Nov 10/GLD loses 1.87 tonnes of gold/SLV gains 1.43 million oz of silver/gold and silver trashed today/

My website is still under construction.  However I will be posting my commentary at or  and at the silverdoctors website on a continual basis.

I would like to thank you for your patience.

Gold: $1159.60 down $10.00
Silver: $15.67 down 3 cents

In the access market 5:15 pm


Gold $1151
silver $15.59



Gold and silver had a terrible day today.   As I warned you on Friday,


“Monday is a critical day.  Rarely do they ever let gold rise in a follow through.”


The bankers came to work early this morning at 6 am est and knocked gold and silver down badly and the kept the pressure on throughout the day.




The gold comex today had a poor delivery  day, registering  0 notices served for nil oz.

Silver registered 0 notices for nil oz.
A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 255.02 tonnes for a loss of 48 tonnes over that period. .

In silver, the open interest rose a bit despite Friday’s huge rise in price.  It looks like we have a few nervous shorts in silver racing against the clock to cover some of their shortfall!!  The OI  remains extremely high and today at 169,091 contracts.
The  December silver OI lowered to 100,965 which is as expected with a normal contraction as some of the paper longs move to March..



Today, we had a huge withdrawal of gold Inventory at the GLD of 1.87 tonnes/ inventory rests tonight at  725.36 tonnes.

In silver,  the SLV inventory had an addition of 1.438 million ounces of silver.

SLV’s inventory  rests tonight at 344.888 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: still deep in backwardation!!



All months basically moved ever so slightly into the positive direction.

(except the one year GOFO which moved closer to the negative) Now, the first 3 month GOFO rates remain  deeply into 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 even though negative are still fully manipulated.

London good delivery bars are still quite scarce.

The backwardation in gold is incompatible with the raid on gold yesterday morning. It does not make any economic sense.

Nov 10 2014

1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

-.135%                  -0.0875%               -0.0575%          + .0100%          + .1375%


Nov 7 .2014:

1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

-.1625% +          -.1175%                  +-.0752%           -.0000 %      + .145%




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 rose by a humongous margin of 16,366 contracts from  417,929  up to 434,295 with gold up $27.30 on Friday. Is it possible that a sovereign is standing for gold metal?  As I pointed out to you on Friday, today’s reading of OI will be very important to see how the bankers reacted to gold/ silver’s rise. The bankers reacted firmly to the huge increase in oI for gold.  The next delivery month is November and here the OI actually fell by 18 contracts We had 0 delivery notices filed on Friday so we lost 18 contracts  1800 oz of  additional gold ounces will not  stand for the November contact delivery month. The big December contract month strangely saw it’s Oi rise by 5,207 contracts up to 259,840.  The estimated volume today was poor at 109,401.  The confirmed volume on Friday was gigantic at 329,022. Strangely on this 8th day of notices, we had zero notices filed for nil oz.

And now for the silver comex results.  The total OI rose marginally  by 425 contracts from  168,666 up to 169,091 as silver was up 31 cents on Friday. It seems that judging from gold’s OI, our banker friends got more nervous and continued to cover their massive shortfall in silver.   In ounces, this represents a total of 845 million oz or 120.7% of annual global supply.  We are now in the non active silver contract month of November and here the OI fell by 1 contract down to 101. We had 0 notices filed on Friday so we lost 1 contract or we have an additional 5,000 oz that will not stand for the November contract month.  The big December active contract month saw it’s OI fall by 4,648 contracts down to 100,965.   In ounces the December contract  is represented by 504 million oz or 72.1% of annual global production  (production = 700 million oz – China). The estimated volume today was tiny at 26,604.  The confirmed volume on Friday  was huge at 87,954. We also had 0 notices filed  today for nil oz.

Data for the November delivery month.

November initial standings

Nov 10.2014



Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 64.30 oz(,Manfra,) 2 kilobars
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 16,075.000 oz (Scotia) 500 kilobars
No of oz served (contracts) today   0 contracts(nil oz)
No of oz to be served (notices) 43 contracts (4300 oz)
Total monthly oz gold served (contracts) so far this month  10 contracts  (1000 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month    80,224.3  oz

Total accumulative withdrawal of gold from the Customer inventory this month

 514,774.2 oz

Today, we had 0 dealer transactions

total dealer withdrawal:  nil  oz

total dealer deposit:  nil oz

we had 1 customer withdrawals:  and again we had these wonderful kilobar transactions

ii) Out of Manfra;  64.3 oz (2 kilobars)

total customer withdrawals : 64.30  oz

we had 1 customer deposits:

i) Into Scotia:  16,075.000 oz  (500 kilobars)????

total customer deposits : 160,075.000  oz

We had 0 adjustments:

Total Dealer inventory: 869,309.361 oz or   27.03 tonnes

Total gold inventory (dealer and customer) =  8.199 million oz. (255.02) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 48 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 the month (10) x 100 oz to which we add the difference between the OI for the front month of November 43) – 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:

10  (notices filed today x 100 oz +   (43) OI for November – 0 (no of notices filed today) = 5300 oz or .1648 tonnes.  We lost 1800 oz of gold standing for the November contract month.

 And now for silver:

Nov 10/2014:

 November silver: initial standings



Withdrawals from Dealers Inventory  nil oz (Scotia)
Withdrawals from Customer Inventory 99,396.300 oz
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 101 contracts (505,000 oz)
Total monthly oz silver served (contracts) 112 contracts (560,000 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 3,904,139.1 oz

Today, we had 0 deposits into the dealer account:

 total dealer deposit: nil oz

we had 0 dealer withdrawal:

total  dealer withdrawal: nil  oz

We had 1 customer withdrawals:

i) Out of CNT:  99,396.300 oz

total customer withdrawal  99.396.300   oz

We had 0 customer deposits:

total customer deposits: nil      oz

we had 1 adjustment


i) Out of Delaware:


59,677.73 oz was adjusted out of the customer and this landed into the dealer at Delaware

Total dealer inventory:  66.1200 million oz

Total of all silver inventory (dealer and customer)   179.776 million oz.

The total number of notices filed today is represented by 0 contracts or nil 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 (112 ) x 5,000 oz to which we add the difference between the total OI for the front month of November(101) minus  (the number of notices filed today (0) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  112 contracts x 5000 oz  +  (101) OI for the November contract month – 0 (the number of notices filed today)  = amount standing or 1,065,000 oz of silver standing.


we lost 5,000 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 10. we lost another 1.79 tonnes of gold at the GLD/Inventory 725.36 tonnes

Nov 7 wow!! we lost another huge 5.68 tonnes of gold at the GLD/inventory 727.15 tonnes

Nov 6.2014: we had another huge withdrawal of 2.99 tonnes of gold. Inventory 732.83 tonnes

This gold is also heading to Shanghai.  If I was a shareholder of GLD I would be quite concerned as there will be no real gold inventory left per outstanding shares.

Nov 5 we had another huge withdrawal of 3.000 tonnes of gold.  This gold will be heading to Shanghai/GLD inventory 735.82 tonnes

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 10. a huge withdrawal of 1.87 tonnes   gold inventory   at the GLD

inventory: 725.36 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:  725.36 tonnes.


And now for silver:

Nov 10/ we had an addition of 1.438 million oz of silver into inventory at the SLV/Inventory 344.888 million oz  (again note the difference between gold and silver)

Nov 7/ 2014/no change in silver inventory/inventory rests at 343.45 million oz.  (please note the difference between silver (SLV) and gold  (GLD)

Nov 6.2014: no change in silver inventory/(as of 6 pm est) inventory rests at 343.45 million oz.

Nov 5  today, the total silver inventory drops of 2.074 million oz/SLV inventory: 343.45 million oz

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

 Today, Nov 10..2014: we have an addition of 1.438 million oz in silver inventory /inventory 344.888 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 11.2% percent to NAV in usa funds and Negative   10.9% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.7%

Percentage of fund in silver:37.80%

cash .5%

( Nov 10/2014)   

2. Sprott silver fund (PSLV): Premium to NAV falls to positive 4.57% NAV (Nov 10/2014)  

3. Sprott gold fund (PHYS): premium to NAV  falls to negative -0.86% to NAV(Nov 10/2014)

Note: Sprott silver trust back hugely into positive territory at 4.57%.

Sprott physical gold trust is back in negative territory at  -0.86%

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:


1. The biggest news was gold rigging settlement with UBS/with many to follow.

2.  Last week 47.5 tonnes of gold was demanded (removed ) from Shanghai  (see below)


(courtesy Goldcore/Mark O’Byrne)

Gold Rigging Settlement With UBS – Other Banks To Follow

Published in Market Update  Precious Metals  on 10 November 2014

By Mark O’Byrne

Suspicions that the price of precious metals are frequently manipulated by a few international banks were further confirmed over the weekend. UBS agreed to settle with various international regulatory bodies investigating rigging in foreign exchange and precious metals markets.

While failing to admit wrongdoing one person familiar with UBS’s internal probe said that the bank found “a small number of potentially problematic incidents at its precious metals desk,” reports the Financial Times:

UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two  people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.

Regulators around the world have alleged that traders at a number of banks have colluded and shared information about client orders to manipulate prices in the $5.3 trillion a day forex market. UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.

Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff – who mainly trade gold and silver – sit on the same floor as the forex traders.

A small number of problematic incidents in precious metals trading, a small number of problems in forex trading, some problems in LIBOR … It seems that major banks have quite a large amount of small numbers of rigging problems.

While UBS have agreed to settle with regulators, the victims of price manipulation- mining companies and people who have bought precious metals in recent years and incurred financial losses – will receive not a penny. Nor is there any way for them the get to the bottom of what actually occurred.

It is important to remember the context of this settlement. Those who have voiced concerns that precious metals markets are being rigged have been dismissed as conspiracy theorists for years.

The Gold Anti Trust Action Committee or GATA have been very vocal and most prominent in this regard.

Yet, the so called conspiracy ‘theories’ are being proven to be real conspiracies by banks.

Former advisor to President Reagan and Assistant Secretary of the U.S. Treasury, Dr. Paul Craig Roberts pointed out over the weekend how the smashes on precious metals, similar to what happened last week, are executed.

Futures contracts representing vast quantities of gold, up to forty tonnes worth, are dumped onto the electronic futures market over the course of a few minutes. This frequently happens after trading in Asia has finished and Europe is not yet open for business. In other words – at a time when the least amount of traders are available to buy. This guarantees a precipitous fall in the price.

Dr. Roberts quite reasonably surmises that this is an act of blatant manipulation to force prices down.

It smacks of either arrogance or desperation that even as the outcome of investigations by regulatory bodies into the manipulation of gold and silver prices are beginning to be made public such displays of manipulation should occur.

Manipulation can be effective in the short term. However, prices will eventually be dictated by real world forces of supply and demand for physical precious metals. This has been seen throughout history and was seen as recently as the 1960’s and the failure of the London Gold Pool which gave rise to the bull market of the 1970’s.

Acclaimed writer of the Dow Theory letters, Richard Russell observed the strong surge in precious metals prices on Friday and saw it as a positive indicator suggesting further gains are likely.

The sage ninety-year-old and respected writer of one of the oldest investment newsletters in the world, wrote that he thinks “big money sees QE4 ahead and is protecting itself.”

Given the significant macroeconomic, systemic, geopolitical and indeed monetary risks of today, owning physical gold coins and bars as insurance remains prudent and will again reward those who take a long term view.

Access 7 Key Bullion Storage Must Haves here

Today’s AM fix was USD 1,172.00, EUR 938.20 and GBP 737.25 per ounce.
Friday’s AM fix was USD 1,145.00, EUR 923.39 and GBP 723.17 per ounce.

Gold climbed $31.80 or 2.8% to $1,175.30 per ounce Friday and silver rose $0.29 or 1.88% at $15.74 per ounce. Gold finished up 0.25% for the week and silver finished down 2.60%.

Gold in U.S. Dollars – 1 Year (Thomson Reuters)

Gold surged 3.2% on Friday as market participants adjudged the recent sell off excessive and bought the dip. The gains may have also been due to a short covering rally.

Spot gold was down 0.7% at $1,168.80 an ounce at 1200 GMT. Gold bullion has built on Friday’s gains and is marginally lower this morning after Friday’s sharp gains. Friday’s U.S. payrolls data was slightly lower than expectations and may contributed to safe haven buying and the gains .

Gold in U.S. Dollars – 10 Year (Thomson Reuters)

Silver was down 0.6% at $15.68 an ounce, spot platinum was down 0.2% at $1,210.25 an ounce, and spot palladium was down 0.1% at $766.97 an ounce.

Futures trading volume was double the average for the past 100 days for this time of day, Bloomberg data showed.

Possibly the single most important benchmark of global gold demand today remains gold withdrawals from the Shanghai Gold Exchange (SGE).

Last week saw a very robust week for Chinese demand despite talk of weak demand and low premiums in China. For the week ending October 31, there were withdrawals of 47.5 tonnes for the week. This means that the world’s largest gold buyer continues to be headed for annual gold demand of some 2,000 tonnes.

Manipulation of markets can work effectively in the short term (see above). However, in the long term prices will be dictated by the global supply and the global demand of 7 billion people, many in Asia who believe in gold as a store of wealth.

Not to mention, sovereign central banks such as the People’s Bank of China and the Russian central bank – who also believe in gold as an important monetary asset.

Posted on 10 Nov 2014 by
Demand for gold as indicated above is 47.5 tonnes per last week.  That is represented by  6.77 tonnes per day.  The world produces 6.02 tonnes per day (ex China ex Russia)
2. Silver is still in backwardation in Shanghai.
3. Silver futures on Shanghai 81,886 tonnes vs comex 50,785 tonnes
4. Open interest at Shanghai rises to 6619 tonnes  (comex 26,230 tonnes)
5. Shanghai inventories remain at 3.1 million oz.
 (courtesy Koos Jansen)

Chinese Gold Demand Strong, Mainstream Media Twisting

The numbers have been published by the Shanghai Gold Exchange (SGE) on the amount of gold withdrawn from the vaults in week 44 (October 27 – 31); just of over 47 tonnes were withdrawn, another strong week. Year to date 1654 tonnes have been withdrawn – SGE withdrawals equal Chinese wholesale gold demand, as has been confirmed by the SGE and the China Gold Association (CGA).

SGE gold withdrawals week 44 2014
Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

These numbers are hard to reconcile with a Wall Street Journal (WSJ) article from November 3, which quoted a leading Hong Kong-based executive with an international bank, who didn’t want to be identified, stating: “The physical buying in gold has dried up.

Shanghai Gold Exchange withdrawals 2014 week 44, dips
Chinese gold demand increases on falling prices. (gold can be bought on the SGE, but withdrawn from the vaults a next week, this can somewhat distort the illustration of my thesis in this chart)

Reuters also reported on November 3 about weak Chinese gold demand:

Chinese unmoved by gold price drop, see it cheaper still

Even with gold prices dropping to near 4-year lows, buyers in China – the world’s leading market – aren’t tempted, suggesting prices have further to fall.

When gold prices are in a slump, Chinese buyers, eyeing a bargain, traditionally move in and stop the rot. But that doesn’t seem to be happening this time around.

World gold prices are at their lowest since 2010 and slid $25 an ounce on Friday as the U.S. dollar strengthened, but Chinese buyers still aren’t biting, predicting prices have further to drop.

On November 5 I wrote an article in which I strongly disagreed with the WSJ and Reuters and thoroughly expanded  why Chinese gold demand has been very strong in recent weeks.

On November 9 Reuters came out with a new article covering Chinese gold demand. This time they reported Chinese gold demand was strong in week 45 (November 3 – 9)! From Reuters November 9:

A rush of physical buying in the past week – from jewelry in Shanghai to coins in Germany – may prove to be a dead-cat bounce that is too feeble to offset a broader trend of selling by investors betting on further gains in the dollar, U.S. equities and an improving U.S. economy, according to the survey of more than two dozen analysts and traders.

In contrast to what they’ve reported on November 3, Reuters now states Chinese demand was strong – but, of course, will weaken in the future.

I’ll leave the quality of Reuters’ reporting on Chinese gold demand up to you.

Next to quoting sources the WSJ and Reuters (November 3) stated SGE gold traded at a discount to London that day, hence Chinese gold demand was weak. According to my data, which tracks the end of day (EOD) premium/discount, SGE gold was not trading at a discount on November 3. A journalist from Reuters told me the discount often occurs intra-day, subsequently ending the day at a premium (I don’t have the tools to chart the intra-day premium/discount, yet).

However, as I stated in a previous post, the SGE price of gold, the EOD SGE premium and SGE withdrawals are all correlated. In the chart above we can see SGE withdrawals increasing when the price of gold (in yuan per gram) declines. In the chart below we can see the EOD SGE premiums rising when the price of gold drops. This clearly illustrates the Chinese buy on falling prices. 

Shanghai Gold Exchange premium 2009 2014
In general, the price of gold on the SGE and SGE premiums move as an inverse of each other.

According to my thesis Chinese gold demand is not only up because SGE withdrawals are strong, also because the price is falling and EOD premiums have not been negative for over a month. (conversely, in March and July 2014 SGE gold was trading at a discount when withdrawals were down.) And so, I see absolutely no signs of weak Chinese gold demand.


Silver on the Shanghai Futures Exchange (SHFE) is still trading in backwardation, since August 6.

SHFE silver backwardation November 7, 2014

The discount on silver on the SHFE (ex VAT), though,  tumbled from 4 % to 8 %. This can have been caused by the revelation about Chinese traders that found a loophole to export silver bullion, circumventing VAT laws, to arbitrage the pure price spread between China and London. When this story came out I presume Chinese authorities stepped in and closed to loophole.

Shanghai Gold Exchange SGE silver premium 2014

SHFE silver inventory stands at 124.9 tonnes.

SHFE silver inventory, November 7, 2014

Worth noting is that gold and silver trading volumes on the SHFE and SGE are in an uptrend. In week 45 (November 3 -7) 12,098 tonnes of silver were traded on the SGE, an all-time record.

SGE weekly silver volumes

Silver volumes on the SHFE are once again transcending the COMEX volumes. In week 45 total volume traded on the SHFE was 81,886 tonnes, up from 45,064 tonnes in the previous week. The open interest (OI) closed on November 7 at 6,619 tonnes, which was also an all-time record. Silver volume on the COMEX was 50,785 tonnes, up from 43,077 tonnes a week earlier. The COMEX open interest closed at 26,230 tonnes.

(all counted unilaterally / single-sided)

COMEX vs SHFE silver volume and open interest

Gold volumes on the SGE have also been increasing in recent weeks, this is most likely due to the fact many SGE gold products can be traded by foreigners since September 18, 2014. In week 45, the total trading volume of all gold products on the SGE accounted for 229 tonnes.

SGE weekly gold volumes

Gold volumes on the SHFE are still dwarfed by the COMEX. However, the gold OI on the SHFE also hit a record in week 45 (November 3 -7) at 138 tonnes. The traded volume was 762 tonnes, up from 504 tonnes a week earlier. COMEX volume was also up at 3,431 tonnes, from 2,859 tonnes a week before.

COMEX vs SHFE gold volume and open interest

Koos Jansen




Not a bad idea…
(courtesy Yahoo news)

Why not defend the ruble by buying gold instead?


It sure would kick all the other currencies down a peg or two, and the best defense is a good offense.

* * *

In Shift, Russia Lets Ruble Float Free in Markets

By Vladimir Isachenvov and Laura Mills
Associated Press
via Yahoo News
Monday, November 10, 2014

MOSCOW — With the Russian ruble in a nosedive under the pressure of Western sanctions and slumping oil prices, the country’s central bank decided today to freely float the currency in markets and stop regularly spending billions in a vain attempt to stem its fall.

The bank has been burning through its reserves, which plunged from $510 billion at the year’s start to about $400 billion now, to soften the drop in the ruble, which has lost about half its value since the beginning of the year as investors pulled money out of Russia and the economy headed toward recession. It spent $30 billion last month alone — an unsustainable rate.

On Monday, the central bank said it would let the market decide what value to give the ruble, which touched a record low of above 48 to the dollar on Friday. It also warned, however, that it would be ready to intervene if necessary to maintain financial stability.

A free float could see the ruble depreciate further in the longer term, stoking inflation and other economic problems for Russians. But investors welcomed the central bank’s move as a necessary step protect the nation’s hard currency reserves and curb market speculation. …

… For the remainder of the report:–…

(USA Today)/special thanks to Robert H for sending this to us:

China hoarding gold to challenge U.S. dollar?

In a world filled with fiat currencies, how important is gold’s role in the financial system? Proponents often view the precious metal as a hedge against economic chaos, while critics typically claim gold is hardly more than an unproductive rock. Interestingly, some countries appear to believe gold is quite important, and one former Fed chair explains why.

Alan Greenspan, who served at the helm of the Federal Reserve for nearly two decades, recently penned an op-ed for the Council on Foreign Relations discussing gold and its possible role in China, the world’s second-largest economy. He notes that if China converted only a “relatively modest part of its $4 trillion foreign exchange reserves into gold, the country’s currency could take on unexpected strength in today’s international financial system.”

Greenspan also believes the downside risks for China stockpiling gold are limited, at least from a pure investment point of view. “It would be a gamble, of course, for China to use part of its reserves to buy enough gold bullion to displace the United States from its position as the world’s largest holder of monetary gold,” he wrote. “But the penalty for being wrong, in terms of lost interest and the cost of storage, would be modest.”

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The People’s Bank of China has not formally disclosed any changes to its gold holdings in years, but it’s believed that the central bank is purchasing gold to diversify its reserve holdings. In 2009, China announced that it boosted its gold reserves by 454 tonnes via acquiring gold quietly over the previous five years. That represented an impressive 76 percent increase in gold reserves. Today, China still shows that it holds 1,054.1 tonnes in reserves, but it’s speculated by analysts to actually have around 2,000 to 3,000 tonnes.

Some market participants also believe China is building up its gold reserves to challenge the U.S. dollar, which is currently the world’s reserve currency. A few years ago, China’s official news agency, Xinhua, said, “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”

Gold already plays a significant role in China’s economy. In 2013, China’s gold consumption surged 41 percent year-over-year to 1,176.40 tonnes, exceeding 1,000 tonnes for the first time on record, according to the China Gold Association. Demand for jewelry was the biggest contributor, with an increase of 43 percent to 716.50 tonnes, while bullion demand rose 57 percent to 375.73 tonnes. China is the largest gold consumer and producer in the world.

China faces an uphill battle if it’s going to challenge America’s gold stockpile. According to the most recent data from the World Gold Council, the U.S. holds 8,133.5 tonnes of gold, representing 71.8 percent of reserves and the most held by any one country in the world. Furthermore, a behind-the-scenes look from Greenspan reveals that the U.S. is not likely to sell its gold stash anytime soon.

“In 1976, for example, I participated, as chair of the Council of Economic Advisers, in a conversation in which then U.S. Treasury Secretary William Simon and then Federal Reserve Board Chair Arthur Burns met with President Gerald Ford to discuss Simon’s recommendation that the United States sell its 275 million ounces of gold and invest the proceeds in interest-earning assets,” said Greenspan. “Whereas Simon, following the economist Milton Friedman’s view at that time, argued that gold no longer served any useful monetary purpose, Burns argued that gold was the ultimate crisis backstop to the dollar. The two advocates were unable to find common ground. In the end, Ford chose to do nothing. And to this day, the U.S. gold hoard has changed little, amounting to 261 million ounces.”

The big news on the weekend: UBS admits to gold/silver rigging and to pay a fine.
Not a penny goes to the mining operations or to us:
(courtesy zero hedge/UBS)

Another “Conspiracy Theory” Bites The Dust: UBS Settles Over Gold Rigging, Many More Banks To Follow

Tyler Durden's picture

Remember when everyone decried wholesale Libor manipulation as a crazy conspiracy theory (Zero Hedge:January 2009:This Makes No Sense: LIBOR By Bank“) because after all, it was impossible for so many people to keep their mouth shut or whatever the generic justification is for disproving such “conspiracy theories”? Why, none other than ICAP chief Michael Spencer says they all though Libor was “unmanipulable.” As it turns out, not only is Libor manipulable(sic), and a vast rate-rigging “conspiracy theory” is quite possible when everyone’s interests are aligned, but it also was massively profitable.

Then it was the turn of the even more massive, multi-trillion FX market, when first UBS squealed like a pig and soon ratted out every other bank in the criminal “Cartel” (or was it “Bandits”?) syndicate (see: “Meet The (First) Seven Banks Who Rigged The FX Market“). End result: banks such as JPM, Citi and BofA forced to review their criminal ways and adjusting their third quarter results a month into Q4. Many more legal fees, charges and settlement coming however for those who lost money on the other side of such long-running manipulation, please accept our condolences: you won’t see a penny.

And finally, there was the precious metals market: a market which all the Keynesian fanatic paper bugs said was immune from manipulation, be it of the central or commercial bank kind, even with every other market clearly exposed for perpetual rigging either by hedge funds, by prop desks, by HFTs, or central banks themselves.

Sadly this too conspiracy theory just was crushed into the reality of conspiracy fact, when moments ago the FT reported that alongside admissions of rigging every other market, UBS – always the proverbial first rat in the coalmine, to mix and match metaphors- is about to “settle” allegations of gold and silver rigging. In other words: it admits it had rigged the gold and silver markets, without of course “admitting or denying” it did so.

From the FT:

UBS is to settle allegations of misconduct at its precious metals trading business alongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging.


* * *

UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.


Regulators around the world have alleged that traders at a number of banks have colluded and shared information about client orders to manipulate prices in the $5.3tn-a-day forex market. UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.


Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff – who mainly trade gold and silver – sit on the same floor as the forex traders.


One person familiar with UBS’s internal probe said the bank found a small number of potentially problematic incidents at its precious metals desk.

Potentially provlematic incidents“? One must give props to the FT for always finding just the right amount of politically correct lipstick to cover up what was market manipulation, pure and simple, which continued for years and years, even as the same FT routinely mocked everyone who alleged otherwise.

The good news is that the FT will finally reinstate the Gold manipulation article which is penned in February then promptly removed following complaints from up high.

Some more from the BOE’s favorite media outlet:

The head of UBS’s gold desk in Zurich, André Flotron, has been on leave since January for reasons unspecified by the lender.

Surely it is because he made too much money rigging FX and gold?

Those who wish to send Andre their regards, may do so courtesy of his LinkedIn profile

… Because he is one of many people responsible for such perfectly new normal trades as “Vicious Gold Slamdown Breaks Gold Market For 20 Seconds.” Recall what “a humble block of 2000 gold futs (GC) taking out the bid stack, and slamming the price of gold, managed to halt the gold market: one of the largest “asset” markets in the world in terms of total notional, for 20 seconds” looks like:

Thank you Monsieur Flotron for teaching us how market manipulators “trade” gold:

Mr Flotron has not been accused of wrongdoing and has never responded to any requests for comment. He has labelled his professional status on his LinkedIn profile as being “on leave, keen to return in due time”.

The gold market has this year become the latest trading area to be subjected to heavy regulatory scrutiny and allegations of price-rigging. The FCA fined Barclays £26m in May after an options trader was found to have manipulated the London gold fix.

Germany’s financial regulator BaFin has launched a formal investigation into the gold market and is probing Deutsche Bank, one of the former members of a tarnished gold fix panel that will soon be replaced by an electronic fixing.

As for what happens next, the game is clear, because the only thing that can surpass the “developed world’s” rigged markets is said world’s “judicial” system: rigged far more than a $10 billion gold market sell order at 1 am in the morning. The TBTF, aka Too Big To Prosecute Banks will settle, paying out pennies on the dollar of the profits they made from rigging gold, silver, FX, libor, Interest rates, equities, and so on, and will lay low for a while until the rigging resumes.

But fear not: even as the criminal banks stay out of the rigged market for a month or so – after all they have to at least give the appearance of complying with the rigged law – the central banks, courtesy of the “People Bringing You Currency Manipulation On A Daily Basis” located conveniently at the nexus of central banking in the Bank of International Settlements in Basel, will keep on rigging. Or else none other than Benoit Gilson, Head of Foreign Exchange & Gold at the BIS will be forced to report that he too is “on leave, keen to return in due time”…

Alas, we are far too deep inside the rabbit hole at this point to even pretend normalcy can ever again exist without the biggest systemic reset in history.



The actual story from the London’s Financial times:
(courtesy London’s Financial Times/GATA)

UBS to settle allegations over precious metals trading


Daniel Schäfer and James Shotter
Financial Times, London
Sunday, November 9, 2014

UBS is to settle allegations of misconduct at its precious metals trading business alongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging.

The Swiss lender is one of a group of banks including Barclays, Citigroup, HSBC, JPMorgan, and Royal Bank of Scotland that are set to announce an agreement of at least L1.5 billion on Wednesday to settle forex rigging allegations with the UK’s Financial Conduct Authority.

Several US authorities are also expected to be part of the settlement, including the Office of the Comptroller of the Currency and the Commodity Futures Trading Commission in the US, while Switzerland’s Finma may also take part. Bank of America Merrill Lynch is also expected to settle but only with US authorities.UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.

Regulators around the world have alleged that traders at a number of banks colluded and shared information about client orders to manipulate prices in the $5.3 trillion-a-day forex market.

UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.

Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff — who mainly trade gold and silver — sit on the same floor as the forex traders.

One person familiar with UBS’s internal probe said that the bank found a small number of potentially problematic incidents at its precious metals desk.

Andre Flotron, the head of UBS’s gold desk in Zurich, has been on leave since January for reasons unspecified by the lender.

Mr Flotron has not been accused of wrongdoing and has never responded to any requests for comment. He has labelled his professional status on his LinkedIn profile as being “on leave, keen to return in due time.”

The precious metals market has this year become the latest trading area to be subjected to heavy regulatory scrutiny and allegations of price rigging. The FCA fined Barclays L26 million in May after an options trader was found to have manipulated the London gold fix.

BaFin, Germany’s financial regulator, has launched a formal investigation into the gold market and is probing Deutsche Bank, one of the former members of a tarnished gold-fix panel that will soon be replaced by an electronic fixing.

UBS’s top management has pushed hard to speed up its internal forex and precious metals probes. It has sought to get ahead of rivals in securing immunity agreements as it wants to leave behind its legacy problems as soon as possible.

In a global forex-rigging probe against at least 15 banks, UBS has the highest numbers of suspended traders — at least seven — across London, New York, Singapore, and Zurich.

It is said to have fired several forex traders in recent months, some of whom had earlier been suspended.

UBS is also in separate talks over a forex settlement with the US Department of Justice’s criminal division. It is expected to get leniency from the DoJ’s antitrust team in return for handing over information early on and co-operating.







Another big story over the weekend:  China and Canada agree to a 30 billion currency swap.

This is a big nail in the coffin of the uSA dollar.


(courtesy Hopkins/Reuters/GATA)

Chinese and Canadian central banks agree to $30 billion currency swap


By Andrea Hopkins
Saturday, November 8, 2014

BEIJING — The central banks of China and Canada have agreed to a currency swap worth 200 billion yuan ($32.67 billion) or C$30 billion, according to a Canadian government statement issued at a meeting of Asia Pacific nations on Saturday.

The swap will be effective for three years, according to a separate statement from China’s central bank. The agreement was announced after Canadian Prime Minister Stephen Harper met Chinese Premier Li Keqiang.

China’s central bank, the People’s Bank of China, will also appoint a clearing bank in Canada for yuan — or renminbi, as the currency is also called — as part of a memorandum of understanding, the statement said. It did not say which bank would be appointed as the clearing bank, but it is likely to be one of China’s four largest banks. …

… For the remainder of the report:

Craig Roberts is very vocal of the rigging of gold and silver/claims no bear market at all, jsut
a rigged one!!
(courtesy Dr Paul Craig Roberts/GATA)

No bear market in monetary metals, Roberts tells KWN, just a rigged one


9:40p ET Friday, November 7, 2014

Dear Friend of GATA and Gold:

Former Assistant U.S. Treasury Secretary Paul Craig Roberts tells King World News tonight that there can’t be a bear market in gold and silver when real metal is so scarce. Instead, Roberts says, agents of the U.S. Federal Reserve are suppressing prices with futures contracts. An excerpt from the interview is posted at the KWN blog here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.







(courtesy Ronan Manly/GATA)





Ronan Manly: Why doesn’t the World Gold Council care about Switzerland anymore?


By Ronan Manly
Saturday, November 8, 2014

GATA’s dispatch of a Bloomberg News story November 5, “World Gold Council Has Nothing to Say about Swiss Gold Referendum” —

— reminded me that there was a time when the council would publish detailed analysis on topics relevant to Switzerland’s gold reserves. This time covered at least from May 1997 to May 2000, prior to Switzerland’s infamous gold sales.

These World Gold Council publications were frequent and often questioned the motives and purposes of the Swiss National Bank and Switzerland’s federal government, while taking an independent stance representing the global gold industry. Here are five examples:

1. In-depth analysis on potential Swiss gold sales, published by the World Gold Council in May 1997 as part of its quarterly Gold Demand Trends letter. Two pages of analysis titled “What Swiss Gold Rush?” can be found on Pages 16 and 17.

2. Analysis titled “Swiss Gold Policy” issued by the World Gold Council’s “Centre for Public Policy Studies” on May 28, 1998, in reaction to statements made the previous day by the Swiss Finance Ministry about plans for constitutional changes involving the Swiss National Bank and their impact on Switzerland’s gold reserves, including sections on the independence of the bank, the bank’s mandate, and analysis of gold reserves.

3. “The Swiss National Bank and Proposed Gold Sales,” Research Study No. 21, published by the World Gold Council in October 1998. This provided detailed analysis of everything concerning the Swiss National Bank’s and the Swiss federal government’s proposed gold sales.

The report was written by an academic, Mark Duckenfield, on behalf of the World Gold Council’s Centre for Public Policy Studies and was introduced by Robert Pringle, who was head of the Centre for Public Policy Studies. Pringle is the founder and chairman of Central Banking Publications and is well known in the world of central bank gold.…

4. A review by the World Gold Council titled “The Washington Central Banks Agreement on Gold,” published September 26, 1999, immediately after announcement of the Washington agreement. This review includes analysis of the agreement’s impact on Switzerland’s gold reserves.

5. An extensive question-and-answer brochure titled “20 Questions About Switzerland’s Gold (with Answers by the World Gold Council)” written by the council in June 2000 pursuant to the October 1998 report “The Swiss National Bank and Proposed Gold Sales” and released soon after the Swiss National Bank had started its gold sales in May 2000. Access requires free registration.

The World Gold Council was born in Switzerland and has its roots there. Its headquarters was in Geneva until it moved to London in 1999. The council was established as a verein in Switzerland and is still registered with the Swiss Registre Du Commerce. Notably, the council is registered in England and Wales as an “overseas company.”

So not so long ago the World Gold Council did care about Switzerland and the Swiss people’s gold reserves.

But with the council’s continued silence on the Swiss Gold Initiative, unfortunately that caring seems to have passed. Whether this change results from the council’s move to London and its alignment with the London gold market or from the council’s opening offices worldwide, only the council itself can answer.

The late Swiss gold advocate and banker Ferdinand Lips seems to have been prophetic about what was to become of the World Gold Council when in an interview in 2004 he rebuked it while incidentally complimenting GATA. Lips said:

“GATA is accomplishing outstanding work by daily informing the investment public about the manipulation of all markets, especially the gold and silver markets. More, they are bringing out many interesting articles and information. To inform about the gold market actually would be the job of the World Gold Council . But this organization fails completely. … GATA should be institutionalized and take over the work of the World Gold Council. My opinion is that the World Gold Council is worthless and even works against the interests of the gold-mining industry.”

In 2005, shortly before Lips died, his business partner J.P. Schumacher delivered a speech for him, saying:

“It can only be in the interest of mining people to support GATA. Actually the defense of the mining industry was the job of the World Gold Council. But they failed. That is one of the strangest organizations I ever met. In any case the World Gold Council is not the friend of the gold-mining industry.”

With just three weeks until the potentially historic Swiss Gold Initiative referendum on November 30, it remains to be seen whether the World Gold Council in London or the gold-mining companies that it claims to represent will stir from their stupor and even comment in any way on an issue that a mere 15 years ago would have had the council devoting significant resources for analysis, comment, and shaping the debate.

Without such commentary from the World Gold Council, it is becoming increasingly difficult to accept its claims that it provides “research and thought leadership” and “communication” on the gold market and that it would “inform and shape future gold markets.”


Ronan Manly is a market analyst for GoldCore and a consultant to GATA.








(courtesy Chris Powell/GATA)




GATA dollar, euro, pound, or bitcoin?


11:04a ET Sunday, November 9, 2014

Dear Friend of GATA and Gold:

With the monetary metals mining industry agreeing to die quietly and its investors dying with them, the World Gold Council celebrating watches for plutocrats as its industry dies —

— and the Western financial journalism celebrating central bankers instead of questioning them critically, it’s getting harder to perceive GATA’s constituency in particular beyond humanity generally.

At least our efforts in North America, dominated by the U.S. government and Wall Street (yes, what’s the difference?), produce less and less. Efforts more distant from those financial powers seem more promising, since while in North America the consequence of the gold price suppression scheme is mainly the loss of the market economy, in the rest of the world the consequence is daily financial exploitation.

GATA is not unknown outside North America. As noted yesterday —

— your secretary/treasurer will be speaking twice next month at conferences in Europe. And he has been invited to speak at three conferences in Asia in March. But travel over such long distances is expensive and the conference business, especially for conferences connected with mining, is not in a position to cover much of that expense.

Further, of course, GATA has never put a lot of effort into fundraising — not that it would accomplish much, given the radioactivity of our mission: free markets, limited and transparent government, and fair dealing among nations and peoples.

Our support has fallen off dramatically over the last year and unless things change just as dramatically soon our operations will be severely curtailed next year; just keeping the flag flying, the Internet site operating, may become a challenge.

So, as a practical matter, who is our constituency? Only you 9,562 people who as of this morning belong to our e-mail dispatch list — and most of you have never contributed to the organization, even as a mere dollar, euro, pound, or tiny fraction of a bitcoin from each of you would give GATA a crucial boost right now.

Providing that little bit of support is easily accomplished by credit card or bitcoin code at GATA’s Internet site —

— but please, just new donors this time. We can’t keep relying on our most loyal friends.

One more reason to help: If this doesn’t work, we may have to resort to Soupy Sales methods:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


A great discussion on backwardation, its meaning and the resultant effect on a world
wide financial meltdown
(courtesy Fraser Murrell/GATA)

Fraser Murrell: Permanent gold backwardation means a worldwide financial meltdown


11:20a ET Sunday, November 9, 2014

Dear Friend of GATA and Gold:

Australian scholar Fraser Murrell, a mathmetician and former stockbroker, argues today in commentary posted at MineWeb that, as the economist Antal Fekete has written, permanent backwardation in gold is the great threat to the world financial system, at least as it is now constituted as a fiat money system.

“Sooner or later,” Murrell writes, “the bullion banks and governments will run out of ammunition and they will be forced to step back and allow the market to do its thing. Which is to repeat the 1970s — the worst of all economic outcomes — stagflation. Unfortunately, this is the consequence of all the money printing, and while it can be delayed it cannot be stopped. The gold price will eventually peak in the tens of thousands of dollars and unless the bullion banks unwind their short positions, they will either default or go bankrupt.”

Murrell’s commentary is headlined “Permanent Gold Backwardation = Global Meltdown Ahead” and it’s posted at MineWeb here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.




(courtesy zero hedge)



What The Swiss Gold Referendum Means For Gold Demand


The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war – between theSwiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People’s Party (SVP) on the other – has begun and we expect it to escalate as the day draws ever nearer. Having already questioned the ‘location, location, location’ of Switzerland’s current gold stash, andexamined the initiative in great depth here, JPMorgan notes that not only might the forthcoming Swiss gold referendum stabilize gold prices at a time when Gold ETF demand continues to decline, but warns, it also appears that markets under-appreciate this event.


As JPMorgan explains,

Gold ETF flows continued to bleed losing $4bn or 6% of AUM cumulatively since the end of August.


Gold Miners ETFs, which have held up relative well up until recently also suffered over the past two weeks (Figure 7).


The downtrend in Gold ETF flows represents a headwind for gold in the face of subdued physical demand recently.

The latest data from China Gold Association, reported physical gold demand by Chinese investors of only 185 tonnes in Q3, down from 246 in Q2 and 322 in Q1.

While Chinese physical demand remains subdued

[ZH – a point we note is very much in the eye of the newspaper holder]


Who do you choose to believe?


h/t @sobata416



*  *  *



The forthcoming Swiss gold referendum could stabilize gold prices at a time when Gold ETF demand continues to decline.

It also appears that markets under appreciate this event.


If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year.


This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year.

*  *  *

As Grant Williams noted previously, with the establishment being unable to actively campaign AGAINST the Initiative, all has been quiet for many months; but with the dawning awareness that this little campaign might actually grow some legs, a few members of that establishment have been getting a little antsy…

( …Now, with less than two months until the vote, the central bank is intensifying its communication. It opened a “dossier” on its website yesterday where it will post materials outlining why it “reject[s] the initiative”.

“Monetary policy transactions directly change our balance sheet. Restrictions on the composition of the balance sheet therefore restrict our monetary policy options,” [SNB Vice-chairman Jean-Pierre] Danthine explained.

“A telling example is our decision to implement the exchange rate floor vis-à-vis the euro… with the initiative’s legal limitation in place, we would have been forced during our defence of the minimum exchange rate not only to buy euros but also to buy gold in large quantities.


“Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means.”

Sometimes I think these people are completely delusional.

So, let me get this straight: gold is a relic which restricts your ability to do such vital things as… oh, I dunno, promise to print unlimited amounts of your currency in order to peg it to another, failing currency and thereby debase it by 9% in 15 minutes? Or it might mean the market doesn’t have complete faith that you might be completely relied upon to do really smart things like that?


Somebody. Please? Make it stop.

The Swiss establishment has been reliant upon the public’s ignorance in these matters, but now they are up against a formidable opponent in Egon von Greyerz. Not only that, but they can clearly see that, as elsewhere around the world, the public is fast becoming disenchanted with the status quo; and that is potentially very dangerous for these people.

What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY — not in two years, as many blogs and websites are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you.

The closer we get to the vote on November 30, the bigger this story is going to become, and the bigger it becomes, the higher the chance that the yes vote wins.

Should that happen, it will undoubtedly set off alarm bells throughout the gold market, as yet more physical gold will need to be repatriated and another sizeable, price-insensitive buyer will enter the marketplace.







Looks like one of the darling stocks on the London stock exchange the former Hambro

gold mines is on the verge of bankruptcy:


(courtesy zero hedge)




One Of Largest Russian Gold Miners On Verge Of Bankruptcy

Tyler Durden's picture


A little over a year ago, we showed the average cost curves of gold and the cost per mine for one reason: with the forced selling in paper gold, extracting physical gold is increasingly unprofitable for gold miners.

And while some companies, those lucky few which have no debt on their balance sheet, have the option to mothball projects and wait for the lack of supply to catch up with demand and also price (at least in a world in which physical supply and demand still have some bearing on trading of paper gold) others, those who have creditors breathing down their neck, whose extraction cash costs are above the spot price and who aren’t hedged, are essentially out of options.

One such company is Russian gold producer Petropavlovsk, which a few years ago was one of Russia’s biggest companies and whose Pioneer mine produced 314,850 oz of gold in 2013, and is one of the largest gold mines in the Russian Far East.

As Siberian Times reports, founded by Eton-educated Peter Hambro, Petropavlovsk was valued at more than $3 billion four years ago and was a potential candidate to move into the coveted FTSE100. But today the firm is now worth just $60 million and is in a perilous financial situation, with speculation it may even default on $310 million in convertible bonds in February.

A statement from Petropavlovsk said: ‘The company confirms it is continuing to talk to its senior lenders, bondholders, other stakeholders and third parties in order to complete a holistic refinancing of the group’s outstanding four per cent convertible bonds due February 2015.”

Further details on the gold-miner’s financial plight:

The Financial Times reported the consortium includes Russian Kirill Androsov, the managing partner of Altera Capital and former deputy chief of staff to Prime Minister Vladimir Putin. Shares in Petropavlovsk rose almost 20 per cent after news broke of the potential rescue deal, which has been put together by Amsterdam-based investment company Sapinda.


Petropavlovsk develops gold deposits in the Amur region at mines in Pokrovsky, Pioneer, Malomyr and Albyn. The company decreased gold production by four per cent to 741,000 ounces in 2013, and targets for 2014 are even lower at 625,000 ounces.


In the first half of this year the company did cut its net losses nearly 88 per cent to $95million, but was unable to post profits. The fall from grace for what was once one of Russia’s biggest companies is certain to be difficult for the man who built it up from nothing 20 years ago.

And yet for those hoping to see an avalanche of gold miner defaults, which would lead to a collapse in gold production just as demand for physical is surging, and an even greater imbalance between physical and paper prices, may have to wait: a bailout may be in the offing. Also from the Siberia Times: “Petropavlovsk is on the brink of a rescue package that could save the company following a turbulent period that saw billions wiped off its value. Directors of the firm, which commercially develops gold deposits in the Amur region of Siberia, have announced they are looking at ‘all options’ to stem the crisis.”

The company added that “as part of this ongoing process, the company has also been in receipt of approaches by various potential third-party investors in recent months. The company continues to examine all its options and is working towards a solution in as expedient a manner as possible. No transaction has yet been approved or agreed.”

Stressing that no deal has yet been done, in a statement they said they had received a number of proposals from third-party investors. The announcement came after the Financial Times newspaper said that consortium, of Russian, German and South African investors, was prepared to inject up to $250million in the company.

And while the future of the company’s current owner, Peter Hambro is clouded and bondholders may soon get control of the company, a better question is whether the company may not be the latest one to feel some pressure for additional proximity, courtesy of the Kremlin:

Meanwhile, it was also announced that Mr Maslovsky, who has been a Russian senator for the past three years, is rejoining the firm as chief executive.

All it would take is a phone call from Putin to make it clear that Russia would provide some rescue funding in addition to a majority stake. And will Putin stop there, or will he make it a mission to do the same to all other Russian gold miners?

Finally, here is the soon to be insolvent gold miner in its natural habitat.




Two biggy commentaries from Bill Holter today.

I urge you to read these carefully!!


(courtesy Bill Holter/Miles Franklin)


No .1


They’ll call it “The G-20 Massacre”!



