Radio Show Newsletter
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: The U.S. Stock Market Belongs to Bots. That money you see sloshing around in the U.S. stock market? It belongs to the robots. At least, that’s the picture emerging from a growing divergence between quantitative funds and discretionary managers. Systematic strategies have barely budged from near-record participation in U.S. stocks. Meanwhile, fundamental equity long-short managers can’t afford to be anything but picky, considering the market’s narrow leadership. The result: the largest gap on record between humans’ and computers’ gross exposure to U.S. equities, data compiled by Credit Suisse Group AG show. For now, systematic traders are the dominating force in markets. “This is the largest footprint for quants. It’s a function of allocation and leverage,” Mark Connors, global head of risk advisory at Credit Suisse Group, said. “The reason why that’s important is that they’re not going away. Complexity isn’t going to be rolled back.” Read more here-https://bloom.bg/2sQDvEz
-CHART OF THE WEEK: Remember the Stunning Dollar Rally in 2014? It’s the Euro’s Turn. You may think the reflation trade is dead. Actually, it’s simply traveled across the Atlantic. Instead of betting on the dollar and better economic growth in the U.S., currency investors are coming to terms with the possibility that the dollar’s best days are behind it after three years of record-breaking strength. More and more, traders are starting to count on the euro to take the dollar’s place as the overarching trade of the $5.1 trillion market. Read more here-https://bloom.bg/2tNBYvi
-CHART OF THE WEEK: The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing. It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders. But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix. At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz. Part of it has to do with the paltry returns that have plagued pensions across corporate America as ultralow interest rates prevailed in the aftermath of the financial crisis. But perhaps more importantly, GE’s dilemma underscores deeper concerns about modern capitalism’s all-consuming focus on immediate results, which some suggest is short-sighted and could ultimately leave everyone including shareholders themselves worse off. Read more here-https://bloom.bg/2sQOehm
-“You invest and trade in the market you have not in the one you want. In other words, don’t envelop yourself in being bullish or bearish. Just be pragmatic and opportunistic. Take advantage of the market you have.” Quincy Krosby Prudential Financial chief market strategist
-“I can understand why they are discouraged because an awful lot of people are influenced by price action, rather than studying the pure fundamentals. The fundamentals are overwhelming. Gold and silver are so cheap in relation to every other asset on the planet.” John Embry
-The bottom line is this week’s latest Fed rate hike is actually bullish for gold. Kneejerk selling based on a false premise isn’t uncommon, but that soon passes. Both this young gold bull, and its current second major upleg, were born the very next days after Fed rate hikes. Gold has not only already powered higher in today’s newest Fed-rate-hike cycle, but has thrived on balance in all the past cycles of this modern era.
Fed rate hikes hurt stock markets, which boosts gold investment demand for diversifying portfolios. And this week’s FOMC announcement heralding the first-ever quantitative tightening is exceedingly bearish for these Fed-levitated record-high stock markets. As they inevitably roll over, gold investment demand will once again surge and catapult gold much higher. This trend will generate great wealth for prudent contrarians. Adam Hamilton
-Gold was down after last week’s rate hike, but I expect it to start heading higher again. Too many powerful forces are driving it behind the scenes. Dwindling physical supply is a major one. On a recent visit to Switzerland, I was informed that secure logistics operators could not build new vaults fast enough and were taking over nuclear-bomb proof mountain bunkers from the Swiss Army to handle the demand for private storage. Geopolitical fear is another. The crises in North Korea, Syria, Iran, the South China Sea, and Venezuela are not getting better. The headlines may fade in any given week, but geopolitical shocks will return when least expected and send gold soaring in a flight to safety.
Fed policy tightening is normally a headwind for gold. But, the last two times the Fed raised rates December 14, 2016 and March 15, 2017 gold rallied as if on cue. Gold is the most forward-looking of any major market. It may be the case that the gold market sees the Fed is tightening into weakness and will eventually over-tighten and cause a recession. At that point, the Fed will pivot back to easing through forward guidance. That will result in more inflation and a weaker dollar, which is the perfect environment for gold. In short, all signs point to higher gold prices in the months ahead based on Fed ease, geopolitical tensions, and a weaker dollar. Jim Rickards
-The dollar rose as Federal Reserve speakers talked up the strength of the U.S. economy, with New York Fed President William Dudley saying he was confident the expansion had a long way to go, while Chicago Fed President Charles Evans said that fundamentals look good. Evans did strike a more dovish tone, saying the current environment supports very gradual rate hikes. The bond market is showing signs that it thinks the Fed is done raising rates until December. Bloomberg
-Federal Reserve Bank of Minneapolis President Neel Kashkari said he dissented against the central bank’s decision to raise interest rates this week because of recent softening in inflation data. “If we base our outlook for inflation on these actual data, we shouldn’t have raised rates this week,” Kashkari, who votes this year on the policy-setting Federal Open Market Committee, said Friday in an essay published on the Minneapolis Fed’s website. “Instead, we should have waited to see if the recent drop in inflation is transitory to ensure that we are fulfilling our inflation mandate,” said Kashkari, who also dissented against a FOMC decision in March to raise rates. Bloomberg
-Nearly a year after the United Kingdom voted to leave the European Union, negotiations began this morning on that divorce in Brussels with confusion remaining on what the U.K. wants from the breakup. The EU and U.K. teams have a lot of ground to cover, but they have at least agreed on a timetable for talks ahead of today’s meeting, with the exit-deal basics due to be complete by December this year, before talks on future trading arrangements can begin. Bloomberg
-Economic reality is catching up with the U.K., where it is becoming clear that leaving the European Union will lead to lower living standards, billionaire investor George Soros said. “We are fast approaching the tipping point that characterizes all unsustainable economic developments,” Soros wrote in an article published Monday on the website of the Project Syndicate news organization. “The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the European Union. It cannot be undone, but people can change their minds. Apparently, this is happening.”
