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World Financial Report – April 11th, 2019

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WORLD FINANCIAL REPORT ON RADIO APRIL 11TH 2019
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: There’s a Middle-Class Threat to the Fabric of Global Economy. There’s a trend shaking the foundations of the world’s richest economies: middle-class life is unfair, expensive and uncertain. According to the OECD, its share of total income is falling, and there’s a surge in the core costs of its defining pillars like housing, education and health. Over-indebtedness is now higher than for other income brackets and the risks of tumbling down the social ladder are increasing as automation and the changing nature of work threaten jobs. “The middle class is increasingly only a dream for many,” the OECD said. “This bedrock of our democracies and economic growth is not as stable as in the past.”

Inequality and the squeeze on the middle is a risk for economic and political stability that’s attracting greater attention from policy makers and investors. Last week, billionaire founder of Bridgewater Associates Ray Dalio warned of revolutions as disparity in wealth fuels conflict and populism. France has put tackling inequality and reinventing capitalism on the top of the agenda as it leads the Group of Seven this year. According to OECD analysis, not only is the middle class essential for growth, but countries where it thrives are healthier, more stable, better educated, and have lower crime rates and higher life satisfaction. “There is a risk of a spiral to the extent that the middle class is the one main sources of political and economic stability,” said Stefano Scarpetta, OECD director of employment, labor and social affairs. Bloomberg

-CHART OF THE WEEK: Chinese Real-Estate Investors Wary of Vancouver Head to Toronto. Chinese investment in Vancouver commercial property from companies such as Anbang Insurance Group Co. has slumped amid a flood of regulations, with investors looking to Toronto instead. Asian investments in Vancouver fell to almost C$350 million ($260 million) in 2018, a drop from the C$1 billion-plus that hit the market in each of the two prior years, according to data from CBRE Ltd. In contrast, Toronto took in C$526 million of Asian investment last year, up slightly from 2017, including a C$256 million purchase of an office building by Chinese private investor Tigra Vista Inc.

Chinese investors are retreating globally following government restrictions on capital outflows in 2016. In Vancouver, Asian investment dropped off even more last year due in part to a series of new taxes instituted by the government, including a speculation and wealth tax on homes. The province has also proposed a bill to expose hidden land owners both residential and commercial and failure to disclose may result in a fine of C$100,000 or 15 percent of the property’s assessed value, whichever is greater, is driving away some investors. Bloomberg

-CHART OF THE WEEK: Canada’s Jobs Run Stalls in March With First Drop in 7 Months. Canada posted its first employment drop in seven months, ending an unusually strong run of job gains. Employment fell by 7,200 in March, mostly full-time positions in the services sector, Statistics Canada said Friday in Ottawa. Economists had forecast employers would add 6,000 jobs. Statistically, the decline is considered a flat reading. The country’s jobless rate was unchanged at 5.8 percent. It was only a matter of time before Canada’s jobs market cooled after a sharp rise in employment in recent months, particularly as other indicators have showed a much weaker picture.

Canada’s economy had added 290,000 jobs between August and February, the largest six-month increase since 2002. Those gains however were out of line with data that showed production stalling at the end of last year, in part because of falling oil prices. “The party had to end at some point, since Canadian jobs data had outrun other signposts of economic growth so dramatically, making the small retreat in employment in March not much of a surprise,” Avery Shenfeld, chief economist at CIBC Capital Markets, said in a note to investors. The strong performance of the jobs market up to now has been one of the reasons why the Bank of Canada has stuck to its belief the economy will rebound later this year. Bloomberg

-CHART OF THE WEEK: FAANG’s $800 Billion Rally Has Mom and Pop Investors Cashing Out. After a three-month rally that’s added more than $800 billion to the value of FAANG stocks, individual investors have decided it’s time to cash out of the high-flying names. Retail clients at brokerage TD Ameritrade increased their overall exposure to equity markets for a second consecutive month in March, yet they sold shares of Amazon Inc., Facebook Inc., Netflix Inc. and Apple Inc. All four members of the so-called FAANG cohort which also includes Google parent Alphabet Inc. have gained at least 35 percent since stocks bottomed on Christmas Eve, one-and-a-half times the S&P 500’s return. “Taking profits isn’t the worst idea in the world,” said Joe “JJ” Kinahan, the chief market strategist at TD Ameritrade, noting clients had been buyers of Amazon for eight straight months while also showing immense interest in Netflix in recent periods. “What it makes me wonder is, they were the momentum stocks, so where do we get our new momentum?” Bloomberg

-CHART OF THE WEEK: Norway Is Walking Away From Billions of Barrels of Oil. Western Europe’s biggest petroleum producer is falling out of love with oil. To the dismay of the nation’s powerful oil industry and its worker unions, the opposition Labor Party over the weekend decided to withdraw its support for oil exploration offshore the sensitive Lofoten islands in Norway’s Arctic, creating a solid majority in parliament to keep the area off limits for drilling. The dramatic shift by Norway’s biggest party is a significant blow to the support the oil industry has enjoyed, and could signal that the Scandinavian nation is coming closer to the end of an era that made it one of the world’s most affluent. Bloomberg

-CHART OF THE WEEK: Venezuela Unemployment Nears That of War-Ruined Bosnia, IMF Says. Venezuela’s unemployment rate is soaring to levels unseen in the world since the Bosnian war came to an end more than two decades ago, according to the International Monetary Fund. Joblessness will reach 44.3 percent in 2019 and will slam nearly half of Venezuela’s labor force in 2020, the IMF said in its World Economic Outlook published on Tuesday.

