Nov 4.2014: GLD inventory falls another 2.39 tonnes to 238.82 tonnes/SLV inventory rises by 1.15 million oz to 345.524 million oz/Mutiny at the ECB/
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Gold: $1167.40 down $1.90
Silver: $15.93 down 26 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 251.94 tonnes for a loss of 51 tonnes over that period. Today the loss was slightly over 10 tonnes.
I am deeply concerned that most of the gold that enters as a deposit at the comex are of the kilobar variety i.e. exact multiples of 32.15 oz
In silver, the open interest continues to remain extremely high and today we are close to multi year highs at 175,819 contracts.
To boot, the December silver OI remains extremely high at 116,836.
Today, we had a huge withdrawal of gold Inventory at the GLD of 2.39 tonnes/ inventory rests tonight at 738.82 tonnes.
In silver, strangely again we see that the SLV inventory actually rose by 1,150,000 oz:
SLV’s inventory rose and rests at 345.524 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 4 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
-.05% -015% + .0175% + .07% + .1775%
Nov 3 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
-.0475% + +.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 1205 contracts from 416,728 down to 415,523 with gold down $1.70 on yesterday. Not too many longs left the arena despite the drop in gold price. The next delivery month is November and here the OI actually rose by 10 contracts. We had 0 delivery notices filed on yesterday so we gained back the 10 contracts we lost or 1000 oz of additional gold ounces will stand for the November contact delivery month. The big December contract month saw it’s Oi fall by 3,014 contracts down to 265,110. The estimated volume today was fair at 123,953 . The confirmed volume yesterday was also fair at 150,286. Strangely on this 3rd day of notices, we had 0 notices filed for nil oz.
The fun continues with the silver comex results. The total OI fell marginally by 1523 contracts from 177,342 down to 175,819 with silver up 10 cents. It looks like we are having a few short shorts leave the area. In ounces, this represents a total of 879 million oz or 125.5% of annual global supply. We are now in the non active silver contract month of November and here the OI actually rose by 14 contracts up to 133. We had 3 notices filed on yesterday so we gained 17 contracts or we have an additional 85000 oz will stand for the November contract month. The big December active contract month saw it’s OI fall by 2435 contracts down to 116,868. In ounces this is represented by 584 million oz or 83.4% of annual global production (production = 700 million oz – China). The estimated volume today was fair at 34,690. The confirmed volume yesterday was excellent at 44,863. We also had 22 notices filed on first day notice for 110,000 oz.
Data for the November delivery month.
November initial standings
Withdrawals from Dealers Inventory in oz
|71,639.16 oz (Scotia)|
Withdrawals from Customer Inventory in oz
|333,481.218 oz(HSBC,JPM,Manfra,Scotia)includes 3000 kilobars from Scotia|
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
|23,469.50 oz (Manfra,Scotia)730 Kilobars|
No of oz served (contracts) today
0 contracts( nil 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 1 dealer transactions
i) out of Scotia: 71,639.16 oz
total dealer withdrawal: 71,639.16 oz
total dealer deposit: nil oz
we had 4 customer withdrawals: and again we had these wonderful kilobar transactions
i) Out of HSBC: 196,764.679 oz
ii) Out of JPM: 3,881.833 oz
iii) Out of Manfra: 36,384.706 oz
iv) Out of Scotia: 96,450.00 oz (3,000 kilobars)
total customer withdrawals : 333,481.218 oz (10.372 tonnes)
we had 2 customer deposits:
i) Into Manfra: 964.5 oz (30 kilobars)
ii) Into Scotia: 22,505.00 oz (700 kilobars)
total customer deposit: 23,469.5 oz (730 kilobars)
We had 0 adjustments:
Total Dealer inventory: 874,140.811 or 27.189 tonnes
Total gold inventory (dealer and customer) = 8.100 million oz. (251.99) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 51 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 (65) – 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 initial standings:
2 (notices filed today x 100 oz + (65) OI for November – 0 (no of notices filed today = 6700 oz (.2083 tonnes)
we gained back our 1000 oz of gold standing for the November contract month.
November silver: initial standings
|Withdrawals from Dealers Inventory||79,740.85 oz (Scotia)|
|Withdrawals from Customer Inventory||830,488.80 oz
(CNT HSBC,JPM, Scotia)
|Deposits to the Dealer Inventory||nil|
|Deposits to the Customer Inventory||600,508.59 oz (CNT,Brinks)|
|No of oz served (contracts)||22 contracts (110,000 oz)|
|No of oz to be served (notices)||120 contracts (600,000 oz)|
|Total monthly oz silver served (contracts)||69 contracts (345,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||183,382.9. oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||2,058,755.4 oz|
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 1 dealer withdrawal:
i) out of Scotia: 79,740.85 oz
total dealer withdrawal: 79,740.85 oz
We had 4 customer withdrawals:
i)Out of Scotia: 661,550.49 oz
ii) Out of HSBC: 20,185.49 oz
iii) Out of JPMorgan: 121,477.72 oz
iv) Out of CNT: 27,275.100 oz
total customer withdrawal 830,488.80 oz
We had 2 customer deposits:
total customer deposits: 592,820.700 oz oz
we had 0 adjustments:
Total dealer inventory: 66.140 million oz
Total of all silver inventory (dealer and customer) 179.875 million oz.
The total number of notices filed on second day notice total 22 for 110,000 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 (69 ) x 5,000 oz to which we add the difference between the total OI for the front month of November(133) minus (the number of notices filed today (22) x 5,000 oz = the total number of silver oz standing so far in November.
Thus: 69 contracts x 5000 oz + (133) OI for the November contract month – 22 (the number of notices filed today) = amount standing or 900,000 oz
we gained 85,000 oz of silver standing.
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 4.2014: a huge withdrawal of 2.39 tonnes of gold/GLD inventory/738.82 tonnes
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.
Today, Nov 4. a huge withdrawal of 2.39 tonnes gold inventory at the GLD
inventory: 738.82 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: 738.82 tonnes.
And now for silver:
Nov 4.2014: wow!! we had another addition of 1.151 million oz of silver inventory/SLV inventory rises to 345.524
Please note the difference between GLD and SLV. The GLD has physical gold to send on its way to Shanghai/SLV has no silver to offer to the participants to give to various players..
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 10,1% percent to NAV in usa funds and Negative 10.0% to NAV for Cdn funds
Percentage of fund in gold 61.1%
Percentage of fund in silver:38.30%
( Nov 4/2014)
2. Sprott silver fund (PSLV): Premium to NAV falls to positive 4.30% NAV (Nov 4/2014)
3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.85% to NAV(Nov 4/2014)
Note: Sprott silver trust back hugely into positive territory at 4.30%.
