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For anyone who wasn’t included on the 1.5 million person distribution list for Incrementum AG’s latest 160-page annual tome on the gold sector, “In Gold We Trust”, the authors/portfolio managers, Ronni Stoeferle and Mark Valek, helpfully condensed the report into a chartbook containing "only" mere 60 charts. This can be viewed below, and as a courtesy for those short on time, here is our pick of the 14 best charts. 

Incrementum believes that the bull market in gold has resumed. The gold price will benefit from the Fed’s inability to normalize monetary policy. With so much debt, how can it.

The gold price has dramatically lagged creation of base money, resulting from unconventional policies of central banks. Incrementum terms this “advanced monetary surrealism” which has eliminated risk aversion.

Pressure on the long end of the Treasury yield curve threatens Fed policy and is bullish for gold.

Central banks have outdone asset bubbles that have gone before with the “Everything Bubble”  this time (except gold).

Gold has been much stronger in other currencies than the dollar. While Fed tightening has restrained the dollar price, it will be unable to “normalize” policy.

The current gold bull market since 2001 has been following a similar timeline and pattern to the great 1970s bull market.

From a risk on/risk off perspective, the bull market in equities has been one of the key negatives for gold. Now the gold/S&P ratio is bottoming out.

The Commodity sector in aggregate is trading at a 50-year low compared with the S&P 500.

Unsurprising statistic – 89 economists were surveyed by Bloomberg and none expects a GDP contraction in 2017, 2018 or 2019 (plus ca change)…

…despite 16 out of the last 19 rate hiking cycles being followed by recessions. That’s 84% in case you’re wondering.

Periods of negative real interest rates (using Fed Funds) are positive for gold.

The market cap of Apple is more than 7 times that of the HUI Index, which includes the 16 largest unhedged gold producers.

In 2016, the free cash flow of the HUI stocks was superior to 2011 as managements have structurally improved operating and capital outlays.

Finally, some solace for long-suffering gold bulls: the purhasing power of gold in terms of beer at the annual Oktoberfest is comfortably above the long-term average.

Of course, metric system and all, it’s lit(re)s not pints although £5.00 per pint in the City of London is still exhorbitant.

The full slideshow is below (link)

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Just hours after rumors that MGM Resorts had pressured Jesus Campos to appear on a 'soft' talkshow, rather than a hard-hitting news show, local Laws Vegas NBC affiliate News3LV reports that Mandalay Bay and its corporate owner MGM Resorts have been ordered to preserve evidence relate to the October 1st massacre.

As we previously noted, sources told DailyMail.com, MGM is worried that families of the 58 people murdered as well as many of the 546 injured  in the Mandalay Bay massacre will launch lawsuits potentially worth billions of dollars against the company, and they thought Campos might not keep his story straight under the pressure of the TV lights and tough questioning.

That is why Campos, 25, appeared on a daytime chat show hosted by a fast-talking, dancing comedienne, rather than take questions from TV hardhitters such as Fox News’ Sean Hannity, NBC News or ABC News.

 

‘MGM was behind the decision to call off all the interviews and did a deal with Ellen, knowing she would not play hardball on the timeline as long as she had the exclusive,’ a TV insider told DailyMail.com.

But now, as News3LV.com reports, Mandalay Bay and its corporate owner MGM Resorts have been ordered not to destroy anything that could be considered evidence in a civil negligence trial over events related to the Route 91 music festival. The order was sought by attorneys who represent Rachel Sheppard, a California woman who survived the attack, despite being shot in the chest three times.

“The shooter was in that hotel for six days,” says attorney Brian Nettles.

 

The order, granted by Judge Mark Denton, restrains Mandalay Bay from destroying anything of evidentiary value until another hearing set for Oct. 30 at 9 a.m.

 

That’s when MGM will have a chance to argue against the ruling, before a possible ruling to would make the order permanent.

 

“There’s evidence that’s coming out about surveillance cameras that he may have set up himself, evidence about ways that he may have altered his room or that hallway,” he says.

 

The lawsuit alleges that negligence on the part of Mandalay Bay, and MGM Resorts, contributed to the shooting massacre that claimed 58 lives and injured more than 500 people.