Bosnia and Herzegovina’s joblessness was 50 percent in 1996, immediately after its 3 1/2-year domestic war, according to the multilateral’s database. The Venezuelan depression is among the deepest economic catastrophes ever suffered by a nation outside of wartime. This year alone, the Andean nation’s output will shrink by a quarter the most worldwide since the 2014 start of the Libyan civil war, according to the IMF. The contraction has become so large that it’s generating “sizable drag” on growth not just in Latin America, but also in emerging markets as a whole. Bloomberg

-Goldman Considers ‘A World Without Buybacks.’ It Looks Ominous. With political scrutiny of stock buybacks growing, Goldman Sachs started assessing an extreme scenario: “a world without buybacks.” The picture doesn’t look pretty. That’s because corporate demand has far exceeded that from all other investors combined, according to strategists led by David Kostin. Since 2010, net buybacks averaged $420 billion annually, while buying from households, mutual funds, pension funds and foreign investors was less than $10 billion for each, Federal Reserve data compiled by Goldman showed. “Repurchases have consistently been the largest source of U.S. equity demand,” the strategists wrote in a note Friday. “Without company buybacks, demand for shares would fall dramatically.” Bloomberg

-“In recent years, thanks to central bank intervention in virtually every asset class, writing about capital markets in the context of some valuation or fundamental analysis framework has become a laughable, surreal, and self-defeating exercise.” Zerohedge.com

-“The Canadian dollar is lining up to be the world’s most frustrating currency. Cheap, but held back by soft growth and housing market concerns.” Kit Juckes Societe Generale Global Fixed Income Strategist

-Cannabis industry researcher BDS Analytics has cut its estimate for the size of Canada’s legal pot market to US$5.2 billion by 2024, from its previous call of US$5.9 billion by 2022. BNNBloomberg

-75,000 more stores need to close across the US, UBS estimates, as online sales and Amazon grow. UBS estimates roughly 75,000 more stores need to close in the U.S., should e-commerce penetration grow to 25% by 2026, from 16% today. Within that, about 21,000 clothing stores, 10,000 consumer electronics stores, 8,000 home furnishing stores and 1,000 home improvement stores should close, UBS says. CNBC

-Walmart wants store workers to help out customers instead of mopping up floors and unloading boxes in backrooms. So it’s increasingly turning to robots to fill those tasks. The world’s largest retailer announced Tuesday that it is adding thousands of new robots to its stores. By next February, it expects to have autonomous floor scrubbers in 1,860 of its more than 4,700 US stores. Walmart will also have robots that scan shelf inventory at 350 stores.

And there will be bots at 1,700 stores that automatically scan boxes as they come off delivery trucks and sort them by department onto conveyer belts. Walmart says these “smart assistants” will reduce the amount of time workers spend on “repeatable, predictable and manual” tasks in stores and allow them to switch to selling merchandise to shoppers and other customer service roles. “The overall trend we’re seeing is that automating certain tasks gives associates more time to do work they find fulfilling and to interact with our customers,” CEO Doug McMillon said last year of the new technology in stores. CNN

-U.S. Budget Deficit Widens to $691 Billion in First Half of 2019. The U.S. budget deficit widened to $691 billion in the first half of fiscal 2019 as spending outpaced an increase in revenue, highlighting the continued fallout on the government debt from President Trump’s tax cuts and the effects of an aging population. The budget gap increased 15 percent compared with the same October-March period a year earlier, according to the Treasury Department’s budget report released Wednesday. Receipts for the six-month period rose 0.7 percent while spending jumped 4.9 percent. For the month of March alone, the deficit narrowed to $147 billion, which was narrower than economist forecast in a Bloomberg survey and the $234 billion level the prior month. Bloomberg

Fed officials are leaving the door open for more rate hikes if the economy improves, minutes say. Fed minutes: “Some participants indicated that if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely judge it appropriate to raise the target range for the federal funds rate modestly later this year.” Read more here-https://cnb.cx/2UccPas

-Steve Eisman, the money manager who foresaw the collapse of the U.S. housing market, is now predicting a “20 percent plus” decline for Canadian bank stocks as credit conditions “normalize” and loan losses jump. Eisman said that he’s shorting Royal Bank of Canada, the country’s biggest lender, along with Canadian Imperial Bank of Commerce and Laurentian Bank of Canada. In an interview Tuesday with BNN Bloomberg Television, he also said he’s targeting mortgage insurer Genworth MI Canada Inc. and alternative lender Home Capital Group Inc. Eisman said his Canadian bet pertains mostly to “a normalization” of credit conditions and how much the banks are setting aside for loan losses.

He said the lenders aren’t “provisioning appropriately” for future losses, which will lower the banks’ capital ratios and eventually share prices. “Canada has not had a credit cycle in a few decades and I don’t think there’s a Canadian bank CEO that knows what a credit cycle really looks like,” he said. “I just think psychologically they’re extremely ill prepared.” Eisman, the money manager at Neuberger Berman Group, said this isn’t going to be “The Big Short: Canada” referring to the 2010 book by Michael Lewis that helped propel his reputation. He said it’s not a call on the country’s housing market or the economy. “I’m not calling for some enormous, massive losses,” he said in the interview. “The Canadian banks are not going to have to be bailed out by the Canadian government. There’s none of that.” “At the end of the day, the Canadian banks will still be standing,” he added. Bloomberg

-Josh Brown: How I explain the stock market vs the economy. Each day, investors are treated to news about the economy and information about how the stock market has done recently. It can be very difficult to process what’s going on because at any given moment in time, there may be very little correlation between how things are going in the real world and how prices are acting on Wall Street. The noted fund manager and author Ralph Wagner once described the relationship between the economy and the stock market thusly.

