The World Financial Report

World Financial Report – January 10th, 2019

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WORLD FINANCIAL REPORT ON RADIO JANUARY 10TH 2019
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Has the Market Bottomed? Cases For and Against a Continued Rally. With the S&P 500 up more than 8 percent since its Christmas Eve meltdown, some chart watchers are calling a bottom to the bear market that never was. Others say, not so fast. It’s an exercise in perspective. Certain technical indicators and market internals are flashing green lights. Yet risks remain as reporting season nears and history suggests bottoming processes take time not two weeks.

The S&P rose as much as 1.2 percent Tuesday for its third straight day of increases, before paring some of those gains. Below is a compilation of bull and bear cases for a stock market bottom. Monday’s stock rally triggered a long-term buy signal for the first time since 2012, according to Sundial Capital Research Inc. The so-called Zweig Breadth Thrust is based on the volume of rising shares and occurs when momentum surges from an oversold level. The technical signal has preceded longer-term gains in U.S. equities in the past, Sundial President Jason Goepfert wrote in a note to clients Monday. Bloomberg

-CHART OF THE WEEK: A Decade of Negative Rates? Denmark May Be the First to Try It. The world’s longest experiment with negative interest rates may end up lasting an entire decade. Not until 2021 at the earliest will Danes have a chance to see positive rates again, according to Danske Bank. The country’s policy rate first dropped below zero in 2012. Danske Bank senior analyst Jens Naervig Pedersen says last year’s pattern of krone depreciation, which had some economists predicting rate hikes, won’t continue. In fact, he expects the Danish currency to appreciate in 2019. And with the central bank’s sole purpose being to defend the krone’s peg to the euro, a stronger exchange rate makes monetary tightening in Denmark less likely.

Nowhere else have people lived with negative interest rates as long as in AAA-rated Denmark. The policy has protected the currency peg, but it’s also turbo-charged the mortgage market and pushed those trying to save money into riskier assets. Meanwhile banks have done a bit less traditional lending and a lot more wealth management. The jury is still out on the extent to which negative rates are a useful policy, especially in economies in which the central bank targets stable prices rather than fixed exchange rates. This week, former U.S. Treasury Secretary Lawrence Summers threw his hat into the ring, criticizing the policy because of its apparent failure to stimulate bank lending “due to a negative effect on bank profits.” Bloomberg

-CHART OF THE WEEK: Canadian Heavy Crude Surges as Rail Shipments Keep Climbing. Heavy Canadian crude surged to the strongest level in more than a year as rail shipments keep rising even as production was curtailed. The discount of Western Canadian Select at Hardisty, Alberta, to West Texas Intermediate futures shrank $2.70 to $9.90 a barrel, the narrowest since August 2017, data compiled by Bloomberg show.

That’s from about $29 a barrel at the end of November, just before Alberta announced that producers would have to reduce output by 325,000 barrels a day in January to alleviate a glut caused by surging oil sands supply running into limited pipeline space. The current discount is too narrow to cover the cost of transporting oil by rail to refineries on the U.S. Gulf Coast and wouldn’t even cover some shipments by pipeline. But train deliveries continued to creep upwards last month after oil companies signed long-term contracts earlier in the year, said Mike Walls, an analyst at Genscape Inc., which monitors Western Canadian terminals that account for about 70 percent of the region’s crude-by-rail shipments. Bloomberg

-CHART OF THE WEEK: Manhattan Home Prices Fall Under $1 Million for the First Time Since 2015. Manhattan home prices fell in the fourth quarter, with the median slipping to less than $1 million for the first time in three years, as ample inventory continued to allow buyers to demand sweeter deals. Condo and co-op prices declined to $999,000 in the three months through December, a drop of 5.8 percent from a year earlier, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday. Many apartments were sold for less than sellers originally sought, with an average discount of 6.2 percent from the last list price. That’s up from price cuts of 5.4 percent a year earlier. It was the first time the median was less than $1 million since the third quarter of 2015, when it was $998,000. Bloomberg

-CHART OF THE WEEK: Richer Americans Are Skipping SUVs for Station Wagons. To wealthier and better educated buyers, crossovers are for Kardashians. These shoppers are looking for Masterpiece Theater. Stately, plump SUVs are running roughshod over the auto industry, crushing sedans, compacts and anything else that doesn’t approximate a 5,000-pound turtle. And yet amid the carnage, the earnest, doughty station wagon has emerged unscathed. In fact, it’s picking up speed thanks to a crowd of new models.

U.S. customers drove off in 212,000 brand spanking new station wagons last year, 29 percent more than they did five years earlier, according to new data from Edmunds.com. While the wagon is still the narrowest of niche products, that growth rate bests some of the industry’s most popular machines, as well as the long tail of vehicle sizes and shapes that are fading fast. “The winner in the death of the car is the station wagon,” said Karl Brauer, executive publisher for Autotrader and Kelley Blue Book. “You’ve got the car on one end of the spectrum and the SUV on the other; the wagon sits right in between those two.” Bloomberg

-U.S. President Donald Trump stopped short of declaring a national emergency in his prime-time address Tuesday night, but demanded Congress provide billions to fight illegal immigration. The partial U.S. government shutdown has reached its 19th day with no end in sight to solve the dispute over Trump’s proposed border wall. BNNBloomberg

-The partial government shutdown, which began Dec. 22, has now stretched well into the new year. President Donald Trump said Friday that it would continue for “months or even years” until he receives the requested $5 billion in funding for a border wall. The shutdown has left approximately 800,000 federal workers in financial limbo. Around 420,000 “essential” employees are working without pay, while another 380,000 have been ordered to stay home, according to calculations provided to CNBC by Paul Light, a professor of public service at New York University.

In some cases, the furloughs have forced government employees to tap into their savings, rely on credit cards or crowdsource funds to make ends meet. Government workers are far from alone in feeling stressed about not getting paid. Nearly 80 percent of American workers (78 percent) say they’re living paycheck to paycheck, according to a 2017 report by employment website CareerBuilder. Women are particularly vulnerable: 81 percent of them report living paycheck to paycheck, compared with 75 percent of men. Tony Reardon, president of the National Treasury Employees Union, tells CNBC that the group has heard from hundreds of frantic federal employees. “They’re scared,” he says. “They don’t know how they’re going to put food on the table.” CNBC

-Prospective home buyers derailed by the government shutdown. The stalemate in Washington, one of the longest in history, is throwing a wrench into some people’s plans to buy houses, according to real estate experts. So far, nearly 40,000 mortgages could be caught up in the shutdown, according to online real estate firm Zillow. More than 20 percent of realtors said they had either a current or prospective client impacted by the shutdown, according to a recent survey by the National Association of Realtors. CNBC

-The recently deposed Republican majority increased the federal debt by $7.9 trillion in the eight years it controlled the House of Representatives. At the close of business on Jan. 4, 2011, the day before the Republicans took control of the House, the debt was $14,014,049,043,294.41, according to the Treasury. On Jan. 3, 2019, the last day before the Republicans turned control of the House back to the Democrats, the debt closed at $21,929,258,046,653.58. So, under the Republican House majorities in four Congresses, the debt climbed $7,915,209,003,359.17. That works out to approximately $989,401,125,420 per year, or $2,710,688,015 per day, or $112,945,334 per hour, or $1,882,422 per minute. In fact, under the Republican-controlled House, the federal debt increased at an average rate of $31,374 per second. CNSNews

-The average millennial (aged 18 to 34) had about $32,000 in personal debt, excluding home mortgages, last year, according to Northwestern Mutual’s 2018 Planning & Progress Study. That debt can feel both crushing and endless. Just over 60 percent of millennials (classified here as those aged 18-37) with debt don’t know when, or if, they’ll ever be able to pay off what they owe, according to a new CreditCards.com report. That includes roughly 42 percent of millennials who don’t know when they’ll be able to wipe out their debt, and almost 20 percent of those who expect to die in debt. CNBC

-Sears reached an 11th-hour deal Tuesday to remain open at least for now. Attorneys for Sears said they had reached an acceptable agreement with a hedge fund controlled by Eddie Lampert, the chairman and former CEO of Sears, after a series of last-minute negotiations. Without an agreement, Sears faced the possibility of liquidation. The deal, a revised version of a $4.4 billion bid Lampert submitted in December, would keep 425 of the stores open if certain conditions are met.

Under the new terms, Lampert must come up with a $120 million cash payment by Wednesday afternoon, as a down payment. By deeming Lampert’s revised bid acceptable, Sears started the clock on an auction period that ends on January 14. Lampert’s is the only bid designed to keep Sears open. But itis still possible that those wishing to shut down the company will bid more for the assets than Lampert is offering. That wouldset the company on the path of shutdown once again. Read more here-https://cnn.it/2sjUcWM

-Saudi Arabia’s massive oil reserves total 263 billion barrels, even bigger than previously known. Saudi Arabia’s oil reserves are 2.2 billion barrels larger than previously reported, an independent audit finds. The audit confirms that the kingdom’s reserves are above 260 billion barrels, a figure that has long faced skepticism. The audit shows why “Saudi Aramco is the world’s most valuable company and indeed the world’s most important,” says Saudi Energy Minister Khalid al-Falih. CNBC

-Minutes of the Federal Reserve’s December meeting revealed policy makers took a more cautious approach to further rate increases than their statement indicated. “Many participants expressed the view that, especially in an environment of muted inflation pressures, the committee could afford to be patient about further policy firming,” the central bank said in minutes of its Dec. 18-19 policy meeting released Wednesday in Washington. The vote to hike rates was unanimous but the minutes showed “a few participants” favored no change.

The minutes showed the committee was attentive to recent financial-market volatility and risks to the outlook. “Participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier,” the minutes said. Officials signaled that further gradual increases in the policy rate were likely, though several participants said that it might be appropriate “over upcoming meetings to remove forward guidance entirely.” They suggested replacing it with language emphasizing “the data-dependent nature” of monetary-policy decisions. Bloomberg

-James Stack, who predicted the 2008 real estate crash and nailed last year’s housing slowdown with uncanny timing, is back with some bad news for 2019. “Housing could be heading for its worst year since the last housing crash,” Stack, 67, said in a phone interview. “Expect home sales to continue on a downward trend in the next 12-plus months. And there’s a significant downside risk to housing prices if a recession takes hold.” Last January, Stack was practically alone when he warned rising mortgage rates would expose housing’s affordability problem and “the risk that today’s highly inflated housing market will again end badly.”

The day after Bloomberg published his comments on Jan. 22, homebuilder shares began a 10-day slide, and ended the year down by more than a third. Almost a year later, the signs of coming distress in property markets and the broader economy are only increasing, said Stack. Home purchase contracts in the U.S. fell 7.7 percent in November, according to a National Association of Realtors index. Consumer confidence dropped in December. And a gauge of U.S. manufacturing plunged by the most since 2008, only a day after Apple cut its sales outlook, prompting investor worries about a global growth slowdown.

Stack, who manages $1.3 billion for people with a high net worth from his office in Whitefish, Montana, studies his fireproof files of newspaper articles on bear markets dating back to 1929. He predicted the housing crash in 2005, just before prices reached their peak. Last year’s warning came after Stack noticed that his “Housing Bubble Bellwether Barometer” of homebuilder and mortgage stocks was up 80 percent in a year, a sign that investors once again had gotten too “exuberant.” He says it’s too early to know if housing is in another bubble. It will depend on what happens with the economy. “Unfortunately, bubbles are only recognized with 100 percent certainty in 20/20 hindsight,” he says. Bloomberg

-Hedge funds posted a loss of 5.7 percent last year as managers struggled to capitalize on volatility and were roiled by political uncertainty. For December, funds lost 1.9 percent, according to preliminary figures from the Bloomberg Hedge Fund Database. The industry suffered through one of its worst years in 2018. Many managers not only failed to make money but did worse than the broader market. The return of volatility posed a challenge. The prospect of a trade war with China and the combative stance of President Donald Trump didn’t help. Bloomberg

-No change: Bank of Canada keeps benchmark interest rate at 1.75%. The Bank of Canada kept its benchmark interest rate unchanged at 1.75 per cent Wednesday, despite a few dark clouds appearing on Canada’s economic horizon. The bank has raised its key rate five times since the summer of 2017, attempting to keep inflation in an acceptable range, typically between one and three per cent annually. The bank last raised its rate in October, before deciding to do nothing in December and then again today.

The bank’s rate impacts consumers by raising or lowering the rates that Canadian borrowers and savers get for lines of credit, savings accounts, and variable-rate mortgages. The bank also downgraded its expectations for Canada’s economy this year. A 25 per cent plunge in the price of oil since October has had a “material impact” on the economy, to the point where the bank is now forecasting just 1.7 per cent growth this year. Three months ago, it was expecting 2.1 per cent growth. But despite that slowdown, the bank still indicated it plans to raise the rate again sooner rather than later. “The policy interest rate will need to rise over time into a neutral range to achieve the inflation target,” the bank said.

That sentiment buoyed the loonie, which gained about a third of a cent to 75.73 cents US after the decision came out. Like just about every economist covering the bank, CIBC’s Avery Shenfeld wasn’t expecting the central bank to announce a hike on Wednesday, but he found the bank’s rationale for its decision interesting nonetheless. “Its message today suggests that it isn’t quite as sure about when it will come off the sidelines and hike again,” he said. CBC

-The world’s largest money manager expects the Bank of Canada to hit the brakes on policy tightening in 2019. With officials set to convene in Ottawa, BlackRock Inc. says the central bank will probably hold rates steady until at least next year as Canadian growth cools and lower oil prices work their way through the economy, weighing on the inflation outlook. Short-end traders largely agree: Overnight index swaps are barely pricing in any tightening over the next 12 months.

Investors have slashed expectations for hikes following a dovish December policy meeting and amid a broad reassessment of the prospect of central-bank tightening as global growth shows signs of slowing. Given increased market volatility and more restrictive financial conditions, the BOC will likely pause to see the effects of its five rate hikes since mid-2017, according to BlackRock’s Aubrey Basdeo. “The bank has latitude to go on an extended pause,” said Basdeo, the firm’s Toronto-based head of Canadian fixed income. “What’s the rush to get to neutral if inflation’s not an issue?” Bloomberg

Canada’s recent dip into an economic soft patch will keep the country’s central bank from raising interest rates for a second straight decision Wednesday, with investors betting it may even be done with hiking altogether. The Bank of Canada is likely to remain on hold for at least a few months as the country copes with turmoil in the oil sector and policy makers gauge the impact of volatility in financial markets. After that, views diverge. Economists expect hikes to resume later this year with one or two more increases given the nation’s fundamentals remain strong despite recent headwinds. Markets are less sanguine, focusing more on the deteriorating global economic outlook and trade risks between the U.S. and China.

Swaps trading suggests investors believe the Bank of Canada’s normalization may already have come to an end, after five hikes since the middle of 2017. “The pendulum in the market often swings more than the underlying facts on the ground,” Avery Shenfeld, chief economist at CIBC World Markets, said by phone. “We’re still expecting a hike or two in 2019,” though “it’s going to really depend on what sort of recovery we get in oil prices and when we get it.” All but one of 18 economists surveyed by Bloomberg expect the central bank to keep its benchmark rate at 1.75 percent in a decision at 10 a.m. in Ottawa. Markets are pricing in zero chance of an increase. The Bank of Canada will also release its quarterly economic forecasts Wednesday, followed by a press conference from Governor Stephen Poloz. Bloomberg

-Canada’s jobless rate held steady at 5.6 per cent in December as the economy added 9,300 jobs, but about the same number of people were looking for work. Most of the jobs were part time, Statistics Canada reported Friday. As 28,300 new part-time jobs were added, 18,900 full-time jobs were lost. The jobless rate, meanwhile, remained at the lowest level on record 5.6 per cent. December’s figure means that for 2018 as a whole, Canada’s economy added 163,000 jobs, which represents 0.9 per cent growth. CBC

-U.S. employers dramatically stepped up their hiring in December, adding 312,000 jobs in an encouraging display of strength for an economy in the midst of a trade war, slowing global growth and a partial shutdown of the federal government. The Labor Department said Friday that the unemployment rate rose slightly to 3.9 per cent, but that reflected a surge in jobseekers a positive for growth. Average hourly pay improved 3.2 per cent from a year ago, up from average wage growth of 2.7 per cent at the end of 2017. CBC

-The number of employed Americans has now set a 14th record under Trump. When Trump became president in January 2017, 152,076,000 Americans were employed. Last month, that number grew to a record 156,945,000, a gain of 4,869,000 in two years. At the same time, the number of unemployed Americans increased by 276,000 last month, to 6,294,000, as more people were actively looking for work but had not found a job. In another positive sign, the labor force participation rate increased two-tenths of a point to 63.1 percent, the highest it’s been since Trump took office. CNSNews

-An increasing number of Canadians can’t meet their financial obligations, another sign rising borrowing costs are taking a toll on household balance sheets. The number of consumers seeking debt relief jumped 5.1 percent to 11,320 in November from a year earlier, the Ottawa-based Office of the Superintendent of Bankruptcy reported on Jan. 4. October and November combined saw 22,961 consumer insolvency filings, the most for those two months since at least 2011.

