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R.T.M. ~ Frontrunning ~ 4th Ed., Vol.2 ~ Jan 25th - 29th

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#2
Weekly Forex Review - 25th to the 29th of January
Forex Reviews


Published on Jan 23, 2016

Weekly Forex Outlook and Review for the 25th to the 29th of January 2016.

Pairs and Markets Analysed this Week ( including looking at potential high probability opportunity zones, management points and targets ): EURUSD, GBPUSD ( 4 Hour ), AUDUSD ( 4 Hour ), NZDUSD ( 4 Hour ), USDJPY, USDCAD, USDCHF, Silver, Gold, AUDCAD, GBPAUD, AUDNZD, EURCAD and GBPNZD.

Thanks for watching and Happy Trading, if you watched this bio do not forget to comment, like and subscribe. Also comment "Happy Trading" below to let me know you read the bio as well.

I appreciate you all.
 

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#4
Michael Pento-Devastating Metastasizing Global Depression On its Way
Greg Hunter


Published on Jan 24, 2016
Financial expert and money manager Michael Pento is forecasting a global depression, and Pento contends, “It’s happening. It’s happening now. This is not your garden variety recession. You have impotent central bankers and impotent sovereign nations. How many more empty cities is China going to build without destroying their currency? . . . . There are going to be global sovereign defaults, and those defaults are going to take the form of defaults through monetization and inflation. That is where we are headed.” Pento warns that until the Fed starts printing massive amounts of money to turn the imploding economy around, “It’s going to be a devastating, metastasizing global depression. It’s on its way. ”

On gold, Pento says, “Your golden life preserver is going to be gold. It’s the only thing that is going to work when you have depression, insolvent nations and massive monetization of all outstanding bonds. I would definitely get physical gold.”

Join Greg Hunter as he goes One-on-One with Michael Pento of Pento Portfolio Strategies.

All links can be found on USAWatchdog.com: http://usawatchdog.com/next-crash-wor...
 

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#5
Frontrunning: January 25


Submitted by Tyler Durden on 01/25/2016 07:28 -0500

  • Oil Drops as Saudis to Maintain Spending, China Diesel Use Falls (BBG)
  • Saudi Arabia is able to withstand low prices says Saudi Aramco Chairman (WSJ)
  • Recession Warnings May Not Come to Pass (WSJ)... or they May
  • Stocks moving in tandem are squeezing short sellers (FT)... as first noted here in 2013
  • Problems Found at Theranos Lab (WSJ)
  • New York rebounds after blizzard, Washington shuts down government (Reuters)
  • China business confidence, recruitment hit record lows in January - SMI survey (Reuters)
  • Twitter to Revamp Leadership Under CEO Jack Dorsey (WSJ)
  • Johnson Controls to Combine With Tyco, Move Domicile to Ireland (BBG)
  • Birinyi More Worried About Markets Than Any Time Since 2009 (BBG)
  • Wal-Mart: It Came, It Conquered, Now It's Packing Up and Leaving (BBG)
  • Sanders, Clinton cool to Bloomberg's possible entry into 2016 race (Reuters)
  • Ford Shutting Operations in Japan, Indonesia on Lack of Profit (BBG)
  • China’s Working-Age Population Sees Biggest-Ever Decline (WSJ)
  • More holes than fingers? Beijing struggles to plug capital flight (Reuters)
  • Chinese Developer Aims Lower Amid Manhattan's Luxury-Condo Glut (BBG)
  • Merkel's party, sliding in polls, weighs German 'border centres' (Reuters)
  • German Business Sentiment Falls as Market Woes Cloud Outlook (BBG)
  • Syria opposition to meet Tuesday, blames Russia for 'obstacles' (Reuters)
  • U.S. Relies Heavily on Saudi Money to Support Syrian Rebels (NYT)
  • U.S. IPO Market on Track for Slowest Month Since Recession (BBG)
  • Canada's Trudeau to DiCaprio: Your climate remarks don't help (Reuters)


Overnight Media Digest

WSJ

- Twitter Inc Chief Executive Jack Dorsey is revamping his top ranks as he tries to find ways to revive the social media company and earn the trust of investors. (http://on.wsj.com/1RHubsr)

- U.S. health inspectors have found serious deficiencies at Theranos Inc's laboratory in Northern California, according to people familiar with the matter. (http://on.wsj.com/1RHGjtC)

- Johnson Controls Inc and Tyco International PLC are in advanced talks to combine, according to people familiar with the matter, in a deal that could value Tyco as high as $20 billion and signal that companies are still willing to embark on large mergers despite being shaken by recent market volatility. (http://on.wsj.com/1QsUkda)

- Canada's efforts to curb greenhouse gas emissions are calling into question oil majors' ability to tap the world's third-largest oil reserves. (http://on.wsj.com/1OQkSk3)



FT

Twitter is on the verge of a major management shake-up. Three of its most senior executives - head of product, head of media and head of engineering are leaving the company. The San Francisco-based company might announce the appointment of two new members to its board as soon as this week.

U.S. asset manager Third Avenue Management's asset under management have dropped by more than $1 billion. The company had $6.3 billion under its management at the end of 2015, however, investment losses coupled with client redemptions have led to a reduction in its assets under management to $5 billion.

Investors in China's rural commercial banks are selling their stakes on Taobao showing signs of desperation amongst cash-straped investors. The sale in lenders at the bottom of China's financial system require minimum to no regulatory approval at all.

Iran plans to sign a contract with Airbus to buy 114 new aircrafts. Following the lifting of economic sanctions against the middle-eastern nation, president Hassan Rouhani's government is determined to show Iranians the economic benefits of its diplomacy.



NYT

- Avocados From Mexico and two other advertisers - Skittles and Wix.com - have decided to return to the Super Bowl, indicating that live television remains important for advertisers. (http://nyti.ms/1WIMWLr)

- Traders and portfolio managers worry that sophisticated institutional investors, who generally tend to take a long-term view, have been the ones driving the selling over the past six months. (http://nyti.ms/1Nu7j86)

- Whether or not negotiators reach a pact by Feb. 1 on how companies such as Google and Facebook use Europeans' online data, Isabelle Falque-Pierrotin, who chairs the group of European data protection regulators as well as France's watchdog called the CNIL, is in a position to propel privacy protection efforts. (http://nyti.ms/1ZMrViZ)

- Twitter will undergo a major overhaul of its top ranks in the next few weeks, from its eight-member board to key executives in engineering and product. (http://nyti.ms/23mTROW)



Canada

THE GLOBE AND MAIL

** Sears Canada Inc is stepping up its efforts to close another round of stores. The company has instructed real estate firm CBRE to look for alternative uses for Sears's weakest stores, such as its clearance outlets, Brandon Stranzl, executive chairman of Sears Canada, said in an interview. (http://bit.ly/1nJ5Rdj)

** Canadian investigators are analyzing cellphone data in an attempt to track down the masterminds of a militant attack that killed six Canadians, Burkina Faso foreign minister Alpha Barry, said in an interview with The Globe and Mail. (http://bit.ly/1nJ6bIW)

NATIONAL POST

** Peter MacKay, a high ranking cabinet member in the previous Conservative government, is joining the Toronto office of global law firm of Baker and McKenzie as a partner. (http://bit.ly/1lJKdE6)

** By arguing that publishing peer viewed research conflicted with her role as an indigenous scholar, former law professor Lorna June McCue has won her bid for a human rights tribunal hearing after losing her job at the University of British Columbia. (http://bit.ly/1lJKjeW)



Britain

The Times

The Financial Conduct Authority has been accused of betraying the confidence of whistleblowers by passing on evidence and sensitive information to the high street banks that were the subject of their complaints. (http://thetim.es/1OQsuDl)

Competition to win the £4 billion contract to build superfast trains for the HS2 rail line has been blown open by a promise from Alstom, the French industrial giant, to bring rolling stock production back to Britain if it wins the tender. (http://thetim.es/1SGgXfG)

The Guardian

Unilever, the consumer goods group behind Persil and Magnum ice-creams, has said it will not scale back its UK operations if Britain votes to leave the EU. (http://bit.ly/23lUh8v)

Iran plans to buy 114 aircraft from the European company Airbus by March, and is looking for other deals, senior Iranian officials said on Sunday as their country emerges from sanctions and international isolation. (http://bit.ly/1Pwfy4Q)

The Telegraph

HSBC is poised to make a decision on whether it will stay in the UK as early as this week, The Daily Telegraph has learnt. (http://bit.ly/1ZXvoAC)

Former Ofcom chief Ed Richards has ruled himself out of the race to become the next chief executive of City regulator the Financial Conduct Authority, the Telegraph understands, further narrowing the field of candidates to take over from ousted boss Martin Wheatley. (http://bit.ly/23mji3e)

Sky News

The Government is considering taking thousands of unaccompanied Syrian refugee children from migrant camps in Europe, the International Development Secretary has told Sky News. (http://bit.ly/20nGiMI)

Severe weather warnings are being issued as the snowstorm that deluged the U.S. heads to Britain, bringing up to 8 inches (20cm) of rain in some areas. (http://bit.ly/1PtRFkH)

The Independent

A controversial policy reportedly forcing asylum seekers in Cardiff to wear brightly coloured wristbands has been axed after a public outcry. (http://ind.pn/1Jw3NiN)


http://www.zerohedge.com/news/2016-01-25/frontrunning-january-25
 

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#6
Oil Slides Dragging Global Stocks, US Futures Lower, After Saudi Aramco Supply Comments


Submitted by Tyler Durden on 01/25/2016 06:48 -0500

After the biggest two-day surge in oil in seven years, early in the overnight session both Brent and WTI continued their run for a third day, entering a bull market, 20% up from recent lows hit just last week (yet still 15% down on the year) when Saudi Arabia spoiled the momentum party after the world’s biggest crude exporter said it’s keeping up investments in energy projects while diesel consumption in China dropped for a fourth consecutive month, signaling an industrial slowdown.

WTI reversed course and futures dropped as much as 4.1% in New York when Saudi Aramco Chairman Khalid Al-Falih announced his company hasn’t reduced its investment capacity amid lower crude prices, suggesting that oil will remain oversupplied for the foreseeable future. As a result, West Texas Intermediate for March delivery dropped as much as $1.33 to $30.86 a barrel on the NYMEX and was at $31.14 at pixel time after rising as high as $32.74 earlier. “The Saudi news surely would give a little bit of a worry that production would remain strong,” Daniel Ang, an investment analyst at Phillip Futures, said by phone from Singapore. “The main reason for oil losing steam still comes from the fact that oil markets are currently in oversupply.”



Khalid al-Falih, the chairman of Saudi state oil giant Aramco, addresses the 10th Global Competitiveness Forum on Monday. He said that a moderate oil price would be reached before long. Photo: Agence France-Presse/Getty Images

Elsewhere, diesel use in China dropped 5.6% in December compared with a year earlier and gasoline consumption grew at the slowest pace in more than two years, confirming it is not just growing supply but slowing demand - something the DOE confirmed last week - that is the culprit for record oil stockpiles. “The China demand figures is a stark reminder that consumption growth may not be stellar in 2016,” Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB, said by phone. “Prices needs to stay weak for some time at least in order to keep excess production out and help rebalance the market later.”

Since algos continue to track every risk tick-for-tick with oil, as seen by the Bloomberg chart below showing the near record correlation between equities and oil, global stocks and US equity index futures initially rose only to slide following the Saudi Aramco comments, as stocks and the currencies of exporters were dragged down, while havens, including gold and the Japanese yen, rallied.

\


“The correlation between oil prices and equities has turned positive,” former Goldmanite Erik Nielsen, chief global economist at UniCredit Bank AG, wrote in a report to clients on Sunday. It’s “wrong, and therefore temporary,” he wrote. “When oil prices drop, it reduces the transfer of income and wealth from oil-consuming countries, like Europe, to oil-producing regions, like the Middle East and Russia. Since the ‘winners’ in Europe have lower savings ratios than the ‘losers’ this is all good for growth.”

For now, of course, it is Nielsen who is wrong as the latest snapshot of global risk confirms:

  • S&P 500 futures down 0.3% to 1893
  • Stoxx 600 down 0.1% to 338
  • MSCI Asia Pacific up 1.2% to 120
  • US 10-yr yield down 2bps to 2.03%
  • Dollar Index down 0.15% to 99.42
  • WTI Crude futures down 2.1% to $31.50
  • Brent Futures down 1.6% to $31.66
  • Gold spot up 0.5% to $1,104
  • Silver spot up 0.9% to $14.16
Flipping quickly through regional markets, we start in Asia where equity markets traded higher in a continuation of the gains seen late last week amid prospects of central bank easing and a rebound in the energy complex . The ASX 200 (+1.8%) and Hang Seng (+1.4%) were led higher after crude posted its largest 2-day gain in 7yrs to climb back above USD 32/bbl. Shanghai Comp (+0.6%) was further bolstered by reports that the PBoC are planning as much as CNY 800bIn of mid-term liquidity support, while the Nikkei 225 (+0.9%) surpassed the 17000 level after shrugging off weak Japanese trade figures, underpinned by a weaker JPY. 10yr JGBs traded higher despite the firm risk on tone in the region, supported by hopes of further central bank easing while the BoJ were also in the market for 5yr-10yr government debt.

Elsewhere in Japan, BoJ Governor Kuroda said Japan's underlying price trend currently looks solid and reiterated that the BoJ will not hesitate on further easing if needed to reach its price target, but could not comment on whether BoJ will ease this week or not.

Top Asian News

  • Mirae Asset Buy $2 Billion Stake in Daewoo Securities: Mirae Asset agreed to buy a 43% stake in Daewoo Securities for 2.39t won ($2b), will create South Korea’s largest brokerage by assets
  • PBOC’s Year of Monkey Challenge Opens With Calming Money Markets: 7-day repos done at 4.5% last week, highest since June
  • Hong Kong Scores Record in Survey of Priciest Home Markets: Sydney ranked second priciest, followed by Vancouver
  • J.C. Flowers to Buy Chi-X Exchange Business in Australia, Japan: Head of Japan unit aiming for 5% to 10% market share
  • INCJ Fund Says Sharp Needs Just $2.5 Billion to Revive Growth: Fund CEO says no agreement has been reached on rescue
In Europe equities have been choppy this morning, despite initially following Asia's lead and opening in positive territory (EuroStoxx -0.10%). Equity indices are mixed as North American participants come to their desks, as the risk tone for markets is somewhat uncertain. Total SA and BP Plc lost more than 1 percent on Monday, while Rio Tinto Group also dropped 1 percent after oil weighed in early trading after Aramco's comments.

Banca Monte dei Paschi di Siena SpA advanced for a third day, taking its surge in the period to a record 50 percent. Greece’s ASE Index climbed 1.5 percent after Standard & Poor’s upgraded the country to B- from CCC+, with a stable outlook.

Bunds have failed to benefit from lingering uncertainty in markets, trading in only very mild positive territory. Prices have been weighed upon by this week's upcoming supply, with around EUR 11 bIn (equiv. to 77K Bund futures) expected this week.

