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Prompted by growing interest among the hedge fund community, Goldman is dedicating increasingly more “bandwidth” to covering bitcoin, and judging by the bank’s bullish bias, most of the “smart money” appears to be long the cryptocurrency.

In a report posted overnight by Goldman’s chief technician Sheba Jafari, she writes that since “Bitcoin is still within the limits of a well-defined range, it may need another few swing within the range before resuming its underlying trend” higher. Eventually, after some potential volatility that could send it as low as $1,786 “but not much further from there”, Goldman expects the original cryptocurrency to surge to a “minimum target at 2,988 and scope to reach 3,691.“

Here is the full text of how Goldman reassures its nervous clients, many of whom appear to have bought BTC near its recent all time highs, that record highs in  bitcoin are just a matter of time:

• As has been discussed in recent updates, Bitcoin is in wave IV of a V wave impulsive rally that began at the ‘11 low. It’s not uncommon for a 4th wave to be complex and time-consuming.
• The fact that the market is still unable to break above the key day high on Jun. 13th (3,000) increases the likelihood of this being a triangle. These triangles are typically characterized by five swings in either direction, making it an ABCDE sequence. If this is the correct interpretation, the next leg lower should retrace back towards the bottom of wave A (1,852) but no further than there.
• Alternatively, it could also be an ABC pattern in which case the market could make a marginal new low –to ~1,786—but again, not much further than there.
• Anything above 3,000 (Jun. 13th high) will suggest potential to have already started wave V, which again has a minimum target at 2,988 and scope to reach 3,691 (the latter being a preferred target as this assumes a new high). At this point, it seems reasonable to assume that the market is in a corrective process until there’s been real evidence of an impulsive advance.

Jafari’s conclusion: “Consider range-bound/corrective below 3,000. Shouldn’t retrace much further than 1,857-1,787. Eventually see potential for 3,691.”

While Goldman’s sellside euphoria on bitcoin is tangible, one wonders if this is just the latest attempt by its prop desk to offload some holdings to institutional and retail traders who are a little late to the crypto party.

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Over the past few months, the story of the Awan brothers has been largely ignored by mainstream media. However, the Pakistani-born brothers Abid, Imran, and Jamal Awan are at the center of a criminal investigation by U.S. Capital Hill Police and the FBI.  While official charges have not yet been filed, allegations of wrong doing vary from simply overcharging taxpayers for congressional IT equipment to blackmailing members of Congress with secrets captured from emails.

The Awan brothers were Pakistani IT specialists, whom worked for more than 30 house and senate democrats, as well as Rep. Debbie Wasserman Schultz. The substantial scandal has raised questions about who may have been passed data which the Awans had access to, given Pakistan’s history of collaborating with a number of foreign countries who have demonstrated past willingness to influence U.S. politics.

Now, per an exclusive report from the Daily Caller, we learn that the twisted plot surrounding the Awan brothers has grown even more interesting as FBI agents have reportedly seized a number of “smashed hard drives” and other computer equipment from their former residence in Virginia.

FBI agents seized smashed computer hard drives from the home of Florida Democratic Rep. Debbie Wasserman Schultz’s information technology (IT) administrator, according to an individual who was interviewed by Bureau investigators in the case and a high level congressional source.

 

Pakistani-born Imran Awan, long-time right-hand IT aide to the former Democratic National Committee (DNC) Chairwoman, has since desperately tried to get the hard drives back, the individual told The Daily Caller News Foundation’s Investigative Group.

 

The congressional source, speaking on condition of anonymity because of the sensitivity of the probe, confirmed that the FBI has joined what Politico previously described as a Capitol Police criminal probe into “serious, potentially illegal, violations on the House IT network” by Imran and three of his relatives, who had access to the emails and files of the more than two dozen House Democrats who employed them on a part-time basis.

 

Capitol Police have also seized computer equipment tied to the Florida lawmaker.

Makes you wonder whether they used the official BleachBit hammer to destroy the hard drives.

 

Apparently the hard drives were first discovered by a Marine Corps veteran after he rented a house in Lorton, Va. that belonged to the Awans.  Upon moving in, the Marine found a trove of abandoned computer equipment in the garage, much of which had been destroyed, and called the FBI to take a look.

One of the new tenants — a Marine Corps veteran married to a female Navy Officer — said he found “wireless routers, hard drives that look like they tried to destroy, laptops, [and] a lot of brand new expensive toner.”