Perhaps now – in discovery – we may actually get to the bottom of the 'real' timeline…

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 Just one week after Chicago shockingly repealed their soda ban following a revolt from local business owners (see: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote), it seems that Philadelphia’s flirtations with forming a more perfect “nanny state” via the elimination of sugary drinks could be on a collision course with a similar fate.

As WHYY points out today, a survey conducted by Philadelphia’s Controller Alan Butkovitz — a longtime opponent of the soda tax — found that nine out of 10 businesses reported revenue loss since the city’s sweetened beverage tax took effect earlier this year. Of those reporting revenue loss, 60% of them blamed the soda tax for their woes.

City Controller Alan Butkovitz today released the results of the Philadelphia Beverage Tax survey that found more than 60 percent of businesses indicated a revenue loss as a direct result of the new tax.

 

Of the 650 businesses that reported a decline in year-to-year revenue, more than 400 attributed “most” or “all” of the decline to the implementation of the Beverage Tax.  The majority of these businesses reported revenue losses of more than 10 percent.

 

“The overwhelming majority of businesses that carry products subject to the Philadelphia Beverage Tax feel a significant impact as a result of the tax,” said Controller Butkovitz.  “The tax has had detrimental effects.”

 

Butkovitz’s team, with help from various business groups, reached out to “more than 1,600” businesses that sell or sold taxed beverages. Response was purely voluntary, and 741 businesses filled out questionnaires.

 

“This is not going to be the comprehensive answer to everything, but I think it does create a serious warning and an attestation of what has been stated by a number of the businesses,” he said during a Monday news conference. “Because I think the administration has minimized and ridiculed the idea that businesses are fighting for survival.”

To our great ‘shock’, many Philadelphia grocers reported that customers were simply driving to the suburbs to do their weekly shopping which means that local retailers lost not only their soda sales but everything else as well.

And, as usual, the Office of the Controller noted that this latest misinformed regulatory overstep by Philly’s liberal elites is most detrimental to the very same people it was intended to help, namely low-income, inner-city families who can’t afford to travel to the suburbs for groceries and who are about to get crushed with higher prices following a wave of business failures.

According to Controller Butkovitz, the areas with the most businesses reporting revenue losses included West Philadelphia along the Market Street and 52nd Street corridors (19139), Hunting Park in North Philadelphia (19140), and areas around Juniata and Frankford (19124).  Many businesses in these neighborhoods reported losses of more than 10 percent.

 

“Consequently, these zipcodes have neighborhoods with some of the highest poverty rates in the city,” said Controller Butkovitz.  “These businesses cannot afford a one percent loss in business – let alone more than 10 percent.

 

“These are also neighborhoods subject to food deserts in Philadelphia. If these stores cannot continue to operate, it will be even more difficult to buy affordable or good-quality fresh food.”

 

Grocery stores reported the most revenue losses followed by convenience stores and restaurants.  Forty percent of businesses indicated they would have to make significant changes to keep their doors open.

 

“The tax seems to be impacting behavior and orientation toward the future,” said Controller Butkovitz.  “Many business owners seem apprehensive about the viability of their enterprises in the near and medium term.”

Of course, facts have never really had much impact on political discourse in the past so absent an uprising from local business owners, similar to what we saw recently in Chicago, we wouldn’t suggest holding your breadth while waiting for a repeal.

 

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Following his sudden re-appearance on The Ellen Show after vanishing for 6 days, numerous questions remain unanswered about Mandalay Bay shooting hero Jesus Campos' timeline and perhaps more concerning stil is that The Daily Mail reports that he was pressured into giving his only interview to Ellen DeGeneres because the giant company that owns the Las Vegas casino feared he would spill the beans about the shooting timeline if he was grilled by real journalists.

As we detailed previously, Campos had originally agreed to do five interviews, all on Thursday last week, but suddenly went missing, his union boss, who was helping set up the deal, told DailyMail.com in an exclusive interview. David Hickey, president of the Michigan-based International Union, Security Police and Fire Professionals of America, would not confirm that MGM was behind the decision, but said the company certainly influenced Campos.

‘I was in a meeting with MGM’s upper management and they were definitely concerned about how tough someone like Hannity would be on him and they voiced their opinions,’ Hickey said.

 

He said all sides had agreed parameters for the interviews. ‘Everyone knew he wasn’t to talk about security protocols, staffing or training or give out names of employees.’

