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WORLD FINANCIAL REPORT ON RADIO NOVEMBER 13th 2015
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-CHART OF THE WEEK: Europe’s Quiet Currency War Besets Nations Losing Inflation Grip. You don’t have to use the euro for Mario Draghi to be the central banker setting your monetary policy. From Stockholm, where the Riksbank published the minutes of its latest policy meeting on Tuesday, to Prague, Copenhagen and Zurich, officials in countries circling the currency bloc are waiting for the European Central Bank president to say next month whether he’ll expand stimulus. Only then will it be clear whether they’ll need to retaliate with more asset purchases, rate cuts and currency interventions of their own to dig in against imported disinflation. Read more here-http://bloom.bg/1L9gFVI
-CHART OF THE WEEK: May 1994 What Happened When the Fed Last Diverged With Europe. It’s been more than 21 years since the Federal Reserve last raised interest rates the same month as its main counterpart in Europe eased monetary policy. May 1994 was the month. Nelson Mandela was being sworn in as South Africa’s first black president and the tunnel linking the U.K. and France was opening for the first time. Beverly Hills Cop 3 was released in cinemas and the Crash Test Dummies were singing “Mmm Mmm Mmm.” At the same time, Janet Yellen was teaching at the University of California Berkeley and about to become a Fed governor. Mario Draghi was a top civil servant in Italy’s finance ministry.
Now they run the Fed and European Central Bank, respectively. It’s so long ago that neither the euro nor the ECB existed. Europe’s benchmark interest rate was set by Germany’s Bundesbank. That month, Alan Greenspan’s Fed boosted its benchmark to 4.25 percent from 3.75 percent to “maintain favorable trends in inflation and thereby sustain the economic expansion.” Meantime, the Bundesbank led by Hans Tietmeyer cut its discount rate to 4.5 percent from 5 percent to spur expansion in Europe’s largest economy. Left unsaid by both central banks was the likely desire for a stronger dollar after its decline had started to trouble financial markets. Read more here-http://bloom.bg/1PqcIn6
-CHART OF THE WEEK: Russia’s Oil Rivalry With Saudis Masks the Bigger Iranian Threat. Competition is growing in Russia’s biggest oil market. While Saudi Arabia’s encroachment in Europe is getting all the attention, the greatest threat comes from another part of the Middle East Iran. Saudi Arabia has started shipping crude to traditional Russian markets like Poland and Sweden, but supplies to Europe from the world’s largest exporter won’t increase by enough to reduce prices, said Texas-based consultant Stratfor.
In contrast, a surge in Iranian exports after the lifting of sanctions could erode the value of Russian shipments to the region as soon as next year, according to KBC Advanced Technologies. Tougher competition in Europe, the destination for almost 70 percent of Russia’s oil exports, comes as the country is already battling recession. Oil and gas sales account for about half of government revenues and the commodity-price slump has amplified the economic blow from international sanctions over Ukraine. An increase in Iranian exports following a nuclear deal with world powers could make matters worse. Read more here-http://bloom.bg/1O5Kjj4
-CHART OF THE WEEK: Facebook Leapfrogs GE in Market Value. Facebook Inc.’s rapid growth to new highs has left yet another stock market stalwart in its wake. This time it was General Electric Co. that saw itself surpassed by the operator of the world’s largest social network, which now has a market value of almost $308 billion. Facebook is now the sixth-largest company in the Standard & Poor’s 500 Index, edging out Amazon.com Inc. and solidly above Johnson & Johnson. Read more here-http://bloom.bg/1OD9mx9
-CHART OF THE WEEK: Wine, stamps, and art values have smoked bonds since 1900. Read more here-http://read.bi/1Y7PILs
-“Consumer inflation in China rose 1.3 percent in October, lower than the 1.5 percent median estimate in a Bloomberg survey. The lower-than-expected number was driven by a big drop in food prices. The producer-price index fell for the 44th straight month, coming in at -5.9 percent. The low inflation number, coupled with the trade drop announced on Sunday has opened the door to additional stimulus from the authorities.” Bloomberg
-“It would take a “disaster” to keep the Fed from hiking in December. After the Fed’s October FOMC statement, economists increasingly warmed up to the idea that the first rate hike would come in December. And after Friday’s huge US payrolls report, more and more economists were comfortable saying that a December rate hike was a “done deal.” Even Barclays’ Michael Gapen, who was among the minority forecasting the first rate hike to come in March 2016, flipped and moved his call to December.” Businessinsider.com
-“Nils Smedegaard Andersen, CEO of the shipping giant Maersk, has warned that the world economy is growing at a slower pace than that predicted by the IMF and other large forecasters. Maersk, which handles 15 percent of all consumer goods transported by sea, is seen as a bellwether for global trade. This morning the OECD trimmed its global economic forecast for the second time in three months. The organization now says that global output will expand 3.3 percent in 2016. It had previously forecast a growth rate of 3.6 percent for next year. The ongoing slowdown in emerging markets was cited as a risk factor.” Bloomberg
