US Futures Fall, European Stocks Rise As Stronger Dollar Sends Oil Lower

European stocks rose and US S&P futures fell after the dollar strengthened following the latest hawkish comments from Fed vice-chair Stanley Fischer signalled that a 2016 rate hike is still being considered and again boosted speculation that US rates will rise this year. The rising dollar pressured commodities and notably oil, which dropped 2% breaking a 7 days stretch of increases; emerging markets retreated. 

Top news stories include Pfizer reportedly nearing Medivation deal, ChemChina winning CFIUS approval for Syngenta acquisition, Renesas said to be in talks to buy Intersil.

Bloomberg’s dollar index climbed to a one-week high after Fed Vice Chairman Stanley Fischer said Sunday the U.S. economy is already close to meeting the central bank’s goals and that growth will pick up. On the other side of the Pacific, the Yen fell following comments from Kuroda that more September easing may be on the table. Emerging-market shares and currencies declined for a second day, oil fell below $48 a barrel and silver led losses among precious metals. European equities advanced after their biggest weekly slide in two months and government bonds rebounded. The chart below shows the USD’s reactions to just last week’s Fed jawboning.

Global markets have been buffeted over the past week by comments from Fed officials flagging the possibility of higher borrowing costs as early as next month, even though minutes of the central bank’s last meeting struck a more dovish tone. The focus will shift to Janet Yellen’s speech this week at a gathering of global central bankers in Jackson Hole, Wyoming. Futures traders on Friday assigned a 22 percent probability to a September rate increase by the Fed, up from 16 percent a week earlier.

Still, as we showed last night, being hawkish – or dovish – is nothing new for the Fed, which has seen it share of contradictory statements in the past several months, all largely market, and economy, dependent.

Responses were mixed: “The Fed is a bit all over the shop so it’s going to be Janet Yellen’s job this Friday to try to centralize all of these messages into a coherent message that markets can react to,” says Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney.

“We’ve had a full spectrum of messages in the past week or so,” said Josh O’Byrne, a currency strategist at Citigroup Inc. in London. The dollar will “probably hold if indeed she backs up Fischer,” he said. “ I think the consensus is that she will be a bit more dovish.”

While it remains to be seen if Yellen will announce anything truly market moving, the recent dollar strength has led to some early selling in crude oil, while dropped 2.0% to $47.28. Selling was accelerated after OPEC’s second-biggest producer, Iraq, said it will boost exports by about 5% in coming days. Another downside catalyst was the previously reported ceasefire announcement by the militant Niger Delta Avengers, as well as the record collapse in short WTI positions, which has led to speculation the short squeeze may be largely over. Oil had jumped 9.1% last week on speculation that OPEC talks next month could lead to an output freeze. U.S. drillers added rigs for an eighth week, the longest run since April 2014.

The stronger dollar also pressured previous metals with silver dropping as much as 3% to a seven-week low, while gold was down 0.6% amid the dollar’s advance.

The MSCI Emerging Markets Index slid 0.6 percent, with shares in Shanghai dropping 0.8 percent, the most in three weeks. Saudi Arabia’s Tadawul All Share Index led losses in Gulf stocks, sliding 1.5 percent.

In equity markets, Europe’s Stoxx 600 Index added 0.7%, with banks leading gains while trading volumes were about 40 percent lower than the 30-day average. Automakers advanced as the euro weakened, while miners were the only industry group to decline. Syngenta jumped 12 percent, the most in more than a year, as China National Chemical Corp. received approval from U.S. national security officials for its $43 billion takeover of the Swiss chemical company.

S&P 500 Index futures were down 0.2% after U.S. stocks slipped for the first time in three days on Friday, with a recent rally showing signs of tiring amid elevated valuations and rising speculation that borrowing costs will increase before year-end. Medivation Inc. jumped 21% in premarket New York trading after people familiar with the situation said Pfizer Inc. is close to an agreement to buy the biotechnology company for about $14 billion.

Market Snapshot

• S&P 500 futures down 0.2% to 2181
• Stoxx 600 up 0.8% to 343
• MSCI Asia Pacific down 0.2% to 139
• US 10-yr yield up 1bp to 1.59%
• Dollar Index up 0.24% to 94.74
• WTI Crude futures down 1.5% to $47.79
• Brent Futures down 1.7% to $50.04
• Gold spot down 0.6% to $1,334
• Silver spot down 1.7% to $18.99

Top Global News

• Fischer Signals 2016 Rate Hike With Economy Nearing Fed Goals: Fed vice chair talks days before Yellen’s Jackson Hole address
• Pfizer Said Close to $14b Deal to Acquire Medivation: Deal may be announced as early as Monday, according to people familiar with the situation
• ChemChina Clinches U.S. Security Nod for Syngenta Purchase: Deal would be biggest in record year of Chinese takeovers
• Renesas Said to Be in Talks for $3b Intersil Acquisition: Discussions may not result in a deal, person familiar says
• Nomura Back in Hiring Mode for U.S. Bankers After Cutting Costs: COO Ozaki sees “tremendous business opportunities for M&A”
• ‘Ben-Hur’ Remake Stumbles to Fifth Place in Box-Office Debut: Warner Bros.’ ‘Suicide Squad’ holds onto No. 1 for third week
• Marvell Said to Continue Steps Exploring Sale: DealReporter
• China to Scrap Anti-Dumping Measures on EU, Japan Steel Tubes
• Focus Financial Partners Said to File for IPO: WSJ
• Former Travelers CEO Fishman Has Died, Dasburg to Be Chairman
• Lockheed Martin Gets 10-Yr C-130J Air Force Contract for $10b

* * *

Looking at regional markets, Asian stocks began the week in a choppy fashion which followed Friday’s subdued US close, where market-thin trade and a pull-back in energy hindered sentiment. Nikkei 225 (+0.3%) outperformed its counterparts, underpinned by a weaker JPY after dovish comments from BoJ Governor Kuroda over the weekend, while trade in the ASX 200 (-0.2%) was flat after mixed earnings. Markets in China were also indecisive with both the Hang Seng (flat) and Shanghai Comp (-0.8%) swinging between gains & losses despite the PBoC increasing its liquidity injections, as debt concerns persisted. Price-action in 10yr JGBs was subdued amid the increased risk-appetite seen across Japanese equities, while participants look to tomorrow’s 20yr auction. BoJ Governor Kuroda commented that he wouldn’t rule out cutting rates deeper into negative territory and added that there is a sufficient possibility the BOJ will add to its easing programme in September. India picked RBI Deputy Governor Urjit Patel as the central bank’s next governor to succeed Governor Rajan when his term ends next month. Deputy Governor Patel is seen as a hawkish, continuity candidate to follow Rajan.  PBoC set CNY mid-point at 6.6652 (Prey. 6.6211) and injected CNY 110bIn via 7-day reverse repos.

Top Asian News

• India’s New Central Banker Faces Nervy Markets After Rajan Rally: Patel’s inflation hawk reputation seen reducing rate- cut odds
• Paul Singer’s Elliott Seizes on Bank of East Asia’s Profit Slide: Paul Singer’s fund gets more ammunition for shake-up campaign
• China Overseas Land 1H Net HK$19.7b vs HK$16.3b Year Ago: Co. raises FY16 sales target by 17%

In Europe, the morning has seen a subdued start to a, so far, typical mid-August week, with a particularly light calendar for the day. European equities trade in positive territory across the board, with Syngenta (+11.8%) the notable outperformer after announcing US clearance for their USD 44b1n ChemChina deal. Elsewhere, material names drag on the FTSE, with the likes of Anglo-American (-3.2%), Glencore (-1.9%) and Rio Tinto (-2.5%) among the worst performers on the continent. Finally, fixed income markets have been particularly subdued this morning, with bunds trading in modest positive territory and above 167.00. In terms of going forward, participants will be looking ahead to the BoE 3-7yr Gilt purchases this afternoon.

Top European News

• London Housing Boom to End in 2017 as Brexit Bites, Broker Says: Countrywide sees home values falling for first time since 2009
• VW Restarts Talks as Supplier Feud Expands to Golf Production: Six factories face partial production halt beginning Monday
• Getinge Ousts CEO After Less Than 18 Months as Views Differ: Surgical Workflows unit head Lindoff appointed acting CEO, shares fall
• Europe Plans for Life After Brexit as Merkel Meets Allies at Sea: Renzi hosts Merkel, Hollande on Italian warship off Naples
• Teleperformance to Buy LanguageLine Solutions for $1.52b: Co. sees deal accretive to EPS by ~10% on a pro forma basis for 2016
• Sanofi Updates NDA on Diabetes Product; Pdufa Date Now in Nov.
• Linde-Praxair Plan to Put Headquarters in Europe: Handelsblatt

In FX, the Bloomberg Dollar Spot Index rose 0.3% in early trading, after losing ground in each of the last two weeks. The yen dropped 0.5% to 100.75 per dollar. Bank of Japan Governor Haruhiko Kuroda Kuroda told the Sankei newspaper that the BOJ is conducting a comprehensive review of Japan’s economy and finances and said there is “sufficient chance” of more easing at next month’s policy meeting. Hedge funds and other large speculators raised net wagers for a weaker pound to a record in the week ended Aug. 16. That’s the seventh straight week of increases. The U.K currency gained 0.3 percent against the dollar to $1.3109. The MSCI Emerging Markets Currency Index dropped 0.3 percent. South Africa’s rand, South Korea’s won and the Taiwanese dollar posted the biggest declines among 16 major currencies measured against the greenback, sinking at least 0.5 percent. Turkey’s lira lost 0.6 percent. Fitch Ratings cut the outlook on the country’s investment grade credit to negative from stable after a failed coup attempt in July increased political risks. The rupee weakened 0.2 percent after India named Urjit Patel to take over from Raghuram Rajan as central bank governor from Sept. 4.

In commodities, the Bloomberg Commodity Index declined 0.8 percent, after slipping from a one-month high in the last session. Crude oil slid 2.0% to $47.65 a barrel in New York after Iraq, OPEC’s second-biggest producer, said it will boost exports by about 5 percent in coming days. The price jumped 9.1 percent last week on speculation that OPEC talks next month could lead to an output freeze. U.S. drillers added rigs for an eighth week, the longest run since April 2014, Baker Hughes Inc. data show. Silver dropped as much as 3 percent to a seven-week low, while gold was down 0.6 percent amid the dollar’s advance. Silver has rallied 37 percent this year while gold jumped 26 percent as the Fed refrained from tightening and other central banks embraced negative rates, benefiting bullion which doesn’t pay interest. Base metals fell, with aluminum declining for a third day and nickel sagging as much as 1.8 percent.

It’s a quiet start to the week today with only the Chicago Fed national activity index in the US this afternoon to note of

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities enter the North American crossover higher with the FTSE 100 the notable laggard amid softness in commodity names
• JPY lost ground against the major overnight amid dovish rhetoric from Kuroda who hinted at further easing next month
• Looking ahead, the calendar is particularly light with Chicago Fed National Activity at 1330BST
• Treasuries dropped during Asia, European sessions after Fed Vice Chair Stanley Fischer said U.S. economy is close to the central bank’s goals; started paring drop toward end of overnight trading as European equities reversed gains.
• Fed fund futures pricing 50/50 chance of rate hike in Dec. 2016; fully pricing next rate hike around June 2017, implied rate 62bp, near midpoint of 50-75bp target range
• Pimco’s largest international bond fund and China are piling into negative-yielding Japanese debt, buying securities that pay out less than the purchase price. And there’s a way to turn a tidy profit off the trade
• The world’s largest banks are racing to meet a deadline next month when billions of dollars in new collateral requirements will begin to hit the over-the-counter derivatives market
• GDP is so 20th century. Whether compiled by production, income or expenditure approaches — GDP is increasingly struggling to keep up with the pace of economic change
• The U.K. economy has shown some post-Brexit strength. All it needs now is stamina as the focus is on whether the economy can sustain the initial robust readings that came last week

US Event Calendar

• 8:30am: Chicago Fed Nat Activity Index, July, est. 0.20 (prior 0.16)

DB’s Jim Reid concludes the overnight wrap

There won’t be much skiing this weekend at the Jackson Hole symposium but there will be focus on Yellen’s speech on Friday where we’ll see whether she brings the Fed’s message back on piste after a few recent moguls created by various Fed speakers over the last week.

Indeed the usually dovish NY Fed President Dudley caused the first bump when he said on Tuesday that a September hike was ‘possible’ and that ‘we’re edging closer towards the point in time where it will be appropriate to raise rates further’. Dudley also made the comment that he thought 10y Treasuries were ‘pretty low given the circumstances’. On the same day Atlanta Fed President Lockhart (a centrist) added that he thought at least one rate increase could be appropriate later this year. Late on Thursday we then heard from San Francisco Fed President Williams (also largely seen as a centrist) who said that every meeting should ‘be in play’, including September.

The latest addition to the debate over the weekend was Fed VC Stanley Fischer who suggested that the Fed “are close to their targets”. Although he didn’t comment on when they should hike it was a generally upbeat reflection on the US economy. The main theme of the speech though was the slowdown in productivity in recent years and how monetary policy wasn’t equipped to reverse the slump and that fiscal and regulatory policy were likely to be more effective. Although Fischer is known to be on the hawkish side (albeit moderately) and Yellen on the more dovish side, he probably wouldn’t want his comments in the week of the Jackson Hole get together to be interpreted in a manner completely different to his boss. So this sets up an interesting Friday.

In terms of Fed hike pricing, we went into last week with September and December probabilities of 16% and 42% respectively. Post Dudley’s comments we went to 22% and 51%. The FOMC minutes on Wednesday moderated things a little with September staying unchanged at 22% but December nudging down to 49%. Following Williams we ended the week back at 22% and 51% however.

Indeed the US Dollar also took heart from Williams’ comments late last week with the Dollar index finally closing up on Friday (+0.38%) for the first time in six sessions. It’s up a similar amount this morning too while US 2y and 10y Treasury yields, which closed up 4.4bps and 4.3bps respectively at 0.748% and 1.579% are also higher this morning (+2.8bps and +1.5bps respectively). Emerging market currencies were the biggest losers on Friday while US equity markets (S&P 500 -0.14%) and credit indices (CDX IG +0.9bps) ended a touch weaker.

Elsewhere this morning equity markets are off to another mixed start in Asia. A weaker sessions for the Yen (-0.55%) is providing some respite for the Nikkei (+0.24%) and Topix (+0.40%), while the ASX (+0.10%) is also up slightly. The Hang Seng (-0.45%), Shanghai Comp (-0.34%) and Kospi (-0.65%) all appear to be following the lead from the US on Friday however. US equity index futures are in the red by a similar amount this morning although there’s also been a bit of M&A focus over the weekend with the news that Pfizer is nearing a $14bn takeover of Medivation.

Moving on. Along with the various chatter out of the Fed, the relentless move higher for Oil last week was the other big focus for markets. Indeed WTI climbed +9.06% last week and even more impressively is up nearly 16% over the last 8 sessions. The prospect of some sort of coordinated major producers production freeze has been at the centre of the rally however our commodity strategists don’t think that a freeze would have much fundamental impact. Indeed they highlighted in their report on Friday that as before, the parameters of the proposed deal are likely to be very weak. They note that this is before we consider the impact of national oil companies who may try to ‘game’ the system by ramping up volume this month to set a high-water mark before the meeting on the sidelines of the International Energy Forum in Algeria on 26-28th September. They go on to note that since the terms of a deal are unlikely to pose upside constraints to Libya, Iraq or Nigeria, OPEC production could still exceed their 2017 assumption of 33.5mmb/d in the event of an agreement. Their fair value models currently suggest that oil is close to fair value of $46.6/bbl.

Elsewhere, it was a very quiet end to the week on Friday for economic data. There were no reports out in the US while in Europe the only data we got came in Germany, where PPI rose +0.2% mom (vs. +0.1% expected) in July, and also the UK where public finances (excluding bank groups) were in surplus to the tune of £1bn in July, boosted by a 3.4% rise in receipts. European equity markets actually ended the week on a bit of a sour note with the Stoxx 600 closing -0.81% as Italian equities (-2.18%) and Bank Stocks (-1.40%) struggled in particular.

Turning now to this week’s calendar. It’s a quiet start to the week today with only the Chicago Fed national activity index in the US this afternoon to note of. Tomorrow morning we kick off in Asia where we’ll get the flash manufacturing PMI reading for August in Japan and also the MNI business indicator out of China. During the European session we’ll get the August flash PMI’s for the Euro area, Germany and France (manufacturing, services and composites) along with CBI trends data for the UK. In the US we’ll also get the flash manufacturing PMI along with the Richmond Fed manufacturing index and new home sales for July. The Euro area consumer confidence reading for August will also get released in the afternoon. Turning to Wednesday the highlight of the morning session in Europe will likely be the final Q2 GDP revisions for Germany, along with the various subcomponent readings. The data in the US on Wednesday is focused on the housing market with existing home sales for July and the FHFA house price index reading due. With little in the way of data to note of in Asia on Thursday we’re starting in France where the August confidence indicators are due to be released. Shortly after that the IFO survey in Germany for August is due. There’s a number of important releases in the US on Thursday starting with the flash durable and capital goods order data for July, along with the remaining flash PMI’s (services and composite), initial jobless claims and the Kansas City Fed’s manufacturing index. The end of the week on Friday is a big one for data. In Japan we’ll get the July CPI report early on. German and France consumer confidence readings follow this, along with UK Q2 GDP. We then end the week in the US with the second reading of Q2 GDP and core PCE, the advance goods trade balance reading in July and the final University of Michigan consumer sentiment reading.

Away from the data the other big focus will be Fed Chair Yellen speaking at the Jackson Hole Policy Symposium on Friday. Another potentially interest event to keep an eye on is a meeting between Merkel, Hollande, Renzi and Tusk today in Italy where they are due to speak on Brexit

end

ASIA MARKETS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 23.30 POINTS OR 0.13%/ /Hang Sang closed DOWN 85.94 points or 0.37%. The Nikkei closed UP 59.81 POINTS OR 0.75% Australia’s all ordinaires  CLOSED DOWN 0.21% Chinese yuan (ONSHORE) closed UP at 6.6544/Oil FELL to 47.16 dollars per barrel for WTI and 49.31 for Brent. Stocks in Europe: in the RED . Offshore yuan trades  6.6635 yuan to the dollar vs 6.6544 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

More sabre rattling as Japan doubles its F 15 missile payload as escalation in the South China seas escalates:

(courtesy zero  hedge)

Japan To Double F-15 Missile Payload Ahead Of “China Confrontation” After Latest Chinese Threat

In the most recent escalation involving China’s latest foray into the East China Sea, we reported that Japan’s coast guard released a video of several hundred Chinese ships located near the disputed naval territory, among which 18 patrol vessels of which seven were equipped with what looked like machine guns. “Actions by the Chinese side like this, which will escalate the situation, are not tolerable,” the Japanese Coast Guard said in a statement.

This took place just days after Japan announced it would deploy land-to-sea missiles with a 300 km range to protect the nation’s isolated islands, including the Senkakus, with costs for the deployment borne by the defense ministry’s budgetary request for the March 2018 fiscal year, which means even more bonds for the BOJ to monetize.

China’s nationalist Global Times paper immediately responded, saying :”Japan’s decision to develop surface-to-sea missiles with a range of 300 kilometers to cover the disputed islands shows the country may be eyeing a shift to an offensive posture, analysts said. “Japan is trying to use the missile system to lock down the Miyako Strait and prevent Chinese forces from entering the Western Pacific Ocean,” Zhou Yongsheng, a professor at the Institute of International Relations of China Foreign Affairs University, told the Global Times.

And since neither side was willing to backtrack in this series of escalating threats, earlier today Japan’s Defense Ministry announced it wants its 200 F-15 fighter jets to carry twice as many air-to-air missiles as they do now, in preparation for a possible confrontation with Chinese Air Force around disputed East China Sea islands, RT reported. These upgrades would double the number of air-to-air missiles carried by ASDF F-15s, from eight to 16 per each aircraft. In addition, damaged wings and other parts of the fighter jets will be repaired to extend their lifespan.

Currently, the Japanese Air Force operates 200 F-15s in combat and trainer variants as well as roughly 90 Mitsubishi F-2 multirole fighters, a development of F-16 design. The 2017 military budget worth $51 billion will reportedly include a separate purchase of an undisclosed number of controversial fifth-generation F-35 stealth fighter jets, said to be deployed at the Misawa Airbase at the northern tip of Honshu, Japan’s main island.

Tokyo says China’s “assertive” actions near the disputed Senkaku Islands – or Diaoyu in Chinese – makes Japan’s military to respond with re-deploying forces closer to the troubled area and investing into strengthening combat capabilities. “As the cruising range of Chinese military aircraft has gotten longer, they are coming ever closer to our territories,” a Japanese Defense Ministry official was cited by Nikkei Asian Review.The ministry also added the ASDF has been scrambling fighter jets 199 times from April until June to intercept Chinese planes over the East China Sea, a 75 percent increase from the same period last year.

And while Japan is focusing on expanding its airborne presence in proximity to the disputed islands, China – which would not leave Tokyo have the final word – warned Tokyo of a harsh response if it ever crossed a “red line” in deciding to sail with US warships near disputed waters surrounding China’s artificially reclaimed islands under the pretext of the Freedom of Navigation principle, Japanese media reported.

Tokyo will “cross a red line” if Japan’s Self-Defense Forces sail with the Americans, Chinese Ambassador to Japan Cheng Yonghua allegedly told a Japanese official in Tokyo, Kyodo reported citing a source.

“Japan should not take part in a “joint military action with US forces that is aimed at excluding China in the South China Sea,” Cheng reportedly told Japanese officials late in June. “(China) will not concede on sovereignty issues and is not afraid of military provocations.”

While Japan’s official reassured the ambassador that Japan had no plans to join the US sails, which have intensified lately by constant American warship maneuvering near artificial islands that China has built in the South China Sea, it is unlikely that Japan will hold to its word, especially since earlier this week, Japanese media reported that China continues to expand military infrastructure next to the disputed waters, erecting a military pier on Nanji Island, one of 52 islands in the Nanji chain that are part of China’s Zhejiang Province.

Furthermore, to counter the perceived Chinese threat, Tokyo is seeking a record defense budget of 5.16 trillion yen ($51 billion) for next year to strengthen the Japanese coast guard near the disputed waters with China. Part of the funding will also be spent on neutralizing the North Korean threat by deploying PAC-3 missile defense system and the joint Japanese-US production of the Block IIA version of the Standard Missile-3 system. Japan also seeks to purchase an upgraded version of the F-35 stealth fighter.

Meanwhile, Beijing has finished long-range combat drill in the Sea of Japan with its East China Sea Fleet by launching simulated attacks to improve the capability of continuous strikes at maximum range, CCTV reported. The exercise also included air force simulation of air-to-ship missile launches against enemy vessels. The Chinese navy called the drill “routine” and in accordance with international law.

Tensions in the area were heightened even further when four Chinese coastguard ships sailed into territorial waters surrounding the disputed islands in the East China Sea on Sunday morning. The Japanese foreign Ministry responded by issuing a note of protest against the “incursion” and the violation of Japanese sovereignty.

“Despite Japan’s repeated strong protests, the Chinese side has continued to take unilateral actions that raise tensions on the ground, and that is absolutely unacceptable,” the statement said.

As the sabrerattling continues, we anticipate that so will the escalations on both sides, and while these will not spill over into a full blown conflict between the two nations, may result in another collapse in trade between the two nations, in a repeat of events that took place in late 2013, when nationalistic tensions on both sides soared, leading to the boycott of many Japanese goods on mainland China. If this transpires, it will come at a very troubling time for China, which is now growing at a quarter of the pace it did three years ago, and will likely force Beijing to issue even more debt to compensate for the lack of growth, at a time when unofficial estimate calculate China’s total debt at a staggering 350%+ of GDP.

b) REPORT ON CHINA

Hong Kong based Cathay Pacific earnings are totally crushed as corporate travel within China collapses as tourism into China falters terribly

(courtesy zero hedge).

Cathay Pacific Crushed As Chinese Corporate Travel Collapses

Cathay Pacific announced earnings earlier this week which paint a fairly ominous picture for China.  The airline posted a 9.3% YoY drop in revenue and an 82% decline in net profit which they attributed to, among other things, “weak passsenger demand, particularly in the premium class“.  Comments from the Cathay’s press release clearly indicate weak corporate travel with the company pointing out that corporate enplanements in Hong Kong declined for the first time since 2009:

• The slowdown in the Mainland China economy and economic fragility elsewhere caused restrictions to be placed on corporate travel. This adversely affected premium class demand, particularly on long-haul routes.
• Yield was further affected by strong competition, adverse currency movements and asignificant reduction in premium corporate travel.
• Demand for travel originating from Hong Kong was strong in the first two months of the year, but weakened thereafter. Corporate travel originating in Hong Kong was well below expectations, particularly to London and New York. Numbers travelling declined for the first time since 2009, when business was affected by the financial crisis.
• Tourism from Mainland China to Hong Kong is weak.

A couple of tables from Cathay’s earnings presentation help sum up the story.

Passenger yields tanked in 1H16 on lower corporate travel…

Marking the lowest yields since 2009…

While cargo yields plunged through 2009 levels…

Unfortunately, Chairman John Slosar doesn’t expect things to improve in the back half of 2016:

We expect the operating environment in the second half of the year to continue to be impacted by the same adverse factors as in the first half. The overall business outlook therefore remains challenging. We expect passenger yield to remain under pressure. Overcapacity and economic fragility will dampen cargo demand.  We will also continue to be vigilant on costs.

Meanwhile, the company’s earnings presentation noted the following for 2H16 outlook:

• The challenging business environment is expected to continue.
• Yields are expected to continue to be under intense pressure.
• Lower Hong Kong traffic with more 6th Freedom travel.
• The cargo business will continue to be adversely affected by overcapacity and economic fragility.

And, of course, Mr. Market was not happy…

• China
• Hong Kong

end

The following is a big story.  On Oct 1, China will finally see its yuan included in SDR’s. Now we see the IMF has allowed a new Chinese bond offering denominated in SDR’s with interest paid in yuan.  As China gets to issue more of these bonds there will be less use of dollars circulating the globe. The unwanted dollars would then return to the USA and inflation and quite possibly hyperinflation will be the inevitable

(courtesy Chris Vermeulen/the Gold and Oil Guy)

China Announces New Loan In International Reserve Asset Which May Affect Gold

By Chris Vermeulen of TheGoldAndOilGuy

Saturday, August 20, 2016 7:59 PM EDT

The People’s Bank of China (PBOC) has received approval from the World Bank allowing its issuance of bonds which are denominated in Special Drawing Rights (SDRs). The World Bank is the first entity to approve of it and consequently marks the launch of the SDR bond market of the worlds’ second- largest economy.

Jim Yong Kim, The World Bank Group President, said “This is a landmark development for China’s bond market and for the SDR as an international reserve asset. We are very pleased to support China’s growing role in global financial markets. World Bank issuance of SDR bonds in China will support the G-20’s objective of expanding the use of SDRs and help promote the development of China’s domestic capital market. It will also increase Chinese investors’ access to foreign currencies in the domestic bond market, while opening up new opportunities for international investors seeking high-quality investment products in the country.”

This new bond issuance is 2 billion SDRs which is equivalent to $2.8 billion. The bonds will be denominated in SDRs and payable in Chinese renminbi (RMB). The precise timing of issue and individual bond terms will be based on favorable market conditions, at the time of issuance.

The World Bank approval of China, as being the first issuer of SDR-denominated bonds, is a further step in the “internationalization” of the Chinese capital markets. It shows the vital role of the World Bank and how it assists in opening new markets as well as developing local capital markets. The World Bank SDR-denominated bonds in the Chinese market are a fantastic opportunity for Chinese investors to support the World Bank’s sustainable development activities via a new product. These bonds will also be attractive to international investors who are seeking SDR products to hedge SDR liabilities.

The World Bank raises $50-$60 billion, in the international capital markets, each year. The new SDR program in China is part of the World Bank’s strategy to open and support the development of new markets and will therefore expand World Bank’s product offerings which attract new domestic and international investors to World Bank bonds.

Officially, as of October 1st, 2016, the new mix of the SDR will include the Yuan. It now joins the dollar, euro, pound and yen in an exclusive club of currencies that have special drawing rights. The yuan will be weighted at 10.92%. This is the first change in the SDR basket since 1999. In the past, the IMF rejected the yuan in 2010.

For many in the markets, this has been the year of the yuan. When China suddenly devalued its’ currency, earlier this year, it sent the global markets into a tailspin. Currently, the yuan is depreciating even further since traders believe that the Chinese government will step down from its’ intervention in the currency. Being included in the exclusive club is a sign that the currency has ‘grown up’, in a manner of speaking.

This story began in 2009 with the global financial crisis. The People’s Bank of China said that the economic shocks were due to the financial system being overly reliant on a single currency – the US dollar. It has been pushing for inclusion ever since.

But what effect will this have on both the Chinese economy and other currencies in the basket? The Euro, for example, will surely be affected by this decision. The currency shared by 19 nations within the Eurozone has had a terrible decade and now it appears that things could get worse.

When it comes to this special basket, the weighting of the currency is the most important aspect. If a new currency is introduced, then all of the others have to give up their share. Therefore, the yuan will be weighted at 10.97%, which means that the share of the euro will drop from 37.4% to 30.93%.

As for China, this announcement is nothing but good news. This move by the IMF is more than just ‘symbolic’. Being counted as a reserve currency mainly means that the government has taken the right steps to free up its economy. It has reined in intervention and has allowed the currency to be more ‘free’ within the international markets.

Central Banks, around the world, which hold SDRs in reserve, have this new currency as an option to convert into. This means that a lot more Chinese bonds (maybe a trillion dollars’ worth) will now be able to find their way into the market.

Additionally, there is no indication that Central Banks have a lot of demand for the Yuan. This decision gives them the option to convert into the currency, but whether or not they will is a question yet to be answered. The US dollar is still the worlds’ reserve currency.

I question how the SDR will maintain any value if all of its’ underlying currencies, that it has been composed of, have become worthless.

If this is what does occur, then they will be forced to back these fiat currencies with a tangible asset in order to accept this standard. The only money that has lasted for over 5,000 years is gold. I would not be surprised to see a new gold standard set in some way, but that is still a long way away and some serious catastrophes have to happen first.

With that said, the markets tend to move before major events happen, so as things worsen globally, it only makes sense for precious metals (physical currency) to strengthen over time.

http://www.talkmarkets.com/content/global-markets/china- announces-new-loan-in-international-reserve-asset-which-may- affect-gold?post=103953

-END-

EUROPEAN AFFAIRS

The vote for a BREXIT certainly did not cause Armageddon for Britain. However it is giving the country many opportunities to right itself in the face of no growth in Europe.  It is proposing to cut corporate taxes something that Sweden is against but cannot do anything about it.

It sure looks like Britain will be the clear winner with its Brexit with the clock set to start by April 2017:

(courtesy Mish Shedlock/)

Brexit: Worst Case Scenario For EU; Armageddon Promise Now Exposed As Pack Of Lies

Submitted by Michael Shedlock via MishTalk.com,

Project Fear predicted economic meltdown if Britain voted leave. Where are the devastated high streets, job losses and crashing markets?

In other Brexit news, Sweden warns the UK about cutting corporate taxes. How should the UK respond? Who is in control?

What Happened to Promised Armageddon?

The Guardian reports Brexit Armageddon was a Terrifying Vision – but it Simply Hasn’t Happened.

Unemployment would rocket. Tumbleweed would billow through deserted high streets. Share prices would crash. The government would struggle to find buyers for UK bonds. Financial markets would be in meltdown. Britain would be plunged instantly into another deep recession.

Remember all that? It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer’s remorse.

The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark. Far from dumping UK government gilts, pension funds and insurance companies have been keen to hold on to them.

City economists had predicted an immediate rise in the claimant count measure of unemployment in July. That hasn’t happened either. This week’s figures show that instead of a 9,000 rise, there was an 8,600 drop.

Pack of Lies Clearly Visible

Armageddon fears were purposely over-hyped from the beginning. Now reality has set in.

Project fear backfired. People can easily see what liars David Cameron and the nannycrats in Brussels were.

Project Remain: Where are the admissions “We were wrong?”

Worst Case Scenario for EU

That the UK has gone on as normal has to be one of the worst fears for the nannycrats in Brussels. There is life, not death after Brexit. What country will be next to figure that out?

Some rough times are likely ahead for the global economy, including the UK. But in the long run, Brexit will be a good thing for the UK, which means it will be a bad thing from the point of view of Brussels.

Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks

The nannycrats are now worried that the UK will do something smart, like lower corporate taxes again.

Today, Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks.

The U.K. should avoid any drastic steps to cut corporate taxes, or similar measures, as it prepares to start talks on leaving the European Union, Swedish Prime Minister Stefan Loefven said.

If the U.K. wants some time to think about the situation, this will also give EU countries some time,” Loefven told Bloomberg after giving a speech in Stockholm on Sunday. “On the other hand, you hear about plans in the U.K. to, for example, lower corporate taxes considerably. If they, during this time, begin that kind of race, that will of course make discussions more difficult.”

Stellar Opportunity for UK to Set Example for the World

By all means the UK should precisely make things more difficult.

Everyone says, Brexit terms need to be negotiated. Actually, the UK can pick up its marbles and go home. Who could stop the UK from doing just that?

On July 11, I wrote Stellar Opportunity for UK to Set Example for the World.

In that post I proposed among other things a recommendation “The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.”

I was unaware at the time that UK chancellor George Osborne had already decided to cut taxes, but by a lesser amount than I suggested.

Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan

In a follow-up post I wrote Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan.

Michel Sapin Pisses and Moans

First Step in Training a Mule

There’s an old saying “The first step in training a mule is to hit it as hard as you can in the head with a stick.”

I don’t really advise that with mules, but it is the precise thing to do to EU nannycrats.

Follow

Mike Shedlock @MishGEA

The first step in training EU mules is to hit them in the head as hard as you can with a stick. Osborne just smacked French and German mules

Reflections on Clearness

“It’s clear that the UK can’t participate in the big decisions involving the EU’s future,” said Emmanuel Macron, France’s economy minister.

Well, it’s equally clear the EU cannot participate in big decisions involving the UK’s future.

And with his plan to cut corporate taxes, chancellor Osborne just hit nannycrat mules in Germany, France, and Belgium in the head with not a stick, but a brick.

Trade War the Right Way

The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.

Set Example for the World

Shed of inane EU rules and regulations coupled with the freedom to do anything it wants, the UK has a golden opportunity to embrace the benefits of genuine free trade and growth via low taxes.

I have often stated the first country that fully embraces free trade, regardless of what any other country does, will come out stunningly ahead.

The UK now has that chance.

Negotiation Progress

Follow

Mike Shedlock @MishGEA

#eu Sweden is pissing and moaning along with Germany and France about UK tax rates. I call this progress. Advantage UK in Negotiations.

I suggest the UK cram it straight down their throats by lowering taxes to 10% right now. This will set proper the negotiation tone  and inform the nannycrats in Brussels who calls the shots.

France and Germany threatened to make things difficult for the UK. But as I have stated all along, the UK, not the EU, has the upper hand in these negotiations.

Import/export math proves the point. The UK imports more from the the EU than it exports to them.

For details, please see “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish.

The more the EU pisses and moans, the more successful Brexit will be for the UK.

END

 

Germans are not happy with the Bundesbank proposal that people must work until the age of 69 to collect a pension;

(courtesy zerohedge)

Germans Furious After Bundesbank Demands People Work Until Age 69

there’s something rotten in Denmark’s neighbor. Amid rising islamic terror incidents, Merkel denies any link to her immigration policies… but the government suggests the citizenry arm itself and stash 10 days worth of food and water “in case of attack or emergency,” and now, despite constant proclamations of Germany’s economy at the heart of European economic ‘strength’, the Bundesbank is calling for people to work until they are 69 (up from the current retirement age of 62)… and neither the government nor the people are happy.

As Germans live longer and lower birth rates mean fewer workers are available to replace retirees, the Bundesbank says people will need to work longer in order to meet pension demands. As The Local reported last week,

The German Federal Bank (Bundesbank) said in its monthly report on Monday that by 2060 Germany should increase the retirement age to 69 from the current 65.

The retirement age is already set to reach 67 by 2030, but the Bundesbank said that even with the current favourable financial situation and this increase, “further adjustments are inevitable”.

“At the same time, a longer working life will not be taboo,” said the report.

Because Germans are now living longer and having fewer children, the current system will not be enough to meet targets. Once the baby-boomers have all retired, there will be fewer new workers to fill the gaps and thus fewer contributors into the system – especially since Germany has been seeing lower birth rates in recent years.

A longer working life should be able to stabilize pension levels so that retirees would receive 44 percent of their average salary: maintaining the current plan could see pension levels fall to just over 40 percent.

And what the bank proposed to ensure stability of the pensions system is a further gradual increase in the legal retirement age, already set to go from 65 to 67 by 2029, to reach 69 years by 2060.

The proposal has sparked fury among Germans and federal government officials are speaking out against the central bank’s demands...

Economy Minister and Vice-Chancellor Sigmar Gabriel was swift to condemn it, saying: “A factory worker, a shop assistant, a nurse, a care-giver would find this idea nuts. So do I.”

Political parties, which are already warming up for general elections next year, are expected to make pensions a key theme of their campaigns.

With 20 million retirees eligible to vote, politicians will be seeking to win on issues ranging from the level of future pensions and the question of equalising pension payments in east and west Germany, to the amount of contributions to be levied on future working generations.

But no one expects to win votes by telling Germans they would have to work two years longer,as the issue is making many nervous, particularly at a time when many savers are seeing little gain from their long-term investments against the backdrop of the European Central Bank’s low interest rate expansionary policy.

“Working until 70 while others feast on canapes and some are unemployed,” huffed a reader on Spiegel Online.

Huether however argued that the Bundesbank’s suggestion was likely to be the “least damaging solution for everyone”.

But, German politicians’ refusal to address the issue on what comes after 2030 simply shows a “fear of confronting the truth,” said Boersch-Supan, an economist at the Max Planck institute, adding that “what the Bundesbank is talking about actually concerns those who are born after 1995, that means people who are only turning 20 now. It’s not about making someone who is working now retire only at 69 or 70.”

We suppose he meant this in some “wee it’s not so bad” way… but the bottom line is that under the surface of a market (bond, stock, credit) representing the manipulated view of the world is a Germany that is anything but stable…both socially and economically; and with the core of  the EU on such shaky ground ahead of elections, one can only add that brick to the wall of worry to climb when buying dips in the stock market.

 

end

RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

GLOBAL ISSUES

As we outlined to you on Friday, the Vancouver housing market is imploding as the new tax seems to have a devastating effect on the market.

(courtesy zero hedge)

As The Vancouver Housing Market Implodes, The “Smart Money” Is Rushing To Get Out Now

Three weeks after we suggested that the Vancouver housing bubble had popped in the aftermath of the implementation of the July 25, 15% property tax in British Columbia targeting the Chinese free for all in Vancouver real estate, we got confirmation of that last week when we reported that only one word could describe what has happened to Vancouver housing in the past month: implosion.

Zolo, a Canadian real estate brokerage, which keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price”, showed as of last week a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago.

The number of transactions has likewise slammed shut: while August is typically one of the slowest months for real estate transactions, MLS sales data from the first two weeks of the month shows what many have been hoping for during the last few years of escalating prices. According to MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94%.

In short, the Vancouver housing bubble has poppsed, and  not surprisingly the “smart money”, which rode the bubble all the way up, has duly noticed, and wants out. Immediately.

As Bloomberg reports, the Ontario Teachers’ Pension Plan is quietly seeking buyers for a minority stake in its C$4 billion ($3.1 billion) real-estate portfolio in Vancouver, including office towers and shopping malls, according to people familiar with the matter.

Cadillac Fairview, the real-estate unit of Canada’s third-biggest pension fund, is looking to raise about C$2 billion from the sale. Cadillac Fairview has hired CBRE Group Inc. and Royal Bank of Canada for the sale.

According to Bloomberg, Cadillac Fairview is the latest pension group seeking to reduce its holdings in the Vancouver commercial market, where prices have reached record highs amid an influx of foreign cash even as new supply drives up vacancy rates. Ivanhoe Cambridge and the Healthcare of Ontario Pension Plan are seeking about C$800 million for their office towers in Burnaby, British Columbia, just outside of Vancouver.

The Cadillac Fairview portfolio, which hasn’t yet started marketing, includes 14 properties in downtown Vancouver and Richmond, with some of Canada’s largest shopping centers, office towers, and historic buildings up for grabs. The assets include a portfolio of waterfront properties including Waterfront Centre, a 21-story tower on the harbor built in 1990; the 238,000-square-foot PricewaterhouseCoopers Place; and The Station, a historic property built in 1912 that serves as North America’s largest transport hub, currently pending approval for an added office tower.

The liquidation has a whiff of panic as some of the country’s biggest retail assets are also in the mix, such as the Pacific Centre, a downtown retailer with 1.6 million square feet for which Cadillac Fairview submitted a proposal this year to expand. It’s the third-most profitable shopping mall in Canada, according to brokerage Avison Young, with C$1,599 in sales per square foot Bloomberg adds. The center also contains eight office towers of two million square feet, including 701 West Georgia and the HSBC building.

In recent years, alongside the plain vanilla housing bubble, commercial real estate soared too, as demand for Vancouver offices sent prices of properties to record highs in recent transactions, including the purchase by Anbang Insurance Group – another notorious Chinese offshore buyer – of the Bentall Centre.

Meanwhile, a warning sign had emerged even before the July property tax hike as the vacancy rate in the city rose to a 12-year high of 10.4% as of June 30 as tenants absorbed 1 million square feet of new space since the same time last year, according to Avison Young.

It is only set to get worse, because in a rerun of what happened to the Alberta office market in early 2015 after oil cratered, additional space is set to flood the market, with six office towers under construction for delivery as soon as this year totaling about 802,700 square feet, and 10 buildings proposed for the city, including Cadillac Fairview’s Waterfront Tower, according to Avison Young’s mid-year 2016 report. Despite the vacancy, rental rates for the best quality assets in Vancouver are the highest in Canada and some U.S. cities such as Chicago and L.A. at about C$30 a square foot, Avison Young said.

And so, Vancouver – after enjoying years of unprecedented upside in both residential and commercial real estate – is on the edge of full blown, freely falling hangover, just like the one the OECD prudently warned about three months ago, when it said that a “disorderly housing market correction” notably in Toronto and Vancouver, is the biggest threat to Canada’s economy, one which “would damp residential investment and private consumption, and could threaten financial stability.” One can now add commercial investment and consumption to that list as well.

In the coming months, if not weeks, we will find out just how accurate the OECD’s gloomy forecast was.

end

 

Jim Grant on the global economy:  the lack of growth and negative interest rates:

In his words:  “this will turn out to very bad for many people”

Jim Grant/Christoph Gisiger/Finanz und Wirtschaft)

Jim Grant: “This Will Turn Out To Very Bad For Many People”

Submitted by Christoph Gisiger via Finanz und Wirtschaft,

James Grant, Wall Street expert and editor of the investment newsletter «Grant’s Interest Rate Observer», warns of a crash in sovereign debt, is puzzled over the actions of the Swiss National Bank and bets on gold.

From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market.

Jim, for more than three decades Grant’s has been observing interest rates. Is there anything left to be observed with rates this low?

Interest rates may be almost invisible but there is still plenty to observe. I observe that they are shrinking and that the shrinkage is causing a lot of turmoil because people in need of income are in full hot pursuit of what little of yields remains.

What are the consequences of that?

It reminds me of the great Victorian English journalist Walter Bagehot. He once said that John Law can stand anything but he can’t stand 2%, meaning that very low interest rates induced speculation and reckless investing and misallocation of capital. So I think Bagehot’s epigraph is very timely today.

John Law was mainly responsible for the great Mississippi bubble which caused a chaotic economic collapse in France in the early 18th century. How is the story going to end this time?

It will turn out to be very bad for many people. If Swiss insurance and reinsurance executives are reading this right now they might be rolling their eyes and they might be frustrated to hear an American scolding from a distance of 3000 miles about the risk of chasing yield. After all, if you’re in the business of matching long term liabilities with long term assets you have little choice but to wish for a better, more sensible world. But you have to take the world as it is and today’s world is barren of interest income. The fact is, that these are very risk fraught times.

Where do you see the biggest risks?

Sovereign debt is my nomination for the number one overvalued market around the world. You are earning nothing or less than nothing for the privilege of lending your money to a government that has pledged to depreciate the currency that you’re investing in. The central banks of the world are striving to achieve a rate of inflation of 2% or more and you are lending certainly at much less than 2% and in many  cases at less than nominal 0%. The experience of losing money is common in investing. But where is the certitude of loss even before your check clears? That’s the situation with sovereign debt right now.

On a worldwide basis, more than a third of sovereign debt is already yielding less than zero percent.

There is not quite a bestseller, but a very substantial book called «The History of Interest Rates». It was written by Sidney Homer and Richard Sylla. Sidney Homer is no longer with us, but Richard Sylla is alive and well at New York University. So I called him and said: « Richard, I’ve read many pages but not every single page in your book which traces the history of interest rates from 3000 BC to the present. Have you ever come across negative bond yields?» He said no and I thought that would be kind of a major news scoop: For the first time in at least 5000 years we have driven interest rates below the zero marker. I thought that was an exceptional piece of intelligence. But I notice however that nobody seems to have picked up on it.

It’s now already two years ago since the ECB was the first major central bank to introduce negative rates.

There are some other historical settings: In Europe, ??Monte dei Paschi di Siena, this 500 and plus year old bank in Italy, is struggling and as broke as you can be without being legally broke. Monte dei Paschi has survived for half a millennium and now it is on the ropes. Meanwhile, the Bank of England is doing things today that it has never done in its history which is 300 plus years. So I suggest that these are at least interesting times and in many respects unprecedented ones.

So what’s the true meaning of all this?

In finance, mostly nothing is ever new. Human behavior doesn’t change and money is a very old institution and so are our markets. Of course, techniques evolve, but mostly nothing is really new.However, with respect to interest rates and monetary policy we are truly breaking new ground.

Now central bankers are even talking openly about helicopter money. Will they really go for it?

I already hear the telltale of beating rotor blades in the sky. I also hear the tom-toms of fiscal policy being pounded. There seems to be some kind of a growing consensus that monetary policy has done what it can do and that what me must do now – so say the «wise ones» – is to tax and spend and spend and spend. That seems to be the new big idea in policy. In any case, it is not good for bondholders.

Interestingly, nobody seems to be talking about the growing government debt anymore. Also, budget politics are just a side note in the ongoing presidential elections.

The trouble with this election is that somebody has to win it. I have no use for Donald Trump but I have equally no use for Hillary Clinton. The point is that one of those two is going to win. That is the tragedy! So we at Grant’s regret that one of them is going to win.

The financial crisis and the weak economic recovery likely have spurred the rise of Donald Trump. Why isn’t the US economy in better shape after all those monetary programs?

I wonder how it would have been if markets had been allowed to clear and if prices had been allowed to find their own level in real estate in 2008. Central banks have intervened to quell financial panics for at least 200 years. For instance, in 1825 the bank of England lent without stint and was not – as they said – overnice about the kind of collateral. That was a very dramatic intervention. So it’s not as if we have never before seen the lender of last resort at work. But what is new is the medication of markets through this opiate of quantitative easing year after year after year following the financial crisis. I think that this kind of intervention has not only not worked but it has been very harmful. Around the world, the economies are not responding despite radical monetary measures. To some degree, I believe,  they are not recovering because of radical monetary measures.

What’s exactly the problem with the US economy?

There is another side of what we are seeing now: In America certainly the Federal Reserve and bank regulators generally are very heavy handed in their interventions. I’m sure they have every good intention. But with their regulatory charges they are suppressing the recovery in credit that takes place  in a normal economic recovery and in this particular case after a depression or after a liquidation.

Then again, a revisit of the financial crisis would be catastrophic.

The new rules with respect to financial reform have absorbed not only forests worth of paper but also the time and attention of legions of lawyers. If you talk to a banking executive what you hear is that thebanks have been overwhelmed by the need to hire compliance and regulatory people. This is especially bearing on the smaller banks. I think that’s part of the story of the lackluster recovery:Monetary policy has been radically open in the creation of new credit. But it has been radically restrictive with regard to risk taking in the private world.

So what should be done to get the economy back on track?

There are guides in history on how to do this. For more than a hundred years in Britain, in the United States and probably as well in Switzerland, the owners of the equity of a bank themselves were responsible for the solvency of the bank. If the bank became impaired or insolvent they had to stump up more capital to pay off the liability holders, including the depositors. But over the past hundred years collective responsibility in banking has gradually replaced individual responsibility. The government, with the introduction of deposit insurance, new regulations and interventions has superseded the old doctrine of the responsibility of the owners of a property. That’s why I think we need to go away from government intervention and go more towards market oriented solutions such as the old doctrine of responsibility of the bank owners.

At least in the US, the Fed is trying to go back to a more normal monetary policy. Do you think Fed chief Janet Yellen will make the case for another rate hike at the Jackson Hole meeting next week?

Janet Yellen is by no means an impulsive person. According to the « Wall Street Journal», she arrives for a flight at the airport hours early – and that’s plural! So this is a most deliberative and risk averse person. Also, as a labor economist, she’s a most empathetic person. She believes what most interventionist minded economists believe: They have very little faith in the institution of markets and they don’t believe that the price mechanism is anything special. They want to normalize rates and yet they can always find an excuse for not doing so. We have been hearing for years now that the next time, the next quarter, the next fiscal year they will act. So I believe what I’m seeing: None of these days the Federal Funds Rate will go higher than 0.5%. I can’t see that happening.

Wall Street seems to think along the same lines. So far, many investors don’t take the renewed chatter of a rate hike too seriously.

The Fed is now hostage to Wall Street. If the stock market pulls back a few percent the Fed becomes frightened. In a way I suppose, the Fed is justified in that belief because it is responsible to a great degree for the elevation of financial asset values. Real estate cap rates are very low, price-earnings-ratios of stocks  are very high and interest rates are extremely low. One can’t be certain about cause and effect. But it seems to me that the central banks of the world are responsible for a great deal of this levitation in values. So perhaps they feel some responsibility for letting the world down easy in a bear market. It has come to a point where the Fed is virtually a hostage of the financial markets. When they sputter, let alone fall, the Fed frets and steps in.

Obviously, the financial markets like this cautious mindset of the Fed. Earlier this week, US stocks climbed to another record high.

Isn’t that a funny thing? The stock market is at record highs and the bond market is acting as if this were the Great Depression. Meanwhile, the Swiss National Bank is buying a great deal of American equity.

Indeed, according to the latest SEC filings the SNB’s portfolio of US stocks has grown to more than $60 billion.

Yes, they own a lot of everything. Let us consider how they get the money for that: They create Swiss francs from the thin alpine air where the Swiss money grows. Then they buy Euros and translate them into Dollars. So far nobody’s raised a sweat. All this is done with a tab of a computer key. And then the SNB calls its friendly broker – I guess UBS – and buys the ears off of the US stock exchange. All of it with money that didn’t exist. That too, is something a little bit new.

Other central banks, too, have become big buyers in the global securities markets. Basically, it all started with the QE-programs of the Federal Reserve.

It is a truism that central banks do this. They’ve done this of course for generations. But there is something especially vivid about the Swiss National Bank’s purchases of billions of Dollars of American equity. These are actual profit making, substantial corporations in the S&P 500. So the SNB is piling up big positions in them with money that really comes from nothing. That’s a little bit of an existential head scratcher, isn’t?

So what are investors supposed to do in these bizarre financial markets?

I’m very bullish on gold and I’m very bullish on gold mining shares. That’s because I think that the world will lose faith in the PhD standard in monetary management. Gold is by no means the best investment. Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.

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

Euro/USA   1.1298 DOWN .0020 (STILL  REACTING TO BREXIT/REACTING TO BRITISH CUT IN INTEREST RATE TO .25%

USA/JAPAN YEN 100.53  UP .402(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 1.3089 UP .0020 

USA/CAN 1.2917 UP .0050

Early THIS MONDAY morning in Europe, the Euro ROSE by 20 basis points, trading now well above the important 1.08 level FALLING to 1.1287; 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 23.30 POINTS OR 0.75%    / Hang Sang CLOSED UP 60.69 POINTS OR 0.26%     /AUSTRALIA IS LOWER BY .21% / EUROPEAN BOURSES ALL  IN THE RED

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 MONDAY morning CLOSED UP 52.37 POINTS OR 0.32%  

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 60.69 POINTS OR 0.26%  ,Shanghai CLOSED DOWN 23.30  POINTS OR 0.75%    / Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED IN THE GREEN   /INDIA’S SENSEX IN THE RED 

Gold very early morning trading: $1336.40

silver:$18.94

Early MONDAY morning USA 10 year bond yield: 1.581% !!! PAR  in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES SLIGHTLY to 2.280 PAR in basis points from FRIDAY night. 

USA dollar index early MONDAY morning: 94.72 UP 12 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

END

And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.03% UP 3 in basis points from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.06% UP 2 in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:0.935% DOWN 2 IN basis points from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.104  DOWN 3 in basis points from FRIDAY 

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

GERMAN 10 YR BOND YIELD: -0.09% DOWN  6 IN  BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1321 UP .0003 (Euro UP 3 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 100.32 UP .193(Yen DOWN 19 basis points/

Great Britain/USA 1 .3136 UP 0.0068 ( Pound UP 68 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED/NEW PRIME MINISTER T. MAY/GR BRITAIN LOWERS INTEREST RATES/

USA/Canada 1.2946 UP 0.0079 (Canadian dollar DOWN 79 basis points AS OIL FELL(WTI AT $47.06). Canada keeps rate at 0.5% and does not cut!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 3 basis points to trade at 1.1321

The Yen FELL to 100.32 for a LOSS of 19 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 

The POUND was UP 68 basis points, trading at 1.3136 AS PRIME MINISTER THERESA MAY TAKES OFFICE/CARNEY CUTS INTEREST RATE TO ONLY  .25%

The Canadian dollar FELL by 79 basis points to 1.2946, WITH WTI OIL AT:  $47.05

CANADIAN RATES WERE NOT CUT

The USA/Yuan closed at 6.6473

the 10 yr Japanese bond yield closed at -.06% UP 2 IN  points / yield/

Your closing 10 yr USA bond yield:DOWN 4 IN basis points from FRIDAY at 1.542% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.236 DOWN 5 in basis points on the day /

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

Your closing USA dollar index, 94.54  DOWN 6 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 MONDAY

London:  CLOSED DOWN 30.41 OR 0.44%
German Dax :CLOSED DOWN 50.01 OR  0.47%
Paris Cac  CLOSED DOWN 10.58  OR 0.24%
Spain IBEX CLOSED UP 17.40 OR 0.21%
Italian MIB: CLOSED UP 59.08 POINTS OR 0.36%

The Dow was DOWN 23.15 points or 0.12%

NASDAQ DOWN  6.22 points or 0.12%
WTI Oil price; 47.05 at 4:30 pm;

Brent Oil: 49.16

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  64.680 (ROUBLE down  78/100 ROUBLES PER DOLLAR FROM FRIDAY) 

TODAY THE GERMAN YIELD FALLS TO -0.09%  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:47.05

BRENT: 49.16

USA 10 YR BOND YIELD: 1.542% 

USA DOLLAR INDEX: 94.54 DOWN 6 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3196 UP .0002 or 2 basis pts.

German 10 yr bond yield at 5 pm: -0.090%

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

“Orchestrated Chaos” – Stocks Rollercoaster Despite Oil, Dollar, Bond Yield Tumble

“Whatever the disease… The Fed is the cure…”

 

Today’s market action was up there for the “most fucking idiotically algo-driven ever” award…as equity indices and VIX were spanked at 930, 1030, 1130, 1230, 1330, and 1430 before the self-organization idiots figured out their own pattern and backed off… (NO, there was no headline catalysts for these moves)

This has the smell of major gamma in options markets with the flushes in VIX anchoring around 18500.Also note that the plunge in VIX after NYMEX closed had little to no effect on stocks.

As Nanex illustrated oh so well – this was algo-driven orchestrated chaos…

View image on Twitter

Follow

Eric Scott Hunsader @nanexllc

Orchestrating Chaos.
A detailed look at momentum ignition eventshttp://www.nanex.net/aqck2/4045.html 

2:06 PM – 22 Aug 2016

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Which left stocks mixed on the day – Small Caps and Nasdaq gained (another squeezefest) and Trannies were the biggest loser…

 

“Most Shorted” stocks saw 5 squeeze attampts today…

 

Ironically, Fed Veep Fischer’s hawkish tone sparked some USDollar strength in Sunday trading and through Asian trading but early morning as USDJPY neared 101.00, the surge stalled and USD Index fell all day…

 

So stocks did what they did – in some manic-bipolar dance – but bonds, the dollar, and oil did not…

 

CAD was whacked today on weaker oil but cable rallied most of the majors offsetting Fischer’s hawkish tone on Sunday…leaving the USDollar index lower on the day..

 

Treasury yields all fell on the day (with 2Y underperforming)

 

Collapsing 2s30s to its post-Brexit lows…

 

Which financials no longer care about…

 

Commodities were all lower (despite the usd weakness) but gold outpeformed (silver slammed on the open after Fischer) as crude was crushed…

 

Nigeria’s Delta Avengers ceasefire chatter and increased supply from Iraq – along with early USD strength – sent crude lower…

 

Notably the gold/silver ratio keep surging – the last 2 days are the biggest gold outperformance since China’s devaluation in Aug 2015…

 

Charts: Bloomberg

end

 

Markets reaction to Fisher’s hawkish comments at Jackson Hole that a rate hike in 2016 may be in the offering:

(courtesy zerohedge)

VIX Surges As Market Confusion Reigns After Fischer’s J-Hole Comments

Market confusion remains following Fischer’s hawkish tone yesterday at J-Hole. Despite market-implied rate-hike odds have barely budged but the USDollar, stocks, VIX, bonds, and commodities are moving notably.

Rate-hike odds barely budged after Fischer – 16% chance of Sept hike (slight rise) and 32% of Dec (so a 48% cumulative chance of a 2016 cut)…

The Dollar is now falling – having risen after Fischer’s comments…

Bond yields are tumbling (even 2Y) – having risen after Fischer’s comments…

Stocks are fading fast – having risen after Fischer’s comments…

Oil’s drop is being driven by three main factors – Iraq boosting exports 5%, Niger Delta Avengers backing off, and the Fischer-effect on the USD.

And VIX is surging…

Charts: Bloomberg

 

end

 

Looks like our good friend Hillary is in trouble with this:

New emails reveal Hillary Clinton provided special access to foundation donors.

The Clinton Foundation is nothing but a racket and Hilary lied about providing everything work related:

(courtesy zero hedge)

 

From Soccer Stars To Bahrain Princes: New Emails Reveal Hillary Clinton Gave Special Access To Foundation Donors

The farce continues as detailed reckoning of Hillary Clinton’s State Department emails reveal former Hillary Clinton’s top aide Huma Abedin provided influential Clinton Foundation donors special, expedited access to the secretary of state. In many instances, as Judicial Watch exposes, the preferential treatment provided to donors (from a British soccer player to the crown prince of Bahrain) was at the specific request of Clinton Foundation executive Douglas Band.

As JudicialWatch.com details, the new documents included 20 Hillary Clinton email exchanges not previously turned over to the State Department, bringing the known total to date to 191 of new Clinton emails (not part of the 55,000 pages of emails that Clinton turned over to the State Department).  These records further appear to contradict statements by Clinton that, “as far as she knew,” all of her government emails were turned over to the State Department.

The Abedin emails reveal that the longtime Clinton aide apparently served as a conduit between Clinton Foundation donors and Hillary Clinton while Clinton served as secretary of state. In more than a dozen email exchanges, Abedin provided expedited, direct access to Clinton for donors who had contributed from $25,000 to $10 million to the Clinton Foundation. In many instances, Clinton Foundation top executive Doug Band, who worked with the Foundation throughout Hillary Clinton’s tenure at State, coordinated closely with Abedin. In Abedin’s June deposition to Judicial Watch, she conceded that part of her job at the State Department was taking care of “Clinton family matters.”

Included among the Abedin-Band emails is an exchange revealing that when Crown Prince Salman of Bahrain requested a meeting with Secretary of State Clinton, he was forced to go through the Clinton Foundation for an appointment. Abedin advised Band that when she went through “normal channels” at State, Clinton declined to meet. After Band intervened, however, the meeting was set up within forty-eight hours. According to theClinton Foundation website, in 2005, Salman committed to establishing the Crown Prince’s International Scholarship Program (CPISP) for the Clinton Global Initiative. And by 2010, it had contributed $32 million to CGI. The Kingdom of Bahrain reportedly gave between $50,000 and $100,000 to the Clinton Foundation. And Bahrain Petroleum also gave an additional $25,000 to $50,000.

From: Doug Band

To: Huma Abedin

Sent: Tue Jun 23 1:29:42 2009

Subject:

Cp of Bahrain in tomorrow to Friday

Asking to see her

Good friend of ours

From: Huma Abedin

To: Doug Band

Sent: Tue Jun 23 4:12:46 2009

Subject: Re:

He asked to see hrc thurs and fri thru normal channels. I asked and she said she doesn’t want to commit to anything for thurs or fri until she knows how she will feel. Also she says that she may want to go to ny and doesn’t want to be committed to stuff in ny…

From: Huma Abedin [Huma@clintonemail.com]

Sent: Thursday, June 25, 2009 10:35:15 AM

To: Doug Band

Subject:

Offering Bahrain cp 10 tomorrow for meeting woith [sic] hrc

If u see him, let him know

We have reached out thru official channels

Also included among the Abedin-Band emails is an exchange in which Band urged Abedin to get the Clinton State Department to intervene in order to obtain a visa for members of the Wolverhampton (UK) Football Club, one of whose members was apparently having difficulty because of a “criminal charge.” Band was acting at the behest of millionaire Hollywood sports entertainment executive and President of the Wasserman Foundation Casey Wasserman. Wasserman has donated between $5 million and $10 million to the Clinton Foundation through the Wasserman Foundation.

From: Tim Hoy [VP Wasserman Media Group]

Date: Tue. 5 May 2009 10:45:55 – 0700

To: Casey Wasserman

Subject: [Redacted] Wolverhampton FC/visa matter

Casey: Paul Martin’s [popular English footballer] client [Redacted] needs to get an expedited appointment at the US Embassy in London this week and we have hit some road blocks. I am writing to ask for your help.

The Wolverhampton FC is coming to Las Vegas this Thursday for a “celebration break.” [Redacted] so he cannot get a visa to the US without first being “interviewed” in the visa section of the US Embassy in London …

I contacted Senator Boxer’s office in SF for help … They balked at the criminal charge and said they “couldn’t help.”

I’m now trying to get help from Sherrod Brown’s office but that’s not going well either. So do you have any ideas/contacts that could contact the US Embassy in London and ask that they see [Redacted] tomorrow?

From: Casey Wasserman

To: Doug Band; Trista Schroeder [Wasserman Media Group executive]

Sent: Tue May 05 2:23:50 2009 [PT]

Subject: FW [Redacted] Wolverhampton FC/visa matter

Can you help with the below [Hoy email], or maybe Huma??? I am copying trista as I am on the plane in case I lose connection … thx.

From: Doug Band

Sent: Tue May 05 7:08:21 2009 [ET]

To: Casey Wasserman; Trista Schroeder

Subject: Re: [Redacted] Wolverhampton FC/visa matter

Will email her.

From: Doug Band

To: Huma Abedin

Sent: Tue May 5 7:26:49 2009

Subject: Fw: [Redacted] Wolverhampton FC/visa matter

[As per subject line, Band apparently forwarded Abedin material sent to him by Casey.]

From: Huma Abedin [Huma@clintonemail.com]

Sent: Tuesday, May 05, 2009 7:39:38 PM

To: Doug Band

Subject: Re: [Redacted] Wolverhampton FC/visa matter

I doubt we can do anything but maybe we can help with an interview. I’ll ask.

From: Huma Abedin

To: Doug Band

Sent: Tue May 05 5:50:09 2009

Subject: Re: [Redacted] Wolverhampton FC/visa matter

I got this now, makes me nervous to get involved but I’ll ask.

From: Doug Band

To: Huma Abedin

Sent: Tuesday, May 05, 2009 7:43:30 PM

Subject:  Re: [Redacted] Wolverhampton FC/visa matter

Then don’t

The Abedin emails also reveal that Slimfast tycoon S. Daniel Abraham was granted almost immediate access to then-Secretary of State Clinton, with Abedin serving as the facilitator. According to the Clinton Foundation website, Abraham, like the Wasserman Foundation, has given between $5 million and $10 million to the Clinton Foundation. The emails indicate that Abraham was granted almost immediate access to Clinton upon request:

From: Huma Abedin

To: H

Sent: Mon May 04 4:40:34 2009

Subject: Danny

Danny abraham called this morning. He is in dc today and tomorrow and asked for 15 min with you. Do u want me to try and fit him in tomorrow?

From: H

To Huma Abedin

Sent: Mon May 04 5:14:00 2009

Subject: Re: Danny

Will the plane wait if I can’t get there before 7-8?

From: Huma Abedin

Sent: Monday, May 04, 2009 5:15:30 PM

Subject: Re: Danny

Yes of course

Additional Abedin emails in which the top Clinton aide intervenes with the State Department on behalf of Clinton Foundation donors include the following:

• On Friday, June 26, 2009, Clinton confidant Kevin O’Keefe wrote to Clinton saying that “Kevin Conlon is trying to set up a meeting with you and a major client.” Clinton wrote to Abedin, “Can you help deliver these for Kevin?” Abedin responded, “I’ll look into it asap” Kevin O’Keefe donated between $10,000 and $25,000 to the Clinton Foundation. Kevin Conlon is a Clinton presidential campaign “Hillblazer” who has raised more than $100,000 for the candidate.

• On Tuesday, June 16, 2009, Ben Ringel wrote to Abedin, “I’m on shuttle w Avigdor Liberman. I called u back yesterday. I want to stop by to see hrc tonite for 10 mins.” Ringel donated between $10,000 and $25,000 to the Clinton Foundation.

• On Monday, July 6, 2009, Maureen White wrote to Abedin, “I am going to be in DC on Thursday. Would she have any time to spare?” Abedin responded, “Yes I’ll make it work.” White donated $75,000 to the Clinton Foundation.

• In June 2009, prominent St. Louis political power broker Joyce Aboussie exchanged a series of insistent emails with Abedin concerning Aboussie’s efforts to set up a meeting between Clinton and Peabody Energy VP Cartan Sumner. Aboussie wrote, “Huma, I need your help now to intervene please. We need this meeting with Secretary Clinton, who has been there now for nearly six months. This is, by the way, my first request. I really would appreciate your help on this. It should go without saying that the Peabody folks came to Dick [Gephardt] and I because of our relationship with the Clinton’s.” After further notes from Aboussie, Abedin responded, “We are working on it and I hope we can make something work… we have to work through the beauracracy [sic] here.” Aboussie donated between $100,000 and $250,000 to the Clinton Foundation.

• On Saturday, May 16, 2009, mobile communications executive and political activist Jill Iscol wrote to Clinton,“Please advise to whom I should forward Jacqueline Novogratz’s request [for a meeting with the secretary of state]. I know you know her, but honestly, she is so far ahead of the curve and brilliant I believe she could be enormously helpful to your work.” Clinton subsequently sent an email to Abedin saying, “Pls print.” Jill and husband Ken Iscol donated between $500,000 and $1 million to the Clinton Foundation. Clinton subsequently appointed Novogratz to the State Department’s Foreign Affairs Policy Board.

The newly obtained Abedin emails also contain a memorandum sent to Cheryl Mills from State Department White House liaison Laura Pena revealing that Rajiv Fernando was proposed for his controversial appointment to the sensitive International Security Advisory Board as early as June 2009. Fernando was not actually appointed until 2011, and his appointment raised a firestorm because, according to an ABC News report,“he had no obvious experience in the field.” Fernando donated $1 million to the Clinton Foundation.

The Abedin emails reveal that even U2’s Bono got into the act when former Bill Clinton aide Ben Schwerin, who helped set up the Clinton Foundation, urged Abedin to help the aging rock star broadcast from the international space station. In a May 27, 2009, email with the subject line “Bono/NASA,” Schwerin wrote, “Bono wants to do linkup with the international space station on every show during the tour this year.… Any ideas? Thks.” Bono has been a donor to the Clinton Global Initiative. And in 2011, he gathered top entertainers for “A Decade of Difference: A Concert Celebrating 10 Years of the William J. Clinton Foundation.” According to USA Today, “Some tickets were sold to the public for $50 to $550, and premium seats went for $1,000 to $5,000 on the Foundation website.”

“These new emails confirm that Hillary Clinton abused her office by selling favors to Clinton Foundation donors,” said Judicial Watch President Tom Fitton. “There needs to be a serious, independent investigation to determine whether Clinton and others broke the law.”

This is the tenth set of records produced for Judicial Watch by the State Department from the non-state.gov email accounts of Huma Abedin.  The documents were produced under a court order in a May 5, 2015, Freedom of Information (FOIA) lawsuit against the State Department (Judicial Watch, Inc. v. U.S. Department of State (No. 1:15-cv-00684)) requiring the agency to produce “all emails of official State Department business received or sent by former Deputy Chief of Staff Huma Abedin from January 1, 2009 through February 1, 2013, using a ‘non-state’.gov email address.”

In June, Judicial Watch uncovered two batches (here and here) of new Clinton email records through court-ordered discovery.  Twice in May, Judicial Watch uncovered new Clinton emails, including emails that show Clinton knew about the security risk of her BlackBerry (see here and here).

Recently, Judicial Watch released other State Department emails (one batch of 103 pages, the second of 138 pages), with newly discovered Clinton emails also going back as far as January 2009.

In March, Judicial Watch released Clinton State Department emails dating from February 2009 that also call into question her statements about her emails. Those emails contained more evidence of the battle between security officials in the State Department, National Security Agency, Clinton and her staff over attempts to obtain secure BlackBerrys.

On August 9, Judicial Watch produced a 2009 email in which Band directed Abedin and Mills to put Lebanese-Nigerian billionaire and Clinton Foundation donor Gilbert Chagoury in touch with the State Department’s “substance person” on Lebanon. Band noted that Chagoury is “key guy there [Lebanon] and to us.” Chagoury has donated between $1 million to $5 million to the Foundation, according to foundation documents. He also pledged $1 billion to the Clinton Global Initiative.

Hillary Clinton has repeatedly stated that she believes that the 55,000 pages of documents she turned over to the State Department in December 2014 included all of her work-related emails.  In response to a court order in other Judicial Watch litigation, she declared under penalty of perjury that she had “directed that all my emails on clintonemail.com in my custody that were or are potentially federal records be provided to the Department of State, and on information and belief, this has been done.” This new email find is also at odds with her official campaign statement suggesting all “work or potentially work-related emails” were provided to the State Department.

 

END

 

And late this afternoon Hillary’s troubles continues as the FBI finds 15,000 more business related emails:

(courtesy zero hedge)

 

FBI Uncovers Over 15,000 More Emails In Clinton Probe

Updating our earlier note, it appears The State Department’s stalling has been disallowed… (as Bloomberg reports)

A judge ordered the State Department to expedite its review of almost 15,000 previously undisclosed documents recovered by the FBI from Hillary Clinton’s private e-mail servers.

 

U.S. District James Boasberg on Monday ordered the State Department to process those recovered records by Sept. 22 and report back to him that day. He didn’t set a schedule for public release. The department raised the possibility of a phased release starting Oct. 14, which left open how many would be disclosed before the Nov. 8 presidential election.

As we detailed earlier, in yet another incident pointing to Hillary’s ‘above the law’ persistent lies, WaPo reports The FBI’s year-long investigation of Hillary Clinton’s private email server uncovered tens of thousands more documents from her time as secretary of state that were not previously disclosed by her attorneys. Worse still, as Judicial Watch details, “it looks like the State Department is trying to slow roll the release of the records.”

Having suffered blowback from throwing Colin Powell under the bus over the weekend, The Clinton campaign is likely back in panic mode as The Washington Post reports the number of emails to be released is nearly 50 percent more than the 30,000-plus that Clinton’s lawyers deemed work-related and returned to the department in December 2014…

The State Department is expected to discuss when and how it will release the emails Monday morning in federal court.

 

Monday’s hearing comes seven weeks after the Justice Department on July 7 closed a criminal investigation without charges into the handling of classified material in Clinton’s email set-up, which FBI Director James B. Comey Jr. called “extremely careless.”

 

The FBI on Aug. 5 completed transferring all of what Comey said were several thousand previously undisclosed work-related Clinton emails that the FBI found in its investigation for the State Department to review and make public. Government lawyers until now have given no details about how many emails the FBI found or when the full set would be released. It’s unclear how many of the 15,000 or so documents might be attachments, duplicates or exempt from release for various legal reasons.

 

Government lawyers disclosed last week that the FBI turned over six computer discs of information: one including e-mails and attachments that were sent directly to or from Clinton, or to or from her at some point in an e-mail chain, and not previously turned over by her lawyers; a second with classified documents; another with emails returned by Clinton; and three others containing materials from other individuals retrieved by the FBI.

Judicial Watch president Tom Fitton tweeted Monday morning that…

Follow

Tom Fitton ✔@TomFitton

FBI found almost 15,000 new Clinton documents. When will State release them? Court hearing today.

8:22 AM – 22 Aug 2016

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• 273273 likes

Adding in an interview that “it looks like the State Department is trying to slow roll the release of the records. They’ve had them for at least a month, and we still don’t know when we’re going to get them.”

The roughly 15,000 documents at issue now come from the first disc, Fitton said.

Lawyers for the State Department and Judicial Watch, the legal group, said in an Aug. 12 court filingthat they intended to negotiate a plan for the release, part of a civil public records lawsuit before U.S. District Judge James E. Boasberg of Washington.

The pre-emptive excuse already being pitched by FBI Director Comey is just as disgusting as his previous statement that  investigators found no evidence that the emails it found “were intentionally deleted in an effort to conceal them.”

Clinton’s lawyers also may have deleted some of the emails as “personal,” Comey said, noting their review relied on header information and search terms, not a line-by-line reading as the FBI conducted.

We are sure this is “probably nothing” – just another factual falsehood from the Clintons and their establishment cronies.

Of course, as Bill Clinton has stated, this will all change…

If [Hillary] is elected, we will immediately implement the following changes:

 

The Foundation will accept contributions only from U.S. citizens, permanent residents, and U.S.-based independent foundations, whose names we will continue to make public on a quarterly basis.

 

And we will change the official name from the Bill, Hillary & Chelsea Clinton Foundation to the Clinton Foundation.

 

While I will continue to support the work of the Foundation, I will step down from the Board and will no longer raise funds for it.

But – we presume – if she is not elected then the foreign bribes will continue?

 

end

Let us close with this must see video and discussion on the fraudulent comex courtesy of Craig Hemke and Greg Hunter

 

Fed Goons Will Not Raise Rates Until 2017-Craig HemkeBy Greg Hunter On August 21, 2016

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Financial writer and precious metals expert Craig Hemke says forget about new threats that the Federal Reserve is raising interest rates in September. Hemke explains, “They are trying to move things by talking, which is their primary policy. That’s why so many of these Fed goons, not Fed Governors, as we like to say, that’s why they seem to have conflicting messages all the time. They are always trying to get the markets to do what they want them to do. Rational human beings are telling you that they are not going to raise rates in September. Not only are they going to do it right before an election, that never happens, if you look at FOMC minutes, the expectations actually went down. . . . People see through the nonsense, and actually you’ve got to go all the way out to March of next year, seven months from now, before you at least have a 50/50 likelihood of a an interest rate hike.”

On gold, Hemke contends, “What people have to understand here is what you think of as a market, two rational people exchanging goods at a certain price that works for both of them, is not what happens here. The price is discovered for the paper derivative itself, and it is determined by electronic high-frequency trading. All this is machines taking ques from other things that seem totally unrelated. So, it sounds like these are markets that are broken. I think that is a safe assumption to make. . . . The speculators trading the paper derivative is what is allowed to set price, and that is absolutely breaking everything. For my specific purposes, it is going to break the derivative paper pricing scheme, as well. We can’t wait for that to come because the price is not going to be discovered to be $1,360 per ounce at that point. . . . I know how this is going to end. Tolstoy in ‘War and Peace’ said ‘time and patience are the greatest warriors,’ and that’s exactly right. I have time and patience on my side because I know how this ends.”

Hemke goes on to say, “One day, this unallocated, super-hypothecated system, where one ounce of gold is pledged to 100 different owners, that is going to stop when a couple of those owners show up at once wanting their ounce, and they are told they can’t have it. . . . They all tell you we’ve got your gold and as long as only one person shows up at a time wanting to make a withdrawal then everything is hunky-dory. But when everybody shows up at the Bailey Savings and Loan on George Bailey’s wedding day wanting their gold all at once, the thing just crumbles. It’s a confidence game. Negative interest rates are the greatest fundamental we have ever seen. This is physical demand that extracts gold from the banker’s system that will eventually lead to shortages, and lead to lack of confidence, lead to delivery failure, and finally, the paper derivative pricing scheme will fail.”

 

Join Greg Hunter as he goes One-on-One with Craig Hemke of TFMetalsReport.com.

(There is much more in the video interview.)

After the Interview:

(There is much more in the video interview.)

http://usawatchdog.com/fed-goons-will-not-raise-rates- until-2017-craig-hemke/#more-17743

-END-

well that is all for today

I will see you tomorrow night

harvey