 

But he said the company — that, like most of Vegas’s casino industry, obsessively controls what employees are allowed to say to the media — was pressuring Campos not to give too much away.

 

‘I thought they were being negative, telling him that someone was going to be tough and how they were worried about his health — it wasn’t the thing he needed to hear four hours before the interviews were going to begin.’

Hickey said he met with the MGM executives at a location in Las Vegas where Campos was staying. They met in the living room but he wanted a word with some of the management team in private so they went into the bedroom.

When they returned, Campos had gone, and Hickey said he hasn’t seen or heard from him since. The next thing he knew the security official had bailed on the five interviews.

Then he learned on Monday that instead of appearing on a news show he would go on Ellen.

‘It certainly wasn’t my choice that he should appear on that circus,’ Hickey told DailyMail.com.

 

Ellen did not press him on the official timeline of the shooting, which has changed three times since the massacre.

And that appears to have been MGM's plan.

When he went through his recollection of the night, she did not press him to clarify some of the lingering questions about the official timeline – such as whether he or hotel officials delayed calling police for six minutes after he was shot.

If that version is proven to be true, it could open MGM to massive costs from lawsuits.

DeGeneres told him:

'I know you've had so many people asking for you to tell the story and talk about it and I understand your reluctance. You're talking about it now and you're not going to talk about it again.

 

‘I don't blame you. Why relive it over and over?'

Sources told DailyMail.com, MGM is worried that families of the 58 people murdered as well as many of the 546 injured  in the Mandalay Bay massacre will launch lawsuits potentially worth billions of dollars against the company, and they thought Campos might not keep his story straight under the pressure of the TV lights and tough questioning.

That is why Campos, 25, appeared on a daytime chat show hosted by a fast-talking, dancing comedienne, rather than take questions from TV hardhitters such as Fox News’ Sean Hannity, NBC News or ABC News.

 

‘MGM was behind the decision to call off all the interviews and did a deal with Ellen, knowing she would not play hardball on the timeline as long as she had the exclusive,’ a TV insider told DailyMail.com.

The stench of coverup continues…

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North Korea swiftly quashed hopes for a détente with the US and its regional allies earlier this week when a government spokesman said there would be no sit-down between US and North Korean diplomats at a non-proliferation conference in Moscow this week.

Now that the North – presumably taking its ques from President Donald Trump who earlier this month ridiculed Secretary of State Rex Tillerson’s attempts at backchanneling – has refused to participate in talks, tensions between the two nuclear-armed powers have escalated to absurd new heights.

Making matters worse, Russian media reported earlier this week that Pyongyang is preparing to test a ballistic missile capable of reaching the west coast of the US. And in a move that alarmed the international community, about a Deputy UN Envoy Kim In Ryong told a UN General Assembly committee the situation on the Korean peninsula had reached a touch-and-go point and a nuclear war could break out at any moment.

Apparently, the rising tensions have only emboldened the US, Japan and South Korea to carry out more provocative war games this week, eliciting howls of condemnation from North Korea.

But this time, US and South Korean fighter jets will be accompanied by the USS Ronald Reagan, a 100,000-ton nuclear powered aircraft carrier which has been patrolling the waters east of the Korean peninsula on Thursday in a show of sea and air power designed to warn off North Korea from any military action. But as China and Russia have repeatedly warned, its presence will only exacerbate tensions between the North and the US, increasing the chances of a military conflict, Reuters reported.

The US Navy’s biggest warship in Asia – sporting a crew of 5,000 sailors – sailed around 100 miles (160.93 km) this week, launching almost 90 F-18 Super Hornet sorties from its deck.

The Ronald Reagan is conducting drills with the South Korean navy involving 40 warships deployed in a line stretching from the Yellow Sea west of the peninsula into the Sea of Japan.

“The dangerous and aggressive behavior by North Korea concerns everybody in the world,” Rear Admiral Marc Dalton, commander of the Reagan’s strike group, said in the carrier’s hangar as war planes taxied on the flight deck above.

North Korea has slammed the warship gathering as a “rehearsal for war.”

As the standoff with the North enters its ninth month, the US, Japan and South Korea are meeting to discuss a possible diplomatic resolution to the war of words. On Sunday, Trump changed his mind – something he's done a lot lately – and ordered Tillerson to try and revive backchannel talks with the North. Washington has not ruled out the eventual possibility of direct talks with the North to resolve the stand-off, U.S. Deputy Secretary of State John J. Sullivan said on Tuesday.

But who’s to say whether another missile test, or, worse, another nuclear test, won't again change the president's mind, leading to a resumption of the threatening rhetoric that has so alarmed the North?

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Like many others, the world's largest money manager with $5.9 trillion in (ETF) investments, BlackRock, is not too worried about a market which no matter what, promptly rebounds from any and every selloff, and seems to close at all time highs day after day as if by magic. To be sure, BlackRock's employees are delighted: the less the volatility, and the higher the S&P goes, the more likely retail investors are to hand over their cash to BlackRock. So far so good. Still, not even Blackrock can state that after looking at this chart, which unveils unprecedented economic policy uncertainty at a time when equity uncertainty has never been lower…

… that everything is ok.

And it doesn't: in a blog post by BlackRock's Isabelle Mateos y Lago, Blackrock's chief multi-asset strategist writes that while markets may be a sea of calm, geopolitics are anything but. As a result, the world's biggest ETF administrator has its eyes on 10 geopolitical risks and is tracking their likelihood and potential market impact, as it wrote recently in the firm's Global Investment Outlook Q4 2017.

The "world of risk" map below is a quick snapshot of all

Of the risks listed above, which are the ones BlackRock is most worried about? According to Mateos y Lago, the top three right now: North American trade negotiations, a North Korea conflict and U.S.-China tensions, with the second and third particularly interrelated.

The details:

North American trade negotiations

The fourth round of North American Free Trade Agreement (NAFTA) renegotiations ended this week, with Mexico and Canada rejecting what they view as harsh U.S. proposals. Still, news reports did suggest apparent progress on less contentious parts of the agreement, and the negotiations aren’t over. The next round of talks are scheduled to take place in Mexico next month.

Our base case is that successful negotiations will be completed in early 2018. However, our hopes for this outcome have recently diminished given tough positions from U.S. negotiators and threatening rhetoric from U.S. President Donald Trump that has resulted in greater uncertainty. Market risks are biased to the downside given that a good outcome is priced in, in both Canadian and Mexican markets.

* * *

North Korea

We view North Korea’s missile and nuclear weapons program as a major threat to regional stability, U.S. security and nuclear non-proliferation. The possibility of armed conflict has risen, we believe, given North Korea’s missile launches over Japan, a nuclear test and an intense war of words. This has raised the chance of misstep or miscalculation, and we could see limited action such as the shooting down of missiles.

Yet we currently see a low probability of all-out war; the costs are too high on all sides. Instead, we expect the U.S. to intensify its “peaceful pressure” campaign, evident in imposing unilateral sanctions and leaning hard on China to participate. We see the crisis straining U.S.-China relations just as economic tensions are rising.

* * *

Deteriorating U.S.-China relations

We see frictions between the U.S. and China heating up over time. The countries risk falling into the “Thucydides Trap,” a term coined by Harvard scholar Graham Allison to describe clashes between rising powers and established ones. We see trade and market access disputes straining an increasingly competitive U.S.-China relationship in the long run, and believe markets have yet to factor in this gradual deterioration.

In the short term, tensions could rise if Chinese President Xi Jinping pursues an even more nationalistic agenda in the wake of the National People’s Congress. Economic tit for tats could lead to an erosion of relations—and have sector-specific effects.

U.S. military action against North Korea and/or an accidental clash in the South China Sea would deal a blow to the relationship, in our view, and hurt risk assets. But our base case is that the U.S. and China avoid these land mines in the short term, and try to use President Trump’s upcoming visit to emphasize cooperation.

* * *

Taking the above in context, what is BlackRocks recommendation for portfolios? The good news, according to the author, is that most geopolitical shocks have short-lived market impacts, except in regions directly affected. For those who wish to hedge, Blackrock recommends government bonds as useful diversifiers against volatility and equity market selloffs sparked by such shocks.

More in the BlackRock Global Investment Outlook Q4 2017.
 

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After months of planning and cogitating over how to address the failing public pension systems in their state, which are somewhere between $40 and $80 billion under water, Governor Matt Bevin and the leaders of the General Assembly’s Republican majorities released their plan earlier today and it appears to be nothing more than the same old “kick the can down the road” approach to “pension reform” that has perpetuated the pension ponzi in this country for decades while doing absolutely nothing to address the actual crisis.

Here is a summary of the ‘plan’ courtesy of the Courier-Journal…notice that aside from putting new teachers into a “401(k)-style” defined contribution plan, the Republican proposal does pretty much nothing else except demand that more taxpayer dollars be diverted to service failing pension plans.

Here are highlights of the multi-point proposal:

 

• There is no increase in the full retirement age for current workers

 

• There will be no reductions in pension checks for retirees, and it protects health care benefits for them.

 

• Future non-hazardous employees and teachers will be required to enroll in 401(k)-style plans.

 

• Hazardous duty employees, such as police officers and firefighters, will continue in the same system they are in now.

 

• The plan would close a loophole to ensure payment of death benefits to families of hazardous employees.

 

• The plan would stop the defined benefits plans for all legislators, moving them into the same plan as other state employees under the jurisdiction of Kentucky Retirement Systems.

Here’s an overview of the 10-point pension plan @GovMattBevin and GOP leaders have developed to try to fix Kentucky’s pension crisis. http://pic.twitter.com/tcXar5yyd7

— Morgan Watkins (@morganwatkins26) October 18, 2017

Not surprisingly, Governor Bevin, who as a politician is worried not so much about the long-term solvency of his state’s pensions as he is about getting through the next election cycle, said the plan “will be a model for this nation” as it “keeps the promise” to public workers and delivers on his promise to “do what is legally and morally right.”

In reality, of course, Bevin’s plan does nothing to “keep any promise” and simply delays the inevitable collapse of a ponzi scheme that will eventually buckle from a wave of retiring baby boomers who have been sold a lie for decades.

Just as quick reminder to Bevin, below is a recap of the changes that his own pension consultants told Kentucky’s Public Pension Oversight Board would be required to save the pensions in his state (courtesy of the Lexington Herald Leader)…suggestions that he seemingly dismissed in their entirety…

An independent consultant recommended sweeping changes Monday to the pension systems that cover most of Kentucky’s public workers, creating the possibility that lawmakers will cut payments to existing retirees and force most current and future hires into 401(k)-style retirement plans.

 

If the legislature accepts the recommendations, it would effectively end the promise of a pension check for most of Kentucky’s future state and local government workers and freeze the pension benefits of most current state and local workers. All of those workers would then be shifted to a 401(k)-style investment plan that offers defined employer contributions rather than a defined retirement benefit.

 

PFM also recommended increasing the retirement age to 65 for most workers.

 

The 401 (k)-style plans would require a mandatory employee contribution of 3 percent of their salary and a guaranteed employer contribution of 2 percent of their salary. The state also would provide a 50 percent match on the next 6 percent of income contributed by the employee, bringing the state’s maximum contribution to 5 percent. The maximum total contribution from the employer and the employee would be 14 percent.

 

For those already retired, the consultant recommended taking away all cost of living benefits that state and local government retirees received between 1996 and 2012, a move that could significantly reduce the monthly checks that many retirees receive. For example, a government worker who retired in 2001 or before could see their benefit rolled back by 25 percent or more, PFM calculated.

 

The consultant also recommended eliminating the use of unused sick days and compensatory leave to increase pension benefits.

 

All of which just reminds us once again of how we once summed up public pensions in this country:

Defined Benefit Pension Plans are, in many cases, a ponzi scheme.  Current assets are used to pay current claims in full despite insufficient funding to pay future liabilities… classic Ponzi.  But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit.  Everyone from government officials to union bosses are incentivized to maintain the status quo…public employees get to sleep better at night thinking they have a “retirement plan,” public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.  

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Authored by Mac Slavo via SHTFplan.com,

In just the blink of an eye, island life on Dominica was turned upside down.  Like Puerto Rico, Dominica was violently ravaged by Hurricane Maria, and residents are still fighting for survival.

The wooden frames and scattered, water-damaged belongings are all that remains of some homes of on Dominica, which was ravaged by Hurricane Maria last month.

Without warning, the storm rapidly accelerated from a Category 3 to a Category 5, and residents said they could do little to prepare.

 “There was lightning, there was heavy rain…[it was like] the hurricane was in the house,” said Dominica’s Prime Minister Roosevelt Skerrit according to ABC News.

 

“We have lost everything that money can buy, and that is a fact.”

The roof of Roosevelt Skerrit’s house was blown away and its floors flooded. On the night Hurricane Maria hit, Skerrit took to Facebook to post updates including one that said, “I am at the complete mercy of the hurricane. House is flooding” and another that said, “The winds are merciless! We shall survive by the grace of God!” Later he posted, “I have been rescued.”

“You can still see the shock, the anxiety, the fear the trauma in the eyes and the expressions of people every day,” he told ABC’s Nightline.

 

“Their entire life investments, life’s savings, blown away.”

 

Another now displaced resident named Emmanuel Peter said he can still remember the roar of the hurricane-force winds.

 

 “It was just whistling, whistling,” he said. “I thought it would burst my eardrums.”

Puerto Rico was not the only island in Hurricane Maria’s path, and almost a month later, both islands still look like post-apocalyptic zones.  But the island with the highest death toll per capita was Dominica; a close-knit, mostly Christian nation that was left at the mercy of a hurricane that shared a name with the mother of Christ: Maria.  

To date, 26 people are confirmed dead, 31 are still missing, and more than 50,000 people are displaced on the island that has a total population of roughly 74,000.

When  ABC’s Nightline visited Dominica six days after the storm, the only way to reach its interior was with the United States military. Upon arrival, many who had the option to evacuate the island were already in the process of doing so, including 1,300 students at Ross University Medical School, an American college based in Dominica.

“I do feel sadness for the people of Dominica,” said Carey James, the college’s associate dean of operations, analysis, and admissions. “My wife’s family is from Dominica … and it’s hard to see a place that you love go through that kind of a storm.” And nearly four weeks after the storm, people are still fighting to survive.

No one on the island has access to running, drinkable water, and with sewage systems destroyed, residents are contending with fears of diarrhea, dehydration, and dysentery. Much of the island still remains without power. For the vast majority of Dominicans, the choice to leave their home country isn’t financially available. More than 85 percent of houses have been damaged, and of those, more than a quarter simply do not exist anymore, leaving many of the residents homeless.

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After weeks of testimony, the fate of former HSBC trader Mark Johnson, who stands accused of orchestrating a massive international front-running scheme that netted his firm over $8 million in illicit profits, has been left in the hands jurors.

Over the past couple of weeks, tidbits of the prosecution’s case has made it’s way into the media, including reports last week that Johnson used the code phrase “my watch is off” to trigger trading by HSBC traders all around the globe.  Meanwhile, as Law360 recently pointed out, jurors also had the opportunity to hear some rather damning recordings of Johnson’s phone conversations with traders, including the one below in which he says “I think we got away with it.”

Prosecutors played a recording of a call between Johnson and Stuart after the 3 p.m. fix as they debrief, with Johnson telling Stuart, “I think we got away with it,” but Stuart replies that HSBC executive Dipak Khot — who acted as the go between with Cairn and HSBC — thinks otherwise and suspects that Cairn will protest.

 

Johnson in turn argued that Cairn is still in a better position than it would have been if it had taken any other offers to execute the deal in alternate methods as opposed to the fix. “They don’t really have a lot of room to complain,” he said on the call.

 

But as Cahill was trading ahead of the 3 p.m. fix on the day of the transaction, Johnson sounded more concerned about “ramping it up” too much. Jurors heard another recording of a call between Johnson and Scott, with Scott talking to Cahill in the background as he trades, in which Johnson cautions against spiking the price of sterling too high out of concern that Cairn will “squeal.”

 

“Frank, Frank if it rates above 30 at the fix, I think they’ll start to ah … if you need to buy them, obviously, but ideally don’t ramp it above 30,” Scott tells Cahill. “Do what you need to do, but … sorry I know I’m probably not helping much…I’ll leave you alone.”

 

“Is he getting a bit tetchy?” Johnson asks.

 

“No, he’s not,” Scott replies.

 

“He can’t, fucking moaning bastard,” Johnson said. “I do all the work and he gets all the glory.”

 

Jurors heard that days later in a call with HSBC forex trader Ed Carmichael in Hong Kong, Johnson told him that HSBC’s London forex trading desk, “just had a bonanza” on the Cairn deal, and described his response when Cairn sought an explanation on the less than stellar result for the oil and gas developer.

Of course, when HSBC’s client complained about their less than stellar execution price, Johnson admits that he blamed all the usual suspects: “Russians, other central banks, all that sort of stuff.”

“And they said, well you know it jumped up a bit, who else was buying? And we said the usual Russian names, other central banks, all that sort of stuff,” Johnson said on the call.

For those who haven’t followed this particular story, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. following a nearly 3-year investigation into efforts on the part of several large investment banks to rig FX markets but Stuart Scott has remained free at his home in the London suburbs pending the outcome of the extradition proceedings.  Per Bloomberg:

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

 

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

 

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.

According to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.

“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

 

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”

As we noted last week, nearly a dozen HSBC traders around the globe netted over $8 million in profits by allegedly front-running their own client.

Of course, Johnson would like for you to know that this entire case is just “much ado about nothing” as he never intended to “front-run” his client but rather was just engaging in some innocent “pre-hedging“…which is a new term for us…must be a technical term only used by European FX traders.

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Disgraced former Hollywood studio head Harvey Weinstein is hiding out at a $2,000 a night rehab center in Arizona since the New York Times published an expose about the mogul’s history of sexual assault and harassment – a history that has been littered with settlements and NDAs – two weeks ago.

Since then, more than 30 women have come forward to accuse Weinstein of misconduct ranging from harassment to groping to rape, prompting law enforcement agencies on two continents to open sex crime investigations.

And on Thursday, the number of open investigations climbed to four when the Los Angeles Times reported that the LAPD has opened an investigation into Weinstein over an alleged sexual assault that reportedly took place in 2013. The investigation was launched after a two-hour meeting with his accuser earlier Thursday.

An Italian model-actress met with Los Angeles police detectives for more than two hours Thursday morning, providing a detailed account of new allegations that movie mogul Harvey Weinstein sexually assaulted her at a hotel in 2013.

 

She is the sixth woman to accuse Weinstein of rape or forcible sex acts. Los Angeles police Capt. Billy Hayes confirmed that the department has launched an investigation into the matter.

 

It is the first case related to Weinstein to be reported in Southern California. New York police already have two active sex crime probes and London’s Metropolitan Police is investigating allegations made by three women.

 

The new allegation could be legally troubling for Weinstein because it falls within the 10-year statute of limitations for the crime that existed at the time of the alleged incident, legal experts say.

The woman, who has not been named, provided a detailed account of the incident to the LA Times.

In the latest case, the 38-year-old woman, who has asked not to be named because she is fearful of retaliation and concerned about protecting her children’s privacy, first contacted police on Tuesday, through her attorney, David Ring. Two detectives from the Los Angeles Police Department’s Robbery-Homicide Division’s rape special section took her statement on Thursday, describing how Weinstein pushed his way into her hotel room, dragged her into the bathroom and allegedly forcibly raped her.

She told the Los Angeles Times that the incident occurred at Mr. C Beverly Hills hotel after she attended the 8th annual Los Angeles, Italia Film, Fashion and Art Fest in February 2013. She had previously met Weinstein once, briefly, in Rome after being introduced by an acquaintance.

 

At that time, he invited her up to his hotel room, but she said she declined. She said they spoke briefly at the film festival, but he didn’t appear to recall meeting her.

 

Later, he showed up “without warning” in the lobby of her hotel. He asked to come up to her room. She said she told him no and offered to meet him downstairs, but soon, he was knocking on her door.

 

“He … bullied his way into my hotel room, saying, ‘I’m not going to [have sex with] you, I just want to talk,’” the woman told The Times. “Once inside, he asked me questions about myself, but soon became very aggressive and demanding and kept asking to see me naked. He grabbed me by the hair and forced me to do something I did not want to do. He then dragged me to the bathroom and forcibly raped me."

 

She told her attorney she tried to dissuade Weinstein by showing him pictures of her children.

 

After about 45 minutes, Weinstein departed.

 

“When he left, he acted like nothing happened,” the woman said. “I barely knew this man. It was the most demeaning thing ever done to me by far. It sickens me still. … He made me feel like an object, like nothing with all his power."

The unnamed woman's story echoes accounts given by many other women, including actress Asia Argento, who was shared her own account of being assaulted by Weinstein with the New Yorker.

IN addition to the NYPD, LAPD and Scotland Yard, it has also been reported that the FBI is investigating Weinstein and fears he could pull a “Roman Polanski” by fleeing the country to “seek treatment” in Europe.

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