“There’s an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch.” “But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the dog watchers, big and small, seem to have their eye on the dog, and not the owner.” CNBC

-Dalio Says Capitalism’s Income Inequality Is National Emergency. While President Donald Trump is focused on the national emergency he’s declared to secure the southern U.S. border, the billionaire founder of the world’s biggest hedge fund is more worried about losing the American dream. Capitalism must be reformed because it’s not producing enough opportunities for most Americans, creating an income gap that threatens to spark conflict, Ray Dalio, the Bridgewater Associates co-chairman, said in an interview airing Sunday on CBS’s “60 Minutes.” “If I was the president of the United States,” Dalio said, “what I would do is recognize that this is a national emergency.”

It has to come from the top, he said: “If you look at history, if you have a group of people who have very different economic conditions, and you have an economic downturn, you have conflict.” While Dalio, 69, previously has focused on inequality and warned about the dangers of populism, he’s started to focus on what he terms the existential threats they present to American society. Dalio cited four major countries in the 1930s that “chose not to be democracies because they wanted leadership to bring order to the conflict.” While he’s not saying the U.S. will go there, it’s an unfair and unproductive issue that “threatens to split us,” he said. “The American dream is lost,” he said. “For the most part we don’t even talk about what is the American dream. And it’s very different from when I was growing up.”

The Republican idea that cutting taxes on the rich promotes productivity “doesn’t make any sense to me at all,” and the wealthy must pay more, Dalio said. “The important thing is to take those tax dollars and make them productive,” he added. Dalio Philanthropies and Connecticut Governor Ned Lamont, a Democrat, announced a partnership on April 5 to improve public education and economic opportunity, with $100 million from the state matched by $100 million from Dalio plus $100 million from other philanthropists and business leaders. Thanks to Bridgewater’s asset base and investing success over time, Dalio has a fortune that the Bloomberg Billionaires Index estimates at $16.9 billion. “It doesn’t need to be abandoned,” Dalio said of capitalism on CBS. “Like a car, like anything, a plane, a school system, anything, it needs to be reformed in order to work better.” Bloomberg

-American billionaires call for upgrades to capitalism, starting with higher taxes on themselves. The modern version of capitalism isn’t working, according to some of the country’s richest people. Warren Buffett, Jamie Dimon, Ray Dalio, Howard Schultz and other business leaders are calling for fixes to widening income inequality and under-investment in public education. Democratic presidential hopefuls Elizabeth Warren and Bernie Sanders are campaigning on higher taxes on the wealthy, and some left-leaning policies are sparking a renewed debate over socialism vs. capitalism. Billionaires are hardly looking to pivot to socialism. Dimon warns socialism would be “a disaster,” while Dalio underlines that capitalism shouldn’t be destroyed, it just needs to present an equal opportunity. CNBC

-Redistribution Won’t End Wealth Inequality. There’s a lesson from the Old South: Within a generation, the once-rich former slave-owning families were back on top. One such enlightening study is a recent paper by economists Philipp Ager, Leah Platt Boustan and Katherine Eriksson, entitled “The Intergenerational Effects of a Large Wealth Shock: White Southerners After the Civil War.” Using detailed Census records, Ager et al. measure the effect of the war on the wealth of slaveholders and their sons. This is an interesting question, because it asks: When the government takes away some of your wealth, how quickly can you bounce back? The answer: Very. Bloomberg

-Job market bounces back in March with 196,000 gain in payrolls. Nonfarm payrolls expanded by 196,000 and the unemployment rate held steady at 3.8%. Wage gains fell off the recent strong pace, increasing just 0.14% for the month and 3.2% year over year, below expectations of the 3.4% pace from last month. The numbers came a month after February’s jaw-dropping gain of just 20,000, which was revised up to 33,000 in the March report. CNBC

-Americans 55 and older are suddenly losing jobs at the fastest pace in 4 years. Employment for people 55 and older dropped 209,000 last month, the biggest such decline since February 2015, according to the Bureau of Labor Statistics. The monthly employment number tends to be volatile and the broader trend has been positive for older workers, experts say. This age group still has the lowest unemployment rate among all ages. CNBC

-These people are on the verge of retiring and they have nothing saved. 48 percent of American households over the age of 55 still have no retirement savings. This is an improvement from previous years, according to the U.S. Government Accountability Office. If you are behind on your retirement savings, there are a few things you can do to catch up. Read more here-https://cnb.cx/2GbjC0n

-JPMorgan Chase CEO Jamie Dimon said corporate tax cuts boosted the bank’s profits to the tune of $3.7 billion last year. In his annual letter to shareholders, Dimon noted that the Trump administration’s tax reform was a key factor in the bank’s record $32.5 billion haul. US bank profits, which were also buoyed by a healthy economy, reached all-time highs in 2018. CNN

-Jamie Dimon: US ‘absolutely’ right to enter trade war, despite short-term economic toll. When asked if the U.S. should be in a trade war with China, J.P. Morgan’s CEO said “absolutely we should have entered into it.” “We’re better off dealing with it now, whatever that means for the economy,” Dimon said on stage at the Council on Foreign Relations Thursday. Dimon said he wasn’t in favor of tariffs and “threatening,” but was in favor of resolving issues like intellectual property theft. CNBC