Top European News

  • VW Given Deadline to Come Clean by Second-Biggest Shareholder: Given three months by the prime minister of Lower Saxony, its 2nd-biggest shareholder, to provide a full account of the roots of the diesel-emissions scandal
  • Rabobank Said to Hold Talks for $4.9b Leasing Unit Sale: Is in preliminary talks with banks, institutional investors and private-equity firms that may bid for its leasing unit, De Lage Landen, in a sale that may fetch as much as EU4.5b
  • Russian Economy Shrinks Most Since 2009 as Oil Prices Plunge: GDP drops 3.7% in 2015 after growth of 0.6 percent in 2014, less than 3.8% fall seen in survey
  • Airbus Jets, French Cars on Shopping List as Iran’s Rouhani visits Europe
  • Portuguese Consensus Candidate Sousa Wins Presidential Election: Marcelo Rebelo de Sousa will become president after winning more than 50% of 1st-round vote Sunday, avoiding runoff
  • Kingfisher Shares Drop on Cost to Implement Strategy Revamp: 5-year plan to boost profit will come at a cost to short- term earnings
  • Google Agrees to Pay $185m in U.K. Tax Settlement: Google will adopt a new approach for U.K. taxes, and the settlement covers taxes going back to 2005
  • Timid Inflation Pickup First Clue for Draghi Pondering Stimulus: Inflation picked up to 0.4% in Jan. from 0.2% the previous month, according to a Bloomberg Survey before data due Friday
  • Anglo Platinum Sees $740 Million Loss on Mine Write-Offs: To report a bigger-than-expected loss after reported impairments and write-offs amounting to 14b rand
In FX, the yen halted a two-day decline after Bank of Japan Governor Haruhiko Kuroda showed little appetite for an immediate expansion of stimulus as the central bank prepares to set policy this week.

Japan’s currency has gained versus all its 16 major counterparts since the start of the year as a China-led stock selloff and a tumble in oil prices spurred demand for haven assets. Hedge funds and other large speculators raised net bullish yen positions to the highest in almost four years last week. The BOJ is scheduled to meet Jan. 28-29 and announce its monetary-policy decision on Jan. 29.

Kuroda said in an interview on Jan. 22 in Davos, Switzerland, that “we don’t think the current market situation has been affecting corporate behavior unduly.”

The Canadian dollar and Mexico’s peso declined with the ruble as currencies of commodity producers fell with crude. South Korea’s won strengthened 0.5 percent before data forecast to show South Korea’s economic growth quickened.

In commodities, West Texas Intermediate dropped as much as 4.1 percent. Saudi Arabian Oil Co. is maintaining investment in oil and natural gas projects as it studies options to sell shares in its parent company and refining and chemical operations, Chairman Khalid Al-Falih said Monday. The state-run producer, known as Saudi Aramco, can sustain low oil prices for “a long, long time,” he told reporters in Riyadh.

Aramco, which supplies all of Saudi Arabia’s crude, pumped 10.25 million barrels a day in December, adding to a global supply glut as the Organization of Petroleum Exporting Countries effectively abandoned production limits to defend market share.

Gold advanced as investors weighed the prospects of the metal as a haven. Bullion for immediate delivery rose 0.5 percent to $1,103.78 an ounce, according to Bloomberg generic pricing. The metal climbed 0.8 percent last week as turmoil in global stocks renewed interest in the metal as a store of value. Copper in London added 0.2 percent to $4,451 a metric ton, while nickel dropped 0.6 percent to $8,650 a ton.

On the US calendar today the only event today is the Dallas Fed manufacturing activity update for January, which is estimated at -14, up from a prior -20.1.

Global Top News:

  • Johnson Controls Said in Talks to Merge With Tyco International: Johnson is continuing with its plan to spin off its automotive-seating operations, said people familiar; terms weren’t immediately available
  • Twitter Loses Product, Engineering Chiefs in Major Shake-Up: Losing four members of its executive leadership team, including its product and engineering chiefs; will this week add 2 new board members to help guide it through a turnaround, according to a person familiar with the matter
  • New York Gets Back on Track After Storm, Washington Slower: Stock, bond, and commodities markets in New York are planning to operate on regular schedules Monday, spokeswomen said; Federal offices in Washington will be closed on Monday, the Office of Personnel Management said
  • German Business Sentiment Falls as Market Woes Cloud Outlook: Ifo institute’s business climate index dropped to 107.3 from a revised 108.6 in Dec.
  • AT&T Sees $2.2b Pretax Gain on Pension, Benefit Changes: Gains were partially reduced by returns on assets that fell short of AT&T’s estimates
  • Apple’s Growth Seen Slowing as IPhone Demand Wanes: Earnings due tomorrow; Apple Executive Leading Electric-Car Project Said to Depart
  • Federal Realty Investment Trust to Replace Broadcom in S&P 500
  • VMware Said to Cut About 900 Jobs in Restructuring: The job reductions may be announced on Tuesday when the company reports quarterly earnings or a day earlier
  • U.S. IPO Market on Track for Slowest Month Since Recession: Zero listings so far this month as volatility shakes stocks
  • ‘Revenant’ Climbs to Box-Office Lead After Oscar Nominations: Collected $16m in U.S. and Canadian theaters, Rentrak said
  • Goldman’s Cohn Says Sell Treasuries; Morgan Stanley Is Bullish: Goldman Sachs President Gary Cohn says Treasury yields will probably rise, just as Morgan Stanley predicts the opposite
  • Puerto Rico Electric Maintains Talks After Debt Plan Expires: Puerto Rico’s main electricity provider and its bondholders are continuing negotiations even after a plan to restructure nearly $9b of debt terminated Friday
  • SandRidge Said to Explore Debt Restructuring Options: Reuters: Has been in talks with investment banks, law firms about hiring restructuring advisers
  • Greenlight Capital to Get SunEdison Board Seat, WSJ Reports: Greenlight likely to pick director from outside firm, WSJ said
  • Yahoo Said to Speed Up Stock Option Vesting: Business Insider: Co. to accelerate stock option grants to begin vesting after 1 mo. rather than 1 yr in attempt to stem departures
  • Samsung Bioepis Delays Nasdaq IPO, The Bell Reported: Co., which had aimed to list shrs on Nasdaq in 1H, “indefinitely” delays IPO plan, The Bell reported in a story available to subscribers on Jan. 22
  • Ford to Exit All Operations in Japan, Indonesia This Yr: Reuters
  • Hilton Says New Tru Hotels May Become Company’s Biggest Brand
Bulletin Headline Summary from RanSquawk and Bloomberg

  • Oil has sold off in European trade, following comments from Saudi Aramco's Chairman that they will continue to sustain investments in the wake of lower oil prices
  • European equities are mixed, with last week's Draghi-effect no longer at the forefront. FX is taking a breather after a tumultuous start to the year
  • Looking ahead at the calendar today, highlights include speeches from ECB's Lautenschlager and ECB's Draghi as well as earnings from McDonalds, Kimberly-Clark and Halliburton
  • Treasuries rally overnight led by long-end as world equity markets mixed; week offers Fed rate decision on Wednesday and $90b UST note auctions beginning tomorrow with $26b 2Y.
  • Federal Reserve Chair Yellen and her colleagues have so far found themselves wrong-footed by the stronger dollar after they raised interest rates last month for the first time since 2006
  • ECB’s Draghi is about to receive his first major clue of 2016 on Friday as to whether the euro area needs more stimulus with inflation still only a fraction of the goal of just under 2% -- a target the ECB president hasn’t met in nearly three years
  • BOJ Governor Kuroda spoke at Davos ahead of what could be an agonizing decision about whether to add to the central bank’s record asset-purchase program
  • The PBOC is adding administrative orders to its toolbox to calm money markets amid record capital outflows and a surge in cash demand, ordering some banks to cancel repurchase agreements at interest rates it deemed excessive
  • German business confidence fell for a second month in January in a sign that companies in Europe’s largest economy are increasingly worried about slowing global growth
  • Russia’s economy, facing renewed pressure from plunges in energy prices and the ruble, contracted the most since 2009 last year on oil’s decline and sanctions over the conflict in Ukraine that curbed access to international financing
  • In today’s bond market, there’s plenty of hand-wringing about liquidity, or rather, the lack of it. But it’s become so pervasive that even in the market for U.S. Treasuries buyers are gravitating to the newest, easiest-to-sell debt
  • $28.825b IG corporates priced last week along with $1.3b HY. BofAML Corporate Master Index OAS 2bp lower Friday at +196 to end week 7bp wider; 2015 range 180/129. High Yield Master II OAS tightened 26bp to +787 to end week 2bp tighter; 2015 range 733/438
  • Sovereign 10Y bond yields mostly steady except for Greece will widen 19bp. Asian stocsk rally, European stocks mixed; U.S. equity-index futures drop. Crude oil drops, copper and gold higher
US Event Calendar

  • 9:30am: Dallas Fed Mfg Activity, Jan., est. -14 (prior -20.1)
Central Banks

  • 1:00pm: ECB’s Draghi speaks in Frankfurt
Jim Reid completes the overnight wrap

The market's allergic reaction so far in 2016 has eased for now and we're actually only 2% off a bull market in Oil (based on the March WTI contract) after an 18% rally since the lows near Wednesday's close. That included a 9% surge on Friday alone and while the prospects for further central bank stimulus and a general bounce off the recent record lows are playing their part, some comments out of Saudi Arabia suggesting that $30 oil is irrational as well as the prospect of those extreme winter conditions in the US over the weekend were also to partly to blame.

In fact, as much as last week felt horrible for large parts of it it's worth pointing out that the S&P500, DAX, CAC, FTSE and Oil were up +1.41%, +2.30%, +3.01%, +1.65% and +5.92% respectively on the week. Elsewhere crossover was 15bps tighter and CDX IG 6bps tighter. US HY energy spreads finished the week 20bps wider but that included a 101bp move wider on Wednesday alone, with spreads actually 80bps tighter in the last two days of the week. Although we continue to think the global financial system is fundamentally broken and the global economy is in a secular stagnation funk we do think that the cycle has a few quarters of life left in it yet even if recent events have made us much more nervous that the next downturn could come a year earlier than we've been thinking for some time. When inflation is this low central banks can still play a part keeping the plates spinning and when oil is this low the consumer can offset the severe structural issues for a while.

Indeed on the former, Draghi's assertion on Thursday that more was likely to be done in March proved that Central Banks can still have influence even though many in the market have given up on them. It's another big week on this front with the FOMC (Wednesday) and the BoJ meeting on Friday to anticipate. It feels unlikely they will be negative events for the market even if there is no actual hard signs of a Fed relent or fresh stimulus this month from Kuroda. As a minimum we should hear hints of more dovish soundbites relative to their last meetings.

Following on from a strong performance across most Middle Eastern bourses over the weekend on the back of that rally in Oil, the momentum has continued into the Asia session this morning where there have been broad based gains across most of the region. The Nikkei (+0.59%), Hang Seng (+1.37%), Shanghai Comp (+0.59%), Kospi (+0.80%) and ASX (+1.84%) are all currently up as we go to print, with oil markets generally up another 1% this morning. The iTraxx Asia is a couple of basis points tighter while US equity index futures are flat.

The early data this week has come out of Japan where the notable takeaway has been a slightly softer than expected export number for December (-8% yoy vs. -7% expected). Imports were also less than expected last month (-18% yoy vs. -16.4% expected) which has helped to swing the trade balance back to a surplus. The Yen has been trading between gains and losses post the data although some of the focus this morning has been on BoJ Governor Kuroda’s comments from the weekend in Davos where the Governor has appeared to keep his cards close to his chest, saying that ‘at this stage, we don’t think the current market situation has been affecting corporate behavior unduly’, but that ‘the market is the market, and markets could affect the real economy – so we carefully watch’.
Quickly recapping the news and price action from Friday. The direction across the bulk of the markets was pretty much one-way and owed to that biggest daily gain for Oil since August last year. Equities closed strongly, the S&P 500 (+2.03%), Dow (+1.33%), Stoxx 600 (+3.00%), DAX (+1.99%) finishing with strong gains. US credit was a notable outperformer (CDX IG 4.5bps tighter) relative to Europe (Main 1bp tighter) most probably reflecting the exposure to energy, while US Treasury yields crept higher for the second consecutive day, the benchmark 10y yield up a couple of basis points to 2.053%.

As well as the obvious focus on Central Banks this week, as you’ll see in the week ahead earnings season is set to kick up a gear in the US with a number of the bellwether tech names set to report. The only notable report from Friday was a mixed set of quarterly numbers from General Electric, with a beat in earnings but falling well short of revenue expectations after an unsurprisingly weak quarter for the oil and gas segment. All told with 73 S&P 500 companies having reported, we’ve seen a healthy 78% beat earnings expectations but just 48% beat consensus estimates at the top line. Regular readers will recognize that this follows a recent trend. Q1, Q2 and Q3 2015 earnings beats amounted to 73%, 75% and 74% respectively based on Bloomberg data, while sales beats failed to break 50% during any of the quarters (48%, 49% and 44% respectively). So its early days but a similar pattern is already emerging. A lot of the big Oil names are still to report and will likely be the main focus for analysts. Speaking of which, Friday saw Moody’s place 120 energy issuers credit ratings on review for downgrade, a large proportion of which are based in North America in what was the rating agency’s largest warning sign of potential downgrades since the financial crisis.

In terms of the macro, the US economic data was fairly unexciting on the whole on Friday. Existing home sales were up a much better than expected +14.7% mom in December (vs. +9.2% expected). The Conference Board’s leading index for last month declined -0.2% mom as expected, although the flash January manufacturing PMI rose unexpectedly by 1.5pts to 52.7 (vs. 51.0 expected).
Meanwhile, the latest set of European flash PMI’s for January were a little more disappointing than the market had hoped. The Euro area composite declined 0.8pts this month to 53.5 and below expectations of 54.1. Both the manufacturing (-0.9pts to 52.3; 53.0 expected) and services (-0.6pts to 53.6; 54.2 expected) components fell, while regionally the decline was led by Germany where the composite was down 1pt to 54.5 (vs. 55.1 expected). France’s composite actually rose 0.4pts to 50.5 (vs. 50.3 expected) while our European economics expect that the weakness in the Euro area services PMI was also likely driven by the periphery, although we have to wait until the final PMI’s to assess this fully. At face value the data still points to quite strong growth of +0.4% qoq for the Euro area, although it’s still worth highlighting the disappointment of hard data relative to surveys in Q4 so caution is warranted.

Elsewhere, in the UK we saw December retail sales come in softer than expected last month at -0.9% mom (vs. -0.3% expected) excluding autos fuel sales and -1.0% mom (vs. -0.3% expected) including. Staying with the UK, on Friday our UK Chief Economist George Buckley highlighted that he has now pushed back his call for a BoE rate hike from May to November this year. George notes that the previous forecast was becoming more difficult to justify in light of inflation expected to rise more slowly than previously thought, wage growth disappointing, the economy showing signs of slowing and global growth/financial markets looking fragile.

http://www.zerohedge.com/news/2016-...tures-lower-after-saudi-aramco-supply-comment
 

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#9
The black-sheep founder
By: George Smith
Paine had little in the way of formal education, yet his understanding of complex issues and his ability to articulate them clearly and passionately were without parallel in his lifetime, which is why he was the bestselling author of the 18th century. One of his most profound essays addressed the nature of paper money.


Gold and Silver Market Morning: Jan-25-2016
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
The New York gold price closed Friday at $1,096.80 down from $1,101.20, down $4.20. In Asia on Monday, it rose over $1,101.00 once more before London took it up to be set by the LBMA at $1,103.70 up from $1,097.65 with the dollar index higher at 99.43 up from 99.31 on Friday. The euro was down at $1.0817 from $1.0824 against the dollar. The gold price in the euro was set at €1,020.34 up from €1,014.09. Ahead of New York’s opening, the gold price was trading at $1,105.00 and in the euro at €1,021.54.
 

