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Gold: $1169.30 down $1.70
Silver: $16.17 up 10 cents
In the access market 5:15 pm:
The gold comex today had a poor delivery day, registering 0 notices served for nil oz
A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 261.94 tonnes for a loss of 41 tonnes.
In silver, the open interest continues to remain extremely high and today we are close to multi year highs at 177,341 contracts.
To boot, the December silver OI remains extremely high at 119,271.
Today, we had no change in gold Inventory at the GLD/ inventory rests tonight at 741.21 tonnes.
In silver, strangely we see that the SLV inventory actually rose by 958,000 oz:
SLV’s inventory rose by 958,000 oz and rests at 344.373 million oz.
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today.
First: GOFO rates: OH OH!!! we are deeper in backwardation!!
All months basically moved slightly in a negative directions with the first two months GOFO still in the negative. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.
It looks to me like these rates are now fully manipulated.
London good delivery bars are still quite scarce.
Nov 3 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
-.0475% -015% + .02% + .085% + .1825%
Oct 31 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
-.025% + +.0025% +-0325% +.0925 + .185%
Let us now head over to the comex and assess trading over there today,
Here are today’s comex results:
The total gold comex open interest fell by a narrow margin of 1631 contracts from 418,259 down to 416,728 with gold down $27.00 on Friday. Not too many longs left the arena despite the huge whack in gold. The next delivery month is November and here the OI actually fell by 12 contracts. We had 2 delivery notices filed on Friday so we lost 10 contracts or 1000 oz of gold standing. The big December contract month saw it’s Oi fall by 5,224 contracts down to 268,114. The estimated volume today was fair at 130,682 . The confirmed volume on Friday was humongous at 328,215. Strangely on this second day notice, we had 0 notices filed for nil oz.
The fun begins with the silver comex results. The total OI fell marginally by 2266 contracts from 179,608 down to 177,342 yesterday with silver down 31 cents.In ounces, this represents a total of 886 million oz or 126.5% of annual global supply. We are now in the non active silver contract month of November and here the OI fell by 45 contracts down to 119. We had 44 notices filed on Friday so we lost one contract or 5000 oz standing. The big December active contract month saw it’s OI fall by 4082 contracts down to 119,271. In ounces this is represented by 596 million oz or 85.1% of annual global production (production = 700 million oz – China). The estimated volume today was fair at 37,508. The confirmed volume on Friday was humongous at 90,777. We also had 3 notices filed on first day notice for 15,000 oz.
Data for the November delivery month.
November initial standings
Withdrawals from Dealers Inventory in oz
Withdrawals from Customer Inventory in oz
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
No of oz served (contracts) today
2 contracts( 200 oz)
No of oz to be served (notices)
65 contracts (6500 oz)
Total monthly oz gold served (contracts) so far this month
2 contracts (200 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
Today, we had 0 dealer transactions
total dealer withdrawal: nil oz
total dealer deposit: nil oz
we had 0 customer withdrawals:
total customer withdrawals :nil oz
we had 0 customer deposits:
total customer deposit: nil oz
We had 0 adjustments:
Total Dealer inventory: 885,779.97 or 27.55 tonnes
Total gold inventory (dealer and customer) = 8.422 million oz. (261.97) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 41 tonnes have been net transferred out. We will be watching this closely!
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped by JPMorgan customer account.
To calculate the total number of gold ounces standing for the November contract month, we take the total number of notices filed for today (2) x 100 oz to which we add the difference between the OI for the front month of November (55) – the number of gold notices filed today (0) x 100 oz = the amount of gold oz standing for the November contract month.
Thus the in intial standings:
2 (notices filed today x 100 oz + (55) OI for November – 0 (no of notices filed today = 5700 oz (.177 tonnes)
we lost 1000 oz of gold standing for the November contract month.
November silver: initial standings
|Withdrawals from Dealers Inventory||103,641.98 oz (CNT)|
|Withdrawals from Customer Inventory||808,949.26 oz
|Deposits to the Dealer Inventory||nil|
|Deposits to the Customer Inventory||592,820.700 oz CNT|
|No of oz served (contracts)||44 contracts (220,000 oz)|
|No of oz to be served (notices)||120 contracts (600,000 oz)|
|Total monthly oz silver served (contracts)||44 contracts (220,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||103,641.98 oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||1,228,266.6 oz|
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 1 dealer withdrawal:
i) out of CNT: 103,641.98 oz
total dealer withdrawal: 103,641.98 oz
We had 1 customer withdrawals:
i)Out of Scotia: 808,949.26 oz
total customer withdrawal 808,949.26 oz
We had 1 customer deposits:
total customer deposits: 592,820.700 oz oz
we had 1 adjustment:
i )Out of Delaware; 138,081.55 oz was adjusted out of the customer and this landed into the dealer account at Delaware
Total dealer inventory: 66.220 million oz
Total of all silver inventory (dealer and customer) 180.185 million oz.
The total number of notices filed on second day notice total 3 for 15,000 oz. To calculate the number of silver ounces that will stand for delivery in November, we take the total number of notices filed for the month (47 ) x 5,000 oz to which we add the difference between the total OI for the front month of November(119) minus (the number of notices filed today (3) x 5,000 oz = the total number of silver oz standing so far in November.
Thus: 47 contracts x 5000 oz + (119) OI for the November contract month – 3 (the number of notices filed today) = amount standing or 815,000 oz
It looks like China is still in a holding pattern ready to pounce when needed.
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Nov 3.2014: no change in gold inventory at the GLD/741.21 tonnes
Oct 31.2014: no change in gold inventory at the GLD despite the raid/inventory at 741.21 tonnes
October 30.2014: we had another 1.2 tonnes of gold leave the GLD and heading to Shanghai/Inventory 741.21 tonnes
October 29.2014: we had another .99 tonnes of gold removed from the GLD/inventory 742.40 tonnes
Oct 28.2014: we had another withdrawal of exactly 2 tonnes of gold heading to Shanghai; Inventory 743.39 tonnes
Oct 27.2014: no change in gold inventory at the GLD/inventory 745.39 tonnes.
Oct 24.2014: a huge withdrawal of 4.48 tonnes of gold at the GLD/Inventory 745.39 tonnes. This gold is heading to friendly territory: namely Shanghai.
Oct 23.2014: no change in gold inventory at the GLD/Inventory at 749.87 tonnes.
Oct 22.2014: we lost another 2.1 tonnes of gold at the GLD. Inventory rests at 749.87 tonnes. This tonnage no doubt is off to Shanghai.
Oct 21.2014: no change in inventory/GLD inventory rests tonight at 751.96 tonnes.
Oct 20.2014: wow!! a massive 8.97 tonnes of gold leaves the GLD heading to the friendly shores of Shanghai./Inventory 751.96
Oct 17.2014: No change in gold inventory at the GLD/Inventory 760.93 tonnes
Oct 16.2015: GLD gained back 1.79 tonnes of gold/inventory 760.93 tonnes
Today, Nov 3. no change in gold inventory at the GLD
inventory: 741.21 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD gold: 741.21 tonnes.
And now for silver:
Nov 3.2014: this is good news: the “actual silver inventory” rose by 958,000 oz to 344.373 oz
(I guess there is no physical silver to raid from the SLV vaults:)
October 31.2014: despite the huge raids yesterday and today: no change in silver inventory at the SLV/inventory at 343.415 million oz
October 30.2014; no change in silver inventory at the SLV/inventory at 343.415 million oz
October 29.2014 no change in silver inventory at the SLV inventory/343.415 million oz
October 28.2014: no change in silver inventory at the SLV/Inventory at 343.415 million oz
Oct 27.2014: no change in silver inventory at the SLV
Oct 24.2014: as of 6 pm, there is no change in silver inventory at the SLV. Note the difference between gold and silver. Gold leaves the vault of GLD as little silver leaves the SLV. (I guess it means that there is no silver to give to the banker participants)/Inventory: 343.415 million oz
Oct 23.2014: no change in silver inventory at the SLV (as of 6 pm est
Inventory: 343.415 million oz
Oct 22.2014: no change in silver inventory at the SLV ( as of 6 pm est)
Oct 21.2014; no change in silver inventory at the SLV (as of 6 pm est)
Oct 20.2014: we lost 1.15 million oz of silver inventory at the SLV/inventory 343.415 million oz
Oct 17.2014: no change in silver inventory/344.565 million oz
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now deeply into the positive to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 9.8% percent to NAV in usa funds and Negative 9.5% to NAV for Cdn funds
Percentage of fund in gold 61.1%
Percentage of fund in silver:38.40%
.( Nov 3/2014)
2. Sprott silver fund (PSLV): Premium to NAV rises to positive 4.68% NAV (Nov 3/2014)
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.88% to NAV(Nov 3/2014)
Note: Sprott silver trust back hugely into positive territory at 4.68%.
Sprott physical gold trust is back in negative territory at -0.88%
Central fund of Canada’s is still in jail.
And now for your most important physical stories on gold and silver today:
Early gold trading form Europe early Monday morning:
(courtesy Goldcore/Mark O’Byrne)
GoldCore details Swiss National Bank’s dissembling about gold reserves
2:05p ET Monday, November 3, 2014
Dear Friend of GATA and Gold:
The Swiss National Bank’s evasiveness and dissembling about the location and disposition of Switzerland’s gold reserves is explored in detail in GoldCore’s daily gold market commentary, written today by Ronan Manley:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Koos Jansen interviewed on German radio:
(courtesy Koos Jansen/GATA)
Chinese gold demand insatiable, Jansen reports; in Germany, a run on silver
7:50a ET Monday, November 3, 2014
Dear Friend of GATA and Gold:
Chinese gold demand continues to be huge, insatiable, and largely ignored or underestimated by the Western financial news media, Bullion Star market analyst and GATA consultant Koos Jansen reports today:
And the Goldreporter Internet site in Germany reports today that there is a run on silver coins in that country:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc
Chris Martenson interviews Ted Butler on the commodity manipulation:
(courtesy Chris Martenson/Ted Butler/GATA)
Chris Martenson interviews Ted Butler about commodity price suppression
7:56p ET Sunday, November 2, 2014
Dear Friend of GATA and Gold:
Silver market rigging whistleblower Ted Butler, interviewed by Peak Prosperity’s Chris Martenson, explains how the rigging of the commodity markets with derivatives has suppressed commodity prices, including the prices of the monetary metals, even as central banks have been inflating the prices of financial assets. The interview is headlined “Ted Butler: The Silver Nightmare Will Be Over Soon,” is 47 minutes long, and is posted at Peak Prosperity here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold miners are having great difficulty producing gold/silver at these low prices:
(courtesy Kingworldnews/Eric King/John Ing)
Gold mines can’t produce at current low prices, Maison Placements’ Ing says
9a ET Sunday, November 2, 2014
Dear Friend of GATA and Gold:
Mining analyst John Ing of Maison Placements in Toronto, interviewed by King World News, says that gold mine production is likely to diminish substantially with the current low prices. (Like most gold mining executives, he doesn’t add that people who are willing to accept mere certificates in place of metal will not need any metal at all.) But, Ing adds, China and Russia are taking whatever metal the West is selling, and in recent years peak short positions on the futures markets like the current one have preceded dramatic price increases. An excerpt from Ing’s interview is posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
We have two huge commentaries to bring to your attention today from Bill Holter.
The first one deals with the Alasdair Macleod paper on Friday and the second one on silver fraud.:
The commentary of Alasdair Macleod on Friday was an extremely important one for us and now Bill Holter dissects it for us such that we understand what probably has happened.
Alasdair and Bill are probably correct that China accumulated 20,000 tonnes in the time period 1983 through to 2003 as the west was busy dishoarding. Also, no doubt, that the USA persuaded the Arabs to dishoard with all of the bases protecting them. The Chinese were happy campers accumulating gold under the radar of the uSA. The amounts purchased would be ).25 trillion dollars and this is hardly a dent in the total Chinese dollar equivalent reserves. Once sovereign China accumulated enough gold to satisfy itself for the time being, it then allowed its citizens to acquire gold (and thus wealth).
Thus China will hold all of gold and the West will hold nothing but paper obligations on gold with no physical. The comex will default along with the Bank of England and the GLD. The bankers will also default on their silver obligations.
Quite a story…
and now Bill Holter explains it all:
(courtesy Bill Holter)
Has China played possum?
And now for our more important paper stories today:
1. Stocks up down Asian bourses with the lower yen values to 112.92
2 Nikkei closed
3. Europe stocks down/Euro collapses USA dollar index up at 87.29.
3b Japan 10 year yield at .46%/Japanese yen vs usa cross now at 112.92/
3c Nikkei now above 17,000
3d Abe goes all in with another QE/it is now all up to Japan to stimulate the world/will be known
as the great Yen massacre!!!
3e Japanese companies going bankrupt with the high yen vs dollar at over 111.
3fOil: WTI 80.00 Brent: 85.36
3g/ Gold down/yen down; yen above 112 to the dollar/
3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion
Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP
3i Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt.
3j Gold at $1172.00 dollars/ Silver: $16.12
4. USA 10 yr treasury bond at 2.34% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)
Lack Of Daily Central Bank Intervention Fails To Push Futures Solidly Higher, Yen Implosion Continues
While it is unclear whether it is due to the rare event that no central bank stepped in overnight with a massive liquidity injection or because the USDJPY tracking algo hasn’t been activated (moments ago Abe’s deathwish for the Japanese economy made some more progress with the USDJPY hitting new mult-year highs over 113.6, on its way to 120 and a completely devastated Japanese economy), but European equities have traded in the red from the get-go, with investor sentiment cautious as a result of a disappointing the Chinese manufacturing report. More specifically, Chinese Manufacturing PMI printed a 5-month low (50.8 vs. Exp. 51.2 (Prev. 51.1)), with new orders down to 51.6 from 52.2, new export orders at 49.9 from 50.2 in September. Furthermore, this morning’s batch of Eurozone PMIs have failed to impress with both the Eurozone and German readings falling short of expectations (51.4 vs Exp. 51.8, Last 51.8), with France still residing in contractionary territory (48.5, vs Exp and Last 47.3).
Regarding Europe’s final September PMI print, Goldman comments as follows: “The Euro area Final manufacturing PMI printed at 50.6 in September, 0.1pt below the Flash estimate (and the Consensus expectation). This implies that the Euro area manufacturing PMI rose 0.3pt in October, the first increase since April. The German Final manufacturing PMI for October was revised down 0.4pt while the French manufacturing PMI was revised up substantially by 1.2pt. The Spanish manufacturing PMI surprised slightly to the upside by remaining unchanged at 52.6 (Cons: 52.2). The Italian manufacturing PMI fell notably by 1.7pt to 49.0 (Cons: 50.6). This suggests some implicit downward revisions outside Germany/France.”
The breakdown in October was mixed. Both new orders and stocks improved marginally, the former increased by 0.3pt to 49.5, while the latter increased by 0.4pt to 50.0,leaving the forward-looking order-to-stock ratio slightly lower in October; following gradual declines during 2014, this ratio now stands at the lowest level since April 2013. Production and employment improved by 0.5pt and 0.3pt in October, respectively.
With today’s Final print, the Euro area manufacturing PMI is now estimated to have risen slightly in October (0.3pt), the first increase since April. Between April and September, the Euro area manufacturing PMI eased by about 3pt. Prior to that, the Euro area manufacturing PMI rose sharply by around 10pt between July 2012 and early 2014 (and remained broadly unchanged in the spring).
On an index specific basis, the MIB leads the way lower for Europe with Snam (-6.7%) and Terna (-11.5%) sharply lower following Mediobanca cutting rating on both companies in reaction to the Italian energy regulator’s gas storage remuneration decision. Italy’s Monte Paschi continues to be halted first down, then up, after tumbling again earlier today, then surging, but in any event is now 40% lower since the stress test results were announced. Elsewhere, HSBC (-0.3%) reported this morning and trade with modest losses after they fell short of expectations and set aside USD 378mln in provisions for FX investigations. Furthermore, Ryanair (+9.1%) have lifted UK airliners after their pre-market update where they lifted their forecast, with easyJet and IAG leading the FTSE 100. With macro newsflow relatively light over the weekend, fixed income products have seen a flight to quality and have traded in the green throughout the session.
Of course, by now everyone knows that the traditional pattern is weakness at the US open, ramping into Europe close, then ramping some more to preserve faith in central planning. Today should be no different.
Looking at today’s economic calendar, we have U.S. manufacturing PMI, ISM manufacturing, construction spending, vehicle sales due later.
In short: European shares remain lower with the utilities and health care sectors underperforming and travel & leisure, basic resources outperforming. Euro-area October manufacturing PMI was below estimates, U.K. PMI above. Companies including HSBC, Holcim Ryanair issued results. The Italian and Spanish markets are the worst-performing larger bourses, the Dutch the best. The euro is weaker against the dollar. Spanish 10yr bond yields rise; Greek yields increase. Commodities gain, with soybeans, corn underperforming and natural gas outperforming.
- S&P 500 futures down 0.1% to 2010.1
- Stoxx 600 down 0.2% to 336
- US 10Yr yield down 1bps to 2.33%
- German 10Yr yield at 0.84%
- MSCI Asia Pacific down 0.8% to 140.8
- Gold spot down 0.1% to $1172.5/oz
Bulletin Headline Summary
- Lacklustre Chinese and Eurozone manufacturing PMIs dictate the price action in Europe with equities trading in a sea of red.
- USD/JPY breaks above overnight highs at 112.99 and trips stops through 113.00 to trade at its highest level in 7 years.
- Looking ahead, attention turns towards US manufacturing PMI, ISM manufacturing and any comments from ECB’s Constancio, Fed’s Evans and Nowotny after the European close.
- Treasuries steady before Markit and ISM manufacturing PMIs as traders await ECB rate decision and Draghi press conference Thursday, October payrolls on Friday.
- U.K. manufacturing growth accelerated to the fastest pace in three months in October as buoyant domestic demand offset weakening sales to the embattled euro region
- European manufacturing barely grew last month as factory output in France and Italy shrank
- Last week’s easing moves by the BOJ and Sweden’s Riksbank leave Draghi under pressure to intensify his own response to weak inflation or surrender in a renewed global currency war that has policy makers looking to jolt consumer prices by embracing weaker exchange rates
- China’s official services PMI fell to 53.8 in October, a nine month low, from 54 the previous month; China’s manufacturing PMI fell to 50.8 from 51.1 in September
- China is opening its 26.31t yuan ($4.3 trillion) interbank bond market to non-financial firms after tightening trading rules following a crackdown on illegal transactions
- BOJ’s unexpected expansion of stimulus puts the spotlight back on Abe’s economic policies and the decision he faces on raising the sales tax
- While corporate profits are higher, the yen is lower and stocks have surged 57% since Abe came to office 22 months ago, sustained economic expansion remains elusive
- Democrats’ 55-45 control of the Senate is in jeopardy, polls indicate before voting tomorrow, with candidates trailing in Montana, West Virginia and South Dakota and incumbents in varying degrees of trouble in Arkansas, Colorado, Louisiana, North Carolina and New Hampshire
- Business Secretary Vince Cable said European leaders are frustrated by U.K. attempts to pick apart key aspects of the European Union’s founding principles, branding it a “dangerous” course for Britain to take
- Spanish Prime Minister Mariano Rajoy is being challenged on a second front as support for the anti-establishment Podemos party surges before an informal ballot on Catalonian independence
- $103.48b IG priced in October, $26.92b high yield. BofAML Corporate Master Index OAS holds at 127; YTD range 106-132. High Yield Master II OAS narrows 5bps to 430; YTD range 508-335bps. CDX High Yield closed at 107.01 from 106.62; YTD range 104.52-109.15
- Sovereign yields mixed; peripheral EU yields higher. Asian stocks mixed; Tokyo closed for holiday. European stocks, U.S. equity-index futures decline. Brent crude steady, copper and gold lower
FX markets, remain relatively tentative, with price action in EUR/USD muted after tumbling to Aug’12 levels overnight after tripping sell stops at the 1.2500 handle to break below Friday’s lows at 1.2585. However, moving forward, price action for the pair may be largely dictated by a raft of option expiries with 3bln due to roll-off for EUR/USD at 1.2500 tomorrow. GBP/USD has been one of the sessions other notable movers following the better than expected UK manufacturing report (53.2 vs. Exp. 51.4) which came in at its highest level since July and pushed the pair back above the 1.6000 handle. USD/JPY trades at its highest level in 7 years after breaking above the overnight high of 112.99 and tripping stops to the upside at 113.00. The move saw USD/JPY take out an option barrier at 113.00, with the next one said to be placed at 113.50 and stops also said to be placed at 113.20.
Heading into the North American open WTI crude futures have moved back into positive territory, shrugging off overnight losses following the weak Chinese data, which has placed weight on the precious metals sector. Overnight, precious metals weakened again as the USD resumed its recent rally following the surprise BoJ announcement, with gold (-0.31%) initially falling to near the four-year low it hit on Friday. Silver prices fell in tandem and declined for a fourth successive session to their lowest since February 2010.
Venezuela and Ecuador are working on a joint proposal to defend oil prices that the two countries will present at the next OPEC meeting, according to the Venezuelan PM. (RTRS) As a guide, the next OPEC meeting is scheduled for Nov. 27th
Pro-Russian rebels have voted to set up a separatist leadership in eastern Ukraine, taking the region closer to Russia and defying Kiev and the West, as shelling continues across the country. (RTRS)
* * *
DB’s Jim Reid concludes the overnight recap
After one of the mildest Octobers on record in the UK it seems a shame to welcome in November and what will most likely soon be a cold spell to shock the system. As part of our seemingly endless house renovations we’ve just had one of those new heating systems installed that are zoned and controlled by an app and hopefully will save us money over the medium term. I’ve been waiting for a cold spell to check on my wife’s heating consumption when I’m not there as I can see it all at the touch of a button on my phone. So far its been too warm to need it but things will change soon no doubt. Its fair to say that I tend to put the heating on as late in the year as I possibly can whereas my wife is not impartial to a little boost in August if the weather is unkind. During this mild autumn there have been no arguments. I fear it won’t be long before tensions start though but I at least now have the technology to override from wherever I am in the world. I suspect it will be a brave move to use this veto though.
As its now November we produce our regular cross asset class performance review at the end with all the usual charts and tables in the pdf. Its clearly been a fascinating month and one where the hint of future central bank action (and then on the last day actual action from the BoJ) was enough to see huge swings from the lows.
Central banks continue to be the main story in financial markets and this week attention will move firmly towards the ECB. A few people asked me on Friday as to whether the BoJ surprise move on Friday took the pressure off the ECB or put it firmly back on them. Overall I would say the latter as although the BoJ’s increase in purchases aren’t huge, it does send a message that they are determined to carry on printing money if needed and are clearly prepared to use the currency to help meet their inflation goal of 2%. They’re now buying JPY80tln of paper per month which is getting to within 15-20% of what the Fed were doing at their peak despite being an economy less than a third of the size. Even with that you still don’t get the impression that the BoJ will stop until they’ve succeeded or the policy spectacularly fails. In the meantime if Europe stands still the risk is a repeat of the domestic inflation dip that originated from the last big Yen devaluation from the middle of 2012 to the start of 2014 when EURJPY moved from around 95 to nearly 145 (around 141 currently). Indeed we think the BoJ’s move and likely ECB future move still makes QE4 in the US a realistic possibility when the next US growth slowdown occurs. If there is a global currency war, a stronger dollar will mean the US is unlikely to be able to get rates high enough in this cycle to be able to avoid unconventional policy again in the future. So we still think central banks are trapped into years of money printing ahead.
As for this week, DB’s Mark Wall thinks that if the ECB simply repeat the line that the Council “remains unanimous in its commitment to other unconventional policies if necessary” then it will disappoint the market. So as a minimum they probably need to hint at more accommodation at their December meeting. Its perhaps pretty unrealistic to expect a BoJ-style surprise initiative this week though. Public QE is likely coming but it feels like more of a 2015 story as consensus will take time to build on the council.
Looking at news over the weekend, the main headline was China’s official manufacturing PMI which printed below expectations at 50.8 (51.2 exp.), down from 51.1 in September and marking a five month low. The new orders index didn’t fare much better, 0.6pts lower at 51.6 whilst the input prices index declined 2.3pts to 45.1. This has been followed up this morning with further data in China including a fairly subdued non-manufacturing PMI (53.8 vs. 54 in September) and an HSBC manufacturing PMI of 50.4, unchanged on the reading earlier in the month. Markets are fairly mixed overnight with bourses in Hong Kong, Korea and Australia -0.3%, -0.8% and -0.4% respectively as we type whilst Chinese equities are firmer (+0.3%) despite the softer prints. Japan is closed for a public holiday.
Just recapping a busy day of price action on Friday, the Nikkei closed just shy of intra-day highs at +4.8% whilst the S&P rallied 1.2% and CDX IG tightened 2bps. Treasuries were unsurprisingly weaker given the risk on sentiment with the 10y 3bps wider. The Dollar index rallied 1% including a 2.3% gain versus the Yen whilst Gold declined 2.1%. With the focus on Japan, the data prints went almost unnoticed on Friday with a solid October University of Michigan consumer sentiment reading (86.9 vs. 86.4 in September) and a 5.7 point rise in Chicago PMI offset by softer September personal spending (-0.2% mom vs.0.1% mom expected). The September personal income print (0.2% mom vs. 0.1% expected) and the PCE deflator (0.1% vs. 0.1% expected) rounded off the readings.
On this side of the Atlantic the Stoxx 600 finished +1.8% on Friday to close out a strong week. The soft European inflation prints helped support calls for future ECB stimulus with the core inflation reading marginally lower at 0.7% yoy (0.8% yoy expected) and unemployment unchanged at 11.5%. There were further disappointing prints in France with consumer spending declining 0.8% mom (-0.3% expected) and German retail sales -3.2% mom (-0.9% mom expected) although the numbers were perhaps impacted by holiday timings.
Closer to home, UK banks rallied following news from the Bank of England on Friday that the rules around leverage would be less stringent than widely expected. The BoE have stated that important lenders will face a basic leverage ratio of 4.05% from 2019 with a further buffer of 0.9% for excessive lending, following expectations that the basic ratio could be set at around 5%. Barclays shares surged over 8% on Friday following the news after previous worries that the bank was most at risk whilst RBS, HSBC and Lloyds all rallied on the day. UK Bank credit, especially AT1s, also benefited.
Away from the core markets, Brazil was back in the headlines as it reported its largest monthly deficit on record. The overall public sector deficit of R$69.4bn was the worst since records began in 2001 and comes following a heightened election process and surprising rate hike last week. The BRL depreciated 2.5% versus the Dollar on the back of the print whilst our Emerging Markets colleagues noted the considerable uncertainties around government fiscal plans for next year.
Before we run through the main highlights this week, one thing to note on the agenda are the midterm elections in the US with the result due on Wednesday. The view is largely that Republicans will take control of the Senate, however a result whereby the Senate becomes divided could add some volatility to markets.
As for the rest of the week ahead before we get to ECB Thursday we have a pretty full calendar and then payrolls finishing off the week the day after. Today we kick off with the ISM reading in the US as well as construction spending and motor vehicle sales whilst across the pond we’ll first see PMI prints for the Eurozone as well as regionally in France, Germany and Spain. Tuesday will see Eurozone PPI and we will keep an eye for any interesting comments to come out of ECB’s Costa speaking on the Portuguese economy the same day. We’ll also see the mid-term elections in the US which will be interesting. There will be a lot to digest on Wednesday as we await ADP, the non-manufacturing ISM print in the US along with services PMI in China and retail sales readings in Europe and various composite and services PMI prints across the continent. This all comes at the same time as various members of the Fed are speaking, in particular we’ve got Kocherlakota commenting on monetary policy and Lacker speaking on financial stability. At the back end of the week it’s time for claims data in the US on Thursday along with the remaining PMI prints in Europe. We round out the week with industrial production in Germany and the ever important payrolls data on Friday in the US. Our US colleagues expect a print of 225k. In case that wasn’t enough to digest, we’ve got earnings reports from 84 S&P500 companies and 101 Stoxx 600 companies for us analyze. The standout names include Walt-Disney and Time Warner in the US and closer to home HSBC, Santander and Astra-Zeneca will be reporting.
Sunday night, the Euro crashes:
(courtesy zero hedge)
Euro Suddenly Crashes On No News
Two weeks ago, this happened to the world’s allegedly most liquid On The Run bond on no news, which subsequently sent the entire market plunging before James Bullard was forced to hint at QE4 and send the market into a short-selling spasm (and a Bank of Japan hyperinflationary Hail Mary) that has since seen it hit record highs.
Now, the “stability” of the world’s (formerly) most liquid market has shifted to what used to be the most liquid FX pair, the EURUSD (as well as the EURJPY), which moments ago, on no new whatsoever – again – imploded, plunging to the weakest level since August 2012, on what appears to have been a massive 1.25 stop hunt.
One of these days, the V-shaped recovery that every BTFDer has grown to love and expect in every of these broken markets, be it equity, bond or FX, will not come. What happens then is unknown.
(courtesy zero hedge)
Not Again! US Trained Syrian “Moderates” Surrender To Jihadists – Hand Over Heavy Weapons
Despite the Obama Administration continuing to insist that its strategy in Syria is “working,” The Telegraph reports that two of the main rebel groups receiving weapons from the US to fight both the regime and jihadist groups in Syria have surrendered to al-Qaeda. Rather stunningly, the Syrian Revolutionary Front, one of the largest “vetted, moderate” US-backed rebel forces, has been effectively wiped out; and has handed over all their weapons and bases including US-provided anti-tank missiles and GRAD rockets. Simply out, “as a movement, the SRF is effectively finished,” but apart from that US foreign policy is ‘nailing it’. As The Telegraph concludes, for the US, the weapons they supplied falling into the hands of al-Qaeda is a realisation of a nightmare.
West Texas Intermediate oil plunges to a 29 month low;
(courtesy zero hedge)
WTI Tumbles To 29-Month Lows After Saudi Price Cut
After initially jerking higher after Saudi Arabia released its new ‘lower-prices-for-the-US’ strategy, it appears the market began to realize that in fact – as we warned –Saudi Arabia may be willing to accept prices “lower for longer.” WTI futures are trading below $78.50 – the lowest since June 2012 (and its dragging Trannies lower today)…
Saudi Arabia, the world’s biggest oil exporter, is telling the market it won’t cut output to lift crude back to $100 a barrel and that prices must fall further before it does so, according to consultant FACTS Global Energy.
Swelling supplies from non-OPEC producers drove Brent crude into a bear market on Oct. 8 amid waning demand from China, the world’s second-largest importer. The Organization of Petroleum Exporting Countries meets Nov. 27 to consider changing its production target in the face of the highest U.S. crude output in almost 30 years.
“Production of shale oil in the U.S. will not be hit as hard as the Saudis think” by the price decline, FGE Chairman Fereidun Fesharaki said at a conference today in Doha, Qatar. Producers in the U.S. “can withstand a lot of pressure” by reining in their operating costs before they curb investment in new wells and production, he said.
The death of the Petrodollar:
(courtesy zero hedge)
How The Petrodollar Quietly Died, And Nobody Noticed
Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company – the end of the system that according to many has framed and facilitated the US Dollar’s reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held US-denominated assetsand printed US currency) loop.
The main thrust for this shift away from the USD, if primarily in the non-mainstream media, was that with Russia and China, as well as the rest of the BRIC nations, increasingly seeking to distance themselves from the US-led, “developed world” status quo spearheaded by the IMF, global trade would increasingly take place through bilateral arrangements which bypass the (Petro)dollar entirely. And sure enough, this has certainly been taking place, as first Russia and China, together with Iran, and ever more developing nations, have transacted among each other, bypassing the USD entirely, instead engaging in bilateral trade arrangements, leading to, among other thing, such discussions as, in today’s FT, why China’s Renminbi offshore market has gone from nothing to billions in a short space of time.
And yet, few would have believed that the Petrodollar did indeed quietly die, although ironically, without much input from either Russia or China, and paradoxically, mostly as a result of the actions of none other than the Fed itself, with its strong dollar policy, and to a lesser extent Saudi Arabia too, which by glutting the world with crude, first intended to crush Putin, and subsequently, to take out the US crude cost-curve, may have Plaxico’ed both itself, and its closest Petrodollar trading partner, the US of A.
As Reuters reports, for the first time in almost two decades, energy-exporting countries are set to pull their “petrodollars” out of world markets this year, citing a study by BNP Paribas (more details below). Basically, the Petrodollar, long serving as the US leverage to encourage and facilitate USD recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance.
A consequence of this year’s dramatic drop in oil prices, the shift is likely to cause global market liquidity to fall, the study showed.
This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.
But no more: “this year the oil producers will effectivelyimport capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”
In short, the Petrodollar may not have died per se, at least not yet since the USD is still holding on to the reserve currency title if only for just a little longer, but it has managed to price itself into irrelevance, which from a USD-recycling standpoint, is essentially the same thing.
According to BNP, Petrodollar recycling peaked at $511 billion in 2006, or just about the time crude prices were preparing to go to $200, per Goldman Sachs. It is also the time when capital markets hit all time highs, only without the artificial crutches of every single central bank propping up the S&P ponzi house of cards on a daily basis. What happened after is known to all…
“At its peak, about $500 billion a year was being recycled back into financial markets. This will be the first year in a long time that energy exporters will be sucking capital out,” said David Spegel, global head of emerging market sovereign and corporate Research at BNP.
Spegel acknowledged that the net withdrawal was small. But he added: “What is interesting is they are draining rather than providing capital that is moving global liquidity. If oil prices fall further in coming years, energy producers will need more capital even if just to repay bonds.”
In other words, oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.
Which is hardly great news: because in a world in which central banks are actively soaking up high-quality collateral, at a pace that is unprecedented in history, and led to the world’s allegedly most liquid bond market to suffer a 10-sigma move on October 15, the last thing the market needs is even less liquidity, and even sharper moves on ever less volume, until finally the next big sell order crushes the entire market or at least force the [NYSE|Nasdaq|BATS|Sigma X] to shut down indefinitely until further notice.
So what happens next, now that the primary USD-recycling mechanism of the past 2 decades is no longer applicable? Well, nothing good.
Here are the highlights of David Spegel’s note Energy price shock scenarios: Impact on EM ratings, funding gaps, debt, inflation and fiscal risks.
Whatever the reason, whether a function of supply, demand or political risks, oil prices plummeted in Q3 2014 and remain volatile. Theories related to the price plunge vary widely: some argue it is an additional means for Western allies in the Middle East to punish Russia. Others state it is the result of a price war between Opec and new shale oil producers. In the end, it may just reflect the traditional inverted relationship between the international value of the dollar and the price of hard-currency-based commodities (Figure 6). In any event, the impact of the energy price drop will be wide-ranging (if sustained) and will have implications for debt service costs, inflation, fiscal accounts and GDP growth.
Have you noticed a reduction of financial markets liquidity?
Outside from the domestic economic impact within EMs due to the downward oil price shock, we believe that the implications for financial market liquidity via the reduced recycling of petrodollars should not be underestimated.Because energy exporters do not fully invest their export receipts and effectively ‘save’ a considerable portion of their income, these surplus funds find their way back into bank deposits (fuelling the loan market) as well as into financial markets and other assets. This capital has helped fund debt among importers, helping to boost overall growth as well as other financial markets liquidity conditions.
Last year, capital flows from energy exporting countries (see list in Figure 12) amounted to USD812bn (Figure 3), with USD109bn taking the form of financial portfolio capital and USD177bn in the form of direct equity investment and USD527bn of other capital over half of which we estimate made its way into bank deposits (ie and therefore mostly into loan markets).
The recycling of petro-dollars has benefited financial markets liquidity conditions. However, this year, we expect that incremental liquidity typically provided by such recycled flows will be markedly reduced, estimating that direct and other capital outflows from energy exporters will have declined by USD253bn YoY. Of course, these economies also receive inward capital, so on a net basis, the additional capital provided externally is much lower. This year, we expect that net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity – not to mention related downward pressure on US Treasury yields– is negative.
* * *
Even scarcer liquidity in US Capital markets aside, this is how BNP sees the inflation and growth for energy exporters:
Household consumption benefits: While we recognise that the relationship is not entirely linear, we use inflation basket weights for ‘transportation’ and ‘household & utilities’ (shown in the ‘Economic components’ section of Figure 27) as a means to address the differing demand elasticities prevalent across countries. These act as our proxy for consumption the consumption basket in order to determine the economic benefit that would result as lower energy prices improve household disposable income. This is weighted by the level of domestic consumption relative to the economy, which we also show in the ‘Economic components’ section of Figure 27.
Reduced industrial production costs: Outside the energy industry, manufacturers will benefit from falling operating costs. Agriculture will not benefit as much and services will benefit even less.
Trade gains and losses: Lost trade as a result of lower demand from oil-producing trade partners will impact both growth and the current account balance. On the other hand, better consumption from many energy-importing trade partners will provide some offset. The percentage of each country’s exports to energy producing partners represents relative to its total exports is used to determine potential lost growth and CAR due to lower demand from trade partners.
Domestic FX moves are beyond the scope of our analysis. These will be tied to the level of openness of the economy and the impact of changed demand conditions among trade partners as well as dollar effects. Neither do we address non-oil related political risks (eg sanctions) or any fiscal or monetary policy responses to oil shocks.
The least impacted oil producing country, from a GDP perspective, is Brazil followed by Mexico, Argentina, Tunisia and Trinidad & Tobago. The impact on fiscal accounts also appears lower for these than most other EMs.
Remarkably, the impact of lower oil for Russia’s economic growth is not as severe as might be expected. Sustained oil at USD80/bbl would see growth slow by 1.8pp to 0.6%. This compares with the worst hit economies of Angola (where growth is nearly 8pp lower at -2%), Iraq (GDP slows to -1.6% from 4.5% growth), Kazakhstan and Azerbaijan (growth falls to -0.9% from 5.8%).
For a drop to USD 80/bbl, it can be seen (in Figure 27) that, in some cases, such as the UAE, Qatar and Kuwait, the negative impact on GDP can be comfortably offset by fiscal stimulus. These economies will probably benefit from such a policy in which case our ‘model-based’ GDP growth estimate would represent the low end of the likely outcome (unless a fiscal policy response is not forthcoming).
Global growth in 2015? More like how great will the hit to GDP be if oil prices don’t rebound immediately?
On the whole, we can say that the fall in oil prices will prove negative, shaving 0.4pp from 2015 EM GDP growth. The collective current account balance will fall 0.58pp to 0.6% of GDP, while the budget deficit will deteriorate by 0.61pp to -2.9%. This probably has the worst implications for EM as an asset class in the credit world.
Energy exporters will fare worst, with growth falling by 1.9pp and their current account balances suffering negative pressure to the tune of 2.69pp of GDP. Budget balances will suffer a 1.67pp of GDP fall, despite benefits from lower subsidy costs. The impact of oil falling USD 25/bbl will be likely to put push the current account balance into deficit, with our analysis indicating a 0.3% of GDP deficit from a 2.4% surplus before. Fortunately, the benefit to inflation will be the best in EM and could help offset some of the political risks from reduced growth.
As might be expected, energy importers will benefit by 0.4pp better growth in this scenario. Their collective current account will improve by 0.6pp to 1.1% of GDP.
The regions worst hit are the Middle East, with GDP growth slowing to 0.3%, which is 3.8pp lower than when oil was averaging USD105/bbl.The regions’ fiscal accounts will also suffer most in EM, moving from a 1.7% of GDP surplus to a 1.8% deficit. Meanwhile, the CAB will drop 5.3pp, although remain in surplus at 3.9%. The CIS is the next-worst hit, from a GDP perspective, with regional growth flat-lined versus 1.91% previously. The region’s fiscal deficit will worsen from 0.7% of GDP to -1.8% and CAB shrink to 0.7% from 3% of GDP. Africa’s growth will come in 1.4pp slower at 2.8% while Latam growth will be 0.4pp slower at 2.2%. For Africa, the CAB/GDP ratio will fall by 2.4pp pushing it deep into deficit (-2.9% of GDP).
Some regions benefit, however, with Asia ex-China growing 0.45bpp faster at 5.5% and EM Europe (ex-CIS) growing 0.55pp faster at 3.9%, with the region’s CAB/GDP improving 0.69pp, although remain in deficit to the tune of -2.4% of GDP.
* * *
And so on, but to summarize, here are the key points once more:
- The stronger US dollar is having an inverse impact on dollar-denominated commodity prices, including oil. This will affect emerging market (EM) credit quality in various ways.
- The implications of reduced recycled petrodollars has significant ramifications for financial markets, loan markets and Treasury yields. In fact, EM energy exporters will post their first net drain on global capital (USD8bn) in eighteen years.
- Oil and gas exporting EMs account for 26% of total EM GDP and 21% of external bonds.For these economies, the impact will be on lost fiscal revenue, lost GDP growth and the contribution to reserves of oil and gas-related export receipts. Together, these will have a significant effect on sustainability and liquidity ratios and as a consequence are negative for dollar debt-servicing risks and credit ratings.
USA/JAPAN YEN 112.90 up .86
This morning in Europe, the euro is well down, trading now just at the 1.25 level at 1.2500
as Europe reacts to deflation and bourses crumble. Abe went all in with Abenomics with another round of QE purchasing 80 trilllion yen from 70 trillion. The yen is down a ton and it closed in Japan falling by 86 basis points at 112.90 yen to the dollar. The pound is basically flat as it now trades just at the 1.60 level to 1.6000.
Early Monday morning USA 10 year bond yield: 2.34% !!! par in basis points from Friday night/
The NIKKEI: Monday morning holiday
Trading from Europe and Asia:
1. Europe all in the red
2/ Asian bourses all in the red except Shanghai / Chinese bourses: Hang Sang in the red, Shanghai in the green, Australia in the red: red/Nikkei (Japan) holiday/India’s Sensex in the red/
Gold early morning trading: $1172.00
Your closing Spanish 10 year government bond Mondayday/ down 7 in basis points in yield from Friday night.
Spanish 10 year bond yield: 2.14% !!!!!! up 5 basis points.
Your Monday closing Italian 10 year bond yield: 2.41 up 5 in basis points:
trading 27 basis points higher than Spain:
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Monday night/USA dollar index/USA 10 yr bond: currencies falling apart this afternoon
Euro/USA: 1.2490 down .0029
USA/Japan: 113.76 up 1.45
Great Britain/USA: 1.5979 down .0015
USA/Canada: 1.1359 up .0095
The euro fell quite a bit in value during this afternoon’s session, and it was down by closing time , closing well below the 1.25 level to 1.2490. The yen was down a tonne during the afternoon session,and it lost 145 basis points on the day closing well above the 113 cross at 113.76. The British pound lost some ground during the afternoon session and was down on the day breaking the 160 barrier at 1.5979. The Canadian dollar was down a lot in the afternoon and was down on the day at 1.1359 to the dollar.
Currency wars at their finest today.
Your closing USA dollar index: 87.29 up 39 cents on the day!!!!
your 10 year USA bond yield ,par in basis points on the day: 2.34%
European and Dow Jones stock index closes:
England FTSE down 58.50 or 0.89%
Paris CAC down 39.06 or 0.92%
German Dax down 75.17 or 0.81%
Spain’s Ibex down 103.40 or 0.99%
Italian FTSE-MIB down 414.96 or 2.10%
Nasdaq; up 8.16 or 0.18%
OIL: WTI 78.15
And now for your big USA stories
Today’s NY trading:
(courtesy zero hedge)
Stocks Pump (On ‘Bad’ Data) And Dump (On ‘Good’ Oil Price Cuts)
As we noted earlier, something is seriously broken in these ‘markets’ and when the head of Blackrock appears on CNBC and uses the “cash on the sidelines” meme to justify stocks going higher (which is unbridled idiocy remember), we suspect even the big boys are getting nervous about the decouplings, illiquidity, and BoJ-driven exuberance. The early pre-open ramp in stocks was quickly eviscerated as data missed (PMI & Construction Spending) and stocks retraced back to bond reality… but ‘they’ needed all-time highs to run some more stops as USDJPY burst to 114. Once those highs in US equyities were tagged and traders realized what the Saudi actions regarding oil prices meant, WTI plunged and dragged stocks with it. Bonds, oil, HY credit, and VIX all decoupled from stocks.
The other decoupling
Disappointing day – but we are sure a victory for the bulls…
Quite a day for homebuilders (dump-and-pump on piss-poor housing data) and Enertgy pump-and-dump on Saudi news)
Post-Saudi price cuts, stocks pumped (yay lower prices) then dumped (wait the Saudis are screwing us?!)
As stocks played catch down to bonds 3 times…
Driven by oil prices – today higher oil was a good thing, lower a bad thing again…
VIX decoupled notably from stocks today…
Treasuries close the day mixed (30Y -1bps, 2Y +2bps) as traders sold bonds in Europe and boiught them in the US session
The USDollar closes the day up 0.4%
And commodities were generally mixed (gold down,silver unch, coppe rup) but crude was monkey-hammered
Oil pumped (yay they raised prices on Asia, Europe), then dumped (waity they cut US prices!)
Of course, Japanese stocks didn’t give a shit – all they want is a JPY that is crushed Venezuela-style…
Bonus Chart: Commodity vol remains very elevated and FX vol is picking up again…
Bonus Bonus Chart: Asness on the unbrdidled idiocy of ‘cash on the sidelines’
(courtesy Economic collapse blog)
Most People Cannot Even Imagine That An Economic Collapse Is Coming
(courtesy zero hedge)
Yellen Shocked After Fisher Again Reveals Fed Is Source Of Record Inequality
s Janet Yellen prepares to meet with President Obama this morning for the first time, it appears The Dallas Fed’s Richard Fisher has planted a rather uncomfortable tape bomb for her to explain:
- FISHER: QE3 WAS A GIFT TO THE RICH
So right before the Midterm elections, a week after Janet Yellen discussed inequality, she is summoned to meet with The ‘fair’ President to explain how her policy is keeping Obama’s dream alive?
* * *
Janet Yellen becomes aware of the inequality “problem”…
And maybe understands why…
* * *
To those that suggest QE was a victory, we have words and pictures…
If it was so successful, why did they stop?
and does this look like the chart of a successful monetary policy action?
Well, yes, if one believes the lies:
- Bernanke 4/22/14: FED ACTIONS DIDN’T FAVOR WALL STREET OVER MAIN STREET
Q.E. er D.
That is all for today
I will see you Tuesday night
bye for now