Radio Show Newsletter
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: Analysts Are Getting Worried About the Euro. It’s 2007 all over again. The euro is on a tear, U.S. investors are snapping up European stocks and traditional theories to justify the shared currency’s spirited advance have broken down, as investors luxuriate in a climate of low volatility. That’s the market landscape as painted by Deutsche Bank AG strategist George Saravelos. Given the parallels, he suggests caution after the euro’s 7 percent rally against the dollar this year. “Something strange has happened to the euro in recent months,” Saravelos wrote in a client note Wednesday. “Almost all traditional drivers that usually ‘explain’ the price action have broken down.” The bank’s currency correlation model which includes factors such as interest-rate differentials, the relative performance of equity markets, and spreads of southern European government bonds is flashing red. Read more here-https://bloom.bg/2rZZRCq
-CHART OF THE WEEK: These Digital Tokens Are Making Bitcoin’s Huge Rally Look Tame. Forget U.S. stocks and emerging-market assets, even ignore bitcoin. Those brave enough to invest in the Wild West of tech are the ones making a killing. While the record-breaking rally in bitcoin has captivated markets, demand for other digital coins is surging as companies raise millions in minutes, or even seconds, from investors wanting in on the next big tech startup.
Last week it took 30 seconds for Mozilla co-founder Brendan Eich to issue about $35 million of basic attention token, the unit of exchange in a blockchain-based advertising platform built on top of the company’s Brave browser. Digital tokens tied to the blockchain platform issued this year have more than doubled in price on average since trading started, according to data compiled by Bloomberg. Tech startups are increasingly selling coins that can be used on their projects instead of resorting to traditional financing methods such as venture capital. Read more here-https://bloom.bg/2rWUjIZ
-CHART OF THE WEEK: Americans Are Pouring Money Into Their Homes Like It’s the 1990s. If you’re building or renovating a home in the U.S. these days, you’ve got plenty of company. Americans’ spending on residential construction projects from the pouring of foundations to home improvement just hammered out its strongest three-month period since 1994. Solid job growth, low borrowing costs and a recovery in home equity since the market crash a decade ago are generating momentum. The outsized advance in outlays also has its roots in more than favorable conditions for building across the U.S. After all, the first four months of 2017 were the second-warmest on record, according to the National Oceanic and Atmospheric Administration. Read more here-https://bloom.bg/2sVlLUx
-“It is a case of better having insurance and not needing it, then one day realizing that one needs it but doesn’t have it.” Acting-man.com
-What’s a bail-in? A bail-in forces creditors of a bank to shoulder losses when the firm fails. Banks go belly-up when their shareholder equity is wiped out, which happens when loans or investments they’ve made go sour. When you bail in the creditors typically through a debt-for-equity swap they become new shareholders of the bank while it goes through a resolution process similar to bankruptcy. It’s less disruptive because the bank can continue functioning with the fresh capital from the creditors. Although it was originally construed as part of a quick resolution mechanism, the term bail-in has come to cover every case of creditor loss-sharing when a bank gets in trouble. Bloomberg
-Billionaire hedge fund manager Ray Dalio, who was initially bullish on Donald Trump’s ability to stimulate the economy, is growing increasingly concerned about the potential consequences of his presidency. “When faced with the choices between what’s good for the whole and what’s good for the part, and between harmony and conflict, he has a strong tendency to choose the part and conflict,” Dalio said in a LinkedIn post Monday. “The more I see Donald Trump moving toward conflict rather than cooperation, the more I worry about him harming his presidency and its effects on most of us.” Bloomberg
-Gold may end the year at $1,350, according to the median estimate of 15 people surveyed at a conference organized by the Singapore Bullion Market Association this week. Twelve respondents were bullish, citing the geopolitical uncertainty that continues to weigh on market sentiment. Separately, Westgold Resources Ltd. managing director Peter Cook said Wednesday that prices will gain on global volatility to reach $1,400 by the end of 2017. Bloomberg
-Jamie Dimon wants to disrupt JPMorgan. With $2.55 trillion in assets and operations, the bank has the most to lose should clients suddenly decide to do business in a different way. Star coder David Hudson is tasked with building innovation inside the bank to protect it from outside threats, making sure that if new technology upends trading patterns, it’s JPMorgan that does the disrupting. Bloomberg
-According to the prevailing narrative, job growth in the US, where GDP over the past decade has been on par with that in the 1930s, is one of the otherwise brighter economic indicators in a time when much of the economic data such as capital spending, productivity and especially wage growth (so critical for the Fed’s future plans) has been a chronic disappointment. Today, for example, headlines blast that the US has enjoyed 80 months of continuous jobs growth with unemployment hitting 4.3% the lowest since 2001. However, there is more to this “strong” number than meets the untrained eye. As our friends at Morningside Hill calculate, a full 93% of the new jobs reported since 2008 6.3 million out of 6.7 million and 40% of the jobs in 2016 alone were added through the business birth and death model a highly controversial model which is not supported by the data. On the contrary, all data on establishment births and deaths point to an ongoing decrease in entrepreneurship. Zerohedge.com
-The European Central Bank ruled out further interest-rate cuts in a sign that it’s moving closer to an exit from its stimulus program. The Governing Council, meeting in Tallinn on Thursday, dropped its guidance that rates might fall further, saying only that it now expects borrowing costs to stay at present levels for an extended period. Policy makers reiterated their pledge to increase the size or duration of their bond-buying program if the economy deteriorates. While the improving economy has sparked a debate about policy, it wasn’t a certainty how far the ECB would change its guidance at this meeting. President Mario Draghi and his closest allies had sought to talk down expectations for any major shift, arguing the ECB must be extremely cautious in communicating any exit from stimulus amid a lack of convincing inflationary pressure. Bloomberg
-The diplomatic clash between Qatar and three Arab allies flared regional tensions and caused oil prices to jump. For OPEC, it’s likely to remain business as usual. Saudi Arabia and three other Arab countries severed most diplomatic and economic ties to Qatar to punish the nation for its links with Iran and Islamist groups. Although most of the countries involved are members of the Organization of Petroleum Exporting Countries, the stand-off is seen posing little threat to the group’s initiative to re-balance world oil markets by cutting production. “It is not the first time for OPEC to see a political rift between its member countries, and it’s not going to be the last,” said Abdulsamad Al-Awadhi, a London-based analyst who was one of Kuwait’s representatives to the group between 1980 and 2001. “OPEC has gone through many political and military conflicts among its members and this has never had an impact on the flow of work of the organization or its binding agreements.” Bloomberg
-Gunmen in Iran killed a least one person in twin attacks that targeted both the country’s parliament and a shrine dedicated to the Islamic Republic’s founder, state media reported. Nearby, the diplomatic crisis in the Gulf shows no sign of abating, with Trump backing the Saudi-led isolation and a new suggestion that Russian hackers helped exacerbate tensions by planting fake news in Qatari state media. While the emirate still has many friends in the energy market, its $135 billion stock market is the most volatile globally. Bloomberg
-Jason Goepfert: This Remarkable Indicator Just Hit The Second Highest Level In 55 Years. The Federal Reserve released its latest quarterly report on financial assets in the U.S. on Thursday, and it’s no surprise that it shows investors have done very well. The total value of equities held by households reached 86% of gross domestic product, moving to the 2nd highest reading since 1952, exceeded only by the second quarter of 1999 through the third quarter of 2000.
Equities as a percentage of total household assets remained about the same, not quite as extreme but barely so. Private pension funds have 80% of their stock/bond/cash allocation in stocks, the highest since 2005- 07. As a result, their cash cushion dropped to 3.5% of assets, the 2nd lowest in history next to the first quarter of 2015. While there is a certain amount of circular reasoning in using this data, it mildly suggests that stocks are as fully valued as they’ve been at any other point in 70 years, limiting the likelihood of substantial and sustained further gains. Read more here-http://bit.ly/2s9swpi
-Bill Gross Says Market Risk Is Highest Since Pre-2008 Crisis. U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund. “Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit. Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross. The U.S. economy is expected to grow 2.2 percent this year and 2.3 percent in 2018, according to forecasts compiled by Bloomberg. Trump administration officials have said their policies will boost annual growth to 3 percent. Read more here-https://bloom.bg/2rWiCXi
-Elliott’s Singer Warns System May Be More Leveraged Than 2008. Billionaire investor Paul Singer said “distorted” monetary and regulatory policies have increased risks for investors almost a decade after the financial crisis. “I am very concerned about where we are,” Singer said Wednesday at the Bloomberg Invest New York summit. “What we have today is a global financial system that’s just about as leveraged and in many cases more leveraged than before 2008, and I don’t think the financial system is more sound.”
Years of low rates have eroded the effectiveness of central banks to contend with downturns, Singer said at the event in an interview with Carlyle Group co-founder David Rubenstein. “Suppressive” fiscal, regulatory and tax policies have also exacerbated income inequality and led to the rise of populist and fringe political movements, he added. Confidence “could be lost in a very abrupt fashion causing conceivably a ruckus in bond markets, stock markets and in financial institutions,” said Singer, founder of hedge fund Elliott Management Corp., which is known for being an activist investor. Read more here-https://bloom.bg/2r0jbMA
-Santander buys ‘failing’ Spanish bank for €1. Spanish banking giant Santander has paid €1 to acquire Banco Popular after the struggling lender was deemed to be near collapse. Banco Popular, which was saddled with billions in bad real estate loans, was auctioned by European regulators after they determined the bank was “failing or likely to fail.” In addition to the symbolic €1 purchase price, Santander said it will raise €7 billion ($7.9 billion) from investors to finance the deal and inject fresh cash into its rival. It’s the first time that a failing bank has been rescued under new rules designed to keep European taxpayers from having to bail-out failing lenders. Implemented in the wake of the global financial crisis, the idea is that shareholders and bondholders take the financial hit instead of the public. The European Commission said in a statement that in the case of Banco Popular, a sale “was the best course of action.” Read more here-http://cnnmon.ie/2rCliZx and https://bloom.bg/2qXPVWJ
-Vancouver Home Prices Resume Stubborn Climb to Fresh Record. Vancouver home prices climbed back to a record in May, suggesting the impact of a foreign-buyer tax imposed last year is fading. Benchmark prices in the west coast city reached a record C$967,500 ($716,300), up 8.8 percent from a year earlier, the Real Estate Board of Greater Vancouver said Friday. Average prices for single detached homes hit C$1.831 million, the most ever. It’s an indication of how stubborn gains have been in Canada’s biggest real estate markets.
Not even a cash-crunch at Toronto mortgage lender Home Capital Group Inc., a succession of government tightening measures or warnings about how price gains are detached from economic fundamentals have had a sustained cooling effect. The number of homes sold was the third-highest on record for the month of May at 4,364 transactions, and 24 percent above the 10-year average, the Vancouver realtor group said. Sales of the more expensive detached homes fell 17 percent from a year earlier while for attached properties they rose 4.9 percent, possibly reflecting a greater reluctance among home buyers to take on large mortgages in the face of rising interest rates in the U.S. While total sales fell 8.5 percent from a year earlier, the decline was far less than January’s 40 percent drop. Read more here-https://bloom.bg/2qY1QUc
–Toronto May Home Price Gains Slow as New Listings Surge 49%. Toronto’s housing fever is showing signs of cooling as price gains slowed and new listings surged in May, the first full month reflecting a new tax on foreign buyers and a crisis at mortgage lender Home Capital Group Inc. The number of new listings soared 49 percent last month from a year earlier to 25,837, the biggest increase since 2010, according to Toronto Real Estate Board figures published Monday. The average price rose 15 percent to C$863,910 ($640,076), compared with annual gains of 25 percent in April and 33 percent in March. The benchmark price index, which measures more typical mid-priced homes, rose 29 percent, also down from a 32 percent gain in April.
Sellers may be moving to lock in price gains after the Ontario government’s April announcement of a 15 percent foreign buyer tax on the Greater Toronto Area to clamp down on speculation. Home Capital needed to refinance after a regulator accused the Toronto-based company of misleading investors about potential fraud by some brokers. “The increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains,” Jason Mercer, the board’s director of market analysis, said in the report. He also said it’s unclear what the long-term effect of the new tax will be. Read more here-https://bloom.bg/2rWzzks and http://bit.ly/2rCArtO
-Don’t Bet the House on Poloz Busting Toronto and Vancouver Bubbles. The old debate about whether central banks should raise rates to counteract housing bubbles is finding new life in Canada as the country copes with record prices in its two biggest real estate markets. Toronto home prices were still up almost 30 percent last month, compared with the previous year, the city’s real estate board reported Monday, and have more than doubled since the 2008-2009 recession.
In Vancouver, the country’s most-expensive real estate market, they’ve climbed 58 percent over four years. Meanwhile, household debt is at record levels, recently surpassing gross domestic product for the first time. Lawmakers at every level have tried with a succession of tailored policies to engineer a slowdown, but have fallen short of achieving the desired effect. Could now be the time for the Bank of Canada, which releases its bi-annual analysis of financial stability risks Thursday, to step in with higher borrowing costs to “lean against” the bubble, even at the expense of its inflation target? Don’t bet the house on it. Read more here-https://bloom.bg/2r3NPIP
-House prices and debt loads a growing concern; Bank of Canada says. Bank cites Toronto and Vancouver prices, but says crash is unlikely and impact would be limited. Debt loads tied to overheated Canadian housing markets are making households more vulnerable, but on the whole Canada’s economy is resilient enough to withstand any major shocks to the system, the Bank of Canada says. Canada’s central bank released its semi-annual Financial System Review on Thursday, a document which outlines some of the major risks that the Bank of Canada sees on the economic horizon. As expected, the housing market and debt loads tied to it features prominently in the report. Specifically, the bank mentions an increase in uninsured mortgages, and growth in home equity lines of credit, since the last review in December. Most of the bank’s concerns from the housing market stem from activity in the two markets that tend to get a lot of attention: Toronto and Vancouver. Read more here-http://bit.ly/2s06eWq
-More Canadians ‘use their homes as ATMs’: Consumer agency. Canadians are borrowing against their homes in increasing numbers and many are not making regular payments against the principal, adding financial stress to households already carrying a record level of debt, a consumer agency warned on Wednesday. The number of households that have taken a home equity line of credit (HELOC) on top of their mortgage has soared nearly 40 per cent since 2011, the Financial Consumer Agency of Canada said in a report that stoked concerns about consumer debt linked to Canada’s slowing housing market.
“At a time when consumers are carrying record amounts of debt, the persistence of HELOC debt may add stress to the financial well-being of Canadian households,” the agency’s commissioner, Lucie Tedesco, said in a statement. “HELOCs may lead Canadians to use their homes as ATMs, making it easier for them to borrow more than they can afford,” she added. Outstanding HELOC balances reached $211 billion in 2016, according to the report. There are about three million HELOC accounts in Canada, with an average outstanding balance of $70,000. Read more here-http://bit.ly/2sUSyt2
-Canadians keep up long-running credit binge in first quarter of 2017. Canadian consumers continued to spend on credit in the first three months of 2017, bringing the average non-mortgage debt across the country to $21,696, up 1.9 per cent annually. At the same time, the national 90-day delinquency rate for non-mortgage credit accounts fell 1.45 per cent on an annual basis, to 2.72 per cent. “While delinquency rates for subprime borrowers generally are much higher than other risk groups, it’s a positive sign to see delinquencies decline even as more consumers in this risk group gain access to credit,” said Matt Fabian, director of research and consulting at TransUnion Canada, which put out the report Thursday morning.
Delinquency rates saw the largest annual declines in Toronto (down 7.55 per cent) Winnipeg (down 3.9 per cent) and Montreal (down 2.51 per cent). Overall debt loads increased in all three of those cities, and others, even as delinquency rates declined. “It’s especially encouraging to see some major Canadian markets lead the way in delinquency declines and credit growth, as it bodes well for Canada’s overall economic activity,” Fabian said. Delinquency rates were up 6.64 per cent for the year in Calgary, 4.84 per cent in Edmonton, and 2.34 per cent in Regina. Debt loads increased slightly in the first two cities, while they declined in Regina. At the end of the first quarter of 2017, 20.4 million Canadian consumers were carrying a credit card balance, a 3.5 per cent increase from the first quarter of 2015. Read more here-http://bit.ly/2r0me7c
-Loonie expected to dip, then stabilize in next 12 months. Canada’s dollar is expected to dip in the short term but stabilize in 12 months, a Reuters poll showed on Thursday, as a strengthening domestic economy encourages the Bank of Canada to prepare the market for interest rate hikes. The loonie, which has been the weakest performer among G10 currencies this year, is expected to decline slightly in three months to C$1.36 to the U.S. dollar, or 73.53 U.S. cents, according to the median forecast in a survey of more than 50 foreign exchange strategists.
The currency has been buffeted this year by lower prices for oil, one of Canada’s major exports, while investors have worried that the country’s economy will suffer if a potential housing bubble pops or the North American Free Trade Agreement is revised. But the poll respondents expect the currency to stabilize at C$1.36 in six months and recover to C$1.35 in a year, around where it was trading on Thursday. Signals from the Bank of Canada that it is preparing to tighten monetary policy as the domestic economy strengthens will offset pressure from expected interest rate hikes from the U.S. Federal Reserve, strategists said. Read more here-http://bit.ly/2s5wPSN
-This Is A Death Spiral: The tsunami of store closures is doubling in size. Retailers are closing stores at a staggering rate. About 2,000 store closures have been announced just within the last six weeks, bringing the total number of planned closures this year to nearly 5,100. That number is expected to keep growing, and reach more than 8,600 before the end of the year, according to Credit Suisse. “Store closings have accelerated, even in tier-one markets,” Credit Suisse analysts wrote in a recent research note. Major department stores such as Macy’s, JCPenney, and Sears are among those shutting down stores, along with retailers like Payless, Rue21, Michael Kors, and Bebe.
The closures are crippling hundreds of shopping malls across the US. “This is a death spiral,” John M. Clapp, a professor at the University of Connecticut’s Center for Real Estate, told Business Insider. “Once a department store goes vacant that tends to be contagious because all those middle-mall stores the nail salons and the jewelry stores they are all depending on the traffic coming from the bigger retail stores.” Credit Suisse expects 20% to 25% of malls or roughly 220 to 275 shopping centers to shut down over the next five years as a result of all the store closures happening this year.
As malls decline, the communities around them tend to follow suit. “Retail jobs are lost and eventually tax revenues decline,” Clapp says. Ultimately, growing crime rates can become a problem for the surrounding area, as well. Many local economies will be reeling from the effects of the closures for years, but they have been a long time coming in the US, where the amount of retail space per capita far outweighs any other country in the world. The US has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia, the next two countries with the most retail space per capita, according to Morningstar Credit Ratings. Read more here-http://read.bi/2rNuIA1
-Alphabet Shares Follow in Amazon’s Footsteps and Top $1,000. Shares of Google parent Alphabet Inc. passed $1,000 six days after Amazon.com Inc. crossed the same threshold, showing the sustained investor confidence that tech giants can outmatch older companies. Amazon’s rise reflected a bullishness in e-commerce, coming despite bigger sales in brick-and-mortar retail. Likewise, Alphabet shareholders see that TV ad budgets will continue to gravitate online, where Google dominates. Read more here-https://bloom.bg/2r7ny7x
-Greg Hunter: Andy Hoffman Interview, Bitcoin & Gold Form Two Front War with Central Banks. Financial analyst Andy Hoffman contends Bitcoin and other crypto currencies are the new threat to central banks’ power over fiat money. Hoffman explains, “Now, the powers that be are facing a new threat. It’s a threat. I think even a bigger threat to their monetary hegemony than gold and silver, and that is Bitcoin. Now, there is a decentralized monetary system that is in its early stages. People say it can never be money, but it’s only been around for nine years, and it’s already taking on those properties.
Bitcoin is going to take the pressure off of gold as the primary threat to the cartel. It’s always been a one front war against gold, which they have handled in the paper markets to the point where they have almost destroyed themselves. They are running on fumes. Now, it’s a two front war because the physical gold and silver markets are as tight as ever, and now they have a decentralized crypto currency markets, particularly Bitcoin to fight. I have a feeling once Bitcoin gets bigger, and the market cap is $50 billion, they will realize this is our day to day transactional enemy.” Watch and read more here-http://bit.ly/2sjASKF
-Greg Hunter: Clif High Interview, Crypto Currencies Show Global Reset Underway. Internet data mining expert Clif High has just finished an in-depth dive on crypto currencies such as Bitcoin. High uses what he calls “predictive linguistics” to spot trends and make predictions for future events. With the latest price spikes in so-called blockchain type crypto currencies, what does Clif High see with his latest Internet mining report? High reveals, “We are not at a period of time where we are valuing one store of wealth, Bitcoin against a store of debt, the dollar. We are, instead, looking at an episode of hyperinflation.
It is an episode where a great many people lose faith in the dollar, and they rush into Bitcoin and other crypto currencies. There are people coming in and out of the crypto space based on the degrading levels of confidence in the U.S. dollar. So, we are at a global currency reset at this point. There will be no Bretton Woods conference. There will be no G-7 central bank meeting that will be meaningful because these individuals are behind the curve. The curve is being led by all the people as they lose confidence in all of the fiat currencies. We have demonstrable proof that the managers of the dollar are very bad at it. Lots of people understand this, and they want out of the dollar and into something else.” Read more here-http://bit.ly/2s8BiUx
-Why Aren’t American Teenagers Working Anymore? The decline of the summer job. This summer American teenagers should find it a little easier to get a job if they want one. The U.S. unemployment rate fell to 4.3 percent in May, the lowest in 16 years, so teens started looking for summer jobs in the best labor market since the tech boom of the early 2000s. The May unemployment rate for 16- to 19-year-olds was 14.3 percent, but teens usually find it harder to find jobs than their more experienced elders. Back in 2009, the teenage jobless rate hit 27 percent. A CareerBuilder survey of 2,587 employers released last month found that 41 percent were planning to hire seasonal workers for the summer, up from 29 percent last year. Read more here-https://bloom.bg/2sEPYbg
-Rockefeller’s Art Treasures to Be Sold at Christie’s Auction. The vast art collection of banker and philanthropist David Rockefeller, who died in March, will be sold at Christie’s next year, the auction house said on Tuesday. Rockefeller’s estate is selling more than 2,000 objects, including modern art masterpieces, Chinese export porcelain, American paintings and European furniture, according to Christie’s. The auction house plans to offer the works in 2018 in a series of special sales in New York, according to a statement. Its results could be the largest tally in auction history, according to current and former auction specialists. Read more here-https://bloom.bg/2qZT0FN
-May 31 2016: ‘Aurora Green’ Diamond Sells For Record Breaking $16.8 Million. The 5.03-carat “Aurora Green” diamond set two world auction records for a green diamond Tuesday at Christie’s Hong Kong Magnificent Jewels sale, selling for more than $16.8 million. The rectangular-cut fancy vivid green diamond sold for more than $3.3 million per carat. The green diamond, with VS2 clarity mounted on a gold ring surrounded by circular-cut pink diamonds, was purchased by Hong Kong-based Chow Tai Fook Jewellery , one of the largest jewelry retailers in the world. Its price was at the low end of its estimate. The diamond shattered the previous records for a green diamond, which was set earlier this month for “The Ocean Dream,” a 5.5-carat fancy vivid blue-green diamond that sold for $8.6 million ($1.5 million per carat). Read more here-http://bit.ly/2rGlsPQ
-Current Aurora Green Records: The largest Fancy Vivid Green Diamond ever to be offered at auction. The most expensive Green Diamond in the world to be sold at auction. The highest per carat price ever sold for any Green Diamond in the world at auction. The most expensive Green Diamond to be sold in Asia. Wikipedia
-Diamond ring purchased for $13 as costume jewelry sells for $848K. A diamond ring purchased for £10 ($13) has sold for £656,750 ($847,667) roughly double its initial estimated value of £250,000 ($325,000) to £350,000 ($456,000) at the Sotheby’s Fine Jewels auction in London last night. The 26-carat ring was first purchased in the 1980s by an anonymous seller, who bought the jewel at a car boot sale, under the assumption that it was a piece of costume jewelry. The startling realization of the ring’s true value came decades later, when the wearer chose to have the ring appraised by a local jeweler. The ring was later identified as a cushion-shaped diamond set in a 19th century mount. Read more here-http://cnn.it/2rQbkSU
-World’s Most Expensive Earrings Fetch $57 Million at Sotheby’s. Sotheby’s set the record auction price for a pair of earrings, selling a duo of blue and pink diamond jewels for $57 million in Geneva. The earrings, known as the “Apollo Blue” and the “Artemis Pink,” were bought by the same buyer, who wants to remain anonymous, Sotheby’s said Wednesday. Named after ancient Greek gods, the pear-shaped earrings were estimated at $50 million to $68 million combined.
The buyer renamed the 14.54-carat blue diamond “The Memory of Autumn Leaves” and the 16-carat pink diamond “The Dream of Autumn Leaves.” The previous record price for earrings was set by the “Miroir de l’Amour,” two pear-shaped white diamond earrings that Christie’s sold for $17.7 million in November. Colored diamonds have been setting records recently. Christie’s sold the 14.62-carat ‘‘Oppenheimer Blue’’ for $58 million last year, while Sotheby’s adjudicated the 59.6-carat ‘‘Pink Star’’ for $71 million last month, a record auction price for any gem. Sotheby’s raised $151 million in the auction Tuesday, beating the total estimate of $100 million. Two-thirds of the lots sold beat their high estimate, including a purplish-pink Piaget diamond that sold for $13 million. Read more here-https://bloom.bg/2rsCte9
-Broken Shard of Second-Biggest Diamond Sells for $17.5 Million. When you’re selling your offcuts for almost $20 million, you know something is going right. Lucara Diamond Corp. just sold a 373.7-carat diamond for $17.5 million. For a company that has been unearthing some of the world’s biggest and most expensive stones in the past few years that may sound less impressive, until you realize it’s a broken shard from the second-biggest diamond ever found. Lucara sold the stone as part of its $54.8 million special diamond sale that consisted of 15 large and high value diamonds, the company said in a statement Friday.
The diamond was a very large chip broken off the 1,109-carat diamond the company found in 2015. Named the Lesedi la Rona, or “our light” in the Tswana language spoken in Botswana where it was found, it was the biggest diamond found in more than 100 years. The diamond went unsold at a Sotheby’s auction last year when the highest bid of $61 million didn’t clear the reserve price, leaving Lucara to retain the stone. The massive diamonds were unearthed at Lucara’s Karowe mine in Botswana.
The Vancouver-based company sold an 813-carat diamond for $63 million in last year, a record, to Dubai-based rough-diamond trading company Nemesis International DMCC. That stone sold for about $77,500 a carat, while the 373.7-carat diamond sold for about $47,000 a carat. The Lesedi la Rona, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found near Pretoria, South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain. Read more here-https://bloom.bg/2qw2WJ8
-Rare $1.8 million coin trilogy unveiled in Perth. A unique $1.8 million coin collection boasting fancy coloured diamonds has been unveiled at the Perth Mint and is likely to be snapped up by an international buyer. The Australian Trilogy is comprised of three coins struck from gold, platinum and rose gold, with each featuring a different native animal. Each of the one-kilogram coins is also hand set with a natural fancy coloured diamond from Rio Tinto’s Argyle mine in WA.
One coin, crafted from 99.99 per cent pure gold, depicts two kookaburras on a wooden fence looking at a 0.47 carat round brilliant cut fancy deep purple-pink diamond. The kangaroo coin, crafted from 99.95 per cent pure platinum, shows the marsupial in an outback plain with a 0.46 carat emerald-cut fancy dark grey-violet diamond. The 91.67 per cent rose gold koala coin displays the animal beneath a eucalyptus tree beside a 0.58 carat emerald-cut fancy intense pink diamond. The 2016 Kimberley Treasure coin, valued at $1 million, sold to an international buyer within 48 hours. Read more here-http://bit.ly/2sIZPNl and http://bit.ly/2r7mq99
-In US, diamonds are a millennial’s best friend. Diamonds are making a comeback in America as more millennials fall for crystals long associated with “eternal” love. US diamond demand hit $40 billion in 2016, up 4.4 percent from the prior year and comprising half of global diamond revenues for the first time since the 1990s, according to global diamond mining and retail giant De Beers. The surge has come despite sluggish economic growth and overproduction of the jewels that has depressed prices, said Stephen Lussier, vice president of marketing at De Beers.
The industry has gotten more bullish in America with the success of a marketing pivot targeted at millennials, those born between 1981 and 2000 who have shown concern for social issues, including the ethics of harvesting of diamonds from war-torn countries. Increased demand from this key demographic has lifted sales of diamonds that cost between $1,000 and $5,000. The US, along with China and India, are considered the most crucial components of the $80 billion global diamond market.
Gone is the motto “diamonds are forever” that was introduced after World War II and popularized by Marilyn Monroe, who sang “Diamonds are a girl’s best friend” in the 1953 movie, “Gentlemen Prefer Blondes.” Today’s slogan, “Real is rare, real is a diamond,” positions the crystals as a “symbol of authentic connection and commitment” and an antidote to all things mass-produced, according to industry lobby the Diamonds Producers Association. Read more here-https://yhoo.it/2r6WLxe and http://bit.ly/2rbjenL
-CHART OF THE WEEK: Flush With Cash, Americans Buying More Diamonds Than Ever. With stock prices scaling new highs and robust economic growth, Americans spent a record amount of money buying diamonds last year. Demand in the U.S., which now accounts for more than half of the world’s diamond consumption, rose 4.4 percent to a record $41 billion last year, top producer De Beers said in a report Friday. That helped offset contractions in China and India, where the company will be stepping up marketing to revive growth.
Global demand edged higher by 0.3 percent, to $80 billion. The U.S. has been a bright spot in the diamond industry, expanding its market share in the past six years as wage growth, job creation and a strong stock market helped boost consumption, according to De Beers. That contrasted with purchases in key growth market India, where a jewelers strike and the demonetization campaign led to a 13 percent contraction. Demand fell 10 percent in the Gulf region as oil prices remained depressed. Read more here-https://bloom.bg/2r7ly4e
-Ronald-Peter-Stoeferle: In Gold We Trust Report. We live in an age of advanced monetary surrealism. In Q1 2017 alone, the largest central banks created the equivalent of almost USD 1,000bn worth of central bank money ex nihilo. Naturally the fresh currency was not used to fund philanthropic projects but to purchase financial securities. Although this ongoing liquidity supernova has temporarily created an uneasy calm in financial markets, we are strongly convinced that the real costs of this monetary madness will reveal themselves down the line. We believe that the monetary tsunami created in the past years, consisting of a flood of central bank money and new debt, has created a dangerous illusion: the illusion of a carefree present at the expense of a fragile future. Read more here-http://bit.ly/2rFOGhz and http://bit.ly/2t00pFD and http://bit.ly/2r1shbD and http://bit.ly/2rGTX8y and http://bit.ly/2s9wHSm
-CHART OF THE WEEK: Gold Prices Break Through a 6-Year-Long Downtrend Line. Gold is breaking out of a six-year slump as investors search for safe havens during a period of global upheaval and bets that historically low U.S. interest rates will endure. After breaching a six-year downtrend line, gold is at the highest level since Nov. 4, and has advanced 12.7 percent this year. An uptick in bullion imports in China, as a hedge against currency risk, and a tepid pace of U.S. monetary tightening could fuel the next leg-up in the rally, say analysts. Read more here-https://bloom.bg/2s1ihCR
-China’s Gold Imports Seen Jumping 50% as Haven Demand Booms. China, the world’s biggest gold market, may boost imports through Hong Kong by about half this year as local investors seek to protect their wealth from currency risks, a slowing property market and volatile stocks, according to the Chinese Gold & Silver Exchange Society. Mainland China is set to import about 1,000 metric tons from the territory in 2017, said Haywood Cheung, president of the century-old exchange in Hong Kong which trades physical gold and silver.
That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department compiled by Bloomberg show. Demand is rising on concerns over property, share and bond markets and the outlook for the yuan, amid a government drive to reduce leverage in the financial system. Local consumption was up 15 percent in the first quarter, with sales of bars for investment climbing more than 60 percent and dwarfing a 1.4 percent rise in jewelry buying, according to data from the China Gold Association. China also imports gold from Switzerland.
“People are looking at other means to invest, a safe haven to protect their renminbi because of the depreciation, so everybody starts to look for safe haven products,” Cheung said in an interview at a precious metals conference in Singapore on Monday. “So I think we’re going to have a good year.” Imports from Switzerland topped 100 tons in the first four months of the year, according to calculations on data reported by the Swiss Federal Customs Administration. In December, China imported 158 tons from the country, taking the total for the year to 442 tons, up from 288 tons in 2015, the data show. Read more here-https://bloom.bg/2r6lC49
-Gold Imports by India Jump Fourfold as Tax Fear Spurred Stocking. India, which vies with China as the world’s top gold consumer, saw a fourfold increase in imports of the precious metal in May as traders stocked up fearing that the government would fix a higher rate for jewelry under a new national goods tax to be implemented from next month. Overseas purchases advanced to 126 metric tons in May from 31.5 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Finance Ministry spokesman D. S. Malik declined to comment on the data. India fixed the goods and services tax for gold at 3 percent, effective from July 1.
The rate is lower than expected, Ketan Shroff, joint secretary at the India Bullion and Jewellers Association Ltd. said on Monday. The duty will replace more than a dozen domestic levies including excise tax and state tariffs, making India a common market for the first time. “The massive import numbers were because people were worried about the kind of taxation that would come in but now that the tax has been fixed at a lower rate, imports will moderate going forward,” said Kunal Shah, head of research at Nirmal Bang Securities Pvt. by phone from Mumbai. India’s monsoon is expected to be normal and that would further underpin a demand recovery, he said. Demand is projected to rise to between 850 tons to 950 tons by 2020 from an estimated 650 tons to 750 tons this year buoyed by the new tax regime, the World Gold Council said in a report Thursday. Read more here-https://bloom.bg/2r0QY8a
-The New Gold Rush Is All About Vaults. From safety-deposit boxes in leafy west London to high-security facilities housing gold and silver in Frankfurt, companies that store valuables are expanding to meet demand. A rush into haven assets that began during the financial crisis is getting a new lease on life from an upsurge in populist politics and a quickening of inflation. Two firms say they’re planning to open vaults in Europe capable of holding more than 100 million euros ($112 million) in gold, offering customers lower costs than exchange-traded products and protection from rising prices. “Inflation is a key concern for many of our clients,” said Ross Norman, chief executive officer of bullion dealer Sharps Pixley Ltd., which operates a gold vault within walking distance of Buckingham Palace.
“A safe-haven asset isn’t just about what you buy it’s also about where you keep it.” Political surprises like Britain’s decision to leave the European Union and the election of Donald Trump as U.S. president have shaken investors over the past year. At the same time, negative interest rates have persisted across much of Europe and inflation has shown signs of life, threatening to wipe out the fixed coupon payments offered by bonds and increasing the allure of storing wealth in a dark room with walls of tempered steel. “I was just dealing with a customer here in Germany who got charged negative interest rates on his bank account,” Daniel Marburger, the CEO of CoinInvest.com, said by email from Frankfurt. The client decided to buy gold and silver with some of his cash.
“That is definitely a driving factor and will lead to more sales and also more storage clients.” CoinInvest, a European gold dealer, is in negotiations over the construction of a 100 square-meter (1,076 square-foot) vault that would hold more than 100 million euros of the precious metal. The safe will weigh 82 metric tons, with the door alone tipping the scales at 1.5 tons. Users of the largest online platform for physical gold trading, BullionVault.com, added about 3 tons of the metal in the 12 months through May, bringing their combined holdings to almost 38 tons worth $1.5 billion at current prices. The company holds the gold in vaults in Zurich, London, New York, Singapore and Toronto, said Paul Tustain, one of the company’s founders.
Gold in storage at the Bank of England which operates one of the largest commercial vaults climbed about 6 percent since the start of 2016 to some 5,067 tons in February. The central bank holds gold for the U.K. Treasury, other central banks and private firms. “Our customers are looking to park their wealth somewhere,” Tony Dobra, the CEO of Baird & Co., the U.K.’s largest gold refiner, said at a party previewing the opening of a new vault. “They understand fluctuations in the gold price, but they’re comfortable with that. They know gold’s never going to go to zero.” The vault, set to open soon, has steel walls that look to be about a foot thick and seismometers to detect nearby digging or boring. For security reasons, more than one person is required to open the door. Read more here-https://bloom.bg/2r4siQc
-Here’s why billionaires are parking their cash in gold. There are always lessons that can be learned from the “smart money.” Unlike regular investors, billionaire money managers like Ray Dalio and Stan Druckenmiller are professional investors. They have entire institutional teams at their disposal, dive deep into the nuances and complexities of the market, and spend every waking moment of their lives thinking about how to get more from their investments. They want to make money but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event. Read more here-http://read.bi/2sZBodx
-Clive Maund: The Sun Rises On The Precious Metals Sector. Read more here-http://bit.ly/2rbD7uX
-Chats by Ex-Deutsche Bank Metals Trader Reveal Spoofing ‘Tricks from the Master.’ David Liew was a quick study. Less than a year into his metals-trading job at Deutsche Bank in Singapore, he joked with a colleague about their latest win. “Tricks from the master,” Liew typed in a chat after working with a colleague to move gold futures prices while Liew executed a trade. In the course of a year, Liew and his colleagues used fake orders to try to manipulate prices, an illegal practice called spoofing, more than 50 times.
After pleading guilty to fraud charges last week and agreeing to cooperate, Liew has become a prime government witness for U.S. prosecutors investigating whether traders at the world’s biggest banks conspired to manipulate prices in silver, gold, platinum and palladium. His chats with colleagues part of an FBI affidavit filed in Chicago and placed under seal provide a window into the investigation by the Justice Department, which began looking into such activities at a dozen of the biggest global banks two years ago.
The U.S. is also looking beyond precious-metals trading and planning more criminal spoofing charges against Wall Street traders, according to people familiar with the matter. Working with the Commodity Futures Trading Commission, prosecutors in the Justice Department’s criminal division in Washington have been developing spoofing cases across markets since the 2010 adoption of the Dodd-Frank financial law, which made the practice illegal. Read more here-https://bloom.bg/2sFNKbE and https://bloom.bg/2r0Ow1G
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-I’m convinced that because the ink was still relatively wet on the agreement between JPMorgan and the U.S. government when Gensler came on board and because he was unaware of that until he was way down the road to instituting position limits and overall reform, all his efforts were for naught. Anything that would have inconvenienced JP Morgan at that time was not going to fly; neither the Treasury Department nor the Federal Reserve would allow it. As Gensler slowly came to this realization, he recognized his efforts would not come to fruition and he beat a retreat.
But that was then and this is now. The secret and illegal agreement between JP Morgan and the Fed and Treasury is now nine years old and long of tooth. None of the original U.S. Government arrangers appear to be in office and JP Morgan’s manipulative actions over this time are starting to ripen and smell. For cripes sake, JP Morgan hasn’t taken a single loss when shorting COMEX silver over the past nine years and has amassed 600 million ounces of physical silver at artificially depressed prices over the past six years. No way, no how was that ever intended by the U.S. Government at the outset (JPM’s intentions excluded).
Now JP Morgan’s actions appear inexcusable and not to be tolerated for much longer. Enter the appointment of an apparently honest man to a position that matters at the CFTC and the whole dynamic appears to have changed. Who at the Fed or Treasury will demand that JP Morgan continue to be treated with kid gloves in silver because of a secret agreement made under duress nine years ago, particularly with more [people] than ever openly recognizing the scummy and duplicitous actions of the country’s most important bank? Silver analyst Ted Butler June 7 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-“There are a few unusual developments in the current COMEX June deliveries for gold and silver, but the standout feature to me is still the complete absence of JPMorgan in either making or taking delivery in either commodity in its own proprietary trading account. Silver, in particular, is showing fairly large numbers of new contracts being created and immediately delivered against (for a non-traditional delivery month), but the issuers and stoppers are so mixed and cross-related that I can’t draw any concrete conclusions aside from it suggesting tight wholesale conditions.” Silver analyst Ted Butler June 3 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Ed Steer: The Silver Price Could Reach 3 Digits if This Happens. Watch more here-http://bit.ly/2ramrEo
-Adam Hamilton: Silver Short-Squeeze Potential. The bottom line is silver is set up for an imminent potential short squeeze. A likely forced liquidation of a huge long position enticed speculators to flood into silver-futures shorts between mid-April and mid-May. That fueled a massive shorting spike, leaving shorts exceptionally high despite some covering buying since. These remaining shorts must soon be covered by buying offsetting longs, driving silver sharply higher. Given the extreme leverage inherent in silver-futures trading, these speculators can’t mess around with the next FOMC meeting looming. Silver has surged sharply after all three previous Fed rate hikes in this latest cycle! So major buying to cover is actually highly likely before mid-June’s universally-expected next rate hike. This short covering will probably entice in long buying, amplifying silver’s near-term upside. Read more here-http://bit.ly/2s9qwOa
-Theodore Butler: Surprise CFTC Announcement. I was shocked by Friday’s announcement by the CFTC of an order and simultaneous settlement of manipulation charges in COMEX gold and silver futures. I first saw it in a Zerohedge article and subsequent articles on Bloomberg and in the Wall Street Journal, but all those accounts were somewhat off target compared to the CFTC announcement itself. This was one of those rare cases where the source announcement was much clearer than the articles describing it. I would ask you to take the time to read and reread the actual announcement from the CFTC, including both the press release itself and the complete order.
In essence, for the first time in history, the Commodity Futures Trading Commission has brought charges against someone for manipulating the gold and silver markets exactly in the manner I have described for decades. This is so astounding on its face, that I hardly know where to begin. In addition, I am writing this less than 24 hours after reading the announcement, so I reserve the right to alter my opinion as time evolves. But there is much to say at this point.
While it is true that the agency brought these charges against a former junior trader of an unnamed foreign bank (said to be Deutsche Bank), the price manipulation occurred during the time of the CFTC’s infamous five-year formal silver investigation. You’ll remember that the original investigation by its Enforcement Division previously concluded that there were no manipulation charges worthy of pursuing. Clearly, something changed the CFTC’s mind. Also, please note that all the alleged price manipulation took place on the cesspool also known as the COMEX and not on any of the foreign exchanges often bandied about.
Further, as the press release makes abundantly clear, this is no one-off by the agency. I don’t think I am exaggerating in the slightest to say that the press release reads more like an open solicitation for others to step forward to provide information pertaining to COMEX gold and silver futures manipulation. Again, please read the documents. I don’t know what I am more shocked by the announcement of manipulation in COMEX gold and silver futures or the very obvious intent by the Commission to pursue this further. Read more here-http://bit.ly/2sjuV0q