Although the U.K. economy initially defied predictions of an immediate slowdown after the surprise Brexit vote, signs are now emerging that consumer spending is faltering as the weaker pound drives up prices. Bank of England Governor Mark Carney, in a speech at London’s Mansion House on Tuesday, said domestic inflation pressures remain subdued and signaled he isn’t in a hurry to raise interest rates. In his first major comments in six weeks, he also said he wants to see how the economy responds to the “reality of Brexit negotiations.” The pound fell after the remarks. Soros said Britain’s eventual exit from the EU will take at least five years to complete, during which the country will probably hold another election. “If all went well, the two parties may want to remarry even before they have divorced,” he wrote. Bloomberg
-Bank of England Governor Mark Carney does not believe that it is time for Britain’s central bank to raise interest rates, despite inflation climbing sharply above target in recent months. Speaking at London’s Mansion House on Tuesday morning, the governor said that he believes the sclerotic wage growth and dwindling consumer spending currently impacting the British economy provide reasons to avoid hiking interest rates, as some of the bank’s most senior officials believe.
“From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment,” Carney told a gathering of the UK’s most prominent financiers in the speech. “In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.” Businessinsider
-President Emmanuel Macron’s party and its allies won a comfortable majority in the French parliament, securing 350 out of 577 seats in yesterday’s second-round vote. While the victory wasn’t the landslide some polls had predicted, and turnout was a record low for the vote, it does bolster the young president’s legislative agenda. The victory for the year-old movement sees much of the French old guard swept from parliament. Bloomberg
-Saudi Arabia’s Deputy Crown Prince Mohammed Bin Salman has replaced his cousin as the next in line to the country’s throne, a move that consolidates the 31-year-old leader’s growing power. King Salman, 81, also retroactively reinstated all allowances and bonuses that were canceled or suspended to civil servants and military personnel. Bloomberg
-Hong Kong’s pegged exchange rate should stay as it has served the city well through financial crises for more than 30 years, the chief of its de facto central bank said. “Hong Kong is a small and open economy,” Hong Kong Monetary Authority Chief Executive Norman Chan said in a statement as the city approaches the 20th anniversary of Chinese rule. “Keeping a stable exchange rate between the Hong Kong dollar and the U.S. dollar is the most suitable arrangement. We have no need and no intention to change such an effective system.” The city linked its currency to the greenback in 1983, when negotiations between China and the U.K. over Hong Kong’s return to Chinese rule spurred a capital exodus. The Hong Kong dollar has come under pressure this year amid a widening interest-rate gap with the U.S., with the local exchange rate touching the lowest level since January 2016 on Friday. Bloomberg
-According to a recent report from the Transportation Security Administration, travelers left behind a record $867,812.39 dollars in change in the year 2016. That’s over $100,000 more than went unclaimed in 2015. Businessinsider
-“A survey by the Insured Retirement Institute found that just 23% of baby boomers thought their savings would last through retirement.” Businessinsider
-About 1 in 4 literally have no emergency savings. A survey released Tuesday by Bankrate.com found that 24% don’t have even a single dollar saved for an emergency. And that’s just one of many surveys showing how little we have saved: A survey released in January by Bankrate found that nearly 60% of Americans wouldn’t have enough savings to pay for a $500 expense if it came up unexpectedly. What’s more, more than one in five say they’d slap down their credit card to pay that expense and more than one in would mooch off family to get the cash. Experts recommend that Americans have a least three to six months of income in the bank to pay for unexpected emergencies. Moneyish.com
-We are more worried about paying for our next vacation than about saving enough for retirement. That’s the finding of a study released this week by COUNTRY Financial, in which Americans report being more concerned about affording that vaca vacations (36%) than having adequate retirement savings (32%). That may explain, in part, why more than half of Americans will be broke when we retire, according to a survey from GoBankingRates.com. Moneyish.com
-Millions of us hide money from our spouses and partners. An estimated 12 million Americans confess they have kept a source of money secret from their romantic partners, according to CreditCards.com. That’s typically not smart, experts say: “Any time you get into these kinds of things where you are operating behind the scenes, it usually comes out at some point,” Corey Allan, a marriage and family therapist told Credit Cards.com. “We can’t keep things hidden, especially in today’s technological world. Any spouse who has any kind of suspicion can become a detective and find it.” (Also see: If you have sex with a rich millennial, expect this power dynamic.) Moneyish.com
-We prioritize paying the wrong bills first. When we can’t pay all our bills, we make bad choices about which to pay. “Consumers in financial distress tend to prioritize unsecured personal loans ahead of other credit products such as auto loans, mortgages and credit cards,” according to a study of roughly two million consumers who had all four types of debt out this week from credit monitoring service TransUnion. But experts say that’s a backwards way to handle these bills. Moneyish.com
-We’ve racked up $1 trillion in credit card debt and that’s just a fraction of what we owe. That’s according to data released this year from the Federal Reserve, which found that U.S. consumers owe $1.0004 trillion on their cards, up 6.2% from a year ago; this is the highest amount owed since January 2009. What’s more, this isn’t the only consumer debt to top $1 trillion. We now also owe more than $1 trillion for our cars, and for our student loans, the data showed. Moneyish.com
-Oil Bears Are Back as Prices Fall and Driller Shares Take a Hit. Shale producers risk drowning in their own surplus again. On Tuesday, oil slid into its first bear market in 10 months, falling 21 percent from its high for the year. The swoon dragged down driller shares amid concern that unceasing production from U.S. shale fields is overwhelming OPEC efforts to ease a global supply glut. Explorers who came of age at a time when ever-increasing production was rewarded with ever-higher prices are now having a bit of a déjà vu from their fall from grace in 2014.