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#11
RANsquawk week ahead - 25th January 2016
RAN squawk

 

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#13
**Take this fwiw and dyodd.................

A Time For Staying Out Of Harms Way | New Harbor
FinanceAndLiberty.com


Published on Jan 25, 2016
This video was posted with permission from http://PeakProsperity.com

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#16

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#17
Frontrunning: January 26


Submitted by Tyler Durden on 01/26/2016 07:48 -0500

  • China shares end at 14-month lows after late selling frenzy (Reuters)
  • China Dec gold imports through Hong Kong highest since 2013 (Reuters)
  • China Contagion Fades as European Stocks Pare Drop, Oil Rises (BBG)
  • Apple set for slowest ever iPhone sales growth (Reuters)
  • Saudis, Russia Seen by Iraq as More Flexible on Oil-Output Cuts (BBG)
  • China Probes NEV sector for subsidy fraud (China Daily)
  • J&J forecasts 2016 sales below analysts' estimates (Reuters)
  • Wider China-Hong Kong Discrepancy Revives Fake Trade Doubts (BBG)
  • German two-year yields hit new low as March ECB cut almost priced in (Reuters)
  • AIG to Sell Broker-Dealer Network (WSJ)
  • At $3.68 Million, This California Home Has Everything But Buyers (BBG)
  • Pimco to Vanguard Step Into Credit Fray to Buy High-Grade Bonds (BBG)
  • Vacant Office Spaces Pile Up in Houston (WSJ)
  • Khomeini Grandson Barred From Iran Poll in Blow to Reformers (BBG)
  • Germany’s Cautious Savers Find New Taste for Risk (WSJ)
  • In coastal New Jersey, a flood of criticism for Christie follows storm (Reuters)
  • European Stability Mechanism head rules out haircut for Greek debt (Reuters)
  • One Salmon Costs More Than Barrel of Oil as Slump Deepens (BBG)


Overnight Media Digest

WSJ

- The Supreme Court ruled Monday that convicts who received life sentences as juveniles can seek parole, extending the possibility of freedom to as many as 2,500 inmates who otherwise would die in prison. (http://on.wsj.com/1PhlByD)

- The White House unveiled on Tuesday a raft of proposals to make it easier for workers to save for their retirements, in part by pushing businesses and states to make benefits more portable. The steps include a $100 million grant proposal to explore ways to provide benefits that are portable across employers and are available to workers who are self-employed, are part-timers or have multiple employers. (http://on.wsj.com/1PhlItY)

- Hassan Rouhani landed in Rome on Monday on his first overseas trip since the European Union lifted sanctions on Jan. 16 in return for Tehran's implementation of key restrictions on its nuclear program. With a number of U.S. sanctions still in place, European countries are moving quickly to re-establish ties to sell everything from consumer goods to aircraft. (http://on.wsj.com/1PhlRxm)

- Johnson Controls Inc and Tyco International Plc agreed to merge in a $14 billion deal that creates a new giant provider of commercial-building systems and reflects a growing push by some executives and shareholders toward companies that are bigger but more focused. (http://on.wsj.com/1PhlSBC)

- A highly anticipated new energy-demand projection from Exxon Mobil Corp released Monday cuts the company's expectations for China. And a slew of data is emerging that points to the toll a weakened economy has taken on Chinese energy demand, which is among the most important factors in determining the price of crude oil. (http://on.wsj.com/1Phm5Vs)



FT

Greg Medcraft, chairman of the International Organization of Securities Commissions said that financial groups betting on blockchain technology should also take into account the cost of fraudulent transactions, much like banks do for credit card transactions.

The CFE-CGC energy union has put forward a set of challenges that may jeopardise EDF's plans to build an 18 billion pound ($25.61 billion) nuclear power plant at Hinkley Point in Somerset. These include an expression of serious concern about the plant's viability and what it might cost the company.

French billionaire Xavier Nile's Iliad has held preliminary discussions with UK telecoms regulators Ofcom to enter Britain's mobile market.

Greece has hit back at EU proposals to tighten its border security with Macedonia to stem the flow of refugees, saying its a dangerous experiment which would turn the country into a "cemetery of souls".



NYT

- Years of rapid economic growth across sub-Saharan Africa fueled hopes of a prosperous new era. To many, the world's poorest continent was finally emerging, with economies that were no longer dependent on the fickle global demand for Africa's raw resources. (http://nyti.ms/1PhmRS7)

- "Manchester by the Sea," a buzzy drama starring Casey Affleck as a handyman coping with family strife, was sold to Amazon.com Inc for $10 million, beating out the likes of Fox and Universal. (http://nyti.ms/1Pho6Rq)

- Johnson Controls Inc, which introduced a device that could control room temperature some 130 years ago, has agreed to combine with Tyco International PLc. With the deal, Johnson Controls will relocate its headquarters from Milwaukee to Cork, Ireland, where Tyco is domiciled and where corporate taxes are lower than in the United States. (http://nyti.ms/1Pho7VA)

- Airbus Group SE said Monday it was in talks with Iran toward the sale of dozens of new commercial aircraft - part of a number of international business deals likely to flow toward Iran since it agreed to curtail its nuclear ambitions. (http://nyti.ms/1Pho8Zm)

- A Chinese journalist who was traveling across Thailand on a frantic quest for political refuge messaged his wife recently to say that he would soon reach the border with Laos. Two weeks ago, the journalist, Li Xin, disappeared. Li's wife, He Fangmei, and his supporters believe he has joined a growing list of people at odds with Beijing, who have been spirited into China across borders, especially from Thailand. (http://nyti.ms/1PhoiQG)



Canada

THE GLOBE AND MAIL

** WestJet Airlines will suspend some of its regularly scheduled flights from Calgary and Edmonton to divert more of its capacity to Central and Eastern Canada. (http://bit.ly/200RYII)

** Canadian government plans to require a separate climate test for proposed pipelines and a planned LNG export terminal, which are now under regulatory review, to determine their impact on Canada's greenhouse gas emissions, a move that could impose new delays on billion dollar projects. (http://bit.ly/200S5E7)

** Postmedia Network Canada Corp announced an unconventional deal with Mogo Finance Technology Inc, an online provider of short-term loans that is looking to build a customer base among young people who shy away from traditional bank branches. (http://bit.ly/200SfLQ)

NATIONAL POST

** Vancouver is the third least affordable city in the world for a home, and construction constraints are to blame for rising home prices there and in other Canadian cities, according to U.S. group Demographia. (http://bit.ly/200Sq9Z)

** Fitch Ratings affirmed the default ratings of Canada's largest banks Monday, but changed its outlook on Royal Bank of Canada's to negative from stable. (http://bit.ly/200SyWK)

** Crude oil prices have fallen so low that oilsands producers are now in danger of seeing negative prices for their bitumen, according to a report Monday from FirstEnergy Capital Corp. (http://bit.ly/200SI0o)



Britain

The Times

The Guardian is to slash its costs by £54 million over the next three years and could start charging for some of its content after burning through £80 million of cash in only a year. (http://thetim.es/1POjwX3)

Ophir Energy has signed a preliminary agreement with Schlumberger to develop its Fortuna gas project off the coast of Equatorial Guinea. (http://thetim.es/1Py8kNN)

The Guardian

American Apparel founder Dov Charney has lost his last-ditch attempt to wrest back control of the bankrupt retailer he started in his Tufts University dorm room in 1989. (http://bit.ly/1SflfJv)

Sainsbury's largest investor, the Qatar Investment Authority, has indicated that it might be willing to support a £1bn-plus bid for Home Retail Group at a "modest" increase to the 130p or so cash and shares offer rejected by the Argos owner in November. (http://bit.ly/1TkzsFZ)

The Telegraph

Regulators are considering whether to allow two Iranian banks in London to resume operations after years of sanctions. (http://bit.ly/1JzxJdV)

McDonald's will accelerate the rollout of table service across its refurbished UK restaurants and expand its trial of premium burgers in a bid to revamp its image amid intensifying competition in the fast food space. (http://bit.ly/1JzAk7t)

Sky News

George Osborne is preparing to end a six-month search for the new head of the City watchdog this week after ruling out one of the leading contenders for the job. (http://bit.ly/1njOwXH)

The head of Opec has laid the blame on smaller oil-producing countries for the glut in supply swilling through global markets that has driven down prices. (http://bit.ly/1ZOKB1G)

The Independent

The oil explorer JKX, which faces an attempt to topple its management this week, banned two of its biggest shareholders from voting yesterday after accusing them of providing "false or materially incorrect" information. (http://ind.pn/1JzBpwb)

A former Oxford schoolboy dubbed "Jihadi Jack" has dismissed reports that he is a member of Isis and accused the media of demonising young Britons who convert to Islam - in messages seen exclusively by The Independent. (http://ind.pn/1nkgLpg)

http://www.zerohedge.com/news/2016-01-26/frontrunning-january-26
 

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#18
China Crashes To 13 Month Low After Last Hour Panic Selling; Crude, Futures Tumble Then Surge


Submitted by Tyler Durden on 01/26/2016 06:53 -0500


It has been another volatile, illiquid, whipsawed session, driven by the only two things that have mattered so far in 2016, China and oil.... and stop-hunting algos of course.

A quick look at the former first reveals that after sliding gradually all session, Chinese stocks puked in the last hour of trading with the China's Shanghai Composite Index plunging 6.4% to 2,750, the most since the first week of January, and falling to the lowest level since December 2014. The composite has now plunged 22% in 2016 alone and is the world's worst-performing primary equity index this year.



Among the reasons for the crash was concern about a possible cash squeeze before next month’s Chinese new year holiday as well as further capital outflows amid signs of a slowing economy, Huang Cendong, Shanghai-based analyst at Sinolink Securities, was quoted by Bloomberg as saying. We find that hard to believe, as neither are news.

What is far more accurate is what Wu Kan, a fund manager at JK Life Insurance Co. in Shanghai, said namely that "we are less than two weeks from the spring festival and it seems that most investors have no mood for trading any more." Indeed, it appears that even the Chinese banana stand traders are tired of participating in a rigged casino and would much rather lose their money on other wholesome activities.



Furthermore, judging by the variety of predictions about what happens to Chinese stocks, such as these:

  • China Fund That Beat 98% of Peers Says Time to ‘Buy in Bulk’ -BBG
  • The Trader Who Made 6,200% on China Stocks Says Sell Now - BBG
... it is quite clear that nobody has any idea what is going on in China, or what is coming.

One thing that is certain, however, is that the Chinese government will continue intervening if not in stocks then in FX which it did earlier today in the offshore Yuan which had dropped 0.2% against the USD only to see the entire loss recovered after the PBOC intervened via "large-sized Chinese banks."

The latest Chinese crash, and continued oversupply fears initially sent crude falling below $30 a barrel. The two-day drop in West Texas Intermediate topped 8% after a 21 percent rally on Thursday and Friday, the biggest in over seven years demonstrating just what a volatile pennystock oil has become. Data on Wednesday may show U.S. supplies rose by four million barrels last week, keeping inventories more than 120 million barrels above the 5-year seasonal average. As a reminder, the sliding price of oil hasn't deterred Saudi Arabia. It won't reduce its spending on energy projects, the catalyst for yesterday's bounce.

And then, as if on cue, WTI and Brent both surged back over $30 after a few flashing read headlines carried the latest statement from the Iraq oil minister Adel Abdul Mahdi who told reporters in Kuwait City that Saudi Arabia and Russia are more flexible now on making cuts and cooperating, and that Iraq is ready to cut if others do so. The only problem is that Saudi Arabia has made it very clear it won't cut until either the marginal producers cut first, or it puts the marginal shale producers out of business.

Furthermore, it will only take algos a few hours to realize that such statements are merely an opportunity for the oil ministers to sell into especially after Angola nnounced it would boost crude exports to 55.8MM B/D in March, and will ship 58 cargoes, equating to 1.8m b/d, according to final loading program obtained by Bloomberg. This is up from 1.69m b/d in Feb., and 1.77m b/d in preliminary plan for March. In other words, the supply glut is not only not improving, but getting worse by the day.

And then this:

  • ARAMCO CEO NASSER SAYS OIL MARKET OVERSUPPLIED BY 3M B/D.
For now however that is irrelevant, as algos saw the Iraqi headlines and ran with them, sending oil rebounding sharply from the lows and back into the green for the day, in the process pushing both US equities, which had tumbled more than 1% earlier, back to unchanged, and as now 7 points higher on the day...



... while the US 10 Year which had tumbled as much as 1.94% overnight is back to 2.00%.

At last check, this is where we stood:

  • S&P 500 futures up 0.2% to 1874
  • Stoxx 600 down 0.8% to 334
  • MSCI Asia Pacific down 1.6% to 118
  • US 10-yr yield unch at 2.00%
  • Dollar Index up 0.02% to 99.38
  • WTI Crude futures up 0.9% to $30.55
  • Brent up 1.4% to 30.98
  • Gold spot up 0.6% to $1,115
  • Silver spot up 1.1% to $14.39
Going quickly through the regional markets, Asian stocks traded in firm negative territory following the lacklustre close on Wall St., with sentiment dampened after crude pulled back from its largest 2-day gain in 7 years. Nikkei 225 (-2.4%) was pressured by the oil slump, while telecoms led declines amid losses from index heavyweight Softbank, which continued to suffer from Sprint woes. Elsewhere, the Shanghai Comp (-6.4%) weakened despite the largest liquidity injection conducted in 3 years, as oil weakness dictated sentiment, while outflow concerns also added to the downbeat tone. As a reminder, the ASX 200 was closed today due to Australia Day holiday. Finally, 10yr JGBs traded relatively flat, failing to sustain most its early advances despite weakness in stocks, as participants remain tentative ahead of Friday's BoJ policy decision.

Top Asian News

  • PBOC’s Flood of Cash Keeps Money Rates in Check Before Holiday: China’s central bank conducts most reverse repos in 3 yrs
  • China’s Stocks Fall to 13-Month Low Amid Capital Outflow Concern: Shanghai Composite Index plunged 6.4% to lowest close since Dec. 2014
  • Hyundai Posts Lowest Profit in Five Years on China Slowdown: Slump in China deliveries overshadowed gains in the U.S., Europe, South Korea; 4Q oper. profit 1.52t won; est. 1.68t won
  • Sumitomo Mitsui Profit Unexpectedly Rises 17% on Stock Gains: 3Q net 238.1b yen, est. 192.4b yen
  • SK Hynix Profit Misses Estimates on Lower Memory Chip Prices: 4Q oper. profit 988.9b won; est. 1.04t won
  • Some BOJ Officials Are Said to See More Easing as Close Call: Kuroda gave no hint of his appetite for more stimulus at Davos
  • Hong Kong Feels Squeeze of Slowing China and Rising Rates: Stock selloff and Hong Kong dollar pressure unnerve investors
  • Singapore’s 80-Cent Loans Not Cheap Enough for Distressed Funds: Asian secondary loan trading thinnest in decade, says SC Lowy
  • Malaysia Brings Najib Probe to Close With No Graft Found: Najib has faced pressure to step down over funding scandal
In Europe, oil has turned around in recent trade, abating the risk off sentiment after both Brent and WTI re-took the USD 30.00 handle aided by comments from the Iraqi oil minister regarding production. European equities have been boosted by a turnaround in the energy sector, which was the laggard by a substantial margin throughout most of European trade today. It has recently turned around however, and lifted European indices off their worst levels.