Sprott physical gold trust is back in negative territory at -0.85%
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 Tuesday morning:
(courtesy Goldcore/Mark O’Byrne)
Germany’s Third Largest Political Party Sells
€1.6 Million of Gold In Two Weeks
Disillusionment with Europe’s single currency continues to grow with the cracks beginning to show in it’s heartland, Germany, where the third largest political party is now selling gold coins and bars to raise funds.
In a poll in September Alternative for Germany (AfD) were found to be Germany’s third most popular party. The rise of the Alternative for Germany (AfD) party saw it receive 10.6% of the vote in Thuringia and 12.2% in Brandenburg on 14 September. Two weeks earlier it secured its first regional government seats in Saxony.
AfD are not anti-EU per se and have distanced themselves from other eurosceptic parties. They see a future for Germany in the EU and embrace common markets but wish to see the European Monetary Union (EMU) and the euro itself wound up and a return to the Deutschmark.
In the past two weeks, in a bid to gain as much state funding as possible they have entered the gold bullion market with quite a degree of success. In Germany, the federal government will match, up to a value of €5 million, any funds raised privately by a political party. In a bid to get the full allocation of state funding, AfD have started to sell gold bullion online.
In the two weeks since the scheme was announced they have sold gold coins and bars worth a sizable €1.6 million.
There has been strong, broad based demand for precious metals in Germany in recent weeks and months due to concerns about the Eurozone, the Euro, the conflict with Russia and global uncertainties.
AfD have managed to sell a large volume of bullion bars and coins despite being unable to undercut the well established bullion dealers with whom they have been competing. This indicates that their customers are motivated to buy gold from them specifically because they support the party and it’s policies.
“I have always warned that we can not compete with the prices of the competition,” federal executive of the party Konrad Adam told Spiegel newspaper. “People should not feel deceived by our offer.”
The smash on silver and gold on Thursday and Friday of last week played into the AFD’s hands as it saw German people, both investors and savers, entering the market in droves to take advantage of the low prices.
Gold brokers across Germany described the manner in which demand for precious metals exploded last week as “a run.” Many have seen a sharp increase in demand and found their inventories insufficient to meet demand according to Goldreporter.
Germans have become more knowledgeable vis-a-vis precious metals in the last few years and indeed have a cultural affinity for gold due to the hyperinflation and to Hitler’s banning of gold ownership.
The benefits of owning a tangible, divisible asset that cannot be printed at will by a government is strong in the folk memory. The lack of a response of the Merkel government following the scandal which arose when the Federal Reserve refused Germany’s request to have it’s sovereign gold repatriated has also motivated many Germans to take matters of wealth protection into their own hands.
They, like many people in the world today, are electing to become their own central bank.
The prudence and patience for which Germans are admired are worthy of emulation in these times. It is wise to do ones own research into owning precious metals and if one does take a position in gold – be sure to own coins and bars in segregated, allocated vaults in safe jurisdictions such as Switzerland
Trust in one’s decision and your judgement and view the volatility of the market with equanimity.
The fragile global financial and monetary system is teetering on the edge of collapse and serious inflation and stagflation is very possibly on the cards.
In the event of a crisis it will be there to help protect you which may not necessarily be the case for paper money and digits on a computer screen.
Gold was gold at the dawn of time and will continue to be.
Get Breaking News and Updates on the Gold Market Here
Today’s AM fix was USD 1169.25, EUR 933.91 and GBP 730.55 per ounce.
Yesterday’s AM fix was USD 1,170.75, EUR 936.90 and GBP 731.90 per ounce.
Gold fell $5.50 or 0.47% to $1,166.90 per ounce yesterday and silver remained unchanged at $16.16 per ounce.
Importantly, for European buyers, gold has remained quite robust in euro terms and seen only slight falls in recent days. Gold in euros remains up 8% for the year so far. Given the problems in the eurozone – it looks very well supported above the €900 level.
Gold in Euros – Year to Date 2014 (Thomson Reuters)
Gold inched up higher today in London, as the U.S. dollar retreated from multi year highs and alleviated recent pressure on the yellow metal.
Bullion traded below a key support level of around $1,180 an ounce on Friday as investors weighed the Fed’s announcement of the end of QE and the news that the Bank of Japan vastly increased increased its money printing and debt monetisation experiment in a surprise move, lending strength to the dollar.
This downward pressure on gold triggered stop loss selling and sent gold down to $1,161.25, its lowest since July 2010. Traders are now awaiting the U.S. non-farm payrolls report on Friday for its impact on the dollar and ramifications for monetary policy.
Technical analysts show support for gold at $1,155 an ounce, the 61.8% retracement of gold’s rally from its 2008 lows to its 2011 record high at $1,920.30, and $1,180.
Unusually, Chinese buyers who normally buy on the dips did not appear to do so yesterday as measured by local premiums – an indicator of demand – which have failed to pick up in any big way.
Shanghai Gold Exchange premiums had fallen to a discount to the global price on Monday but recovered to a premium of $1-$2 an ounce today showing a pickup in demand. They are still far short of the $50 plus premiums seen last year but demand remains very robust with 60 tonnes taken delivery of on the SGE last week. Chinese gold demand alone is heading for some 2,000 metric tonnes again this year.
See Essential Guide to Storing Gold and Silver In Switzerland here
a very important commentary from James Turk and John Embry
James Turk states that both gold and silver are in backwardation.
John Embry talks about how silver is terribly undervalued!
(courtesy James Turk,John Embry/Kingworldnews/GATA)
Turk: Gold and silver in backwardation —
Embry: Silver is most undervalued asset
7:07p ET Monday, November 3, 2014
Dear Friend of GATA and Gold:
While central banks have pushed gold below the triple-bottom level of $1,180, GoldMoney founder and GATA consultant James Turk tells King World News today, it has come at the expense increased demand for real metal and has pushed both gold and silver into backwardation. An excerpt from the interview is posted at the KWN blog here:
And Sprott Asset Management’s John Embry tells KWN about the continuing manipulation of the silver market and says he considers silver the most undervalued asset he has ever seen:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
What else is new!! A criminal probe???/not a chance!!
JPMorgan faces U.S. criminal probe Into
By Hugh Son and Michael J. Moore
Monday, November 3, 2014
NEW YORK — JPMorgan Chase & Co. said today it faces a U.S. criminal probe into the firm’s foreign-exchange business and increased the upper end of its “reasonably possible losses” related to legal matters.
The lender is cooperating with a criminal investigation by the Department of Justice as well as inquiries by the Commodity Futures Trading Commission and regulators in Britain and elsewhere, the New York-based company said in its quarterly regulatory filing. Reasonably possible losses could be as much as $5.9 billion, the bank said, an increase of $1.3 billion since the end of June.
“These investigations are focused on the firm’s spot FX trading activities as well as controls applicable to those activities,” according to the filing. JPMorgan “continues to cooperate with these investigations and is engaged in discussions with DOJ and various regulatory and civil enforcement authorities about resolving their respective investigations.” …
For the remainder of the report:
Year-to-date sales stand at 38,041,000 coins for the second quickest pace ever, and are down just 2.9% from the January to October 2013 period when sales reached 39,175,000 coins. Last year, American Silver Eagles hit an all-time record at 42,675,000 coins. This year’s Silver Eagle sales total is already higher than annual sales of all but 2 years since the coins debuted in 1986.
American Eagle Gold Bullion Coins
September sales of American Eagle gold coins rallied 67,500 ounces for the highest total since the 2014-dated versions launched in January. Orders last month rose 16.4% from sales of 58,000 ounces in September and climbed 39.2% from the 48,500 ounces sold in October 2013.
Although higher on the month than a year ago, demand last year was still stronger overall. American Gold Eagle sales in the January to October period total 446,500 ounces, down 40.7% from the 752,500 ounces sold during the first ten months of 2013.
22-karat American Gold Eagles are produced in sizes of 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. These correspond to denominations on the coins of $50, $25, $10 and $5. All sizes gained in October for the second straight month.
American Buffalo Gold Bullion Coins
24-karat American Buffalo gold coins surged 21,000 for a 44.8% increase over the previous month and the highest total since 41,500 sold when the 2014-dates versions debuted in January. Orders rose 16.7% from the same time last year.
Sales through the first ten months of 2014 total 160,500 coins for a 26.4% drop from a year earlier when orders reached 218,000 coins.
American Eagle Platinum Bullion Coins
On Oct. 1, the United States Mint stopped selling American Eagle platinum coins. The 99.95% pure Platinum Eagles rose 400 on the day, bringing their year-to-date total to 16,700 coins. Until this year, the bullion coins had not been issued since 2008. In that year, annual sales combined to 33,700 ounces across sizes of 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. This year there is only the 1 oz size.
America the Beautiful Five Ounce Silver Bullion Coins
Lastly, orders of 2014 America the Beautiful Five Ounce Silver Bullion Coins climbed 5,100 in October after rising 9,200 in September. Monthly and total sales for the 99.9% pure silver coins are:
- Great Smoky Mountains National Park Five Ounce Silver Coins sold out at 33,000
- Shenandoah National Park Five Ounce Silver Coins gained 900 to 22,400
- Arches National Park Five Ounce Silver Coins stayed at 22,000
- Great Sand Dunes National Park Five Ounce Silver Coins rose 4,200 to 16,200
Sales of 2014 America the Beautiful Five Ounce Silver Bullion Coins totaled 93,600 or 468,000 ounces. That compares to 179,700 coins for 898,500 ounces through October of last year.
US Mint Bullion Sales by Product
Tables below offer U.S. Mint bullion sales by product. The first table lists October 2013 sales for comparison and then monthly sales between June and October of this year. The second table offers monthly sales figures between January and May. Totals are in the number of bullion coins sold, not in the amount of ounces.
June – October 2014 Sales of US Mint Bullion Coins
|Last Year Oct||Jun 2014||Jul 2014||Aug 2014||Sept 2014||Oct 2014||YTD Sales|
|$100 American Eagle Platinum Coins (1 oz)||N/A||700||0||700||2,700||400||16,700|
|$50 American Eagle Gold Coins (1 oz)||41,000||43,000||26,000||21,000||50,500||57,500||353,500|
|$25 American Eagle Gold Coins (1/2 oz)||3,000||2,000||0||0||5,000||6,000||38,000|
|$10 American Eagle Gold Coins (1/4 oz)||10,000||4,000||6,000||6,000||8,000||8,000||100,000|
|$5 American Eagle Gold Coins (1/10 oz)||35,000||35,000||25,000||25,000||30,000||50,000||490,000|
|$50 American Buffalo Gold Coins (1 oz)||18,000||16,000||5,500||8,000||14,500||21,000||160,500|
|ATB Silver Coins (5 oz)||6,600||21,400||2,000||9,200||9,800||5,100||93,600|
|American Silver Eagle Coins (1 oz)||3.087M||2.692M||1.975M||2.0075M||4.14M||5.79M||38.041M|
January – May 2014 Sales of US Mint Bullion Coins
|Jan 2014||Feb 2014||Mar 2014||Apr 2014||May 2014||YTD Sales|
|$100 American Eagle Platinum Coins (1 oz)||N/A||N/A||10,000||1,200||1,000||16,700|
|$50 American Eagle Gold Coins (1 oz)||62,500||22,000||16,000||26,000||29,000||353,500|
|$25 American Eagle Gold Coins (1/2 oz)||12,000||3,000||2,000||5,000||3,000||38,000|
|$10 American Eagle Gold Coins (1/4 oz)||28,000||10,000||4,000||20,000||6,000||100,000|
|$5 American Eagle Gold Coins (1/10 oz)||160,000||50,000||30,000||50,000||35,000||490,000|
|$50 American Buffalo Gold Coins (1 oz)||41,500||12,000||12,000||17,500||12,500||160,500|
|ATB Silver Coins (5 oz)||0||0||12,400||10,600||23,100||93,600|
|American Silver Eagle Coins (1 oz)||4.755M||3.750M||5.354M||3.569M||3.9885M||38.041M|
U.S. Mint bullion coins are sold in bulk to “Authorized Purchasers” who consist of major coin and precious metals dealers, brokerage companies, and other participating financial intermediaries. Bullion coins are usually priced at a few percentage points above the latest value of their precious metal content.
German Precious Metal Dealers Report Huge
Run on Silver Coins
Precious metal dealers in Germany have literally been run down after the latest slump in gold and silver. Wholesalers already expect deferred deliveries.
The latest plunge in gold and silver late last week has led to a sharp increase in demand by German precious metals investors, which also continued on Saturday. There was a particularly strong demand for silver coins. “On Thursday and Friday people had to draw numbers in order for us to control the run”, reports Andreas Heubach, CEO of Heubach Edelmetalle in Nuremberg. “On both days we sold each around 40,000 silver ounces – incredible”, he said. “Demand is back – and hysteria as well”, he evaluated.
“The run is tremendous, even today on a Saturday”, Christian Brenner, CEO of Philoro Edelmetalle GmbH in Leipzig and Berlin reports. Despite the high counter trade level in September, demand has increased by 100 percent, online-trade even soared by 300 percent.
“Run is not the right expression“, says René Lehmann of Münzland in Dresden. “We’ve seen up to 80 percent of our regular customers taking advantage of the slide to build up more positions. On those two days, on Thursday and Friday, we made approximately 50 percent of our monthly revenue”, he reports to Goldreporter. Maple Leaf (1 oz.), 1 kg Lunar and ½ oz. Great White Shark were particularly in demand, since Münzland had a special offer on them. In gold especially 1 oz. Maple Leaf and 1 oz. bars have been purchased. The ratio of buyers to sellers has generally been at 50 to 1.
Dominik Lochmann, CEO of ESG Edelmetall Service GmbH & Co. KG, confirms the surge in silver coins that are subject to differential taxation. Even higher taxed 1 kg silver bullion did very well.
Increased demand also for gold
The big German precious metal dealers also confirm the strong growth in turnover. Oliver Heuschuch, head of precious metal trades at Degussa Goldhandel GmbH, didn’t report to Goldreporter that there is a particular increase of demand for silver, but sales in general have “greatly improved”.
Robert Hartmann, CEO of Pro Aurum, was more specific: “On Thursday demand had improved considerably. On Friday we had 250 percent more business (tickets) than on average in the weeks before. But it were rather gold bullion and coins that people focused on. Silver demand rose about 1.5 times.“
And now for our more important paper stories
1. Stocks up on Asian bourses with the higher yen values to 113.35
2 Nikkei up 449 points or 2.73% after being up over 1000 points.
3. Europe stocks mainly up/Euro rises/ USA dollar index down at 87.17.
3b Japan 10 year yield at .46%/Japanese yen vs usa cross now at 113.35/
3c Nikkei now below 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 76.42 Brent: 82.41 /RUSSIA deeply hurt with these low oil prices/also USA shale oil in trouble
3g/ Gold down/yen down; yen above 113 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 $1171.00 dollars/ Silver: $16.05
4. USA 10 yr treasury bond at 2.32% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)/your early morning trading
Futures Fail To Surge On European
Commission Slashing Growth Outlook As
Crude Plunge Continues
Submitted by Tyler Durden on 11/04/2014 06:58 -0500
Despite last night’s Nikkei futures smash, in the hours that immediately followed, algos had an easy time levitating both European stocks and US futures on the usual no volume, until suddenly, a little after the European open, the European commission released an Easter egg when it finally admitted, with less than 2 months left in the year, that a European triple dip is in the card, when it slashed its May growth and inflation forecasts across the board for not only Europe but the rest of the world as well.
The commission said it now expects gross domestic product in the 18-country Eurozone to grow 0.8% this year, down from 1.2% growth it forecast this spring. In 2015, the eurozone economy will likely grow 1.1%, also less than the 1.7% growth seen in the spring. In 2016, growth in the currency union will rise to 1.7%, the commission said, as the WSJ summarized. Needless to say this latest set of expectations by Jean-Claude “You have to lie” Juncker, will also be severely over-optimstic, and we eagerly look ahead to 2015 growth being slashed to negative at the next EC growth revision in six months.
Yet what is strange is that while traditionally such a major downward growth revision would have been sufficient to send futures soaring – why: because in a world where only central banks are left, it means more central bank global bailouts of course – this time the adverse update actually had the impact of sending futures to their lows of the session, granted just a few tiny points since the market is clearly disconnected with even the most pro forma, non-GAAP version of reality, but the reaction direction was clearly unexpected.
Perhaps this is explained by the ongoing devastation in both WTI and Brent, which were trading at $76.70 and $82.50 at last check, both down almost 3% as the plan to use Saudi Arabia to crush Russia has instead backfired and the Saudi princes are now openly looking at destroying the US shale infrastructure, as we forecast in the worst, for Obama, scenario.
So looking at fixed income and equity markets, European equities enter the North American open, mostly in negative territory as participants shrug off initial BoJ-inspired gains, with attention instead turning towards the EU Commission who cut their Euro-Area growth and inflation forecasts for 2014 and 2015. The continuation of the slide seen in WTI prices has placed further heavy pressure on energy-related names, with the energy-heavy FTSE 100 being squeezed as a result. In terms of this morning’s earnings reports, they painted a relatively mixed picture with the notable outlier Hugo Boss (-5.7%) after they cut their FY forecasts. On an index specific basis, the FTSE MIB leads the way for Europe, with Banca Monte dei Paschi (+12.2%) higher after NIT Holding Limited said it has proposed a EUR 10bln investment for the Co.’s restructuring. Elsewhere in Italy, both Snam and Terna trade firmly in the green after yesterday’s heavy losses that buoyed the index.
Fixed income products initially softened alongside the higher open in European equities, with news that Apple are to launch Euro-denominated bonds and hawkish comments from ECB’s Nowotny who went against his ‘never say never’ attitude on Friday, also adding to the downside. Nonetheless, heading into the North American open Bunds have staged a turn around with some analysts suggesting that yesterday’s sell-off is somewhat overdone, with other analysts also suggesting short-covering head of the ECB on Thursday and thus prices have broken back above 151.00. However, this move was then further extended by the aforementioned EC forecasts, with German, France and Italy’s growth prospects all being cut.
In FX markets, AUD continues to recover from overnight losses, which stemmed from the Australian ABS revising their unemployment rate higher to 6.2% from 6.1%, with markets instead focusing on the RBA dropping their ‘AUD remains historically high’ phrase. Elsewhere, EUR/USD continues to remain magnetised by 5.9bln due to roll-off at 1.2500 for today’s NY cut, while GBP has slipped back below 1.6000 following the lacklustre UK construction PMI release (61.4 vs. Exp. 63.5 (Prev. 64.2)) which came in at a 5-month low. Furthermore, the USD-index has given back some of yesterday’s gains underpinning JPY and thus dragging USD/JPY back below 114.00.
WTI crude futures trade down USD 1.60 after extending on yesterday’s losses, with WTI closing below USD 80/bbl for the first time since 2012 after Saudi Arabia lowered its prices for US crude exports amid speculation that stockpiles increased. Saudi Arabia cut its price of oil to the US in December while raising prices to Asia. The state-owned producer Saudi Aramco lowered the premium for Arab light relative to us gulf coast benchmarks by USD 0.45 per barrel. Some analysts also suggest that the European Commission slashing their growth forecasts have also hampered energy prices due to the impact on demand for future oil consumption. Elsewhere, spot gold consolidated above recent lows overnight as the USD-index marginally weakened overnight while a lack of physical demand and weak technicals present a bleak outlook for the yellow metal.
European shares reverse earlier gains and fall with the oil & gas and tech sectors underperforming and real estate, financial services outperforming. The European Commission cut its growth forecasts for the euro area. Companies including Glencore, Santander, BMW and Continental had results.
Saudi Arabia cut prices for crude exports to U.S. customers. The Spanish and Dutch markets are the worst-performing larger bourses, the Swedish the best. The euro is stronger against the dollar. German 10yr bond yields fall; French yields decline.
Commodities decline, with WTI crude, Brent crude underperforming and natural gas outperforming. U.S. ISM New York, factory orders, trade balance due later.
- S&P 500 futures down 0.2% to 2007.5
- Stoxx 600 down 0.1% to 333.8
- US 10Yr yield down 2bps to 2.32%
- German 10Yr yield down 4bps to 0.81%
- MSCI Asia Pacific up 1.4% to 142.3
- Gold spot up 0.3% to $1169/oz
Bulletin headline summary from Bloomberg and Ransquawk
- European equities slip mostly into negative territory, shrugging off initial gains as focus shifts towards the EU Commission cutting their Euro-Area growth and inflation forecasts for 2014 and 2015.
- Energy markets continue to see further misery, with WTI at its lowest level since Oct’11 as participants continue to react to Saudi Arabia slashing prices for US crude exports.
- Looking ahead, attention turns towards the release of US trade balance, factory orders, API inventories and US mid-term elections
- Treasuries gain, led by long end, as traders await ADP tomorrow, ECB Thursday, October nonfarm payrolls Friday; bunds higher as European Commission cuts growth forecasts for euro region.
- European Commission lowers 2014 GDP forecast for euro region to 0.8% from 1.2%, 2015 to 1.1% from 1.7%; says inflation in the euro area will be even weaker than ECB predicts
- Japan’s Government Pension Investment Fund will have to buy $187b of Japanese and foreign equities to meet the asset-allocation targets it set last week, based on June holdings
- JGB 30Y yield has fallen as much as 20.5bps in two days to reach 1.39%, lowest since April 2013, following BOJ decision last week to boost bond purchases to JPY80t ($704b) annual pace
- Republicans appears poised to gain the six seats needed to win control of the Senate, even if that outcome isn’t immediately known late Tuesday or early Wednesday
- JPMorgan said it faces a U.S. criminal probe into forex dealings and boosted its maximum estimate for “reasonably possible” losses on legal cases to the highest in more than a year
- Oil tumbled, with West Texas Intermediate falling 2.6% to $76.75/bbl, as Saudi Arabia cut the cost of its crude to the U.S.
- Ukrainian President Petro Poroshenko said rebel-held elections in the country’s east violate a two-month-old cease-fire, as he threatened to scrap the law granting greater autonomy to the separatist regions
- Israel pushed forward with plans to build homes in east Jerusalem, defying U.S. criticism of measures that would expand the Israeli presence on territory the Palestinians claim for a future state
- China plans a $16.3b fund to finance construction of infrastructure linking its markets to three continents as President Xi Jinping pushes forward with his plans to revive the centuries-old Silk Road trading route
- Sovereign yields lower. Asian stocks mostly higher, Nikkei +2.7% as Japan returns from holiday. European stocks, U.S. equity-index futures decline. Brent crude lower, copper and gold gain
DB’s Jim Reid concludes the overnight recap
The conclusion from yesterday’s global PMIs was that the US are behaving like Real Madrid and Europe, and in particular Italy, like Liverpool. The final European manufacturing PMIs were generally a touch weaker with the Eurozone print revised lower to 50.6 with Italy the underperformer (49 vs 50.6 expected and 1.7 points lower than last month). The US surprised on the upside coming in at 59.0 (vs. 56.2 expected, +2.4 points on last month and the highest since March 2011). In the pdf today we’ve updated our PMI vs YoY equity table to take into account yesterday’s numbers. The data is based on a regression between the two variables over several years of data. This simple analysis suggests that given current ISMs, equity markets are too low in the US, Germany, UK and Spain and too high in Japan and Italy. However can the US PMI really stay at these levels if global activity continues to be soft and will Japan’s increased asset buying mean that Japan equities stay above where activity suggests it should be in a similar way to US equities did during QE3. The answer to the latter question is probably yes so we only use the table as a guide to valuations.
Markets in Europe were weaker yesterday following the softer data and some weaker corporate earnings. There also seemed to be fairly low expectations ahead of the ECB on Thursday which weighed on markets. The Eurostoxx closed -1.0% and the Dax -0.8% although the main underperformers were the peripheral assets led by the FTSE MIB with a 2.1% decline whilst 10 year yields in Italy and Spain rose 7bps with Portugal and Greece 12bps and 10bps higher respectively. The Euro sold off 0.35% versus the Dollar.
Italy’s data didn’t help the peripherals yesterday, and Spanish politics is quietly bubbling under the surface due to both ongoing Catalonian tensions and also with some chatter about Sunday’s El Pais poll putting Podemos – a left wing insurgent party set up only 10 months ago – in the lead nationally having seen support surge over the past month. Most observers think this is largely a protest reaction after recent political scandals but the evidence from Syriza in Greece, the Five Star movement in Italy and even UKIP in the UK (to name but a few) show that these new radical parties can create serious political shockwaves even if they’ve yet to make the leap into power. However the risk is that one day we may wake up to a maverick political leader elected somewhere in Europe given recent trends. The irony is that the ECB don’t want to let politicians off the hook and are therefore being careful with public QE. However the longer they leave it the higher the risk that they help elect politicians that will be much more confrontational towards them and ones that they will struggle to do business with at all.
Talking of elections, it’s the US mid-terms today and in my career I can’t remember such a low level of interest in it from a financial market point of view. Perhaps that’s because there’s been such a gridlock politically in recent years that nobody really expects much to change afterwards. Governments around the world are not really politically able to drive or shape growth at the moment and everything is being left to central bankers. It’s unlikely that much will changes after these elections.
Whilst we’re on the US price action was fairly volatile yesterday as an early boost from the PMI print was offset later in the day with a sell-off in the energy sector causing the S&P to close fairly flat (-0.01%). Credit markets mirrored the moves in equities whilst the DXY Index rallied a further 0.4%. Interestingly we saw the Fed’s Fisher applauding the FOMC’s action, or lack of it, in response to the recent market volatility after reporting that he chose to vote with the majority of policy makers last week. After dissenting against the September policy decision, Fisher acknowledged the positive wording in the statement this time round with regards to the labour market and mentioned that the US economy is headed towards increasing employment and inflation rising to the 2% target. Just wrapping up the US, yesterday we had the quarterly Fed bank lending survey which was fairly uneventful on the whole with a ‘modest net fraction of banks easing their standards’ during the period. The report also stating that a large majority of banks expect an increase in retail business lending over the next year.
Looking at markets in Asia this morning, there seems to be no sign of a breather in Japan following yesterdays public holiday as the Nikkei (+3.3%) and Topix (+3.0%) extend Friday’s rally, the former index briefly rose above the 17,000 level for the first time since 2007 whilst the Yen is 0.51% lower versus the Dollar and 30y JGB’s 13bps tighter. Elsewhere in Asia markets are largely muted with bourses in China, Hong Kong and Taiwan broadly unchanged. The Aussie Dollar is +0.46% versus the US Dollar as we type following strong retail sales data and a wider trade deficit whist the RBA kept rates on hold as expected.
Core markets aside, the Russian ruble weakened 0.8% versus the Dollar yesterday to extend declines to nearly 25% over the calendar year after Germany warned the nation of stronger sanctions following news that elections organized by pro-Russian rebels in eastern Ukraine were backed by a Russian foreign minister. Meanwhile a Reuters report yesterday quoted a senior NATO general as saying that ‘Russia’s border with eastern Ukraine has softened to the point of becoming completely porous’.
Before we look at the day ahead, it’s worth noting the movements in the oil price yesterday. Brent declined 2.1% and WTI -0.7% after Saudi Arabia, the largest OPEC producer, slashed prices for oil sold to the US. This follows price cuts earlier last month which prompted concerns over OPEC members looking to capture market share. As we reported in yesterday’s EMR, October was the month that Oil officially dipped into bear market territory and so far this month we’ve seen little evidence of this trend correcting.
Looking at the agenda today, we’ve got the European Commission forecasts to look forward to which will be interesting ahead of the ECB on Thursday. Peripheral nations will be worth keeping an eye on with the Spanish unemployment figure and ECB member Costa speaking at a conference on the Portuguese economy. Away from Europe and other than the mid-terms in the US, we’ve got the September factory orders print and the latest trade data which our US team highlighted yesterday could influence the Q3 GDP number.
Japanese stocks tumble over 400 points along with bond yields. the 20 yr bond yield
plummets to below 1.21 /
Japanese Stocks Tumble Over 400 Points;
Nikkei Futures Back Below 17,000, Bond Yields
One word – seppuku
Not laughing now eh?
Here’s one problem:
- *GPIF PANEL MEMBER SAYS GOVERNANCE LAW REFORM MAY TAKE A YEAR
We’re gonna need a biggerer QQE!
- *JAPAN’S 20-YEAR YIELD DROPS TO 1.21%, LOWEST SINCE APRIL 2013
Everyone is greatly rotating into JGBs! 20Y yield collapses 8bps!
back to crazy chaos levels from last year
And Japanese stocks plunge the most intraday in 10 days
Your big story of the day!!
(courtesy zero hedge)
Markets Slide As European Central Bankers
Mutiny: Challenge Draghi, Just Say No To QE
Game changer? It appears there is a mutiny afoot in Europe as Reuters and Bloomberg report that a number (rumored to be between 7 and 10) central bankers are set to challenge ECB head mario Draghi’s leadership style and question his decisions on quantitative easing. As Reuters reports, bankers faulted his secretiveness and communication style making it hard for ECB to take bolder steps.
- NATIONAL BANKERS FAULT SECRETIVENESS AND COMMUNICATION STYLE
- SOME MEMBERS PLAN TO RAISE CONCERNS AT GOVERNORS DINNER
- DRAGHI KEPT AIDES IN DARK ON POLICY STEPS
- IRRITATION COULD MAKE IT HARD FOR ECB TO TAKE BOLDER STEPS
National central bankers in the euro area plan to challenge European Central Bank chief Mario Draghi on Wednesday over what they see as his secretive management style and erratic communication and will urge him to act more collegially, ECB sources said.
The bankers are particularly angered that Draghi effectively set a target for increasing the ECB’s balance sheet immediately after the policy-making governing council explicitly agreed not to make any figure public, the sources said.
“We specifically agreed at the meeting… not to put any numbers on the table,” one central banker. “Draghi’s reference to the balance sheet of 2012 irritated a lot of colleagues. So he has had to backtrack a bit … to compensate.”
“This created exactly the expectations we wanted to avoid,” an ECB insider said. “Now everything we do is measured against the aim of increasing the balance sheet by a trillion (euros)… He created a rod for our own backs.”
Even members of the ECB’s executive board – the six-member inner circle that runs the bank – were not informed in advance about two key recent policy announcements, two sources said.
“Mario is more secretive… and less collegial. The national governors sometimes feel kept in the dark, out of the loop,” said one veteran ECB insider.
At times, Draghi has appeared to pay little attention to national governors’ comments in the monthly rate-setting meeting after chief economist Peter Praet and board member Benoit Coeure report on the economic situation and financial markets.
“He sits there with these three mobile phones in front of him and sometimes he’s sending text messages or going out to make or take phone calls,” one source usually in the room said. On at least one occasion, a national governor has skipped his turn to speak because Draghi was not present.
* * *
Stocks are not happy:
and peripheral bond spreads are cracking wider:
It seems that everybody knows that Europe is in a triple dip recession:
(courtesy Goldman Sachs/zero hedge)
Europe In Triple-Dip Recession, Goldman’s
Internal Model Finds
If today’s European Commission slashing of Euro GDP forecasts did not leave a warm and fuzzy feeling in Europeans that the greatest depression ever is proceeding just as planned, if not quite as “forecast” as the following chart shows, confirming yet again that when it comes topredicting the future nobody can hold a candle to the Fed, the IMF or Europe…
… then here is Goldman with the loudest warning yet, courtesy of its internal RETINA model, that Europe is now effectively in a triple-dip recession, with Q3 GDP for the Euro area at -0.2%.
From Goldman’s Huw Pill
RETINA retreats further into Q3 contraction
Bottom line: We are less than a fortnight away from Eurostat’s publication of its flash estimate of Q3 GDP growth in the Euro area. In today’s Daily, we look through the lens of our contemporaneous tracker of real-time inflation and activity. Since our previous update in mid-October, RETINA’s median estimate of Q3 GDP growth has moved deeper into negative territory, driven largely by a disappointing print for area-wide industrial production in August. The downside risks to our +0.1%qoq judgemental forecast for Q3 GDP now look skewed to such an extent that our point estimate no longer falls within a 50% confidence interval around RETINA’s median reading.
RETINA sees negative GDP growth in Q3
As Chart 1 shows, from mid-September to mid-October, RETINA’s median estimate for third-quarter GDP growth (the red line in Chart 1) fell from around +0.3%qoq to just short of -0.2%qoq. Following a disappointing contraction in area-wide August IP on 14 October, RETINA’s median estimate fell a further 10bp — yet deeper into negative territory. Having stabilised at around -0.3%qoq in the past fortnight, RETINA’s median estimate is now some 40bp weaker than our current judgemental forecast for Q3 GDP growth(+0.1%qoq, the black dotted line in Chart 1).This is yet more pessimistic than the latest available poll among other private-sector economists (collated on 8 September), which envisaged Q3 growth of around +0.35%qoq.
RETINA’s latest leg lower is down (solely) to Euro area IP
As Chart 2 shows, the latest move lower in RETINA’s median growth tracker (from around -0.2%qoq to -0.3%qoq) was driven almost exclusively by the 1.8%mom contraction in Euro area IP in August. Conditional on this out-turn, subsequent releases of national business surveys (ranging from the Italian ISTAT, the Belgian business survey and the French and German PMIs), as well as a +0.5%qoq sequential expansion in Spanish Q3 GDP, left our RETINA growth tracker largely unmoved.
The mechanical nature of the RETINA framework implies that it may underestimate the potentially significant ‘calendar effect’ in the German IP data (changes in the timing of holidays is likely to have shifted production out of August into July, as reflected in the month-to-month volatility of outturns). Some caution is required in interpreting the downward shift implied by these data, at least until we see the September print later this week. That said, the broadly confirmatory signal offered by business surveys (e.g. with the German IFO index continue to decline) suggest that idiosyncracies in the data should not be overstated.
RETINA suggests that degree of downside risk to our forecast has returned
As Chart 3 shows, RETINA’s growth tracker implied an escalation of downside risks to our former (+0.4%qoq) judgemental forecast through most of September. The latest indications are that the intensity of that downside skew has returned through the course of October — even as it pertains to our much weaker current forecast for +0.1%qoq growth in Q3. The Bayesian underpinning beneath RETINA’s growth tracker allows us to quantify this skew. Chart 3 shows that the model-implied probability that Q3 growth beats our judgemental forecast has fallen to 25% — down from around 35% at the time we made our forecast change. Furthermore, as Chart 1 also underscores, the downside risks to our judgemental forecast for Q3 now look skewed to such an extent that our point estimate no longer falls within a 50% confidence interval around RETINA’s median reading.
So far, we have discussed RETINA’s median tracking estimate. We can also track RETINA’s modal estimate of GDP growth – that is, the single estimate of sequential growth that the models deems more likely. As Chart 4 shows, this modal estimate has been broadly unchanged over the past month.
* * *
There is some good news:
It is still too early to be emphatic, but RETINA seems to object less to a small expansion in Q4 GDP than it does to a positive print in Q3.
And that is, what in the New Abnormal, passes for good economic news.
wow!! look how fast this party has risen in popularity. They are now the frontrunners
and also remember that the referendum on Catalonia is on Nov 9.2014
(courtesy Mike Krieger/Liberty Blitzkreig blog)
Spain’s Newest Political Party “We Can”
Surges Ahead Of Incumbents
Submitted by Mike Krieger of Liberty Blitzkrieg blog,
I thought one of the principles of democracy is listening to people and allowing them to give their opinions. If people can’t express their opinions, then it’s not a democracy of great quality.
– Artur Mas, President of Catalonia
We all know that Spain has had very rough go as of late. From 50% youth unemployment, to American financial oligarchs Goldman Sachs and Blackstone entering the nation’s depressed real estate market, it seems Spaniards simply can’t get a break.
As is always the case, at some point all populations snap under the relentless weight of fraud and corruption and demand an end to the status quo. It appears that moment may be near for the Spanish population, as evidenced by the incredible rise of the brand new political party “Podemos,” which translates into “We Can.”
The party was formed earlier this year, and is now leading the polls against both establishment political parties, the Socialists and the People’s Party, which have run the country for the past 32 years. The following graphic perfectly demonstrates the incredible suddenness of its rise:
More from Bloomberg:
Nov. 3 (Bloomberg) –- 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.
Podemos was formed less than a year ago to channel Spaniards’ disaffection with Rajoy’s People’s Party and the opposition Socialists, who between them have run the country for the past 32 years.
With corruption allegations again swirling around the PP, that discontent may be reaching tipping point: a poll for El Pais newspaper yesterday showed Podemos doubled its support in a month to a record 28 percent. In doing so, it’s overtaken both main parties, while challenging European attempts to restore political stability after years of debt crisis.
Podemos grew out of the “indignados” movement that saw thousands of Spanish set up camp in Madrid’s Puerta del Sol in 2011 as unemployment soared above 20 percent, peaking at more than 26 percent the following year.
Unfortunately, some of its policies seem destined to further run the Spanish economy into the ground…
With youth unemployment stuck above 50 percent, the group is calling for a program of public investment to create jobs. It also wants to cap the working week at 35 hours and lower the retirement age to 60 to redistribute job opportunities. The group proposes prohibiting profitable companies from firing workers and imposing a maximum wage.
Its program demands an audit of Spain’s public debt to assess what part of it is “illegitimate” and advocates giving euro area governments control over the European Central Bank.
I certainly can’t blame them for questioning the debt.
While the next scheduled national elections that would allow voters to pass judgment on Podemos aren’t due until late 2015, Rajoy faces a more immediate electoral threat in Catalonia on Nov. 9. That’s when nationalists plan to defy his government and the Constitutional Court to hold a volunteer-run ballot on independence.
Separately, the prime minister apologized last week for an “accumulation of scandals” after evidence showed party officials were taking kickbacks to hand out 250 million euros of public contracts while he was administering the harshest budget cuts in Spain’s democratic history.
“Let’s not give the impression, because that is not the reality, of a country immersed in corruption — it’s not true,” Rajoy told parliament in Madrid on Oct. 29. “Politics is a very noble activity, even with errors and mistakes.”
It appears Rajoy is prepping himself for his next career as a comedian.
On a more serious note, Americans need to understand that Spain is merely a few years ahead of us. The question isn’t whether the status quo will be overthrown, the question is what will replace it. Something better, or something worse? Our key mission must be to ensure we get a better system after this one blows up, not something even worse.
Watch Spain closely in the months ahead. It will be another canary in the coal mine for the entire Western world.
USA/JAPAN YEN 113.35 down .340
GBP/USA 1.6001 up .0027
This morning in Europe, the euro is well up, trading now just at the 1.25 level at 1.2512
as Europe reacts to deflation. Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion. The yen is up and it closed in Japan rising by 34 basis points at 113.35 yen to the dollar. The pound is up this morning as it now trades just at the 1.60 level to 1.6001.
Early Tuesday morning USA 10 year bond yield: 2.32% !!! down 2 in basis points from Monday night/
The NIKKEI: Tuesday morning up 449 points or 2.73% (it was up over 1000 points then cooler heads prevailed)
Trading from Europe and Asia:
1. Europe all in the green except France and Spain
2/ Asian bourses all in the green except Hang Sang and India / Chinese bourses: Hang Sang in the red, Shanghai in the green, Australia in the green: red/Nikkei (Japan) green/India’s Sensex in the red/
Gold early morning trading: $1171.00
Your closing Spanish 10 year government bond Tuesday/ up 5 in basis points in yield from Monday night.
Spanish 10 year bond yield: 2.19% !!!!!! up 5 basis points.
Your Monday closing Italian 10 year bond yield: 2.44 up 5 in basis points:
trading 25 basis points higher than Spain:
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Tuesday night/USA dollar index/USA 10 yr bond: currencies falling apart this afternoon
Euro/USA: 1.2553 up .0061
USA/Japan: 113.54 down .160
Great Britain/USA: 1.6002 up .0028
USA/Canada: 1.1388 up .0028
The euro rose quite a bit in value during this afternoon’s session, and it was up by closing time , closing well above the 1.25 level to 1.2553. The yen was up during the afternoon session,and it gained 16 basis points on the day closing well above the 113 cross at 113.54. The British pound gained some ground during the afternoon session and was up on the day breaking the 160 barrier at 1.6002. The Canadian dollar was down a lot in the afternoon and was down on the day at 1.1388 to the dollar.
Currency wars at their finest today.
Your closing USA dollar index: 87.03 down 28 cents on the day!!!!
your 10 year USA bond yield , down 1 in basis points on the day: 2.33%
European and Dow Jones stock index closes:
England FTSE down 34.00 or 0.52%
Paris CAC down 63.84 or 1.52%
German Dax down 85.23 or 0.92%
Spain’s Ibex down 220.00 or 2.12%
Italian FTSE-MIB down 434.40 or 2.24%
Nasdaq; down 15.80 or 0.34%
OIL: WTI 77.13
And now for your big USA stories
Today’s NY trading:
(courtesy zero hedge)
US Election Anxiety & ECB Mutiny Spark Small
Cap Stocks & Dollar Selling
It appears the excitment of US midterm election sparked a “sell-everything-American” strategy today as stocks, bonds, WTI crude, the dollar, Treasuries, and credit all sold off to a lesser or greater amount. Trannies started off liking weak oil prices but faded as WTI could not bounce off multi-year lows but stocks were jolted lower (before v-shape recovering to VWAP) by Mutiny at the ECB (and desk chatter that – as we have warned – QE is not coming). The decouplings continue as high yield presses to 2-week lows and Nikkei futures diverge from USDJPY. The dollar weakened back to unch on the week after Draghi but commodities saw no gains from that as gold, silver, and copper slipped. WTI dropped to as low as $75.85 at 3-year lows. VIX – helped by numeous CBOE ‘breaks’ today – jerked back below 15 (after trading above 16 briefly).
On the day, Trannies and The Dow ended just green as broader indices closed red unable to recover Draghi’s Mutiny drop…
VIX was jerked lower after CBOE broke a few times and Draghi’s slam down sparked ucnertainty
Credit markets are flashing red again…
On the day, Treasuries close mixed 30Y -2bps, 5Y +1bps with the flattening curve continuing oin the week…
The dollar lost notable ground on the day as EUR strengthened post Draghi…
Commodities slipped lower despite the USD weakness with oil the biggest loser once again…
Crude appears at a key support level here
Bonus Chart: NKY and USDJPy decoupled…
Factory Orders Slide 2nd Month In A Row (Did
It Snow In September?)
Factory orders in September printed a drop of 0.6% MoM following August’s 10.0% revised tumble off the spurious spending in July. This is the first 2-month-in-a-row drop in factory orders since January – amid the economy-crushing polar vortex.
Did it snow in Septmeber?
This is what happens when the USA dollar rises: exports plummet.
However it did not help imports as they also fell. Generally when both exports and imports fall together, you are mired in a recession!!
(courtesy zero hedge)
Q3 GDP Alert: US Trade Deficit Worse Than
Expected As Exports, Goods Imports Drop
This could be a problem for the escape velocity believers: the US trade balance printed its biggest deficit since April at -$43.0bn (missing expectations of -$40.2bn) bn, and jumping 7.6% from $40 billion in August. This reflected a decrease in exports (but, but decoupling!?) though imports of goods also slid, suggesting not only is there slack in foreign demand for US goods and services, but the US manufacturing sector is also undergoing to a contractionary realignment. Someone please notify the (seasonally-adjusted) ISM that Q3 GDP estimates areabout to tumble on this latest non-confirmation of hopium.
Some of the highlights:
- *U.S. TRADE DEFICIT WITH CHINA HIGHEST EVER ON RECORD IMPORTS
- *U.S. IMPORTS LITTLE CHANGED AT $238.6 BLN ON CHEAPER OIL
- *U.S. EXPORTS DROP 1.5% TO $195.6 BLN ON OIL, CAPITAL GOODS
- *U.S. IMPORTS OF PETROLEUM WERE LOWEST SINCE NOVEMBER 2009
And the details:
The U.S. monthly international trade deficit increased in September 2014 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $40.0 billion in August (revised) to $43.0 billion in September, mainly reflecting a decrease in exports. The previously published August deficit was $40.1 billion. The goods deficit increased $2.4 billion from August to $62.7 billion in September; the services surplus decreased $0.6 billion from August to $19.6 billion in September.
Exports of goods and services decreased $3.0 billion in September to $195.6 billion, mostly reflecting a decrease in exports of goods. Exports of services also decreased.
- The decrease in exports of goods was more than accounted for by decreases in industrial supplies and materials, in capital goods, and in consumer goods. An increase in foods, feeds, and beverages was partly offsetting.
- The decrease in exports of services mostly reflected decreases in travel (for all purposes including education) and in transport, which includes freight and port services and passenger fares. Changes in the other categories of services exports were relatively small and nearly offsetting.
Imports of goods and services increased $0.1 billion in September to $238.6 billion, reflecting an increase in imports of services. Imports of goods decreased.
- The increase in imports of services mostly reflected an increase in transport. Changes in the other categories of services imports were relatively small.
- The decrease in imports of goods was more than accounted for by decreases in industrial supplies and materials, in capital goods, and in automotive vehicles, parts, and engines. An increase in consumer goods was partly offsetting.
Goods by geographic area (seasonally adjusted, Census basis)
- The goods deficit with China increased from $28.5 billion in August to $31.2 billion in September. Exports decreased $0.1 billion to $9.8 billion, and imports increased $2.6 billion to $41.0 billion.
- The goods deficit with Canada increased from $2.7 billion in August to $4.0 billion in September. Exports decreased $0.6 billion to $26.3 billion, and imports increased $0.7 billion to $30.3 billion.
- The goods deficit with Germany decreased from $7.2 billion in August to $6.2 billion in September. Exports increased $0.1 billion to $4.2 billion, and imports decreased $0.8 billion to $10.4 billion.
That is all for today
I will see you Wednesday night
bye for now