-19 million barrels of oil are due to arrive by ship from Iraq in American ports this month, the biggest influx from that country since June 2012, as OPEC members continue to defend market share in the face of low oil prices. The tactic seems to be working as yesterday the Energy Information Administration cut its U.S. crude oil production forecast for 2016 by 1 percent to 8.77 million barrels a day. Bloomberg
-The emerging market slowdown is a theme reflected in the decision by Goldman Sachs to fold its money-losing BRIC fund. The bank said in an SEC filing that it doesn’t expect “significant asset growth in the foreseeable future.” The fund, which had lost 88 percent of its assets since its 2010 peak, was based on an acronym coined in 2001 by former Goldman Sachs Economist Jim O’Neill. Bloomberg
-“China took another step to boost the yuan’s global usage, saying it will start direct trading with the Swiss franc, as the nation pushes its case for reserve-currency status at the International Monetary Fund. The link will start on Tuesday, the China Foreign Exchange Trade System said in a statement, making the franc the seventh major currency that can bypass a conversion into the U.S. dollar and be directly exchanged for yuan. The rate will be allowed to fluctuate a maximum 5 percent on either side of a daily fixing, according to CFETS.” Bloomberg
-“The world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting. That’s according to Nils Smedegaard Andersen, chief executive officer at A.P. Moeller-Maersk. His company, owner of the world’s biggest shipping line, is a bellwether for global trade, handling about 15 percent of all consumer goods transported by sea. We believe that global growth is slowing down he said in a phone interview. Trade is currently significantly weaker than it normally would be under the growth forecasts we see.” Bloomberg
-The Financial Stability Board, created by the G20 in the aftermath of the financial crisis, said that the most systemically important lenders will need to increase capital by up to €1.1 trillion ($1.2 trillion) by 2022. Bank of England Governor Mark Carney, who heads the FSB, said as investors now “actually have skin in the game,” the pressure they exert on banks will make a major failure less likely. Bloomberg
-“Mario Draghi signaled that the European Central Bank is ready to boost stimulus at its December meeting at a hearing in the European Parliament Thursday. He said that signs of a turnaround in core inflation have somewhat weakened and downside risks are visible.” Bloomberg
-“The ferocity of this attack is well-illustrated in Jason Goepfert’s excellent work that KWN published, which noted that this is the first time on record that gold has closed lower in 14 out of 16 trading days. However, I could make the case that the attack on silver may be even more relentless, as silver has been driven to levels that make virtually every pure silver producer uneconomic. But with more than 50 percent of silver coming as a byproduct from base metal production, that source hasn’t been impaired yet.
But what is transpiring in the base metals business suggests that there will be a myriad of mine shutdowns in the future, and this will take a significant toll on silver production. With roughly 75 percent of mined silver required in various medical and industrial uses, this isn’t going to leave much left over for investors at the very time that they are going to need to own it. There is a story floating around that someone has come up with a process that replaces silver with aluminum in solar panels. This tends to be the type of misinformation that is floated around at times when the silver price is being taken to the woodshed. So I remain very skeptical on that issue.” John Embry
-“The seeds for the next crisis are already being sown. The longer the zero interest rate policy lasts, the greater risks investors will have to take, especially the ones who have certain return requirements. At the same time, the capital structure in general as well as many individual speculative strategies have adapted to ZIRP. The attempts by central banks to return to “monetary normalcy” would likely cause a vast amount of defaults such that a big market crash might be triggered.
Hence, central banks appear to be bound to ZIRP, which will foster even more speculation and unproductive investment, will further enlarge the discrepancy between savings and investments, and will more than ever aggravate structural problems. The point at which confidence in the fragile edifice of debt will be lost is difficult to forecast. We are strongly convinced that gold represents a sensible hedge against such a crisis of confidence.” Ronald-Peter Stoeferle of Incrementum AG
-“It is extremely rare to see such selling pressure with the metals closing lower over several consecutive days like this. When a period of several consecutive lower closes does occur, it it usually happens to drive out some speculative excesses that have developed. But with sentiment toward gold and silver at such low levels, there are no speculative excesses today. So why has there been such selling pressure? It could be that the last remaining weak hands were being driven out of the market.
That possibility is easy to understand given the unusually long time this correction in the precious metals has been going on. But there may be another reason. Namely, the selling is being driven by the paper-gold market and the central planners no doubt have had a hand in it. The paper-gold they sell needs to be matched from day to day with a show of force, and the only way to do that is being able to deliver physical metal when the buyer of your paper promise asks for physical metal rather than cash settlement.” James Turk
-“The absolute evidence of the market is that the U.S. dollar is still ‘King.’ And as long as the U.S. dollar continues its bullish run against all other currencies, gold is going to struggle. So we have to see a turnaround in the entire commodity complex in order to see the dollar finally start to roll over, but that’s not happening yet. Is that going to happen? Absolutely. The reason for that is because the dollar’s rise is going to reach a point where it creates so much pain for the U.S. economy that the dollar’s run will be forced by the Fed to come to an end. But that’s not today. So I’m carefully watching key markets such as oil, gold, copper, and the entire commodity complex. And as long dollar continues its bullish run, the gold bulls are fighting a battle they can’t win in the very short-term.” Pierre Lassonde
-“Today, there are no free markets left anywhere in the world. Governments control the fixed income, equity and real estate sectors; and therefore control the entire economy. And what was once touted as the U.S. manufacturing renaissance has morphed into another example of how government’s abrogation of free markets will ultimately result in economic chaos and disorder.” Michael Pento
-“Make no mistake, if they are really serious about rate hikes, the stock market is extremely vulnerable because it is about as overpriced as I’ve seen it in my 52+ years in the business. Volume and breadth are atrocious and there is far too much unwarranted optimism. However, the true insult to intelligence came last Friday with the announcement by the BLS that 271,000 jobs were created in October. This was 80,000 over the highest estimate. The fact that over half the jobs came from the completely discredited Birth/Death model, which estimates job creation in the small business sector, tells you all you need to know. But there has been nothing in the microeconomic data in October that would validate anything close to that figure.” John Embry
-Gundlach Says December Rate Hike a Threat to Stocks, Bonds. A December interest rate increase would threaten U.S. stock and bond markets while potentially driving up the value of the dollar to the point where it weakens the economy, according to Jeffrey Gundlach, chief executive officer of DoubleLine Capital. “I have a hard time believing a Fed tightening will help the economy,” Gundlach, whose Los Angeles-based company manages about $80 billion, said Monday on a conference call with investors. “I think volatility will increase and the economy will weaken.” The odds of a Federal Funds rate increase by the central bankers in December stood at 66 percent Tuesday, according to Bloomberg data, surpassing the 50 percent level last week after the Bureau of Labor Statistics said the unemployment rate fell to 5 percent in October as the U.S. added more jobs than expected. Read more here-http://bloom.bg/1O1QEMB
-Paul Krugman to the Fed: Don’t do it. Nobel Laureate Paul Krugman doesn’t think the Federal Reserve should raise interest rates in December. Writing on his blog at The New York Times on Friday, Krugman said that while it looked as if the Fed would probably raise rates in December after Friday’s blowout jobs report particularly with the market now pricing in a 70% chance the Fed goes in December this doesn’t mean it should do it. Krugman’s main argument centers on inflation and wage growth. Read more here-http://read.bi/1lm1Zh5
-China’s Deflation Pressures Signal More Monetary, Fiscal Easing. China’s consumer inflation waned in October while factory-gate deflation extended a record streak of negative readings, signaling policy makers may need to hit the gas again to ease deflationary pressures. Read more here-http://bloom.bg/1kngPDP
-Negative Interest Rates the New Normal Next Time Economies Slump. The report from once-uncharted monetary territory: there’s little to be scared of. Now that Sweden and Switzerland have shown that negative benchmark interest rates don’t necessarily result in flights to cash, asset bubbles or banking strains, the global giants of central banking may be more willing to embrace sub-zero borrowing costs the next time their economies slide.
“There’s a very real chance unorthodoxy becomes the new orthodoxy,” said Alan Ruskin, global head of Group-of-10 currency strategy at Deutsche Bank AG in New York. While financial markets are focused on the Federal Reserve’s looming rate increase, policy makers and economists are already changing their attitude toward negative rates. European Central Bank President Mario Draghi is open to reducing the rate he charges banks to leave money in his coffers overnight further into negative territory. Bank of England Governor Mark Carney has also revised his thinking to say the U.K. benchmark could fall below 0.5 percent if needed having previously worried deeper cuts would roil money markets.
Meantime, Fed Chair Janet Yellen said last week that “if circumstances were to change” then “potentially anything, including negative interest rates, would be on the table.” One of her policy-setting colleagues has already advocated them for next year. Plumbing new depths the next time economies stumble would continue the pattern of the past few decades in which each of the peaks and troughs in rates were more often than not lower than in the previous business cycle. Read more here-http://bloom.bg/1MZnbG7
-Ex-GAO head: US debt is three times more than you think. The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion. Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised. “If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms,” Walker said. Read more here-http://bit.ly/1HKEXoL
-U.S. budget deficit widens to $136 billion in October. The United States posted a budget deficit of $136 billion, up 12 percent from the same period last year, the Treasury Department said on Thursday. Read more here-http://reut.rs/1WViUma
-$944,143,000,000: Social Security Administration Spending Hit Record in FY2015; $6,345 For Every American With a Job. Spending by the Social Security Administration which includes payments for Social Security and disability benefits as well as Supplemental Security Income payments and the administrative costs for these programs hit a record $944,143,000,000 in fiscal 2015, according to data published by the U.S. Treasury. Even in constant 2015 dollars (with adjustments made using the Bureau of Labor Statistics inflation calculator), that was up $33,748,280,000 from the $910,394,720,000 the Social Security Administration spent in fiscal 2014.
As of September, there were 59,737,817 beneficiaries getting Social Security or disability benefits, according to the SSA. At the same time, according to the Bureau of Labor Statistics, there were 148,800,000 people who had either a full- or part-time job in the United States. That means there were only 2.49 people with jobs for each of the 59,737,817 Social Security and disability beneficiaries. At the same time, there were only 121,839,000 people with full-time jobs in the United States in September, according to BLS. Those 121,839,000 full-time job holders equaled about 2.04 for each of the 59,737,817 people getting Social Security or disability benefits. Read more here-http://bit.ly/1M9KvNC
-Labor Force Participation Remains at 38-Year Low; 94,513,000 Not in Labor Force just 62.4% of American civilians over 16 either working or looking for work. Read more here-http://read.bi/1SmQK2m and http://bit.ly/1kQ4Iie
-The stock market owes more than all of its success this year to just 8 companies. The S&P 500 owes more than all of its success this year to eight stocks. Collectively, these eight stocks account for a roughly 2.5% positive contribution to the S&P 500’s return this year. Facebook (+31% year-to-date) Amazon (+110% YTD) Netflix (+122% YTD) Google (+41% YTD) Nike (+35% YTD) O’Reilly (+41% YTD) Starbucks (+50% YTD) Home Depot (+18% YTD). The index is up about 0.6% over the same time period, so these stocks actually account for more than all of the gains the benchmark index has enjoyed this year. Read more here-http://read.bi/1O5Oyvc
-Kirk Spano: The next 1000-point down day is coming. Read more here-http://on.mktw.net/1MZsp4G
-Goldman’s BRIC Era Ends as Fund Folds After Years of Losses. The BRIC era is coming to an end at Goldman Sachs Group Inc. The bank’s asset-management unit folded its money-losing BRIC fund, which invests in Brazil, Russia, India and China, and merged it last month with a broader emerging-market fund. Goldman Sachs pulled the plug on the nine-year-old product because it doesn’t expect “significant asset growth in the foreseeable future,” according to a filing to the U.S. Securities and Exchange Commission.
Fourteen years after former Goldman Sachs economist Jim O’Neill coined the acronym that ushered in an unprecedented investment boom, the biggest emerging markets are now sputtering. Russia and Brazil have fallen into recessions. China, long an engine of the world’s growth, is poised for its weakest expansion since 1990. The downfall of the BRIC fund, which had lost 88 percent of its assets since a 2010 peak, also underscores how the strategy of bundling disparate countries into a single investment theme is losing its appeal among investors. Read more here-http://bloom.bg/1OGSZ2D
-IEA Sees OPEC Market-Share Growth in 2020 as Rivals Stagnate. OPEC’s share of the global oil market will expand from 2020 as prices recover to $80 and supply outside the group stagnates following spending cuts, according to the International Energy Agency. The Organization of Petroleum Exporting Countries’ share of global supply will remain steady at 41 percent until 2020 then rise to 44 percent by 2025, two percentage points higher than the IEA forecast a year ago. Production growth from countries not part of the group will slow over the next five years and halt by 2020. Read more here-http://bloom.bg/1kKfxCq and http://read.bi/1RRJo6N
-Saudi Arabia: ‘We’ve seen the pain’ and we don’t care. Saudi Arabia’s mission to blow everyone out of the oil market isn’t over yet. The country’s policy of pumping so much oil that prices stay too low for competitors to make a profit has led to losses at big oil companies, suppressed inflation globally, and even seen Saudi Arabia’s own sovereign debt downgraded. And the country has no plans to stop. The chairman of Saudi Aramco, the state’s oil company, told the Financial Times: “There have been no conversations here that say we should cut production now that we’ve seen the pain. “The only thing to do now is to let the market do its job,” the Saudi Aramco chairman, Khalid al-Falih, said. The OPEC oil-producing cartel, of which Saudi Arabia is a key member, decided against cutting production targets last year, letting the price fall from around $100 to less than $50. Read more here-http://read.bi/1NtpxHr and http://read.bi/1PqzbAG
-Saudi Vice Oil Minister Sees Price Surge After Cutbacks. The scale of the global oil and gas industry’s spending cuts are making another surge in energy prices possible by diminishing future supply, Saudi Vice Minister of Petroleum & Mineral Resources Prince Abdulaziz bin Salman said. Investments have been cut by $200 billion this year and will drop another 3 percent to 8 percent next year, marking the first time since the mid 1980s that industry cut the spending for two consecutive years, Prince Abdulaziz said in a copy of his speech for delivery to energy ministers in Doha Monday.
Nearly 5 million barrels a day of projects have been deferred or canceled, he said in the remarks. Just like high oil prices can’t last, a prolonged period of low prices is “also unsustainable, as it will induce large investment cuts and reduce the resilience of the oil industry, undermining the future security of supply and setting the scene for another sharp price rise,” the prince said in the remarks. “As a responsible and reliable producer with long-term horizon, the kingdom is committed to continue to invest in its oil and gas sector, despite the drop in the oil price.” Read more here-http://bloom.bg/1Nqg4kb
-How Canada Can Get Out the Oil After Keystone. Watch here-http://bloom.bg/1MyaHDg
-Apple boss: Next generation of children ‘will not know what money is.’ Tim Cook, chief executive of Apple, makes bold prediction about the death of cash as he promotes Apple Pay alternative. The next generation of children born in Britain “will not know what money is”, the boss of Apple has predicted. Tim Cook, the chief executive of technology giant, forecast the death of cash by the time current university students have a family. Cash is still used for more than half of payments by consumers, according to Payments UK, the industry body, but its popularity is falling as people switch to cards and smartphone apps such as Apple Pay and Google Wallet. Read more here-http://bit.ly/1PqdAYW
-JPMorgan’s 2014 Hack Tied to Largest Cyber Breach Ever. The U.S. described a vast, multi-year criminal enterprise centering on hacks of at least nine big financial and publishing firms and the theft of information on 100 million of their customers that fueled a web of stock manipulation, credit-card fraud and illegal online casinos. Two indictments, unsealed Tuesday, tied three of four suspects to previously reported hacks of JPMorgan Chase & Co., E*Trade Financial Corp., Scottrade Financial Services Inc. and Dow Jones & Co., a unit of News Corp. Hackers and conspirators in more than a dozen countries generated hundreds of millions of dollars in illicit proceeds on pump-and-dump stock schemes and particularly lucrative online gambling, prosecutors said. Read more here-http://bloom.bg/1WPLKVe
-No wonder California freaked out! New pictures show spectacular launch of nuclear-capable Trident missile over Golden Gate Bridge that sparked UFO scare and a host of conspiracy theories. Read more here-http://dailym.ai/1krObkV and http://read.bi/1ME4Pbu
-Navy launches second test missile off Southern California coast. The U.S. Navy said it launched a second and final missile in a planned exercise Monday afternoon from a submarine off the Southern California coast. The second test launch of the Trident II (D5) missile from a ballistic submarine in the Pacific Ocean took place Monday afternoon, the Navy said. The blast-off took place to far less fanfare than Saturday night’s launch, which provoked residents from San Francisco to Mexico to take to social media, posting photos of an eerie-looking bluish-green plume smeared above the Pacific. Speculations were wide-ranging, including rumors of an otherworldly alien UFO visit. In fact, the streak was generated from the Trident missile’s rocket motor. Read more here-http://lat.ms/1kPKNQB
-The US government is preparing for a cataclysmic blast from space. For our electronic way of life, the sun is a formidable foe, and the White House is taking protective action against it. On Oct. 29, the White House’s National Science and Technology Council released its strategic plan to prepare for an extreme space weather event that could destroy satellites, spacecraft, and vital telecommunications systems. Many of these electrical systems depend on each other, which is a recipe for disaster. “These critical infrastructures make up a diverse, complex, interdependent system of systems in which a failure of one could cascade to another,” the Council reported in the plan. Read more here-http://bit.ly/1RN2ATc
-Cyber Threat Underscores Safety of Owning Texas Land, Perot Says. The growing menace of hackers gaining access to the financial system concerns Texas billionaire Ross Perot Jr. enough that he’s keeping key records in file drawers in case the Internet goes down. Yet his perch as chairman of Hillwood, the largest landowner in the Dallas-Fort Worth region, helps him sleep at night. “What I like about land is I can drive out and check on it,” Perot, 57, with a net worth of $2.1 billion on the Bloomberg Billionaires Index, said last month in an interview in his Dallas office. “It doesn’t go anywhere. It’s hard to steal land.” Read more here-http://bloom.bg/1llNb1S
-Chinese Billionaire Buys Modigliani for Record $170.4 Million. Chinese billionaire Liu Yiqian bought Amedeo Modigliani’s painting of a reclining nude woman for $170.4 million, the second-highest price for an artwork at auction, in a volatile sale at Christie’s in New York. Modigliani’s 1917 “Nu Couche (Reclining Nude)” anchored Christie’s special, mixed-category sale titled “The Artist’s Muse,” which included 34 paintings and sculptures created from the 1860s through the 2000s. The evening tallied $491.4 million, setting five auction records for artists including Gustave Courbet and Roy Lichtenstein, whose painting of a nurse sold for $95.4 million. The Modigliani price was an auction record for the Italian artist. “Prices have reached the Promised Land,” billionaire collector Eli Broad said after the sale. “I can’t imagine it going much higher though. Can you? Read more here-http://bloom.bg/1Qhj5th
-Sotheby’s Sells Swatch Rarities for $1.3 Million in Geneva. A collection of almost 1,000 Swatch timepieces fetched 1.3 million Swiss francs ($1.3 million) at a Sotheby’s sale in Geneva on Tuesday, the second seven-figure auction of watches this year by the inexpensive Swiss brand. The lot, which includes almost 380 prototypes, sketches, cases and dials, was offered by Marlyse Schmid and Bernard Muller, who were early designers for Swatch in the 1980s, according to the auction house. Sotheby’s estimated the lot would fetch more than 1 million francs. Read more here-http://bloom.bg/1SG9BGc
-Patek Philippe Becomes Most Expensive Wristwatch Ever Sold at Geneva Charity Auction. On Saturday, at the Only Watch charity auction in Geneva, a one-of-a-kind Patek Philippe wristwatch sold for 7.3 million Swiss Francs ($7.26 million). This makes it the most expensive wristwatch ever sold publicly. Did I mention it’s made of stainless steel? The 2015 Only Watch auction is held every other year to raise money for Duchenne Muscular Dystrophy, and brands big and small dontate unique watches to be sold. This year, Patek contributed a one-of-a-kind stainless steel reference 5016, a grande complication that includes a tourbillon, minute repeater, and retrograde perpetual calendar all in a small, wearable package. The steel case is complemented by a rich blue dial and matching strap. It’s beautiful, highly complex, and an obvious trophy for collectors. There was no question this was going to be the top lot of the sale. Read more here-http://bloom.bg/1Pn26Wk
-Hong Kong tycoon spends millions on diamonds for daughter at Geneva auctions. A Hong Kong billionaire tycoon paid a total of US$77 million at auctions in Geneva for two large and rare colored diamonds for his 7-year-old daughter Josephine and renamed them after her, his office said Thursday. Joseph Lau was the top bidder for the 12.03-carat “Blue Moon” diamond that sold Wednesday night for a record-setting 48.6 million Swiss francs (US$48.5 million), said a spokeswoman for Lau, who declined to give her name. Sotheby’s said the buyer promptly renamed the pricier gem “The Blue Moon of Josephine,” Lau was also the buyer of a 16.08-carat vivid pink diamond that sold for 28.7 million Swiss francs (US$28.5 million) auctioned by Christie’s the night before, she said.
The buyer renamed that diamond “Sweet Josephine,” Christie’s said. “Yes, the two diamonds are bought by Joseph Lau,” said the spokeswoman, who added that they were named after Lau’s daughter. The blue diamond, set in a ring, was said to be among the largest known fancy vivid blue diamonds and was the showpiece gem at the Sotheby’s jewelry auction. The Blue Moon named in reference to its rarity, playing off the expression “once in a blue moon” topped the previous record of US$46.2 million set five years ago by the Graff Pink, Sotheby’s said. The diamond also set a new record of more than $4 million per carat, capping the daylong high-end jewelry sale that reaped roughly $140 million.
Lau, a property developer with a fortune estimated by Forbes at US$9.9 billion, has a habit of snapping up expensive gems for his children. At a Sotheby’s Geneva auction in 2009, he bought another blue diamond, paying a then-record US$9.5 million for the 7.03-carat “Star of Josephine.” Last November, he also bought two gems for another daughter, 13-year-old Zoe, his spokeswoman said. One was a 9.75-carat blue diamond that he named “Zoe Diamond” after buying it for about US$33 million at a Sotheby’s auction in New York. He also spent 65 million Hong Kong dollars (US$8.4 million) for a 10.1-carat ruby and diamond brooch at a Christie’s Hong Kong auction.
He named that one “Zoe Red.” “Tonight we set a new world record, a new auction record for any diamond, any jewel, any gemstone, with the sale of the Blue Moon diamond,” said auctioneer David Bennett in Geneva. He specified the price as US$48,468,158. “I have never seen a more beautiful stone. The shape, the colour, the purity it’s a magical stone.” The polished blue gem was cut from a 29.6-carat diamond discovered last year in South Africa’s Cullinan mine, which also yielded the 530-carat Star of Africa blue diamond that is part of the British crown jewels, and the Smithsonian Institution’s “Blue Heart” discovered in 1908.
Sotheby’s says experts took five months for an “intense study” of the original Blue Moon diamond, and a master cutter took another three months to craft, cut and polish the stone. The auction house said in a video that the Cullinan mine was the “only reliable source in the world for blue diamonds,” and only a tiny percentage of those found in it contain even a trace of blue. Blue diamonds are formed when boron is mixed with carbon when the gem is created. Read more here-http://bit.ly/1Y7B0Ec
-Sean Connery’s Diamond Sale Makes Record at Sotheby’s Auction. Sean Connery sold a diamond pendant for $4 million (CHF 4.1 million), about twice its upper estimate, setting what Sotheby’s described as a record bid for a fancy orange-pink diamond. The 15.20-carat piece was sold at the auctioneer’s magnificent jewels and noble jewels tender in Geneva this week, at $266,063 per carat, It was slated to sell for $1.2 million to $2.2 million. The former James Bond movie star also sold a single 5.18-carat pear-shaped diamond in a ring, which went for $249,300, having been estimated at $145,600 to $244,300, according to the Sotheby’s website. Read more here-http://bit.ly/1MEXSXI
-The world’s most expensive diamonds have all been sold. A collection of 65 rare pink and red diamonds from the Argyle mine in the North West of Australia has been sold in a global tender. The Argyle Pink Diamonds Tender, known as the Connoisseurs Collection weighing a total of 44.14 carats and including four what are known as fancy red diamonds, went to bidders from 11 countries. Rio Tinto, the owner of Argyle, doesn’t reveal what the tender winners paid for their diamonds.
However, pink diamonds can fetch 50 times more than the more common white diamonds. They often get $1 million a carat. Based on that the 2015 Argyle collection would have brought in more than $40 million. The most expensive pink diamond sold was the Graff Pink, a 24.78 carat fancy intense pink diamond, sold at Sotheby’s in 2010 for $US46 million. Josephine Johnson, the Argyle Pink Diamonds manager, says she’s delighted with this year’s results.
She says the 2015 Argyle pink diamonds achieved the highest average price per carat since the tender began in 1984. The five heroes of the collection were sold to notable investors, collectors and retailers based in Europe, US, China and the Middle East. The most valuable diamond was Lot Number 1, called Argyle Prima, a 1.20 carat fancy red pear-shaped diamond which went to Sciens Diamond Management. Almost the entire world supply of rare pink and red diamonds comes from Rio Tinto’s Argyle diamond mine in the east Kimberley region of Western Australia.
-India is suing Queen Elizabeth II for the return of a ‘stolen’ £100 million diamond. It was once the world’s largest-known diamond, is worth a reported £100m and is currently part of Britain’s crown jewels. But India wants it back. Bollywood stars and businessmen have united to instruct lawyers to begin legal proceedings in London’s High Court to return the Koh-i-Noor diamond. The diamond was in the crown worn by the Queen Mother at the coronation of her husband King George VI in 1937 and again at Queen Elizabeth’s coronation in 1953.
The group, which has called itself the “Mountain of Light” after the translation of the stone’s name, say that the 105-carat diamond was stolen from its true home in India and are demanding that the UK Government returns it. The stone is “one of the many artefacts taken from India under dubious circumstances”, according to David de Souza from the Indian leisure group Tito’s. Souza claims the British colonisation of India had stolen wealth and “destroyed the country’s psyche”. The jewel was given to the reigning Queen of the time by the last ruler of the Sikhs, Duleep Singh, after the British annexe of the Punjab. Read more here-http://read.bi/1NtrvYn
-Greg Hunter: Eric Sprott Interview, US is Broke and By Far the Biggest Issue. Renowned money manager Eric Sprott is still very bullish on physical gold and silver. Why? Sprott proclaims, “The U.S. is broke. We know they’re broke. About a thousand professors have signed up and told Congress you’ve got to deal with this issue, and it is immediately ignored, but it is by far the biggest issue. It’s not just government. It’s corporate pension plans, and state pension plans and all these unfunded obligations where everyone thinks they are going to receive something only to find out that they are not going to receive something. The math is pretty simple.
The U.S. is broke, and I don’t want to single out the U.S. Lots of countries are broke. I am sure Japan is broke, and I am sure there are European countries that are broke. We can’t keep extending and pretending and suggesting everything is great. Unfortunately, someone is going to pay the price, and I am not sure when the price is going to be paid. The analogy I use is we all knew ten years ago that Detroit was broke. It was so mathematically certain that you knew what was going to happen. The same thing will happen to the United States.”
On his physical gold and silver investments, Sprott says, “I don’t lose any sleep over the price of gold going down in the sense that I believe what I believe. I believe it’s been manipulated. It’s very much about currency and economics of the Keynesian scheme that we’re going to spend money, print money and it’s all going to work. It’s not working. I don’t want to wait and find out the day it falls apart because when it falls apart someday, then it will be too late. I want to be positioned beforehand. I can remember shorting stocks before March of 2000.
It was a bit of a rough ride for three months, but my gosh, when it rolled over you have to be a little bit early on things. I believe the last four years have been orderly and created to be difficult. I think gold would have gone up, but they could not stand for it to go up because they were printing money. If you are printing money and gold goes up, everybody figures it out. I’ve been around for a while, and I have the patience to hang in there. I have been a buyer of gold stocks, and so I am hopeful this will end up being a very, very rewarding trade.” Sprott predicts, “There has to be a collapse. It will be way bigger than 2008. We had a debt problem in ‘07 and ‘08 and the debt has exploded.” Watch and read more here-http://bit.ly/1RN1aZ5
-Greg Hunter: Craig Hemke Interview, Huge Fraud at COMEX Covering Up Huge Demand for Gold. Financial expert Craig Hemke says not only is the 300 to 1 leverage at COMEX “extreme fraud,” but it also is a sign of record demand for physical gold. Hemke explains, “We have been at this number now for a couple of months. Meaning that for every one physical ounce of supply in the vaults of COMEX, there are 300 beneficial owners. 300 paper ounces have been created. That leverage, that stress is telling us something.
You get the anecdotal stories about the empty vaults of London and the stress of the gold that is flowing out of the vaults of London and out of the U.S., out of the UK and into Switzerland. There are stories of the refiners running 24 hours a day, 7 days a week, taking the old 400 ounce gold bar and recasting them into kilo bars and shipping them to the East where the demand is. It’s huge fraud to cover up huge demand. There is no doubt about it.” On the falling price of gold and silver since 2011, Hemke says, “I don’t lose a minute of sleep over that–none.
Everything we were worried about in 2011 and 2012 is still out there. It’s only gotten even worse than it was then. The fact that the price is where it is, actually, is a bonus for everybody. It is a chance for those who have not prepared for this event to get prepared and get their hands on physical metal while they can because the end is coming. The fact that it’s been postponed for a couple of years doesn’t mean anything and doesn’t make a bit of difference to me.” Watch and read more here-http://bit.ly/1Y7BI4i
-Clive Maund: Gold Market Update. Read more here-http://bit.ly/1WPQLCy
-Frank Holmes SWOT Analysis: Gold Reacts to Increased Odds of a December Rate Hike. Read more here-http://bit.ly/1WVjErE
-Overstock has $10 million of gold and silver stored at an off-site facility to pay employees in case there’s a financial crisis. Read more here-http://read.bi/20PtuQu
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
-Clive Maund: Silver Market Update. Read more here-http://bit.ly/1HECGkr
-Ted Butler: Silver Commentary, The Count. In the meantime, something accounts for gold and silver price movement and that something is COMEX positioning. As dismal as the silver market has been for the past 4.5 years, it would have been a heck of lot more dismal if there was no clear explanation for the price torment. And that explanation is being recognized by more daily. The explanation, of course, is that silver prices are being set as a result of massive leveraged paper bets between two specific groups of speculative traders on the COMEX.
This is an absurdity and outrage on its face and that alone guarantees it won’t last forever. The key is that when it does end, it can’t end gradually – it must end suddenly and dramatically. I still maintain that dramatic end will most likely occur when the prime silver manipulator, JPMorgan, is ideally positioned for the inevitable silver price explosion. Having amassed more actual silver (400 million oz) than any private entity in history, as and when it buys back the additional COMEX contracts it shorted recently, the explosion could occur at any time and I will treat it as such.
It will take lower prices for JPMorgan and the other crooked COMEX commercials to buy all the COMEX silver contracts they intend to buy if history is any judge, but once that occurs it should be a new and better world. I’m sorry this increasingly obvious silver manipulation has lasted as long as it has, but I am grateful recent market structure extremes have mostly played out as analyzed and expected. All that remains is the final selloff and price explosion and that is coming from everything I look at. Read more here-http://bit.ly/1NOfWiQ
-It would be an understatement to simply observe that the price of gold and silver (and other commodities) have followed the rigid script dictated by the market structure on the COMEX. Not only are more becoming aware that COMEX futures market positioning is what drives gold and silver prices; the script has become so reliable and repetitive, that I don’t believe that I can recall more commentators interpreting correctly the recent COT setup. Hopefully, no one reading this should be in the dark as to why gold and silver prices have declined. (You may be disappointed or angry, but you shouldn’t be confused about what caused recent price action).
First, a brief recap. From the intraday price highs of October 28, just 10 trading days ago, the price of gold has fallen close to $100 and silver by $2 on a nearly uninterrupted stair step decline of new price lows daily. I do believe this has been the most pronounced price salami slicing I’ve ever witnessed in COMEX gold and silver. When successive new price lows (or highs) are created by the commercials, there can be no doubt that it is designed to induce the managed money technical funds to sell (or buy). That is the essential rhyme and rhythm behind gold and silver price movement.
Because the managed money technical funds held record net long positions in COMEX silver and hefty net long positions in COMEX gold at the October 28 price peaks, the skids were greased for the commercials to rig (slice) prices lower in order to lure the managed money traders to the sell side. And slice is the right word to describe what the commercials did since then. Through [Wednesday], my back-of-the-envelope calculations indicate that the commercials achieved a net monetary gain (by taking profits and favorable contract repositioning) of close to $1 billion over the past ten trading days in COMEX gold and silver. Silver analyst Ted Butler Nov 11 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Sales of American Eagle bullion coins from the U.S. Mint seem to be consistent with very recent trends, namely, a sharp fall-off in demand for Gold Eagles and continuing strong demand for Silver Eagles, even if that strong demand is just under the Mint’s ability to produce, effectively ending the rationing of Silver Eagles. I am convinced the recent sales patterns can be traced to the crooks at JPMorgan. To be sure, retail demand is just about non-existent.
First, the bank suddenly stopped buying Gold Eagles since it knew it would soon drive gold prices lower and will probably resume buying when prices bottom (which could be soon). JPMorgan is still buying as many Silver Eagles as it can but it is not interested in seeing the Mint struggle to keep up with its demand and inflame talk of retail shortage. Therefore, JPM is buying Silver Eagles at a pace that won’t cause the Mint to ration, but will allow the bank to add to its massive actual silver holdings. I never said this bank was stupid, just cunning and crooked. Silver analyst Ted Butler Nov 7 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-The turnover or physical movement of metal brought into or taken out from the COMEX-approved silver warehouses picked up [last] week to 4.8 million oz. I wanted to say that’s close to the “normal” average weekly movement over the past 4.5 years, but I caught myself; as how could a physical inventory movement equal to 30% of world mine production possibly be considered normal, particularly when it occurs in only a few warehouses around NYC? Total COMEX silver inventories fell by a slight 0.3 million oz., but set another two-year low water mark.
While on the topic of COMEX warehouses, 76,500 oz of gold were moved into the COMEX warehouse of JPMorgan, undoubtedly reflecting the gold deliveries taken by the bank during the October gold delivery process on futures contracts. These are not big quantities but JPM was the only net gold stopper last month on the COMEX and this is the same pattern that JPMorgan employed this year in COMEX silver, in taking 20 million oz of silver on futures contract deliveries and moving it all into the bank’s COMEX facility. Not that it needs mentioning, but this is further evidence that JPM is the lead sled dog in everything related to gold and silver (and other commodities), most particularly in manipulating prices.
Sticking with gold, the past week has seen sizable withdrawals from the big gold ETF, GLD, on the order of 750,000 oz, worth more than $850 million. While sizable in dollar terms ($850 million would buy more than 55 million oz of silver), the reduction in the holdings of GLD looks like plain vanilla investor liquidation. In contrast, holdings in the big silver ETF are only down slightly (so far). I do believe that the GLD investor selling was in reaction to the downward price manipulation on the COMEX; with my point being that the manipulation affects more things than you can shake a stick at. That’s why price manipulation is the number one market crime, even if the CFTC continues to look away. Silver analyst Ted Butler Nov 7 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Seeing as gold prices fell close to $50 during the [COT] reporting week just completed on Tuesday, it would not surprise me if Friday’s COT report indicated 30,000 net contracts of managed money selling and/or commercial buying. If this occurs, it would represent one of the largest weekly changes recently, but would still represent only a portion of the 130,000 net contracts or so of Managed Money buying that took place over the past few months. In other words, it does look like the commercials had set the Managed Money traders up like bowling pins on the price run up in gold (and silver).
As I wrote previously, it looked like the commercials had an average sale price of $1165 on the 90,000 net gold contracts that they sold over the past 5 weeks, so the commercials are already much deeper into profits than they usually are at this stage. Just to put these numbers into some type of perspective, if the commercials are able to buyback those recently sold 90,000 COMEX gold contracts at a $50 profit, the collective profit (and corresponding loss to the managed money traders) would be $450 million. If the commercials re-buy with a net gain of $100, the collective profit would be $900 million. Similar back of the envelope numbers exist in silver. I’d like to stop here and make a point.
These gold and silver positions I speak of that may result in the many hundreds of millions and perhaps more than a billion dollars in collective profits to the commercials and losses to the managed money traders haven’t been realized yet and may not end up being realized (although it looks like the probabilities favor that outcome). Fifty traders divvying up a billion dollars comes to $20 million a trader, certainly not an insignificant profit or loss for a trade that took only a few months, or even weeks to achieve. Silver analyst Ted Butler Nov 4 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN