http://www.zerohedge.com/fullrss2.xml/news en Bitcoin: An Unknowable Bubble? http://www.zerohedge.com/news/2017-11-22/bitcoin-unknowable-bubble <p><strong><em>&quot;Whatever [Bitcoin] is, I missed it... It looks and smells like all the bubbles I have seen throughout history.&quot;</em> </strong>- <a href="https://cointelegraph.com/news/jim-rogers-smells-a-bitcoin-bubble">billionaire investor Jim Rogers</a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bit1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bit1_0.png" style="width: 600px; height: 369px;" /></a></p> <p><a href="http://trueeconomics.blogspot.com/2017/11/201117-bitcoin-unknowable-bubble.html"><em>Authored by Constantin Gurdgiev via True Economics blog,</em></a></p> <p>There is a much-discussed in the crypto-sphere chart making rounds these days, plotting Bitcoin price dynamics against the historical bubbles of the past:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bit.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bit_0.png" style="width: 600px; height: 644px;" /></a></p> <p><strong>The chart is striking. Albeit simplistic. </strong><em>See Note 1 below for a technical argument on the chart timing.</em></p> <p>On price dynamics alone, Bitcoin looks like a sure bubble - a disaster waiting to happen. <strong>But Bitcoin dynamics are basically not suited for any empirical analysis of any significant accuracy.</strong></p> <p>As noted by some commentators, Bitcoin had numerous 80-90% and larger drawdowns in the past (given its immense volatility). It keeps coming back from these. Some claim this to be the evidence that Bitcoin it not a bubble. Which is neither here nor there: bubbles are generated by exuberant expectations of investors, not by actual parameters of price processes. Causality does not flow from dynamics to bubbles, but the other way around. So to identify a bubble, one needs to identify exuberance. See Note 2 below for more on 80% drawdowns.</p> <p>In the case of Bitcoin fans, there is clearly such.</p> <p><strong>No investor or serious analyst has been able to provide a fundamentals-based valuation model for Bitcoin.</strong></p> <p>A disclosure in order here: myself and a graduate student of mine have looked at the fundamental modelling for Bitcoin over the summer. We found no tangible relationship between any economic or financial parameters tested and Bitcoin price dynamics. In another piece of research, myself and two co-authors are currently looking at empirical dynamic and fractal properties of Bitcoin. Again, we finding nothing consistent with a behaviour of an asset with fundamentals-derived valuations.</p> <p><u><strong>Absence of evidence is not the same as evidence of absence.</strong></u> But, taken together with the general lack of credible fundamentals-linked modelling of the crypto-currency, this means that, at this point in time, Bitcoin price can be potentially driven solely by&hellip; err&hellip; expectations held by its enthusiasts, plus the incentives by the predominantly China-based investors to avoid extreme risks of capital controls and expropriations. If so, both drivers would make it a speculative bubble.</p> <p>The only quasi-fundamentals-linked argument for Bitcoin has been the blockchain one - the promise of Bitcoin serving as a key tool for data aggregation, recording and transmission. This argument, however, no longer holds. Blockchain technology has migrated from public blockchains, like Bitcoin, to either open blockchains, like Ethereum or, increasingly more frequently, private blockchains. It is the latter that currently hold the promise to serve as viable platforms for data economy.</p> <p><u><em><strong>As a libertarian, I should like a private currency system that supports anonymity of transactions. As an economist, I should like the innovative nature of Bitcoin. And, put simply, I do. Both.</strong></em></u></p> <p><strong>But as an investor, I do not have the stomach for Bitcoin&rsquo;s valuations and volatility, as well as for its higher moments behaviour</strong> <em>(in particular worrying are kurtosis, co-skews and co-kurtosis, which severely complicate empirical dynamics analysis, see Note 3 below). </em>And I have even less enthusiasm for the crypto market that is sustained increasingly by undertakings, like BitMEX - a purely speculative platform trading some $35 billion in Bitcoin derivatives with leverage up to x100 to the amateur speculators who, put frankly, have zero idea what they are buying and at what price. The vast majority of Bitcoin investors have no clue what a butterfly option looks like and how it can be valued. And the vast majority of financial markets analysts and professionals won&rsquo;t be able to price a butterfly strategy for Bitcoin, given its painfully twisted moments. Yet, within a month of starting trading, BitMEX reached 1/3 of the market capitalisation of Bitcoin. This is not just a shoe-shine-boy moment, folks. It is white-powder-under-the-nose-and--empty-bottles-of-vodka-on-the-floor hour for high school dropouts with cash to burn.</p> <p><strong>Another worrying issue with Bitcoin is the argumentation of its main supporters.</strong></p> <p>This ranges from the cognitively biased &ldquo;you don&rsquo;t know anything about the Bitcoin&rdquo; to &ldquo;Bitcoin is scarce &amp; limited in supply&rdquo; to &ldquo;Bitcoin is a promise of liberating the masses from the oppression of the Central Bankers&rdquo;.</p> <p><em>The first sort of argument exhibits not just Jurassic ignorance of logic, but also a gargantuan dose of arrogance. Repeated sufficiently enough, it signifies the absurd degree of exuberance of investors&rsquo; expectations.</em></p> <p><em>The second argument is patently false. Bitcoin has undergone splits, and engendered dozens of other cryptos, with unlimited supply of such into the future. Bitcoin itself is divisible ad infinitum and, with forks, its supply is potentially unlimited. Worse, Bitcoin rests on man-made mathematical foundations. Which means it has no physical bound or constraint. Anything man-made (and even more so, anything mathematically derived) is, by definition, fungible and axiomatic. Just because to-date no one cracked the code to alter Bitcoin mid-stream or drain blockchain-held information does not mean that in the future such a code cannot be written. So hold your horses: gold is physically limited in quantity (even though in the Universe, it is not as scarce as it is on Earth, which makes long term supply constraint on gold potentially non-binding). Bitcoin is limited by our capacity to alter the underlying code defining it. Anyone thinking of an algorithm as a &#39;law&#39; needs to go back to Godel&#39;s mathematics.</em></p> <p><em>Finally, there is an argument of &lsquo;liberation&rsquo;. Bitcoin value is only sustained as long as it remains convertible into goods, services and other currencies. This means that Bitcoin cannot remain a government- regulation-free asset, as long as its popularity as a medium of exchange and a vehicle for store of value grows. Which means that in the medium terms (3 years or so?), Bitcoin will either cease to be, or cease to be anonymous. All protection from the dictate of the Central Bankers will be gone.&nbsp; Benign tolerance of Bitcoin by some regulators can quickly turn into outright prohibition on trading - as current and past examples of China, Vietnam, Nigeria, Colombia, Taiwan, Ecuador, Bangladesh, Kyrgyzstan and Bolivia, Russia, and Thailand suggest. Evolution of cybersecurity measures and regulatory and supervisory tools, including their spread into cryptocurrencies domain will only increase effectiveness of such measures into the future. So, unless you are planning to live in a libertarian paradise, where legal norms of other states do not apply, good luck committing much of your wealth to Bitcoin as a safe haven for oppressive or coercive actions of the nation states.</em></p> <p><strong>Worse, anyone claiming that Bitcoin is a hedge against inflation fails to understand how modern markets work. </strong>Again, to increase in value, Bitcoin requires higher rates of adoption. Higher rates of adoption bring about higher rates of asset instrumentation (see above for BitMIX). Higher rates of instrumentation and adoption, taken together, imply higher holdings of Bitcoin by institutional and diversified portfolio investors. So far so good? Right, now the kicker: these holdings imply greater, not lower, positive correlations between Bitcoin and other asset classes in shock-experiencing markets. That&#39;s right, dodos: Goldman holdings of Bitcoin are correlated to liquidity supply in general markets, because if such liquidity starts evaporating, Goldman will sell Bitcoin to plug holes in other instruments. Sell-off in the markets can trigger sell-off in Bitcoin. Now, another kicker: Bitcoin is currently less liquid than any major asset class (see extreme volatility of pricing across various Bitcoin exchanges). Which means that smart folks at Goldman will be dumping Bitcoin before they dump gold and other assets. Hipsters hugging their laptops will be the last to wake up to this momentum (behavioural evidence suggests, they might actually buy into falling Bitcoin in hope of speculatively gaining on a bounce, which, incidentally, can explain why large drawdowns in Bitcoin can turn so fast into upward trends).</p> <p><strong>The tricky bit about Bitcoin is that its enthusiasts need to learn to live in the real world first. </strong>Until they do, Bitcoin will continue its upward path, and this process can go one for quite a while, depending on the supply of cash in the markets for Bitcoin. Once they are taught a sufficient lesson, however, the rest of us will be learning the long term fundamentals valuations of Bitcoin. I, for now, have no idea what these valuations might be.</p> <p><u><strong>So Bitcoin, then. A bubble or not?</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>If you ignore the arguments that attempt to justify its valuations, it looks like one,</strong> albeit with dynamics that are very hard to interpret.</p> <p>&nbsp;</p> <p><strong>If you listen to them, it looks that way even more,</strong> with more confidence in the arguments bogus nature.</p> </blockquote> <p>Draw your own final conclusions.</p> <p>*&nbsp; *&nbsp; *</p> <p><em><strong>Note 1: </strong>In defence of the chart above, without validating its implied conclusions: the chart plots Bitcoin evolution from 3 years ago through today. This starting point makes sense. Until mid-2014, Bitcoin was extremely obscure, hype-only investor vehicle, with volatility so off the charts, any analysis of its dynamics was futile (I know, I did such analysis and presented the results in my talk at Bloomberg two years ago). Those us who do research in finance generally and routinely disregard the first 3-4 years of existence of Bitcoin for exactly that reason.</em></p> <p><em><strong>Note 2:&nbsp; </strong>A note due here: Bitcoin&#39;s returns from 80-90% drawdowns is not a solid evidence of the crypto-currency not being a bubble, because they are in line with Bitcoins&#39; overall massive volatility. In other words, a valid comparative for these drawdowns relative to other asset classes is not &quot;an 80% drawdown in&nbsp; Bitcoin ~ an 80% drawdown in stocks&quot;, but &quot;an 80% drawdown in Bitcoin ~ an 8% drawdown in stocks&quot;. Apples to apples. Dust to dust.</em></p> <p><em>&nbsp;</em><em><strong>Note 3:&nbsp;</strong> Interesting Elliott Wave analysis of Bitcoin dynamics <a href="https://atozforex.com/news/29-september-bitcoin-elliott-wave-analysis/">here</a> and <a href="https://www.cnbc.com/2017/07/20/bitcoin-bubble-dwarfs-tulip-mania-from-400-years-ago-elliott-wave.html">here</a> , although I am not convinced Bitcoin price trends are established enough for this technique to work.</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="712" height="438" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_bit1.png?1511356941" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/bitcoin-unknowable-bubble#comments Alternative currencies Bitcoin Bitcoin Blockchain technology Blockchains China Cryptocurrencies Currency Decentralization Digital currency Economics of bitcoin Elliott Wave Finance Jim Rogers Legality of bitcoin by country or territory Money Volatility Wed, 22 Nov 2017 14:10:34 +0000 Tyler Durden 607741 at http://www.zerohedge.com Unsealed Fusion GPS Bank Records Reveal $523K Payment From Russian Money Launderer http://www.zerohedge.com/news/2017-11-22/unsealed-fusion-gps-bank-records-reveal-523k-payment-russian-money-launderer <p><em>Submitted by at&nbsp;<a href="http://ibankcoin.com/" target="_blank">iBankCoin.com</a></em></p> <p>Unsealed court documents reveal that the firm behind the salacious 34-page Trump-Russia Dossier, Fusion GPS, was paid $523,000 by a Russian businessman convicted of tax fraud and money laundering,&nbsp;<strong>whose lawyer,&nbsp;<a href="https://ibankcoin.com/zeropointnow/files/2017/11/vesel.png">Natalia Veselnitskaya</a>, was a key figure in the infamous June 2016 meeting at Trump Tower arranged by Fusion GPS associate Rob Goldstone.</strong></p> <p>In short, D.C. opposition research firm Fusion GPS is the common denominator linked to two schemes used to damage the Trump campaign.</p> <p><a href="https://ibankcoin.com/zeropointnow/files/2017/11/170822_gma_brianross2_0712_16x9_992-3.jpg" target="_blank"><img src="https://ibankcoin.com/zeropointnow/files/2017/11/170822_gma_brianross2_0712_16x9_992-3-300x216.jpg" /></a></p> <p>Founded in 2011 by former Wall St. Journal journalist Glenn Simpson and two other WSJ alumni, Fusion was responsible for the&nbsp;<a href="http://archive.is/hpR9m" rel="noopener noreferrer" target="_blank">Clinton/DNC -<em> funded dossier</em></a><em>&nbsp;(<a href="https://ibankcoin.com/zeropointnow/files/2017/11/sources.png" target="_blank">which two Kremlin&nbsp;</a><a href="https://ibankcoin.com/zeropointnow/files/2017/11/sources.png" target="_blank">officials&nbsp;participated in</a></em>),&nbsp;and was also involved in the infamous Trump Tower meeting with the Russian attorney of another Fusion client - an encounter some suspect may have been used to obtain a FISA wiretapping warrant on the Trump campaign.&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>He [Simpson] worked closely with Natalia Veselnitskaya, the Russian lawyer who also showed up at the infamous Trump Tower meeting held on June 9, 2016.</p> <p>&nbsp;</p> <p><strong>Simpson&rsquo;s research ended up in the Trump Tower meeting in the form of a four-page memo carried by Veselnitskaya</strong>. She also shared Simpson&rsquo;s work with Yuri Chaika, the prosecutor general of Russia.</p> <p>&nbsp;</p> <p>Simpson told the House Intelligence Committee earlier this week that he did not know that Veselnitskaya provided the Browder information to Chaika or to Donald Trump Jr., the Trump campaign&rsquo;s point-man in the Trump Tower meeting. -<a href="http://dailycaller.com/2017/11/21/unsealed-fusion-gps-bank-records-show-russia-related-payments/" target="_blank">Daily Caller</a></p> </blockquote> <p>Of note, the 34-page dossier created by Fusion&nbsp;<a href="https://archive.is/UAl0K" rel="noopener noreferrer" target="_blank">was reportedly used to obtain a FISA surveillance warrant</a>&nbsp;on one-time adviser to the Trump campaign, Carter Page.</p> <p>Quite a bit more notable is the fact that Glenn Simpson&nbsp;<a href="http://dailycaller.com/2017/11/07/fusion-gps-founder-met-with-russian-at-center-of-trump-tower-meeting/" target="_blank">met with Natalia Veselnitskaya</a>&nbsp;hours before the Trump Tower meeting, and&nbsp;also&nbsp;met with Hillary Clinton&#39;s campaign chairman&nbsp;<strong>John Podesta&nbsp;</strong><a href="http://dailycaller.com/2017/11/11/john-podesta-met-with-fusion-gps-founder-after-trump-dossier-was-published/" target="_blank">the day after</a>&nbsp;the 34-page dossier was published by BuzzFeed. Glenn gets around.&nbsp;</p> <p><u><strong>InFusion of Funds</strong></u></p> <p><em>The Daily Caller</em>&#39;s&nbsp;<a href="https://twitter.com/ChuckRossDC" rel="noopener noreferrer" target="_blank">Chuck Ross</a>&nbsp;- who has done an&nbsp;outstanding job turning over stones and finding gold - now reports that the&nbsp;<a href="http://dailycaller.com/2017/11/21/unsealed-fusion-gps-bank-records-show-russia-related-payments/" rel="noopener noreferrer" target="_blank">heavily redacted Fusion GPS bank records</a>&nbsp;unsealed Tuesday reveal DNC law firm <a href="http://ibankcoin.com/zeropointnow/files/2017/11/rec1.png" target="_blank">Perkins Coie</a>&nbsp;paid Fusion a total of&nbsp;<strong>$1,024,408</strong>&nbsp;in 2016 for opposition research on then-candidate Donald Trump - including the 34-page dossier.</p> <p>Ross&nbsp;also&nbsp;reports that law firm <a href="http://ibankcoin.com/zeropointnow/files/2017/11/rec2.png" target="_blank">Baker Hostelter</a>&nbsp;paid Fusion<strong>&nbsp;$523,651</strong>&nbsp;between March and October 2016 on behalf of a company owned by&nbsp;<strong>Russian businessman and money launderer Denis Katsyv&nbsp;</strong><a href="https://www.theatlantic.com/politics/archive/2017/07/bill-browders-testimony-to-the-senate-judiciary-committee/534864/" target="_blank">to research Bill Browder</a>, a London banker who helped push through the Magnitsky Act - named after deceased Russian lawyer Sergei Magnitsky, who Browder hired to investigate Russian corruption.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Veselnitskaya, through Baker Hostetler, hired Glenn Simpson of the firm Fusion GPS to conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act. <em>-<a href="https://www.theatlantic.com/politics/archive/2017/07/bill-browders-testimony-to-the-senate-judiciary-committee/534864/">Bill Browder</a>,&nbsp;Testimony to Senate Judiciary Committee, 7/26/17</em></p> </blockquote> <p><u><strong>Magnitsky Act</strong></u></p> <p>Magnitsky uncovered a high level embezzlement and money laundering scheme, sanctioned by Russian Officials, in which large sums of money were stolen from the Russian government&nbsp;and invested in New York real estate. Some of the missing funds were&nbsp;<a href="https://www.reportingproject.net/proxy/en/following-the-magnitsky-money" rel="noopener noreferrer" target="_blank">traced to Katsyv</a><a href="https://www.reportingproject.net/proxy/en/following-the-magnitsky-money" rel="noopener noreferrer" target="_blank">&#39;s firm</a>, Prevezon Holdings Ltd., which settled with the Justice Department in 2017 - paying&nbsp;<a href="https://www.bloomberg.com/news/articles/2017-05-13/u-s-reaches-5-9-million-deal-in-russian-fraud-laundering-case" rel="noopener noreferrer" target="_blank">$5.9 million</a>&nbsp;in fines.</p> <p><a href="https://ibankcoin.com/zeropointnow/files/2017/11/serge.jpg"><img src="https://ibankcoin.com/zeropointnow/files/2017/11/serge-300x187.jpg" /></a></p> <p>Magnitsky was arrested and thrown in prison for just under a year, only to die seven days before he was to be released. He developed gall stones, pancreatitis, and a blocked gall bladder for which he received little to no medical care,&nbsp;and was found to have been&nbsp;<a href="https://www.independent.co.uk/news/world/europe/russia-drops-inquiry-into-death-of-sergei-magnitsky-8541205.html" target="_blank">physically assaulted</a>&nbsp;shortly before he died.&nbsp;</p> <p>In response to Magnitsky&#39;s horrific death and&nbsp;because Russian money laundering occurred on US soil, Congress and President Obama enacted the Magnitsky act in 2012 - imposing sanctions on Russia and barring Russian officials believed to be involved in Magnitsky&#39;s death from entering the United States. Russia retaliated by halting an adoption program for US foster parents.</p> <p><u><strong>Enter Natalia</strong></u></p> <p>What&#39;s strange is that Katsyv&#39;s attorney, Natalia Veselnitskaya - a&nbsp;<a href="https://ibankcoin.com/zeropointnow/files/2017/11/mccainfan.png" target="_blank">John McCain fan</a>&nbsp;who hates Trump and <a href="http://dailycaller.com/2017/07/12/exclusive-radical-dem-worked-for-russian-lawyer-who-met-with-trump-jr/" target="_blank">uses Democrat lobbyists</a>, was initially&nbsp;<strong>denied entry into the United States</strong>,&nbsp;only to be allowed in under &quot;extraordinary circumstances&quot; by Obama&#39;s Homeland Security Department and&nbsp;<a href="http://thehill.com/homenews/administration/342118-homeland-security-confirms-special-entry-for-russian-lawyer" rel="noopener noreferrer" target="_blank">approved by former AG Loretta Lynch</a>&nbsp;so she could represent&nbsp;<strong>Fusion GPS client&nbsp;</strong>Denis Katsyv&#39;s company, Prevezon Holdings -&nbsp;<strong>and attend the meeting at Trump Tower&nbsp;with Donald Trump Jr. - arranged by Fusion GPS associate Rob Goldstone.</strong></p> <p><u><strong>Let&#39;s Review:</strong></u></p> <ul> <li>Russian businessman Denis Katsyv was a key figure in an embezzlement and money laundering scheme involving New York real estate, uncovered by Russian lawyer and accountant Sergei Magnitsky. Magnitsky died in&nbsp;Moscow&#39;s Butyrka prison after a year of inhumane treatment.&nbsp;</li> <li>The embezzlement scheme uncovered by Magnitsky along with the circumstances behind his death&nbsp;resulted in the Magnitsky Act - a bipartisan bill signed in December 2012 by President Obama which imposed sanctions on Russia.</li> <li>Katsyv settled with the U.S. Justice department in 2017, paying a paltry $5.9 million in 2017 to settle the case -&nbsp;<a href="https://www.reuters.com/article/us-usa-crime-prevezon/u-s-settles-russian-money-laundering-case-idUSKBN18904I" target="_blank">less than 3%</a>&nbsp;of the amount originally&nbsp;sought by federal prosecutors.&nbsp;</li> <li>Katsyv&#39;s attorney,&nbsp;<a href="https://ibankcoin.com/zeropointnow/files/2017/11/vesel.png" target="_blank">Natalia Veselnitskaya</a>,&nbsp;<strong>lobbied&nbsp;to remove the sanctions&nbsp;</strong>imposed by the Magnitsky Act.&nbsp;</li> <li>Fusion GPS was paid&nbsp;$523,651 by Katsyv to investigate London Banker Bill Browder who pushed for the Magnitsky Act</li> <li><strong>Fusion GPS associate Rob Goldstone&nbsp;</strong>set up the infamous meeting at Trump Tower&nbsp;between Donald Trump Jr.,&nbsp;<strong>Katsyv&#39;s lawyer&nbsp;</strong>Natalia Veselnitskaya and various associates. The meeting was pitched to Trump Jr. as a &quot;discussion on adoption&quot; (<a href="http://thehill.com/policy/national-security/354537-russian-lawyers-email-points-to-sanctions-as-focus-of-meeting-with" target="_blank">not&nbsp;opposition research on Hillary Clinton</a>)&nbsp;and was shut down by Trump after it became clear Veselnitskaya wanted to discuss the Magnitsky Act, which Don Jr. apparently didn&#39;t realize was linked to the adoption issue. Others present at the meeting include Jared Kushner, Paul Manafort, and&nbsp;Goldstone.</li> <li><strong>Hours before the Trump Tower meeting, Fusion GPS founder Glenn Simpson&nbsp;<a href="http://dailycaller.com/2017/11/07/fusion-gps-founder-met-with-russian-at-center-of-trump-tower-meeting/">met with Veselnitskaya</a>.</strong></li> </ul> <p><u><strong>Meanwhile...</strong></u></p> <ul> <li><strong>Fusion GPS was paid $1,024,408 by a DNC law firm, funded in part by Hillary Clinton and the DNC,&nbsp;to create the salacious 34 page dossier.</strong></li> <li><strong>Fusion paid former British spy Christopher Steele $168,000&nbsp;</strong>to assemble the document (which had the cooperation of&nbsp;two&nbsp;senior Kremlin officials).</li> <li>Clinton campaign manager&nbsp;John Podesta met with Fusion CEO Glenn Simpson&nbsp;the&nbsp;<a href="http://dailycaller.com/2017/11/11/john-podesta-met-with-fusion-gps-founder-after-trump-dossier-was-published/" rel="noopener noreferrer" target="_blank">day after</a>&nbsp;the 34 page dossier was made public.</li> </ul> <p>For their efforts, Fusion GPS was paid over $1.5 million dollars between Hillary Clinton, the&nbsp;DNC, and the holding company owned by pro-Kremlin businessman&nbsp;Denis Katsyv.</p> <p><u><strong>Russian Ties Galore!</strong></u></p> <p>Looking at&nbsp;other&nbsp;Russian affiliations on the left - since that&#39;s the entire&nbsp;impetus&nbsp;of the witch hunt against President Trump:</p> <ul> <li>Russia gained control over 20% of United States uranium after the Clinton Foundation&nbsp;<a href="http://www.chicagotribune.com/news/opinion/commentary/ct-clinton-foundation-investigation-russia-20171120-story.html" target="_blank">received $145 million</a>&nbsp;from Uranium One affiliates and Russian oligarchs connected to the deal.</li> <li>The Obama administration approved the transaction&nbsp;<a href="http://thehill.com/policy/national-security/355749-fbi-uncovered-russian-bribery-plot-before-obama-administration" target="_blank">after the FBI knew</a>&nbsp;of a Russian plot to corner the US Uranium market and a racketeering scheme involving a Kentucky trucking company.&nbsp;Over 5,000 documents&nbsp;<a href="http://ibankcoin.com/zeropointnow/2017/11/17/fbi-informant-has-video-of-russian-agents-with-briefcases-of-bribe-money-in-clinton-uranium-scandal/" target="_blank">and a video</a>&nbsp;of Russians preparing a briefcase stuffed with&nbsp;bribe money for Obama administration officials&nbsp;were obtained by an FBI informant.</li> <li>Bill Clinton met with Vladimir Putin&nbsp;<a href="http://thehill.com/policy/national-security/356323-bill-clinton-sought-states-permission-to-meet-with-russian-nuclear" target="_blank">at his house in Russia</a>,&nbsp;<strong>the same day&nbsp;</strong>he collected $500,000 for a speech to a Russian bank which upgraded Uranium One stock. Clinton sought approval from Hillary Clinton&#39;s State Department to meet with 15 Russians.</li> <li>&nbsp;<a href="https://ibankcoin.com/zeropointnow/files/2017/10/pic_giant_041314_SM_The-Influence-Merchants-Podesta.jpg">Tony Podesta</a>, brother of John Podesta,&nbsp;<a href="http://dailycaller.com/2017/11/05/tony-podesta-lobbied-for-russias-uranium-one-and-did-not-file-as-a-foreign-agent/" target="_blank">lobbied for Uranium One</a>&nbsp;after&nbsp;Russia state-owned energy giant Rosatom owned the company outright.</li> <li>Tony Podesta met regularly with Clinton Foundation and was considered &quot;basically part&quot; of the organization,&nbsp;<a href="http://ibankcoin.com/zeropointnow/2017/10/25/former-podesta-group-executive-says-firm-peddled-russian-oligarchs-all-over-dc-with-paul-manafort-video/#sthash.lCftZFE9.kEWjyziv.dpbs" target="_blank">according to a former long-time executive</a>&nbsp;of the Podesta Group, who also said Podesta was &quot;peddling Russian oligarchs&quot; all over D.C.&nbsp;&nbsp;</li> <li>Clinton campaign chief and longtime DNC operative John Podesta recommended&nbsp;that brother Tony hire Hillary Clinton&#39;s chief legislative advisor at the State Department,&nbsp;<a href="http://archive.is/fG26W">David Adams</a>, which&nbsp;allowed a direct link between the firm&#39;s Russian clients and the Obama administration.&nbsp;</li> <li>John Podesta sat on the board and owned shares in Joule Unlimited - a green-energy company which received&nbsp;<a href="https://nypost.com/2017/07/05/uncovering-the-russia-ties-of-hillarys-campaign-chief/" target="_blank">$35 million</a>&nbsp;from the Russian government while Hillary Clinton served as Secretary of State. In addition to Podesta, Joule&#39;s board of directors included senior Russian official Anatoly Chubais and oligarch Reuben Vardanyan - a Putin appointee to the Russian economic modernization council. Podesta jettisoned his shares before the 2016 election, transferring them to his daughter via a shell corporation.&nbsp;</li> </ul> <p><strong>Unfortunately</strong>,&nbsp;Attorney General Jeff Sessions&nbsp;<a href="http://thehill.com/policy/national-security/360292-sessions-wed-need-factual-basis-for-second-special-counsel-for" target="_blank">feels there isn&#39;t &#39;enough basis</a>&#39;&nbsp;to investigate&nbsp;any or all of the above.&nbsp;</p> <p><em>Follow on Twitter&nbsp;<a href="https://twitter.com/ZeroPointNow" target="_blank">@ZeroPointNow</a>&nbsp;</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="293" height="156" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_fusion.png?1511360418" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/unsealed-fusion-gps-bank-records-reveal-523k-payment-russian-money-launderer#comments Business Clinton Foundation Congress Corruption Department of Justice Department of State Donald Trump Donald Trump Donald Trump–Russia dossier FBI Federal Bureau of Investigation Fusion GPS Glenn R. Simpson House Intelligence Committee International relations John McCain Judiciary Committee Links between Trump associates and Russian officials Natalia Veselnitskaya Obama Administration Obama administration Obama's Homeland Security Department Politics President Obama Racketeering Real estate Rob Goldstone Russian government Russian interference in the 2016 United States elections Sergei Magnitsky SPY Tax Fraud Testimony Trump campaign–Russian meetings Twitter Twitter United States presidential election Uranium Vladimir Putin Wed, 22 Nov 2017 13:50:56 +0000 Tyler Durden 607744 at http://www.zerohedge.com Core Capital Goods Orders Plunge Most In 13 Months http://www.zerohedge.com/news/2017-11-22/core-capital-goods-orders-plunge-most-13-months <p>After rebounding from its July jolt,<strong> Durable Goods New Orders dramaticaly missed expectations in October </strong>(dropping 1.2% vs expectations of a 0.3% rise). Perhaps even more concerning is the drop in Core Capital Goods Orders (-0.5% MoM vs expectations of a 0.5% rise) -<strong> the biggest drop in 13 months.</strong></p> <p>The June/July swing (Boeing orders) and storm bounce has gone and October&#39;s preliminary print suggests a slowdown...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur1.png"><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur1_0.png" width="600" /></a></p> <p>Aircraft orders tumbled:</p> <ul> <li> <p>Nondefense aircraft orders -18.6%</p> </li> <li> <p>Defense aircraft orders -11.3%</p> </li> </ul> <p>Removing the impact of aircraft orders and defense spending, we have a problem in the real economy...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur2_0.png" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Is this as good as it gets?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur3.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur3_0.png" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p>But then again - what does the real economy matter anyway?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_dur4_0.png" style="width: 600px; height: 315px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="956" height="504" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_dur2.png?1511357827" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/core-capital-goods-orders-plunge-most-13-months#comments Boeing Business Wed, 22 Nov 2017 13:42:06 +0000 Tyler Durden 607743 at http://www.zerohedge.com Pound Slides, Then Rebounds, After Hammond Reveals Sharp Cuts To UK GDP Forecast http://www.zerohedge.com/news/2017-11-22/pound-slides-after-hammond-reveals-sharp-cuts-uk-gdp-forecast <p>Update: after the GBP initially dropped on the lower GDP forecasts, it has since rallied after Hammond finished speaking , in what Citi said was a "relief rally" as there were no "<strong>banana skins and government safe. Relief trade here." </strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>This was a risk event – while Budget Announcements are normally quite quiet affairs in FX, the government is so weak that this could have been a banana skin. Fortunately, that was a good budget in political terms, and exactly what May needed. Economically speaking, the downgrade in GDP forecasts will attract some attention, but they were broadly expected, and Hammond’s big spending on the national healthcare and on housing will probably grab the headlines tonight (the rabbit-out-of-the-hat moment was the abolition of stamp duty for first-time home buyers below GBP300k). There were also extra funds for Brexit preparations and a positive tone about the process. May’s government will be thankful, and Chancellor should be safe.</p> </blockquote> <p><em>Earlier: </em></p> <p>The pound dropped, sliding to session lows, after UK chancellor Philip Hammond revealed a sharp downgrade (more than expected) to Britain’s economic forecasts during the presentation of the UK Budget, underlining the government’s challenge in transforming its political prospects and boosting growth as the country prepares for Brexit. </p> <ul> <li>U.K. FORECASTS 2017 GDP GROWTH 1.5% (VS 2% in March)</li> <li>U.K. FORECASTS 2018 GDP GROWTH 1.4% (VS 1.6% in March)</li> <li>U.K. FORECASTS 2019 GDP GROWTH 1.3% (VS 1.7% in March)</li> <li>U.K. FORECASTS 2020 GDP GROWTH 1.3% (VS 1.9% in March)</li> </ul> <p>Hammond said that the UK has missed productivity predictions, once again falling disappointingly short. And, somewhat ironically, one of the Hammond’s first comments was to remark that the UK economy is “confounding those who talk it down” and that “those who underestimated the UK, do so at their peril”, suggesting the economy is doing better than its critics said it would be.</p> <p>As the FT adds, putting a brave face on official forecasts showing weaker growth, lower rises in productivity and worse public finances in the medium term, the chancellor said his Budget would create a “future that would be full of new opportunities”. </p> <p>Hammond also <a href="https://www.bloomberg.com/news/articles/2017-11-22/u-k-sets-aside-extra-4-billion-to-prepare-for-brexit-outcomes">announced that the UK has set aside an additional 3 billion </a>pounds for Brexit over the next two years for Brexit preparations and stands ready to allocate further sums “if and when needed”.&nbsp; The Chancellor said that the government would make progress on achieving a Brexit implementation agreement “a top priority in the weeks ahead”. The chancellor said he is setting.</p> <p>Earlier, Downing Street said that foreign secretary Boris Johnson and environment secretary Michael Gove, two key pro-Brexit ministers, were among those who endorsed the Budget. The show of unity came ahead of the chancellor’s announcement of significant downgrades in the economic forecasts from the independent Office for Budget Responsibility. </p> <p>Some other forecasts:</p> <p><strong>On the NHS:</strong></p> <ul> <li>HAMMOND ALLOCATES ADDED GBP10B FOR NHS OVER PARLIAMENT </li> </ul> <p><strong>On minimum wage/benefits:</strong></p> <ul> <li>HAMMOND: MIN. WAGE TO RISES 4.4% TO GBP7.83 FROM APRIL</li> <li>HAMMOND: HIGHER RATE TAX THRESHOLD RISES TO GBP 46,350</li> <li>HAMMOND: UNIVERSAL CREDIT MEASURES TO COST GBP1.5 BLN – to address concerns about the delivery of the benefit.</li> </ul> <p><strong>Business rates:</strong></p> <ul> <li>HAMMOND SAYS WILL BRING FORWARD PLANNED SWITCH FROM #RPI TO #CPI INDEXATION OF #BUSINESS #RATES TO 2018. SAYS WILL SAVE BUSINESSES £2.3 BN OVER 5 YEARS</li> </ul> <p><strong>On Scotland:</strong></p> <ul> <li>Money coming for Scotland, courtesy of lobbying from Scottish Tory MPs - he's announced refunds on VAT for Scottish emergency services</li> <li>HAMMOND: TRANSFERABLE TAX HISTORY FOR N.SEA OIL TO START 2018</li> </ul> <p><strong>On Housing:</strong></p> <ul> <li>HAMMOND: U.K. COMMITS GBP44 BLN FOR HOUSING OVER 5 YEARS</li> <li>HAMMOND: TARGETS 300,000 NEW HOMES/YR ON AVG BY MID-2020S</li> <li>HAMMOND: NO STAMP DUTY FOR FIRST-TME BUYERS UP YO GBP300,000 (rabbit-out-of-the-hat)</li> </ul> <p>In immediate reaction to the projection cuts, cable tumbled to session lows, however it has since recovered roughly half of the loss.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/2017-11-22.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/2017-11-22_0.png" width="500" height="243" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="512" height="249" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017-11-22.png?1511357013" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/pound-slides-after-hammond-reveals-sharp-cuts-uk-gdp-forecast#comments Brexit Business CPI Economy of the United Kingdom Euroscepticism in the United Kingdom Government of the United Kingdom Gross domestic product headlines NHS Office for Budget Responsibility Office for Budget Responsibility Parliament of the United Kingdom Philip Hammond Politics Politics of the United Kingdom Withdrawal from the European Union Wed, 22 Nov 2017 13:23:40 +0000 Tyler Durden 607739 at http://www.zerohedge.com Frontrunning: November 22 http://www.zerohedge.com/news/2017-11-22/frontrunning-november-22 <ul> <li>Uber Is Facing Yet Another Irate UK Watchdog (<a href="https://www.bloomberg.com/news/articles/2017-11-22/uber-hack-raises-huge-concerns-with-u-k-data-regulator">BBG</a>)</li> <li>Oil Is Heading Towards a Two-Year High (<a href="https://www.bloomberg.com/news/articles/2017-11-21/oil-extends-gains-on-signs-u-s-crude-stockpiles-resume-declines">BBG</a>)</li> <li>Regulators to press Uber after it admits covering up data breach (<a href="https://www.reuters.com/article/us-uber-cyberattack/regulators-to-press-uber-after-it-admits-covering-up-data-breach-idUSKBN1DL2UQ">Reuters</a>)</li> <li>FOMO Fails to Drive European Stocks While Rest of World Parties (<a href="https://www.bloomberg.com/news/articles/2017-11-22/fomo-fails-to-drive-european-stocks-while-rest-of-world-parties">BBG</a>)</li> <li>Putin Hosts Assad in Sochi Ahead of Syria Summit (<a href="https://www.wsj.com/articles/putin-hosts-assad-in-sochi-ahead-of-summit-on-syria-conflict-1511260796">WSJ</a>)</li> <li>UK Sets Aside Extra £3 Billion to Prepare for Brexit (<a href="https://www.bloomberg.com/news/articles/2017-11-22/u-k-sets-aside-extra-4-billion-to-prepare-for-brexit-outcomes">BBG</a>)</li> <li>Effort to Block AT&amp;T-Time Warner Deal Gets Mixed Reception (<a href="https://www.wsj.com/articles/effort-to-block-at-t-time-warner-deal-gets-mixed-reception-1511304121">WSJ</a>)</li> <li>Zimbabwe's Mnangagwa to be sworn in as president on Friday (<a href="https://www.reuters.com/article/us-zimbabwe-politics/zimbabwes-mnangagwa-to-be-sworn-in-as-president-on-friday-idUSKBN1DM0ES">Reuters</a>)</li> <li>Mugabe’s Reign Ushered in Zimbabwe’s Economic Decline (<a href="https://www.wsj.com/articles/mugabes-reign-ushered-in-zimbabwes-economic-decline-1511346601">WSJ</a>)</li> <li>Nuclear strategists call for bold move: scrap ICBMs (<a href="https://www.reuters.com/article/us-usa-nuclear-icbm-specialreport/special-report-nuclear-strategists-call-for-bold-move-scrap-icbm-arsenal-idUSKBN1DM1D2">Reuters</a>)</li> <li>Political media engulfed by sexual harassment crisis (<a href="http://thehill.com/homenews/media/361422-harassment-allegations-shake-political-media">The Hill</a>)</li> <li>Lebanese Prime Minister Puts Resignation on Hold (<a href="https://www.wsj.com/articles/lebanese-prime-minister-saad-hariri-puts-resignation-on-hold-1511344670">WSJ</a>)</li> <li>Goldman to Get $180 Million Payday With Toshiba Deal (<a href="https://www.bloomberg.com/news/articles/2017-11-22/goldman-is-said-poised-for-180-million-payday-with-toshiba-deal">BBG</a>)</li> <li>Russian Metals Billionaires Hope for Peace as ‘Shoot Out’ Looms (<a href="https://www.bloomberg.com/news/articles/2017-11-22/russian-metals-billionaires-hope-for-peace-as-shoot-out-looms">BBG</a>)</li> <li>In Trump strongholds, Democrats walk tightrope ahead of 2018 elections (<a href="https://www.reuters.com/article/us-usa-politics-texas/in-trump-strongholds-democrats-walk-tightrope-ahead-of-2018-elections-idUSKBN1DM1DR">Reuters</a>)</li> <li>China's pig farmers go north, upending world's top meat, grain market (<a href="https://www.reuters.com/article/us-china-farming-pigs/chinas-pig-farmers-go-north-upending-worlds-top-meat-grain-market-idUSKBN1DM12P">Reuters</a>)</li> </ul> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- Uber Technologies Inc revealed it paid hackers $100,000 in an effort to conceal a data breach affecting 57 million accounts one year ago, a disclosure that adds to a string of scandals and legal problems for the world's most highly valued startup. on.wsj.com/2hTZNRS</p> <p>- Meg Whitman said she will step down as chief executive of Hewlett Packard Enterprise Co early next year, handing the reins to Antonio Neri, a company veteran, and signing off on her overhaul of the troubled hardware maker. on.wsj.com/2hSmO7T</p> <p>- Dutch paints maker Akzo Nobel NV and United States rival Axalta Coating Systems Ltd said they abandoned talks to merge after failing to agree on terms for the proposed tie-up. on.wsj.com/2hTu1V5</p> <p>- Federal regulators' plans for dismantling Obama-era open-internet rules, would clear the way for a range of new deals between internet-service providers and online media and other services, in a victory for cable and wireless firms. on.wsj.com/2hSpBOp</p> <p>- Special Counsel Robert Mueller's investigators are asking questions about White House adviser Jared Kushner's interactions with foreign leaders during the presidential transition and what role he may have played in firing ex-FBI Director James Comey. on.wsj.com/2hSYV0a</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>British MPs have urged the UK government to rethink the economic case for new nuclear power stations after making “grave strategic errors” in the Hinkley Point project.</p> <p>Akzo Nobel NV , the Dutch paintmaker, and its U.S. rival Axalta Coating Systems Ltd have terminated talks over a multibillion dollar merger after failing to reach agreement.</p> <p>John Lasseter, the chief creative officer of Pixar and Walt Disney Animation Studios, is taking a leave of absence from Walt Disney Co following allegations of inappropriate behaviour toward employees.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- United States officials are charging an Iranian hacker in the theft of 1.5 terabytes of data from HBO in May, an attack that tormented network executives and included the release of several unaired programs and scripts. nyti.ms/2hJFJ0M</p> <p>- Skype, one of the last foreign-run tools for online communication in China, appears to be in trouble with the authorities in the country. It is unavailable on a number of sites where apps are downloaded in China, including Apple Inc's app store in the country. nyti.ms/2za1oXo</p> <p>- An alternative virtual currency that is owned and operated by the same people as Bitfinex, known as Tether, announced on Tuesday that it had been hacked and lost around $30 million worth of digital tokens. nyti.ms/2mRPyiP</p> <p>- Twenty-First century Fox Inc's Fox News network announced on Tuesday that another hard-line conservative is set to join its ranks: Mark Levin, one of the country's most prominent right-wing radio hosts, will host a weekly Sunday show starting in February. nyti.ms/2zYSe35</p> <p>- One of the Walt Disney Co's most important executives, the Pixar co-founder John Lasseter, said Tuesday that he would take "a six-month sabbatical" after unspecified "missteps" that made some staffers feel "disrespected or uncomfortable." nyti.ms/2A1UfJR</p> <p>- Two female-led investor groups are lining up to save the Weinstein Company, which has been straining to avoid bankruptcy since dozens of allegations of sexual harassment and rape were made against co-owner Harvey Weinstein. nyti.ms/2zrBulW</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** An investigation of "abuse of dominance" allegations against Loblaw Cos Ltd that stretched almost four years has been dropped by the Competition Bureau because of insufficient evidence. tgam.ca/2jKSE6Z</p> <p>** Independent investment bank GMP Capital Inc announced on Monday that Doug Bell, vice chairman of investment banking, is leaving to start his own business. tgam.ca/2jN4QUW</p> <p>** Royal Bank of Canada has officially joined the ranks of global banks deemed too big to fail. The Financial Stability Board (FSB), an international body based in Basel, Switzerland, has added RBC to the list of 30 global systemically important banks, which must set aside larger capital buffers and face more onerous oversight. tgam.ca/2jM06is</p> <p>NATIONAL POST</p> <p>** The fifth round of NAFTA negotiations wrapped up in Mexico City on Tuesday with little progress on major contentious issues, including auto rules of origin, raising the question of whether the U.S., Mexico and Canada can reach an agreement by the March 2018 deadline - if at all — as the U.S. stands by its demands. bit.ly/2jKW4ql</p> <p>** The Canada Revenue Agency blocked more than half of the calls it received from Canadian taxpayers in order to obscure the performance results of its customer services division, and also accidentally provided incorrect information to a high number of callers, according to a report released by the Auditor General of Canada. bit.ly/2jLSjkI</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>Russian cybercriminals are enjoying five-star holidays at knockdown prices using reward points stolen from unwitting Britons, according to a report by research firm Flashpoint. bit.ly/2jcja5z</p> <p>Mobile CT scanners will be sent to shopping centres and high streets to make it easier for older smokers to attend checks after a pilot scheme in Manchester found that four times as many tumours were spotted early enough to offer the chance of a cure. bit.ly/2jdAtmy</p> <p>The Guardian</p> <p>Britain's deficit unexpectedly widened in October, handing Philip Hammond disappointing news on the eve of the budget. bit.ly/2jc1uab</p> <p>Uber Technologies Inc concealed a massive global breach of the personal information of 57 million customers and drivers in October 2016, failing to notify the individuals and regulators, the company acknowledged on Tuesday. bit.ly/2jch1a1</p> <p>The Telegraph</p> <p>Christopher Hohn, one of the London Stock Exchange's top investors, has urged the governor of the Bank of England to step in and remove the exchange's chairman, in a significant escalation of one of the most bitter City spats in recent memory. bit.ly/2jgovZg</p> <p>Pay is rising across the UK as unemployment falls to record lows and companies have to raise wages to fill gaps in their workforce, the Bank of England believes. bit.ly/2jem8Xh</p> <p>Sky News</p> <p>Simon Henley, president-elect of the Royal Aeronautical Society - which represents professionals in the industry - said firms were missing out on bids on the Galileo satellite programme because it is funded by the European Union. bit.ly/2jc2Em3</p> <p>EasyJet Plc says it has a "strategic advantage" over rivals, with bookings in its current quarter up 88 percent on last year as competitors dwindle in number and others endure operational problems. bit.ly/2jchWqZ</p> <p>The Independent</p> <p>Ikea AB relaunched a recall of 29 million chests and dressers on Tuesday after the death of an eighth child. ind.pn/2jcTmpH</p> http://www.zerohedge.com/news/2017-11-22/frontrunning-november-22#comments AkzoNobel Apple Bank of Canada Bank of England Bank of England BBG Bitly Business Canada Revenue Agency China Cinema of the United States Competition Bureau Economy European Union European Union Fail Federal Bureau of Investigation Financial Stability Board Fox News Ikea Lasseter Mexico Nuclear Power Pixar Reuters Reuters Royal Aeronautical Society Switzerland The Walt Disney Company The Weinstein Company Too Big To Fail Uber UK Government Unemployment White House White House Wed, 22 Nov 2017 13:12:32 +0000 Tyler Durden 607738 at http://www.zerohedge.com Beware The Marginal Buyer, Borrower, And Renter http://www.zerohedge.com/news/2017-11-22/beware-marginal-buyer-borrower-and-renter <p><a href="http://charleshughsmith.blogspot.com/2017/11/beware-marginal-buyer-borrower-and.html"><em>Authored by Charles Hugh Smith via OfTwoMinds blog,</em></a></p> <p><em>Bubbles always look unstoppable, yet they always burst. </em></p> <p><strong>When times are good, the impact of the marginal buyer, borrower and renter on the market is often overlooked.</strong> By &quot;marginal&quot; I mean buyers, borrowers and renters who have to stretch their finances to the maximum to afford the purchase, loan or rent.</p> <p>In bubble manias, buyers of real estate reckon the potential appreciation gains are worth the risk of buying a house they really can&#39;t afford with the intention of flipping the home for a profit.</p> <p>Workers moving to high-rent cities reckon they&#39;ll either make more money going forward or find a cheaper flat later, so they pony up the high rent.</p> <p>When there&#39;s steady overtime or generous tips adding to the household income, buying a new car or getting a new auto lease looks do-able.</p> <p><strong>It&#39;s difficult to assess how many recent buyers, borrowers and renters are marginal,</strong> but given the stagnation in household incomes and rising debt loads, it seems reasonable to guess that a substantial number of recent buyers, borrowers and renters are one lay-off or one missed bonus or one unexpected expense away from being unable to pay their mortgage, loan payment or rent.</p> <p><strong>On the surface, home and auto sales and the rental market all look robust</strong> because there&#39;s no differentiation in sales data between people paying cash, qualified buyers/renters and marginal buyers/renters for whom every month is a stretch.</p> <p>There have been times in my life when I was down to my last $100, and if things don&#39;t turn up very quickly and in a sustained fashion when finances are that fragile, then payments will be missed at the first unexpected drop in income or first unexpected expense. Budget-killers include medical emergency, illness/lost work time, major car repairs and a host of other everyday risks.</p> <p><strong>There&#39;s another layer of recent buyers who don&#39;t feel they&#39;re marginal--but their financial stability is more contingent than they realize.</strong> Their employment seems solid, but their employers sales and profits are more contingent and fragile than they realize.</p> <p><strong>When good times reverse to bad times, every enterprise with marginal sales takes a hit, and layoffs follow as night follows day.</strong> When times are good, layoffs are not even on the horizon. But when the economic tides recede, skittish, hollowed-out, and/or debt-burdened employers push the layoff button sooner rather than later because their own financial structure is so fragile.</p> <p><strong>Those laid off assume they will find another job quickly</strong> because in good times, there appears to be a labor shortage. But when the tide ebbs, the job offers dry up seemingly overnight.</p> <p><strong>The Grand Illusion being pushed by central bankers and conventional pundits is that another round of interest rate cuts and quantitative easing (QE) will restart the economy should it falter.</strong> This is illusion because it ignores how much of the market is dependent on marginal businesses, buyers, borrowers and renters who will not benefit from QE or a tiny decline in interest rates.</p> <p><strong>Conventional economists don&#39;t quantify marginal businesses, buyers, borrowers and renters, and so the rapidity of the next drop in the economy will come as a great surprise to them.</strong> There is little to no awareness of how many enterprises, buyers, borrowers and renters are hanging on by a slender thread--and how many who reckon their finances are robust are one layoff away from insolvency.</p> <p><strong>Bubbles always look unstoppable, yet they always burst.</strong> The symmetry in this chart of the Case Shiller Housing Index for San Francisco suggests the clock is ticking on markets being propped up by marginal buyers, borrowers and renters:</p> <p><img align="middle" border="0" class="wide" src="http://www.oftwominds.com/photos2017/SF-Case-Shiller4-17a.png" /></p> <p>*&nbsp; *&nbsp; *</p> <p><em>If you found value in this content, please join me in seeking solutions by <a href="https://www.patreon.com/charleshughsmith" target="resource">becoming a $1/month patron of my work via patreon.com</a>. Check out both of my new books, <a href="https://www.amazon.com/gp/product/B01MSP2SXM/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01MSP2SXM&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=e45dbb20ba66e69c33a3a26772391278" target="resource">Inequality and the Collapse of Privilege</a> ($3.95 Kindle, $8.95 print) and <a href="http://www.amazon.com/gp/product/B01ELXQZGE/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01ELXQZGE&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=33DAOPEVGBNGBS37" target="resource">Why Our Status Quo Failed and Is Beyond Reform</a> ($3.95 Kindle, $8.95 print, $5.95 <a href="https://www.amazon.com/gp/product/B01M7YCLI2/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01M7YCLI2&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=60a5ab448cf91113c0df9df97732358e" target="_blank"> audiobook</a>) For more, please visit the <a href="http://www.oftwominds.com/essentials.html" target="resource">OTM essentials website</a>.</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="218" height="123" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_bub.png?1511355873" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/beware-marginal-buyer-borrower-and-renter#comments Auto Sales British literature Business Case Shiller Housing Humanities Market Quantitative Easing Real estate The Borrowers Wed, 22 Nov 2017 13:04:49 +0000 Tyler Durden 607736 at http://www.zerohedge.com Navy Plane Crashes Into Pacific Off Okinawa With 11 Aboard; 3 Missing http://www.zerohedge.com/news/2017-11-22/navy-aircraft-crashed-pacific-11-aboard-3-still-missing <p>In an incident reminiscent of the two accidents earlier this year involving Navy destroyers deployed in the Pacific, a Navy plane carrying 11 military personnel crashed Wednesday in the Pacific near Okinawa. Eight of the passengers have been rescued but three are still missing. The Navy said in a tweet that the eight were brought aboard the USS Ronald Reagan after their C-2 &ldquo;Greyhound&rdquo; transport aircraft crashed while on its way to the carrier about 150 kilometers (90 miles) northwest of Okinotorishima, a Japanese atoll.</p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/c-2a-greyhound_001.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/c-2a-greyhound_001_0.jpg" style="width: 500px; height: 333px;" /></a><br />A C-2 aircraft</em></p> <p>The Navy said the ship was operating in the Philippine Sea, south of Japan, when the crash occurred at 2:45 pm Japan time. The names of the crew and passengers are being withheld pending next of kin notification.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22navy.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22navy_0.JPG" style="width: 500px; height: 240px;" /></a></p> <p>The plane was taking part in an ongoing joint US-Japan naval exercise in waters surrounding Okinawa. The exercises began on Nov. 16, and were slated to run through Nov. 26. The Navy described the exercises as the &ldquo;premier training event&rdquo; between the two navies, designed to increase defensive readiness and interoperability in air and sea operations.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/BREAKING?src=hash&amp;ref_src=twsrc%5Etfw">#BREAKING</a>: <a href="https://twitter.com/hashtag/USNavy?src=hash&amp;ref_src=twsrc%5Etfw">#USNavy</a> aircraft crashes in <a href="https://twitter.com/hashtag/PhilippineSea?src=hash&amp;ref_src=twsrc%5Etfw">#PhilippineSea</a> carrying 11 crew and passengers en route to <a href="https://twitter.com/hashtag/USSRonaldReagan?src=hash&amp;ref_src=twsrc%5Etfw">#USSRonaldReagan</a>. Search and rescue underway. More to follow - <a href="https://t.co/QQkcYlAP6N">https://t.co/QQkcYlAP6N</a> (File pic) <a href="https://t.co/Cf53Hdh24h">pic.twitter.com/Cf53Hdh24h</a></p> <p>&mdash; U.S. Navy (@USNavy) <a href="https://twitter.com/USNavy/status/933266803714809856?ref_src=twsrc%5Etfw">November 22, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/BREAKING?src=hash&amp;ref_src=twsrc%5Etfw">#BREAKING</a> UPDATE: Eight personnel recovered following C2-A Greyhound crash and transferred to <a href="https://twitter.com/hashtag/USSRonaldReagan?src=hash&amp;ref_src=twsrc%5Etfw">#USSRonaldReagan</a> for medical eval. In good condition. Search and rescue for three personnel continues. More to follow.</p> <p>&mdash; U.S. Navy (@USNavy) <a href="https://twitter.com/USNavy/status/933281288563208194?ref_src=twsrc%5Etfw">November 22, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>Japanese Minister of Defence Itsunori Onodera told reporters the U.S. Navy had informed him that the crash in the Philippine Sea may have been a result of engine trouble. The propeller powered transport plane, a C-2 Greyhound, carries personnel, mail and other cargo from mainland bases to carriers operating at sea.</p> <p>C-2 aircraft have been in operation for more than five decades and are due to be replaced by the long-range tilt-rotor Osprey aircraft.</p> <p>Accidents involving Navy vessels and aircraft have skyrocketed this year (they were previously exceedingly rare). Following the first incident &ndash; where seven sailors died after the USS Fitzgerald collided with a Philippines container ship &ndash; rumors that the ship&rsquo;s navigation system might&rsquo;ve been hacked abounded. But they were later put to the rest by the military, which relieved the ship&rsquo;s captain and ranking officers of their command and blamed the lethal accident on human error.&nbsp; In the second incident, the USS John S. McCain and an oil tanker collided near Singapore in August, leaving 10 sailors dead. Both of the collisions involved Navy destroyers from the 7th fleet. In total, the accidents left 17 sailors dead.