Radio Show Newsletter
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: IMF Says Venezuela’s Inflation Rate May Rise Beyond 2,300% in 2018. Venezuela’s triple-digit annual inflation rate is set to jump to more than 2,300 percent in 2018, the highest estimate for any country tracked by the International Monetary Fund. An intensifying political crisis that’s spiraled since 2014 has weighed heavily on economic activity. Gross domestic product is expected to contract 6 percent next year, after shrinking an estimated 12 percent in 2017, the IMF said in its latest World Economic Outlook report published Tuesday.
While Venezuela’s central bank stopped publishing inflation data in December 2015, the IMF argues the country’s consumer prices are estimated to leap 2,349.3 percent in 2018, the highest in their estimates, followed by the Democratic Republic of the Congo’s 44 percent. As oil production declines and uncertainty increases, unemployment is forecast to increase to about 30 percent in 2018, also the highest and followed by South Africa’s 28 percent and Greece’s 21 percent. Read more here-https://bloom.bg/2ye0NnV
-CHART OF THE WEEK: This Is How Trump’s Market Rally Stacks Up Against Other Presidents.’ President Donald Trump wishes the media spent more time focusing on the rally in stocks since he took office. OK, here’s the news: the “unprecedented” stock market rally since his election right now isn’t big enough to crack the top five in presidential history. Read more here-https://bloom.bg/2hDiUeW
-CHART OF THE WEEK: Carney Rate Hike Signals Something Rotten in U.K. Economy. Bank of England Governor Mark Carney is ready to raise interest rates from a position of economic weakness rather than strength. The fastest inflation in four years has left the U.K. central bank preparing to hike next month for the first time in more than a decade, yet it’s not an accelerating economy fanning those price pressures. Instead, policy makers are being pushed to temper less benign inflationary forces generated by weak productivity and Brexit. Read more here-https://bloom.bg/2z0tPGu
-CHART OF THE WEEK: Canadian Oil’s High-Priced Run Set to End as Supply Surges. Canadian oil-sands producers enjoying the strongest market for heavy crude since 2008 will soon face a renewed glut. Suncor Energy Inc. expects its Fort Hills oil-sands mine to begin producing by year end, reaching as much as 175,000 barrels a day within a year. The startup will roughly coincide with the completion of planned maintenance at Imperial Oil Ltd.‘s Kearl mine.
The additions will fill pipelines, such as Enbridge Inc’s Mainline, that move barrels to refining centers and force more crude-by-rail shipments, pressuring prices, said Carl Evans, an oil analyst at Genscape Inc. in Boulder, Colorado, by phone on Tuesday. “If the mainlines can’t do any more, you are going to have to see prices to encourage movement by rail,” he said. Western Canadian Select will probably trade at a $12-to-$15 a barrel discount to West Texas Intermediate futures by the first quarter versus a differential of less than $10 for part of this year, Evans said.
The crude was at $11.15 below WTI on Tuesday. Shipping by rail is more expensive than by pipeline, generally requiring a bigger discount in the price. As pipelines fill up, crude exports by rail could rise to 400,000 barrels a day early next year, Evans said. That’s up from 92,000 barrels a day in July, National Energy Board data show. Read more here-https://bloom.bg/2i4cCsJ
-“The Nasdaq fell 78% in the “tech wreck” of early 2000. Most investors look at a chart and see the index is now higher on a nominal basis. But adjusted for inflation it’s still down 17.6% from its March 2000 peak! In other words, almost two decades later, tech stocks are not back to the same level of purchasing power, despite the index being higher on a nominal basis.” Jeff Clark
-While human analysts are still overwhelmingly bullish on Alphabet Inc. and Facebook Inc., a new robot analyst at Wells Fargo says it’s time to sell. Late last month, Wells Fargo analyst Ken Sena introduced AIERA, short for artificially intelligent equity research analyst, a bot that does massive automated grunt work to support human analysts as they track stocks and make trade recommendations. And while analysts are known to skew toward buy ratings, the new bot doesn’t seem to share the bias.
“AIERA’s approach this week appears decidedly more conservative (than last week), as she places a ‘hold’ recommendation on 11 names and even going so far as to place Google and Facebook in the ‘sell’ category,” Sena says in a new note sent out to clients on Friday. This is at odds with Wall Street’s outlook. Facebook, a stock that has climbed 48 percent this year, has 42 buys out of 47 ratings, according to data compiled by Bloomberg. Google parent Alphabet, up 24 percent in 2017, is similarly beloved, with 34 buys out of 41 ratings. It’s also at odds with its inventors. AIERA’s pessimism isn’t enough to cause Sena and his team to remove their own outperform rating on both stocks. Bloomberg
-Less than a week into the massive blackout that followed Hurricane Maria and essentially turned Puerto Rico into a cash-only economy, one top local banker became so concerned about the supply of bills that he called the Federal Reserve. William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island, according to Richard Carrion, the Popular Inc. executive chairman who made the call. He and Chief Executive Officer Ignacio Alvarez reflected on the chaotic early days of the crisis in an interview Friday at their office in San Juan’s Hato Rey financial district. Bloomberg
-“My message is very clear: There is going to be such a mess in the global financial system in coming years that a major amount of the assets that people have in banks will disappear. This is why I have been warning people, ‘Don’t keep your wealth preservation assets in the bank.’ People must keep their wealth outside of the banking system in private vaults, otherwise they might never get access to it when they need it. People have to own physical gold and when they do, do not trust the banks. When you own physical gold, store it outside the banks because they are already, right now, being extremely difficult when it comes to clients wanting their gold out of the banks, and I’m afraid the situation will get much worse during the next financial crisis.” Egon von Greyerz
-Sears Canada closing all of its stores. Sears Canada wants to close all of its remaining stores. The company said on Tuesday that it will apply to the Ontario Superior Court of Justice for permission to liquidate all of its remaining stores and assets. The court will likely hear the motion on Friday. If the court gives Sears the go ahead, the retailer will start liquidation sales at its locations on or after October 19. It expects the sales to last between 10 and 14 weeks. About 12,000 jobs will be eliminated. “The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” Sears said in a statement. Read more here-http://cnnmon.ie/2g3CG31
-Nobel Economist Thaler Says He’s Nervous About Stock Market. A buoyant and complacent stock market is worrying Richard H. Thaler, the University of Chicago professor who this week won the Nobel Prize in economics. “We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, speaking by phone on Bloomberg TV. “I admit to not understanding it.” The S&P 500 index has been reaching repeated records since President Donald Trump‘s election last November amid steady growth in the U.S. economy and labor market, as well as expectations for lower taxes, though policy action in Washington has been limited.
Thaler, who has made a career of studying irrational and temptation-driven actions among economic actors and won the Nobel for such contributions to behavioral economics, expressed misgivings about the low volatility and continued optimism among investors. “I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,” Thaler said, “Nothing seems to spook the market” and if the gains are based on tax-reform expectations, “surely investors should have lost confidence that that was going to happen.” The economist said that he didn’t know “where anyone would get confidence” that tax reform is going to happen. Read more here-https://bloom.bg/2wPDjnk and https://bloom.bg/2z13fNJ
-Fed Minutes Show Support for Next Hike Was a Close Call for Some. Federal Reserve officials held a detailed debate last month over whether forces holding inflation down were persistent or temporary, with several policy makers looking for stronger evidence of price gains before supporting a third interest-rate hike this year. “Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent,” according to minutes of the Sept. 19-20 meeting, released Wednesday in Washington.
Several policy makers said their decision on whether to raise rates this year “would depend importantly on whether the economic data in coming months increased their confidence” on inflation rising toward their 2 percent target. At the meeting, the U.S. central bank left the target range for the federal funds rate unchanged while projecting another increase before the end of the year and announcing an October start for a gradual unwind of its $4.5 trillion balance sheet.
The minutes suggest that the forecast for another rate increase in 2017 is conditioned on economic data showing that the inflation target is within reach over the next couple of years. “It was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted,” the minutes said. Before the release of the minutes, investors saw about a 78 percent probability of one more rate increase by the end of the year, according to pricing in fed funds futures markets. Fed officials have meetings scheduled on Oct. 31-Nov. 1 and Dec. 12- 13. Read more here-https://bloom.bg/2i7F50U
-Working Class’s Growing Debt Load May Hit ABS, Moody’s Says. Working-class Americans devoted a growing percentage of their income toward paying their debts last year, the first increase since 2010 and a shift that is likely contributing to rising default rates, Moody’s Investors Service said. The families’ debt burdens are still relatively low compared with earnings less than they’ve been for most of the last three decades, according to Moody’s, which released a report Tuesday that analyzed the Federal Reserve’s triennial survey of consumer finances. But the borrowers are accumulating more debt even as the economy continues its recovery, which could create problems for lenders if U.S. growth slows, said Jody Shenn, a senior analyst at the bond grader. “We are seeing signs of the credit cycle turning,” Shenn said in an interview. It’s important to look out for signs of stress “and think about the implications when the economy does hit a rough patch.” Read more here-https://bloom.bg/2wP9Xp2
-Billions in Illinois bills not sent for payment. Illinois is chasing a moving target as it tries to dig out of the nation’s worst budget crisis, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills as much as half the total hadn’t been sent to the official who writes the checks by the end of June. Although many of those IOUs have since been paid, a similar amount in unprocessed bills has replaced them in the last three months, Comptroller Susana Mendoza’s office said Monday.
That’s in addition to $9 billion worth of checks that are at the office but being delayed because the state lacks the money to pay them. The mound of past-due bills tripled over the two years Republican Gov. Bruce Rauner and Democrats who control the General Assembly were locked in a budget stalemate, which ended in July when lawmakers hiked income taxes over Rauner’s vetoes. In some cases, agencies were waiting to send their receipts to Mendoza because lawmakers haven’t approved the spending. For example, the Department of Corrections had $471 million in unpaid bills on hand as of June 30 largely for that reason. Read more here-https://yhoo.it/2gw29mg
-Government Eyeing ‘All Options’ to Cool Vancouver Housing Market. Vancouver’s million-dollar home prices aren’t just straining buyers, they’re holding back investment and businesses, said British Columbia’s finance minister, vowing to look at every option on the table to cool the market. “It’s become a bigger issue it’s become an economic issue for companies that can’t find opportunities to retain and attract employees,” Carole James, whose New Democratic Party-led government took power in July, said in an interview Tuesday at Bloomberg’s headquarters in New York.
“That’s critical to companies looking to invest.” Vancouver is ranked among global cities most at risk of a housing bubble for the second time this year as the cost of a typical single-family home surged to a record $1.6 million ($1.3 million), about 20 times the median household income. The seemingly relentless run-up has defied attempts to cool it, including a 15 percent tax on foreign buyers imposed by the previous, Liberal-led government last year. “One tax in place isn’t going to fix the challenges that are there,” James said. “We’re looking at all options. All ideas are on the table to address both demand and supply.” Read more here-https://bloom.bg/2zhufJO
-Why Trudeau’s Fight to Cool Toronto Housing Is an Uphill Battle. Justin Trudeau’s Liberal government has been under pressure to rein in runaway home prices, but a study by the national housing agency suggests the prime minister will struggle to exert control over the real estate market in Canada’s largest city. Conventional economic factors including population, incomes and borrowing costs accounted for less than half of the 40 percent surge in Toronto home prices between 2010 and 2016, according to a Canada Mortgage & Housing Corp. study obtained by Bloomberg through a freedom of information request.
Supply constraints, and to a lesser extent speculation and investment, accounted for most of the rest of the gains, although a lack of high-quality data about the availability of land made firm conclusions hard to draw. The report details the “puzzling” dynamics of the Toronto market and suggests factors other than demand are driving prices higher, leaving Trudeau few options to ease the affordability crisis.
It may also mean more needs to be done to promote supply and curb speculation, issues more readily dealt with at the municipal level. “While price increases in Vancouver have largely been supported by economic fundamentals, a more puzzling result points to the state of the Toronto market, where fundamentals haven’t been as strong,” CMHC analysts said in the 134-page study prepared for Families Minister Jean-Yves Duclos. Read more here-https://bloom.bg/2yecrPF
-London House-Price Outlook Slides as ‘Spooked’ Buyers Stay Away. Real-estate agents in London are at their most downbeat since at least 2010 as the British capital remains the weakest spot in a slowing market. The U.K. market as a whole lacked momentum in September as the prospect of the Bank of England raising interest rates added to buyer caution, the Royal Institution of Chartered Surveyors said in a report published Thursday. That was most acutely felt in London, where prices fell and expectations for the next 12 months hit their weakest since the survey began seven years ago.
While prices nationally grew marginally last month, agents were pessimistic, at least in the shorter-term, with three-month expectations becoming increasingly negative, RICS said. New buyer inquires and agreed sales volumes slid to the lowest level since the direct aftermath of the Brexit vote. Buyers are “definitely spooked” in London, according to Michael Fiddes at agents Strutt and Parker, while data from researcher Lonres suggests there are few signs that the pound’s decline since the European Union referendum last year is attracting foreign buyers. Read more here-https://bloom.bg/2yjpSiX
-Distressed Investors Are Already Buying Houston Homes for 40 Cents on the Dollar. Bryan Schild drives through the byways of Houston looking for what could be the investment opportunity of a lifetime: homes selling for as little as 40¢ on the dollar. “We Pay Cash For Flooded Homes $$$$$$$$ Don’t fix it, sell it. Quick close,” read the signs piled in the back seat of his Ford pickup. Schild stops by a ranch-style house where 74-year-old Paul Matlock lives with his wife, disabled from multiple sclerosis. Matlock is desperate to leave and is considering Schild’s offer of $120,000 half the home’s value three weeks earlier. A half-dozen other investors have made offers, one as low as $55,000. “The whole thing makes me feel like there’s a bunch of vultures sitting on my back fence,” Matlock says. “They’re waiting for the dead body to fall over.” Read more here-https://bloom.bg/2z36bJs
-Amazon Is Testing Its Own Delivery Service to Rival FedEx and UPS. Amazon.com Inc. is experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses, according to two people familiar with the plan, which will push the online retailer deeper into functions handled by longtime partners United Parcel Service Inc. and FedEx Corp. Read more here-https://bloom.bg/2g0SFhW
-Bitcoin Breaches New Milestone by Smashing Past $5,000 Mark. Bitcoin surged to a fresh record Thursday as the enthusiasm for cryptocurrencies showed little sign of abating. The world’s largest cryptocurrency rose as much as 8.4 percent and was trading 7.9 percent higher at $5,209 as of 12:34 p.m. in London, resuming gains after a one-day break. As recently as December, bitcoin was trading at less than $1,000 dollars. Bitcoin tumbled below $4,000 last month after China’s central bank banned initial coin offerings and ordered all cryptocurrency exchanges to close. Recent reports that Goldman Sachs Group Inc. is exploring how it could help its clients trade cryptocurrencies are now helping sentiment. Read more here-https://bloom.bg/2g5Qf1J
-A former hedge fund manager says bitcoin is headed to $10,000 in 6-10 months. The Bitcoin bubble will continue blowing up until it inevitably pops, according to Michael Novogratz, a former manager at the $72 billion investor Fortress. “It would not surprise me if, in the next six to 10 months, we’re over $10,000,” Novogratz told CNBC on Tuesday. Bitcoin traded near $4,823 per dollar at 11:31 a.m. ET on Monday, up 657% for the year. At a recent meeting with institutional investors in San Francisco, he realized the “herd” was approaching to cash in on the booming demand for cryptocurrencies. The CEOs of major investment banks including Morgan Stanley and Goldman Sachs have recently commented publicly on bitcoin. Novogratz is starting a $500 million crypto fund that invests in bitcoin, ethereum, and initial-coin offerings. “Yes, it’s a bubble,” Novogratz said. “It’s going to be one of the great manias of all time.” Read more here-http://read.bi/2xzj8tq
-Ken Rogoff: Bitcoin will eventually collapse. Kenneth Rogoff, the former chief economist of the International Monetary Fund, has weighed in on Bitcoin. “My best guess is that in the long run, the technology will thrive, but that the price of Bitcoin will collapse.” Bitcoin’s price has exploded over the last two years, and has climbed more than 350% since the start of 2017. The cryptocurrency’s rapid ascent, and the cottage industry that has grown around it, have both galvanized investors’ interests and elicited their fair share of criticism. Read more here-http://read.bi/2yFbkvr
-Kyle Bass Says ICO Investors Will Get Wiped Out in Crypto ‘Mania.’ Hedge fund manager Kyle Bass just took sides in the raging battle over the viability of the cryptocurrency market. Calling many of the dozens of initial coin offerings that have taken place this year “frauds,” the Hayman Capital Management founder warned in a Bloomberg Television interview that investors will face steep losses. “A whole bunch of people are going to lose a lot of money,” Bass said in an interview with Erik Schatzker.
“These ICOs you’re going to see a bunch of them go completely broke. A bunch of them are frauds, and that is going to be problematic for all the people that just rushed in.” So far this year, more than $2 billion has flowed into ICOs which allow cryptocurrency startups to raise funds by issuing their own tokens according to Coinschedule.com. Once the “gold rush” settles down, Bass said, cryptocurrencies could be a viable asset class. For now, though, “it is a bit of a mania.” Read more here-https://bloom.bg/2g38wwI
-North Korean Hack of U.S. War Plans Shows Off Cyber Skills. The techno soldiers of Kim Jong Un are growing more aggressive in defending North Korea’s supreme leader against threats from Donald Trump and South Korea. The country’s hackers stole military plans developed by the U.S. and South Korea last year that included a highly classified “decapitation strike” against the North Korean leader, according to a South Korean lawmaker. The plans were devised as the regime in Pyongyang steps up nuclear tests and fired long-range missiles toward the Pacific Ocean. Read more here-https://bloom.bg/2xzt2eK
-Inside the Saudi King’s 1,500-Person Entourage in Moscow. Saudi officials booked two entire luxury hotels and brought their own carpets and hotel staff with King Salman bin Abdulaziz on his historic visit. Saudi King Salman bin Abdulaziz brought 1,500 people, a golden escalator and his own carpets on his historic, four-day state visit to Russia, a person familiar with the matter said. The 81-year-old leader of the Gulf kingdom exited his plane late Wednesday and stepped out onto the special escalator he travels with. But something went wrong: It malfunctioned halfway down, and he had to walk the rest of the way. A cavalcade of cars sped the monarch to the center of the city, flanked by Russian police escorts. Read more here-https://bloom.bg/2i4cDg2
-Drop $60 Million, Build a Mansion, Become a Prince of Bel Air. In what’s being billed as a “last of its kind” opportunity for the ultra-wealthy of Southern California, a 4.6-acre (1.9-hectare) parcel ready for development is coming on the market in the exclusive community of Bel Air. Asking price: $60 million. Just build a mansion on the land, and join such local nobility as Elon Musk and Jay Z and Beyonce. Read more here-https://bloom.bg/2gdRKyt
-Da Vinci and Warhol Paintings Could Command $150 Million. Two paintings by art icons could fetch $150 million in a New York auction next month. Christie’s valued “Christ as Salvator Mundi,” a small painting by Leonardo Da Vinci, at about $100 million. A monumental canvas by Andy Warhol inspired by Da Vinci’s famous “Last Supper” could go for $50 million. Both works will be offered during an evening auction of postwar and contemporary art on Nov. 15. Being able to partner an Old Master painting with Warhol’s “Sixty Last Suppers” appealed to the Da Vinci seller, according to Christie’s. Read more here-https://bloom.bg/2ycTsEU
-Francis Bacon Painting Offered for $78 Million Fails to Sell. A trophy painting by Francis Bacon failed to draw any bids at Christie’s in London after being offered at auction for 60 million pounds ($78 million). The unexpected outcome for the star lot of Christie’s evening sale of postwar and contemporary art on Friday drew a collective gasp in the sale room. The auctioneer began soliciting bids at 50 million pounds and continued up to 58 million pounds. None came. Titled “Study of Red Pope 1962. 2nd Version 1971,” the 6.5-foot-tall canvas depicts Bacon’s two most famous subjects: his lover George Dyer and Pope Innocent X. It’s the only work that has both muses in the same composition, Christie’s said. Dyer committed suicide six months after the work was made. A Christie’s spokesperson said Friday that the piece attracted global attention and the auction house expects strong after-sale interest in it. Read more here-https://bloom.bg/2i4QGxI
-The Glut of Private Jets Means ‘Insane’ Bargains for Buyers. Corporate-jet makers are flooding the market, spurring deep discounts for new aircraft and fueling a three-year slide in prices of used planes. Most major manufacturers, including Gulfstream and Bombardier Inc. which is also contending with rising hurdles in its commercial-jet business have pared production somewhat in the last couple years as demand for private jets has sagged. But that hasn’t been enough to halt declines in aircraft values, say consultants, brokers and analysts in the $18 billion industry. Read more here-https://bloom.bg/2xzIYxp
-Wineries devastated, bottles sucked dry of wine after deadly wildfires in California. Metal racks sagging with dozens of blackened bottles were among the smoldering remains of a Napa Valley winery destroyed by wildfires that raced through a region famous for its fine food and drink. The bottles were empty, sucked dry of wine. Some wine barrels were intact, as well as a swimming pool and chairs, but otherwise, the Signorello Estate winery structure was gone.
Throughout Northern California’s wine country, vintners able to get to property surveyed the damage to vineyards, tasting rooms and storage while others had to wait patiently for flames to die down. At the Gundlach Bundschu in Sonoma County, workers were not sure the grapes above the winery survived a second night of fires that have destroyed at least two wineries and damaged more. “We haven’t been able to go up and assess the vine damage,” said Katie Bundschu, vice president of sales. “We’re in the process of salvaging what we can.” Read more here-http://read.bi/2yivTwJ
-Before-and-after photos show how California’s wineries have been devastated by fires. Northern California wine country is threatened as a series of massive wildfires continue to rage in the counties of Napa, Sonoma, and elsewhere. Read more here-http://read.bi/2wP7QSs
-Hurricane Ophelia is on course to strike Ireland and the UK early next week. Hurricane Ophelia is churning the waters of the northeastern Atlantic, headed for Europe. It’s far from land right now, but it’s noteworthy for its location, intensity, and direction of movement. The storm is the 10th straight tropical cyclone to reach hurricane intensity in the Atlantic Ocean. Which means this year has tied the all-time record set in 1878 which was also met in 1886 and 1893, though lack of satellite measurements until the latter half of the twentieth century means there’s some uncertainty here. Read more here-http://on.mash.to/2z3jHNd
–Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 1+ Carat Radiant Cut Fancy Blue Green Diamond. Extremely Rare, One of a Kind Worldwide. Harold Seigel-Watch here-http://bit.ly/LIsp98
-Record 37ct. Pink Diamond Up for Sale. Sotheby’s will auction the Raj Pink diamond next month for an estimated $20 million to $30 million, the company announced Sunday. Weighing 37.30 carats, the diamond is the largest fancy intense pink diamond on record, according to Sotheby’s. It will headline the auction house’s Magnificent Jewels and Noble Jewels sale in Geneva on November 15. “The discovery of any pink diamond is exceptional, but the Raj Pink’s remarkable size and intensity of color places it in the rarefied company of the most important pink diamonds known,” said David Bennett, chairman of Sotheby’s international jewelry division.
The auction house set the current record price for a fancy intense pink diamond when it sold the Graff Pink for $46.2 million, or $1.86 million per carat, in November 2010. At 24.78 carats, the Graff Pink is a third smaller than the Raj Pink and has a lighter color, Sotheby’s noted. Since that sale, the auction market for exceptionally rare and beautiful colored diamonds, notably pinks and blues, has been buoyant.
The rough diamond that yielded the Raj Pink was studied for over a year after its discovery in 2015. A master cutter crafted it into a sparkling cushion-modified brilliant cut. The Gemological Institute of America (GIA) characterized the diamond as an “astonishing stone,” describing its hue as “a very bright and ravishing fancy intense pink color.” “For a diamond to display strong, unmodified pink color like that observed in the Raj Pink is rare, particularly at so considerable a weight,” the GIA added. Read more here-http://bit.ly/2gcV9xC and http://bit.ly/2z2WxH0
-Forget Gold, This Exchange Says Diamonds Could Be a Great Safe Haven. When it comes to havens, investors usually think of gold or Treasuries. Now an exchange in Singapore is starting to trade a credit card-sized package of diamonds for those seeking a shelter from global risks. While bullion trades in standard weights and purities, diamonds vary according to cut, clarity, color and carat, making them generally harder to buy and sell as an investment.
To solve this, the Singapore Diamond Investment Exchange is listing a product called Diamond Bullion, or sets of investment-grade polished gems, in denominations of about $100,000 and $200,000 each. “Until now, there was no way people could invest in diamonds in the form which is equivalent to investing in gold,” said Alain Vandenborre, executive chairman and founder of the exchange. “A diamond has absolutely zero correlation with any other asset class, whether it’s commodities, bonds, equities. It’s a store of wealth, it’s a hedge against volatility and you need that in your portfolio.” The products are issued by the Singapore Diamond Mint Co.
The gems are sourced from the wholesale market through De Beers sightholders and Alrosa PJSC, and must be in the top five levels of color and clarity, Vandenborre said in an interview in Singapore on Oct. 4. The exchange plans to list other denominations in future, and the interest they attract could boost trading volumes and global prices, he said. The products are fungible and tradeable, with real-time pricing available from the exchange website or the mint’s mobile app, the bourse said in a statement. Each package has a unique optical signature recognition system and serial number. Read more here-https://bloom.bg/2zjB2CB
-Jim Rickards: Four Major Catalysts for Gold. The Federal Reserve would like to continue “normalizing” interest rates. But the most recent economic data simply does not justify it. On Sept. 29, the August core PCE year-over-year (YoY) inflation figure was released. And the data came in exactly as I expected. YoY inflation for August was just 1.3%, down 0.6% from the January reading of 1.9%. That marked eight consecutive months of flat or lower readings. Needless to say, the Fed is miles away from their 2.0% target. They’re actually moving consistently in the wrong direction.
Second, the September employment report came out the Friday before last. A Reuters survey of economists had expected the economy to add 90,000 jobs in September. How many did it really add? Not zero, but less than zero. The economy shed 33,000 jobs last month. This was the first time in seven years that the U.S. economy lost jobs. Now, that may be partly due to the recent hurricanes that struck Texas and Florida. But coming on top of the weak inflation data that also came out, it will certainly give the Fed more than enough reason to hit the “pause” button on a December rate hike. Read more here-http://bit.ly/2yIhjQ8 and http://bit.ly/2i7nLcc
-Lawrie Williams: The fiction in Chinese gold reserves and media import coverage. According to the People’s Bank of China the country’s central bank the Asian economic giant’s gold reserves have now remained unchanged for 11 straight months indeed ever since the nation’s currency the yuan or reminbi was admitted by the IMF as an integral constituent of that entity’s Special Drawing Right (SDR). This acceptance was a key step towards making the yuan acceptable as a reserve currency around the globe.
And in the 16 months leading up to this China reported its gold reserve increases monthly in the interests of transparency. Since then somewhat cynically we believe the country has reverted to reporting zero increases month-by-month. While it is unlikely to unseat the U.S. dollar as the world’s principal reserve currency in the short term, China has already been making moves to make the yuan an integral constituent of certain trade deals, notably as acceptable payment currency for its huge oil imports particularly so as it is prepared to facilitate the exchange of its yuan payments for gold tradable on a Chinese exchange, thus bypassing the petrodollar in which all payments for oil had been made in the past.
But while its ‘official’ gold reserve figure remains unchanged there is increasing belief that this figure is a fiction, and its true gold reserves are considerably higher which might indeed be deemed necessary if it is effectively to finance its oil purchases with gold, albeit indirectly. The country has a history of only announcing its gold reserve accumulations at several year intervals claiming that this additional reserve gold had been held in a separate account which it did not need to declare to the IMF as it was not actually a constituent part of its official forex reserve a question of semantics at best. Read more here-http://bit.ly/2wRsiCf
-Is Gold Really a Good Hedge? Bloomberg’s Macro Man Cameron Crise columnist set out to test whether gold really offers protection against market turmoil. What he found was a bit of a surprise. Gold bugs point to a myriad of reasons to own their favorite metal, from fiat currency debasement to gold’s history as a monetary unit. Among the favorites, however, is gold’s utility as protection against a market or political crisis. In August, for example, Bridgewater Associates LP’s Ray Dalio suggested investors should hold 5 percent to 10 percent of their portfolios in gold to hedge against rising political risks.
I’m a macro strategist who writes Bloomberg’s Macro Man column, and I found myself wondering: Is gold really an effective hedge in periods of risk? I decided to take a Mythbusters-style approach to find the answer. My first step was to search for evidence of a statistical relationship between risk aversion and the gold price. I used the CBOE Volatility Index (VIX) as a proxy for market risk aversion and ran a series of multifactor regressions to determine whether equity volatility is statistically significant as an explanatory variable for gold. The answer, somewhat to my surprise, appears to be yes.
I used monthly data from 1990 to 2015 and modeled the level of the gold price. Although the VIX wasn’t the most important driver that would be inflation, followed by real U.S. 10-year yields the t-statistic, a gauge of the importance of explanatory variables, shows up as highly significant. Interestingly, gold’s relationship with inflation over the past three decades has been sharply negative, suggesting the metal could drop as inflation rose. So its reputation as an inflation hedge appears somewhat exaggerated, though the results would likely look rather different if the 1970s were included in the analysis. Read more here-https://bloom.bg/2xAPbON
-Frank Holmes: Here’s why bitcoin will never replace gold. Believe it or not, there are upwards of 2,100 digital currencies being traded in the world right now, with a combined market cap of nearly $150 billion, according to Coinranking.com. Obviously not all of these cryptos will survive. We’re still in the early innings. Last month I compared this exciting new digital world to the earliest days of the dotcom era, and just as there were winners and losers then, so too will there be winners and losers today. Although bitcoin and Ethereum appear to be the frontrunners right now, recall that only 20 years ago AOL and Yahoo! were poised to dominate the internet. How times have changed!
It will be interesting to see which coins emerge as the “Amazon” and “Google” of cryptocurrencies. Lately I’ve been seeing more and more headlines asking whether cryptos are “killing” gold. Would the gold price be higher today if massive amounts of money weren’t flowing into bitcoin? Both assets, after all, are sometimes favored as safe havens. They’re decentralized and accepted all over the world, 24 hours a day. Transactions are anonymous. Supply is limited. But I don’t think for a second that cryptocurrencies will ever replace gold, for a number of reasons.
For one, cryptos are strictly forms of currency, whereas gold has many other time-tested applications, from jewelry to dentistry to electronics. Unlike cryptos, gold doesn’t require electricity to trade. This makes it especially useful in situations such as hurricane-ravished Puerto Rico, where 95 percent of people are reportedly still without power. Right now the island’s economy is cash-only. If you have gold jewelry or coins, they can be converted into cash all without electricity or WiFi. Finally, gold remains one of the most liquid assets, traded daily in well-established exchanges all around the globe. Every day, some £13.8 billion, or $18 billion, worth of physical gold are traded in London alone, according to the London Bullion Market Association (LBMA). The cryptocurrency market, although expanding rapidly, is not quite there yet. Read more here-http://read.bi/2g4NTjH and http://bit.ly/2wRL9go
-Clive Maund: Gold Market Update. The last Gold Market update almost a month ago called the intermediate top within a day, as you may recall, and the subsequent Gold and US Dollar Interim update called the rally in the dollar the day before it started. Having seen a significant reaction back by gold, the question now is “Has it run its course?” The short answer to that is yes, although calling a bottom here is complicated by the fact that gold’s COTs have not eased as much on the reaction as we might have expected, and the dollar Hedgers’ chart is still flat out bullish for the dollar.
What this means is that we may need to see some bottoming action by gold, even if it soon breaks out of its rather steep short-term downtrend, and another possibility that we will examine is that the dollar and gold rally in tandem, a rare circumstance that could be occasioned by an extreme development such as an attack on North Korea, although if this happens the peoples of Seoul and Tokyo will doubtless have more important things to think about than the price of gold.
On gold’s latest 6-month chart we can see how the reaction of recent weeks has retraced about 50% of the prior rally, as tensions with N Korea have temporarily eased. This reaction has more than fully corrected the overbought condition resulting from the rally, and has brought gold back into a zone of significant support just above its rising 200-day moving average, and with moving averages in bullish alignment, conditions generally favor a reversal and rally. The “spinning top” candlestick that occurred on Friday on increased volume may mark the turn, although the candlesticks that occurred on the charts for silver and silver proxies look like more convincing reversals. Read more here-http://bit.ly/2kL8pLd
-Greg Hunter: Michael Pento Interview, Massive Global Defaults Coming. On gold, Pento says, “You’ve got to have 10% physical gold in your liquid net worth. It has to be physical gold that you possess directly. I cannot stress that enough. I like all precious metals. They are going to be in a massive and unprecedented bull market sometime in 2018.” Read and watch more here-http://bit.ly/2g6YQRW
-Scientists Find $1.8 Million Worth of Gold in Swiss Wastewater. Switzerland’s gold refineries may want to consider starting a recycling program. Scientists at the Swiss Federal Institute of Aquatic Science and Technology estimate that about 43 kilograms of gold worth about $1.8 million passes through the country’s wastewater every year. In some sites in the southern Ticino region, “concentrations of gold in sewage sludge are sufficiently high for recovery to be potentially worthwhile,” the researchers said in a report published Tuesday.
“This can be attributed to the presence of several gold refineries in the region.” The study involving 64 water treatment plants also found about 3,000 kilograms of silver equivalent to about $1.7 million going to waste every year, much of it residue from the chemical and medical industries. Switzerland is major gold-refining hub. About 70 percent of the world’s gold passes through the country’s refineries on average every year. Read more here-https://bloom.bg/2yevoUy
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
-It is now a matter of public record that JPMorgan became the dominant COMEX paper silver short upon its acquisition of Bear Stearns in March 2008 and has maintained that role to this day. At that time, silver had run up to $21, the highest level it had been in 28 years and was inflicting ruinous margin and mark-to-market losses on Bear Stearns, leading to the JPMorgan takeover. That proved to be the price high for silver for the next two years as JPM was successful in driving prices under $9 in late 2008, making hundreds of millions and even billions of dollars on its short sales in the process.
But a budding physical silver shortage which began to exert itself in late 2010 caused prices to move higher and inflict large open and unrealized losses on JPMorgan due to its large COMEX paper short position. Silver prices raced to near $50 by the end of April 2011, leaving JPMorgan with billions in open losses. There is no doubt in my mind that this was JPMorgan’s “come to Jesus” moment, in which it came to understand the power of a physical shortage by being on the dead-wrong side of the equation. In April 2011, with silver racing to $50 on genuine signs of a developing wholesale physical shortage, JPMorgan looked into the financial abyss and saw the light.
The light that JPMorgan saw was that a physical silver shortage was at hand and it needed to both rescue itself at that time and position itself never to be in that predicament again. It did so by arranging to help crash prices starting on May 1, 2011 to cut off the growing investment demand that was flaming the developing physical shortage (before it awakened the industrial users). Having accomplished that in spades through a variety dirty COMEX trading tricks, JPM also set about creating not only protection against certain future silver shortages, but a way to earn enormous future profits. The only thing that could offer both permanent protection and massive profit opportunity in a physical silver shortage was to possess physical silver. Silver analyst Ted Butler Oct 11 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-The just over 68,000 contracts that the managed money traders hold long are only 12,000 contracts or so above the 56,000 contract level that has proven so far to be the drop dead low level over the past two years. This implies only 12,000 long contracts worth of potential selling on lower prices should we go back to the extreme lows. Of course, there could be even greater liquidation, but keep in mind there’s no guarantee the 12,000 contracts will be liquidated either.
My point is that the key feature is not the amount of potential managed money long liquidation remaining, because we’re not talking about massive numbers of potential contracts in the total scheme of things. The wild card in silver is still potential managed money new shorting from here. With just under 13,000 contracts held short through Tuesday, the managed money technical funds hold almost 53,000 contracts less short than the near 66,000 contracts they held short on July 18, not that long ago. Tell me how many (if any) new short contracts the managed money traders will sell from this point and I think I could give you a pretty good blueprint for prices. Silver analyst Ted Butler Oct 7 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-For the criminals (the commercials) to win this latest round of COMEX positioning, they must generate sufficient managed money selling and the only way for that to occur is with a series of new price lows (aka slicing the salami). There is no particular time period in which this must occur and this allows for intermittent price rallies during a positioning move to the downside. This is one of the frustrations with COT market structure analysis as a timing mechanism the only time basis that matters is what the criminals determine it to be. The only measure of criminal failure is collective commercial short covering to the upside.
That’s coming someday, but not through this day. As and when there is collective commercial short covering to the upside, the silver manipulation will be over. Over the past three weeks, through today, the 8 largest commercial shorts in COMEX gold and silver have succeeded in rigging prices lower to the tune of largely recovering the entire $2.7 billion they were out in unrealized losses at the recent top in gold and silver prices. I know there is wide disparity between the individual positions held by the 8 largest shorts, but on average, each big short has recouped close to $350 million as a result of the price decline. But simply knocking down the price is not enough, the real task at hand for the biggest criminal shorts is to buy back as many short positions as possible. On that measure, there would still appear to be much work ahead. Silver analyst Ted Butler Oct 4 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Steve St. Angelo: The Unknown Fundamental, This Will Push The Silver Price Up Much Higher. Precious metals investors need to understand the coming silver price surge will not occur due to the typical supply and demand forces. While Mainstream analysts continue to generate silver price forecasts based on supply and demand factors, they fail to include one of the most important key factors. Unfortunately, the top paid Wall Street analysts haven’t figured it out that supply and demand forces don’t impact the silver price all that much. For example, I continue to read articles by analysts who suggest that industrial demand will impact the silver price in the future. They believe that rising industrial silver demand should push prices higher while lower demand does the opposite. However, according to my research, I don’t see any real correlation. So, why should industrial demand impact the silver price in the future when it hasn’t in the past? Read more here-http://bit.ly/2z3zJGU
-KWN: One Of The Greats Just Exposed Why The Price Of Silver Will Surge Above $100 In 27 Months. “Silver is often referred to as gold’s ‘sister’ metal. And if they were real sisters, you could imagine that silver might well resent the greater attention invariably lavished on its lustrous sibling. I’ve been making the case as strenuously as I can that gold is on the threshold of a great bull market that will transcend anything seen in the past, and I’ve urged all investors to make sure they have a big stake in it. But here I want to give silver its due as well, for I have long believed that as gold rises, silver which for many investors might be the more affordable metal to acquire will be enjoying a big bull move of its own. Read more here-http://bit.ly/2i8LbxK
-Clive Maund: Silver Market Update. The last Silver Market update almost a month ago called the intermediate top within a day, as you may recall, and it has back to the extent predicted in that update. There was more evidence of a turn in silver than gold on Friday, when a more obvious reversal candle appeared on its chart. On the 6-month chart we can see that a long-tailed candle occurred that approximates to a bull hammer where the price closed not far off the day’s highs on the biggest volume for over a month. After its recent reaction this certainly looks like a reversal, especially as the downtrend channel has been converging. The earlier overbought condition has more than fully unwound and the price has dropped back into a zone of support. Read more here-http://bit.ly/2g5ruCJ