Monday, December 10, 2018

CFTC Fines Banks For Precious Metal Price Manipulation


by Turd Ferguson, TF Metals:

Hmmm. I wonder how System Apologists like Moriarty, Christian, Hug and Weiner will try to spin this one?

In order to get this information out as quickly as possible, we’ll save the price implications for later. But just today I saw this posted at Silver Doctors. I only post it here as a demonstration of typical Apologist garbage:  So, given what you’re about to read, will that author soon print an apology and retraction? Don’t hold you breath.

Late Friday, reports hit Reuters that the CFTC would soon levy fines for “spoofing and price manipulation in the futures markets”. Well, just a few minutes ago, we got the news release. You can read it all here:

However, to save you some time, here’s the most important section:

What about “ENGAGED IN A SCHEME TO MANIPULATE THE PRICE OF PRECIOUS METALS FUTURES CONTRACTS” is vague or open to interpretation? Not much. However, those who have based their careers and cash flow upon the notion that the precious metal markets are sacrosanct, free and fair just got themselves a cold slap of reality.

Will there be arrests and future charges against some of the US Banks? Meh, we’ll see. Maybe. But that’s a topic for another day. For now we await the response of those who have always claimed that we here at TFMR are nothing but tin foil-hatted simpletons who rely upon conspiracy theories to explain away things we’re too stupid and unsophisticated to understand.


Don’t Fight the Fed! Or the Rest of the World’s Central Banks

by Michael Pento, Market Oracle:

On March 9, 2009, The Wall Street Journal’s Money and Investing section posed this ominous question: “How low can stocks go?” The stench of economic malaise was suffocating as the Dow Jones Industrial Average (DJIA) rounded off its fourth straight week of losses, and the S&P 500 touched below 700 for the first time in 13 years. Goldman Sachs cautioned the S&P could fall to 400, while CNBC’s Jim Cramer was busily calculating the stock valuations of the DJIA components based on balance sheet cash levels. 

Yet miraculously, as the market pundits stood despondently believing there was nothing positive on the economic horizon and that no stock was worth buying at any price, investors stared into the abyss and took a leap of faith. And just like that, the market had bottomed. Dow 6,440.08 was a buying opportunity, and with the Fed’s QE spigot operating on full throttle, the Dow was poised for a historic take-off.

Oh, what a difference nine years make! Today, the Dow has now crossed the then unimaginable level of 26,000. The rationalizations abound; lower corporate taxes, less regulation and sizzling business and consumer confidence all scream “happy days are here again!” With nothing but blue skies ahead, the only question left for Wall Street to ponder is the uncertainty of how many days it will take before the Dow crosses another 1,000-point milestone.

But not so fast…Remember, the stock market climbs a wall of worry, and in 2009 that wall was seemingly insurmountable. Back then the sentiment was that nothing could go right–yet the market endured as economic and financial Armageddon loomed around every corner. Today, the exact opposite scenario is evident. The belief prevails that nothing can go wrong. However, hiding in plain sight there is one gigantic cliff the market has already started to head down. But the real reason behind the next violent crash in the equity market is the current bursting of the worldwide bond bubble.

The stock market now resembles an unstable uranium 235 isotope. The splitting catalyst will be the result of slamming $10 trillion worth of negative-yielding sovereign debt and $230 trillion worth of total global debt into the reversal of central bank money printing and unprecedented interest rate suppression.

Remember this truth: If the market can rise on sluggish growth, it can also fall when growth seems fine. 

Investors must determine what has already been priced into shares and what lies ahead for growth. It is essential to keep in mind that the market is over-priced according to almost every metric. For instance, even if all the rosy economic projections pan out for the tax cuts, the market is still trading at 18.6 times forward 2018 earnings, according to FACT SET–the market trades typically closer to 15 times earnings. The trailing PE ratio is now at its highest going back to 2009.

In addition to this, we have cash levels at all-time lows and margin debt at all-time highs. Mutual funds and ETFs that focus on stocks just recently raked in $58 billion in new money, according to Bank of America Merrill Lynch. And at 150%, the total market capitalization of equities has never been higher in relation to the underlying economy.

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FBI Deputy Director McCabe Steps Down, Forced To Retire Early


from ZeroHedge:

Update:  According to Fox News and CBS News’s Pat Milton just answered the question of why McCabe stepped down Monday when he would become eligible for his full pension benefits n March: McCabe was reportedly forced to step down. According to Fox News, McCabe was “removed” from his post as deputy director, “leaving the bureau after months of conflict-of-interest complaints from Republicans including President Trump.”

In both cases, his early departure suggests that he was forced out.

Several media outlets reported that McCabe is using his remaining vacation days to go on “terminal leave” and that his official retirement from the agency won’t happen until March, allowing him to collect the full pension.

As we noted last week, FBI Director Wray threatened to resign after being pressured by AG Jeff Sessions.

* * *

In a move that was widely expected (although not for another month or so), Deputy FBI Director Andrew McCabe is stepping down effective Monday, NBC reported.

McCabe, who briefly served as acting director last year after Trump fired Comey, first let it slip to the Washington Post late last year that he would be retiring in the coming months as Congressional Republicans targeted him for criticism surrounding his pro-Clinton bias (McCabe’s wife even secured campaign funding from Clinton ally Terry McAuliffe, something he initially failed to disclose).

Around the time of the reports of his impending retirement, McCabe had spent several marathon sessions answering questions from Congressional committees behind closed doors.

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Debbie Wasserman Schultz stuns CNN host with her stupidity (Video)


by Alex Christoforou. The Duran:

CNN’s Brooke Baldwin presses the very corrupt former DNC chari, Debbie Wasserman Schultz (D-FL) about what the Democrats got in return for shutting down the government, and is stunned over the congresswoman’s answer…“We won potential for momentum.”

Jimmy Dore crushes the stupidity of Debbie Wasserman Schultz, who managed to ‘out stupid’ even CNN…


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Jay Z EXPOSED! All Aboard The Trump Train?


from WeAreChange:

Even Orwell and Huxley Couldn’t Imagine the Threat Posed by Facebook and Google


by Jake Johnson, The Anti Media:

In addition to warning that U.S. President Donald Trump represents an immense “danger” to civilization, billionaire George Soros used the spotlight of the World Economic Forum in Davos, Switzerland on Thursday to urge the international community to take seriously the threats posed by Facebook and Google, which he said could ultimately spawn “a web of totalitarian control” if they are not reined in.

Particularly alarming, Soros said, is the prospect of Facebook and Google—which he scathingly deemed a “menace” to society—teaming up with “authoritarian states” to “bring together nascent systems of corporate surveillance with an already developed system of state-sponsored surveillance.”

Such “unholy marriages” could result in a strain of authoritarianism “the likes of which not even Aldous Huxley or George Orwell could have imagined,” the billionaire investor cautioned.

Soros went on to compare the tech giants’ impact on the internet—and social media in particular—to the effects of fossil fuel giants on the environment.

“Mining and oil companies exploit the physical environment; social media companies exploit the social environment,” Soros said, warning that the days of internet monopolies like Facebook and Google “are numbered.”

“They claim they are merely distributing information,” Soros added of the tech giants that are frequently denounced by critics of corporate power for abusing their market dominance. “But the fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access.”

If tech companies are permitted to retain overwhelming control over information, “far-reaching adverse consequences on the functioning of democracy” could result, Soros concluded.

“The power to shape people’s attention is increasingly concentrated in the hands of a few companies,” Soros said. “It takes a real effort to assert and defend what John Stuart Mill called ‘the freedom of mind.’ There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it.”

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Mueller’s Collusion Probe is Unravelling Fast


by Onan Coca, Freedom Outpost:

On Monday night’s episode of Tucker Carlson’s Fox News show he sat down with former federal prosecutor Joe diGenova who sounded a very skeptical note about Robert Mueller’s investigation into Russian collusion in our recent presidential election.

JOE DIGENOVA: [Strzok’s text messages] suggest, as we have said from the beginning, that there was a brazen plot to illegally exonerate Hillary Clinton and, if she didn’t win the election, to then frame Donald Trump with a falsely created crime. 

Everything we have seen from these texts, and from all the facts developing, shows that the FBI and senior DOJ officials conspired to violate the law, and deny Donald Trump his civil rights.

The motive would be that they didn’t like Donald Trump, they didn’t think that he was fit to be president, and they were going to do everything within their power to exonerate Hillary Clinton, and if she lost to frame Donald Trump with a false crime, because they didn’t think he should be president.

TUCKER CARLSON: What do you make of the claim that five months of text messages between Strzok and Page have somehow disappeared — as Lois Lerner’s emails did, as Hillary Clinton’s emails did. 

DIGENOVA: As an old U.S. attorney who has watched obstructions of justice over the years, that explanation from the Bureau is ludicrous. Those texts were either purposely destroyed, or, period. They were purposely destroyed. Moreover, they exist somewhere. I can tell you the NSA has them, other companies have them. Verizon has them, [or] AT&T. And if the Bureau can’t figure out how to get them, they’re in worse shape than I thought they were. 

Those texts exist, and if they don’t exist, they were destroyed. 

TUCKER CARLSON: So you suggest this was obstruction of justice. How do you proceed if the country’s chief law enforcement agency is guilty of that? 

DIGENOVA: Well, the Attorney General needs to appoint a special counsel, and if he doesn’t want to do that, he needs to make sure the criminal division of the Justice Department impanels a grand jury immediately and starts putting in that grand jury, under oath, Comey Strzok, Page, Baker, McCabe, everybody. And senior Justice Dept. officials Sally Yates, Bruce Ohr, and others — John Carlin, the head of the national security division. All of these people need to be in front of a grand jury. We have long since passed the time when we need to have just Congressional investigations over this. 

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Hackers Create “Perfect Virus,” Put Oil Companies On Edge


by Tsvetana Paraskova, Oil Price:

Russian security services have arrested a local hacker who planted malware at gas stations across Russia’s southern regions that had been cheating drivers out of the gasoline that they pumped in their cars in a major fraud scheme that later resold the stolen fuel.

Russia’s Federal Security Service (FSB) have arrested the creator of the malware, Denis Zayev, who had gas stations employees working with him to trick the software systems to selling less fuel to the customers, while reselling the fuel that was stolen.

This fraud was one of the largest such scams uncovered by the Russian services, a source in law enforcement told news outlet Rosbalt. The scheme extended to almost all regions in the south of Russia, with dozens of gas stations infected with the malware. Zayev has created a “perfect virus” that couldn’t be detected by either security controls that oil companies have used to remotely monitor gas stations, or by specialists at the Ministry of Internal Affairs, according to the police source who spoke to Rosbalt.

The virus planted in the systems allowed the hacker and his accomplices to steal up to 7 percent of the fuel. Zayev acted not only as the “seller” of the malware at some stations, but also as co-owner of the channel to steal fuel, and received a cut from the proceeds from the re-sale of the stolen fuel.

Schemes by hackers targeting gas stations are not new.  

In early 2014, 13 people were indicted in the U.S. for allegedly using small Bluetooth-enabled skimmers to steal more than US$2 million from credit cards that customers used at gas stations in Texas, Georgia, and South Carolina in 2012 and 2013. According to the Manhattan District Attorney, the four main defendants had attached skimming devices at gas pumps at Raceway and RaceTrac to steal credit card information from customers. 

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How Chinese Bitcoin Buyers Are Getting Around Government Ban


by Joseph Young, Coin Telegraph:

Chinese citizens are still investing in Bitcoin and the cryptocurrency market despite the government’s heavy crackdown.

In September 2017, Chinese cryptocurrency exchanges BTCC China, Huobi and OKCoin were ordered by the government to shut down their businesses. At one point, executives of the three cryptocurrency exchanges were prevented from leaving the country, due to a government investigation into local cryptocurrency exchanges.

Three months later, in December of 2017, China’s three largest cryptocurrency exchanges relocated their businesses to Hong Kong. BTCC China, Huobi and OKCoin rebranded to BTCC, Huobi Pro and OKEx, respectively. They intended to address the rapidly growing demand from Hong Kong-based investors.

Shortly after their move, the three trading platforms started to see daily volumes from Chinese investors grow exponentially. Somehow, Chinese investors were managing to circumvent Chinese trading restrictions by using Hong Kong-based exchanges. How is this possible?

In Hong Kong, it is relatively easy for investors to set up businesses. With less than $1,000, businesses can be legally created, which allows the opening of business bank accounts at Hong Kong-based financial institutions. Beginning in December 2017, many Chinese investors moved their funds from their Chinese bank accounts to Hong Kong bank accounts and started to trade cryptocurrencies more actively, effectively bypassing China’s restrictions.

But, unlike China, Hong Kong has a substantially lower supply to meet the growing demand. While China is home to major miners like Bitmain, Hong Kong does not produce much Bitcoin and other cryptocurrencies. As such, premiums in the Hong Kong cryptocurrency market increased, surpassing even that of the South Korean market. On January 18, when the global average price of Bitcoin was around $11,500, Bitcoin was being traded at above $13,000 on Huobi Pro.

Krystal Hu, a Hong Kong-based finance journalist, noted that traders outside of China have also started to take advantage of the arbitrage opportunity presented by the Hong Kong market. For instance, on January 18, the price of Bitcoin on Coinbase was $11,800. Purchasing Bitcoin from Coinbase and selling it on any Hong Kong-based market would have generated $1,200 in profit.

Chinese Government Concerned

Hong Kong’s exchanges have also integrated widely-used fintech applications in China such as Alipay and Tencent’s WeChat Pay. Alipay is a $60 billion fintech app that is used by more than 50 percent of mobile users. WeChat Pay, which was only used by seven percent of mobile users in 2014, is now being used by more than 40 percent of mobile users in China.

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ECB official calls for G20 nations to create a single policy on regulating Bitcoin and other cryptocurrencies


by Kenneth Schortgen, The Daily Economist:

In preparation for an upcoming European Summit, a member of the European Central Bank (ECB) at Davos suggested to G20 members that they look towards the creation of a singular policy across the Eurozone regarding the regulation of Bitcoin and other cryptocurrencies.

Speaking at the World Economic Forum last week, Benoit Coeure intimated that the arrival of digital currencies may be a good thing for getting companies and nations to update their legacy payment systems, but at the same time he warned that problems could occur if individual countries forged their own policies for cryptocurrency regulation outside of a uniform model.

European Central Bank Executive Board member Benoit Coeure urged Group of 20 nations to discuss ways to regulate bitcoin at their upcoming summit, adding that digital currencies could also be a force for good by pushing countries to upgrade their payment systems. 

Digital currencies can buy anything from drugs to cupcakes and are seen as having the potential to reshape the global financial system. 

Couere said the international community needs to find a way to understand and “control these gateways between the shadow currency universe and the regular financial system.”
At the same time he urged central banks not to lose sight of the opportunities created by the rise of cryptocurrencies. 

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Debate Over Food Inflation: What’s the Real Story?


by Mish Shedlock, Mish Talk:

Is food a bargain or are prices rising far faster than the BLS says they are?

The above image is from the Visual Capitalist via ZeroHedge a Decade of Grocery Prices for 30 Common Items.

Is the chart accurate? I have no reason to believe otherwise.

In fact, it supports my contention that food is a bargain.

Annualized Rate of Inflation

16 of 30 Items Annualized Inflation Under 2%

16 of the 30 items listed by the Visual Capitalist have prices rising less than 2% per year.

Foods that Store Easily

Next consider flour, rice, sugar, pasta, and dried beans.

All of those items store very well for long periods of time in a pantry. No refrigeration is necessary.

Moreover, all of those items go on sale periodically. There is no reason to buy any of those items when not on sale.

And how much flour and sugar does one use anyway? Few bake bread any more, and those who do can always buy on sale.

Pasta is frequently 2 for 1.

There are 5 items in this category.


I have discussed this before and it’s worth repeating. Get a freezer!

I was at Sam’s Club a week ago. Whole pork tenderloin was on sale at $1.98 a pound. It is still on sale today at that price.

Compare that price to the Visual Capitalist listed price of $3.82.

All of the prices listed by the Visual Capitalist are likely accurate, but as of a moment in time.

Anyone paying those prices has no idea how to shop.

Paying $4.12 per pound for ground beef or $3.21 for boneless chicken is absurd.

Frozen turkeys go on sale every Thanksgiving for $0.69 or so. That’s the same freaking price nearly every year for 10 years. Buy 2 or 3. Have one for thanksgiving and another for Christmas and Easter.

Bacon, on sale, is often 2 for 1.

There are 7 items in the meat basket. One of them, pork, also falls in the under 2% inflation category.

Peanut Butter

Peanut butter does not store forever, but it does store well, especially unopened, and is frequently on sale.

Food Inflation Complaints

  • Grapes at 2.48% inflation.
  • Potatoes at 3.31% inflation.
  • Cookies at 2.54% inflation.

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