Radio Show Newsletter
WORLD FINANCIAL REPORT ON RADIO NOVEMBER 6th 2015
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CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: These charts show that London is in a housing bubble and it’s going to pop any second. The cost of either renting or buying a property in London is absolutely nuts and investment bank UBS just warned investors that the market is going to explode any time now. Read more here-http://read.bi/1Q4m203
-CHART OF THE WEEK: A crystal clear illustration of how the stock market is not the US economy. In a recent email to clients, Deutsche Bank’s Torsten Slok shared two pie charts capturing this. One chart showed the share of the US employment in service industries versus manufacturing industries, and the second showed the share of earnings in S&P 500 coming from service industries versus manufacturing. A key difference between the S&P500 and GDP is that most of the earnings in the S&P500 come from the manufacturing/energy/goods producing sectors but those sectors make up only 14% of total employment in the US economy,” he writes. It’s the manufacturing/goods producing industries that have been slowing substantially. And it’s responsible for just a sliver of the employed workforce while representing the bulk of the S&P 500. Read more here-http://read.bi/1WwsBwt
-CHART OF THE WEEK: Here’s How Much QE Helped Wall Street Steamroll Main Street. Wall Street is counting its winnings from seven years of easy money. In a report sent to clients on Sunday, Bank of America Corp. strategists totted up the results of 606 global interest-rate cuts since the collapse of Lehman Brothers Holdings Inc. and the $12.4 trillion of central bank asset purchases following the rescue of Bear Stearns Cos.
The results represent a clear victory for Wall Street over Main Street, according to the team of Michael Hartnett, BofA’s chief investment strategist. For every job created in the U.S. this decade, companies spent $296,000 buying back their stocks, according to the New York-based bank. An investment of $100 in a portfolio of stocks and bonds since the Federal Reserve began quantitative easing would now be worth $205. Over the same time, a wage of $100 has risen to just $114. For every $100 U.S. venture capital and private equity funds raised at the start of 2010, they are now raising $275, but for every $100 of U.S. mortgage credit extended five years ago, just $61 was extended and accepted this June, BofA said. Read more here-http://bloom.bg/1GM9CXY
-CHART OF THE WEEK: Greenspan’s Nightmare Chart Spoils Labor Department Data Party. It was supposed to be a celebration: The U.S. Bureau of Labor Statistics was trumpeting 100 years of the Current Employment Statistics survey, the backbone of its monthly jobs report. Then the maestro rose to deliver bad news. Alan Greenspan, the former Federal Reserve chairman, damped the mood at the Oct. 19 festivities by pointing out that, while the department has a respected history of data collection, its numbers show the economy will struggle.
Using 50 years of government figures, Greenspan found an inverse relationship between entitlement outlays and gross domestic savings, implying that as the government spends more on retiring baby boomers, fewer dollars will be available for investment. That, he argued, suggests economic growth will be limited for years to come. “If savings are not being created, therefore investment is not occurring, therefore productivity is not growing, therefore the rate of growth in the economy” is held back, Greenspan said in an Oct. 27 interview in Washington. He said his calculation is “reassuring as a mathematician and an economist, which is what I am. It is dreadfully frustrating as a public official, which I was for 20 years.” Read more here-http://bloom.bg/1LQrvDE
-CHART OF THE WEEK: Buy high, sell low. The definition of stupid. That’s what Congress is considering as it eyes selling oil from the U.S. Strategic Petroleum Reserve (SPR) to pay for certain projects in its latest spending plan. The last time the U.S. bought oil for the SPR in 2000 through 2005, oil prices were rising. Now Congress wants to sell oil when prices are the lowest in a decade and continuing to fall. Read more here-http://read.bi/1LQthog
-“We’ve seen periods when conglomeratization went too far, and one of the reasons you’re seeing so many de-mergers, and split-ups, and so many activists are pushing for that, is we saw too much of that. Too many companies are just being big for the sheer sake of it. Too many CEOs thinking bigger is better. I think that has gone too far.” Roger Altman CEO Evercore ISI
-“My only advice is to own hard assets at this point and eschew all paper. Gold and silver have gotten cheaper in the past week, but their physical availability is dwindling, and investors would be well-advised to get what physical metal they can while it’s still available.” John Embry
-“Well, as I remarked to you last week about the huge buildup in the commercial i.e. bullion bank short interest on the Comex in gold. I said that we were either going to see a commercial signal failure, where the shorts were overrun, which is a very rare event, or we were going to experience a prodigious selloff as the shorts would force the longs to dump their positions. It didn’t take long to find out the outcome. On Wednesday, the Fed’s tone was allegedly hawkish as they signaled a possible December rate increase.