</p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="788" height="379" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.11.22navy.JPG?1511352644" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/navy-aircraft-crashed-pacific-11-aboard-3-still-missing#comments Aircraft Arleigh Burke-class destroyers Aviation Aviation accidents and incidents Disaster Grumman C-2 Greyhound Japan John McCain Naval warfare navy Science and technology in the United States Twitter Twitter United States Navy United States Navy USS Fitzgerald USS John S. McCain USS Ronald Reagan Wed, 22 Nov 2017 12:40:02 +0000 Tyler Durden 607732 at http://www.zerohedge.com Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust http://www.zerohedge.com/news/2017-11-22/geopolitical-risk-highest-%E2%80%9C-four-decades%E2%80%9D-%E2%80%93-gold-demand-germany-and-globally-remain- <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/us/gold-blog/geopolitical-risk-highest-four-decades-gold-demand-germany-globally-remain-robust/">Geopolitical risk highest "in four decades" should push gold higher - Citi</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>&nbsp;</strong><strong>- Elections, political and&nbsp;macroeconomic crises and war lead to gold investment<br />- Political uncertainty in Germany means "gold likely to remain in good demand as a safe haven" say Commerzbank<br /></strong>-&nbsp;&nbsp;<strong>“There has rarely been such political uncertainty in Germany at any time in the country’s post-war history” - Commerzbank</strong><br /><strong>-&nbsp;Reduce counter party risk: own safe haven allocated and segregated gold</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Editor: Mark O'Byrne</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/Snip20171122_1.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/Snip20171122_1-1024x672.png" width="1024" height="672" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-12466" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The geopolitical case for gold investment has been emboldened due to heightened and ongoing geopolitical risk, according to Citi analysts.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">In every continent, there appears to be major political upset and geopolitical risk against a background of growing economic uncertaintly and turmoil. Just this week we have seen the US declare North Korea's leader a 'sponsor' of terrorism, Angela Merkel seemingly lose her political dominance in Germany and the EU and the Gulf countries&nbsp;ramp up fear mongering regarding Iran.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">What does this mean for gold?&nbsp;Quite simply its role as a safe haven is now at its strongest point in four decades&nbsp;according to&nbsp;Citigroup.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Commerzbank concur and this week their analysis concluded that the political uncertainty in Germany means&nbsp;<em>"gold is likely to remain in good demand as a safe haven."</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>“There has rarely been such political uncertainty in Germany at any time in the country’s post-war history,”&nbsp;</em>according to<em>&nbsp;</em>Commerzbank. Given the fragile state of the European Union and the monetary union this does not bode well for the EU or indeed the euro.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The geopolitical case for gold investment&nbsp;today&nbsp;is not just because of current&nbsp;geo-political risks including Germany,&nbsp;but because there is no let up on the horizon. It seems with each political, financial or humanitarian disaster more problems swiftly follow.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Investors are no longer considering the downside risks to gold investment to be as great as&nbsp;geo-political and macro risks pose to risk assets such as equities and bonds.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We have seen this in recent World Gold Council figures. Demand for physical gold bars and coins climbed by 17% in the last quarter. This, say Citi, is the new normal.</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>"Event-driven bids for gold seem to be occurring more frequently and may be the new normal… In short, even as the rates and forex channel dominate the outlook for gold pricing, the yellow metal is increasingly being used by investors as a policy and tail risk hedge."</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>What are the&nbsp;geopolitical&nbsp;risks today?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/triangle-warning-sign-30522_640.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/triangle-warning-sign-30522_640.png" width="640" height="568" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-12467" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">If an extra-terrestrial being was carrying out a risk-assessment on landing on earth, they would be struggling with where to start. The fact is, you can't assess risk reasonably right now as there are so many unknowns.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We seem to a have a planet that is blowing up both physically (see Nigeria and Yemen, to name a few), politically (EU, anyone?) and economically (personal debt, student debt, car debt, mortgage debt, corporate debt, pensions timebomb to name just a few).</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Of course, we have had tough times before. What&nbsp;is concerning about today's issues is that the emerging risks appear to be political, financial, economic&nbsp;and indeed environmental and all of them at the same time. This creates&nbsp;new, unappreciated risks for financial markets.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">When problems are economic the talking heads and think-tanks like to roll out the models and theories they have so closely built for these very situations. This gives them (and the markets) the ill-founded confidence that they have the ability to predict the future and can therefore price in the risks.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Today the problems are as much political as economic. This is worrying for those who like a good financial model. You cannot predict how political tensions will carry-out. Just ask the many pollsters who messed up Brexit and the Trump election. Once you have serious political issues then you also have economic ones, unpredictable ones.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><em>N.B. You also can't predict economic outcomes as they relate as much to human behaviour as political ones do, but this fails to occur to the econometricians out there and that's for another blog.&nbsp;</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The Citi analysts recognised&nbsp;<em>'Elections and political votes, military attacks and macroeconomic crises'</em>&nbsp;as some of the key geopolitical events that would positively influence gold investment. Looking back over the last four decades they were able to conclude that&nbsp;prices rallied more frequently during these periods of uncertainty.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">As a result Citigroup expects to see safe haven demand&nbsp;push prices above $1,400 an ounce&nbsp;<em>“for sustained periods through 2020.”</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Interestingly, a quick glance at the 2017 price chart might suggest that gold has been more susceptible towards monetary policy sentiment than geopolitical risk. So far this is likely to be because buyers like to believe that&nbsp;escalation in certain areas such as North Korea or the Middle East is unlikely to happen.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">But whilst the gold price might not have been climbing against this uncertainty, the number of people holding onto gold has. Sales of coins and bars or ETF liquidations have not been increasing despite the boring price climb, and there has been little indication of people getting rid of their gold. Perhaps the tides are turning and the reality of what various uncertainties mean is beginning to take hold in investors' strategies.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>What is a safe haven?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Gold is frequently referred to as a safe haven. If (like me once) you imagine a safe haven to be somewhere with no signal, a good book and an invisibility cloak then you might be a bit confused. Gold is a financial safe haven that protects an investor from geopolitical risk and during uncertain and difficult economic times - financial crashes, recessions and depressions.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Investopedia&nbsp;define a safe haven as:</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>An investment that is expected to retain its value or even increase its value in times of market turbulence. Safe havens are sought after by investors to limit their exposure to losses in the event of market downturns. However, what are considered safe havens alter over time as market conditions change, and what appears to be a safe investment in one down market could be a disastrous investment in another down market.</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This opinion is reflected in the gold buying activities of individual investors, institutional investors and governments alike. All have been increasing their physical gold purchases&nbsp;in recent months and years in order to line their portfolios with some serious financial insurance. The precious metal has repeatedly shown its mettle during times of currency crises, something which is very likely on the horizon.</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>“Gold will prove a haven from currency storms” is the conclusion of a wide-ranging analysis of the world monetary system by Official Monetary and Financial Institutions Forum, (OMFIF), the global monetary think-tank. The OMFIF report entitled, ‘Gold, the Renminbi, and the multi-currency reserve system,’ warns of “twin shocks” to the dollar and the euro and of a “coming dollar shock” and points out how gold would be a safe haven in a dollar crisis.&nbsp;<em><a href="http://www.goldcore.com/uk/research/gold-safe-haven-asset/">Read more</a>.</em></em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We will no doubt start to see the demand for a safe haven increase as investors become increasingly wary of the growing number of uncertainties that are around today and those on the horizon.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Whether this will affect the price as Citigroup expects, who knows but one would expect it to. Gold's price and its value are tricky concepts. For most gold's value is&nbsp;reflected in its anonymity and portability. Plus, &nbsp;its very low or negative correlation with the majority of&nbsp;other asset classes and as an inflation hedge, makes it a valuable component in a portfolio.</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>Many studies have shown that precious metals are one of the few asset classes with a positive correlation coefficient with inflation. According to asset allocation experts, Ibbotson Associates, precious metals are the most positively correlated asset class to inflation. From a strategic point of view, Ibbotson determined that portfolios could reduce risks and improve returns with a 7-15% allocation to precious metals bullion.&nbsp;</em><em><a href="http://www.goldcore.com/uk/research/gold-safe-haven-asset/">Read more</a>.</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/Snip20171110_12.png"><br /></a><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/Gold-vs-annualized-US-CPI.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/Gold-vs-annualized-US-CPI.png" width="942" height="576" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-12465" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">At the moment however Citigroup believes we are looking at increased demand for gold thanks to geopolitical risk a series of black swan events, i.e. those we cannot foresee. This is something that gold is an excellent hedge against, as we discovered when doing an analysis of academic research into safe havens:</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>Gold is a good hedge against black-swan events and against tail risk. According to a study by Mercer, the so-called conditional value at risk can also be reduced drastically by adding just 5% of gold to a portfolio. This risk parameter (also called expected shortfall or expected tail loss) defines the deviation in case of an extreme event.&nbsp;<em><a href="http://www.goldcore.com/uk/research/gold-safe-haven-asset/">Read more</a>.</em></em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold investment is the old&nbsp;normal,&nbsp;geopolitical risk is the new normal</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Our<strong>&nbsp;mission statement&nbsp;</strong>since 2003 has been to<strong>&nbsp;'Protect and Grow Our Clients Wealth'</strong>. For hundreds, indeed thousands of years people have held gold in order to&nbsp;<strong>protect and grow their wealth.&nbsp;</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">At first this was because it was money, then it was because it no longer was money but a safe haven, store of value. Today for many people it is because something inside them tells them physical gold is a good thing to own as a diversification and a hedge.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Some try&nbsp;to tell us that allocated, physical gold&nbsp;coins and bars is something old-fashioned, almost provincial in its simplicity. something for those crazy preppers. However research shows us that is has an important role to play in protecting us against a variety of risks.&nbsp;Increasingly research tells us those risks are the 'new normal'.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Much of the media&nbsp;will only consider this report with interest in regard to the price prediction, but in truth this is pretty irrelevant. Especially when considered against the reasons for gold's expected price climb: turbulence, uncertainty and upset are going to become commonplace. Investors need to add the safe haven of physical gold to their portfolios.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Whilst the Citigroup analysis does&nbsp;consider&nbsp;what will happen to the price of gold in the coming years due to geopolitical risk, the truth is that is shouldn't matter all that much. If an investor is looking to reduce the counterparty risk and protect their portfolio, it doesn’t matter what price is paid&nbsp;for the gold because over time it acts as hedge against currency devaluations.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This can only be the case if you choose to<a href="http://www.goldcore.com/us/our-services/storage-2/" target="_blank">&nbsp;invest in allocated and segregated physical gold coins and bars</a>. This allows you to own gold in your name, without counterparty risk. The whole financial and economic system is on a knife edge thanks to the exposure to counterparty risks on all sides. Investors would be wise to reduce their exposure and get used to the 'new normal'.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Related content</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/uk/gold-blog/gold-coins-and-bars-saw-demand-rise-17-to-222t-in-q3/" rel="bookmark">Gold Coins and Bars Saw Demand Rise 17% to 222T in Q3</a></strong></p> <p class="entry-title" style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/uk/research/gold-safe-haven-asset/">Gold Is A Safe Haven Asset</a></strong></p> <p class="entry-title" style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/uk/research/gold-safe-haven-asset-latest-research-shows/">Gold Is A Safe Haven Asset- Latest Research Shows</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>News and&nbsp;Commentary</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://uk.reuters.com/article/global-precious/precious-gold-rises-as-dollar-dips-ahead-of-fed-minutes-idUKL8N1NS2OM">PRECIOUS-Gold rises as dollar dips ahead of Fed minutes (Reuters.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.marketwatch.com/story/gold-crawls-higher-bucking-inverse-dollar-relationship-2017-11-21">Gold regains some lost ground as dollar struggles (MarketWatch.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.reuters.com/article/us-global-markets/stocks-rally-on-boost-from-strong-global-growth-earnings-idUSKBN1DM03A">Stocks rally on boost from strong global growth, earnings (Reuters.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.reuters.com/article/us-global-markets/global-stocks-rally-on-growth-earnings-outlook-bonds-slip-idUSKBN1DL03C">Global stocks rally on growth, earnings outlook; bonds slip (Reuters.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.bloomberg.com/news/articles/2017-11-21/uber-concealed-cyberattack-that-exposed-57-million-people-s-data">Uber Paid Hackers to Delete Stolen Data on 57 Million People (Bloomberg.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/gold-slump-prices-fallen.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/11/gold-slump-prices-fallen.png" style="height: auto; max-width: 100%;" /><br /></a>Source: Bloomberg</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.scrapregister.com/news/43651/political-uncertainty-in-germany-could-mean-gold-safe-haven-buying">COMMERZBANK : Political uncertainty in Germany means "gold likely to remain in good demand as a safe haven" (ScrapRegister.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://smaulgld.com/russian-gold-reserves-october-2017/">Russian Gold Reserves Rise To Record - Now 1,800 tonnes (SmaulGld.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://dailyreckoning.com/markets-are-trapped-in-zombie-like-state/">Markets Are Trapped in “Zombie-like” State (DailyReckoning.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://soundcloud.com/sprottmoney/sprott-money-news-weekly-wrap-up-111717">Monetary Metals Holding Up Well Despite Raids - Sprott (SoundCloud.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.mauldineconomics.com/frontlinethoughts/bonfire-of-the-absurdities">Bond Bubble, Crazy Swiss and the Bonfire of the Absurdities - Mauldin (MauldInEconomics.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.bloomberg.com/news/articles/2017-11-20/can-bitcoin-survive-an-apocalypse">Can Bitcoin Survive An Apocalypse? (Bloomberg.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold Prices (LBMA AM)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">22 Nov: USD 1,283.95, GBP 969.25 &amp; EUR 1,092.51 per ounce<br />21 Nov: USD 1,280.00, GBP 967.04 &amp; EUR 1,090.69 per ounce<br />20 Nov: USD 1,292.35, GBP 974.82 &amp; EUR 1,096.43 per ounce<br />17 Nov: USD 1,283.85, GBP 969.31 &amp; EUR 1,088.19 per ounce<br />16 Nov: USD 1,277.70, GBP 969.01 &amp; EUR 1,085.53 per ounce<br />15 Nov: USD 1,285.70, GBP 976.62 &amp; EUR 1,086.29 per ounce<br />14 Nov: USD 1,273.70, GBP 972.47 &amp; EUR 1,086.59 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Silver Prices (LBMA)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">22 Nov: USD 16.97, GBP 12.81 &amp; EUR 14.44 per ounce<br />21 Nov: USD 17.00, GBP 12.85 &amp; EUR 14.50 per ounce<br />20 Nov: USD 17.15, GBP 12.94 &amp; EUR 14.56 per ounce<br />17 Nov: USD 17.09, GBP 12.95 &amp; EUR 14.49 per ounce<br />16 Nov: USD 17.04, GBP 12.92 &amp; EUR 14.48 per ounce<br />15 Nov: USD 17.12, GBP 13.00 &amp; EUR 14.45 per ounce<br />14 Nov: USD 16.94, GBP 12.92 &amp; EUR 14.45 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Recent Market Updates</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/us/gold-blog/gold-versus-bitcoin-pro-gold-argument-takes-shape/">-&nbsp;Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/money-markets-infographic-shows-silver-undervalued-asset/">-&nbsp;Money and Markets Infographic Shows Silver Most Undervalued Asset</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/new-fed-chief-swamp-critter-extraordinaire/">-&nbsp;Is New Fed Chief A “Swamp Critter Extraordinaire”?</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/deepening-crisis-hyper-inflationary-venezuela-zimbabwe/">-&nbsp;Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/uk-debt-crisis-consumer-spending-employment-sterling-fall-inflation-takes-off/">-&nbsp;UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/protect-savings-gold-ecb-propose-end-deposit-protection/">-&nbsp;Protect Your Savings With Gold: ECB Propose End To Deposit Protection</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/internet-shutdowns-show-physical-gold-ultimate-protection/">-&nbsp;Internet Shutdowns Show Physical Gold Is Ultimate Protection</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/gold-coins-and-bars-saw-demand-rise-17-to-222t-in-q3/">-&nbsp;Gold Coins and Bars Saw Demand Rise 17% to 222T in Q3</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/prepare-interest-rate-rises-global-debt-bubble-collapse/">-&nbsp;Prepare For Interest Rate Rises And Global Debt Bubble Collapse</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/platinum-bullion-may-one-cheap-assets/">-&nbsp;Platinum Bullion ‘May Be One Of The Only Cheap Assets Out There’</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/worlds-largest-gold-producer-china-sees-production-fall-10/">-&nbsp;World’s Largest Gold Producer China Sees Production Fall 10%</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/german-investors-now-worlds-largest-gold-buyers/">-&nbsp;German Investors Now World’s Largest Gold Buyers</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/gold-price-reacts-central-banks-start-major-change/">-&nbsp;Gold Price Reacts as Central Banks Start Major Change</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Important&nbsp;<span class="m_-928942620346942956il">Guides</span></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">For your perusal, below are our&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">most</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">popular</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">guides</span>&nbsp;in 2017:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*N5MhbFRBkTqXW95dlRy194d-P0/5/f18dQhb0S5ft8X-f1rW8cCGTT51FcdHN5s9DSvWrM1ZW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHmp3PnStQVS9p0b63dhWbW8mp0Tc5x5KNkW7-XB_567h1CPW8r5PXz49z-4PN2MV0Xm5w8jDW1mw3yc59SFsZN4H-tjrQC5z2VPC2cV7gvpc4W4XYhBl2y9PQJW4sxqtN7h5hQFW28TbSB2Cg_LLW96LzRy5DkRJDW5BRXXj2y4Lc7N3Kd2SV_-Nf6W3brNsz66rKFTW2xH0xz1lcG1VVQBGcH5DQdGhN22JjmzdPgQwW9464-Y5GFs9DW4Rj6Nh6BzJrnN45Ly2MkwRN4W8qYMH51FnsVDW2X9_p02MVHnbN2GZdYq215_BW1J7MZd3mgJK7W4F32xR1JjtM5W4Bn5JG3ZzLH2W5jL56q7dkHC7W3VtW1b1MWhN-W1MKd944yqBfl111" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Switzerland</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W5Hh19S2J1j6jW1gxPj45yTRLt0/5/f18dQhb0S5fw8X-fbXW8cCGTT51FcdHN5s9DSvWrM1YW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHjG25x99KVwyMQc6PVJWyW625bx16Gj8TSW6bVy-525hjVhW83KHrF7J39qHN2m8DqKmmF0wW1jsTjn5VDnrHVbq5fx4TKc2lW6Rjg6t5Pk17jW2xZzRk8LpcPpW36k5sF4FnHNZW1mvfQB2BpzSjN1mT8mr2g4dYW5VZ-P_37vq3BW2--Tfh1w3GzfW5CkFpW6ZccdyW5vvKY_3N2S6fW3KRSNH8yxr7CW7YJp821cQlwRW63x06S1bBvW3W408wWR11rnNbV4Vjkz6NjfdLW55Fr2P5nn1d6W301cwV4GX00sW5hfR428jJDdkW4Cy2w54wj2JxVMFy4w4hyJQMV6N2-D1mPRd4N6YRN0Y4ZDMLD2LMBk7BT1f5Fq5PC03" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Singapore</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W7dc5x_8dXcz0W57pb-W8yRfPY0/5/f18dQhb0Sjv98X-fhGW8cCGTT51FcdHN5s9DSvWrBCVW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z0sTg7mCbb0W57V1HT7tVHF9W8Z32tg35s628W859LV685kgn-W5mG2963qCNtmW8hTG4j5Zh496W2d551v3pNnKLVLrb9R83_Pn-W7JCxGl81bhDKW7N_KqM11GBXTW41TlcR3TwTqzW19BjML1ks0KjW7RPZVs5-2sjBW7ZzDyK7GLjPjW2KH_vB6SdpRZW1hx1p11Gg3W9W6rwy5K1YZKs5W2gFslL6NqPjwW1tbMwf7n90PHW67SS1j224DVBW6SdFBY1S1FW8W1Th1-Q1X2dwGW1swLvy81myPRW1B9M4Q6SdHPtW7C3gqS89xKZ9W1Ms6WG19gjwJN42ktpLPs031VgkKmy5qqk_FW41Q13s3srYmmW2-yGlm4v9PYhVmLW2J4r5l5jW7fnqv3187HWVW794lJw3T7yBDW1Zq0mT90vVQHW7SNfQy7BfhjRN3QzSrFQN_TjVcGblm3cFvNY0" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;to Tax Free Gold Sovereigns (UK)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Please share our research with family, friends and colleagues who you think would benefit from being informed by it.</p> http://www.zerohedge.com/news/2017-11-22/geopolitical-risk-highest-%E2%80%9C-four-decades%E2%80%9D-%E2%80%93-gold-demand-germany-and-globally-remain-#comments B+ Bank Bitcoin Black Swan Bond Bullion Business Central Banks China Citigroup Citigroup Economy European Central Bank European Union European Union Finance Foreign exchange market Germany Gold as an investment Gold coin Hedge Institutional Investors Iran Market Conditions Middle East Middle East Monetary Policy Money New Normal North Korea Precious Metals Precious metals Reality Renminbi Reuters Silver as an investment Sovereigns Switzerland US Federal Reserve World Gold Council World Gold Council Wed, 22 Nov 2017 12:39:56 +0000 GoldCore 607734 at http://www.zerohedge.com Blain: "Stop Worrying About The Yield Curve, Something Much Worse Is Around The Corner" http://www.zerohedge.com/news/2017-11-22/blain-stop-worrying-about-yield-curve-something-much-worse-around-corner <p><em>From Blain's Morning Porridge, Submitted by Bill Blain of <a href="http://www.mintpartners.com/">Mint Partners</a></em></p> <p><strong>Stop worrying about the US yield curve - its a distortion. Something much worse is around the corner....</strong></p> <p>A bit of a feeding frenzy in the new issue primary bond market as 21 deals hit the screen and went fairly well. With Thanksgiving tomorrow it’s likely the tail of the week will be very quiet, but our primary trading team reckon there is still plenty of momentum. We’re likely to see another two weeks of proper activity before the holiday slowdown. There are a large number of deals queued up and still to come to market.</p> <p>I wonder if the Credit Markets will be as busy next year?</p> <p><strong>It rather depends. Regular readers will know I’m uber-bearish and expecting the big bond market crash coming sometime soon, but others point to the US yield curve as evidence of a slowdown and therefore favourable conditions for the bond binge to continue – what’s not to like for issuers looking for almost zero cost money?</strong></p> <p>Frankly, there is far too much guff and nonsense about the US yield curve… so, it’s time for me to scare you some more, and add some Blain mumbo-jumbo to the mix.</p> <p>It’s pretty simple.</p> <p>The flatter US curve is NOT sending a deep meaningful warning of looming recession. It’s hiding something much worse….</p> <p>The short-end of the US curve reflects what the Fed has done in terms of hiking rates. But, the long end of the US Curve (10-30) is being driven by very different forces. It has flattened because of interest rate differentials between the ZIRP rest of world and the rate normalising US, but also on the fact external investors effectively drive US rates because they are the forced buyers! Ongoing QE distortions in Europe and Japan are still driving close to Zero domestic interest rates – forcing investors offshore. <strong>Global demand for duration partially explains why the US 10-30 curve appears to have flattened.</strong></p> <p><strong>The transmission effects of $5 trillion QE in last three years is a massive allocation towards US assets – which explains why the 10-yr is sticking round 2.5% and the term perimum is negative.</strong> Remove these effects of global distortion and the US curve would look much steeper and cause far less fear, panic and mania than the yield curve doomsters perceive.</p> <p>Relax.</p> <p>The yield curve is not the thing to worry about..</p> <p>I did read another yield curve view on Bloomberg: “The yield curve is inexorably flattening because duration is the hedge, not the risk, when it’s paired with a long equity component.” </p> <p>Anticipating the imminent stock market meltdown with long duration bonds kind of makes some sort of sense – but I’m convinced that is going to be a massively expensive strategy.</p> <p><strong>Why? Because something much more wicked this way comes…..</strong></p> <p>That dark thing is inflation. </p> <p>Over the last 10-years – since the Global Financial Crisis – we’ve seen the main drivers of inflation stagnate across the board. (I’ve argued many times if you want to see inflation then look at financial assets.) While prices and inflation signals have flat-lined, the inflation Central Bank feared they would create through QE has been incubating in massively inflated real assets – stocks and bonds.</p> <p><strong>My Macro Economist colleague Martin Malone reckons an inflation shock is now a 50% plus risk! </strong>He points out all the major inflation drivers are coming back on line.&nbsp;&nbsp; </p> <ul> <li>Global inflationary expectations have risen dramatically this year</li> <li>Inflation data – which was deflationary 5 years ago, then flat, has now accelerated towards more normal levels</li> <li>The safe asset long-term rate – in effect government bonds – are beginning to normalise</li> <li>Output gaps are increasing and positive around the globe</li> <li>Real Asset Prices – particularly housing and real estate rose dramatically over last 3 years</li> <li>Risk Assets – like bond and stocks remain hugely inflated</li> <li>Oil and commodities prices are rising</li> <li>Jobs are being created around the world, and increasing number of countries now looking at supply side fiscal policy means wage inflation looks inevitable! The Philips Curve returns!&nbsp;&nbsp; </li> </ul> <p>Malone has quantified all the inflation drivers and added them up. He reckons in inflation drivers haven’t been this high since 2007! (If you want the numbers – let me know!)</p> <p>Ask anyone on the street about inflation and they’ll tell you it’s very real. <strong>Wages have stagnated for 10-years, but prices are clearly rising. And look at UK housing – up 50% over 5-years!