August 24/Huge raid on gold and silver today/gold/silver equity shares are also walloped/Huge earthquake in central Italy/Turkish forces invade Syria with the excuse of ISIS but in reality they will attack the Kurds/

Gold:1324.40 down $16.20

Silver 18.55  down 36 cents

In the access market 5:15 pm

Gold: 1325.00.40

Silver: 18.58


For the August gold contract month,  we had a huge sized 499 notices served upon for 49,900 ounces. The total number of notices filed so far for delivery:  13,886 for 1,388,600 oz or  tonnes or 43.191 tonnes.  The total amount of gold standing for August is 43.788 tonnes.

In silver we had 10 notices served upon for 50000 oz. The total number of notices filed so far this month:  490 for 2,400,000 oz.

I wrote the following yesterday:

“We now enter in earnest the options expiry  for gold and silver.  The comex options expiry is: Friday, August 26.

Options expiry for the OTC /London’s LBMA contracts expire at noon August 31.

Today we witnessed gold and silver rise yet gold/silver equity shares falter. Generally this is a good sign that the crooks are orchestrating another raid in the next 24 hours. The silver situation is no doubt bothering them immensely.”


Our friendly bankers did not disappoint us today as they raided gold and silver pretty bad and also caused a huge waterfall in gold/silver equity shares.


The crime scene was simple:  It was down in basically a few minutes:

from Dave Kranzler…


“You need look no further than today’s gold fiasco to see what Rick Santelli is referring to. Clearly today was preordained to be prime time Crimex time and the cartel didn’t disappoint. Right out of the Crimex gate a whopping 10,426 Dec. contracts were sold in a millisecond. Those 32 tons of fictitious gold dropped the price $10. Like clockwork another 4,758 contracts (14.87 tons) were sold at 9:04 AM, and a 3rd hit occurred at 10:11 AM, with an additional 4,192 contracts sold. In just those 3 minutes exactly 60 tons of paper gold were sold- another “curiosity” no MSM reporter is interested in exploring.”

Let us have a look at the data for today



In silver, the total open interest ROSE BY 1219 contracts UP to 206,264.   THE OPEN INTEREST IN THE FRONT MONTH OF SILVER ROSE CONSIDERABLY  DESPITE THE FACT THAT THE SILVER PRICE WAS UP A TINY   7 CENTS IN YESTERDAY’S TRADING .In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.031 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia &ex China).

In silver we had 10 notices served upon for 50,000 oz

In gold, the total comex gold ROSE 128 contracts as the price of gold ADVANCED BY $2.90 yesterday . The total gold OI stands at 572,973 contracts.


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


we had no changse today at the GLD/

Total gold inventory rest tonight at: 958.37 tonnes of gold


we had no changes in the SLV,  / THE SLV Inventory rests at: 358.793 million oz


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


1. Today, we had the open interest in silver ROSE by 1219 contracts UP to 206,264 despite the fact that the price of silver ROSE BY ONLY 7 cents with YESTERDAY’S trading.The gold open interest ROSE 128 contracts UP to 572,973 as the price of gold ADVANCED  $2.90 WITH YESTERDAY’S TRADING.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge


i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 3.82 POINTS OR 0.12%/ /Hang Sang closed DOWN 178.15 points or 0.77%. The Nikkei closed UP 99.94 POINTS OR 0.61% Australia’s all ordinaires  CLOSED UP 0.14% Chinese yuan (ONSHORE) closed UP at 6.6538/Oil FELL to 47.16 dollars per barrel for WTI and 49.27 for Brent. Stocks in Europe: in the GREEN EXCEPT LONDON . Offshore yuan trades  6.67134 yuan to the dollar vs 6.6538 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY AS  MORE USA DOLLARS   LEAVE CHINA’S SHORES  



none today


none today


Central Italy was rocked by a powerful 6.2 magnitude earthquake with after shocks. The tremors were felt in Rome.  The epi-center of Amitrice has 1/2 of its town totally destroyed. This was an event that Italy did not need as its economy is suffering terribly:

( zero hedge)


i)This morning, Turkish tanks enter Northern Syria in an attempt to clear out ISIS around the town of Jarabulus.  The goal is not ISIS in Syria but the Kurds.  Good reason today for our banker friends to raid gold and silver

(zero hedge)

ii)Syria condemns the Turkish invasion as Turkish forces strike Kurdish territory inside Syria and not ISIS.  Syria is basically one complete quagmire.

( zero hedge)


none today


i)Iran rumours have now died.  Angola is supplying more oil to China than Saudi Arabia.Huge inventory at API

( zero hedge)

ii)Now it is the DOE to complete the rout on oil:

( zerohedge)


So much for democracy:  Venezuela will “purge” all state workers who sign for a Maduro recall petition;

( zero hedge)


i)Earnings fell badly with Glencore as this derivative giant tries to pare its debt. The higher zinc prices now will help them in the short run.  The big risk with this company is of course the huge derivative bets placed by them


ii)Your criminal act in broad daylight:  10,000 contracts of paper gold shorted by our banker crooks:

( zero hedge)

iii)I would like everyone to read the following and understand that technical analysis in the manipulated gold/silver market (metals and stock) is totally useless!!

( Robert Appel/GATA)

iv)This is what happens when you tax gold importing of 10%: huge smuggling of gold and this has shut out refiners as they cannot get enough ore from legal operations

( Reuters/GATA)


i)As I have stated in the past, the Clinton Foundation is a corrupt enterprise and this will no doubt be a key to the election.  The question is of course, does the USA public care?

( zero hedge)

ii)Fun and games in Illinois as the pension system is completely unfunded by almost 60%.They face crippling tax hikes.  No wonder many are leaving the state

( zero hedge)

iii)A huge plunge in existing home sales due to affordability.  This is the reason why furniture sales are way down:

(courtesy zero hedge)


iv)This new block technology will be great for the world as countries  by-pass the USA / USA dollar. This would be the ultimate death knell of the USA dollar.  Finally the USA will have to pay for goods.

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 572,973 for a GAIN of 128 contracts as the price of gold ROSE by $2.90 with yesterday’s trading. We are now in the active month of August.  I wrote the following at the beginning of the month: ” As I stated this month:”Somebody big is continually standing for the gold metal and continues to do so in August in the same manner as we have witnessed in May, June and July whereby the front delivery month increases in I standing for metal or a slight contraction.  We will no doubt see increases in amount standing in August and probably we will surpass the amount standing on first day notice. “

Tonight we saw a huge increase in the amount of gold ounces standing as somebody was in great need of gold.

The big active contract month of August saw it’s OI ROSE by 64 contracts UP to 691.  We had 261 notices filed upon yesterday so we  gained 325 gold CONTRACTS  or an additional 32,500 ounces that will  stand for delivery in August.  The next contract month of Sept saw it’s OI fall by 161 contracts down to 4057.  The September contract still remains extremely elevated and we may have another of those high deliveries rare for a non active month. The next active delivery month is October and here the OI FELL by 922 contracts DOWN to 46,838.  The estimated volume today (which is just comex ales during regular business hours of 8:20 until 1:30 pm est) was GOOD at 256,123, however that volume swelled due to the massive shorts put on by the criminal banks.  The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was POOR at 146,612 contracts. The comex is not in backwardation.

Today we had  499 notices filed for  49,900 oz of gold.

And now for the wild silver comex results.  Total silver OI ROSE by 1,219 contracts from 205,045 UP to 206,264 despite the TINY rise in  price of silver to the tune of 7 cents yesterday.  We are moving away from the all time record high for silver open interest set on Wednesday August 3:  (224,540). The non active month of August saw it’s OI rise by 1 contract up to 16.  We had 9 notices served upon yesterday, so we gained 10 silver contract or an additional 50,000 will stand for silver in this non active delivery month of August.  The next active month is September and here the OI fell by only 13,752 contracts down to 54,622 .We have 5 days left before first day notice.  The volume on the comex today (just comex) came in at 96,603 which is  HUGE but many rollovers.  The confirmed volume yesterday (comex and globex) was also huge  at 94,314( with many rollovers). Silver is not in backwardation.  London is in backwardation for several months.
we had 10 notices filed for 50,000 oz
INITIAL standings for AUGUST
 August 24.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
20,993.95 oz
i) Brinks 52 kilobars
ii) manfra 1 kilobar
iii) Scotia: 600 kilobars
total:  653 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
261 notices 
26,100 oz
No of oz to be served (notices)
192 contracts
(19,200 oz)
Total monthly oz gold served (contracts) so far this month
13,886 contracts (1,388,600 oz)
(43.191 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    559,.810.3 OZ
Today:  tiny activity at the gold comex AND 3 KILOBAR ENTRIES//
Today we had 0 dealer DEPOSITS
total dealer deposit: NIL    0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 0 customer deposit:
Total customer deposits: nil OZ
Today we had 3 CUSTOMER withdrawals AND IT WAS ALL KILOBARS
i) out of Brinks:  1671.800 oz     52 kilobars
 ii) out of Manfra: 32.15 oz          1  kilobar
iii) Out of Scotia; 19,290.000 oz    600 kilobars.
Total customer withdrawals  20,993.95 OZ  653 kilobars
Today we had 4 adjustment:
 i) Out of BRINKS:  16,546.820oz was adjusted out of the customer and this landed into the dealer account of BRINKS:
ii)Out of Delaware:  100.248 oz was transferred out of the customer account and this landed into the dealer account of Delaware
If anybody is holding any gold at the comex, you must be out of your mind!!!
since comex gold storage is unallocated , rest assured any gold stored at the comex will be compromised!
I also urge all of you do not place any option trades at the comex as these gangsters will gun you down.
If you are taking delivery of gold/silver please remove it from comex banks and place it in private vaults 
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 499 contracts of which 2 notice was stopped (received) by JPMorgan dealer and 431 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the AUGUST  contract month, we take the total number of notices filed so far for the month (13,886) x 100 oz  or 1,388,600 oz , to which we  add the difference between the open interest for the front month of AUGUST  (691 CONTRACTS) minus the number of notices served upon today (499) x 100 oz   x 100 oz per contract equals 1,407,800 oz, the number of ounces standing in this active month. 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (13,886) x 100 oz  or ounces + {OI for the front month (671) minus the number of  notices served upon today (499) x 100 oz which equals 1,407,800 oz standing in this non  active delivery month of AUGUST  (43.788 tonnes).
We gained 32,500  gold ounces that will stand for delivery in this  active delivery month of August.
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
We now have partial evidence of gold settling for last months deliveries We now have  +  6.889 TONNES FOR MAY + 49.09 TONNES FOR JUNE +  21.452 TONNES FOR JULY + 12.3917 + 43.788 tonnes Aug +  tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16.3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes –MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018; june 29 .036 tonnes; JUNE 30 2.49 /july 1 1778 tonnes, JULY 28 .089 TONNES / JULY 29 .128 TONNES/ aUG 10// 0.219 TONNES/August 11: .3619 TONNES/ AUG 12/.05878/ aug 17. 6418, aug 23: .1756 tonnes/THEREFORE 92.673 tonnes still standing against 73.047 tonnes available.
 Total dealer inventor 2,365,124.904 oz or 73.562 tonnes
Total gold inventory (dealer and customer) =10,999,518.878 or 342.13 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 342.13 tonnes for a  gain of 41  tonnes over that period. 


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

And now for silver
 august 24.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
30,043.820 oz
Deposits to the Dealer Inventory
Deposits to the Customer Inventory
1,048,392.32 OZ
No of oz served today (contracts)
(50,000 OZ)
No of oz to be served (notices)
6 contracts
30,000 oz)
Total monthly oz silver served (contracts) 490 contracts (2,450,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  10,150,179.0 oz
today we had 0 deposit into the dealer account:
 Total dealer deposits;  NIL oz
we had 0 dealer withdrawal:
total dealer withdrawals:  NIL oz
we had 1 customer withdrawal:
 i) Out of Scotia;  30,043.820 oz
Total customer withdrawals: 30,043.820 oz
We had 2 customer deposit:
i) Into HSBC;  577,431.400 oz
ii) Into Scotia; 970,965.92 oz
total customer deposits:  1,048,392.32   oz
 we had 0 adjustments
The total number of notices filed today for the AUGUST contract month is represented by 10 contracts for 50,000 oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (490) x 5,000 oz  = 2,450,000 oz to which we add the difference between the open interest for the front month of AUGUST (16) and the number of notices served upon today (10) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the AUGUST contract month:  490(notices served so far)x 5000 oz +(16 OI for front month of AUGUST ) -number of notices served upon today (10)x 5000 oz  equals  2,480,000 oz  of silver standing for the AUGUST contract month.
we gained  50,000 additional silver ounces that will not stand for silver metal in this non active delivery month of August.
Total dealer silver:  27.453 million (close to record low inventory  
Total number of dealer and customer silver:   158.529 million oz (close to a record low)
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.

And now the Gold inventory at the GLD
August 24/NO CHANGE  in gold inventory at the GLD/inventory restsw at 958.37 tonnes
August 23/no change in gold inventory at the GLD/Inventory rests at 958.37 tonnes
August 22/ a deposit of 2.38 tonnes of gold into the GLD/Inventory rests at 958.37 tonnes
August 19/no changes at the GLD/inventory resets at 955.99 tonnes
August 18/a withdrawla of 6.24 tonnes of gold from the gLD/Inventory rests at 955.99 tonness
August 17/no change in gold inventory at the GLD/inventory rests at 962.23 tonnes
August 16/ a deposit of 1.78 tonnes of “paper gold” into the GLD/Inventory rests at 962.23 tonnes
August 15/what a farce!! a huge “paper gold’ withdrawal of 12.17 tonnes/inventory rests at 960.45 tonnes
August 12/no change in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 11/no changes in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 10/no changes in GLD/Inventory rests at 972.62 tonnes
August 9/we had a withdrawal of 1.18 tonnes of gold from the GLD inventory/inventory rests at 972.62 tonnes
August 8/a huge changes in the GLD/Inventory, a withdrawal of 6.54 tonnes of paper gold/ rests at 973.80 tonnes of gold/
August 5/ a huge deposit of 10.69 tonnes of gold (with gold down $22.40??)/GLD inventory rests at 980.34 tonnes
August 4/no change in inventory at the GLD/Inventory rests at 969.65 tonnes
August 3/a big deposit of 5.62 tonnes of paper gold/Inventory rests at 969.65 tonnes
August 2/no change in gold inventory at the GLD/Inventory rests at 964.03 tonnes
August 1/we had a huge paper deposit of 5.94 tonnes of gold into the GLD/Inventory rests at 964.03 tonnes
August 24/ Inventory rests tonight at 958.37 tonnes


Now the SLV Inventory
August 24/no change in silver inventory at the SLV/Inventory rests at 358.793 million oz
August 23/no change in silver inventory at the SLV/Inventory rests at 358.793 million oz.
August 22/a huge addition of 3.324 million oz into the SLV/Inventory rests at 358.793 million oz
August 19/no change in silver SLV/Inventory rests at 355.469 million oz/
August 18/ a massive paper deposit of 2.185 million oz into the SLV/Inventory rests at 355.469 million oz
August 17/ we had a huge deposit of 1.519 million oz into the SLV/Inventory rests at 353.284 million oz/
August 16/no change in inventory/rests tonight at 351.765 million oz
August 15./amazing, we have a huge withdrawal in gold and yet nothing moves out of silver: no change in silver inventory at the SLV/Inventory rests at 351.765 million oz.
August 12/no change in silver inventory at the SLV/Inventory rests at 351.765 million oz
August 11/no change in silver inventory at the SLV/Inventory rests at 351.765 oz
August 10/no changes in silver inventory at the SLV/Inventory rests at 351.765 oz
August 9/a deposit of 950,000 oz into the SLV/Inventory rests at 351.765 oz
August 8/no change in silver inventory at the SLV/Inventory rests at 350.815 million oz.
August 4/no change in silver inventory at the SLV/inventory rests at 350.815 million oz
August 3/no change in silver inventory/inventory rests at 350.815 million oz
August 2/ we had a tiny withdrawal of 40,000 oz of silver/Inventory rests at 350.815 million oz
August 1/we had a huge paper deposit of 1.235 million oz into the SLV/Inventory rests at 350.955 million oz
August 24.2016: Inventory 358.793 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 5.9 percent to NAV usa funds and Negative 5.9% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 60.2%
Percentage of fund in silver:38.6%
cash .+1.2%( August 24/2016).
2. Sprott silver fund (PSLV): Premium falls to +0.13%!!!! NAV (august 24/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.36% to NAV  ( august 24/2016)
Note: Sprott silver trust back  into POSITIVE territory at +0.13% /Sprott physical gold trust is back into positive territory at 0.36%/Central fund of Canada’s is still in jail.


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

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

Jim Grant Is “Very Bullish On Gold”

Jim Grant is “very bullish on gold” due to deepening concerns of a crash in sovereign debt. The monetary historian and expert, financial journalist and editor of the investment newsletter ‘Grant’s Interest Rate Observer’ is always worth reading and listening to.

Grant gave voice to his deepening concerns in an excellent interview with  Swiss business newspaper ‘Finanz und Wirtschaft’ (Finance and Economy):

“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.”

As to what investors should do to protect themselves from this risk, Grant is very clear:

“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.”

GoldCore: 7 Key Storage Must HavesDownload Guide

Gold and Silver Bullion – News and Commentary

Gold Prices Edge Higher on Weaker Dollar (WSJ)

Gold futures finish higher in volatile trading (MarketWatch)

Gold attempts modest gains as traders look ahead to Yellen speech (

North Korea fires submarine-launched ballistic missile towards Japan (Reuters)

Earthquake Shakes Central Italy, at Least 12 Reported Killed (Bloomberg)

Inverse relationship between gold, stocks has never been this extreme (MarketWatch)

Monetary policy has nationalized Japanese stock market, CLSA analyst says (CNBC)

Tiny bead from Bulgaria may be world’s oldest gold artifact (Reuters)

India’s gold smugglers shut out refiners, banks  (Reuters)

Is the EU Volcano About to Erupt? (MishTalk)


Gold Prices (LBMA AM)

24Aug: USD 1,337.30, GBP 1,010.73 & EUR 1,185.38 per ounce
23Aug: USD 1,338.50, GBP 1,015.25 & EUR 1,181.09 per ounce
22Aug: USD 1,334.30, GBP 1,018.20 & EUR 1,181.26 per ounce
19Aug: USD 1,346.85, GBP 1,026.30 & EUR 1,189.67 per ounce
18Aug: USD 1,347.10, GBP 1,023.93 & EUR 1,190.84 per ounce
17Aug: USD 1,342.75, GBP 1,031.23 & EUR 1,191.96 per ounce
16Aug: USD 1,349.10, GBP 1,039.89 & EUR 1,197.33 per ounce

Silver Prices (LBMA)

24Aug: USD 18.84, GBP 14.23 & EUR 16.70 per ounce
23Aug: USD 18.98, GBP 14.40 & EUR 16.75 per ounce
22Aug: USD 18.91, GBP 14.45 & EUR 16.74 per ounce
19Aug: USD 19.42, GBP 14.80 & EUR 17.14 per ounce
18Aug: USD 19.78, GBP 15.04 & EUR 17.47 per ounce
17Aug: USD 19.57, GBP 15.04 & EUR 17.37 per ounce
16Aug: USD 20.04, GBP 15.43 & EUR 17.77 per ounce

Recent Market Updates

– Germans Warned To ‘Stockpile’ Cash In Case Of ‘War’
– Ireland’s Biggest Bank Charging Depositors – Negative Interest Rate Madness
– Rothchilds Buying Gold On “Greatest Experiment” With Money In “History of the World”
– Gold – “Mother of All Bull Markets Has Only Just Begun” – Grandich
– 45th Anniversary Of Nixon Ending The Gold Standard
– Gold In UK Pounds Collapses 38% Versus Gold and 56% Versus Silver Year To Date
– Will Ireland Be First Country In World To See Bail-in Regime?
– Money “Madness” Negative Interest Rates Sees Gold Buying Surge
– Gold Investment Demand Reaches Record In First Half 2016 On “Perfect Storm”
– Peak Gold – Did Gold Production Peak in 2015?
– Financial Times: “Victory For Gold Bulls Is Only Just Beginning”
– Irish Banks Most Vulnerable In Stress Tests – Banking Contagion In EU Cometh
– Gold In Sterling 2.2% Higher After Bank Of England Cuts To 0.25% and Expands QE

Mark O’Byrne
Executive Director



Earnings fell badly with Glencore as this derivative giant tries to pare its debt. The higher zinc prices now will help them in the short run.  The big risk with this company is of course the huge derivative bets placed by them


Glencore Widens Debt Plan to Weather Rout After Worst Profit

  • Trader and miner wants to cut debt to as low as $16.5 billion
  • Stock price has doubled this year after 70% slump last year

Glencore Plc, the miner and commodities trader headed by billionaire Ivan Glasenberg, sharpened its plan to cut debt after reporting its worst half-yearly profit since listing in London five years ago.

The company widened its debt-reduction target by $500 million and plans to trim net borrowings to as low as $16.5 billion by year-end, it said in a statement Wednesday. The shares dropped as much as 5.2 percent as lower raw-material prices cut first-half profit by 66 percent. Still, a recent rebound in coal and zinc will help earnings going forward and underpins a likely return to restarting dividends.

Last year’s collapse in commodities and Glencore shares forced the firm to roll out a rescue strategy that included scrapping its dividend, selling $2.5 billion of stock, disposing of assets and slashing spending. The shares have doubled this year as Glasenberg checked off targets on the plan designed to almost halve borrowings. The company made further progress today by announcing a $670 million deal to sell future output from an Australian gold and copper mine.

“The mining sector is still in divestment mode, it’s still trying to get balance sheets in order,” Colin Hamilton, an analyst with Macquarie Group Ltd. in London, said in an interview Wednesday with Bloomberg Television. “They are doing much more work to repair their balance sheet, I would say, than many of their peers.”

Dividend Return?

It’s “pretty likely” Glencore will pay a full-year dividend and the board will decide on a payout ahead of results in March, Chief Financial Officer Steve Kalmin said on a conference call. Glencore, based in Baar, Switzerland, last paid an interim dividend of 6 cents a share last August.

A five-year rout in commodity prices has pummeled mining profits. Glencore’s net income excluding some items in the six months to June 30 dropped to $300 million from a year earlier. That compares with a $318 million average estimate of 16 analysts compiled by Vuma Consensus and posted to the mining company’s website.

Glencore fell 5.1 percent to 180.10 pence by 9:44 a.m. in London. The company, which has a market value of about $34.5 billion, is still this year’s third-best performer in the U.K.’s benchmark stock index.

The miner reported adjusted earnings before interest, tax, depreciation and amortization of $4 billion, down 13 percent from a year earlier. Capital spending slid 51 percent to $1.5 billion. Net debt declined to $23.6 billion.

The company’s plan to trim borrowings has been helped by completing the saleof almost 50 percent of its agriculture business for just over $3.1 billion in the first half. Two copper mines, an Australian coal rail unit and a Kazakhstan gold mine have also been put up for sale.

Glencore agreed a A$880 million deal to sell future output from its Ernest Henry mine in Australia to Evolution Mining Ltd., the country’s second-largest gold producer, it said in a separate statement today. Evolution will receive the equivalent of 100 percent of future gold output, 30 percent of copper and silver production and a 30 percent interest in the operation in Queensland.

The commodity slump means Glencore now generates most of its cash from trading as its mines and smelters around the world struggle to make a profit. Last year, the company reported a $292 million loss at its mining division.

Adjusted first-half earnings before interest and tax from the trading unit totaled $1.22 billion. Glencore forecasts full-year adjusted Ebit from the division at $2.4 billion to $2.7 billion this year.

Its three major London-listed peers, BHP Billiton Ltd., Rio Tinto Group and Anglo American Plc, have reported earnings in the past month that reflected the dire state of the mining industry. Profit was the worst ever for BHP, the biggest miner, and the poorest for Rio in more than a decade.

While average first-half commodity prices were lower than a year earlier, miners have benefited from a rebound following production cuts. BHP Chief Executive Officer Andrew Mackenzie said last week that it’s possible the freefall in commodity prices may be over. Glasenberg said in March he thought commodity prices had bottomed.

“After a difficult start to the year, the more constructive tone of markets in recent months has helped support the pricing of many of our key commodities,” Glasenberg said in the statement. “While we are highly cash generative at current spot prices, we remain mindful that underlying markets continue to be volatile.”

Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.




Your criminal act in broad daylight:  10,000 contracts of paper gold shorted by our banker crooks:

(courtesy zero hedge)

Someone Just Puked $1.5 Billion Of Notional Gold

Makes perfect sense – someone just decided in keeping with their fiduciary duty, 0840ET was the perfect time tounleash $1.5 billion of gold notional into the futures markets….

Over 10,000 contracts dumped in 1 minute… “normal”

New low prices are bringing in some dip-buyers…

And Silver dropped on heavy volume too…


I would like everyone to read the following and understand that technical analysis in the manipulated gold/silver market (metals and stock) is totally useless!!

(courtesy Robert Appel/GATA)

Robert Appel: Technical analysis is of little use in manipulated gold market


8:16a ET Tuesday, August 23, 2016

Dear Friend of GATA and Gold:

Profit Confidential’s Robert Appel writes today that the contest in the gold market is not between bulls and bears but between legitimate buyers and, on the sell side, central banks and their bullion bank agents manipulating the market. Appel adds that in such circumstances technical analysis of the market is of little use. His analysis is headlined “Triple-Digit Upside for Direxion Shares Exchange-Traded Fund Trust?” and it’s posted at Profit Confidential here:…

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




This is what happens when you tax gold importing of 10%: huge smuggling of gold and this has shut out refiners as they cannot get enough ore from legal operations

(courtesy Reuters)

India’s gold smugglers shut out refiners and banks


By Rajendra Jadhav
Tuesday, August 23, 2016

MUMBAI, India — Indian gold refiners just months ago were ramping up capacity and struggling to secure enough ore from miners. Now they are suspending operations as a surge in smuggled bullion wipes out wafer-thin margins.

Gold importing banks and big jewelers have also been hit by the growing entry of illicit gold, which avoids import duties and makes its way on to the so-called “gray market,” where it is sold to end-users at a discount.

Smuggled gold could account for more than a third of demand this year in India — the world’s second-biggest buyer of the metal after China — potentially costing the government over $1 billion in lost revenue.

The upsurge will lead to pressure for a reduction in the 10 percent import duty and a rethink on recently introduced levies on gold jewelry, which critics say are boosting the unofficial trade the government has been trying to curb. …

… For the remainder of the report:



I brought this to your attention yesterday but it is more repeating: China sees gold as the key to its currency

(courtesy Koos Jansen/GATA)

Koos Jansen: More indications that China sees gold as key to currency


12:30p ET Tuesday, August 23, 2016

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen today reports more comments by Song Xin, general manager of the Chinese government’s National Gold Group Corp., indicating that government policy is the steady acquisition of gold reserves, eventually surpassing United States gold reserves, to facilitate internationalization of the yuan and confidence in the currency. Jansen’s report is headlined “Song Xin: Increase Gold Reserves and Join SDR” and it’s posted at Bullion Star here:…

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




The nationalization of the Japanese stock market

(Leslie Shaffer/CNBC)

Monetary policy has nationalized Japanese stock market, CLSA analyst says


“There are no markets anymore, just interventions.” — High School Graduate, GATA Washington conference, April 18, 2008.

* * *

By Leslie Shaffer
CNBC, New York
Monday, August 22, 2016

Even a resurgent yen hasn’t dampened Japan’s stock rally over the past couple months, but that’s not necessarily because investors like the market.

The Nikkei 225 index has surged around 10 percent since late June, even as the yen has climbed against the dollar, with the pair testing levels under 100.

Normally this would be bad news for stocks as a stronger yen is a negative for exporters as it reduces their overseas profits when converted to local currency. So what explains the buoyant stock market?

Analysts attributed the gains to the Bank of Japan, not fundamentals.

In a report titled, “BoJ Nationalizing the Stock Market,” Nicholas Smith, an analyst at CLSA, said that the central bank’s exchange-traded fund buying program was distorting the market.

At its late July meeting, the BoJ said it would increase its ETF purchases so that their amount outstanding will rise at an annual pace of 6 trillion yen ($56.7 billion), from 3.3 trillion yen previously.

Those purchases were particularly distorting to the market because they focused largely on funds tracking the Nikkei 225 index, Smith said in a note dated Sunday, estimating that more than half of the BoJ’s ETF buying was likely in Nikkei-tied funds. …

… For the remainder of the report:…


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




2 Nikkei closed UP 99.94 OR .61% /USA: YEN FALLS TO 100.20

3. Europe stocks opened  IN THE GREEN (EXCEPT LONDON),     /USA dollar index UP to 94.65/Euro DOWN to 1.1261

3b Japan 10 year bond yield: RISES TO  -.0680%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 100.20

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.16  and Brent: 49.27

3f Gold DOWN  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” ON THE TABLE 

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.091%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 7.03%/: 

3j Greek 10 year bond yield FALL to  : 8.03%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1337.50-/silver $19.02(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 22/100 in  roubles/dollar) 64.83-

3m oil into the 47 dollar handle for WTI and 49 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9674 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0892 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -0.091%

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


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

4. USA 10 year treasury bond at 1.549% early this morning. Thirty year rate  at 2.23% /POLICY ERROR)

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

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


S&P Set For New Record Highs As Futures, Dollar Rise; Oil Slides

In a rerun of yesterday’s overnight session, European indexes trade higher while US index futures were modestly in the green, set to propel the S&P 500 to new all time highs. Emerging Market dropped the most in three weeks alongside commodities, as today the market was predisposed hawkishly on a US rate hike ahead of Yellen’s Friday speech, pushing the US dollar higher and oil resumed its pre “anonymous sources” headlines slide.

Meanwhile, the absolute lack of volatility continues. As DB points out, “in the S&P 500 we haven’t had a +/- 1% or more day since July 8th. That’s 32 consecutive sessions which matches the run in August-September 2014. There’s some way to go to match the run of 62 consecutive sessions from April-July 2014 however.” Lack of excitement is good for stocks, however, as the chart below shows.

While political and security concerns rippled through some developing nations, global sentiment has seesawed across asset groups as traders look toward Yellen’s speech in Jackson Hole, Wyoming, on Friday for clues on the timing of rate increases. At least three Fed officials have made hawkish remarks since the start of last week, though U.S. economic data remain mixed with figures on Tuesday showing a slowdown in manufacturing and strength in the housing market. A report on Wednesday is forecast to show sales of existing homes held close to a nine-year high.

In the absence of any market-moving news, all traders remained focused on Yellen’s upcoming speech: “while political risks do matter, now it is all eyes on the Fed and Yellen,” said William Jackson, a London-based economist at Capital Economics Ltd. “That seems to be the biggest factor.” Daniel Weston, chief investment officer of Aimed Capital in Munich added that “Yellen’s comments are the focus. She may well signal there could be a rate hike next month, but equities should stay fairly solid, as that small upward change in interest rates won’t hugely hurt earnings.”

Crude was lower by 1.7%, as euphoria from yesterday’s Iran-related headlines evaporated after contrary to WSJ reports, Iran said it still hasn’t decided whether it will attend the OPEC meeting in Algiers next month, while API reported crude oil inventories rose 4.5mm bbl, before more definitive EIA data later today.

The MSCI Emerging Markets Index dropped 0.9% as of 6:02 a.m. in New York, the most since Aug. 3 on a closing basis after Fed funds futures ended Tuesday showing a 54 percent chance of a U.S. interest-rate increase by December. The Borsa Istanbul 100 Index slid 1.9 percent, the most in a month, as Turkey began its first major offensive in Syria. The military started bombing Islamic State positions in the district of Jarablus in Syria’s Aleppo province Wednesday morning, according to the prime minister’s office.

The dollar rose against the euro and the Swiss franc. South Korea’s won weakened after North Korea conducted a missile test, while South Africa’s currency and bonds declined amid speculation the finance minister will be replaced. Signs of rising stockpiles sent oil and copper lower. 

The Stoxx Europe 600 Index reversed earlier losses to rise 0.4 percent after its biggest rally in more than two weeks. WPP Plc led a gauge of media companies to the biggest advance on the Stoxx 600. Shares jumped 6.1 percent after the world’s largest advertising company said profit rose 15 percent in the six months ended June 30 as a favorable currency translation more than offset Brexit’s drag on the British economy.  S&P 500 Index futures rose 0.1% to 2,187.25 in early trading. Stocks ended up 0.2% on Tuesday, paring gains that briefly sent the equity benchmark above its Aug. 15 record close.  Commodity and energy producers fell the most, with Glencore Plc down 4.8 percent after reporting a plunge in first-half earnings.

Market Snapshot

  • S&P 500 futures up less than 0.1% to 2185
  • Stoxx 600 up 0.3% to 345
  • FTSE 100 down 0.2% to 6857
  • DAX up 0.2% to 10612
  • German 10Yr yield up less than 1bp to -0.09%
  • Italian 10Yr yield up less than 1bp to 1.12%
  • Spanish 10Yr yield down less than 1bp to 0.93%
  • S&P GSCI Index down 0.9% to 363.6
  • MSCI Asia Pacific up less than 0.1% to 139
  • Nikkei 225 up 0.6% to 16597
  • Hang Seng down 0.8% to 22821
  • Shanghai Composite down 0.1% to 3086
  • S&P/ASX 200 up 0.1% to 5562
  • US 10-yr yield unchanged at 1.55%
  • Dollar Index down 0.03% to 94.51
  • WTI Crude futures down 1.6% to $47.31
  • Brent Futures down 1.3% to $49.33
  • Gold spot up 0.2% to $1,340
  • Silver spot up 0.5% to $18.91

Top Global Headlines:

  • Pfizer to Buy Antibiotics From AstraZeneca for $725 Million: U.K. drugmaker to get up to $850 million if certain goals met. Deal gives Pfizer Zavicefta for drug-resistant infections
  • Lockheed’s F-35 Still Falls Short, Pentagon’s Chief Tester Says: Fighter is ‘on a path toward failing to deliver,’ Gilmore says. Memo came a week after Air Force declared its version ready
  • South Africa finance minister Gordhan has taken legal advice on letter received from special police unit
  • At BlackRock, even a 40% gain can’t save ETFs from the trash; in spite of their strong performance they’re just not that popular with investors
  • Germany 2Q final GDP in-line with ests. at +0.4% (q/q) and +1.8% (y/y)
  • Norway June unemployment rate higher than expected at 4.8% vs 4.7% prev. and est.
  • July BBA loans for house purchase fell to lowest level since January 2015; BBA says “the data does not currently suggest borrowing patterns have been significantly affected by the Brexit vote, but it is still early days”
  • Glencore Widens Debt Plan to Weather Rout After Worst Profit: Trader and miner wants to cut debt to as low as $16.5 billion. Stock price has doubled this year after 70% slump last year
  • Exxon’s Pacific Partner Sees LNG ‘Revolution’ Among Buyers: LNG buyers use glut to recalibrate future contracts: Botten. Company to start new supply contract negotiations next year

* * *

Looking at Asian markets, stocks outside Japan fell as Hong Kong shares retreated and investors grew cautious before Federal Reserve Chair Janet Yellen’s speech this week. Japanese equities gained as exporters rallied. “While recent U.S. data has been mixed, the base case for the Fed is probably to increase rates in the absence of any compelling reason not to,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, told Bloomberg. “The Fed is aware that there’s a substantial risk that if economic conditions deteriorate, they have very little room to move. Given this, the central bank wants to normalize rates as soon as they can.” 5 out of 10 sectors fall with tech, staples underperforming and consumer, health care outperforming.

Top Asian News

  • PetroChina Posts Smallest Half-Year Profit on Oil’s Meltdown: China’s biggest producer able to overcome first- quarter loss. Domestic crude output fell 4.2% to 385.3 million barrels
  • PBOC Adds Funds in 14-Day Reverse Repos First Time in Six Months: Benchmark seven-day money rate rises to highest since March
  • China’s Postal Bank Said to Seek Approval for $8 Billion IPO: Lender moves closer to world’s biggest share sale this year
  • Credit Suisse Asia Markets Bankers Said to Plan Macro Hedge Fund: Kiely, Firth to start cross-asset fund under Rafiki Capital
  • Qantas Pays First Dividend Since 2009 After Record Profit: Underlying profit rises 57% to A$1.53 billion in year to June
  • North Korea Successfully Launches Ballistic Missile From Sub: Japan protests over missile that flew ~500 km toward nation

In Europe, equities traded relatively flat this morning (DAX +0.2%) despite the early morning drop with the FTSE 100 (-0.05%) the initial laggard due to Glencore earnings (-4.5%), the Co. reported a 13% drop in underlying earnings for the first six months of the year and as such dragging the whole materials sector lower. Fixed income price action have been particularly muted this morning, as has been the case during European mornings throughout the week, also of note we saw this week’s most significant European auction in the form of the Buba’s Bobl auction, which saw a b/c of 1.4, higher than the previous.

Top European News

  • VW’s Crippling Supplier Feud Shows Limits of Penny Pinching: German carmaker to compensate supplier to end production halt. Labor leaders also resist making workers bear brunt of crisis
  • UBS Joined by Peers to Promote Blockchain-Backed Digital Cash: UBS joined by ICAP, Deutsche Bank, Santander, BNY Mellon. Banks are trying to speed transactions that can take days

In FX, the Bloomberg Dollar Spot Index held a three-day gain after futures traders priced in an increased probability of a rate increase by December. The JPMorgan Chase & Co. gauge of currency price swings was at 10.22, matching the highest since July 26 on a closing-market basis. MSCI Emerging Markets Currency Index fell 0.7 percent. The won weakened 0.6 percent versus the dollar after North Korea test-launched a ballistic missile from a submarine off its east coast. The rand fell to a three-week low after a news website said that South Africa’s Finance Minister Pravin Gordhan had been summoned to report to police on Thursday, signaling a deepening rift between Gordhan and President Jacob Zuma.

In commodities, WTI fell 1.7% to $47.30 a barrel in New York after API figures showed inventories increased by 4.46 million barrels last week. It rallied 2.2 percent in the last session after Reuters cited unidentified sources in OPEC and the oil industry as saying that Iran is sending “positive signals” it may support joint action to bolster the market. Copper slid 0.5 percent to a six-week low after inventories tracked by the London Metal Exchange climbed to the highest level since January. Jiangxi Copper Co., China’s biggest producer, said Wednesday that prices may soon bottom out given looser monetary policies adopted by countries to stimulate growth.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • FTSE 100 is the main laggard in Europe as losses in the mining sector drag the index lower
  • GBP strength pushes GBP/USD to the highest level in 3 weeks.
  • Looking ahead, highlights include weekly DoE crude oil inventories, US Existing Home Sales and Earnings from HP
  • When the Fed Chair Yellen speaks Friday in Jackson Hole, Wyoming, any description she offers of the U.S. economy will probably be crafted to keep an interest-rate rise on the table for the FOMC meeting next month — without committing it to act
  • Trade was the main driver of German economic growth in the second quarter as domestic demand suffered from a slump in investment
  • Derivatives users are the latest group to be hurt by negative interest rates as they get penalized for the cash they park at Europe’s biggest clearinghouses. Traders can thank European Central Bank President Mario Draghi
  • The central bank in Reykjavik cut its benchmark interest rate for the first time in 20 months amid an increase in capital inflows that have pushed inflation below target, pushing it into the global currency war that has dominated monetary policies from Japan to Switzerland
  • Denmark’s biggest pension fund, which manages about $115 billion in assets, says it’s growing increasingly worried about how markets will react when crisis-era correlations across asset classes start to reverse
  • China’s central bank injected cash into the financial system using 14-day reverse-repurchase agreements for the first time since February amid speculation policy makers are looking to increase the use of more expensive, longer-term funding to cool a bond rally
  • Chinese President Xi Jinping may feel a bit smug when he hosts global leaders at next month’s G-20 summit. The heralded hard landing of the world’s number two economy hasn’t materialized — instead many Western nations are facing economic and political upheaval
  • August 2015 was a terrifying time for investors, with the imminent withdrawal of Federal Reserve stimulus and China’s currency devaluation sending stocks on their wildest ride in four years. Twelve months later, it’s nothing but calm

DB’s Jim Reid concludes the overnight wrap

If you want an idea of how dull things are then Bloomberg published a good chart last night showing that the monthly trading range in 10 year US Treasuries is so far in August the lowest for 10 years. It’s impressive given that Fed speakers have recently been doing their best to persuade the market that they are close to raising rates from a point where expectations were very low at the start of the month. Obviously post Yellen at Jackson Hole on Friday, yields could fluctuate more aggressively but so far the month has been pretty dull. Indeed in the S&P 500 we haven’t had a +/- 1% or more day since July 8th. That’s 32 consecutive sessions which matches the run in August-September 2014. There’s some way to go to match the run of 62 consecutive sessions from April-July 2014 however.

With markets in a bit of a sit and wait mode ahead of Yellen, yesterday our Global Economic Perspective’s team published their latest piece in which they take a look at the outlook for the neutral fed funds rate. In their view it is an issue that is likely to garner considerable attention during the Jackson Hole symposium and with the rate at persistently near or at record low levels it has drawn intensifying scrutiny from key Fed officials. In the report they derive projections of the future path for the neutral fed funds rate based on various economic scenarios using framework based on Laubach and Willliams methodology. Their findings reveal that there are three key implications that are potentially crucial for the Fed outlook. Firstly, if US real GDP growth averages about 2% as the Fed and most other forecasters expect, the real neutral fed funds rate is unlikely to rise significantly over at least the next several years and it is also likely to remain below the Fed’s long-term projection of 1% over this time frame. Consequently, a rising neutral rate is unlikely to be a key driving force for near-term rate increases, contrary to Fed forecasts and commentary. Over the longer-term, in the absence of shocks to the economy, the real neutral rate would likely approach the Fed’s long-run estimate of 1% if economic growth remains around 2%. But the high persistence of the neutral rate implies that the convergence toward 1% is likely to be very gradual, taking many years. If instead real GDP growth slows persistently below 1.5%, the real neutral rate is likely to remain stuck at around 0%.

In terms of markets yesterday, while dull, the overall tone was at least more positive compared to Monday. This was particularly the case in Europe where the Stoxx 600 (+0.93%) had its strongest day in over two weeks. Financials appeared to be at the heart of it with the Stoxx 600 Banks index rising +2.38% which is the most since July 14th. The robust PMI readings helped (we’ll touch on those shortly) while Italian Banks had a better day somewhat boosted by a +6.63% rally for Unicredit after Polish press reported that the Bank is looking to weigh a sale of its stake in Bank Pekao. Across the pond the S&P 500 edged up a more modest +0.20% after initially looking at the 2016 highs before paring back a little.

Oil is probably the one market consistently generating headlines at the moment. Yesterday WTI rebounded +1.46% although at one stage did rally nearly 4% off the intraday lows following a report on Reuters suggesting that Iran was becoming more willing to support OPEC action to prop up the market. As we’ve highlighted before there was no shortage of headlines in the build up to the last OPEC meeting so this comes as little surprise and as we noted earlier this week our expectation is that a coordinated output freeze will have little meaningful fundamental impact anyway. Elsewhere fixed income markets ended up little changed yesterday. The USD was flat for the second consecutive day while Treasuries also paused for breath with yields little changed.

Refreshing our screens this morning WTI Oil (-1.10%) has given up more of yesterday’s gains following the latest US inventory data. That appears to have taken some momentum out of markets in Asia this morning with the Hang Seng (-0.99%), Shanghai Comp (-0.20%) and Kospi (-0.35%) in particular in the red. The Nikkei (+0.50%) is up with the Yen a touch weaker. The ASX (+0.20%) has also edged slightly higher following a raft of corporate earnings reports this morning while sovereign bond markets are little changed. On the whole though newsflow is again pretty quiet in the Asia session.

Moving on. Data-wise the big focus yesterday were the Europe PMI’s. The overall feeling was one that was relatively positive. The Euro area composite PMI edged up 0.1pts to 53.3 (vs. 53.1 expected) which is actually the highest since January although the reading has consistently sat at or around 53 since then. Services were a standout (+0.2pts to 53.1 vs. 52.8 expected) while the manufacturing reading faded 0.2pts to 51.8 (vs. 52.0 expected). Across countries there was a reasonable positive services surprise in France which offset a slightly softer services reading in Germany. Our European economists highlighted that the data also implies a slight improvement on average in the periphery. Importantly though the data signals ongoing resilience of the domestic Euro area economy, particularly post Brexit. Our colleagues also highlight that the data points to GDP growth of between 0.3% and 0.4% qoq in Q3 which is broadly in line with their forecast.

Away from this in the UK the latest CBI trends orders data weakened 1pt to -5 although that was a little better than the -10 expected by the market. Meanwhile the flash August consumer confidence reading for the Euro softened 0.6pts to -8.5 and is now at the lowest since April. Economic data in the US was a much more mixed bag. Manufacturing data in particular disappointed with the flash manufacturing PMI in August dropping 0.8pts to 52.1 (vs. 52.6 expected) and the Richmond Fed manufacturing survey weakening 21pts to -11 (vs. +6 expected). It’s worth noting that while that’s the weakest reading since January 2013, the series does have a tendency to be extremely volatile. The better news came in the housing sector where new home sales surged to a near nine-year high of 654k annualized after rising +12.4% mom in July (vs. -2.0% expected).

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where shortly after this goes to print we’ll get the final revision to Q2 GDP (expected to stay unchanged at +0.4% qoq). We’ll also get the various components of the growth report. This afternoon in the US it’s relatively quiet with only the June FHFA house price index reading and July existing home sales data. Glencore is among the companies due to report earnings.



i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 3.82 POINTS OR 0.12%/ /Hang Sang closed DOWN 178.15 points or 0.77%. The Nikkei closed UP 99.94 POINTS OR 0.61% Australia’s all ordinaires  CLOSED UP 0.14% Chinese yuan (ONSHORE) closed UP at 6.6538/Oil FELL to 47.16 dollars per barrel for WTI and 49.27 for Brent. Stocks in Europe: in the GREEN EXCEPT LONDON . Offshore yuan trades  6.67134 yuan to the dollar vs 6.6538 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY AS  MORE USA DOLLARS   LEAVE CHINA’S SHORES  






Central Italy was rocked by a powerful 6.2 magnitude earthquake with after shocks. The tremors were felt in Rome.  The epi-center of Amitrice has 1/2 of its town totally destroyed.

This was an event that Italy did not need as its economy is suffering terribly:

(courtesy zero hedge)

Death Toll From Italian Quake Rises To 38; Army Mobilized As Dozens Remain Buried Under Rubble

A powerful 6.2-magnitude earthquake followed by a series of aftershocks rocked central Italy on early Wednesday, burying residents under rubble as they slept and killing at least 38 people. Strong tremors were felt in the country’s capital, Rome, and several small towns and villages have been seriously damaged.

The temblor hit at around 3:30 a.m. local time near Norcia, 50 miles southeast of Perugia, and was felt more than 100 miles away in Rome. Several large aftershocks soon followed. As dawn broke, stunned locals picked through ruins in the worst-affected towns of Amatrice and Accumoli. Italy’s defense ministry mobilized the army to help in the search for survivors, NBC reports.

Video Shows Scale of Destruction in Amatrice

The center of Amatrice was devastated, with entire palazzos razed to the ground. Aerial images from the fire department showed whole streets flattened. “There are people under the rubble,” the town’s mayor, Sergio Pirozzi, told state-run broadcaster RAI. “The town isn’t here anymore” adding that “The ancient doors have come down. We need help from the civic protection [services],” he said to Radi Rai.

At least 38 people have been confirmed dead — including 17 in Amatrice alone, a spokeswoman for Italy’s civil protection agency told NBC News. Francesca Maffini said 11 others were killed in Accumoli and 9 in the town of Arquata. She told NBC News that residents in Amatrice were “distraught” and that schools were being used as makeshift shelters for the many displaced.

“We flew to Amatrice from Rome in a helicopter so I saw it from the air,” she said. “There are a lot of historical buildings that are destroyed. It’s really bad.”

Residents, rescuers and even priests used shovels and their bare hands to dig out survivors in the devastated town. A firefighter told reporters there were as many as 70 people buried in the ruins. The town’s hospital has been badly damaged and patients moved into the streets, Reuters reported.

Authorities said the quake was similar in scale to the devastating 2009 temblor in nearby L’Aquila that killed more than 300 people, urging Italians to give blood and donate blankets, medicine and water.

Roads were blocked in several areas of the mountainous region, severely hampering efforts to assess the damage and deploy rescue operations. A key road bridge over the Castellano River leading to Amatrice was declared unsafe.

“We need chain saws, shears to cut iron bars, and jacks to remove beams: everything, we need everything,” one civil protection worker Andrea Gentili told the AP.

Infrastructure minister Graziano Del Rio and Fabrizio Curcio, head of Italy’s Civil Protection Department, were on their way to reach the affected areas, the government said. Curcio told a news conference that the region is popular with tourists escaping the August heat of Rome, with more residents than at other times of the year.

Facebook activated its safety check-in service for the affected area Wednesday morning and the U.S. State Department urged all American citizens in the region to check in with friends and family to let them know they were safe.

Italy sits on two fault lines, making it one of the most seismically active countries in Europe. Wednesday’s quake occurred along a fault in the central Apennine Mountains, which span Italy from the Gulf of Taranto in the south to the southern edge of the Po River basin in the north, the USGS said. “The whole ceiling fell but did not hit me,” Amatrice resident Maria Gianni told the AP. “I just managed to put a pillow on my head and I wasn’t hit luckily, just slightly injured my leg.”

The quake woke people up in Rome, where lights swayed and car alarms went off. About 100 miles northeast of Rome in the town of Ceseli, Lina Mercantini also felt the temblor. “It was so strong,” she said. “It seemed the bed was walking across the room by itself with us on it.”



This morning, Turkish tanks enter Northern Syria in an attempt to clear out ISIS around the town of Jarabulus.  The goal is not ISIS in Syria but the Kurds.  Good reason today for our banker friends to raid gold and silver

(courtesy zero hedge)

Turkish Tanks Enter Syria As Part Of “Anti-ISIS” Operation

Turkish tanks crossed the border into northern Syria Wednesday as part of “operations to clear ISIS terrorists “from the city of Jarabulus and to protect Turkey from the Islamic State and Kurds, Anadolu News Agency reported.

According to media reports, even more armored reinforcements have been dispatched to Gaziantep near the Turkey Syria border, including at least 80 Leopard tanks.

Armored reinforcements dispatched to Gaziantep near border, including 80 Leopard tanks

The invasion followed hours after the Turkish prime minister’s office announced that the Turkish military and the U.S.-backed coalition forces have launched an operation called “Euphrates Shield” to clear a Syrian border town from Islamic State militants.

The assault on ISIS held Jarablus has been defined as follows:

  • phase 1 siege ring
  • pahse 2 storming Jarablus
  • phase 3 advance along border Azaz/ N-Aleppo

/ assault on held :
phase 1 siege ring
pahse 2 storming Jarablus
phase 3 advance along border / N-Aleppo

Anadolu adds that Free Syrian Army members are about to reach the village of Kaklijah, some three kilometers inside the Syrian border. The tank incursion followed the Turkish Armed Forces hitting 81 targets in northern Syria 294 times with rockets starting at 4.00 a.m. (0230 GMT) early Wednesday, the sources added.

The anti-Daesh operation, called Euphrates Shield, aims to support U.S.-led coalition forces, strengthen Turkey’s border security by clearing away terrorist groups, and support Syria’s territorial integrity, the sources said.

The Turkish Air Forces carried out an operation “on identified targets” with F-16 fighter jets in Jarabulus, Aleppo as well as the nearby village of Kaklijah, the sources added.

“At 4:00 this morning, operations started in the north of Syria against terror groups which constantly threaten our country, like Daesh [Arabic name for Islamic State] and the PYD [he Democratic Union Party of Syria],” Recep Tayyip Erdogan said in a speech in Ankara.

Erdogan said that the incursion had been prompted by cross-border attacks originating from Jarablus, stressing they “must stop,” according to Turkish state news agency Anadolu.

Turkish media reported earlier that IS had launched retaliation attacks into the Turkish border town of Karkamis after the violence around Jarablus escalated. The Turkish operation is focused on the Kurdish border town of Jarablus, which has been held by the Islamic State terrorist group since July of 2013.

The operation, called Euphrates Shield, is being supported by Turkish air forces, as well as warplanes from the US-led coalition.

Turkish artillery began shelling targets across the Syrian border earlier on Wednesday, Reuters reported, citing its own journalist on the scene. The agency said Turkish tanks can now be seen inside Syria and an intensive bombardment can be heard.

Earlier, the Prime Ministry said the operation launched early Wednesday by the Turkish military and the U.S.-led coalition warplanes aimed to free the IS-held town of Jarablus, Anadolu reported.

The operation, which began at around 4 a.m. local time (0100 GMT), is aimed at clearing the Turkish borders of terrorist groups, helping to enhance border security and supporting the territorial integrity of Syria, they said.

Turkish forces are using intense artillery fire against Daesh elements in Jarabulus in a retaliatory strike, officials said.

Preventing a new flow of migrants and delivering aid to the region’s civilian population in need are also among the goals, officials added.  The move comes after a series of mortar bombs landed in a residential Turkish area along the Syrian border beginning Tuesday morning, security sources said.

There were no injuries in Karkamis, which lies approximately 1 kilometer across the frontier from Jarabulus — part of Aleppo governorate — where Free Syrian Army forces are fighting to take control of the city from Daesh.

Operations of Turkish Armed Forces, which has been actively fighting Daesh, have significantly contributed to ongoing efforts of U.S.-backed international coalition against the terror group.

Elsewhere in Istanbul, law enforcement reportedly conducted raids targeting suspected IS sympathizers, according to the Dogan news agency.

Syria condemns the Turkish invasion as Turkish forces strike Kurdish territory inside Syria and not ISIS.  Syria is basically one complete quagmire.
(courtesy zero hedge)

Syria Condemns Turkish Invasion As “Breach Of Sovereignty” While Joe Biden Meets With Erdogan

Syria’s Foreign Ministry, which has the backing of Russia and as of last week, China, condemned Turkey’s military incursion against an Islamic State-held Syrian town near its border, aided by aircraft from a U.S.-led coalition, as abreach of its sovereignty, Syrian state television reported. It added that any counter terrorism operations inside its borders had to be conducted in coordination with Damascus and accused Ankara of launching the incursion to replace Islamic State with “other terrorist groups” a reference to rebels.

There has already been speculation that Turkey’s latest incursion into Syrian territory has little to do with the stated purpose of cleansing ISIS forces close to its border following this weekend’s Gaziantep suicide bombing which was promptly blamed on ISIS, and is merely the latest escalation in Erdogan’s ongoing conflict with militant Kurdish forces located in the region.

As reported earlier, Turkish special forces, tanks and jets backed by planes from the U.S.-led coalition launched their first co-ordinated offensive into Syria on Wednesday to try to drive Islamic State from the border and prevent further gains by Kurdish militia fighters. Turkish tank units and Syrian rebels backed by the NATO member crossed into northern Syria to push Islamic State out of the border town of Jarablus, military sources said.

“Euphrates Shield”, named after the river running nearby, is Turkey’s first major military operation since the abortive coup. It was the first time warplanes from Turkey have struck in Syria since November, when Turkey downed a Russian warplane near the border, and the first significant incursion by Turkish special forces since a brief operation to relocate the tomb of Suleyman Shah, a revered Ottoman figure, in February 2015. The operation comes four days after a suicide bomber suspected of links to the group killed 54 people at a wedding in the southeastern city of Gaziantep.

Turkey’s President Tayyip Erdogan said the operation was targeting Islamic State and the Kurdish PYD party, whose gains in northern Syria have alarmed Turkey. Ankara views the PYD as an extension of Kurdish militants fighting an insurgency on its own soil, putting it at odds with Washington, which sees the group as an ally in the fight against Islamic State.

Kurdish fighters have captured large areas of territory since the start of the Syrian conflict in 2011, and Ankara has long declared the Euphrates river, which runs just east of Jarablus, a red line which it does not want them to cross. Foreign Minister Mevlut Cavusoglu said Kurdish fighters must return east of the Euphrates or Turkey would “do what is necessary”.

According to Reuters, Turkey and the United States hope that by removing Islamic State from the border, they can deprive it of a smuggling route which long saw its ranks swollen with foreign fighters and its coffers boosted by illicit trade. Which, of course, is ironic since for over a year Turkey was allegedly the main provider of financial support for ISIS in exchange for the Islamic State’s oil “exports.”

* * *

White and gray plumes of smoke rose from the rolling hills around Jarablus, visible from the Turkish town of Karkamis across the border. The boom of artillery rounds was audible as advancing Turkish tanks opened fire.

Turkish military sources said the air strikes had hit 12 Islamic State targets, while artillery fire hit 70 targets. “The aim of the operation is to ensure border security and Syria’s territorial integrity while supporting the U.S.-led coalition against Islamic State,” one military source said, adding work to open a passage for ground forces was under way.

Erdogan said Turkey was determined that Syria should retain its territorial integrity and would take matters into its own hands if required to ensure that was the case.

But Saleh Muslim, head of the Kurdish PYD, wrote in a tweet that Turkey was entering a “quagmire” in Syria and faced defeat there like Islamic State. Considering historical anecdotes about “land wars” in Asia, he may have a point.

* * *

Coincidentally, the invasion takes place just as U.S. Vice President Joe Biden has arrived in Turkey hours after operations began on a pre-planned trip, the most senior U.S. official to visit since a failed July 15 coup shook confidence in Turkey’s ability to step up the fight against Islamic State.

Biden – whose visit has been panned by some as an attempt at appeasement of the Turkish ruler – is likely to repeat U.S. concerns about Turkey’s crackdown on free speech and political opponents, while Turkish President Recep Tayyip Erdogan is sure to repeat demands that the United States extradite a Muslim cleric living in Pennsylvania who Erdogan claims masterminded the failed military coup. Fethullah Gulen, 75, has denied any involvement with the July 15 coup attempt. State Department deputy spokesman Mark Toner announced Tuesday that Turkey formally submitted an extradition request for the cleric. Toner said the request doesn’t relate to the recent coup attempt, but he declined to provide further details.  “We are considering the merits of the request,” Toner said.

A senior administration official traveling with Biden said the United States wanted to help Turkey to get Islamic State away from the border, and was providing air cover and “synching up” with the Turks on their plans for Jarablus. He also appears to have lied, when he said the shelling was hitting Islamic State, not Kurdish forces.

Biden, while in Ankara, will emphasize Washington’s “ongoing strong support” of Turkey, the White House said this week. He also will meet with Prime Minister Binali Yildirim.

However, in the latest sign of strains between the two countries, Turkish news media reported that Erdogan plans to visit Iran on Wednesday, possibly to forge new ties. The trip follows Erdogan’s visit to Moscow this month to improve relations.

Furthermore, today’s invasion has noticeably complicated Ankara’s relations with Washington, political analyst Bulent Aliriza told Radio Sputnik. “After the suicide attack in Gaziantep the Turkish government said that they will no longer tolerate the presence of Daesh on the border,” the director of the Turkey Project at the Center for Strategic and International Studies in Washington, DC said.

“Clearly President Erdogan is sending a message by getting closer to Russia and Iran that he’s unhappy with the attitude of the West,” Bulent Aliriza, a Turkey analyst at the Center for Strategic and International Studies, told the Associated Press. “Turkey’s still going to remain a NATO member and aspire for EU membership, but the atmosphere is worse” than before the coup.

“If Turkish artillery hit Manbij, it was hitting mostly Kurdish elements. So it hit both Daesh and the YPG. This of course created massive complications in Turkey’s relationship with the US because the US has been backing the YPG against Daesh,” the analyst said.

“Washington’s hope was that after the capture of Manbij, the SDF would move to the town of al-Bab, which is further west, 20-30 kilometers away from the Turkish border and ultimately that these forces would move to Raqqa,” the capital of Daesh’s caliphate, he added.

* * *

Meanwhile, as CBS correspondent Mark Knoller writes on Twitter, “Sr US Official says there are strains in the US/Turkey relationship but denies it’s on the brink of a rupture” and adds that “Sr official says @VP objective in Turkey is to make sure US-Turkey relations remain rock solid… says US can’t afford any friction in relations with Turkey. Cites importance of Turkish role against ISIS in Syria.”

The biggest friction between the two countries remains over the extradition of Gulen: “Biden to stress to Erdogan that US taking seriously s request for extradition of cleric Fethullah Gulen. DOJ lawyers pouring over evidence. But official says Turkey wouldn’t be satisfied unless Gulen had been brought over with Biden on Air Force Two.”

* * *

Finally, in a separate meeting, Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry will hold talks in Geneva on Friday focusing on the conflicts in Syria and Ukraine, Reuters reported. The two men also discussed Syria by phone on Wednesday, the Russian foreign ministry said in a statement.

U.S. and Russian officials, whose countries back opposite sides in the five-year Syrian war, have been meeting to agree on military cooperation in the fight against their common enemy there, the Islamic State militant group.  Kerry said earlier this week the talks were nearing an end, with technical teams still meeting to discuss details. Earlier, a U.S. official said that Kerry, who was in Abuja, Nigeria, would meet Lavrov in Geneva on Aug. 26 to discuss the conflict in Syria and the Ukraine crisis.

The Russian foreign ministry said the two men discussed Syria on Wednesday, “including the situation around Aleppo where the (Syrian) government forces, with the support of the Russian military, have been carrying a humanitarian operation.”

No progress has been reported on a 48-hour humanitarian pause sought by the United Nations in Aleppo to allow aid deliveries and evacuation of wounded from the divided city of 2 million that lacks food and water.

Russia also said that the two ministers had talked about the need to separate “Washington-oriented” Syrian opposition groups from the “terrorist groups” that are not covered by a regularly broken ceasefire.

It was unclear how today’s unexpected military campaign by Turkey in Syria targeting the very group, YPG, that the US has been allegedly protecting from ISIS attacks, would impact the ongoing peace talk impasse.





So much for democracy:  Venezuela will “purge” all state workers who sign for a Maduro recall petition;

(courtesy zero hedge)


Venezuela Will “Purge” All State Workers Who Sign Maduro Recall Petition

Last week we reported that in addition to confiscating the guns of Venezuela’s famished population, president Maduro had a warning for would-be coup plotters (perhaps sensing that a coup is imminent): “Did you see what happened in Turkey?” said Maduro, in a televised public event on Thursday evening. “Erdogan will seem like a nursing baby compared to what the Bolivarian revolution will do if the right wing steps over the line with a coup.”

He didn’t stop here: as Bloomberg reported last week, in a replay of one of the ugliest chapters in the two-decade rule of the socialist party in Venezuela, a top government official said Thursday that a list of those who signed a petition seeking to recall President Nicolas Maduro will be handed over to government ministries and state-run companies. The tactic is clearly an attempt to intimidate government workers into staying away from the recall petition, and thus to keep Maduro in power.

“In a revolution, revolutionaries must be in charge of state institutions, not political opponents,” Diosdado Cabello, a top official in the ruling Socialist Party and a lawmaker, said at a rally. “This is not a violation of the right to work.”

Cabello has made similar threats earlier this year, but Thursday’s comments brought back memories of the so-called “Tascon List” which was used by the government under then President Hugo Chavez to fire state workers and bar others from everything from jobs to loans for having signed a petition for a recall referendum in 2004 that Chavez eventually survived. The list was compiled by then lawmaker Luis Tascon and electronic versions of the list circulated throughout Venezuela even being sold by sidewalk vendors. Some Venezuelans even attempted to pay officials to be removed from the list.

There was some hope that despite the threats, Maduro would not actually follow up on his tacit threat, however overnight, Venezuela confirmed that it would remove state employees who signed a petition to recall President Nicolas Maduro as the opposition seeks to remove him amid an unprecedented economic and social crisis. In the first confirmation by a cabinet member, Information Minister Luis Jose Marcano said the government is free to name as well as remove high-level bureaucrats it has appointed.

Whoever has a position that is freely appointed and removable, those referred to yesterday by the PSUV on President Maduro’s instructions, evidently cannot be allowed to attack the Bolivarian revolution,” Marcano said in an interview on the Globovision network, referring to the ruling party. “A lot of these people end up sabotaging the revolution.”

Jorge Rodriguez, a national leader of the ruling PSUV and mayor of Caracas’s Libertador municipality, on Monday warned that high-ranking appointees in five ministries had 48 hours before being re-assigned to a new position after lawmaker Diosdado Cabello first made the threat earlier this month.

Maduro has not commented publicly on the matter.

The opposition demanded the Public Prosecutor and Human Rights Ombudsman investigate “these violations to the labor law,” opposition leader Jesus “Chuo” Torrealba said on the opposition coalition’s Twitter account. Considering that Venezuela is now a quasi dictatorial joint venture run between Maduro and the military (recall that the army is now in charge of the country’s food supply system), we don’t anticipate the opposition’s effort to seek a fair challenge to the Maduro threat will meet with much success.


Iran rumours have now died.  Angola is supplying more oil to China than Saudi Arabia.

Huge inventory at API

(courtesy zero hedge)

Oil Erases ‘Iran Rumor’ Rally Following Inventory Data As Angola Supply Soars

Despite denials, yesterday’s oil price rally sustained on the back of rumors that Iran was willing to support a production freeze. However, an unexpected crude build overnight from API combined with news that Angola has overtaken Saudi Arabia as the number 1 seller of oil to China (more supply at the margin) has sunk WTI Cride back to $47 – erasing all of yesterday’s gains…

Iran rumors have died… for now…

But the API build (biggest in 4 months) and Bloomberg noting that “Angola Overtakes Saudi Arabia as No. 1 Oil Seller in China” has not helped…

China’s imports of crude oil from Angola rose 23% y/y to 4.72m tons in July, second highest on record,according to General Administration of Customs data released Wednesday.

  • That’s equivalent to about 1.12m b/d; imports rose to record 4.78m tons in Feb.
  • Imports from Russia -14% y/y to 3.23m tons, lowest since Aug. 2015 and down from 4.11m tons in June
  • Imports of Saudi crude -4.2% y/y at 4.03m tons, lowest since March and compared with June’s 4.57m tons
  • Imports from Iran -1.7% y/y to 2.4m tons, lowest since Jan. and down from June’s 3.21m tons
  • Imports of Iraq crude +18% y/y to 3.13m tons vs 2.33m tons in June

Of course – all that will change with DOE data today the world’s oil investors remain glued to production data – ignoring demand.




Now it is the DOE to complete the rout on oil:

(courtesy zerohedge)

Crude Slammed After Inventory Builds Across Entire Oil/Product Complex

Following API’s reported biggest crude build in 4 months overnight, which weighed on oil prices, DOE exasperated the pain by signaling builds across the entire complex. Crude’s build of 2.5m barrels (biggest in 3 months)was less than API but more than the expected 850k draw but Cushing saw a big build and gasoline and distillates both saw builds despite expectations of big draws. As a reminder, US Crude production surged by the most since May 2015 the prior week but fell modestly in the last week. Crude tumbled back to $47 on the print.


  • Crude +4.464mm (-850k exp)
  • Cushing +417k (+200k exp)
  • Gasoline -2.2mm (-1.7mm exp)
  • Distillates -834k


  • Crude  +2.5mm (-850k exp)
  • Cushing  +375k (+200k exp)
  • Gasoline +36k  (-1.7mm exp)
  • Distillates +122k

DOE reports biggest build in 3 months and builds cross the entire complex… This is the first time since Feb 2016 that all 4 major segments have seen a build in the same week.

Production surged most since May 2015 the prior week but fell this week.

The other key variable, gasoline stocks, remained flat at 233 million bbls.

There was some good news for East Coast gasoline stocks which declined by 1 mm bbd to 69 million, now just 14% higher than a year ago, which however may be a function of more tankers leaving such PADD 1 ports as New York and heading to other, less full locations.

The offset was that East Coast crude stocks last week rose by the most since February 2015, suggesting another big spike in gasoline inventories is imminent.

* * *

The reaction in crude is obvious – erasing the minal bounce intraday and extending the post API weakness:

Finally we note that Citi’s Morse warns that oil is “at risk of wash-out” if OPEC doesn’t freeze.



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



GBP/USA 1.3226 UP .0029 

USA/CAN 1.2937 UP .0018

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 41 basis points, trading now well above the important 1.08 level FALLING to 1.1261; 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 3.82 POINTS OR 0.12%    / Hang Sang CLOSED DOWN 178.15 POINTS OR 0.77%     /AUSTRALIA IS HIGHER BY .14% / EUROPEAN BOURSES ALL  IN THE GREEN EXCEPT LONDON

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 WEDNESDAY morning CLOSED UP 99.94 POINTS OR 0.61%  

Trading from Europe and Asia:


Gold very early morning trading: $1337.00


Early WEDNESDAY morning USA 10 year bond yield: 1.549% !!! PAR  in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES SLIGHTLY to 2.230 PAR in basis points from TUESDAY night. 

USA dollar index early WEDNESDAY morning: 94.65 UP 11 CENTS from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING



And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 2.97% DOWN 4 in basis points from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.068% UP 1 in   basis points from TUESDAY

SPANISH 10 YR BOND YIELD:0.932% PAR IN basis points from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.13  UP 1 in basis points from TUESDAY 

the Italian 10 yr bond yield is trading 19 points HIGHER than Spain.





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

Euro/USA 1.1262 DOWN .0039 (Euro DOWN 39 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 100.45 UP .155(Yen DOWN 15 basis points/


USA/Canada 1.2932 UP 0.0012 (Canadian dollar DOWN 12 basis points AS OIL ROSE(WTI AT $46.76). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 39 basis points to trade at 1.1262

The Yen ROSE to 100.45 for a LOSS of 16 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 


The Canadian dollar FELL by 12 basis points to 1.2932, WITH WTI OIL AT:  $46.74


The USA/Yuan closed at 6.6545

the 10 yr Japanese bond yield closed at -.068% UP 1 IN  points / yield/

Your closing 10 yr USA bond yield:UP 1 IN basis points from TUESDAY at 1.554% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.239 UP 1/2 in basis points on the day /


Your closing USA dollar index, 94.76  UP 23 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 WEDNESDAY

London:  CLOSED DOWN 32.73 OR 0.48%
German Dax :CLOSED UP 30.09 OR  0.28%
Paris Cac  CLOSED UP 14.02  OR 0.32%
Spain IBEX CLOSED UP 74.60 OR 0.87%
Italian MIB: CLOSED UP 113.58 POINTS OR 0.68%

The Dow was DOWN 65.82 points or 0.35%

NASDAQ DOWN   42.38 points or 0.30%
WTI Oil price; 46.73 at 4:30 pm;

Brent Oil: 48.72




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:


BRENT: 49.03

USA 10 YR BOND YIELD: 1.563% 

USA DOLLAR INDEX: 94.76 up 23 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3229 UP .0029 or 29 basis pts.

German 10 yr bond yield at 5 pm: -0.089%


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


VIX Spikes Most Since Brexit After Crude Carnage, Biotech Bust, Asian Angst


Overheard at The NYFed this afternoon…

It’s probably nothing but Chinese money-market rates are spiking again…

Turmoil? VIX spikes over 10% (yes we know percentages on VIX), but still, this is the biggest surge since Brexit…

As a reminder, from earlier, VIX term stucture is its steepest since 2012…

And bad stuff happened…

A look at futures provides more details on the price action as OIl weakness and some turmoil in China money markets start to ripple through US equities… VIX hit 14 into the close which sparked instant vol-selling and spiked stocks in the last minute..

Small Caps and Nasdaq were the worst performers on the day (with Nasdaq almost the worst day since Brexit)…Trannies panic bid was unable to get them green on the day

Pushing all the major indices red on the week…but the panic bid into the close lifted Small Caps green

Leaving the S&P back in the twilight zone…

Biotechs were punished thanks to populist tweets and comments from the government over Mylan’s EpiPen… (owrts day since Brexit)

The USD Index rose on the day amid Swissy/Euro weakness offsetting Cable strength…

Despite the turmoil in stocks, credit, and commodities, and vol, Treasuries went nowhere…

As stocks caught down to bond’s reality…

USD strength appeared to weigh on Commodities across the board but crude was worst hit…

WTI tumbled back below $47…

Gold and Silver were slammed early on…

Charts: Bloomberg

Bonus Chart: NewEdge’s Brad Wishak notes an unusual 6-month cycle top pattern in S&P 500 since the end of QE3…



Fun and games in Illinois as the pension system is completely unfunded by almost 60%.They face crippling tax hikes.  No wonder many are leaving the state

(courtesy zero hedge)

Illinois Warns Of “Crippling Tax Hikes”, “Devastating Impact” If Largest Pension Fund Admits Reality

Defined Benefit Pension Plans are, almost by definition, a ponzi scheme. Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities: classic Ponzi.  But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit.  Everyone from government officials to union bosses are incentivized to maintain the status quo – public employees get to sleep better at night thinking they have a “retirement plan,” public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.

We even published a note several weeks ago titled “Establishment Tries To Suppress “Dissident Actuaries” Explosive Report On Public Pensions,” which pointed out that the American Academy of Actuaries and the Society of Actuaries killed a report that would have warned about the implications of lowering long-term expected returns on pension assets.  Apparently the truth was just too scary.

Similarly, Janus’ Bill Gross has been warning of the unintended consequences of low interest rates for years, and reiterated his concerns to Bloomberg recently:

Fund managers that have been counting on returns of 7 percent to 8 percent may need to adjust that to around 4 percent, Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, said during an Aug. 5 interview on Bloomberg TV. Public pensions, including the California Public Employees’ Retirement System, the largest in the U.S., are reporting gains of less than 1 percent for the fiscal year ended June 30.

Two weeks ago, we decided to take a look at what would happen if all federal, state and local pension plans decided to heed the advice of Mr. Gross. As one might suspect, the results were abysmal.  We conservatively assume that public pensions are currently $2.0 trillion underfunded ($4.5 trillion of assets for $6.5 trillion of liabilities) even though we’ve seen estimates that suggest $3.5 trillion or more might be more appropriate.  We then adjusted the return on asset assumption down from the 7.5% used by most pensions to the 4.0% suggested by Mr. Gross and found that true public pension underfunding could be closer to $5.5 trillion, or over 2.5x more than current estimates.  Others have suggested that returns should be closer to risk-free rates which would imply an even more draconian $8.4 trillion underfunding.  

Pension Underfudning

The result which we dubbed an “Unsolvable Math Problem“, is the reason why so few pension funds have dared to address this issue face on.

However, to our surprise perhaps because they realize just how near to the end really is or for other unknown reason, certain pension funds are finally taking notice, and action. In early August, Richard Ingram of Illinois’s largest pension fund announced that he would be taking another look at long-term return expectations noting that “anybody that doesn’t consider revisiting what their assumed rate of return is would be ignoring reality.”  Ingram’s Illinois Teachers’ Retirement System is only 41.5% funded and currently assumes annual returns of 7.5%, down from 8% in 2014.

And right here we get an example of precisely why US pensions are a legal ponzi, because the moment one person is willing to do the right thing, and evaluate the situation soberly, someone else promptly steps in, realizing that if just one card is removed from the house of cards, the whole thing collapses.

Enter Illinois governor Bruce Rauner, who warned that should his state’s largest public pension fund do what it should have done long ago, it would put a big dent in the state’s already fragile finances and lead to “crippling” pension payment hikes, Reuters reported today.

Bruce Rauner and his wife Diana

According to a Monday memo from a top Rauner aide, the Teachers’ Retirement System (TRS) board could (or rather, should) decide at its meeting this week to lower the assumed investment return rate, warning that this move “would automatically boost Illinois’ annual pension payment.”

“If the (TRS) board were to approve a lower assumed rate of return taxpayers will be automatically and immediately on the hook for potentially hundreds of millions of dollars in higher taxes or reduced services,”Michael Mahoney, Rauner’s senior advisor for revenue and pensions, wrote to the governor’s chief of staff, Richard Goldberg.

As a reminder, the TRS already lowered its assumed rate of return once, back in 2014, and as a result of the even bigger underfunding hole created by the lower assumed rate of return, the state’s pension payment increased by more than $200 million, according to the memo.

It is about to do it again, only this time it would have to cut the discount rate far lower, if it wishes to be even remotely realistic: recall Gross’ suggestion is to lower the expected return to 4% (or even lower).  However, as we reported two weeks ago, the TRS hole is already gargantuan and about to get even bigger. Illinois’ fiscal 2017 pension payment to its five retirement systems was estimated at $7.9 billion, up from $7.617 billion in fiscal 2016 and $6.9 billion in fiscal 2015, according to a March report by a bipartisan legislative commission. The country’s fifth-largest state’s unfunded pension liability stood at $111 billion at the end of fiscal 2015, with TRS accounting for more than 55 percent of that gap. The funded ratio remains just under 42%, implying that any rate reductions will push the already frigthfully low funding ratio even lower.

And this is where the politicians come in.

An impasse between the Republican governor and Democrats who control the legislature left Illinois as the only state without a complete 2016 budget, however a six-month fiscal 2017 spending plan was passed in June.

Still, Mahoney has cautioned that “unforeseen and unknown automatic cost increases would have a devastating impact” on Illinois’ ability to fund social services and education.

What Rauner’s senior advisor is essentially saying, is that if the TRS does what the Fed and other central banks are forcing it to do, our political careers may be over, and that could be just the beginning.

And here is the punchline: one of Rauner’s top Republican legislative allies, Senate Minority Leader Christine Radogno, urged the TRS board to delay a vote Friday to give the public time to weigh in on its possible actions. “This issue is important enough at the very least to put the TRS board on notice we don’t want them taking any action that could cost taxpayers $200 to $300 million without appropriate scrutiny,” she said. The action in question, Radogano is demanding the TRS not take, is to lower its return expectations from the ludicrous 7.5% to something realistic; instead she is suggesting the fund pretend all is well, and avoid the day of reckoning for at least a few more years, ideally until she has quit as Senate Minority Leader, at which point the TRS can by all means go ahead and admit just how terrible its underfunding truly is.

Translation: please keep your heads stuck in the sand, and dare not admit the reality of near-zero returns in the new normal, but instead keep the projected return rate at 7.5%, or else you will not only admit just how much bigger the underfunding hole truly is, but the resultant surge in public anger following the broad rise in taxes coupled with cut to pensioner benefits could lead to millions of furious voters sweeping all of Illinois’ current career politicians right into the unemployment office.

Incidentally, this is precisely the fight that countless ponzi schemes, pardon pension funds, across the US will be forced to go through in the coming months, unless somehow the Fed funds a way to guarantee 8% returns every year, or else sending inflation soaring, and wiping out the fund’s liabilities.

Since neither is likely to happen for a while, the biggest losers will once again be taxpayers and pensions recipients, who this time will be forced to pay – literally – because their public fiduciaries lied to them, and because other fiduciaries are hoping the lies will continue for at least a few more years.


As I have stated in the past, the Clinton Foundation is a corrupt enterprise and this will no doubt be a key to the election.  The question is of course, does the USA public care?

(courtesy zero hedge)

Trump Slams Clinton Foundation As “Most Corrupt Enterprise In Political History” After Latest Donor Revelations


A huge plunge in existing home sales due to affordability.  This is the reason why furniture sales are way down:

(courtesy zero hedge)

Existing Home Sales Crush Recovery Narrative, Plunge Most Since Nov 2015



This new block technology will be great for the world as countries  by-pass the USA / USA dollar. This would be the ultimate death knell of the USA dollar.  Finally the USA will have to pay for goods.

(courtesy zero hedge)

Barack Obama May Have Finally Destroyed America’s #1 Advantage

Submitted by Simon Black via,

In July 1944, just weeks after the successful Allied invasion of Normandy, hundreds of delegates from around the world gathered in Bretton Woods, New Hampshire to determine the future of the global financial system.

The vision was simple: America would be the center of the universe, and every other nation would revolve around the US.

This arrangement ultimately led to the US dollar being the world’s dominant reserve currency which still remains today.

Whenever a Brazilian merchant pays a Korean supplier, that deal is negotiated and settled in US dollars.

Oil. Coffee. Steel. Aircraft. Countless commodities and products across the planet change hands in US dollars, so nearly every major commercial bank, central bank, multi-national corporation, and sovereign government must hold and be able to transact in US dollars.

This system provides a huge incentive for the rest of the world to hold trillions of dollars worth of US assets– typically deposits in the US banking system, or US government bonds.

It’s what makes US government debt the most popular “investment” in the world, why US government bonds are considered extremely liquid “cash equivalents”.

As long as this system continues, the US government can continue to go deeper into debt without suffering serious consequences.

Just imagine being totally broke… yet every time you want to borrow money there’s a crowd of delighted lenders eager to replenish your wallet with fresh funds.

This may be the US government’s #1 advantage right now.

You’d think that they would be eternally grateful and take care to never abuse this incredible privilege.

But no… not these guys.

In fact, they’ve done the exact opposite. Over the last eight years the US government has gone out of its way to eliminate as much of this benefit and alienate as many allies as possible.

They’ve abused the trust and confidence that the rest of the world placed in them by racking up record amounts of debt, waging indiscriminate wars in foreign lands, and dropping bombs on children’s hospitals by remote control.

They’ve created absurd amounts of regulations and had the audacity to expect foreign banks to comply.

Plus they’ve levied billions of dollars worth of fines against foreign banks who haven’t complied with their ridiculous regulations.

(Last week, for example, New York state financial regulators fined a Taiwanese bank $180 million for not complying with NY state law.)

And they’ve threatened to banish any foreign banks from the US financial system who don’t pay their steep fines.

Abuse. Deceit. Extortion. Not exactly great ways to win friends and influence people.

It’s as if Barack Obama pulled together the smartest guys he could find to make a list of all the ways the US government would have to screw up in order to lose its enormous financial privilege… and then he went out and did ALL of them.

The US government is practically begging the rest of the world to find an alternative to the US dollar and US banking system.

Even the government of France, a key US ally, called into question continued US dominance of the global financial system after the US government slammed French bank BNP Paribas with a $9 billion fine.

There have already been some attempts to displace the United States in the financial system.

China has been aggressively setting up its own competing financial infrastructure, something called the China International Payment System.

It’s been a slow start for the Chinese, but they’re building momentum. Though I’m not sure China is the answer in the long run.

While banks around the world may not care for the long and strong arm of the US government, the Chinese government doesn’t exactly inspire trust either.

But now there really is an alternative. Technology.

Ripple, a blockchain-style protocol that’s funded by Google Ventures (among others), is now being utilized by international banks to send and receive transactions directly.

The way international bank transfers work now relies exclusively on the US financial system.

Large foreign banks have what’s called a “correspondent account”, typically at a major US bank like JP Morgan, Citibank, etc.

A correspondent account is essentially a bank account for other banks. Our company holds funds at a bank in Singapore, for example, whose US dollar correspondent account is at Bank of New York Mellon.

Foreign banks’ US dollar correspondent accounts are typically at major Wall Street banks because that’s the epicenter of US dollar transactions.

So when a bank in Australia sends US dollars to a bank in South Africa, that payment actually flows from the Australian bank’s correspondent account in the US to the South African bank’s correspondent account in the US.

The entire transaction effectively takes place using the US banking system.

Again, this gives the US government enormous power over foreign banks. Any foreign bank that doesn’t do what Uncle Sam commands can be excommunicated from the US banking system.

And without access to the US banking system, a foreign bank will be unable to transact in US dollars, and hence unable to conduct any global business.

This is a death sentence for a bank. The US government knows this and has been blackmailing global banks for years.

But now technology is providing another option.

Banks don’t have to use the US banking system anymore; they can send real-time payments internationally using the Ripple protocol.

Two months ago a Canadian financial services company sent the first-ever institutional cross-border payment to a German bank.

This isn’t some wild theory or conjecture. It’s actually happening.

Just this morning a group of 15 banks in Japan signed up to start using Ripple, and dozens of banks plan to use the protocol within the next six months.

The technology is cheaper. Faster. Superior. And it doesn’t come with any US government strings attached.

So it seems Uncle Sam may have finally shot himself in the foot for the last time.



Well that is all for today

I will see tomorrow


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