The S&P 500 Energy Index has lost 14 percent this year, while West Texas Intermediate crude, the U.S. benchmark, has fallen 19 percent. Buoyed by prices that hit $54.45 a barrel in February, U.S. explorers have boosted the number of rigs drilling for oil to the highest since mid-2015, and expanded their production to 9.33 million barrels a day. “A lot of faith and hope and belief was put into” the deal by OPEC, Russia and other exporters to cut their production as a way to balance the market, said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. But “it’s proven ineffectual.” Read more here-https://bloom.bg/2sB4Mb5
-Bank Of America: ‘Oil is in a downtrend and risks trending into the $30’s.’ Oil prices fell to seven-month lows on Tuesday, as traders continued to grapple with a market that is oversupplied. According to Paul Ciana, a technical strategist at Bank of America Merrill Lynch, oil is headed even lower and could revisit levels it hasn’t hit in over a year. “Oil is in a downtrend and risks trending into the $30’s,” Ciana said in a note on Tuesday. West Texas Intermediate crude oil, the US benchmark, fell to a 12-year low of $26.21 per barrel last February.
Using technical analysis, traders examine chart patterns to forecast changes in a security. Some traders do this alongside fundamental analysis, which, in oil’s case, would point to rising output from Libya and other key producers when making a bearish case. Ciana noted a year-to-date downtrend in the price action of oil. It peaked this year near $54 per barrel in February and has lost nearly 20% this year. “The decline in oil prices has paused at the bottom of the downward sloping channel with support at $44.09 and resistance at $46.75 and $48.70,” Ciana said.
However, he said, a close below the support of $44.09, the level below which traders had not allowed oil to fall, is bearish. The Organization of Petroleum Exporting Countries, a cartel of key producers, has had a tough time rebalancing the oversupplied market. After agreeing to curb production for six months starting in January, OPEC decided in May to extend cuts for nine more months. Read more here-http://read.bi/2sNNUQs
-CEO Who Called Canada’s Stock Bottom Sees $90 Oil by 2020. Early last year, Jean-Guy Desjardins correctly predicted that Canadian equities were due for a rebound. He’s now saying oil prices will double, taking energy stocks along for the ride. “The fundamentals of the global supply-demand relationship are favoring higher oil prices,” Desjardins, chief executive officer of Fiera Capital Corp., said in an interview in Toronto on Thursday. “When it goes up it’s going to go up for an extended period of time. I think it can go back to $90, not in six months but over a couple of years.” That’s way more bullish than most analysts, with the median forecast in a Bloomberg survey calling for $65 crude in 2020 from $45 now. Still, Desjardins believes global central banks will keep some amount of stimulus as their economies recover, boosting demand for crude. Read more here-https://bloom.bg/2rBo275
-Retail exec warns a global economic crisis is looming: ‘This bubble will explode.’ Bernard Arnault, CEO and chairman of the world’s largest luxury goods conglomerate LVMH, has a dire warning for the global economy. “For the economic climate, the present situation is mid-term scary,” Bernard Arnault said on CNBC on June 15. Arnault justified his outlook on high stock prices, low interest rates, and “the amounts of money flowing into the world.” “I think a bubble is building and this bubble, one day, will explode,” Arnault said. Arnault didn’t specify timing, but insisted that it could be soon, because the last major crisis was in 2008, and these tend to happen every 10 years. Read more here-http://read.bi/2rSLxYC
-$240,418,000,000: Feds Collect Record Taxes in May; Still Run $88,246,000,000 Deficit. The U.S. Treasury hauled in $240,418,000,000 in total taxes in the month of May, setting a record for inflation-adjusted tax revenues for that month of the year, according to the Monthly Treasury Statement released this week. Despite these record revenues, however, the federal government still ran a deficit of $88,426,000,000 in May because it spent $328,844,000,000 in the month. In the first eight months of fiscal 2017 (October through May), the federal government hauled in $2,169,160,000,000 in total taxes and spent $2,602,013,000,000 thus, running a deficit of $432,853,000,000. Fiscal 2017 will end on Sept. 30, 2017. Read more here-http://bit.ly/2rRq8DZ
-With Sales Gauge at Decade Low, Toronto Home Prices Set to Drop. The latest data on Toronto housing show a sharp decline in sales in Canada’s biggest city has yet to trigger a drop in prices. A major indicator of market conditions suggests it will soon enough. The ratio of Toronto sales to new listings slumped to 41 percent in May, according to Canadian Real Estate Association data Thursday. That’s the lowest since 2008 and near the bottom of the range for what economists generally consider a balanced market.
The gauge is a pretty good predictor of home prices and what it’s showing based on the typical historical relationship between the two variables is that a modest price decline is probably in the cards. According to Bloomberg calculations, the 3-month moving average of the sales to new listings ratio explains almost 60 percent of the variation in Toronto benchmark home prices five months later. A sustained ratio of 40 percent implies small, single-digit annual price declines in about half a year. Read more here-https://bloom.bg/2sQnzl6
-7% of Toronto’s homes are sold within a year of being purchased. Toronto real estate had a sudden surge last year, and we’re finally starting to get a better picture of what happened. New statistics released by the Toronto Real Estate Board (TREB) once again confirm everyone didn’t just wake up to a shortage of land overnight. Instead it appears that speculators saw a gold rush, adding pressure to prices that sent emotional buyers into a bidding frenzy. Read more here-http://read.bi/2sTVQR3
-Ben Carlson: Canada’s Housing Bubble Will Burst. U.S. homeowners know what can happen to the economy when the market destabilizes. Canadian home sales fell the most in five years last month. That didn’t stop an increase in prices, which were up 18 percent nationwide from a year earlier. When you consider that most houses are leveraged assets, this represents huge gains for homeowners. While leverage can help boost performance on the way up, it becomes very dangerous on the way down. Leverage can turn even the best investments into poor ones when things go wrong, as losses are amplified.
Equity can get wiped out pretty quickly on an overleveraged asset. Canadian real estate has been on fire for years. The housing price data there has made the U.S. real estate market during the boom of the mid-2000s look mild. The Federal Reserve Bank of Dallas puts out a global housing price index for more than 20 countries every quarter. Using this data, I looked at the real house price index data for Canada and compared it with the same data in the U.S. going back to 1975. Here’s this relationship from 1975 through the end of 2005.
Although there were some divergences in the early and late 1980s, both housing markets essentially ended up in the same place after 30 years. Now let’s add in the most recent data to see how things have unfolded since.
An enormous divergence occurred in 2006, when U.S. housing prices really began to soften, while Canadian price barely skipped a beat. This makes any differences in the past look like blips. The rise in Canadian real estate prices has been relentless. The U.S. housing market peaked in late 2006. Since then, based on this index, U.S. housing prices are still down almost 13 percent from their peak through the end of 2016. In that same time frame, Canadian housing prices are up 56 percent. From the 2006 peak, it took until late 2012 for real estate in the U.S. to bottom. We’ve since witnessed a 19 percent recovery from what was a 27 percent decline nationwide, on average. While the U.S. real estate downturn lasted almost six years, Canada’s housing market experienced just a 7 percent drawdown that lasted less than a year.
And house prices in Canada reclaimed those losses in about a year and a half. Canadian housing has also outpaced its neighbors to the south since the 2012 bottom in U.S. real estate, with a 30 percent gain in that time. To recap: On a real basis, Canadian housing prices experienced a much smaller, shorter decrease in prices during the financial crisis and a much larger, longer increase in prices during the recovery. When you couple this unfathomable rise in housing prices with near-record high household debt-to-income ratios, the Canadian housing bubble starts to look scary should the tide turn. Read more here-https://bloom.bg/2sTLFMk
-London Home Sellers Cut Price for Second Time in Three Months. London home sellers cut asking prices for a second time in three months and waning buyer interest hints that the slowdown may continue. Prices dropped 2.4 percent in June the biggest for that month since 2010 leaving them down 1.4 percent from a year earlier, Rightmove Plc said on Monday. Nationally, asking prices slipped 0.4 percent, pushing the annual gain to the weakest since 2013. In London, buyer activity “remains subdued compared to the recent boom years,” Rightmove said.
Multiple reports are signaling a loss of housing momentum. Many first-time buyers have been priced out of the market, while Brexit and political uncertainty may further undermine demand. Figures from Halifax this month showed values are rising at the slowest quarterly pace in four years, while Nationwide Building Society said they’ve fallen for the past three months. London is seeing a sharper slowdown, largely due to weakness in prime locations. Read more here-https://bloom.bg/2tOdO3V
-Poloz Weighs the Sudden Urgency of a July Rate Hike in Canada. There is nothing in the Bank of Canada’s market-moving statements last week to indicate an interest rate hike is imminent, but investors aren’t taking chances. The central bank’s next decision on July 12 is now a toss up, with traders assigning a 50 percent chance of an increase. Before Governor Stephen Poloz and his top deputy Carolyn Wilkins talked openly about the prospect of raising rates, odds were close to zero for a July hike and investors hadn’t priced in a full 25 basis point increase until the end of 2018. Why the sudden urgency? Read more here-https://bloom.bg/2tNU3cO
-Official warns Illinois finances in ‘massive crisis mode.’ The Illinois official responsible for paying the state’s bills is warning that new court orders mean her office must pay out more each month than Illinois receives in revenue. Comptroller Susana Mendoza must prioritize what gets paid as Illinois nears its third year without a state budget. A mix of state law, court orders and pressure from credit rating agencies requires some items be paid first. Those include debt and pension payments, state worker paychecks and some school funding. Mendoza says a recent court order regarding money owed for Medicaid bills means mandated payments will eat up 100 percent of Illinois’ monthly revenue. There would be no money left for so-called “discretionary” spending a category that in Illinois includes school buses, domestic violence shelters and some ambulance services. Read more here-http://wapo.st/2sT0NJE and http://cbsn.ws/2sxXzsx
-Canadians’ love for debt taking us into uncharted territory, PBO report warns. Households owed $174 for every $100 in disposable income in 1st quarter, Parliamentary Budget Office says. Canadians are expected to keep piling on more debt, even in the face of a long-anticipated increase in interest rates, taking household financial vulnerability to levels never seen before, a new report from the Parliamentary Budget Office says. Household indebtedness hit 174 per cent in the first quarter of 2017, according to the PBO.
That means Canadian households owed $174 for every $100 in disposable income. That indebtedness ratio “increased sharply over 2002 to 2011” before evening out at about 170 per cent in early 2015. Then it started rising again. The budget watchdog expects household indebtedness to hit 180 per cent by the end of 2018. Policymakers are particularly concerned about Canadian households’ debt service ratio, which measures the principal and interest payments that households are obliged to make against household disposable income.
That ratio, which is considered an indicator of households’ ability to service debt, is used to measure how vulnerable households are to economic shocks like unemployment or interest rate hikes. In the first quarter of this year, Canadian households owed $14.20 in principal-and-interest payments on debt for every $100 in disposable income, according to the Parliamentary Budget Office. That number has increased slightly from mid-2015, and is projected to increase further: the PBO expects it to hit $16.30 per $100 by the end of 2021. Read more here-http://bit.ly/2rAmomi
-Here’s how many Americans have nothing at all in savings. Most people in the U.S. are living in financially precarious circumstances. Half of all Americans have nothing put away for retirement and the vast majority of them have under $1,000 saved, total. According to a 2016 GOBankingRates survey, 35 percent of all adults in the U.S. have only several hundred dollars in their savings accounts and 34 percent have zero. Only 15 percent have over $10,000 stashed away. Read more here-http://cnb.cx/2sQNgCR
-Someone just paid over $600,000 for a parking spot in Hong Kong. If you think millennials have it tough in the US, they really have it hard in Hong Kong. In the latest installment of jaw-dropping Hong Kong property prices, a parking spot in the Upton, a luxury apartment building in the Western District of Hong Kong, recently sold for $664,000, The New York Times reports. “This is basically the price of one flat in Hong Kong,” Lennon Choy, an associate professor of real estate and construction at the University of Hong Kong, told The New York Times. Choy went on to say what everyone is thinking: “This is crazy, actually.” The record-breaking parking spot is almost double the price of a Hong Kong parking spot that sold for $387,000 in 2012 and caused quite a stir at the time. The previous record for most expensive parking spot was $615,000 in 2016, The New York Times reported. Read more here-http://read.bi/2snLAiA
-Kandinsky Record Broken Twice as Painting Fetches $42 Million. Talk about a quick brush stroke. Wassily Kandinsky’s auction record was broken twice on the same evening minutes apart. The 20th century Russian artist’s richly colored 1913 canvas “Bild mit Weissen Linien (Painting With White Lines)” soared to 33 million pounds ($41.6 million) at Sotheby’s Impressionist and modern art sale in London. His lush 1909 landscape with a green house had just sold for $26.4 million, beating the artist’s previous record of $23.3 million. Read more here-https://bloom.bg/2sX8UoH
-How Do You Put a Price on Audrey Hepburn’s Personal Treasures? The movie star’s belongings are up for auction. Now, how to figure what they’re worth. A Burberry trench coat once owned by Audrey Hepburn will go to auction on Sept. 27 at Christie’s London with an estimate of 6,000 pounds to 8,000 pounds ($7,683- $10,244). At the Real Real, an online consignment site, the asking price for a similar used women’s Burberry trench coat is currently $645. Christie’s, then, is guessing that its coat’s association with Hepburn gives it a $7,000 to $10,000 premium. Why $7,000 to $10,000, though? Why not $70,000? $100,000? Read more here-https://bloom.bg/2sR3Wu3
-Christie’s Magnificent Jewels & the Rockefeller Emerald, June 20 2017, Rockefeller Center New York. Auction Results Here-http://bit.ly/2rSAm7h
-Lot 273-AN EXTRAORDINARY COLORED DIAMOND RING. Set with a modified lozenge mixed-cut fancy deep grayish bluish green diamond, weighing approximately 5.01 carats, ring size 6, mounted in platinum. Accompanied by report no. 1182132234 dated 23 February 2017 from the GIA Gemological Institute of America stating that the diamond is fancy deep grayish bluish green, natural color, VS2 clarity. Estimate USD 2,000,000-USD 4,000,000. Price realised USD 4,391,500. See more here-http://bit.ly/2sCBoS0
-Lot 125-A RARE COLORED DIAMOND AND DIAMOND RING. Set with a cut-cornered square modified brilliant-cut fancy intense green diamond, weighing approximately 4.42 carats, flanked on either side by a cut-cornered rectangular modified brilliant-cut diamond, weighing approximately 1.02 and 1.00 carats each, within a circular-cut pink diamond surround, to the circular-cut diamond gallery and half-hoop, ring size 5 1/2, mounted in platinum and 18k gold.