Very “quietly” the world’s 20 largest economies will meet in Brisbane, Australia later this coming week.  I use the word “quietly” because here in the U.S. almost no mention of the upcoming meeting has been made.  I even searched for news on the event and almost could find none.  Strange?  Well yes and no, quite strange because it surely is big news especially with all that has been going on but not strange because here in the U.S. we must keep a happy face on things which very well may not be the outcome this time around.  I wasn’t sure how I was going to write this piece but I guess it’s just easiest to tell you what I think the result will be and then explain why.
  In my opinion, once this meeting is overnext Sunday all hell could break loose financially.  I say this because much has already been put into place ahead of time and it is my expectation the U.S. and her dollar will at a minimum be taken off of “the top shelf” or at least be pushed back from the front.  Let me put forth some of the many available dots and see if they can’t be connected.
  First, if you remember last year’s summit, president Obama was not pictured in the center as the U.S. has always been at nearly all meetings such as these traditionally.  If I recall, I believe I commented that he was positioned on one of the ends and I took it as “not a very good sign” at the time.  This time around, president Obama will arrive as a “neutered” force after the Democrats lost total control of Congress.  This fact is not lost on the world, they now know president Obama has no collateral nor clout left and will be the lamest duck president in history.  One could argue this point but he has lost Congress while having the lowest public approval rating of any U.S. president.
  We also know that China has been making business deals, setting up renminbi currency hubs, and either preparing for or actually doing trade in local currencies or their own all over the world.  The Chinese have been forming these deals WITHOUT the use of dollars.  Russia, who for the last 5-6 months have been the focus of “Western sanctions” have also been active in doing trade deals, particularly with China.  If you recall, Russia achieved their “Holy Grail” gas deal earlier this year with China worth an estimated $400 billion.  Mr. Putin announced this past Friday a 2nd deal with China which will further intertwine the two nations in trade.  Please also remember that Russia has recently made moves on Arctic energy reserves while U.S. “majors” such as Exxon/Mobil will not be able to participate in unless they break Mr. Obama’s sanction rules.  Are the sanctions “good” for American business?
   Before the upcoming G-20 summit there will also be two other meetings scheduled early this week, APEC (Asia Pacific Economic Coordination) and also a BRICS meeting.  President Xi of China released a statement this past Sundayregarding the upcoming APEC meeting;_ylt=A0LEV1EcwF9U66kA5B1XNyoA  by saying “China wants to live in harmony with all its neighbors”.  Please understand that this is not just a “flowery” comment, it is the way China thinks and does business.  The world understands this and also understands how the U.S. has been doing business for years.  The BRICS “pre G-20 meeting” has already announced goals including the launch of new BRICS bank, its funding and also the restructuring of IMF quotas.
  I would like to speak of “the timing setup” before going any further. There will be these two pre meetings and then the G-20  meeting itself… and also another piece of breaking news which I find VERY curious!  It has been announced out of London that UBS has agreed to a fine for …wait for it …wait for it…”manipulating the prices of gold and silver!!!    Another “Conspiracy Theory” Bites The Dust: UBS Settles Over Gold Rigging, Many More Banks To Follow | Zero Hedge  First off, we have been told every single day for over 15 years that we are wacked out, tin foil hat wearing conspiracy freaks for ever even uttering such nonsense, now we find out it was true…all along …and we are not so crazy after all!  Secondly, other banks are reported also to follow UBS in ‘fessing up so it was a “conspiracy”, only it wasn’t “theory”, it was FACT!  (I wonder what ole’ Martin Armstrong, Doug Casey and all the other apologists will have to say about this?).  I plan to speak about this more, later in the week.
  I’ll bet you thought I was done with “timing” since the above paragraph was so long?  No, there is more.  I would like to add in several other “aligned stars”.  We now know that GOFO forward rates are now more backward than any time in the last 10 years, the Shanghai physical silver inventory is nearly depleted, mints all over the world have gone “back order” and last but not least, December COMEX silver is currently contracted to deliver nearly 10 ounces of silver for every registered (available for delivery) ounce they say they have!  One other little tidbit will be next Monday the 17th, Hong Kong and Shanghai plan on “linking” their exchanges, curious timing?
    OK, so that’s the back ground leading up to the G-20 meeting which concludesnext Sunday.  Just looking at the two “pre” meetings alone can give you a flavor as to what will be discussed and very possibly agreed upon.  The U.S., no matter what the outcome will certainly lose clout.  The possibility however does exist and the stars are currently aligned for the U.S. to be isolated, berated and punished.  In my opinion, China will not allow a sledge hammer financial blow to the U.S. and will probably allow at least some “grace” in its exit from “reserve currency status”.  China has spent years positioning herself.  The BRICS and APEC have made deals, set up settlement infrastructure and now will begin “funding”.  The U.S. on the other hand has spent the last five years adding another $8+ trillion to her balance sheet while the Federal Reserve levered itself up to nearly 80 to 1 while quadrupling its balance sheet.  We fiddled while China methodically positioned herself and the world to move away from the dollar.
  Could this be it?  Could it really be “over” for the American fiat experiment?  Will the world tell a politically neutered president of the biggest bankrupt nation in history what the rules are rather than being dictated to as has always been the case in our lifetimes?  Will China quietly assume the role of “fair arbiter” of international disputes?  Will China assume the role as the center of the financial world?  Will China assume the role as the chief financier of trade?  Will power really shift from New York/London to Shanghai/Beijing?  I think at this point it is a given, the only question is “how, how fast, and when”?  The conditions now exist for the answer to be “overnight and after next weekend”.  Our (western) world is about to change, maybe even violently in overnight fashion, do not be taken by surprise because by now it should not be!  Regards,  Bill Holter
And now the second Bill Holter paper;
(courtesy Bill Holter)
 $15 Silver? You can’t have any!


Here we go again, silver has been trashed to $15! But don’t fear as this “trashing” in my opinion is going to be like Custer’s last stand, let me explain. Just as in past episodes, the artificially suppressed prices have brought out 1,000’s of “Indians” all over the world as buyers of physical metal. I use this analogy of “Indians” because prior to this last 5 years, it was in fact consumers from India (whom are so very price sensitive) who would step up in the physical market to eat up supply if the price dropped.

There were stories out of Germany regarding the public’s consumption of silver this past week which were astounding. There were reports of coin dealers selling out of all silver inventory and even one dealer claiming they did more business Thursday and Friday (a week ago) than they had for average months so far this year. For quite some time now, there have been rumors that the big demand for Silver Eagles has come from Europe. This cannot be confirmed because the U.S. mint does not disclose its customers but the frenzy in Germany this week does add some credence to the rumors.

Domestically, this past week saw exactly what we have seen no less than four previous times going back to the fall of 2008. Premiums started to rise after the FOMC meeting Wednesday a week and a half ago and rose nearly each and every day since. In fact, even though paper (COMEX) silver was down over $1 between Thurs. and Friday, premiums rose by close to an equal amount …so real silver was still priced about the same as it was 2 days earlier. Fast forward to this past week and premiums rose again on Monday and Tuesday and stories of “sell outs” started to swirl. By Wednesday morning, we found out that premiums jumped again and many products were going “wait list” of 2-3 weeks.

This was confirmed by the U.S. mint when they announced a suspension of sales. The mint had a record “non January” month of close to 6 million Silver Eagles followed by nearly 3 million in just the first 3 days of November. Reportedly they sold over 2 million Eagles in less than 2 hours Wednesday morning, they experienced a “run” and suspended sales indefinitely!

Before going any further on the silver topic I want to stop anyone in their tracks who refuse to see that the price of gold and silver are suppressed. Wednesday in the wee hours of the morning at 12:30 AM, someone sold 13,000 COMEX gold contracts which pummeled the price of gold by over $20. In perspective, the size and timing of this is hilarious! 12:30 in the morning? India was on holiday while Japan and China were on lunch breaks …not to mention the outright size. This 1.3 million ounces (40 tons) works out to $1.5 billion dollars or nearly seven days of global production! Who has this amount of gold to sell? Or to even hedge? It is not as if gold is just sloshing around because GOFO lease rates are now more negative than any time in the last 10 years! The gold market was very tight PRIOR to this sale, the sale only made the market tighter and served to clear the shelves. No real seller looking for the “best available price” would sell huge volume like this at THE most illiquid moment in global markets, apologists like Martin Armstrong and Doug Casey might take a stab at explaining this one away? Selling in this manner can have only one result and one purpose alone, affect the price downward …end of story. (The previous was written on Saturday, news out Sunday that UBS will be fined for manipulating gold and silver prices)! !!! It is now a fact folks!

So, the financial Rembrandts got what they wanted, they broke silver and gold through their support levels and broke the charts …but did they really? NO! $15 silver you say? Too bad, you can’t have any! You can’t have any because there is none to be had! Please don’t tell me “yes you can” and that you could simply purchase a COMEX contract and demand delivery because they are on the hook for nearly 600 million silver ounces in December while holding an inventory of just over 60 million ounces, close to a 10-1 ratio of “obligation versus ability to perform”!

By the end of the week, there was nearly no “live” silver available. In fact, this was the case by close of business Wednesday. Most all products saw their premiums rise and wait times go out to 3-4 weeks, “indefinitely” in the case of the U.S. mint. The situation now is like the butcher who has a sign in his window selling filet mignon for $2 per pound …he doesn’t have any and if he did it would be gone in a NY minute. Expanding on this, if it were really true, he was selling prime beef for $2 per pound and ranchers were paid even less, herds would be slaughtered all over the place because a dead cow is better than one that needs feed and water. Think about this in the mining industry, these current prices being offered to mines are not enough for them to sustain business so they will either cut back or go broke which will even further diminish the supply to an already supply starved market!

What I tried to explain to you in the above paragraph is that “low prices will be the cure to low prices”. Low prices have created a literal tsunami of demand and over time will restrict supply, this is why there are now very high premiums, very little product available and if you want any you must pay close to $20 per ounce. This is almost an exact replay of 2008 when the silver price was an artificial $9 and getting real silver at $15 was almost impossible while waiting 4-8 weeks!Let me add by saying this, “it has to start somewhere”, an explanation is needed. I believe the entire “fiat” episode (which Greenspan has now admitted is inferior to gold) will end with both silver and gold going “no offer”. The physical markets will be swept clean by a systemic “run”, probably sometime soon. We may even see the paper markets go down further and physical pricing get even stronger, we are already seeing sub $16 paper and nearly $20 physical. Paper is only 80% in price of the real metal, this can and I believe will widen much much further. The average person will marvel at the prices of gold and silver but that will not be the real story. I believe the gold and silver markets will be defined by “availability” …or lack of. Ask yourself what will be your mindset when gold and silver prices are breaking out to the upside and there is no availability of product? THIS will define the market. What if COMEX silver was moving to $20 but you couldn’t get any for $30? Or COMEX at $50 and your $100 bill could not entice someone to part with an ounce of silver? When the fiat system does finally collapse which it mathematically will, real metal will go “no offer” for any amount of fiat money. Say I’m crazy if you will but keep in mind that this is exactly what has happened every single time in the past to every single fiat currency throughout all of history. All I am saying is that it has to start from somewhere and lack of availability will be present when it does. Lack of availability is now happening again and I do want to point out a most very basic human nature. When man wants something and is told he cannot have it …he wants it even more!

Let me finish with this, the current episode in my opinion is the start of a global systemic “run”. It is quite curious that the G-20 summit starts this coming week and concludes on the 16th. I believe there are 150 or more countries now that would like to see the end of the dollar as the world’s reserve currency (I plan to write about this tomorrow). Is it a coincidence that we now see the end of QE, a “stronger” dollar versus (other paper) fiats, an obvious paint job on metals, a COMEX delivery period where far more metal is contracted for than exists, a real (Shanghai) exchange which has seen 90% of their vault inventory swept clean …followed by a global meeting of all world leaders? Not to mention a meeting where the president of The United States will arrive in a virtually “castrated” condition after the elections? Has the “paint job” been done in order to “show” dollar strength? I believe yes, I also believe that if I can see it then so can the upper echelons of the rest of the world!

If you have waited to this point to purchase silver or gold, the market told you something this past week. The market has spoken and told you “if you want $15 silver, you can’t have any”! The danger as I wrote above is what will happen when prices are higher and “you can’t have any”? Don’t let this happen to you! Regards, Bill Holter, Miles Franklin Associate writer



And now for our more important paper stories




Early Monday morning trading from Europe/Asia

1. Stocks mostly up with  Asian bourses   with a higher yen  value   to 114.10

1b Chinese yuan vs USA dollar  (yuan strengthens) to 6.11935

2 Nikkei down 100 points or 0.59%

3. Europe stocks all up  /Euro rises/ USA dollar index down at 87.35.

3b Japan 10 year yield at .46%/Japanese yen vs usa cross now at 114.10/

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  The USA/Yen rate crosses back below the 115 barrier again last night

3fOil:  WTI  79.58   Brent:     84.70 /RUSSIA and Nigeria deeply hurt with these low oil prices/also USA shale oil in trouble/Rouble and Nigerian currencies collapse and then rebound with sovereign intervention

3g/ Gold down/yen up;  yen below 115 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. Fifty percent of Japanese budget financed with debt (see Von Greyerz)

 3j Europe’s ECB will increase its balance sheet and they will use the old familiar LTRO’s.  Probably in 2015 the ECB will increase the size of its balance sheet by $621 billion  (500 billion euros)

3j Gold at $1168.00 dollars/ Silver: $15.62

3k. Deflation in Greece is now the norm with CPI down 1.7% last month

Industrial production in Greece falls a whopping 5.8%

4.  USA 10 yr treasury bond at 2.29% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid

(courtesy zero hedge)/your early morning trading


Dollar Profit-Taking Keeps Futures Flat In Quiet Session




Following Friday’s sticksave, where the usual 3:30 pm ramp brigade pushed futures just barely green into the close despite a miss in the payrolls report which the spin brigade did everything in its power to make it seem that the hiring a few hundred thousand young female waitresses was bullish for the economy, overnight we have seen a listless session, dominated by more USD-profit taking as increasingly more wonder if the relentless surge higher in the Greenback is massively overdone, especially considering that stocks are screaming “worldwide recession” excluding the US, if only for now, because as Goldman explained soaring USD means plunging Oil, means tumbling E&P capex, means lower GDP, means less growth, means lower corporate profits, and so on.

That said, we expect the now trivial Virtu JPY momentum-ignition algos to activate shortly, pushing the USDJPY and its derivative, the S&P500, higher in the coming minutes, and certainly before the US market opens in under 3 hours.

Over in Europe things were ugly as usual, with the economic highlights coming from Greece, where deflation reigns, as CPI dropped -1.7%, below the -0.9% expected, and down from -0.8%, while Industrial Production tumbled -5.1%, also far below the -3.8% expected. The triple dip recession is also strong in Italy where Industrial Production also plunged from 0.2% to -0.9%, below the -0.2% expected.

Despite, or rather thanks to the now traditionally weaker European data, European shares remain higher with the oil & gas, construction stocks outperforming, real estate, travel sectors underperforming. The Spanish and Dutch markets are the best-performing larger bourses, Swiss the worst as the EURCHF approaches the SNB’s 1.2000 floor ever closer, and should the gold referendum pass the Swiss Bank will have a choice: buy 1500 tons of gold, or scrap the floor. The euro is stronger against the dollar.

From an Italian perspective, the MIB has been dragged lower by the troubled Italian Banking sector, with some analysts noting the political uncertainty in the country following reports that the Italian President could step down from his role before the end of his term. In Spain, participants have shrugged off the results of an informal vote on independence for Catalonia, which showed that 80% are in favour of the notion. In stock specific news, Siemens have traded lower throughout the session after a negative broker move at JP Morgan, while Serco are down a staggering 33% after issuing a profit warning and rights issue.

Meanwhile, the Bank of Russia cuts 2015 growth forecasts.

Over in Asia, JGBs traded up 18 ticks, underpinned by weak Japanese stocks and with notable curve flattening observed ahead of tomorrow’s 30yr JGB auction, with 5s/30s up 1.9bps. Asian equities started the week on a firm footing led by Chinese bourses after confirmation that the exchange link between Hong Kong (+0.8%) and Shanghai (+2.3%) will debut on Nov. 17th. Moreover, market participants chose to overlook mixed Chinese data including an upbeat Trade Balance report, which analysts attributed to ‘over-Invoicing’, while Chinese CPI came in line with expectations. The Nikkei 225 (-0.6%) fell weighed on by JPY strength after the currency gained back lost ground against the greenback. Shanghai Composite rises as China says the Shanghai-Hong Kong exchange link will debut in a week.

Commodities gain, with nickel, silver underperforming and natural gas outperforming. Looking ahead, today’s session sees a distinct lack of tier 1 data releases, although Fed’s Rosengren is due to speak at 2210GMT/1610CST.

Market Wrap

  • S&P 500 futures up 0.1% to 2027.9
  • Stoxx 600 up 0.2% to 336.1
  • US 10Yr yield down 2bps to 2.28%
  • German 10Yr yield down 1bps to 0.8%
  • MSCI Asia Pacific up 0.8% to 141.3
  • Gold spot down 0.5% to $1171.7/oz


Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade largely in the green, with volumes exceedingly thin, while Gilts lead the way higher for fixed income markets ahead of an expected pessimistic QIR release from the BoE.
  • The USD-index has pulled back from last week’s hefty gains, with USD/JPY retreating back towards the 114.00 level.
  • Looking ahead, today’s session sees a distinct lack of tier 1 data releases, although Fed’s Rosengren is due to speak at 2210GMT/1610CST.
  • Treasuries extend Friday’s post-payrolls gains before week’s quarterly refunding auctions begin with $26b 3Y notes; yield 0.94% in WI trading vs 0.975% in October.
  • U.S. bond markets closed tomorrow for Veterans Day, stock markets open; auctions resume Wednesday with $24b 10Y notes
  • China’s exports rose 11.6% in October, more than estimated; imports rose 4.6% vs 5.0% median estimate in a Bloomberg survey, leaving a trade surplus of $45.4b
  • China and Japan broke a two-and-a-half year summit drought as the leaders of Asia’s two largest economies met in Beijing, seeking to repair ties frayed by territorial and historical disputes
  • The exchange link between Hong Kong and Shanghai will debut in a week, giving foreign investors unprecedented access to China’s $4.2t equity market
  • Japan PM Abe considers dissolving parliament if planned Oct. 2015 sales tax increase is postponed, Yomiuri reports, citing unnamed officials; Abe adviser Etsuro Honda says sales tax raise could harm recovery
  • The Financial Stability Board said today that the biggest banks may be required to have total loss absorbing capacity equivalent to as much as 25% of risk-weighted assets, with national regulators able to impose still tougher standards
  • Russia’s economy will probably stagnate next year, the central bank said in the broadest official acknowledgment of the damage wrought by sanctions over Ukraine and a slump in oil prices
  • A leader of Ukraine’s pro-Russian separatists discussed the conflict with senators in Moscow as violence intensified in the territory his forces had seized
  • Prime Minister Rajoy’s plan to use the Spanish constitution to stop Catalans from voting on independence failed as regional officials defied the government, the state prosecutor and the nation’s highest court to hold the ballot; more than 2m Catalans voted, with 81% backing independence
  • Sovereign yields lower. Asian stocks mixed; Nikkei -0.6%, Shanghai +2.3%. European stocks, U.S. equity-index futures rise. Brent crude and copper gain, gold falls

US Event Calendar

  • 10:00am: Fed Labor Mkt Conditions Index, Oct. Central Banks
  • 5:10pm: Fed’s Rosengren speaks at Washington and Lee University, Lexington, Va.
  • 1:00pm: U.S. to sell $26b 3Y notes


JGBs traded up 18 ticks, underpinned by weak Japanese stocks and with notable curve flattening observed ahead of tomorrow’s 30yr JGB auction, with 5s/30s up 1.9bps. Asian equities started the week on a firm footing led by Chinese bourses after confirmation that the exchange link between Hong Kong (+0.8%) and Shanghai (+2.3%) will debut on Nov. 17th. Moreover, market participants chose to overlook mixed Chinese data including an upbeat Trade Balance report, which analysts attributed to ‘over-Invoicing’, while Chinese CPI came in line with expectations. The Nikkei 225 (-0.6%) fell weighed on by JPY strength after the currency gained back lost ground against the greenback.


Despite a relatively mixed start, European equities trade largely in the green with the exception of the FTSE MIB, with a lack of fundamental newsflow to drive price action. In volume-thinned markets, European stocks have been provided some reprieve by the modest rebound in commodity prices which has subsequently seen basic material and energy names outperform throughout the session alongside the softer USD. From an Italian perspective, the MIB has been dragged lower by the troubled Italian Banking sector, with some analysts noting the political uncertainty in the country following reports that the Italian President could step down from his role before the end of his term. In Spain, participants have shrugged off the results of an informal vote on independence for Catalonia, which showed that 80% are in favour of the notion. In stock specific news, Siemens have traded lower throughout the session after a negative broker move at JP Morgan, while Serco are down a staggering 33% after issuing a profit warning and rights issue.

Elsewhere, despite the modest strength in European equities, fixed income products trade higher amid particularly thing volumes, with Gilts leading the way higher ahead of expectations that the BoE will push out its forecast for a rate-hike after they downgrade their UK growth forecasts at this week’s QIR release.


In FX markets, profit-taking in the USD-index has largely dictated price action, with USD/JPY trading in close proximity to 114.00. Elsewhere, EUR/CHF could be a key focus for markets after printing its lowest level since Sept 2012 and residing just above that 1.2000 floor. EUR/USD once again sees a heavy-flow of option expiries which could dictate price action with USD 2.2bln at 1.2500 due to roll-off at the 1500GMT NY cut. Furthermore, RUB has strengthened against the USD following comments from the Russian Central bank that they have decided to cancel its limited interventions of USD 350mln a day if the RUB rate falls below “certain” level.


In the energy complex, both WTI and Brent crude prices have been supported by news of the closure of the El Feel oil field in Southwest Libya which is the third oil facility in Libya to shut down within a week. Additionally, according to an oil official Libya’s Hariga port is still closed, although it may open Tuesday if talks with protesters succeed. Furthermore, one thing to be aware of is the ongoing situation in Eastern Ukraine, with fighting in the area said to be the worst seen in months. In metals markets, Gold is currently trading modestly lower after marking its biggest gain since June on Friday following the NFP report, while
base metals have supported by Chinese trade data.

* * *

DB’s Jim Reid concludes the weekend event recap

there’s plenty to talk about this morning following the US payrolls print on Friday. But first the strong performance in HK/Chinese equities has been the main story overnight despite another soft inflation print out of China. Indeed the positive market sentiment in Chinese equities this morning was largely led by news that the much anticipated Shanghai-Hong Kong Stock Connect will launch on November 17th. The Hang Seng and the CSI have rallied +1.6% and +1.7% respectively on the back of the news which will allow foreign investors the access to tap into the Chinese equity market. Away from equities it’s also worth noting that the PBOC has also raised the daily reference rate for the CNY by 0.37% to 6.1377/dollar representing the largest single day rise since June 2010.

Market sentiment aside fundamentals are a little more mixed with dis-inflationary pressure the continuing theme in the region. Indeed October’s Chinese headline CPI came in at 1.6% yoy. Whilst this is in line with consensus it was basically unchanged from the previous month and still the slowest since January 2010. PPI was lower with a -2.2% yoy fall in October which was a steeper decline than expected (-2.0% yoy). Chinese PPI yoy growth has been negative every month since 2012 and the fall in commodity prices clearly isn’t helping of late but it also shows the excess capacity that industrials are enduring at the moment. The subdued CPI/PPI print follows on from what was a stronger-than-expected Chinese trade data report (US$45.4bn surplus v US$42.0bn expected) over the weekend although Reuters noted that the strength may have been subject to data manipulation and distortion from speculative hot money. Elsewhere in Asia trading is generally mixed with bourses in Taiwan (+1.5%) and Korea (0.9%) outperforming Japan (-0.6%) and Australia (-0.4%) in Asia this morning.

Taking a step back now and reviewing Friday’s price action in the US, markets were generally unchanged at the close of play following what we would describe as a mixed payrolls print. The headline October reading showed a below expectations gain of +214k (vs. +235k expected) although we also had a +31k upward revision to the previous two months whilst private payrolls rose +209k compared to +244k previously. Our US colleagues pointed out that the breadth of job gains were solid with manufacturing (+15k), construction (+12k), trade (+49k), financial activities (+37k) and government (+5k) all up on the month. Household employment rose +683k over the period whilst the number of unemployed fell -267k representing the largest gain in household employment since November 2013 and leading to a modest decline in the unemployment rate to 5.8% (from 5.9%), and now at a post recession low. Our US team concluded if it had not been for a high seasonal hurdle, the October jobs gain would have been well over 300k suggesting that the October print could get revised meaningfully higher and/or the November reading could be noticeably stronger than October’s results.

The S&P 500 closed +0.03% on the day, perhaps reflecting the uncertainty as to how to read the data. Nevertheless this was still enough to extend the all time closing high. More interesting price action was in Treasuries though which saw yields notably lower probably on the softer earnings details within the payrolls release. The 2y closing 4bps lower whilst the 10y fell 8bps to close at 2.30% and the US $ pared back some of its recent gains as the DXY index closed 0.5% lower to 87.594. Credit indices reflected the moves in equities as the IG23 closed modestly wider (+0.75bp) and HY23 remained unchanged.

Closer to home, European markets weakened into the close following the US data with the Stoxx 600 -0.5% lower on Friday. Before this, Germany reported a fairly subdued industrial production print, +1.4% mom which was well under the 2.0% mom consensus. Our European economists noted on Friday that while industrial production fell 0.3% qoq, this was a much smaller drag than the Q2 print although the further deterioration in confidence data does suggest that the underlying economy is weak, despite the robust expansion of private consumption. As a result the team have lowered their GDP forecast (due this week) for Q3 to 0.1% (from 0.4%). Bunds were modestly stronger following the print, 1bp lower to 0.82%. Looking around the rest of the Eurozone, France (0.0% mom versus -0.2% mom expected) and Spain (1.0% versus 0.7% expected) reported firmer industrial production prints.

Staying in Europe, there was further news out over the weekend that Russia has expanded its military presence on rebel-held areas of Ukraine following the deaths of as many as 200 separatists at Donetsk airport. This comes after the Russian Ruble closed out another volatile day on Friday, down 0.2% versus the Dollar although appreciating as much as 2.3% following news that the Central Bank of Russia would take action to halt the crisis.

Before preview the week ahead, Bloomberg have reported that 81% of voters, or 1.6m people have voted for independence in the Catalan non-binding referendum with 88% of the polling stations counted for at this stage. The ballot went ahead peacefully over the weekend despite the tensions with Madrid. The election has been deemed illegal by the Constitutional Court but it will add some pressure on Prime Minister Rajoy to respond. As a minimum it does give some legitimacy and momentum to the independence movement.

Looking at the week ahead we have the usual post payrolls lull in US data with key releases mostly concentrated at the back end of the week. Indeed the global data calendar is fairly light over the first two days with just trade data and consumer confidence in Japan to look out for ahead of a US holiday on Tuesday. There’s a lot to digest on Wednesday starting with industrial production in the Eurozone. This is then followed up with a focus on the UK as we get the BoE inflation report and various employment data whilst later in the day will bring wholesale inventories out of the US. The early prints on Thursday include industrial production in Japan and China along with retail sales in the latter followed by CPI readings in France, Germany, Italy and Spain as well as the JOLTS report in the US. We round off the week with FDI data out of China as well as ever important GDP readings for France, Germany, Italy and Portugal. Finally Friday brings business inventories data out of the US along with retail sales and consumer sentiment. Whilst data looks to be on the lighter side of things, we’ve got a host of Fed speakers which could be worth keeping an eye out for. The Fed’s Rosengren will be speaking today as well as Kocherlakota and Plosser on Wednesday but possibly the highlight will be Bullard’s speech on the US economy on Friday. On the micro front this week will bring the end of peak earnings season in the US with notable reports from Wal-Mart and Cisco. Closer to home we will hear from 67 of the Stoxx 600 companies, highlighted by SABMiller and Vodafone.


The big news on the weekend:
(courtesy zero hedge)

Russia, China Sign Second Mega-Gas Deal: Beijing Becomes Largest Buyer Of Russian Gas

As we previewed on Friday, when we reported that “Russia Nears Completion Of Second “Holy Grail” Gas Deal With China“, moments ago during the Asia-Pacific Economic Cooperation forum taking place this weekend in Beijing, Russia and China signed 17 documents Sunday, greenlighting a second “mega” Russian natural gas to China via the so-called “western” or “Altay” route, which as previously reported, would supply 30 billion cubic meters (bcm) of gas a year to China.

Among the documents signed between Russian President Vladimir Putin and Chinese leader Xi Jinping were the memorandum on the delivery of Russian natural gas to China via the western route, the framework agreement on gas supplies between Russia’s Gazprom and China’s CNPC and the memorandum of understanding between the Russian energy giant and the Chinese state-owned oil and gas corporation.

“We have reached an understanding in principle concerning the opening of the western route,” Putin said. “We have already agreed on many technical and commercial aspects of this project, laying a good basis for reaching final arrangements.”

RIA adds, citing Gazprom CEO Alexei Miller, that the documents signed by Russia and China on Sunday define the western route as a priority project for the gas cooperation between the two countries.

“First of all these documents stipulate that the “western route” is becoming a priority project for our gas cooperation,” Miller said, adding that the documents provide for the export of 30 billion cubic meters of Russian gas to China annually for a 30-year period.

Miller noted that with the increase of deliveries via the western route, the total volume of Russian gas deliveries to China may exceed the current levels of export to Europe in the medium-term perspective. In other words, China has now eclipsed Europe as Russia’s biggest, and most strategic natural gas client. More:

Miller, who heads Russia’s state-run energy giant, told reporters that “taking into account the increase in deliveries via ‘western route,’ the volume of supplied [natural gas] to China could exceed European exports in the mid-term perspective.”


This came after Russian and Chinese energy executives signed on Sunday a package of 17 documents, including a framework deal between Gazprom and China’s energy giant CNPC to deliver gas to China via the western route pipeline.


Miller said Gazprom and CNPC were in talks on a memorandum of understanding that would see Russia bring gas to China through the western route pipeline, as well as a framework agreement between the two state-owned companies to carry out the deliveries.

The western route will connect fields in western Siberia with northwest China through the Altai Republic. Second and third sections may be added to the pipeline at a later date, bringing its capacity up to 100 billion cubic meters a year.

The facts and figures of the Altay deal are broken down in the following map courtesy of RT:

Also of note, among the business issues discussed by Putin and Xi at their fifth meeting this year was the possibility of payment in Chinese yuan, including for defense deals military, Russian presidential spokesman Dmitry Peskov was cited as saying by RIA Novosti. More from RIA:

Russia’s President Vladimir Putin and China’s President Xi Jinping have discussed the possibility of using the yuan in mutual transactions in different fields of cooperation, Kremlin spokesman Dmitry Peskov said Sunday.


“Much attention has been paid to the topic of mutual payments in diverse fields … in yuans which will help to strengthen the yuan as the region’s reserve currency,” Peskov said commenting on the meeting held between Putin and Xi on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Beijing.


On October 13, Russian Economic Development Minister Alexei Ulyukayev announced that Russia was considering Chinese market to partially substitute access to the financial resources of the European Union and the United States.


The European Union and the United States have imposed several rounds of economic sanctions on Russia over its alleged involvement in the Ukrainian crisis, a claim Moscow has repeatedly denied. The restrictions prohibit major Russian companies from seeking financing on western capital markets.

Meanwhile, as China and Russia keep forging ahead in a world in which the two becomes tied ever closer in a symtiotic, dollar-free relationship, this is how the US is faring at the same meeting: “China, U.S. Parry Over Preferred Trade Pacts at APEC: Little Progress Made on Separate Trade Deals at Asia-Pacific Economic Cooperation Forum.”

The U.S. blocked China’s initiatives because it worried that launching FTAAP talks would impede progress on a separate trade deal, the Trans-Pacific Partnership. The ministers’ statement said that any FTAAP deal would build on “ongoing regional undertakings”—a reference to TPP and other regional trade deals.



The Chinese got all they could expect—a reaffirmation that we all share in the vision of having a regional integrated model” for trade, said U.S. Chamber of Commerce Executive Vice President Myron Brilliant.


U.S. Secretary of State John Kerry said Saturday that negotiating the TPP “is a battle that we absolutely must win.” Ministers from the 12 TPP nations met Saturday afternoon to try to narrow differences, including disputes between the U.S. and Japan over agriculture and auto trade. On Monday, the leaders of the TPP nations are again scheduled to discuss the trade deal, although no breakthrough is expected.


The U.S. is trying to tie an ITA deal to progress on other trade deals with China, as a way to increase its leverage with Beijing. “How the ITA negotiations proceed is an important and useful data point” on China’s ability to negotiate an investment treaty with the U.S., Mr. Froman said.


Trade analysts say the U.S. also hopes to use China’s desire to have the Beijing conference produce concrete results as leverage. This is the first major international summit held in China since Xi Jinping took over as Communist Party chief in 2012, and the government wants to use the session to affirm China’s greater role in the world.

Good luck trying to “increase US leverage with Beijing” using a trade conference being held in Beijing as the venue.

In other words instead of actual trade agreements, the US merely jawboned and “shared visions.”

Then again, as noted here since 2010, in a world in which one can merely “print one’s way to prosperity”, what is the need for actual trade? Surely, which China and Russia are expanding their commercial ties at the expense of Europe, the US can continue to pretend it is the world’s only superpower and has no need for either Russia or China. After all, Mr. Chairmanwoman can always go back to work and print some more of that “world reserve currency.”

His China sending a message:
Look where they put Obama:
(courtesy zero hedge)

Is China Sending America A Message?

Tyler Durden's picture

There was China’s president, Xi Jinping, Russia’s president Vladimir Putin to his right, next to Philippine president Aquino and the uberwealthy Sultan of Brunei Hassanal Bolkiah. And then there is Barack Obama, right in the middle of the “wives club”…



Things must be bad in Euroland;


(courtesy zero hedge0




Dutch ABN AMRO Demands Draghi Buy More, Faster As ECB’s Mersch Flip-Flops



Once again today we see spurious ECB members sending more mixed messages about ECB actions in the near future (and really only impacting precious metals by the look of it. Having said just a month ago that ECB QE would only be undertaken in strict adherence with mandates and treaties, and warning that QE would strain the ECB’s risk-bearing ability; today Luxembourger announced that ABS QE would start next week and Sovereign QE is an option if things get worse. One bank, at least, will be overjoyed… as ABN AMRO wrote this morning that that the ECB needs to bid more aggressively for covered bonds to encourage the street to sell to them.


Mersche a month ago…


And today, his memory seems short…



And today, as Bloomberg reportsm, ABN demands the ECB pay up…

ECB needs to bid for covered bonds more aggressively in order to continue to buy significant amounts in secondary market,Joost Beaumont, analyst at ABN AMRO, writes in client note.

Estimates  suggest ECB bought just EU400m/day of covered bonds on secondary market last week vs EU600m daily avg in first two weeks of program.

Slowdown in secondary activity reflects scarce availability of paper due to negative net supply and difficulty in convincing investors to sell bonds

EU7.4b of purchases exceeds ABN’s initial expectations

If central bank becomes more aggressive, impact on spreads likely to become more pronounced

ECB may need to cut EU1t balance sheet expansion target, Credit Suisse analysts said earlier

*  *  *

Roughly translated is: “we front-ran your program based on entirely non-economic rationales and now it’s “fuck you, pay me” time.”

 Unintended consequence #34527, “whatever it takes” means buying everything at the worst possible prices and forcing EU taxpayers to carry that over-paying risk.








Catalans vote for independence


(courtesy zero hedge)




Catalanstrophe – 81% Of 2.25 Million Voters Choose Independence; Government Responds: “Useless Sham”

Tyler Durden's picture

Prime Minister Mariano Rajoy has a problem. Despite his best legal and propoganda defenses (and harsh weather conditions) today’s symbolioc vote for Catalonia independence proceeded… and the initial results (with 88% of the vote counted) are in:


The Spanish government is saying the “data is not valid” and is investigating the illegal ballot calling it a “useless sham.” Catalan President Mas says pro-independence parties will meet this week to put pressure on Madrid.

Catalan President Mas speaks…


Rajoy responds…

  • Prosecutors probing possible criminal wrongdoing in conduct of ballot, according to e-mailed statement.

As Xinhua reports,

Spanish Minister of Justice Rafael Catala said on Sunday that the ballot held in the northeastern region of Catalonia on its independence was a “useless sham.”


The Spanish government said that the ballot was antidemocratic, useless and has no legal effects.

*  *  *

One more thing…

Quite possibly the leader of ISIS is critically wounded
(courtesy zero hedge)

ISIS Leader “Critically Wounded” In US Airstrikes, Al Arabiya Reports

Tyler Durden's picture

While US authorities noted the airstrikes on a 10-vehicle convoy near Mosul, they could not confirm the identity of those killed.



As Reuters reports,

U.S. air strikes destroyed a moving, 10-vehicle Islamic State convoy near the Iraqi city of Mosul but U.S. officials said on Saturday it was unclear whether the group’s top commander Abu Bakr al-Baghdadi was present at the time.


Colonel Patrick Ryder, a spokesman at the U.S. military’s Central Command, said the U.S. military had reason to believe that the convoy was the product of a gathering of Islamic State leaders. The convoy consisted of 10 Islamic State armed trucks.

*  *  *

But now, Al Arabiya reports

As Al-Arabiya reports,

The leader of the Islamic State of Iraq and Syria (ISIS), Abu Bakr al-Baghdadi, was “critically wounded” when a U.S.-led air strike targeted the western Iraqi border town of al-Qaim, tribal sources told Al Arabiya News Channel on Saturday.


U.S. Central Command confirmed in a statement that U.S.-led air strikes targeted ISIS leaders near their northern Iraqi hub of Mosul late Friday, without confirming whether Baghdadi was killed, AFP reported.


“This strike demonstrates the pressure we continue to place on the ISIL [ISIS] terrorist network and the group’s increasingly limited freedom to maneuver, communicate and command,” US Central Command said.


Anbar province MP Mohammad al-Karbuli told Al Arabiya News Channel that coalition aircraft had targeted a gathering of ISIS leaders in al-Qaim that led to the killing of tens of people and wounded.


Karbuli said chaos ensued the air raid with ISIS members scrambling to transport their wounded to al-Qaim hospital which was overwhelmed with the number of patients.


U.S. officials would not confirm or deny whether Baghdadi, the group’s overall leader, had been targeted, the agency said.

*  *  *

And now things getting a little antsy over in Mexico:
(courtesy zero hedge)

Natives Getting Restless: Protesters Set Fire To Door Of Mexican President’s Ceremonial Palace

Following the massacre of 43 students who were allegedly abducted by corrupt police in southwestern Mexico in September, violent anti-establishment protests have broken out across the nation.As Reuters reports, demonstrators set fire to the door of Mexican President Enrique Pena Nieto’s ceremonial palace in Mexico City as the Mexican people are angered at Nieto’s visit to China (at a time when he should, in their eyes, be focused on domestic issues).


The violence has been condemned, “You can’t demand justice while acting with violence,” said Nieto but it seems the people’s restlessness is growing – not helped by the cancellation of a high-speed rail contract last week as opposition lawmakers accused the government of rigging the bidding.



As Reuters reports,

Mexican President Enrique Pena Nieto on Sunday condemned violent protests over the apparent massacre of 43 students after demonstrators set fire to the door of his ceremonial palace in Mexico City on Saturday night.


Tens of thousands of Mexicans have taken to the streets to protest the government’s handling of the case of the missing students, and last night protesters in central Mexico City set fire to the door of the National Palace.


“It’s unacceptable that someone should try to use this tragedy to justify violence,” Pena Nieto told reporters at the airport in Anchorage, Alaska where he was en route to China. “You can’t demand justice while acting with violence.”


The students were abducted by corrupt police in southwestern Mexico in September. Though the government said on Friday it looked as though the students had been killed, then incinerated by gangsters working with the police, it stopped short of confirming their deaths for lack of definitive evidence.


Pena Nieto’s trip to China has infuriated protesters and relatives of the students, who believe he cares more about Mexico’s business interests than trying to deal with the gang violence that has ravaged much of the country for years.


The trip to China has faced problems since before it began.


On Thursday night, Mexico abruptly canceled a $3.75 billion contract to build a high-speed train line that it had awarded to a Chinese-led consortium after opposition lawmakers accused the government of rigging the process.

*  *  *
Consequences? Maybe… It’s not just Mexico City though, as protests break out in Acapulco of all places…

Closing Portuguese 10 year bond yield: 3.24% down 4  in basis points on the day.
Closing Japanese 10 year bond yield: .46% down 2  in basis points from Friday.
And now for our more important currency crosses this Monday morning:
EUR/USA:  1.2488  up .0035

USA/JAPAN YEN  114.10  down  .490

GBP/USA  1.5893  up .0027

USA/CAN  1.13 07  down .0019

This morning in  Europe, the euro is slightly up, trading now well above  1.24 level at 1.24880 as Europe reacts to deflation. Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31.. The yen is up this morning .  It closed in Japan rising by 49 basis points to  114.10 yen to the dollar.  The pound is slightly up  this morning as it now trades well below  the 1.59 level at 1.5893.

The Canadian dollar is up again today, trading at 1.1307 to the dollar.

 Early Monday morning USA 10 year bond yield:  2.29% !!!    down 3  in  basis points from  Friday night/

USA dollar Index early Monday morning: 87.35  down 29 cents from Friday’s close


The NIKKEI: Monday morning  down 100 points or 0.59%

Trading from Europe and Asia:
1. Europe  all in the green

2/    Asian bourses all in the green except Australia and Japan   / Chinese bourses: Hang Sang  in the green, Shanghai in the green,  Australia in the red:  red/Nikkei (Japan) red/India’s Sensex in the green/

Gold early morning trading:  $1168.00

silver:$ 15.62

Your closing Spanish 10 year government bond Monday/ down 4 in basis points in yield from Friday night.

Spanish 10 year bond yield:  2.12% !!!!!!

Your Thursday closing Italian 10 year bond yield:  2.35 %/ down 3  in basis points:

trading 23 basis points higher than Spain:


Closing currency crosses for Monday night/USA dollar index/USA 10 yr bond:   currencies falling apart this afternoon

Euro/USA:  1.2433 down .0020!!!!!!

USA/Japan:  114.76 up .170

Great Britain/USA:  1.5858  down .0009

USA/Canada:  1.1365 up .0014

The euro fell in value during this afternoon’s  session,  and it was down  by closing time , closing just above the 1.24 level to 1.2433.  The yen was down  during the afternoon session, and it lost 17 basis points on the day closing well above the 114 cross at 114.76.   The British pound lost some ground  during the afternoon session and was down on the day  at 1.5858.  The Canadian dollar was down considerably  in the afternoon but was down on the day at 1.1365 to the dollar.

Currency wars at their finest today.

Your closing USA dollar index:   87.76   up 12 cents  on the day!!!!

your 10 year USA bond yield , up 6  in basis points on the day: 2.35%

European and Dow Jones stock index closes:

England FTSE up  44.01 or 0.67%

Paris CAC  up  32.93 or 0.79%

German Dax up 60.04 or 0.65%

Spain’s Ibex up 146 .70 or  1.45%

Italian FTSE-MIB up 163.22    or 0.85%

The Dow: up 39.81  or 0.23%

Nasdaq; up 19.09   or 0.412%

OIL:  WTI 77.70

Brent: 82.61





And now for your big USA stories

Today’s NY trading:





(courtesy zero hedge)



Trannies Trounce Small Caps As Bullion, Bonds, & Black Gold Get Battered

Tyler Durden's picture

Two words tell you all you need to know about today’s equity trading… no volume (lowest since Aug27th).The main theme of today – away from stock markets – was to unwind some or all of Friday’s moves on the dismal Italy/Greece data: Treasury yields jerked almost 10bps off their lows with 30Y almost retracing the entire Friday rally; The USD rallied, recovering some of its losses from Friday (led by CAD and JPY weakness – which were both stronger Friday); gold and silver were slammed today – almost retracing Friday’s gains; and oil prices gave up all their intraday gains to close notably lower. USDJPY and bonds decoupled from stocks which appeared led by a VIX-smashing day, sending the fear index below 12.5. The Dow and S&P closed at all-time highs.



Spot the volume trend…


On the day, Trannies won…


But note the reactions in futures… The selloff into the Asian close, the dump-and-pump on the Greece/Italy data (bad news – sell!, wait that’s great news – it forces the ECB to act – buy!)… then the US Open was exciting. This is performance from Friday’s payroll print… Note – The Nasdaq is red post-Payrolls!


VIX dropped below 12.5 and was in charge of stocks today… some tomfoolery at the bell though


Quite a roundtrip from Payrolls.



Treasuries look normal today.. off the Greece/Italy data lows…


And The USD surged… off the Greece/Italy data lows


And commodities all turned notably lower after the Greece/Italy data…


Copper is marginally lower than its pre-payrolls level but WTI is notably lower having tumbled hard today. Gold and Silver sold off but held on to some gains from Friday…


Charts: Bloomberg

Bonus Chart: The Decoupling of exuberance…

Did you expect anything less?
(courtesy zero hedge)

Surprise: Obamacare Enrollment 30% Less Than Previously Expected; Spike In 2015 Premiums Imminent

While the small business scourge that is Obamacare may not last very long now that the GOP has full control of Congress, and a scourge it is according even to the Philly Fed itself as per “Obamacare Is A Disaster For Businesses, Philly Fed Finds“…

… there is some hope that its disastrous impacts on the US economy (one has to find the irony that the economic slam in late 2013 and early 2014 was blamed on snow in the winter and not on the US president), may be finally fading.

The reason: according to the WSJ, moments ago the Obama administration revised its estimate for Obamacare enrollment, now saying – with the bruising midterms safely in the rearview mirror – that it expects some 9.9 million people to have coverage through the Affordable Care Act’s insurance exchanges in 2015, millions fewer than outside experts predicted.

Only it’s not even 9.9 million:

Health and Human Services Secretary Sylvia Mathews Burwell said Monday the administration was aiming for 9.1 million paid-up enrollees for 2015, though the range could extend to 9.9 million, according to the agency’s analysis. Ms. Burwell said she respected the work of the Congressional Budget Office and its projections but that she believed HHS figures were based on the best and most up-to-date information.

So really 8 million, or less? Which is great news for the economy as it means less forced wealth redistribution, if less than great news for the administration’s propaganda. Recall that as recently as two months ago this number stood about 30% higher: according to a projection by the Congressional Budget Office, some 13 million Americans were expected to enroll in Obamacare in the coming year. But what’s some 30% between friends? Just blame it on seasonal adjustments. And don’t forget: the US budget deficit needs to soar in the coming years to open the much needed capacity for the Fed to monetize even more debt because everyone who lived through October 15 saw what will happen if the Fed continues to monetize more than 100% of net issuance.

It gets worse, or if one is the US economy, better:

Also diminished is the number of Americans who had private coverage under the law’s marketplaces for 2014. The administration said Monday that around 7.1 million people across the country who picked plans during the current year’s open-enrollment period were still paid up for their coverage. That’s down from the eight million who the administration said had picked plans as of this spring.

So… 1 million down in 9 months: must be even more seasonal adjustments.

And just as everyone suspected in late 2013, the wildly overblown numbers by the administration were just that, because sooner or later, even those getting handouts would have to make a token payment or at least confirm they are legal US residents. They couldn’t.

HHS officials said they had cut off tax credits for December for 120,000 households that hadn’t responded to requests for more information about their income. Another 112,000 people have had their coverage terminated because the federal government couldn’t confirm they were legally residing in the U.S. That number is down slightly from an earlier announcement from the federal government that it was cutting off 116,000 people over immigration and citizenship status issues.

And with Obamacare’s punitive measures having been delayed through 2015 in hopes of “buying” the midterm elections, hopes which now lie crushed in a smoldering heap, next up is the real sticker shocked:

A new window-shopping tool on the federal insurance website that made its debut late Sunday is giving consumers the first glimpse of health-insurance prices for next year.Many people who bought insurance plans through will see their premium increase in 2015 unless they are willing to switch insurance carriers.

Changing plans to ones which have far worse deductibles and coverage, which of course is par for the course for anything the government gets its hands on. For everyone else, well: there are higher prices which will more than offset the temporary gas price drop holiday:

Proposed rates filed by insurers with state regulators over the past six months suggested that big carriers that snapped up a lot of customers last year are raising their rates for 2015, and new market entrants and plans that got fewer sign-ups in 2014 are slashing prices in a bid for more market share. The final rates, posted late Sunday on, have followed a similar pattern. As a result, most people who bought coverage through the site last year will see their premiums increase for 2015, at the same time that the lowest rate available on the site remains relatively steady.


In Tallahassee, Fla., the lowest-cost silver plan available to a 26-year-old nonsmoker for 2014 was sold by Florida Blue, or Blue Cross and Blue Shield of Florida, with a premium of $228 a month. For 2015, the cost would rise about 20% to $273, according to the premium information displayed on The same 26-year-old could pay a $236 monthly premium for a United Healthcare plan that wasn’t available for 2014.

The punchline:

“We are strongly encouraging people to come back to,” said Kevin Counihan, chief executive of the site, on Sunday.

And if people don’t come back, do they get an IRS audit?


That is all for today

I will see you Tuesday night

bye for now



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