And this was used as a cover to once again crush the prices of gold and silver and force the speculators to run for the hills. So this tired, old, wash, rinse and repeat cycle was invoked for the umpteenth time. Now, make no mistake. The bullion banks may be the main operatives in this undertaking, but they have the total support of the Western central banks, who are becoming increasingly desperate in their attempt to keep things afloat.” John Embry
-“Throughout history, corrupt leaders and governments have consistently over-promised and under delivered leading to chronic deficits, money printing and mounting debts. This is why gold is continuously going up measured in paper money. And this is why gold will go to unimaginable heights in coming years as global debt increases exponentially. Just look at the US. There has not been a real budget surplus in the US since the early 1960s. A reserve currency cannot rest on a foundation of quicksand in the form of massive debt. This is why the dollar will soon continue its fall until it reaches its intrinsic value of zero, as Voltaire said in 1729. All other currencies will also participate in this race to the bottom, but the dollar will soon take the lead.” Egon von Greyerz
-“Gold should not be bought for speculation or for a short term investment. Instead, for the privileged few that have savings, gold should be bought as insurance against a rotten financial system and in order to preserve wealth. But remember it must be held in physical form and stored outside the banking system. When we advised investors in 2002 to put an important percentage of financial assets into gold at $300, our target was $10,000 in today’s money.
We still stand by that target as a minimum. The problem for the world is that we are unlikely to have today’s money for very much longer because soon all central banks will print unlimited amounts of money to try save the world financial system from collapsing. But sadly, solving a problem using the same method that caused it will not work and eventually we will see a deflationary implosion of the financial system. But before that we will have a brief period of hyperinflation that in nominal terms could take gold to $100,000 or $100 million.” Egon von Greyerz
-“Futures contracts now show a 50 percent chance that the Federal Reserve will raise interest rates for the first time since 2006 at its December meeting. With that meeting six weeks away, the markets will continue to focus mostly on incoming economic data, rather than speeches from central-bank officials to manage their expectations. The first of two payrolls numbers ahead of that meeting is due on Friday on this week.” Bloomberg
-$20 trillion man: National debt nearly doubles during Obama presidency. When President Obama signs into law the new two-year budget deal Monday, his action will bring into sharper focus a part of his legacy that he doesn’t like to talk about: He is the $20 trillion man. Mr. Obama’s spending agreement with Congress will suspend the nation’s debt limit and allow the Treasury to borrow another $1.5 trillion or so by the end of his presidency in 2017. Added to the current total national debt of more than $18.15 trillion, the red ink will likely be crowding the $20 trillion mark right around the time Mr. Obama leaves the White House. Read more here-http://bit.ly/1l7S3rA
-Debt ceiling lifted, and the same day, debt jumps $339B. The U.S. national debt jumped $339 billion on Monday, the same day President Obama signed into law legislation suspending the debt ceiling. That legislation allowed the government to borrow as much as it wants above the $18.1 trillion debt ceiling that had been in place. The website that reports the exact tally of the debt said the U.S. government owed $18.153 trillion last Friday, and said that number surged to $18.492 on Monday. The increase reflects an increasingly common pattern that can be seen in the total U.S. debt level when the debt ceiling is reached. Read more here-http://washex.am/1NeoDhK
-Yellen Signals Solid Economy Would Spur December Rate Hike. Fed Chair Janet Yellen said an improving economy has set the stage for a December interest-rate increase if economic reports continue to assure policy makers that inflation will accelerate over time. “At this point, I see the U.S. economy as performing well,” Yellen said on Wednesday in testimony before the House Financial Services Committee in Washington. “Domestic spending has been growing at a solid pace” and if the data continue to point to growth and firmer prices, a December rate hike would be a “live possibility,” she said in response to a question from Representative Carolyn Maloney, a New York Democrat. The Federal Open Market Committee in its October statement said it will consider raising interest rates at its “next meeting,” citing “solid” rates of household spending and business investment. Read more here-http://bloom.bg/1HrjrVW
-Mark Carney: Prudent to Expect U.K. Rate Rise in 2016. Mark Carney says Britons should be ready for a rate increase in 2016. “Would I rather have the majority of the British people thinking that rates are likely to go up in the next year, which is the case today? Yes I would, because that is reasonably prudent behavior, given the progress this economy is making,” the Bank of England governor said in an interview on Bloomberg Television on Thursday. “At some point, rates are going to move. It’s not today, unfortunately.”
Carney’s remarks provide clues for investors who are currently doubtful on the timing of a rate increase. After he presented new forecasts at a press conference earlier, forward contracts fluctuated, with some showing the first quarter-point rate move will come as late as the first quarter of 2017. The governor spoke to Bloomberg after the Monetary Policy Committee kept the benchmark rate at 0.5 percent, with only one member pushing for an increase, and the majority saying underlying price pressures “were not strong enough to justify” tightening. Read more here-http://bloom.bg/1QgpxzR
-People are hiding cash in their microwaves as Sweden gets closer to being the first cashless society with negative interest rates. Sweden is shaping up to be the first country to plunge its citizens into a fascinating and terrifying economic experiment: negative interest rates in a cashless society. The Swedish central bank, the Sveriges Riksbank, on Wednesday held its benchmark interest rate at -0.35%, the level it has been at since July. Though retail banks have yet to pass that negative rate on to Swedish consumers, they face increased pressure to do so as long as the rates remain where they are. That’s a problem, because Sweden is the closest country on the planet to becoming an all-electronic cashless society.
Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATMs from rural areas, annoying old people and farmers. Credit Suisse says the rule of thumb in Scandinavia is: “If you have to pay in cash, something is wrong.” If banks charge customers negative interest rates in a cashless society, those customers are not able to withdraw their money as cash to shield it under their putative mattresses. Consumers’ only choice in such a scenario is to spend it or let the bank take it. (The theory is that by forcing people to spend cash rather than save it, you can spur economic growth.) Read more here-http://bit.ly/1PncYBU
-It looks like loose Swedish monetary policy has inflated a housing bubble. House buyers in Sweden have never had it so good, at least by some measures. But cheap credit and spiraling prices may be creating a bubble one that could send the country’s economy reeling when it bursts. Sweden now has one of the fastest growth rates of any developed economy. Inflation is near zero and official interest rates are below zero. Home buyers can take advantage of interest-only loans and a variety of tax breaks. On the other hand, consumer debt is about 175 percent of disposable income, one of the highest rates in Europe. Housing prices keep rising apartments in Stockholm cost around $6,350 per square meter, on a par with London’s $6,750.
Most Swedes would take a century to repay mortgages at current rates. “The prices are just crazy,” said 37-year-old Cathrin Wentzel. She was looking at a one-bedroom, 44-square-meter flat built in the 1930s in the chic Kungsholmen area of Stockholm. It featured a fireplace and balcony and had a view of the water. Asking price: 3.8 million crowns ($446,000). Wentzel reckoned she would need to offer at least 500,000 crowns more than that. “I won an auction last week, but even though I offered 900,000 crowns more than the starting price, the seller withdrew the apartment,” said Wentzel, who runs her own marketing company. “They did not think the bid was enough.”
The Riksbank’s decision this week to keep rates lower for longer just extends a bonanza of cheap money that has fueled the real estate prices and borrowing. But the central bank is caught in a dilemma. Leaving rates so low only encourages home buyers. But raising them enough to tamp down the housing frenzy would also slow an inflation rate that is already flirting with zero and has dipped into outright deflation. The concern is that Sweden might end up with a local version of the 2008 financial crisis. Homeowners saddled with enormous mortgages might see the value of the homes plummet. They would cut back on spending, try to save more and hobble the economy. Read more here-http://read.bi/1Md8Qjv
-Greece May Win 2 Billion-Euro Payout by Monday, EU Official Says. The Greek government might win a delayed 2 billion-euro ($2.2 billion) aid disbursement by Nov. 9 and the country’s banks will probably have to tap some emergency funding earmarked for them, a European Union official said. The 2 billion-euro payout for the government of Prime Minister Alexis Tsipras could precede or coincide with a meeting on Monday of euro-area finance ministers at which the European Central Bank will present its recent review of the health of Greek lenders, the EU official told reporters in Brussels on the usual condition of anonymity. The ECB on Saturday announced a 4.4 billion-euro shortfall at the four main Greek banks National Bank of Greece SA, Piraeus Bank SA, Eurobank Ergasias SA and Alpha Bank AE using its baseline economic assumptions; and a 14.4 billion-euro gap under the most pessimistic scenario. Read more here-http://bloom.bg/1QcDPRX
-Greek Banks Face $15.9 Billion Bill After Economic Debacle. Greece’s four main banks must raise 14.4 billion euros ($15.9 billion) in fresh capital, the European Central Bank said, as investors and taxpayers face the cost of repairing the damage from six months of wrangling between the nation’s government and its creditors. Read more here-http://bloom.bg/1H8DFZU and http://read.bi/1Ns26Tm
