Tag: finance

While Trump has personally expressed skepticism about the validity of the payrolls report, and especially the seasonally adjusted Establishment Survey, one aspect of the jos report he has been especially focused on is the number of people who are out of the labor force for economic reasons or otherwise: this is the infamous 95 million number that he brings up every time the strength of the “Obama recovery” has been mentioned. Which is why we are confident Trump will be happy to learn that in January, while the US economy added some 227K jobs according to the Establishment Survey, the Household Survey showed that the number of people not in the labor force tumbled by a whopping 736,000, the biggest drop in our series history, bringing the number of Americans not in the labor force to 94,366.

Curiously, a driver of this move is that the civilian non-institutional population reportedly declined by 660K, declining to 254,082K, which we attribute to the annual benchmark revisions in the jobs report.

One of the direct consequences of this move is that the unemployment rate went up as the civilian labor force grew from 159,640K to 159,716K even as the number of Employed workers – per the household survey – actually declined by 30,000 to 152,081.

It also means that the Labor Participation Rate rose from 62.7% to 62.9%, the highet print since September.

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Summary

 Submitted by Vince Lanci and MarketSlant. "If you are bullish gold, buy silver" is an axiom I'm fond of repeating. This axiom is a positive one for Silver people, but actually has its roots in cynicism and manipulation years ago.

Silver is more volatile, which is why in the short term it over-reacts relative to Gold. We now believe that Silver is the better investment going forward because there are big forces with too much to lose if it does not keep a reliable ratio with Gold. You must stomach the higher volatility. We simply believe the "rule" no longer applies to Silver only as a function of its higher volatility. We believe it applies in the long term as an investment now. First let’s look at the phrase's cynical roots in the context of how Bullion Dealers used to (and some still) operate:

The 1990's: Buy Silver if you are Bullish Gold – and don't need your money: The root for this axiom is not in a love for Silver. It is how Bullion Banks herded clients into metals. In the 90's, Silver was a broken market. PM investors hated it. Every day we heard the demoralizing stories while Swiss Bank shoved Calls down our throats hedging their LATAM producer business.

Losers trade Silver:

• Hunt Bros were robbed. The Comex will cry foul and the Gov't will force liquidation- no argument. they did it again to Buffet in 1997
• Silver is a waste product of nickel production now- Yup, pour acid on mined nickel and out pops Silver. Leech mining
• Film is dead– there is no use for Silver anymore.- Yup. I remember looking at potential Silver uses like it replacing chlorine in swimming pools, rationalizing my long call position.. not good

Silver Was a Roach Motel: The result is Silver had a wider bid-offer on a huge contract not suited for retail. And finally, it had non-continuous liquidity, aka markets that flaked from 1 cent wide to 10 cents wide for no apparent reason. This last part killed me.

Silver was indeed a roach motel in the 90's. If J. Aron (GS) owned the Gold mkt, Republic and HSBC owned the Silver market. And good luck getting an exit price when you needed one. For energy traders: Ever have to trade Heating Oil without Morgan Stanley or BP involved? Same idea.

But George Soros and PhiBro (based on info and evidence at the time) changed that in 1994. Even though their short squeeze was aborted, it became apparent that Silver shorts were too complacent. Then in 1997 Warren Buffet and PhiBro (Andy Hall) capitalized on the concept. More on that below.

The Mechanics of Silver Manipulation- Short Con

1. When Gold rallies it did so from origin interest or from Banks releasing recommendations to its "special" clients
2.  Silver could lag in early stages of any Gold rally, as it did often in the 90's.
3.  Post a Gold rally, Bullion banks still had precious metals demand on its books, and they were likely short Gold
4. The Banks would often say, " Silver is the better value here, we like it and are long"
5. And that was the end of the rally

How Does Buying Silver Kill Gold Rallies? Think of Silver as the cheapest means at the time to get PM exposure. As hedge fund money allocated to Gold, Silver was left behind initially. What follows was witnessed almost monthly. We watched from our option trading pits as the real life events that determined RSI and stochastics played out in front of us. Here is how it used to play out typically:

1. Big Money Funds Buy Gold
   • Origin Order Flow Buys Weakness: So the Paul Tudor Jones' of the world would get long Gold and some of that flow was handled by the Bullion arms of US Banks
   • Information would leak. Sometimes by the buyer, sometimes by the Bank, usually by both
   • Gold rallied before (Banks buy) during (Tudor buys), and after (see #2 below) the order is filled
2. Tier 2 Funds Enter
   • Either  Banks would get a call from the tag-along funds or the banks would call them with a "tip"- "pssst, Tudor is buying"
   • The Chesapeakes would buy less than Tudor. And the execution was likely less than perfect- but they beat the vwap!
   • Banks also start to sell some of their own longs to the Tier 2 Players to lock in their flow trading profits
3. Momo funds enter
   • At this point, momentum signals would go off and trend chasing funds would start to buy strength, enter Trout and others.
   • But during these days Gold priced supply, not demand. Which means there were no trends, just price discovery for readily available supply to hit the market
4. The Kiss of Death- Buy Silver
   • Now you have all sorts of undercapitalized over-leveraged players looking to get in
   • They can't afford to buy Gold to get proper exposure for their capital
   • The Banks oblige them: "Buy silver, it is undervalued on a relative basis"
   • phone clerks used to snicker and announce to the floor "Trout is buying, game over"
   • And that was the top. For there was no retail to sell to.

Silver Educates a Reluctant Chartist: So when a colleague at JPM used to say, Buy Silver if you are bullish Gold, he was right. But he  always followed it with, "But it's a quick trade, don't take it home."  So I started watching the RSI and Stochastics as a non-believer in technical analysis. One of the traders I worked with, Gregg Salzman, was a big contributor to learning charts. The result was a begrudging respect for technical analysis as a confirmation of the monthly tragedy we witnessed in Silver.

And the JPM guy was right. In fact, Silver itself was an RSI non-confirmation signal of Gold's overbought status at the time. Less money invested, moved more than Gold that day. And a sign that any fund that had PM money to invest was done allocating. Next up, Banks gunned the stop-loss orders below left  by their clients. Tudor? He was long gone by then.

Short Silver becomes a crowded trade

At some point the pendulum had swung too far the other way. Miners were hedging production not yet mined to stay in business. They relied on the ability to borrow above ground Silver in HSBC, Republic etc vaults to make delivery if they had to. Funds did not take delivery, instead always rolling to the next month and getting killed on the contango. During this time I took delivery a few times  to see if the contango would snap. It usually didn't until after my FCM forced me to retender. It did start to work later on. But the Silver prophets were George Soros, and Warren Buffet.

Why Did Soros and Buffet Play Silver and not Gold?

1. Central Banks did not own Silver
2. In 1994, it was widely held that Soros started his accumulation in Gold and was told "stop" by the Fed- so he turned to Silver with PhiBro
3. Warren Buffet after rescuing PhiBro and its parent company in 1994 makes his own play on Silver. Based from what we saw on Silver miners sloppy cash flow mgt. The Gov't requested he not take delivery. He obliged, lending the miners who did not have Silver to deliver back to them at a 40% cost for a year based on the bacwardation.

Today: Buy Silver if you are Bullish Gold

Because Gold will be:

1. Confiscated where it can be.-When China Confiscates Gold- Get Silver like JPM
2. Taxed where possible.- LATAM countries 
3. So called Physical ETFs flaking on requests for bullion as in the Xetra-Gold fund case.– do you want a free toaster instead?
4. Prohibited from being stored in JPM safety deposit boxes- a CYA in case a Gold count is taken?
   • as of April 2015, JPMorgan Chase sent a letter to all renters of safe deposit boxes, specifying a new agreement that they must sign if they wish to continue to rent a safe deposit box. It includes this key phrase:“Contents of the box: You agree not to store any cash or coins other than those found to have a collectible value.”
5. Silver will not be Confiscated
   • And the major longs in Silver will do what they can to keep a stable ratio between the 2 metals so that if Gold ever becomes Gov't domain only, and a ratio is fixed for Silver at that time, (or not), the data will back it up.

Why not Platinum?

By all means, PGM's fit the bill. But they are very soft and actually lose mass overtime just by being handled. Hence they aren't used in coins.What's the exit strategy?

Related Articles

• A Former NYMEX Trader Explains "The Mechanics Of Silver Manipulation- ZH
• What does JPMorgan need Physical Silver For?- MS
• "Abolish Cash"- KC Fed paper-MS

vlanci@echobay.com

Twitter: @vlancipictures

 

 

 

via http://ift.tt/2l4ts72 Vince Lanci

The NYU College Republicans likely had no idea what they were setting themselves up for when they invited Vice Media co-founder Gavin McInnes to speak on their campus.  Two years ago such an event almost certainly would have gone completely unnoticed but for the the couple of hundred students in attendance.  But in today’s post-Trumpian world, every appearance of a conservative personality is taken by intolerant Leftists as just another opportunity to destroy public/private property, incite violence and shout catchy slogans incorporating the word “Nazi.”

According to Reuters, McInnes’ speech was cut short when protesters rushed into the room where he was speaking and began interrupting him.  The protesters subsequently scuffled with police officers and McInnes supporters outside the university’s student center in New York City, where he was invited to speak by NYU College Republicans.  Here is some footage of the violence:

Soros sponsored #ANTIFA #1A Riots. Last nite #MiloAtCal tonight @Gavin_McInnes #NYU. Oh there’s a #BodegaStrike too.http://pic.twitter.com/1Vi4hpCig1

— ?ia?ExtremeVetting? (@nia4_trump) February 3, 2017

 

And here is a very entertaining leftist, who claims to be “professor”, having a nervous breakdown on camera while yelling at the cops.  Ironically, she insists that cops assault conservative protesters while suggesting they should also protect students from hate.

“You should be ashamed of yourselves.  You should be standing up to those Nazis.  You should be protecting these students from hate.  This is hate!”

 

“Fuck you.  Fuck you.  Fuck you.  These are kids who are trying to learn about humanity.  They’re trying to learn about human rights and racism and Xenophobia and LBGTQ rights and you’re letting these fucking Neo-Nazis near here.  You should kick their ass.”

Please become a meme. This “professor” went off on NYPD for arresting Antifa members who assaulted Gavin McInnes. http://pic.twitter.com/xvklL1ITXK

— Ian Miles Cheong (@stillgray) February 3, 2017

 

McInnes responded to the violence via Twitter saying that he was “sprayed with pepper spray but being called a Nazi burned way more.”

Thanks for asking if I’m OK guys. I was sprayed with pepper spray but being called a Nazi burned way more. ????

— Gavin McInnes (@Gavin_McInnes) February 3, 2017

 

Meanwhile, NYU’s College Republicans responded to the violence on Facebook:

“Our intention was not to advocate for McInnes’s views, in fact many of us differ with him when it comes to certain ideas.  The purpose of this event was to promote free speech and not to promote certain ideas.”

And Trump seemed to chime in on this latest outburst of the intolerant left saying that “Professional anarchists, thugs and paid protesters are proving the point of the millions of people who voted to MAKE AMERICA GREAT AGAIN!”

Professional anarchists, thugs and paid protesters are proving the point of the millions of people who voted to MAKE AMERICA GREAT AGAIN!

— Donald J. Trump (@realDonaldTrump) February 3, 2017

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Donald Trump’s first official economic report has started off on the right foot, with the BLS reporting that some 227K jobs were added in January, far above the 175K expected, and in line with the ADP number.

The change in total nonfarm payroll employment for November was revised down from +204,000 to +164,000, and the change for December was revised up from +156,000 to +157,000. With these   revisions, employment gains in November and December combined were 39,000 lower than previously reported.

Offsetting the headline surge in jobs was a disappointment in the average hourly earnings which rose a tepid 0.1% , below the 0.3% expected, and below the downward revised December 0.2% (from 0.4%) despite January being the month in which minimum wage hikes took place across 19 states.

On the year, average hourly earnings rose by 2.5%, the weakest annual growth since August. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.84.

While the amoung of average weekly hours for all employees remained flat at 34.4, the average weekly earnings dipped to 1.9%, the lowest print in the past year.

Judging by the market reaction, which has seen the dollar drop as stocks and bonds rose, this is a mildly dovish report and is likely to sow more doubts about the Fed’s plane to hike rates three times in 2017.

Also of note, the unemployment rate ticked up from 4.7% to 4.8% even as the number of employed workers according to the Household survey declined modestly.

More details from the report:

• Total nonfarm payroll employment rose by 227,000 in January. Employment increased in retail trade, construction, and financial activities.
• Retail trade employment increased by 46,000 over the month and by 229,000 over the year. Three industries added jobs in January–clothing and clothing accessories stores (+18,000), electronics and appliance stores (+8,000), and furniture and home furnishings stores (+6,000).

  Employment in construction rose by 36,000 in January, following little change in December. Residential building added 9,000 jobs over the month, and employment continued to trend up among residential specialty trade contractors (+11,000). Over the past 12 months, construction has added 170,000 jobs.

• Financial activities added 32,000 jobs in January, with gains in real estate (+10,000), insurance carriers and related activities (+9,000), and credit intermediation and related activities (+9,000). Financial activities added an average of 15,000 jobs per month in 2016.
• In January, employment in professional and technical services rose by 23,000, about in line with the average monthly gain in 2016. Over the month, job gains occurred in computer systems design and related services (+13,000).
• Employment in food services and drinking places continued to trend up in January (+30,000). This industry added 286,000 jobs over the past 12 months.
• Employment in health care also continued to trend up in January (+18,000), following a gain of 41,000 in December. The industry has added 374,000 jobs over the past 12 months.
• Employment in other major industries, including mining and logging, manufacturing, wholesale trade, transportation and warehousing, information, and government, showed little change over the month.
• The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in January. In manufacturing, the workweek edged up by 0.1 hour to 40.8 hours, while overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.6 hours for the sixth consecutive month.
• In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $26.00, following a 6-cent increase in December. Over the year, average hourly earnings have risen by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.84.

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• Gold hits 12-week high
• USD Gold price up 4.85% in last month
• Sabre-rattling from Trump administration set-to benefit gold
• Iran upset and Middle East tensions could drive oil and gold prices up.
• Financial Times foresees “not only currency wars but a fully fledged trade confrontation that could be disastrous for the world economy.”
• Royal Mint producing 50 % more gold bullion coins and bars compared to 2016
• Utah moves to hold public funds in gold
• WGC report demand for gold hit four-year high in 2016
• Investment demand climbed by 70% last year fuelled by geopolitical uncertainties 

The Trump administration continues to sabre-rattle at global powers and threatens to disrupt the status-quo of international relations. Comments in just 24-hours by Donald Trump and his team have included attacking an Ivy League university, a nuclear power and two of the United States’ key trading partners.

We continue to look on as the unconventional tweets and announcement appear, but in the meantime watch the gold price hit 12-week highs and inflows of roughly 1.2 million ounces surge into gold ETFs, as uncertainty continues to drive investors towards safe havens.

FOMC stand-by to watch the Donald

Many market observers may have found a funny sort of comfort in seeing the statement of the FOMC meeting, this week. A funny thing to say, but given each day appears to bring a new surprise there is something reassuring that meetings and announcements from the likes of the Federal Reserve, continue as scheduled.

Unsurprisingly, and despite Janet Yellen’s warnings of a ‘nasty surprise on inflation if it was too slow with rate hikes’, the Federal Reserve held back from a further rate rise this week. The committee painted a fairly positive outlook of the economy, it was perceived to be dovish. The statement helped to ultimately push gold prices higher as the dollar fell in disappointment to no rate hike. For some this was an example of ‘The Fed that cried Wolf.’

The Fed is still expected to hike rates up at points throughout the year, but uncertainty about when and how much remains. The FOMC are waiting for further disclosure President Trump’s economic policy.

Gold was the only commodity that climbed higher (+0.9%) following the Fed announcement.

Iran on notice: be on notice to buy gold

Earlier this week Iran tested a ballistic missile and attacked a Saudi navy vessel. The Trump did not disappoint in letting the world that they were unhappy, through both Twitter and Mike Flynn.

Mike Flynn, Trump’s national security advisor stated, ““Recent Iranian actions involving a provocative ballistic missile launch and an attack against a Saudi naval vessel conducted by Iran-supported Houthi militants underscore what should have been clear to the international community all along about Iran’s destabilizing behaviour across the entire Middle East”

Flynn concluded, “As of today, we are officially putting Iran on notice.” This was followed by a Tweet confirming this position, by Trump.

Fordham University maritime law professor and former US Navy Commander Lawrence Brennan spoke to Business Insider on Monday.

“This attack is likely to impact US naval operations and rules of engagement (ROE) in nearby waters,” said Brennan, who pointed out that Iranian ships frequently harass and sail very closely to US Navy ships.

Brennan suggested that in light of the recent suicide boat attacks, the US Navy should now consider shooting Iranian or hostile vessels that get too close.

Given that Trump has so far proven his intention to follow through on campaign promises, we expect him to do the same with Iran. Whilst campaigning in Florida, in September, he told a rally of thousands that when it comes to Iran, “when they circle our beautiful destroyers with their little boats, and they make gestures at our people that they shouldn’t be allowed to make, they will be shot out of the water.”

The remarks from Trump and Flynn took immediate effect on the US dollar (already weakened by the FOMC’s statement) and sent gold higher (as shown in this Business Insider chart).

Iran weighed in on the matter with defence minster Hossein Dehghan telling Iranian state media that contrary to the claims of the US,  “The test was not a violation of a nuclear deal with world powers or any UN resolution,”

Later Ali Akbar Velayati, senior adviser to Iran’s supreme leader Ali Khamenei, told the Fars news agency, “”This is not the first time that an inexperienced person has threatened Iran … the American government will understand that threatening Iran is useless.”

Iran to dump the dollar but stocking up on gold

Of course, this wasn’t the first time President Trump has rattled the Iranians since he took office. When he declared a travel ban on seven countries, including Iran, the country’s central bank decided to respond.

Iranian Central Bank Governor, Valiollah Seif, told sate Press TV that the bank “is seeking to replace the dollar with a new common foreign currency or use a basket of currencies in all official financial and foreign exchange reports.” This will come into force on 21st March 2017. Seif has apparently recommended currencies “ with a high degree of stability.”

The country reportedly receives around USD$41billion in oil revenues, a risk on both sides of the equation.

It is also worth noting that Iran bucked the trend for gold demand in the last quarter of 2016. The WGC reports that a growth of 15% in Q4 helped push annual demand up to 41.0t. This push for gold was supported by the improving domestic economy and is set to continue to climb as the central bank releases new coins later this year.

Good for oil, good for gold

 

Low oil prices across the Middle East affected gold demand, according to the World Gold Council’s 2016 Q4 report, however with Trump’s ongoing fighting-talk (and executive orders to the Middle East) we expect the correlation between oil and gold prices to work in our favour.

Whilst the jury is still out on the correlation between gold and oil returns, there is some clearer correlation between their prices. It is estimated that over 60% of the time, there is a strong correlation between the two. The above chart compares the month-end LBMA fix gold price with the monthly closing price for West Texas Intermediate (WTI) crude oil since 1946.

With all the fighting talk with Iran, oil has had a bit of a pop up (also helped by Exxon’s (XOM) Rex Tillerson being sworn in as Secretary of State). As tensions increase in the Middle East and Trump carries on protecting America’s trade, we expect to see higher oil and therefore gold prices.

As oil prices rise, this pushes up inflation. Gold is an inflation hedge and therefore an increase in demand for the yellow metal, as a safe haven, will increase. It is also worth remembering the damage high oil prices can do on economic growth – by slowing it. Slow economic growth is likely to impact equity markets and boost demand for alternative investments such as gold and silver.

Currency wars set to come out into the open

It is not just the price of oil which signals a positive picture for gold in both the long and short-term. Currency wars, as most recently discussed by us a week ago are now an open threat to the stability of the global financial and trade system.

Trump suggesting that the US dollar was too strong and enticing China into a currency war now seems like a distant memory. It was in fact the start of a trend of the new administration to take on currencies.

Peter Navarro, head of the National Trade Council, had accused Germany of exploiting a ‘grossly undervalued Euro’. This came just days after Shinzo Abe had accused Trump of attacking both China and Japan and for “play[ing] the devaluation market” and was forced deny reports of yen manipulation.

Following Navarro’s Euro comments Ulrich Leuchtmann, an analyst with Germany’s Commerzbank, warned clients to “buckle up for a currency war that might become nasty…With his statement [Mr Navarro] has in fact fired the next salvo in the currency war the US administration is currently conducting against the rest of the world,”

These latest moves by both the President and Navarro signal further steps away from the usual protocol of government leaders who do not openly comment on the currencies of other countries. A job which is usually handled by the Treasury Secretary.

It will be interesting to see what Trump and Navarro think they can do about the strong dollar and other currencies. It is not so easy to devalue, as it once might have been. Moves to weaken the dollar are likely to occur through protectionist measures which will ultimately see price inflation exported around the world as the dollar is used in the majority of trade. This will not be taken well across the globe. The Financial Times echoes such concerns:

“But the chaotic start to the administration and what many see as its protectionist agenda have amplified fears of not only currency wars but a fully fledged trade confrontation that could be disastrous for the world economy.”

Hype overshadows the real news

Despite the announcement from the Yellen and her team, the ongoing sabre-rattling from the Trump administration distracts from economic reports that once influenced markets. For example, today the January employment report will be released, economists are expecting gains of 170,000 which could raise expectations of a rate-hike in March. However, markets appear distracted by activities in the Trump administration and a certain twitter account.

Should the jobs report be positive news then we may see a small-pullback in the gold price, however it is unlikely that investors wish to be short-gold given the world-wide geopolitical environment of uncertainty.

But it is not just Trump that is prompting upset and discomfort, as highlighted by the recent WGC report, gold demand was high in 2016 (and continues to be in 2017) because of ongoing uncertainty with Brexit, elections in France, Germany and Holland.

This has been reflected in an insightful report into government owned Royal Mint shows the explosion in demand for gold across both the UK and Europe. Reuters reports that demand has climbed by 50% since the same point last year and sales rose by one-third in January.

Demand in the UK is reportedly up 25%, whilst sales to German more than doubled in volume terms, in the last year. Workers at the Mint point to uncertainties surrounding Brexit, the EU and the United States as reasons for the dramatic pick-up in demand.

Far away from the White House and the communications machine that is Twitter, in Utah Rep. Ken Ivory introduced a bill that will add several provisions to state law that will allow (and arguably encourage) the use of gold and silver as legal tender.

House Bill 224 will give the state the option to hold public funds in gold and silver, as opposed to Federal Reserve notes. Utah has long been at the forefront in the move to sound money, in 2011 it was the first state in 80 years that allowed the precious metals to be used as legal tender. This latest bill is seen as the next step in allowing gold and silver to be used in everyday transactions.

 

2017 set to shine like 2016

Whilst Q4 saw outflows, 2016 was the second best year for ETFs on record according to the WGC’s latest report. Global demand for gold-backed ETFs was 531.9t – the highest since 2009.

The World Gold Council points to three main factors driving the surge in gold demand in 2016: negative interest rates, the FOMC’s decisions and uncertainty stemming from the geopolitical situation.’

Demand for ETFs continues to be strong, just one month into the year. A report released on January 20th, Inauguration Day, by Bank of America Merrill Lynch said that precious metals saw the first ETF inflows of $1.3 billion, the largest weekly gain in five months.

According to Bloomberg, almost $1.6 billion poured into the 10 precious-metals ETFs that have attracted the most money in January. In Europe, in the week of Trump’s inaugurations, Germany’s Xetra-Gold ETF added $544 million in gold-backed ETF inflows. That amount is ten times that in the world’s biggest gold-backed ETF, SPDR Gold Shares (GLD).

Uncertainty remains, as does the need to buy gold

As we discussed yesterday, there is much uncertainty in the markets at present. The inauguration of Donald Trump just two weeks ago has, if anything, increased this feeling rather than reassure markets. However this sabre-rattling is distracting and markets do not know where to turn.

Supply and demand ultimately affect prices, but it is expectations and sentiment that make markets move. Despite Trump doing exactly what he promised, he continues to shock in the way he is delivering on those promises and this is confusing the sentiment in the market. Putting aside the events in the first week of his Presidency, this week in just 24 hours President Trump managed to threaten an Ivy League institution with a stop their federal funding, put a nuclear power ‘on notice’ and insult Australia over immigrants.

What is not confusing, as we see in the levels of gold demand, is market expectations. The market is expecting a period of uncertainty, it is expecting a period of raised tensions between the United States and the growing list of countries it has publicly taken issue with and it is expecting people to turn to safe havens such as gold and silver.

Yesterday we wrote about how big declarations and fear-mongering can distract us from what is really going on and, therefore, distract us from making the right decisions. It is clear that there is growing number of investors, around the world, who are not being distracted by the noise and the hype and are choosing to invest in safe havens such as gold and silver.

It would be wise to expect heightened uncertainty in the forthcoming months, if not longer. There is little point in looking to market sentiment at a time when a 140-character tweet can flip it upside down. Instead, investors should look to hold some of their wealth in gold and silver, assets that have long-held their value at times of unpredictability and turmoil whether through war, economic crises or political upheaval – all of which appear to be on the cards.

Gold and Silver Bullion – News and Commentary

Dollar, Stocks Fluctuate Before Jobs: Markets Wrap (Bloomberg)

JPM Silver Rigging Case Back in Court (Zerohedge)

Gold marks highest finish since mid-November (MarketWatch)

Investors Are Pouring Into Gold (Bloomberg)

Gold slips on profit-taking, firm dollar (Reuters)

The weak dollar policy is back with a vengeance (MoneyWeek.com)

China Suffers Largest Capital Outflow On Record In 2016 (Zerohedge.com)

The best precious metal to buy right now (MoneyWeek.com)

Trump devaluation claims raise fears of global currency war (FT.com)

Who Will Trump Blast Next Over Their Currencies? (Bloomberg)

Gold Prices (LBMA AM)

03 Feb: USD 1,214.05, GBP 970.93 & EUR 1,128.99 per ounce
02 Feb: USD 1,224.05, GBP 966.14 & EUR 1,131.88 per ounce
01 Feb: USD 1,210.00, GBP 960.01 & EUR 1,122.03 per ounce
31 Jan: USD 1,198.80, GBP 964.91 & EUR 1,119.20 per ounce
30 Jan: USD 1,189.85, GBP 949.38 & EUR 1,112.63 per ounce
27 Jan: USD 1,184.20, GBP 943.81 & EUR 1,108.77 per ounce
26 Jan: USD 1,191.55, GBP 945.14 & EUR 1,111.95 per ounce
25 Jan: USD 1,203.50, GBP 956.90 & EUR 1,119.62 per ounce

Silver Prices (LBMA)

03 Feb: USD 17.28, GBP 13.84 & EUR 16.10 per ounce
02 Feb: USD 17.71, GBP 13.95 & EUR 16.38 per ounce
01 Feb: USD 17.60, GBP 13.91 & EUR 16.29 per ounce
31 Jan: USD 17.29, GBP 13.86 & EUR 16.07 per ounce
30 Jan: USD 17.10, GBP 13.65 & EUR 16.03 per ounce
27 Jan: USD 16.70, GBP 13.32 & EUR 15.61 per ounce
26 Jan: USD 16.86, GBP 13.39 & EUR 15.71 per ounce
25 Jan: USD 16.93, GBP 13.46 & EUR 15.74 per ounce

Recent Market Updates

– Buy Gold Because of Uncertainty not Doomsday
– The Alternative Fact of the Cashless Society
– Silver, Platinum and Palladium As Safe Havens – Reassessing Their Role
– Why 2017 Could See the Collapse of the Euro
– Dow 20K … US Debt $20 Trillion … Trump and $15,000 Gold
– Switzerland’s Gold Exports To China Surge To 158 Tons In December
– Blockchain – Central Banks Banking On It
– Sharia Standard May See Gold Surge
– Gold Price To 2 Month High As Fiery Trump Declares New American Order
– Gold’s Gains 15% In Inauguration Years Since 1974
– Turkey, ‘Axis of Gold’ and the End of US Dollar Hegemony
– Gold Up 5.5% YTD – Hard Brexit Cometh and Weaker Dollar Under Trump
– Bitcoin and Gold – Outlook and Safe Haven?
– Physical Gold Will ‘Trump’ Paper Gold

www.GoldCore.com

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Having seemingly survived their existential crisis last year, it appears the world’s most systemically dangerous bank remains under pressure. Just a day after missing analysts’ earnings expectations, Deutsche Bank is set to announce major job cuts across its trading businesses.

 

As Bloomberg reports, the bank will cut as much as 17 percent of staff in its equities unit and reduce fixed-income headcount by as much as 6 percent, with notices to be served to employees soon, the person said.

Chief Executive Officer John Cryan is cutting 9,000 jobs across the company to raise profitability and capital levels eroded by misconduct costs. Deutsche Bank’s market share in fourth-quarter trading fell to the lowest since the financial crisis as Cryan cut assets and clients concerned about the company’s finances pulled back.

 

Debt-trading revenue rose 11 percent to 1.38 billion euros ($1.48 billion), falling short of the 1.68 billion-euro average estimate of 10 analysts in a Bloomberg News survey. Equity trading revenue, which analysts had expected to be flat, fell 23 percent to 428 million euros.

 

The equities business is still “flattish to slightly down” in January compared with a year earlier, though the firm’s debt-trading business saw a 40 percent increase in the month, Deutsche Bank Chief Financial OfficerMarcus Schenck said Thursday on a call with analysts.

Following chatter of more client redemptions during the call, the share price has begun to flag once again – but for now CDS remains well off its 2016 wides.

via http://ift.tt/2kp8IYA Tyler Durden

Having received his doctorate from UC Berkeley in 1978, Dr. Michael Savage offered a unique perspective today on the trajectory the famed college has taken over the subsequent decades since.

Wistfully, he compared the present day cadre of left wing anarchists, known to us as AntiFA, to communist anarchists in Germany, circa 1920s. The response to the agitators then paved the way for Hitler’s brown shirts. The rest, as you know, is history.

But, have we learned from history, posited an inquisitive Savage? For every action is a counter-reaction and so forth. Hence, law and order is the only tonic to quell the present day disorder, fomented and encouraged by democratic politicians, carefully cultivated and organized by left wing groups for the explicit purposes of strong arming those who do not fit into the zeitgeist of their political ideals.

“This was the start of the free speech movement back in the 1960s. Now we complete the arc, from free speech to dead speech.’

Dr. M. Savage, Feb. 2nd, 2017

‘Tis a slippery slope. Behold a momentous monolog by the good Dr.

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Submitted by Martin Armstrong via ArmstrongEconomics.com,

A shocking statement was made by a United Nations official Christiana Figueres at a news conference in Brussels.

Figueres admitted that the Global Warming conspiracy set by the U.N.’s Framework Convention on Climate Change, of which she is the executive secretary, has a goal not of environmental activists is not to save the world from ecological calamity, but to destroy capitalism. She said very casually:

“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution.”

She even restated that goal ensuring it was not a mistake:

“This is probably the most difficult task we have ever given ourselves, which is to intentionally transform the economic development model for the first time in human history.”

I was invited to a major political dinner in Washington with the former Chairman of Temple University since I advised the University with respect to its portfolio. We were seated at one of those round tables with ten people. Because we were invited from a university, they placed us with the heads of the various environmental groups. They assumed they were in friendly company and began speaking freely. Dick Fox, my friend, began to lead them on to get the truth behind their movement. Lo and behold, they too admitted it was not about the environment, but to reduce population growth. Dick then asked them, “Whose grandchild are we trying to prevent from being born? Your’s or mine?

All of these movements seem to have a hidden agenda that the press helps to misrepresent all the time. One must wonder, at what point will the press realize they are destroying their own future?

Investors.com reminds Figueres that the only economic model in the last 150 years that has ever worked at all is capitalism. The evidence is prima facie: From a feudal order that lasted a thousand years, produced zero growth and kept workdays long and lifespans short, the countries that have embraced free-market capitalism have enjoyed a system in which output has increased 70-fold, work days have been halved and lifespans doubled.

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According to Trepp, one of the world’s leading providers of global research and analysis for the securities and investment management industry, the delinquency rate for Commercial Mortgage-Backed Securities (CMBS) hit a 14-month high-water mark in December 2016. At 5.23%, the rate of CMBS delinquencies was 20 basis points higher than a month earlier (November 2016).

So what does this mean in terms of what industry watchers might expect in the next year
and beyond? Is this a prelude to the CMBS ghosts of 2007 making a revival?

Since the 2007 crisis, some borrowers have seen respite to their dire situations. With their property values on the rise, and their own financial situations set to improve gradually, they are in a much better position today to re-finance upcoming loans.

According to Trepp, over $54.5B of CMBS conduit loans matured in 2015. By 2018, the researcher forecasts nearly $205.2 of such loans to become due. $87.1 billion of that came due in 2016, while over $105.8 billion is set to mature this year – 2017. When we compare these amounts to what matured in 2014 ($37B) and 2015 ($70B), we can see there is a definite uptrend in delinquencies.That uptrend is forecast to dip in 2018, with $12.8 billion up for re-negotiation that year.

While the fortunate few have managed to make a comeback, for many others things don’t look too good! Barely able to keep up with their payments; and with scant equity created in the property they own, these unfortunates aren’t seeing their property values appreciate either.

For them, as for the general CMBS market, there’s more doom to come!

THE SQUEEZE IS ON

For CMBS loan borrowers who are up for re-financing, things could get even tougher. With the massive volume of debt that’s coming due, and the spectre of 2007 still looming large, many lenders are taking a fresh look at their own lending practices. The ensuing soul-searching is causing lenders to more closely review their regulatory compliance, with many of them now requiring borrowers to meet a higher underwriting standard – that of current income as opposed to projected income.

As a result, some lenders have been forced to close shop and exit the CMBS marketplace, with others preparing to brace a fresh onslaught of defaulters and delinquencies.

BIG NAMES…BIG PAINS

Big names like CA Technologies (formerly Computer Associates) are not immune to the CMBS turmoil’s either. In August 2016, Fitch Rating had tagged CA’s commercial loan for purchase of its former HQ as “high probability” of defaulting. While CA finally did agree to a sale-leaseback arrangement, the loan (which was part of a $4.2 collateral for Goldman Sachs Mortgage Securities), highlights the murky waters of the CMBS business.

Wealth manager UBS was yet another ‘big name’ that has been swept by the tidal wave of bad CMBS loans. Early last year, its $156 million mortgage against its downtown Stamford premises, which it had securitized in association with Lehman Brothers, was put into the hands of a “special servicer” who deals with problem loans.

While these are just a few examples of ‘name brand’ borrowers defaulting on their mortgage commitments, it sets the tone of what we are to expect in 2017 and beyond. According to a report from Kroll Bond Rating Agency, “lending volumes for both insured depositories and non-bank lenders are likely to fall in 2017 and beyond…” The report expects a sharp decline in refinancing volume – from $263B in Q4 2016 to
just under $145B in Q1 of 2017.

And if businesses, homeowners and corporations can’t refinance – then what?

BRACING FOR THE FALL

Industry watchers are concerned about the massive tide of maturities that loom from now till 2018. While the 2018 wave is expected to be less “messy” – largely due to improving real estate values in certain areas, the CMBS market as a whole faces other headwinds.

Though employment rates are improving gradually, large segments of mortgage holders aren’t benefiting from the green shoots in the economy. Add to that the increasing demand by many lenders for lower loan-to-value (LTV ratio) requirements, and toss in potential (impending) interest rate hikes – and we are looking at a recipe for disaster.

Borrowers, whose loans are set to mature shortly, shouldn’t automatically expect that they will get renewed. Lenders, who have such loans on their books, should worry about what course of action to follow if/when their clients default.

In either case, it does seem as though the ghost of the sub-prime past is once again rearing its ugly head. Let’s hope this time everyone involved – lenders, accountants, real estate lawyers, borrowers, regulators – are well prepared and already bracing for the fall!

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