</strong></p> <p>One further driver of inflation may be China. (Yep, I know – it’s too easy.. If in doubt about markets, blame China.) For years I’ve been arguing the real risk in China isn’t creating enough jobs to keep the populace happy – it’s actually been about a revolution caused by the increasingly perilous state of the Chinese environment.</p> <p>The leadership has now made the environment the number 1 priority – they get it and are acting accordingly. Pollution is the enemy. It’s not just coal fired power stations, but agriculture is a major source of river pollution – especially from Pigs. So piggeries have been “emptied” and hog prices are through the roof. <strong>As these supply side policies hit prices, the government is forced to raise wages. Wage inflation driven by rising food prices.</strong></p> <p>Go figure what happens elsewhere as China drives up protein and carb prices.</p> <p>* * * </p> <p>And… back to Germany… I am indebted to some German readers for pointing out my knowledge of the German constitution is not a sound as it should be (the word being “inadequate”!) It’s not Merkel who can call an election, but former SPD vice-chancellor and now BundesPresident Steinmeier who makes that call. He is vehemently opposed to a second election. As a result it’s likely we’ll see a drawn out process and votes before an election can be called, giving time to put together a new grand coalition in which either the SDP participates with a strong left-wards shift, or a weaker minority government is imposed which will further focus German policy internally rather than at Europe.</p> <p>One theme suggested last night is the SDP offering to participate in a new Grand Coalition – but only if Merkel goes…&nbsp; Time to hedge the Dax?&nbsp;&nbsp;&nbsp; </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="303" height="166" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/inflation%20ahead.jpg?1511353107" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/blain-stop-worrying-about-yield-curve-something-much-worse-around-corner#comments Bond Bond Business China Deflation Economy Financial markets Fixed income Grand Coalition Inflation Japan Macroeconomics Market Crash Meltdown Monetary policy Money Phillips curve Real estate Recession US Federal Reserve Yield Yield Curve Yield curve Wed, 22 Nov 2017 12:20:16 +0000 Tyler Durden 607733 at http://www.zerohedge.com Asian Stocks Smash Records; Dollar Slides As Crude Surges To July 2015 Highs http://www.zerohedge.com/news/2017-11-22/asian-stocks-smash-records-german-curve-flattens-crude-surges-july-2015-highs <p>Global shares hit another record high on Wednesday, propelled higher by what increasingly more call (ir)rational exuberance, and investors’ unflagging enthusiasm for tech stocks. That said, S&amp;P futures are unchanged the morning before Thanksgiving (at least before the market open ramp), as are European stocks (Stoxx 600 is flat), despite the euphoria in the Asian session which saw the MSCI Asia Pac index hit a new all time high... </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/asia%20record.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/asia%20record_0.jpg" width="500" height="282" /></a></p> <p>... as oil jumped, rising as much as $1.15 to $57.98/bbl, <strong>the highest since July 2015, </strong>following yesterday's API report which showed crude stocks fell another 6.4mmbbls and a Keystone pipeline outage shaprly tightened the market, while the dollar fell after Janet Yellen warned against raising rates too fast and the euro gained amid new moves to end Germany’s political impasse.</p> <p>Emerging markets too were on a roll, lifted by a weaker dollar and inflows into Asian assets, with little sign of spillover from Turkey where the lira plumbed a new record low.</p> <p>As SocGen previews today's action, "the US has durable goods orders, U-Mich consumer sentiment, jobless claims and FOMC Minutes out today, but none of these matters as much as Thanksgiving preparations." In other words, expect a much slower trading day, with the key event - the Fed minutes - delivered at 2pm to trading desks staffed by the sub-30 year old team. </p> <p>So as we prepare for even more all time highs amid the stock euphoria, the bond market has been showing fixed-income traders are more concerned that the U.S. economy may slow, with the 2s10s flattening further below 60 bps. Outgoing Fed chair Yellen warned Tuesday that tightening too quickly risked stranding inflation below the Fed’s 2 percent target, with investors awaiting the release of minutes from the last FOMC meeting for more clues about the policy path. As a result, the Bloomberg Dollar Spot Index dropped 0.2%, hitting a one-month as cautious Yellen and curve flattening underpin selling momentum. </p> <p>As <a href="http://www.zerohedge.com/news/2017-11-22/euphoric-asian-equities-break-above-2007-all-time-high-hang-seng-clears-30000">we noted earlier</a>, Asian stocks hit new all time highs, with Hong Kong's Hang Seng jumping 1%, and rising above 30,000 for the first time in 10 years, as Hong Kong-listed Tencent leapt past Facebook this week to become the world's fifth-most valuable company. </p> <p>The mood was slightly less buoyant on European shares which opened flat to marginally firmer. Britain's benchmark rose 0.2 percent just before finance minister Philip Hammond presents a crucial budget to a country facing faltering economic growth. After yesterday's jump, European stocks struggled to follow the global rally that drove global benchmarks to record highs. The Stoxx Europe 600 Index tracked sideways amid mixed fortunes for regional bourses. Earlier, <a href="http://www.zerohedge.com/news/2017-11-22/euphoric-asian-equities-break-above-2007-all-time-high-hang-seng-clears-30000">we noted that the MSCI Asia Pacific Index </a>climbed above its 2007 peak, with shares up from Tokyo to Sydney, and the major American equity indexes reached all-time highs. Australia’s S&amp;P/ASX 200 Index rose 0.4%; South Korea’s Kospi index added 0.4%; . The Hang Seng Index jumped 0.8% as Chinese financial shares climbed. The Shanghai Composite Index gained 0.6% . The MSCI Asia Pacific Index advanced 0.6 percent. The MSCI Emerging Market Index extended a rally that took it to the highest in more than six years.</p> <p>The only fly in the Asian ointment was that China’s government bonds extended declines, <strong>with the benchmark 10-year yield rising 4 basis points to 4.03% to head for the highest close since 2014.&nbsp;</strong>How much longer before China finds itself in a funding squeeze and the recent euphoria crashes?</p> <p>“The earnings picture is dominant and that’s of course what has, and will continue, to move markets,” Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV. “Icing on the cake is the tax bill and that does boost earnings but a lot of people are already baking that into their assumption.”</p> <p>While there was little of note in global bond or equity markets, the biggest overnight story is the on-going strength of oil prices, jumping to more than 2 year highs as a result of the latest API inventory numbers and the Transcanada pipeline interruption, which helped NOK and CAD within G10 currencies.&nbsp; Haven currencies also outperform on potential hedging amid a global stocks and oil rally; euro gains to stay below pivotal 55-DMA resistance amid chances that a German grand coalition may be achieved.</p> <p>“<strong>WTI is, for a change, in the driving seat</strong>,” says Ole Hansen, head of commodity strategy at Saxo Bank. “<strong>The spread is tightening and if we have a prolonged disruption then that will play its part in bringing down inventories further in the US.”</strong></p> <p>On the US political front, US Senator Murkowski who is seen as a key moderate swing vote, is said to support repealing of ObamaCare's individual mandate. Earlier, <a href="http://www.zerohedge.com/news/2017-11-21/watch-live-janet-yellen-and-mervyn-king-nyu">Janet Yellen said the Fed must keep an open view </a>and not be trapped by forecasts and said so far so good in terms of reducing the balance sheet. Yellen also commented that she is uncertain whether low inflation is transitory and is keeping an open view that it could be long-lasting. </p> <p>In Europe, Angela Merkel’s party is betting on a revived alliance with the Social Democrats to dodge the risk of new elections after coalition talks with two other parties broke down, Bloomberg reported although other news sources were skeptical. The goal is to avoid new elections and appeal to the need for German stability at a critical time for the country and the European Union "amid nationalist pressures and challenges posed by Brexit."</p> <p>The yield curve in Germany, the euro zone’s benchmark government bond issuer, flattened to its lowest in more than two months, catching up with the U.S. curve. According to Bloomberg, there was heavy bear flattening seen in early trade, with the 5Y sector underperforming with focus on Coeure’s speech yesterday which suggested moving forward guidance away from QE and onto rate hikes. USTs were dragged lower in tandem, however U.S. curve is marginally steeper. </p> <p>Morgan Stanley analysts said flattening curves were not cause for concern just yet. “Those looking at U.S. yield curve flatness as a potential bearish risk factor may be reminded that during the last 30 years, it has taken at least a year after the initial inversion before the recession set in,” they told clients.</p> <p>While most currencies did little overnight, the Turkish lira plunged to fresh record low. Fears are growing for Turkey where expectations are growing of emergency central bank action to counter the lira's slide to record lows. <strong>Will the next emerging market crisis start in Turkey, and if so when?</strong></p> <p>Commodity markets too are benefited from the improved global growth outlook, with copper futures rising to two-week highs CMCU3. Oil prices too jumped, with Brent crude up almost $1 a barrel due to cuts in piped Canadian crude and expectations of a prolonged OPEC-led production cut.</p> <p><strong>Bulletin headline Summary from RanSquawk</strong></p> <ul> <li>European stocks are relatively directionless with the EuroStoxx 50 trading flat in what has been a light session of macro newsflow thus far</li> <li>Fixed income markets feel the squeeze in Europe amid a rapid turnaround with the front end of the curve giving way first</li> <li>Looking ahead, highlights include the UK budget, US durables, weekly jobs, DoEs, FOMC minutes and Baker Hughes</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures little changed at 2,597.70</li> <li>Stoxx Europe 600 little changed at 387.97</li> <li>MSCI Asia up 0.6% to 172.62</li> <li>MSCI Asia ex Japan up 0.5% to 568.44</li> <li>Nikkei up 0.5% to 22,523.15</li> <li>Topix up 0.3% to 1,777.08</li> <li>Hang Seng Index up 0.6% to 30,003.49</li> <li>Shanghai Composite up 0.6% to 3,430.46</li> <li>Sensex up 0.3% to 33,563.33</li> <li>Australia S&amp;P/ASX 200 up 0.4% to 5,986.41</li> <li>Kospi up 0.4% to 2,540.51</li> <li>German 10Y yield rose 1bp to 0.36%</li> <li>Euro up 0.2% to $1.1763</li> <li>Italian 10Y yield fell 3bps to 1.51%</li> <li>Spanish 10Y yield rose 1bp to 1.49%</li> <li>Brent futures up 0.7% to $63.03/bbl</li> <li>Gold spot up 0.3% to $1,284.35</li> <li>U.S. Dollar Index down 0.2% to 93.78</li> </ul> <p><strong>Top Overnight News</strong></p> <ul> <li>Fed officials have penciled in a gradual path for raising interest rates, but minutes of their last meeting may show increasing concern that the U.S. labor market is overheating</li> <li>Yellen however cautioned against raising interest rates too quickly and said it was dangerous to allow inflation to drift lower</li> <li>German Chancellor Angela Merkel’s party is betting on a revived alliance with the Social Democrats to dodge the risk of new elections, according to people familiar with discussions in Berlin</li> <li>Uber Concealed Hack That Exposed 57 Million People’s Data</li> <li>For the U.K. government, which has already been weakened by infighting over Brexit and the hasty departure of two cabinet ministers, a badly-received Budget could put Chancellor of the Exchequer Philip Hammond’s political future in doubt; Hammond is constrained by reduced growth forecasts while he has been tasked to wow voters disillusioned by years of austerity<br />Russian President Vladimir Putin meets his Turkish and Iranian counterparts, Recep Tayyip Erdogan and Hassan Rouhani respectively, in Sochi for summit talks on Syria</li> <li>Tax bill update: bill contains future tax traps for multinationals</li> <li>German Chancellor Angela Merkel’s party is betting on an alliance with the Social Democrats even as she publicly stated she’s open to another election</li> <li>Fed Debate Over Rate-Hike Pace in Focus Amid Strong Job Market</li> <li>Disney Animation Legend Lasseter Takes Leave Over Misconduct</li> <li>Nippon Paint Derails Akzo Bid for Axalta in Surprise Counter</li> <li>MiFID Myth Is That Rules Will Benefit Savers, Money Managers Say</li> </ul> <p><strong>Asia equity markets were higher across the board as the regional bourses received a lift from their US counterparts, </strong>where tech outperformed and all major indices posted fresh record levels. ASX 200 (+0.4%) was led by energy names as crude prices extended on post-API gains after the latest inventory report showed the largest drawdown in 3 months, while Nikkei 225&nbsp; (+0.5%) shrugged off a firmer currency and jumped aboard the tech-rally ahead of tomorrow’s market closure. Elsewhere, the Taiex (+0.4%) posted a 27-year high, while Hang Seng (+0.6%) rose to its highest in a decade above the 30,000 level after the PBoC upped its liquidity operations again, with blue-chip energy names also underpinned. Finally, 10yr JGBs&nbsp; shrugged off the positive risk tone across the region and traded higher with mild support seen amid the BoJ’s presence in the market for nearly JPY 1tln of JGBs ranging from 1yr-10yr maturities. PBoC Governor Zhou said China should allow markets to play a decisive role in financial resource allocation, while he added they will reduce FX intervention and push ahead on CNY internationalization. PBoC injected CNY 100bln via 7-day reverse repos, CNY 80bln via 14-day reverse repos &amp; CNY 10bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6290 (Prev. 6.6356). Sources state that although the BoJ sees no immediate need to withdraw stimulus, officials are now more vocal on increasing costs of prolonged ultra-loose policy which could be a hint that the next move would be to cut back stimulus rather than widen it.</p> <p><em>Top Asian News</em></p> <ul> <li>Hedge Funds Are Demanding China Buyers Pay More in M&amp;A Deals</li> <li>Indian Steel Tycoon Is Said to Hire StanChart Banker to Lead M&amp;A</li> <li>Yuan Interbank Rates Jump in Hong Kong Amid Year-End Demand</li> <li>Hong Kong’s Hang Seng Index Rises Above 30,000 to Decade- High</li> <li>Anbang Is Said to Be Required to Cut Bank Stakes Under New Rules</li> <li>Gulf Energy Prices $733 Million Thailand IPO at Top End of Range</li> </ul> <p><strong>European stocks are relatively directionless with the EuroStoxx 50 trading flat</strong>. Newsflow has also been on the lighter side ahead of the UK Autumn Budget. Among the biggest movers is Thomas Cook, slipping some 13% after its earnings report. Although, profit figures had come in-line or ahead of analyst estimates, focus was on the tighter margins and aggressive&nbsp; discounts, signalling potential warnings over heightened competition. On a sector basis, basic materials and oil names are faring better, with the latter bolstered by the rise in oil prices, in which WTI is now at fresh 2-yr highs. More colour and analysis around the rapid turnaround in bonds courtesy of market contacts, as we hear that the front end caved first. Dec 2 year contracts breached the pre-October ECB QE tapering low at 112.2400 (low now 112.200), while 5 year Bobls have been underperforming since the off on spreads and some positioning after Coeure hinted at more forward guidance before September 2018 to flag the end of bond buying. There is also talk about 10s vs 30s flattening trades, and block sales of Bunds in 10k lot clips, one at the 162.67 low, but set more than 10 ticks higher, and the other vs an option strategy (162.50/160.50 put spread against 163.50 calls). Some consolidation off the lows in Eurex contracts in wake of a strong 30 year German auction, with the retention at the lower end of norms, albeit not a big offering to place.</p> <p><em>Top European News</em></p> <ul> <li>Germany Heaps Pressure on SPD to Bow to Call for New Merkel Pact</li> <li>Riksbank Takes On Housing Correction Fears, Sees Krona Gains</li> <li>Poland’s ‘Wait-and-Sleep’ Stance on Rates Alarms Zubelewicz</li> <li>Oil Dealmakers Seek Boost in U.K. From North Sea Tax Change</li> <li>Denmark’s Nationalists Suffer Surprising Blow in Local Elections</li> </ul> <p><strong>In currencies</strong>, the DXY dollar Index is back below 94.000 yet again on broad USD losses ahead of Thanksgiving, with comments from outgoing Fed Chair Yellen weighing as she expresses serious doubts about inflation reaching target due to factors that may not be transitory. The DXY is holding around 93.770, but in danger of revisiting recent multi-week lows under&nbsp; 93.500 if the Greenback succumbs to more selling pressure in holiday-thinned volumes. The EUR/USD has trimmed its early gains after initially rebounding strongly from sub-1.1720 lows as residual offers from 1.1780-1.1800 continue to obstruct re-tests of the highs above 1.1800. Option expiries could exert more direction influence as Thanksgiving approaches and nearest strikes to watch in decent size are at 1.1750-75 (1.2 bn) then 1.1800-30 (2.4 bn). Cable also firmer and just under 0.8900, with potential for volatility around the Frankfurt fix (385 mn expiry at the figure too). Yen was initially the firmest of the G10 vs the Dollar, with the pair chopping and changing above 112.00 (1.4bln expiry), and a market contact also noting selling in the GBP/JPY cross through 148.50 (program offers reportedly) and key chart support at 147.50.</p> <p><strong>In commodities,</strong> brent and WTI crude futures are firmer this morning, with sentiment bolstered by the sizeable drawdown in last night’s API crude report (largest drawdown in 3-months). As such, WTI rose to a fresh 2-yr high, however did fail to push through USD 58. Elsewhere, gold prices are modestly higher amid the support from the softer greenback. US API weekly crude stocks (Nov 17) -6.356M (Prev. 6.513M).</p> <p><strong>Looking at the day ahead, </strong>we will get the FOMC minutes from the latest monetary policy meeting, while in the UK the big focus will be Chancellor of the Exchequer Philip Hammond’s Budget statement in Parliament. The most significant release of note is the flash October durable and capital goods orders data in the US. The latest weekly initial jobless claims data is also due along with the final November University of Michigan consumer sentiment reading.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>7am: MBA Mortgage Applications, prior 3.1%</li> <li>8:30am: Initial Jobless Claims, est. 240,000, prior 249,000; Continuing Claims, est. 1.88m, prior 1.86m</li> <li>8:30am: Durable Goods Orders, est. 0.3%, prior 2.0%; Durables Ex Transportation, est. 0.5%, prior 0.7% <ul> <li>Cap Goods Orders Nondef Ex Air, est. 0.5%, prior 1.7%; Cap Goods Ship Nondef Ex Air, est. 0.3%, prior 0.9%</li> </ul> </li> <li>9:45am: Bloomberg Consumer Comfort, prior 52.1</li> <li>10am: U. of Mich. Sentiment, est. 98, prior 97.8; Current Conditions, prior 113.6; Expectations, prior 87.6</li> <li>2pm: FOMC Meeting Minutes</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>The highlight today is likely to be the UK budget where I’ll find out how much more tax I’ll have to pay over the next 12 months and beyond. As our economists highlight, a stronger fiscal starting point over the last six months is likely to be wiped out by downward revisions to productivity from the OBR, leaving the chancellor slightly less space in meeting his fiscal mandate. Nevertheless, DB anticipate Hammond will spend at least some of what remains, in response to political pressure over austerity and in anticipation of slowing growth next year. See the full preview here.</p> <p>In terms of markets, can I be the first to declare the start of this year’s Santa Clause rally? Yesterday saw the S&amp;P 500 (+0.65%) cross 2600 for the first time ever, before closing at a fresh record high just below that mark. In fact the DOW (+0.69%) and Nasdaq (+1.06%) were also at record highs.</p> <p>The one spoke in the wheel as far as I’m concerned is the continued flattening of the US yield curve. 2s10 closed at 58.4bps and below 60bps for the first time in a decade. We still get worried by a flat yield curve as we think it risks cutting off animal spirits. The flatter the yield, the less attractive longer-term investments/activity becomes. The opportunity cost of keeping money safe at the front end gets lower and the risk is economic participants/investors become more defensive. In more recent cycles (since the early 80s) we’ve needed it to invert<br />for it to be a precursor to a recession but virtually all recessions over the last 70 plus years have followed a flattening of the yield curve. In a low yield world markets may keep reaching for every last bit of carry as the curve flattens but the closer the yield curve gets to zero the more the risks build. Obviously the Fed have to be conscious of this in 2018. It’s difficult to plough through and raise rates if the back end doesn’t budge. Our base case is that it does as inflation increases but a risk is that long end rates get anchored at low levels by BoJ/ECB buying elsewhere and we could see an inverted curve if the Fed dots are accurate. So one to keep an eye on.</p> <p>Staying with the Fed, our economists put out a piece last night suggesting that in recent weeks, many Fed officials have raised the possibility of re-considering the Fed's current policy framework of targeting a 2% inflation rate. Today’s minutes could provide further indications that this is becoming a lively debate among Fed officials. Given the breadth and the increase in the intensity of this discussion, our guys think markets should take note and they go through the pros and cons of all the possible alternatives to the 2% inflation target.</p> <p>In Germany, the political gridlock continues but behind the scenes there has been more initiatives to avoid a new election with sources (per Bloomberg) claiming a grand coalition between Merkel’s party with the Social democrats may still be possible even though SPD’s leaders have been publicly against this. The German President Steinmeier has also met with the FDP and Greens party, asking them to consider re-joining the coalition talks with Chancellor Merkel. Elsewhere, the longest serving Finance minister Mr Schaeuble has urged German political parties to work together and start building a government, while the FDP leader Mr Lindner has noted “the experiment of a four-party coalition is unfortunately finished”.</p> <p>Across the pond, the US Senate Finance Committee has released the text of its draft tax bill yesterday, with Republican leaders expecting a full chamber vote on it, potentially as soon as next week on the 30th November.</p> <p>This morning in Asia, markets are trading higher again, with the MSCI Asia Pac. index c0.7pts away from its 29 year high. The Nikkei (+0.72%), Kospi (+0.31%) and ASX 200 (+0.54%) are all up modestly, while the Hang Seng (+0.90%) jumped above 30,000 to a fresh decade high as we type.</p> <p>Now recapping other markets performance from yesterday. As discussed earlier US bourses strengthened to record highs with little material new news flow, although trading volumes in the S&amp;P were c15% below average. Within the S&amp;P, all sectors excluding telco (-0.54%) were in the green, with gains led by tech (+1.19%) and heath care stocks. European markets were broadly higher, with the Stoxx 600 (+0.44%), DAX (+0.83%) and FTSE (+0.30%) all up modestly, while Spain’s IBEX fell 0.32%. The risk on bias was evident again with the VIX index down for the fourth consecutive day and now back below 10 (-8.64% to 9.73). </p> <p>Sovereign bond markets were slightly firmer with core bond yields down 1-3bp (UST 10y &amp; Bunds -1.2bp; Gilts -1.8bp; OATs -2.6bp) while peripherals modestly outperformed (down c3bp). In currencies, the US dollar index dipped 0.13% while both the Euro and Sterling rose 0.08%. The Turkish Lira pared losses to be down 0.7% vs. the greenback (c14% down since September) after its central bank took steps to strengthen the currency by providing funding from its late liquidity window which will raise the weighted average cost of funding by 25bp. In commodities, WTI oil rose 0.83% yesterday and is trading c1.7% higher this morning as API data show crude stockpiles continuing to decline. Precious metal rebounded slightly (Gold +0.31%; Silver +0.37%) while most other base metals advanced (Copper +1.39%; Zinc +2.23%) but aluminium fell 0.83%.</p> <p>In Europe the ECB’s Coeure reiterated his expectations that interest rate guidance rather than QE bond purchase will “gain importance over time”, he noted “I expect the link (between inflation and QE) to change when the governing council is sufficiently confident that net asset purchases are less needed” to support inflation and that “I expect it will come at some point between now and September 2018”. Elsewhere, when asked if QE should end in September, he noted “for me, it’s the logical conclusion”, although he reiterated that he is part of the large majority of council members that believe a substantial degree of monetary accommodation is still needed.</p> <p>In the UK, Brexit Secretary Davis pushed back on EU negotiator Barnier’s earlier claims for an unique solution on the Irish border, Mr Davis noted “we must start talking about our future (trade) relationships…the Northern Ireland border cannot be fully addressed if we’re not taking into account the shape of our future…with the EU”. We wait and see if a breakthrough occurs before the EU summit on 14th December but it’s increasingly seems likely that the UK will up its settlement offer soon.</p> <p>Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the October Chicago Fed national activity index was materially above expectations at 0.65 (vs. 0.20) – the highest since January 2012, with the strength likely aided by the post storm rebuild efforts. The existing home sales also beat at 5.48m (vs. 5.40m expected) – a four month high. Sales grew 2% mom, with modest growth seen across all four regions, although annual growth was still down 0.9% yoy.</p> <p>In the UK, both the October underlying private sector net borrowing (8.0bln vs. 7.1bln expected) and public sector net borrowing (7.5bln vs. 6.5bln expected) was modestly higher than expectations. Elsewhere, the CBI’s Industrial trends survey posted a 19pt mom rebound in the new orders index to +17 in November – the strongest reading since 1988. The export orders index also rose to its highest level since 1995.</p> <p>Looking at the day ahead, the big focus in the UK will be Chancellor of the Exchequer Philip Hammond’s Budget statement in Parliament, due at midday. In the evening we will also receive the FOMC minutes from the latest monetary policy meeting. Datawise, the most significant release of note is the flash October durable and capital goods orders data in the US. The latest weekly initial jobless claims data is also due along with the final November University of Michigan consumer sentiment reading.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="853" height="468" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trader%20looking%20at%20screen%202.jpg?1511352074" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/asian-stocks-smash-records-german-curve-flattens-crude-surges-july-2015-highs#comments 2s10s 2s10s 2s10s. Angela Merkel’s party animation API ASX 200 Bank of Japan Bloomberg Bloomberg Dollar Spot Bond Business CAD Chicago Fed Chicago Fed national activity China China’s government Consumer Sentiment Continuing Claims Copper Crude Dow 30 Economy Equity Markets European Central Bank European Union European Union EUROSTOXX 50 Fail FDP federal government Federal Open Market Committee Finance Financial markets Fixed income flash Germany Gilts Greens Party Hang Seng 40 Hong Kong IBEX 35 Initial Jobless Claims Ireland Janet Yellen Janet Yellen Japan Jim Reid Kospi Merkel’s Party Michigan Monetary Policy Monetary policy Money Morgan Stanley MSCI Asia Pac MSCI Asia Pacific MSCI Emerging Market NASDAQ Nikkei Nikkei 225 None Organization of Petroleum-Exporting Countries People's Bank of China Price of oil Recession S&P S&P 500 S&P/ASX 200 Saxo Bank SocGen SSE 50 Stock market STOXX Stoxx 600 Taiex Turkey U.S. Senate Finance Committee UK Government University Of Michigan University of Michigan US Dollar Index VIX Vladimir Putin Volatility Yen Yield Curve Yield curve Wed, 22 Nov 2017 12:01:48 +0000 Tyler Durden 607731 at http://www.zerohedge.com