-70% of Wall Street thinks Trump will be reelected in 2020. While Biden was viewed as the most stock market-friendly possible Democratic candidate, more than 70% expect Trump to be reelected. Elections can affect financial markets; the Dow rallied 8 percent from the 2016 election to year-end as investors grew confident in tax reform and big spending. RBC also said that if Biden does not declare, or the polling data suggests that he won’t win the nomination, it could weigh on the market. CNBC

-Americans don’t support Sen. Elizabeth Warren’s plan to break up big tech: Poll. Americans have offered their initial judgment of Sen. Elizabeth Warren’s plan to break up large technology companies: They don’t support it. By 50% to 47%, the NBC News/Wall Street Journal Poll shows, Americans disagree that the likes of Apple, Amazon, Facebook and Google should be split into smaller competing companies because they have too much influence on American life. By a more emphatic 68% to 28%, Americans say such decisions should be left to the free market rather than government. CNBC

-Five years ago today, the first pot stock began trading on the public markets, prompting a few raised eyebrows and many, many bad puns. Today, that company is worth nearly $15 billion. Canopy Growth Corp., then known as Tweed Inc., listed on Toronto’s TSX Venture Exchange on April 4, 2014 via a reverse takeover of a capital pool company. Shares closed that first day at C$2.59 and have gained over 2,139 percent since then to C$58 Thursday morning. If you were lucky enough to sell at its high of C$76.91 in October, your return would have been 2,869 percent. Bloomberg

-Canada’s deposit insurance is getting beefed up to keep up with the times. Many Canadian savers might not know the federal government already insures up to $100,000 in savings in the event a member financial institution fails. Just about every Canadian financial institution pays into it, and that’s why they rarely fail. But they can fail, and that’s why Ottawa is expanding deposit insurance over the next two years. Here are the key changes, which will come into force in two phases, beginning April 30, 2020.

It’s important to know that the Canada Deposit Insurance Corporation (CDIC) covers savings and chequing accounts, GICs or other term deposits, money orders, certified cheques, bank drafts, and accounts that hold realty taxes on mortgaged properties. It does not cover stocks, bonds, or investment funds. Bloomberg

-Trump delays closing US-Mexico border for at least a year. President Donald Trump says he will give Mexico a year to stem the flow of illegal drugs and migrants over the southern border, or he will impose auto tariffs, and if they don’t work, he will shut the border. The statement represents a significant step back from Trump’s earlier threats to shut the border as early as this weekend. The new, yearlong delay before any action will be taken is good news to businesses and Republican lawmakers, both of whom were strongly opposed to any border closure. CNBC

-To be considered “rich” in America, according to a recent poll from data firm YouGov, most people think you need to earn$100,000 or more a year. But to be a part of the top 5% of earners in some states, like California, you need to make a lot more than that. “You might be surprised to learn,” the report says, “that there’s a vast discrepancy between the 5-percenters in one state as compared with some others.” Here’s what the data shows for the Golden State: Average top 5% income: $447,207.

Lower limit of top 5%: $250,000. “To be rich in California means you’ve really hit the big time,” says GOBankingRates. “California is one of the seven states in the country eight if you include Washington, D.C. in which you’ll need at least $250,000 to reach the top 5%.” The others include notoriously pricey states such as Connecticut, New Jersey and New York. “But that’s still chump change compared to California’s 1-percenters,” the study adds, “who earn close to $1.7 million on average.” The minimum annual income needed to crack the state’s top 1% is $514,694, according to the Economic Policy Institute. Nationally, it’s $421,926. CNBC

-The list of ways China keeps tabs on citizens is getting longer. China’s ambitious plan to assign lifelong scores to citizens based on their behavior has stoked international concern, even as the project remains nascent and numerous hurdles must be overcome before the experiment can be implemented nationwide. In fact, the so-called social credit system is merely an extension of the myriad ways the government already rates its citizens. Here’s a breakdown of the systems China has in place. Supreme Court blacklist, Personal credit rating, Sesame credit, Tourism blacklist, National blacklist.

Social credit system. All these systems could ultimately feed into or influence the establishment of the nationwide Social Credit System the government wants in place by 2020 to determine whether its citizens are well behaved and punish or reward them accordingly. A number of cities have been experimenting with the concept for years, and 12 were selected as pilots on Jan. 1, 2018. People have points added or deducted depending on everyday social behavior including recycling, keeping their dogs leashed and parking cars where they’re supposed to. Local governments have also adapted their own systems to focus on particular behaviors they want to address. Ultimately, data collected from various blacklists and rating systems already in use could feed into the overarching national program. Read more here-http://bit.ly/2IuGYzw

-While people tend think of satellites and cell towers as the heart of the internet, the most vital component is the 380 submerged cables that carry more than 95 percent of all data and voice traffic between the continents. They were built largely by the U.S. and its allies, ensuring that (from a Western perspective, at least) they were “cleanly” installed without built-in espionage capability available to our opponents. U.S. internet giants including Google, Facebook and Amazon are leasing or buying vast stretches of cables from the mostly private consortia of telecom operators that constructed them. But now the Chinese conglomerate Huawei Technologies, the leading firm working to deliver 5G telephony networks globally, has gone to sea.

Under its Huawei Marine Networks component, it is constructing or improving nearly 100 submarine cables around the world. Last year it completed a cable stretching nearly 4,000 miles from Brazil to Cameroon. (The cable is partly owned by China Unicorn, a state-controlled telecom operator.) Rivals claim that Chinese firms are able to lowball the bidding because they receive subsidies from Beijing. Just as the experts are justifiably concerned about the inclusion of espionage “back doors” in Huawei’s 5G technology, Western intelligence professionals oppose the company’s engagement in the undersea version, which provides a much bigger bang for the buck because so much data rides on so few cables. Bloomberg

-Remember when Netflix used to be a DVD-by-mail company? Well, for 2.7 million subscribers in the US, it still is. The familiar red envelopes have been arriving in customers’ mailboxes since 1998 and helped earn the company a healthy $212 million profit last year. Why are so many people still using this old-school service in the age of streaming? There are a number of reasons. CNN

-A toddler locked his father’s iPad for 48 years, here’s what to do if that happens to you. This happens if the wrong password is entered too many times. There’s an easy fix: You just need to put your iPad (or iPhone) into recovery mode and reset it. Read more here-https://cnb.cx/2YYTe1n

-Jeff Bezos to keep 75% of couple’s Amazon stock after finalizing divorce. MacKenzie Bezos announces on Twitter that she and Jeff Bezos have completed the process of dissolving their marriage. She grants him 75 percent of their Amazon stock, along with voting control. She also says she will give him her interests in The Washington Post and the Blue Origin aerospace company. The settlement would make her among the five richest women in the world. Her ex will remain the world’s richest person. CNBC

-Rob ‘Gronk’ Gronkowski just sold his Boston penthouse for $2.3 million take a look inside. New England Patriots star Rob “Gronk” Gronkowski announced his retirement from the NFL in March, and now he has sold his Boston penthouse for $2.3 million, reports the Los Angeles Times. Gronk, 29, reportedly bought the home in 2016 for $1.9 million. Take a look. The Boston condo is a little more than 2,000 square feet and has an additional 340-square-foot private roof deck. It includes two bedrooms, two bathrooms and an open living and dining room area. It has a mix of exposed brick, natural maple and beamed ceilings. Read more here-https://cnb.cx/2OWsGsX

-Michael Corleone’s house from ‘The Godfather’ selling for $1.37 million. In Staten Island’s affluent Todt Hill neighborhood stands a stately Tudor that looks like something out of a movie. And just steps from the front gate, small-time crook Carlo Rizzi was whacked by a member of the Corleone crime family. The 120 Longfellow Ave. residence, which served as the home of Michael Corleone (Al Pacino) in the 1972 film “The Godfather,” is now for sale. Asking price for the four-bedroom property: $1.37 million, a pretty penny more than “The Turk” requested from Don Corleone. Looky-loos are already lining up for showings. “One was quoting all sorts of lines [from the film],” said broker John A. Vernazza. Read more here-https://fxn.ws/2uWE9zj

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-Rare 25ct. Diamond to Lead Christie’s Geneva. A storied diamond connected to the Oppenheimer family will be among the top lots at next month’s Geneva auction at Christie’s, with a presale estimate of $2.5 million to $3.5 million. The rectangular-cut, 25.27-carat, D-color Jonker V ring will go under the hammer at the Magnificent Jewels sale on May 15, the auction house said last week. The stone was cut from a 726-carat rough South African farmer Johannes Jacobus Jonker discovered in 1934. At the time, the Jonker was the fourth-largest gem-quality diamond ever unearthed.

A subsidiary belonging to Sir Ernest Oppenheimer, the founder of Anglo American and a former De Beers chairman, bought the polished stone. In 1935, Harry Winston purchased the diamond and set it in a ring. Later that year, it was displayed during the Silver Jubilee celebrations for King George V and Queen Mary. Christie’s will also offer a heart-shaped, fancy-deep-blue diamond ring, featuring two stones weighing 2.22 carats and 2 carats, valued at $3.5 million to $4.5 million. Separately, an old cushion-cut, 118.05-carat, fancy-yellow diamond carries an estimate of $2.5 million to $3.5 million.

Other notable lots are a necklace comprising 110 natural pearls with a presale estimate of $2.5 million to $3.5 million, and a pear-shaped, 75.61-carat emerald pendant necklace expected to fetch $2 million to $3 million. In addition, the Geneva sale will feature an early-19th-century emerald and diamond fringe necklace Henri d’Orléans, duke of Aumale, gave to his goddaughter, Princess Hélène of France, for her 1895 wedding to Prince Emanuele Filiberto of Italy. The auction will also include jewels from Cartier, Bulgari, Van Cleef & Arpels and Harry Winston. Christie’s will preview the jewels in London from April 9 to 11, and in Geneva from May 10 to 15. Read more here-http://bit.ly/2uWkcZC

-Sotheby’s to Sell Storied Pieces in Geneva. Sotheby’s will offer two rare jewels with royal connections at its auction in Geneva next month. An Art Deco necklace will feature in the Magnificent Jewels and Noble Jewels sale May 14. The Van Cleef & Arpels piece includes diamonds, as well as 11 cabochon Colombian emeralds with a total weight of more than 75 carats. It was created in the 1930s for Hélène Beaumont, an American socialite and close friend of Wallis Simpson, the duchess of Windsor. The piece has a presale estimate of $3 million to $4 million.

“This is Art Deco at its absolute finest, a connoisseur’s jewel,” David Bennett, worldwide jewelry chairman for Sotheby’s, said Monday. “Rare and exceptional pieces like these are the reason people collect jewelry. The first time I laid eyes on this emerald and diamond necklace was exactly 25 years ago, when we sold the Hélène Beaumont collection in Geneva. I said at the time that it was the most important row of cabochon emeralds I had seen during my then 20-year career. Today, 25 years on, that statement still holds true.”

