Nov 24/Turkey shoots down Russian jet/Two Russian pilots jetison out of their plane but killed by rebel fire/Also Russian rescue helicopter brought down by missile/Monstrous 5.06 tonnes of gold leaves GLD/Nothing leaves the SLV/In USA data: Philly Fed worst mfg figures in 3 years/Consumer confidence wanes/CFTC now

Gold:  $1074.30 up $7.50   (comex closing time)

Silver $14.17 up 13 cents

In the access market 5:15 pm

Gold $1075.50

Silver:  $14.16


At the gold comex today,  we had a very poor delivery day, registering 0 notice for nil ounces.  Silver saw 1 notice for 5,000 oz.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 200.26 tonnes for a loss of 103 tonnes over that period.

In silver, the open interest surprisingly rose by 675 contracts  despite the fact that silver was down 6 cents in yesterday’s trading. The total silver OI now rests at 174,199 contracts In ounces, the OI is still represented by .871 billion oz or 124% of annual global silver production (ex Russia ex China).

In silver we had 1 notice served upon for 5,000 oz.

In gold, the total comex gold OI was hit again as this time another 1079 contracts were liquidated as the OI fell to 417,546 contracts. Gold was down by $9.60 in yesterday’s trading. It seems the modus operandi of the bandits is to try and liquefy gold/silver OI as we approach first day notice on Monday, November 30. They are succeeding in gold but not silver. The bankers get very nervous when OI is rising despite awful prices for the metals. We had 0 notices filed for nil today. As I know everybody is aware that we are now in the options expiry for:  a) the comex gold/silver contracts, b)   LBMA contracts and c) OTC contracts.

We had a monstrous withdrawal in gold inventory at the GLD to the tune of 5.06 tonnes  and this was done with respect to the downing of a Russian fighter jet???/ thus the inventory rests tonight at 655.69 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex.   In silver, we had no change in silver inventory,  / Inventory rests at 318.209 million oz.



First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver rise by 675 contracts up to 174,199  despite the fact that silver was down by 6 cents with respect to yesterday’s trading.   The total OI for gold fell by 1079 contracts to 417,546 contracts as gold was down by $9.60 with respect to yesterday’s trading.

(report Harvey)

2  a)Gold trading overnight, Goldcore

(Mark OByrne)


 i) i) Last night, 9:30 pm MONDAY night, TUESDAY morning Shanghai time.  Japan Nikkei closed up, Shanghai rises slightly due to government intervention/ Hang Sang falls.  Copper rises. Glencore rises to 92 pence up 2 pence on the day.
i) Volkswagen again has added headaches
(zero hedge)
ii) Glencore trading today
iii) Late this afternoon, the socialist Antonio Costa is named Prime Minister. The troika are not amused…
(courtesy zero hedge)

iv   Another hostage taking on the border of France and Belgium but this is not labelled as a “terrorist attack”

several wounded:

it is still ongoing!

(courtesy zero hedge)
i) Early this morning a Russian jet was brought down by a Turkish jet. They are arguing on whose territory the jet was in.
Then the Russian pilots parachuted from their downed aircraft only to be killed by gunfire as they descended.  Then a Russian rescue helicopter was blown up and the missile was fired by the FSA  (Free Syrian Army).  The rebels rejoiced over the killing of the Russian pilots.
Ten stories
(courtesy Bloomberg/zero hedge/Reuters/etc)
ii) Russia knocks out 1,000 ISIS oil tankers
(zero hedge)
i) Dennis Gartman does it again.  He is now stopped out of his big loss in shorting oil
(zero hedge)
i) 3rd quarter GDP revised higher from 1.5% up to 2.1%.  However all of the gain is due to revised higher inventory levels
(zero hedge)
ii) Philly fed records a 3rd straight downturn
(Philly Fed/zero hedge)
iii)  What a miss!!!  The very big national consumer confidence crashed from 99.1 down to 90.4.  This is the lowest in over a year and this is due to a less favourable outlook on the economy!!
two commentaries
(courtesy zero hedge)

iv)  The shares of Valeant, the once darling on Wall Street, just will not stop falling despite Ackman’s huge purchase of calls yesterday on the stock(courtesy zero hedge)

i.  Huge demand from China in this latest weekly report: 49 tonnes.  Year to date: 2259 tonnes
(courtesy Koos Jansen)
ii) Avery Goodman: Reuters has it wrong.  Major defaults of gold loans in China will increase gold demand.
This has been confirmed by Koos Jansen
(Avery Goodman/seeking Alpha)
iii)  Bloomberg highlights the HFT scandal and cannot figure out why foreigners are charged and not Americans
iv)  Bloomberg states that spoofing is now on the N.Y. Attorney General’s radar
v) CFTC now getting involved in the spoofing and high frequency trading
 vi  Bill Holter’s commentary tonight is entitled:
“A Rotten Turkey for Thanksgiving”
and the subject is the Turkish shooting of a Russian fighter jet over Syria

vii  Not only is the comex gold inventory fallen by 59% in one year but also the LBMA inventory as wella most important commentary

( courtesy Clint Siegner/Safe Haven)

Let us head over to the comex:

The total gold comex open interest fell from 418,625 down to 417,546  for a loss of 1079 contracts as  gold was down by $9.60 with yesterday’s trading.   For the past two years, we have strangely witnessed two interesting developments with respect to the gold open interest:  1) total gold comex collapse in OI as we enter an active delivery month, and 2) a continual drop in the amount of gold standing in an active month. We certainly are witnessing the former in spades again today. Surprisingly somebody was in need of gold and the amount standing increased. The November contract gained 44 contracts up to 254 . We had 0 notices filed yesterday, so we gained 44 gold contracts or an additional 44000 oz will stand for delivery in this non active delivery month of November. Somebody was in great need of gold today. The big December contract saw it’s OI fall by a monstrous 31,877 contracts from 133,160 down to 101,283.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was 256,911 which is very good. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was very good at 260,123 contracts.

Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI rose by 675 contracts from 173,524 up to 174,199 despite the fact that the price of silver was down 6 cents with respect to yesterday’s trading. The bankers continue to pull their hair out trying to extricate themselves  from their silver mess (the continued high silver OI with it’s extremely low price, combined with the banker’s massive physical shortfall) as the world senses something is brewing in the silver arena. The huge rise in silver OI necessitates  massive raids by the bankers as they had to cover their rather large shortfall.  We now enter the non active delivery month of November. The OI remained constant at 25. We had 0 notices filed yesterday so we neither gained nor lost any silver contract that will stand for delivery in this non active month of November.  The big December contract month saw its OI fall by 12,477 contracts down to43,067. The volume on the comex today (just comex) came in at 78,541 , which is huge. The confirmed volume yesterday (comex + globex) was humongous at 88,380. First day notice for both gold and silver is Monday Nov 30. After today,  we have exactly 3 trading days left.
We had 1 notices filed for 5,000 oz.

November contract month:

INITIAL standings for November

Nov 24/2015

Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil nil
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz   400.10 oz


No of oz served (contracts) today 0 contracts
No of oz to be served (notices) 254 contracts


Total monthly oz gold served (contracts) so far this month 7 contracts

700 oz

Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month 267,503.2 oz
 Today, we had 0 dealer transactions
Total dealer withdrawals:  nil oz
total dealer deposit:  nil oz
We had 0 customer withdrawals:
total customer withdrawal nil  oz
We had 1 customer deposits:
 i) Into Delaware:400.10 oz

Total customer deposits  400.10  oz

we had 0  adjustments:

 JPMorgan has a total of 10,777.279 oz or.3352 tonnes in its dealer or registered account.
***JPMorgan now has 337,121.339 oz or 10.48 tonnes in its customer account.
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 (received) by JPMorgan customer account.
To calculate the final total number of gold ounces standing for the Oct contract month, we take the total number of notices filed so far for the month (7) x 100 oz  or 600 oz , to which we  add the difference between the open interest for the front month of Nov.( 254 contracts) minus the number of notices served upon today (0) x 100 oz   x 100 oz per contract equals the number of ounces standing.
Thus the initial standings for gold for the Nov. contract month:
No of notices served so far (7) x 100 oz  or ounces + {OI for the front month (254) minus the number of  notices served upon today (0) x 100 oz which equals 26,100 oz standing in this non delivery month of November (..8118 TONNES)
we neither lost nor gained any gold contracts that will stand for delivery  in this non active delivery month of November.
We thus have 0..8118 tonnes of gold standing and only 4.708 tonnes of registered gold for sale, waiting to serve upon those standing
Total dealer inventory 151,482.729.079 oz or 4.708 tonnes
Total gold inventory (dealer and customer) =6,438,471.159   or 200.26 tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 200.26 tonnes for a loss of 103 tonnes over that period.
JPmorgan has only 10.5 tonnes of gold total (both dealer and customer)
And now for silver

November initial standings/First day notice

Nov 24/2015:

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 705,402.79 oz



Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil


No of oz served (contracts) 1 contracts  5,000 oz)
No of oz to be served (notices) 24 contracts 

120,000 oz)

Total monthly oz silver served (contracts) 57 contracts (285,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month nil oz
Total accumulative withdrawal  of silver from the Customer inventory this month 8,751,508.6 oz

Today, we had 0 deposit into the dealer account:

total dealer deposit; nil oz


we had no dealer withdrawals:

total dealer withdrawals:  nil


we had 0 customer deposits:

total customer deposits: nil oz

We had 2 customer withdrawals:
i)Out of Scotia: 600,477.390 oz
ii) Out of JPM: 99,999.600 oz
iii) Out of Brinks:  4955.800

total withdrawals from customer account: 705,402.79   oz

we had 0 adjustments
The total number of notices filed today for the November contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in Nov., we take the total number of notices filed for the month so far at (56) x 5,000 oz  = 280,000 oz to which we add the difference between the open interest for the front month of November (25) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the Nov. contract month:
56 (notices served so far)x 5000 oz +(25) { OI for front month of November ) -number of notices served upon today (1} x 5000 oz ,=405,000 of silver standing for the Nov. contract month.
we neither gained nor lost any silver contracts that will stand for delivery in this non active delivery month of November.
Total number of dealer silver:  43.545 million oz
Total number of dealer and customer silver:  up to 159.875 million oz
again, the silver comex sheds considerable silver from its vaults. 


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
And now the Gold inventory at the GLD:
Nov 24/somebody was in great need of gold/GLD withdrawal of 5.06 tonnes today/inventory rests at 655.69 tonnes.
Nov 23 no changes in gold inventory at the GLD/Inventory rests at 660.75 tonnes
Nov 20/a huge withdrawal of 1.19 tonnes of gold at the GLD/Inventory rests at 660.75 tonnes
Nov 19.2015/no change in gold inventory at the GLD/Inventory rest at 661.94 tonnes
Nov 18/no change in gold inventory at the GLD/Inventory rests at 661.94 tonnes
Nov 17/no change in gold inventory at the GLD/Inventory rests at 661.94 tonnes
Nov change in gold inventory at the GLD/Inventory rests at 661.94 tonnes
Nov 13/no change in gold inventory at the GLD/Inventory rests at 661.94 tonnes/
Nov 12/another huge withdrawal of 1.49 tonnes of gold inventory/rests tonight at 661.94 tonnes/GLD is bleeding gold and the blood flow is heading east.
Nov 11/a huge withdrawal of 3.00 tonnes of gold inventory/rests tonight at 663.43 tonnes
Nov 10/a small deposit of .32 tonnes of gold in gold inventory/rests tonight at 666.43 tonnes
nov 9/another 2.98 tonnes of gold leaves the GLD/Inventory rests at 666.11
Nov 6/another huge 2.68 tonnes of gold leaves the GLD/Inventory rests at 669.09 tonnes
 Nov.24.  inventory 655.69 tonnes
*this is the lowest level in quite some time.  It looks like physical gold acquired in the past few months have now left the GLD vaults heading for China.
Nov 24./no change in silver inventory at the SLV./Inventory rests at 318.209 million oz
Nov 23/we had another addition (deposit) of 1.053 million oz of silver into the SLV tonight/Inventory rests at 318.209 million oz
Nov 20/no change in silver inventory at the SLV/rests tonight at 317.156 million oz.
Nov 19/no change in inventory rests tonight at 317.256 million oz/
Nov 18.2015: no change in inventory/rests tonight at 317.256 million oz
Nov change in inventory/rests tonight at 317.256 million oz/

Nov 16.And now SLV/another huge addition of 2.145 million oz into the silver inventory of SLV/rests tonight at 317.256 million oz

Nov 15/no change in silver inventory at the SLV/inventory 315.111 million oz/

nov 12/surprisingly we had a huge addition of 1.43 million oz of silver into the SLV/Inventory rests at 315.111 million oz/(my bet:  it is paper silver not real silver entering the vaults)

Nov 11/no change in silver inventory at the SLV/rests tonight at 313.681 million oz/

Nov 10/no change in silver inventory at the SLV/rests tonight at 313.681 million oz/

Nov 9/no change in silver inventory/rests tonight at 313.681

Nov 6/ we had a very tiny withdrawal of 136,000 oz (probably to pay for fees)/Inventory rests tonight at 313.681 oz

Nov 5/strange no change in silver inventory/rests tonight at 313.817 million oz/

Nov 4/2015: no change in silver inventory/rests tonight at 313.817 million oz/

Nov 24/2015:  tonight inventory rests at 318.209 million oz***
******Note the difference between the GLD and SLV.  GLD sees liquidation of metal but not SLV. Why?  because the SLV has no real silver behind it only paper silver.
And now for our premiums to NAV for the funds I follow:
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 11.5 percent to NAV usa funds and Negative 11.4% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.6%
Percentage of fund in silver:37.3%
cash .1%( Nov 24/2015).
2. Sprott silver fund (PSLV): Premium to NAV falls to-0.35%!!!! NAV (Nov 24/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV rises to – .63% to NAV Nov 24/2015)
Note: Sprott silver trust back  into negative territory at -0.35% Sprott physical gold trust is back into negative territory at -.63%Central fund of Canada’s is still in jail.

Press Release

Sprott Announces Clear Path and Timeline to Complete Offers for Central GoldTrust and Silver Bullion Trust

Only Through the Sprott Offers can Unitholders Receive Real and Certain Value

Sprott Encourages all Unitholders to Follow the Majority That Have Already Tendered

TORONTO, Nov. 23, 2015 (GLOBE NEWSWIRE) — Sprott Asset Management LP (“Sprott” or “Sprott Asset Management”), together with Sprott Physical Gold Trust (NYSE:PHYS) (TSX:PHY.U) and Sprott Physical Silver Trust (NYSE:PSLV) (TSX:PHS.U), today announced that it is now positioned to take action to expedite its offers for Central GoldTrust (“GTU”) (TSX:GTU.UN) (TSX:GTU.U) (NYSEMKT:GTU) and Silver Bullion Trust (“SBT”) (TSX:SBT.UN) (TSX:SBT.U) and bring these matters to a successful conclusion.

Pursuant to the recently announced decision of the Ontario Securities Commission, Sprott has provided additional disclosure and extended its offers to 5:00 p.m. (Toronto time) on December 7, 2015 to allow unitholders to review such updated disclosure. Upon the expiration of this 15 day “waiting period”, Sprott will be entitled to remove the GTU and SBT trustees in order to expedite a special meeting of unitholders to vote on the transactions, assuming more than 50.1% of units have been tendered to the applicable Sprott offer.

A majority of GTU, and a significant number of SBT, unitholders have already tendered into the Sprott offers. With majority unitholder support on December 7, 2015, Sprott will have a clear path to completion by being able to affect the necessary changes at the Trustee level of both Trusts on this date. Sprott will then immediately take actions to convene special meetings where unitholders may finally take action to complete the Sprott offers.

John Wilson, CEO of Sprott Asset Management, said, “We have consistently defeated the transparent attempts of the Spicers and the conflicted GTU and SBT Trustees to block our offers and we are now finally positioned to bring this process to a timely and successful conclusion. We encourage unitholders to not be swayed by the proposal to convert their bullion trust into an open-ended ETF or the Spicers’ hollow arguments to support this extreme and self-serving measure. Sprott encourages any unitholders who haven’t already done so to tender their units to the Sprott offer today to receive real and certain value from your bullion investment.”

Sprott urges GTU and SBT unitholders to remember the reasons to tender to the Sprott offers:

  • The Sprott offers provide an immediate premium on an NAV to NAV basis plus an additional premium payable in Sprott Physical Gold Trust and Sprott Physical Silver Trust units, respectively.
  • Sprott initiated these offers after GTU and SBT unitholders were punished by consistent trading discounts to NAV.
  • The Sprott offers are an opportunity to enter into a security that is fully-backed by bullion and properly tracks the price of such underlying bullion. Unitholders have chosen to invest in gold or silver, and the Sprott offers provide an opportunity for unitholders to enter into a security that properly reflects the value of that commodity.
  • Sprott is now positioned to provide GTU and SBT unitholders witha clear and timely path to completion.

Additionally, the Sprott offers provide:

  • A regulated entity that is committed to unitholders’ best interests and is managed by experienced, professional investors with a superior investment platform. GTU and SBT are run by entrenched and conflicted Trustees who have only sought to maintain the status quo and enrich themselves at unitholders’ expense.
  • A safe and secure investment stored at the Royal Canadian Mint, which is backed by the Canadian federal government, rather than the ordinary commercial vault that is used by GTU and SBT.
  • Investor friendly redemption features that allow unitholders to decide how and when to sell their investment. GTU and SBT offer no option to redeem for physical bullion and effectively charge a 10% fee to redeem for cash.

Mr. Wilson continued, “The desperation of the Spicers and their Trustees is reflected by their 11th hour announcement of a highly conditional and hastily made proposal to convert GTU and SBT into ETFs. This transaction would betray the very purpose of unitholders initial investments, and even if approved, could take many months to complete and carry substantial costs and risks to unitholders. We encourage unitholders to tender into the real, immediate Sprott offers before them which provide a premium on a NAV to NAV basis.”

As of 5:00 p.m. (Toronto time) on November 20, 2015, there were 9,714,610GTU units (50.34% of all outstanding GTU units) and 2,294,529 SBT units (41.97% of all outstanding SBT units) tendered to the respective Sprott offers.

GTU and SBT unitholders who have questions regarding the offers by Sprott to purchase the units of GTU and SBT (the “Sprott offers”), are encouraged to contact Sprott Unitholders’ Service Agent, Kingsdale Shareholder Services, at 1-888-518-6805 (toll free in North America) or at 1-416-867-2272 (outside of North America) or by e-mail at

For more information, unitholders can

And now your overnight trading in gold and also physical stories that may interest you:
Trading in gold and silver overnight in Asia and Europe
(courtesy Goldcore/Mark O’Byrne)

Global Bond Markets: Where Did All the Liquidity Go?

Why does the lack of liquidity in bond markets have many of the world’s top economic opinion-makers worried?  Ben Wright writing in the Telegraph reports on the voices in “the chorus of doom” and explains why the evaporation of this liquidity in the global fixed income market signals “a warning shot across the bow”.

GoldCore: Where has all the liquidity gone?
Where did all the liquidity go?Photo: Ryan Brennecke

“Every market is a tug-of-war between buyers and sellers. Liquidity is a gauge of both the size of the market (the number of buyers and sellers) and its depth (the number of buyers and sellers of both small and large amounts of securities). Why is the depth of the market important? Because you’re sure to find plenty of willing buyers if you want to sell £10,000 of government bonds. But if you want to sell £100m-worth, it might be a touch harder.”

“The less liquidity there is, the greater the impact large trades will have. If lots of people are all trying to sell lots of stuff at once, it could get messy.”

GolfCore: Where has all the liquidity gone?“Since the financial crisis, global financial regulators have rightly been attempting to make banks safer. They have done this by, for example, banning proprietary trading, making it harder to lend government bonds in the repo market and, most importantly, forcing banks to deleverage.  One of the upshots is that it is now much more expensive for banks to hold securities on their own books and therefore provide liquidity in the market. Deutsche Bank recently noted that the amount of outstanding corporate bonds has doubled since 2001 but dealer inventories of these securities have fallen 90pc over the same period”.

Read the full article “The world’s multi-trillion dollar bond market is circling the drain” in the Telegraph.

Ben Wright is Group Business Editor at The Telegraph. He was previously the City Correspondent at The Wall Street Journal and before that Editor of Financial News.  Follow him on Twitter.


Read also:
“As more investors pile into overvalued, increasingly illiquid assets – such as bonds – the risk of a long-term crash increases.  This is the paradoxical result of the policy response to the financial crisis. Macro liquidity is feeding booms and bubbles; but market illiquidity will eventually trigger a bust and collapse.”
Nouriel Roubini in “The Liquidity Time Bomb

Today’s Gold Prices: USD 1073.00, EUR 1008.32 and GBP 709.67 per ounce.
Yesterday’s Gold Prices: USD 1068.35, EUR 1005.90 and GBP 705.31 per ounce.

GoldCore: Gold in USD - 1 Year

Gold in USD – 1 Year

Gold fell again yesterday, losing $8.50 to close the day at $1068.70.  Silver lost $0.04 closing at $14.11. Platinum lost $6 to $843.

Download the Essential Guide to Storing Gold in Switzerland

GoldCore: The Essential Guide to Storing Gold in Switzerland

Download the Essential Guide to Storing Gold in Singapore

GoldCore: Storing Gold in Singapore


Latest weekly report on gold demand from China:  49 tonnes.  Year to date 2259 tonnes.
(Remember gold supply from all mines throughout the globe per year is 2200 tonnes ex China ex Russia)
(courtesy Koos Jansen)

Switzerland Gold Export China October 29t, +34% m/m

First, withdrawals from the vaults of the Shanghai Gold Exchange (SGE), our best measure for Chinese wholesale gold demand, accounted for 49 tonnes in week 44 (9 – 13 November), up 9 % from the previous week. Year to dateSGE withdrawals have reached 2,259 tonnes, which is already more than any previous yearly total.

Shanghai Gold Exchange SGE withdrawals delivery 2015 week 44

Seasonally, SGE withdrawals are the highest around new year, therefore I expect them to increase from current levels before the end of 2015 – perhaps transcending 60 tonnes a week. Chinese people traditionally exchange gifts during new year and lunar year, often in the form of gold.

As SGE vaults have likely been depleted from July until September – after the crash in the Chinese stock marketwithdrawals skyrocketed – I don’t expect Chinese gold imports will decline until the January 2016. Year to date China has net imported 1,058 tonnes, according to lagging data released by various customs departments around the world.

The most recent data from Swiss customs points out there were 29 tonnes of gold shipped directly to China mainland in October, up 34 % m/m. Year to data (Jan – Oct) Switzerland has net exported 217 tonnes directly to China.

Switzerland China gold trade 2012 - oct 2015

A couple of years ago all net gold export from the UK (a large supplier of gold to the East) to China flowed via Switzerland or Hong Kong. Because the UK has started to export gold directly to China since 2014, Swiss gold exports to China have been somewhat decreasing.

Year to date (Jan – Sep) Hong Kong has net exported 582 tonnes directly to China.

Year to date (Jan – Sep) the UK has net exported 210 tonnes directly to China.

Year to date (Jan – July) Australia has net exported 49 tonnes directly to China.

Koos Jansen
E-mail Koos Jansen on:




Avery Goodman: Defaults on gold loans in China will increase, not reduce, demand


12:24a ET Tuesday, November 24, 2015

Dear Friend of GATA and Gold:

Securities lawyer and gold market analyst Avery Goodman has joined GATA consultant Koos Jansen in accusing the Reuters news agency of false and possibly deliberately false reporting about gold.

Jansen’s accusation was brought to you yesterday:

Goodman writes that contrary to Reuters’ assertion, any default by jewelers on gold loans in China will increase demand for the metal, since the obligation to repay the metal will remain with the intermediaries that borrowed it and the gold to repay it will have to come from someone other than the original borrowers.

Also contrary to Reuters, Goodman writes, Chow Tai Fook Jewellery Group Ltd., the biggest gold retailer in China, did not report declining profit because of declining demand for gold but because of rising demand for gold, which carries less of a retail markup than gems.

Goodman concludes that the gold price remains low amid rising demand because “there is a not-so-mysterious gold supplier of last resort that is backing up its agents in the gold market by filling the ever-growing deficit. That situation cannot last forever, because not even 8,000 tons of gold (if it still amounts to that) are enough to last for more than a few years at the current burn rate. Gold prices will go up dramatically once this entity exhausts itself either physically or politically (with, for example, the election of a Republican president).”

Goodman’s analysis is headlined “Chinese Gold Demand Booms as a Looming Dealer Default Could Cause an Even More Dramatic Increase in Gold Imports” and it’s posted at Seeking Alpha here:…

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



More on the HFT scandal:

(courtesy GATA/Chris Powell/Bloomberg)

The scandal isn’t what’s illegal — it’s what’s perfectly legal


9:42p ET Monday, November 23, 2016

Dear Friend of GATA and Gold:

Citing the Bloomberg News report brought to your attention this afternoon about the New York attorney general’s supposed investigation of the use of “spoofing” to manipulate the foreign-exchange market —

— Zero Hedge asks tonight, “Why is the New York attorney general not prosecuting the real FX spoofing criminalgos?”:…

Zero Hedge writes:

More interesting than who was named in this latest ‘investigation’ is who wasn’t — and while the ‘carbon-based’ inter-dealer traders are looking at billions more in settlement charges and fines over the coming months, the real culprits of constant foreign-exchange spoofing remain unnamed. We refer of course, to the algo-based ‘FX traders’ of the Virtus, the Volants, the Citadels of the world … but especially the latter, whose role in executing New York Fed trades and curbing sharp market moves lower is well-known and has been documented.

We also refer to the central banks themselves that trade either directly out of their own account, like the Swiss National Bank, or via trust banks such as the Bank of Japan, or like the New York Fed, which transacts in various pathways but most notably by spoofing FX using high-frequency-trading firms.

So why not go after the true FX riggers?

Because as noted above, if one really begins pursuing the spoofers, one will ultimately have to charge central banks for engaging in this criminal behavior. And that is unacceptable because with central bank credibility already on the way out, the last thing the monetary “authorities” need is for the general population to realize that the concept of price discovery has been dead since 2008.

And yet if one really wants true price transparency and discovery ever to return to markets, instead of focusing on various anonymous small-time traders in aptly-named chat rooms, they should look at just one thing: the central banker meetings every other month on Sunday at 7 p.m. in Conference Room E on the 18th floor of the Bank for International Settlements tower in Basel.

They won’t.

Zero Hedge thus summarizes pretty neatly GATA’s 16-year study of the markets, except for one important detail, a detail GATA discovered long before it discovered most of its documentation about market rigging, documentation summarized here:

That is, the authorities don’t prosecute market rigging undertaken by governments and central banks precisely because it is legal.

Back in 1999 GATA spent its first substantial money on legal research by a major anti-trust law firm. The lawyers reported that our hopes for suing the U.S. government for rigging the gold market were pretty much dashed by the Gold Reserve Act of 1934, which established the Exchange Stabilization Fund within the U.S. Treasury Department and which, as amended through the years, conferred on the ESF the power to trade in and presumably rig not just the gold market butevery market:…

Nevertheless two years later, in 2001, GATA’s consultant, the Harvard-trained lawyer Reginald H. Howe, found a novel mechanism for challenging gold market rigging — a lawsuit in U.S. District Court in Boston against the Bank for International Settlements, U.S. Treasury Department, U.S. Federal Reserve, and various major investment banks, in which Howe claimed standing as one of the few remaining private shareholders in the BIS, whose own gold holdings, he charged, were undervalued because of market rigging by Western central banks.

Howe’s lawsuit eventually failed on a jurisdictional technicality but it produced an enormous disclosure at the one hearing held in the case, at which the defendants moved for dismissal. An assistant U.S. attorney put it plainly. Without admitting the conduct Howe’s lawsuit alleged, the assistant U.S. attorney said the lawsuit had to be dismissed because the government had the legal power to do exactly what Howe accused it of doing: rigging the gold market.

Your secretary/treasurer attended the hearing and wrote about it a few hours later. His report is here:

Much of GATA’s documentation consists of the records of surreptitious gold trading by governments and even admissions by central bankers that such trading is undertaken secretly to control the gold price. After all these years of market rigging they wouldn’t leave themselves open to a charge that it was illegal.

Of course mainstream financial news organizations won’t touch this issue; doing so would enrage their governments and reveal that their reporting has been and remains a big hallucination — that as a high school graduate put it at GATA’s Washington conference seven years ago, “there are no markets anymore, just interventions”:

But even some advocates of the monetary metals fail to understand this, instead railing against regulatory agencies that are actually powerless to do anything about the biggest market rigging of all, though the U.S. Commodity Futures Trading Commission, during the tenure of Commissioner Bart Chilton, gave GATA a spectacular forum to thrust the issue at market participants and news reporters at a hearing in Washington in March 2010 at which GATA Chairman Bill Murphy and Board of Directors member Adrian Douglas spoke:

That’s why GATA long has concentrated on research, freedom-of-information requests, and publicity rather than complaining to market regulators. For as the recently retired editor of The Washington Monthly, Charles Peters, often said: “The scandal isn’t what’s illegal. The scandal is what’s perfectly legal.”

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




The Bloomberg report that states that spoofing is the latest New York’s AG’s latest target:

(courtesy Bloomberg/GATA)

Currency spoofing is said to be New York’s latest target


By Karl Gelger
Bloomberg News
Monday, November 23, 2015

The New York attorney general is investigating possible manipulation in foreign-exchange trading, according to a person familiar with the matter, aiming more scrutiny at a market already tainted by scandals that have led to billions of dollars in fines.

The investigation centers on brokers who may be placing fake orders, a technique sometimes called spoofing, according to the person. These practices are also referred to as ghosting, because they create the impression of activity that isn’t really there. …

… For the remainder of the report:…



Amazing!! It took them 5 years to get a handle on HFT

(courtesy zero hedge)

High-Frequency Traders Face Crackdown As CFTC Proposes Tougher Regulations – Live Feed

CFTC meets this morning to propose a registration standard applying to as many as 100 firms that have changed markets by trading their own money using complex algorithms and advanced technology. As Bloomberg notes, this proposal follows more than 5 yrs of debate about market disruptions, such as the May 2010 flash crash. Crucially, as is well known now, high-speed, automated trading in recent years has surged to account for almost three-quarters of certain derivatives markets which means any regulatory crackdowns will no doubt have impacts on markets.

As Bloomberg adds,

High-speed and other forms of computer-driven trading have surged in recent years to make up almost three-quarters of trading in some derivatives markets. One top U.S. regulator now wants to catch up.


The Commodity Futures Trading Commission on Tuesday is set to propose a new registration standard that would affect as many as 100 firms that have changed markets by trading their own money through complex algorithms and advanced technology like microwave towers. The rules are designed to help the agency oversee firms that represent a significant amount of trading but so far haven’t had to directly follow key government policies for curbing risk.


The proposals are the biggest step by the CFTC to oversee automated trading. Over the past five years, disruptions such as the May 2010 flash crash and a series of technological failures in equities trading have spurred questions about the resilience of markets and led to a debate over the best way to regulate. The CFTC has already spent two years reviewing industry feedback on just the possibility of new rules.


“It’s time for regulators to have laws and regulations that are commensurate with the realities of trading today,”Bart Chilton, a former commissioner at CFTC who has provided advice to a group of high-frequency traders, said yesterday in an interview. “Clearly some of the rules are antiquated.”



The agency’s plans being discussed on Tuesday would require automated trading firms to have kill switch policies and technology to cancel trades that could disrupt markets. They would have to submit annual compliance reports about the risk controls and keep records on their algorithmic trading procedures.


The agency’s proposal would also require firms to have a repository for the computer code that makes up their electronic trading systems. That would give the CFTC an easier way to inspect and review algorithms to see what role they played in a market malfunction. That may prove a controversial requirement because trading code contains firms’ secrets and trading strategies.


The CFTC is also moving to require greater transparency around incentive programs exchanges such as CME Group Inc. and Intercontinental Exchange Inc. offer to spur trading in derivatives. The agency said those programs may encourage unnecessary amounts of trading.


A separate part of the proposal seeks to curb how often a high-speed trading firm winds up being on both sides of the same trade, a practice highlighted by regulators in a report on price swings in the Treasury market in October 2014. Exchanges would need to publish quarterly statistics on the amounts of self-trading.

Live Feed (click here for feed)

And captions…


As highlighted above by Mark O’Byrne, liquidity has deteriorated for USA treasuries.
This is a problem as more and more investors want to liquidate treasuries and they find that there are fewer and fewer
(courtesy Joe Rennison/London’s Financial times)

Liquidity deteriorates for U.S. treasuries


Joe Rennison
Financial Times, London
Monday, November 23, 2015

NEW YORK — Trading in the world’s biggest government bond market has become increasingly challenging as the large banks that support transactions focus on slimming down their balance sheets.

As dealers step back from facilitating the buying and selling of U.S. Treasury debt, a key measure of market liquidity has deteriorated sharply and plumbed a level not seen since the bond rout of 2013, when investors anticipated that the Federal Reserve would start tapering its quantitative easing policy. …

… For the remainder of the report:



Not only is the comex gold inventory fallen by 59% in one year but also the LBMA inventory as well


a most important commentary


( courtesy Clint Siegner/Safe Haven)

Trouble Is Brewing in the Paper Markets for Gold and Silver

By: Clint Siegner | Mon, Nov 23, 2015

Precious metals bulls question why metals prices keep falling in the face of what appears to be strong demand and great fundamental reasons for prices to move higher instead.

The bears have some answers of course. You can’t eat gold, it’s basically a pet rock, and modern financial systems are doing just fine without anything as antiquated as bullion gumming up the works.

The bears are declaring victory and saying the market has spoken. They ought to look a bit deeper into recent developments.

Outside of the price action, there is very little to support claims that gold and silver bullion are relics of the past.

300 to 1 gold to COMEX contracts

Lately, the real answer to the bulls’ question about why prices are headed lower isn’t the stuff of a lengthy philosophical debate. These days, the answer seems to be a lot simpler; huge demand for physical metal hidden behind an enormous glut in paper supply. And the actual physical metals are shifting into new hands.

Without looking, you would never know that exchange inventories are falling – a combination of demand for physical bars and a dearth of sellers willing to furnish actual metals at the current price.

The natural dynamic is for prices to move higher, but the market has been completely overwhelmed by a huge increase in leverage. Unfortunately, there is no end to the supply of paper gold and silver contracts the trading exchanges will stack atop a shrinking layer of physical bars in their vaults.

The amount of paper gold has tripled relative to “registered” stocks available for actual delivery. This has happened in just the past few months. Just one ounce of registered gold now backs nearly 300 ounces in COMEX contracts (as depicted in a chart we re-published last week from

Stated another way, that’s razor thin coverage of just 0.0033. Trouble is brewing. About 1% of contract holders have been standing for delivery in recent years. So we could see requests to deliver 3 times more gold than is currently in the registered category in Exchange vaults.

COMEX Warehouse - Gold Deliveries

To avoid default, the exchanges are going to need more registered gold. Luckily, there is another category of physical inventory available to draw against.

The vaults also hold “eligible” gold which can easily be converted to registered, provided the owners are willing. Bullion banks often move bars from the “eligible” category to “registered.” In fact, that is what they have been doing recently.

The problem is stocks of eligible gold are collapsing as well. reports that combined eligible and registered gold in the COMEX have fallen nearly 50% during the past 5 years.

It’s a lot worse for JPMorgan Chase and Scotia Mocatta, two of the largest bullion banks. Since March the amount of eligible and registered gold in their vaults has fallen from 3,732,915 ounces to1,515,825 ounces. That’s a 59% drop in just the past few months. And December is historically the biggest month of the year when it comes to requests for physical delivery.

The drop in physical inventory isn’t limited to COMEX vaults. Trouble is brewing in London’s LBMA market – the world’s largest exchange – as well. Ronan Manly authored a report estimating that LBMA stocks outside the Bank of England vaults have fallen by 67% since 2011.

LBMA VAulted Gold in London

However, the report estimates that ETFs hold 1,116 of the 1,122 tonnes remaining, leaving only 6 tonnes – roughly 200,000 ounces – really in play for delivery.

Consider that LBMA banks often trade 1,000 times that amount – 200,000,000 ounces – in paper gold per day, and you find the same completely untenable scenario.

The price is falling because exchanges around the world are happy to let traders and banks sell more and more metal they don’t have and almost certainly can’t get. On the other side are folks busily buying the paper gold and ignoring the metastasizing counterparty risk. And behind-the-scenes inventories are vanishing as players with greater concern take delivery of bars and head for the exit.

There is no telling how this scenario will end. It could end if spot prices rise to the point that sellers with actual bars show up to sell. Or we may see exchanges engulfed and destroyed by a massive wave of delivery defaults. Who knows?

However, given the explosion in leverage over the past few months, the question of when it will end may be easier to answer. The reckoning for metals markets may not be far ahead.


(courtesy Bill Holter/Holter Sinclair collaboration)

A rotten Turkey for Thanksgiving.

By now you have heard the news of a Russian fighter being shot down over Turkey.  There are conflicting reports as to whether the plane was in Turkish or Syrian airspace.  Another unknown is whether the plane was shot down from the air or ground.  Also conflicting as to whether the pilots were dead prior to landing, or executed while parachuting down or after landing.  Add to this the destruction of a Russian search helicopter by an anti tank “TOW”. 
The ramifications of these events are mind boggling to say the least.  While sitting down to write this, a news conference between presidents Obama and Hollande is being televised.  I do not want to diminish the horror of the recent attacks in Paris and Belgium but what just happened in Turkey is far more important for several reasons.  Thankfully they received questions regarding the Russian shootdown (maybe they were not U.S. reporters doing the questioning?).
Please understand, no matter how you look at the downing of the Russian fighter jet, “we” did it.  Turkey is a member of NATO and the weapons used are of western origin.  Turkey would never have done this without a green light given to them.  They cannot even say “oops, our trigger finger slipped” as they claim to have warned the Russian fighter 10 times or more.  The fact that the plane crashed on Syrian land shows even if they were in Turkish airspace, they were only a driver and pitching wedge across the border and on their way out.  This genie cannot ever be put back in the bottle.
  Judging by President Putin’s immediate statements afterward, we can now look forward to some sort of retaliation.  Most importantly, he claims “ISIS” has been selling oil into Turkey to fund their military operations.  Is this true?  I cannot prove or disprove it but the actions of war require funding and ISIS obviously has funding and “somehow” Western arms and munitions.  No matter how you slice it, the West will now be seen in a different light both in current time and historically.  I can only hope to God this does not spawn WWIII but am afraid this is exactly where it’s headed because episode pits the U.S. versus Russia directly.
   The following is how I see it, “in my opinion”.  I believe this episode was no mistake and was fully planned.  I think the “stress” on the Western financial system is coming to a full blown head and can no longer be hidden like the crazy aunt in the basement.  As I have said all along, the collapse when it comes will need “cover” to hide the real and true cause.  Starting a war with Russia even as unthinkable and unwinnable for anyone as it is will only serve to cover the foundational policy flaws of the Ponzi scheme.
  The West is patently broke.  Our standard of living can no longer be “funded” with debt.  The current negative swap rates I believe are evidence of a scarcity of collateral …the alternative being banks and brokers truly are a better credit risk than sovereign debt.  We also know gold is in scarcity because the negative GOFO rates.  If you look to COMEX registered inventories you will see they are almost gone and amount to 150,000 ounces heading into what is the biggest delivery month of the year.  The list goes on and on but suffice it to say, no matter where you look you will see things financial and economic either in decline or collapsing.  You need to “look” for yourself and past the “headlines” and BLS reportings to understand why “now”.
I have long thought Russia and China had a “truth bomb” up their sleeve to be delivered by Mr. Putin.  It has been my opinion he would expose many falsehoods and false flags over the years with hard evidence to back his claims.  Now, should we be involved militarily against Russia much of what he has to deliver will be considered “propaganda” no matter how credible the evidence.  Thank honest journalism for this.
  Another very “current event” is the upcoming meeting of the IMF to either include or exclude China from the SDR.  This vote is scheduled for next Monday.  Ask yourself, would the U.S. like China sitting at “their” table or would they prefer not?  We will soon see the outcome but I believe the neocons have taken over Washington and would like to use anything possible (including war) as a way to cover the reality. 
  A war at this point will kick the table over so to speak.  It can be pointed at as a reason for the collapse of markets, the economy and a reason the Fed cannot even consider raising rates.  I believe we will hear “our policies were working… but”.  I also think a war would certainly be reason for “force majeure”, particularly in the gold and silver markets.  How convenient would it be should the nonexistent inventory not have to meet the demand for delivery?
Should war break out and gold move up hundreds of dollars, it can again be easily said “this would never have happened if it were not for the damned Russians”.  A force majeure from the current levels would certainly solve the problem of how to cover the shorts used to create the current price.  Collapsing financial markets will be “understood” by a population who wakes up each morning hoping to be “fooled for longer”.
  Unfortunately, what comes will arrive with or without a war.  The American population will experience something they have not since 1945, shortages.  The shortages will be blamed on anything but the real thing.  If left on its own, foreigners not willing to accept dollars for trade will be the end result.  Laugh at this if you want to but the world is craving “fair trade” where they get paid “something for something” as opposed to the never pay model currently in effect.  The American public has just been served a very rotten Turkey for Thanksgiving.  The timing in my opinion is anything but random!  
  I would like to say a few words of respect for the passing of Richard Russell.  Sir Richard, the godfather of financial writers passed away yesterday at 91 years old.  He began writing in 1958 and became an iconic source of truth and common sense in the financial world.  I can remember reading his work while still in college, I credit his common sense approach as something I strived to duplicate as a broker and now as a writer.  May God rest your soul Sir Richard! 
  I wish everyone a Happy Thanksgiving!


Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome

And now your overnight TUESDAY morning trading in bourses, currencies, and interest rates from Europe and Asia.

1 Chinese yuan vs USA dollar/yuan rises in value , this  time at  6.3885/ Shanghai bourse: in the green , hang sang: red

2 Nikkei closed up  45.08 or .23%   

3. Europe stocks all in the red  /USA dollar index down to 99.61/Euro down to 1.0648

3b Japan 10 year bond yield: falls to .317%   !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.12

3c Nikkei now just above 18,000

3d USA/Yen rate now well above the important 120 barrier this morning

3e WTI: 42.35  and Brent:   45.48

3f Gold up  /Yen up

3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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.

3h Oil up for WTI and up for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to  .522 per cent. German bunds in negative yields from 6 years out

 Greece  sees its 2 year rate rise to 7.73%/:  still expect continual bank runs on Greek banks 

3j Greek 10 year bond yield rises to  : 7.32%  (yield curve inverted

3k Gold at $1075.85/silver $14.18 (7:45 am est)

3l USA vs Russian rouble; (Russian rouble down 24/100 in  roubles/dollar) 66.07

3m oil into the 42 dollar handle for WTI and 45 handle for Brent/ China purchases huge supplies from Saudi Arabia

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar.

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0171 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0832 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p Britain’s serious fraud squad investigating the Bank of England on criminal charges/arrests 10 traders for Euribor manipulation

3r the 6 year German bund now  in negative territory with the 10 year rises to  +.523%/German 6 year rate negative%!!!

3s The ELA lowers to  82.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.24% early this morning. Thirty year rate above 3% at 2.99% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Slide, Futures Drop After Turkey Shoots Down Russian Warplane

It had been a relatively quiet session overnight, with German GDP reported in line as expected, and attention focused on the second revision of US Q3 GDP in a few hours, when as reported previously, the geopolitical situation in the middle east changed dramatically when NATO-member country Turkey downed a Russian fighter jet allegedly over Turkish territory even though the plane crashed in Syria, and whose pilots may have been captured by local rebel forces.

The news promptly slammed Turkish assets and FX, sending the Lira tumbling…

pushing lower European stocks and US equity futures while sending 2 Year German Bunds to record negative yields.

Since then, there has been a modest rebound in risk, however assets on both side of the Atlantic remain subdued on concerns just what the Russian response will be. According to Frants Klintsevich, deputy head of upper house’s security and defense committee, Russia views Turkish actions as “extremely agressive”, even though Kremlin spokesman Peskov said that “it would be wrong to make some kind of assumptions right now, to make any statements until we have the complete picture. Therefore, we just have to be patient. This is a very serious incident, but again, it is impossible to say anything without complete information.”

Elsewhere, the commodity pain continues and asBloomberg notes, “there’s no respite for mining stocks.BHP Billiton sank to its lowest in seven years in London trading. The world’s largest mining company faces a one-notch downgrade to its credit rating in the next 12 months. Standard & Poor’s says the move depends on BHP’s response to potential falls in iron ore and oil prices. The fortunes of the Bloomberg World Mining Index, a gauge of 81 stocks, are tied to the outlook for commodity prices, particularly base metals. An LME index of six industrial metals has sunk to the lowest since 2009 on falling demand from China, the biggest commodities user. Citigroup is sticking its neck out and saying platinum may prove to be a good bet after slumping to a seven-year low on Monday.

In other overnight news, Bill Ackman’s increased his Valeant stake through a syntehtic long of 12.5 million share equivalents by buying calls and selling puts, China loosening control over brokerage business, VW approval of diesel engine fix, Noble Group put on S&P credit watch negative, and Carl Icahn announced new 7.13% Xerox stake.

Where global markets stand:

  • S&P 500 futures down 0.3% to 2079
  • Stoxx 600 down 1.1% to 376
  • FTSE 100 down 0.7% to 6260
  • DAX down 0.7% to 11013
  • German 10Yr yield down 3bps to 0.5%
  • MSCI Asia Pacific up 0.1% to 134
  • US 10-yr yield down 2bps to 2.22%
  • Dollar Index down 0.13% to 99.68
  • WTI Crude futures up 1.1% to $42.22
  • Brent Futures up 1.2% to $45.36
  • Gold spot up 0.4% to $1,073
  • Silver spot up 0.1% to $14.16

A more detailed look at global markets shows that Asian stocks traded mostly lower mirroring the lacklustre close on Wall St. as the continued losses in the metals complex weighed on risk sentiment after copper retreated below USD 4,500/ton . This saw the ASX 200 (-1.0%) pressured by large mining names. Nikkei 225 (+0.2%) traded mildly higher with Sharp shares soaring over 20%. Chinese bourses completed saw the materials sector underperforming in the Shanghai Comp. (-0.2%), while the Hang Seng (-0.4%) was weighed on by financials after China’s Asset Management Association stated that 12 of its registered private funds were not contactable and it could declare the funds abnormal. There were also reports in the WSJ that China is to drop the limit on brokers’ proprietary trading and allows for net short positions. 10yr JGBs traded flat amid light volumes despite the BoJ entering the market to purchase JPY 1.1trl in government bonds.

In Europe equities were weighed on by the uncertain sentiment (Euro Stoxx: -1.0%), particularly given that Turkey is a member of NATO and as such any escalation could have a wider impact on other NATO members . However equities came off their worst level in the following hour, amid no sign of immediate escalation on the back of the incident. In line with the softness in equities, fixed income markets saw a bid, while also benefitting from month end extensions, which are set to come into effect sooner than usual given the Thanksgiving Day holiday in the US on Thursday.

European Top News and Eco data:

  • Germany Relied on Domestic Demand for Growth in 3Q: Growth led by private, government consumption last quarter as trade dragged on output amid a global slowdown.
  • Altice Drops as Goldman Sells 61m Shares in Drahi Trade: Drahi’s Next in “funded collar” trade with Goldman, covering 81.2m of Altice’s Class A shares, according to statement late Monday
  • Brussels Lockdown Stays as Terror Alert Extended by a Week: Schools, subway will be closed for 1 more day before gradually re-opening on Wed., PM Charles Michel told press conference late Mon. Paris Suffers Slump in Christmas Bookings After Attacks
  • German Nov. IFO Confidence at 109.0; Median Forecast 108.2; Germany 3Q construction investment -0.3% vs survey 0.1%
  • Finland Oct. PPI -3.2% y/y
  • France Nov. business confidence 102 vs survey 101

In commodities, WTI held onto the Saudi inspired gains seen yesterday to see WTI and Brent remain above the USD 42.00/bbl and USD 45.00/bbl respectively. In the metals complex, gold rebounded off its lows amid concerns regarding the Turkish strike of a Russian plane, while also being supported by USD softeness.

In FX, the most notable event of the European morning has come in the form of the military incident between Turkey and Russia. Turkey have reportedly shot down a Russian jet, which they suggest was in Turkish airspace, however Russian press have stated the plane remained over Syria. The pilots parachuted out of the jet and as such there have been no reported casualties . In terms of how this filtered through to financial markets. Immediate weakness was seen in TRY, with USD/TRY moving sharply in the wake of the news, while bourses in Moscow and Istanbul have also both seen significant weakness throughout the morning.

Other implications have been a bid in JPY, with the safe haven benefitting from the uncertainty to see USD/JPY soften and move away from the 123.00 level, while gold also benefitted from a flight to safety.

Away from the events in Turkey, the key data release of the morning has come in the form of German IFO release (Business Climate 109.0 vs. Exp. 108.2) and while the higher than expected release saw no immediate impact, EUR continued its trend through the morning of strengthening, notable against the GBP, with stops being tripped in EUR/GBP at 0.7025-30.

Looking ahead, today also sees the secondary reading of US Q3 GDP, The September S&P/Case-Shiller home price index is also set to be released later, along with November consumer confidence (expectations for a bounce) and finally the Richmond Fed manufacturing index. We also get API crude oil inventories and comments from a host of BoE and ECB speakers.

Top Overnight News:

  • Turkey Says It Shot Down Russian Warplane Near Syria Border: Turkish military downed Russian warplane in NW Syria after it violated Turkish airspace, local media reported, citing military officials it didn’t identify.
  • Fed Rate Odds Rise to 74% in Bond Market as Pimco Sees Liftoff: Probability that Fed will act at its Dec. 15-16 session increased from
  • China Said to Ease Control Over Brokerages’ Proprietary Trading: Govt cancels rule requiring brokerages to hold daily net long positions in proprietary trading accounts.
  • VW Wins Approval for Fixes for Some Dirty Diesel Engines: Co. has approval to repair most of its rigged European diesel engines; made deal with U.S. regulators to resubmit questionable software for review in 85k other vehicles.
  • Ackman’s Valeant Stake Expands to 9.9% in Show of Commitment: Holding grew to 9.9% in series of transactions starting in Oct.
  • Tesla Motors Invites Customers to Personalize Model X SUV: SUV’s price starts at $80,000 before federal tax credits or state rebates.
  • OPEC Seen Holding the Line as $40 Crude Looms Over Vienna: Group will keep strategy of undercutting rival producers when ministers meet next week, according to 30 analysts, traders surveyed by Bloomberg.
  • Clinton Says Pfizer Deal Leaves Taxpayers ‘Holding the Bag’: “This proposed merger, and so-called inversions by other companies, will leave U.S. taxpayers holding the bag,” Democratic presidential candidate said in statement on Mon.
  • Icahn Amasses 7.13% Stake in Xerox, May Seek Board Seats: Will speak with leadership over “improving operational performance and pursuing strategic alternatives, as well as the possibility of board representation,” according to boilerplate in regulatory filing.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Turkey have reportedly shot down a Russian jet, which they suggest was in Turkish airspace, however Russian press have stated the plane remained over Syria
  • Sentiment was weighed on by the news regarding Turkey, however European equities have come off their lows ahead of the North American crossover amid higher than expected German IFO data
  • Looking ahead, today also sees the secondary reading of US Q3 GDP, consumer confidence index, API crude oil inventories and comments from a host of BoE and ECB speakers
  • Treasuries gain as European stocks slid after Turkey said it shot down a Russian jet near the Syrian border; auctions continue today with 2Y FRN and 5Y notes, WI 1.665% vs 1.415% in October.
  • The Russian warplane was shot down near the border and the two pilots were captured by Turkmen forces in Syria, AHaber TV reported. One of them is dead, CNNTurk reported, citing unnamed local sources
  • Russia’s Defense Ministry denied that the aircraft had ever left Syrian airspace, while acknowledging that one of its jets had crashed in the country
  • Yellen, responding to a letter calling for higher interest rates on behalf of savers, said Americans would have been worse off had the central bank not kept rates near zero since 2008, and repeated that she expects to tighten policy “gradually” after liftoff
  • China has canceled a rule requiring brokerages to hold daily net long positions in their proprietary trading accounts as the nation’s stock market stabilizes following its summer slump, according to people with knowledge of the matter
  • Bank of England Governor Mark Carney said Britain is going to have low interest rates “for some time” and officials must watch out for financial-stability risks arising from cheap borrowing costs
  • Germany’s Ifo institute business climate index climbed to 109 in November, the highest level since June 2014, from 108.2 in October; Ifo said the Paris terror attacks didn’t have a negative impact on the survey data
  • Passenger bookings for flights arriving in Paris during the Christmas period are down 13% from last year with visits from the U.S, Spain, Japan and Germany worst affected, according to a study based on figures from 200,000 travel agencies
  • Investigators raced to examine an explosive vest similar to those used in the Paris attacks for clues as police across Europe hunted for a key suspect in the assaults and Brussels remained on security lockdown
  • Russia and Iran underscored their growing alliance in the Middle East by bolstering business ties and projecting a united front on the civil war in Syria, where both have deployed military power to support President Bashar al-Assad
  • $2.68b IG priced yesterday, $900m HY. BofAML Corporate Master Index OAS holds at +162, YTD range 180/129. High Yield Master II OAS widens 3bp to +635, YTD range 683/438
  • Sovereign 10Y bond yields lower. Asian stocks mixed, European stocks lower, U.S. equity-index futures decline. Crude oil, gold and copper gain


DB’s Jim Reid concludes the overnight wrap

There was plenty of white noise for markets to consider yesterday. More deep losses in metal markets, big volatile swings for Oil, credit market fragility tested again by Vodafone pulling its latest bond offering (despite sweetening the deal with step-up language), the biggest pharma acquisition ever with Pfizer acquiring Allergan, surprisingly hawkish ECB chatter and better than expected European PMI’s but some softish US data.

So it was perhaps surprising at the close of play to see such muted moves for risk assets all things considered. European equities were down modestly with the Stoxx 600 finishing -0.37% while in the US and after equity markets had been on track for one of the smallest high-to-low ranges of the year so far, a late fall into the close saw the S&P 500 (-0.12%), Dow (-0.17%) and Nasdaq (-0.05%) all close a smidgen lower. Credit markets were largely flat while in the Treasury market US 10y yields closed 2.5bps lower at 2.238% and 2y yields finished unchanged just below 0.920%, although at one stage traded north of 0.940% after yesterday’s 2y auction drew a yield of 0.948% – the highest since April 2010.

It’s been a similar start for bourses in Asia this morning where commodity names in particular have led the bulk of bourses lower. Losses are being led out of China in particular where the Shanghai Comp and CSI 300 are -0.21% and -0.33% respectively. The Hang Seng is down a similar amount while the ASX is -0.95%. Markets in Japan have reopened a touch higher after Japan’s Nikkei flash manufacturing PMI rose 0.4pts to 52.8. Commodity markets are a bit more mixed this morning (Oil posting a modest half a percent gain) while commodity currencies have rebounded generally. Meanwhile late last night the US issued a global travel alert citing ‘increased terrorist threats’ and Belgium has extended its lockdown in Brussels for another day.

Much of the focus today will be on two important data releases in the US. Firstly, the advance goods trade balance reading for October is expected to show a modest widening in the deficit, reflecting a drag from net exports which would be consistent with recent trends in the export and import components of the manufacturing ISM survey. Released at the same time will be the second reading for Q3 GDP. Our US economists are expecting growth to be revised up from the initial 1.5% print to 2.3% reflecting greater inventory accumulation, which is slightly ahead of current market expectations for 2.1%. They also note that this would point to less growth in the current quarter, because of the need to run inventories down a bit further and so we could see some implications for Q4 projections.

Taking a closer look at some of those themes which played out in markets yesterday. As noted it was a broadly weak day for metals in particular with fresh ‘across the board’ lows being reached as supply concerns reverberate. Copper closed down just shy of 2% and below $4500 for the first time since May 2009. Zinc closed down -1.28% although was down as much as 4% intraday, while Nickel fell nearly 5% and to the lowest since 2003. There was a steep fall for Gold (-0.82%) also, hovering around its five year low, while other precious metals also saw declines.

Meanwhile, it was a much more volatile session for Oil markets yesterday. WTI (-0.36%) actually closed the session little changed at just below $42, although that masked a 5.8% intraday range during the session, sparked by a big surge higher off the low print after Saudi Arabia said that it plans to cooperate with all oil producers and exporters, from inside and outside of OPEC to ‘preserve the stability of the market and prices’. The next OPEC meeting, due to take place in Vienna, is scheduled for the 4th December – a date worth keeping an eye on and a busy end to the week given the ECB meeting a day before.

Over at the ECB it was comments from board member Lautenschlaeger which, along with data, helped sovereign bond yields in the region nudge higher, 10y Bund yields in particular closing up +5.0bps at 0.528% and wiping out all of last week’s grind lower in the process. In contrast to the much more dovish commentary from Draghi on Friday, Lautenschlaeger said that she doesn’t ‘see any reason for further monetary policy measures, especially not for an extension of the purchase programme’. Justifying this, the board official said that ‘data in the last few weeks indicates that the euro-area economy has so far shown itself to be resistant to uncertainty in the global economy’ and that ‘we should give the numerous and, all-in-all formidable, monetary-policy efforts time to show their full effects’.

The main focus of yesterday’s data was on the November flash European PMI’s. In particular, there was a new cyclical high reached for the Euro area composite at 54.4 (vs. 54.0 expected) which was up half a point from October. This was supported by equal +0.5pt gains for both the manufacturing (52.8 vs. 52.3 expected) and services (54.6 vs. 54.1 expected) components, while our European economics colleagues noted that sub indices for composite new orders and employment rose to the strongest levels since May 2011. Meanwhile regionally, there was a positive surprise in Germany where the composite was up +0.7pts to 54.9 (vs. 54.0 expected) after being boosted by services, however in France the composite nudged down 1.3pts to 51.3 (vs. 52.5 expected) which is a reflection of a decline in the services activity, most likely impacted by the terror attacks. Our colleagues note with the composite PMI average of the big two countries virtually flat on the month, the flash PMI’s imply that on average Italy, Spain and Ireland rose by just over a point in November. Bigger picture and assuming no change in December, the composite PMI suggests euro-area output growth of 0.5% qoq in the last quarter of 2015, largely ahead of current market expectations. Importantly, the PMI surprise would likely have a negligible impact on the ECB decision in December.

Wrapping up yesterday’s data. Across the pond the main data of note was a softer than expected existing home sales reading for October, where sales were down -3.4% mom (vs. -2.7% expected) during the month, dragging the annualized rate down to 5.36m but consistent with other recent housing market data. The flash manufacturing PMI declined a greater than expected 1.5pts to 52.6 (vs. 54.0 expected) which was the lowest since October 2013. Finally, the October Chicago Fed national activity index came in a slightly softer than expected -0.04 (vs. +0.05 expected).

Looking at the day ahead, this morning in Europe the early focus will be on Germany where we will get the final reading for Q3 GDP where there is expected to be no change to the initial +0.3% qoq print, while later on we’ll get the November IFO survey. In France we well get the latest November confidence indicators. Over in the US this afternoon the aforementioned headline releases are the second reading for Q3 GDP and the October advance goods trade balance. The September S&P/Case-Shiller home price index is also set to be released later, along with November consumer confidence (expectations for a bounce) and finally the Richmond Fed manufacturing index. This morning we’re also expecting comments from BoE Governor Carney who is set to testify to UK lawmakers on the Treasury Committee on the BoE’s latest inflation report.





 i) Last night, 9:30 pm MONDAY night, TUESDAY morning Shanghai time.  Japan Nikkei closed up, Shanghai rises slightly due to government intervention/ Hang Sang falls.  Copper rises. Glencore rises to 92 pence up 2 pence on the day.
get a load of the following:
(courtesy zero hedge)

Volkswagen Admits To Equipping Audis, Porsches With Second Illegal Defeat Device

When last we checked in on Volkswagen and the widening emissions scandal, we learned that in addition to software installed on some 11 million diesel vehicles designed to game nitrogen oxide tests, Germany’s largest carmaker has also been habitually understating CO2 output on around 800,000 cars sold in Europe.

In a nutshell, the company said it found “unexplained inconsistencies” while conducting an internal probe related to carbon-dioxide output.

For the first time, gasoline engines were said to be affected.

“VW is leaving us all speechless,” Evercore ISI’s Arndt Ellinghorst said.

Well Arndt, prepare to be left speechless-er, because now, the company has admitted that some 85,000 Audi engines contained a second defeat device just weeks after saying (and this is about as explicit as it gets) that “no software has been installed in the three-litre V6 diesel power units to alter emissions characteristics in a forbidden manner”.

As it turns out, software had been installed in all three-litre V6 diesel power units. As FT reports, “the luxury car brand of the VW group admitted that the software was in all three-litre V6 diesel engines manufactured by Audi and sold from 2009 until this year.”

So no big deal, just every single three-litre V6 diesel vehicle sold for the past seven years.

FT goes on to note that after a meeting between Audi’s chief executive, the company’s engineers, and the US Environmental Protection Agency, the carmaker “sent out a statement saying that it had failed to disclose three auxiliary emissions control devices (AECDs) to regulators. Without disclosure and subsequent approval from regulators, AECDs are not legal.”

“One of them,” the company added, “is regarded as a defeat device according to applicable US law.Specifically, this is the software for the temperature conditioning of the exhaust-gas cleaning system.”

Apparently, the company will stop selling 3.0 litre TDI-equipped Audi A6s, A7s, A8s, Q5s and Q7s, VW Touaregs and Porsche Cayennes. 

According to Bloomberg, Audi “agreed to revise and resubmit data concerning the V6 TDI 3-liter diesel engine to U.S. authorities after negotiations.” The cost affecting Audi, Porsche and VW for a software update is expected to be in the “mid-double-digit millions of euros” range.

To be sure, the writing was already on the wall here. AsBloomberg noted on Friday, “Thursday’s meeting between company officials, EPA and the California regulators involved technical experts who talked about three pieces of equipment on the 3.0-liter engines that should have been disclosed as auxiliary emissions control devices.” According to the EPA, one of the three devices qualifies as a defeat device.

And so, it just keeps getting worse and in fact, the bad news is piling up so quick that analysts can’t keep up with it. For instance, earlier today, Deutsche Bank said the following: “…the product offensive Audi is currently rolling should help to sustain a healthy pricing environment going forward. Obviously this weekend’s newflow might change this at least in the US.”

Yes, “obviously”, especially when one variant of every single model besides the A4 and the TT is now under a stop sale order.

Additionally, it’s hilarious to note that despite it all, Germany’s manufacturing PMI came in at 52.6 today, a three-month high. 

In any event, we’ll anxiously await the analyst response on Tuesday to see just how much more “speechless” everyone is and in the meantime, we would note that if you thought “stability in volatile times” was a hilariously ironic tagline for a VW coporate presentation…

… then you’ll love being reminded of Audi’s mantra…

Glencore rises a bit to 92 pence but 2 pence
(courtesy LSE)


Price (GBX) 92.18 Var % (+/-) +1.95% (Up +1.76)
High 95.89 Low 90.18
Volume 54,286,890 Last close 90.42 on 23-Nov-2015
Bid 92.15 Offer 92.19
Trading status Regular Trading Special conditions NONE
 Late this afternoon, the socialist Antonio Costa is named Prime Minister.  This should be fun…
(courtesy zero hedge)

Look Out Troika, Portugal Names Socialist Antonio Costa Prime Minister

This was a bad month for Brussels and Berlin when it comes to Portuguese politics. Just days after Pedro Passos Coelho was reappointed PM by President Anibal Cavaco Silva, Socialist leader Antonio Costa cemented an alliance with the Left Bloc and the Communists on the way tooverthrowing the government.

The drama came on the heels of inconclusive elections held in October and sets the stage for a government that’s less amenable to harsh austerity and far less troika-friendly that Passos Coelho. “While uncertainty about the composition of a new government remains, the most likely scenario involves a minority Socialist party (PS) government with political support from far-left parties.Relative to the previous government, the new government is likely to (a) be more sceptical about fiscal austerity; and (b) contain some minority elements that have been anti-Euro or anti-EU in the past,” Goldman said in a note out earlier today.

As we noted earlier this month, Portugal may well honor its obligations but even so, it’s hard to imagine that relations between Lisbon and Brussels will won’t change materially going forward and that’s bad news for Juncker and Merkel, because unlike Greece, Portugal “matters” and the country’s debt level (both public and private) is quite high:

As RBS’ Alberto Gallo detailed last week, “public debt levels are high (130% of GDP), corporates are highly levered (140% of GDP) and banks have low profitability and asset quality. Q3 GDP ended a sequence of five consecutive quarters of growth – it expanded by 0.5%, the same as Q2. In what symbolises the political stalemate, the government has approved the TAP privatisation (privatisations were a key part of the incumbent government’s reform agenda) while the Socialist have called for it to be halted.”

On Tuesday, Sliva finally decided to name Costa PM.  AsReuters reports, the announcement “ends weeks of political stalemate and paves the way for the first Socialist government backed in parliament by the far left.”

As Reuters goes on to note, “the Socialists have promised to end years of harsh austerity, increase families’ disposable incomes and help the poor, who suffered during Portugal’s debt crisis and the bailout that ended last year.”

Although it’s not clear what the alternative would have been, Silva attached a number of conditions to the nomination including “written assurances from Costa that he and his leftist partners would respect Portugal’s commitments to EU budget rules, something that Costa – but not his partners – had pledged to do.” Some analysts are afraid the country’s economic “recovery” could be derailed.

“The ascent of 54-year-old Mr. Costa, the former mayor of Lisbon, makes Portugal the second eurozone country this year after Greece to rebel against a belt-tightening recipe imposed on troubled Southern European economies by the European Union’s executive arm,” WSJ said, adding that“Costa’s administration will be the first Portuguese government supported by far-left parties in the country’s four decades of democratic rule.”

The worry for the troika is that this is the first step towards an outright repudiation of Berlin’s brand of fiscal rectitude. Underscoring that is Socialist lawmaker Francisco Assis who says his party will be “a hostage of a far left.” 

Yes, a “hostage to the far left” and you know what that means when it comes to austerity and debt negotiations.

Sorry Jim, looks like you missed this one:


Another hostage taking on the border of France and Belgium but this is not labelled as a “terrorist attack”
several wounded:

it is still ongoing!

(courtesy zero hedge)

Suspects Armed With Kalashnikovs Take Hostages In French Town Near Belgian Border

Although details are still sparse, Reuters is reporting that there’s an unfolding hostage situation in the Northern French town of Roubaix. 

According to the information we have now, there are several individuals with gunshot wounds. According to the daily La Voix du Nord newspaper the suspects are armed with Kalashnikovs. Witnesses say the incident occurred at around 7:00pm local time at a gas station.

Officials told Reuters that “an operation is underway after hostages were taken. Gunshots were fired and the neighborhood has been cordoned off. A bank director and his family may have been taken as hostages.” Reports now indicate that the incident “is not terror related” as though there’s nothing terrifying about being taken hostage by heavily armed gunmen with automatic weapons.

As you can see from the following map, Roubaix is very close to the border with Belgium which initially prompted specualtion that the standoff could be connected to the ongoing search for two unidentified terror suspects as well as the eighth Paris attacker Salah Abdeslam:

Images from the scene:

Belgium has been on heightened alert since Friday and Brussels has been a veritable warzone with police and military units patrolling the city and ransacking Molenbeek in a desperate attempt to head off what’s been described as a “serious and imminent” terror threat.

Roubaix is a short drive from Brussels:

More as we get it.

The big news this morning:  Russian jet shot down by Turkish jets, probably in Syria territory right on the border with Turkey
(courtesy zero hedge)
First big story

Turkish F-16s Shoot Down Russian Su-24 Warplane Near Syria Border

Moments ago a big black geopolitical swan landed when newswires lit up with headlines that a Turkish F-16 shot down what was initially said to be an unidentified warplane near the Syrian border after it violated Turkey’s airspace on Tuesday, a Turkish military official said, but the nationality of the downed aircraft was not immediately clear.

The Russian jet crashed in the mountainous Jabal Turkmen area of Latakia, where air strikes and fighting between rebels and Syrian government forces were reported earlier on Tuesday. 

According to Reuters, Turkish F16s warned the jet repeatedly over the airspace violations before shooting it down.

A Russian Su024 aircraft goes down in Kizildag region of Turkey’s
Hatay province, close to the Syrian border, on November 24, 2015


Footage from private broadcaster Haberturk TV showed a warplane going down in flames in a woodland area, a long plume of smoke trailing behind it. The plane went down in area known by Turks as “Turkmen Mountain” in northern Syria near the Turkish border, Haberturk said.


Minutes later, the Turkish Lira sank like a rock while risk assets across Europe tumbled when the Turkish presidency confirmed that, as many had expected, the jet was a Russian fighter jet, which the Russian Defense Ministry later said was a Su-24. The Su-24 jet was warned after violating Turkish airspace and was then downed in line with Turkey’s rules of engagement, Anadolu says, citing officials at the presidency.

According to Todays’ Szaman, in a statement, the Turkish military said a plane of unknown origin was shot down after it violated the Turkish airspace despite repeated warnings. The aircraft was warned 10 times in 5 minutes, the military said.

It said two Turkish F-16s were involved in the shooting down of the jet.

However, while moments ago the Russian defense ministry confirmed that the shot down plane was indeed one of its own in what will be deemed a clear act of aggression by a NATO-member country against Russia,the Russian defense ministry said it could prove the aircraft was over Syria for the entire flight.

The ministry added that the pilots ejected, according to preliminary info, and that Russia trying to determine their fates, Interfax reports.  Interfax also adds that the plane was probably downed by fire from ground, and that it had been flying at flying at an altitude of 6,000 meters.

Meanwhile, Turkish media reported that either one or both of the pilots may have been captured by Turkmen forces located in the region.


Although there is confusion whether both or just one pilot was captured


Especially with a YouTube video spread showing what is alleged to be one of the pilots dead


A CNN Türk reporter in Yaylada? said a helicopter was hovering over the scene of the crash, apparently to pick up the pilots, but that opposition fighters were preventing it. The reporter later said one of the pilots was at the hands of Turkmen opposition fighters.


Prime Minister Davuto?lu has been briefed by the General Staff and ordered the Turkish Foreign Ministry to contact NATO, UN and relevant countries about the downed plane.

This huge escalation in the Syrian proxy war, one where a NATO country has openly attacked a non-NATO country (if Russia is correct and it did not violate Turkish airspace), comes after Turkey called this week for a U.N. Security Council meeting to discuss attacks on Turkmens in neighboring Syria, and last week Ankara summoned the Russian ambassador to protest the bombing of their villages.

Ankara has traditionally expressed solidarity with Syrian Turkmens, who are Syrians of Turkish descent.

We await a formal reaction by Russia, one which we doubt will be calm, cool and collected and may in fact see the Turkish aggression as an act of war if indeed the Russian Su never entered Turkish territory.

Here is the official statement by Kremlin spokesman Dmitry Peskov via Sputnik:

“So far, we have not heard the reason for the crash of our attack aircraft from the Defense Ministry. We know for sure that the aircraft was in Syrian airspace, over the territory of Syria,” Peskov said, noting that the ministry’s first statement on the crash was based on preliminary information.


It would be wrong to make some kind of assumptions right now, to make any statements until we have the complete picture. Therefore, we just have to be patient. This is a very serious incident, but again, it is impossible to say anything without complete information,” he added.


It can be assumed that the president… will touch upon this issue during the talk with the king, and that there will be some kind of a reaction,” Peskov told reporters when asked whether Putin would make a statement on the matter.

Elsewhere, the Turkish army released what it claims is a radar path analysis of the downed jet’s flight path:

At first blush it is not clear how the airspace violating jet could have received “10 warnings” in the several seconds it took to cross what the Turks claim was the offending Turkish territory, especially since the plane ultimately crashed in Syrian territory.

Updates to follow.



Second story

The rebels release a video of the dead Russian pilot.  Still no official response from Russia

(courtesy zero hedge)

US-Backed Rebels Release Video Of Dead Russian Pilot

A few hours ago, Turkey decided that it would be a good idea to shoot down a Russian Su-24 near the Syrian border. It was the first time in nearly 60 years that a NATO member has shot down a Russian warplane. 

There are competing accounts as to what led to the “incident”:

  • Russia: “So far, we have not heard the reason for the crash of our attack aircraft from the Defense Ministry. We know for sure that the aircraft was in Syrian airspace, over the territory of Syria,”
  • Turkey:We warned them to avoid entering Turkish airspace before they did, and we warned them many times. Our findings show clearly that Turkish airspace was violated multiple times. And they violated it knowingly.”

Here’s the official statement from the Russian Defense Ministry (note they say it was shot down from the ground):

Today an aircraft from the Russian air group in the Syrian Arab Republic crashed on the territory of Syria supposedly shot down from the ground.


The aircraft was flying at the altitude of 6 000 metres. The status of the Russian pilots is being defined.


According to the preliminary data, the pilots managed to eject from the warplane.


The circumstances of the crash are being defined.


During all the flight time, the aircraft was flying only within the borders of the Syrian territory. That was registered by objective monitoring data.

So, as The Kremlin contemplates how best to respond to what is quite clearly the most serious escalation to date in Syria’s multi-sided, five-year civil war, the search is on for the two Russian pilots who ejected as the plane went down. Needless to say, just about the last place you want to be running around if you’re a fighter pilot is Syria.

But the search for the two men may be a lost cause. According to a video sent to Reuters, by “a Syrian rebel group”, at least one of the pilots is dead. Here’s the official word from AFP:

AP says the pilot was dead before he hit the ground.

The footage “appears to show a Russian pilot immobile and badly wounded on the ground,” Reuters says, adding that the rebels can be heard saying “a Russian pilot”, and “God is great” in the background. Here’s the clip:

ISIS is not known to operate in the region, which is controlled by the Free Syrian Army.

Now, both Moscow and Ankara are scrambling to figure out next steps. Frants Klintsevich, deputy head of Russia’s upper house security and defense committee called the act “extremely agressive,” and says “NATO countries are trying to demonize Russia and discredit its actions against international terrorism.” “This is a provocation,” he added, but did say that direct confrontation with Turkey would be “absurd.”

For his part, State Duma Deputy Speaker Nikolai Levichev says Russia should cut off air traffic to Turkey and evacuate Russian citizens.

Meanwhile, Turkey contends that it wouldn’t have mattered whose jet it was, it would have been shot down regardless for violating the country’s airspace. “Before the downing of the jet, Turkey repeatedly warned an unidentified aircraft that it was 15km (9.3 miles) or fewer away from the Turkish border. The aircraft didn’t heed the warnings and proceeded to fly over Turkey; Turkish Air Force responded by shooting it down. Turkey’s downing of a Russian jet was in line with clearly defined military rules of engagement and wasn’t an action against any specific country,” an official told Bloomberg by text message.

So we suppose if that were say, a Saudi warplane, Turkey would have shot it down too.

Here’s a second video released by the FSA:

That would of course be the same FSA that’s backed by the US and the same FSA who is allied with al-Nusra with whom the group shares American and Saudi-supplied TOWs and other advanced weaponry (seehere).

As The Telegraph notes, “Alwiya al-Ashar [who fight with the FSA] is one of around a dozen Turkmen groups fighting alongside Syria’s rebels. It is linked to a Turkish and CIA-backed logistics supply programme that funnels a near-constant stream of small arms, ammunition, and cash for salaries to rebel groups across northern Syria.

So just to be clear on what’s happened here in case the gravity of the situation is somehow lost on anyone, a NATO member from whose airbase the US is flying combat missions, just shot down a Russian fighter jet and the US-backed, al-Qaeda aligned FSA has released not one, but two videos depicting their fighters dancing over the body of a dead Russian pilot while shouting “Allahu Akbar” and holding up the “we’re number one” hand signal.

Here’s a tweet from Turkey’s ambassador to the US:

Translation, “now understand, Turkey’s words and warnings should be heeded. Do not test its patience, try to win its friendship.”

NATO has called an emergency meeting to discuss.

Tensions between Putin and Erdogan were already going south quickly over the Assad issue (Russian Deputy Energy Minister Anatoly Yanovsky declined to comment on prospects of Turkish Stream pipeline talks when asked over the phone by Bloomberg). We can’t wait to see where things go from here…

Third story
Russia’s initial response as they accuse Turkey of backstabbing and funding ISIS.
(courtesy Vladimir Putin/zero hedge)

Putin Accuses Turkey Of “Backstabbing”, Funding ISIS, Sees “Serious Consequences” To Ties

Moments ago Putin delivered a brief statement following the downing of the Russian jet by Turkish forces during a press conference with the King of Jordan. Here are the highlights:


Putin makes it quite clear that Turkey, a NATO state, is responsible for ISIS funding:


And the first official diplomatic escalation:


The futures did not like the sharp, accusatory tone to what many “experts” though would be a non-event.

Fourth story
A search and rescue Russian helicopter downed by the rebels
(courtesy zero hedge)

Russian Search Helicopter Downed Near Syrian Border By US-Made Anti-Tank Missile, Rebels Claim

If Putin was angry when Turkey shot down a Russian plane, which may or may not have crossed Turkish territory – reports on both sides are conflicting – he will be absolutely livid to learn that, according to Turkey’s Dogan News, the Russian pilots who had parachuted in an attempt to save their lives after the plane was shot down, had been executed while parachuting down by local rebels, which considering thevideo released earlier belonged to the Free Syrian Army, are same “rebels” who are funded directly by the CIA.

And this:

As Telegraph points out, the above tweet is from CNN Turk’s Foreign Editor who tweeted that the Turkmen rebels DHA spoke to said: “We hit at the two pilots after they parachuted.”

This, as many have already pointed out, is a war crime.

The only question is whether this, together with the provocative action by Turkey which many can see being an act of war, will be deemed as such by Putin.

The parachuters can be seen in the second half of the clip below:

For those who missed it, here is the video uploaded by the Free Syrian Army of at least one dead parachuter.

Sixth story
Caught on tape:  the destruction of the helicopter brought down by a USA made missile.
(courtesy zero hedge)

Caught On Tape: Syrian Rebels Destroy Russian Helicopter With US-Supplied Anti-Tank Missile


Seventh story

Now we have the tape of the two Russian pilots who were killed while parachuting trying to save their lives.  As explained earlier, the Russian planes were hit with USA made missiles
(courtesy zero hedge)

Execution Of Russian Pilots While Parachuting Caught On Tape

If Putin was angry when Turkey shot down a Russian plane, which may or may not have crossed Turkish territory – reports on both sides are conflicting – he will be absolutely livid to learn that, according to Turkey’s Dogan News, the Russian pilots who had parachuted in an attempt to save their lives after the plane was shot down, had been executed while parachuting down by local rebels, which considering thevideo released earlier belonged to the Free Syrian Army, are same “rebels” who are funded directly by the CIA.

And this:

As Telegraph points out, the above tweet is from CNN Turk’s Foreign Editor who tweeted that the Turkmen rebels DHA spoke to said: “We hit at the two pilots after they parachuted.”

This, as many have already pointed out, is a war crime.

The only question is whether this, together with the provocative action by Turkey which many can see being an act of war, will be deemed as such by Putin.

The parachuters can be seen in the second half of the clip below:


For those who missed it, here is the video uploaded by the Free Syrian Army of at least one dead parachuter.


And here is the video of rebels opening fire on Russian pilots:



Eight story

The USA response!
(courtesy zero hedge)

It Wasn’t Us – Pentagon Shrugs At “Exaggerating, Sloppy, Uncaring” Russian Jet Shootdown

The Pentagon’s army colonel Steve Warren has made it clear how Washington feels about the unraveling situation in Syria. In not so many words, Warren explained ‘not our problem’, pointing out the Russian jet shootdown is “a Russia-Turkey issue,” and that US was not ionvolved. He then quickly moved on to the propaganda section of the briefing, explaining how “sloppy, uncaring” Russia was “exaggerating” its achievements in Syria.


The Pentagon explains, it wasn’t us…

“Our Turkish Allies informed us that their military aircraft shot down a Russian military aircraft near the Syrian border after it violated Turkish airspace on Tuesday. At this time, we can confirm that US forces were not involved in this incident,” the official said.



And Bloomberg headlines explain how Washingtonm really feels…

ninth story
Russia responds again!!!
(courtesy zero hedge)

Russia Declares Warplane Downing A “Hostile Act” But Will It Cut Turkish Gas Supplies?

Some have suggested Vladmir Putin’s first retaliation for the Turkish shooting down of a Russian fighter jet would be to cut off gas supplies (which represent 57% of Turkey’s supply). With Russia Defense Minister stating that the “downing of the Russian warplane is a ‘hostile act’,” adding that the defense ministry is “devising a set of measures to respond to the incident,” it seems taking the ‘nuclear option’ of cutting off 20% of Erdogan’s entire energy supply would be a strong first non-lethal non-World-War-3-starting step.


And then…


So, despite earlier saying that “there will be no disruption,” given the statements above, (and all of Erdogan’s bluster on finding alternate sources) Russia may well decide to take the ‘nuclear option’ and cut off Turkey’s gas supplies as a first non-military reaction.

Turkey gets 57% of its gas from Russia (and Turkey is Russia second biggest non-domestic market for gas). Turkey’s alternative supply routes include Iran, which of course just signed a $5 bn trade deal with Russia and is unlikely to come to Turkey’s aid. As we ominously predicted recently,  although Moscow and Ankara have thus far kept it civil in order to preserve and expand trade, it now looks as though each country may be willing to Plaxico themselves all because they disagree over what the fate of Bashar al-Assad should be… It appears we have moved on from ‘civil’.

As we detailed previously,

In June, we noted that Russia had signed an MOU with Shell, E.On and OMV to double the capacity of the Nord Stream pipeline, the shortest route from Russian gas fields to Europe.

Here is a helpful visual:

What you’ll note from the above is that the Nord Stream allows Gazprom to dodge Ukraine, which is desirable for obvious reasons.

Of course that’s not good for the Eastern European countries (like Ukraine) who derive revenue from the flow of gas. Late last month, Slovak PM Robert Fico had the following to say about the Nord Stream project:

“They are making idiots of us. You can’t talk for months about how to stabilize the situation and then take a decision that puts Ukraine and Slovakia into an unenviable situation.”

To which we said the following:

When it comes to making grand public declarations about “stabilizing” unstable geopolitical situations and then turning around and doing something completely destabilizing, the West (and especially the US) are without equal, as evidenced by all manner of historical precedent including Washington’s efforts to help sack Viktor Yanukovych whose ouster precipitated the conflict in Ukraine in the first place. And make no mistake, to the extent there’s energy and money involved, that’s all the more true which is why it isn’t at all surprising that Western Europe would facilitate a deal that lets Gazprom bypass a war zone if it means getting natural gas to countries that “matter” in a more efficient way.

In an interesting, if predictable twist, Western Europe may need to step up its cooperation with Gazprom even further going forward because now, the conflict in Syria has strained the energy relationship between Moscow and Ankara. Specifically, several purported Russian violations of Turkey’s airspace have made President Erdogan “irate” and more generally, The Kremlin’s support for the Assad regime has angered Turkey, which has long supported and worked to facilitate his ouster. Here’s a bit of color from FT:

Last year, Recep Tayyip Erdogan, then Turkey’s prime minister, was one of the only western statesmen to attend the opening ceremony of the 2014 Winter Olympics in Sochi. On the sidelines he met President Vladimir Putin and hailed the strong ties that bound Russia and Turkey.


Such warmth seems a distant memory today.


The two men are at loggerheads over Syria, and their spat threatens an important energy relationship: Turkey is the second-largest consumer of Russian natural gas. A new pipeline across the Black Sea was supposed to cement the partnership. Its future is now murky.


Last week, an irate Mr Erdogan, now Turkey’s president and still the country’s unquestioned leader, warned that, because of its military intervention in Syria, Russia risked forfeiting a $20bn contract to build a nuclear power plant on Turkey’s Mediterranean coast. Ankara could also source its gas from elsewhere, he warned.

But that’s where things get tricky because as Bloomberg noted on Monday, “Russian gas keeps the lights on in Turkey”:

Nearly 75 percent of Turkey’s energy use is derived from outside sources, with Russia alone accounting for one-fifth of Turkey’s energy consumption, more than any other. Russia’s Rosatom is scheduled to start building Turkey’s first nuclear plant next year and the two countries are also partners on a major new natural gas pipeline, known as TurkStream, which will eventually allow Russia to send its natural gas into the heart of Europe via the Turkish-Greek border rather than through embattled Ukraine. Gazprom, the world’s largest natural gas producer and a TurkStream signatory, recently announced that the project would be delayed and capacity cut. Turkey represents Gazprom’s second largest market after Germany. 

Read the last bolded passage there and then, referring back to the map shown above, follow the Nord Stream right into … Germany. Once again, here’s Bloomberg:

Putin feels able to change tack on Turkey, the second-largest customer for Russian gas, because in September he agreed to expand the Nord Stream pipeline that links Russia directly with Germany.


“Putin is betting on Nord Stream, but that bet is risky,” Sijbren de Jong, energy security analyst at the Hague Centre for Strategic Studies, said by e-mail. “Can Gazprom really afford to annoy Turkey and forgo gas revenues? Hardly.”


Europe receives about a third of its gas from Russia with a third of that volume flowing through Ukrainian pipelines. Gazprom aims to end or at least cut its gas transit through the former Soviet republic after the current transit contract expires in 2019.


Putin said last year that the new Turkey route would help Russia to meet this goal. After talks on the link stalled over the summer, Gazprom said that the Baltic Sea link directly to Germany known as Nord Stream-2 was a priority.


Putin’s bet on Nord Stream-2 is risky as the project may face opposition in the EU, De Jong said. EU Energy Commissioner Miguel Arias Canete said last week the link risked concentrating 80 percent of the bloc’s Russian gas imports on one route while eastern European nations have also warned of the risk of circumventing Ukraine.


Gazprom said Tuesday that key markets for Nord Stream-2 are boosting gas purchases from Russia, with total European exports in early October gaining almost 36 percent from last year’s level.

There are two takeaways here. First, all of this underscores the degree to which geopolitics and energy are inextricably bound up and that serves to strengthen the thesis that part of what triggered the conflict in Syria were energy disputes between the two regional axes of power. Although Moscow and Ankara have thus far kept it civil in order to preserve and expand trade, it now looks as though each country may be willing to Plaxico themselves all because they disagree over what the fate of Bashar al-Assad should be.

Second, Turkey needs to be careful here. If Erdogan effectively kills the Turkish Stream because Russia is bombing anti-regime forces in Syria, then Ankara had better hope Moscow and Tehran don’t succeed in restoring Assad, because then, there’d be no hope for the Qatar line either.

And as for Erdogan’s contention that because Turkey can get gas from sources other than Russia, Moscow should “think well,” the following pie chart suggests that in the current geopolitcal environment, it is actually Ankara that should think twice before adopting too brazen a position…


But, of course, this is not a ‘simple’ decision since Turkey has become a notably important market for Russia…


Tenth story
NATO backs Turkey’s version of events:
(courtesy zero hedge)

NATO Backs Turkey’s Version Of Events, Calls For “Calm & De-Escalation”

Eleventh story:
How is this for escalation: (from the Russian defense ministry)
“Furthermore, as the Russian Ministry of Defense explained, going forward, any Turkish plane that enters Syrian airspace will be fair game.”
please remember that Turkey is part of NATO
(courtesy zero hedge)

Russia Suspends Military Cooperation With Turkey, Will Use Warships To “Destroy Any Threats To Russian Planes”

Despite demands from France’s Hollande, America’s Obama, and NATO’s Stoltenberg that this situation not escalate, it appears Putin is not taking the shooting down of a fighter jet lying down. The seemingly cagey confirmation by NATO and Obama of Turkey’s claims that Russia invaded its airspace has been rebuked byRussia which claims the Hmeimim airbase radar shows the attacking Turkish plane violating Syrian airspace. In response, Russia is moving a Cruiser ‘Moskva’ off the coast to strengthen air-defenses – just as French and US carriers are on their way.

Here is The Turkish version mapping of the flight paths.


Russia claims otherwise:


And is escalating:



Specifically, as RT reports, the steps announced by Russian top brass as the following:Three steps as announced by top brass:

  1. Each and every strike groups’ operation is to be carried out under the guise of fighter jets
  2. Air defense to be boosted with the deployment of Moskva guided missile cruiser off Latakia coast with an aim to destroy any target that may pose danger
  3. Military contacts with Turkey to be suspended

Just like the downing of flight MH17 over Ukraine, it has quickly become a case of “he said, she said”:

Rudskoy said the Russian warplane did not violate Turkish airspace. Additionally, according to the Hmeymim airfield radar, it was the Turkish fighter jet that actually entered Syrian airspace as it attacked the Russian bomber. The Turkish fighter jet made no attempts to contact Russian pilots before attacking the bomber, Rudskoy added.

“We assume the strike was carried out with a close range missile with an infra-red seeker,” Rudskoy said. “The Turkish jet made no attempts to communicate or establish visual contact with our crew that our equipment would have registered. The Su-24 was hit by a missile over Syria’s territory.”

Sergey Rudskoy, a top official with the Russian General Staff, condemned the attack on the Russian bomber in Syrian airspace by a Turkish fighter jet as “a severe violation of international law”. He stressed that the Su-24 was downed over the Syrian territory. The crash site was four kilometers away from the Turkish border, he said.

As a result, Russia now plans to implement new measures aimed at strengthening the security of the country’s air base in Syria and in particular to bolster air defense. Russian guided missile cruiser Moskva, equipped with the ‘Fort’ air defense system, similar to the S-300, will be deployed off Latakia province’s coast.

“We warn that every target posing a potential threat will be destroyed,” lieutenant general Sergey Rudskoy said during the briefing.

“All military contacts with Turkey will be suspended,” he added.

Furthermore, as the Russian Ministry of Defense explained, going forward, any Turkish plane that enters Syrian airspace will be fair game.

And again, all this is happening as both the Frenchcarrier de Gaulle and the US carrier CVN-75 USS Harry S. Truman are on their way to a very dangerous rendezvous off the Syrian coast.

So just as we warned in September, the situation is a full re-run of the 2013 Syria “Mediterranean” showdown, with full naval engagement by all parties, except this time the tensions are significantly escalated, a Russian fighter jet has just been taken down, and Putin will not hestitate to go as far as he has to to save face.

Late last night:
(courtesy zero hedge/Russia bombs 1000 ISIS oil tankers!)

Russia Bombs 1,000 ISIS Oil Tankers As France Launches First Carrier Strikes Against “Evil Death Cult”

Two days ago, we noted that both France and the US were rushing aircraft carriers toward the Syrian coast.

The French dispatched the nuclear powered, $3.5 billion Charles de Gaulle on Saturday while the US sent the CVN-75 Harry Truman last Monday. The departure of the CVN-71 Theodore Roosevelt from the Persian Gulf a month ago had left the entire 5th Naval Fleet without a US carrier presence for the first time in a decade.

But not for long.

At last check, the Truman was already approaching Gibraltar.

(the Charles de Gaulle)

(Harry Truman)

Meanwhile, the Charles de Gaulle has arrived and the carrier’s jets have flown their first combat missions. AsRT reports, “the presence of 26 military aircraft aboard the Charles de Gaulle triples French forces in the region, adding to the 12 planes already stationed in the UAE and Jordan: six Rafale and six Mirage 2000 aircraft.”

“We will intensify our strikes, we will choose targets that will do the most damage possible to the terrorist army,” Francois Hollande proclaimed (a note to the French President: if that’s really your goal, you might want to source your “intelligence” from someone other than Washington).

Interestingly, France isn’t confining its strikes to Syria. AsAFP reports, French warplanes engaged targets in Ramadi and Mosul on Monday:

France launched air strikes against Islamic State targets in Iraq on Mondayin the first sorties from the Charles de Gaulle aircraft carrier, newly deployed in the eastern Mediterranean.


“We carried out strikes in Ramadi and Mosul in support of ground forces that were pushing against troops of (the Islamic State group),” said army chief of staff General Pierre de Villiers, aboard the carrier.


He said planes from the Charles de Gaulle would launch strikes against IS targets in Syria, including command and recruitment centres as well as oil facilities, in “a matter of hours or days”.


Rafale jets catapulted from the carrier’s flight deck on Monday morning, an AFP reporter saw.

Meanwhile, the Russians have stepped up strikes on ISIS oil tankers as the debate heats up in the US about why the Obama administration is just now beginning to target Islamic State’s main source of revenue. According to the Russian Defense Ministry, Moscow’s warplanes have destroyed 1,000 tankers carrying “stolen crude” to refineries in the last five days alone. The Kremlin is also targeting depots and refineries near Raqqa, and because we’re talking about the Russians here, you know they took plenty of pictures.

Here’s the destruction of “an object at the terrorists’ oil production plant”:

And here’s a strike on “facilities of oil production, storage, and processing”:

We wonder whether the Russians, like the Americans,dropped leaflets 45 minutes ahead of time letting ISIS know that airstrikes were imminent.

In any event, both the skies above Syria and the waters off its coast are becoming quite crowded these days, and the “parking lot” in the Mediterranean will only become more cramped once the Truman shows up. And just in case things weren’t complicated enough, David Cameron is now seeking Parliamentary approval to join the air campaign and has given the French permission to use Britain’s RAF base in Cyprus to launch anti-ISIS strikes. On that note, we’ll close with a rather amusingly hyperbolic quote from the British PM:

“The United Kingdom will do all in our power to support our friend and ally France todefeat this evil death cult.”



Then this afternoon Tunisia gets hit again by radicals:

At Least A Dozen Killed In Tunisian Capital As “Terror Attack” Targets Presidential Guards

none today
none today.
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/TUESDAY morning  7:00 am

Euro/USA 1.0648 up .0012

USA/JAPAN YEN 122.56 down .389

GBP/USA 1.5106 down .0020

USA/CAN 1.3348 down.0015

Early this morning in Europe, the Euro rose by 12 basis points, trading now just below the 1.07 level rising to 1.0648; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore,and now Nysmark and the Ukraine, along with rising peripheral bond yield and falling bourses. Last night the Chinese yuan up in value (onshore). The USA/CNY down in rate at closing last night:  6.3885  / (yuan up) 

In Japan Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31/2014. The yen now trades in a northbound trajectory  as settled up again in Japan by 39 basis points and trading now well above the all important 120 level to 122.56 yen to the dollar.

The pound was down this morning by 20 basis points as it now trades well below the 1.52 level at 1.5106.

The Canadian dollar is now trading up 15 in basis point to 1.3348 to the dollar.

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially  with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade (blowing up)

3. Short Swiss franc/long assets (European housing/Nikkei etc. This has partly blown up (see Hypo bank failure).(blew up)

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this TUESDAY morning:closed up 45.08 or 0.23% 

Trading from Europe and Asia:
1. Europe stocks   all in the red

2/ Asian bourses mostly in the red  (except Australia)   … Chinese bourses: Hang Sang red (massive bubble forming) ,Shanghai in the green (massive bubble ready to burst), Australia in the red: /Nikkei (Japan)  in the green/India’s Sensex in the red/

Gold very early morning trading: $1074.75


Early TUESDAY morning USA 10 year bond yield: 2.22% !!! down 2 in basis points from Tuesday night and it is trading well below resistance at 2.27-2.32%.  The 30 yr bond yield falls to  2.99 down 1 in basis point.

USA dollar index early TUESday morning: 99.61 down 15 cents  from Monday’s close. (Resistance will be at a DXY of 100)

This ends early morning numbers Tuesday morning


 Our illustrious buffoon gets stopped out of his short on oil:
(courtesy zero hedge)


“We Are Gone… Now!” – Dennis Gartman Stopped Out As Oil Surges


And now for your closing numbers for Tuesday night: 3:00 pm
Closing Portuguese 10 year bond yield: 2.53% down 1 in basis points from Monday
Japanese 10 year bond yield: .320% !! down 1/4 in basis points from Monday and extremely low
Your closing Spanish 10 year government bond, Tuesday down 1   in basis points.
Spanish 10 year bond yield: 1.64%  !!!!!!
Your Tuesday closing Italian 10 year bond yield: 1.51%  down 1  in basis points on the day: Tusday/ trading 13 basis points lower than Spain.
Closing currency crosses for TUESDAY night/USA dollar index/USA 10 yr bond:  2:30 pm
 Euro/USA: 1.0647 up.0011 (Euro up 11 basis points)
USA/Japan: 122.47 down 0.471 (Yen up 47 basis points)
Great Britain/USA: 1.5086  down .0038 (Pound down 38 basis points
USA/Canada: 1.3300 down .0062 (Canadian dollar up 62 basis points)

USA/Chinese Yuan:  6.3882 (down.0008 on the day (yuan up)

This afternoon, the Euro rose by 11 basis points to trade at 1.0647.  The Yen rose to 122.47 for a gain of 47 basis points. The pound was down 38 basis points, trading at 1.5086. The Canadian dollar rose by 62 basis points to 1.3300. The USA/Yuan closed at 6.3882
Your closing 10 yr USA bond yield: par in basis points from Monday at 2.24%// ( trading at the resistance level of 2.27-2.32%)
USA 30 yr bond yield: 3.00 par  in basis points on the day and will be worrisome as China/Emerging countries  continues to liquidate USA treasuries
 Your closing USA dollar index: 99.57 down 18 cents on the day  at 2:30 pm
Your closing bourses for Europe and the Dow along with the USA dollar index closings and interest rates
London:  down 28.26 points or 0.45%
German Dax: down 158.36 points or 1.43%
Paris Cac down 68.84 points or 1.41%
Spain IBEX: down 70.20 points or 0.68 %
Italian MIB: down 346.55 points or 1.55%
The Dow up 19.51 or 0.11%

The Nasdaq:  up .33 or 0.01%

WTI Oil price; 42.87
Brent OIl:    46.14
USA dollar vs Russian rouble dollar index:    65.32  (rouble is up 51/100 roubles per dollar)
This ends the stock indices, oil price, currency crosses and interest rate closes for today.
And now for USA stories:
New York equity performances for today:

Stocks, Bonds, & Bullion Bid As Geopolitical Risk Soars Most In 62 years

Ok – where to start…

1) GDP met improved expectations thanks to a huge inventory build (which we know from sales since remains at cycle extremes)


2) Richmond Fed weak for 3rd month in a row (signalled last 2 recessions)


3) Consumer Confidence collapsed (worst in 14 months)


4) Americans have given up hope for more employment opportunities




5) Another terrorist attack (this time in Tunisia)


oh yeah and 6) Turkey shot down a bloody Russian fighter jet (in what is the closest we have come to WW3 proxy wars yet – the first NATO nation to fire at a Russian plane since 1953)

And so… “investors” bought stocks…


As soon as Europe closed… (because when Obama, Hollande, and NATO speak, stocks must rally to confirm the confident good news)…But ended the day below the pre-Doomsday levels…


Small Caps once again outperformed amid yet another short squeeze… and trannies were worst despite the ramp in energy stocks and oil…


S&P is unch, “Most Shorted” is up 3% this week!!!


As energy stocks soared over 2%…


Everything happened when Europe closed…


And VIX was hammered to get the momo going…


Is the squeeze over in KaleBios? Down 50% today…



FX Carry and Treasuries were not buying it…


as stocks ramped to catch up with crude…


Credit markets were not bouncing with stocks…


Treasury yields tumbled on safety bids after the Russian fighter jet was shot down… then traded in a very narrow range for the rest of the day…


The USDollar was notably weaker on the day as EUR and JPY strengthened…


Commodities were volatile today with oil backing everything but early jumps in PMs were quickly sold into…




Charts: Bloomberg


Old faithful inventory gains causes revised 3rd quarter GDP to rise from 1.5% to 2.1%.  No doubt that further revisions will bring this down southbound.
(courtesy zero hedge)

Q3 GDP Revised Higher As Inventories Surge Again, Personal Consumption Disappoints

A month ago the US economy was said to have grown only 1.5%, driven by a long-overdue and perhaps welcome correction to inventories. Moments ago we got the first revision to the Q3 GDP, which as consensus expected rose from 1.5% to 2.1%, however for all the wrong reasons because while personal consumption actually decline from a 3.2% increase, and a 2.19% contribution to the GDP bottom line, it is now said to have grown only 3.0%, adding 2.05% to the final GDP print.

So what drove the jump?

The “old faithful” plug to “growth” inventories, which instead of dropping at an annualized 1.44% as in the original release, declined just 0.59% annualized, meaning that instead of contributing $62.2 billion, inventories jumped a material $100.6 billion, confirming that the inventory liquidation is still to take place, and as a result we now expect substantial downward revisions to Q4 GDP in the coming hours as Wall Street has no choice but to assume the inventory reduction will now be shifted to Q4.

The summary GDP print:


The detail:


And the inventory contribution to GDP, showing that Q3 increase from $62.2 billion to a whopping $100.6 billion.


Spot the “revision”


The punchline: if it wasn’t for the $40 billion surge in inventories shown above, Q3 GDP would be 1.2%!

What a miss!!!  The very big national consumer confidence crashed from 99.1 down to 90.4.  This is the lowest in over a year and this is due to a less favourable outlook on the economy!!
(courtesy zero hedge)
Tyler Durden's picture

From Hope To Nope – Consumer Confidence Crashes To 14-Month Lows

Just three months ago Consumer Confidence was peaking at 8 year highs and everything was awesome. Now, with the biggest miss since March 2009, Consumer Confidence crashed to 90.4 from 99.1. This is the lowest since Septmeber 2014 as the “decline was mainly due to a less favorable view of the job market.” Almost every cohort – across age, income, race saw a collapse in confidence though we note low income and under-35s saw the biggest declines as Income Growth expectations plunge to the lowest in 14 months.

That was not supposed to happen…

“Consumer confidence retreated in November, following a moderate decrease in October,” said Lynn Franco, Director of Economic Indicators at The Conference Board.

“The decline was mainly due to a less favorable view of the job market. Consumers’ appraisal of current business conditions, on the other hand, was mixed.


Fewer consumers said conditions had improved, while the proportion saying conditions had deteriorated also declined. Heading into 2016, consumers are cautious about the labor market and expect little change in business conditions.

Charts: bloomberg


Low income Americans spend 100% of income received.  It seems that all hope is gone to them:
(courtesy zero hedge)

For Low Income Americans, All “Hope” Is Gone

The lowest income Americans appear to have officially given up on the “hope”…


Source: The Conference Board

Are they now the cynics too?

Charts: Bloomberg


The Richmond Mfg index shows a huge plunge and the culprit is the biggest decline in wages in 4 years.  This is not the kind of data that Obama wants to see
(courtesy zero hedge)

Richmond Fed Shows 3rd Monthly Decline As Wages Crash Most In 4 Years


The shares of Valeant just will not stop falling despite Ackman’s huge purchase of calls yesterday on the stock

(courtesy zero hedge)

Valeant Just Won’t Stop Falling

Despite Ackman’s triple-down,Valeant has given up all the after-hours’ gains and is rapidly losing last week’s “buying spree” dead-cat-bounce rally as Pershing’s newly synthetic position in the troubled stock moves deeper in the red…



As we noted previously, Pershing’s position ‘proxies’ 34.12 million shares at an average cost of $113.76…

Although his exposure is dramatically non-linear should things not work out (and note he remains even more  drastically underwater still even on this newly acquired position).


Well that about does it for tonight

I will see you tomorrow night



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