-Europe’s Biggest Banks Are Cutting 30,000 Jobs. Standard Chartered Plc became the third European bank in less than two weeks to announce sweeping job cuts, bringing the total planned reductions to more than 30,000, or almost one in seven positions. The London-based firm said Tuesday it will eliminate 15,000 jobs, or 17 percent of its workforce, as soaring bad loans in emerging markets hurt earnings. Deutsche Bank AG, based in Frankfurt, last week announced plans for 11,000 job cuts, while Credit Suisse Group AG said it would trim as many as 5,600 employees. Read more here-http://bloom.bg/1RvSOol
-UBS: It’s the beginning of the end of the bull market. It’s looking more and more like the top to UBS strategist Julian Emanuel. In a note to clients on Friday, Emanuel wrote: Signs are accumulating that, after 6 1/2 years and price gains of more than 200%, the Bull Market has entered into the “Late Innings.” M&A activity as revenue growth stays challenged has been feverish, and the announcement of talks between Pfizer (PFE) and Allergan (AGN) is reminiscent of deals such as AOL/Time Warner in 2000 and RBS/ABN-AMRO in 2007, blockbusters in market leading sectors which were followed by major market tops. Emanuel makes it clear, though, that this is not yet the peak for stocks. And though this is one of the longest bull runs since FDR was president in the 1930s, bull markets don’t die of old age. But a few things are signaling that the top is near. Read more here-http://read.bi/1kbtV7g
-This Is the Worst U.S. Earnings Season Since 2009. Biggest quarterly drop since the aftermath of the financial crisis. This U.S. earnings season is on track to be the worst since 2009 as profits from oil & gas and commodity-related companies plummet. So far, about three-quarters of the S&P 500 have reported results, with profits down 3.1 percent on a share-weighted basis, data compiled by Bloomberg shows. This would be the biggest quarterly drop in earnings since the third quarter 2009, and the second straight quarter of profit declines. Earnings growth turned negative for the first time in six years in the second quarter this year. Read more here-http://bloom.bg/20ufUls
-Druckenmiller Says He’s Short the Euro, Stocks Could Be Next. Stan Druckenmiller, who boasts one of the best investor track records over the past three decades, said he’s betting against the euro again and could see himself becoming bearish on stocks. Druckenmiller, who produced average annual returns of 30 percent from 1986 through 2010 at his Duquesne Capital Management, said in April he was bearish on the euro. He covered that position later in the year. Read more here-http://bloom.bg/1KXG2d5 and http://read.bi/1l8vFhL
-Loeb Boosts Short Bets Citing Sloppy Accounting, Volatility. Billionaire hedge fund manager Dan Loeb said he’s building bets against stocks that surged because companies are relying too much on dubious financial metrics. “There’s been some real sloppiness in accounting, and this move toward using adjusted Ebitda and adjusted earnings has produced some companies that I think are trading on valuations that are not supported by the real numbers,” Loeb said Wednesday in a conference call held by Third Point Reinsurance Ltd., referring to earnings before interest, taxes, depreciation and amortization. “We’ve seen some real themes that favor the type of short selling that we do.” Read more here-http://bloom.bg/1Q5u4Ws and http://read.bi/1RUnijU
-Paul Singer Says Aug. 24 Shows Stock, Bond Markets Are ‘Unsound.’ Paul Singer, the billionaire founder of $27 billion hedge fund firm Elliott Management, said stock and bond markets are structurally “unsound” as evidenced in recent market volatility. In a wide-ranging letter that warned of the effects from low interest rates, unrest in the Middle East, and leverage in the financial system, Singer, 71, said steep declines and rapid recoveries in financial markets, such as the Aug. 24 stock market slump, and recent flash crashes in bond markets, probably foreshadow the future.
“All of the innovations and complexity in the modern world of finance combine in different ingredients at different times with different catalysts to create fragility, not stability,” he wrote in a note to clients dated Oct. 27. “We wonder if the overall impact of financial innovation, including derivatives, structured products, high frequency trading and communication advances, is net negative, albeit with a possibly long delay before the drawbacks become visible.” Read more here-http://bloom.bg/1H9f3jB and http://read.bi/1kttzYY
-Oil Guru Who Called 2014 Rout Sees OPEC Production on Hold. OPEC will probably hold production steady at its meeting next month as the gap between supply and demand for oil closes, according to the analyst who correctly predicted last year’s rout in prices. “I don’t think they have to do anything,” Gary Ross, founder and chairman of PIRA Energy Group, said in an interview in Singapore on Monday, referring to the Organization of Petroleum Exporting Countries. Global consumption of crude will continue to grow while output from non-OPEC countries will decline next year, helping to bring the market toward equilibrium, he said.
