Netflix’s recent interconnect deals with Comcast and Verizon in the US have highlighted the challenging nature of the relationship between OTT providers and ISPs. As IP content proliferates, how will CDN infrastructure evolve and who will hold power? Anna Tobin reports. Is it time to get out the violins? Are ISPs justified in feeling that they are being taken for a ride? Cable and telecom companies have spent years aggregating and creating content to retain old and entice new customers. Now many content owners are taking the OTT route, sending their content down the ISPs’ pipes free of charge and their customers just can’t get enough of it, they are often even prepared to pay the content owners direct for their content.Now, some large consolidated ISPs are attempting to turn the tables to try to regain control of their traffic to make it pay.The unhappy marriage between Netflix and Comcast in the US is the most high-profile case pointing to this power shift. The way Netflix sees it, Comcast is effectively charging third-party content providers to access its souped-up highways to reach their customers. Netflix could have refused and taken the toll-free route, but this, they argue is congested and results in slow streaming speeds and poor Quality of Experience for viewers.In a statement explaining the company’s reluctant decision to comply, Ken Florance, vice-president, content delivery at Netflix says: “Netflix agreed to pay Comcast for direct interconnection to reverse an unacceptable decline in our members’ video experience on the Comcast network. These members were experiencing poor streaming quality because Comcast allowed its links to internet transit providers like Level3, XO, Cogent and Tata to clog up, slowing delivery of movies and TV shows to Netflix users.”Subsequently, Netflix has signed a similar deal with Verizon, but it still argues that having to enter these commercial agreements goes against the principle of net neutrality.Presumably to avoid opening themselves up to probing questions, neither party was willing to be interviewed about this story. But, in a statement, Jennifer Khoury, senior vice-president, corporate and digital communications in public policy at Comcast, claims that Netflix is presenting a distorted view of the situation.“Netflix’s decision to reroute its internet traffic was about improving Netflix’s business model. While it’s understandable for Netflix to try to make all internet users pay for its costs of doing business, as opposed to just their customers, the company should at least be honest about its cost-shifting strategy,” says Khoury. “Comcast has a multiplicity of other agreements like the one Netflix approached us to negotiate and so has every other ISP for the last two decades. Those agreements have not harmed consumers or increased costs for content providers – if anything, they have decreased the costs those providers would have paid to others.”The Netflix-Comcast dispute has led the whole industry to rethink the positions of the different players in the market. The disharmony goes beyond this particular dispute, says Nivedita Nouvel, vice-president of marketing at CDN technology provider Broadpeak.“The story probably started three years ago with the Level3-Comcast-Netflix case. At the time, an agreement could not be reached between its [Netflix’s] CDN provider, Level3, and one of the biggest operators in the US, Comcast,” says Nouvel. “To Netflix, this agreement was a key element in addressing an important portion of its market. The company’s practice of dealing directly with the last-mile owner, which fully controls its network, probably comes from this painful experience. Inevitably, this brings many questions to the floor concerning who should handle what part of the video streaming business.”Major ISPs across the world are equally concerned about who should be meeting the costs of transporting streamed traffic. In a guarded statement, a Virgin Media spokesperson said: “As people do more online than ever before, we should be talking about ways to ensure continued investment, innovation and a great online experience.”Commercial agreementsNetflix is promoted via an app on Virgin Media UK’s TiVo boxes, and marketed to Virgin Media customers. Such mutually beneficial commercial agreements are likely to become more commonplace, predicts Jon Haley, vice-president, marketing and business development at technology provider Edgeware.“Good examples are Swedish cable operator Com Hem, which offers Netflix on its TiVo boxes, and Jazztel, the Spanish telco, which has been offering local broadcaster Prisa TV’s OTT service under its own Canal+ Yomvi brand since 2012,” he says.Meanwhile, other ISPs are looking to their customers to shoulder the cost of the extra traffic. Christy Thomas, director of business strategy at Alcatel-Lucent Core Networks, cites Deutsche Telekom as an example. “We are seeing different reactions from different operators trying to protect their investments as OTT providers fill their pipes with traffic. Deutsche Telecom in Germany tried to put some limits on the traffic their subscribers can access, but they’ve upset a lot of their subscribers as a result. I think the trend will be more towards service providers partnering with OTTs as Virgin Media and Comcast have done [in their different ways] with Netflix,” he says. “What we are seeing is an ongoing migration of traffic to the most cost-effective way of delivering. Operators are putting in place various mechanisms to present the right interconnect models for the content owners to deliver the best quality of experience.”It is also important to remember that Netflix is an exceptional case due to its size, but the OTT market is still very much in its infancy. More and more content providers ranging from multinational broadcasters to tiny niche content providers are launching or preparing to launch OTT services. Soon it won’t be possible for last mile providers to do deals with every third-party content provider knocking on their doors.“This is why network operators selling IP transit and CDN operators exist,” says Mark Taylor, Level 3’s vice-president of media and IP services. “They efficiently support hundreds of content customers and compete vigorously for that business. It is unlikely that there will be many more direct deals like Netflix-Comcast. But that still leaves the problem of getting access to a monopoly’s control over broadband consumers.”When there is only one operator feeding into homes, jibes about monopolies are only to be expected, but this doesn’t mean that there is only one way to access those viewers.As Broadpeak’s Nouvel sees it, to deliver higher Quality of Service to viewers, OTT content providers have two options: “They can invest in the development of their own content delivery system, striking deals with operators to install their software or appliances on their premises. However, operators are reluctant to let external content providers install their hardware into existing infrastructures, due to lack of control over the equipment and operational issues such as maintenance, etc,” she says. “[Alternatively] they can leverage existing delivery solutions deployed by operators for their own content. However, this has to deliver a significant gain over the standard delivery of anonymous IP packets, and at a cost that is able to compete with what they pay CDN service providers. Currently, operators who want to address content providers directly lack a real differentiator in terms of their offering and value proposition. This is what Broadpeak brings to the market with nanoCDN, a technology that allows the streaming of live OTT channels by leveraging the operator’s multicast capabilities. The result is a significant improvement in quality to content providers at a low cost for the operator.”Cost barriersWhilst many content owners would love to build their own CDNs, very few would be able to finance them anyway. Netflix is rolling out its Open Connect CDN; Yahoo has recently bought PeerCDN; Google will also deliver caches to operators that will take them, and there is speculation that Apple is working on launching a CDN. Aside from these huge global brands, however, not many content providers will have the finance available to deploy their own CDNs. They have no choice but to find alternate ways to guarantee that their viewers receive good QoS – including striking deals with operators.“Operators have limited ability to manage multiple content provider relationships, both from a technology and a business perspective,” argues Peter Coppola, vice-president of product and solutions marketing at global CDN provider Limelight Networks. “We expect there will be more such deals, but we do not believe it’s a real trend. An OTT content provider needs relationships with one or more CDNs that have demonstrated their ability to deliver at scale into the geographies the OTT provider is targeting.”As the market matures, Coppola believes that the demand for global CDN services will grow. “One of the advantages operators have in dealing with a global CDN is that they represent an aggregation of many content providers,” he says. “A CDN like Limelight is a good option for content providers in that we have already negotiated arrangements with more than 600 operators for delivery.”Due to the complexities of the web that the internet has spun out, however, it seems that both local and global CDN providers will have a role to play in getting content to viewers.OTT content providers have three options open to them to achieve their goals, says Taylor at Level 3. “First, they can do what Netflix has done and build their own CDN. That CDN is then deployed in third-party data centres where it is available to peer with ISPs, or purchase transit off IP transit networks. They can also deploy their CDN infrastructure inside ISP networks,” he says. “Second, they can outsource that whole thing to a CDN provider like Level 3. Level 3 does all this work and on an aggregated basis for hundreds of content customers. Large content owners typically contract with two or more CDNs for resilience and for global coverage. Finally, there is a middle way where the content owner buys their own CDN servers, but deploys them in third-party data centres and then buys IP Transit of multiple providers for resilience and global coverage.”However, says Nouvel at Broadpeak, the CDN works best by caching content closer to end-users, based on its popularity. “Caching servers and streaming servers are, therefore, deployed by operators to handle the assets and live channels delivered by content providers,” she says. “In addition, operators can propose specific technologies, relying on their control of the home gateways, to enhance the service. nanoCDN from Broadpeak is based on this approach. It allows the delivery of live multi-bitrate channels at a low cost and can also be used to enable transparent caching of OTT video content, meaning the content provider does not need to change its portal. This solution allows content providers to combine the benefits of operator CDNs and global CDNs. In the future we think content providers will use a combination of CDNs: local operator CDNs for their region of focus and global CDNs to extend their reach outside this zone.”Net neutralityWhilst ISPs wrestle with how to make money from all of the traffic travelling down their networks, they have the added headache of having to comply with ever evolving net neutrality legislation.“There are many questions that are raised concerning net neutrality,” says Nouvel at Broadpeak. “Obviously, most people don’t want to see the internet becoming a place where content is restricted to those who can afford to pay for it. On the other hand, it’s legitimate for end-users to benefit from higher QoS for the service they pay for, versus a service that is free.”However, net neutrality isn’t really the issue here, argues Taylor at Level 3. He says that ISPs investing in a CDN infrastructure don’t present net neutrality concerns, but they could create unfair monopolies. “It isn’t the CDN investment that is at issue. The issue is how an ISP that has monopoly control of the connection to its broadband consumers interconnects with the rest of the internet,” he says. “What we have seen is that they have been trying to impose interconnection tolls that would unfairly advantage their own content or their own CDN over competitors. An ISP can throttle access to their network at the interconnect point. And in doing so have exactly the same effect that the net neutrality rules were set up to avoid.”To preserve neutrality while allowing ISPs to optimise their traffic, says Nouvel, “operators need to implement technologies that enhance the quality of delivery for premium content without degrading the common internet traffic. This can be done by using [Broadpeak’s] nanoCDN technologies, for live ABR and transparent caching. By caching specific content and removing it from the traditional chain of delivery, the technology actually improves internet traffic globally.”Whatever the arguments about interconnect tolls and privileging access, in this highly competitive marketplace it is unlikely that ISPs will be willing to sustain free-riding OTT offerings long term. To avoid becoming ‘dumb pipes’, telcos and cable operators want to monetise their investments in infrastructure by selling streaming and caching capabilities. They would like to pass on the costs of OTT content to someone, and viewers and the content providers are the only choices available.The regulators in the US and Europe are starting to sit up and take notice that their existing net neutrality rules possibly didn’t anticipate all of these issues emerging.As Haley at Edgeware says, “For internet TV and video services to compete with broadcast and DVD rental, there are really only two choices for regulators – let the ISPs charge the OTT provider for the required delivery quality or accept that they will need to increase broadband pricing for consumers, with price freezes or even data caps to cover the cost of the required network upgrades.”The ISPs will need to put their PR machines into overdrive to face the wrath they are likely to engender among both customers and content pedlars. If the courts are to have the final say, that could mean years of legal wrangling.
Asanga GunatillakaCable Congress speaker Asanga Gunatillaka, chief product officer at Com Hem, talks to DTVE’s Andy McDonald about product innovation and the impact of OTT. Sweden’s number one cable provider Com Hem has supplied TV, telephone, and high-speed internet access to Swedish homes and businesses for more than 30 years, adding its TiVo advanced television offering to the mix a little over a year ago.According to chief product officer Asanga Gunatillaka the TiVo offering has seen rapid take up since launch and will remain the focus of its innovation efforts for the foreseeable future.Com Hem launched TiVo in October 2013 and in just over a year has seen more than a quarter of its TV customer base adopt the next-generation service. A handful of European operators – namely Ono in Spain and Virgin Media in the UK – have launched similar services based on the TiVo DVR platform. However, Gunatillaka, who was previously commercial director at Virgin Media and worked there when it launched its TiVo offering, claims that Com Hem has had the “fastest TiVo growth” of all its European peers.According to Com Hem’s recently announced fourth quarter 2014 numbers, over the three months ending December 31 it added 32,000 TiVo customers. This gave it a total of 164,000 advanced TV customers, accounting for 27% of its overall TV customer base.Discussing the success Com Hem has seen to date, Gunatillaka says, “I think the key thing for us is that we launched the product with multiscreen in mind. When we launched TiVo, we launched it not only on a set-top box format, but we launched it on Apple, iOS and Android and on the web and that’s been really, really important to us.”Multiscreen approachWith what he describes as “near-universal” household access to broadband in Sweden, and high tablet device penetration, Gunatillaka says that it has been “really important to position TiVo as a multiscreen service” – rather than evolve it over time to incorporate more than the main TV screen.According to the European Commission’s recently published Digital Economy and Society Index, Sweden ranked as the second most digital country in Europe, based on a number of indicators including connectivity and digital skills, integration of digital technology accounts by the business sector, and overall internet usage. According to the research, fixed broadband is available to 99% of Swedish homes and high-speed broadband is available to 71%, with some 91% of Swedes found to use the internet.“Swedish Internet users engage in a broad range of online activities. They read news online (88%), listen to music, watch films and play games online (57%), use the internet to communicate via video calls (52%) or through social networks (70%), and obtain video content using their broadband connections (mostly though video-on-demand – 44%),” according to the research.Mass market propositionGunatillaka says that its TiVo offering has reached “the mass market very quickly” and claims that the 27% figure shows that it is “not a niche product”, with further growth likely to follow as Com Hem continues to develop the product.“I think it’s fair to say we’ve been pleased with the take-up of TiVo and I suppose in a way we’re happy that it’s grown rapidly, because I think it reflects the fact that TiVo was addressing a need, specifically in the Swedish market, which is for there to be a one-stop shop for entertainment,” says Gunatillaka. “I think TiVo provides that, because obviously it’s able to aggregate many content sources together into one environment, which is one of the key benefits of TiVo.”One of the main content sources to be added into the service at an early date was Netflix. Com Hem integrated the SVoD service into its platform in January 2014, becoming one of the first operators to do so. While some may have considered it a risky strategy to invite a disruptive OTT player onto a closed content platform, for Gunatillaka it was a simple case of trying to establish Com Hem as a “one-stop shop” for content.“We [have] worked very hard with our content partners to provide a really comprehensive content line-up; the packages which our subscribers have access to have a really good content line-up on multiple screens. So we were confident to bring Netflix onto our service, because we saw it as being complementary to our offering,” he says.Com Hem allows customers to log in to a current Netflix account or subscribe direct through their TiVo box. It has also integrated Netflix with Com Hem’s TiVo search function, so that any search instigated by TiVo users will include content from Netflix.By not forcing users to change HDMI inputs, and by placing the content together in one ecosystem, Com Hem is aiming for ease of use and a better customer experience – and it is not just Netflix that is available on the platform.Cirkus, a subscription online service focused around ‘the best of British’ TV content, is also available via Com Hem, having launched on the platform in December 2013. Cirkus has deals with ITV Studios, BBC Worldwide and All3Media among others, giving it shows including Sherlock, Midsomer Murders and Poirot.Gunatillaka says that Com Hem is “looking for great titles and stuff that will excite customers; it’s not a volume game for us”. For the Swedish operator, the key is quality, not quantity. “In our view we’ve combined taking content from content providers that are trusted in the Swedish market and our strategy is to complement those core content packages with selected services, like Cirkus and Netflix,” says Gunatillaka. “It’s about careful curation.”For the time being, this curation rests around video content – not on providing other internet-powered services like music streaming or gaming. “We’re obviously always open to other applications and services on the platform, but our focus should be on providing great content,” says Gunatillaka.Innovation and convergenceAn area of innovation that Com Hem has focused on is around improving the customer experience – specifically work on user navigation. Gunatillaka says the aim is “to make it even easier to find the content we love” – something that Com Hem will continue to work on “in the coming months.”“I think our task is to continue making content discovery even easier for customers,” says Gunatillaka. “We’re going to continue to innovate and tweak the interface, continue to editorialise the content we have better and better. We are not going to sit still. We will continue to look at ways of bringing content to life for our customers.”“What I’m keen to do is to address customer needs, which is to find and consume great content. I’m not interested in technology for technology’s sake,” he adds.Providing content to users across multiple different screens is important for Com Hem. However, with the main platforms of iOS, Android and the web already supported, Gunatillaka says that its philosophy is to focus on improving the experience there rather than working to extend the offering to connected TVs and other platforms.One way that Com Hem has worked to improve its multiscreen experience is by investing heavily in broadband – something that is important as TV and broadband increasingly converge.“You need the best broadband service to consume content delivered over the internet,” says Gunatillaka. “I think the key focus is for us to build on our current position of being the fastest network in Sweden, reaching speeds of over 500Mbps to over 1.6 million households.”One aspect of this will be based around further network investment; the other will be around improving the in-home experience.At the beginning of the year Com Hem demonstrated its commitment to the latter by launching a next-generation modem router, designed to offer a latest generation WiFi experience to customers – a move designed to help customers with multiple devices “get the most out of their broadband.”Looking ahead, Gunatillaka stresses that Com Hem is focused squarely on “delivering a great customer experience”. The firm has been single-minded in its focus on TiVo, he says, because it provides the best of both worlds of DVR capabilities and internet-powered apps. “We want to deliver a market-leading customer experience across all of our products, and that’s what we’re focusing on right now.”Asanga Gunatillaka spoke day three of Cable Congress 2015 on a panel session titled “OTT – New Game, New Rules for Operators and Content Providers?”
Eurovision Sport, the broadcasting arm of public broadcaster organisation the EBU, has named Robert Portman, the head of sport and sports rights at Finnish pubcaster Yle, as head of winter sport.Robert PortmanPortman has worked for Yle since 2001, initially as entertainment and events producer, before becoming head of sport, Svenska Yle in 2008. He then became head of sports rights and major events before taking on his present role as head of sport and sports rights.At Eurovision he will manage the winter sports portfolio and leading the acquisition strategy for this important sports rights property.Portman said: “I am excited to join the EBU and the team at Eurovision Sport to lead on winter sports. With the ever-evolving media landscape, it is evident that sports will be one of the key elements for media companies in the future. I look forward working together with the team to secure important sport rights for our members. Furthermore, coming from the EBU member side, I hope I can contribute with my experience to further improve the dialogue and co-operation between the Members and the permanent services.”Stefan Kurten, executive director, Eurovision Sport, said: “We’re very pleased to welcome Robert to the team at Eurovision Sport. He brings with him great experience of winter sports combined with an in-depth understanding of the needs of our Members. Winter sports are an important part of our sports rights portfolio and greatly valued by our Member broadcasters, and we are pleased to be able to strengthen our team with senior executive of this level.”
ShareTweet “If you see me out and about over the coming weeks, make sure and be on your best behaviour as I will be keeping an eye out for good boys and girls who deserve a Legenderry Licks chocolate bar and who knows you could be a Golden ticket winner!”Those interested in attending the Brick Wonders Exhibition are encouraged to book in advance by contacting the Nerve Centre at www.nervecentre.orgThe Brick Wonders Exhibition is part of the City of Culture Legacy Programme and further events are planned in February including the Space Camp at the Tower Museum on Saturday 20th and the Colour of Science at the Foyleside Shopping Centre on Saturday 27th.MAYOR’S GOLDEN TICKET CHANCE TO SEE BRICKWONDERS EXHIBITION was last modified: February 11th, 2016 by John2John2 Tags: Mayor McCallion says the initiative is a fun way of promoting the local chocolate company as well as creating a buzz and excitement around the Brick Wonders exhibition that is currently in the city until 06 May.The Mayor says the Brick Wonders Lego Exhibition in Derry is its only Irish showcase and is the ideal event for families over the mid-term break and Easter holidays.As well as viewing the 70-piece exhibition, families can create their own fantastic LEGO creations in the play and create area or take part in some of the workshops organised to complement the event in the city.The Mayor has a message for kids all over the Council area who are keen to get their hands on a Golden Ticket. MAYOR of Derry City and Strabane District Council, Cllr Elisha McCallion is donning her Willy Wonka costume over the next few weeks as part of a quirky Golden Ticket initiative.The giveaway will see five lucky families from across the Council area securing a Golden Ticket to the fantastic Brick Wonders Lego Exhibition on display at the Nerve Centre. Launching details of her Legenderry Licks Golden Ticket giveaway, Mayor, Cllr Elisha McCallion said she will be handing out Legenderry Licks chocolate bars to children and young people when she is out and about at her Mayoral engagements and events, with the lucky recipients getting the chance to secure one of five Golden tickets to the exhibition.The chocolate bars are made locally by Legenderry Licks and are available at the Visit Derry offices. ELISHA MCCALLIONMAYOR’S GOLDEN TICKET CHANCE TO SEE BRICKWONDERS
“This is the second death on the A6 in weeks and, as we enter into the winter months, I would urge all road users to exercise care and caution on the roads at all times and to allow for extra travelling time if conditions are poor.”Last month, Loreto Douglas, 64, a child care worker and former nun from the Culmore area of Derry died after a three-vehicle crash on a stretch of the A6 at the Glenshane Pass.TRAGEDY AS MAN DIES IN TWO VEHICLE CRASH ON MAN DERRY-BELFAST ROAD was last modified: December 5th, 2016 by John2John2 Tags: ShareTweet A MAN in his 30’s has died following a serious road traffic collision on the main Derry to Belfast road.The two-vehicle collision happened on the Foreglen Road between Claudy and Dungiven at about 6.30 am this morning.Police said a car and a van were involved in the collision. Diversions remain in place and motorists are being warned to expect delays.Three other people were treated at Altnagelvin Hospital for minor injuries and have since been discharged.Sinn Féin MLA Caoimhe Archibald said her thoughts were with the dead man’s family.“I would like to express my sympathies to the family and friends of the man who has died as a result of this morning’s crash,” she said. claudydungivenFOREGLEN ROADLORETO DOUGLASPSNITRAGEY AS MAN DIES IN TWO VEHICLE CRASH ON MAN DERRY-BELFAST ROAD
ShareTweet ALTNAGELVIN HOSPITALCO DONEGALDerryMaternal and Foetal Assessment unitPSNITeenage mum cared for after her stillborn baby is found in car boot at Derry hospital A forensic team carried out a detailed search and removed a number of samples from various parts of the vehicle.The PSNI said they had been alerted to a “concern for safety” at the hospital site last Thursday.They said it would be “inappropriate to comment further”.The Western Trust refused to comment.The mother, from Co Donegal, was said to be in a deeply traumatised state after she was found.The PSNI said: “Inquiries are ongoing.”Teenage mum cared for after her stillborn baby is found in car boot at Derry hospital was last modified: April 19th, 2018 by John2John2 Tags: Fearing for the safety of the woman, in her late teens, staff contacted police. She was located soon after.Officers sealed off the area around a white Audi after finding the little baby inside.The car had been parked up at the hospital’s south wing, close to the entrance of the Maternal and Foetal Assessment Unit.It is understood the tiny corpse was found in the boot of the car. A YOUNG mum was being cared for after her baby was tragically found stillborn in the car park of Altnagelvin Hospital.The child, believed to have been some weeks premature, was found in a car boot after being delivered by the woman outside the hospital building.The hugely distressed mum went into the hospital to report what had happened but is understood to have then disappeared.
CrimeWatch NewsFeaturedNewsWatch Beckley Police Department is currently investigating a shoplifting By Daniella HankeyAug 23, 2018, 11:24 am 725 0 Tumblr Next PostMidland Trail vs. Independence as Opioid Abuse Prevention Game Of The Week Previous PostFormer WV Supreme Court of Appeals Justice Menis Ketchum II Pleads Guilty to Wire Fraud Linkedin BECKLEY, WV (WOAY)- The Beckley Police Department needs your help finding these two suspects for shoplifting at Walmart on Wednesday, August 22nd.If anyone can identify the suspects pictured please contact Cpl. Neal Smith at the Beckley Police Department 304-256-1720 or West Virginia Crime stoppers at 304-255-STOP. www.crimestopperswv.com. Google+ Pinterest Facebook Twitter Mail Home NewsWatch CrimeWatch News Beckley Police Department is currently investigating a shoplifting Daniella Hankey
In This Issue… * Successful Dutch auction pushes euro higher… * What’s with Risk On-Risk Off? * Japanese to try more QE? * Running out of money at Soc. Sec…. And, Now, Today’s Pfennig For Your Thoughts! Aussie Inflation Falls, Dragging The A$ Down… Good day… And a Tom Terrific Tuesday! A problem here, and with the Cardinals ability to close out a game on the same day… UGH! Jen had to deal with the problem here, as I was getting stuck and poked.. I grab my balding head, and rub the forehead over things when they get to stressful, so I’m glad but sorry I wasn’t here last night… Speaking of problems… Well, the Aussie inflation report that printed last night, certainly is going to give my thought of no rate cut, a lot of problems… Aussie 1st QTR CPI, rose just .3% from the previous quarter. The forecasts ranged from .5 to .6%, so the lower inflation is going to be the straw that stirs the drink for the Reserve Bank of Australia (RBA), who had hung their rate cut hat on this report. Now that it has printed and was very weak, I don’t see how the RBA doesn’t cut rates… So much for me leaving a light on for no cut, eh? And the “pricing in of the rate cut” began immediately after the inflation report printed, which means the Aussie dollar (A$) got sold… Now, the thoughts in the markets is that since the inflation report was so weak, that the RBA would go for an even deeper rate cut in May… Now, the markets may be getting a little ahead of themselves with that thought, have they already forgotten that the most recent jobs report showed that 44,000 jobs were created in March, which was nearly 7 times the forecast for the increase of jobs? Oh well… onto other things… The currencies, other than the A$, range traded overnight, the euro has gained a tiny bit this morning after it was announced that the Dutch had a successful bond auction. There’s additional things going on in the Netherlands, as the current cabinet handed in their resignations and the current Prime Minister, Mark Rutte, has offered to resign too, if his proposed budget that meets European Union guidelines (which means lots of austerity measures), isn’t approved. So… the euro’s gains are muted by the questions in the Netherlands… And don’t forget that the pain in Spain continues… The British pound sterling was once again on the rally tracks overnight, but just when investors begin to look seriously about the pound once again, a report that illustrates what I’ve warned about, prints… U.K. debt has gone past 1 Trillion pound sterling, which in dollars is, $1.6 Trillion… Sure that sounds like chicken feed compared to our $15.7 Trillion debt… But, it’s still significant… The problems as I see them in the U.K. include the fact that interest on debt is growing at a huge clip, just last year +10.1%, the economy continues to drag, and tax receipts are missing the mark, growing at 3.9% last year, rather than 4.8%, which is what was needed or planned for in the budget… Do those problems sound familiar? Yes, they sound very familiar, for they too are the some of the problems we face here in the U.S. Tax receipts that don’t cover the Gov’t spending… an economy that drags, and increased cost on debt… So, the pound sterling may be on the rally tracks, but I fear that it’s about to get derailed… But maybe not… Maybe people who asses value on assets don’t care about this stuff any longer… Speaking of not caring about this stuff any longer… No, I’m not talking about me! What I’m’ talking about is what I’ve been begging for since 2008, and that’s a return to fundamentals… We’ve had to deal with this Risk On- Risk Off trading since the collapse of Lehman Brothers… In the Risk On- Risk Off trading, all the so-called “risk assets” of stocks, currencies and commodities, all get thrown together and either get bought on a “Risk On Day” or sold on a “Risk Off Day”… Prior to 2007-8, this was never the case… stocks, currencies and commodities, all have different pricing mechanisms, and a low correlation to each other. So, is there a new model for investment allocation? Well, there might be, in my opinion, though it will be short-lived, in the overall scheme of things… That’s right… 4 years now, is a small time period in the overall picture… I guess what the next question would be, is what will trigger this change back to “the way things were”… and that, I don’t really know… but if you really nailed me down on this I would say that when the questions about the ability of sovereign governments to function are put to bed, then we could see a return to the fundamentals… And then the question would be, when will that happen? Oh goodness me… maybe it never does? With all the debt in the world, one has to wonder if we as a world ever get out of this mess? It’s a complete systemic failure of the principles that I learned from my economics mentors… You see, in the Risk On- Risk Off trading scheme, it’s all about safe havens, and not fundamentals… Do you see what all this debt is doing to the principles of investing? But, I remain steadfast in my belief that the fundamentals will return, and we will get past this Risk On- Risk Off bull dookie… Wow! I really went down a road I was not prepared to go down, but see how quick I am on my feet? HA! Oh!, and today looks like a Risk On Day, so we have that going for us! OK… this Friday (our Thursday night), the Bank of Japan (BOJ) will meet, and there are all kinds of rumors being whispered about what the BOJ might do… All of these rumors though come back to the thought that the BOJ will ease this week… OK, I hear you saying, But Chuck, they nothing left to ease… Ahhh grasshopper, that’s right… but just like here in the U.S. having nothing to ease doesn’t present a roadblock! The BOJ will probably announce that they are going to expand asset purchases, let’s say up to 10 Trillion yen… But, hasn’t the BOJ been down this road before? Oh yes… for about 2 decades now! They are the godfather of Quantitative Easing (QE), and they will show us once again that implementing QE doesn’t achieve economic growth one iota… I think the markets have all see this game played by the BOJ so many times now that they automatically begin to sell yen… Which would also be a goal of the BOJ’s so, to them another round of QE does half the job… Remember, when St. Louis Fed Head, James Bullard, was asked whether the two rounds of QE had achieved the Fed’s goals, and he answered with a resounding “yes it had” , and then listed among other things the “fact that the dollar had weakened” as one of the goals of the Fed… So, central bankers know that when they want a weaker currency going forward, all they have to do is implement a round of QE… Of course, the Fed Heads don’t call it QE any longer… Instead they do their bond buying in the smoky dark back room… Or at least that’s my version of what’s going on… Just being Chuck… Ok… onto China… a week after their announcement that they would widen the trading band for the renminbi / yuan, I sit here and watch the currency be stuck in the mud… The forward points in renminbi have really widened out on the curve… For all you new to class, the forward points for most currencies represent the difference in interest rates between the two countries’ currencies and the length of the forward.. so how far out in time does the trade go… But with currencies that are called NDF’s (non-deliverable forwards), the speculators get to instill their will in the forward points… So, when the points in Chinese renminbi are positive, that adds to the price, making it cheaper to buy in dollars in the forward market… and vice versa… So, what the markets are telling me right now, is that they don’t believe the renminbi will reach convertibility in the next 2 years… But that doesn’t mean the Chinese will drop their slow-appreciation of the renminbi… that’s bound to continue, although nothing is a given… So… the dollar has at least two more years and probably more before the renminbi is ready… And every time I talk about the Chinese wanting to remove the dollar standard, I get a few emails telling me that China will never have the reserve currency of the world because they are a Communist country… I say… That will be overcome, the Chinese are more capitalists than we think they are, and that will continue… mark my word… I truly believe this… Canada will report their latest Retail Sales today… The only reason I mention this is all the talk I had last week about Canada, and how the Bank of Canada (BOC) Gov. Carney, had made a point of saying that an interest rate hike could come sooner than later… If Canadian Retail Sales are stronger than expected (+.1%) that could be a feather in the rate hike’s cap! The Canadian dollar / loonie has really been Steady Eddie in recent weeks, bound by a very tight trading range… My charts friend, tells me that the loonie is ready to break out… but the break out could go either way… That plays well with what I’m about to say… the markets will hang around this range trade for awhile… but if they don’t see concrete evidence that rates are going higher, they will back away from the loonie… But if they do see concrete evidence, the loonie could shoot higher from here… Here in the U.S. today, the data cupboard, will produce the Feb S&P CaseShiller Home Price Index, which I would think would continue to show rot on the home price vine… We’ll also see Consumer Confidence, and New Home Sales data. So… a busy day at the data cupboard. And if recent data plays through, the weaker data will be dollar negative today… And moving south from here… I once again shake my head in disgust at the way the Brazilian Gov’t and Central Bank have gone about decimating the real’s value… The real has lost 8.7% in the past two months, as the Gov’t tripled a tax on foreign loans and the Central Bank slashed interest rates 350 Basis Points (3.5%) since last August, and continued to sell real and buy dollars… You know, it occurred to me the other day, when I was thinking about this assault on the real by the Brazilian Gov’t and central bank, that they are probably hurting most large businesses in Brazil, because most large businesses carry a large portion of their debt in dollars… reminds me of the old saying about not cutting off your nose to spite your face… Then There Was This… From Forbes.com this morning… “The news in the Social Security Trustees’ annual report released Monday wasn’t good—the Trustees now project that the old age and disability trust funds combined will be unable to pay full benefits in 2033, three years sooner than projected in last year’s report. That’s in 21 years, the shortest period to trust fund “exhaustion” since before the last fix to Social Security’s finances in 1983. The grimmer outlook is due largely to changes in the Trustees’ economic assumptions–for example, they’re now projecting lower wage growth and higher unemployment–as well as a higher than predicted 3.6% cost of living increase for beneficiaries in 2012.”Chuck again… Well… My take on all this is that as I’ve talked about for years now… The Gov’t needs to make some tough decisions about these plans, including Medicare… But the longer they wait to do something the deeper the cuts will have to be, and will affect the young people the most… and here I go again with the pointing out how our kids and grandkids are going to have to deal with this stuff… we have successfully kicked the can down the road… they won’t have that choice… To recap… The Aussie Inflation data printed very weak, thus suggesting to the markets that a rate cut will take place at the RBA’s meeting in May, and that deep sixed the A$ overnight. In Europe, the Dutch successfully auctioned bonds, and the euro was able to gain a bit on the news. Japan is set for more QE because it has worked so well in the past… NOT! And Chuck talks about Risk on- Risk Off… Currencies today 4/24/12… American Style: A$ $1.0295, kiwi .8140, C$ $1.0110, euro 1.3170, sterling 1.6155, Swiss $ 1.0960, … European Style: rand 7.8080, krone 5.7310, SEK 6.7375, forint 225.90, zloty 3.1850, koruna 18.9490, RUB 29.37, yen 81.20, sing 1.2465, HKD 7.76, INR 52.69, China 6.3078, pesos 13.15, BRL 1.88, Dollar Index 79.70, Oil $103.17, 10-year 1.95%, Silver $30.98, and Gold… $1,640.75 That’s it for today… a tough day for sure yesterday, but the sun is coming up today, and it’s a new day… Cardinals lose a tough one last night in 40 degree weather at Wrigley Field… That’s too cold to play baseball… what the heck were the schedule makers thinking playing night games at Wrigley in April? Baseball should be played under blue umbrellas skies, with golden sun, and immaculate fields… day baseball… Well, our Blues will take on the L.A. Kings in the second round of the NHL Playoffs. The Blues will have home-ice advantage, let’s hope they use it wisely! I’m heading to Westin Florida this week to speak at the Casey Summit… Then I’ll just stay there to speak at the KCI conference in Palm Beach the following weekend… I’ll write from Florida.. no worries… and with that… I thank you again for reading the Pfennig, and I hope you have a Tom Terrific Tuesday! Chuck Butler President EverBank World Markets 1-800-926-4922 1-314-647-3837 www.everbank.com
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold MineralizationColumbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. Please visit our website for more information about the project. The mining companies seem to have no real interest in helping their shareholdersThe gold price was under selling pressure right from the Far East open on their Thursday…and that continued for the rest of the day…and got even more downside help during the Comex trading session.Not surprisingly, the low of the day [$1,663.90 spot] came at the London p.m. gold fix at 9:00 a.m. local time in New York.Gold closed at $1,667.40 spot…down $17.40 on the day. Roll-over volume was heavy, but net volume was only around 128,000 contracts.I was pretty much the same story in silver…although the silver price rallied a bit during the Comex trading session. That lasted until 11:15 a.m. Eastern time…and then down went the price.The silver price closed virtually on its low of the day which was $31.62 spot…down 61 cents from Wednesday. Volume was pretty heavy…around 55,000 contracts.The dollar index chopped around the 80.00 mark all day long, closing at 79.99…virtually unchanged from Wednesday. And it nearly goes without saying the currency movements played no roll in the precious metal price action yesterday. It was all JPMorgan et al.Like Wednesday, the gold stocks opened down…and then headed for the nether reaches of the earth once again. The HUI closed virtually on its low tick…down 3.13%.Gold has been hit for $25 during the last two trading days and, in response, the HUI has declined by a bit over 6 percent. John Embry has always maintained that the share prices are being managed as well as the gold price itself…and I would agree with that statement after watching the share price movements over the last two days.The silver stocks got it in the neck as well…and Nick Laird’s Intraday Silver Sentiment Index closed down 3.20%.(Click on image to enlarge)The CME’s Daily Delivery Report showed that only one lonely silver contract was posted for delivery on Monday. I’m not really surprised. The January delivery month, such as it was, is winding down…and will be done by the end of trading next Wednesday. Most deliveries into the January contract have already been made…but I suppose there still could be surprises in the next few days, but I doubt it.There was movement in both GLD and SLV yesterday. First, there was another withdrawal by an authorized participant from GLD. This time it was 77,451 troy ounces. And over at SLV a knee-wobbling 6,189,901 troy ounces of silver were also withdrawn and shipped off to parts unknown.For the second day in a row, there was no sales report from the U.S. Mint.Over at the Comex-approved depositories on Wednesday, they reported receiving 1,344,577 troy ounces of silver…and shipped 441,608 troy ounces out the door. Lots of silver in motion once again this week. The link to Wednesday’s activity is here.I heard from the Silver ETF Bar Guru, Joshua Gibbons, yesterday evening…and here is what he had to say.Hi Ed,“I haven’t finished my weekly SLV analysis…I’ll take care of that sometime Friday…but I did a quick check and came up with something interesting.”“We know that JPM added a vault in New York last week, in addition to the four they have in London. However, early this week they moved the 8.9 Moz of silver from the Johnson Matthey London vault, to the Brinks London vault, presumably ending the contract with Johnson Matthey. The JM vault only started holding silver for SLV in early 2012.”“So now SLV is using four vaults; two JPM vaults (one in New York, one in London), and two Brinks vaults (both in London). SLV had previously also used vaults with ViaMat and HSBC, but no longer does.”“I also asked iShares if they could comment as to whether or not the large SLV deposit last week was used to close out the short position. Not surprisingly, I got a “No comment” reply.” – JoshuaThe photo below is one I ‘borrowed’ from the spaceweather.com Internet site a few weeks back. It’s an Airbus of some kind taking off from the Rome airport and silhouetted against a sunspot-covered solar disk.I have the usual number of stories for a weekday…and I hope you have the time to spend on the ones that interest you the most.After the game, the King and the pawn go into the same box. ~ Italian proverbWell, was Wednesday and Thursday’s price action the start of the engineered price decline? Beats me…but as I said several days ago, the set-up to fail at the 50-day moving average was all there if they wish to take advantage of it…and it appears that the process has been started.In silver, JPMorgan et al could hit the price for a dollar or more, as their short position is still monstrous.(Click on image to enlarge)The gold price actually touched its 200-day moving average on yesterday’s price decline. But using the recent past as prologue, you can see that “da boyz” could actually get the price lower than that if they so choose.(Click on image to enlarge)As Ted Butler is careful to point out…JPMorgan et al can pretty much do whatever they want to the price of any of the precious metals…and there is no one to stop them. If you think that a new CFTC commissioner will make a difference, then I have a bridge to sell you. Because with Gensler and Chilton as silver’s “friends”…who needs enemies?Here’s the 6-month HUI chart. Based on yesterday’s closing price, the HUI is back to where it was on August 6th of last year.(Click on image to enlarge)From what I learned at the Vancouver Resource Conference this past weekend, we are pretty much on our own as investors. The mining companies seem to have no real interest in helping their shareholders…and won’t touch the price management scheme with a 20-foot barge pole. If pressed, most will privately admit that it exists…and that they really should do something about it. But publicly they’d rather watch their share prices drop into the toilet…or go bankrupt…rather than lift a finger to help the real owners of these companies…us. They will never admit the obvious elephant in the living room…and you wouldn’t believe some of the excuses I heard from companies as to why their share prices were doing so poorly.Today we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday…and with both gold and silver rising just about every day of the reporting period…and JPMorgan et al going short against all comers…it’s a pretty safe bet that there will be an increase in the Commercial net short positions in both metals. It’s just a matter of how bad the numbers will be.The precious metals didn’t do much of anything in Far East trading on their Friday…and are about unchanged from Thursday’s New York close. Volumes are nothing out of the ordinary as I hit the ‘send’ button at 3:10 a.m. Eastern time…and the dollar is gyrating just under the 80.00 mark like it has been doing almost all week.I haven’t the foggiest as to what kind of day we’ll have in New York…but it’s a Friday, so be prepared for anything. I am.Enjoy your weekend…and I’ll see you here tomorrow. Sponsor Advertisement
New details are emerging after a deadly shooting at a downtown business in Jasper.Police say there’s a suspect in custody who is also an employee of Dripping Wet Customs Paint and Auto Body Repair Shop on Commerce Avenue in Jasper.Jasper Police said they believe an argument over work done last week lead to the Monday morning shooting.Police found William Earl Ervin, 38, dead at the scene around 9 a.m.The suspect’s name has not yet been released, and there’s no word on any charges or an arrest.But the Jasper Police Department said they’re turning over the case to the Walker County District Attorney’s Office as soon as they can.