Radio Show Newsletter
SPECIAL ANNOUNCEMENT FROM HAROLD SEIGEL
-We are in a time of great change. The media landscape is no different. Harold Seigel’s successful and popular World Financial Report on Radio show has been running on 630 CHED in Edmonton for over 17 years. After reviewing how people were listening to the radio show it was decided by Harold that effective the end of October the show would move online to his website rarecoloreddiamonds.com. With the majority of people listening online or via podcast it was felt we could serve our listeners best with the change. The show will be about a half hour long and we will continue to put our weekly World Financial Report newsletter out. Harold is committed to bringing you the latest information on the financial markets and helping you prosper with that knowledge. Thank you to all our great listeners for tuning in and reading our newsletter every week. We will keep you up to date on our changes via our weekly newsletter. Join us at rarecoloreddiamonds.com. Harold Seigel
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: Toronto Housing Prices Fall Amid Growing Pool of Homes for Sale. Canada’s largest housing market continues to see prices fall amid a widening pool of homes for sale, though there are signs the correction is beginning to lure in some new buyers. The Toronto Real Estate Board’s benchmark home price index fell for the sixth consecutive month, down another 0.4 percent from October. The index has fallen 8.8 percent since May the largest six-month decline in the history of data back to 2000.
For the first time since 2009, the average price of a home sold in Toronto at C$761,757 ($600,991) in November failed to surpass levels from a year earlier. Toronto’s housing market, dubbed one of the riskiest housing bubble cities by UBS Group AG, has slumped over the past few months amid government rules and harsher mortgage guidelines aimed at curbing demand. That’s coincided with a sharp increase in supply with new listings up 37 percent from a year earlier. Yet, the data are now indicating the lower prices have also begun to boost demand and fuel sales. Read more here-https://bloom.bg/2zPuqvx
-CHART OF THE WEEK: It Looks Like Another Rough Year for the Dollar in 2018. A hawkish Federal Reserve, an economy firing on all cylinders, the tentative revival of the “Trump Trade” — all that won’t be enough to boost the dollar next year, according to a chorus of Wall Street strategists. The dollar is heading for its worst year in more than a decade, and bearish projections are still piling up. Analysts say the steady unraveling of the greenback’s post-crisis bull run will be confirmed next year as global growth gathers pace and central banks converge on a more hawkish tone. “Beware of sleeping volcanoes and seriously undervalued currencies,” Kit Juckes, global fixed-income strategist at Societe Generale SA, wrote in a report Tuesday. With global “growth becoming more balanced and more synchronized, the dollar looks expensive.” Read more here-https://bloom.bg/2BD7oZt
-CHART OF THE WEEK: Bitcoin Is Now Bigger Than Buffett, Boeing and New Zealand. Bitcoin’s extraordinary price surge means its market capitalization now exceeds the annual output of whole economies, and the estimated worth of some of the world’s top billionaires. With the debate over its bubble status still raging, the flagship cryptocurrency continued its march higher on Monday, solidifying above $11,000 and bringing its climb this year to more than 1,000 percent. With market tracker Coinmarketcap.com putting the total value of all bitcoins in circulation at $190 billion, it’s come a long way from August, when one coin could buy you a hefty supply of avocados. The South Pacific nation’s farm-and-tourism-led economy is valued at $185 billion, according to World Bank data as of July, putting it some $5 billion below bitcoin. The cryptocurrency’s market cap is also bigger than the likes of Qatar, Kuwait and Hungary. Read more here-https://bloom.bg/2AXqddc
-“To go green, to do all the things we want to do as the human race gets off oil and gas, we need a ton of silver,” Keith Neumeyer, CEO of First Majestic Silver Corp
-A new survey by Sotheby’s International Realty Canada and Mustel Group shows one-third of baby boomers in Vancouver, Toronto, Calgary and Montreal say they plan on giving a living inheritance to help beneficiaries buy a home, with a median gift range of $25,000 to $49,999. BNN
-San Francisco’s median rent is $4,450, nearly three times that in Houston. Instead of hiring expensive talent in the Bay Area, one Houston-based law firm flies its lawyers in on a private jet once a month to meet with clients. The firm uses the jet which costs $2,500 an hour to operate as a tool for recruiting top talent. Businessinsider
-The Great Recession caused a drop in Christmas tree sales, which meant there was less space available to plant trees that would now be reaching maturity. This shortage of Christmas trees is leading to an increase in prices. Christmas tree shortages across the US have already been reported. Businessinsider
-New bitcoin is created by computers solving complex cryptographic problems, a process known as “mining.” PowerCompare.co.uk says the amount of electricity used by computers mining bitcoin so far this year eclipses the annual usage of countries like Ireland and most African countries. Bitcoin’s electricity usage is coming under increasing scrutiny. Businessinsider
-After a decade of monetary laxity, money and even bitcoins, fiat currencies have become a market commodity like tulips during the 1687 Dutch mania. Bitcoin has become an investment mania, made for the times and the craze has dwarfed the tech bubble. Who can trust the value today? Bitcoin or digital currencies are a man-made product created in minutes with a click. Like fiat money, there are no limits to production, no guarantor and consequently, of little lasting value. Ironically, undeterred by warnings that this electronic currency is a bubble waiting to be burst, bitcoin is a currency without a country. When investors can borrow to hedge bitcoins or when Wall Street creates the newest digital cyber-currency derivative, only then will we discover bitcoin’s intrinsic worth. John Ing Maison Placements
-It’s the time of year where investment houses turn their attention to what 2018 might bring. Yesterday, Goldman Sachs Inc. warned that current asset valuations show markets are possibly set for a painful return to earth. Credit Suisse Group AG strategists said that the clock is ticking on the global equity rally, which they see running out of steam in the second half of next year. Morgan Stanley, for its part, says it might be time to get out of credit markets, predicting underperformance in Asia, Europe and the U.S., while JPMorgan Chase & Co. says that cash will dethrone government bonds to post its best return since 2012 next year. In short, 2018 bulls are a rare breed at the moment. Bloomberg
-The lawyers always win. So many of San Juan’s swankiest hotels remain closed from hurricane damage that a federal judge canceled plans to bring Puerto Rico’s historic, $74 billion bankruptcy case back to the island. Before Hurricane Maria pummeled Puerto Rico in September, causing so much damage that electricity still isn’t fully restored, San Juan’s hottest hotels would fill up with highly paid bankruptcy advisers attending the regular, two-day hearings held by U.S. District Court Judge Laura Taylor Swain.
