August 18/August gold ounces standing:42.815 tonnes/GLD loses a massive 6.24 tonnes of gold yet SLV gains a massive 2.185 million oz/Japan reports a terrible trade report of lower exports and lower imports/Ukraine President Poroshenko warns of a full scale war with Russia/Turkey now heading towards Russia as the USA are pulling out their nukes at Incirlik/Harley Davidson may join Chrysler with criminal charges on gas emissions/

Gold:1351.20 up $8.50

Silver 19.72  up  9 cents

In the access market 5:15 pm

Gold: 1352.00

Silver: 19.76

.

For the August gold contract month,  we had a small sized 66 notices served upon for 6600 ounces. The total number of notices filed so far for delivery:  12,923 for 1,292,300 oz or  tonnes or 40.195 tonnes.  The total amount of gold standing for August is 42.82 tonnes.

In silver we had 0 notices served upon for NIL oz. The total number of notices filed so far this month:  393 for 1,965,000 oz.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE BY A SMALLISH  820 contracts UP to 206,725 AND MOVING AWAY FROM ITS AN ALL TIME RECORD AS  THE  PRICE OF SILVER FELL  BY 22 CENTS WITH YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.033 BILLION TO BE EXACT or 148% of annual global silver production (ex Russia &ex China).

In silver we had 0 notices served upon for nil oz

In gold, the total comex gold FELL 2,292 contracts as the price of gold FELL BY   $7.80 yesterday . The total gold OI stands at 570,205 contracts.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD

we had a huge change at the GLD/a massive withdrawal of 6.24 tonnes

*if this is real physical gold and then it is off to Shanghai

Total gold inventory rest tonight at: 955.99 tonnes of gold

SLV

we had a huge addition of 2.185 million oz  into the SLV, /   THE SLV/Inventory rests at: 355.469 million oz.

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

1. Today, we had the open interest in silver ROSE by 802 contracts UP to 206,725 despite the fact that the price of silver FELL BY 22 cents with YESTERDAY’S trading.The gold open interest FELL 2,291 contracts DOWN to 570,205 as the price of gold FELL by $7.80 WITH YESTERDAY’S TRADING.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

3. ASIAN AFFAIRS

 i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 5.41 POINTS OR 0.17%/ /Hang Sang closed UP 223.38 points or 0.98%. The Nikkei closed DOWN 259.63 POINTS OR 1.55% Australia’s all ordinaires  CLOSED DOWN 0.49% Chinese yuan (ONSHORE) closed UP at 6.63270/Oil FELL to 46.92 dollars per barrel for WTI and 49.67 for Brent. Stocks in Europe:  in the GREEN . Offshore yuan trades  6.6381 yuan to the dollar vs 6.63445 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

Quite a disaster for this exporting nation.  Exports and imports plunge as the higher yen is playing havoc to this nation

( zero hedge)

b) REPORT ON CHINA

none today

4 EUROPEAN AFFAIRS

none today

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)RUSSIA/UKRAINE

Ukraine President warns of a full scale Russian invasion of the Don Bass

( zero hedge)

ii)TURKEY

Leaked documents show Erdogan supporting and financing terrorist groups like ISIS and Hamas:

( zero hedge)

iii)As Turkey moves closer and closer to Russia, the USA quietly remove their nukes to Romania.  The big question of course, is what will Turkey do with all of those migrant. It sue looks like they will flood Europe with them

( zero hedge)

6.GLOBAL ISSUES

none today

7.OIL ISSUES

i)Nothing will stop these crooks:  oil rises despite record Saudi output and no output freeze and rig increases

( zero hedge)

8.EMERGING MARKETS

BRAZIL

i)Bizarre events in Brazil as two swimmers are pulled from their return trip back to the States.  It seems that Brazil wants a little revenge from the Americans for their support in bringing down Roussef

( zero hedge)

 

ib) late morning;

Mystery solved:  it was not a robbery as the story was fabricated.  However things got a little rowdy inside a gas station where Lochte tried to unlock a bathroom  lock and broke the door.  The owner demanded that the swimmers pay for the door.  Lochte then went to police and fabricated the story of being robbed at gunpoint.

( zero hedge)

 

ii)Then last night, a British Olympic athlete was robbed at gunpoint. Rio is not a safe environment warns their officials:

( zero hedge)

9.PHYSICAL STORIES

i)This was put to your attention yesterday but it is worth repeating because of the nonsense that GFMS puts out

( Koos Jansen/GATA)

ii)A very worthy cause as Koos Jansen tries to obtain Fort Knox audit information from the USA treasury:

( GATA/Chris Powell)

iiii)John Embry talks about the misinformation emanating from Washington as to the true state of their economy.  He expects the dollar to collapse.  Gold is to go to investment:

(courtesy John Embry/Kingworldnews)

 

iv)Three major reasons why negative interest rates are not working and it is a boon for gold

( Lawrie Williams/Lawrieon gold/Sharp’sPixley)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Obamacare is in such a mess.  Insurers are now down 2 billion USA dollars.  There are 3 major steps outlined by the insurers as to how they are going to fix their problem:

  1. get out of Obamacare altogether
  2. those that remain will hike premiums by 24%
  3. mergers and the resulting entity will raise rates

( ZERO HEDGE)

 

ii)The hope part of the Philly index rises but the other components such as new orders and employment crashes to 7 yr lows.  The overall index rises to 45.8 from 33.7.

( zero hedge)

iii)One of my favourite Bellwether indicators on global health is Caterpillar.  Today it is retail orders that have suffered their second biggest plunge in 7 years and it has now posted 44 consecutive declines in retail sales:

( zero hedge)

iv)With the markets threatening for a rout, it breaks again:

( zero hedge)

v)The truth behind the real earnings from Wall Street.  The current P>E for the S & P is 25.1

( David Stockman/)

vi)Dr. Pinsky states that there is something wrong with Hillary’s health

( Jankowski/zero hedge)

vii)The USA is going after Harley Davidson for evading emission requirements.  So we now have Chrysler under criminal investigation and now Harley Davidson:

.

Let us head over to the comex:

The total gold comex open interest FELL TO AN OI level of 570,205 for a LOSS of 2291 contracts AS THE PRICE OF GOLD FELL BY $7.80 with YESTERDAY’S TRADING..   We are now in the active month of AUGUST. As I stated this month : “Somebody big is continually standing for the gold metal and continues to do so in August in the same manner as we witnessed in May,  June and July  whereby the front delivery month increases in OI standing for metal or a slight contraction We will no doubt see increases in amount standing in August and probably we will surpass the amount standing on first day notice.  The  big active contract month of August saw it’s OI FALL by 14 contracts DOWN to 908,  We had 11 notices filed upon yesterday so we LOST A TINY 3 contracts or an additional 300 oz will not stand for delivery in August AND THESE GUYS WERE WITHOUT A DOUBT CASH SETTLED FOR A FIAT BONUS. The next contract month of Sept saw it’s OI fall by 59 contracts down to 4522.The September contract STILL remains extremely elevated and we may have another of those high deliveries rare for a non active month.The next active delivery month is October and here the OI ROSE by 1069 contracts UP to 47,607. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was FAIR at 205,203.  The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was FAIR at 185,887 contracts.The comex is not in backwardation.
Today, we had  66 notices filed for 6600 oz in gold
And now for the wild silver comex results. Total silver OI ROSE by 820 contracts from 205,905 UP TO 206,725 despite the FALL in price of silver to the tune of 22 cents.  We are moving away from the all time record high for silver open interest set ON Wednesday AUGUST 3: (224,540). The non active month of August saw it’s OI FELL BY 119 CONTRACTS DOWN TO 84. We had 119 notices served yesterday so we neither gained nor lost any silver ounces that will  stand in this non active delivery month of August. The next big active month is September and here the OI fell by ONLY 3812 contracts down to 100,246  and that would alarm our bankers to no end. The volume on the comex today (just comex) came in at 97,745 which is HUGE and small rollovers..The confirmed volume yesterday (comex + globex) was HUMONGOUS at 96,985 with tiny rollovers.. Silver is not in backwardation. London is in backwardation for several months.
We had 0 notices filed for today for NIL oz
INITIAL standings for AUGUST
 August 18.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
8,198.25 oz
SCOTIA
MANFRA
255 KILOBARS
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 
nil
 3,864.382 oz
DELAWARE
No of oz served (contracts) today
66 notices 
6600 oz
No of oz to be served (notices)
842 contracts
(84,200 oz)
Total monthly oz gold served (contracts) so far this month
12,923 contracts (1,292,300 oz)
(40.195 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    441,969.7 OZ
Today:  TINY activity at the gold comex AND 1 KILOBAR ENTRY
Today we had 0 dealer DEPOSITS
total dealer deposit: NIL    0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposit:
 i) Into DELAWARE:  3,864.382 OZ
Total customer deposits: 3,864.382 OZ
Today we had 2 CUSTOMER withdrawals
 i) Out of SCOTIA:  8,037.500 OZ  250 KILOBARS
ii) OUT OF MANFRA  160.75 OZ (5 KILOBARS)
Total customer withdrawals  8,198.25 OZ  255 KILOBARS
Today we had 2 adjustments:
 i) Out of BRINKS:  868.05 oz (27 KILOBARS) was adjusted out of the dealer and this landed into the customer account of Scotia:  (0.027 tonnes)
ii) Out of Delaware: 488.635 oz was adjusted out of the customer and this landed into the dealer account of Delaware
Note: If anybody is holding any gold at the comex, you must be out of your mind!!!
since comex gold storage is unallocated , rest assured any gold stored will be compromised!
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 66 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 48 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the AUGUST  contract month, we take the total number of notices filed so far for the month (12,923) x 100 oz  or 1,292,300 oz , to which we  add the difference between the open interest for the front month of AUGUST  (908 CONTRACTS) minus the number of notices served upon today (66) x 100 oz   x 100 oz per contract equals 1,376,500 oz, the number of ounces standing in this active month. 
 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (12,923) x 100 oz  or ounces + {OI for the front month (908) minus the number of  notices served upon today (66) x 100 oz which equals 1,376,500 oz standing in this non  active delivery month of AUGUST  (42.815 tonnes).
We lost 3 contracts or additional 300 oz will not stand for metal in this active month of August.
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
 
We now have partial evidence of gold settling for last months deliveries We now have  +  6.889 TONNES FOR MAY + 49.09 TONNES FOR JUNE +  21.452 TONNES FOR JULY + 12.3917 + 42.815 tonnes Aug +  tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16.3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes –MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018; june 29 .036 tonnes; JUNE 30 2.49 /july 1 1778 tonnes, JULY 28 .089 TONNES / JULY 29 .128 TONNES/ aUG 10// 0.219 TONNES/August 11: .3619 TONNES/ AUG 12/.05878/ aug 17. 6418 tonnes/THEREFORE 91.926 tonnes still standing against 72.789 tonnes available.
 Total dealer inventor 2,339,798.107 oz or 72.777 tonnes
Total gold inventory (dealer and customer) =10,999,357.817 or 342.126 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 342.126 tonnes for a  gain of 39  tonnes over that period. 
 

THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD AND FRAUDULENT!!

To me, the only thing that makes sense is the fact that “kilobars” are entries or hypothecated gold sent to other jurisdictions so that they will not be short in their derivatives like in England.  This would be similar to the gold used by Jon Corzine. If this is the case, this would be the greatest fraud perpetrated on USA soil.

 

 
 end
And now for silver
 
AUGUST INITIAL standings
 august 18.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
nil oz
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil oz
No of oz served today (contracts)
0 CONTRACTS
(NIL OZ)
No of oz to be served (notices)
84 contracts
420,000 oz)
Total monthly oz silver served (contracts) 393 contracts (1,965,000 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  8,424,966.0 oz
today we had 0 deposit into the dealer account:
 Total dealer deposits;  NIL oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 0 customer withdrawals:
Total customer withdrawals: nil oz
total customer deposits:  nil  oz
 
 
 
 we had 1 adjustments
ii) Out of CNT:
we had a transfer of 596,827.980 oz from the customer to the dealer account of CNT
The total number of notices filed today for the AUGUST contract month is represented by 0 contracts for NIL oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (393) x 5,000 oz  = 1,965,000 oz to which we add the difference between the open interest for the front month of AUGUST (84) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the AUGUST contract month:  393(notices served so far)x 5000 oz +(84 OI for front month of AUGUST ) -number of notices served upon today (0)x 5000 oz  equals  2,385,000 oz  of silver standing for the AUGUST contract month.
we neither gained nor lost any silver ounces that will stand for delivery in this non active month of August.
 
Total dealer silver:  27.042 million (close to record low inventory  
Total number of dealer and customer silver:   157.459 million oz (close to a record low)
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
END
And now the Gold inventory at the GLD
August 18/a withdrawla of 6.24 tonnes of gold from the gLD/Inventory rests at 955.99 tonness
August 17/no change in gold inventory at the GLD/inventory rests at 962.23 tonnes
August 16/ a deposit of 1.78 tonnes of “paper gold” into the GLD/Inventory rests at 962.23 tonnes
August 15/what a farce!! a huge “paper gold’ withdrawal of 12.17 tonnes/inventory rests at 960.45 tonnes
August 12/no change in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 11/no changes in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 10/no changes in GLD/Inventory rests at 972.62 tonnes
August 9/we had a withdrawal of 1.18 tonnes of gold from the GLD inventory/inventory rests at 972.62 tonnes
August 8/a huge changes in the GLD/Inventory, a withdrawal of 6.54 tonnes of paper gold/ rests at 973.80 tonnes of gold/
August 5/ a huge deposit of 10.69 tonnes of gold (with gold down $22.40??)/GLD inventory rests at 980.34 tonnes
August 4/no change in inventory at the GLD/Inventory rests at 969.65 tonnes
August 3/a big deposit of 5.62 tonnes of paper gold/Inventory rests at 969.65 tonnes
August 2/no change in gold inventory at the GLD/Inventory rests at 964.03 tonnes
August 1/we had a huge paper deposit of 5.94 tonnes of gold into the GLD/Inventory rests at 964.03 tonnes
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
August 18/ Inventory rests tonight at 955.99 tonnes

end

Now the SLV Inventory
August 18/ a massive paper deposit of 2.185 million oz into the SLV/Inventory rests at 355.469 million oz
August 17/ we had a huge deposit of 1.519 million oz into the SLV/Inventory rests at 353.284 million oz/
August 16/no change in inventory/rests tonight at 351.765 million oz
August 15./amazing, we have a huge withdrawal in gold and yet nothing moves out of silver: no change in silver inventory at the SLV/Inventory rests at 351.765 million oz.
August 12/no change in silver inventory at the SLV/Inventory rests at 351.765 million oz
August 11/no change in silver inventory at the SLV/Inventory rests at 351.765 oz
August 10/no changes in silver inventory at the SLV/Inventory rests at 351.765 oz
August 9/a deposit of 950,000 oz into the SLV/Inventory rests at 351.765 oz
August 8/no change in silver inventory at the SLV/Inventory rests at 350.815 million oz.
August 4/no change in silver inventory at the SLV/inventory rests at 350.815 million oz
August 3/no change in silver inventory/inventory rests at 350.815 million oz
August 2/ we had a tiny withdrawal of 40,000 oz of silver/Inventory rests at 350.815 million oz
August 1/we had a huge paper deposit of 1.235 million oz into the SLV/Inventory rests at 350.955 million oz
.
August 18.2016: Inventory 355.469 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 4.7 percent to NAV usa funds and Negative 4.8% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 59.4%
Percentage of fund in silver:39.4%
cash .+1.2%( August 18/2016).
2. Sprott silver fund (PSLV): Premium falls to +1.11%!!!! NAV (august 18/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO  0.16% to NAV  ( august 18/2016)
Note: Sprott silver trust back  into POSITIVE territory at +1.11% /Sprott physical gold trust is back into positive territory at 0.16%/Central fund of Canada’s is still in jail.
 
 
 

end

And now your overnight trading in gold,THURSDAY MORNING and also physical stories that may interest you:

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne/David Russell

Gold – “Mother of All Bull Markets Has Only Just Begun” – Grandich

There are many reasons to believe that “the mother of all bull markets has only just begun” for gold.

So believes Peter Grandich, the market analyst dubbed the “Wall Street Whiz Kid” whose track record speaks for itself. He called the Wall Street Crash in 1987 and subsequent sharp stock market recovery, the end of the bull market in stocks in 2000 and the global financial crisis in 2008.


Gold in USD – 1971 to Today

On his website this week he entertainingly and insightfully outlined why he is so positive on gold:

I’m not going to write some long dissertation but rather just highlight some of the reasons I personally believe gold is in the earliest stages of what can turn out to be its biggest bull market ever.

The bullish fundamentals for gold ownership grow almost daily. Again, I could write pages of why, but I will just point out a few key ones:

1 – The severe gold correction literally wiped away every ounce of bullishness. It had come to last one out of the bullish camp, please turn off the lights. While bullishness is off the canvas now, we still see little or no interest in gold overall while its main rival, financial assets, are now in a full bullish blow-off mode. Being a supporter of gold is like being the “Maytag Repairman” when compared to what most investors and professional are loaded to the gills with (financial assets).

2 – We’re now just about 180 degrees where we were in 1980. Back then, financial assets were called “dead” and investment “war rooms” preaching gold ownership were widespread. Gold is the ultimate contrarian play and on a valuation basis compared to stocks and bonds, relatively cheap.

3 – Whether its debt bombs all around the world, paper currencies being debased faster than “Grant took Richmond”, or Central Banks getting ready to launch funny money from helicopters in a last futile attempt to correct their quantitative easing failures, take your pick on the inevitable ignitor that will lead to a blow up of financial systems. It’s not if, but when!

I can go on and on why this former “soothsayer” believes gold is going much, much higher. I would suggest if you’re serious and want to consider it as part of your portfolio, we’re coming close to a break out point where if and when it occurs, I suspect an acceleration to the upside will take place.
See full article here

Peter Grandich was the author of The Grandich Letter for a quarter century and had a wide audience with his subscriber base and in the financial media, such as The Wall Street Journal, MarketWatch and CNN. Peter was dubbed “the Wall Street Whiz Kid” after he forecast the 1987 stock market crash weeks before it happened. He then predicted that the market would reach a new all-time high within two years. It did. He said that 2000 would see the end of the great bull market of the 1980s and 1990s. It was. Early in the new millennium, he thought U.S. banks had gone “overboard in making loans that required near-perfect economic conditions in order to avoid substantial bankruptcies.” Another spot-on prediction. In October 2007, he warned investors to “man your battle stations” and prepare for the “unprecedented economic tsunami” that would hit America beginning in 2008.

Gold and Silver Bullion – News and Commentary

Gold treads water on U.S. Fed rate views; awaits July minutes (Reuters)

Gold Holds Advance Even as Fed Officials Flag Possible Rate Rise (Reuters)

Gold’s Popularity Dims In Short Term as ETFs Shrink by Most This Year (Bloomberg)

Gold cuts gains after mixed U.S. economic data (Reuters)

Banks to keep piles of cash in high security vaults (FT)


Billionaire Crispin Odey “Is Betting Everything On Gold” (Zerohedge)

Odey Still Bearish, Explains Massive Long Gold Bull Position (ValueWalk.com)

DB discloses $2 billion mining share portfolio (Smaulgd)

Labour opposition wants to increase the national debt by £270 billion (Telegraph)

Gold: Fresh Upside Breakout Is Imminent (Goldseek)

7RealRisksBlogBanner

Gold Prices (LBMA AM)

18Aug: USD 1,347.10, GBP 1,023.93 & EUR 1,190.84 per ounce
17Aug: USD 1,342.75, GBP 1,031.23 & EUR 1,191.96 per ounce
16Aug: USD 1,349.10, GBP 1,039.89 & EUR 1,197.33 per ounce
15Aug: USD 1,339.20, GBP 1,037.21 & EUR 1,198.85 per ounce
12Aug: USD 1,336.70, GBP 1,032.60 & EUR 1,199.02 per ounce
11Aug: USD 1,344.55, GBP 1,037.05 & EUR 1,206.06 per ounce
10Aug: USD 1,351.85, GBP 1,035.11 & EUR 1,209.23 per ounce

Silver Prices (LBMA)

18Aug: USD 19.78, GBP 15.04 & EUR 17.47 per ounce
17Aug: USD 19.57, GBP 15.04 & EUR 17.37 per ounce
16Aug: USD 20.04, GBP 15.43 & EUR 17.77 per ounce
15Aug: USD 19.90, GBP 15.40 & EUR 17.81 per ounce
12Aug: USD 19.87, GBP 15.33 & EUR 17.81 per ounce
11Aug: USD 20.21, GBP 15.56 & EUR 18.13 per ounce
10Aug: USD 20.34, GBP 15.55 & EUR 18.19 per ounce


Recent Market Updates

– Gold In UK Pounds Collapses 38% Versus Gold and 56% Versus Silver Year To Date
– Will Ireland Be First Country In World To See Bail-in Regime?
– Money “Madness” Negative Interest Rates Sees Gold Buying Surge
– Gold Investment Demand Reaches Record In First Half 2016 On “Perfect Storm”
– Peak Gold – Did Gold Production Peak in 2015?
– Financial Times: “Victory For Gold Bulls Is Only Just Beginning”
– Irish Banks Most Vulnerable In Stress Tests – Banking Contagion In EU Cometh
– Gold In Sterling 2.2% Higher After Bank Of England Cuts To 0.25% and Expands QE
– Silver Kangaroo Coins – Sales Surge To Over 10 Million
– Trump, Clinton, “Ugliest” Election Coming – Gold’s “Summer Doldrums” Prior To Resumption of Bull Market
– Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion
– “Could Not Invent A More Bullish Story For Gold Bullion”
– Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money

abidpasha

END

 

This was put to your attention yesterday but it is worth repeating because of the nonsense that GFMS puts out

(courtesy Koos Jansen/GATA)

Koos Jansen: GFMS keeps wildly underestimating Chinese gold demand

Section:

1:25p ET Wednesday, August 17, 2016

Dear Friend of GATA and Gold:

Metals consultancy GFMS and other establishment organs keep wildly underestimating Chinese gold demand and changing their rationalizations for doing so, gold researcher Koos Jansen charges today. Jansen calculates that Chinese demand in 2015 was at least 2,250 tonnes. His analysis is headlined “Spectacular Chinese Gold Demand in 2015 Fully Denied by GFMS and Mainstream Media” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/spectacular-chinese-gold-d…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

A very worthy cause as Koos Jansen tries to obtain Fort Knox audit information from the USA treasury:

(courtesy GATA/Chris Powell)

Help Koos Jansen pry Fort Knox audit info from Treasury Department

Section:

9:40p ET Wednesday, August 17, 2016

Dear Friend of GATA and Gold:

Our friend gold researcher Koos Jansen needs to raise $3,145 to cover the costs being charged to him by the U.S. Treasury Department for copies of documents involving audits of the gold at Fort Knox. As of this hour a Go Fund Me page on the Internet is about $500 short of raising the money for him. Jansen’s work has been of the greatest importance to the cause of transparency in the gold market, so please consider helping him by visiting the Go Fund Me page and making a contribution here:

https://www.gofundme.com/2k82ef38?rcid=585dcdd664a911e6bab8bc764e065bc4

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

END

 

John Embry talks about the misinformation emanating from Washington as to the true state of their economy.  He expects the dollar to collapse.  Gold is to go to investment:

(courtesy John Embry/Kingworldnews)

‘Chaotic fall’ in dollar is likely, Embry tells King World News

Section:

9:20p ET Wednesday, August 17, 2016

Dear Friend of GATA and Gold:

Economic data in the United States doesn’t match the spin being offered by the political authorities, Sprott Asset Management’s John Embry tells King World News today. “At any sign of emerging weakness,” Embry says, “they trot out some Fed official to talk about an imminent rate increase and then aggressively manipulate the currency and precious metals markets to give credence to the statement.” He expects “a chaotic fall” for the dollar, which he considers “over-owned.” An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/john-embry-the-deep-state-is-desperate-right-no…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

 

Three major reasons why negative interest rates are not working and it is a boon for gold

(courtesy Lawrie Williams/Lawrieon gold/Sharp’sPixley)

 

Negative interest rates:  Great for gold but are they any good for the economy?

Central Banks have been viewing ultra-low, or in many cases directly, or effectively, negative, interest rates as being the panacea for all economic ills.  Deprive savers of interest, so the theory goes, and they will opt to spend their savings instead, thereby generating a boost for the economy.  Low interest rates also make borrowing costs lower for industry and, with supposedly additional availability of capital through quantitative easing programmes should thereby boost investment in necessary plant and equipment.

It is becoming more and more apparent that neither of these strategies are working, or at least not to the extent anticipated by the economists promoting this policy which is, unfortunately, being followed by many of the world’s major central banks.

From the savings angle, what the policy is really doing is driving savers away from traditional income generating securities and into assets like gold which may pay no interest – no interest is better than negative interest – but offers the possibility of capital accumulation.  Those in countries like the UK, where the currency first weakened against the US dollar post the Brexit vote, and then again when the Bank of England cut the base rate and re-introduced monetary stimulation, will have seen some substantial gains through moving into gold.  We advised, (See:UPDATE: Brexit in the balance.  Gold surges.  Silver may begin to fly where I commented “UK investors in particular should look to investing in gold as a wealth protector given that if the UK referendum, now only a week away, should result in a Leave vote – the Brexit option – there would be a knee-jerk reaction knocking the pound sterling down sharply against the dollar, while the gold price would likely rise on fears of considerable further economic disruption within the Eurozone ahead of the Brexit vote”) for UK investors to at least put some of their investments into gold for example as insurance against a ‘Leave the EU’ decision, and those who did benefited very nicely indeed, thank you, at least in terms of the pound sterling. The combination of the rising gold price in US dollars and the fall in sterling against the dollar had a multiplying impact on an investment in gold or in silver.

On the business front there’s little evidence that the huge move towards zero, or negative, interest rates has done much to stimulate activity.   Businesses are seen as reluctant to borrow, even when the cost of borrowing is so low, to put money into new plant and equipment, or services, when demand for their products is not seen as being positive in any case.  For many the imposition of such low interest rates is seen as yet another indication of a sick economy and an ultra low-growth environment.

Among the nations which have moved to the imposition of negative interest rates are, most significantly, the European Central Bank (ECB) and the Japanese Central Bank (BoJ), while Denmark, Sweden and Switzerland have also followed suit.  The Bank of England (BoE) is almost there too and with the prospect of another rate cut should the post-Brexit economy not pick up, could be in zero, or negative, territory by the year end.  And with inflation probably running higher than most governments will admit, all these, and more including the USA, are effectively in a below zero environment as far as bond investment returns are concerned.  All this is positive for gold, but of increasing worry for the Central Banking system which seems to have little more ammunition left with which to try and stimulate flagging global economies.

Just to emphasise the problem a recent survey, published in the UK’s highly respectedFinancial Times newspaper suggested that the universe of sub-zero-yielding debt – primarily government bonds in Europe and Japan but also a mounting number of highly-rated corporate bonds – has reached the enormous total of $13.4 TRILLION.

Another factor which is indeed worrying for businesses and which could see them look to deposit any spare cash in alternative investments is the looming possibility of bank bail-ins, whereby large holders of money in the banking system see some of their hard-earned cash effectively confiscated to help rescue an ailing bank.  This was brought to the fore a couple of years ago in Cyprus when a bail-in was imposed for major clients of the Bank of Cyprus which was close to failure because of its large holdings of Greek debt.  As the UK’s Daily Telegraph reported at the time: The imposed bail-in forced big savers to foot the bill for the recapitalisation of the nation’s biggest bank.  The bank said that it converted 37.5% of deposits exceeding €100,000 into “class A” shares, with an additional 22.5% held as a buffer for possible conversion in the future. Another 30pc was temporarily frozen and held as deposits.

Legislation was subsequently changed to permit bail-ins of this nature across the EU and now the spectre of something similar occurring in Ireland has been reported with one of the country’s biggest insurers said to have been moving its cash holdings out of the banking system into government bonds for fear of another property price crash putting the Irish banking system in peril.

There is thus something of a confluence in factors which would seem to be gold supportive in the medium term, while the increase in geopolitical tensions between the Ukraine and Russia, and China’s belligerent rhetoric over its de facto annexation of large sections of the South China Sea, and the uncertainties engendered by perhaps the most politically divisive US presidential election ever, is further adding to the positive environment for the gold price.  Whether the markets will recognise this after the Labor Day holiday, when the US traders, bankers, fund managers et al are back from their holidays, which has seen something of a volatile marketplace for precious metals over the past month, remains to be seen as there are a lot of big vested interests at play here, but we do see the overall pricing environment as distinctly positive.

 

end

Your early THURSDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight

 
 

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.6327( SMALL REVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6381) / Shanghai bourse  DOWN 5.41 OR 0.17%   / HANG SANG CLOSED UP 223.38 or 0.98%

2 Nikkei closed /USA: YEN RISES TO 100.30

3. Europe stocks opened  IN THE GREEN,     /USA dollar index DOWN to 94.43/Euro UP to 1.1320

3b Japan 10 year bond yield: FALLS TO  -.082%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 100.30

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  46.95  and Brent: 49.67

3f Gold UP  /Yen DOWN

3g Japan 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./“HELICOPTER MONEY” ON THE TABLE 

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 FALLS to -.074%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 6.88%/: 

3j Greek 10 year bond yield FALL to  : 8.11%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1350.40-/silver $19.77(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 45/100 in  roubles/dollar) 63.71-

3m oil into the 46 dollar handle for WTI and 49 handle for Brent/

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/GOT a SMALL REVALUATION UPWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 100.30 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9585 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0849 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 VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -0.074%

/German 10+ year rate BASICALLY  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

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 1.549% early this morning. Thirty year rate  at 2.260% /POLICY ERROR)

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

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

HELICOPTER MONEY STILL ON THE TABLE/JAPANESE STIMULUS PLAN DISAPPOINTS

S&P Futures Unchanged As Europe Rises; Dollar Slide Sends Oil Above $47

In the latest quiet trading session, European shares rose while Asian stocks fell and S&P futures were little changed. Minutes of the Fed’s last meeting damped prospects for a U.S. interest-rate hike, sending the  Bloomberg Dollar Spot Index doen 0.3%, approaching a three-month low. Dollar weakness continues to buoy commodities, with the Bloomberg Commodity Index set for the most enduring rally in more than two months, as WTI flirted with $47 and Brent briefly rising above $50. 

Dollar weakness also pushed the MSCI emerging market  index to a fresh one year high. The latest leg lower in the dollar was the result of yesterday’s Fed minutes, which showed officials saw little risk of a sharp uptick in inflation and pushed odds of a rate increase this year back below 50 percent. “The message appears to be that as much as a September hike is a possibility, the Fed is unlikely to move until there is a consensus on the outlook for growth, hiring and inflation,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “Recent data would therefore suggest a hike is not imminent.”

Here is Jim Reid’s take on yesterday’s FOMC minutes:

The reaction in markets suggested that the minutes were on the dovish side, certainly relative to what we’d heard from Dudley although it still felt like investors were left fairly confused. The question is probably what is the more up to date view and should we place higher value on Dudley’s comments as a barometer of the overall leaning at the Fed? Dudley is due to speak again this afternoon on regional economic conditions at a press briefing however Q&A is expected after so that will be interesting to watch. A reminder than next week on Friday we’ll also hear from Fed Chair Yellen at Jackson Hole.

In terms of the minutes the most notable takeaway was the mention that ‘members generally agreed that, before taking another step in removing monetary accommodation, it was prudent to accumulate more data in order to gauge the underlying momentum in the labour market and economic activity’. This was followed with ‘a couple of members preferred also to wait for more evidence that inflation would rise to 2% on a sustained basis’ and also that ‘some other members anticipated that economic conditions would soon warrant taking another step in removing policy accommodation’.

The text also revealed that ‘several suggested that the committee would have ample time to react if inflation rose more quickly’ while others were of the view that ‘labour market conditions were at or close to those consistent with maximum employment and expected that the recent progress in reaching the Committee’s inflation objective would continue, even with further steps to gradually remove monetary policy accommodation’. The minutes also suggested that the committee was encouraged by the post-Brexit reaction in markets. The text showed that ‘participants generally agreed that the prompt recovery of financial markets following the Brexit vote and the pickup in job gains in June had alleviated two key uncertainties about the outlook’.

Speculation that central banks in the world’s biggest economies will remain accommodative propelled global equities to a one-year high this month. “Today is a breather after yesterday’s declines,” said Benno Galliker, a trader at Switzerland’s Luzerner Kantonalbank AG. “I am optimistic about the market overall – there is no other option but equities at the moment, as rates are going down and down and down. Central banks are going to remain quite accommodating, now politics have to come in to improve the mood.”

The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak.

Britain’s pound was the biggest winner against its U.S. counterpart, surging after a report showed U.K. retail sales jumped more than economists forecast in the month after Britain voted to quit the European Union. Following last night’s devastating Japan trade data, which showed imports and exports crashing the most since the crisis...

…  economic data out of the UK showed retail sales unexpectedly surged in the month after Britain voted to quit the European Union, as hot weather bolstered sales of clothing and footwear and a drop in the pound encouraged tourists to snap up watches and jewelry.

The volume of goods sold in stores and online jumped 1.4 percent, after dropping 0.9 percent in June, figures from the Office for National Statistics showed on Thursday, exceeding a prediction of 0.1 percent in a Bloomberg survey. Sales excluding auto fuel advanced 1.5 percent. As a result, sterling strengthened 0.9 percent to $1.3160.

In Japan, the Nikkei 225 tumbled -1.6%, pressured by a sliding USD/JPY which fell below 100.00 early in the session, as well as July trade figures which showed both exports and imports declined by the most since 2009, while ASX 200 (-0.5%) was weighed ON by disappointing earnings. Chinese markets are positive with the Hang Seng (+1.0%) underpinned by strong results from the likes of Tencent and Lenovo, while the Shanghai Comp (-0.2%) saw indecisive trade after firm Chinese Property Prices which could spur outflows from stocks into the rampant sector.

In Europe, the Stoxx 600 added 0.5% with all industry groups rising. Nestle SA, which has the highest weighting in the Stoxx 600, advanced 1.2 percent as Chief Executive Officer Paul Bulcke forecast pricing will rebound in the coming months, after the world’s biggest food company reported the slowest first-half sales growth since 2009.

The MSCI Emerging Markets Index rose 0.7 percent, led by technology stocks. Tencent Holdings Ltd. jumped to an all-time high after a 47 percent surge in profit beat analysts’ estimates. Samsung Electronics Co. also climbed to a record. The two stocks have the biggest weightings in the MSCI equity benchmark.

S&P 500 futures were little changed, after shares eked out gains on Wednesday following the release of the Fed minutes. Cisco Systems Inc. fell 1.6 percent in German trading after the biggest maker of equipment that runs the Internet announced plans to cut about 7 percent of its workforce.

In addition to the weekly jobless claims data, investors will focus on earnings from retail giant Wal-Mart for indications of the state of the U.S. economy. Fewer than 30 of the S&P 500’s companies have yet to report.

Market Snapshot

  • S&P 500 futures up less than 0.1% to 2180
  • Stoxx 600 up 0.5% to 342
  • FTSE 100 up 0.2% to 6876
  • DAX up 0.6% to 10597
  • German 10Yr yield down 1bp to -0.06%
  • Italian 10Yr yield down 2bps to 1.1%
  • Spanish 10Yr yield down 2bps to 0.95%
  • S&P GSCI Index up 0.1% to 365.5
  • MSCI Asia Pacific down 0.4% to 139
  • Nikkei 225 down 1.6% to 16486
  • Hang Seng up 1% to 23023
  • Shanghai Composite down 0.2% to 3104
  • S&P/ASX 200 down 0.5% to 5508
  • US 10-yr yield up less than 1bp to 1.56%
  • Dollar Index down 0.23% to 94.5
  • WTI Crude futures up 0.3% to $46.94
  • Brent Futures down 0.4% to $49.63
  • Gold spot down 0.1% to $1,347
  • Silver spot up less than 0.1% to $19.70

Top Global News

  • Cisco Cuts Workforce by 7% to Speed Transition to Software: CEO Robbins moving company away from traditional hardware. Any savings from job reductions to go toward growth areas
  • Nestle Revenue Grows at Weakest Pace Since 2009 on Deflation: KitKat maker increasing prices in U.K., Brazil, Russia. Sales growth needs to accelerate to reach full-year target
  • Blackstone Said Nearing $620 Million New York Apartment Purchase: Kips Bay Court on east side of Manhattan has 894 rental units. Deal would follow $5.3 billion Stuyvesant Town purchase
  • American Apparel Said to Hire Bank to Explore Sale: Hires Houlihan Lokey to explore sale, Reuters reports, citing unidentified people familiar.
  • Redstone Granddaughter Said Pursuing Trial Even If Others Settle: Case in Massachusetts is scheduled to go to trial on Sept. 19. Suit claims media mogul is unduly influenced by daughter Shari
  • Retrophin Said to Consider Bid for Raptor Pharmaceutical: Raptor has also attracted interest from other drugmakers. No agreement has been reached, firms could decide against deal
  • Widening Fed Consensus on Inflation Overshadows Rate-Hike Debate
  • Caesars Suing Apollo to Stop Creditors From Suing Apollo
  • Bosch’s VW Diesel Cheating Role Called Key by Car Owners
  • American Apparel Said to Hire Bank to Explore Sale: Reuters
  • Tronc Said to Respond to Gannett’s Bid by End of the Week: WSJ
  • Clinton Foundation Said to Hire FireEye on Suspected Hack: Reuters
  • Gawker CEO Denton to Exit After Univision Sale Closes: Politico
  • Mondelez to Invest >$100m in China Over 3 Yrs: China Daily

Looking at regional markets, we start as usual in Asia where equities traded mixed following the mild gains seen in the US after dovish FOMC minutes, although Japanese sentiment was dampened on JPY strength and poor trade data. Nikkei 225 (-1.6%) was pressured after USD/JPY fell below 100.00 and July trade figures showed both exports and imports declined by the most since 2009, while ASX 200 (-0.5%) was weighed ON by disappointing earnings. Chinese markets are positive with the Hang Seng (+1.0%) underpinned by strong results from the likes of Tencent and Lenovo, while the Shanghai Comp (-0.2%) saw indecisive trade after firm Chinese Property Prices which could spur outflows from stocks into the rampant sector. 10yr JGBs traded higher amid the lack of risk appetite seen in Japanese equities, whilst today’s 5yr JGB auction was also supportive with the bid/cover increasing from prior.

Top Asia News

  • China Bailout Fund Said to Sell Bank Stocks as Rally Extends: Selling seen after benchmark index climbs to 7-mo. high
  • Hong Kong Stocks Rally to Nine-Month High on Earnings Optimism: Tencent, Lenovo jump after profit beats analyst estimates
  • BOJ Cornered as Japanese Banks Running Out of Bonds to Sell: Banks cut almost half of holdings since Kuroda began easing
  • China July New Home Prices Rise M/m in Fewer Cities: New home prices, excluding subsidized housing, rises m/m in in 51 out of 70 cities tracked by China’s statistics bureau, vs 55 in June
  • Swire Properties Says 2H H.K. Office Demand Likely Subdued: 1H underlying profit HK$3.56b vs HK$3.94b y/y
  • Arsenal of Smartphone Apps Seeking Reliable Power Grows in India: Tarang phone app to track electricity transmission projects

In Europe, the upside in oil has seen energy names lead the way higher in terms of European equities, with major indices all trading in modest positive territory (Euro Stoxx: +0.5%). Elsewhere, basic material names are the laggard of the session so far, while on a stock specific basis, earnings continue to dictate play as we come to the back end of earning season, with Vestas Wind Systems and NN Group the top performers after their update, while Boskalis are the worst performer. Fixed income markets have seen a continuation of the post FOMC minutes fallout, with Bunds playing catch up to trade higher this morning amid dissipating expectations of a near term rate hike form the Fed, while the German curve has flattened this morning, also in line with its US counterpart.

Top European News

  • Bosch’s VW Diesel Cheating Role Called Key by Car Owners: Supplier accused of participating in ‘decade-long conspiracy’. Car owners’ lawyers expand on allegations in U.S. court filing
  • Casino Quietly Buying Back its own Shares: Casino has begun to buy back its own shares, bought back 0.7% of total equity or 1.4% of the free float for EU35m so far, Bernstein says in note
  • U.K. Retail Sales Surge as Sunshine Overpowers Brexit Concern: Volumes increased 1.4% on month in July, 5.9% on year. Slide in sterling after Brexit prompted watch, jewelry spree
  • Brexit-Bashed Banks Can’t Escape From London’s Canary Wharf: U.K. commercial property market fell into recession in July. Canary Wharf pivots to residential and retail construction
  • Argos to Buy U.S. Plants From HeidelbergCement for $660 Million: German company says disposal proceeds ahead of target. Argos to add one plant and eight related terminals in U.S.

In FX, the Bloomberg Dollar Spot Index fell 0.3 percent, approaching a three-month low. It posted a 0.2 percent gain on Wednesday, having been up as much as 0.5 percent ahead of the Fed minutes’ publication. Britain’s pound was the biggest winner against its U.S. counterpart, climbing after a report showed U.K. retail sales jumped more than economists forecast in the month after Britain voted to quit the European Union. Sterling strengthened 0.9 percent to $1.3160. The Aussie climbed 0.4 percent after a report showed Australia’s unemployment rate unexpectedly fell to 5.7 percent in July. The MSCI Emerging Markets Currency Index added 0.2 percent, after falling 0.5 percent on Wednesday. South Africa’s rand was among the biggest gainers, rising 0.4 percent, while Mexico’s peso and Malaysia’s ringgit both appreciated a similar amount.

In commodities, the Bloomberg Commodity Index was set for the most enduring rally in more than two months as the dollar weakened. West Texas Intermediate crude rose for a sixth day, the longest advance in more than a year, as U.S. crude and gasoline stockpiles dropped from the highest seasonal level in at least two decades. Oil added 0.4 percent to $46.96 a barrel after gaining more than 12 percent over the previous five sessions. Brent added as much as 0.4 percent to trade above $50 for the first time in more than a month. Industrial metals also rose, with copper gaining 1.4 percent to $4,839 a metric ton and nickel adding 1.5 percent.

* * *

Bulletin Headline Summary From RanSquawk and Bloomberg

  • European equities trade modestly higher with energy names leading the way in what has once again been a relatively quiet session
  • GBP/USD has been dealt further support by another batch of positive post-referendum data with retail sales exceeding market consensus
  • Looking ahead, highlights include ECB Minutes, Philadelphia Fed Manufacturing Index and earnings from Wal-Mart
  • Treasuries mostly steady in overnight trading, global equities mixed and commodities rise as USD drops for fifth day in a row.
  • For all of their differences, one thing most Federal Reserve officials seem to agree on is that there’s not much risk of inflation running away from them anytime soon, regardless of what they do with interest rates
  • U.K. retail sales unexpectedly surged in the month after Britain voted to quit the European Union, as hot weather bolstered sales of clothing and footwear and a drop in the pound encouraged tourists to snap up watches and jewelry
  • France’s unemployment rate dropped to 9.9% in the second quarter from 10.2% in the first quarter, its lowest level in almost four years, helping President Francois Hollande fulfill a promise to cut joblessness before the next election
  • Japan’s biggest banks are running out of room to sell their government bond holdings, pushing the central bank closer to the limits of its record monetary easing; Etsuro Honda, an adviser to Japanese Prime Minister Abe, tells WSJ in interview he sees “more than a 50% possibility” of the Bank of Japan taking “bold” easing measures next month
  • Chinese state-backed funds sale of bank shares may signal confidence among Chinese policy makers that the $6.5 trillion market is growing strong enough to stand on its own
  • Steve Eisman made his name and fortune by foreseeing the collapse of subprime mortgage securities. Now he’s betting against a different kind of Wall Street money machine. He thinks hedge fund fees are going to tumble
  • JPMorgan Chase, Citigroup and Morgan Stanley are among 16 banks being sued by funds in the U.S. for allegedly manipulating a key Australian interest rate benchmark to generate hundreds of millions of dollars in illicit profits
  • Fannie Mae and its cousin, Freddie Mac, are once again headed for trouble. On Jan. 1, 2018, the two government- sponsored enterprises will officially run out of capital under the current terms of their bailout. After that, any losses would be shouldered by taxpayers

DB’s Jim Reid concludes the overnight wrap

Markets have spent the last 48 hours up and down like a BMX rider as they try to come to terms with the Fed’s latest thinking after a relatively hawkish set of comments from the NY Fed’s Dudley on Tuesday was then followed up yesterday by FOMC minutes which suggested a much more divided committee. The reaction in markets suggested that the minutes were on the dovish side, certainly relative to what we’d heard from Dudley although it still felt like investors were left fairly confused. The question is probably what is the more up to date view and should we place higher value on Dudley’s comments as a barometer of the overall leaning at the Fed? Dudley is due to speak again this afternoon on regional economic conditions at a press briefing however Q&A is expected after so that will be interesting to watch. A reminder than next week on Friday we’ll also hear from Fed Chair Yellen at Jackson Hole.

In terms of the minutes the most notable takeaway was the mention that ‘members generally agreed that, before taking another step in removing monetary accommodation, it was prudent to accumulate more data in order to gauge the underlying momentum in the labour market and economic activity’. This was followed with ‘a couple of members preferred also to wait for more evidence that inflation would rise to 2% on a sustained basis’ and also that ‘some other members anticipated that economic conditions would soon warrant taking another step in removing policy accommodation’.

The text also revealed that ‘several suggested that the committee would have ample time to react if inflation rose more quickly’ while others were of the view that ‘labour market conditions were at or close to those consistent with maximum employment and expected that the recent progress in reaching the Committee’s inflation objective would continue, even with further steps to gradually remove monetary policy accommodation’. The minutes also suggested that the committee was encouraged by the post-Brexit reaction in markets. The text showed that ‘participants generally agreed that the prompt recovery of financial markets following the Brexit vote and the pickup in job gains in June had alleviated two key uncertainties about the outlook’.

Treasuries were bid up following the minutes. 10y yields ended the day 2.5bps lower at 1.550% although remain a couple of basis points above where they were immediately prior to the Dudley comments. 2y yields have gone from 0.694% pre-Dudley to a high of 0.767% and are now back down 0.726%. The USD was pretty choppy following the minutes but finished little changed. US equities had traded in the red for much of the session (quarterly results from Target and Lowes in the retail sector weighing) before firming slightly following the minutes. Indeed having been down as much -0.45% intraday the S&P 500 closed +0.12% although is still a shade below pre-Dudley levels. Meanwhile September rate hike expectations are unchanged at 22% (18% pre-Dudley) while December expectations continue to be a coin flip (49% from 51% on Tuesday and 45% on Monday)

This morning in Asia has seen another relatively mixed start in markets. The Hang Seng (+1.60%) has rallied on the back of a number of earnings reports, while the Shanghai Comp (+0.41%) and Kospi (+0.48%) are up more modestly. The Nikkei (-0.89%) is in the red with the Yen breaking through 100 again early this morning (its hovering around that level as we go to print). The ASX (-0.57%) is also lower.
There’s also been a bit of data released overnight. In Japan exports weakened to -14.0% yoy (vs. -13.7% expected) in July from -7.4% the month prior, while imports (-24.7% yoy vs. -20.0% expected; -18.8% previously) were also lower despite the strengthening Yen. The decline in exports is now the most since October 2009. Meanwhile in China the latest property prices data for July showed that prices increased in 51 cities last month (excluding government-subsidized housing) from 55 in June. This is out of 70 cities signalling a slight cooling off in property prices gains. Lastly a decline in the unemployment rate in Australia following the latest data this morning has seen the Aussie Dollar rise half a percent.

Away from the Fed yesterday, the only real economic data to note came again from the UK where the latest employment numbers were released, some of which covered the post-Brexit period. In the three months to June 172k jobs were added which was a bit more than expected (150k expected). The ILO unemployment rate held steady in the same period at 4.9% as expected while average weekly earnings including bonuses (+2.4% yoy) and excluding bonuses (+2.3% yoy) both rose one-tenth which was in-line. Meanwhile, in terms of the July data jobless claims actually declined unexpectedly (-8.6k vs. +9.0k expected) – this was also the first monthly decline in claims since February although it’s worth noting that the data tends to be a bit volatile.

Sterling was little changed by the end of play and Gilt yields were lower (10y Gilts -2.2bps) which was in line with the wider market generally. The FTSE 100 was -0.50% although this outperformed most other European bourses which were down 1-1.5% generally, seemingly still reacting to Dudley’s more hawkish comments the day prior.

Meanwhile, Portugal has been focus for sovereign bond markets over the past couple of days. Indeed 10y Portugal yields had been up as much as 31bps from Tuesday’s intraday lows at one stage over concerns that Portugal may lose its BBB rating from rating agency DBRS – the only rating agency to still rate Portugal investment grade and so making Portugal still eligible for ECB bond purchases. Yesterday late afternoon however the Chief Economist at DBRS said that the agency is ‘comfortable’ with its rating for Portugal which helped to alleviate some concerns for now. Portugal’s bonds rallied 8bps or into the close following those comments.

In terms of the day ahead, shortly after we go to print this morning we’ll get the Q2 employment numbers out of France. It’s all eyes on the UK after that where the July retail sales data is set to be released and should be another important post-Brexit indicator. Current market consensus is for +0.3% mom excluding fuel and +0.1% mom including fuel. Also out this morning will be the final revisions to July CPI for the Euro area along with the minutes from the last ECB Council Meeting. Across the pond this afternoon we’ll get the latest initial jobless claims reading, Philly Fed survey for August and also the Conference Board’s leading index for July. Away from the data and as noted at the top we’re due to hear from the Fed’s Dudley this afternoon (at 3pm BST) and also Williams (at 9pm BST) later this evening.

ASIA MARKETS

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 5.41 POINTS OR 0.17%/ /Hang Sang closed UP 223.38 points or 0.98%. The Nikkei closed DOWN 259.63 POINTS OR 1.55% Australia’s all ordinaires  CLOSED DOWN 0.49% Chinese yuan (ONSHORE) closed UP at 6.63270/Oil FELL to 46.92 dollars per barrel for WTI and 49.67 for Brent. Stocks in Europe:  in the GREEN . Offshore yuan trades  6.6381 yuan to the dollar vs 6.63445 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

Quite a disaster for this exporting nation.  Exports and imports plunge as the higher yen is playing havoc to this nation

(courtesy zero hedge)

Japanese Imports, Exports Crash At Worst Rate Since 2009

For the 19th month in a row, Japanese Imports plunged – dropping 24.7% YoY (worse than expected), the biggest drop since Oct 2009. Exports were just as dismal, also missing expectations, plunging 14.1% YoY – worst since Oct 2009. The biggest driver of the collapse of Japanese trade was a 44% crash in the Chinese trade balance.

There’s no lipstick to put on this pig… it’s a disaster.. and worse still Yen is strengthening back below 100 against the USD.

Charts: Bloomberg

end

b) REPORT ON CHINA

none today

EUROPEAN AFFAIRS

none today

RUSSIAN AND MIDDLE EASTERN AFFAIRS

RUSSIA/UKRAINE

Ukraine President warns of a full scale Russian invasion of the Don Bass

(courtesy zero hedge)

Following “Deadliest Month” In A Year, Ukraine President Warns Of “Full-Scale Russian Invasion”

The last month has seen Russia pull out of peace talks (citing attacks in Crimea and detention of key individuals) and an increasing mobilization of Ukraine troops near the Russian border, and now, after the deadliest month since last August, Ukraine president Poroshenko has warned he isn’t ruling out a full-scale Russian invasion and may institute a military draft if the situation with its neighbor worsens.

As Bloomberg reports, the confrontation between Ukrainian forces and the rebels in Ukraine’s eastern Donbas region has worsened, Poroshenko said in the western city of Brody on Thursday.

His comments come a week after Russian President Vladimir Putin accused the government in Kiev of engaging in “terror” tactics in Crimea, which Ukraine’s fellow former Soviet republic annexed in 2014. Putin vowed to respond with “serious measures.”

“The probability of escalation and conflict remains very significant,” Poroshenko said in a televised speech. “We don’t rule out full-scale Russian invasion.”

The Ukrainian government, which says Russia is funneling troops, cash and weapons to the separatists, has rejected Putin’s accusations over Crimea and said its neighbor may use them as a pretext to mass more troops in the disputed Black Sea peninsula. Ukraine has enough forces along its eastern front line and near the border with the territory to resist a possible offensive, military spokesman Oleksandr Motuzyanyk said Thursday.

Rebels fired more than 800 artillery and mortar rounds at government positions during the past 24 hours, the most since last August, Motuzyanyk said. He added that Ukrainian positions along the front line stretching from near the rebel-held city of Luhansk to the government-controlled port Mariupol on the Azov Sea came under attack. July was the deadliest month since last August in the conflict, which the United Nations estimates has killed at least 9,500 people since 2014.

Putin may travel to Crimea on Friday to talk with local officials and visit a summer camp for children, Russian media group RBC reported on its website on Tuesday, citing three people it didn’t identify.

Of course, all western officials are calling for a resumption of talks but as we noted previously the so-called Minsk II agreement was set up to fail…

“Minsk II is set up in a way that Russia can blame Ukraine for not meeting the political targets, and then you lose the perspective that Russia is still fueling this conflict,” said a European diplomat in Moscow.

The preceding paragraph is precisely what one would expect from mainstream media. Here’s a short translation: “It’s all Russia’s fault”

In reality, it’s clear both sides have violated aspects of the Minsk II agreement.

However, Ukraine has taken none of the key steps on constitutional reforms and local autonomy laws for Donetsk and Luhansk as promised.

Deadlock

Tomorrow’s Ukraine discusses the reasons for a “deadlock” in Minsk II: A Trap, or an Escape?

“France is calling for the full implementation of the Minsk agreements by all parties.”
—French President Francois Hollande.

“We are confident that only through full and faithful implementation of the Minsk agreements of February 12, 2015 can we put an end to the bloodshed and find a way out of the deadlock.”
—Russian President Vladimir Putin.

“We are here to implement the Minsk deal, not to call it into question.”
—German Chancellor Angela Merkel.

Many leaders in the East and West find the Minsk II Agreement indispensable. But is this truly the case?

Why Isn’t Minsk II a Slam-Dunk?

Point 9 says that control of the border between Russia and Ukraine should be restored to Ukrainian control IF Ukraine successfully implements Point 11; which, in turn, requires Ukraine to enact constitutional amendments permanently decentralizing power and to pass laws permanently granting special status to separatist territory, which would entail local self-government, the right to form “people’s militias,” and more. And then there’s Point 10, which mandates the “pullout of all foreign armed formations” and the “disarmament of all illegal groups.”

But here’s the rub: popular opinion in Ukraine makes it impossible to discuss a special status for the breakaway territories until free and fair local elections are held there, and “free and fair” effectively means that illegal armed groups and foreign armies need to pull out. But Minsk II says that border control doesn’t need to be restored to Ukraine until after it decentralizes, while also requiring that local elections be held in accordance with Ukrainian law.

This is the definition of “deadlock.” Elections that prop up what Kyiv calls “terrorist regimes” would be difficult for Ukraine’s elite to sell to the people, regardless of the merits of such a plan. The general fear on Ukraine’s side is that if Kyiv approves of the elections in rebel-held territory, the separatist leaders—who would likely win any election held at their guns’ points—would claim some degree of legitimacy. Public opposition to granting even the slightest concessions to the separatists, much less elections that could possibly lead to “special status,” is driven by populists like Oleh Lyashko and his Radical Party, as well as by Yulia Tymoshenko and the Fatherland Party, both of whom stand to gain many seats in Parliament if MPs are unable to form a government and new elections are held.

The “Prisoners’ Dilemma” from game theory describes this situation exactly. The game illustrates why two rational actors might not cooperate, even though cooperation is in both their best interests.

The second main reason why Minsk II is seen as controversial is that it requires Ukraine to enact constitutional amendments that devolve some powers to local and regional governments. In the fall of 2015, it became clear that Ukraine was not going to be able to enact the constitutional amendments required. The German, French, Ukrainian, and Russian heads of state, meeting in Paris on October 2, 2015, informally decided to postpone the deadline into 2016.

Minsk II Designed to Fail

Minsk II

With so many obvious complications, Minsk II was setup to fail right from the start.

By accident or design, the setup is precisely what warmongers like.

end

TURKEY

 

Leaked documents show Erdogan supporting and financing terrorist groups like ISIS and Hamas:

(courtesy zero hedge)

In Leaked Doc, Germany Accuses Erdogan Of Supporting And Financing Terrorist Groups

While it will come as no surprise to readers of this site, which last year first revealed that Turkey was a key financial backer of the Islamic State, exchanging ISIS oil for cold, hard (USD) cash, it now appears that the Germans have finally caught up, after a leaked internal government document accused the Turkish government of supporting terrorist organizations such as Hamas, public broadcaster ARD reported yesterday. The leaked report, which just a year ago would have been called, what else – a tinfoil conspiracy theory – states the German government’s belief that Ankara has been deliberately financing Islamist and terror organizations with the direct consent of President Recep Erdogan.

The document written by the Interior Ministry was a confidential answer to a question posed by Die Linke (the Left Party) in the German parliament (Bundestag). “The numerous affirmations of solidarity and support for the Muslim Brotherhood in Egypt, for Hamas and for armed Islamist opposition groups in Syria by the ruling AKP party and president Erdogan underscore their ideological affinity to their Muslim brothers,” the document states, cited by The Local.

Ankara has repeatedly denied it delivers weapons to Islamist militants in Syria, even though we have shown on various occasions that weapons and supplies destined for ISIS do cross Turkey. But it has a very different attitude to Hamas as that of western states, viewing the group as a legitimate representative of the Palestinian people.

According to Spiegel this is the first time the German government has publicly accused Turkey of having links to Hamas and other Islamist militant groups. The document also reportedly claims that Ankara has recently deepened its links with these groups.

As a result of the step-by-step Islamization of its foreign and domestic policy since 2011, Turkey has become the central platform for action by Islamist groups in the Middle East,” the document states, according to ARD.

Relations between Germany and Turkey have soured markedly in recent months after the Bundestag ratified a proposal to recognize the massacres of Armenians by Turkish Ottoman troops in 1915-16 as genocide. German authorities also recently barred Erdogan from talking via video link to supporters at a rally in Cologne where thousands took to the streets to support the Turkish president after a failed coup in July.

At first sight, it does not appear that the German government intended to use this classified document as a means of embarrassing Ankara. The document stated that a public response to Die Linke’s question was not possible “for the welfare of the state.” It is also not clear to what extent the response had been agreed with the Foreign Ministry.

Germany views Turkey as an “important partner” in fighting terrorism, including by Islamic State, and the refugee accord remains valid and “sensible,” Steffen Seibert, Merkel’s chief spokesman, told reporters in Berlin. He declined to comment on the substance of the leaked report.

However, by then the damage had been done, and with the leaking of this critical report, Ankara has been badly “embarrassed.”  As a result, overnight Turkey’s government slammed the leaked report, increasing the risk of renewed tension between Turkish President Recep Tayyip Erdogan and Chancellor Angela Merkel.

In a statement on Wednesday, the Turkish Foreign Ministry – which so far had mostly lashed out against the US for harboring alleged coup mastermind Fethulah Gullen – said that the German government’s internal assessment is a “new indication of a twisted mentality that attempts to wear out our country by targeting our president and the government.” It blamed unnamed politicians in Germany for applying “double standards” on countries’ commitment to fighting terrorism.

Needless to say, engaging in a war of words with both the US and Germany at the same time, is extremely foolhardy for even the most hardened dictator, unless they truly do have all the leverage, or some trump card up their sleeve the general public is unaware of.

This leak is the the latest scandal between the two countries after Turkey pledged in March to halt the flow of refugees from the Middle East to Europe under an accord with the EU that was championed by Merkel. Turkey, now grappling with upheaval after an attempted military coup against Erdogan in July, has said it will scrap the deal if isn’t granted visa waivers for its citizens traveling to the EU, Bloomberg adds.

German Finance Minister Wolfgang Schaeuble defended the refugee accord at an election rally late Tuesday. “I don’t like at all what Mr. Erdogan is doing, but I’m not in favor” of ending EU-Turkish cooperation on refugees, Schaeuble said in the port city of Rostock. Foreign Minister Frank-Walter Steinmeier has been cautious in his criticism of Turkey ever since the EU signed a refugee deal with Turkey in March, which has contributed to massively reducing the number of asylum seekers arriving in Germany since a high point at the end of last year.

Which is also why we find it so odd that Germany would “leak” a report whose potential destructive power on such a critical diplomatic issue, is so vast. Unless, of course, the leak was premeditated, and designed to force Erdogan to do something “irrational”, like for example unleashing another 1-2 million refugees in Germany’s general direction, which would have a far more destabilizing effect on German society than Grexit and Brexit combined. And with Putin now at his back, Erdogan just may do that.

The only question we have: why is Germany implicitly encouraging this and, of course, what doesGeorge Soros stand to gain from all of this?

 

END

As Turkey moves closer and closer to Russia, the USA quietly remove their nukes to Romania.  The big question of course, is what will Turkey do with all of those migrant. It sue looks like they will flood Europe with them

 

(courtesy zero hedge)

As Turkey “Considers Military Cooperation” With Russia, US Said To Move Nukes Out Of Turkey

Over the past month, ever since the “failed” Turkish coup, there has been a dramatic, and surprising, deterioration in the of Turkey with various European states, most notably Austria and Germany, as well as with the US, and NATO in general. This was confirmed once again earlier today when Turkish Foreign Minister Mevlut Cavusoglu lashed out at NATO, in an interview with Russian Sputnik, saying the alliance is not fully cooperating with Ankara. More importantly, he hinted that Turkey would consider military cooperation with Russia.

In the interview, Cavusoglu said that Ankara has become alarmed at the lack of willingness shown by NATO to cooperate with Turkey, which is a member of the alliance. “It seems to us that NATO members behave in an evasive fashion on issues such as the exchange of technology and joint investments. Turkey intends to develop its own defense industry and strengthen its defense system,” he said.

Turkish Foreign Minister Mevlut Cavusoglu

And, as a result of Turkey’s rising animosity toward NATO, it appears to have handed yet another olive branch to the Kremlin: “In this sense, if Russia were to treat this with interest, we are ready to consider the possibility of cooperation in this sector,” Cavusoglu said when asked about the possibility of working with Russia in the defense sphere.

It was Cavusoglu’s strongest rebuke of NATO to date. In an interview with the Anadolu news agency on August 10, he said that Turkey and Russia would look to establish a joint military, intelligence, and diplomatic mechanism, while adding that relations with NATO were not as satisfactory as he would have wished. He also proposed to bypass the dollar in bilateral trade between Turkey and Russia.

“Turkey wanted to cooperate with NATO members up to this point,” he said. “But the results we got did not satisfy us. Therefore, it is natural to look for other options. But we don’t see this as a move against NATO,” he told Anadolu.

Cavusoglu accused the West of treating Turkey and Russia like “second class countries” simply because they did not see eye-to-eye. “They consider Russia and Turkey to be second class countries, and they are outraged that these second class countries dare to criticize them… Therefore, faced with the straightforwardness and resilience of Erdogan and [President Vladimir] Putin, they feel very worried and anxious,” Cavusoglu said.

Cavusoglu’s criticism was not restricted to NATO, as he launched a broadside towards the West, saying it was largely responsible for the crisis in Ukraine. “Look at what has happened in Ukraine,” he told Sputnik. “They were always threatening the country and forcing it to make a choice between them and Russia. They were saying, ‘you will either be with us or with Russia.’ This course of action is futile. What is happening in Ukraine is a reflection of the main problems in the region.”

* * *

To be sure, Russia has promptly taken advantage of these Turkish overtures, and in addition to the recent meeting between Putin and Erdogan where the two leaders vowed to boost economic and diplomatic ties, a member of Russia’s upper house of parliament has suggested that Turkey could provide its Incirlik air base for Russian Air Forces jets in their campaign across the border in Syria, Turkish daily Hurriyet reported.

“Turkey could provide the Incirlik base to the Russian Aerospace Forces for its use in counterterrorism operations [in Syria]. This could become a logical continuation of Turkish President [Recep Tayyip] Erdogan’s step toward Russia,” Senator Viktor Ozerov, member of the Russian Federation Council Defense and Security Committee, was quoted as saying by RIA Novosti on Aug. 16.

According to Russian news agencies, Ozerov did not rule out that Ankara could offer the use of its air base after Erdogan’s reconciliatory visit to St. Petersburg last week, where he affirmed support for Russia’s anti-terrorist mission in Syria. “It is not guaranteed that Russia needs Incirlik, but such a decision could be regarded as Turkey’s real readiness to cooperate with Russia in the fight against terrorism in Syria, and not just pay lip service,” Ozerov was also quoted as saying.

Ozerov also clarified that the decision could be taken based on similar agreements made with Syria on the use of the Hmeymim facility and the latest use of the Hamadan airfield in western Iran to carry out airstrikes in Syria, the Russian news website Sputnik reported on Aug. 16.

Turkey opened its Incirlik base to the U.S.-led anti-ISIL coalition in July 2015 after a bilateral agreement was signed among both parties.

Notably, Incirlik airbase is where the US has stationed over 50 B61 nuclear bombs, as reported before. Which may explain why according to EurActiv, which cites two independent sources the US has “started transferring nuclear weapons stationed in Turkey to Romania, against the background of worsening relations between Washington and Ankara.”

According to one of the sources, the transfer has been very challenging in technical and political terms. “It’s not easy to move 20+ nukes,” said the source, on conditions of anonymity.

Another source told EurActiv.com that the US-Turkey relations had deteriorated so much following the coup that Washington no longer trusted Ankara to host the weapons. The American weapons are being moved to the Deveselu air base in Romania, the source said. Deveselu, near the city of Caracal, is the new home of the US missile shield, which has infuriated Russia.

EurActiv has asked the US State Department, and the Turkish and the Romanian foreign ministries, to comment. American and Turkish officials both promised to answer. After several hours, the State Department said the issue should be referred to the Department of Defense. EurActiv will publish the DoD reaction as soon as it is received.

 

The Romanian foreign ministry strongly denied the information that the country has become home of US nukes. “In response to your request, Romanian MFA firmly dismisses the information you referred to,”  a spokesperson wrote.

 

According to practice dating from the Cold War, leaked information regarding the presence of US nuclear weapons on European soil has never been officially confirmed. It is, however, public knowledge that Belgium, the Netherlands, Germany and Italy host US nuclear weapons.

Recall that earlier this week, a US-based Think Tank, The Stimson Center, warned that US nuclear bombs In Turkey are at risk of “Seizure By Terrorists Or Other Hostile Forces.”

As such, while unconfirmed, EuroActiv’s report does make strategic sense for the US and Romania, which is emerging as the new Eastern European focal point in the Cold War 2.0, even as NATO, and the US, quietly vacate Turkey. However, if even tangentially confirmed, it will merely accelerate NATO member Turkey’s recent, and abrupt, shift away from the US sphere of influence and into that of Russia, a move which would have the biggest geopolitical consequences for the global balance of power since the end of the Cold War.

EMERGING MARKETS

BRAZIL

Bizarre events in Brazil as two swimmers are pulled from their return trip back to the States.  It seems that Brazil wants a little revenge from the Americans for their support in bringing down Roussef

(courtesy zero hedge(

Brazil Escalates: Authorities Pull 2 US Olympic Swimmers From Rio Flight

It appears Brazilian officials are not simply going to let this one go. With Ryan Lochte reportedly back in the US (and teammate James Feigen unaccounted for) following the Brazilain judge’s search-and-seizure warrant, CNN reports that two fellow swimmers involved in the alleged robbery – Jack Conger and Gunnar Bentz – were removed by Brazilian authorities on Wednesday night from their flight before it departed Rio de Janeiro to the United States, according to US Olympic Committee spokesman Patrick Sandusky.

As a reminder, Lochte, a gold-medal winner, said his wallet was stolen as he and three of his American teammates — Bentz, Conger and James Feigen — were returning to Rio’s Olympic Village in a taxi. They said they were robbed by men posing as police officers, adding that the group initially didn’t contact the U.S. Olympic Committee because they were “afraid (they’d) get in trouble.” The story made quick waves Sunday, especially after Lochte, 32, detailed the alleged encounter on the “Today” show. Lochte’s account has come under increased scrutiny since then. Embarrassed Rio police said they have found little evidence to support the accounts, and a police source said they are unable to find the taxi driver or witnesses.

And now as NBC reports,

Multiple sources told NBC Sports that Conger and Bentz cleared security and were in their seats on the plane when authorities came on to the aircraft shortly before takeoff and removed the swimmers.

They are being held at the airport but are being treated well and cordially, the sources said.

Authorities have indicated they don’t want to hold the swimmers long, but do want to know what happened during the early morning robbery, the sources said.

“We can confirm that Jack Conger and Gunnar Bentz were removed from their flight to the United States by Brazilian authorities,” U.S. Olympic Committee spokesman Patrick Sandusky said. “We are gathering further information.”

Lochte’s lawyer Ostrow said Lochte gave police a statement as representatives from the U.S. State Department, United States Olympic Committee and the FBI observed. Lochte signed the statement to attest to its truthfulness, Ostrow said.

Police have not asked Lochte for more information, and they did not ask him to remain in Brazil, Ostrow said.

“They never said, ‘Stay around,'” Ostrow said. “Otherwise, I would have advised Ryan to stay.”

He accused Brazilian authorities of trying to “save face” after allowing the incident to become “a circus.”

*  *  *

Of course, if one were truly wearing their tin foil hat, one might wonder if this is somehow retribution for Washington’s alleged hand in Rousseff’s downfall…

 

end

 

Then last night, a British Olympic athlete was robbed at gunpoint. Rio is not a safe environment warns their officials:

(courtesy zero hedge)

British Olympic Athlete ‘Robbed At Gunpoint’; Officials Warn Of Curfew, Say “Rio Is Not A Safe Environment”

As Brazilian officials crack down on the four US swimmers allegedly robbed at gunpoint, The Daily Mail reports, aTeam GB athlete has also been robbed at gunpoint in Rio while on a night out. The unnamed athlete is in shock but was uninjured after a similar m.o. is being reported of a taxi-based confrontation. British Team officials have warned they are considering imposing a curfew on athletes, banning partying in the city ‘after dark’, warnings that “Rio is NOT a safe environment, and the level of crime has spiked in the last few days.”

As The Daily Mail details, The incident, which happened in the early hours of Tuesday morning, has led to a warning that it is ‘not worth the risk’ to leave the athletes village, or wander around in their Team GB branded kit.

The athlete, who has not yet been named, is believed to be in shock but was uninjured after being robbed by the gunman.

Details of the attack are still emerging but it is likely the robber held up the star in a taxi or as they entered the Olympic village.

A British Olympic Association spokesperson said:

‘We can confirm there has been an incident of theft involving a Team GB athlete returning to their accommodation. All members of our delegation, including the individual concerned, are accounted for, and are safe and well’.

As a Team GB member was threatened athletes and staff were warned to stay in the Olympic Village – orensure they do not wear team clothing in Rio.

Our biggest Olympic stars, including Mo Farah, Laura Trott and Sir Bradley Wiggins, who enjoyed a night out in the city on Sunday, have received the official warning.

It included the warning that if there are any more robberies a ban on leaving the Olympic Village ‘after dark’ could be introduced. The email said:

‘Avoid leaving the village after dark in anything other than British Olympic Association/Local Organising Committee/UK Athletics transport – taxis cannot be considered safe late at night.

‘If you are planning on going out after dark and have no way of returning other than via taxi, do not go out.

‘You MUST inform a member of team management if you are leaving the village and planning on staying out overnight – please do this BEFORE you leave.

‘Rio is NOT a safe environment, and the level of crime has spiked in the last few days.

‘Think very carefully about whether it is worth the risk of leaving the village to celebrate after you have finished competing – BOA/UKA staff cannot guarantee your safety when away from the village/British School/British House.

‘Our strong advice is that it is simply not worth the risk given the current climate in Rio.’

Other countries have banned athletes from leaving and Team GB’s email said: ‘If further safety/security issues arise it is likely that an outright ban on leaving the village after dark will be introduced’.

We have one piece of advice to the athlete who was robbed – grab your passport and get out of Rio now.

 

end

 

Mystery solved:  it was not a robbery as the story was fabricated.  However things got a little rowdy inside a gas station where Lochte tried to unlock a bathroom  lock and broke the door.  The owner demanded that the swimmers pay for the door.  Lochte then went to police and fabricated the story of being robbed at gunpoint.

 

(courtesy zero hedge)

Mystery Solved: Brazilian Police Say Lochte Fabricated Robbery; Got Rowdy In Gas Station Instead

The strange story involving US Olympic Swimmer Ryan Lochte may just have been resolved moments ago when a Brazilian police official told The Associated Press that American swimmer Ryan Lochte fabricated a story about being robbed at gunpoint in Rio de Janeiro.

BREAKING: Brazil police official: Lochte fabricated robbery claim; US Olympic swimmers were in rowdy gas station confrontation.

The official said that around 6 a.m. on Sunday, Lochte, along with fellow swimmers Jack Conger, Gunnar Bentz and Jimmy Feigen, stopped at a gas station in Barra da Tijuca, a suburb of Rio where many Olympic venues are located. One of the swimmers tried to open the door of an outside bathroom. It was locked.

A few of the swimmers then pushed on the door and broke it. A security guard appeared and confronted them, the official said.

The official says the guard was armed with a pistol, but he never took it out or pointed it at the swimmers.

According to the official, the gas station manager then arrived. Using a customer to translate, the manager asked the swimmers to pay for the broken door. After a discussion, they did pay him an unknown amount of money and then left.

The official says that swimmers Conger and Bentz, who were pulled off a plane going back to the United States late Wednesday, told police that the robbery story had been fabricated.

A spokesperson for the U.S. Olympic Committee declined to comment. The USOC said earlier on Thursday that three of the swimmers who remain in Brazil would be helping police with their investigation, after authorities stopped two of them leaving the country the previous day. The fourth swimmer, gold medallist Ryan Lochte, returned to the United States on Monday.

And so the mystery appears to be finally over.

Nothing will stop these crooks:  oil rises despite record Saudi output and no output freeze.

(courtesy zero hedge)

Oil Panic-Buying Continues

Record Saudi output; multiple nations proclaiming no output freeze; US production up most in 15 months; rig counts rising…global GDP growth plunging, China demand tumbling… Brent near $50 and WTI soaring to 6-week highs…

Sept 2016 contract continues to soar as the roll hits…

As the short squeeze continues…

As the USDollar slides.

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/THURSDAY morning 7:00 am

Euro/USA   1.1320 UP .0022 (STILL  REACTING TO BREXIT/REACTING TO BRITISH CUT IN INTEREST RATE TO .25%

USA/JAPAN YEN 100.30  UP .396(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA HELICOPTER MONEY  ON THE TABLE BUT DISAPPOINTS WITH STIMULUS

GBP/USA 1.3146 UP .01035 

USA/CAN 1.2832 DOWN .0012

Early THIS THURSDAY morning in Europe, the Euro ROSE by 22 basis points, trading now well above the important 1.08 level FALLING to 1.1320; Europe is still reacting to Gr Britain BREXIT,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, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite CLOSED down 5.41 POINTS OR 0.19%    / Hang Sang CLOSED UP 223.38 POINTS OR 0.98%     /AUSTRALIA IS LOWER BY .49% / EUROPEAN BOURSES ALL  IN THE GREEN

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 ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

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 THURSDAY morning CLOSED DOWN 259.63 POINTS OR 1.55%  

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 223.38 POINTS OR 0.98%  ,Shanghai CLOSED DOWN 5.41  POINTS OR 0.17%    / Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED IN THE RED   /INDIA’S SENSEX IN THE GREEN 

Gold very early morning trading: $1350.80

silver:$19.78

Early THURSDAY morning USA 10 year bond yield: 1.549% !!! DOWN 2  in basis points from WEDNESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES SLIGHTLY to 2.2601 DOWN 3   in basis points from WEDNESDAY night. 

USA dollar index early THURSDAY morning: 94.43 DOWN 30 CENTS from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

END

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield:  2.91% UP 4 in basis points from WEDNESDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.082% UP 1 in   basis points from WEDNESDAY

SPANISH 10 YR BOND YIELD:0.916% DOWN 6 IN basis points from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.075 DOWN 4 in basis points from WEDNESDAY (again totally nuts/)

the Italian 10 yr bond yield is trading 16 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -0.082% up  3 IN  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR THURSDAY

Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

Euro/USA 1.1353 UP .0056 (Euro UP 56 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 99.92 UP .0240(Yen DOWN 2 basis points/

Great Britain/USA 1 .3147 UP 0.0104 ( Pound UP 104 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED/NEW PRIME MINISTER T. MAY/GR BRITAIN LOWERS INTEREST RATES/

USA/Canada 1.2775-DOWN 0.0070 (Canadian dollar UP 70 basis points AS OIL FELL(WTI AT $48.15). Canada keeps rate at 0.5% and does not cut!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 56 basis points to trade at 1.1353

The Yen FELL to  99.92 for a LOSS of 2 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 

The POUND was UP 104 basis points, trading at 1.1476 AS PRIME MINISTER THERESA MAY TAKES OFFICE/CARNEY CUTS INTEREST RATE TO ONLY  .25%

The Canadian dollar ROSE by 70 basis points to 1.2847, WITH WTI OIL AT:  $48.15

CANADIAN RATES WERE NOT CUT

The USA/Yuan closed at 6.6299

the 10 yr Japanese bond yield closed at -.082% DOWN 1 IN  points / yield/

Your closing 10 yr USA bond yield:DOWN 3 IN basis points from WEDNESDAY at 1.537% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.259 DOWN 2 in basis points on the day /

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 94.17  DOWN 55 CENTS  ON THE DAY/4 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY

London:  CLOSED UP 9.81 OR 0.14%
German Dax :CLOSED UP 65.36 OR  0.62%
Paris Cac  CLOSED UP 19.38  OR 0.44%
Spain IBEX CLOSED UP 63.10 OR 0.74%
Italian MIB: CLOSED UP  145.22 POINTS OR 0.88%

The Dow was UP 23.76 points or 0.13%

NASDAQ UP  11.49 points or 0.22%
WTI Oil price; 48.20 at 4:30 pm;

Brent Oil: 50.72

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.67 (ROUBLE UP  46/100 ROUBLES PER DOLLAR FROM FRIDAY) 

TODAY THE GERMAN YIELD FALLS TO -0.082%  FOR THE 10 YR BOND

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:48.28

BRENT: 50.92

USA 10 YR BOND YIELD: 1.533% 

USA DOLLAR INDEX: 94.16 down 57 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.31639 up .0119 or 119 basis pts.

German 10 yr bond yield at 5 pm: -0.082%

END

And now your more important USA stories which will influence the price of gold/silver

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Crude ‘Crashes’ Up To Bull Market, Dollar Dumps To Brexit Lows

You have to laugh sometimes…

 

US Macro data continues to disappoint after its record run…

 

Post-payrolls gold is the winner (usd the loser)…

 

Stocks ended higher on the day with Small Caps best – all melting up into the close…

 

S&P and Dow hovered around unch on the week…

 

It seems VIX 12 was as ‘extreme’ as the market was willing to go today before panic struck… (must close green above 2182) – total panic bid into close as VIX was clubbed

 

As an aside, stocks remain ‘safer’ than bonds on an implied vol basis… (in fact S&P (SPY) vol is just 75% of bond (TLT) vol – the lowest on record) – it did not end well last time…

 

The USD Index kept sliding today led by cable and swissy strength…

 

Smashing USD Index to Brexit lows…

 

Treasury yields fell across the complex with the longest-end modestly under-performing…

 

Spot the odd commodity out… gold and copper mirroring USD weakness but crude in a world of its own…

 

Oil closed up 23% from its Aug 2nd lows – swinging from bear to bull market in just 2 weeks…

 

The last 6 days in crude oil…

 

Notably it is the front-end that is surging…

 

Finally, oil appears to continue tracking last year’s maniacal analog with its stunning sudden meltup…

To explain…

Step 1: OPEC jawboning
Step 2: Short-covering rally
Step 3: Oil back in bull market
Step 4: No need for OPEC action

But be careful… today saw major hedging in Crude vol…

 

 

Charts: Bloomberg

Bonus Chart: A Gentle Reminder Of What Really Matters…

end

 

Obamacare is in such a mess.  Insurers are now down 2 billion USA dollars.  There are 3 major steps outlined by the insurers as to how they are going to fix their problem:

  1. get out of Obamacare altogether
  2. those that remain will hike premiums by 24%
  3. mergers and the resulting entity will raise rates

(COURTESY ZERO HEDGE)

Obamacare Doomed As Insurers Lose $2 Billion On Plans In 2016 (Prompting 2017 Rates To Soar)

The typical rosy Democrat narrative on Obamacare highlights the decline in uninsured Americans as evidence of its great “success” while conveniently ignoring the fact that most of the “newly insured” are actually coming from the expansion of Medicaid.  The fact is that Obamacare is a debacle and is on the verge of collapse (see our previous post “Obamacare On “Verge Of Collapse” As Premiums Set To Soar Again In 2017“).

Our reasoning is quite simple and is the same reason Obamacare was doomed from the start.  As we’ve pointed out numerous times in the past, the true downfall of Obamacare will be in its inherentadverse selection bias.  “Sicker/older” people have every incentive to enroll while “younger/healthier” people, the ones that were supposed to subsidize everyone else by buying policies they didn’t need, are choosing to simply pay their penalties instead.  So what you’re left with is a pool of “sicker/older” people who consume a massive amount of healthcare but whom don’t pay “their fair share” because Obamacare specifically caps the rates that can be charged to the “sicker/older” people at 3x the rates charged to “younger/healthier” people (who cares if they consume 20x more healthcare…3x just sounded about right)

And as a recent article from Bloomberg confirms, the negative impacts of “adverse selection bias” are playing out in insurers’ financials.  Per Bloomberg, the major U.S. insurers are set to lose roughly $2BN on Obamacare in 2016.  UnitedHealth has announced they lost $850mm on Obamacare in 2016 while Aetna, Anthem and Humana are expected to lose about $300mm each.

Obamacare advocates had hoped that big government subsidies to consumers would persuade healthy people to sign up for the ACA plans. But the policies have largely been taken out by older, less healthy people who are more expensive to insure.What we are left with … is a highly subsidized program for relatively low-income people,” says Dan Mendelson, the CEO of consulting firm Avalere Health. “We’re not getting to the broader vision of a robust private market structure that enables a broad swath of Americans to purchase their insurance.

In the end, the fate of Obamacare boils down to simple math.  Each person that signs up for insurance has some expected present value of future healthcare consumption…believe it or not the insurers are pretty good at calculating these values.  Insurers agree to post significant sums of capital to underwrite those future healthcare costs but expect a return on that capital.  Now, in theory, the insurers don’t really care whether premium dollars come from the “sicker/older” people or the “younger/healthier” people so long as the aggregate dollars collected meet their minimum return on invested capital thresholds.  That said, with rates capped on “sicker/older” people and the absence of “younger/healthier” people signing up, there simply aren’t enough dollars in aggregate being collected to provide that return to insurers.

So, insurers are left with 2 options: (1) pull out of Obamacare or (2) implement massive premium hikes.  Well, turns out they’re actually doing both.

Per Bloomberg, UnitedHealth has announced plans to exit 31 of the 34 states where it currently offers ACA policies, Aetna is dropping 11 out of 15 states and Humana is reducing it’s offerings to just 156 counties down from 1,351 a year ago.  Meanwhile, insurers are also hiking premiums by 24%, on average, for the remaining states in 2017 (see our previous post: “Obamacare Sticker Shock: Average 2017 Premium Surges 24%“).   Despite Obama’s promise that Obamacare would increase options and lower costs, it is, in practice, doing the exact opposite as Cynthia Cox of the Kaiser Family Foundation points out that “as many as a quarter of all U.S. counties, mainly in rural areas, are at risk of having just a single insurer for next year.

On Aug. 15, Aetna said it will stop selling Obamacare plans in 11 of the 15 states where it had participated in the program, reversing its plan to expand into five new state exchanges in 2017. “The exchanges are a mess as they exist today,” says Aetna Chief Executive Officer Mark Bertolini. “They’re losing a lot of money for a lot of people.

Actually, there was also a 3rd option proposed by insurers to cut ACA losses.  Insurers also attempted mergers as a way to reduce costs and alleviate some of the profitability pressures inflicted by Obamacare but Obama’s Justice Department isn’t too keen on the idea.  Per Bloomberg:

Insurance companies were hoping that a wave of mergers would help them cope with ACA-related red ink. In July 2015, Aetna struck a deal to buy Humana and Anthem agreed to buy Cigna. But the U.S. Department of Justice sued to block both transactions, saying they’d harm competition. “The synergies from the two mergers would have subsidized a lot of losses,” says Ana Gupte, an analyst at Leerink Partners. “That could have helped them manage some of the pressure they’re seeing on the exchanges.”

Meanwhile, the media is now starting to spin a narrative that Aetna CEO,  Mark Bertolini, effectively attempted to blackmail antitrust officials over the approval of his proposed merger with Humana.  Per another report from Bloomberg:

Aetna Inc. warned antitrust officials more than a month ago that it would pull out of Obamacare’s government-run markets for health insurance if the U.S. attempted to block its $37 billion merger with Humana Inc.

In a July 5 letter to the Justice Department from Chief Executive Officer Mark Bertolini, Aetna said that challenging the merger “would have a negative financial impact on Aetna and would impair Aetna’s ability to continue its support” of plans sold under the Affordable Care Act. That would leave the insurer “with no choice but to take actions to steward its financial health.

“If the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint,” Bertolini wrote. He said that the cost of litigation and debt taken on by Aetna, the need to plan for a breakup fee it would owe Humana, as well as cost savings from a successful deal, would all factor into Aetna’s need to pull back.

“By contrast, if the deal proceeds without the diverted time and energy associated with litigation, we would explore how to devote a portion of the additional synergies (which are larger than we had planned for when announcing the deal) to supporting even more public exchange coverage,” Bertolini said in the letter.

Since when did corporations taking actions to make money for shareholders become a crime in this country?

 

END

 

The hope part of the Philly index rises but the other components such as new orders and employment crashes to 7 yr lows.  The overall index rises to 45.8 from 33.7.

(courtesy zero hedge)

Philly Fed ‘Hope’ Jumps As New Orders Plunge, Employment Crashes To 7 Year Lows

Despite a modest bounce in Philly Fed headline data – thanks purely to a jump in ‘hope’ from 33.7 to 45.8 (the highest in 18 months) – the underlying components of the Philly fed survey are a disaster. New orders collapsed, employment crashed to 7 year lows, Average workweek plunged, prices paid soared, and inventories fell.

6 of the 9 indicators fell…

But hope soared to 18 month highs…

Optimism is all they have left…

The August Manufacturing Business Outlook Survey indicated, on balance, that growth in the region’s manufacturing sector is currently weak. The survey’s indicators for current general activity and shipments were positive, while the indicators for new orders and employment were negative. The indicators for future conditions rose sharply from last month’s readings, however…

The current new orders index dropped significantly from a reading of 11.8 in July to -7.2 in August. The percentage of firms reporting an increase in new orders (27 percent) was less than 1 point lower than last month; however, the percentage of firms reporting a decrease (34 percent) was 18 points higher than last month. The current shipments index rose slightly, from 6.3 to 8.4. The percentage of firms reporting an increase in shipments (35 percent) was 6 points higher than last month. The indexes for unfilled orders and delivery times fell into negative territory, recording values of -15.0 and -3.8, respectively. The index for inventories dropped from -4.3 to -9.2. The indicators for unfilled orders, delivery times, and inventories have been negative for most of this year.

The survey’s indicators of employment weakened considerably. The employment index fell 18 points to -20.0, which is its largest negative reading for the current year. Although 67 percent of the firms reported no change in employment this month, the percentage reporting decreases (25 percent) significantly exceeded the percentage reporting increases (5 percent). The workweek index also fell, from -3.6 to -11.5. Twenty-five percent of the firms reported a decrease in average work hours, and only 13 percent reported an increase.

Charts: Bloomberg

end

 

 

One of my favourite Bellwether indicators on global health is Caterpillar.  Today it is retail orders that have suffered their second biggest plunge in 7 years and it has now posted 44 consecutive declines in retail sales:

(courtesy zero hedge)

Caterpillar Retail Orders Suffer Second Biggest Plunge Since Financial Crisis

While the relentless decline in Caterpillar retail sales has been duly noted here every month for nearly 4 years, now posting 44 consecutive declines, the latest, July data was downright depressionary.

According to the company, in the latest month – just when China was supposed to be rebounding and the US recovery getting “stronger” – demand took another sharp leg lower, as follows:

  • North America machine sales down 20% after falling 12% in June
  • Asia/Pacific sales July down 7% after falling 7% in June
  • Latam sales July down 43% after falling 38%
  • EAME (Europe, Africa, Middle East) sales July down 13% after falling 4%

This means that Caterpillar’s rolling 3-month retail machine sales dropped by 19% in July vs the more modest 12% fall in June and May. It also means that, as shown in the chart below, in the past month CAT retail sales just posed the second largest monthly drop since the financial crisis.

And the breakdown by segment.

end

 

With the markets threatening for a rout, it breaks again:

(courtesy zero hedge)

And The Market Breaks (Again)

Despite a positive open, stocks startd to slide rapidly on heavy volume with VIX suddenly surging… so what was to be done!! Break The Market…

  • *BATS BYX EXCHANGE HAS DECLARED SELF-HELP VS NYSE ARCA

Source: BATS

And it worked…

And having stalled the plunge, it’s fixed:

0949ET BATS EDGX EXCHANGE HAS REVOKED SELF-HELP VS NYSE ARCA

end

The truth behind the real earnings from Wall Street.  The current P>E for the S & P is 25.1

(courtesy David Stockman/)

On The Impossibility Of Helicopter Money And Why The Casino Will Crash

NOTE TO READERS

I am in the throes of finishing a book on the upheaval represented by the Trump candidacy and movement. It is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.

It also delves into the good and bad of the Trump campaign and platform and outlines a more consistent way forward based on free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.

In order to complete the manuscript on a timely basis, I will not be doing daily posts for the next week or two. Instead, I will post excerpts from the book that crystalize its key themes and which also relate to the on-going gong show in the presidential campaigns and in the financial and economic arenas. Another of these is included below.

I am also working with my partners at Agora Financial on a new version of Contra Corner. More information on that will be coming later this month.

Trumped Final

……..As the stock market reached its lunatic peak near 2200 in August, the certainty that the Fed is out of dry powder and that the so-called economic recovery is out of runway gave rise to one more desperate pulse of hopium.

Namely, that the central banks of the world were about to embark on outright ‘helicopter money’, thereby jolting back to life domestic economies that are sliding into deflation and recession virtually everywhere—– from Japan to South Korea, China, Italy, France, England, Brazil, Canada and most places in-between.

That latter area especially includes the United States. Despite Wall Street’s hoary tale that the domestic economy has “decoupled” from the rest of the world, the evidence that the so-called recovery is grinding to a halt is overwhelming.

After all, the real GDP growth rate during the year ending in June was a miniscule 1.2%. It reflected the weakest 4-quarter rate since the Great Recession.

And even that was made possible only by an unsustainable build-up in business inventories and the shortchanging of inflation by the Washington statistical mills. Had even a semi-honest GDP deflator been used, the US economy would have posted real GDP on the zero-line, at best.

So the stock market’s 19% melt-up from the February 11 interim low of 1829 on the S&P 500 was positively surreal. There was not an iota of sustainability to it. In fact, “interim” was exactly the right word for a low that is going a lot lower, and soon.

Indeed, the spring-summer rebound was the work of eyes-wide-shut day traders and robo-machines surfing on a thinner and thinner cushion of momentum. What must come next, in fact, is exactly what happens when you stop peddling your bicycle. To wit, momentum gets exhausted, gravity takes over and the illusion of stability is painfully shattered.

But these revelers are going to need something stronger than the hope for “helicopter money” to avoid annihilation when the long-running central bank con job finally collapses. Indeed, that denouement lies directly ahead because helicopter money is a bridge too far and valuations are literally perched in the nosebleed section of history.

As to the latter point, the S&P 500 companies posted Q2 2016 earnings for the latest 12 month period at $86.66 per share. So at the August bubble high the market was being valued at a lunatic 25.1X.

Even in a healthy, growing economy that valuation level is on the extreme end of sanity. But actual circumstances are currently more nearly the opposite. That is, earnings have now been falling for six straight quarters in line with GDP growth that has slumped to what amounts to stall speed.

In fact, reported earnings for the S&P 500 peaked at $106 per share in the 12 months ended in September 2014. That means that earnings had fallen by 19% since then, even as the stock market moved from 1950 to nearly 2200 or 13% higher.

This is called multiple expansion in the parlance of Wall Street, but it’s hard to find a more bubblicious example. Two years ago the market was trading at just 18.4X, meaning that on the back of sharply falling earnings the PE multiple had risen by 36%!

Valuation multiples are supposed to go up only when the economic and profits outlook is improving, not when it’s unmistakably deteriorating as at present. But during the spring-summer melt-up these faltering fundamentals were blithely ignored on the hopes of a second half growth spurt and, failing the latter, that the Fed would again pull the market’s chestnuts out of the fire.

The growth spurt absolutely has not happened, and the recent sharp decline in in-bound containers at the West Coast ports means that the US retail sector is not provisioning for any rebound in sales during the coming fall and holiday seasons.

And that is why the Wall Street gamblers are so desperately hoping for helicopter money. The fact is, the Fed is out of dry powder via the “extraordinary” measures it has employed since the financial crisis.

To wit, in the event the economy is visibly drifting into recession, it cannot go to sub-zero interest rates without triggering a Donald Trump led domestic political conflagration. Nor can it abruptly shift to a huge new round of QE without confessing that $3.5 trillion of the same has been for naught.

Yet “helicopter money” isn’t some kind of new wrinkle in monetary policy, at all. It’s an old as the hills rationalization for monetization of the public debt—–that is, purchase of government bonds with central bank credit conjured from thin air.

It’s the ultimate in “something for nothing” economics. That’s because most assuredly those government bonds originally funded the purchase of real labor hours, contract services or dams and aircraft carriers.

As a technical matter, helicopter money is exactly the same thing as QE. Nor does the journalistic confusion that it involves “direct” central bank funding of public debt make a bit of difference.

Suppose Washington issues treasury bonds to the 23 primary dealers on Wall Street in the regular manner. Further, assume that some or all of these dealers stick the bonds in inventory for 3 days, 3 months or even 3 years, and then sell them back to the Fed under QE (and most likely at a higher price).

So what!

The only thing different technically about “helicopter money” policy is the suggestion by Bernanke and others that the treasury bonds could be issued directly to the Fed. That would just circumvent the dwell time in dealer (or “investor”) inventories but result in exactly the same end state. In that event, of course, Wall Street wouldn’t get the skim.

Why Helicopter Money Is The Ultimate Beltway Scam

But that’s not the real reason why helicopter money policy is so loathsome. The unstated essence of it is that our monetary politburo would overtly conspire and coordinate with the White House and Capitol Hill to bury future generations in crushing public debts.

They would do this by agreeing to generate incremental fiscal deficits—-as if Uncle Sam’s current $19 trillion isn’t enough debt—–which would be matched dollar for dollar by an increase in the Fed’s bond-buying or monetization rate. That amounts not only to teaching children how to play with matches; it’s tantamount to setting fiscal forest fires across the land……

END

Dr. Pinsky states that there is something wrong with Hillary’s health

(courtesy Jankowski/zero hedge)

.

Dr. Drew Pinsky Says He Is “Gravely Concerned” About Hillary Clinton’s Health

 

end

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: