By Emann Charts
Banks Warn Fed They May Have To Start Charging Depositors
The Fed's Catch 22 just got catchier. While most attention in the recently released FOMC minutes fell on the return of the taper as a possibility even as soon as December (making the November payrolls report the most important ever, ever, until the next one at least), a less discussed issue was the Fed's comment that it would consider lowering the Interest on Excess Reserves to zero as a means to offset the implied tightening that would result from the reduction in the monthly flow once QE entered its terminal phase (for however briefly before the plunge in the S&P led to the Untaper). After all, the Fed's policy book goes, if IOER is raised to tighten conditions, easing it to zero, or negative, should offset "tightening financial conditions", right? Wrong. As the FT reports leading US banks have warned the Fed that should it lower IOER, they would be forced to start charging depositors.
Nicaragua canal boosts China power
Since it first opened in 1914, the Panama Canal has provided the primary shipping conduit linking the Pacific and Atlantic Oceans through the Americas. And in that time, it has also represented US dominance in the region. Even after the canal passed entirely into Panama's control in 1999, the United States has maintained a strong military presence in the region, establishing its continuity as the region's key economic and political player.
P5+1 and Iran agree landmark nuclear deal at Geneva talks
The P5+1 world powers and Iran have struck a historic deal on Tehran’s nuclear program at talks in Geneva on Sunday. Ministers overcame the last remaining hurdles to reach agreement, despite strong pressure from Israel and lobby groups.
@JZarif: We have reached an agreement.
GEAB N°79 is available! 2014 – Internationalization of the Yuan, the opening of Saudi Arabia, the implosion of the EU, and three of the last pillars of the dollar crumble
“It was night, and the rain fell; and, falling, it was rain, but, having fallen, it was blood.” These words of Edgar Allan Poe (1) apply perfectly to the slow process of global dislocation now in progress, where seemingly innocuous events – like the “rain” – combine to undermine the foundations of an international system that is dying, hence the “blood.” If the process is slow, if the events seem trivial, it is paradoxically because the crisis is the first truly global systemic crisis, one much deeper than the one in 1929, affecting all countries and overwhelming the heart of the system. Whereas 1929 was the adolescent crisis of a new world power, the US, we now experience the last days of an incurable, and incurable that had been the world’s sole superpower since 1945. But the whole organization of the world was built around the US, and it is no one’s interests for it to collapse before a complete decoupling. So it is for everyone to safeguard the usual appearances while ensuring a smooth transition, which explains the slow crash in progress.
Special Report: The Pentagon's doctored ledgers conceal epic waste
(Reuters) - Linda Woodford spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense's accounts.
Every month until she retired in 2011, she says, the day came when the Navy would start dumping numbers on the Cleveland, Ohio, office of the Defense Finance and Accounting Service, the Pentagon's main accounting agency. Using the data they received, Woodford and her fellow DFAS accountants there set about preparing monthly reports to square the Navy's books with the U.S. Treasury's - a balancing-the-checkbook maneuver required of all the military services and other Pentagon agencies.
Why America May Be Fabricating Its Jobs Numbers
Many accuse China of manipulating its economic data to fit what the market wants to see, yet this kind of behavior doesn’t appear to be isolated to China. It even occurs here—if you believe what the New York Post reported in a recent editorial. If it were true, to be honest, I wouldn’t be that surprised.
PBOC Says No Longer in China’s Interest to Increase Reserves
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.
China to start gold swaps trading on Nov. 25
Nov 22 (Reuters) - China, set to overtake India this year as the world's top gold consumer, will start gold swaps trading on the interbank market next week, giving more hedging tools for banks dealing in bullion.
The Shanghai-based China Foreign Exchange Trade System will start gold swaps trading on November 25th, with the Shanghai Gold Exchange responsible for related settlement and delivery, the National Interbank Funding Center said in a statement on Friday.
A.M. Kitco Metals Roundup: Gold Firmer On Short Covering; Why Tapering May Be Bullish for Metals
(Kitco News) - Gold prices are modestly higher in early U.S. trading Friday, on short covering and some perceived bargain hunting after prices Thursday hit a four-month low. The weaker U.S. dollar index is also a bullish “outside market” factor for the precious metals markets Friday morning. Read below why the Federal Reserve’s “tapering” of its monetary policy could actually be bullish for gold and silver. February Comex gold was last up $3.40 at $1,247.70 an ounce. Spot gold was last quoted up $5.80 at $1248.75. March Comex silver last traded up $0.054 at $20.03 an ounce.
Higher Interest Rates: No Longer a Death Sentence for Gold
The announcement by Bernanke & Co. that the Fed would stay the course with its asset-purchasing program until it sees more evidence of a strengthening economy sent shock waves across the investment world. The Dow and S&P 500 has rocketed to all-time highs, and the dollar has plummeted. Interest rates have been dealt a stiff blow.
Where Did All The Gold Go?
The last twenty years have seen an acceleration of real wealth transfer from the west to the east. Nowhere is that more evident than the change in gold stock piles since 1993with Russia and China gorging and Holland, Belgium, and most notably Switzerland selling it all...
Accord reached with Iran freezes nuclear program for six months
Geneva: The foreign policy chief of the European Union and Iranian officials announced a landmark accord Sunday morning that would temporarily freeze Tehran's nuclear program and lay the foundation for a more sweeping accord.
After marathon talks that finally ended early Sunday morning, the United States and five other world powers reached an agreement with Iran to halt much of Iran's nuclear program, and some elements would even be rolled back. It was the first time in nearly a decade, US officials said, that steps were taken to halt much of Iran's nuclear program and roll some elements of it back.
Gold Option Wagers on Surge to $3,000 Was Most-Active Yesterday
Wagers betting that gold prices will rally 141 percent in about two years were the most-traded option in New York bullion yesterday.
Call options giving owners the right to buy gold at $3,000 an ounce by December 2015 traded 7,250 contracts yesterday on the Comex in New York, more than double the amount of the next most-active option, data compiled by Bloomberg show. Futures for December delivery slumped 1.1 percent to $1,243.60 on the Comex in New York today. Prices reached a record $1,923.60 in September 2011.
Fed's Tarullo details plans to counter bank runs
Global regulators need more policy tools to counter the risk of devastating bank runs and should have powers over a wide array of market participants, U.S. Federal Reserve Governor Dan Tarullo said on Friday.
"There is a need to supplement prudential bank regulation with a third set of policy options in the form of regulatory tools that can be applied on a market-wide basis," Tarullo said at a conference on shadow banking.
Labour seeks tougher checks on top bankers
Labour, which has been scrambling to distance itself from Paul Flowers, the disgraced former chairman of the Co-operative Bank, will urge the government this week to introduce a tougher licensing regime, with an annual "health check" for all senior bankers.
The party says Treasury ministers have resisted this call on three separate occasions over the last two years, but have retabled the proposal for debate on the banking bill in the Lords this week.
Iran nuclear deal makes Mid-East safer place - Kerry
The US secretary of state has said the deal reached on Sunday over Iran's nuclear programme will make Israel and the Middle East a safer place.
John Kerry was speaking after Iran agreed to curb some of its nuclear activities in return for about $7bn (£4.3bn) in sanctions relief.
However, Israel has described the agreement as a "historic mistake".
Russian lawmaker wants to outlaw U.S. dollar, calls it a Ponzi scheme
MOSCOW — Predicting the imminent collapse of the U.S. dollar, a Russian lawmaker submitted a bill to his country’s parliament Wednesday that would ban the use or possession of the American currency.
Mikhail Degtyarev, the lawmaker who proposed the bill, compared the dollar to a Ponzi scheme. He warned that the government would have to bail out Russians holding the U.S. currency if it collapses.
Here's The Ominous Demographics Chart That Shows What China Will Become In Less Than 2 Decades
China recently announced plans to loosen its infamous one-child policy.
As the country grows richer and the pace of population growth slows, the country has a new demographic concern: underpopulation. Specifically, it has reason to be worried about getting old before it gets rich, and a high dependency ratio (lots of old, retired people being supported by a workforce that isn't big enough).
China creates air defence zone over Japan-controlled islands
AFP - Beijing on Saturday announced it was setting up an "air defence identification zone" over an area that includes islands controlled by Japan but claimed by China, in a move that could inflame the bitter territorial row.
Along with the creation of the zone in the East China Sea, the defence ministry released a set of aircraft identification rules that must be followed by all planes entering the area, under penalty of intervention by the military.
Oil falls sharply after Iran nuclear deal
LOS ANGELES (MarketWatch) — Oil futures fell in electronic trading Monday, with Brent crude seeing particularly sharp losses, as markets reacted to a deal between Iran and major world powers that could head off further sanctions on Iranian crude.
Benchmark U.S. crude oil for January delivery retreated $1.31, or 1.4%, to $93.53 a barrel, after having ended Friday’s regular session on the New York Mercantile Exchange 0.6% lower.
RBS accused of pushing small businesses to the edge to boost profits
City regulators have been handed a dossier of evidence compiled by an adviser to Vince Cable which claims that Royal Bank of Scotland was deliberately wrecking viable small businesses to make profits for the bailed out bank.
The business secretary – a long-time critic of the banking industry's lending practices – said some of the allegations were so serious that he had handed the report, compiled by businessman Lawrence Tomlinson, to the regulators and the bank. It has also been given to Sir Andrew Large, a former deputy governor of the Bank of England, whose report on lending failures by RBS will also be released on Monday.
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