After the hurricane, Swain suspended her visits to Puerto Rico, saying she would return to hold court there again in December, once the island had recovered. On Friday, Swain decided against that, issuing a minor scheduling order that cited the difficulty lawyers and financial advisers were having getting hotel and airline reservations. “The Court has reluctantly decided to conduct the December Omnibus Hearing in New York,” Swain wrote.
The hearing is now set to take place in Manhattan Dec. 20. Dozens of lawyers and financial advisers sent by bondholders have been appearing at every court hearing, reflecting the high stakes in the record municipal bankruptcy. While some advisers, many of whom are based in New York, may have welcomed the Caribbean getaway, they will be much closer to home the week before Christmas than originally planned. As the old bankruptcy saw goes: sometimes the only winners in a case are the lawyers. Bloomberg
-Investors wondering how long the distaste for technology stocks will last may be asking the wrong question. The popular narrative is that stock pickers are selling tech after the massive runup this year and are piling into companies set to benefit from U.S. tax cuts. But observers such as Andrew Lapthorne of Societe Generale SA don’t buy it. They look at the contours of the selloff over the past few days and have a different take: A few heavy hitters are dumping factor positions that incidentally hurt chipmakers and software companies and once they’re done, the rally will resume.
Two factors stood out last week. First, the plunge in the momentum trade (betting on past winners to continue winning), and second the gains in value (seeking out underpriced stocks) to near-record proportions. Because the moves were severe in U.S. stocks and occurred across sectors, macro forces aren’t causing a rotation from technology to financials, strategists reason. Rather, computer-driven funds liquidated or readjusted factor exposures, they say. Bloomberg
-Bitcoin surpassed $12,000 for the first time amid speculation that the widespread use of futures will help lead to digital currencies being viewed as a legitimate asset class for mainstream investors. The largest cryptocurrency by market value has soared from less than $1,000 at the start of the year as optimism climbs for the distributed ledger technology known as blockchain that is at the heart of bitcoin. The price surge has been accompanied by a growing chorus of warnings that the speculative frenzy is an asset bubble poised to burst. Cboe Global Markets Inc. has said it will start trading bitcoin futures on Dec. 10, while CME Group Inc.’s contracts are set to debut on Dec. 18. Nasdaq Inc. is planning to offer futures in 2018, according to a person familiar with the matter. Cantor Fitzgerald LP’s Cantor Exchange is creating a bitcoin derivative, and startup LedgerX already offers options. Bloomberg
-The Venezuelan government’s attempts to save the country’s collapsing economy took a bizarre twist on Sunday. President Nicolas Maduro announced plans to create a cryptocurrency, dubbed “the Petro,” as a way to defeat the “financial blockade” imposed by U.S. sanctions on his regime. Cryptocurrencies are virtual “coins” that are “mined” by computers using complex algorithms. The most famous and widely used cryptocurrency is bitcoin. Maduro said the Venezuelan cryptocurrency would be backed by the country’s oil, gold, gas and diamond reserves. Venezuela is home to the world’s largest crude oil reserves, but its production has steadily declined to a 13-year low after companies halted some operations because of unpaid bills. Its gold, gas and diamond holdings are few smaller and they’re counted by the nation’s central bank in its $9.7 billion of dwindling foreign reserves, a paltry sum for any country. CNNMoney
-Nobel Prize winner and economist Robert Lucas pointed out that if people were rational, then their rationality would cause them to figure out predictable patterns from the past and adapt, so that past information would be more or less useless for predicting the future. What we are facing today is a pattern that we have seen over many, many market cycles, which would seem to point to an impending bear market. Valuations are high and many are extreme by historical measures.
We have the usual sign of market excess in the speculation in imagined value this time it’s bitcoin. And we have the ultimate killer argument that the Fed will be there to prevent any meltdown from getting out of hand, which allows these excesses to transpire in the first place. What we do not have as of yet is any signal that the end times for the stock market are imminent. In fact, if anything, the U.S. tax “reform” bill will potentially improve the upside potential for the market, and maybe by a fair degree. So we are left with the task of trying to keep our assets more or less safe from meltdown harm, while at the same time trying to make some money due to the rising tide of the market.
Because I know that current excessive valuations will eventually be corrected they always are I am personally content with holding a fair amount of cash in my portfolio, as well as providing a hedge against monetary stupidity (of which there is a lot), and then try to find some stocks that will benefit from most environments. It is a compromise strategy, that is true, and not ideal if all you want to do is make money, no matter the risks you are running, but I can sleep at night without undue anxiety. Ross Healy, chairman of Strategic Analysis Corporation
-While the usual raft of year-end predictions for what the next twelve months will hold fills inboxes, there is one interesting trend that may be worth more focus. BlackRock Inc. and Vanguard Group are getting closer to a position where they will have a relative duopoly in the U.S. asset management industry. With the wealth under management of the two companies on track to exceed U.S. GDP, none other than Vanguard founder Jack Bogle is raising the prospect that too much money is in too few hands. With the number of ETFs now higher than the number of U.S. stocks, the power these companies have may start to hurt basic market efficiency. Bloomberg
-Bank of Canada Reiterates Caution in Holding Rates Steady. The Bank of Canada kept borrowing costs on hold at its last interest rate decision of 2017 and reiterated it will be “cautious” with future moves, indicating it’s in no rush to cool an economy that is very close to capacity. Policy makers led by Governor Stephen Poloz left the benchmark overnight rate at 1 percent Wednesday for a second straight rate decision, as the market expected. The current pause comes after consecutive hikes in July and September.
Even as it acknowledges borrowing costs will eventually need to rise, the Bank of Canada is handling the normalization of rates very carefully, wary of inadvertently triggering another downturn. One argument, repeated Wednesday, is that geopolitical uncertainties remain around U.S. trade policies. “While higher interest rates will likely be required over time, Governing Council will continue to be cautious,” the Ottawa-based central bank said in its statement. “The current stance of monetary policy remains appropriate.”
Higher rates will eventually be needed to account for an economy that’s been one of the strongest in the developed world with a jobs market on a tear. Even with an anticipated second-half slowdown, Canada is headed for 3 percent growth this year. Its unemployment rate, meanwhile, has fallen to the lowest in a decade. By the central bank’s own measure, interest rates are still a full 2 percentage points below what it would consider “neutral.” Before Wednesday’s decision, investors were anticipating as many as three more hikes by the end of 2018, with the first likely in March. Read more here-https://bloom.bg/2Ax63WB
-BIS Joins Chorus Saying Stock Valuations Are Looking ‘Frothy.’ The Bank for International Settlements added its voice to institutions questioning whether stocks have become too expensive, saying they look “frothy” particularly in the U.S. The BIS weighed in on the debate just days after Goldman Sachs Group Inc. said a prolonged bull market across stocks, bonds and credit left its measure of average valuation at the highest since 1900. Stock prices are above historical averages and U.S. companies may struggle to continue their pace of dividend growth, the BIS said in its quarterly review on Sunday. Warnings on elevated asset prices have become more frequent as the world’s biggest central banks move toward tighter monetary policy.
A Bank of America Merrill Lynch survey showed a record 48 percent of investors say equities are overvalued. Nobel-Prize winning economist Richard H. Thaler said in October he can’t understand why stocks are still rising. The California State Teachers’ Retirement System CIO said last week that holding shares feels like “sitting on a pin cushion.” The paradox is that financial conditions have continued to ease even in the U.S., by far the most advanced in increasing interest rates, leaving investors struggling to judge how rates will drive prices.
“Ultimately, the fate of nearly all asset classes appeared to hinge on the evolution of government bond yields,” the Basel, Switzerland-based institution said. “There is also significant uncertainty about the levels those yields will reach once monetary policies are normalized in the core jurisdictions.” The price-earnings ratio of the U.S. stock market, cyclically adjusted, was recently above 30, exceeding its post-1982 average by almost 25 percent, the BIS said. While that’s below the peak of 45 reached in the dotcom bubble of the late 1990s, it’s nearly double the long-term average of 1881–2017. The gauges for European and U.K. equities were at their post-1982 averages. Read more here-https://bloom.bg/2A76urL
-Stock Wealth Surges for the Oldest Americans While the Young Miss Out. U.S. stocks have more than tripled in value since 2009, but the bull market has left a lot of Americans behind. In almost every age group, the share of families owning equities either directly or through funds and retirement accounts declined from 2007 to 2016, according to the Federal Reserve’s most recent Survey of Consumer Finances. There’s one prominent exception: households headed by someone 75 or older. Almost 49 percent of those households own stocks, up from 40 percent in 2007, just before the financial crisis, and about 35 percent in 2013, as many Americans were still recovering from the wreckage.
It’s the highest number since the Fed began its triennial report on Americans and their money in 1989. The top rate of stock ownership, 58 percent, is among families headed by people 55 to 64, just before traditional retirement age. Retired investors have historically been conservative. While stocks can provide larger returns over the long term, they’re prone to dramatic crashes like the more than 50 percent drop in the 2007-09 bear market and an octogenarian doesn’t have decades to wait for a rebound. Retirees often rely on their investments for income and emergency expenses. But the numbers suggest a generational change: Americans who have relied less on traditional pensions and more on 401(k)s and individual retirement accounts are aging into the 75-plus group. Read more here-https://bloom.bg/2jVSeHC
-Greg Hunter: Dr. Mark Skidmore Interview, missing $21 Trillion Means Federal Government Is Lawless. Michigan State University economics professor Mark Skidmore made an astounding discovery about the finances and budgets of the U.S. federal government earlier this year. He and a team of graduate students discovered $21 trillion missing in the federal budget going back to 1998. Dr. Skidmore, who specializes in public finance, explains, “We know from official government sources that indicate $21 trillion is, in some way, unaccounted for.
Furthermore, if we come back to the Constitution, all spending needs to be authorized by Congress. It looks to me, and I think I can conclude with a high degree of certainty, there is money flowing in, as well as out, that is unaccounted for. That’s the one thing we know from these documents, that there is $21 trillion in unaccounted funds.” In one example, Skidmore found a huge transfer from the Treasury Department to the Army that, again, was not authorized. Keep in mind, the Army has an approved budget of a little more than $120 billion a year. Skidmore says, “In this one report there is an appendix table that indicates there was a transfer from Treasury to the Army of about $800 billion. That’s almost a trillion dollars flowing in.
There is a note that says we had to do this in order to reconcile past years. That doesn’t make sense to me either because, these earlier years, you have a transfer from the Treasury of your $120 billion or $130 billion, and every year, the Army is granted the authority to spend this money in the ways they say they will. How can you get (an additional) $800 billion in and call that an ‘adjustment’? I tried to call and talk to the office of the Inspector General to talk to the people who helped generate these reports. I haven’t been successful, and I stopped trying when they disabled the links.” Read and watch more here-http://bit.ly/2AxO3LN
-Greg Hunter: Lynnette Zang Interview, Ultimately, They Need the Markets to Implode. Market analyst Lynette Zang says even with the new tax cuts passed in Congress, the market looks like “it’s running out of steam.” Zang explains, “I have been noticing in the past month some pattern shifts that would indicate to me the market is struggling and breaking down. So, these tax cuts make earnings per share look a lot better and also brings back a lot of funds. The CEOs are saying that money will go into share buybacks, and they need to because that is shifting. Corporate buy backs are actually breaking down.”
Zang says ever since the 2008 meltdown, the elite have just been buying time to set up a debt reset. Zang charges, “I am 100% certain we are in the middle of a money standard shift. Ultimately, they need the markets to implode. In 2008, the debt based system broke. It died, it was done. The central banks, globally, put it on life support, and they have to create a new system. In my opinion, they want us cashless, and they want everything in digital form. They want to dematerialize wealth at least for the masses. I am 100% certain that this Bitcoin craze, and all of this, is about getting people used to digital currencies. So, when they shift us from the debt based system to the digital system, we are more comfortable with it and more familiar with it.”
Zang says one must-have asset to protect you from what is coming is physical gold (and silver). Zang says, “Keep in mind, for 6,000 years, gold has been money. It is the primary currency metal because it is indestructible, and it has full intrinsic value because it has uses right across the entire global economic spectrum. It’s real, and it’s the only thing that is outside of the system and fully invisible. It is also the foundation of the monetary system. After you have a major implosion, all confidence is lost. What if we have a grid implosion? You won’t have access to your Bitcoin. You are going to need barterable silver, and you are going to need physical gold. You can always convert real tangible money into any good, service or any other currency. The true value of gold, if they did the reset today, is north of $9,500 per ounce.
That is a very conservative number. Before the reset happens, the higher the debt amount and the higher the derivatives amount, the higher that gold price goes.”Zang predicts in the next crash, “real estate, stocks and bonds will all crash.” When will this happen? Zang says, “Enjoy your Christmas,” but in 2018, all bets are off. Zang explains, “In 2018, I don’t think they can hold these things together. I think we will see a major market correction in 2018. When that happens, that will cause the derivative implosion. We have to feel a lot of pain. I think we are going to go into hyperinflation, and I think we will start to see that in 2018 because I think we will see these markets implode. I think we will see QE4 (money printing) for sure. We have QE right now propping it up, according to the Fed’s own documents.” Read and watch more here-http://bit.ly/2k0NY9w
-All You Need to Know About Bitcoin’s Rise, From $0.01 to $11,000. The initial price of bitcoin, set in 2010, was less than one cent. On Nov. 29, it crossed $11,000. Once seen as the province of nerds, libertarians and drug dealers, bitcoin today is drawing millions of dollars from hedge funds. The recent price surge may be a bubble. Or it could be a belated recognition by the broader financial community that so-called cryptocurrencies digital forms of money are going mainstream. It might be time to nail down what a bitcoin is, and why its price has been going through the roof.
1) What exactly is bitcoin? It’s a form of money that’s remarkable for what it’s not: It’s not currency you can hold in your hand. It’s not recognized by most Main Street stores. It’s not issued or backed by a national government. At their core, bitcoin and its imitators are sets of software protocols for generating digital tokens and for tracking transactions in a way that makes it hard to counterfeit or re-use tokens. A bitcoin has value only to the extent that its users agree that it does. Read more here-https://bloom.bg/2zSHlge
-Rogers Evaluating Sale of Blue Jays, Cogeco Stake, CFO Says. Rogers Communications Inc. is considering selling assets such as baseball’s Toronto Blue Jays and a stake in media company Cogeco Inc. to free up capital for other investments, Chief Financial Officer Tony Staffieri said. The Toronto-based telecommunications giant wants to get more value for the assets, though no deal is imminent, Staffieri said at the UBS Global Media and Communications conference in New York. Read more here-https://bloom.bg/2AC9Wro
-IOC slams Russia with unprecedented punishment over doping controversy ahead of the 2018 Olympics. The International Olympic Committee on Tuesday handed down an unprecedented punishment to Russia over its doping controversy. Russia’s team has been barred from the 2018 Winter Olympics in Pyeongchang, South Korea. Government officials will be forbidden from attending, the flag will not be part of the opening ceremony, and records will show that Russia didn’t win any medals.
Some qualifying Russian athletes who have passed several drug tests will be allowed to compete at the IOC’s discretion, but they will do so in neutral uniforms. The decision comes after a 17-month investigation by the IOC into what was deemed to be state-supported doping. It confirmed other findings that Russian officials had tampered with and even swapped urine samples to conceal evidence of its systematic doping of top athletes. The findings led the committee to strip Russia of some of its medals from the 2014 Sochi Olympics and limit the number of Russian athletes at the 2016 Rio Olympics a punishment that was criticized as not severe enough. Read more here-http://read.bi/2A7RKJf
-Fire closes I-405, rages near Bel Air, Getty museum in Los Angeles. A new wildfire closed part of Interstate 405 early Wednesday near Los Angeles’ posh Bel Air area and prompted evacuations one in a series of blazes that have scorched more than 83,000 acres, burned scores of buildings and forced tens of thousands of people to flee their homes over three days. The closure of I-405 a significant north-south artery in the country’s second-largest city came after flames swept down the foothills toward the highway near Sepulveda Pass and the Getty Center arts complex as stunned motorists drove by shortly before 6 a.m. “It was dark until I saw a gigantic ball of orange,” motorist Tiffany Lynette Anderson wrote on Instagram, where she posted a picture of fire raging beside the highway before it shut down. “On absolute fire. I’m grateful to be safe truly grateful.” Read more here-http://cnn.it/2jjSFfc
-It’s Official: Putin Says He’ll Run for Re-Election. President Vladimir Putin, who’s ruled Russia for 18 years, announced he will seek a new six-year term in March. Constitutional limits mean it’s likely to be his last. “I can’t think of a better time or place to announce it thank you for your support I will run for the post of president of the Russian Federation,” Putin told an event at the GAZ auto factory in Nizhny Novgorod on Wednesday. In comments carried live on national television, he was responding to a worker who asked him to “do us a favor” and confirm his intentions, triggering chants of “GAZ is behind you!”
At the peak of his power at home and abroad, Putin is expected to win a landslide in the contest, due on March 18, with a recent poll showing he’d get 67 percent of the vote. Though popular domestically, his aggressive rebuilding of Russia’s global influence has brought a surge in tension with the West. Relations with the U.S. are at the lowest since the Cold War, with Russia facing more sanctions over allegations of Kremlin meddling in last year’s American presidential election. Read more here-https://bloom.bg/2j0dFLh
-‘MeToo’ Movement Named Time Magazine’s Person of the Year. The “Silence Breakers” those who have shared their stories about sexual assault and harassment have been named Time magazine’s Person of the Year. Numerous women have spoken out publicly since October about sexual misconduct by dozens of high-profile men in entertainment, media, business and sports. Time praised those who have given “voice to open secrets, for moving whisper networks onto social networks, for pushing us all to stop accepting the unacceptable.” The magazine’s cover features Ashley Judd, Taylor Swift, Susan Fowler and others who say they have been harassed. Read more here-https://bloom.bg/2AvMaiG
-The Military Is Using Falcons to Build a Drone Killer. A raptor’s approach to targeting prey may one-day help protect soldiers and even airports, Air Force-funded research shows. Throughout history, humans have employed falcons as lethal hunters of other animals. Now those raptors are being sent after drones. It turns out that many of the skills feathered predators use to find a tasty lunch can be applied to the developing field of drone defense. A U.S. Air Force-funded study by zoology researchers at Oxford University suggests that the means by which a peregrine falcon tracks its quarry could be effective in defending against drones that threaten troops, police or airports. Read more here-https://bloom.bg/2Aw4VTr
-Sotheby’s Magnificent Jewels Sale, December 05 2017, New York City. Auction Results Here-http://bit.ly/2AyD4Sq
-Blue Diamonds and Sapphires Are Tops At Sotheby’s New York Auction. The color blue was the theme of the 211-lot Magnificent Jewels sale at Sotheby’s New York on Tuesday as blue diamonds and sapphires attracted the most attention from bidders. Among the notable pieces: A 5.69-carat fancy vivid blue diamond sold for more than $15.1 million, just topping its high estimate. The emerald-cut gem with a VVS1 clarity grade was the top lot in the sale. The total price amounted to more than $2.6 million per carat. A 2.05-carat fancy intense blue diamond mounted on a diamond ring sold for more than $2.6 million (more than $1.29 million per carat), more than $1 million above its high estimate. Read more here-http://bit.ly/2iuUdCb and http://bit.ly/2BIsmG6
-Peace diamond: Precious stone fetches $6.5m in New York. A giant 709-carat diamond unearthed in Sierra Leone has sold at auction in New York for $6.5m (£4.8m). Laurence Graff, chairman of Graff Diamonds, won the precious stone nicknamed the “peace diamond” in bidding on Monday. Half of the proceeds, $3.8m, will be used to fund infrastructure projects to benefit the community of the small village where it was discovered. The Sierra Leone government rejected a bid of $7.8m at an earlier auction. The government is now expected to use the money raised to improve conditions in the village of Koryardu, including the introduction of a fresh supply of water, electricity, roads, medical care and the building and maintenance of schools. The “peace diamond” said to be the 14th largest recorded diamond in the world. Read more here-http://bbc.in/2AwOmqt and http://cnnmon.ie/2AwsKKQ
-Rare diamonds from WA’s outback break records at Rio Tinto’s Pink Diamond Tender as Argyle mine closure looms. Every year for the past 13 years, Perth diamantaire and jeweller David Fardon prepares to go into battle for the world’s rarest and most valuable diamonds. The Linneys Jewellery owner is one of the privileged few invited to attend the annual Argyle Pink Diamond Tender, where collectors from around the globe bid on the top pink, red and violet stones diamonds so rare they never reach the open market. Mr. Fardon said pinks from Rio Tinto’s East Kimberley mine had stunned the diamond world for many years, but with only three years away from closure, the 2017 tender was more competitive than ever.
“It’s an increasingly competitive process, one that’s fun to participate in because in your appointed time you do get to see some of the world’s most rare diamonds,” he said., “Out of the Argyle diamond production less than 0.1 per cent are pink, and then out of that the best 50 to 60 stones are offered by tender. “They vary in price points from some that are going to be perhaps a hundred thousand dollars, through to some that are many millions of dollars. “We were successful with a beautiful fancy vivid purple pink with a with a size of 0.39 of a carat.”
Although Rio Tinto has not disclosed the total figure reached by this year’s tender, it did reveal the collection reached double digit price growth, including the sale of the most valuable diamond in the tender’s 33-year history. Known as the Argyle Everglow, the 2.11 carat red diamond was won by a New York based diamantaire Optimum Diamonds LLC, who is thought to have bid in the millions for what was described as a “once in a lifetime stone.” Previously there have only been three red diamonds over one carat offered in the tender, fetching upwards of $2 million in the past. Argyle Avaline was the largest pink diamond in the 2017 collation at 2.42 carats, acquired by the international luxury jewellery house Graff.
Rio Tinto sales and marketing vice president of copper and diamonds, Alan Chirgwin, said the 2017 Argyle Pink Diamonds Tender results reflected increasing international demand for a product with a shrinking supply. Virtually the world’s entire supply of pink, red and violet diamonds are sourced from Rio Tinto’s Argyle mine and with the looming closure of the mine in 2020, there is an increasing awareness amongst collectors the global supply of pink diamonds may run out. Mr. Fardon said over the past decade pink diamond prices had experienced 10-15 per cent growth every year. “There’s been a very solid appreciation in price over time with the pink diamonds and especially those in the tender each year,” he said.
“The rarity is reflected in their value, so pink diamonds on average are 23 to 30 times the price of equivalent white diamond. “They have been very popular for a good number of years in Europe, the United states and Japan but what we’ve seen in the last 5-8 years are the emerging markets of China and India which has further increased demand.” With no other known sources of pink diamonds, speculation has risen in recent years on how the closure of the Argyle mine will ultimately impact the industry. Mr. Fardon said after almost 30 years association with the pink diamond industry, it would be an emotional time for long-time collectors when the Argyle Diamond Tender called its last bids.
“For 15 years I worked for Argyle [looking] after the pink diamond tender and for the last 13 years I’ve been sitting on the other side of the table where I’m participating as a buyer,” he said. “I’ve seen some very special pieces over the time, gained a lot of experience, met a lot of interesting people around the world have been able to present some of the world’s most rare pink diamonds to my clients. “I’m sure there will continue to be a secondary market for pink diamonds beyond [the mine’s closure] because they are very much a collectable. “Just like works of art, people are putting them aside for later or to hand down as heirloom pieces within families. “So I think there will be a lot of interest in pinks for a long time to come.” Read more here-http://ab.co/2AuU4c5 and http://bit.ly/2BDEtUW
-Russia’s 51-Carat Diamond Named for Romanovs Fails to Sell. The most expensive diamond ever polished in Russia, named Dynasty after the Romanov-era Imperial Court, failed to sell in an auction. Alrosa PJSC said it didn’t receive a high enough offer for the 51.4-carat gem in a Nov. 29 online auction. The stone has the best so-called triple excellence cutting quality, a characteristic Alrosa says is shared by less than 1 percent of all gems ever cut. Other gems in the collection, named Sheremetyev, Orlov, Vorontsov and Usupov after Russia’s noble families, sold at an average premium of 30 percent to reserve prices, Alrosa said, without disclosing prices.
The company now plans to hold a separate auction to sell Dynasty. As many as 130 bidders had registered to buy the stones, cut from a 179-carat rough diamond found in 2015. Alrosa was hoping to get at least $10 million for the whole collection, Chief Executive Officer Sergey Ivanov said in August. The auction is a rarity for the Russian miner, which specializes in digging up diamonds, but not polishing them. Ivanov, who took the job earlier this year, has said that the miner won’t fully expand into the cutting business, but will polish any unique stones. Read more here-https://bloom.bg/2ivtqFW
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
-I suppose everyone has their own version of the ranking of those financial entities considered the most powerful, best connected politically and at the top of the food chain; in other words, the “baddest dudes” in the financial ‘hood. My list starts with JPMorgan as the very baddest, with Goldman Sachs next. My guess is that most would agree, with perhaps some putting Goldman first. So when I see conclusive proof that the two baddest dudes in the ‘hood are taking 80% of all COMEX silver and gold deliveries for the first time in nine months in the case of one and much longer than that in the case of the other, I sit up and take notice.
I also know that there is one basic reason for why anyone would buy and take delivery of anything, namely, that they think it will go up in value. No one buys and takes delivery (paying full cash value) for an asset expected to decline. That Goldman Sachs is now taking delivery of COMEX gold and silver, second only to JPMorgan, should send strong signals to anyone interested in these metals as an affirmation to do likewise. Despite this data being so hard and conclusive, the remarkable thing is how little has been written about it.
Remarkable is truly an understatement when I contemplate JPMorgan and silver. JPMorgan has held the largest paper short position in COMEX silver futures for the past ten years, maintaining its dominant role on the short side of COMEX silver futures even after it began to accumulate physical silver six and a half years ago. The obvious conclusion is that the bank is taking advantage of the low prices its paper short position helped create to buy up physical silver at a bargain price. Until it started covering in this week’s COT report, JPM held its largest paper short position in years, only to turn around and add another 10 million physical oz to its hoard this week. How the heck can the regulators allow such a travesty? The answer is easy when the baddest dude shows up. Silver analyst Ted Butler Dec 2 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-As far as what Friday’s new Commitments of Traders (COT) Report might indicate, once again, I’m going to refrain from any predictions because the data I look at are so mixed. There have been very sharp declines in total open interest, particularly yesterday in gold, but that liquidation looks to be of the spread variety into tomorrow’s first notice of delivery day on the big December contracts in gold and silver. Price action alone would suggest some further increase in commercial shorting in gold and the opposite in silver (based upon Tuesday’s price decline in silver). Gold remained above both of its key moving averages during the reporting week, while silver finished below its key moving averages in yesterday’s trade.
Still, this week’s report is one to be analyzed, rather than handicapped. Of more significance is Wednesday’s price action in which silver set (slight) new lows for the past three months and is once again decisively below both key moving averages. This intensifies the question of whether the managed money traders can be induced into selling much more aggressively than they have to date. While gold is down today, it is still way above its 200-day moving average. The pressure is building for some type of resolution of the market structure and I’m still of the opinion that a very large up move is going to unfold, either with one final flush out to the downside or not. Silver analyst Ted Butler Nov 29 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Silver’s Positive Fundamentals Due To Strong Demand In Key Growth Industries. The beauty of silver is its dual role. It is both a monetary metal and an industrial metal. Because of this investors can look to a positive few years as the metal’s fundamentals will thrive due to strong demand in major growth areas. Over 50% of silver’s annual demand comes from industry. This is set to continue to grow as high-growth industries such as self-driving cars, green energy and health care drive demand for the precious metal.
The majority of industries are looking at improving products with technology and boosting energy efficiency. Many solutions call for silver, a tricky solution given the ongoing supply deficit. Along with silver’s growing importance in the world of manufacturing we should also remember its importance when it comes to its role as a monetary metal. Government and central bank policies will continue to increase budget deficits and drive inflation which is positive for both gold and silver. The tables look set to turn for a precious metal that is able to serve us both in our portfolios and our day-to-day lives. Read more here-http://bit.ly/2AVlcSd
-David Morgan: What drives the Silver Price Supply or Demand? There is a Disinformation War taking place in the silver market as certain industry analysis is confusing individuals by purposely disregarding the tremendous impact of rising investment demand. Not only do I find this troubling, but I am also quite surprised how much the silver industry pays attention to this faulty analysis. So, it’s time once again to set the record straight. Watch more here-http://bit.ly/2AfIbrV and http://bit.ly/2ACNX3N
-Eric Sprott: Talks Global Demand for Metals, Impact in 2018. Listen here-http://bit.ly/2BDLJAn
-Don’t Expect Gold to Go Wild Next Year. Gold has its fans for next year, but sparks are probably not going to fly. Even as the Federal Reserve tightens monetary policy and the European Central Bank tapers bond purchases, gold is set to rise marginally as real interest rates stay low and the dollar weakens, according to Bart Melek, global head of commodity strategy at TD Securities Inc. in Toronto. He sees bullion averaging $1,313 an ounce in 2018, about 4 percent more than the mean so far this year. “We don’t expect a big shock from the Fed in terms of rates,” Melek said in a phone interview last week. “Real rates continue to be quite low by historical standards. That represents a fairly limited rise in the opportunity costs of holding zero-yielding assets like gold. The yield curve is going to be fairly flat as well and that implies a robust precious metals market.”
While bullion has climbed 10 percent this year, it’s been range-bound since the end of September as the U.S. stock market hit numerous records and optimism grew over President Donald Trump’s tax reform plans. A black swan event in financial markets, a hefty equity correction, or signs the Russian probe is really hurting Trump could all push gold sharply higher, but the outlook seems to be relatively becalmed for now.
Gold has mostly accommodated increases in interest rates this year and will average $1,310 in 2018, said James Steel, an analyst at HSBC Securities (USA) Inc. A shift in investment demand has also supported bullion, said Jeffrey Christian, managing director of CPM Group, a New York-based research consulting company, who expects an average of $1,322 next year.
“You’ve seen fear-based investors pull away, but you’re seeing a new generation of new types of investors” who are interested in gold because equities are at records and bond prices are high, and both are vulnerable for a correction, Christian said. Bullion holdings in exchange-traded funds are the biggest since 2013, according to data compiled by Bloomberg. Melek, Steel and Christian are among speakers at a precious metals conference in Shanghai this week. Bullion traded at $1,268.34 on Wednesday.
Others are less optimistic. Citigroup Inc. is a little bearish in the second half, citing a slightly more hawkish Fed, optimism for tax cuts and sluggish Asian jewelry demand. Strong global economic projections for 2018 in developed and emerging markets should push gold down, said the bank, which predicts an average of $1,270 on Comex. ABN Amro Bank NV sees $1,250 by end-2018.
The outlook for the economy isn’t as upbeat as it seems, said CPM’s Christian. “What we’re looking at is an economic environment that is perhaps at or close to its peak and that we’ll probably see an incremental decline in growth rates in economic performances in 2018 and 2019, and you might actually see a short, shallow recession in the U.S. in that time frame,” he said.
U.S. tax reforms could support precious metals, TD Securities’ Melek said, as the legislation is set to add more than $1.4 trillion to the federal deficit over a decade. “If we see the debt-to-GDP ratio of the U.S. rise, that tends to be an accretive element for the gold and silver market broadly,” said Melek, who sees silver averaging $18.88 an ounce next year, up from $17.14 this year. Read more here-https://bloom.bg/2ABDFkb
-CHART OF THE WEEK: Bitcoin’s Gold Poaching to Slow Under ‘Adult Supervision.’ Bitcoin‘s torrent of all-time highs is widening the cryptocurrency’s record gap with gold. The surge “should be tamed with adult supervision in 2018,” as futures trading in bitcoin on regulated exchanges gets under way, said Mike McGlone, a Bloomberg Intelligence strategist. “There is little doubt that bitcoin and cryptos are stealing some gold demand interest, at least in this parabolic stage,” McGlone said. “When the crypto rally reaches its apex, gold should regain more shine. That looks like a good prospect in 2018.” Read more here-https://bloom.bg/2BRDt0H
-Gold ETFs Soar as Russia Probe Closes In on Trump’s Inner Circle. As U.S. political turmoil mounted, investors ran to gold. On Friday, holdings in exchange-traded funds backed by bullion jumped to 71.9 million ounces, the highest since May 2013, according to the latest data compiled by Bloomberg. SPDR Gold Shares, the biggest gold-backed ETF, attracted the most money since September as the Trump-Russia probe escalated. SPDR Gold attracted $351 million as prices advanced after reports that Trump’s former national security adviser Michael Flynn pleaded guilty to lying to federal agents and would cooperate with investigators.
The news sent gold prices surging amid demand for haven assets. The metal pared gains later as deficit hawks opposed to the Senate tax bill vanished, clearing the way for its passage early Saturday morning. The U.S. political tumult “resulted in higher risk aversion among market participants for a time,” Commerzbank AG analysts including Daniel Briesemann said in a note to investors. By Monday, haven demand for gold had dissipated, sending gold prices lower as optimism that the tax cut would bolster corporate profits spurred gains in U.S. equities and the dollar. Read more here-https://bloom.bg/2ksMGIg
-U.S. Mint American Eagle gold, silver coin sales fall sharply. Sales of U.S. Mint American Eagle gold and silver coins fell sharply year-over-year in November, keeping their tally for the first 11 months of 2017 on track for the weakest year since 2007, the latest data showed on Thursday. U.S. Mint data showed its sales of American Eagle gold coins totaled 12,000 ounces in November, down 92 percent from November 2016. This placed sales for 2017 so far at 259,500 ounces, on track for the lowest in 10 years. Sales of American Eagle silver coins reached 385,000 ounces in November, down 87 percent from November 2016, and bringing year-to-date sales to 17.3 million ounces, also on track for the lowest in 10 years. Investors have shrugged off geopolitical concerns and have been selling some silver in favor of investing in the stock market’s record rally. Read more here-http://reut.rs/2BG6dse