 

The tenants called the Naval Criminal Investigative Service and, not long after, FBI agents arrived together with the Capitol Police to interview them and confiscate the equipment. The Marine spoke on condition of anonymity because of concerns for his wife’s naval career, saying she doesn’t want to be associated with a national security incident.

 

“It was in the garage. They recycled cabinets and lined them along the walls. They left in a huge hurry,” the Marine said. “It looks like government-issued equipment. We turned that stuff over.”

For those who have managed to avoid this story, Imran was first employed in 2004 by former Democrat Rep. Robert Wexler (FL) as an “information technology director”, before he began working in Rep. Debbie Wasserman Schultz’s office in 2005.

The family was paid extremely well, with Imran Awan being paid nearly $2 million working as an IT support staffer for House Democrats since 2004. Abid Awan and his wife, Hina Alvi, were each paid more than $1 million working for House Democrats. In total, since 2003, the family has collected nearly $5 million.

The staffer’s services were so important to congressional members, that on March 22, 2016, eight democrat members of the House Permanent Select Committee on Intelligence issued a letter, requesting that their staffers be granted access to Top Secret Sensitive Compartmented Information (TS/SCI). Of those that signed the letter were representatives Jackie Speier (CA) and Andre Carson (IN), the second Muslim in Congress, both of whom employed the Awan brothers.

The brothers were also employed by members of the House Permanent Select Committee on Intelligence and the House Committee on Foreign Affairs, such as: Jackie Speier (D-CA), Andre Carson (D-IN), Joaquín Castro (D-TX), Lois Frankel (D-FL), Robin Kelly (D-IL), and Ted Lieu (D-CA). Lieu has since openly called for leaks by members of President Trump’s administration despite the fact that he may until recently have been under surveillance by a foreign entity.

One bombshell that has been all but ignored by the main stream media is that Imran Awan had access to Debbie Wasserman Schultz’s iPad password, meaning that the brothers also had direct access to the notorious DNC emails.

The brothers are accused of removing hundreds of thousands of dollars of equipment from congressional offices, including computers and servers, while also running a procurement scheme in which they bought equipment, then overcharged the House administrative office that assigns such contractors to members.

Some congressional technology aides believe that the Awan’s are blackmailing representatives based on the contents of their emails and files, due to the fact that these representatives have displayed unwavering and intense loyalty towards the former aides.

Of course, if Republicans and/or members of the Trump administration hired foreign-born IT specialists who were suspected of committing a laundry list of federal crimes and then smashed a bunch of hard drives just before skipping town…we’re sure the media would still gloss right over it in much the same way they’re doing for the the Democrats in this instance.

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On the same day that Greek PM Alexis Tsipras triumphantly announced to The Guardian that “The worst is clearly behind us“, Greece just as triumphantly announced that its long-rumored bond issue, the first after a three year hiatus which saw its last bond issue crash then surge, is now a reality. Just like in 2014, Greece is looking to sell another batch of five-year bonds, according to an Athens Stock Exchange filing. The bonds will be sold in benchmark size via a legion of banks, and are expected to price on Tuesday. In terms of total size, it will ultimately depend on client demand – recall that the the 2014 issue was 8x oversubscribed – with UBS expecting a possible size of €2BN-4BN while JPMorgan anticipates roughly €3BN in new bonds.

But the biggest surprise in today’s announcement was the announcement of a present for its last batch of bond buyers: a cash tender offer for its existing 4.75% bonds due in 2019 – the same bonds that were issued in 2014 – which will be bought back at a price of 102.6. The 2019 bond have jumped in recent weeks, with the yield dropping around 15bps, though as Bloomberg notes “hardly anything has traded as is usual in Greek bonds.” The bond was priced around 102.25 ahead of the announcement, before rising another 30c.

Greek 10Y bonds are currently yielding 5.28%. Putting this in context, at the peak of the financial crisis in 2012, when Greece was expected to leave the euro area, the yield surged to a record 44.21 percent.

With the latest bond sale, Tsipras government is seeking to pave a path for an exit from the current bailout program, which ends in August 2018, while also capping the country’s financing needs in 2019, expected to be about 19 billion euros ($22.1 billion). After not being able to convince creditors to reduce its debt burden and being left out of the European Central Bank’s bond-purchase program, Greece is testing the market, although it still remains to be seen if Greece will be added to the ECB’s QE program.

Greece delayed its return to the bond market last week due to a €325 billion ceiling set by the IMF on how much debt the country can hold. Workarounds, like the infamous debt swaps that pushed Greece into its crisis in the first place, could improve Greece’s maturity profile without increasing the overall load according to Bloomberg, and can ease the government’s forays into the market.

In other words, we are right back where we started: with everyone agreeing to mask the total amount of unrepayable Greek debt, which obviously will not matter to yield-starved credit investors who will be delighted to give billions to Greece in exchange for a yield in the 4%+ range. After all, by the time the debt comes due, it will be someone else’s problem.

The bond sale follows the successful conclusion of the second bailout review and the disbursement of the first part of the €8.5BN tranche by the ESM on July 10. The IMF agreed to a new $1.8 billion conditional loan for Greece on Thursday, with disbursement contingent on euro-zone countries providing debt relief. Helping to ste the stage for today’s announcement, on Friday S&P raised the country’s sovereign credit-rating outlook to positive, even though it kept the Greek rating at B-, 6 levels below investment-grade.

Some were cautious: “Having failed to achieve anything substantial on debt relief or having Greece admitted into the ECB’s asset purchase program, the objective of the Syriza government is now a ‘clean exit’ when the bailout expires next year,” said Eurasia’s Mujtaba Rahman. “This will be the first leg of that strategy – to test market appetite while simultaneously building cash buffers ahead of next year.”

Meanwhile, the euphoria is already palpable: “they’ve been doing well,” said Mohit Kumar, head of interest rates strategy at Credit Agricole CIB. “Psychologically, yields are below levels when they last came to the market. And it’s a good time to issue because if ECB starts tapering post summer, peripherals would come under pressure. ”

As Landesbank Berlin’s Lutz Roehmeyer told Bloomberg, it’s “perfect timing: it is after getting bailout money, after getting the go ahead for a debt reduction next year, after IMF said it is likely to join the bailout finally, after S&P rating action and still before ECB ends QE and started raising rates.”

Naturally, Roehmeyer already holds Greek bonds and plans to take part in the new issue.

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Janet Yellen has confirmed that the ($USD) is going to collapse.

I don’t mean a systemic, going to zero, collapse (though one day the $USD, like all fiat currencies will fail). I mean that the $USD is going to drop hard in the coming 18+ months.

How hard?

I believe we’ll see the $USD in the 80s sometime in 2018. That’s a full 11%-13% lower from where the $USD is today. Put simply, the entire move in the greenback that was driven by the Fed ending QE will be unwound.

How do we know this?

Janet Yellen’s testimony to Congress earlier this month was a clear signal.

First, a little context…

For months now, numerous Fed officials have been publicly stating that the Fed was embarking on a significant tightening schedule.

This has been one of the most coordinated and clear Fed PR campaigns in recent history with numerous Fed officials calling for 3-4 rate hikes in 2017 as well as Fed balance sheet shrinking.

Then on Tuesday and Wednesday July 11th and 12^th respectively, Fed Chair Janet Yellen testified in front of Congress that the Fed is just about done with tightening. Moreover, she stated that the Fed WOULDN’T use its balance sheet normalization as a monetary policy (indicating that it won’t use it to drain liquidity from the system).

The $USD, which was already trending downward in spite of the Fed’s previous hawkishness, promptly collapsed. And Gold erupted higher.

It's time to get moving into inflation plays.

If you’re not taking steps to actively prepare your portfolio for this, you need to so now.

We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

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Chief Market Strategist

Phoenix Capital Research

 

 

 

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In a project dubbed ‘Bowline’, Bloomberg reports that Deutsche Bank may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union. While not the first bank to threaten to move post-Brexit, the scale of asset movement is the largest yet.

Deutsche Bank’s balance sheet listed 1.59 trillion euros in total assets at the end of last yea and much of its trading in Europe is traditionally booked in London. But, as Bloomberg reports, the Brexit-contingency project calls for Frankfurt trading to go live in September 2018 and for the balance sheet migration to be completed by March 2019, said the person, who asked for anonymity in discussing internal matters.

Chief Executive Officer John Cryan told employees in a recent videotaped message that he’s girding for a hard Brexit, with the “vast majority” of trades currently booked in London probably moving to Frankfurt, but the bank hasn’t officially detailed its plan.

 

People familiar with the matter told Bloomberg that the lender intends to move chunks of trading and investment-banking assets from London to Frankfurt, with the jobs of several hundred traders and as many as 20,000 client accounts likely to be shifted.

 

“There’s an awful lot of detail to be ironed out and agreed,” Cryan said in the video. “But inevitably roles will need to be either moved, or at least added, in Frankfurt.”

Deutsche Bank’s plan notes that trade and balance sheet migration will begin in September 2018, with six months required for the move of the balance sheet, the person said. The bank plans to start informing clients from September 2017 that their contracts will be switched to Frankfurt. It wants to have built front-to-back technology and processes by June 2018, according to the person.

This report comes just days after Cryanb warned his staff that the bank “will assume a reasonable worst outcome” from the UK’s talks with the European Union, according to a Bloomberg News report.

“The worst is always likely to be worse than people can imagine,” Cryan said.

Britain is expected to lose financial passporting rights, which allow banks with a base in the UK to sell products and services to customers and financial markets across the EU.

Frankfurt is emerging as a popular destination for many international firms choosing a post-Brexit base. Three Japanese lenders, Daiwa, Sumitomo Mitsui Financial Group, and Nomura, have all confirmed in recent weeks that they will set up new post-Brexit bases in Frankfurt.

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Authored by Mike Shedlock via MishTalk.com,

Illinois, Alabama, Connecticut, Michigan, Mississippi, New Mexico, Ohio, and Wyoming are the only states that still have not regained employment lost during the Great Recession or prior recessions.

The Wall Street Journal comments These Eight States Still Haven’t Regained All Their Lost Jobs.

Nonfarm payrolls in June still lag high-water marks set in 2008 or earlier in eight states struggling against headwinds like population loss and the manufacturing sector’s long-term decline: Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio and Wyoming.

 

At the same time, unemployment rates were at all-time lows in six states, a mix of regions that are experiencing strong growth and other places with slower job gains and possible worker outflows: Arkansas, California, Colorado, North Dakota, Tennessee, and Washington. Records for state unemployment rates go back to 1976.

 

Some areas face structural challenges, such as factory employment’s long decline. Across a swath of the industrial Midwest – Illinois, Michigan and Ohio – employment peaked back in 2000 and still hasn’t recovered to that level after two national recessions and two recoveries.

 

For other states, the local jobs recovery has simply been much slower than the national average.

Notably, in past recoveries, some states saw their unemployment rates return to normal levels not because jobs returned but because job seekers moved away or otherwise departed the local workforce.

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On the heels of homebuilder optimism tumbling to 8-month lows in July, existing home sales slumped in June (down 1.8%, more than the 0.9% decline expected) to the second lowest SAAR this year. Existing home sales are now unchanged since September, but we note that average prices are up 6.5% YoY.

Total existing-home sales , decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month's decline, June's sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Since rates surged, exisitng home sales have gone nowhere (but prices have risen)…

"Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that's straining their budget," he said.

 

"The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines."

For context, this is the weakest summer selling season since 2011… a time when seasonally sales have tended to increase…

First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago.

NAR's 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

"It's shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs," said Yun.

 

"Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers' dreams of owning a home this year."

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Following Europe's PMI slump to six-month lows this morning, US Composite PMI rose to a six-month high, with Manufacturng surprising to the upside (4-mo high). The stronger PMI reading was supported by accelerated growth in output, new orders, employment and stocks of inputs during July, but the principal weak spot in the economy remained exports, with foreign goods orders dropping.

As 'hard' US economic data has drastically disappointed over the last three months, Services (higher) and Manufacturing (lower) based on Markit's PMI survey have diverged markedly until today's July print which saw manufacturing catch up…

 

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The July PMI surveys show an economy gaining growth momentum at the start of the third quarter, enjoying the strongest monthly improvement in business activity since January.

 

“Most encouraging was an upturn in new order inflows to the second-highest seen over the past two years, which helped push the rate of job creation to the highest so far this year, indicative of non-farm payrolls growing at a rate of around 200,000.

 

“The principal weak spot in the economy remained exports, with foreign goods orders dropping – albeit only marginally – for the first time since last September, often blamed on the strength of the dollar.”

 

“The overall rate of expansion remains modest rather than impressive. The surveys are historically consistent with annualized GDP growth of approximately 2%, but the signs are that growth could accelerate further in coming months.

 

We leave you with UBS' comment which seemed to sum things up rather well:

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