Accompanied by report no. 1102900161 dated 22 July 2009 from the GIA Gemological Institute of America stating that the diamond, weighing approximately 4.42 carats, is fancy intense green, natural color, VS2 clarity. With report nos. 15213414 and 15332548 dated 27 June 2006 and 30 November 2006 from the GIA Gemological Institute of America stating that the diamonds, weighing 1.02 and 1.00 carats, are D and E color, VS2 and VVS2 clarity, respectively. Estimate USD 1,300,000-USD 1,800,000. Price realised USD 1,267,500. See more here-http://bit.ly/2srW2G4
-Lot 114-AN IMPRESSIVE PAIR OF COLORED DIAMOND AND DIAMOND EAR PENDANTS, BY BULGARI. Each suspending a pear modified brilliant-cut fancy yellow diamond, weighing approximately 11.87 and 10.47 carats, joined by a marquise and circular-cut diamond link to the surmount, set with a pear modified brilliant-cut fancy intense yellow and fancy yellow diamond, weighing approximately 3.00 and 2.82 carats, with circular-cut diamond trim, 2 1/4 ins., mounted in platinum and gold.
Signed Bulgari. Accompanied by report nos. 2165671347, 1162614121 and 2171086032 dated 8 December 2014 and 4 September 2015 from the GIA Gemological Institute of America stating that the diamonds, weighing approximately 11.87, 10.47 and 2.82 carats, are fancy yellow, natural color, SI1, SI1 and VS2 clarity, respectively. With report no. 6157230344 dated 22 February 2013 from the GIA Gemological Institute of America stating that the diamond, weighing approximately 3.00 carats, is fancy intense yellow, natural color, SI1 clarity. Estimate USD 350,000-USD 450,000. Price realised USD 427,500. See more here-http://bit.ly/2sVjm07
-Lot 118-A COLORED DIAMOND RING. Set with a cut-cornered square modified-cut fancy blue-gray diamond, weighing approximately 3.90, within a circular-cut pink diamond surround, gallery and hoop, ring size 6, mounted in 18k rose gold. Accompanied by report no. 1186256313 dated 29 March 2017 from the GIA Gemological Institute of America stating that the diamond is fancy blue-gray, natural color, SI1 clarity. Estimate USD 200,000-USD 300,000. Price realised USD 271,500. See more here-http://bit.ly/2tPuqbu
-Lot 120-A COLORED DIAMOND AND DIAMOND RING. Set with an oval mixed-cut light pink diamond, weighing approximately 5.10 carats, within a circular-cut pink diamond surround and oval-cut diamond border, to the circular-cut diamond bifurcated hoop, ring size 6, mounted in platinum and 18k gold. Accompanied by report no. 2171471036 dated 2 February 2016 from the GIA Gemological Institute of America stating that the diamond is light pink, natural color, SI1 clarity. Estimate USD 200,000-USD 300,000. Price realised USD 235,500. See more here-http://bit.ly/2tPclu3
-Lot 170-COLORED DIAMOND RING, BY LOUIS COMFORT TIFFANY, TIFFANY & CO. Of navette design, set with three marquise-cut yellow diamonds, and a marquise-cut fancy intense yellow diamond, weighing approximately 1.38 carats, within a gold wire and beadwork scroll mount, circa 1915, ring size 5 1/2, mounted in gold. Signed Tiffany & Co. Accompanied by report no. 2181417413 dated 15 May 2017 from the GIA Gemological Institute of America stating that the diamond, weighing approximately 1.38 carats, is fancy intense yellow, natural color, VS2 clarity. Estimate USD 30,000-USD 50,000. Price realised USD 87,500. See more here-http://bit.ly/2tPlUcL
-Lot 263-A COLORED DIAMOND AND DIAMOND RING, BY TIFFANY & CO. Collet-set with a square antique-cut fancy intense yellow diamond, weighing approximately 4.17 carats, within a circular-cut diamond surround, gallery and half-hoop, ring size 6, mounted in platinum and 18k gold. Signed Tiffany & Co., no. 27439551. Accompanied by a Tiffany & Co. Diamond Certificate report no. 27439551/L05070149 stating that the diamond is fancy intense yellow, natural color, Internally Flawless clarity. Estimate USD 40,000-USD 60,000. Price realised USD 75,000. See more here-http://bit.ly/2sVqKZA
-Harry Winston Spends $5.5M on Historic Emerald. Harry Winston bought the Rockefeller Emerald for a record price per carat at Christie’s New York on Tuesday. The luxury jeweler’s CEO, Nayla Hayek, had instructed chief financial officer Robert Scott to “bring this magnificent gem home at any price,” Christie’s reported Wednesday. That price was $5.5 million, setting a world record of $305,516 per carat for an emerald at auction.