In spite of a turnaround in risk sentiment, Bunds still trade higher (25 ticks), while the Dax (-0.7%) is lower even though one of its largest companies Siemens (6.4%) upgraded its EPS forecast. As participants await the release of Apple earnings after market today, it's worth noting that its German

Top European News:

  • Lundbeck Said to Explore Options for Alcohol-Dependence Drug: Review may lead to a partnership agreement for Selincro
  • Draghi Says ECB Credibility Hinges on Meeting Its Inflation Goal: ECB President says critics ignore risks of doing nothing
  • Philips Earnings Beat Estimates on Jump in Medical Orders: 4Q Ebita ex-items EU842m, est. EU798m; confirms it sees modest comparable sales growth in 2016, expects improvements in the year to be back-end loaded; Philips’s Lumileds Draws Interest, May Get Lower Price, CEO Says
  • EasyJet to Intensify Cost Cuts as 2015 Terrorism Hurts Fares: iscal 1Q rev. fell 0.1% on pricing, currencies
  • Swiss Watch Exports Decline Amid Smartwatch Encroachment: Dec. exports declined 3.8%, pushing shipments down 3.3% on the yr to CHF21.5b, Federation of the Swiss Watch Industry said
  • Dixons Carphone to Accelerate Closings as Sales Beat Estimates: Will reduce outlet numbers by 134 over the next yr as it combines its PC World and Currys stores, while inserting a Carphone Warehouse outlet into each
  • Tesco Rapped by Grocery Regulator Over Treatment of Suppliers: Serious Fraud Office criminal probe still hangs over grocer
  • U.K. Flirts With Failed Debt Auction as Analysts Wince at Depth: Analysts study chance as Jan. 20 offer barely oversubscribed
  • Deutsche Post to Expand Parcel Service to Confront Amazon: Bild
In commodities, WTI crude fluctuated after Monday’s 5.8 percent retreat. Government data due out Wednesday is expected to show U.S. inventories rose by 4 million barrels last week, according to energy analysts. That would be a third week of gains. Oil is down almost 20 percent this year amid concern over brimming U.S. stockpiles, steady output from Saudi Arabia and Russia and the prospect of increasing Iranian shipments after the end of sanctions. Bets that WTI will retreat below $25 a barrel have reached a record high.

Iraq's oil ministers says Russia and Saudi Arabia are more flexible on cutting oil output and would agree to have an emergency OPEC meeting but says it would be pointless without an upfront agreement on production.

Gold for immediate delivery gained 0.5 percent to $1,112.94 an ounce. It climbed 0.8 percent last week as the turmoil in global stock markets renewed interest in the metal as a store of value.

In FX, haven currencies erased earlier gains. The euro weakened 0.2 percent to $1.0833, while the yen was at 118.29 per dollar. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, increased 0.1 percent. The won fell for the first time in four days after South Korea reported economic growth of 3 percent for the fourth quarter on a year-on-year basis, retreating from a five-year high. Foreign funds have pulled $2.5 billion from Korean shares so far this year. Russia’s ruble strengthened 0.6 percent, erasing an intraday decline and clawing back some of Monday’s 2.5 percent drop.

EUR/USD drivers are similar balanced, risk off rally against fresh ECB stimulus keeping the pair on the 1.0800's for the foreseeable future. Oil was back on a USD 29.0 handle to send CAD, RUB, MXN et al all lower again, but recovering well in line with both WTI and Brent reclaiming USD 30.0 on fresh comments (from SA, Russian and Iraq) on production levels.

On the US calendar today we have the November FHFA house price index and S&P/Case-Shiller home price index. Following this will be the flash January services and composite PMI’s, before we get the January consumer confidence reading where current expectations are for no change relative to last month. The Richmond Fed manufacturing index print for January is also due out this afternoon. In terms of central bank speakers, comments from the BoE’s Carney (at 10.45pm GMT) this morning related to the December Financial Stability Report will be worth keeping an eye on. Meanwhile, earnings season rumbles on with 23 S&P 500 companies due to report. The highlight will no doubt be the Apple results which are expected post the closing bell, while Johnson & Johnson (pre-market), AT&T (after-market) and Proctor & Gamble (pre-market) are also due to report.

Bulletin Headline Summary from Bloomberg and RanSquawk

  • Treasuries slightly higher overnight as world equity markets selloff, oil mostly steady; week’s U.S. auctions begin today with $26b 2Y notes, WI yield 0.86%, compares with 1.056% awarded in Dec., fifth straight 2Y auction to stop through.
  • China’s stocks tumbled to the lowest levels in 13 months amid concern capital outflows will accelerate as the economy slows and support for the yuan eats into the nation’s foreign reserves
  • The mismatch between trade data reported by Hong Kong and China widened to the second-highest on record in December, renewing speculation of faked invoices
  • According to Bank of America Merrill Lynch, China will steer clear of a hard landing and the government will contain the risks arising from its financial market turbulence
  • While stocks are having a chaotic start to the year, investors are pulling money from securities that profit from higher volatility at the same time as short sellers are piling into bets that tranquility will return
  • Mario Draghi hit back at critics of his policies, saying the European Central Bank must fulfill its inflation mandate in order to maintain its credibility
  • Greece’s next bite of bailout money may turn into a movable feast if PM Alexis Tsipras can’t convince euro-area authorities he’s making good on his promises to fix Greece’s pension system, update its labor markets and close fiscal gaps
  • U.K. government bonds have investors bracing for a failed sale. An offering Jan. 20 that attracted the lowest demand in nearly seven years might be a warning sign for buyers who haven’t balked at acquiring all the targeted debt since a March 2009 auction
  • Across the U.S., the story is much the same. The world’s economic woes -- from China to Russia to South America -- are damping sales in the high-end real estate market
  • Sovereign 10Y bond yields mostly lower except for Greece which widens 15bp. Asian, European stocks mostly lower; U.S. equity-index futures drop. Crude oil steady, copper and gold rise
US Eveonomic Calendar

  • 9:00am: FHFA House Price Index m/m, Nov., est. 0.5% (prior 0.5%)
  • 9:00am: S&P/Case-Shiller US HPI m/m, Nov. (prior 0.88%)
    • S&P/CS 20-City Index NSA, Nov., est. 183.09 (prior 182.83)
    • S&P/CS 20 City m/m SA, Nov., est. 0.8% (prior 0.84%)
    • S&P/CS Composite-20 y/y, Nov., est. 5.67% (prior 5.54%)
    • S&P/CS US HPI NSA, Nov. (prior 175.65)
    • S&P/CS US HPI y/y, Nov. (prior 5.17%)
  • 9:45am: Markit US Services PMI, Jan. P, est. 54 (prior 54.3)
  • Markit US Composite PMI, Jan. P (prior 54)
  • 10:00am: Consumer Confidence Index, Jan., est. 96.5 (prior 96.5)
  • 10:00am: Richmond Fed Mfg Index, Jan., est. 2 (prior 6)
Top Headline News:

  • Oil has turned around in recent trade, abating the risk off sentiment after both Brent and WTI re¬took the USD 30.00 handle
  • FX markets continue to trade in familiar ranges, but clearly to the downside as sentiment is mostly sour
  • Today's highlights include: US S&P/CaseShiller 20-City Index NSA, API Crude Oil Inventories, BoE's Carney and earnings from the likes of Apple and Johnson & Johnson
  • Huntington Bancshares to Acquire FirstMerit for $3.4b: FirstMerit shareholders will receive 1.72 shares of Huntington common stock and $5 in cash for each share that they own
  • Staples Shakes Up Management, May Go Without Office Depot: Demos Parneros, Staples’ president of North American stores and its online business, will step down by March 31
  • Siemens Raises Outlook as Lower Tax Offsets China, Oil Slump: FY EPS will be between EU6-EU6.40, higher than a previous forecast of EU5.90-EU6.20
  • Crane Co. 2016 EPS Forecast Range Below Ests; 4Q Adj. EPS Beats: Sees yr EPS $3.85-$4.15, est. $4.27.
  • Obama Seeks to Expand 401(k) Use by Letting Employers Pool Plans: President wants $100m to test more portable accounts
  • JPMorgan Reaches $1.42 Billion Deal in Lehman Clearing Case: Lehman said the settlement resolves 2 of the 3 major pieces of litigation with JPMorgan left over from its 2008 bankruptcy
  • Paulson Pledges Personal Holdings to Back Firm After Assets Fall: Puts up his hedge-fund interests for credit line
  • Traders Are Withdrawing Money From VIX Funds Like Never Before: VIX index of market stress jumps 33 percent in Jan.
  • Flexible Workers, AI Keys to Future Success, Accenture Predicts: Companies must invest in AI, training, platforms, says firm
  • Einhorn’s Greenlight May Seek SunEdison Sale, Filing Shows: Greenlight says it may propose changes including asset sale
  • Retirement Giant Fidelity Now Wants Workers’ Health Insurance: To offer private health exchange for midsized firms
  • Nexstar Said to Be Close to $2.3b Deal for Media General: NYP: Agreement is expected to be put on hold when announced, because Media General has already pledged itself to Meredith Corp.: NYP cites one unidentified person familiar
  • Tesla’s Musk Says Held High-Level Talks With Chinese Government: Tesla is looking for a Chinese production partner but still “trying to figure that out,” billionaire co. co-founder Elon Musk tells a business conference in Hong Kong
  • Verso Files for Chapter 11 Protection in Delaware Today
DB's Jim Reid concludes the overnight wrap

Global markets spat their dummy out again on Monday as oil tumbled yet again (over -7.5%) after the largest 2-day rally for 7 years. News out of Saudi Arabia proved to be a big driver in the European session, as the world’s largest crude exporter noted that it did not plan to reduce its investment spending on energy projects despite lower oil prices (Bloomberg). The risk-off sentiment once again dragged on equities, as European markets wiped out early gains and closed in marginally negative territory (STOXX -0.62%; FTSE -0.39%; DAX -0.29%) while US equities sold off in line until a weak final hour of trading saw the S&P 500 lose nearly an extra percentage point to close -1.56%.

Asia is following on from the US close with the Nikkei and Hang Seng down -2.4% and -1.8% as we go to print. The Shanghai Comp is around -3% lower and trading at 13 month lows. Oil has continued its slide from yesterday, declining around -2.5%. Just after we went to print yesterday the futures contract hit $32.73. 24 hours later it’s at $29.57 - nearly 10% lower from the highs. With high impact news-flow from China easing for now, Oil has taken over as the main global markets driver at the moment and when you get swings like we've seen since last Wednesday evening, sentiment is going to be messy.

Obvious one of the asset classes most in focus over the last few months and one closely tied to the price of Oil has been US credit. Yesterday our US credit strategist Oleg Melentyev published an update which included looking at how the market has rarely been as dislocated (less than 15% of HY trading within 100bps of the overall index - close to the lowest ever) but at least showing signs of fair value re-emerging. As Oleg discusses, HY ex-energy has widened 80bps so far in 2016, and 115bp since early December; currently standing at 667bp. IG ex-energy spreads at 168bp are +17 and +21bps respectively over those time horizons. Both markets have now modestly overshot his targets of 650bp and 155bp respectively. Oleg worries that if credit widens much more it could reach the point of no return and become even more self fulfilling. In the note he also looks at their lead indicators for the default cycle with many of them recently reaching critical levels. So overall value re-emerging but with risk that we could be near a tipping point in some of the market drivers.

Back to markets, data releases out yesterday were largely disappointing and did little to help the risk off sentiment across markets. The German IFO survey data for January missed estimates as the business expectations index fell to 102.4 (vs. 104.2 expected; 104.6 previous) and the business climate index fell to 107.3 (vs. 108.4 expected; 108.6 previous). Data out of Italy was also soft, as retail sales numbers for November posted only +0.3% mom (vs. +0.5% expected) and increased concerns that the country’s economic recovery may already be losing momentum. The UK saw factory orders data for the three months to January dip more than expected as indicated by the CBI order book balance (-15 vs. -10 expected; -7 previous). On a somewhat positive note, optimism about the general business environment increased to -4 (vs. -12 prior) over the same period.

Data out of the US was also negative, as the Dallas Fed Manufacturing Survey reported a sharp drop in broader business conditions, as the general business activity index for January came in at -34.6 (vs. -14.5 expected; -21.6 previous) – the lowest levels since April 2009. Texas manufacturing activity also fell sharply to near recession levels with the production index dropping to -10.2 (vs. 12.7 previous), while the general Company outlook index came in at -19.5 (vs. - 10.5 previous).

Looking at today’s calendar, with no data due in Europe this morning it’s all eyes on the US session where there are a number of releases due. Kicking things off will be the latest housing market data where we’ve got the November FHFA house price index and S&P/Case-Shiller home price index prints both expected. Following this will be the flash January services and composite PMI’s, before we get the January consumer confidence reading where current expectations are for no change relative to last month. The Richmond Fed manufacturing index print for January is also due out this afternoon. In terms of central bank speakers, comments from the BoE’s Carney (at 10.45pm GMT) this morning related to the December Financial Stability Report will be worth keeping an eye on. Meanwhile, earnings season rumbles on with 23 S&P 500 companies due to report. The highlight will no doubt be the Apple results which are expected post the closing bell, while Johnson & Johnson (pre-market), AT&T (after-market) and Proctor & Gamble (pre-market) are also due to report.


http://www.zerohedge.com/news/2016-...tocks-crashing-13-month-low-crude-stock-futur
 

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#19
Goldman: These Are the Stocks to Buy If You Fear Recession
Strategists at Goldman Sachs have some recommendations for clients who do believe economic growth is poised to retreat. Goldman analysts are recommending investors look for companies that boast strong balance sheets that do relatively better during periods of tightening financial conditions. [Full Story]

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#21
Gold and Silver Market Morning: Jan-26-2016
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
The New York gold price closed Monday at $1,108.30 up from $1,096.80 up $11.50. In Asia on Tuesday, it rose over $1,115.35 before London’s LBMA set it at $1,114.70 up from $1,103.70 with the dollar index down slightly at 99.36 from 99.43 on Monday. The euro was up at $1.0831 from $1.0817 against the dollar. The gold price in the euro was set at €1,029.18 up from €1,020.34. Ahead of New York’s opening, the gold price was trading at $1,113.20 and in the euro at €1,027.46.
 

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#25
Frontrunning: January 27


Submitted by Tyler Durden on 01/27/2016 07:43 -0500

  • Global stocks, dollar struggle ahead of Fed as oil falters (Reuters)
  • Bond Bulls Bank on Fed Mention of Market Chaos as Drag on Growth (BBG)
  • Fees on Mutual Funds and ETFs Tumble Toward Zero (WSJ)
  • China Climbs Back Up Janet Yellen's Worry List (BBG)
  • The World’s Favorite New Tax Haven Is the United States (BBG)
  • New Jersey Gov. Christie backs Atlantic City takeover plan (Reuters)
  • U.S. Universities Raised a Record $40.3 Billion Last Year (BBG)
  • With China weakening, Apple turns to India (Reuters)
  • Cash Is King as Europe Adapts to Negative Interest Rates (BBG)
  • Trump pulls out of Republican debate in Iowa (Reuters)
  • French Justice Minister Taubira Quits Over Constitutional Change (BBG)
  • Clock ticks down on EU passport free travel dream (AFP)
  • Yuan Bears Denounced as Delusional, Doomed by China State Media (BBG)
  • States Asks High Court to Delay EPA Carbon-Emissions Rule (WSJ)
  • AIG Passes JPMorgan, Approaches Wells Fargo on Buybacks (BBG)
  • NYSE's $2 Trillion ETF Business Sees Heightened Competition (BBG)
  • World's Biggest Wealth Fund Speaks Out on Liquidity Banks Miss (BBG)


Overnight Media Digest

WSJ

- A group of 26 states on Tuesday filed a last-ditch request at the Supreme Court seeking the delay of a key Obama administration environmental rule to cut carbon emissions from power plants. (http://on.wsj.com/1Sa4BwF)

- A jury found John Bills, former assistant transportation commissioner, guilty of fraud, bribery and extortion charges for receiving hundreds of thousands of dollars in cash and perks in exchange for helping Redflex Traffic Systems Inc build Chicago's red-light ticketing system into the one of the largest in the nation. (http://on.wsj.com/1Sa4FwE)

- Apple Inc said iPhone sales grew at the slowest pace since its introduction in 2007 and forecast that revenue in the current quarter will decline for the first time in 13 years, signaling an end to its recent period of hypergrowth. (http://on.wsj.com/1Sa4SQj)

- Iran is pushing to find new ways to extract and export its vast natural-gas reserves, including developing facilities to liquefy the commodity and ship it to Europe in two years, now that Western sanctions have been lifted, according to a top Iranian official. (http://on.wsj.com/1Sa54iF)

- Federal regulators soon are expected to propose overhauling rules for television set-top boxes, a move aimed at lowering bills for cable viewers and providing more access to Internet-based programming. (http://on.wsj.com/1Sa5be2)



FT

Cupertino, California-based Apple Inc has forecast first ever decline in sales for the iPhone due to growing volatility in some markets, including China.

Social networking site Facebook Inc is resisting attempts by tax authorities in Britain to coax it into paying back-taxes, a move that may increase public anger against the Palo Alto, California-based company.

Elzbieta Bienkowska, the European commissioner responsible for car industry regulation, said she would relentlessly pursue German car giant Volkswagen AG to pay compensation to millions of car owners in Europe affected by the diesel emissions scandal.

Dixons Carphone is scheduled to close more than 130 of its stores in Britain as it embarks on its plan to merge its three main brands in one store.



NYT

- Despite global economic turmoil, many economists argue that the American currency's rise is mostly a good thing. But there are downsides, and not all in the United States. (http://nyti.ms/1SiBfKM)

- If accepted, Fox Searchlight's offer for "The Birth of a Nation," about Nat Turner, would be one of the highest prices ever paid for a film making its debut at the film festival. (http://nyti.ms/1OY8K0G)

- Apple Inc's quarterly revenue fell short of Wall Street forecasts, and it issued a disappointing forecast for the current period. (http://nyti.ms/1KElJTe)

- The insurance giant American International Group Inc brushed aside Carl Icahn's push for a breakup, saying it would sell or spin off some businesses and create nine operating units. (http://nyti.ms/1PiUyCM)



Canada

THE GLOBE AND MAIL

** Canadian National Railway on Tuesday beat analysts' expectations with an 11 percent rise in fourth-quarter profit and raised its dividend by 20 percent. (http://bit.ly/1NzX3v9)

** Alberta suffered its worst year for employment losses since the dark days of the national energy program and early 1980's recession, according to revised labor figures from Statistics Canada. (http://bit.ly/1NzX95S)

** The Ontario government has reached inward for the next leader of the Ontario Securities Commission, nominating the agency's executive director, Maureen Jensen, to replace departed chair Howard Wetston. (http://bit.ly/1NzXg1c)

NATIONAL POST

** The office of federal environment commissioner, Julie Gelfand, said in a report Tuesday that the National Energy Board has a serious problem tracking whether pipeline companies meet conditions for project approvals. (http://bit.ly/1NzXt4s)

** Food price inflation has been driving Canadians into the frozen food aisles, according to the CEO of grocery chain Metro Inc, Eric La Flèche. (http://bit.ly/1nnda9X)

** Quebec City Mayor Régis Labeaume supports the Energy East pipeline project but he blasted the promoter Tuesday for an "incompetent" sales job. (http://bit.ly/1NzXSUE)



Britain

The Times

EasyJet has conceded that it will achieve its lowest rate of profit growth this year since the arrival of Dame Carolyn McCall as its chief executive in 2010. (http://thetim.es/1OXm45h)

Mark Carney may remain as the governor of the Bank of England for a full eight-year term, despite pledging to serve just five. Yesterday he revealed that he had not made up his mind but would "by the end of the year", causing consternation among MPs. (http://thetim.es/1Si3RDY)

The Guardian

MPs have launched an inquiry into the UK's tax system after the government was accused of allowing Google to pay too little in a £130 mln deal. (http://bit.ly/1PNNhHq)

Brakes Group, one of the UK's largest food distributors, is understood to have postponed plans for a stock market flotation in London that could have valued it at up to £2.5 bln. (http://bit.ly/1WMIIT3)

The Telegraph

The spread-betting group CMC Markets is seeking a value of between £678m and £794m as it prepares to join the London stock market.(http://bit.ly/1ZRqy2r)

Tesco investors are set to launch a huge damages claim, saying they lost tens of millions because of the accounting scandal at the supermarket. (http://bit.ly/1VpyR4k)

Sky News

Denmark's parliament has voted in favour of seizing the assets of asylum seekers to help pay for their stay while their claims are processed.(http://bit.ly/1TlRoQG)

A patent holder is demanding $500m (£351m) from Apple because it says the firm has used its intellectual property without permission. (http://bit.ly/23rYc3q)

The Independent

Two former Disney employees have filed separate class-action lawsuits against the entertainment giant claiming they conspired to replace their jobs with cheaper immigrant workers on temporary U.S. work visas. (http://ind.pn/1ZRrzHM)

Twitter is experimenting with not showing ads to some of its most "high value" users. (http://ind.pn/1PAmWSW)


http://www.zerohedge.com/news/2016-01-27/frontrunning-january-27
 

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#26
Futures Slide On Apple Disappointment, Oil Slumps Ahead Of Fed Decision


Submitted by Tyler Durden on 01/27/2016 07:00 -0500


While the focus in the overnight session has traditionally been about two things, namely oil and China, today one can also throw in AAPL which is down 4% in the pre-market after its disappointing earnings yesterday in which it confirmed our channel-checked warnings about China from last summer, and the Fed which is set to release the January FOMC statement this afternoon.

Unlike yesterday, when the National Team allowed stocks to tumble, today the Chinese Plunge Protection Team intervened, and with the Shanghai Composite down as low at 2,638, the benchmark stock index pared the loss of as much as 4.1%, spurred by rallies for PetroChina, ICBC and other shares that are long considered favorite holdings of state-linked rescue funds. The result was a -0.52% drop in the composite, preventing what could have been the latest two-day -10% correction. Still, after today's close the index dropped to the lowest since December 2014.

With the Fed set to take center stage today, the dollar's prospects - which increasingly many recognize needs to somehow decline to avoid a worsening global recession - rest on the wording of the Fed's policy statement. Since the U.S. central bank raised interest rates on Dec.16 for the first time in almost a decade, a Bloomberg gauge tracking the dollar against 10 of its leading global peers has risen 1.5 percent, touching a record high on Friday. Those gains have been fueled in part by indications from the Fed that there will be four rate hikes in 2016. Investors are watching for any deviation from that plan. Traders have been more dovish than the Fed, pricing in roughly one rate increase this year. At the end of December the odds of a March move were 51 percent. Fed fund futures now put the probability at 25 percent.



Elsewhere, Apple showed that contrary to Tim Cook's email to Jim Cramer, the tech company isn't immune to China's troubles. The world's biggest company is beginning to see "economic softness" in Greater China, which includes Taiwan and Hong Kong. Apple also projected its first quarterly sales decline since 2003

The negative sentiment weighed in on crude, and after yesterday's gargantuan 11.4 million barrel API inventory build, oil resumed declines amid further evidence of a global glut, dragging European stocks and U.S. equity index futures lower before the Federal Reserve’s first policy statement this year. European bonds gained and the yen strengthened.

West Texas Intermediate crude fell toward $30 a barrel after U.S. industry data showed stockpiles increased. European stocks deepened a monthly rout as disappointing earnings reports reignited investor concern about global growth prospects, with Apple Inc. forecasting its first drop in sales since 2003. Yields on Treasuries due in a decade held at around 2 percent and German note yields fell to record lows, while Malaysia’s ringgit climbed to a seven-week high as Prime Minister Najib Razak was cleared in a corruption probe.

Today it wasn't just about crude: as Bloomberg adds, Iron ore will will be the worst performing metal this year. That's the verdict of the World Bank, which cites low-cost supply outstripping consumption. The Washington-based lender says prices will average $42 a metric ton in 2016, a drop of 25 percent from 2015. Ore with 62 percent content delivered to Qingdao, a global benchmark, sank to a record low of $38.30 in December, having lost almost half its value last year. The slowdown in China has restricted demand from the world's biggest user. At the same time the biggest mining companies are raising production to build market share. The World Bank forecasts nickel may fall 16 percent in 2016, while copper may drop 9 percent.

"Nobody is really sure where we go from here, and nobody is brave enough to make the call,” Peter Dixon, Commerzbank AG’s global equities economist in London told Bloomberg. “Corporate earnings season won’t provide much of a support - markets may find a floor if the Fed is extremely dovish tonight. At least investors will have time to think and reassess valuations."

Looking at markets around the globe, we start in Asia, where stocks traded mostly higher following the firm close on Wall St. where strong earnings and a rebound in the energy complex supported risk sentiment. Nikkei 225 (+2.7%) was led higher by the telecoms sector after index giant Softbank rose the most in 21 months following strong earnings report from its Sprint unit, while the ASX 200 (-1.2%) traded lower as it played catch up to yesterday's regional losses on its return from holiday. Shanghai Comp. (-0.5%) initially underperformed after Chinese industrial profits printed its largest decline in 4 months and 4th consecutive monthly decline, however, the index was granted some reprieve heading into the EU open amid support for energy names. 10yr JGBs traded higher despite the inflows into riskier assets, while the BoJ also entered the market to purchase JPY 1.26tr1 in government bonds.

European stocks opened lower this morning despite a generally positive close from their Asian counterparts. With somewhat damp sentiment, and without large swings in Asian equities, earnings from European majors have managed to dictate price action. Heavy weight Novartis (-3.0%) missed on its headline sales and EPS figures, and as a result weighs upon the SMI (-0.8%). The fallout from Novartis' poor fourth quarter has also been felt in other defensive sectors across Europe, who have failed to benefit from a lack of risk-on. Elsewhere, BASF (-3.0%) and RBS (-2.9%) issued warnings of upcoming EUR 600mln and GBP 500mln impairment charges respectively. To round it off the premier company of the IBEX, Santander (-1.0%), posted virtually zero Q4 net.

Apple's (-3.2%) Frankfurt listing trades lower following fears about iPhone sales growth, despite the company posting a beat on EPS. iPhone sales grew just 1% from a year earlier, the slowest ever rate for the device, sluggishness which, according to the company's own projections is set to continue. Furthermore, the company projected the first revenue decline in over a decade, although CEO Tim Cook said was indicative of a slowdown in global economic growth.

In FX, extremely tight trade seen in FX this morning, with the majors well contained by familiar limits. Oil/stock watching dominates, but we had some brief excitement with AUD/USD breaking higher through the .7000's on better than expected CPI, but the move ran out of steam around .7050. This coincided with a turn in risk sentiment, though Asia was mixed. Oil lower again though, holding off the $29.0 handle, but enough to pull the CAD a cent off the 1.4040 highs vs the USD. USD/JPY confined to the 118.00 handle, finding support at the figure level in Asia and since. EUR/USD is trying to break higher, but upper 1.0900's well offered. GBP is losing its shine.

In commodities, WTI and Brent trade lower as the supply glut continues, with yesterday's API inventories showing a substantial build of 11.4 min bbl; if the official data out later today shows a similar rise, it would be the largest weekly gain in stocks since May 1996. With this is mind however, Brent remains above USD 31.00 level and WTI above USD 30.00, with comments yesterday from Iraq's Oil Minister in regards to production, seemingly preventing a further slide in prices.

Spot gold ticked down from 3 months highs overnight, amid a relatively quiet session in Europe, with similar lack of price action in USD, as participants await today's FOMC. The yellow metal hit after hit USD 1,123.06 in yesterday's session, its highest level since November 3rd, and as of this morning remains higher by 5.3% since the start of the year, as the beneficiary of safe haven bids.

Elsewhere, copper prices have seen subdued trade, with LME copper now around the level of its Kerb close yesterday, seemingly quite comfortable above that important USD 4,500 handle. Some have speculated that this is because short positions are closing ahead of the Chinese New year, as an uptick is demand is expected after Chinese participants return from their week long-hiatus and businesses complete their first quarter copper tender in March.

Finally, Iron ore has continued its rebound with prices rallying to a 3-week high. This comes despite the World Bank forecasting iron ore to be the worst performing among metals this year, citing increasing output by the industry leaders and low cost supply continuing to overshadow demand.

Datawise in the US today the only release of note will be the December new home sales data. That’s before we turn to the main event of the day of course with the conclusion of the two-day FOMC meeting at 7.00pm GMT. Away from this we’ve got a number of ECB board members due to speak including Coeure, Mersch and Lautenschlaeger at various points this morning. Earnings season rumbles on and today sees 33 S&P 500 companies report including Facebook (after-market), eBay (after-market) and Boeing (pre-market open).



Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities trade lower amid a raft of weak earnings and impairments, Apple's (-4.0%) Frankfurt listing trades lower following fears around i Phone sales growth
  • Extremely tight trade seen in FX this morning, with the majors well contained by familiar limits
  • Today's highlights: US new home sales, DoE inventories, FOMC & RBNZ rate decisions, comments from BoE's Shafik, ECB's Lane, Mersche & Lautenschlaeger
  • Treasuries lower overnight ahead of FOMC rate decision at 2pm ET; week’s U.S. auctions continue today with $35b 5Y notes, WI yield 1.44%, compares with 1.785% awarded in Dec., highest 5Y auction stop since 1.800% in Sept. 2014.
  • When Fed Chair Yellen looks for an update on China she’ll find little reason for cheer. The Shanghai Composite Index has tumbled to a 13-month low as a rout that started in the middle of 2015 shows no signs of easing up. Capital is leaving at a record pace
  • Last year, Chinese policy makers watched $1t in capital head for the exits. Now, the question is what exactly will President Jinping’s economic team do about it. One option is capital controls
  • China’s leading state media are becoming more vociferous in their support for the yuan; short sellers “haven’t done their homework,” the state-run Xinhua News Agency said on Wednesday, while the People’s Daily declared that such trades will undoubtedly fail
  • The Italian government and the European Commission agreed on a plan to help banks offload bad debt in a deal that won’t count as state aid because Italy’s backing will be priced at market rates
  • Royal Bank of Scotland dropped after taking a £3.6b ($5.2b) hit to the value of its assets and set aside more money for past misconduct, overshadowing CEO Ross McEwan’s efforts to resume dividend payments
  • Bank of America isn’t waiting to see if trading revenue rebounds from a tough 2015. CEO Thomas Montag is increasing pressure on deputies to lower expenses across his trading and investment banking world, according to people with knowledge of the initiative
  • Canadian PM Trudeau has pledged to keep the country’s debt declining in relation to the size of the economy, even as he drives up the deficit with infrastructure spending
  • After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners by resisting new global disclosure standards
  • Sovereign 10Y bond yields mostly steady. Asian stocks mostly higher, European stocks drop; U.S. equity-index futures drop. Crude oil falls, copper and gold drop
US Event Calendar

  • 7:00am: MBA Mortgage Applications, Jan. 22 (prior 9%)
  • 10:00am: New Home Sales, Dec., est. 500k (prior 490k)
  • New Home Sales m/m, Dec., est. 2% (prior 4.3%)
  • 1:00pm: U.S. to sell $35b 5Y notes
  • 2:00pm: FOMC rate decision, est. 0.25%-0.5% (prior 0.25%-0.5%)
DB's Jim Reid completes the overnight wrap

Having struck an intraday low of $29.25/bbl early yesterday morning, WTI staged a comeback post the Asia close, rising steadily through much of the European and US sessions after headlines concerning potential supply cuts from OPEC and Russia gained traction. That saw Oil hit an intraday high of $32.41/bbl (an 11% swing from the day’s low) but the momentum faded slightly into the close with prices settling back down at $31.45/bbl and still nearly a dollar off where we closed Friday. As you’ll see below that fading momentum has continued into the Asia session. The earlier moves were enough to see equity markets rebound and close broadly higher yesterday with decent gains for the S&P 500 (+1.41%), Dow (+1.78%), Stoxx 600 (+0.87%) and DAX (+0.89%).

Post the US close we saw Apple report which given its size is becoming a macro event. While earnings came in slightly ahead of estimates and sales a smidgen behind, the bigger news was the guidance for the current quarter where management is forecasting the first quarterly drop in sales since 2003 (to between $50bn to $53bn). That’s also below Wall St forecasts for $55.5bn with Apple’s CFO highlighting some softness in China and Hong Kong this month in particular. The news saw shares down a couple of percent in extended trading while US equity index futures are looking up to 1% lower.

US futures are not being helped by another turnaround in Asia with the majority of bourses cooling off after opening strongly. The Nikkei (+2.24%), Kospi (+1.03%) and Hang Seng (+0.47%) appear to be following much of the lead from the US although have pared much greater gains, while there’s been another steep fall for bourses in China (Shanghai Comp -3.52%), while the ASX is also down -1.20%. Oil continues to reverse last night’s high mark with WTI down -1.00% at $31.13/bbl in trading this morning. The weakness in China this morning may also be reflecting some soft industrial profits data, with profits falling for a seventh consecutive month in December (-4.7% yoy) after being at -1.4% in November.

These moves come ahead of the main event of today – the FOMC meeting. Leading into it, futures markets are actually pricing a greater chance of a cut than a hike (4% versus 0%) from the Fed. The important takeaway however will be what hints we get from the committee about forward policy guidance. It would be no great surprise to see the FOMC leave the door for a March move open, but clearly the news since the December meeting doesn’t lend itself to a March move. As DB’s Peter Hooper points out, financial conditions have deteriorated enough to subtract as much as half a percent point from GDP growth if sustained and the committee has emphasized the importance of incoming data to their decisions going forward. As a result they will have the delicate task of acknowledging the recent deterioration in economic and financial conditions while at the same time leaving the door open for a March move if recent deterioration proves to be temporary. We continue to be of the view that the Fed should be on hold for now however and so would not be surprised to see a more dovish message out of today. Of potentially more relevance could be Fed Chair Yellen’s monetary policy testimony in a couple weeks. By then we will have had the December consumer spending and inflation data, Q4 GDP, Q4 ECI data, January employment data and the Q1 Fed Senior Loan Officer Survey.

Moving on and quickly recapping the rest of markets yesterday. As well as that bounce in Oil some better than expected corporate earnings results from Procter & Gamble, Johnson & Johnson and 3M contributed to the much better tone for risk. US consumer confidence data also attracted some attention after we saw the print unexpectedly jump 1.8pts this month to 98.1 (vs. 96.5 expected), marking a three-month high in the process. This was surprising in the context of the big slump for equities this month which has been seemingly overshadowed by the resilient labour market and consumer benefits from lower energy prices. The rest of the data yesterday offered few surprises. The flash US services PMI came in a touch below expectations at 53.7 (vs. 54.0 expected), a decline of 0.6pts from December. The Richmond Fed manufacturing index print declined 4pts to 2 as expected. Meanwhile the S&P/Case-Shiller house price was up +0.9% mom in November (vs. +0.8% expected), while the FHFA house price index rose in line with the market at +0.5% mom.

There was no data out of Europe yesterday but that didn’t stop Europe sovereign bond yields edging lower once more. 10y Bund yields finished 2.5bps lower and are now sitting around 0.445% which is the lowest since the end of October last year after starting the year closer to 0.628%. Meanwhile 2y Bunds have quietly gone about extending their move deeper into negative territory, moving another basis point lower yesterday to -0.460% and in the process setting a fresh record all time low. The latest leg lower in part helped by some more affirmative words from ECB President Draghi who reiterated the need for the ECB to achieve its inflation mandate.
Staying in Europe, the systemic euro peripherals are both in focus at the moment. In Spain the probability of a left-wing PSOE-Podemos government has increased materially according to DB's Marco Stringa. There is a significant risk that an eventual agreement will include the reversal of the labour market reform. A left-wing government would probably be highly unstable as it will likely fall short of an absolute majority and would likely require the collaboration of more than seven parties. Overall, the three main options continue to be: (i) a left-wing government, (ii) a last-minute temporary Grand Coalition or (iii) a new election to be called probably in April. Although uncertainty is very high, options (i) and (iii) seems the more likely. Overall Marco continues to think that an early election at a national level is a question of when rather than if.

Moving to Italy, last Friday, Marco and DB bank analyst Paola Sabbione published a report on the country and its banks. There is the risk that recent events put upward pressure on bank funding costs, above all for the small credit institutions. But this will not compromise the stability of the Italian banking sector in their view. The recent ECB request for additional information on NPLs is not a sign of a new risk in asset quality. Italy could undertake a significant institutional makeover via the Senate reform. A referendum should take place in October. Were it to be rejected, it would likely trigger the fall of Renzi's government. h

Turning over to today’s calendar now, we’re kicking off this morning in Europe with various consumer confidence readings out of Germany, France and Italy along with house price data out of the UK. Datawise in the US this afternoon the only release of note will be the December new home sales data. That’s before we turn to the main event of the day of course with the conclusion of the two-day FOMC meeting at 7.00pm GMT. Away from this we’ve got a number of ECB board members due to speak including Coeure, Mersch and Lautenschlaeger at various points this morning. Earnings season rumbles on and today sees 33 S&P 500 companies report including Facebook (after-market), eBay (after-market) and Boeing (pre-market open).


http://www.zerohedge.com/news/2016-...-disappointment-oil-slumps-ahead-fed-decision
 

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#29
Gerald Celente-Global Banking System in Bear Market
Greg Hunter


Published on Jan 26, 2016
Trends researcher Gerald Celente predicts, “It’s a global recession and it’s already on. What they could do to prop up the stock markets, I don’t know, but our forecast is they won’t be able to. It’s also very important to understand that the people will not blame Obama for the declining economy. They are not tuned in enough, and they have been pushed down to I don’t care and I don’t believe in hope and change anymore. It will be neutral as to the party preference.”

On the upcoming 2016 election, Celente says, Conservatives aren’t conservative anymore and liberals aren’t liberals anymore. . . . We see it as Trump and Clinton, at this point, and Trump is not going to get the woman vote. At this point, I think Clinton can beat Trump.”

On the subject of the stability of the banks, Celente says, “The only money I keep in a bank is money to run our business because here is the deal. If there is a terrorist strike, false flag or real, there will be a bank holiday and . . . bail-ins. The global banking system is in a bear market. China . . . Japan . . . . France bear market . . . UK is in a bear market. We are told everything is going to be okay. I wouldn’t put my money in the banks and I’ll tell you why. (They’ll say) We got your money and will give it back if and when we want to. Look what happened in Greece. Look what happened in Cyprus. . .”

Join Greg Hunter as he goes One-on-One with Gerald Celente, Publisher of the Trends Journal.
 

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#30
Oil Prices, Market Manipulation & Trump
Fabian4Liberty


Published on Jan 26, 2016
 

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#31
The War on Cash: An Open Source Investigation
corbettreport


Published on Jan 27, 2016
Link to the article: https://www.corbettreport.com/?p=17539

We've all seen bits and pieces of the cashless society agenda unfolding around us, from cash restrictions to cashless banks to calls for the outright elimination of cash. But are you aware of just how widespread this agenda is? Join me as I try to compile a comprehensive list of moves toward the cashless society in countries around the world.
 

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#33
MACRO ANALYTICS - 01 22 16 WHAT ARE THE MACRO CHARTS SIGNALLING? - w/John Rubino
GordonTLong


Published on Jan 27, 2016
 

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#34
Gold Seeker Closing Report: Gold Gains After Fed While Stocks Fall
By: Chris Mullen, Gold-Seeker.com
Gold drifted down to $1114.94 by a little after 10AM EST, but it then jumped higher after the release of today’s FOMC Rate Decision and ended near its late session high of $1127.99 with a gain of 0.39%. Silver rose to as high as $14.557 and ended with a loss of 0.14%.
 

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#35
Frontrunning: January 28


Submitted by Tyler Durden on 01/28/2016 07:31 -0500

  • Unease over Fed rate path dents European stocks (Reuters)
  • Global Stocks Pressured After Fed Statement (WSJ)
  • Japan's Economy Minister Amari to Resign Over Graft Scandal (BBG)
  • Authorities working to clear remaining protesters in Oregon occupation (Reuters)
  • China Sharpens Efforts to Halt Money Outflow (WSJ)
  • Eurozone January Economic Sentiment Falls Sharply, Hits 5-Mth Low (MNI)
  • Glencore Said to Store Oil in Ships Off Singapore Amid Contango (BBG)
  • Investors Hedge Bets on Crude-Oil Revival (WSJ)
  • Deutsche Bank Securities Unit Reports Loss on Revenue Slump (BBG)
  • Deutsche Bank Board Members Won't Get 2015 Bonuses, Cryan Says (BBG)
  • The One White-Collar Job in Hot Demand in Busted Brazil Economy (BBG)
  • Ford Posts $1.9 Billion Profit: North America operations lifted by record U.S. industry sales (WSJ)
  • EU's Too-Big-to-Fail Bank Bill Won't Be Withdrawn, Hill Says (BBG)
  • The $29 Trillion Corporate Debt Hangover That Could Spark a Recession (BBG)
  • South Africa Sees 32,000 Possible Mining Job Cuts, Minister Says (BBG)
  • Weekly carload traffic down nearly 20% (Railway Age)
  • Campaigning in style: How Jeb Bush blew through his warchest (Reuters)
  • Europe Faces Another Million Refugees This Year, UN Report Says (BBG)




Overnight Media Digest

WSJ

- Alibaba Group Holding Ltd reached a roughly $900 million deal to sell its stake in Meituan-Dianping, which is China's largest online provider of movie ticketing, restaurant bookings and other on-demand services, as the Internet giant builds its own competing platform. (http://on.wsj.com/1SkMend)

- Federal Reserve officials expressed worry about financial-market turbulence and slow economic growth abroad, leaving doubts about whether the central bank will raise interest rates as early as March. (http://on.wsj.com/1SkMvqc)

- Facebook Inc posted more than $1 billion in quarterly profit for the first time, showing the social network's mobile strength as advertisers increasingly look to reach younger users. (http://on.wsj.com/1SkMCBV)

- Federal inspectors found "deficient practices" at a Theranos Inc laboratory that "pose immediate jeopardy to patient health and safety",. The Centers for Medicare and Medicaid Services said an inspection completed in November uncovered five major infractions that violate the federal law governing clinical labs. (http://on.wsj.com/1SkMNNK)

- If BG Group Plc investors support the deal on Thursday as analysts and investors expect, the combination would nearly double Royal Dutch Shell Plc's production of liquefied natural gas within two years, and turn it into the world's largest marketer of the fuel by the end of the decade. (http://on.wsj.com/1SkN6YU)



FT

French utility EDF said in a statement on Wednesday that its board had agreed to buy the reactor business of Areva based on a value of 2.5 billion euros.

British Prime Minister David Cameron will fly to Aberdeen, Scotland, on Thursday to announce a 250-million-pound ($356.20-million) package to prop up the North Sea oil industry.

In October last year, Zeus Capital announced that it will acquire rival broker Novum Securities. However, that plan appears on the brink of falling apart as the Financial Conduct Authority plans to bring tax fraud charges against Zeus co-founder Richard Hughes.

Five former brokers were acquitted on Wednesday of conspiring with convicted trader Tom Hayes to manipulate crucial benchmark interest rates as London's second Libor trial dealt a blow to the UK's Serious Fraud Office.



NYT

- Even as petroleum prices plummet and the kingdom burns through its financial reserves, the Saudis are betting they can win an oil war of attrition. (http://nyti.ms/1PUnxsX)

- A report from the New York attorney general portrays a complex business in which technologically adept ticket brokers are able to profit at the expense of ordinary fans. (http://nyti.ms/23vhOnh)

- Gilead Sciences may face legal action in Massachusetts unless it drops prices for its hepatitis C drugs. In California, it is being sued over patents for an H.I.V. treatment. (http://nyti.ms/1KcfUBy)

- The quarter was another blockbuster for Facebook Inc and its shares jumped in after-hours trading. (http://nyti.ms/1SLtQoO)



Canada

THE GLOBE AND MAIL

** Bombardier Inc was sued on Wednesday for at least C$14.2 million ($10.1 million) by a unit of Comerica Inc , after the Canadian aircraft maker was unable to find buyers for four planes whose leases had expired. (http://bit.ly/1Sl1L6c)

** Rogers Communications chief executive Guy Laurence is defending the escalating prices of wireless plans, comparing the value customers get from the money cellular carriers pour into their networks every year to the cost of a daily coffee. (http://bit.ly/1Sl1MHk)

** Housing markets across the Prairies are showing major signs of stress as job losses mount in the energy sector and rental vacancy rates soar, Canada's federal housing agency, Canada Mortgage and Housing Corp, warned in a quarterly assessment. (http://bit.ly/1Sl1Yqh)

NATIONAL POST

** The federal government will take extra time to weigh approvals for both the Energy East and Trans Mountain pipeline projects, and will assess both projects' impacts on Canada's greenhouse gas emissions. (http://bit.ly/1Sl2fcy)

** Canada's top energy regulator, the National Energy Board, forecasts crude oil production in the country to grow 56 percent to reach 6.1 million barrels per day by 2040 from its current level of 4.3 million bpd. (http://bit.ly/1Sl2oge)

** Canadian vehicle sales will be flat in 2016 as weakness in commodity-producing provinces is offset by strength in the industrial heartland, according to a new report from Scotiabank. (http://bit.ly/1Sl2rbX)



Britain

The Times

The trial of six brokers accused of rigging Libor ended in defeat for the Serious Fraud Office yesterday when a jury cleared five of the men. (http://thetim.es/1OZ9hPG)

The chances that the payment protection insurance scandal will exceed £30 billion rose yesterday after Santander took a fresh £450 million provision to pay compensation. (http://thetim.es/1KGeJ8p)

The Guardian

Shell has won shareholder approval for its £35bn takeover of BG Group despite nearly a fifth of investors opposing the deal. (http://bit.ly/1VrjqIQ)

One of the most powerful opponents of Google's controversial tax structures, European tax commissioner Pierre Moscovici, is expected on Thursday to call on Britain and Ireland to drop their objections to radical tax reform across the EU. (http://bit.ly/1Vshi3M)

The Telegraph

Royal Bank of Scotland has set aside an extra £2.5bn to cover legal bills, compensation payouts and reduced income due to low interest rates, just weeks before it announces its financial results for 2015. (http://bit.ly/20rZMjj)

The City watchdog has issued a warning to people considering taking out a self-certification mortgage from a company based outside the UK. (http://bit.ly/1nxKhsz)

Sky News

A fund backed by Britain's biggest banks has agreed to back a fast-growing app-based advertising platform founded by a trio of 20-something entrepreneurs. (http://bit.ly/1UrHzPi)

Apple's Safari browser suddenly crashed on iPhones, iPads and Macs worldwide on Wednesday. (http://bit.ly/1SbPgvA)

The Independent

Scotch whisky makers have called on the UK Government to cut tax on the bottle from an "onerous" 76 per cent. (http://ind.pn/1OZ4ca7)

America's central bank stressed today that it is "closely watching" global markets in the wake of January's turmoil, suggesting that it is likely to slow the pace of its monetary tightening. (http://ind.pn/1PTLqRr)

http://www.zerohedge.com/news/2016-01-28/frontrunning-january-28
 

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#36
Futures Bounce Fades As Oil Treads Water, Italian Banks Turmoil, Chinese Stocks Won't Stop Falling


Submitted by Tyler Durden on 01/28/2016 06:57 -0500

Following the Fed's disappointing "dovish, but not dovish enough" statement which effectively admitted Yellen had committed policy error by hiking just as the US economy "was slowing down" which in turn lowered the odds of a March rate hike to just 18%, it was up to oil to pick up the correlation torch, and so it did, rising in an otherwise mixed session which has seen European stocks slide on continued weakness surrounding Italian banks, many of which have been halted limit down, while Asia was unable to pick a direction after the resignation of Japan’s "Abenomics" minister Akira Amari to over a graft scandal and yet another rout for Chinese stocks.

Before we get to the US, we should note what is going on in China where the Shanghai Composite Index fell by another 2.9% to 2655.66, capping a 9.6 percent retreat over three days, as concern a weakening economy will reduce corporate profits overshadowed the biggest cash injection into the financial markets in three years. The SHCOMP closed at the lowest level since November 2014, taking its decline for the year to 25 percent, the most since 2008. As Bloomberg notes, authorities continue to take measures to stabilize the nation's financial markets but having most of their time focused on propping up the devaluing currency, they appear to have left equity investors to fend for themselves.

This week's net injection of 590 billion yuan ($90 billion) into the money markets ahead of the start of the Chinese new year was the biggest since February 2013, however it wasn't big enough. Further declines in the equity benchmark could be on the way. Strategists and technical analysts surveyed by Bloomberg are targeting a bottom of 2,500, compared with 2,656 today. Since the Shanghai Composite Index reached a record high on June 12 it has plummeted 48 percent. As can bee seen on the chart below, it remains the world's worst performing major equity index in 2016.



Away from Asia, futures on the Nasdaq 100 Index climbed driven by Facebook which jumped 12% in early New York trading after posting another record earnings period. Technology peers also rallied, with more than 2 percent gains each in Google parent Alphabet Inc., Apple Inc., Netflix Inc., Amazon.com Inc. and Microsoft Corp. Amazon and Microsoft are due to report results today, along with some 50 other Standard & Poor’s 500 Index members.

And while Europe was initially happy to track oil modestly higher, it has since then stumbled deep in the red following the latest bout of risk in Italy where banks fell for the second day, leading the FTSE MIB to underperform the broader European market, and pushing the FTSE Italia All-Share Banks index down 4.2% as of 12:18pm CET. Indeed, this morning has been a a freeze fest, with Pop. Milano, UniCredit, Monte Paschi, Pop. Emilia shares halted; down ~5% or more after Banca Akros says price of the "bad bank" guarantee looks rather costly, doubts many Italian banks will be interested in using it to offload bad loans.

The one silver lining has been the MSCI Emerging Markets Index which rose for a second day and Gulf stocks were on course for their best week since December 2014. as U.S. crude headed for a three-day advance, helping boost currencies of commodity-exporting nations. "Emerging-market assets are rallying across the board today as the Fed sounded relatively dovish watching global developments,” said Bernd Berg, an emerging markets strategist in London at Societe Generale SA. “A March Fed rate hike looks increasingly unlikely now. I think we are now entering a risk-on phase and oil-related currencies will post a sizable rally."

However, that may not last: with the futures picture changing dramatically, moments ago US equity futures slid as Oil erased all of its losses for the day:

  • WTI CRUDE ERASES GAINS, TRADES LITTLE CHANGED AT $32.26/BBL
  • WTI Crude Erases Earlier Advance, Dips 0.4% to $32.16/Bbl
  • S&P FUTURES QUICKLY TURN LOWER; OIL FALLS; EU STOCKS DROPPING
And then as oil was sliding, a familiar headline reappeared:

  • RUSSIAN ENERGY MINISTER NOVAK SAYS OPEC IS TRYING TO ORGANISE MEETING OF OPEC AND NON-OPEC COUNTRIES IN FEB
Maybe it can work for a second day in a row.

And while risk levels are changing rapidly and violently by the minute, this is roughly where we stand

  • S&P 500 futures down 0.1% to 1872
  • Stoxx 600 down 1.0% to 336.8
  • MSCI Asia Pacific up less than 0.1% to 120
  • Nikkei 225 down 0.7% to 17041
  • Hang Seng up 0.8% to 19196
  • Shanghai Composite down 2.9% to 2656
  • S&P/ASX 200 up 0.6% to 4976
  • US 10-yr yield up 2bps to 2.02%
  • Dollar Index down 0.11% to 98.8
  • WTI Crude futures up 1.6% to $32.83
  • Gold spot down 0.6% to $1,118
  • Silver spot down 0.4% to $14.43
A quick stroll through regional markets, we find Asian equity markets traded mixed having initially shrugged off the negative lead from Wall St . ASX 200 (+0.6%) outperformed amid gains in commodity names after crude briefly regained the USD 32/bbl level, while the Nikkei 225 (+0.7%) saw indecisive trade with participants tentative ahead of the BoJ policy decision tomorrow. Shanghai Comp (-2.9%) extended on its weakening trend, although is off its worst levels after the PBoC injected CNY 340b1n into the inter-bank market. 10yr JGBs traded lower, amid a suspected lack of buyers as participants await tomorrow's conclusion to aforementioned policy meeting in which the BoJ is widely expected to remain on hold.

European indices trade in negative territory amid choppy trade with stabilizing oil markets failing to give stocks a lift. As North American participant come to their desks, stocks are gradually approaching their post-FOMC levels, after a cautious Fed revealed they are not blind to the risks the global economy faces, which resulted in pressure upon stock markets and a flight to safe-haven assets. Energy is supporting stocks, with the sector outperforming in the Euro Stoxx 600. The SMI (-1.5%) is the notable underperformer amongst the premier indices, its second largest component Roche (-4.3% ) weighing it down after predicting a less than stellar outlook for the coming year, with sales expected to grow in mid to low single digits.

In FX, Risk tone is mixed and as such short term speculators have taken the opportunity to buy USD/JPY this morning, taking encouragement from the domestic and offshore buying seen overnight. News that the Japanese Econ Min Amari will step down prompted a brief hit, but this looks to be short lived with the push for 119.00 back on in anticipation of the BoJ meeting this evening.

A gauge of 20 emerging-market currencies rose for a third day, gaining 0.4 percent. Russia’s ruble led the advance, climbing 1.3 percent in a third day of gains. Malaysia’s ringgit strengthened 1.1 percent, after Prime Minister Najib Razak maintained his fiscal-deficit target and announced measures to shore up an economy hit by a plunge in oil. Turkey’s lira and South Africa’s rand appreciated at 0.7 percent.

The pound advanced versus most of its 16 major peers after a report showed the U.K.’s economic expansion accelerated in the fourth quarter. Britain’s economy grew 0.5 percent in the final three months of 2015, from 0.4 percent in the third quarter, matching to the median forecast of analysts surveyed by Bloomberg.a

In commodities, West Texas Intermediate crude rose 0.7 percent to $32.54 a barrel after gaining 6.4 percent over the past two days. It’s recovering after falling to $26.19 on Jan. 20, its lowest since 2003.

The worldwide surplus will decline this year even after Iran adds an expected 500,000 barrels a day of output, United Arab Emirates Energy Minister Suhail Al Mazrouei said on his Twitter account. U.S. crude inventories increased by 8.38 million barrels last week, the biggest gain in volume since April, according to a weekly report from the Energy Information Administration.

Looking at the US calendar we’ve got last week’s initial jobless claims reading before the important preliminary December durable and capital goods orders data. Last month’s pending home sales data follows this and we close with the Kansas City Fed manufacturing activity index reading. Earnings wise today we’ve got 52 S&P 500 companies set to report with the highlights being Amazon (after-market), Caterpillar (before the open), Microsoft (after-market) and Ford Motor (before the open).

Global Top News

  • Deutsche Bank Securities Unit Reports Loss on Revenue Slump: Transaction banking only unit at group to post profit gain
  • Japan’s ‘Abenomics’ Minister Amari to Resign Over Graft Scandal: Economy Minister Akira Amari to resign, article alleges he took cash
  • company in breach of law
  • U.K. Economy Gained Momentum at End of 2015 on Services Growth: GDP rose 0.5% in 4Q
  • Euro-Area Economic Confidence Declines to Lowest in Five Months: Indicator falls to 105 in January from 106.7 in December
  • Roche Declines After Full-Year Profit Misses Analyst Estimates: Co. sees 2016 sales having low- to mid-single digit growth
  • China’s Money-Market Operations Inject Most Cash in Three Years: PBOC’s reverse repos add a net 590b yuan this week
  • Google Tax Deal May Be Next in Line for EU Probe, Vestager Says: EU competition chief Margrethe Vestager said she’s ready to investigate Google parent Alphabet’s GBP130m U.K. tax deal
  • Takata CEO Said to Face Pressure to Resign as Crisis Deepens: Honda said to be more receptive on support if CEO resigns
  • Wynn Resorts, Boston Reach Settlement on Everett Casino: Globe
  • Apple May Introduce New IPad at March Event: 9to5Mac
  • NetApp Said to Close SolidFire Deal Next Week: CRN
  • Alibaba Said to Sell Meituan-Dianping Stake in $900m Deal: WSJ


Bulletin Headline Summary from RanSquawk and Bloomberg:

  • Brent and WTI continue to grind higher, looking to test USD 34.00 and USD 33.00 respectively, in spite of the large DoE build seen yesterday
  • European indices trade in negative territory amid choppy trade with stabilizing oil markets failing to give stocks a lift
  • Looking ahead, highlights include German national CPI, UK GDP, US weekly jobless data, durable goods and pending home sales, comments from ECB's Costa, Nowotny and Weidmann andf Microsoft earnings
  • Treasuries lower in overnight trading before this week’s U.S. auctions conclude with $29b 7Y notes, WI yield 1.78%, compares with 2.161% awarded in Dec., highest 7Y auction stop since 2.235% in Sept. 2014.
  • Federal Reserve Chair Janet Yellen and her colleagues have opened the door to a change in their outlook for the economy this year, and possibly a slower pace of interest-rate hikes that would make a move in March less likely
  • There’s been speculation recently about whether the U.S. and the world are about to sink into recession. Underpinning much of the angst is an unprecedented $29 trillion corporate bond binge that has left many companies more indebted than ever
  • Threats to financial stability include long-term impact on risk-taking of “persistently low interest rates,” increasing debt and declining credit quality in U.S. companies and emerging markets, according to Office of Financial Research’s annual report
  • The U.K. economy gained a little momentum at the end of last year, thanks entirely to the services industry. 4Q GDP rose 0.5% from the previous three months, when it expanded 0.4%
  • Spanish unemployment dropped to 20.9% from 21.2% the previous quarter to its lowest in almost five years, as Acting PM Mariano Rajoy struggles to form a government following an inconclusive election
  • Euro-area economic confidence slumped to 105 from a revised 106.7 in December, the lowest since August, strengthening the European Central Bank’s case for increasing stimulus
  • Currency traders are writing off Haruhiko Kuroda’s ability to weaken the yen the way he did in 2014, when he expanded his record monetary stimulus program
  • Japanese Economy Minister Akira Amari resigned amid allegations he received money in return for favors. A tearful Amari apologized for the scandal, saying any cash received by his office was a political donation
  • $2b IG corporates priced yesterday along with $300m HY. BofAML Corporate Master Index OAS 1bp wider yesterday at +200; 2015 range 180/129. High Yield Master II OAS tightened 5bp to +778; 2015 range 733/438
  • Sovereign 10Y bond yields mostly steady. Asian stocks mixed, European stocks drop; U.S. equity-index futures rise. Crude oil rises,
US Economic Calendar

  • 8:30am: Initial Jobless Claims, Jan. 23, est. 281k (prior 293k); Continuing Claims, Jan. 16, est. 2.218m (prior 2.208m)
  • 8:30am: Durable Goods Orders, Dec. P, est. -0.7% (prior 0.0%)
    • Durables Ex-Transportation, Dec. P, est. -0.1% (prior 0%)
    • Cap Goods Orders Non-Def Ex-Air, Dec. P, est. -0.2% (prior -0.3%)
    • Cap Goods Ship Non-Def Ex-Air, Dec. P, est. 0.8% (prior -0.6%)
  • 9:45am: Bloomberg Consumer Comfort, Jan. 24 (prior 44)
  • 10:00am: Pending Home Sales m/m, Dec., est. 0.9% (prior -0.9%)
  • Pending Home Sales NSA y/y, Dec., est. 4.8% (prior 5.1%)
  • 11:00am: Kansas City Fed Mfg Activity, Jan., est. -10 (prior -9)
DB's Jim Reid concludes the overnight wrap

Looking at our screens this morning, it’s been a relatively mixed start for bourses in Asia but after a weak open, some positive sentiment is returning as we reach the midday break. There’s been gains this morning for the Hang Seng (+0.18%), Kospi (+0.31%) and ASX (+0.60%) after all three opened in the red, while in Japan the Nikkei is currently -0.44% but opened down nearly -1.5% following the FOMC selloff in the US last night. China is bucking the trend with markets seemingly struggling to trade with any conviction. The Shanghai Comp is currently -0.59% but has swung between gains and losses this morning. Elsewhere WTI is off around a percent in Asia and back below $32/bbl. Datawise the only release of note has been a softer than expected Japanese retail sales print (-0.2% mom vs. +1.0% expected).

Moving on. Earnings season is ramping up with a number of bellwether corporates reporting. Much like what we saw with Apple, despite Boeing’s quarterly earnings coming in ahead of analyst estimates investors latched onto the soft outlook for the quarter and year ahead which sent shares plummeting nearly 9% lower by the close. After the close we also got some bumper numbers out of Facebook (beat both earnings and revenue expectations) which sent shares up as much as 12% in extended trading (while US equity index futures are also up this morning). That was in stark contrast to eBay however who saw its share price down double digits after the close with management outlining a slightly more difficult quarter ahead than analysts had expected. All told yesterday we saw 33 S&P 500 companies report with 18 beating revenue expectations (55%) and 27 (82%) coming ahead of earnings estimates. That was slightly better than the overall trend so far after 133 companies having reported with 52% and 80% beating sales and earnings expectations respectively.

Elsewhere, the rest of the price action in markets played second fiddle to the FOMC. European equities managed to eke out small gains yesterday after trading with losses for much of the session (Stoxx 600 closing +0.31%). Meanwhile in terms of the economic data we saw both German (9.4 vs. 9.3 expected) and French (97 vs. 96 expected) consumer confidence indicators come in a smidgen ahead of expectations. In the US the only data of note was a greater than expected surge in December new home sales (+10.8% mom vs. +2.0% expected) which rose to a ten-month high after being put down to the unseasonably warm weather last month.

Looking at the day ahead, it’s a busy one for economic data and we kick off in Germany this morning where we’ll get the December import price index print. That’s before we turn to the UK where the advanced Q4 GDP print is due to be released (+0.5% qoq expected) followed by various confidence indicators for the Euro area. Germany’s preliminary CPI report for January is due out after this. Over in the US this afternoon, we’ve got last week’s initial jobless claims reading before the important preliminary December durable and capital goods orders data. Last month’s pending home sales data follows this and we close with the Kansas City Fed manufacturing activity index reading. Earnings wise today we’ve got 52 S&P 500 companies set to report with the highlights being Amazon (after-market), Caterpillar (before the open), Microsoft (after-market) and Ford Motor (before the open).


http://www.zerohedge.com/news/2016-...talian-banks-turmoil-chinese-stocks-wont-stop
 

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#37
How The Rothschilds Made America Into Their Private Tax Fraud Backyard


Submitted by Tyler Durden on 01/27/2016 20:25 -0500


Back in September 2012 we first presented "the world's biggest hedge fund nobody had ever heard of": a small, previously unknown company called Braeburn Capital which, however, managed more cash than even Ray Dalio's Bridgewater, the world's largest hedge fund.



How had the little firm operating out of a non-descript office building in Nevada achieved this claim to fame? By managing the cash hoard (now well over $200 billion) of the world's biggest and most valuable company: Apple.

But what was perhaps more notable is where Braeburn was physically located: Reno, Nevada.

We explained the company's choice for location with one simple word: "taxes", or rather the full, and very much legal, avoidance thereof.

Three and a half years later we encounter this quiet Nevada town once again, and once again it is Reno's aura of tax evasion that brings is to the world's attention courtesy of a Bloomberg report discussing "The World’s Favorite New Tax Haven."

Only instead of Apple this time, the focus falls on a far more notorious company: the Rotschilds.

As Bloomberg writes, "last September, at a law firm overlooking San Francisco Bay, Andrew Penney, a managing director at Rothschild & Co., gave a talk on how the world’s wealthy elite can avoid paying taxes. His message was clear: You can help your clients move their fortunes to the United States, free of taxes and hidden from their governments. Some are calling it the new Switzerland."

Ah, the rich irony: years after Obama single-handedly destroyed the secrecy-based Swiss banking model, the U.S. itself has taken over the role of the world's biggest, if no longer very secret, tax haven, and the epicenter is this modest Nevada city located next to lake Tahoe, which has become the favorite city, if only for tax purposes, for such names as Apple and the Rothschild family.

The Swiss are not amused:



After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.



How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

It will probably come as no surprise, that the firm at the center of it all is the (in)famous financial institution: Rotschild & Company.



Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.



The firm says its Reno operation caters to international families attracted to the stability of the U.S. and that customers must prove they comply with their home countries’ tax laws. Its trusts, moreover, have “not been set up with a view to exploiting that the U.S. has not signed up” for international reporting standards, said Rothschild spokeswoman Emma Rees.

And where the Rothschilds are to be found, everyone else quickly arrives: "Geneva-based Cisa Trust Co. SA, which advises wealthy Latin Americans, is applying to open in Pierre, S.D., to “serve the needs of our foreign clients,” said John J. Ryan Jr., Cisa’s president."



Trident Trust Co., one of the world’s biggest providers of offshore trusts, moved dozens of accounts out of Switzerland, Grand Cayman, and other locales and into Sioux Falls, S.D., in December, ahead of a Jan. 1 disclosure deadline.



“Cayman was slammed in December, closing things that people were withdrawing,” said Alice Rokahr, the president of Trident in South Dakota, one of several states promoting low taxes and confidentiality in their trust laws. “I was surprised at how many were coming across that were formerly Swiss bank accounts, but they want out of Switzerland.”

Next comes the need to legitimize US hypocrisy and to justify how America, in demanding everyone else opens their books, is ignored when not only does it keep its own books closed but is openly welcoming all those millionaires and billionaires whose offshore accounts were closed as a result of US intervention!



Rokahr and other advisers said there is a legitimate need for secrecy. Confidential accounts that hide wealth, whether in the U.S., Switzerland, or elsewhere, protect against kidnappings or extortion in their owners’ home countries. The rich also often feel safer parking their money in the U.S. rather than some other location perceived as less-sure.



“I do not hear anybody saying, ‘I want to avoid taxes,’ ” Rokahr said. “These are people who are legitimately concerned with their own health and welfare.”

Picture that: nobody wants to admit they are intent on evading taxes to their financial advisor. How quaint. But the greatest thing about US-based tax evasion is that it is taking place right under the nose of the world's allegedly biggest tax-fraud chaser. It also happens to be perfectly legal.



There’s nothing illegal about banks luring foreigners to put money in the U.S. with promises of confidentiality as long as they are not intentionally helping to evade taxes abroad. Still, the U.S. is one of the few places left where advisers are actively promoting accounts that will remain secret from overseas authorities.

Put all that together, and one company has realized there are billions in "fees" to be made by taking advantage of what is now officially the biggest hypocrite in the world: the United States of America. And adding insult to irony is that the "not easy to find" Rothschild Reno office is located just 6 floors away from the U.S. attorney's office!



Rothschild’s Reno office is at the forefront of that effort. “The Biggest Little City in the World” is not an obvious choice for a global center of capital flight. If you were going to shoot a film set in Las Vegas circa 1971, you would film it in Reno. Its casino hotels tower above the bail bondsmen across the street, available 24/7, as well as pawnshops stocked with an array of firearms. The pink neon lights at casinos like Harrah’s and the Eldorado still burn bright. But these days, their floors are often empty, with travelers preferring to gamble in Las Vegas, an hour’s flight away.



The offices of Rothschild Trust North America LLC aren’t easy to find. They’re on the 12th floor of Porsche’s former North American headquarters building, a few blocks from the casinos. (The U.S. attorney’s office is on the sixth floor.) Yet the lobby directory does not list Rothschild. Instead, visitors must go to the 10th floor, the offices of McDonald Carano Wilson LLP, a politically connected law firm. Several former high-ranking Nevada state officials work there, as well as the owner of some of Reno’s biggest casinos and numerous registered lobbyists. One of the firm’s tax lobbyists is Robert Armstrong, viewed as the state’s top trusts and estates attorney, and a manager of Rothschild Trust North America.

A little history: the trust company was set up in 2013 to cater to international families, particularly those with a mix of assets and relatives in the U.S. and abroad, according to Rothschild. It caters to customers attracted to the “stable, regulated environment” of the U.S., said Rees, the Rothschild spokeswoman.

“We do not offer legal structures to clients unless we are absolutely certain that their tax affairs are in order; both clients themselves and independent tax lawyers must actively confirm to us that this is the case,” Rees said.

Reread that sentence again, and this time try not to laugh: imagine a world in which both clients and tax lawyers, who are both conflicted and incentivized monetarily to lie, affirmatively confirm that they are not tax cheats? This is almost as good as Wall Street policing itself.



The managing director of the Nevada trust company is Scott Cripps, an amiable California tax attorney who used to run the trust services for Bank of the West, now part of French financial-services giant BNP Paribas SA. Cripps explained that moving money out of traditional offshore secrecy jurisdictions and into Nevada is a brisk new line of business for Rothschild.



“There’s a lot of people that are going to do it,” said Cripps. “This added layer of privacy is kicking them over the hurdle” to move their assets into the U.S. For wealthy overseas clients, “privacy is huge, especially in countries where there is corruption.”

Here are some examples of families whose affairs are in order (after active self-confirmation of just that):



One wealthy Turkish family is using Rothschild’s trust company to move assets from the Bahamas into the U.S., he said. Another Rothschild client, a family from Asia, is moving assets from Bermuda into Nevada. He said customers are often international families with offspring in the U.S.

America's gain is Switzerland's, that centuries-old tax haven's, loss: Switzerland has been the global capital of secret bank accounts. That may be changing. In 2007, UBS Group AG banker Bradley Birkenfeld blew the whistle on his firm helping U.S. clients evade taxes with undeclared accounts offshore. Swiss banks eventually paid a price. More than 80 Swiss banks, including UBS and Credit Suisse Group AG, have agreed to pay about $5 billion to the U.S. in penalties and fines.

Guess who was among them? why yes, Rothschild Bank AG last June entered into a nonprosecution agreement with the U.S. Department of Justice. The bank admitted helping U.S. clients hide income offshore from the Internal Revenue Service and agreed to pay an $11.5 million penalty and shut down nearly 300 accounts belonging to U.S. taxpayers, totaling $794 million in assets.

Well, Rothschild is doing it all over again, only this time in Uncle Sam's back yard. Wait, you mean paying a $11.5 million penalty didn't teach it a lesson? No way.

But even more tragicomic is the US push for tax transparency, known as the FATCA. Well, a push everywhere except in the US itself.



The U.S. was determined to put an end to such practices. That led to a 2010 law, the Foreign Account Tax Compliance Act, or Fatca, that requires financial firms to disclose foreign accounts held by U.S. citizens and report them to the IRS or face steep penalties. Inspired by Fatca, the OECD drew up even stiffer standards to help other countries ferret out tax dodgers. Since 2014, 97 jurisdictions have agreed to impose new disclosure requirements for bank accounts, trusts, and some other investments held by international customers. Of the nations the OECD asked to sign on, only a handful have declined: Bahrain, Nauru, Vanuatu—and the United States.



“I have a lot of respect for the Obama administration because without their first moves we would not have gotten these reporting standards,” said Sven Giegold, a member of the European Parliament from Germany’s Green Party. “On the other hand, now it’s time for the U.S. to deliver what Europeans are willing to deliver to the U.S.”

As it turns out the US had no qualms about implementing global tax disclosure standards... as long as it itself would be exempt and benefit from the entire world parking its criminal money on US territory:



The Treasury Department makes no apologies for not agreeing to the OECD standards. “The U.S. has led the charge in combating international tax evasion using offshore financial accounts,” said Treasury spokesman Ryan Daniels. He said the OECD initiative “builds directly” on the Fatca law.



To the extent non-U.S. persons are encouraged to come to the U.S. for what may be our own ‘tax haven’ characteristics, the U.S. government would likely take a dim view of any marketing suggesting that evading home country tax is a legal objective,” he said.

And since the US now openly welcome all forms of hot, laundered, embezzled, or otherwise misappropriated money, there are countless banks willing to provide the service of parking that money in the US... for a commission. What amounts are we talking about?

Well, trillions.



At issue is not just non-U.S. citizens skirting their home countries’ taxes. Treasury also is concerned that massive inflows of capital into secret accounts could become a new channel for criminal money laundering. At least $1.6 trillion in illicit funds are laundered through the global financial system each year, according to a United Nations estimate.

And most of those funds are now being parked in the US, where a key portal is Rothshild's Reno, NV office.

But what makes this particular case of tax evasion particularly abominable is that it is nothing less than a symbiosis between proven and charged tax evaders and a U.S. government which has once again proven it can be bought for pennies on the dollar by banks like Rothschild, and legislate to make sure the bank continues pocketing billions in fees for the foreseeable future.

We dare readers to read the following several concluding sections without sending their blood pressure to dangerously homicidal levels:



For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”



Rothschild says it takes “significant care” to ensure account holders’ assets are fully declared. The bank “adheres to the legal, regulatory, and tax rules wherever we operate,” said Rees, the Rothschild spokeswoman.

Except in cases like Switzerland where it didn't exactly "adhere to the legal, regulatory, and tax rules." This time will be different though.



Penney, who oversees the Reno business, is a longtime Rothschild lawyer who worked his way up from the firm’s trust operations in the tiny British isle of Guernsey. Penney, 56, is now a managing director based in London for Rothschild Wealth Management & Trust, which handles about $23 billion for 7,000 clients from offices including Milan, Zurich, and Hong Kong. A few years ago he was voted “Trustee of the Year” by an elite group of U.K. wealth advisers.



In his September San Francisco talk, called “Using U.S. Trusts in International Planning: 10 Amazing Feats to Impress Clients and Colleagues,” Penney laid out legal ways to avoid both U.S. taxes and disclosures to clients’ home countries.



In a section originally titled “U.S. Trusts to Preserve Privacy,” he included the hypothetical example of an Internet investor named “Wang, a Hong Kong resident,” originally from the People’s Republic of China, concerned that information about his wealth could be shared with Chinese authorities.

Instead Wang will buy, sight unseen a Manhattan duplex for call it $50 million or whatever amount the seller demands, using a Nevada LLC with which to shield his purchase. In the process Wang's purchase, under the sage advice of Rothschild's Mr. Penney, assures that the luxury US housing bubble grows so big, and real estate prices rise so high, not a single law-abiding US citizen can afford to buy any form of luxury real estate.



Putting his assets into a Nevada LLC, in turn owned by a Nevada trust, would generate no U.S. tax returns, Penney wrote. Any forms the IRS would receive would result in “no meaningful information to exchange under” agreements between Hong Kong and the U.S., according to Penney’s PowerPoint presentation reviewed by Bloomberg.

Keep in mind: all of this is legal, and with the express permission of a US government, which one can rightly say is as criminal as any of the advisors who are merely explaining to their wealthy clients how to cheat the system best.

There was a catch: not all western governments are muppets for the Rothschilds of the world:



"Penney offered a disclaimer: At least one government, the U.K., intends to make it a criminal offense for any U.K. firm to facilitate tax evasion."

Of course not the US, even though with that line it makes it very clear that what the US is doing is encouraing the criminal offense of facilitating tax evasion. Or maybe not.



Rothschild said the PowerPoint was subsequently revised before Penney delivered his presentation. The firm provided what it said was the final version of the talk, which this time excluded several potentially controversial passages. Among them: the U.S. being the “biggest tax haven in the world,” the U.S.’s low appetite for enforcing other countries’ tax laws, and two references to “privacy” offered by the U.S.



“The presentation was drafted in response to a request by the organizers to be controversial and create a lively debate among the experienced, professional audience,” Rees said. “On reviewing the initial draft, these lines were not deemed to represent either Rothschild’s or Mr. Penney’s view. They were therefore removed.”

And that was that.

* * *

While none of the above should come as a surprise to anyone who has been following our series since 2012 showing how US real estate has been used by foreign oligarchs to park illegal cash, what we would find very interesting in the next and final expose in this series, is for Bloomberg's Jesse Drucker to find how many billions (or maybe only millions - the US government is a very cheap whore) were paid under the table by Rothschild et al to bribe the US government to enable this kind of circular, incestuous legalized tax fraud on US soil, one for which Rothschild will collect billions in financial advisory fees for the indefinite future, and which blatantly steals from those who do pay their taxes: the middle class.


http://www.zerohedge.com/news/2016-...made-america-their-private-tax-fraud-backyard
 

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