It’s a worrying sign for an economy that has relied so heavily on consumer spending and the housing market to drive growth. The Bank of Canada has lifted its key lending rate five times since mid-2017. Policy makers, who meet this week to determine their next move, are closely monitoring the impact of higher borrowing costs on the economy. “We’re seeing a bump, and in some provinces that bump is significant,” David Lewis, a board member at the Canadian Association of Insolvency and Restructuring Professionals, said by phone from Edmonton. Lewis blamed economic uncertainty, rising interest rates and softening housing prices. Bloomberg

-It was a rough ride for the loonie in 2018. The Canadian dollar fell nearly eight per cent against its U.S. counterpart last year with much of its slide worsening in the fourth quarter plunging almost six per cent since October. In fact, the loonie was the second worst performing major currency in the world against the U.S. dollar in the last quarter, just behind another commodity currency, the Norwegian Krone, according to CIBC. A combination of falling oil prices, trade tensions, higher interest rates in the U.S. and a stronger U.S. dollar have weighed on the Canadian dollar. CIBC’s sentiments were echoed by Swiss bank UBS in December, when it called the loonie “overvalued” in its global currency forecasts report for 2019. “The Canadian dollar still stands out as being one of the more overvalued currencies in the G10 space,” the bank said. “Canada’s external balance remains negative, and would require foreign exchange depreciation to bring it back to a more sustainable level.” CBC

-Canada’s pot shortage could last as long as three years, according to industry executives who say production estimates are too rosy. Shortages have plagued the country since recreational marijuana was legalized in October. In response, Quebec’s government-controlled stores have closed three days a week, Alberta has temporarily stopped issuing retail licenses and Ontario has said it will initially open just 25 stores across Canada’s most populous province. As of mid-December, about 50 percent of products for sale in five provinces were out of stock, according to Cowen & Co. analyst Vivien Azer. This situation could continue for as long as three years, said Chuck Rifici, chief executive officer of Toronto-based Auxly Cannabis Group Inc. “There’s a lot of execution risk, people are expanding by 10, 20 times,” Rifici said in an interview at an AltaCorp Capital conference in Toronto Tuesday. “Personally, I think we’re at least three years out from hitting real equilibrium.” Bloomberg

-A home on Billionaire’s Beach in Malibu, California, sold for $110 million in April 2018 the most expensive home sale in Los Angeles County history. That price also makes it the most expensive house sold in the US in 2018. The cofounder of the Hard Rock Cafe chain sold the beachfront property to a natural gas billionaire. Billionaire’s Beach is home to several notable residents, including Oracle cofounder Larry Ellison. Businessinsider

-The Top 20% of Households Pay 88% of Federal Income Taxes. Congresswoman Alexandria Ocasio-Cortez (D-NY) recently proposed a 70 percent top federal income tax rate. This would nearly double the current top tax bracket, which is currently at 37 percent. Ocasio-Cortez fails to mention that the tax code is already steeply progressive. Read more here-http://bit.ly/2C8OAmN

-Amazon.com Inc. founder Jeff Bezos, the world’s richest person, and his wife MacKenzie are divorcing after 25 years. “After a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends,” according to a tweet Wednesday that both of them signed. The couple met when they worked at hedge fund D.E. Shaw, and married in 1993. He founded Amazon a year later. Bezos, 54, is worth $137 billion, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest individuals. Bloomberg

-Writing has never been a lucrative career choice, but a recent study by the Authors Guild, a professional organization for book writers, shows that it may not even be a livable one anymore. According to the survey results, the median pay for full-time writers was $20,300 in 2017, and that number decreased to $6,080 when part-time writers were considered. The latter figure reflects a 42 percent drop since 2009, when the median was $10,500.

These findings are the result of an expansive 2018 study of more than 5,000 published book authors, across genres and including both traditional and self-published writers. “In the 20th century, a good literary writer could earn a middle-class living just writing,” said Mary Rasenberger, executive director of the Authors Guild, citing William Faulkner, Ernest Hemingway and John Cheever. Now, most writers need to supplement their income with speaking engagements or teaching. Strictly book-related income which is to say royalties and advances are also down, almost 30 percent for full-time writers since 2009. NYTimes

-A 278 kg bluefin tuna sold for a world record $3 million at Tokyo’s famous Tsukiji fish market on Saturday. The buyer, Sushi Zanmai restaurant chain owner Kiyoshi Kimura, has won the auction in the past. He told Japanese TV: “The quality of the tuna I bought is the best.” However, he admitted he was suprised by the price, adding: “I think I did too much.” Businessinsider

-Paris’s first NAKED restaurant closes after 15 months due to lack of customers. O’naturel opened November 2017 and was billed as Paris’s first nudist restaurant. Mike and Stephane Saada founded eatery despite not being nudists themselves. But just 15 months later it has been forced to close after failing to attract custom. Owners thanked everyone who came along for ‘sharing exceptional moments. DailyMail

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RARECOLOREDDIAMONDS.COM

-Colored Diamonds Expected to Shine in 2019. Colored diamonds, which have natural pink, blue, yellow, and other brilliant hues, will continue to be closely sought-after by collectors and investors in 2019, according to Russian diamond group Alrosa. “Colored diamonds appreciate even in turbulent times against the backdrop of instability of the world economy,” says Yuri Okoyemov, vice president at Alrosa, the world’s largest diamond mining company by volume. “We expect fancy diamonds to become ever more popular investments in the near future.” Alrosa auctions colored diamonds twice a year. Last September, its “True Colours” auction in Hong Kong sold a total of US$9 million worth of colored diamonds.

Tracked by Knight Frank as one of 10 luxury investment assets along with jewelry in general, art, wine, watches, and cars, the value of colored diamonds has appreciated 70% in the last decade, or about 12% every year, according to The 2018 Knight Frank Luxury Investment Index. During the third quarter last year, the last period for which data is available, overall fancy color diamond prices grew 0.4% from the year before, according to the Fancy Color Research Foundation, an Israel-based diamond market information provider. Fancy vivid blue diamonds continued to outperform other kinds, rising 8.5% during the same period of time.

While all fancy pink diamonds gained only 0.5% in value in the third quarter of 2018, their valuations will likely grow faster in the coming years due to an expected shortage of supply, according to Okoyemov. The Argyle Diamond Mine in Australia, a source of over 90% of pink diamonds in the world, is set to close by 2020. Rare fancy pink diamonds have also set records at auction in recent years. Last November, a 18.96-carat rectangular fancy vivid pink diamond, The Pink Legacy, fetched US$50.4 million at Christie’s Geneva, setting a record price per carat for a pink diamond sold at auction, at US$2.6 million.

In 2017, The Pink Star, a 59.60-carat fancy vivid pink diamond fetched US$71.2 million at a Sotheby’s auction in Hong Kong. It retained the title of most expensive pink diamond in the world. Also in 2017, Christie’s Hong Kong sold The Pink Promise, an oval-shaped, 14.93-carat fancy vivid pink diamond, for US$32.5 million, or US$2.2 million per carat. Yellow diamonds saw their overall value rise 1.6% in the third quarter of 2018, according to the Fancy Color Research Foundation. Only one in every 10,000 gem-quality diamonds has natural color. Depending on the intensity of the colors, colored diamonds can be even more valuable than white (or colorless) diamonds, which are considered to be of the highest quality. Read more here-http://bit.ly/2H329tB

-Tiffany CEO Says It’s His ‘Duty’ to Reveal Diamonds’ Provenance. Tiffany & Co. is telling consumers where its diamonds come from as the jeweler tries to become more transparent in a notoriously opaque industry. Its top executive says the change was imperative. “This is a topic that has become more and more relevant for new generations,” Chief Executive Officer Alessandro Bogliolo said in an interview with Bloomberg TV. “This is our duty, as a leader in diamonds, to provide customers with this information.”

Tiffany is undergoing a revitalization effort under Bogliolo, seeking out younger shoppers with a refreshed image. It has enlisted celebrities like Zoe Kravitz, Elle Fanning and Maddie Ziegler and is undertaking a massive renovation of its New York flagship store. The comeback hit a snag last quarter, however, as tourist spending waned, even as Tiffany made inroads with the younger crowd. Bogliolo said that revealing the provenance of Tiffany diamonds isn’t a marketing gimmick, but a real effort to attract more customers who value transparency.

He said while Tiffany was for years seen as a more conservative label, management has recently taken major strides to appeal to a broader clientele. “What we did in the past couple of years has been to really embrace change, with the objective of being culturally relevant for the people for society today,” Bogliolo said. Effective Wednesday, shoppers will be able to see the region or country of origin displayed alongside a selection of diamond rings, and they can ask store employees for geographic information for all newly sourced, individually registered diamonds. Bloomberg

The Rubik’s Cube solver calculates the rotations to sove the unsolvable cube.

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GOLD-SILVER-PALLADIUM

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

-China Adds to Gold Reserves for First Time Since October 2016. After a hiatus of more than two years, China is adding to its gold reserves again. The People’s Bank of China increased holdings to 59.56 million ounces by the end of December, or about 1,853 metric tons, from 59.24 million ounces previously, according to data on the central bank’s website. They had been unchanged since about 130,000 ounces were added in October 2016. The world’s biggest producer and consumer boosted holdings of bullion in a month marked by mounting concerns that China’s trade dispute with the U.S. is threatening economic growth. Spot gold had its strongest month in almost two years as those fears spurred gyrations in equities and the dollar and boosted demand for the precious metal as a haven.

Speculation that the Federal Reserve may pause its interest rate hikes has given further strength to gold’s rally into the new year and assets in bullion-backed exchange-traded funds are at a seven-month high. Spot gold was trading 0.5 percent higher at $1,291.83 an ounce. “It’s a bullish sign for gold,” Matthew Turner, a commodities strategist at Macquarie Group Ltd. in London, said by phone. “The reasons could be diversification, a wish to get away from the dollar, but it’s hard to be certain because we just don’t know enough about what their motivations are.”

The Asian nation has previously spent long periods without revealing increases in gold holdings. When the central bank announced a 57 percent jump in reserves to 53.3 million ounces in July 2015, it was the first update in six years. “I’m always wary of year-end moves, but if they buy again, then it’ll look like they’re on another run of additions, like they did in 2015-2016.” Turner said. It’s not just China buying. Poland and Hungary surprised the market in 2018 by adding to their gold holdings for the first time in many years. Central banks were expected to increase their purchases of gold in 2018 for the first time in five years as eastern European and Asian countries seek to diversify their reserves, according to an October projection by consultancy Metals Focus Ltd. Bloomberg

-Mike Maloney: Why I Believe 2019 Will Be The Year For Gold & Silver. Watch here-http://bit.ly/2M0Angd

-Investors turn to gold as stocks get whipped around. The turbulent stock market has thrilled gold investors. The price of gold has gained more than 8% since the beginning of October. The S&P 500 has plunged 14% during the same time frame. And investors who’ve bought gold mining stocks have done even better than those who just own the precious metal. Newmont, a gold miner whose stock is in the S&P 500, has soared more than 13% since October. And Barrick Gold, which merged with Randgold last year to create the world’s largest gold miner, is up nearly 20%. Why has gold been so hot? Gold performs well when investors are nervous, as they clearly are right now. Read more here-https://cnn.it/2CZoFj3

-BlackRock Heaps Praise on Gold’s Role as a Tough Year Opens. Gold may extend gains as global growth slows, equity market volatility remains elevated and the Federal Reserve is expected to ease back on the pace of policy tightening this year, according to a BlackRock Inc. money manager, who says the precious metal offers an effective hedge. “Recession fears are probably overblown, but I do think we’re experiencing a slowdown,” Russ Koesterich, portfolio manager at the $60 billion BlackRock Global Allocation Fund, said in an interview, citing decelerations in the U.S., China and Europe. While BlackRock doesn’t have a price target, it’s been raising bullion holdings since the third quarter through exchange-traded funds.

Bullion surged in December as global stocks capped their worst annual performance since the financial crisis. Investors took fright at signs of economic weakness in the world’s largest economies, with China grappling against the U.S. trade war. Other political uncertainties, such as Brexit and the partial U.S. government shutdown, have also buttressed demand for havens. “We’re constructive on gold,” Koesterich said in the phone interview on Friday. “We think it’s going to be a valuable portfolio hedge. We’re multi-asset investors: we think about its effect on the entire portfolio, and what we see value in right now is gold’s value as a diversifier.” Bloomberg

-Frank Holmes: Gold Has Beaten the Market Over Multiple Time Periods. Global uncertainty made gold a holiday winner for investors seeking a relatively safe haven. U.S. stocks just logged their worst year since 2008 their worst December since 1931 as fears over global trade, ballooning debt, the end of accommodative central bank policy and a U.S. government shutdown unsettled investors. Against this backdrop, the price of gold rallied late in 2018, reversing a trend of negative returns and weak investor demand that prevailed for most of the year. Read more here-http://bit.ly/2RlmpeM

-Gold-backed ETFs gained globally in 2018, even with North America outflows.Gold-backed exchange-traded funds ended 2018 with new inflows globally as uncertainty about Britain’s exit from the EU drove investors to the perceived safety of European-backed ETFs, more than offsetting outflows in North America resulting from a strong U.S. dollar. Gold-backed exchange-traded funds (ETFs) worldwide registered net inflows of $3.4 billion, a 3 percent annual rise and increased by 69 tonnes to 2,440 tonnes in the year.

This was the first year since 2012 that total gold-backed ETF holdings finished above $100 billion, at $100.6 billion, according to the World Gold Council. Europe-based funds grew 10 percent during 2018, or by 96.8 tonnes worth $4.5 billion, with Germany leading country inflows and UK-based funds following as concerns increased about Brexit. North American gold-backed ETFs experienced outflows in 2018, as gold prices weakened during the third quarter, the World Gold Council said. Holdings in North American gold-backed ETFs declined 1.3 percent by 13.4 tonnes worth $667.4 million. Volatile stock markets in the fourth quarter drew some investors back to gold. During times of uncertainty, the precious metal is seen as a safe-haven alternative to stocks and other comparatively risky assets. Reuters

-What’s the best speculative asset for 2019: silver or Bitcoin? Silver is a somewhat comparable speculative alternative to Bitcoin. It has been used as money since the dawn of civilisation, albeit as monetary metal not computer code. In recent years silver has become more of a speculative asset than a currency, although it is also a very useful industrial metal. It’s vital for smartphones and other electronic products. Between 2000-2011 the price of silver rocketed from $3 to $49 an ounce.

That was its biggest bubble since the previous one in the 1970s, which ended at $50 per ounce in 1980. What other commodity is currently cheaper than it was in 1980? None. Silver acts as a leveraged play on the gold price as the supply of silver is tighter than gold. So, when the king of monetary metals rises in price the queen makes double that gain. Therefore, if you reckon 2019 is going to be a great year for the gold price then you should do much better speculating in silver. Read more here-http://bit.ly/2SHjz0d

-Investors Should Pay Attention To Silver Momentum. Gold is not the only precious metal seeing a strong start in 2019. Optimism in silver is building as prices hold near their highest levels in almost six months.

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that continued financial market volatility and a weaker U.S. dollar should continue to support silver prices. In a report Wednesday, McGlone described silver’s weakness in the second half of last year as a “failed bear-market raid.”

However, he added silver’s resilience in the face of extreme weakness could mark a long-term bottom for the precious metal as buying momentum picks up. He added that the critical level investors should keep an eye is $16.35 an ounce, which represents a long-term resistance level. “Silver is poised in 2019 to move above a resistance level that has held the market in check for three years, in our view,” he said. “A primary companion of higher silver prices a weakening dollar is likely to join the recovery in gold and industrial-metals prices.” McGlone isn’t alone in his bullish outlook for silver. Ira Epstein, director of the Ira Epstein Division of Linn & Associates, Inc., also said that he is bullish on the metal in a note to clients.

Epstein said that he sees a potential for silver to move higher through the year as it looks like the Fed will scale back its monetary policy tightening. “As I see it, silver is now in an uptrend. Long positions are now warranted and should be held to as long as prices don’t close back under the 18-day moving average,” he said. Epstein said that he is looking for initial resistance at $15.955 but added that with its current momentum, it has room to run to $17 an ounce. Read more here-http://bit.ly/2SGxW52

-Palladium Just Smashed Another Record. Palladium’s premium to platinum jumped to a record, building on its ranking as the best-performing metal of 2018. Shortages of the metal used in autocatalysts for gasoline-fueled vehicles sent its price to yet another all-time high, widening the price difference with rival platinum to more than $500 an ounce on Tuesday. Most analysts don’t see supply relief for palladium anytime soon.

Both metals are used in catalytic converters to reduce vehicle emissions. Platinum, the more expensive of the two for most of this century, has seen usage decline from its key consumers, diesel carmakers. Demand slid as consumers turned away from diesel vehicles in the wake of Volkswagen AG’s emissions-cheating scandal. Platinum is now trading near a 10-year low, at about $821.35 an ounce, while palladium is near its highest, $1,325.13 an ounce. The widening price gap has spurred speculation that petrol-carmakers may switch from palladium to cheaper platinum. Anton Berlin, head of analysis and market development at Russia’s Norilsk Nickel PJSC, says this is unlikely.

Palladium has some features that make it more suitable for gasoline or hybrid cars, like better resistance to higher temperatures. Switching to platinum would take at least two years and would need additional work and costs to adjust engines and car-exhaust systems, said Berlin, whose company is the world’s biggest palladium miner and fourth in platinum. Manufacturers also need to use more of the precious metal than is needed with palladium, he said. Berlin believes that overall demand for platinum will recover anyway. The market may even face a deficit if investment demand is sufficient, including bar and coin sales, he said. The World Platinum Investment Council predicted in November that platinum will remain in surplus in 2019, albeit a smaller one than last year. Bloomberg

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend