China’s ambitious defense technology modernization plans driven primarily by  “Beijing’s longstanding interest to eventually compel Taiwan’s reunification with the mainland and deter any attempt by Taiwan to declare independence.”

The Defense Intelligence Agency report also stated, “Beijing’s anticipation that foreign forces would intervene in a Taiwan scenario led the (People’s Liberation Army) to develop a range of systems to deter and deny foreign regional force projection.”

Notably the report was issued the same month that President Xi Jinping gave a landmark Jan. 2 speech which offered a vision of the future relationship between China and Taiwan that blatantly contradicts what Taiwan wants for itself – which is, more autonomy, if not outright independence, as the ruling pro-independence party has repeatedly insisted.

Though giving up some of their freedoms might seem daunting, Xi tried to assure Taiwan that there was “nothing to fear” from reunification with Beijing – and that they would enjoy even greater economic prosperity under “one country, two systems”. And while Xi said he’d be willing to give Taiwan “broad latitude” for peaceful reunification, China absolutely would not tolerate “any form of separatist activities.”

While Taiwan is satisfied with the status quo, Beijing is growing increasingly uneasy – evidenced by Beijing’s incessant military posturing in the Strait of Taiwan. And if markets are fearful about a collapse in the global trading order due to the US-China trade spat, imagine how they would react to saber-rattling between Beijing and Washington over Taiwan. A future US decision to send a carrier group through the Strait, for example, would unleash just this scenario.

4.EUROPEAN AFFAIRS

FRANCE/BELGIUM, HUNGARY ETC

Why the protests in these countries are different this time

an excellent presentation by Claudio Grass of Mises

(Grass/Mises)

France’s Protests: Why It’s Different This Time

Authored by Claudio Grass via The Mises Institute,

When the first demonstrations on the streets of Paris were reported nine weeks ago, nobody could have foreseen the endurance, the tenacity and the viral effect of the Yellow Vests movement. After all, the French are known to protest and to strike, it’s part and parcel of their culture. However, by the time this article is being written, protests, marches and demonstrations have broken out in a multitude of European cities.

Why Was it Different this Time?

To begin with, it is worth taking a closer look at the situation in France, the point of origin of this “contagion.” There are a few very important elements that set the Yellow Vests apart from past protests. For one thing, unlike previous demonstrations, this one wasn’t led by the unions, nor was it organized by any identifiable political body. The protesters had no unified or homogenous political beliefs, party affiliations or ideological motivations. In fact, through interviews and public statements of individuals taking part in the demonstrations, it would appear that any organized elements, or members of the far-left or the far-right were a slim minority among the protesters. And while those few were the ones largely involved in the violent clashes with the police and the destruction of private and public property, the crushing majority of the Yellow Vests were peaceful, non-violent and largely unaffiliated with any particular political direction.

As the movement grew and spread, many political figures have tried to co-opt it, without success. Front National’s Le Pen, hardline leftist Melenchon, far-left factions and various union leaders, all tried to place their flag on the Yellow Vests, claiming that they align with and can represent their grievances. They all failed. The Yellow Vests might contain individuals with all kinds of political inclinations, but as a whole, the movement remains apolitical, and if anything, suspicious and hostile to the political class in its entirety.

The Common Denominator

The evolution of the grievances themselves is also of particular interest. What started as a protest against a new fuel tax, gathered momentum and ended up being about the economy, the cost of living and the public resentment toward the establishment. These underlying problems that the Vests are protesting against are far from unique to France.

Even though Yellow-Vest-inspired protests were reported in many European countries, the most extensive demonstrations took place in Belgium, Hungary, the Netherlands and Spain. The causes and aims of most of these protests were not aligned with their French counterparts, as the citizens of different countries had different grievances. For example, in Belgium the focus was on immigration and in Spain on the Catalan independence. With the notable exception of the Hungarian protests, that we will look into later, the rest of the demonstrators’ complaints did have one thing in common: No matter what headline issue their complaints were wrapped in, the core problems were largely of an economic nature, while they also targeted the political class that is widely seen as being out of touch with reality.

The corrosion of purchasing power, the ever-increasing taxation levels, the restriction of business and free markets through regulations and manipulations, are issues most of us face in the West. Add to that mix the surge in immigration of the past years and the projected nonchalance of the political leaders, and it’s plain to see how discontent came to its current boiling point. During the demonstrations, the French chanted “Couper la tête du roi!” (cut off the king’s head!) and the sentiment appears to be shared by their protesters across Europe. Only in France, over 4,500 people have so far been arrested in connection with the Yellow Vest movement, in an environment highly corrosive to “Liberté” and “Égalité” and toxic to “Fraternité”. The combination of these issues manifests in a decrease in the quality of life of all citizens, however, it is the working and the lower-middle class that feel it the most. And it is these citizens that have been taking their grievances to the streets over the last two months.

What is especially problematic at this stage is the way the establishment is choosing to resolve those complaints and to deescalate the demonstrations. President Macron, the first one to capitulate to the demands of the Yellow Vests, chose to scrap the fuel tax hike and to provide an increase of the minimum wage, as well as a tax cut for most pensioners. These measures are set to place the county’s already strained budget under severe additional pressure. As a result, the short-term financial relief that the protesters have won is bound to be massively overshadowed by the long-term effects of their government’s excessive spending. The way President Macron, and the other leaders who will likely soon follow chose to appease the protesters and his concessions just to stay in power will only serve to make the economic situation much more dire for the public and make the problems they protested about much worse.

What Lies Ahead

Overall, the sharp dissatisfaction of the public with the way things are, esp. in Europe, is becoming increasingly apparent and hard to ignore. Nevertheless, short-sighted demands and corresponding capitulations do next to nothing to solve the real, underlying issues that forced the people to the streets in the first place. The refusal of the French Yellow Vests to stop their protests even after President Macron’s concessions proves that their concerns run much deeper and cannot be papered over that easily. So far, the Yellow Vest movement has shown great promise in its potential to bring about change, yet at the same time it has also shown troubling signs of a collectivist and statist inclination, that, much like the original French revolutionaries, might simply replace one centralized and illiberal system with another, updated version of the same idea.

This is highlighted by the exception of Hungarian protests, fueled by complaints that were of a very different nature than those in the rest of Europe. While the French, the Dutch, the Belgians, the Spanish and the rest of the protesters stood up against state overreach and the added pressures on personal and financial freedom, such as excessive taxation, unpopular immigration policies, denial of self-determination and similar issues, the Hungarians complained about the exact opposite. Opposing a wave of reforms misleadingly dubbed “slave labor” laws, the Hungarians actually protested a move by the government to throw out Soviet-era regulations and to liberalize and open up the labor market. By striking down laws that hitherto limited the amount of overtime that a worker has the right to accept, the reforms actually pave the road for a much healthier, competitive and robust labor force, where the state gets out of the way and each individual is free to work and earn more, if they so choose. The opposition and the resulting protests against this move are therefore a very worrying sign as to the true nature of the protesters’ motivations, a concern that might not be unique to Hungary.

In this backdrop of social unrest and contagion of demonstrations, it is important to remember that protests alone cannot be enough to solve anything. Without a viable solution, reasonable counter-proposals to the existing system and an open dialog on the core problems, one cannot hope for progress to be made. It still remains to be seen if the Yellow Vest movement will prove to be yet another political pressure group that still believes in centralized authority or if they see that the solution lies in the competition of ideas and in the understanding that “man is not a means to an end, but an end in themselves.”

As 2019 is set to pile additional pressures and challenges on the economy, with projected slowdowns and rising interest rates, the discontent will only spread. How this discontent will be vented and whether it will be productively or destructively channeled, will likely be defining questions for the long-term, not only socially and politically, but also economically. Nevertheless, for short- and mid-term, hopes for serious structural reforms, potent enough to steer us clear of the next debt-fueled crisis seem overoptimistic and even naive.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

This will certainly escalate the situation:  Russia sends in security contractors to protect Maduro.  Venezuela is in the uSA sphere of influence.  The problem is that billions of dollars was loaned to Venezuela by Russia and China invested large sums of money as well

(courtesy zerohedge)

Russia Sends “Security Contractors” To Venezuela To Protect Maduro

As the international community splits along governments who continue to back embattled Venezuelan ruler Nicolas Maduro and governments, led by the US, who have officially recognized opposition leader Juan Guaido as the country’s legitimate head of state, Reuters reported that a group of Russian mercenaries with ties to the Kremlin have been sent to Venezuela to provide security for Maduro as he struggles with the biggest threat to his rule in his six years in power.

Venz

The contractors are believed to be from the Wagner Group, a group of private contractors who have performed secret missions on behalf of the government, including fighting in Syria and the Ukraine (which brings to mind this incident from last February when US-backed forces killed 100 Russian mercenaries in what was the closest thing to a direct proxy conflict between Russia and the US in Syria). It’s unclear when the contractors arrived, or when they intend to leave. Russia has offered to mediate the conflict between Maduro and Guaido, while joining with China to criticize the US for interfering in Venezuelan affairs.

Russia, which has invested billions of dollars in the Maduro regime, pledged to stand by the embattled socialist leader this week. Yevgeny Shabayev, leader of a local chapter of a paramilitary group told Reuters he had heard the number of security contractors in Venezuela is roughly 400. Russia’s defense ministry and Venezuela’s information ministry haven’t responded to requests for comment. Kremlin Spokesman Dmitry Peskov said we have “no such information” when asked about the contractors.

Venezuela

The contractors traveled to Venezuela on private chartered flights that first landed in Cuba. The contractors have been charged with stopping opposition sympathizers or members of Maduro’s own forces from detaining him.

“Our people are there directly for his protection,” Shabayev said, in light of the attempted revolt staged by rogue military officers earlier this week.

One source said a group of contractors had arrived in Venezuela before elections last year where Maduro won a second six year term, but another group had arrived “more recently.”

Public flight tracking data suggests the latest batch of contractors arrived some time betwee mid-December and this past week.

Asked if the deployment was linked to protecting Maduro, the source said: “It’s directly connected.” The contractors flew to Venezuela not from Moscow but from third countries where they were conducting missions, he added. The third source, who is close to the private military contractors, said there was a contingent in Venezuela but he could not provide further details. “They did not arrive in a big crowd,” he said. Publicly-available flight-tracking data has shown a number of Russian government aircraft landing in or near Venezuela over past weeks, though there was no evidence the flights were connected to military contractors. A Russian Ilyushin-96 flew into Havana late on Wednesday after starting its journey in Moscow and flying via Senegal and Paraguay, the data showed.

The aircraft, a civilian jet, is owned by a division of the Russian presidential administration, according to a publicly-available procurement contract relating to the plane.

Between Dec. 10 and Dec. 14 last year, an Antonov-124 heavy cargo aircraft, and an Ilyushin-76 transport aircraft, carried out flights between Russia and Caracas, flight-tracking data showed. Another Ilyushin-76 was in Caracas from Dec. 12 to Dec. 21 last year. All three aircraft belong to the Russian air force, according to the tracking data.

Since Guaido declared himself the acting president, Maduro has sought to expel US diplomats while vowing not to step aside. He has threatened violence against those who back the opposition. Maduro still retains control of the levers of power, including the country’s energy industry and its military, though while military commanders have largely backed him, the allegiance of the troops on the ground remains somewhat less clear. Maduro has accused the US of agitating for the Venezuelan opposition to move against him.

 

6. GLOBAL ISSUES

Asian exports, the life-blood for their economies is tumbling and as such confirms a global earnings recession.  The Low M1 growth certainly suggests that global industrial production is negative and that will prove that we have an earnings recession.  No wonder China decided to do a quasi QE this morning.

(courtesy zerohedge)

 

 

Tumbling Asian Exports Confirm Global Earnings Recession

One wouldn’t know it looking at today’s surge in stocks, but as of this moment no less than three indicators suggest the world now finds itself in either an economic or earnings recession.

Two weeks ago, we showed a chart from Bank of America, according to which the ongoing collapse in global M1 growth strongly suggested that global industrial production was not only negative, but contracting at a rate last seen during the financial crisis.

Then, one week ago, BMO economist Douglas Porter observed the OECD’s leading indicator – which is a good guide post of what is coming just around the corner – and which dipped for the 11th month in a row—it peaked in December 2017—clearly signaling a cooldown.

Now, according to the latest BofA Flow Show report, the bank’s chief investment strategist Michael Hartnett also confirms that “we are in a global EPS recession” by observing the plunge in Asian export growth, which tumbled –4% YoY most recently, a number “consistent with negative global EPS growth.” This is shown in the left chart below, and is is in line with BofA’s own global EPS model forecast, which is currently at  0% EPS growth in the next 12 months (versus 6% consensus) according to Hartnett, who notes that “no new highs for stocks, lows for spreads without inflection point higher in corporate profits.”

Having declared a global EPS recession, BofA then lays out the signs to keep an eye on that the global EPS recession is over, which include:

  • US 2s10s yield curve steepens (> 50bps);
  • global PMI up from 51 to 53;
  • Asian export growth rebounds (signaled by ADXY >108, KOSPI 2300, copper >$300);

And most importantly: China financial conditions ease more substantially (i.e. CHBGMCI >100) as policy makers U-turn on deleveraging of $20tn shadow banking system & stop rising defaults in $3tn corporate bond market.

On the other hand, considering articles such as this one, “China Quietly Announces Quasi QE To “Keep Ponzi Scheme Afloat””, it may be just a matter of time before China’s easing efforts finally spur a material rebound in China’s credit impulse, signaling the key inflection point that will serve to bounce global EPS from their negative bottom.

 

end

 

7  OIL ISSUES

Tom Luongo discusses the truth behind what the USA wants to do with respect to Venezuela and its oil

(courtesy Tom Luongo)

Luongo: Trump Betrays MAGA Over Venezuela

Authored by Tom Luongo,

The U.S. backed a coup in Venezuela that has failed. And President Trump was the architect of it. This is a farce surrounding an intrigue contained within a tragedy.

What has happened in Venezuela is tragic. Nicolas Maduro is a comical figure straight out of central casting for a South American leader of a junta. But it has been the U.S.’s designs on Venezuela’s oil and gas reserves (the largest proven in the world as of 2017) that is the real story behind this week’s events.

For anyone still harboring doubts as to who Trump truly is Venezuela should end them. Trump’s Energy Dominance policy is at the core of his foreign policy. And he will do whatever it takes to secure that policy and deliver a long-standing order to the U.S. and European oligarchy to gain control over Venezuela.

Energy Dominance

As Alistair Crooke succinctly put it last year at Strategic Culture:

The US – were energy dominance to succeed – simply would control the tap to the economic development – or its lack thereof – for rivals China, and Asia. And the US could squeeze Russia’s revenues in this way, too. In short, the US could put a tourniquet on China’s and Russia’s economic development plans. Is this why JCPOA was revoked by President Trump?
Here then, is the squaring of that circle (more US power, yet less empire): Trump’s US aims for ‘domination’, not through the globalists’ permanent infrastructure of the US defence umbrella, but through the smart leveraging of the US dollar and financial clearing monopoly, by ring-fencing, and holding tight, US technology, and by dominating the energy market, which in turn represents the on/off valve to economic growth for US rivals. In this way, Trump can ‘bring the troops home’, and yet America keeps its hegemony. Military conflict becomes a last resort.

Most of Trump’s supporters refuse to admit this is the plan. They still want to believe that National Security Advisor John Bolton and Secretary of State Mike Pompeo were thrust upon him by the nefarious Deep State.

And that Trump is a trapped hero in a cage yearning to breathe free and MAGA, if we just support him a little more. Nonsense.

Trump has been very clear about this policy for years. We take over these places, kill the bad people and pay for it all by stealing their natural resources, in this case oil.

It is Trump’s 17th century view on trade writ large. Since this is a 17th century colonial mindset.

An independent Venezuela, even if it is run by an incompetent bus driver, is something that cannot be allowed to stand. Anyone that refuses to trade that oil on U.S. controlled exchanges, exchanges controlled by Goldman-Sachs, or in U.S. dollars is to be taken over and a puppet government installed, c.f. Iraq, Libya.

But only after your production is removed from the market. So that we can sell ours.

This is geopolitics 101 folks. Nothing new under the sun. Does everyone not remember Trump’s cutting Venezuela from the global monetary system through sanctions last year?

The Socialism Bogey

The worst of the country’s hyper-inflation occurred after this. Sadly, it was cheered on by libertarians and conservatives more interested in proving Socialism is bad than seeing the bigger picture of how it was fomented by immoral U.S. policy under Trump’s guidance.

Because no one f&cks with the Orange Jesus, man. Whoa!

Maduro’s attempts to rebuild Venezuela’s monetary system outside of the control of the U.S.’s dominance of financial markets are a blueprint for resisting Energy Dominance.

Whether Maduro’s Petro cryptocurrency and Sovereign Bolivar succeed are irrelevant. What’s important is that he has gained the backing of both China and Russia in support of the scheme.

They are all, along with Iran, committed to an alternate path to Trump’s Energy Dominance. They have to be, because the U.S. will not stop locking down the world financial system around oil until stopped practically.

And Trump has to continue on the path he’s on, if he believes in America’s Inherent Greatness (which he does), and quash them with everything in his power.

So, now he is taking on the weakest link, Venezuela. A country softened up by Chavez’s idiocy and Maduro’s incompetence. But it took the U.S. leaning on them through ruinous sanctions to destroy what was left and ensure the collapse of its oil industry so ours can thrive.

Then we blame the Venezuelan people for resisting our edicts and electing the wrong man.

This is the John Bolton blueprint for regime change. Demonize the leader of a country that opposes our imperial rule, cut them off from the rest of the world through sanctions and political/military pressure and wait for the society to collapse. Then back a regime change by a U.S. groomed puppet, in this case the nobody who is Juan Guaidó.

Sell it all the entire time as a failure of the other guy in charge. For Chavez and Maduro the spectre of Socialism is all it takes, especially now with the Democrats and the media championing our own female Che, Alexandria Ocasio-Cortez, as the bogeyfem.

If that fails and it looks like it has then threaten to invade on humanitarian grounds. The only way this works with a U.S. population weary of two straight decades of war is for things to get so bad our intervention makes us look like the savior of a blighted people.

The Good Guy Blueprint

Guess what? This is the exact groundwork Bolton is laying for Iran. Squeeze them until they pop and then back a coup by the Mujahadeen al-Khaq (MEK). Who, like Guaidó, have absolutely zero support within Iran and would be the exact antithesis of what the Iranian people would want.

In other words Shah 2.0.

And are both some flavor of communist, just like Maduro. But don’t tell the MAGApedes this it’ll make them cry.

This is why we refused to work with Venezuela and sanctioned them instead. Maybe the reason Maduro wouldn’t work with us is because he knew what the ultimate plan was.

But the real tragedy here is that Trump has now embraced interventionist foreign policy completely. He’s like Arnold’s character in James Cameron’s True Lies. When his impossibly how wife finds out who he truly is she asks him, “Have you ever killed anyone?”

And he quips like a little boy, “Yeah, but they were all bad.”

This is how he’s selling this betrayal of his base and MAGA. Because Venezuela today, Iran tomorrow.

The Steps to Not MAGA

Go back to the Crooke quote above. Shoring up the flow of how and in what currency oil is traded is one part. This is why Saudi Arabia is doomed, because to survive they need U.S. diplomatic and military backing and to maintain that they need to only accept dollars which is destroying their fiscal position.

The next part is have the U.S. produce the marginal barrel of oil, giving us pricing leverage over Russia. The Saudis and the rest of the Arab world will take whatever we allow them to have.

The alternative is written in today’s headlines — demonization, impoverishment, regime change and seizure of natural resources.

That mean Trump needs low interest rates for the capital intensive and, to this point, capital destructive, fracking industry to maintain the fiction that we can outproduce the Russians on a price per barrel basis.

Venezuela, with a currency which trades outside the SWIFT system, can and will produce oil at far lower prices than U.S frackers in the Permian Basin can. And it can drive domestic wealth generation again.

The last part is what he’s selling to the MAGA crowd, bringing the troops home. But Trump said this morning he doesn’t rule out military intervention in Venezuela to oust Maduro from power. What happened to ‘no regime change’ and bringing the military empire to an end, OJ?

As long as all of the above works he will be able to substitute the troops overseas for control of the flow of energy, except where the bad guys need to be killed of course.

The Failure is Complete

Look around you. Do you really think that’s working?

  • China’s petroyuan contract is a runaway success. Russia is selling so much oil there in yuan and converting it to gold it is now supporting global gold prices.
  • Maduro has survived the coup to this point. Russia has made it clear they will assist Maduro stay in power by flying a nuclear-bomb carrying TU-160 bomber to Caracas. Putin and Maduro just signed a multi-billion dollar exploration and production agreement.
  • No Exxon-Mobil in sight folks.
  • Iran is selling oil to India at 2017 rates still, using rupees. Most of 2018’s increase was in anticipation of Trump putting sanctions on, so the fall from the peak is irrelevant — simply front-running Trump’s predictable policy.
  • Turkey will still buy Iranian oil at whatever rate they want.
  • Nordstream 2 is under construction and Exxon-Mobil and Uniper just signed a big LNG supply deal in Germany. Since Uniper is a part of the Nordstream 2 consortium, do you think sanctions are incoming now?

No.

And neither is energy dominance.

8. EMERGING MARKETS

VENEZUELA

USA orders non emergency government employees out of Venezuela

(courtesy zerohedge)

end

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

Euro/USA 1.1345 UP .0033 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  GREEN 

 

 

 

 

 

USA/JAPAN YEN 109;86  UP 0.259 (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 1.3098     DOWN   0.0021  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3329 DOWN .0021 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS FRIDAY morning in Europe, the Euro FELL by 33 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1345/ Last night Shanghai composite CLOSED  UP 10.03 POINTS OR 0.39% 

 

 

//Hang Sang CLOSED UP 448.21POINTS OR 1.65%

 

/AUSTRALIA CLOSED UP 0.68%  /EUROPEAN BOURSES GREEN

 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED UP 198.93 POINTS OR 0.97%

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED GREEN 

 

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 448.21 POINTS OR 1.65% 

 

 

 

/SHANGHAI CLOSED UP 10.03 PTS OR 0.39%

 

 

 

 

Australia BOURSE CLOSED UP .68%

 

Nikkei (Japan) CLOSED  UP 198.03 PTS OR 0.93%

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1284.40

silver:$15.37

Early THURSDAY morning USA 10 year bond yield: 2.73% !!! UP 1 IN POINTS from THURSDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.05 UP 2  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 96.32 DOWN 28 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.65% DOWN 0    in basis point(s) yield from  THURSDAY/

JAPANESE BOND YIELD: +.00%  DOWN 1   BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.23% DOWN 1   IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.65 DOWN 1     POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 132 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.19%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.46% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1409 UP   .0097 or 97 basis points

 

 

USA/Japan: 109.58 DOWN  0.017 OR 2 basis points/

Great Britain/USA 1.3167 UP.0048( POUND UP 48  BASIS POINTS)

Canadian dollar UP 95 basis points to 1.3255

 

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The USA/Yuan,CNY closed UP AT 6.7483 0N SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.7546(  YUAN UP)

TURKISH LIRA:  5.2700

the 10 yr Japanese bond yield closed at +.00%

 

 

 

Your closing 10 yr USA bond yield UP  2 IN basis points from THURSDAY at 2.74 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.05 UP 1  in basis points on the day /

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

Your closing USA dollar index, 95.88 DOWN  72  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 9.73 OR 0.14%

German Dax : UP 151.61 POINTS OR 1.36%

Paris Cac CLOSED UP 53.86 POINTS OR 1.11%

Spain IBEX CLOSED UP 35.20 POINTS OR  0.38%

Italian MIB: CLOSED UP 246.04 POINTS OR 1.26%

 

 

 

 

WTI Oil price; 53.44 12:00 pm;

Brent Oil: 61.52 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.98  THE CROSS HIGHER BY 0.22 ROUBLES/DOLLAR (ROUBLE LOWER BY 22 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.2700 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.19 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 :  53,54

 

 

BRENT :  61.48

USA 10 YR BOND YIELD: … 2.75

 

 

USA 30 YR BOND YIELD: 3.06

 

 

 

EURO/USA DOLLAR CROSS:  1.1416 ( UP 104    BASIS POINTS)

USA/JAPANESE YEN:109.50 DOWN .099 (YEN UP 10   BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 95.76 UP 84 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.3213  UP 96 POINTS FROM YESTERDAY

the Turkish lira close: 5.2691

the Russian rouble 66.10:   DOWN .34 Roubles against the uSA dollar.( DOWN 34 BASIS POINTS)

 

Canadian dollar:  1.3224 UP 127 BASIS pts

USA/CHINESE YUAN (CNY) :  6.7483  (ONSHORE)

USA/CHINESE YUAN(CNH): 6.7529  (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.19%

 

The Dow closed UP 183.96 POINTS OR 0.75%

 

NASDAQ closed UP 91.40 POINTS OR 1.29%

 


VOLATILITY INDEX:  17.33 CLOSED DOWN  1.56 

 

LIBOR 3 MONTH DURATION: 2.765%  .LIBOR  RATES ARE RISING/

 

FROM 2.779

 

 

 

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

 

Gold Jumps, Dollar Dumps As Trump Folds, Fed Holds

China Manufacturing, European Economy, and US Hope all plunging further… so buy stocks right? Bad global news is great stocks news?

And then there’s this…

So what is lifting stocks? Well that’s easy…

How to trade it? Simple, don’t…

 

China let slip quasi QE but the early gains were erased into the close…

 

German business sentiment tumbled but EU stocks managed strong gains…except UK’s FTSE…

 

Led by European banks soaring today after dumping on ECB comments (and no, nothing changed)…

 

US equity futures surged overnight after Quasi QE from China and a WSJ headline on the end of QT. However, having tagged the week’s highs, stocks dipped on headlines of a shutdown deal (remember, End of Shutdown is negative for stocks as it means the economy won’t crash in Q1, meaning a lower probability that The Fed stops QT), but ended higher on the day and week…

The S&P ended red on the week (breaking its 4-week win streak) but Nasdaq and The Dow managed to hold tiny gains on the week…

 

Another major short-squeeze dragged markets higher after Tuesday’s tumble…

 

Credit and equity protection compressed notably on the day and week…

 

Treasuries were sold today, erasing yesterday’s gains but ending the week lower in yield still…

 

Bond yields still have room to fall if equity cyclicals are right…

 

The dollar puked today after WSJ reports a QT slowdown – this is the biggest drop since early November…

 

Yuan surged on the week… (today was biggest spike since Dec 1st)

 

EUR dumped on ECB yesterday and jumped today on WSJ’s Fed QT story, breaking up to the 1.14 technical support/resistance…

 

Despite the dollar weakness, bitcoin and Ether both fell on the week…

 

Commodities spiked on the day as the dollar dumped…Silver was best on the week…

 

WTI chopped around between various whole numbers…

 

Spot gold spiked above $1300 intraday to its highest since June…

 

Silver surged on the day amid heavy volume…

Breaking above the 200DMA…

Gold is nearing a “golden cross” formation…

 

Gold surged in dollars and yuan (the biggest jump in the latter in over a month)…

But Palladium remains the winner among the PMs for 2019…

 

And finally, since The Fed hiked rates in December, gold remains the leading asset class, just ahead of The Dow…

And we leave you with this from a decade ago – has anything really changed?… “wankingbankers”…

Embedded video

Sven Henrich

@NorthmanTrader

Still the greatest financial crisis explanation rant ever.
See if you note anything different 10 years later.

 

END

market trading/

MARKET DATA

Another Bellwether stock reports revenue misses and disappointing earnings..and they cut outlook. Obviously the meatheads are looking at the Chinese trade delegation coming as a reason to buy stocks.

(courtesy zerohedge)

Intel Tumbles After Earnings & Revenue Miss, Cuts Outlook

Intel is trading down over 6% in the after-hours after missing earnings and revenues (below the lowest estimate) and slashing its Q1 earnings and revenue expectations.

Just how big a miss was Q4? Big…

  • 4Q revenue $18.66 billion, estimate $19.01 billion (range $18.77 billion to $19.28 billion)
  • 4Q earnings per share: $1.12, estimate $1.17.

And Q1 looks uglier:

  • Sees 1Q revenue about $16 billion, estimate $17.34 billion (range $16.37 billion to $18 billion)
  • Sees 1Q adjusted EPS about 87c, estimate $1.02 (range 89c to $1.13)

And the full year’s revenue guidance was cut to $71 billion (from a prior estimate of $73 billion).

And the immediate reaction is not pretty…

The report comes as Intel is still searching for a permanent CEO. The company’s former head, Brian Krzanich, resigned in June after Intel discovered that he’d had a relationship with a company employee, in violation of its policies. Since Krzanich’s resignation, Bob Swan, the company’s chief financial officer, has been serving as its interim CEO.

Trade seems to have been the scapegoat…

USA ECONOMIC STORIES OF INTEREST

Eliz. Warren now proposes a 2% tax on citizens with a wealth of 50 million dollars.  This is an annual tax. She also proposes a 3% annual tax on assets worth 1 billion dollars. She wants an annual audit on all citizens with a wealth of over 50 million dollars.

I guess that would redistribute the wealth in a hurry.

(courtesy zerohedge)

Elizabeth Warren Proposes 2% ‘Wealth Tax’ On Richest Americans

Elizabeth Warren has never been a friend to the wealthy. But in the age of Bernie Sanders and Alexandria Ocasio-Cortez, merely advocating for “holding the rich accountable” simply doesn’t penetrate like it did back in 2008. And that’s because, on the left flank of the Democratic Party, you’re not really a progressive unless you believe that the existence of billionaires is a policy error.

Warren

In keeping with this new “Democratic socialist” spirit, Warren is now calling for a ‘wealth tax’ on all Americans with more than $50 million in assets in what looks like a strategy to one-up AOC’s call for a 70% marginal tax rate on all Americans earning more than $10 million a year as Warren jockeys for mantle of the “one true progressive candidate” in what’s looking like an increasingly crowded primary field (one that, thanks to the entry of South Bend Mayor Pete Buttigieg, now features a gay progressive millennial).

SN

Here’s more from the Washington Post:

Sen. Elizabeth Warren (D-Mass.) will propose a new annual “wealth tax” on Americans with more than $50 million in assets, according to an economist advising her on the plan, as Democratic leaders vie for increasingly aggressive solutions to the nation’s soaring wealth inequality.

Emmanuel Saez and Gabriel Zucman, two left-leaning economists at the University of California, Berkeley, have been advising Warren on a proposal to levy a 2 percent wealth tax on Americans with assets above $50 million, as well as a 3 percent wealth tax on those who have more than $1 billion, according to Saez.

After initially considering a 1% wealth tax on fortunes over $10 million, Warren and her team over the last two weeks decided that a 2% on fortunes over $50 million would make more sense. According to the Warren team’s calculations, the wealth tax would raise $2.75 trillion over ten years from about 75,000 families, a number equivalent to less than 0.1% of the US population (of course, that estimate is probably contingent on the US economy avoiding a punishing, prolonged recession).

SN

 

Warren’s policy point man said the campaign believes the tax would help ameliorate wealth inequality in the US. Because, in Warren’s estimation, the IRS doesn’t do a very good job of taxing the rich.

“The Warren wealth tax is pretty big. We think it could have a significant affect on wealth concentration in the long run,” Saez said in an interview.

This is a very interesting development with deep root causes: the fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people.”

And to make sure that the wealthy simply don’t resort to the myriad options available for ensuring that they pay as little in taxes as possible, Warren’s plan also includes several mechanisms for combating tax evasion.

Warren’s proposal includes at least three new mechanisms to combat tax evasion, according to a person familiar with the plan. Those are a significant increase in funding for the Internal Revenue Service; a mandatory audit rate requiring a certain number of people who pay the wealth tax to be subject to an audit every year; and a one-time tax penalty for those who have more than $50 million and try to renounce their U.S. citizenship.

Warren’s campaign has embraced the Democratic Party’s recent leftward drift, even publishing an op-ed in the NYT praising AOC’s 70% marginal tax rate proposal. Warren’s team argued that the tax is only fair, because, according to their calculations, the wealthiest Americans face a tax burden of 3.2% of their relative wealth, while regular families face 7.2%.

While Warren’s progressive tax policy will help her win votes on the Democratic left, we wonder how well a policy platform centered on tax hikes is going to play with an electorate still enjoying the additional spending cash from the Trump tax cuts. And even if it proves popular, Warren will still struggle to distinguish herself from Bernie Sanders should he enter the race.

END

This Wall Street Journal report caught everybody of guard and was the principal reason for gold’s rise. The Journal is reporting that the Fed wants to end its QT much earlier than expected. This goes against what Brandon Smith believes

(courtesy zerohedge)

Fed Considering Earlier End To Quantitative Tightening

Over the weekend, we showed the one chart that every trader should have “taped to their screen“, namely Nomura’s latest recap of the key Fed balance sheet roll-off dates, or those days in which there is a tangible decline in system liquidity as billions in Fed holdings of Treasurys and MBS mature, and the resultant proceeds as the Treasury repays the Fed in cold, hard cash are subsequently destroyed by the Federal Reserve which, as part of Quantiative Tightening, is now in the process of shrinking the money currently in the system.

Well, it now appears that the chart above may have to be substantially truncated, because according to a d anticipated. That is, assuming the bank’s top policy makers follow through on speculation reported Friday morning by the Wall Street Journal report, the Fed might acquiesce to President Trump’s demands that they “stop with the 50 Bs” – a reference to the central bank’s monthly peak balance sheet runoff

… which as we explained previously is really 36.2 Bs…

… sooner than many investors had anticipated.

Just a few weeks after Fed Chair Jerome Powell backtracked on his claim, articulated during the press conference that followed the December Fed meeting, that the runoff of the Fed’s balance sheet was on “autopilot”, the WSJ said Friday that the central bank’s top policy makers are seriously considering maintaining a larger balance sheet than what the central bank had initially anticipated when it stopped reinvesting the proceeds from expiring holdings.

Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer into sight.

Officials are still resolving details of their strategy and how to communicate it to the public, according to their recent public comments and interviews. With interest rate increases on hold for now, planning for the bond portfolio could take center stage at a two-day policy meeting of the central bank’s Federal Open Market Committee next week.

Yet nothing is certain yet, as Kansas City Fed President Esther George in a Jan. 15 interview: “A lot of the heavy lifting has been done. We’re waiting for the committee to be satisfied that they have reached sufficient understanding of what all the moving pieces are.”

Curiously, when the balance sheet unwind began, few – and certainly not Chicago Fed president Charles Evans – expected it would become such an important issue in the eyes of the market… which is of course bizarre considering it was the expansion of said balance sheet from under $1 trillion to its peak of $4.5 trillion that was the key catalyst behind the market’s rebound from the “generational low” in 2009.

The Fed began gradually shrinking its mortgage and Treasurys portfolio in 2017 by allowing securities to mature without reinvesting the proceeds into other assets. At the time officials said the slow unwind would fade into the background – the equivalent of watching paint dry.

As a result, the Fed expected the process to take up to four years to play out, with many expecting it to conclude some time in 2020. When the runoff began in October 2017, various officials estimated the portfolio—then around $4.5 trillion – could shrink to anywhere between $1.5 trillion and $3 trillion. New York Fed President John Williams went one better in April 2017, when he was the San Francisco Fed’s president, and said that runoff could last five years. Powell himself gave a tentaive ETA of 2020/2021.

“In about three or four years, we’ll be down to a new normal,” said Fed Chairman Jerome Powell at his Senate confirmation hearing in Nov. 2017.

But according to WSJ, the Fed now expects the runoff to end much sooner, though the paper hedged that many policy makers still “don’t understand why the market has placed so much emphasis on the balance sheet lately.” When Esther George surprised markets by calling for a pause on rate hikes, she added that it’s “unclear” whether the balance sheet shrinkage had accomplished much in the way of removing accommodation.

Apparently to the residents of the Marriner Eccles building, inflating the balance sheet is a major market stimulative effect, but its shrinkage should somehow be ignored by the market. And these are the people who set the price of money for the world’s biggest economy…

Whether Powell offers a similar take during the press conference after next week’s meeting will depend on the conversations that take place during the meeting. According to WSJ, the internal debate over the proper size of the balance sheet has focused on the necessary level of reserves in the banking system. Some believe that holding a large amount in reserve would help the Fed better control volatility in short-term credit markets.

Powell

Regardless of where the runoff ends, Lorie Logan, one of the officials responsible for managing the portfolio and an executive at the New York Fed, said in a speech last May that she saw “virtually no chance of going back to the precrisis balance sheet size”, which of course is logical: by 2020 there will be roughly $2 trillion in currency in circulation (and rising) which will be the new floor of the Fed’s balance sheet. Ultimately, the Fed hopes to dump practically all of the MBS it accumulated during QE and shift toward a portfolio consisting almost exclusively of Treasurys.

“The conversation is really about the relative amount of reserves,” she said.

This is a concept that many analysts believe isn’t well-understood by investors.

The idea that the Fed won’t return to its precrisis balance sheet size isn’t well appreciated by some stock investors, creating one potential source of market confusion, said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “Equity investors think the runoff is going to continue in perpetuity,” he said.

Well, no. As we discussed last week, investors are only doing what they did during QE and POMO days, only in reverse, and on days when the Fed withdraws liquidity, the market drops, in what JPM’s Marko Kolanovic explained recently has become a self-fulfilling prophecy.

Ultimately, the WSJ report could just be a trial balloon to see how markets – and maybe the president – react to signs of a more dovish take to shrinking the balance sheet. If it works, that should tell markets – and the Fed – everything they need to know. and so far, futures are solidly in the green…

SWAMP STORIES

Trump is now ready to proclaim an National Emergency and put 7 billion dollars for building the wall.  This will be done without congressional approval

(courtesy zerohedge)

White House Drafting National Emergency Proclamation To Include $7B For Border Wall

The White House is drafting plans to declare a national emergency along the southern US border which would provide $7 billion in potential funds for President Trump’s long-promised border wall, according to CNN – citing internal documents we hope are more accurate than BuzzFeed‘s.

Trump has not ruled out using his authority to declare a national emergency and direct the Defense Department to construct a border wall as Congress and the White House fight over a deal to end the government shutdown. But while Trump’s advisers remain divided on the issue, the White House has been moving forward with alternative plans that would bypass Congress.

“The massive amount of aliens who unlawfully enter the United States each day is a direct threat to the safety and security of our nation and constitutes a national emergency,” a draft of a presidential proclamation reads.

“Now, therefore, I, Donald J. Trump, by the authority vested in me by the Constitution and the laws of the United States of America, including the National Emergencies Act (50 U.S.C 1601, et seq.), hereby declare that a national emergency exists at the southern border of the United States,” the draft adds.

The draft was updated as recently as last week, a US government official told CNN. –CNN

According to the plans, the administration could use $681 million from treasury forfeiture funds, $3.6 billion in military construction, $3 billion in Pentagon civil works funds and $200 million in funds from the Department of Homeland Security.

If Trump declares a national emergency, the US Army Corps of Engineers would construct the wall – which CNN then suggests might set the stage for potential lawsuits over eminent domain land seizures. The documents also convey a sense of urgency – as the draft reportedly allows for the wall to be built without environmental reviews, while DHS would be able to bypass contracting laws using waivers.

The draft document cites Title 10 of the US Code, which allows Trump to unlock a stash of Pentagon funds that are earmarked but have no signed contracts for spending that money. That would give the President authority to pull from military construction funds and civil works projects, like infrastructure repair projects.

Rep. Dan Crenshaw, R-Texas, tweeted earlier this month that acting White House Chief of Staff Mick Mulvaney, “assured Texans that he understood the deep concerns about using Harvey relief funds for the border.” CNN previously reported that the Pentagon was asked to provide a list of those projects in anticipation of a national emergency.

The Pentagon has assisted the Department of Homeland Security in the past. For example, the Army Corps of Engineers, a federal agency within DOD that provides public engineering services, has helped evaluate prototypes of the border wall. –CNN

Earlier Thursday, Trump said that he would only accept a stopgap spending bill to reopen the government if it contains a “down payment” for the wall. Speaking with reporters at the White House, Trump said that a “prorated down payment” would work.

“If they come to a reasonable agreement I would support it yes,” Trump said when asked about talks between Senate leaders.

On Thursday the Senate failed to pass two measures that would reopen the government, hours before the CNN report ran.

Robert Marchini@rhcm123

is this what caving looks like?
*TRUMP SAYS THERE ARE MANY OPTIONS TO GET FUNDING FOR WALL
*TRUMP SAYS HE WANTS PRO-RATED DOWN PAYMENT ON WALL
*TRUMP SAYS HE WON’T BE HAPPY WITH STOPGAP LACKING WALL FUNDS

See Robert Marchini’s other Tweets

Does Trump’s $7 billion include 28-foot cats that shoot lasers and AR-10s?

Senator Rand Paul

@RandPaul

I did something to help the President out though. I found him a wall I think will work on the border.

END
Ridiculous!! Trump advisor Roger Stone arrested for lying to Congress on his alleged contacts with Wikileaks
(courtesy zerohedge)

Former Trump Advisor Roger Stone Arrested As Part Of Mueller Probe

Former Trump advisor Roger Stone, who has been under scrutiny by Special Counsel Robert Mueller over his alleged contacts with Wikileaks, has been arrested In Ft. Lauderdale, Fla. on a seven-count indictment: One count of obstruction, five counts of making false statements and one count of witness tampering.

kadhim (^ー^)ノ

@kadhimshubber

BREAKING: Roger Stone has been arrested following an indictment by Robert Mueller

The arrest – which like many of Mueller’s high profile arrests, occurred early on a Friday – isn’t exactly a surprise: Stone has long said he expected to be indicted by a grand jury convened by Mueller.

As reporters comb through the Stone indictment, one twitter user pointed out that Mueller had determined that Stone had been “contacted by senior campaign officials to inquire about future releases” of information stolen by Wikileaks from the DNC.

Stone will make an initial appearance later Friday at the federal courthouse in Fort Lauderdale. Late last year, Trump famously tweeted a congratulatory message to Stone after the advisor said he would never testify against the president – something that is likely being scrutinized by investigators. The indictment, which was under seal until Stone was taken into custody, was handed down by the jury on Thursday.

In a summary tweeted by WaPo’s Aaron Blake, Stone was busted for lying about the nature of his contacts with his “intermediary” to Wikileaks (he had two intermediaries previously reported to be journalists Randy Credico and Jerome Corsi) and for lying about his communications with senior campaign officials and Wikileaks about the latter’s upcoming releases of stolen emails. Stone raised eyebrows during the campaign for “predicting” the release of emails embarrassing to the Clinton campaign.

Aaron Blake

@AaronBlake

GUILTY:
-Trump’s lawyer/fixer
-Trump’s campaign chair
-Trump’s NatSec adviser
-Trump’s deputy campaign manager
-Trump’s foreign policy adviser

INDICTED:
-Trump’s longest-serving political adviser
-Trump transition Congress liaison

CHARGED/DROPPED:
-Trump’s 1st campaign manager

Aaron Blake

@AaronBlake

In summer of 2016, “STONE was contacted by senior Trump Campaign officials to inquire about future releases by Organization 1 [WikiLeaks].”https://www.justice.gov/file/1124706/download 

Aaron Blake

@AaronBlake

In summer of 2016, “STONE was contacted by senior Trump Campaign officials to inquire about future releases by Organization 1 [WikiLeaks].”https://www.justice.gov/file/1124706/download 

Aaron Blake

@AaronBlake

LATER:

“STONE also continued to communicate with members
of the Trump Campaign about [WikiLeaks] and its intended future releases.”

View image on Twitter

Aaron Blake

@AaronBlake

This seems pretty cut-and-dried. Mueller team says Stone REPEATEDLY said he only talked to his supposed WikiLeaks intermediary in person/via phone.

BUT, in fact he “engaged in frequent written communication by email and text message.”

The indictment also alleges that Stone requested specific Clinton-related information from Wikileaks.

Aaron Blake

@AaronBlake

On Sept. 18, 2016, Stone requested specific WikiLeaks Clinton emails:

“STONE added, “Please ask [the head of [WikiLeaks] for any State or HRC e-mail from August 10 to August 30—particularly on August 20, 2011 that mention [the subject of the article] or confirm this narrative.”

He also allegedly asked a witness appearing before the House Permanent Select Committee on Intelligence to pull a “Frank Pentangeli”, a reference to a famous scene in the Godfather II when a government witness pretends not to know anything about Michael Corleone’s criminal activities during a Congressional hearing.

Aaron Blake

@AaronBlake

👀

“STONE told Person 2 that Person 2 should do a ‘Frank Pentangeli’ before HPSCI in order to
avoid contradicting STONE’s testimony. Frank Pentangeli is a character in the film The Godfather: Part II, [who testifies] not to know critical information that he does in fact know.”

In the indictment, Mueller accuses Stone of…

8. In response, STONE took steps to obstruct these investigations.

Among other steps to obstruct the investigations, STONE:

a. Made multiple false statements to HPSCI about his interactions regarding Organization 1, and falsely denied possessing records that contained evidence of these interactions; and

b. Attempted to persuade a witness to provide false testimony to and withhold pertinent information from the investigations.

Stone’s requests to “Organization 1” – clearly identified as Wikileaks – were occasionally very specific, with Stone at times asking if Wikileaks had specific “dirt” on Hillary Clinton relating to incidents that occurred during her tenure as Secretary of State.

d. On or about September 18, 2016, STONE sent a text message to Person 2 that said, “I am e-mailing u a request to pass on to [the head of Organization 1].” Person 2 responded “Ok,” and added in a later text message, “[j]ust remember do not name me as your connection to [the head of Organization 1] you had one before that you referred to.”

i. On or about the same day, September 18, 2016, STONE emailed Person 2 an article with allegations against then-candidate Clinton related to her service as Secretary of State. STONE stated, “Please ask [the head of Organization 1] for any State or HRC e-mail from August 10 to August 30—particularly on August 20, 2011 that mention [the subject of the article] or confirm this narrative.”

ii. On or about September 19, 2016, STONE texted Person 2 again, writing, “Pass my message . . . to [the head of Organization 1].” Person 2 responded, “I did.” On or about September 20, 2016, Person 2 forwarded the request to a friend who was an attorney with the ability to contact the head of Organization 1. Person 2 blindcopied STONE on the forwarded email.

The indictment also accuses Stone of keeping an individual affiliated with the Trump campaign apprised of Wikileaks’ plans to dump emails stolen from the DNC and Hillary campaign chairman John Podesta.

16. In or around October 2016, STONE made statements about Organization 1’s future releases, including statements similar to those that Person 2 made to him. For example: a. On or about October 3, 2016, STONE wrote to a supporter involved with the Trump Campaign, “Spoke to my friend in London last night. The payload is still coming.”

b. Also on or about October 3, 2016, STONE received an email from a reporter who had connections to a high-ranking Trump Campaign official that asked, “[the head 9 of Organization 1] – what’s he got? Hope it’s good.” STONE responded in part, “It is. I’d tell [the high-ranking Trump Campaign official] but he doesn’t call me back.”

c. On or about October 4, 2016, the head of Organization 1 held a press conference but did not release any new materials pertaining to the Clinton Campaign. Shortly afterwards, STONE received an email from the high-ranking Trump Campaign official asking about the status of future releases by Organization 1. STONE answered that the head of Organization 1 had a “[s]erious security concern” but that Organization 1 would release “a load every week going forward.”

d. Later that day, on or about October 4, 2016, the supporter involved with the Trump Campaign asked STONE via text message if he had “hear[d] anymore from London.” STONE replied, “Yes – want to talk on a secure line – got Whatsapp?” STONE subsequently told the supporter that more material would be released and that it would be damaging to the Clinton Campaign.

17. On or about October 7, 2016, Organization 1 released the first set of emails stolen from the Clinton Campaign chairman. Shortly after Organization 1’s release, an associate of the highranking Trump Campaign official sent a text message to STONE that read “well done.” In subsequent conversations with senior Trump Campaign officials, STONE claimed credit for having correctly predicted the October 7, 2016 release.

When called to testify before the HPSCI, Stone allegedly made false and misleading statements about his interactions with Wikileaks and about whether he had any records of his contacts with his go-between.

20. On or about September 26, 2017, STONE testified before HPSCI in Washington, D.C. as part of the committee’s ongoing investigation. In his opening statement, STONE stated, “These hearings are largely based on a yet unproven allegation that the Russian state is responsible for the hacking of the DNC and [the Clinton Campaign chairman] and the transfer of that information to [Organization 1].” STONE further stated that “[m]embers of this Committee” had made certain “assertions against me which must be rebutted here today,” which included “[t]he charge that I knew in advance about, and predicted, the hacking of Clinton campaign chairman[’s] email, [and] that I had advanced knowledge of the source or actual content of the [Organization 1] disclosures regarding Hillary Clinton.”

21. In the course of his HPSCI testimony, STONE made deliberately false and misleading statements to the committee concerning, among other things, his possession of documents pertinent to HPSCI’s investigation; the source for his early August 2016 statements about Organization 1; requests he made for information from the head of Organization 1; his communications with his identified intermediary; and his communications with the Trump Campaign about Organization 1.

22. During his HPSCI testimony, STONE was asked, “So you have no emails to anyone concerning the allegations of hacked documents . . . or any discussions you have had with third parties about [the head of Organization 1]? You have no emails, no texts, no documents whatsoever, any kind of that nature?” STONE falsely and misleadingly answered, “That is correct. Not to my knowledge.”

When pressed about how he had ascertained that Wikileaks was planning more dumps, Trump offered the HPSCI a misleading statement that minimized the role of “Person 1” – believed to be Jerome Corsi – in ferrying advanced knowledge of Wikileaks’ planned dumps to Stone.

28. STONE’s explanation of his August 2016 statements about communicating with the head of Organization 1 was false and misleading. In truth and in fact, the first time Person 2 interviewed the head of Organization 1 was on or about August 25, 2016, after STONE made his August 8 and August 12, 2016 public statements. Similarly, at the time STONE made his August 2016 statements, STONE had directed Person 1—not Person 2—to contact the head of Organization 1. And Person 1—not Person 2—had told STONE in advance of STONE’s August 8 and August 12, 2016 public statements that “[w]ord is friend in embassy plans 2 more dumps,” including one in October. At no time did STONE identify Person 1 to HPSCI as another individual STONE contacted to serve as a “go-between,” “intermediary,” or other source of information from Organization 1. STONE also never disclosed his exchanges with Person 1 when answering HPSCI’s questioning about STONE’s August 8 and August 12, 2016 statements.

Stone also reportedly lied to HPSCI about his correspondence with senior Trump campaign officials. The indictment implies that Stone’s attempts to obtain the stolen emails from Wikileaks was done at the behest of a campaign official.

35. During his HPSCI testimony, STONE was asked, “did you discuss your conversations with the intermediary with anyone involved in the Trump campaign?” STONE falsely and misleadingly answered, “I did not.” In truth and in fact, and as described above, STONE spoke to multiple individuals involved in the Trump Campaign about what he claimed to have learned from his intermediary to Organization 1, including the following: a. On multiple occasions, STONE told senior Trump Campaign officials about materials possessed by Organization 1 and the timing of future releases. b. On or about October 3, 2016, STONE wrote to a supporter involved with the Trump Campaign, “Spoke to my friend in London last night. The payload is still coming.” c. On or about October 4, 2016, STONE told a high-ranking Trump Campaign official that the head of Organization 1 had a “[s]erious security concern” but would release “a load every week going forward.”

Stone served as an official advisor to the Trump campaign shortly after its launch in 2015. He has publicly acknowledged exchanging messages with a hacker known as Guccifer 2.0 that the government has sought to portray as a front for Russian intelligence, and Stone once boasted about his contacts with Wikileaks, even calling its founder, Julian Assange, “my hero.”

Meanwhile, NBC News reported that roughly a dozen associates of Stone have been summoned to appear before Mueller’s grand jury.

Stone will appear in federal court at 11 am ET.

Read the indictment below:

Stone Indictment 012419 by Zerohedge on Scribd

https://www.scribd.com/embeds/398206050/content?start_page=1&view_mode=scroll&access_key=key-ueXjOdPauou0C1LhtypP&show_recommendations=true

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

@JStein_WaPo: @SenWarren is proposing a “wealth tax” on those with more than $50 million, in an attempt to combat soaring wealth inequality.  The tax would hit those above $50M w/ a 2% wealth tax, & those above $1B w/ 3% wealth tax. Would raise $2.75T/10 years [Dems trying to out ‘left’ each other]

    Update my Warren policy story, she supports: Giving workers 40% control over their corporations

— Enormous wealth tax on top 0.1%

— M4A [Medicare for All]

— Aggressive antitrust

— Ramp up prosecution of white-collar crime

— End PR’s debt

— $15/hr [Minimum wage]

— GND [Green New Deal]

Elizabeth Warren to propose ‘wealth tax’ on Americans with more than $50 million in assets, economic advisor says – “By the time we get to the presidential election, this is going to gain more momentum,” Scott Minerd, global chief investment officer of $265 billion Guggenheim Partners, told CNBC earlier this week… The Post reported that Warren has been advised by Saez and Gabriel Zucman, left-leaning economists affiliated with the University of California, Berkeley

https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html

Before the 2020 election arrives, the multitude of Democrat candidates, in order to out socialist each other, will make Warren’s 2% to 3% wealth tax proposal look like chump change.

The only upside of a wealth tax: All those billionaires that have funded leftist activists and pols would finally get a taste of their own cooking.  “As you sow, so shall you reap.”

Fox News Poll: Voters favor taxing the wealthy, increasing domestic spending

There is broad support for increasing taxes on the wealthiest families. Voters support tax increases on families making over $10 million annually by a 46-point margin (70 percent favor-24 percent oppose), and support a hike on those making over $1 million by 36 points (65-29 percent)…

https://www.foxnews.com/politics/fox-news-poll-voters-favor-taxing-the-wealthy-increasing-domestic-spending

More Americans believe in global warming — but they won’t pay much to fix it

Most Americans are unwilling to pay $10 a month to fight climate change, a survey found.

https://www.nbcnews.com/news/us-news/more-americans-believe-global-warming-they-won-t-pay-much-n962001?cid=sm_npd_nn_tw_ma

@ByronYork: A crazy shutdown. Trump proposal has much bipartisan border stuff: DACA, TPS, humanitarian, more judges, beds, drug detection at ports. Dems dug in against 1) replacing some existing border fence, and 2) 150 miles of new fence in high-risk areas. Absent Trump, bipartisan support.

In other words, it’s all about resisting Trump.

After the close, Intel beat earnings estimates by 6 cents but missed on revenue ($18.7B vs $19.01B).  INTC lowered its FY19 sales guess to ~$71.5B from $73B. The stock tumbled 7% in after-hour trading.

Gregg Jarrett: Testimony in Russia probe shows FBI and Justice Department misconduct in effort to hurt Trump – Newly revealed testimony by a former top FBI counterintelligence lawyer shows that former Deputy Attorney General Sally Yates and former FBI Deputy Director Andrew McCabe examined “line-by-line” the faulty warrant applications to spy on Trump presidential campaign adviser Carter Page… The bulk of the information contained in those applications was based on an anti-Trump “dossier” that was not verified and was funded by Trump’s opponents – the Hillary Clinton presidential campaign and Democrats.  It’s of critical importance that this vital information was deliberately concealed from the Foreign Intelligence Surveillance Court

https://www.foxnews.com/opinion/gregg-jarrett-testimony-in-russia-probe-shows-fbi-and-justice-department-misconduct-in-effort-to-hurt-trump

Kellyanne Conway secretly trashed Trump, his top advisers to mainstream reporters, ex-Trump aide recounts   [Keep hiring Swamp Creatures, Don!]

https://theweek.com/speedreads/819682/elizabeth-warren-reportedly-wants-enact-wealth-tax

 

KY Prosecutor Confirms: Multiple Investigations Underway Into Twitter Users for TERRORIST THREATS against Covington Kids

https://bluntforcetruth.com/news/ky-prosecutor-confirms-multiple-investigations-underway-into-twitter-users-for-terrorist-threats-against-covington-kids/

@elliosch: Rep. Ilhan Omar’s main argument asking a judge for leniency on ISIS recruits is that a harsh sentence might lead them to a life of terrorism when they get out[You can’t make this up!]

http://www.fox9.com/news/minnesota-isis-sentencing-ilhan-omar-letter

It appears that the media has exhausted its anti-Trump benefits on circulation.  Layoffs from a variety of media outlets have been announced this week.

@JackPosobiec: HuffPost just laid off their entire Opinion Section

end

I WILL SEE YOU MONDAY NIGHT
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