Christie’s offered the octagonal, step-cut, 18.04-carat emerald ring on behalf of a private American collector, who had owned it for more than a decade. John D. Rockefeller, Jr. acquired the stone in 1930 as the centerpiece of a brooch for his wife, Abby Aldrich Rockefeller. When she died in 1948, their youngest son, David Rockefeller, inherited it and instructed designer Raymond Yard to set it in a ring. The piece later passed from the family into private ownership. “Harry Winston is immensely proud to own the finest emerald in the world, which once belonged to one of America’s most important dynasties,” Hayek said. The acquisition comes less than a month after the jeweler spent $8.9 million, or $2.2 million per carat, on a fancy vivid blue diamond at Christie’s Hong Kong.
Tuesday’s Magnificent Jewels auction at the Rockefeller Plaza salesroom in Manhattan fetched a total of $26.1 million, selling 83% by lot and 89% by value. Other jewels at the event included a modified lozenge mixed-cut, 5.01-carat, fancy deep grayish-bluish-green, VS2-clarity diamond, which found a buyer at $4.4 million, or $876,547 per carat. A round brilliant-cut, 16.11-carat, D-color, flawless diamond went for $1.9 million, or $119,646 per carat. The results “underscore the strength in the market for pieces of the highest quality,” said Tom Burstein, Christie’s head of jewelry for the US. Read more here-http://bit.ly/2rSNj0O
-CHART OF THE WEEK: Hedge Funds Exit Gold Before Fed Sparks Worst Rout in Month. Hedge funds were smart enough to get ahead of Janet Yellen’s bad news for the gold market. Money managers pared their net-bullish wagers in the metal for the first time in four weeks. The next day, the move was vindicated when Federal Reserve Chair Yellen raised U.S. interest rates and sparked the biggest weekly loss for gold prices in more than a month.
After posting gains earlier this year, the precious metal could be heading for a turning point. The Fed reiterated plans for another hike in 2017, while the European Central Bank is reviewing whether to maintain its loose monetary policy. Higher borrowing costs curb the appeal of bullion, which pays no interest. Investors in SPDR Gold Shares, the largest exchange-traded fund backed by bullion, are pulling money out at the fastest pace this year. Read more here-https://bloom.bg/2sUQghl
-India Said to Plan Gold Policy Revamp for $19 Billion Sector. India, which vies with China as the top consumer of bullion, is working on new policies to improve transparency and help expand its $19 billion gold jewelry industry, according to people with knowledge of the matter. The plans being worked out by the finance and commerce ministries along with industry groups should be finalized by the end of March, the people said, asking not to be identified because they aren’t authorized to speak publicly.
D.S. Malik, spokesman for the finance ministry, didn’t answer calls to his cellphone, while a spokeswoman for the commerce ministry didn’t reply to an email seeking comment. The start of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards, is under consideration, the people said. An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said. The plans also include a dedicated bank for the jewelry industry, according to one of the people.
The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Ensuring quality standards and allowing supply chains to be easily tracked are ways to enhance trust. The estimate for the size of the sector was given by the Mumbai-based India Bullion and Jewellers Association Ltd. Read more here-https://bloom.bg/2sROBs5
-Greg Hunter: Danielle DiMartino Booth Interview, Fed Trying to Cripple Trump Economy. Financial expert and former top Federal Reserve insider Danielle DiMartino Booth says the latest Fed rate hike is nothing less than an attempt to make life worse for President Trump. DiMartino Booth explains, “They are trying to do the opposite of what they did a year ago because the people who occupy the White House have changed. That’s the only feasible answer I can come up with to explain the Fed tightening into a weakening economy. Their own metrics don’t lie.
Nonfarm payroll growth has slowed appreciably over the last 12 months, and their favorite inflation metric is back below 2%. These are the rules they have made up, not me. They (the Fed) are making policies against their own rules, and there has to be a reason for it.” On gold, DiMartino says, “I think gold is in the very late stage of a correction phase. Once we get a sniff of true market reaction to any of these geopolitical events, I think you could see gold take off like a boomerang or a hockey stick. If there is any slowing in the global economy, then the safe haven will not necessarily be U.S. Treasuries. The ultimate safe haven is gold.” DiMartino Booth says it’s unlikely the Fed can fix the economy the next time it gets into trouble.
DiMartino Booth says, “If you tack on slowing auto sales we’re talking about a third of manufacturing jobs in this country manufacturing is still big enough at the margin to lead the economy down. When you aggregate the bloodletting in brick and mortar retail, what’s coming up in restaurants, what auto dealerships are looking to do with the land under their dealerships you add all this up together and there is a perfect storm in this country for commercial real estate, that is highly overvalued, and throw in a black swan or two geopolitically and you could have a confluence of factors that the Fed could not fight.” Read and watch here-http://bit.ly/2sBOxL0
-Frank Holmes: SWOT Analysis Is India’s Gold Market Recovering? Read more here-http://bit.ly/2rDUkOU
-Lawrie Williams: Russia adds another 21.8 tonnes to gold reserves in May. When we reported on last month’s comparatively small increase in Russia’s gold reserve in April of only 6.2 tonnes we commented at the time that perhaps not too much should be read into this monthly fall in volume of reserve increases as being indicative of a slowing down of gold purchases yet, as the nation’s monthly reported increases can fluctuate substantially. Now the May figures are in we can see that we were correct as Russian gold reserves increased that month by some 700,000 ounces (21.8 tonnes) bringing the grand total of its reported gold reserves to around 1,708 tonnes.
This keeps Russia in sixth place among global national holders of gold after China in fifth, but closing the gap given China seems to have ceased to report monthly gold reserve increases since last October. If this non-reporting by China continues and Russia continues to add to its reserves at the current rate then by the year end the gap between the two nations’ reported reserves to the IMF could be as little as 10 tonnes, or perhaps even less. Of course, as we have noted before, China has a track record of non-reporting of its reserve increases. Thus, we don’t believe the Asian giant has ceased adding to its gold reserves at all and is holding these additions in accounts which it is not reporting until such a time it may feel politically, or financially, advantageous to do so.
It has done this in the past only reporting big increases in its reported reserves at five or six year intervals. We suspect it has not yet reached its ultimate gold reserve target and considers it advantageous to continue the pretence that it has ceased buying gold as a device to keep the gold price suppressed in order to continue to adding to reserves at lower prices. We see as significant the fact that it only reported monthly additions to reserves in the runup period to the yuan (renminbi) being accepted as an integral part of the IMF’s Special Drawing Right (SDR) basket of key currencies (which also includes the US dollar, the Euro, the Japanese yen and the British pound sterling). Ever since the yuan’s inclusion in the SDR last October, China has been reporting zero increases in its reserves on a monthly basis. We don’t think this is coincidental.
Given the air of secrecy which surrounds Chinese direct gold imports, coupled with the fact that it is the world’s largest new gold producer at around 450 tonnes annually, it would be fairly easy to assimilate additional tonnages into government controlled vaults surreptitiously. Again, as we have noted before this could, in part at least, account for the fact that known gold exports to China, from countries which publish these statistics, plus domestic gold production, come out hugely higher than the major precious metals consultancies (Metals Focus, GFMS and CPM Group) all calculate as Chinese gold consumption. Read more here-http://bit.ly/2rW2ZLS
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
-But I still sense this thing is headed for a climax. One way or another, there will come a time when JP Morgan won’t add to short positions on a coming silver rally and that rally will be like no other. I just can’t know if it will be McDonald taking the high road and ordering JP Morgan to no longer add manipulative silver shorts or if the most crooked bank in the U.S. will do so on its own. Silver analyst Ted Butler June 17 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-As I see it, this is the defining moment for James McDonald, the new enforcement director for the CFTC. Either he will do something about the continuing silver manipulation or he won’t. In the event he doesn’t do anything to interrupt the big commercials like JP Morgan from continuing to snooker the managed money technical funds into and out of COMEX futures positions by illegal spoofing and other dirty market tricks, it will fall to something and someone else. I’m not worried that the silver manipulation won’t end dramatically and soon, but it is not written in stone that it will be the defining moment that McDonald will look back on with satisfaction many years from now.
Defining moments can be either good or bad and by definition last forever. But it would be a mistake to underestimate the pressure he is under not to do the right thing. Essentially, for him to dismantle the crooked price discovery mechanism on the COMEX for silver (and gold) and on other futures exchanges for other commodities, he must repudiate more than 30 years of prior agency thinking, as well as overcome the secret and illegal agreement made between the U.S. Government and JP Morgan, on the occasion of JPM taking over Bear Stearns in 2008. Admittedly, that’s a very tall order. But the taller the order, the greater the defining moment.
Certainly, the inability to overcome the standard line from the CFTC for decades, namely, that no manipulation was possible in silver, has plagued others who set out to do so. Gary Gensler comes to mind because he started off in hitting the road running to establish legitimate position limits in 2009 and seemed to be on the right path to doing so. Even Bart Chilton, the former and very outspoken commissioner who talked openly of the silver manipulation, eventually lost his public voice for the same reason as Gensler failed neither could overcome the illegal agreement with JPM. Silver analyst Ted Butler June 14 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN