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World Financial Report – September 13th, 2018

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WORLD FINANCIAL REPORT ON RADIO September 13th 2018
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Markets See Highest Chance Yet of Two More Fed Hikes in 2018. Federal Reserve officials expect to lift the central bank’s benchmark interest rate a total of four times in 2018, based on their economic projections. Markets are increasingly becoming believers. Policy makers have already lifted borrowing costs twice this year, and their projections indicate another two quarter-point moves by the end of 2018. The implied yield on January fed funds futures, an indication of where the market sees the benchmark at year end, on Tuesday climbed to an unprecedented 2.36 percent, indicating around 44 basis points of additional tightening by the end of December. The first 25 basis points of this is priced as a near certainty for the Federal Open Market Committee’s meeting later this month, based on the October fed funds contract. Bloomberg

-CHART OF THE WEEK: Goldman Bear-Market Risk Indicator at Highest Since 1969. A Goldman Sachs Group Inc. indicator designed to provide a “reasonable signal for future bear-market risk” has risen to the highest in almost 50 years. The firm’s Bull/Bear Index, which is based on measures of equity valuation, growth momentum, unemployment, inflation and the yield curve, is now at levels last seen in 1969. While the gauge is at levels that have historically preceded a bear market, Goldman strategists including Peter Oppenheimer wrote in a note last week that a long period of relatively low returns from stocks is a more likely alternative. Bloomberg

-CHART OF THE WEEK: Asian Stocks Are Caught in the Longest Sell-off in 16 Years. It’s a losing streak investors haven’t seen since 2002. The benchmark MSCI Asia Pacific Index fell for a tenth consecutive day Wednesday, extending its recent decline to almost 5 percent and bringing the loss in value to almost $700 billion this year. And there’s a slew of reasons: trade, the U.S. dollar, emerging-market turmoil and the bear market in Chinese stocks to name but a few.

“Asian stocks have been caught in the middle of increasing trade tensions as well as the rising dollar and emerging market contagion, and certainly China weakness is also adding fuel to the fire,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd. Most individual Asian stock markets fell Wednesday, with Japan’s Topix index closing 0.5 percent lower while the Hang Seng Index fell further into bear market territory with a 0.3 percent drop. Meanwhile, the Shanghai Composite Index came close a four-year low, ignoring policy makers’ attempts to lift sentiment. Bloomberg

-CHART OF THE WEEK: Jeffrey Gundlach Says Dollar’s Next Move May Be Downward. The next move for the dollar may be weakening, which could bring relief to non-U.S. stocks such as those in emerging markets, according to Jeffrey Gundlach, chief investment officer of DoubleLine Capital. “I don’t think we’ll have new highs in the dollar without first seeing new moves to the downside,” Gundlach said in a webcast on Tuesday for his Total Return Bond Fund. “We’ll probably end with the dollar lower at year-end than it is right now.” Bloomberg

-CHART OF THE WEEK: Pot Stocks Aside, Canadian Equity Market Limps Into September. The S&P/TSX Composite index bounced back from a three-month low in Toronto Tuesday, rising as much as 0.2 percent, after posting its longest streak of losses since Jan. 2016. The gauge’s 1.1 percent drop last week pushed it into the red for 2018, underperforming the S&P 500 Index, which has gained 8 percent. Trade negotiations in Washington that don’t appear to be making significant progress have been the main drag on the market. Turmoil in developing nations has also put pressure on commodities, and materials stocks have been the worst performers in Canada this year. Meanwhile, energy companies are getting hit by renewed concerns over pipeline capacity, according to BMO investment strategist Brian Belski. Bloomberg

-CHART OF THE WEEK: Canadian Weed ETF Passes Billion-Dollar Mark. The first marijuana exchange-traded fund has reached a milestone that has as much to do with surging pot stocks as it does with investor inflows. The Horizons Marijuana Life Sciences Index ETF’s total assets have grown to more than C$1 billion as shares rallied 124 percent since its April 2017 debut on the Toronto Stock Exchange. It’s the first cannabis-focused fund to break the billion-dollar mark. Known by its ticker HMMJ, the ETF has benefited from burgeoning investor demand for pot stocks. “HMMJ’s growth has far exceeded our expectations as investors have strongly supported the sector in anticipation of Canada’s upcoming recreational marijuana legalization,” Horizons Chief Executive Officer Steve Hawkins said in a statement. Canada will legalize recreational use on Oct. 17. Bloomberg

-CHART OF THE WEEK: Small business optimism surges to highest level ever, topping previous record under Reagan. U.S. small business optimism surged to a record in August as the tax cuts and deregulation efforts of President Donald Trump and the Republican-led Congress led to more sales, hiring and investment, according to a survey by the National Federation of Independent Business. The NFIB Small Business Optimism Index jumped to 108.8 last month, the highest level ever recorded in the survey’s 45-year history and above the previous record of 108 in 1983, set during the second year of Ronald Reagan’s presidency. The August figure was up from a 107.9 reading in July. CNBC

-CHART OF THE WEEK: Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash. The Great Crypto Crash of 2018 looks more and more like one for the record books. As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000. “It just shows what a massive, speculative bubble the whole crypto thing was as many of us at the time warned,” said Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform. “It’s a very likely a winner takes all market Bitcoin currently most likely.”

The virtual-currency mania of 2017 fueled by hopes that Bitcoin would become “digital gold” and that blockchain-powered tokens would reshape industries from finance to food has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street. Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite’s recovery to fresh highs 15 years later, and to the internet’s enormous impact on society. They also note that Bitcoin has rebounded from past crashes of similar magnitude. But even if the optimists prove right and cryptocurrencies eventually transform the world, this year’s selloff has underscored that progress is unlikely to be smooth. Bloomberg

-CHART OF THE WEEK: Crypto Wipeout Deepens to $640 Billion as Ether Leads Declines. The cryptocurrency bear market plumbed a fresh 10-month low on Monday as Bitcoin’s biggest rival tumbled and U.S. regulators suspended trading in two securities linked to digital assets. Ether, the second-largest virtual currency, slumped 11 percent from its level at 5 p.m. New York time on Friday, according to Bloomberg composite pricing. Bitcoin declined 2.4 percent, while the market capitalization of digital assets tracked by CoinMarketCap.com shrank to about $197 billion down almost $640 billion from its January peak.

Cryptocurrencies have declined for five of the past six weeks amid concern that a broader adoption of digital assets will take longer than some had anticipated. That worry was underscored over the weekend after the U.S. Securities and Exchange Commission temporarily suspended trading in two exchange-traded notes linked to cryptocurrencies and Ethereum co-founder Vitalik Buterin told Bloomberg that the days of explosive growth in the blockchain industry have likely come and gone. “The temporary suspension of these products led to an initial knee-jerk reaction,” said Ryan Rabaglia, head of trading at cryptocurrency dealing firm OSL in Hong Kong. “But ultimately, it’s just another obstacle for the market to overcome.” Bloomberg

-CHART OF THE WEEK: Bitcoin Bulls Are Sweating Latest Test of Key Resistance Level. Bitcoin’s recent stumble could turn into a full-blown tailspin, testing its strong support level of $6,000 again, according to a leading technical indicator. The biggest cryptocurrency has bounced off the $6,000 mark four times since February, and a break below that price could signal further capitulation. The GTI VERA Convergence Divergence indicator, which detects trend reversals and exhaustion, just ended its longest buy streak since July, suggesting more losses and pain for Bitcoin investors. Bitcoin has already lost more than half its value this year, amid a continued regulatory crackdown and the growing sense that a broader adoption of digital assets will take longer than some had anticipated. Such gloomy views are becoming more prevalent, as institutional and individual investors’ interest in the coin slackens. Bloomberg

-Ten years ago this week, the demise of Lehman Brothers triggered the worst financial crisis since the Great Depression. Two months later, a new president got the job of fixing it. While Barack Obama’s policies arguably helped drag the world back from the brink, setting the stage for an unprecedented (and uneven) economic boom, there are signs a new crisis may be on the horizon. When the next recession comes, how prepared will we be? David E. Rovella Bloomberg

-Middle-class income rose to the highest recorded levels in 2017 and the national poverty rate declined as the benefits of the strong economy lifted the fortunes of more Americans, the U.S. Census reported Wednesday. The median U.S. household earned $61,372 last year, meaning half of the families in the country brought in more income than this and half earned less. Crossing the $61,000 mark signals the American middle-class may have finally earned more than it did in 1999, although the Census Bureau cautions that median income last year was not statistically different from 1999 or 2007.

A change in methodology in 2013 makes precise comparisons difficult. All the income figures have been adjusted for inflation and are reported in 2017 dollars. Middle-class household income has been rising steadily in recent years as the economy has rebounded from the deep recession and millions of Americans have found jobs again. The extra pay from having another person in the home working is the largest factor contributing to the increase in income. washingtonpost.com

-A court-appointed monitor for the Sears Canada bankruptcy process says it opposes a proposal that would effectively allocate all the failed retailer’s remaining assets to the company’s underfunded pensions. FTI Consulting argues in a Sept. 7 filing to Ontario Superior Court that the pension proposal should be dismissed due to legislation and case law. A petition filed with the court in July by the pensioners claimed about 18,000 Sears retirees should have first claim on assets to reduce a roughly $260 million shortfall in their pension plans. However, Sears Canada had only about $158.3 million on hand plus a few properties that remain to be sold meaning none of the company’s other unsecured creditors would receive anything if the pensioners get first priority. CBC

-After years of job growth, workers may finally be getting more money in their paychecks. Job growth in August was strong. The US economy added 201,000 jobs, while the unemployment rate stayed at 3.9%. Average hourly earnings grew 2.9% compared with a year ago, the best rate since 2009, according to monthly payroll data released by the Labor Department Friday. CNNMoney

Job openings hit record high, and more people than ever are confident enough to quit. The Labor Department’s Job Openings and Labor Turnover Survey reported a new high in job openings for July at just shy of 7 million. Also, the JOLTS data showed a fresh high in quits and new hires. The report comes amid a bevy of other positive economic signs, including a new record in small business sentiment. CNBC

-Canada’s economy unexpectedly lost 51,600 jobs, with wage gains slowing and Ontario recording its biggest employment drop in nearly a decade, removing any urgency for the central bank to accelerate rate hikes. The nation’s largest province lost 80,100 jobs in August, all part-time, the biggest decline for Ontario since 2009. Nationally, the economy lost 92,000 part-time workers, though a 40,400 gain in full-time employment is one sign the labor market is firmer than the headline number suggests. The data released Friday by Statistics Canada in Ottawa reversed strong employment gains made earlier this summer, including sharp increases in Ontario. But the overall picture is one of a labor market gearing down markedly from last year and an economy not at risk of overheating. That reinforces expectations the Bank of Canada will take a cautious approach to increasing borrowing costs. Bloomberg

-Unemployment in the U.K. remained at a 43-year low of 4 percent for the three months through July, with the continuing tight labor market showing up in wages that rose a more-than-expected 2.9 percent. While pay is now growing faster than inflation, real wages remain below their pre-crisis level. The data appears to fly in the face of continued Brexit risk, with U.K. companies upping their warnings on the fallout from a messy exit from the European Union. Bloomberg

-Major U.S. airlines said Monday that the booming U.S. economy is what led to a record-breaking level of travel over the summer. “With a growing economy, steady employment gains, and household net worth at an all-time high in the first quarter of 2018 ($100.8 billion), passengers are taking advantage of persistently low airfares,” a spokesperson for Airlines 4 America, which represents the largest U.S. airlines, wrote in an email to the Washington Examiner. From the Wednesday prior to Memorial Day and the Tuesday after Labor Day, the Transportation Security Administration processed 253 million passengers and crew, a 6 percent jump from last summer. The TSA said that nine of the top 10 busiest weeks in its 15-year history occurred this summer. washingtonexaminer.com

-With the Trans Mountain Pipeline Expansion Project stalled, and overall Canadian pipeline capacity limited, the pressure to ship crude oil out of Alberta continues to grow. The amount of oil shipped by rail has been increasing and showing little signs of letting up. The National Energy Board reported in June that crude-by-rail exports from Canada set a record of 204,558 barrels per day. Analysts say much of the crude-by-rail growth has been driven by increasing production and ongoing pipeline capacity problems. CBC

-The Bank of England’s Mark Carney agreed Tuesday to extend his period as governor by six months until January 2020 to help out in the initial phases of Britain’s exit from the European Union. The announcement from the government and the bank was expected after Carney told lawmakers last week that he was “willing” to extend his tenure beyond his scheduled June 2019 departure. CBC

-Former big bull on Tesla says the stock is ‘no longer investable’ due to Elon Musk’s behavior. Nomura Instinet lowers its rating to neutral from buy for Tesla shares, citing concerns CEO Elon Musk’s actions may hurt the company’s brand. “Notwithstanding improving fundamentals, we believe that Tesla is in need of better leadership (an about face) and are moving to the sidelines until we see what happens with management,” the firm’s analyst Romit Shah says. CNBC

-Volkswagen has found a new way to use a 3D printer: To mass produce car parts. The world’s largest carmaker unveiled plans Tuesday to start using HP metal printing technology to manufacture select parts including gear knobs and custom tailgate lettering. Volkswagen said that it wants to mass produce structural parts using the technology within two to three years. “A complete vehicle will probably not be manufactured by a 3D printer any time soon, but the number and size of parts from the 3D printer will increase significantly,” said Martin Goede, the automaker’s head of technology planning and development. 3D printing is not unheard of in auto manufacturing, but it has so far been used for prototypes and individual components. The typical Volkswagen is built using up to 8,000 parts. “A big advantage of [3D printing] is it allows us to produce many of these parts without first having to build manufacturing tools,” said Goede. CNNMoney

-Americans still skittish about investing, post crisis. It’s been 10 years since the financial crisis, yet many Americans are still shying away from investing in the market. There is reason to remain cautious, those polled say: A large majority expect another financial crisis in the decade ahead. In the last decade, the S&P 500 has rallied 200 percent, yet many Americans are less willing to invest in the market than they were before 2008. Roughly three quarters of Americans, or 74 percent, said their financial habits have changed as a result of the financial fallout and Great Recession, according to a new survey by NerdWallet. Nearly half of those polled said they are more cautious about their spending overall 38 percent said they avoid debt as much as possible, one quarter said they have limited the number of credit cards they have as a result of the financial crisis and 7 percent said they no longer invest in the stock market. The personal finance website polled more than 2,000 adults in September. Read more here-https://cnb.cx/2MlOV8O

-The tariff battle with the U.S. will probably cost China 700,000 jobs, or more in the event of further escalation. The job losses would come if the U.S. imposes 25 percent tariffs on $200 billion in Chinese exports and China retaliates by devaluing its currency by 5 percent and adding to levies on U.S. goods, according to economists led by Haibin Zhu at JPMorgan Chase & Co. If China doesn’t retaliate at all, 3 million people could lose their jobs, they wrote in a research note Tuesday. The study highlights the more profound impacts of the tariff battle on the world’s second largest economy, which is grappling with a slowing pace of growth and a massive debt pile. Things may get even worse: if the U.S. imposes 25 percent tariffs on all Chinese imports and China retaliates with the levies already announced, the measures will mean 5.5 million lost jobs and 1.3 percentage points cut off gross domestic product growth. Bloomberg

Three months after U.S. President Donald Trump’s historic handshake with Kim Jong Un, the North Korean leader is holding up talks over one consequential demand: a declaration ending the Korean War. For Trump, the request presents a dilemma. Granting it could guarantee himself another headline-grabbing moment to play the peacemaker weeks before a pivotal midterm election. Withholding it could give the U.S. a second chance to win real concessions in its goal of eliminating the regime’s nuclear threat. Either way, the prospect of a peace declaration to end the 70-year conflict is one of the biggest pieces of leverage Trump has left in dealing with Kim without going back to “fire and fury” threats of nuclear war. The stakes are high: Any peace declaration will bolster arguments for easing sanctions and scaling back the American military presence in South Korea. Bloomberg

-An estimated $400 billion has been wiped off the value of major cryptocurrencies since January. Sean Russell’s life savings were among them. Russell rarely played the stock market and had little investing experience when he put around $120,000 into bitcoin in November 2017. He was stunned when that turned into $500,000 in just one month. “I think there was one morning where I woke up, where I made about £12,000 ($15,600) in one morning on my investment and it just kept going,” said Russell. “I was thinking, wow, that’s mortgages paid, that’s holidays that I’ve always dreamed of.” The dream didn’t last for Russell, who works as a property developer in the United Kingdom, buying homes and fixing them up.

The price of Bitcoin surpassed $20,000 in December before collapsing. It now trades at $6,300. Russell attempted to mitigate his losses by shifting money from bitcoin XBT to an offshoot called Bitcoin Cash and other cryptocurrencies including Ethereum and Ripple. But that didn’t work, and Russell says the paper losses on his initial investment have reached 96%. “It was devastating, quite traumatic, really,” Russell said. “I’ve seen stories on the news of billionaires going bankrupt, and you think how can that be? How on earth did you lose that amount of money? And yet, here I am in that position.” CNNMoney

-A federal judge has ruled that U.S. securities laws may cover an initial coin offering, handing the government a legal victory in its effort to regulate billions of dollars in cybercurrency offerings much like stocks are. The ruling came in a criminal case against a man charged with promoting digital currencies backed by investments in real estate and diamonds that prosecutors said didn’t exist. U.S. District Judge Raymond Dearie in Brooklyn, New York, said on Tuesday that the government can proceed with a case alleging that an initial coin offering is a security for purposes of federal criminal law.

About $18.7 billion has been raised this year by so-called ICOs, according to data compiled by Coinschedule.com. Securities and Exchange Commission Chairman Jay Clayton has said the fundraising method should be regulated, adding that he believes the market has become rife with fraud as it quickly expanded with the popularity of digital currencies and blockchains. “This ruling affirms the SEC’s position that it has authority over ICOs and that market manipulation and anti-fraud provisions in the law apply,” Peter Henning, a professor at Wayne State University’s law school in Detroit, said in an interview. Bloomberg

-California is taking a financial wallop from unrelenting wildfires that have drained its firefighting budget and prompted nearly $1 billion in property claims even before the start of the dangerous fall fire season, officials said Thursday. The disclosures came as a roaring blaze in a rural area near the Oregon state line closed 45 miles (72 kilometers) of heavily traveled Interstate 5, the main highway from Mexico to Canada. Fierce orange flames forced panicked truckers to abandon big-rigs and brought screams from motorists as they watched the advancing fire in Shasta-Trinity National Forest.

California’s insurance commissioner said Thursday that victims of that fire and one in the Mendocino area the two largest blazes in the state so far this year have filed more than 10,000 claims so far totaling $845 million. The two wildfires destroyed or damaged a combined 8,800 homes and 329 businesses. “The worst may be yet to come,” Commissioner David Jones warned at a San Francisco news conference, noting that California wildfires are typically more destructive after Sept. 1. apnews.com

-‘The valuations are off the charts’: Canadian pot stocks might be too high. Canada’s cannabis companies are experiencing a rush of investment that’s making even some participants paranoid. “You might argue our valuations are a little bit ahead of our skis,” said Paul Rosen, chief executive officer of Tidal Royalty Corp., which finances weed companies. Tilray Inc., a marijuana company valued at nearly $9 billion, currently trades at a price-to-sales ratio of about 124. That’s more than 25 times higher than Amazon Inc. and Apple Inc., the two most valuable companies in the S&P 500. And Canopy Growth Corp.’s $11 billion-plus market value is on par with Barrick Gold Corp.’s, even though the mining firm, with 18,000 workers, is expected to post 20 times the sales this year as the 1,000-employee cannabis company.

“It’s still not a grown-up sector by a lot of portfolio managers’ standards,” said Bruce Campbell, founder of StoneCastle Investment Management Inc., which is launching a cannabis-focused mutual fund. “The valuations are off the charts if you use any type of typical metrics, so that scares a lot of institutions.” As Canada prepares to legalize marijuana on Oct. 17, the cannabis industry has soared from virtually nothing five years ago to one with global sweep today. Canadian companies, such as Canopy, Tilray, Aurora Cannabis Inc. and Aphria Inc., are leading the way. Global consumer spending on cannabis is expected to reach $32 billion by 2022, according to U.S. firms Arcview Market Research and BDS Analytics. BNNBloomberg

-Nearly 20 percent of marijuana products in California have failed tests for potency and purity since the state started requiring the checks on July 1, a failure rate some in the industry say has more to do with unrealistic standards and technical glitches than protecting consumer safety. The testing has been especially tough on cannabis-infused cookies, candies and tinctures: About one-third have been blocked from store shelves. In much smaller numbers, testing companies licensed by the state are finding unacceptable levels of pesticides, solvents and bacteria, including E. coli and salmonella, according to data provided to The Associated Press by the state Bureau of Cannabis Control. apnews.com

-Canadian consumers are increasingly looking for better rewards programs when it comes to choosing a credit card, according to a new study that shows that nearly half of the people that switched cards in the past Year did so for a better plan. Of those who switched cards, about 48 per cent did it in search of a better rewards program, according to a study released on Monday by market research firm J.D Power. CBC

-Canada’s ultra-wealthy getting richer faster than the rest of us, report shows. Canada ranks fifth in the world when it comes to the number of people living in a country with a net worth of at least $30 million US beating out the likes of Switzerland and Hong Kong according to a new wealth study. According to research firm Wealth X, Canada had around 10,840 residents worth $30 million or more including their investable assets in 2017. 

The New York-based firm compiles the study based on its database of wealthy individuals every year. The $30 million figure isn’t random that’s what Wealth-X says it takes to be considered an ultra-high net worth individual. Only the United States, Japan, China and Germany had more people with at least that amount of money than Canada. France, Hong Kong, the U.K., Switzerland and Italy all ranked below Canada. CBC

-The share of bankruptcy filers who are older than 65 is the highest it’s ever been. As the cost of living outpaces incomes, health-care costs rise and debt swells, there’s been more than a twofold increase in the rate of older Americans filing for bankruptcy, according to a new study. “For an increasing number of older Americans, their golden years are fraught with economic risks,” it reads. Debt among older Americans is rising fast. In 2016, the average debt in families in which the head of the household is age 75 or older was $36,757. That is up from $30,288 in 2010, according to a recent report by the nonprofit Employee Benefit Research Institute in Washington. CNBC

-It’s hard to say ‘no’ to something for nothing. A village in Switzerland has decided to go ahead with an experiment on basic income, with a payout of 2,500 francs ($2,570) per month. The next step is to raise money to finance the plan via crowdfunding. More than 50 percent of the inhabitants of Rheinau, close to the German border, signed up for the project, according to the organizers website. At least half the 1,300 inhabitants needed to say ‘yes,’ and the count stood at 692 on Monday. The submitted ballots also still have to be checked against government data to ensure eligibility. Bloomberg

-Nike is sprinting past its critics. Shares of the athletic apparel and footwear maker on Monday gained back all of the $3.3 billion lost in the immediate wake of its controversial Colin Kaepernick ad. Nike shares traded as high as $82.44 on Monday topping their pre-Kaepernick ad levels. Shares of the Beaverton, Ore., company closed at $82.10, up 2.2 percent. Nike’s “core customer wants them to take a stand on social issues,” NPD sports analyst Matt Powell said. Edison Trends reported that Nike’s sales skyrocketed by 31 percent from Sept. 2 the day it launched the ad to Sept. 4. That compares with a 17 percent gain for the same period in 2017. nypost.com

-Summer just ended, but CDC officials are already urging people to prepare for another potentially nasty flu season. There were “epidemic levels” of influenza or pneumonia for 16 consecutive weeks during last year’s flu season. The CDC estimates that more than 700,000 people were hospitalized with the flu during the 2017-2018 season. CDC recommends getting vaccinated early, ideally by the end of October, before flu starts spreading. CNBC

-Americans spend tens of billions of dollars on government-run lotteries each year. But as income inequality widens, low-earning households spend a disproportionate amount of money on lottery tickets, according to a new study. The lowest-income households in the U.S. on average spend $412 annually on lottery tickets, which is nearly four times the $105 a year spent by the highest-earning households, according to a study released on Wednesday by Bankrate.com. And almost 3 in 10 Americans in the lowest income bracket play the lottery once a week, compared with nearly 2 in 10 who earn more than that. The Bankrate.com study was conducted by research firm GfK, which surveyed a national sample of 1,000 American adults on Aug. 17-19. Bloomberg

-Bob Woodward’s book “Fear” is already one of the biggest publishing success stories of the year. And it still isn’t even in bookstores yet. The publisher, Simon & Schuster, said Monday that it is printing one million copies of the book to keep up with reader demand. “Fear: Trump in the White House” will officially come out on Tuesday in both hardcover and e-book form. “We have reprinted six times for a total of seven to meet extraordinary demand that will put one million books in print before we’ve even gone on sale,” a Simon & Schuster spokesperson told CNN. “Fear” is already the sixth biggest seller of 2018 on Amazon, thanks to pre-orders. The only other Trump-related titles that are higher on the list are James Comey’s “A Higher Loyalty” at No. 5; a “Last Week Tonight” parody of a Pence family children’s book at No. 2; and Michael Wolff’s “Fire and Fury” at No. 1. CNNMoney

-U.S. budget deficit widens to fifth-highest ever, CBO reports. The U.S. budget deficit in August was $211 billion, nearly double the gap during the year-ago month, the Congressional Budget Office estimated late Monday. Adjusted for shifts in the timing of payments that otherwise would have occurred on a weekend of holiday, the deficit would have grown by 19%. The Treasury Department will report final official numbers on Thursday, and they are usually very similar to the CBO’s. MarketWatch

-The Real Cost of the 2008 Financial Crisis. The aftermath produced a lost decade for European economies and helped lead to the rise of anti-establishment political movements here and abroad. September 15th marks the tenth anniversary of the demise of the investment bank Lehman Brothers, which presaged the biggest financial crisis and deepest economic recession since the nineteen-thirties. After Lehman filed for bankruptcy, and great swaths of the markets froze, it looked as if many other major financial institutions would also collapse.

On September 18, 2008, Hank Paulson, the Secretary of the Treasury, and Ben Bernanke, the chairman of the Federal Reserve, went to Capitol Hill and told congressional leaders that if they didn’t authorize a seven-hundred-billion-dollar bank bailout the financial system would implode. Some Republicans reluctantly set aside their reservations. The bailout bill passed. The panic on Wall Street abated. And then what? Read more here-http://bit.ly/2x3Y1kY

-When You Lose 99.9%, You’ve Lost More Than Money. During the financial crisis, countless investors lost their faith in financial markets and never got it back. On Sept. 1, Barry Popik received a check for $35.98. That legal settlement is all that’s left of the $25,000 he invested in Lehman Brothers preferred stock in February 2008. But money is not all that Mr. Popik, and countless other investors like him, lost. Their faith in the fairness of financial markets is also broken.

Mr. Popik, who lives in Orange County, N.Y., about 60 miles north of New York City, is a respected lexicographer who compiles an online dictionary that documents the origins of such terms as “hot dog” and “the Big Apple.” Lehman issued $1.65 billion of the preferred shares on Feb. 12, 2008, at $25 apiece, with an annual dividend rate of 7.95%, payable in quarterly installments. Mr. Popik had told his broker that above all he wanted to keep his money safe. Mr. Popik had already inherited stock in what became Lehman Brothers, but his broker, then at Smith Barney, urged him to put even more into Lehman for safety’s sake. That sounded plausible at the time. Only two weeks earlier, Lehman had reported record revenues of almost $60 billion and net profits of more than $4 billion for its 2007 fiscal year. “You think you’re investing in a solid company and protecting your family,” Mr. Popik recalls thinking.

“In some ways, this is partly my father’s and my mother’s money, and even my grandfathers’ and grandmothers’ money, and it will be my children’s and grandchildren’s money. I just want it to be safe.” Mr. Popik earned a total of about $990 of dividend income in May and August 2008. Then Lehman declared bankruptcy on Sept. 14, 2008; the shares never paid another dividend and lost nearly 100% of their value almost immediately. Read more here-https://on.wsj.com/2oXkJHw

Billionaire Ray Dalio: We are in the 7th inning of the current economic cycle. Dalio the billionaire founder of the world’s biggest hedge fund, told CNBC on Tuesday that the current economic cycle is in the seventh inning, predicting it has about two years left to run. To help keep the economy and stocks moving forward, the Federal Reserve should not increase interest rates faster than the market expects, said Dalio, co-chairman and co-chief investment officer of Bridgewater Associates.

For now, Dalio warns that investors should be “more defensive” in the stock market and “as time progresses” he sees the risks increasing. The “upside looks limited” because a lot of cash on the sidelines has been put to work and the benefits of the corporate tax cuts are “behind us,” he added. On Monday, Dalio put out a new book, “A Template for Understanding Big Debt Crises,” as a free PDF or for purchase as an e-book and printed edition. He hopes that examining what caused the 2008 crisis will help prevent futures ones. The biggest takeaway from the 2008 downturn, according to Dalio, is that central banks need to pay closer attention to bubbles that often precede crises.

Current debt levels in relation to income are not troubling, he added. Appearing on “Squawk Box” during the 10th anniversary week of the crisis, Dalio said the next crisis won’t be a big bang-type affair but one that leads to more severe social and political problems. Ten years ago this week, Lehman Brothers collapsed touching off a crisis that sunk the economy and the stock market, and led to government bailouts of financial firms and automakers and an extraordinarily easy Fed monetary regime. Dailo, according to Forbes, has an estimated net worth of $18.1 billion. Read more here-https://cnb.cx/2CK9FHv

-Where former Lehman Brothers employees are today. Ten years ago, Lehman Brothers failed. Some 25,000 employers were left asking: Now what? To try and answer that question, CNBC reached out to the company’s former workers. Here are some of their stories. Read more here-https://cnb.cx/2MjJgA7

-1 in 10 Americans say they’ll be in debt for the rest of their lives reality is way worse. A new study from Northwestern Mutual has found that many Americans are sinking in debt, and don’t expect to climb out of it any time soon; the study found that more than one in 10 Americans say they will be in debt for the rest of their lives. The reality, however, may be bleaker. For its 2018 Planning and Progress Study, Northwestern Mutual surveyed 2,003 U.S. adults, revealing just how far deep in debt Americans are. Northwestern Mutual found that 13 percent say they will be in debt the rest of their lives.

But looking at a 2017 study from Experian and Credit.com, 73 percent of consumers had outstanding debt when they were reported deceased. Though there was no information on how long they carried the debt, those who died with debt had an average total balance of $61,554, including mortgage debt; without home loans, the report states there was an average balance of $12,875. Of those 73 percent who died with debt, 68 percent had credit card balances, 37 percent had mortgage debt and 25 percent had auto loans. Twelve percent died with personal loans and 6 percent with student loans. Read more here-https://cnb.cx/2oYq0Pd

-America moves closer to being a cashless society. If you want to buy a beer at Flatstick pub in Seattle, don’t whip out a $10 bill to pay you’ll walk away thirsty. Flatstick, a hot new mini-chain in the Pacific Northwest, doesn’t take cash. Neither does Bluestone Lane, a coffee chain with locations in New York, Philly and D.C. Patrons there have to pay with plastic or an app called LevelUp. Want to grab a Sweetgreen salad for lunch with cash? No can-do at many locations. Cashless commerce is popping up around the country, particularly in restaurants catering to a younger crowd, which is likely to leave home without any greenbacks, or even a wallet, and instead choose to live life with a smartphone and a few credit or debit cards attached.

Businesses who’ve gone cashless rave about the results. Flatstick owner Sam Largent told me plastic-only reduces error rates during times of complex accounting, such as calculating tips when shifts change. Cash sure seems to be on the ropes. The dollar value of cash transactions sank 7% from 2010 to 2015, according to The Nilson Report, while credit and debit card payments rose nearly 50%. Meanwhile, ATMs, which had their 50th birthday last year, are disappearing around the block and around the world, signaling the decline of the “cash run.” Read more here-https://on.mktw.net/2p0laRA

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RARECOLOREDDIAMONDS.COM

-10 history-making pink diamonds sold at Christie’s. Do you know the Martian Pink from the Perfect Pink, the Sweet Josephine or the Pink Promise? Christie’s jewellery specialist Marie-Cécile Cisamolo tells the stories of these and other fabulous pink diamonds that have bedazzled our salerooms. Prices for top-quality, large pink diamonds have increased exponentially in recent years, driven by collector demand and increasingly limited supply. Pink diamonds gain their highly desirable colour as a result of a rare, naturally occurring slippage of the crystal lattice in the stone while it is forming deep within the Earth’s crust. Here we take a look back at some of the biggest and the best stones and pink diamond rings sold at Christie’s in recent times.

Of the seven million diamonds that have passed through the Gemological Institute of America, no more than 40 have exhibited a rare orange glow when examined under ultraviolet light, and the Princie is the largest of all of them. This fluorescent quality pinpoints the stone’s origin to the Golconda mines of India. As it is the largest Golconda-type Fancy Intense pink diamond to ever be graded by the GIA, it’s little wonder that it sold for almost $40 million when it appeared in the sale room in New York in 2013, making it the most expensive pink diamond ever sold at Christie’s a record it still holds. Read more here-http://bit.ly/2MpJR2V

-11ct. Purple to Lead Alrosa Hong Kong Sale. An 11-carat diamond will feature in Alrosa’s inaugural auction of colored polished diamonds at the upcoming Hong Kong Jewellery & Gem Fair. The cushion-cut, fancy-deep-purple-pink stone which will lead the sale is the largest diamond of its color the GIA has graded, Alrosa said Tuesday. The miner will present 250 polished diamonds of various shapes and colors at the auction, which it has named “True Colour.” They will include a vivid-orangey-yellow diamond weighing more than 15 carats, and a cushion-shaped, 11-carat, fancy-vivid yellow.

The Hong Kong show runs from September 12 to 16. “It took more than a year to prepare the collection,” said Alrosa CEO Yury Okoemov. “It is a masterpiece of diamond production created by skillful professionals who put heart into their work, keep the traditions, and know what a real ‘Russian cut’ is.” Alrosa will use the sale as a step toward its goal of expanding further into the colored-diamond market, Okoemov added. The miner will sell the collection through a special electronic platform, which it used previously to sell large stones, it said. After the initial sale, the company will hold a regular auction for its polished stones once or twice a year. Read more here-http://bit.ly/2N98rub

-Giant Diamonds Has Been Mining’s One Success Story This Year. This summer’s crash in commodity prices is turning it into a year to forget for miners. Unless you dig the world’s biggest diamonds. Gem Diamonds Ltd. has been the standout performer in the FTSE All-Share Mining Index, gaining almost 70 percent this year. In comparison, almost every other miner is in negative territory with the second-best performer BHP Billiton Ltd. little changed as growing concerns about trade and collapsing metal prices reversed an industry rally earlier in the year.

Gem Diamonds, which has struggled for years with failed growth plans and problems recovering big diamonds without breaking them, has had a resurgence this year as it successfully unearthed a record number of 100-carat-plus stones. That helped the company report an 81 percent jump in first-half revenue, with operating profit climbing fivefold. The company operates the Letseng mine in the mountainous kingdom of Lesotho in southern Africa. It’s famous for producing the world’s most valuable stones, with an average price of $2,742 a carat, more than triple the next closest major mine. De Beers, the world’s biggest producer, has an average price of $162 per carat. This year has also been Gem Diamond’s best ever for size: the 910-carat Lesotho Legend found in January was the fifth-biggest in history and sold for $40 million at a tender in Antwerp. Read more here-https://bloom.bg/2MlV0Ss

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GOLD-SILVER-PALLADIUM

Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00

Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

-Sales of American Eagle palladium coin took five minutes to end. Orders of 14,782 coins lead to ‘Currently Unavailable’ status. In less than five minutes, orders placed Sept. 6 for the Proof 2018-W American Eagle $25 palladium coin were sufficient to put the numismatic product into “Currently Unavailable” status. The product is limited to a maximum release of 15,000 coins; the Mint sold 14,782 examples. Customers ordering the numismatic product were restricted to purchasing one coin per household.

The Mint-determined price for each coin was $1,387.50. A “Currently Unavailable” status does not automatically mean a sellout. The product notice on the Mint’s website states: “We are currently out of this item, but more may be available later. Even before sales got underway, some dealers were offering bounties of up to $500 per coin to anyone successful in placing an order and willing to resell the coin to the dealer making the guaranteed profit offer. Read more here-http://bit.ly/2N8GLWB

-Hundreds of rare gold coins discovered beneath Italian theater. About 300 Roman-era gold coins were unearthed last week beneath what once was an Italian theater, authorities say. The rare treasure was found by construction workers building an apartment complex at the previous site of the historic Cressoni Theater in northern Italy, which closed in the 1990s. What appears to be a soapstone vase or jar held the coins, believed to be from 474 B.C.

“More than exceptional, it’s epochal one of those discoveries that marks the course of history,” Culture Minister Alberto Bonisoli said during a Monday news conference. Luca Rinaldi, the local archaeology superintendent, told the Times of London the coins are in remarkable condition “unlike anything else ever found” in the area. “Sometimes coins that are found are stuck together, but these are all separate. It was like opening a wallet,” she told the Times. Archaeologists are now restoring and studying the coins at a laboratory in Milan, according to the Ministry of Cultural Heritage and Activities. CNBC

-Clive Maund: The Astounding Trader’s Positions in Silver. The latest gold and silver COTs and Hedgers charts are quite simply astounding we have not see anything like it since the site started 15 years ago. In addition, short selling of gold and silver by futures traders is at record levels by a huge margin at a time when bullishness towards the dollar is also at extreme levels. All of this points not just to a reversal soon, but to a meltup in gold and silver triggered by a scramble to exit massive short positions once the tide turns. We are going to concentrate on silver in this update, because that is where we see the most extreme positions on the COT and Hedgers charts.

Starting with the 6-month chart for silver, we see that just going on the silver price chart alone, it still looks awful, with the price breaking down into another downleg last week within the downtrend shown. This downtrend will continue until it doesn’t and while that doesn’t sound very helpful, we can be perfectly clear about the two things to look out for as a signal of a reversal – one is a clear breakout from the downtrend on strong volume, the other is the appearance of a big white reversal candle, again on strong volume, regardless of whether this candle breaks it out of the downtrend or not. Latest COTs and Hedgers charts indicate a high probability of either of these technical developments occurring soon. Read more here-http://bit.ly/2Mr8Ra2

-Steve St. Angelo: Setting Up For The Next Major Silver Bull Market. While the precious metals are totally off the radar by the majority of investors, silver is setting up for one major bull market. Yes, it’s hard to believe as the gold and silver prices have been trending lower while the broader markets grind up higher, but if we look at the fundamental and technical indicators, the stock market and precious metals are now at extreme opposites. The situation in the silver market is so much more favorable today than when it was trading at $20 at the peak in 2007. I will go one step further and say that the current silver indicators are even better than when the silver price fell to $9 towards the end of 2008. If we look at the Dow Jones-Silver Ratio, it is at a much higher level today than what it was in 2007 or 2008. Read more here-http://bit.ly/2Qq66Ju

-Funds Resume Gold Bear Bet Before Jobs Dent `Worst Is Over’ View. Gold’s nascent recovery may have already been dealt a knockout blow. Hedge funds have resumed their bearish bets in bullion futures and options, with the short position rising 0.5 percent in the week ended Sept. 4, according to Commodity Futures Trading Commission data released Friday in Washington. Bears bets had fallen in the prior week for the first time since mid-June.

The funds’ move came before a burgeoning rally in gold was cut short, sending prices to an eighth weekly loss in nine as a report Friday showing faster U.S. hiring and wage growth crimped demand for the metal as a haven. The jobs data halted gold’s bid for a third straight daily rise as easing dollar gains and emerging-markets turmoil had rekindled some of the metal’s haven appeal. The employment data signal “that the recent gains are not sustainable” in gold, said Walter “Bucky” Hellwig, who helps manage $17 billion as senior vice president at BB&T Wealth Management in Birmingham, Alabama. “As long as the Fed is in a rate increase mode, that’s going to be a headwind for the price of gold.”

Nonfarm payrolls rose 201,000 in August, a Labor Department report showed Friday. The median estimate of analysts surveyed by Bloomberg called for a gain of 190,000 jobs. Average hourly earnings increased 2.9 percent from a year earlier while the jobless rate was unchanged at 3.9 percent, still near the lowest since the 1960s. For those betting that prices would bottom around $1,200, the report “doesn’t help in any way,” said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors, which oversees over $2 billion. “If you had a real weak print on jobs, that could lead to thoughts that maybe the Fed would back away from rate increases, so therefore the dollar would have lots of reasons to weaken. That’s not what we saw today.”

That may be bad news for ETF investors. ETFS Physical Gold, the fourth-largest such fund backed by bullion, attracted $56 million in the week through Thursday after a $14 million outflow the previous week. On Thursday, investors poured $12 million into Perth Mint Physical Gold ETF, boosting total assets by more than half in the fund that was listed just three weeks ago. The jobs data “show that the worst is not over for gold,” Hellwig said. “The patient is not terminal,” but it remains “a poor performer relative to other assets, and clear signs of a recovery have not been seen. I can’t see a lot of tailwinds for gold.” Bloomberg

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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The Investor Learning Center was created to provide investors with the tools to make the right decision when it comes to investing in Rare Colored Diamonds.
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The GIA report for this diamond is not posted on the website at this time however it is available. Please fill out a form to inquire or call us directly at 800-456-3934 for more information.

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend