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World Financial Report – December 13th, 2018

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

-CHART OF THE WEEK: A key measure of U.S. inflation picked up as expected in November on rising costs for housing, medical care and used cars, reinforcing expectations that the Federal Reserve will raise interest rates next week. The so-called core consumer price index, which excludes volatile food and energy costs, rose 0.2 percent from the prior month and 2.2 percent from a year earlier, according to a Labor Department report Wednesday. That matched the median estimates in a Bloomberg survey of economists. The broader CPI was unchanged from the prior month, also in line with projections, as energy prices plunged. The report indicates underlying inflation is steadying around the Fed’s 2 percent goal, without flaring up, as prices get support from the recent pickup in wages as well as higher materials costs amid the tariff war with China. Still, investors and economists are divided about the path of interest rates beyond a widely projected hike at the central bank’s Dec. 18-19 meeting. Bloomberg

-CHART OF THE WEEK: The Stock Market Has Wiped Out Its 2018 Gains. But if You Step Back, It’s Still Riding High. Worries about global economic growth, trade and the strength of corporate America have been battering stocks. While that’s cause for concern, it is important to put slides like this in context.

The S&P 500-stock index has entered what the financial world calls a correction, technically defined by a decline of at least 10 percent from the market’s peak. It’s a relatively arbitrary threshold, but it’s often seen as a symbol of souring investor sentiment. Lately, the markets have been rattled by the prospect that a protracted trade war with China could begin to take an economic toll at a time when global growth is slowing. Viewed over a longer period, however, corrections often begin to look less severe. Even after the current sell-off, for instance, the S&P 500 through Monday’s close was up more than 16 percent since President Trump’s inauguration and more than 23 percent since Election Day 2016.

Over the long run, the markets have risen since the economy came out of recession a decade ago. During that time, there have been a half-dozen corrections, and the declines didn’t presage more significant downturns in the market or the economy. In the last 20 years, there have been 10 corrections. Only two turned into a bear market, defined as a decline of 20 percent from its high, amid the recessions that began in 2001 and at the end of 2007. Of course, corrections can be early indicators of a severe downturn in the stock market. And given concerns about the age of the current bull run, some are wondering if the recent selling indicates that an end to the nearly decade-long rally is near. Read more here-https://nyti.ms/2EesvpC

-CHART OF THE WEEK: Day After Day of Stock Pain Is Starting to Rival February’s Plunge. You thought February was brutal? This sell-off is deeper. And going by the speed at which losses have recently been piling up, it’s approaching the previous episode’s velocity, too. From an intraday high of 2,800.18 last Monday, the S&P 500 Index has been in a week-long swoon that at the lowest point this morning covered 217 points. The last time it slid as much over as many sessions was in February, when 228 points were zapped from Feb. 2 to Feb. 8.

There hasn’t been one single clear catalyst that pushed the S&P 500 down by 6 percent in four days. It’s been a cocktail of concerns, everything from trade, the pace of rate hikes, a possible slowdown in economic growth and uncertainty in Europe. “This is what a stock market correction looks like,” said Michael Antonelli, managing director at Robert W. Baird & Co. “This one is a full-blown market correction, the other one wasn’t.” Bloomberg

-CHART OF THE WEEK: Where’s the Bottom? Valuation Cases for an Unstable Stock Market. How low must stocks go to reach levels where investors get a grip on their hair-trigger selling? It’s the question on everyone’s lips. One after another, levels that promised support have failed amid the wild swings that have engulfed equities since October. While the S&P 500 Index bounced Monday within points of its 2018 low, it’s fallen out of a range of technical support, including its 200-day moving average. Try as they may, investors just can’t decide if shares are cheap enough to own.

So many things make the calculation hard, from U.S.-China trade to rising interest rates and worries about a recession. “In the short run, these valuations are attractive. Longer run, it’s a little tougher to see,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments, said by phone. “At some point the economy is going to slow. We will have higher interest rates to go along with that, and that’s going to hurt valuations.” So where’s the floor? Below are four views that tackle the question from the perspective of valuation, using corporate earnings, monetary policy and economic fundamentals. Some show the bottom is a long way off, others that stocks are a screaming buy. Bloomberg


-CHART OF THE WEEK: A Bear Market Is Already Here for Most Major Global Stocks. The majority of the biggest global stocks, as well as many indexes, are already in bear-market territory. Of companies in the MSCI World Index a gauge of developed-market firms 52 percent are down by more than 20 percent from their 52-week high, according to Societe Generale global head of quantitative strategy Andrew Lapthorne. The MSCI World gauge fell as much as 1 percent Monday, with the drop worsening after the start of the U.S. session.

The S&P 500 was off as much as 0.9 percent. If it’s anything like the two most recent experiences the 2011 and 2015-16 retreats the share of constituents off at least 20 percent from their annual high may be poised to swell to two-thirds. “For a while now equity investors have been concerned about a whole gamut of macro issues; it was just the U.S. equity market ignoring them until now,” he wrote in a note on Monday. To be sure, the strategist observed that this group only accounts for 38 percent of the benchmark by market capitalization. Emerging market indexes, meanwhile, are already well into bear-market territory. Bloomberg


-CHART OF THE WEEK: Planned Production Cuts Are Already Easing Alberta’s Oil Crisis. Alberta’s oil-production curtailment plan has largely accomplished its mission even before it has gone into effect. Since Canada’s top oil-producing province announced mandatory output curbs on Dec. 2, the spot price of Western Canada Select crude has surged more than 70 percent. The grade’s discount to the U.S. benchmark has been chopped in half to around $13 a barrel, the narrowest in more than a year. Other blends, including Edmonton Mixed Sweet and Syncrude, also are surging. Oil producers are saying the 8-day-old plan will bring “significant relief” to the province’s pipeline congestion problem, and it’s even being credited with preventing layoffs for at least one major oil-sands company.

The 325,000-barrel-a-day supply cut takes effect next month. “It’s working the proof is in the price,” said Tim Pickering, chief investment officer of Auspice Capital Advisors Ltd. in Calgary. “The amount of the curtailment was enough to make a measurable difference in the glut that we have.” The plan announced by Alberta Premier Rachel Notley probably has encouraged producers to start dialing back output because they know they can do so without putting themselves at a disadvantage to rivals, Pickering said. As oil suppliers and refiners negotiate sales for the months ahead, the Western Canadian discount may continue tightening into March, he said. Still, uncertainty abounds. Before the production cuts were announced, companies had started to slash dividends and delay 2019 drilling plans, and it may take more than a week of stronger prices for them to reverse those moves. Bloomberg

-CHART OF THE WEEK: Alberta’s Output-Cut Mandate May Be Driving Oil Prices Too High. Alberta’s plan to boost crude prices through mandatory production cuts is working a little too well. Just over a week after Premier Rachel Notley announced that oil producers will be required to curtail output by 8.7 percent, the price of heavy Canadian crude has more than doubled, in some cases rendering Western Canadian Select too expensive to ship south to U.S. Gulf Coast refiners. Alberta’s heavy oil trades at about $41 a barrel, about $9 less than on the U.S. Gulf Coast, according to traders and data compiled by Bloomberg. For a shipper without committed volumes, that price difference is so small that it wouldn’t cover the costs of shipping it down either TransCanada Corp.‘s Keystone pipeline to Houston or Enbridge Inc.‘s pipeline system. Gulf Coast imported about 500,000 barrels a day of Canadian crude in September. Bloomberg

-CHART OF THE WEEK: Sydney House Prices Drop Most in 30 Years. Sydney’s property market slump has reached a new milestone, with values falling further than the late 1980s when Australia was on the cusp of entering its last recession. Average Sydney home values have fallen 10.1 percent since their 2017 peak, CoreLogic Inc.’s head of research Tim Lawless said Tuesday, citing data as of Dec. 7. That surpasses the top-to-bottom decline of 9.6 percent recorded between 1989 and 1991. The declines in Australia’s most populous city are accelerating as tighter mortgage lending standards crimp the amount people can borrow and as nervous buyers sit on the sidelines. Bloomberg

-CHART OF THE WEEK: ‘What Is Bitcoin?’ Topped Google’s 2018 What Asked Trending List. Bitcoin’s mesmerizing rise and fall in the past year has left investors and regulators asking what just happened? Many are also asking an even more fundamental question: ‘What is Bitcoin?’ In fact, that was the most searched definition in the U.S. and U.K. in 2018, according to Google Trends. While previously notorious among anarchists and day traders, Bitcoin, which turned 10 this year, gained mainstream recognition after surging 1,400 percent in 2017 and then falling 80 percent in 2018. But making sense of assets that are digital, created by computer networks and susceptible to extreme volatility is no mean feat. And that’s not to mention all the jargon: blockchain, hash rate, miners and nodes. Bitcoin is not the only cryptocurrency Google users are interested in. ‘How to buy Ripple’ was the fourth most-asked how to question, Google Trends data show. The cryptocurrency widely referred to as Ripple is actually named XRP, just to add to the mayhem. Bloomberg

-CHART OF THE WEEK: Ranks of Crypto Users Swelled in 2018 Even as Bitcoin Tumbled. It turns out that cryptocurrency enthusiasts were committed well beyond the HODL rallying call that urged them to hold on during this year’s digital-asset market collapse. The number of verified users of cryptocurrencies almost doubled in the first three quarters of the year even as the market bellwether Bitcoin tumbled almost 80 percent, according to a study from the Cambridge Centre for Alternative Finance. Users climbed from 18 million to 35 million this year. Bloomberg

-Tuesday’s 60-point decline dragged the TSX to its lowest close since Nov. 14, 2016. BNNBloomberg

-Cronos Group has struck a deal with Altria that will see the cigarette-maker spend $2.4 billion for a 45-per-cent stake in the Canadian pot producer. And there’s a provision that could take Altria’s stake to 55 per cent. BNNBloomberg

-The Price of a Cup of Coffee in Venezuela Is Up 285,614% in a Year. Bloomberg

-Three of last month’s California wildfires will cost insurers about $9.05 billion, according to preliminary information from state regulators. Bloomberg

-The country’s budget deficit in the first two months of fiscal 2019, which began Oct. 1, was 50 percent higher than in the same period the previous year, according to the Congressional Budget Office (CBO), though the figure was inflated by timing. In October and November, the federal government spent $303 billion more than it took in, compared to $202 billion in the same period of fiscal 2018, according to the CBO. Tax revenues were just 3 percentage points higher than the previous year, largely because of the GOP tax law, while spending surged 18 percent. The federal debt and deficit have grown dramatically since President Trump took office, a product of the tax cuts, biparisan spending increases and ongoing growth in mandatory spending programs such as Social Security and Medicare. CBO has warned that if the debt continues to grow at the current level, it could lead to severe financial and economic consequences. TheHill

-U.S. government debt is on track this year to rise at the fastest pace since 2012, as a stronger economy fails to keep pace with the wave of red ink that’s rising under the Trump administration. Total public debt outstanding has jumped by $1.36 trillion, or 6.6 percent, since the start of 2018, and by $1.9 trillion since President Donald Trump took office, according to the latest Treasury Department figures. The latter figure is roughly the size of Brazil’s gross domestic product. If this year’s growth rate is sustained through the end of the year, it would be the biggest jump in percentage terms since the last year of President Barack Obama’s first term, at a time when the economy needed fiscal stimulus in the aftermath of the financial crisis. As of Monday, the nation’s debt stood at a record $21.9 trillion.

The borrowing is needed to cover a budget deficit that expanded by an estimated $779 billion in Trump’s first full fiscal year as president, the widest fiscal gap in six years. By the end of Trump’s first term, the debt is expected to rise by $4.4 trillion despite historically low unemployment, and relatively low interest rates and robust growth. Fights over fiscal policy have been making news lately, and the acrimony between Trump and the House Democratic leadership doesn’t engender confidence about compromise plans coming together any time soon. Government funding for some agencies runs out after Dec. 21 barring an agreement over the budget, while the statutory debt limit has been temporarily suspended through March 1, though the Treasury can take measures to keep paying the government’s bills for a few more months. Bloomberg

-President Donald Trump reportedly dismissed a future debt crisis because he didn’t think he’d be in office for it. US debt sits at about $21 trillion, and the federal government is expected to issue $1.34 trillion in new debt this year its most since 2010. Trump campaigned on reducing the federal debt, but sources told The Daily Beast it did not appear to be a priority for the president. Trump has reportedly developed a new interest in the issue recently, however, telling Cabinet officials to work on a way to reduce the deficit. But people close to him have reportedly said he does not see the issue of rising debt as crucial to his legacy as president. Businessinsider

The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for the next downturn, the deputy head of the International Monetary Fund has warned. David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system. “As we have put it, ‘fix the roof while the sun shines.’ But like many of you, I see storm clouds building, and fear the work on crisis prevention is incomplete.” Lipton said individual nation states alone would lack the firepower to combat the next recession, while calling on governments to work together to tackle the issues that could spark another crash.

“We ought to be concerned about the potency of monetary policy,” he said of the ability of the US Federal Reserve and other central banks to cut interest rates to boost the economy in the event of another downturn, while also warning that high levels of government borrowing constrained their scope for cutting taxes and raising spending. Lipton said the IMF went into the last crash “under-resourced” before it was handed a war chest worth $1tn (£790bn) from governments around the world, while adding that it was important that world leaders had agreed to complete a review of the fund’s financial firepower next year. “One lesson from that crisis was that the IMF went into it under-resourced; we should try to avoid that next time.” Read more here-http://bit.ly/2zTcZfL

-Yellen warns of another potential financial crisis: ‘Gigantic holes in the system.’ “I think things have improved, but then I think there are gigantic holes in the system,” Yellen says. The former Fed chair cites leverage loans as an area of concern and says there remains an agenda of unfinished regulation. She also says rates will remain lower than they have been in past decades. CNBC

-A big market collapse and $20 oil make the list of Nomura’s ‘grey swan’ predictions for 2019. A team of currency, fixed income and economic analysts at Nomura came up with a list of so-called grey swans for clients. These close cousins of black swans are foreseeable risk events that end up having a much more drastic impact than expected, Nomura says. CNBC

-Hot on the heels of HSBC’s top 10 risks for 2019, Nomura’s annual “Gray Swans” listicle has just hit inboxes. After a year of chaos, you get the feeling they really had to dig deep to come up with some potential shocks. In full:

1: End of populism
2: Oil price plunges to $20/bbl
3: The big market quake
4: Italian renaissance
5: EM deflation
6: CNY comeback
7: Global growth takes off
8: Deflating euro area
9: Inflation sonic boom

“So collapsing stock prices, a contagious sovereign crisis in Europe and Chinese defaults would be the obvious manifestation of a market quake,” strategists including Bilal Hafeez wrote. HSBC and Nomura opted to include both positive and negative risks perhaps attempting to add a dose of optimism at the end of the brutal year. And there are plenty of negative scenarios for Europe. Sure, Nomura contemplates the possibility of an Italian renaissance or an end to populism. But fears of a deflationary trap and a full-blown euro-area crisis may sound more persuasive, as France grapples with the gilets jaunes, and Brexit lurches from drama to crisis. Bloomberg

-Gundlach says stocks are breaking down, bonds are overvalued and the Fed is on a suicide mission. The founder and chief executive officer of DoubleLine, which manages $120 billion, held a webcast on Tuesday. “It certainly looks like the U.S. is going to break down to me and to a lower level,” the investor said on the stock market. The Fed seems to be on a “suicide mission,” raising rates while the government deficit increases as a share of GDP, Gundlach said. “Corporate bonds remain very overvalued corporate bonds should be avoided,” the investor added. CNBC

-Retail defaults are at an all-time high here are all the bankruptcies and liquidations so far in 2018. Retailers are filing for bankruptcy at record-high rates. David’s Bridal is the latest retailer to file for bankruptcy. Sears, Nine West, Claire’s, and The Bon-Ton Stores have also filed for bankruptcy this year. Retailers are filing for bankruptcy at record-high rates as Americans’ changing shopping habits, along with years of overly aggressive store growth, continue to shake up the industry. 16 US retailers have filed for bankruptcy or announced liquidations so far in 2018. Here’s the retail carnage so far this year. Read more here-https://read.bi/2Lbcj9P

-Ex-Fed’s Richard Fisher: Rates need to go higher to create enough room to cut should the economy tank. “They have yet to put enough nuts in the tree before winter comes,” says former Dallas Fed President Richard Fisher. Getting to Fisher’s 3 percent threshold would mean additional rate increases next year. The Fed next week is expected to increase its benchmark fed funds rate for the fourth time this year. CNBC

-Strategists in the $5.1 trillion-a-day currency market are gearing up for a slumping dollar next year, while pinning their hopes for 2019 gains on the yen. A major driver of the dollar’s decline could be a downturn in the U.S. economy, especially in the second half of the year, JPMorgan Asset Management predicted. Others expect the Federal Reserve to slow down interest-rate increases, which they see as bearish for the greenback. Rising market volatility and capital demand abroad will also spur an outflow of funds from the U.S., according to Morgan Stanley strategists.

Whatever the reason, a popular view is for a dimmer dollar. The greenback is 10 percent to 15 percent overvalued, according to Morgan Stanley. A Bloomberg survey of foreign-exchange forecasters shows losses are expected for the greenback against traditional haven currencies such as the yen and Swiss franc. The median forecast for the dollar-yen pair is that it will drop from its current level near 113 yen to 108 yen by the end of 2019. Of course, the dollar was also widely expected to lose in 2018, but the Bloomberg Dollar Spot Index rallied starting in April as the Fed continued with gradual rate hikes, the American economy outperformed the rest of the world and trade tensions ramped up between the U.S. and China. The index has risen about 4.1 percent this year. Bloomberg

-A blast of new jobs last month knocked the country’s unemployment rate down to its lowest level since Statistics Canada started measuring comparable data more than 40 years ago. But despite eye-catching progress, Friday’s numbers also delivered disappointment. Canada added 94,100 net jobs for its largest monthly increase since March 2012 when there was a gain of 94,000 jobs, Statistics Canada said in its the labour force survey. The November surge was fuelled by other positives: 89,900 new full-time positions and 78,600 employee jobs in the private sector. The jobless rate fell to 5.6 per cent last month from October’s reading of 5.8 per cent, which had been the previous low mark since comparable data first became available in 1976. The old statistical approach prior to 1976 registered an unemployment rate reading of 5.4 per cent in 1974. CBC

-Another batch of compensation checks is in the works for victims of Bernard Madoff on the 10th anniversary of the con man’s arrest in New York following the collapse of his $19 billion Ponzi scheme. Irving Picard, the trustee unwinding Madoff’s defunct investment advisory firm, said in a statement Tuesday that he asked a bankruptcy court judge to authorize $419 million in distributions on approved claims, which will go out to 880 accounts. That would bring total payouts over the past decade to more than $12 billion.

While victims will never recover the $45 billion in fake profits Madoff claimed on account statements, the trustee has focused on returning the cash they invested. “Very rarely do you see a case of this magnitude where the victims receive a return like this,” Jerry Reisman, a lawyer who represented more than 30 victims who lost a total of about $50 million, said in a phone interview. Madoff, 80, and his top aides fabricated securities transactions and doctored client records to make customers believe he was trading on their behalf. Instead, he used their cash to pay other client withdrawals, prop up his failing market-making unit and enrich himself and his inner circle. He’s serving a 150-year prison term after pleading guilty in 2009. Bloomberg

-Bernie Madoff was convicted in the largest Ponzi scheme in history 10 years ago. According to researchers at Cornell University, the aftershock of Madoff’s crimes caused $363 billion in withdrawals from investment funds unrelated to him. Many people who pulled their money suspected that their advisers were also fraudulent. Businessinsider

-Stocks are on track for the worst year in a decade. Four experts weigh in on what 2019 will bring. Baird’s Bruce Bittles says a recession might be on the horizon for some of the world’s markets, but not the U.S. “The fact that Germany is down 20 percent, China is down 20 percent, and now the U.S. has joined the downturn also, that’s what suggests to us that the global economy is in recession or on the verge of recession. The U.S. we don’t think is going to enter recession. We think there’s going to be a slowdown here, but that’s going to influence corporate profits to a certain extent.” More than any one indicator, Bittles points to volatility as something that could remain high going into 2019, with the negative sentiment of downward momentum another obstacle to a turnaround.

Tudor Investment founder Paul Tudor Jones says he is feeling good about the markets in 2019 and willing to make a bullish bet on the back of buybacks and deleveraged stocks. “I can’t imagine at some time next year we won’t be up 10 or 15 percent on the year,” says Jones, “because we still have the same buybacks we had this past year. The difference is, we’re walking in completely and totally deleveraged.” Even recently, buybacks have been a boon for stocks under pressure. Facebook‘s $9 billion in additional buybacks has the stock up more than 2 percent since they were announced on Friday. Read more here-https://cnb.cx/2G6LBAm

-Ray Dalio says this investment strategy can help you weather a financial crisis. It’s been a bleak week or so for the markets. Stocks have plunged, putting the S&P 500 on pace for its worst year in a decade. On Monday, former Federal Reserve chair Janet Yellen expressed fear about another looming financial crisis. But booms and busts are all part of a larger economic cycle, according to Ray Dalio. And the billionaire Bridgewater Associates founder says there is a way to invest that will help you weather any economic environment.

“You can immunize yourself from the cycle by holding a balanced portfolio of assets,” Dalio told CNBC Make It in September. And Dalio has a simplified “all-weather” asset allocation formula that just about any investor can use. This all-weather portfolio, which Dalio created for the Tony Robbins book, “Money: Master the Game,” involves a mix of 30 percent stocks, 40 percent long-term U.S. bonds, 15 percent intermediate U.S. bonds, 7.5 percent gold and 7.5 percent other commodities. The portfolio needs to be re-balanced annually, Dalio notes. Read more here-https://cnb.cx/2C6DwaX

-Tony Robbins: The No. 1 lesson I learned from Warren Buffett and Ray Dalio is particularly relevant right now. Business strategist and bestselling author Tony Robbins knows the importance of surrounding yourself with leaders: That’s why he pays attention to some of the world’s most successful people, including billionaire investors Warren Buffett, Ray Dalio, Carl Icahn and Richard Branson. There’s a lot to learn from these business leaders, but Robbins says the most important takeaway might be that “none of them let the motion of the market control them,” he tells CNBC Make It.

“Most people live with so much fear and anxiety in their lives and these people just learn to say: ‘This is part of life. There’s going to be ups, there’s going to be downs, and my job is never to let what’s happening in the moment define me.'” In other words, they stay calm, and stay the course, even when the market is fluctuating. This lesson is particularly relevant right now, given recent stock market volatility. On Thursday, the Dow Jones Industrial Average dropped nearly 800 points, bringing two-day losses to more than 1,500 points. Read more here-https://cnb.cx/2SFzhsi

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Christie’s NYC sold more than $69 million of precious jewels in a single night and more than 25% of it came from one blue diamond ring. A whopping $18.3 million of that about 26% came from a blue diamond ring by Bulgari. The night followed last month’s record-breaking sale of a 19-carat pink diamond for $50 million to jeweler Harry Winston in Geneva. Read more here-https://read.bi/2Ejq9Wb and http://bit.ly/2S2gmYA and http://bit.ly/2PAvzhN

-Christie’s Magnificent Jewels Sale. December 5th 2018 New York City. Auction Results Here-http://bit.ly/2zITyGa





-From a Hockney painting to Marie Antoinette’s pearl, here are 4 record-breaking collectibles auctioned in the last month. It marks a year since Leonardo da Vinci’s “Salvator Mundi” became the most expensive painting ever sold, fetching over $450 million at Christie’s auction house in New York City. The 500-year-old oil on panel depicts Jesus Christ in robes holding a crystal orb in his left hand. Also called “Savior of the World,” the piece was “painted in the same time frame as the ‘Mona Lisa,’ and they bear a patent compositional likeness,” said Loic Gouzer, chairman of Christie’s postwar and contemporary art department, last year.

David Hockney’s ‘Portrait of an Artist’ sells for $90 million. “Portrait of an Artist (Pool with Two Figures)” was auctioned Thursday at Christie’s Postwar and Contemporary Art Evening Sale in New York City for a record-breaking $90,312,500, making it the most expensive work by a living artist sold at auction. The previous record was set by Jeff Koons’ “Balloon Dog” in 2013.

‘The Pink Legacy’ sells for $50 million. At just under 19 carats, the super rare fancy vivid pink diamond named “The Pink Legacy” was sold for $50,375,000 at Christie’s Magnificent Jewels auction in Geneva on Tuesday. It was bought by prestige jeweler Harry Winston (owned by Swatch Group), who immediately renamed it “The Winston Pink Legacy.” Only 100,000 diamonds possess a color deep enough to qualify as “fancy vivid,” and “fancy pink vivid” diamonds are rarely larger than five or six carats, according to Christie’s. The diamond breaks the world record for the price per carat of any pink diamond, at $2,175,519 per carat.

Queen Marie Antoinette’s pearl sells for $36.1 million. Actually a diamond and pearl pendant, “The Queen Marie Antoinette’s Pearl” sold on Wednesday for a hammer price of $32 million, but a buyer’s premium and fees increased the total sale to over $36,427,000, according to the auction house Sotheby’s. The 18th century pearl now the most expensive pearl ever sold at auction was part of a collection of 10 pieces once owned by the French queen and held by the Bourbon-Parma family for generations. Some of the jewelry hadn’t been seen in public for 200 years.

Edward Hopper’s ‘Chop Suey’ sells for $91.9 million. The 1929 work by American realist Edward Hopper sold at a Christie’s auction on Tuesday for $91,875,000, making it the world’s most expensive piece of pre-war American art. “Chop Suey, the most iconic painting by Hopper epitomizes the psychological complexity for which his work is celebrated, freezing in place an everyday scene from an America that was changing rapidly,” a statement from Christie’s said. Read more here-https://abcn.ws/2QsC0sr

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GOLD-SILVER

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

-Ahead of the much-anticipated festive season German gold dealer Pro Aurum has erected the most expensive Christmas tree in all of Europe. The unusual decoration is made of gold coins worth €2.3 million ($2.6 million). Read more here-http://bit.ly/2C9qBVJ

-Greg Hunter: Egon von Greyerz Interview, Trend is Clear Rapid Decline of World Economy. The fear hasn’t started yet, but it will, and then there will be a rush into gold and silver. Our clients are increasing their positions. In my view, 25% of total net worth is the minimum (to invest in gold and silver), and, personally, I would not have any major assets in the bank because I don’t think the banking system will survive. If it survives, it will not be in its present form. Stocks, in relation to gold, will go down 90% to 95%. They went down 90% in 1929 to 1932. There will be the most massive wealth destruction ever.” Watch more here-http://bit.ly/2rxbijB

-Lawrie Williams: The State of the Gold Market and where it may be headed. Readers of my musings here will be aware that I rate the opinions and forecasts of Canada’s Martin Murenbeeld extremely highly among gold analysts. He might be described as mildly bullish on gold, but calls it as it is at any given point int time, and sees declines as well as rises in his forecasts. In other words he is a gold realist rather than a perma-bull so in terms of his views on what has happened to gold in the past very eventful week, and where it might go from here, I value his opinion strongly.

In his latest Gold Monitor weekly newsletter see www.murenbeeld.com for info. Murenbeeld looks at the drastic behaviour of the markets in the past week to 10 days which has seen U.S. equities lose any gains they had made year to date and more. Gold, on the other hand has had a fairly positive week, but is still down around 4% year to date so is still being outperformed by equities, just. But any continuation of gold’s rally (which seems likely) and a further decline in U.S. equities, which is also a definite possibility, could see this position reverse by the calendar year end, if not in the next few days. Read more here-http://bit.ly/2Eu22oS

-South African Gold Industry Enters Final Phase of Slow Death. Back in 1987, South African President Cyril Ramaphosa then a 34-year-old labor union leader led 300,000 black miners in a strike that symbolized resistance to the apartheid regime. Now, striking gold workers face a less politically charged battle, but one they can’t win. The nation’s 130-year-old gold industry which has produced half the bullion ever mined on earth is locked in the final stages of a decades-long death spiral. Most of South Africa’s gold mines are unprofitable at current prices.

Dwindling output has cut gold’s contribution to little more than 1 percent of the South African economy, down from 3.8 percent in 1993 the year before Nelson Mandela’s African National Congress won the country’s first democratic elections. While the industry’s demise won’t reverberate in the way it once would have, the mines minister has criticized Gold Fields Ltd.’s plan to cut jobs as the ruling ANC seeks to shore up its base before elections next year. Operations at mines run by Gold Fields and Sibanye Gold Ltd. in South Africa have been halted by strikes over job cuts and wages respectively. Both producers cut their output projections for this year.

South Africa’s gold industry now employs just over 100,000 people, less than a fifth of the number that used to power the apartheid economy. The economic and social impact of a further contraction in the industry will be magnified as every gold miner supports between five and 10 dependents, while creating two jobs elsewhere, according to the country’s Minerals Council. Higher wages and power prices, combined with the geological challenges of the world’s deepest mines, will mean more job losses and less production in the country over the next five years, said Gold Fields Chief Executive Officer Nick Holland. “When you work out the math, when you keep doing that year after year, you are going to go out of business very quickly,” Holland said in an interview. “The industry will just continue to see a slow death.”

Workers at Gold Fields’ South Deep mine have been striking since Nov. 2, protesting the producer’s plans to cut jobs as part of a restructuring to stem losses. A strike over wages at three mines owned by Sibanye, the country’s biggest producer, is entering a third week. CEO Neal Froneman acknowledges that pressure is building on the miner to resolve its safety problems after more than 20 fatalities this year. If that can be done, he’s optimistic that South Africa’s gold mines can survive a little longer. “It’s an industry in decline, yes, and if sunset means the sun setting in 10 years or 15 years, that’s still 10 or 15 years away,” Froneman said in an interview last month. “There is still money to be made.” Bloomberg

-South African Gold Output Drops 13th Straight Month in October. South African gold output contracted for a 13th consecutive month in October, the longest streak of declines in six years, as the industry battles unprofitable mines and labor strikes. Gold production declined 15.1 percent from a year earlier, the Pretoria-based statistics office said Tuesday in a statement on its website. Total mining output rose 0.5 percent.

Key Insights: Dwindling output has cut gold’s contribution to little more than 1 percent of the South African economy, down from 3.8 percent in 1993. Unprofitable mines and demands for higher wages has led to job cuts in the industry, exacerbating unemployment in a country with a 27.5 percent jobless rate. The production of platinum-group metals surged 21.4 percent from a year earlier. Bloomberg

-India’s Gold Smugglers Are Getting Really Creative. India’s immense appetite for gold means smugglers are getting more creative to bypass the country’s high import tax. The Directorate of Revenue Intelligence arrested four people last week for smuggling in 66 kilograms of gold, worth about 210 million rupees ($3 million), and seized fours cars in operations in two northern states that border Nepal, Bhutan and Bangladesh, according to a statement on the Press Information Bureau. Indians can travel to Bhutan and Nepal freely because of bilateral treaties.

The world’s second-biggest consumer raised import taxes three times in 2013 to control a record current-account deficit, with the rate still standing at 10 percent. The high duties spurred a spate of smuggling, including attempts to bring in bullion via planes and trains. The cars seized last week had gold concealed in a specially-built box fixed behind the dash board and also in cavities near the car’s gearbox or driver’s seat. One of the operations was prompted after the DRI received information that a syndicate was attempting to smuggle foreign gold from Bhutan into India through the countries’ land border.

Indian customs authorities seized about 2.63 tons of gold between April and November, according to Monday’s statement. That compares with 3.22 tons in the 2017-18 financial year, more than double the volume seized in 2016-17. Bullion is suspected to be smuggled through India’s land borders with Bangladesh, Myanmar, Nepal, Bhutan and China, it said. The amounts are tiny compared with demand of 771 tons last year and about 200 tons that was brought in illegally at its peak in 2014, according to a trade group. Bloomberg

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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