A diamond tiara, made by Fabergé in 1903 for Duchess Cecilie von Mecklenburg Schwerin, the last crown princess of Prussia, will also go under the hammer. The headpiece, which was a present from her Russian relatives upon her marriage to Crown Prince Wilhelm, is valued at $200,000 to $300,000. Other notable pieces include a brilliant-cut, 36.57-carat, D-color, type IIa diamond, estimated at $4.8 million to $5.8 million, and an emerald-cut, 18.86-carat, D-color, type IIa ring by Harry Winston, expected to fetch $800,000 to $1.2 million. Read more here-http://bit.ly/2X0J8Lj

-Sotheby’s New York To Offer Rare Bulgari Diamond ‘Serpenti’ Necklace At Upcoming Sale. Signed jewels will be on the forefront of Sotheby’s New York Magnificent Jewels sale, April 17. Cartier, Van Cleef & Arpels, Tiffany & Co. and Bulgari will be among the jewelry houses that lead the sale along with a collection of Archaeological and Renaissance-revival style jewels dating from the 19th century. The top lot is a 3.24-carat brilliant-cut fancy intense blue diamond ring, with natural color and VVS1 clarity. Its estimate is $2.5-$3 million. Also highlighted a ring featuring a 3.38-carat square emerald-cut fancy vivid yellow, accented by round diamonds estimate: $60,000-$80,000. Read more here-http://bit.ly/2U8KG4j

-Rare Red Carpet-Ready Vintage Jewels Could Fetch $8M at Christie’s Auction. Fancy colored diamonds and pieces from Bulgari, Tiffany & Co. and Van Cleef & Arpels are on the block at the April 16 sale, as is a 1937 Cartier ‘Snow White and the Seven Dwarfs’ enamel charm bracelet that “may be the first piece of jewelry ever created to promote a movie.” From vivid blue diamonds to an iconic zip necklace by Van Cleef & Arpels, there’s no shortage of sparkle at Christie’s upcoming Magnificent Jewels sale, set for Tuesday, April 16 in New York. Featuring 292 lots, this first event of Christie’s 2019 international auction season for jewelry has been planned with plenty of dazzle in mind, curated to include a mix of vintage pieces and major stones (valued at up to $8 million) that seem destined for the red carpet.

How to pick favorites among the selection? For auction organizers, some lots can feel a bit like holy grail moments; such is the case with a pair of fancy intense yellow diamonds included in this sale, one totaling 37.65 carats and set in a ring and the other totaling 35.06 carats and originally set as a pendant. The diamonds will be sold as separate lots, with the ring estimated to fetch anywhere from $600,000 to $800,000, while the pendant carries an estimate of $500,000 to $700,000. “I’ve been working on these two pieces for 15 years. They’re quite impressive,” says Daphne Lingon, head of jewelry for Christie’s Americas.

“The owner has had these pieces for years, and I’ve always stayed in touch with them, updating them with how the market is. And right now the market is strong, especially for colored diamonds.” Indeed, hefty diamonds in a variety of hues are included in this sale, though the event’s highlight should be a pair of well-matched pear-shaped vivid blue diamonds, at 3.06 and 2.61 carats. The stones are currently set in a ring and will be sold together, carrying an estimate range of $6 million to $8 million. “To find a pair of matched stones like this, which are the same color and quality, is exceptionally rare,” Lingon says. Read more here-http://bit.ly/2UquIrc

-Documents That Resulted In Cutting World’s Largest Diamond For British Crown Jewels Up For Auction. The historic legal agreement that resulted in the cutting of the world’s largest rough diamond to create several polished diamonds that form part of the British Crown Jewels is going up for sale. Bonhams is selling the original manuscript copy, dated January 29, 1908, of the “Agreement for the Inspection of the Cullinan Diamond” between the representatives of King Edward VII and London diamond brokers M.J Levy & Nephews.

This document brokered the cutting of the 3,106-carat Cullinan Diamond still the largest gem quality rough diamond ever discovered by the renowned Asscher Company in Amsterdam to create the nine principal Cullinan Diamonds that form part of the Crown Jewels of Great Britain and the collection of Queen Elizabeth II. It includes the original documents owned by M.J Levy & Nephews, as well as a paste replica of the Cullinan in its original rough crystal form and two replica sets of the nine principal diamonds from the uncut diamond. The lot is estimated at £2,000-£3,000 ($2.606-$3,910). Read more here-http://bit.ly/2Z28MBt

-Graff Reveals 302ct. Diamond from Lesedi La Rona. Graff has unveiled the 67 polished stones it cut from the 1,109-carat Lesedi La Rona, including a record-breaking 302-carat diamond. The jeweler has named the square emerald-cut, 302.37-carat, D-color diamond the Graff Lesedi La Rona. It has yet to receive final certification for the stone, but expects a “very high clarity grading,” a Graff spokesperson told Rapaport News Wednesday. If it turns out to be flawless, it would be the largest D-flawless the Gemological Institute of America (GIA) has graded, the spokesperson added.

It’s also the largest of its shape in history, according to the company. The entire process, from discovery through the cutting and polishing stages, took more than 18 months. “Cutting a diamond of this size is an art form, the ultimate art of sculpture,” said Graff founder Laurence Graff. “It is the riskiest form of art, because you can never add and you can never cover up a mistake, you can only take away. You have to be careful, and you have to be perfect.” Inspecting the diamond presented a challenge to Graff’s gemologists, as the stone was too large for the company’s equipment, the jeweler said.

Graff built a custom scanner specifically for the Lesedi La Rona. Graff initially thought it wouldn’t be able to create a polished diamond weighing more than 300 carats from the rough. However, further assessments, carried out over the course of a few months, determined that Graff could produce a stone of that size. The jeweler planned out each stage of the process, including the initial laser cutting, the shaping, as well as the faceting. It took hundreds of hours to polish the table, the facet at the top of the diamond, Graff noted. The company polished an additional 66 “satellite” diamonds from the same rough. They range from under 1 carat to more than 26 carats.

Each diamond is inscribed with the words “Graff” and “Lesedi La Rona,” as well as the GIA report number. Lucara Diamond Corp. unearthed the 1,109-carat Lesedi La Rona in November 2016 at its Karowe mine in Botswana. It was the second-largest gem-quality diamond in history after the 3,106-carat Cullinan diamond. “There is a huge amount of good fortune involved in unearthing a rough diamond of this extraordinary beauty and importance,” Graff explained. “Year after year can go by, month after month can pass, with nothing. Then you get lucky.” Graff has donated fragments of the Lesedi La Rona to the Smithsonian Institute, where they will be used to help advance diamond research. Read more here-http://bit.ly/2Uanjaq and http://bit.ly/2D8WqxR

-See All of Jennifer Lopez’s Five Engagement Rings. When J.Lo received a 6.10 carat radiant-cut pink Harry Winston diamond when she became engaged to Affleck in 2002, it set off a trend toward colored diamonds, and dramatically increased the value of pink diamonds. Shortly after breaking up with Affleck, Lopez started a relationship with singer Marc Anthony, who would propose with an 8.5 carat blue diamond ring from Harry Winston. The couple married in 2003 and announced their separation in 2011. They finalized their divorce in 2015. Read more here-http://bit.ly/2D40pMk

-Red Sox 2018 World Championship Ring Unveiled at 2019 Fenway Opener. The championship rings, made by Jostens, have 185 stones which represent the 162 regular season games plus 14 postseason games and the 9 World Series titles now held by the Sox. Each ring features 4.5 carats of diamonds, 6.5 carats of blue sapphires and 4.0 carats of rubies. The top of the ring has the signature red “B” logo over a blue sapphire backdrop. One side of the ring features eight small pennants and the largest pennant paying tribute to the last franchise win. The other side is dedicated to each recipient of the team. On the interior of the ring is 10-28-18, the date of the World Series victory and the team’s famous “Damage Done.” Read more here-http://bit.ly/2Ualzhf

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GOLD-SILVER-PALLADIUM-PLATINUM

Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00

Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

-Clive Maund: Gold Market Update, A Bullmarket That Will Dwarf Any Earlier One. Read more here-http://bit.ly/2kL8pLd

-China Is on a Big Gold-Buying Spree. China’s on a bullion-buying spree as Asia’s top economy expanded its gold reserves for a fourth straight month, adding to investors’ optimism that central banks from around the world will press on with a drive to build up holdings. Prices advanced back toward $1,300 an ounce. The People’s Bank of China raised reserves to 60.62 million ounces in March from 60.26 million a month earlier, according to data on its website on Sunday.

In tonnage terms, last month’s inflow was 11.2 tons, following the addition of 9.95 tons in February, 11.8 tons in January and 9.95 tons in December. China, the world’s top gold producer and consumer, is facing signs of a slowing economy, even as progress is being made in trade negotiations with the U.S. The latest data from the PBOC indicate that the country has resumed adding gold to its reserves at a steady pace, much like the period from mid-2015 to October 2016, when the country boosted holdings almost every month. Should China continue to accumulate bullion at the current rate over 2019, it may end the year as the top buyer after Russia, which added 274 tons in 2018.

Last year’s bullion buying by emerging-market central banks was the most robust in a long time as countries diversified reserves, Ed Morse, Citigroup Inc.’s global head of commodities research, said in a Bloomberg TV interview on Monday. The bank’s positive on gold, targeting $1,400 by year-end. Spot gold fell for a second month in March even after the Federal Reserve signaled it would pause rate hikes, which led to a surge in equities instead. Still, the longer-term outlook is more bullish as central-bank demand should help support prices, with inflows running as high as last year, according to Goldman Sachs Group Inc., which expects a rally to $1,450 an ounce over 12 months. Bullion for immediate delivery was at $1,297 on Monday.

Governments worldwide added 651.5 tons of bullion in 2018, the second-highest total on record, according to the World Gold Council. Russia has quadrupled its reserves within the span of a decade amid President Vladimir Putin’s quest to break the country’s reliance on the dollar, and data from the central bank show holdings rose 1 million ounces in February, the most since November. China has previously gone 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 mid-2015, it was the first update in six years. The latest pause was from October 2016 until December last year. Bloomberg

-Greg Hunter: John Rubino Interview, What’s Cheap? Gold and Silver. So, with near record low yields on bonds and near record high prices for stocks, Rubino has just one question. Rubino says, “What’s cheap? Gold and silver. What is down and what is cheap relative to the fundamentals. It’s not just the price of gold and silver, it’s how much gold and silver exists relative to how much paper wealth is in the world. The amount of gold and silver that we are bringing out of the ground is growing at 1% or 2% per year. The amount of paper wealth in the world is growing exponentially. Gold is moving back into the center of the global financial system.” Read more here-http://bit.ly/2D5y5co

-Venezuela removed eight tonnes of gold from the central bank’s vaults last week, and the cash-strapped socialist state is expected to sell the bullion abroad as it seeks to raise hard currency in the face of U.S. sanctions, a lawmaker and one government source said. With sanctions imposed by Washington choking off revenues from exports by state oil company PDVSA, President Nicolas Maduro’s increasingly isolated administration has turned to sales of Venezuela’s substantial gold reserves as one of the only sources of foreign currency. The government source said the central bank’s reserves had fallen by 30 tonnes since the start of the year before U.S. President Donald Trump tightened sanctions, leaving the bank with around 100 tonnes in its vaults, worth more than $4 billion. At that rate of decline, the central bank’s reserves would nearly disappear by the end of the year, leaving Maduro’s government struggling to pay for imports of basic goods. Read more here-https://reut.rs/2GelzJu

-The Best Argument for the Gold Standard. There’s no reason to believe central bankers will be as responsible in the next 40 years as they’ve been in the past 40. With President Donald Trump’s apparent plans to nominate Stephen Moore and Herman Cain to the Federal Reserve Board, attention has turned once again to the gold standard, a policy option once advocated by both men. Trump himself has expressed admiration for the gold standard. To be clear: I don’t at all favor a gold standard. Still, it is worth thinking about why anyone might ever have favored a gold standard, and what the case for one might look like. I am also somewhat of a natural contrarian, to put it mildly, and each time I see rude remarks about the gold standard I ask myself: Is it a completely crazy idea? Finally, and more generally, I don’t like the idea of twisting research knowledge to fit the preferred political message of the day. Bloomberg

-Ted Butler: Silver Market Update, Confirmation, Outrage and Disgust. A recent interview with former CFTC Commissioner Bart Chilton nearly knocked me off my feet because it confirmed what I have alleged, starting more than 12 years ago. I’ll include the interview later, but first I will set the background of the subject and timeline in order put Chilton’s words into the proper perspective. The subject is JPMorgan’s manipulation of the silver market. The timeline is important because Chilton does misstate some facts that need to be corrected. I’m not a big fan of articles that include lots of links to past articles, but in this case it’s unavoidable.

Shortly after Bart Chilton took office as a commissioner in August 2007, he began to make public speeches in which he asserted that the CFTC was no regulatory pushover, like Barney Fife on the “Andy Griffith Show” but more like Elliot Ness or James Bond and that the agency was a tough cop on the beat. I assumed Chilton was genuine in his faith in the agency, but since he was brand new to commodity regulation I was sure that he was unaware of my allegations to the agency over the prior 20 years about a silver manipulation due to a concentrated short position on the COMEX. So I wrote to him about his claims of regulatory toughness at the agency and encouraged others to do so as well. Read more here-http://bit.ly/2U4x61D

-David Morgan: We Will See People Flocking To $30 Silver. Despite silver and gold have a tough year in 2018, David Morgan, editor of The Morgan Report, is not giving up on the precious metals markets yet.
“I don’t give up, and not because I’m stubborn. I’m seeing positive things in the gold market, once you get through $1,300 and level off and get through $1,350, I’m absolutely convinced the bull market is finally back and silver will follow,” Morgan told Kitco News on the sidelines of the Vancouver Resource Investment Conference. Morgan noted that competitors such as bitcoin and cannabis stocks have contributed to investor capital flowing away from silver. Watch more here-http://bit.ly/2X3gY2C

-J.P. Koning: Where did all the silver coins go? Read more here-http://bit.ly/2D7LWiy

-Clive Maund: Silver Market Update, 3 Main Developments Turn Silver Bullish. Read more here-http://bit.ly/2UL3B9K

-Palladium pullback leads strategist to call it ‘the bubble that burst’, but bulls see upside. Palladium has lost some of its luster of late. Prices of the highflying metal have been falling in recent trade though they turned higher Friday meeting resistance after reaching the latest in a string of record highs in late March as part of a rally that took the metal above the price of gold for the first time in 16 years. However, proponents of the metal, used widely in pollution-controlling catalytic converters in automobiles, believe the bull thesis for palladium remains in force. Read more here-https://on.mktw.net/2D4Pcek

-Don’t Bet on More Platinum Supply Anytime Soon. The recent jump in platinum-group metals prices is boosting miners’ profits, but that doesn’t mean they are likely to increase supply anytime soon, according to the world’s No. 1 producer. Prices for platinum, palladium and rhodium have all gained in recent months, boosting earnings for miners in top supplier South Africa. The so-called rand basket price for the industry has increased by 20 to 25 percent this year, said Anglo American Platinum Ltd. Chief Executive Officer Chris Griffith. Still, new supply will be limited. It takes five to seven years to open a new mine from scratch and there are other constraints to consider like processing capacity and the availability of water, the CEO said in an interview. While there are some expansion projects underway, that supply is already accounted for in market estimates, he said.

Any new production will probably replace declines elsewhere, rather than expanding total supply, which is forecast to remain flat over the next decade, Griffith said. Amplats, as the company is known, is studying plans to boost its own production by expanding its flagship Mogalakwena mine. “We can bring metal to the market probably faster than anyone can, and that’s four to five years away,” Griffith said. “Very few companies in South Africa have the ability and real estate they can develop new mines on.” As well as other constraints such as water, there’s very little spare processing capacity in the country, he said. The company estimates that it will probably take 18 to 20 months before carmakers start substituting platinum in for pricier palladium in their autocatalysts, the CEO said. 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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The Investor Learning Center was created to provide investors with the tools to make the right decision when it comes to investing in Rare Colored Diamonds.
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The GIA report for this diamond is not posted on the website at this time however it is available. Please fill out a form to inquire or call us directly at 800-456-3934 for more information.

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