Oil tumbled more than 48 percent last year as U.S. stockpiles and production expanded, creating a global oversupply that the International Energy Agency estimates will persist until at least the middle of 2016. OPEC’s strategy to defend market share has exacerbated the glut as the group, which kept its production target unchanged at 30 million barrels a day at the last meeting in June, exceeded the quota for the past 17 months. “There has to be a tightening of balances,” said Ross, who last year turned bearish on oil before prices shrank by almost half. While OPEC volumes have increased, both demand and production from outside the group have responded to low prices, he said. Read more here-http://bloom.bg/20utYvc
-Saudi Arabia Said to Create Special Office to Cut Spending. Saudi Arabia is creating a special office to tighten oversight of government spending as the country grapples with sliding oil prices and its first projected budget deficit since 2009, two people with knowledge of the matter said. Read more here-http://bloom.bg/1Q5yAUV
-Living in London is now 40% more expensive than it was in 2005. Living in London is now more than 40% more expensive than it was ten years ago, according to the Living Wage Foundation and the Mayor of London. On Monday morning, Boris Johnson announced that the London Living Wage has risen by 40.3% in the past ten years, reflecting the huge rise in the cost of living in the capital. The news came as Johnson announced that the Living Wage has been increased by £0.25 ($0.39) per hour and now sits at £9.40 ($14.55) per hour, an increase of 2.7%. Read more here-http://read.bi/1iDhQ91
-America has built the equivalent of 10 Keystone pipelines since 2010 and nobody said anything. Read more here-http://bit.ly/1HuvbXN
-Here’s how the Chinese send billions abroad to buy homes. The ranks of China’s wealthy continue to surge. As their economy shows signs of weakness at home, they’re sending money overseas at unprecedented levels to seek safer investments often in violation of currency controls meant to keep money inside China. This flood of cash is being felt around the world, driving up real estate prices in Sydney, New York, Hong Kong and Vancouver. The Chinese spent almost $30 billion on U.S. homes in the year ending last March, making them the biggest foreign buyers of real estate.
Their average purchase price: about $832,000. Same trend in Sydney, where Chinese investors snap up a quarter of new homes and are forecast to double their spending by the end of the decade. In Vancouver, the Chinese have helped real estate prices double in the past 10 years. In Hong Kong, housing prices are up 60 percent since 2010. In total, UBS Group estimated that $324 billion moved out last year. While this year’s numbers aren’t yet in, during the three weeks in August after China devalued its currency, Goldman Sachs calculated that another $200 billion may have left. So how do these volumes of cash get out when Chinese are limited by rules that allow them to convert only $50,000 per person a year? Read more here-http://bloom.bg/1GLV8HC and http://bloom.bg/1GLV8HC
-El Nino Hits Dinner Table as Food Costs Soar Most in 3 Years. The effects of El Nino are starting to reach the dinner table, with global food prices rising the most in three years on supply concerns for everything from New Zealand milk to sugar in Brazil and Southeast Asian palm oil. An index of 73 food prices increased 3.9 percent, the biggest jump since July 2012, to 162 in October, the United Nations Food & Agriculture Organization wrote in a report Thursday. Read more here-http://bloom.bg/1WCHGY7
-A large order of McDonald’s fries costs about $126 in Venezuela. The good news is McDonald’s is finally bringing back fries in Venezuela, after getting rid of them last year, according to the AP. The bad news is the regular will cost about $79 (500 bolivars), according to the country’s strongest exchange rate. Worse, a large will cost about $126 (800 bolivars). Read more here-http://read.bi/1kxu1Wk
-The US government spent more than $40 million building a gas station in Afghanistan. The U.S. Department of Defense spent nearly $43 million on a gas station in northern Afghanistan and has been unable to explain why it cost so much, a U.S. special inspector reported on Monday. Read more here-http://read.bi/20uwEco
-Is The 12-Carat ‘Blue Moon’ Diamond Worth $55 Million? A little over a year ago I was invited to view a 12-carat blue diamond, known as the “Blue Moon” prior to its only public exhibition at the Natural History Museum of Los Angeles County. Suzette Gomes, CEO of Cora International, a diamonds and jewels manufacturer known for working with statement diamonds, showed the gem on a plain gray tray under office lighting. When asked of its value, she became annoyed barking the word “priceless” a couple times. Well it turns out that priceless has a price as it will go up for auction at Sotheby’s with an estimate of $35 to $55 million. Any successful bid within this estimate will set a new record for a blue diamond, which is $32.6 million paid in November 2014 in Sotheby’s New York for a pear-shaped 9.75-carat rare Fancy Vivid Blue Diamond Pendant owned by Bunny Mellon.
For Gomes and Cora International, it will present what should be a healthy profit for the 29.62-carat rough it purchased for a reported $26 million even after the costs which include cutting and polishing it into the 12-carat Blue Moon (which took three months, according to Sotheby’s, after five months of study), exhibiting and travel expenses, and auction commissions. There are very few people in the world with the means and desire to purchase such a diamond so Sotheby’s has no doubt been in contact with them and must be fairly certain that the gem, now set on a ring, will meet its estimate and perhaps surpass it. It is obviously the top lot of its November 11 Magnificent Jewels & Noble Jewels sale in Geneva. Read more here-http://onforb.es/1Mfhk9P and http://dailym.ai/1KppH0K
-Pink diamond may sell for $28 million. It’s the size of a postage stamp, the color of bubble gum and the weight of about two pennies. But the 16.08-carat pink diamond to be auctioned off by Christie’s could fetch a whopping $28 million when it goes under the hammer next week. That would make it one of the 10 most expensive diamonds ever sold at auction. The stone is a fancy vivid pink meaning it’s the purest form of pink diamond with no trace of secondary colors such as purple, orange, brown or gray. And it’s a cushion cut, which enhances the color. Only three pure vivid pink diamonds larger than 10 carats have ever been put up for sale.
Rahul Kadakia, Christie’s international head of jewelery, said that with an estimate of between $1.4 million and $1.7 million per carat, the pink stone is a relative bargain. It is estimated to sell for between $23 million and $28 million. While pricey, that’s well below the most expensive diamond ever sold at auction. The 59.6-carat “Pink Star” diamond that Sotheby’s sold in 2013 went for $83 million, but was bought back by the auction house after the buyer failed to pay. “It adds up to a lot of money,” Kadakia said about the 16.08-carat diamond. “But it’s inexpensive for what it is. If you’re looking to make a sizable investment on a color diamond, this is your stone.”
Colored diamonds have become increasingly attractive investments as the global rich look for safer places to store their wealth. Colored diamond prices are up 48 percent over the past five years and 149 percent over the past decade, according to the Knight Frank Luxury Investment Index. Diamonds are especially valuable for their portability, as an owner can easily put a $10 million stone in his or her pocket and quickly fly to another country. “Look at what’s going on in the world,” Kadakia said. “There’s the stock market in Asia.
You have the currencies going up and down. There’s the Middle East situation going on.” “So on the one side, we hope that everything will settle down, and the world will be a great place all the time. But you do want to have yourself a little bit of safety.” The auction will be held Nov. 10. The pink diamond being sold is set in a ring, but Kadakia said it could easily be set in a necklace, bracelet or other piece. When it was purchased around 15 or 20 years ago, Kadakia said it was worth between $5 million and $8 million. The owner will also get to name the stone. Asked what he would name it, Kadakia said, “The Perfect Pink.” Read more here-http://cnb.cx/1Nvm7bA and http://dailym.ai/1P4H5hq
-15-Carat Burmese Ruby Could Fetch $15 Million. An exceptionally rare 15.04-carat Burmese ruby is being billed as the top lot of Christie’s Hong Kong Magnificent Jewels sale on December 1. The gem on a ring is mounted in gold and surrounded by diamonds. It’s known as the “Crimson Flame,” and is “undoubtedly the most important pigeon’s blood ruby to be offered at auction in Asia,” according to Vickie Sek, deputy chairman and director of Christie’s Jewellery Department. Its estimate is $10-$15 million. The auction at the Hong Kong Convention & Exhibition Centre will include diamonds, colored diamonds, colored gemstones, jadeite and signed pieces. Two high quality pink diamonds are included in the sale: A 7.53-carat Fancy Intense Pink diamond ring (estimate $5.8-8.3 million), and a 5.22-carat Fancy Intense Pink, IF, cushion-shaped diamond ring (estimate $3.2-4.5 million). Read more here-http://onforb.es/1OrF7sW
-Greg Hunter: Doug Casey Interview, Bigger Financial Meltdown Starts Before End of Year. Best-selling author and economic expert Doug Casey says another financial meltdown worse than the last one is coming soon. Casey says, “I was saying in 2007 that we were going into a gigantic financial hurricane. It hit in 2008 and 2009. For the last few years, we have been in the eye of the storm of this gigantic hurricane. Now, as we speak, we are entering the trailing edge of this hurricane, and it’s going to be much worse and much longer lasting and much different than what we saw in 2008 and 2009, and that was ugly.” Why will it be much worse than last time? Casey contends, “All these central bankers are doing the same stupid things.
The American central bank, the Europeans, Japanese and the Chinese have all printed trillions of new currency units and, yes, they are doing this in concert. They don’t want to see the market’s collapse, but they are going to collapse, and the nature of this collapse is going to be different because they have created trillions and trillions of new currency units, and that has created bubbles all over the world economy.” Casey also says, “I think the depression has already started, and I call it the Greater Depression because it’s going to dwarf what happened between 1929 and 1946.
It’s already started. We are just in the eye of the storm, but we are leaving that now. What should the average person do right now? You’ve got to liquidate right now, while it’s still possible. You should get rid of things that you don’t need have a yard sale and get rid of stuff you don’t need and generate cash for it. That’s number one. The average guy should buy gold. Don’t keep your savings in a bank. Store it in gold coins or silver coins Silver is volatile but has a much bigger upside than gold.” Watch and read more here-http://bit.ly/1SoZfdU
-Greg Hunter: Bill Holter Interview, China Could Reprice Gold to $100,000 per Ounce. Financial writer and gold expert Bill Holter contends China has enormous debt problems, but a very good plan B. Holter explains, “China used fiat debt to build real infrastructure, and when the system blows up, the fiat debt blows away and they are left with infrastructure. Do they have 20% bad loans? They very well could and probably do. If it is true that they are going to have a debt blow up, don’t forget China has been importing big tonnage of gold for years now.
Over the last five years, they have imported 9,000 tons of gold. Their way out is the old way out. The old way out was to revalue gold higher. They could revalue gold and step up and say they will pay $50,000 or $100,000 per ounce for any and all ounces for sale. You can’t say there is not enough gold. What you can say is that it’s not priced correctly to support the system. If they have an implosion of debt which leaves their balance sheets impaired, the way to recapitalize the balance sheets is to revalue the price of gold higher.
It creates capital, in other words.” How about the U.S. debt problem? Holter says, “That does not and cannot work for the U.S. because we have offloaded our gold. Simple math tells you the gold that China received has to come from somewhere, and that only somewhere in the world is Western U.S. vaults.” Could the U.S. still have its more than 8,000 tons of gold? Holter says, “That’s pure ‘hopium’ that the U.S. still has their gold. Common sense and logic tells you that the gold is gone.” Watch and read more here-http://bit.ly/1QhHaPv
-Lawrie Williams: World Gold Reserve Changes Year To Date. The World Gold Council has published the latest figures to end-September of the World’s national gold reserves. To see the global tabulation click on www.gold.org/statistics to download the latest full table. While most countries’ officially reported gold reserve figures remain unchanged and for the most part have been so for some years what tends to be most interesting in the light of Central Bank gold purchases and sales are for those countries which actually report these sales and purchases to the IMF. The total figures do have to be seen in the context that they may not be fully up to date as some countries may be late in reporting changes and some may neglect to report them altogether as did China for the six year up until June 2015 when it announced an addition of 604.3 tonnes to its reserves reported to the IMF. Read more here-http://bit.ly/1OryM0B
-Mike Maloney: Why Is USA’s Gold Flowing East? Watch here-http://bit.ly/1NSuxrL
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
-The question that should be on everyone’s mind is how much lower in price from here. That all depends on how many contracts the commercial can force the managed money traders to sell. It also depends on how vicious and ruthless the commercials are in rigging prices lower. We do know that lower prices, particularly in the form of new price lows, are necessary to motivate the managed money technical funds to sell; we just can’t know how many, or how thick, the price salami slices will be.
It looks like the price lows of the summer will be hit and taken out ($1,080 in gold and $14 in silver), with the real question being by how much? That’s the problem with a manipulated market – one is forced to think in terms of what the manipulators intend. One thing that may somewhat constrain the commercials from ripping the guts out of the technical funds, particularly in silver, is that prices are so low to begin with, in terms of the cost of mine production, that too low of a price from here may finally force the mining community to pull their collective heads out of the sand and confront a manipulation that becomes clearer daily.
I realize that this must sound to silver investors on a par with catching the bubonic plague, but there is a bright side in my opinion. Not only will the managed money traders likely get flushed out once again and set up another solid buy point, there is nothing that eliminates that point from being the last and best buy point. I know that has been a recurring theme of mine, but it always comes down to the same premise, namely, once the commercials have reduced their net short position to minimal levels, if they don’t add to short positions on the next rally, then it’s the big one by definition. We should be faced with that setup in due course and maybe (hopefully) quickly. Silver analyst Ted Butler Nov 4 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-In trying to come up with the most plausible explanation for the sharp decline in demand for Gold Eagles during October, I’m stuck with my big buyer premise. Sales of Gold Eagles exploded in June and remained very strong thru September, with virtually no signs of strong retail buying. Retail demand for Gold Eagles is still very soft and only now is that reflected in reported sales from the Mint. I would contend that in the absence of strong retail demand all along, the only explanation must be that a big buyer suddenly appeared in June for Gold Eagles and continued buying through September. In October, that big buyer stepped aside and that was reflected in sales this [past] month.
The only real question is why the big buyer stepped aside? In keeping with my observation that no buyer, large or small, buys any investment asset in the expectation that prices will fall; I can’t help but conclude that the big buyer of Gold Eagles over the prior four months (JPMorgan) stepped aside because of expectations of falling prices near term. This is the same scam that JPMorgan pulled off in Silver Eagles on previous occasions, namely, refraining from buying when the COMEX COT market structure dictated that prices would fall and when those lower prices were achieved, then buying all the Eagles available at the new lower prices. This is not the prime component of the manipulation, just another related scam by the sleazebags at JPMorgan.
-The physical turnover or movement of metal brought into or removed from the COMEX-approved silver warehouses increased by one million oz this [past] week from [the prior] week’s low levels, to 2.75 million oz, but that’s still down from the recent stretch of 8 million oz turnover weeks. Still, that’s close to 150 million oz on an annualized basis and far from chump change. Total inventories dropped 0.2 million oz to 162.1 million ounces, another new two year low.
Total COMEX silver inventories are now down more than 20 million oz from peak levels several months ago. As a reminder, COMEX silver inventories are the second largest in the world. In addition, there have been some smaller reductions in the holdings of the largest visible silver stockpile in the world, the ETF SLV, although they are more flat than anything else over the past five years. Still, looking at the grand total of all visible silver (1,000 oz bars) in the world, total silver visible inventories have more or less flat lined for the past five years and currently sit at 833 million oz.
Since I believe the world has produced close to 400 million oz more silver than it has consumed in total fabrication demand over the past 5 years, I would have expected an increase in total visible silver inventories over this time, not a flat line. Among the possible explanations for no increase in visible inventories would be silver being accumulated on an unreported basis (say by a big U.S. bank which has happened to have paid more fines and settlements for doing sleazy things than any other bank). I suppose it is also possible that maybe the world didn’t produce as much silver over total fabrication demand as I’ve believed, but that explanation is far too bullish, even for me. Silver analyst Ted Butler Oct 31 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Regulated futures contract markets were created by congress to allow legitimate producers and consumers of commodities the ability to lay off price risks to willing entities, collectively referred to as speculators. Under the CFTC’s watch, speculators have come to so dominate the price of silver, that there is little remaining legitimate hedging taking place on the COMEX. The COMEX has become, in essence, a purely speculative exchange in which large traders dictate prices to real world producers, consumers and investors.
Two distinct classes of speculative traders have come to dominate COMEX silver futures trading asset managers (hedge funds) running outside investor capital on a price momentum basis and large banks which serve as the counterparties to these technically oriented asset managers. Regularly published CFTC data indicate that these two groups of traders typically account for more than 90% of all net positions transacted in a typical price cycle. In other words, the world price of silver is determined by the alternating buying and selling by no more than 100 large derivatives traders on the COMEX; to the virtual exclusion of real world silver producers and consumers.
Worse, there has evolved a remarkable concentration among the banks and financial institutions who buy and sell from the managed money traders, inviting comparisons with the most extreme instances of antitrust behavior. The most recent data from the CFTC, as of Oct 20, indicates that 8 or less traders hold a net short position in COMEX silver futures of nearly 424 million ounces of silver, or more than 50% of world annual mine production and 60% of all net COMEX positions. In terms of world annual production, no commodity comes close to the concentrated short position in COMEX silver. In contrast, the concentrated short position in crude oil futures is less than 3% of world annual production. Silver analyst Ted Butler Oct 28 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Allegations of a silver price manipulation date back to 1986 and the CFTC has investigated a number of times and subsequently dismissed or failed to form firm conclusions on the merits of the allegations. But for the sake of brevity, I’ll confine the timeline to starting from late March 2008, when the large investment bank, Bear Stearns, failed and needed to be taken over by JPMorgan Chase. No minor matter, the failure and rescue of Bear Stearns is considered by many to have precipitated the financial crises at the time. While the failure and rescue of Bear Stearns received wide attention, there was a little known, but easily verified involvement by the firm central to the silver manipulation.
Unbeknownst to those outside the sphere of precious metals (maybe 99% of the financial world), Bear Stearns was the largest COMEX silver (and gold) short seller at the time of its failure and this suggests this short position was central to the firm’s failure. The record indicates that Bear Stearns needed to post $2 billion to cover losses that grew on its silver and gold short positions as prices rose to their highest levels in a quarter century. I maintain these short positions are what caused the firm’s demise. The record also shows that JPMorgan took up where Bear Stearns left off and the bank fully assumed the role of the biggest COMEX silver short to this day.
To be sure, JPMorgan has been the biggest short and lead manipulator of the price of silver over the past seven years, during which the bank amassed billions of dollars of trading profits and more recently the largest stockpile of physical silver bullion in history all at the depressed prices the bank created. I fully acknowledge that JPMorgan took over Bear Stearns reluctantly and only at the request of the U.S. Treasury Dept. and Federal Reserve, and that goes to the heart of the problem. Having been called upon by the U.S. Government to bail out Bear Stearns, JPMorgan has seemingly been granted the right to dominate and control the price of silver, while the CFTC has looked the other way. Silver analyst Ted Butler Oct 28 2015 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN