Money Flow Trading Method along with Risk Management

The charts tells us nothing at the moment, can't say for sure which direction the price will currently go. It is just an x-ray of the price currently.

Benjamin are you still holding on to your short US30 positions?

Excellent Analysis and Chart - From EUR/USD Thread.

http://www.forexfactory.com/attachme...3&d=1486659303

There are so many factors as we all know so until there is a clear direction or until it moves to resistance we should be on the sidelines. I have a sense that the ruling later today will be 2-1 to keep the Travel Ban on so that could be positive for the State of Mind of the markets.


Benjaminis

KeepCalmfx

I will answer the question and the answer is directed only at you since you have seen one of my real Forex trading accounts of $100,000 US Dollars.

This in my opinion is a once in a lifetime situation as relates to the Euphoria in the markets. I refer to the fact or opinion that US 30 must go back below 19,500.

In the past I would trade around my losing positions on a daily basis so that eventually I would make substantial profits and then close the losing positions.

I was as I stated Short 5 positions of 100 units of US 30.

I have a DRAW DOWN and trying another strategy out , I have also Shorted 2 positions of 100 Units of SPX500. I did that on February 7, 2017 , two days ago. My two positions are still open and my unrealized loss on each of those positions as of this moment is $1525 US Dollars times 2 and along with the DRAW DOWN on the other 5 positions of US 30 my total DRAW DOWN is now $15,995 US Dollars however I have only used 85.84 % of my capital which if I closed all 7 positions now would be NET $56,751.82 US Dollars since I opened the FXCM UK DEMO $50,000 US Dollars account on December 20, 2016. That is now 51 days or 5 days short of 8 weeks of Forex trading.

Normally I would just close the positions at Loss of $7000 US however since I have the skills to not close them I have kept them open. By not putting on more than 7 Positions I have the luxury of doing this. Your thoughts and observations on this topic would be appreciated.


Benjaminis

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

More Evidence Trump Rally Is Thinning
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Feb 9, 2017 9:38 AM


Despite the major averages’ continued drift near all-time highs, volume moving into advancing stocks has been historically light.

About a month ago, we noted some technical evidence that the Trump Rally Was Starting To Thin Out. The evidence was a string of Nasdaq 100 52-week highs occurring on negative breadth on the Nasdaq exchange. In our view, this was a troubling but not alarming development vis-a-vis the post-election rally. As we stated, while it “is not a signal of health…we would stop short of labeling it a sign of major or long-term concern just yet.” As thinning goes, consider it the equivalent of finding 1 or 2 stray hairs in your sink. However, we are now seeing more evidence that this rally is thinning out.

The most recent case in point: yesterday saw all of the major large-cap averages close, or at least touch on an intra-day basis, their respective 52-week highs. Despite that, the % of volume going into advancing stocks on the NYSE was among the lowest in history on such days. Specifically, at 35.5%, the % of advancing volume was the 3rd lowest of any day since at least 1965 on which the S&P 500 touched a 52-week high and closed positive on the day.
http://68.media.tumblr.com/198c5897c...sq14jh_500.jpg
If you can tell on the chart, the only days in at least the past 52 years that saw worse advancing volume on such days were 2 notoriously thin days that we posted about at the time, November 13, 2014: “ Yesterday Was One of the Ugliest “Up” Days in History” and July 20, 2015: “The Thinnest New High In Stock Market History ”. For what it’s worth, in the former case, the S&P 500 continued to bounce for another 3 weeks before a quick and sharp 4% drop. The latter case marked the peak for the index for the next 50 weeks.

We also looked at the Dow Jones Industrial Average (DJIA) for another angle involving yesterday’s data. In the past 30 years, yesterday marked the 28th time that 40% or less of the NYSE volume went to advancing issues on a day that the DJIA touched a 52-week high and closed positive on the day. 24 of them have occurred in the past 10 years. Let’s take a look at those.
http://68.media.tumblr.com/1b6ecbd55...sq14jh_500.jpg
As the chart shows, while these instances were not all signals of impending trouble, more than enough of them marked at least intermediate-term tops to warrant concern. Here is how the DJIA fared, in aggregate, following these events in the past 10 years.
http://68.media.tumblr.com/72e6cc0b1...sq14jh_500.jpg
In the very short-term and long-term, returns were on par with normal. In the intermediate-term, however, there was consistent, if not severe weakness. the 2-month point was the “sweet spot”, at least for bears, as the median return was -1.8% with just 6 winners out of 21 dates having enough data.

Again, one data point alone may not be enough to sound the alarm. However, given the number of thinning examples now piling up in the post-election rally, the drain may be starting to clog with proverbial stray hairs.
* * *

https://www.dailyfx.com/forex/fundam...tm_campaign=em

Bitcoin Dives after Chinese Exchanges’ Halt in Withdrawals
Thursday, Feb 9, 2017 12:34 pm EST Thu Feb 09 17:34:00 GMT 2017

by Renee Mu, Currency Analyst
Fundamental analysis, polices, China
Connect via:


This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources.
- Two Chinese exchanges announced suspensions and one announced restrictions on Bitcoin withdrawals.
- More Bitcoin platforms are under inspection; Bitcoin price are likely to drop further.

- Would you like to know more about trading? DailyFX webinars are a great place to start.

To receive reports from this analyst,sign up for Renee Mu’ distribution list.

Bitcoin/Yuan plunged over -8% as of 11:15am EST on February 9th, following announcements in quick succession from two major Chinese Bitcoin exchanges that they will suspend Bitcoin withdrawals effective immediately. Yuan withdrawals are not impacted: Investors may sell Bitcoin and cash out Yuan. Both exchanges, Huobi and OKCoin, stated that they will follow regulators’ instructions and upgrade their platforms in the effort to prevent and crack down money laundering, unauthorized purchases in foreign exchange as well as pyramid schemes. These suspensions may last for a month until both exchanges complete upgrade on their systems.

BTC/CNH 1-day
https://media.dailyfx.com/illustrati..._BTCCNY_29.png
Prepared by Renee Mu.
BTCChina, the other “Big Three” Bitcoin exchange in China, released restrictions on Bitcoin withdrawals later, though not exactly the same as Huobi and OKCoin’s suspension. BTCChina allows Bitcoin withdrawals but it will take 72 hours for the platform to review and approve such transactions.

These suspensions and restrictions set by the Big Three Chinese platforms will highly likely drive Bitcoin prices lower over the following days, as investors will have to sell their Bitcoin to get money back.

However, these will not be the last moves of Chinese regulators pushing to crack down illegal transactions through Bitcoin. According to a statement released by the PBOC Beijing Office early on Thursday, the inspection has expanded to nine Bitcoin exchanges. The regulator warned these platforms that a serious violation may lead to a shutdown of their business.

Read more about why Bitcoin has caused regulator’s major concerns and extreme moves seen in Bitcoin trading.
To receive reports from this analyst,sign up for Renee Mu’ distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Stockman To Trump: It's The Economy, Stupid
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Feb 9, 2017 1:02 PM

Submitted by Ryan McMaken via The Mises Institute,
In a recent appearance on CNN, David Stockman suggested that Trump might best spend some time actually addressing economic issues instead of the administration's travel ban for immigrants from Middle Eastern countries, which Stockman called "a giant misfire."




Pointing out that Americans are far, far more likely to be struck by lightning than killed by a terrorist, Stockman asserted that it was really Trump's opposition to Obamacare and other government regulation that got him elected. Employing the 1992 Clinton Campaign motto of "it's the economy, stupid," Stockman noted "Trump was elected because flyover America is hurting economically. The voters of Racine, Wisconsin and Johnstown, Pennsylvania are imperiled not because of some refugees, they're imperiled because their jobs have all been disappearing for decades. The problem is far more the Federal Reserve, Janet Yellen, the bubbles they're creating on Wall Street..."


Stockman went on suggest that the Trump Administration is showing decreased interest in "draining the swamp" employing a phrase Trump used when he claimed he would greatly cut federal power in Washington. Instead of doing that, Stockman contends, Trump is merely filling the swamp with " "other creatures that will build up homeland security, border control, more money for defense, more money for spying and national security."


Stockman might also have pointed out that the travel ban itself illustrates how the ban has nothing to do with national security given that Saudi Arabia and Egypt are not on the list of blocked countries, even though Saudi Arabia and Egypt were the two countries most closely linked ot 9/11. Moreover, the perpetrators of the 2015 San Bernardino shootings had been radicalized in Saudi Arabia and traveled there before the killings. Indeed, Trump's list seems to be more accurately described as a list of Saudi enemies, including Saudi Arabia's most bitter enemies Iran and Syria. Also on the list is Yemen, which is currently subject to a vicious war and starvation campaign launched by Saudi Arabia's dictators.


Stockman wasn't alone in noticing the Trump Administration's lack of enthusiasm for tackling any meaningful economic issues. Jack Perry writes at LewRockwell.com:
I gave Trump the benefit of the doubt and said, okay, let’s see what he will do. But what I’ve seen so far is one endless distraction of the type the Democrats usually engage in. That being, pick some lightning rod topic, create a massive kerfuffle over it, and then cling to it tightly like a toddler with a teddy bear. That way, the distraction keeps everyone focused on it instead of, hey, you’re not doing the big things you said you were going to do. For example, how much time and money has now been wasted over this travel ban? And while that’s going on, Obamacare is not being repealed. Maybe Trump has already forgotten about it and now is obsessed with this travel ban thing. That leads me to believe this has become a war of ego for him...

This is not to say that I believe the government can “fix” the economy or “create” jobs. In fact, I laugh at the notion. But the fact is, and Democrats even admit, these were the biggest reasons people voted for Trump... What we are seeing right now is what will go on for the entire term. Endless wrangling, debate, and fuss over issues that don’t really affect a majority of people here.


Meanwhile, Trump's supposed agenda item of repealing Obamacare continues to lose momentum and appears to be on the back burner with the president saying little on the matter in recent weeks. Trump is already pushing the timeframe back to 2018.

Rather than focus on this difficult task, however, the Trump Administration has signaled it plans to keep burning political capital and precious time and energy on fighting for its travel ban all the way to the Supreme Court.


One thing we do know about Trump's economic policy is that he plans to massively increase government spending, as with repeated promises to shower a variety of government agencies with more tax money for military operations, even going so far as the absurdly call the spending of taxpayer funds an "investment." These funds will certainly be needed, however, since the Trump Administration has already been spending immense amounts of cash in Eastern Europe as most recently made clear by a new NATO buildup in the Baltic states.


Trump's other priority, it seems, is to raise taxes on Americans by increasing taxes on imports, thus increasing the cost of living and costs for domestic producers and employers. This stems from what Jeff Deist calls Trump's "fetish for exports over imports" but which has nothing at all to do with raising American living standards.

When will we begin to see an emphasis on freeing up the economy coming out of the White House? If past experience with previous Republican administrations is any indicator, we'll be waiting a long time.

COMMENTS FROM BENJAMINIS: I am going to link one of the most informative and revealing research articles via U Tube on what will happen in the financial markets for the rest of 2017. It is well worth your taking the 34 minutes and 59 seconds that the video plays for. I will watch it later tonight so I can again focus on it.

Here is the information.


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X22Report Spotlight has uploaded This Is Not A Drill: The Economic Crisis Will Start This Year & Last For 5 Years:Clif High
https://ci3.googleusercontent.com/pr...WGU9koKk9caQ9c
This Is Not A Drill: The Economic Crisis Will Start This Year & Las...
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Today's Guest: Clif High

Website:
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http://halfpasthuman.com/

YouTube Channel
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https://www.youtube.com/channel/UCqXZf0F4GLSX1QXBUgPXhqg

Most of artwork that are included with these videos have been created by X22 Report and they are used as a representation of the subject matter. The representative artwork included with these videos shall not be construed as the actual events that are taking place.

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Fair Use Notice: This video contains some copyrighted material whose use has not been authorized by the copyright owners. We believe that this not-for-profit, educational, and/or criticism or commentary use on the Web constitutes a fair use of the copyrighted material (as provided for in section 107 of the US Copyright Law. If you wish to use this copyrighted material for purposes that go beyond fair use, you must obtain permission from the copyright owner. Fair Use notwithstanding we will immediate... (More)
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HEADS UP - VERY IMPORTANT - PLEASE TAKE 36 Minutes and 59 Seconds to listen to the interview with Clif High.
It is beyond incredible what is revealed and explained. Thank You !!!

https://www.armstrongeconomics.com/w...ntral-banking/

The Coming Crisis in Central Banking
24158141


Blog/Banking Crisis
Posted Feb 2, 2017 by Martin Armstrong
https://armstrongmedia.s3.amazonaws....951-Accord.jpg

The question of when will central banks fail is a popular one that comes in. Suffice it to say, the turmoil will hit Europe first. While so many people blame the Fed for all sorts of things, you must realize that Roosevelt usurped the Fed during the Great Depression and imposed a single interest rate administered from Washington. It was during April 1942, when the Department of the Treasury requested the Federal Reserve formally to commit to maintaining a low interest-rate peg of 3/8% on short-term Treasury bills. The Fed also implicitly capped the rate on long-term Treasury bonds at 2.5%. This became known as the “peg” with the express goal to stabilize the securities market and allow the federal government to engage in cheaper debt financing of World War II, which the United States had entered in December 1941.


Today, we have extraordinary low rates of interest that have funded government socialism, but this policy has wiped out the real bond markets insofar as being a viable market long-term. The World War II accord to maintain low rates was followed by a collapse in bonds after 1951 once the accord ended. We will see the same outcome moving forward.

https://armstrongmedia.s3.amazonaws....r-1024x681.jpgAt the time, in order for the Fed to maintain the peg, it was ordered to give up control of the size of its portfolio as well as the money stock. That is also what has happened today withQuantitative Easing among all central banks. Frankly, the Fed back then maintained the low interest rate by buying large amounts of government securities, which also increased the money supply domestically at the time. Because the Fed was committed to a specific rate by the peg, it was compelled to keep buying securities even if the members of the Federal Open Market Committee (FOMC) disagreed.


After the war, politicians were afraid a new depression would emerge as they always fight the last war. They ordered the Fed to maintain the peg even after 1945. The United States entered the Korean War in June 1950. The problem was inflation not deflation. The FOMC of the Fed argued strongly that the continuation of the peg would lead to excessive inflation. A real confrontation with the politicians was brewing all year and they were opposed by the Treasury who naturally wanted to keep borrowing at cheap rates.


Everything exploded by February 1951. Inflation had soared reaching 21%. As the Korean War intensified, the Fed faced the possibility of having to monetize a substantial issuance of new government debt coming out to fund that war. This only intensified inflation. Nevertheless, Harry S. Truman became president in 1945 and it was his administration that continued to urge the Fed to maintain the peg.


The financial crisis erupted into a major conflict when Truman invited the entire FOMC to a meeting at the White House. Truman then issued a statement saying that the FOMC had“pledged its support to President Truman to maintain the stability of Government securities as long as the emergency lasts.” In reality, the FOMC had made no such pledge. Conflicting stories began to appear about the dispute in the press. The Fed then made an unprecedented move – they released the minutes of the FOMC’s meeting with the president.


The conflict erupted in full view. The Fed revolted against the politicians. Shortly thereafter, the Fed informed the Treasury that as of February 19th, 1951, it would no longer “maintain the existing situation.” The Treasury was caught in a crisis for it needed to refund existing debt and issue new debt, a situation governments are still in today. They never pay off debt, they simply roll forever.


The government had no choice but to negotiate a compromise under which the Fed would continue to support the price of five-year notes for a short time, but after that the bond market would be on its own. It was on March 4, 1951, when the Treasury and the Fed issued a statement saying they had “reached full accord with respect to debt management and monetary policies to be pursued in furthering their common purpose and to assure the successful financing of the government’s requirements and, at the same time, to minimize monetization of the public debt.”


It was this accord that created a free market in government securities. The likelihood that government debt becomes extinct will appear by 2023. We can see that the bond market began to crash as interest rates were at last free to move after 1951. This is the most likely outcome of the voluntary Quantitative Easing that is really a critical issue more so in Europe and Japan and less at the Fed.
https://armstrongmedia.s3.amazonaws....uro-Crisis.jpgThis time, the central banks have gone and done this themselves and they are trapped. They cannot sell the debt they have bought and therefore, we are looking at a crisis when that debt has to roll. The European Central Bank holds more than 40% of the government debt for the whole of Europe. Once that matures, who will buy the new debt the next time around?


We are looking at a deflationary impact by default, which can wipe out the central banks. This time, QE programs allowed the money they injected to buy back bonds to go anywhere. Capital flight from the local economy resulted in deflation as the money never truly stimulated anything. So when the bonds mature, will the government be able to repay those bonds buy selling new ones? Who will be the buyer? This is the coming Sovereign Debt Crisis. OWN NO GOVERNMENT PAPER PERIOD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


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http://www.forexfactory.com/attachme...6&d=1486664224

http://www.zerohedge.com/news/2017-0...ahead-schedule

Bundesbank Has Completed Gold Repatriation From New York Fed, Three Years Ahead Of Schedule
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Feb 9, 2017 9:18 AM


In January of 2016, the Bundesbank announced that three years after commencing the transfer of some of its offshore-held gold from vaults located at the Banque de France in Paris and the NY Fed in New York, it had repatriated a total of 366.3 tonnes, bringing the German central bank's gold reserves held in Frankfurt to 1,402 tonnes, or 41.5% of Germany's total gold of 3,381 tonnes, for the first time greater than the 1.347 thousand tonnes located at the New York Fed, which as of January 27, 2016 held 39.9% of Germany's official gold.


"With approximately 1,403 tonnes of gold, Frankfurt has been our largest storage location, ahead of New York, since the end of last year," said Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank. "The transfers are proceeding smoothly. We have succeeded in once again significantly increasing the transport volume compared with 2014. This means that operations are running very much according to schedule," added Thiele last January.

As a reminder, according to its gold storage plan, unveiled in January 2013, the Bundesbank would store half of Germany's gold reserves in its own vaults in Frankfurt am Main by 2020 which would necessitate a transfer to Frankfurt of 300 tonnes of gold from New York and all 374 tonnes of gold from Paris. It also meant that as of January, another 111 tonnes of gold from the NY Fed and 196.4 tonnes of gold from Paris remained to be transfered.


The "politically correct" motives for the transfer, as well as the logistics and the mechanics behind it were explained in a March 2015 video released by the Bundesbank...


... the real reasons, however, is that following several reports on this website which cast doubts on Germany's gold holdings, in late 2012 the German Court of Auditors demanded that the Bundesbank undertake an audit of its gold reserves. Specifically, the court wanted to ensure that the nearly 3400 tons of gold, of which more than 2,000 tonnes held offshore, is in fact in existence - 'because stocks have never been checked for authenticity and weight'. The move to repatriate was only accelerate following rumors that much of the offshore-held gold might have been "rehypothecated", and not be there anymore, that it might have been melted down, leased, or sold.


Ironically, at the time, Bundesbank Board member Carl-Ludwig Thiele told the Handelsblatt that these moves were a “trust-building” measure, and he tried vigorously to put the rumors about the missing gold to rest. Of course, repatriating your gold from foreign central banks is precisely the opposite of a "demonstration of confidence."


What made matters worse is that at the end of 2013, the Bundesbank announced it had managed to repatriate only 37 tonnes of the total 700 scheduled for redemption, further spooking the local population and suggesting that conspiracy theories that the gold was missing were in fact accurate.


As a result, following blowback from both the media and the public, the Bundesbank accelerated its activity, and repatriated 120 tonnes in 2014 and another 210 in 2015, implying that the Bundesbank's faith in its foreign central bank peers had declined in inverse proportion to the following accelerated redemption schedule as of January 2016.
* * *
Then, in an update last December, Germany's Bild reported that in 2016 the Bundesbank has repatriated "more of its gold than planned", as it moves toward relocating half of the world's second-largest reserve at home. "We brought back significantly more gold to Germany in 2016 again than initially planned. By now, almost half of the gold reserves are in Germany," Buba president Jens Weidmann told the German publication. According to Bild, around 1,600 tonnes of Germany's gold reserves are now in the country, a figure set to rise to 1,700 tonnes by 2020. This, according to our recent calculations, meant that the Bundesbank repatriated roughly 200 tonnes of gold in 2016, comparable to the 210 tonnes its brought back to Frankfurt in 2015, and the total held domestically amounts to 1,600 tonnes at the end of 2016.


Fast forward to today, in a press release, the Bundesbank provided an official update of its gold holdings, and our analysis was accurate: the German central bank said it had "successfully continued its transfers of gold last year", and in 2016, more than 216 tonnes of gold were transferred to Frankfurt am Main from storage locations abroad: 111 tonnes from New York and 105 tonnes from Paris.


This would make 2016 the year of fastest gold repatriation, with the 216 tons of gold transfered, higher than the previous record of 210 in 2015. Altogether, the Bundesbank, has now transfered a total of 583 tonnes, or 86% of the 674 tonnes planned in total.


Most importantly, as of December 31, the Bundesbank has now completed all of its scheduled gold withdrawals from the NY Fed, having repatriated a total of 300 tonnes, some 3 years ahead of schedule.


"The transfer of gold from New York was completed successfully last year," said Carl-Ludwig Thiele, Member of the Bundesbank’s Executive Board. "The transfers were carried out without any disruptions or irregularities. The gold storage plan for New York, which envisaged the transfer of 300 tonnes of gold from New York to Frankfurt, was fully realised in 2016," Mr Thiele stated.


The Bundesbank also said the repatriation of gold reserves back home was "considerably ahead of the origianal schedule" and as Thiele added "We will be able to complete the transfer of gold from Paris this year too." Which considering there is only 91t of gold left in Paris, or less than Germany withdrew in 2015 and 2016, should be relatively easy.
http://www.zerohedge.com/sites/defau...ld%203_1_0.jpg
In summary, as of the end of 2016, the Bundesbank had 47.9% of its gold in Frankfurt - just 2.1% shy of the the planned 50% - 36.6% at the Federal Reserve Bank of New York, 12.8% at the Bank of England in London, and 2.7% at the Banque de France in Paris.


Why this unexpected scramble to repatraite so much gold 3 years ahead of the 2020 stated schedule, remains a mystery.

https://dailyreckoning.com/crash-wil...20Notification

The Crash Will Be Violent


[Ed. Note: To see exactly what this former Reagan insider has to say about Trump and specifically what he believes must be done, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back out to any American willing to listen. To learn how to get your free copy CLICK HERE.]


It is almost impossible to overstate the level of unhinged mania in the stock market, but still the robo-machines and knucklehead day traders just can’t seem to let go.


They are essentially 12-year-olds on a bicycle defiantly screaming, look ma — no hands and a blindfold, too!


Worse still, these daredevils have been indulged by the Fed and other central banks so long that they surely have come to believe flying blind is completely safe. After all, we can count at least 60 “dips” since March 2009 that resolved to the upside over and again.


Altogether the S&P 500 now stands at 3.4X its post-crisis low, having generated an 18% annual return (including dividends) for nearly eight years running.
To be sure, in an honest free market that very fact would be a flashing red light, warning that exceptionally high gains over an extended period necessitate a regression to the mean in the period ahead.


But we have a central bank medicated market, not a free or honest one, so at the end of the day fundamentals don’t count. Instead, on the margin the stock market is driven by momentum, central bank liquidity and trader presumption that it will never be withdrawn.

The reflexive dip buyers have ratcheted the market higher 45% without any plausible or sustainable case for it. Economic growth rates are deflating, productivity has slumped and corporate earnings have been sinking for nearly eight quarters.

Even the central banks themselves concede interest rates are intended to eventually normalize. Their radical experiment in zero interest rates (ZIRP) and bond yield repression of the last nine years was designed to force interest rates temporarily to unnatural lows in order to jump start the economy.

The implied channel of monetary policy transmission, therefore, would have been a temporary spurt of GDP expansion (back to the “potential” GDP path) and earnings growth. That didn’t happen, of course, because quantitative easing (QE) stimulus never got outside the canyons of Wall Street. It did nothing for main street.

In so doing, the Fed has destroyed honest price discovery, and therefore the market has no braking or correction mechanism. It will drift higher on pure buy-the-dips momentum until it hits a sharp object.

Stated differently, this is the most dangerous market mutation to have ever been confected by state policy.

It has destroyed two-way trade, short-sellers and the other mechanisms of free market discipline. What is left is robo-machines that all buy the dips together, but will also sell the coming crash just as quickly.

So never mind the fact that the ostensible reason for the post-election Sucker’s Rally — the mythical Trump Stimulus — has already bitten the dust on Capitol Hill.

According to Speaker Ryan, they are not going to even take up tax reform until they dispose of the GOP’s Obamacare “repeal and replace” pledge, but even Trump now says that may take until next year.

Likewise, any corporate tax reform that does happen will be done on a roughly deficit neutral basis, meaning that the average effective corporate tax rate is not going to change much at all.

That is to say, the effective rate today is about 23% overall and 15% for profitable big cap S&P 500 companies. A deficit neutral reform will leave the average effective rate where it is, even if the statutory rate is reduced to around 20%.

Therefore, there will be no growth coming from corporate tax reform.

And don’t take my word for it. Here is what one of the most outspoken fiscal responsibility champions in the House GOP had to say:
“You’re not going to be able to grow your way out of this one. It’s too big,” says Rep. Tom Cole (R., Okla.). He expresses worry about relying on rosy growth projections, through the use of so-called dynamic scoring, to assume tax cuts would stimulate the economy to materially offset upfront revenue losses. “I worry we’re so in love with dynamic scoring, and it never works out the way the tax gurus tell us it’s going to.”


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A CIA insider has launched an urgent mission to expose the government's secret money lockdown plan...

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Moreover, there is not a chance that a significant infrastructure stimulus will pass, either. That’s because a meaningful slice of GOP conservatives in both houses are properly against it and Trump has no chance of forming a coalition with Democrat spenders.

That’s because co-President Steve Bannon does not understand that the White House’s bombastic anti-immigrant campaign is toxic on the Democratic side of the aisle. After all, the Democrats have become the “sanctuary party” of contemporary politics, meaning the two sides will not be joining hands any time soon.

What will be coming soon, however, is the mother of all debt ceiling crises — an eruption of beltway dysfunction that will finally demolish the notion that Trump is good for the economy and the stock market.

The debt ceiling holiday ends on March 15, and it appears that the rudderless Treasury Department — Mnuchin has not yet been approved as Treasury Secretary and there are no Trump deputies, either — may be engaging in a bit of sabotage. That is, the cash balance has run down from a peak of about $450 billion to just $304 billion as of last Friday.

Unless reversed soon, this means that the Treasury will run out of cash by perhaps July 4th rather than Labor Day. After that, all hell will break loose.

Washington has been obviously dysfunctional for years, but the virtue of the Great Disrupter is that his tweets, tangents, inconsistencies and unpredictabilities guarantee that the system will soon shut down entirely.

Consequently, the first half of the year will be consumed in nasty partisan battles over cabinet appointments, the Gorsuch nomination, interminable maneuvers over the travel ban and follow-on measures of extreme vetting and the Obamacare repeal/replace battle.

Then, the second half of 2017 will degenerate into a non-stop battle over raising the debt ceiling and continuing resolutions for fiscal year (FY) 2018 which begins October 1. That will mean, in turn, that there is no budget resolution embodying the Trump/GOP fiscal agenda, and therefore no basis for filibuster-proof “reconciliation instructions” on the tax cut.

This latter point, in fact, needs special emphasis. The frail GOP majorities now in place will be too battered and fractured by the interim battles to coalesce around a ten-year budget resolution that embodies the $10 trillion of incremental deficits already built into the CBO baseline — plus trillions more for defense, veterans, border control, the Mexican Wall, an infrastructure bonanza and big tax cuts, too.

It will never happen. There is not remotely a GOP majority for such a resolution.

But without an FY 2018 budget resolution, inertia and the K-Street lobbies will rule. Without a 51-vote majority rule in the Senate, a material, deficit-neutral cut in the corporate tax rate would be absolutely impossible to pass. Yet that’s exactly what the casino is currently pricing-in.

In short, it is only a matter of time before the robo-machines start re-programming themselves for the fact that the Great Trump Stimulus has gone missing.

When that happens, the stock market will not be a pretty sight.The S&P 500 has now reached the highest ratio to worker earnings in recorded history. It will descend into a bidless free fall when eight years of buying the dip finally unwinds.

But here’s the thing…


The historic mission of the Whirling Dervish in the Oval Office is to bring the “big fat ugly bubble” that has resulted from 30 years of exploding debt and rampant money printing to a thundering halt.


That much the Donald will certainly accomplish.

Regards,
David Stockman
for The Daily Reckoning
Ed. Note: Readers who subscribe to receive The Daily Reckoning by email will get exclusive, forward-leaning commentary sent straight to their inboxes every day. What you’re reading here on our site is just a slice of the independent forecasts we issue daily. Simply click here to receive The Daily Reckoning. It costs you nothing — and promises to be the most informative and entertaining 15 minutes of your day.
https://ads.agorafinancial.com/www/d...&cb=da045b0a33

http://fxcharts.net/10-feb-trumps-ph...eid=16d8768a52

10 Feb: Trumps phenomenal tax plan underpins markets. China TB today. Otherwise, politics to be the focus.
By Jim Langlands | February 10, 2017



This article is available for Free Subscription members. As we continue to transform FXCharts this content is available to all visitors for a trial period. However, from February 19 we will be introducing restricted access and you may be asked to log in to view this and similar articles. If you are already a subscriber and are receiving our daily newsletter you will already have access. If you are not already registered as a subscriber you can register here. For continuing information about the changes please see this forum topic where you can get updates and reply with questions or comments.


Markets have generally had a positive session on Thursday, with stocks, bond yields and the US$ underpinned by comments from Donald Trump, who said that he would be releasing his phenomenal tax plan in the next few weeks. In terms of data, the weekly initial jobless claims were also upbeat, falling 12k to 234k, below expectation of 250k, with the 4 week moving average falling to 244.25k, the lowest since 1973.


Friday gets off to a brisk start with the Australian housing data and the important Quarterly Statement on Monetary Policy, which will include outlooks on inflation and GDP growth as well as the current economic situation. This will be closely followed by the China Trade Balance (exp $47.9 bio; Exports +3.3%, Imports +10%) and it could therefore be a volatile ride for the Aud, possibly taking it out of its recent tight range. From Europe, we get the EU Leaders Summit, at which Brexit will be top of the bill along with the many other issues faced, with Greece also likely to be near the top of the agenda. The UK Manufacturing/Industrial Production will be released, as will the important 3 month NIESR GDP Estimate. From the US we get the Provisional Michigan Consumer Sentiment Index (exp 97.8), the Monthly Budget Statement and the Baker Hughes Oil Rig Count, which has recently risen and helped to keep a cap on the oil price. The other major event to keep an eye on today will be the meeting between Donald Trump and Japan PM, Shinzo Abe in Washington, which could produce some volatility in US$Jpy.


EURUSD: Weighed down by US$ strength and increasing concerns that far right contender Marine Le Pen is becoming a serious contender for the presidential elections in April and May. She would like to take France out of the Euro. ECB president Mario Draghi will meet German Chancellor Angela Merkel for a regular closed meeting today. No press conference is scheduled.


GBPUSD: Unchanged after a choppy session that saw topside stops tripped before heading lower as the dollar gained strength.

USDJPY: The US$ is higher today following Trumps tax announcement. Markets now look towards the Trump/Abe meeting, due to take place today/tomorrow.

AUDUSD: Range-bound again, unchanged from yesterday. Statement on Monetary Policy/China Trade Balance in focus today.

NZDUSD: Lower after the dovish outlook from the RBNZ, despite leaving rates unchanged.

US STOCKS: All time highs after Trump comments.

ASX: Higher, in line with the lead from US markets.

METALS: Under minor pressure from the firmer US$.

OIL: Steady, but slightly firmer after an unexpected drawdown in U.S. gasoline inventories sparked a rally.

CURRENCIES
EURUSD: 1.0662
Res 1.0710 1.0755 1.0800
Sup 1.0640 1.0620 1.0585

USDJPY: 113.20
Res 113.30 113.50 113.95
Sup 112.75 112.25 112.00

GBPUSD: 1.2501
Res 1.2525 1.2565 1.2585
Sup 1.2495 1.2475 1.2455

USDCHF: 1.0009
Res 1.0020 1.0045 1.0075
Sup 0.9970 0.9930 0.9900

AUDUSD: 0.7630
Res 0.7650 0.7665 0.7680
Sup 0.7605 0.7590 0.7570

NZDUSD: 0.7186
Res 0.7220 0.7250 0.7275
Sup 0.7160 0.7140 0.7115

INDICES / COMMODITIES
S+P: 2305
Res 2310 2316 2320
Sup 2300 2296 2288

DJI: 20138
Res 20150 20200 20250
Sup 20080 20050 20000

ASX SPI: 5633
Res 5644 5658 5668
Sup 5624 5610 5580

GOLD: 1234
Res 1244 1254 1266
Sup 1228 1220 1210

SILVER: 17.71
Res 17.90 18.00 18.20
Sup 17.60 17.45 17.25

OIL (WTI): 52.98
Res 53.20 53.50 54.10
Sup 52.35 51.75 51.20

Indices/commodities

S&P Futures2305

US stocks are at all time highs following Trumps announcement of an impending phenomenal tax plan. The momentum indicators are now leaning higher and those who are brave enough can probably go along for the ride. That wont include me as I think the stockmarkets could be an accident waiting to happen.

24 Hour: NeutralMedium Term: Neutral
ResistanceSupport
2325Minor2300Minor
2320Minor2287Session low
2315Minor22809 Feb low
2310Minor22703 Feb low
2305Session/All time high2264/22623 Feb low/1 Feb low


DJI Futures20138
Ditto S+P.
24 Hour: NeutralMedium Term: Neutral
ResistanceSupport
20450Minor20050Minor
20400Minor20000Minor
20350Minor19981Session low
20200Minor199316 Feb low
20149Session/All time high197823 Feb low


ASX SPI5633
The ASX is now closing in on the chart gap 5645 chart gap from 27 Jan beyond which, 5660/70 would beckon, as hinted at by the 4 hour charts. The dailies remain neutral though and I would not be getting too carried away on the topside. Dips today seem likely to hold 5600/10. Trading from the long side, buying dips is mildly preferred, with a SL placed at 5585.

24 Hour: Prefer to buy dipsMedium Term: Neutral
ResistanceSupport
5688(61.8 of 5789/5526)5610Minor
5668/7027 Jan high/19 Jan high/50% of 5789/55555590200 HMA
5657(50% pivot of 5789/5526)5577Session low
5645Chart Gap55267 Feb low
5634Session high5498(38.2% of 5029/5789)


GOLD1234
Gold has dipped back to the minor rising trend support at 1230 after being unable to overcome the 1244 resistance (200 WMA). The 4 hour/daily momentum indicators are mixed, but the short term charts hint at the chance of a run back towards 1220 and possibly even towards 1210, so selling into strength, with a SL placed above the 1244 resistance seems to be the plan. Further out, the daily/weekly momentum indicators remain constructive and an eventual topside break seems possible, which could see a run towards 1255 and then to 1265, so if we see a dip back towards 1210/00, buying into it, with a SL placed under 1200 could be a plan.

24 Hour: Midly bearishMedium Term: Mildly bullish
ResistanceSupport
1275Minor12309 Feb low/Session low
1263200 DMA1220100 DMA
1255(61.8% of 1337/1222)12073 Feb low
1248(50% pivot of 1375/1222)1200/1198100 WMA /2 Feb low
1244200 WMA /Session high118830 Jan low


SILVER17.71
Silver again tested the 17.85 resistance but has failed to overcome it and currently sits back at 17.70. While the dailies remain constructive the short term momentum indicators suggest that we could see slightly lower levels, and below the 17.62 session now could see a run back to 17.35/45 and possibly to 17.20/25. Further out, with the dailies still looking positve, another run to the strong resistance at 17.85 would not surprise at some stage, above which could see even stronger resistance at 18.00, so while mildly bearish today, buying dips for another leg higher may also be a plan, with a SL placed below 17.00.

24 Hour: Midly bearishMedium Term: Mildly bullish
ResistanceSupport
18.65Minor17.62Session low
18.45Descending Trend Resistance17.456 Feb low
18.20(76.4% of 18.98/15.63)17.35(23.6% of 15.63/17.85)/100 DMA
18.00200 WMA17.233 Feb low
17.85/86200 DMA /Session high17.00(38.2% of 15.63/17.85)

OIL (WTI)52.98
WTI had a reasonably tight range (52.34/53.19) but has finished the day slightly higher, with the 4 hour momentum indicators suggesting further gains could be possible today. If so, above the session high, we could then see a return to minor resistance at 53.40 and beyond there to 54.10/30 although possibly not today. On the downside, buyers will arrive at the session low and again at 52.00, below which could see a bit of a run towards 51.20. Overall it looks set to remain choppy but the mild preference is to buy dips, with a SL placed below 52.00 but looking for a run towards 54.00.

24 Hour: Prefer to buy dipsMedium Term: Cautiously long
ResistanceSupport
55.213 Jan high52.34Session low
54.19/313 Feb high /6 Jan high51.207 Feb low/9 Feb low
54.106 Feb high50.7010 Jan low
53.50Minor50.20/10(38.2% of 42.18/55.21) / Reverse Head/Shoulders Neckline
53.19Session high49.95/98100 DMA /15 Dec low


EURUSD: 1.0662
The stronger dollar has placed the Euro under some pressure but it remains above the recent lows, with any movement today likely to be driven by political
soundbites. More rangebound trade could be in order but the dailies look heavy, so below todays low would head towards 1.0620/00, below which, further decent support lies in the 1.0680/90 area. The 4 hour charts look fairly flat today, so any recovery would find offers in the 1.0700/15 area, above which would run into decent offers at around 1.0750, but beyond which there is not too much to stop it heading towards 1.0800. Today could be similar to yesterday, given the lack of any major data, and a range of 1.0620/1.0700 would not surprise. Keep an eye out for anything coming from the EU leaders summit or from Trumps Twitter Account! The China Trade result may affect risk sentiment if too far from expectations.


24 Hour: NeutralMedium Term: Prefer to sell rallies
ResistanceSupport
1.0855Weekly Kijun1.0650Minor
1.0825/2838.2% of 1.1616/1.0340 /Daily cloud top / 2 Feb high1.06409 Feb low
1.0797/903 Feb high /6 Feb high1.062030 Jan low
1.07497 Feb high1.058819 Jan low
1.07/0913Session high/9 Feb high1.057816 Jan low


Economic data highlights will include:
EU Extraordinary Summit, US Import/Export Index, Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count.
Meta Trader
EURUSD: 4 Hour
http://fxcharts.net/wp-content/uploa...02/Euro-13.png

USDJPY: 113.20
US$Jpy is higher today after stops were tripped above 112.50, with the dollar gaining on all fronts on hope of Trumps tax plan. Good resistance now lies at the days highs, and there are US$2 bio of 112.00 option expiries later today so the upside may be limited, and much of the day will be spent waiting for any announcement from the Trump/Abe meeting. The 4 hour/daily momentum indicators do appear to be leaning slightly higher though, and if the nearby resistance is taken out, we could then see a run towards 113.60 and possibly to 114.00. On the downside, support will be seen at 112.75 and at 112.30, with a chance of heading back to 112.00 although the charts suggest this may now be unlikely.

24 Hour: Prefer to buy dipsMedium Term: Neutral
ResistanceSupport
114.28(38.2% of 118.66/111.61)112.75200 HMA
113.941 Feb high112.30100 HMA
113.60Descending trend resistance112.00Minor
113.453 Feb high111.62/589 Feb low/7 Feb low
113.27/29(23.6% of 118.66/111.61)/Session high /Daily Tenkan111.3528 Nov low/Weekly cloud top/100 DMA

Economic data highlights will include:
Tertiary Industry Index, Trump/Abe Meeting..
Meta Trader
USDJPY: 4 Hour
http://fxcharts.net/wp-content/uploa...7/02/Yen-7.png

http://www.zerohedge.com/news/2017-0...ops+to+zero%29











Court Of Appeals Unanimously Rejects Trump's Travel Ban: Full Ruling


http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden

Feb 9, 2017 6:25 PM


In a decision that will hardly come as a surprise, the 9th Circuit Court of Appeals has unanimously (including one GOP appointee) ruled for the U.S. to remain open to refugees and visa holders from seven Muslim-majority countries while the Trump administration fights to reinstate a travel ban in the name of national security.

The San Francisco-based appeals court on Thursday denied the governments request to close the doors after days of public debate over President Donald Trumps attacks on the judicial system and a rush of fearful immigrants. The ruling increases the likelihood that the administration will ask the Supreme Court to step into a case thats the biggest test of Trumps executive power yet.


The government had made a request to reinstate the measure on an emergency basis, which the judges considered to be unwarranted.
"We hold that the government has not shown a likelihood of success on the merits of its appeal, nor has it shown that failure to enter a stay would cause irreparable injury, and we therefore deny its emergency motion for a stay."

The three-judge panel hearing the case included Judges William C. Canby Jr., a Jimmy Carter appointee; Richard R. Clifton, a George W. Bush appointee; and Michelle T. Friedland, a Barack Obama appointee.

"Rather than present evidence to explain the need for the Executive Order, the Government has taken the position that we must not review its decision at all.

We disagree," they wrote.
"In short, although courts owe considerable deference to the President's policy determinations with respect to immigration and national security, it is beyond question that the federal judiciary retains the authority to adjudicate constitutional challenges to executive action."


Trump made a brief remark to reporters in the West Wing, calling the ruling a political decision" and saying national security is at stake, according to NBC News.

The appeals court refused to reinstate Trumps order after a Seattle judge halted enforcement while courts decide whether its constitutional. The courts seem to be so political, Trump said in a speech on Wednesday. Its so sad."

The presidents action initially denied entry to an Iraqi who helped U.S. military, professors at University of Massachusetts and a student seeking to bring her daughter for medical treatment. The ban set off angry protests nationwide and attracted a flurry of lawsuits and adverse rulings. None was more sweeping than that of U.S. District Judge James Robart in Seattle. Washington and Minnesota won the order temporarily blocking the ban nationwide after arguing it hurt their residents and employers including Microsoft, Amazon.com Inc. and the Mayo Clinic.
* * *

The administration can now ask the Supreme Court to immediately intervene, which most legal experts think is likely, or wait until a ruling on the preliminary injunction order. The high court is currently shorthanded with eight justices. If there is a split decision, the lower courts ruling would be upheld.


As The Hill reports, Sen. Tom Cotton (R-Ark.) blasted the court Thursday night, saying Trumps order is plainly legal under the Constitution and our immigration laws and warning that courts ought not second-guess sensitive national-security decisions of the president.


This misguided ruling is from the Ninth Circuit, the most notoriously left-wing court in America and the most reversed court at the Supreme Court. I'm confident the administration's position will ultimately prevail."

Critics of the travel ban came out quickly to cheer the decision: "President Trump ought to see the handwriting on the wall that his executive order is unconstitutional. He should abandon this proposal, roll up his sleeves and come up with a real, bipartisan plan to keep us safe," Senate Minority Leader Charles Schumer (D-N.Y.) said.


Bernie Sanders added that the court ruling could "teach President Trump a lesson."

"Hopefully, the unanimous court ruling against President Trumps immigration ban will restore some of the damage he has done to our countrys reputation around the world," the former Democratic presidential candidate said in a statement minutes after the ruling came down.
Then there was a tweet from the Washington Attorney General who started all of this:




Follow
https://pbs.twimg.com/profile_images...4Gr_normal.jpgWA Attorney General
✔@AGOWA

DENIED. UNANIMOUS. PER CURIUM.
6:13 PM - 9 Feb 2017




And, of course, Hillary Clinton:




Follow
https://pbs.twimg.com/profile_images...qKV_normal.jpgHillary Clinton
✔@HillaryClinton

3-0
7:17 PM - 9 Feb 2017

 

1. 
   59,40359,403 Retweets
2. 
   147,597147,597 likes

... to which however there was an apt reaction:




Follow
https://pbs.twimg.com/profile_images...ob_normal.jpegDanRiehl @DanRiehl

0-2 (2008,2016) https://twitter.com/HillaryClinton/status/829846842150096896
7:22 PM - 9 Feb 2017


* * *
However, it was Trump's tweeted response that made it clear what the next step is: 12 words, ALL CAPS, and all making it clear that Trump won't let it go without a Supreme Court showdown, because just moments after the Appeals Court ruling was released, Trump tweeted the following:
SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!




Follow
https://pbs.twimg.com/profile_images..._V2_normal.jpgDonald J. Trump
✔@realDonaldTrump

SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!
6:35 PM - 9 Feb 2017

1. 
   37,97137,971 Retweets
2. 
   112,691112,691 likes

Concurrently, the US Department of Justice has said that it is reviewing the Appeals Court decision on the Trump travel ban and is "considering its options."




Follow
https://pbs.twimg.com/profile_images...p6U_normal.jpgPaula Reid
✔@PaulaReidCBS

DOJ Reax to 9th Circuit Decision: The Justice Department is reviewing the decision and considering its options.
6:31 PM - 9 Feb 2017



What are next steps?

1. Do nothing.
2. Seek an emergency stay
3. Petition for certiorari before judgment, in the Supreme Court of the United States

Based on the Trump tweet, the option the President will pick is clear: showdown at the Supreme Court.
* * *
Some key excerpts from the ruling.




To rule on the Government's motion, we must consider several factors, including whether the Government has shown that it is likely to succeed on the merits of its appeal, the degree of hardship caused by a stay or its denial, and the public interest in granting or denying a stay. We assess those factors in light of the limited evidence put forward by both parties at this very preliminary stage and are mindful that our analysis of the hardships and public interest in this case involves particularly sensitive and weighty concerns on both sides. Nevertheless, we hold that the Government has not shown a likelihood of success on the merits of its appeal, nor has it shown that failure to enter a stay would cause irreparable injury, and we therefore deny its emergency motion for a stay.

The Opinion starts with Due Process, and rejects the assertion that aliens are not entitled to due process:


The Government has not shown that the Executive Order provides what due process requires, such as notice and a hearing prior to restricting an individuals ability to travel. Indeed, the Government does not contend that the Executive Order provides for such process. Rather, in addition to the arguments addressed in other parts of this opinion, the Government argues that most or all of the individuals affected by the Executive Order have no rights under the Due Process Clause.

Here is the Court saying that Green Card holders have Due Process rights, as do all people on US soil:





First, we decline to limit the scope of the TRO to lawful permanent residents and the additional category more recently suggested by the Government, in its reply memorandum, previously admitted aliens who are temporarily abroad now or who wish to travel and return to the United States in the future. That limitation on its face omits aliens who are in the United States unlawfully, and those individuals have due process rights as well. Zadvydas, 533 U.S. at 693. That would also omit claims by citizens who have an interest in specific non-citizens ability to travel to the United States... There might be persons covered by the TRO who do not have viable due process claims, but the Governments proposed revision leaves out at least some who do.

Here the Court is dismissive of Trump's DOJ claim that the ban is necessary for security, adding there is "no evidence" that aliens from the seven countries perpetrated terrorist attacks:


the Government submitted no evidence to rebut the States argument that the district courts order merely returned the nation temporarily to the position it has occupied for many previous years.

The Government has pointed to no evidence that any alien from any of the countries named in the Order has perpetrated a terrorist attack in the United States. Rather than present evidence to explain the need for the Executive Order, the Government has taken the position that we must not review its decision at all. We disagree.

The court rejecting the argument that a TRO should be narrowed in scope, noting that citizens may have interests for non-citizen travel:


First, we decline to limit the scope of the TRO to lawful permanent residents and the additional category more recently suggested by the Government, in its reply memorandum, previously admitted aliens who are temporarily abroad now or who wish to travel and return to the United States in the future. That limitation on its face omits aliens who are in the United States unlawfully, and those individuals have due process rights as well. Zadvydas, 533 U.S. at 693. That would also omit claims by citizens who have an interest in specific non-citizens ability to travel to the United States. There might be persons covered by the TRO who do not have viable due process claims, but the Governments proposed revision leaves out at least some who do.

On the government's lack of demonstrated authority that a memo from White House Counsel supersedes the Exec Order.


The Government has offered no authority establishing that the White House counsel is empowered to issue an amended order superseding the Executive Order signed by the President and now challenged by the States, and that proposition seems unlikely.

Nor has the Government established that the White House counsels interpretation of the Executive Order is binding on all executive branch officials responsible for enforcing the Executive Order. The White House counsel is not the President, and he is not known to be in the chain of command for any of the Executive Departments. Moreover, in light of the Governments shifting interpretations of the Executive Order, we cannot say that the current interpretation by White House counsel, even if authoritative and binding, will persist past the immediate stage of these proceedings.as

The Court faults the government for submitting "no evidence" to justify the change in long-standing national security policies.

The Government has not shown that a stay is necessary to avoid irreparable injury. Nken, 556 U.S. at 434. Although we agree that the Governments interest in combating terrorism is an urgent objective of the highest order, Holder v. Humanitarian Law Project, 561 U.S. 1, 28 (2010), the Government has done little more than reiterate that fact. Despite the district courts and our own repeated invitations to explain the urgent need for the Executive Order to be placed immediately into effect, the Government submitted no evidence to rebut the States argument that the district courts order merely returned the nation temporarily to the position it has occupied for many previous years.

The Court ends by emphasizing that it has considered national security, but tips towards free flow of travel and freedom from discrimination.


Finally, in evaluating the need for a stay, we must consider the public interest generally. See Nken, 556 U.S. at 434. Aspects of the public interest favor both sides, as evidenced by the massive attention this case has garnered at even the most preliminary stages. On the one hand, the public has a powerful interest in national security and in the ability of an elected president to enact policies. And on the other, the public also has an interest in free flow of travel, in avoiding separation of families, and in freedom from discrimination. We need not characterize the public interest more definitely than this; when considered alongside the hardships discussed above, these competing public interests do not justify a stay.

The punchline and the one sentence that will infuriate Trump, is the following in which the court says it is "beyond question" that the courts have the authority to oversee the President.

In short, although courts owe considerable deference to the Presidents policy determinations with respect to immigration and national security, it is beyond question that the federal judiciary retains the authority to adjudicate constitutional challenges to executive action.

The fight, however, is far from over. The court battle so far has focused on whether the presidents order should be paused while courts weigh larger issues. Robart already ordered both sides to submit additional arguments focusing on the substance of the case: whether the states have a right to sue and whether Trumps order discriminates against Muslims.

Ultimately, the case is likely to end up before the US Supreme Court, although the next three immediate steps are to 1). do nothing, 2) seek an emergency stay, or 3) cert before judgment, i.e., petition the US Supreme Court.
The most likely outcome is the last one.
The full ruling is below:

https://www.scribd.com/document/3389...ing#from_embed

Hi Benjamin (And Good Day to everyone else.)

Thank you for your post.

With all these articles that we have read over the past month it is very clear what the big picture and facts are, but the masses are still trading on the perception, following the herd.

As we also can see is that the markets are very confused at the moment with all the uncertainty and the unpredictable actions of the president.

In my opinion it is very important to know when to trade and when to stay out of the markets.
I agree with you Benjamin, someone like yourself with your experience and expertise can trade the current market, but I think currently with everything that is going on it is better just to stand on the side-line, which is very hard for me to do. Lol

Here are the charts.
Listening to Clif High, very interesting.
This Is Not A Drill: The Economic Crisis Will Start This Year & Las...

Good Day Forex Traders and a Special Good Morning to KeepCalmfx

I am going to link an article and video that I listened to this morning when I woke up.

It is without any question the most important and relevant video that I have heard in the last six months.

I have been reading and getting information from Grant Williams for over 10 years so when he explained so clearly what will happen in the future and why anyone that wants to take the time will have an incredible EDGE over most people in the world including so called experts that are part of the financial world community.

http://www.zerohedge.com/news/2017-0...at-comes-after


Grant Williams: The Death Of The Petrodollar, And What Comes After
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Feb 9, 2017 7:55 PM

In December, Grant Williams, author of "Things That Make You Go Hmm..." offered the most comprehensive analysis yet of the rise and inevitable fall of the petrodollar (and implicitly US hegemony). In the following presentation, from Mines & Money Conference in London in December 2016, Williams focuses on gold's performance in 2016, the reaction to Donald Trump's election and joins a series of dots that may lead to the end of the petrodollar system and a new place for gold in the global monetary system.

Grab a glass fo wine - turn off Trump's twitter feed for 30 minutes and enjoy. Here is the full presentation - "Get It. Got It. Good"


This presentation follows on from his "Nobody Cares" analysis.
* * *
http://www.zerohedge.com/sites/defau...20petrod_0.jpg
The story begins in the 1970s when Henry Kissinger and Richard Nixon struck a deal with the House of Saud — a deal which gave birth to the petrodollar system.

The terms were simple The Saudis agreed to ONLY accept U.S. Dollars in return for their oil and that they would reinvest their surplus dollars into U.S. treasuries.

In return, the U.S. would provide arms and a security guarantee to the Saudis who, it has to be said, were living in a pretty rough neighbourhood. As you can see, things went swimmingly (chart below)
http://www.zerohedge.com/sites/defau...trod%201_0.jpg
Saudi purchases of treasuries grew along with the oil price and everyone was happy. (We’ll come back to that blue box on the right shortly)
The inverse correlation between the dollar and crude is just about as perfect as one could expect (until recently that is... but again, we’ll be back to that).
http://www.zerohedge.com/sites/defau...rodd%202_0.jpg
And, as you can see here, beginning when Nixon slammed the gold window shut on French fingers and picking up speed once the petrodollar system was ensconced, foreign buyers of U.S. debt grew exponentially.

Having the world’s most vital commodity exclusively priced in U.S. dollars meant everybody needed to hold large dollar reserves to pay for it and that meant a yuuuge bid for treasuries. It’s good to be the king.
http://www.zerohedge.com/sites/defau...trod%203_0.jpg
By 2015, as the chart on the next page shows quite clearly, there were treasuries to the value of around 6 years of total global oil supply in the hands of foreigners (if we assume a constant 97 million bpd supply which I think is a pretty reasonable estimate).

Now... with that brief background on the petrodollar system, here’s where I need you to stick with me. I promise you it’ll be worth the mental effort
Ready? Here we go.

Now, back in 2010, then-World Bank President Robert Zoellick caused something of a commotion when he suggested that an entirely new global monetary system maybe wasn’t such a bad idea.

The system he had in mind involved a freely-convertible Yuan and, controversially was constructed around gold as its central reference point:
(Robert Zoellick, November 8, 2010): …the G20 should complement this growth recovery programme with a plan to build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account.

The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.

In seemingly unrelated news, two years later, Iran began accepting Yuan in payment for its oil amid US sanctions. The transactions were conducted through Russian banks:
(Financial Times, May 2012): Iran is accepting renminbi for some of the crude oil it supplies to China…

…Tehran is spending the currency, which is not freely convertible, on goods and services imported from China…

The trade is worth as much as $20bn-$30bn annually according to industry estimates…

The renminbi purchases began some months ago…much of the money is transferred to Tehran through Russian banks, which take large commissions on the transactions…

Beijing has been trying to get its trading partners to use the renminbi, in effect transferring the exchange rate risk to its counterparties, since the price of crude is set in US dollars. It also frees Beijing of the need to hold as many dollars in its reserves.

The crucial part of this deal was that, by diversifying their purchases in this way, the Chinese had found a path towards not only needing to hold fewer U.S. dollar reserves, but to circumventing the petrodollar system altogether.

By 2013, the penny had clearly dropped at the PBoC who declared an end to the era of their accumulation of U.S. treasuries:
(Bloomberg, November 2013): 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

Yes, it was, apparently “no longer in China’s interest” to accumulate foreign exchange reserves.
Sure enough, in 2014, global FX reserves began to decline at the fastest rate in 80 years as you can see from this chart:
http://www.zerohedge.com/sites/defau...trod%204_0.jpg
That same year, another piece of the puzzle was laid in place when Xu Luode, the Chairman of the newly-founded Shanghai Gold Exchange, explained that gold would be priced and sold in Yuan as a step towards what he called the “internationalization of the renminbi” (for those of you confused by Yuan and Renminbi, just think of them as the Chinese equivalent of ‘Pound’ and ‘Sterling’):
(Xu Luode, Speech to LBMA, May 2014): Foreign investors can directly use offshore yuan to trade gold on the SGE international board, which is promoting the internationalization of the renminbi…

Shanghai Gold will change the current gold market “consumption in the East priced in the West” situation.

When China will have a right to speak in the international gold market, pricing will get revealed…

Interestingly, Luode acknowledged what he accurately described as the “consumption in the East, priced in the West” situation and assured the world that the ‘real’ price of gold would become apparent once China took its rightful place at the centre of the gold market.

We can but hope he is correct. When that day comes, the change on the world's gold markets will be unprecedented.

In 2015, another announcement slipped by the world when it was revealed that Russia’s Gazprom would also begin selling oil to the Chinese in exchange for yuan and that they were negotiating further agreements to use rubles and yuan to settle natural gas trading directly, without the need for dollars:
(Moscow Times, June 2015): “Two state energy companies, gas producer Gazprom and its oil arm Gazprom Neft, said they would use more Chinese currency in trade, while Russia’s largest bank, Sberbank, has also promoted the use of the yuan…

Gazprom Neft announced that it began settling shipments of oil to China in yuan. And previously, the head of Gazprom, Alexey Miller, said in a TV interview that the company was negotiating with China to use yuan and rubles for gas deliveries via a planned pipeline in Western Siberia.
OK... hands up if you’re still with me... great!

Oh... you’re reading this so I can’t see you but hopefully you’re following the dots...
For those of you who aren’t, here’s a little recap of where we are so far to help you get things into the right order before we push on to the end:
http://www.zerohedge.com/sites/defau...trod%205_0.jpg
Get it? Got it? Good.

So... here we are, in 2016 and, as it turned out, April was a hell of a month if you were paying attention.
Firstly, the Saudis threatened to sell almost a trillion dollars of U.S. assets—including over $300 billion of treasury bonds—should a bill be passed by the congress allowing the Saudis to be held responsible for the 9/11 attacks:
NY Times, April 16, 2016): Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the 9/11 attacks.

Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi would be forced to sell up to $750B in treasury securities & other assets in the US before they could be in danger of being frozen by American courts.

In a rare show of bipartisanship, the bill was subsequently passed before being vetoed by President Obama who then had to watch in ignominy as he suffered the first veto override of his presidency.

Just days later, the Saudis were the cause of a seemingly surprise failure by OPEC to agree a production cut as the oil price languished in the low-$30s:
(Wall Street Journal, April 17, 2016): DOHA, Qatar—Oil producers that supply almost half the world’s crude failed Sunday to negotiate a production freeze intended to strengthen prices.

The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production.

Oil prices had rallied in recent weeks on speculation that Saudi Arabia might successfully lead an initiative between members of the Organization of the Petroleum Exporting Countries and Russia, which joined the talks.

A deal would have marked a new level of cooperation between non-OPEC countries and OPEC members that producers hoped would keep prices above January lows of $26 a barrel.

Just 48 hours after that surprise, the Chinese finally launched their twice daily gold fixing, setting the price at 256.92 yuan per gram:
(Bloomberg, April 19, 2016): China, the world’s biggest producer and consumer of gold, started a twice-daily price fixing on Tuesday in an attempt to establish a regional benchmark and bolster its influence in the global market.

The Shanghai Gold Exchange set the price at 256.92 yuan a gram ($1,233.85 an ounce) at the 10:30 a.m. session after members of the exchange submitted buy and sell orders for metal of 99.99 percent purity.

“This is a very important development and will obviously be very

closely watched,” said Robin Bhar, an analyst at Societe Generale SA in London. “But as long as it exists inside a closed monetary system it will have limited global repercussions. It could be a very important development if the new benchmark is a precursor to greater use of gold in the Chinese monetary system, Kenneth Hoffman…said by e-mail on Monday. It may also boost interest in the Shanghai free-trade zone, he said.

As Soc Gen’s Robin Bhar correctly identified, if the ability to trade gold for yuan exists within a closed monetary system, its importance will be limited BUT, as Bloomberg’s Ken Hoffman also correctly pointed out, if this was the thin end of the wedge, things could get very interesting indeed. Now, this chart shows the oil price going back to before the U.S. Civil War:
http://www.zerohedge.com/sites/defau...trod%206_0.jpg
Between 1865 and 1973, the price of oil was incredibly stable against a backdrop of perhaps the greatest simultaneous economic, demographic and technological expansion in human history.

How was that possible?

Well simply put, because oil was effectively priced in gold.

However...
Once the gold window closed and the petrodollar system was implemented, the price of oil soared 50-fold in just 35 years.

The move on the right? With the question mark against it? We’re getting there, I promise.

Now, you remember this next chart and the yuuuuuge supply of treasuries which exists compared to oil now? Well, when we add in the roughly $100 trillion in boomer entitlements that will need to be paid for by issuing—you guessed it, more treasuries—the chart changes somewhat:
That red circle down at the bottom of the second chart is the spike you see on the first chart.
http://www.zerohedge.com/sites/defau...debt%201_0.jpg
Ruh-roh!

It’s safe to say that, relative to even oil, and without any infrastructure spending by Donald Trump, treasuries are going to be.... abundant in the coming years.
Conversely, if we look at the value of gold relative to foreign-held treasuries, we see an altogether different story unfold.

During Reagan’s presidency, US treasuries were backed 132% by the market value of the country’s gold reserves.

Today, that number has fallen to just 4.7%

If we do the same thing and account for the $100 trillion in entitlement promises, as you can see from the chart on the next page, the number falls to 0.3% in 2025.

So the second chart (below, right) should come as no surprise to anybody.
http://www.zerohedge.com/sites/defau...a%20tsys_0.jpg
Yes, the Chinese have started to do what they promised to start doing, when they promised to start doing it.

Now, this next part of the presentation was a rattle through a whole bunch of charts showing the recent activity in the U.S. treasury, corporate bond, agency bond and securities markets so you’ll have to brace yourself.

The charts will appear on the next page.

Chinese sales of US treasuries (1) have been consistent for the last three years...
...as have their sales of US securities (2) since 2015 after plateauing in 2013 when treasury divestiture began Concurrently, Chinese sales of corporate bonds (3) have accelerated over the same period...
...though agency sales (4)—despite a few periods of consistent selling—have yet to follow suit.

But now, as tensions rise and the cross-currents get harder to discern, guess who else has showed up as a seller?


That’s right, the Saudis are now steady sellers of US treasuries (5)...
...and even more aggressive sellers of U.S. securities (6)...

Meanwhile, taking a broader view, net foreign purchases of treasuries, according to the TIC data, have been in a clear downtrend since 2009 (7) and have been largely outflows for the last three years.

If we look at the 12-month sum of sales (8), we see an even sharper decline...
http://www.zerohedge.com/sites/defau...20charts_0.jpg
...and if we take the trailing net official demand chart for treasuries back to 1979, the scale and extent of the change is evident—as are the catalysts for the acceleration (and we’re back on this page once again):
http://www.zerohedge.com/sites/defau...20demand_0.jpg
Take a long, hard look at that last chart folks—particularly within the context of the bond bull market and the ‘bid’ for treasuries we’ve seen throughout 2015 and 2016...


Meanwhile, the Russians—who, as we’ve seen are now selling oil for yuan to the Chinese, remember?— have been picking up the pace of their accumulation of gold reserves yet again, with the most recent monthly data setting yet another record...

...and the pick up in pace is evident when we look at average monthly purchases prior to 2013 and post the agreements put in place around that time between the various parties. Now, the next chart (top of the following page) is crucial to understand because a look at the market value of Russia’s gold reserves shows just how crucial their ongoing accumulation of bullion has been for the country’s finances over the last two years...
...and that increase in value has cushioned the effects of, amongst other things, the bailing out of the ruble.
http://www.zerohedge.com/sites/defau...dings%20_0.jpg
As you can see from the green line, Russia’s gold reserves in Ruble terms have soared as the country’s currency has weakened—something which confounded all the doommongers who called Game Over for Russia amidst sharply declining oil revenues:
(Bloomberg, April3, 2015): Here’s why Governor Elvira Nabiullina is in no haste to resume foreign-currency purchases after an eight-month pause: gold’s biggest quarterly surge since 1986 has all but erased losses the Bank of Russia suffered by mounting a rescue of the ruble more than a year ago.

While the ruble’s 9 percent rally this year has raised the prospects that the central bank will start buying currency again, policy makers have instead used 13 months of gold purchases to take reserves over $380 billion for the first time since January 2015.
Hmmm...


Now, crucially, being given the ability to sell oil to the Chinese for yuan and buy gold with that same yuan directly through the Shanghai Exchange has completely changed the game for the Russians and those changes are being reflected where they matter most—in the energy markets, the supply/ demand dynamics of which are quietly morphing in plain sight.

By August of this year, Russia had overtaken Saudi Arabia as the largest exporter of oil into China...:
(Al Awsat, August 3, 2016): During the first seven months of this year, China imported about 30.5 million metric tons of Saudi oil, a 0.4% decrease than that of last year. Whereas, China imported about 29.5 million metric tons of Russian oil with 27% increase than last year.
...and that wasn’t something the Saudis could take lying down:
Amid this fierce competition, it is important for Saudi Arabia to fortify its oil position in China with more political and strategic support
On the contrary, they rededicated their efforts to increase what they call “political and strategic support” for China.

Now, I hope you’re all still with me because here’s where we get to the final piece of this glorious puzzle—the piece that ties all these seemingly unrelated threads together: China’s own crude oil futures contract, to be priced in Yuan and traded at the Shanghai International Energy Exchange—a yuan contract which will be made fully-convertible:
(Bloomberg, November 5, 2015): By the end of 2015, China, the world’s No. 1 oil importer as of April, may start its own crude futures contract.

The idea is to establish a Chinese rival to the world’s two most traded oil contracts: West Texas Intermediate, housed on the New York Mercantile Exchange, and Brent Crude Futures, owned by ICE Futures Europe in London.

The yuan-based contract will trade on the Shanghai International Energy Exchange and will be among the first Chinese commodity contracts available to foreign investors as China promotes global use of its currency…

Participation will be open to all foreign investors and the yuan will be fully convertible under the contract, according to Song Anping, the chairman of the Shanghai Futures Exchange.


As you can see from the date of the article, this contract has been postponed several times— ostensibly for reasons such as stock market volatility in China, but perhaps there is more going on behind the scenes that is causing the delay because, once this contract is in place, things change.
Dramatically.

In the interim, China has supplanted the U.S to become the world’s biggest importer of oil, which serves to increase both its importance in the oil markets and the likelihood of it launching its own yuan-denominated contract at some point in time:
(Bloomberg, October 13, 2016): China is now the world’s biggest oil importer, unseating the U.S. The country’s crude imports climbed to a record 8.08 million barrels a day in September, a year-on-year increase of 18 percent, customs data released Thursday showed.

So, the world’s largest exporter of oil is now dealing with the largest importer directly in yuan and it has the ability to convert those yuan proceeds into physical gold through the Shanghai exchange— which the data suggest it is doing as fast as possible.

Currently, the bilateral oil for gold trade is only available to what the U.S. would no doubt consider a 'basket of deplorables' in Iran and Russia...but just think what happens once that fully convertible oil contract is up and running...?

Suddenly, the availability to price oil in gold is available to everybody and, given rising Saudi/U.S. tensions and the Middle East nation’s recent rededication to providing “political and strategic support” to China it’s easy to see why this would be attractive to the Saudis, for example.
http://www.zerohedge.com/sites/defau...lorables_0.jpg
Whatever happens, opening that contract creates a market-wide arbitrage opportunity which affords anybody with oil to sell the ability to exchange said oil for gold and anybody wanting oil to acquire it cheaply by buying cheap gold in the West and shipping it to Shanghai or HK where it can be sold for yuan.

Already, places like Tokyo, Seoul and Dubai are opening physical gold markets and discussing linking their nascent markets for bullion to the Shanghai exchange which has rapidly become the largest physical delivery market in the world.

Now, were this arbitrage to begin happening in any meaningful size, with the market for oil far bigger than that for gold, it would immediately be evident in the ratio between the two commodities...
...which, interestingly, is precisely what has happened since the peak of global reserves in 2014 and the Sino-Russian agreement to essentially transact oil for gold. With those conditions in place, the gold/oil ratio has broken out to its highest level in 80 years (chart, next page):
...which brings us right back to the question mark on the second chart which we left hanging like a matzah ball earlier in this presentation
http://www.zerohedge.com/sites/defau...%20ratio_0.jpg
The recent move in the oil price looks to me suspiciously like a sign that a move has started to return to pricing oil in gold.

That move, if indeed it is happening beneath the surface, allied with the endless possibilities enabled by the potential full convertibility of the yuan under the Shanghai-based oil contract leaves oil producing nations with a rather obvious choice for the first time in almost half a century—a choice made perfectly clear by the two charts on the next page:
If you are an oil producing country, do you...:
MINIMIZE your production in order to MAXIMIZE your holdings of one of the most abundant and easily-produced commodities in the world—U.S. treasuries—as has been the case for the last 40 years... knowing full well that, with the level of entitlements due in the next decade, more will need to be printed like crazy?
http://www.zerohedge.com/sites/defau...20petrod_0.jpg
Or......
Do you MAXIMIZE production in order to gain the largest possible market share in the biggest oil market in the world and, through the ability to buy gold for yuan, thereby maximize your reserves of a scarce, physical commodity which is impossible to produce from thin air and which happens to be not only the most undervalued asset on the planet, but is trading at its most undervalued relative to U.S. treasuries in living memory?
http://www.zerohedge.com/sites/defau...trod%202_0.jpg
With an annual production of $170bn, gold is by far the largest metal market by value.
However, that figure is dwarfed by the oil market which is 10x the size of the gold market on an annual production basis.
http://www.zerohedge.com/sites/defau...arket%20_0.jpg
If we throw in the average annual foreign holdings of U.S. treasuries over the last 2 years, we see that the ‘other’ commodity is at a different magnitude altogether.


So, which one of these commodities has any scarcity value? Given the choice, which one would you seek to maximize your holdings of?
U.S. treasuries which can be conjured out of thin air by the U.S. government and which, are described thus by The Securities Industry and Financial Markets Association:
Because these debt obligations are backed by the “full faith and credit” of the government, and thus by its ability to raise tax revenues and print currency, U.S. Treasury securities – or “Treasuries” – are generally considered the safest of all investments. They are viewed in the market as having virtually no “credit risk,” meaning that it is highly probable your interest and principal will be paid fully and on time.

Or how about oil? Which the Saudis, for example, can simply print pull out of the ground at will at a cost of a little under $10/barrel?
http://www.zerohedge.com/sites/defau...l%20cost_0.jpg
Or gold? A commodity which is limited in availability, trading at its all-time low relative to U.S. treasury supply and is not only getting harder and more expensive to produce, but which is also catching the eye not only of the central banks of the world’s two largest producers, but of the largest importer and largest exporter of oil?
* * *

http://www.zerohedge.com/news/2017-0...ops+to+zero%29


Janet Yellen Are We In A Bubble?
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by EconMatters
Feb 10, 2017 10:09 AM

By EconMatters

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We look at exorbitant P/E Ratios across the stock market where I literally can pull any stock up and find an insane p/e ratio right now, and secondly the economic data doesn`t justify a 65 basis points effective fed funds rate. Yes we are in the biggest stock market bubble of all time Janet Yellen!
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EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle

The Trend Is Your Friend. I have some Forex Trading thoughts to share with everyone that comes here to this thread. Because I have been on Forex Factory many many hours since I started my thread on December 3, 2016 almost two months ago I have been following most of the posts on the EUR/USD thread.

That has allowed me to get a better sense of how more professional Forex traders think. What I want to say is very important for all of us to understand including myself.

The trend is clearly down with regard to EUR/USD however it might change if the US Dollar returns below 100.000 towards say 95.000.

However no person can say with 100% surety when. So if you keep assuming it will reverse and you keep going long expecting it to go back to 108.000 and it just might do that however until it does the best decision is to stand back and not trade.

In life it should be do what I do not what I say. So why do I bring this up ? I am a very experienced and accomplished Forex trader however sometimes I need to break my own rules because Common Sense must also play a part in trading Forex as a business and to earn a living.

I bring it up because at the moment I have a very large DRAW DOWN and the Dow 30 (US 30) and the SPX500 is going against the TREND although the TREND is clearly up until it is NOT !!! So since there is so much data and research that I have posted here meaning I understand it as does some others such as KeepCalmfx then I can do something that I do not teach.

I started my FXCM UK $50,000 US Dollars Demo Account on December 20, 2016 which has been 52 days ago. My EQUITY Balance with my LARGE DRAW DOWN is now at $53,193.16 US Dollars and my DRAW DOWN which changes by the second is now $19,384.79 US Dollars. I have on 10 positions and no more than that. My margin available is 80.95% so no danger of any Margin Call. I have open 5 Positions of 100 units of US 30 SHORT and 3 open positions of SPX500 of 100 units SHORT and 2 open positions of USD/JPY SHORT.

I just put on the 2 new positions of USD/JPY SHORT and I am already showing an unrealized profit of over $500 US Dollars.

I will keep everyone informed of my progress of course however the point is that even when you think and know that you know the TREND sometimes it becomes so complex that if you are not a REAL EXPERT , then as has been suggested by KeepCalmfx just stop trading until you see your opportunity with an EDGE.

As always it will be most helpful to have a dialogue on this subject so please share with us when you are thinking.

Have a GREAT WEEKEND ALL


Benjamin

Finviz Chart on EUR/USD - 5 Minute Chart

http://finviz.com/forex_charts.ashx?t=EURUSD&tf=m5

Finviz Chart on USD/JPY - 5 Minute Chart

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

What you most likely see is Short Covering that has moved EUR/USD for the weekend.

You also see the strengthening of USD/JPY.

At the moment there are important talks going on and a Press Conference is scheduled with President Donald John Trump and the Prime Minister of Japan.

That puts RISK ON or RISK OFF so Europe is taking that into consideration as is Japan.

This is how you need to think when you are trading Forex as a business.

I am going to have my lunch now and will post again around 2 PM EASTERN STANDARD TIME.

Benjaminis

http://wolfstreet.com/2017/02/10/glo...ors-taxpayers/

But why did they binge-invest in the overcapacity of ships?

When Commerzbank, Germanys second largest bank, reported earnings on Thursday, it made another groan in direction of the collapsing maritime shipping industry. It raised its loan loss provisions to 900 million, as it said, in timely response to the deterioration in the shipping markets. It warned that its losses on shipping loans alone could reach 600 million in 2017 after having nearly doubled to 559 million last year.

At one point, Commerzbank had 18 billion in shipping loans. Over the years, as the shipping crisis worsened, it has whittled down its shipping loan portfolio to 5 billion.

But Commerzbank is neither alone nor the biggest player among German lenders. Before the Financial Crisis, German lenders went on a wild binge and became the worlds biggest issuers of shipping loans that ended up funding horrendous overcapacity of ships, just when global trade would face enormous challenges. Of the $400 billion in maritime loans issued by large banks, German banks hold nearly $100 billion.

Bankruptcies have cascaded through the shipping industry, starting with bulk carriers during the Financial Crisis then converging on container carriers. In August last year it sunk Hanjin, the sixth largest container carrier in the world. In Germany, these bankruptcies have created a financial bloodbath that has led to serial bank bailouts with much more pain to come.

German banks are also exposed to closed investment funds, called KG funds. Theyve been lovingly called the dentist ship fund, because these funds were offered to retail investors seeking low-risk returns over a long period. These funds bought ships and leased them to big shipping companies, like Hanjin. What could go wrong?

These funds now own ships that are rusting away off-shore somewhere, waiting for better days.

For German shipowners, Hanjin is bad news as for them a large company falls away with which they can charter their ships, Oliver Faak, global head ship and aircraft finance at Nord Landesbank, one of the banks steeped in this fiasco, told Reuters.

And its complicated. Commerzbank might end up getting more shipping loans despite its efforts the cut its exposure to them. Theyre nearly everywhere in the German banking system: the bank is bidding to acquire Oldenburgische Landesbank from insurer Allianz. Alas, there are shipping loans on the balance sheet. Sources of the Handelsblatt said that this has become an important sticking point in the deal.



Last week, Deutsche Bank warned that its expected shipping loan losses nearly tripled from a year earlier, to 346 million. Last July, it emerged that it was trying to offload at least $1 billion of its $5 billion to $6 billion of loans tied to the shipping industry.

The largest player globally in the global shipping-loan fiasco is HSH Nordbank, with 23 billion in shipping loans as of last summer. Its two main owners are the German states of Hamburg and Schleswig-Holstein. It had already been bailed out in 2008, re-collapsed, and was re-bailed out, including with 10 billion in loan guarantees by the states.

EU regulators determined the most recent bailout to be illegal state aid and ordered the bank to be privatized by February 2018 or be liquidated. Now everything is up in the air.

The states of Hamburg and Schleswig-Holstein are trying to sell their 85% stake in HSH. Since no one will touch a collapsed bank with a ten-foot pole, it will have to be sanitized. So it created a bad bank which in 2016 took ownership of 253 container ships. These shipping loans will have to be sold at huge discounts, which will likely use up the 10 billion in state guarantees, HSH CEO Stefan Ermisch recently told staff in a memo.

Finance sources told Reuters last December that offers received for these loans so far amounted to 25 to 35 cents on the dollar (or euro).

HSH is currently being marketed to investors in Asia. Taxpayers in Hamburg and Schleswig-Holstein grapple with losses of up to 15 billion, or about 3,000 per person.

Its a catastrophe, Rainer Kerstin, head of the taxpayers association in Schleswig-Holstein, told the Wall Street Journal.

This fiasco has been so deep and so complex that Andreas Dombret, member of the Executive Board of the Bundesbank, highlighted them in a speech in 2013 as a risk to overall financial stability in Germany.

He identified two causes: plunging freight rates and overbuilding of ships of ever larger sizes, driven by cheaply available financial means a direct reference to pandemic easy-money policies.

He detailed the financial bloodbath in Germany: shipping-loan retail funds (the KG funds) that blew up and were shuttered, banks whose shipping portfolios suffered heavy hits, and an industry that was breaking down. The Bundesbank was looking at it from a broader perspective, he said, with an eye on the stability of the entire financial system.

Other banks tangled up in the shipping loan fiasco include Nord Landesbank (NordLB). In 2016, it said it was trying to cut its shipping exposure to 12 billion to 14 billion within three years, from 19 billion at the end of 2015. And to that effect, it sold a 1.5-billion portfolio of shipping loans to US private equity firm KKR and a sovereign wealth fund.

NordLB already got a bailout via state guarantees. Without those guarantees, its bad loan provisions would have more than tripled to almost 1 billion in the first nine months of 2016 due to bad shipping loans. After the guarantees absorbed some of the losses, the loan loss provisions still came to 520 million. Its subsidiary Bremer Landesbank, reeking with bad shipping loans, announced that it would slash one in five jobs.

Among other banks tangled up in this: DekaBank, which in the first two quarters set aside an unexpectedly large amount, as the Handelsblatt put it, for bad shipping loans issued before 2009; Helaba (Landesbank Hessen-Thringen); KFW, and DVB Bank (The leading specialist in international transport finance, it says).

The plight of shipping continues, because world trade has not developed as positively as hoped, Burkhard Lemper, managing director of the Institute of Shipping Economics and Logistics at the University of Bremen, told the Handelsblatt:
The year 2017 is also unlikely to provide reasons for euphoria, because shipping continues to suffer from large excess capacities, he said Mr. Lemper. The long crisis affects ship values for banks. These values are derived from long-term revenue averages. After eight years of crisis, more and more weak years are now reflected in the average values. Because, he added, fire sales at low prices are also beginning to affect the market values banks need to calculate ship values.

The pain continues to spread. German banks, notoriously reluctant to allow sunshine to illuminate the muck on their balance sheets, continue to drag this out, dealing with it only when they have to, and only in the smallest possible increments. But there are more challenges facing the industry. Read Worlds Largest Container Carrier Unexpectedly Has Big Loss in Crushed Industry. Now Trade War with China Looms





← Foreign Governments Dump US Treasuries as Never Before, But Who the Heck is Buying Them?


There’s now a special math for NIRP refugees in Europe.
It started with a whimper a couple of years ago and has turned into a roar: foreign governments are dumping US Treasuries. The signs are coming from all sides. The data from the US Treasury Department points at it. The People’s Bank of China points at it in its data releases on its foreign exchange reserves. Japan too has started selling Treasuries, as have other governments and central banks.

Some, like China and Saudi Arabia, are unloading their foreign exchange reserves to counteract capital flight, prop up their own currencies, or defend a currency peg.

Others might sell US Treasuries because QE is over and yields are rising as the Fed has embarked on ending its eight years of zero-interest-rate policy with what looks like years of wild flip-flopping, while some of the Fed heads are talking out loud about unwinding QE and shedding some of the Treasuries on its balance sheet.

Inflation has picked up too, and Treasury yields have begun to rise, and when yields rise, bond prices fall, and so unloading US Treasuries at what might be seen as the peak may just be an investment decision by some official institutions.

The chart below from Goldman Sachs, via Christine Hughes at Otterwood Capital, shows the net transactions of US Treasury bonds and notes in billions of dollars by foreign official institutions (central banks, government funds, and the like) on a 12-month moving average. Note how it started with a whimper, bounced back a little, before turning into wholesale dumping, hitting record after record (red marks added):
http://wolfstreet.com/wp-content/upl...ansactions.png
The People’s Bank of China reported two days ago that foreign exchange reserves fell by another $12.3 billion in January, to $2.998 trillion, the seventh month in a row of declines, and the lowest in six years. They’re down 25%, or almost exactly $1 trillion, from their peak in June 2014 of nearly $4 trillion (via Trading Economics, red line added):
http://wolfstreet.com/wp-content/upl...es-2017-01.png
China’s foreign exchange reserves are composed of assets that are denominated in different currencies, but China does not provide details. So of the $1 trillion in reserves that it shed since 2014, not all were denominated in dollars.

The US Treasury Department provides another partial view, based on data collected primarily from US-based custodians and broker-dealers that are holding these securities for China and other countries. But the US Treasury cannot determine which country owns the Treasuries held in custodial accounts overseas. Based on this limited data, China’s holdings of US Treasuries have plunged by $215.2 billion, or 17%, over the most recent 12 reporting months through November, to just above $1 trillion.

So who is buying all these Treasuries when the formerly largest buyers – the Fed, China, and Japan – have stepped away, and when in fact China, Japan, and other countries have become net sellers, and when the Fed is thinking out loud about shedding some of the Treasuries on its balance sheet, just as nearly $900 billion in net new supply (to fund the US government) flooded the market over the past 12 months?

Turns out, there are plenty of buyers among US investors who may be worried about what might happen to some of the other hyper-inflated asset classes.
And for long suffering NIRP refugees in Europe, there’s a special math behind buying Treasuries. They’re yielding substantially more than, for example, French government bonds, with the US Treasury 10-year yield at 2.4%, and the French 10-year yield at 1.0%, as the ECB under its QE program is currently the relentless bid, buying no matter what, especially if no one else wants this paper. So on the face of it, buying US Treasuries would be a no-brainer.

But the math got a lot more one-sided in recent days as French government bonds now face a new risk, even if faint, of being re-denominated from euros into new French francs, against the will of bondholders, an act of brazen default, and these francs would subsequently get watered down, as per the euro-exit election platform of Marine Le Pen. However distant that possibility, the mere prospect of it, or the prospect of what might happen in Italy, is sending plenty of investors to feed on the richer yields sprouting in less chaos, for the moment at least, across the Atlantic.


This is the closest the Eurozone has come to falling apart. Read… What Would it Cost a Country to Leave the Euro? That’s What Everyone Suddenly Wants to Know


It’s the closest the Eurozone has come to falling apart.
Marine Le Pen, the leader of the National Front, will get enough votes in April during the first round of the French presidential election but will be defeated in the second-round runoff in May, according to the polls. So at least hopes the French political class, and by extension the European establishment.

They’re hoping Le Pen would be defeated because she is campaigning on taking France out of the euro (after holding a referendum) and re-denominating the entire €2.4 trillion pile of French government debt into new franc. Then the government can just print the money it wants to spend.

There are some complications with her plan, including that the diverse and bickering French political class will unite into a slick monolithic bloc against her during the second round. And if she still wins, her government will face that bloc in parliament. But hey. And now people are seriously thinking about it.

Greece was on the verge of leaving the euro, but then within a millimeter of actually taking the step, it blinked and inched back from the precipice in the hot summer of 2015. And so for now still no one knows what the cost would be to leave… they can only grapple with the costs of staying.

In Italy, the Five Star Movement, which has been gaining momentum, is making noises about a referendum on euro membership. Italy has a special set of problems: It wants to bail out its banks but doesn’t have the money to do it; and it needs to devalue its currency as it had done so many times before it joined the euro, but has no currency it can devalue.

So the question of what it would cost to leave the euro is uncomfortably on everyone’s mind and lips – that’s how far this has gone.

One thing is clear: If a country leaves the euro and devalues its new currency, it practically must re-denominate all its existing government debt into the new currency because it would be impossible to service the euro debt with a devalued new currency.

The ratings agencies, with their eyes on those euro bonds, have already spoken up. Moritz Kraemer, S&P’s head of sovereign ratings, wrote in a letter published in the Economist on February 4 that Le Pen’s plan of re-denominating French debt into new francs would constitute a sovereign default:
There is no ambiguity here: it would. If an issuer does not adhere to the contractual obligations to its creditors, including payment in the currency stipulated, S&P Global Ratings would declare a default. Our current AA rating on France suggests, however, that such a turn of events is highly unlikely.



In other words, S&P doesn’t believe that Le Pen will get that far, and so they have not yet slapped a “D” for default on French government debt.
Moody’s too declared a few weeks ago that a re-denomination of French government bonds into new francs “might technically count as a default.”
Bondholders don’t like the idea of not getting “their” money – the euro – back when the bond matures, and they despise watching the purchasing power of their principal get watered down, as such a plan would do. They bought these bonds with ultra-low yields that had assumed that there wouldn’t be any of these risks.

Hence the “Le Pen premium,” a new term in the financial vernacular to describe the spiking yield spreads between German and French government bonds.
Now ECB President Mario Draghi is stumbling into the fray.

“The euro is irrevocable,” he told the European Parliament on Monday, to counter the populist rejection of the euro. “This is the treaty,” he said.

Which evoked memories of the good ol’ days of the sovereign debt crisis, when, to put an end to it in July 2012, Draghi said that the euro was “irreversible” and that the ECB was “ready to do whatever it takes to preserve the euro.” At the time, the Spanish 10-year yield was above 7% and the Italian 10-year yield was above 6%.

So now, same tune, different scenario. It’s not a debt crisis. It’s just a question of whether or not it’s possible to leave the euro, and if yes, how much it would cost.

And that question has already been raised officially. On January 18, Draghi had sent a letter to European Union lawmakers Marco Valli and Marco Zanni, telling them: “If a country were to leave the Eurosystem, its national central bank’s claims on or liabilities to the ECB would need to be settled in full.”
That was the opening – the IF. “If a country were to leave…” It meant that a country could leave! It was the first official admission that this was actually possible. It was just a matter of cost. That’s how Zani saw Draghi’s response. Bloomberg:

“I wanted to bring up the issue of exit from the euro and how it can happen,” he said in an interview before the testimony. “Draghi has now clearly admitted that such an exit is possible and now there is need to have more clarity about the cost. I’m sure that in case of Italy’s exit from the euro, benefits exceed costs.”

Alas, in his testimony before the European Parliament, Draghi refused to put a price tag on leaving the euro.

Valli asked him whether the “liabilities” Draghi had referred to that would “need to be settled in full” were the so-called Target2 imbalances. These are a result of payment settlements within the European System of Central Banks. They’d soared during the debt crisis to hundreds of billions of euros, a sign of the underlying financial tensions between debtor and creditor countries.

But Draghi dodged the question: “I cannot answer a question that is based on hypotheses, on assumptions which are not foreseen” by the European treaties, he said. “What I could do is send you a written answer which compares our Target2 system with the Federal Reserve-based system.”
Which was very helpful.

But even though he refused to put a price tag on leaving the euro, the whole exchange confirmed that it’s possible to leave the euro, though there is nothing in the treaties that mentions leaving the euro.

Other Eurozone central bankers are also trying to stem the tide, evoking soaring borrowing costs for France, if it chose to leave, and outright “impoverishment,” as ECB Executive Board member Benoit Coeure put it.

Whatever the ultimate costs of leaving the euro – they may be greatest for the holders of affected euro debt – for the Eurozone’s second- and third-largest economies, it has come down to just doing the math and making a decision. That’s the closest the Eurozone has ever come to falling apart.
Bonds are already falling, yields are rising, and NIRP is dying.

Read… Markets Smell a Rat as Central Banks Dither


Markets Smell a Rat as Central Banks Dither
by Wolf Richter • Feb 2, 2017


NIRP is dying.
Markets are suspecting that central banks are in the process of exiting this fabulous multi-year party quietly, and that on the way out they won’t refill the booze and dope, leaving the besotted revelers to their own devices. That thought isn’t sitting very well with these revelers.

In markets where central banks have pushed government bond prices into the stratosphere and yields, even 10-year yields, below zero, there has been a sea change.

The 10-year yield of the Japanese Government Bond (JGB) jumped 2.5 basis points to 0.115% on Thursday, the highest since January 2016, after an auction for ¥2.4 trillion of 10-year JGBs flopped, as investors were losing interest in this paper at this yield, and as the Bank of Japan, rather than gobbling up every JGB in sight to help the auction along, sat on its hands and let it happen.

And on Friday morning, the 10-year yield jumped another 3 basis points to 0.145%!

In September last year, the BOJ started the now apparently troubled experiment of trying to control not just short-term interest rates but also the entire yield curve. It targeted a 10-year yield of about 0% (it was negative at the time). Analysts believed that this would mean a range between -0.1% and +0.1%, and that if the yield rose to +0.1%, the BOJ would throw its weight around and buy.

But the fact that the BOJ allowed the yield to go above that imaginary line signaled to the markets that it no longer has the intention of capping the yield at +0.1%, that in fact the BOJ has stepped back.

This happened even as BOJ Governor Haruhiko Kuroda, on Thursday, once again was trying to jawbone the markets with a verbal commitment to his yield-curve targeting strategy and his mega-QQE of ¥80 trillion ($710 billion) a year in asset purchases.

The 10-year yield had fallen below zero for the first time on February 9, 2016, as the BOJ began dabbling with its own negative interest rate policy (NIRP), because its zero-interest-rate policy and its mega-QQE bond and stock buying binge somehow wasn’t enough, and because everyone in Europe was doing it. But that’s like so ancient history now (via Trading Economics; red marks in the charts below are mine):
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Germany, the second largest NIRP fiefdom, is subject to the ECB’s crazed NIRP absurdity and asset-buying binge that includes government bonds, corporate bonds, covered bonds, asset backed securities, and what not.



But there too, bonds have fallen in price despite the ECB’s purchases, with the 10-year yield emerging from negative la-la land just before the US election and soaring after it. There are now rumors that the ECB will announce sometime later in 2017 the untimely and slow death of QE (via Trading Economics):
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Denmark, whose households are the second biggest debt slaves in the world, still has its own currency and therefore its own monetary policy, and therefore its own NIRP. But the 10-year yield only briefly dipped below 0% and has since rumbled higher (via Trading Economics):
http://wolfstreet.com/wp-content/upl...2017-02-02.png
And that leaves Switzerland, whose households are the Number 1 debt slaves in the world, as the lone straggler in the 10-year negative yield absurdity, but it too is about to exit.

Its 10-year yield plunged below 0% in January 2015, the first sovereign debt in that maturity to do so, when the Swiss National Bank scuttled its currency cap against the euro, and at the same time cut its benchmark interest rate from -0.25% to -0.75%. It was a day of chaos that those who got tangled up in it will likely never forget. A lot of wealth was transferred, by dint of a central bank decision.

The charts above covered one year because that was the time frame of negative 10-year yields in those countries. But in Switzerland, the story started two years ago hence the five-year chart. On Wednesday, the 10-year yield rose to -0.10%, and on Thursday, it rose further to -0.024%, getting perilously close to 0%, before easing back to -0.04% (via Trading Economics):
http://wolfstreet.com/wp-content/upl...2017-02-02.png
In France, the 10-year yield never quite made it into the negative. The French government would like nothing more than to maximize its profits from its debts, which the negative-yield absurdity allows it to do. But it only got within a hair of it in September 2016 when the 10-year yield reached an all-time low of +0.10%. Close, but no cigar.
France, I believe, was the country whose 10-year yield got the closest to participating in the NIRP absurdity without actually making it. Alas, since then, bond prices have tumbled as the 10-year yield has soared over a full percentage point to 1.05% (via Trading Economics):
http://wolfstreet.com/wp-content/upl...2017-02-02.png
These 10-year yields are still very, very low at a time when the annual inflation in the Eurozone has shot up to 1.8% and is threatening to tear higher. Financial repression at its finest continues.

In the US, 10-year Treasury prices have also fallen and the 10-year yield has surged by over a full percentage point since last summer. Unlike the central banks in Japan and Europe, the Fed is on a path of raising rates and is also thinking out loud about unwinding its big-fat balance sheet by shedding some of its Treasuries or mortgage backed securities or both.

So it would make sense for US yields to rise. But why are yields in the bailiwicks of the other central banks so jumpy? Because markets smell a rat – as central banks, despite ceaseless jabbering, appear to be sitting on their hands after years of iron-fisted market domination.

COMMENTS FROM BENJAMINIS: I have linked many articles in this post. If you have interest then take your time and read and study it on the weekend. For myself that is exactly what I will do. I will print out the post and while relaxing read it and then file it away for further reference. I will do some posting on Saturday and Sunday afternoon around 4 PM EASTERN STANDARD TIME start to get ready for the Forex open in Wellington , New Zealand.