Tag: finance

The minutes of the December FOMC meeting will be released at 2 PM ET on Wednesday, January 8. As BofAML notes, the minutes give a platform to those outside the voting majority on the FOMC to express their disagreements with the current policy stance. Typically, that has meant that the minutes sound more hawkish than the FOMC statement or speeches by the voters. Also remember that much of the discussion in the minutes is based on old news: the US economy has shown mostly stronger data since the December 18th FOMC decision to taper by $10 bn as of January 1.

Via BofAML,

On the economy, look for a modestly more optimistic outlook in the minutes, with balanced risks on growth and employment and at most slightly more concern about too-low inflation. We expect active discussion over the extent of cyclical vs structural factors in the labor market — the more time spent on structural concerns, the more hawkish the minutes will sound. A minority of Fed officials may emphasize the risks from persistently low inflation, but we expect the majority to cling to the belief that inflation should soon start to move up toward the Fed’s long-run 2% target.

On policy, the discussion around the pace of tapering is likely to be relatively vague with lots of “data dependence” caveats, but most of the FOMC should indicate support of a $10 bn per meeting reduction in the purchase pace — provided their forecasts are realized. Some significant minority is likely to call for scaling back QE3 at a quicker pace. This may appear in the discussion of the Summary of Economic Projections (SEP).

Also on policy, look for broad support for strengthening Fed communications and forward guidance in particular, but still a lack of agreement on specific approaches. We expect the FOMC to inch toward more qualitative than quantitative guidance. An IOER cut is likely to remain on the table (but not imminent), and additional discussion of the reverse repo facility is likely. These more dovish elements could well be overshadowed by the taper discussion.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KQIdC0AH06o/story01.htm Tyler Durden

With 10Y Treasury yields pressing up agaist 3.00% once again (and equities shrugging off the taper-confirming news from ADP), precious metals are under pressure. Despite a few positive days, the last two have seen silver give back all 2014 gains and push back into the red for the year. Gold remains modestly green (still outperforming stocks for now).

Chart: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/68eU0yNW24c/story01.htm Tyler Durden

The war of words (and deeds) is once again escalating between China and Japan. As we detailed last night, this has been a long time coming and as Reuters reports today took a further turn for the worse. In an op-ed in Britain’s Daily Telegraph, the Chinese ambassador to Britain, Liu Xiaoming, wrote last week: “If militarism is like the haunting Voldemort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul.” Liu’s commentary was followed by another published on Sunday by his Japanese counterpart, Keiichi Hayashi, in the same newspaper, headlined: “China risks becoming Asia’s Voldemort“. As was noted, “Five thousand years of traditional virtues have been turned into this?”

Via Reuters,

China lambasted Japan on Tuesday for comparing it to Lord Voldemort, the villain in the Harry Potter stories, after both countries used the character to describe each other in a tit-for-tat diplomatic spat.

 

Japanese Prime Minister Shinzo Abe’s December 26 visit to Tokyo’s Yasukuni Shrine, where Japanese leaders convicted as war criminals are enshrined along with other war dead, infuriated China and South Korea and prompted concern from the United States, a key ally.

 

Both China and Korea suffered under brutal Japanese rule, with parts of China occupied in the 1930s and Korea colonized from 1910 to 1945.

 

In an op-ed in Britain’s Daily Telegraph, the Chinese ambassador to Britain, Liu Xiaoming, wrote last week: “If militarism is like the haunting Voldemort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul.”

 

…

 

Liu’s commentary was followed by another published on Sunday by his Japanese counterpart, Keiichi Hayashi, in the same newspaper, headlined: “China risks becoming Asia’s Voldemort”.

 

…

 

“I would like to point out that, to Asia and countries in other regions of the world, militaristic invasion is the darkest devil in the history of Japan,” Hua said at a daily news briefing, according to a transcript posted on the foreign ministry’s website.

 

the People’s Daily, said the “Sino-Japanese war of public opinion is facing an escalation on all fronts“.

 

“We need to make our demands simple and clear, that is, the Japanese prime minister cannot visit the war criminals in Yasukuni because it is equivalent to paying homage to criminals like Hitler and Goebbels,” the newspaper said, referring to the leaders of Nazi Germany.

 

…

 

“Five thousand years of traditional virtues have been turned into this?” wrote another microblogger.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CaeeBuwlzLo/story01.htm Tyler Durden

The war of words (and deeds) is once again escalating between China and Japan. As we detailed last night, this has been a long time coming and as Reuters reports today took a further turn for the worse. In an op-ed in Britain’s Daily Telegraph, the Chinese ambassador to Britain, Liu Xiaoming, wrote last week: “If militarism is like the haunting Voldemort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul.” Liu’s commentary was followed by another published on Sunday by his Japanese counterpart, Keiichi Hayashi, in the same newspaper, headlined: “China risks becoming Asia’s Voldemort“. As was noted, “Five thousand years of traditional virtues have been turned into this?”

Via Reuters,

China lambasted Japan on Tuesday for comparing it to Lord Voldemort, the villain in the Harry Potter stories, after both countries used the character to describe each other in a tit-for-tat diplomatic spat.

 

Japanese Prime Minister Shinzo Abe’s December 26 visit to Tokyo’s Yasukuni Shrine, where Japanese leaders convicted as war criminals are enshrined along with other war dead, infuriated China and South Korea and prompted concern from the United States, a key ally.

 

Both China and Korea suffered under brutal Japanese rule, with parts of China occupied in the 1930s and Korea colonized from 1910 to 1945.

 

In an op-ed in Britain’s Daily Telegraph, the Chinese ambassador to Britain, Liu Xiaoming, wrote last week: “If militarism is like the haunting Voldemort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul.”

 

…

 

Liu’s commentary was followed by another published on Sunday by his Japanese counterpart, Keiichi Hayashi, in the same newspaper, headlined: “China risks becoming Asia’s Voldemort”.

 

…

 

“I would like to point out that, to Asia and countries in other regions of the world, militaristic invasion is the darkest devil in the history of Japan,” Hua said at a daily news briefing, according to a transcript posted on the foreign ministry’s website.

 

the People’s Daily, said the “Sino-Japanese war of public opinion is facing an escalation on all fronts“.

 

“We need to make our demands simple and clear, that is, the Japanese prime minister cannot visit the war criminals in Yasukuni because it is equivalent to paying homage to criminals like Hitler and Goebbels,” the newspaper said, referring to the leaders of Nazi Germany.

 

…

 

“Five thousand years of traditional virtues have been turned into this?” wrote another microblogger.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CaeeBuwlzLo/story01.htm Tyler Durden

Equity markets appear wholly dissatisfied with this morning’s ‘good’ news and are unsure whether this taper-on data is confidence-inspiring or liquidty-sapping. The ADP print appears to confirm a hgher probability of another $10 billion taper. Bond yields jumped higher, the USD jumped higher, gold dropped, and stocks are limping to the day’s lows…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6O4OHBRMdQM/story01.htm Tyler Durden

Equity markets appear wholly dissatisfied with this morning’s ‘good’ news and are unsure whether this taper-on data is confidence-inspiring or liquidty-sapping. The ADP print appears to confirm a hgher probability of another $10 billion taper. Bond yields jumped higher, the USD jumped higher, gold dropped, and stocks are limping to the day’s lows…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6O4OHBRMdQM/story01.htm Tyler Durden

Unless ADP is forced to revise its December print following the BLS report on Friday (which in keeping with the baffle with BS tradition should be a major disappointment), the Fed will have no choice but to taper by another $10 billion at the next opportunity, because moments ago ADP, which for all intents and purposes is merely noise until it has revised its data to comply with Nonfarm Payroll reports, announced that in December, some 238K jobs were added in the US, well above the 2300K expected, and the highest monthly print since November 2012.

The ful breakdown by company size, sector and industry:

The primary driver for the above expectation surge were construction jobs, which added 48K in December, also the highest monthly print in over a year, while manufacturing jobs rose less than previously, adding 19K jobs in December. As ADP reports, over the course of 2013, goods-producers added 286,000 jobs. Nearly 75 percent of these gains came from construction as the housing recovery accelerated throughout 2013.

Service-providing industries added 170,000 jobs in December, down slightly from an upwardly revised November figure of 182,000. The ADP National Employment Report indicates that professional/ business services contributed the most to growth in service-providing industries, adding 53,000 jobs. This was the largest gain in the industry in a year. Expansion in trade/transportation/utilities slowed slightly, adding 47,000 jobs in December. Private payrolls increased by nearly 1.9 million jobs in the service-providing industries in 2013. The bulk of this increase was split evenly between transportation/trade/utilities and professional/business services. Finance brought up the rear gaining just 59,000 in the last twelve months

Some soundbites:

“The U.S. private sector added 238,000 jobs in December, surpassing November as the strongest month for job growth in 2013,” said Carlos Rodriguez, president and chief executive officer of ADP. “It’s encouraging news that hopefully bodes well for 2014.”

 

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market ended 2013 on a high note. Job growth meaningfully accelerated and is now over 200,000 per month. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.”

Some other pretty charts from the social-network friendly ADP:

Historical Trend – Change in Total Nonfarm Private Employment (in thousands)

Total Nonfarm Private Employment by Company Size (in thousands)

Finally, the best part about every monthly ADP report: the prepapred infographic – especially for Economist PhDs.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kLr_gdafzeA/story01.htm Tyler Durden

Today’s AM fix was USD 1,226.50, EUR 902.50 and GBP 747.37 per ounce.
Yesterday’s AM fix was USD 1,237.50, EUR 907.92 and GBP 754.44 per ounce.

Gold fell $6.50 or 0.52% Yesterday, closing at $1,232.30/oz. Silver slipped $0.30 or 1.49% closing at $19.87/oz. Platinum dropped $3.01, or 0.2%, to $1,409.74/oz and palladium rose $3 or 0.4%, to $738.25/oz.

Gold Silver Ratio – 1960-Today

Gold edged down in London for the second day ahead of the release of the U.S. Federal Open Market Committee minutes. Strong support is at $1,180/oz which could turn into a double bottom and resistance is at $1,250/oz and $1,270/oz.

FXStreet.com’s Dale Pinkert interviewed Research Director, Mark O’Byrne on Monday about the current state of the gold and silver markets, the history of paper currencies, a global currency reset, the amero currency, the gold silver ratio and silver rising to $150/oz in the coming years.

Another topic looked at was bail-ins by banks of individual creditors becoming one of the most under appreciated risks of our time and noting Poland’s recent government confiscation of pensions.

Silver in U.S. Dollars, 5 Year- (Bloomberg)

They discuss how the gold silver ratio throughout history has been 15:1. Today it is at over 60:1 (see chart) and GoldCore believe it will revert to the mean.

There are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust  there are fifteen parts of silver to every one part of gold.

The other reason is that silver is used in many industrial, technological, medical applications today and since the Industrial Revolution a huge amount of silver has been used up.

Silver in U.S. Dollars, from 1970 – (Bloomberg)

It is for this reason that we are more bullish on silver than on gold in terms of price. We continue to believe that silver will surpass its inflation adjusted high of $150/oz in the coming years.

It was noted how  international storage of coins and bars is becoming a popular diversification for U.S. citizens in Zurich, Singapore and Hong Kong.

Dale asked some good questions and had a great expression that we had not heard before “Don’t wait to buy gold and silver. Buy gold and silver and wait.”

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/MhZ5GvkmsVM/story01.htm GoldCore

The polar vortex came, saw, and is on its way out, and now comes the time for the damage report. As Reuters reports, “At least nine deaths have been reported across the country connected with the polar air mass that swept over North America during the past few days. Authorities have put about half of the United States under a wind chill warning or cold weather advisory…. Homeless shelters and public buildings took in people who were freezing outside. Daniel Dashner, a 33-year-old homeless man who typically sleeps under a bridge on Milwaukee’s south side, said he opted to seek a spot at a shelter on Monday night. “Usually if I have four or five blankets, I can stay pretty warm, but when that wind is blowing, I don’t care how many blankets I have, the wind blows right through me,” he said, as temperatures dropped to minus 6 degrees Fahrenheit (minus 21 degrees Celsius).”

Among the deaths reported was a 51-year-old homeless man in Columbus, Georgia, whose body was found in an empty lot after spending the night outdoors.

 

Two men died in Westerport, Massachusetts, while duck hunting on Tuesday when their boat capsized, dropping them into a frigid river, officials said. A third man was rescued.

 

A large avalanche in backcountry outside the Colorado ski resort area of Vail killed one person on Tuesday and caught up three others who survived and were being rescued, officials said. Avalanche danger in the area was rated as “considerable” due to high winds and recent heavy snows, said Spencer Logan, forecaster with the Colorado Avalanche Information Center.

Reuters with more on the geographic impact:

Major U.S. cities were in the grip of temperatures well below freezing, with Chicago seeing 2 degrees Fahrenheit (minus 17 C), Detroit 0 F (minus 18 C), Pittsburgh 5 F (minus 15 C), Washington 19 (minus 7 C) and Boston 15 F (minus 9 C).

 

New York’s Central Park recorded the lowest temperature for the date, 4 Fahrenheit (minus 16 C), rising to 9 F (minus 13 C) on Tuesday afternoon with wind chills making it feel much colder, meteorologists said.

 

Schools in Minneapolis and Chicago were closed for a second day on Tuesday, although Chicago plans to reopen schools on Wednesday. Cleveland remained below freezing after temperatures fell to minus 11 F (minus 24 C) on Monday, breaking a 130-year-old record.

 

Impassable snow and ice halted three Chicago-bound Amtrak trains on Monday, stranding more than 500 passengers overnight in northwestern Illinois.

 

In the normally mild south, Atlanta recorded its coldest weather on this date in 44 years, as the temperature dropped to 6 degrees Fahrenheit (minus 14 degrees Celsius), while temperatures in northern Florida also briefly dropped below freezing, though the state’s citrus crop was unharmed, according to a major growers’ group.

On the other hand, there was some levity in the newsflow, when as AP reported, an escape inmate opted for the familiar warmth of prison and turned himself in.

Just how cold is it in Kentucky? Apparently cold enough for an escaped prisoner to decide to turn himself in. Authorities said the inmate escaped from a minimum security facility in Lexington on Sunday. As temperatures dropped into the low single digits Monday, officials say the man walked into a motel and asked the clerk to call police.

 

Robert Vick, 42, of Hartford told the clerk he wanted to turn himself in and escape the arctic air, Lexington police spokeswoman Sherelle Roberts said. Vick was checked out by paramedics and returned to Blackburn Correctional Complex, Roberts said.

 

“This was definitely of his own volition,” she said. “It’s cold out there, too cold to run around. I can understand why the suspect would turn himself in.”

 

Vick would have been dressed in prison-issued khaki pants, a shirt and a jacket when he escaped, Department of Corrections spokeswoman Lisa Lamb said. Wind chill readings were 20 below zero Monday in Lexington.

 

The Lexington Fire Department treated Vick for hypothermia Monday evening, Roberts said. A call to the department was not immediately returned Tuesday morning.

 

Vick was serving a six-year sentence for burglary and criminal possession of a forged instrument at the time of the escape from Blackburn Correctional Center.

A forged instrument? Like a Federal Reserve note?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/c8AoAjqRgjg/story01.htm Tyler Durden