August 26 /Only one word to describe today’s events in gold and silver: “Turmoil”

Gold:1321.40 UP $1.50

Silver 18.65  UP 17 cents

In the access market 5:15 pm

Gold: 1321.50

Silver: 18.65


For the August gold contract month,  we had a good sized 45 notices served upon for 4500 ounces. The total number of notices filed so far for delivery:  14,145 for 1,414,500 oz or  tonnes or 43.996 tonnes.  The total amount of gold standing for August is  44.357 tonnes.

In silver we had 0 notices served upon for nil oz. The total number of notices filed so far this month:  501 for 2,505,000 oz.  The amount standing in silver: 2,530,000 oz


There is only one word to describe today’s events and that is turmoil.  Generally when a Fed Chairman speaks the modus operandi of the crooks is to raid gold and silver.  They must not have gold /silver rise while she (he) is speaking.  The problem today was the market just did not believe Yellen and as soon as the speech was released, after an initial planned for whacking on  our precious metals,  gold and silver did a turnaround as well as just about all commodities skyrocketed as the dollar tanked into the toilet.  The world at that point did not buy Janet Yellen.  So they brought out the clown, Stanley Fischer who reiterated what he said last week that a rate hike was a possibility in September and that reversed the course on the dollar as well as gold/silver.  The markets became fast as bids were flying all over the place. Finally when the dust settled, gold was up $1.40 and silver 17 cents.


The Fed has some serious issues to deal with.  The economy is tanking despite the clowns assessments that everything is fine.  It is not.

Expect gold and silver to remain subdued until after the LBMA/OTC options expire on August 31 (generally at 12 noon).

The most notable event today is the low contraction in the upcoming September silver contract.  With two days of massive raids, we only witnessed a lowering of only 15,000 contracts.  Generally we should have had around 25,000 -28000 drop. So with 3 reading days left we have an extremely high silver OI of almost 39000 contracts.

Late tonight,I will get the comex preliminary bulletin to give us another  snapshot of the September OI and if we did receive any more gold oz standing for August.  If it is earth shattering I will amend tonight’s commentary.

Let us have a look at the data for today



In silver, the total open interest FELL BY 3,988 contracts DOWN to 201,857. The open interest fell PRETTY HARD   DESPITE THE FACT THAT THE SILVER PRICE WAS DOWN ONLY 7 CENTS IN YESTERDAY’S TRADING .In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.009 BILLION TO BE EXACT or 144% of annual global silver production (ex Russia &ex China).

In silver we had 11 notices served upon for 55,000 oz

In gold, the total comex gold fell 11,441 contracts as the price of gold FELL BY $4.30 yesterday . The total gold OI stands at 554,455 contracts as the bankers did a pretty good job fleecing our gold longs.


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


we had no changes  today at the GLD

Total gold inventory rest tonight at: 956.59 tonnes of gold


we hadno changes at  the SLV,  / THE SLV Inventory rests at: 356.894 million oz


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

1. Today, we had the open interest in silver fell by 3,988 contracts down to 201,857 despite the fact that the price of silver FELL BY  ONLY 7 cents with YESTERDAY’S trading.The gold open interest fell 11,441 contracts down to 554,455 as the price of gold FELL $4.30 WITH YESTERDAY’S TRADING.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 1.98 POINTS OR 0.05%/ /Hang Sang closed UP 94.59 points or 0.41%. The Nikkei closed DOWN 195.28 POINTS OR 1.18% Australia’s all ordinaires  CLOSED DOWN 0.48% Chinese yuan (ONSHORE) closed DOWN at 6.6719/Oil FELL to 47.13 dollars per barrel for WTI and 49.32 for Brent. Stocks in Europe: in the RED  Offshore yuan trades  6.6826 yuan to the dollar vs 6.6719 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  



Interesting commentary from Wolf Richter today. He has discovered that the Bank of Japan after announcing that they were going to purchase huge sums of ETF’s of the market has only bought on just 2 or 3 days. Why you ask? They are preparing for a market crash after the USA supposedly raises rates.

(courtesy Wolf Richter/WolfStreet)



i)Here is how long it will take for the ECB to own every single sovereign debt of Spain, Germany and France and then all of Europe:  approximately 9 years:

( zero hedge)

ii)Another explosion at a Belgian Sports Complex.

nobody knows how this happened:

(courtesy zero hedge)


none today


none today


i)Iran is so nice!!! We will cooperate under the joint OPEC oil production freeze as long as we are left out.  In other words, they are free to increase production.  Great deal!

( zero hedge)

ii)Discount the following story as Iran Press TV rpeorts that Yemen missiles hit Saudi Aramco facilities:

( zero hedge)


none today


i)Interesting commentary:  It seems that there is no more gold stored at the mint in Denver and the now the only three places where it is stored:

i) Fort Knox

ii West Point

and both of these are under the army

and iii)

Federal Reserve Bank of NY  (mostly foreign held gold)

( Ronan Manly/Bullionstar)

ii)Former Fed Governor Warsh admits that central banks manipulates markets

( Chris Powell/GATA)

iii)In this latest Reuters report, China in the last two months have added, 20.2 tonnes. Actually China accumulated this gold long time again as they are now adding to the “official reserves”  on a monthly basis.  Most of their non official gold is stored with the banks. Russia added 7.3 tonnes which is below their normal 600,000 oz or 18.6 tones.

It is also interesting that Turkey has shed 14.1 tonnes o its gold.

( Reuters/Aranya/)


i)The much anticipated Yellen speech from Jackson Hole Wy. was a dud:

( zero hedge)

ii)the resultant trading as soon as her speech was released

(zero hedge)

iib)Best reaction on the speech:  from Macquarie:  “a whole lot of nothing”

(Macquarie/zero hedge)

iic)Then this: the bond market not buying the Fed speech.

bond yields crash@!

(courtesy zero hedge)

iii)Inventory growth outpaces sales and that should dash all hopes for a Q3 GDP bounce


iv)We now have Q2 revised lower to 1.09%.  Together with the first quarter GDP of 0.83%, together we have first half of of GDP officially at 0.96% or less than 1%

( zero hedge)

v)Hilary used special software designed to prevent recovery and hide traces of her deleted emails

( zero hedge)

vi)My goodness:  CNN cancels Dr Drew one week after he voiced his concern on Hillary’s health

( zero hedge)

vii)A good picture of what happens when you raise minimum wages towards 15 dollars per hours:  In DC restaurants slash jobs

( zero hedge)

viii)A great snapshot on the lower half of USA consumers: they are in dire straits.Please look at the results of the two dollar store giants and their comments:

( zero hedge)

ix)The high cost of Libor in the USA is creating havoc for everyone.  Foreign banks cannot hedge the higher yield on USA bonds due to libor. The higher libor may signify tightness or the shear fright in loaning to another bank as indicated in the higher TED spreads. However what is clear is that bankers are having a difficult time with two major problems:

i) negative rates in Europe, Switzerland et al, creating havoc for European/Japanese banks

ii) higher libor costs preventing the purchase of USA bonds by foreigners

iii) USA yield curve flattening making USA banks vulnerable to profitability.

( zero hedge)

x) this week’s wrap up courtesy of Greg Hunter/usa watchdog

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 554,455 for a LOSS of 11,441 contracts as the price of gold FELL by $4.30 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 another 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 FELL by 209 contracts DOWN to 161.  We had 214 notices filed upon yesterday so we  gained 5 gold CONTRACTS  or an additional 500 ounces that will  stand for delivery in August.  The next contract month of Sept saw it’s OI fall by 675 contracts down to 3197.  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 124 contracts DOWN to 46,460.  The estimated volume today (which is just comex ales during regular business hours of 8:20 until 1:30 pm est) was FAIR at 175,128.  The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was FAIR at 196,187 contracts ( WITH ALL OF THOSE RAID CONTRACTS). The comex is not in backwardation.

Today we had  45 notices filed for  4500 oz of gold.

And now for the wild silver comex results.  Total silver OI fell by 3,988 contracts from 205,845 down to 201,857 despite the slight  fall 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 fall from 16 contracts down to 5 for a loss of 11 contracts.  We had 11 notices served upon yesterday, so we neither gained nor lost any silver contract that 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 6,801 contracts down to 38,903.  This is a very surprising number.  With the last two days of whacking one would have expected a much deeper fall in open interest on the front month of September. We have 3 days left before first day notice.  The volume on the comex today (just comex) came in at 86,785 which is HUGE but lesser rollovers.  The confirmed volume yesterday (comex and globex) was also HUGE  at  81,475( with FEWER rollovers THAN WEDNESDAY). Silver is not in backwardation.  London is in backwardation for several months.
we had 0 notices filed for nil oz
INITIAL standings for AUGUST
 August 26.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
4854.701 oz
Scotia:100 KILOBARS
Deposits to the Dealer Inventory in oz NIL


Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
45 notices 
4500 oz
No of oz to be served (notices)
116 contracts
(11,600 oz)
Total monthly oz gold served (contracts) so far this month
14,145 contracts (1,414,500 oz)
(43.999 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    568,.735.8 OZ
Today:  tiny activity at the gold comex AND 2 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 2 CUSTOMER withdrawals
i) Out of Scotia; 3215.000 oz 100 kilobars
ii) Out of HSBC: 1639.701 oz
Total customer withdrawals  4854.701 OZ
Today we had 2 adjustment:
 i) Out of BRINKS:  2989.95 (93 kilobars) was adjusted out of the customer and this landed into the dealer account of BRINKS:
iii) Out of Scotia: 43,501.291 oz was adjusted out of the dealer and this landed into the customer account of Scotia and a deemed settlement: 1.3530 tonnes
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 214 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 201 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 (14,145) x 100 oz  or 1,414,500 oz , to which we  add the difference between the open interest for the front month of AUGUST  (161 CONTRACTS) minus the number of notices served upon today (45) x 100 oz   x 100 oz per contract equals 1,426,100 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 (14,145) x 100 oz  or ounces + {OI for the front month (161) minus the number of  notices served upon today (45) x 100 oz which equals 1,426,100 oz standing in this non  active delivery month of AUGUST  (44.357 tonnes).
We gained 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 + 44.357 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/aug 25.2115/aug 26: 1.3530/THEREFORE 91.662 tonnes still standing against 74.02 tonnes available.
 Total dealer inventor 2,339,378.554 oz or 72.764 tonnes
Total gold inventory (dealer and customer) =10,991,993.527 or 341.89 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 341.89 tonnes for a  gain of 39  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 26.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
60,060.78 oz
Deposits to the Dealer Inventory
Deposits to the Customer Inventory
577,811.100 OZ
No of oz served today (contracts)
(nil OZ)
No of oz to be served (notices)
5 contracts
25,000 oz)
Total monthly oz silver served (contracts) 501 contracts (2,505,000 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  10,210,239.8 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:  60,060.78 oz
Total customer withdrawals: 60,060.78 oz
We had 1 customer deposit:
i) Into HSBC: 577,811.100 oz
total customer deposits:  nil   oz
 we had 0 adjustment
The total number of notices filed today for the AUGUST contract month is represented by nil contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (501) x 5,000 oz  = 2,505,000 oz to which we add the difference between the open interest for the front month of AUGUST (5) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the AUGUST contract month:  501(notices served so far)x 5000 oz +(5 OI for front month of AUGUST ) -number of notices served upon today (0)x 5000 oz  equals  2,530,000 oz  of silver standing for the AUGUST contract month.
we neither gained nor lost any silver ounces that will stand for silver metal in this non active delivery month of August.
Total dealer silver:  27.444 million (close to record low inventory  
Total number of dealer and customer silver:   160.828 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.
At 3:30 pm we receive the COT report for gold and silver which gives up position levels of our major players
Let us see what our crooked bankers did in this latest report:
Gold COT
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
359,785 65,176 52,821 108,571 426,046 521,177 544,043
Change from Prior Reporting Period
8,250 -2,508 513 -7,557 -1,075 1,206 -3,070
196 83 82 47 59 279 191
Small Speculators  
Long Short Open Interest  
51,796 28,930 572,973  
-729 3,547 477  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, August 23, 2016

Our large specs:

Those large specs that have been long in gold added 8250 contracts to their long side

Those large specs that have been short in gold covered 2508 contracts from their short side.

Our crooked banker commercials:

Those commercials that have been long in gold pitched a huge 7559 contracts from their long side.

Those commercials that have been short in gold covered 1075 contracts from their short side.

Our small specs:

Those small specs that have been long in gold pitched 729 contracts from their long side.

Those small specs that have been short in gold added 3547 contracts to their short side??

Conclusions; our  crooked bankers only go net short by 6482 contracts but still bearish

the boat is certainly overloaded on one side for the specs and the opposite side the commercials.

And now for the silver COT:

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
118,356 35,153 12,383 47,602 145,671
-632 1,154 3,547 -1,574 -4,099
115 59 55 35 44
Small Speculators Open Interest Total
Long Short 206,264 Long Short
27,923 13,057 178,341 193,207
-982 -243 359 1,341 602
non reportable positions Positions as of: 181 137
Tuesday, August 23, 2016   ©

this looks bullish:

Our large specs:

Those large specs that have been long in silver pitched a tiny 632 contracts from their long side.

Those large specs that have been short in silver added 1154 contracts to their short side.

Our commercials:(same crooks as above)

Those commercials that have been long in silver pitched 1524 contracts from their long side.

Those commercials that have been short in silver covered a large 4099 contracts from their short side.

Our small specs;

Those small specs that have been long in silver pitched 982 contracts from their long side.

those small specs that have been short in silver covered 243 contracts.

Conclusions; commercials go net long by 2525 contracts..very bullish

the boat is also overloaded with specs on one side and the commercials on the other.

And now the Gold inventory at the GLD
August 26./no changes at the GLD/inventory rests at 956.59 tonnes
August 25/a withdrawal of 1.78 tonnes at the GLD/Inventory rests at 956.59 tones
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 25/ Inventory rests tonight at 956.59 tonnes


Now the SLV Inventory
August 26/no change in silver inventory at the SLV/Inventory rests at 356.894 million oz
August 25/a withdrawal of 1.899 million oz from the SLV/Inventory rests at 356.894 million oz
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 26.2016: Inventory 356.894 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 4.0 percent to NAV usa funds and Negative 3.6% 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 26/2016).
2. Sprott silver fund (PSLV): Premium rises to +0.43%!!!! NAV (august 26/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO  0.40% to NAV  ( august 26/2016)
Note: Sprott silver trust back  into POSITIVE territory at +0.43% /Sprott physical gold trust is back into positive territory at 0.40%/Central fund of Canada’s is still in jail.


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

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

Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Years

Gold bullion has had its biggest gains in September over the past 20 years. Seasonally gold is entering the sweet spot with the Autumn being gold’s best season and with September being gold’s best month in the last 20 years.

Gold’s Monthly Performance – 1994-2014 (Bloomberg)

Given the backdrop of one of the most uncertain macroeconomic, systemic, geopolitical and monetary outlooks both the U.S. and the world have ever seen, we are likely to see gold do well in its traditionally seasonal strong period. Possibly, the most vitriolic, hateful and divisive election in U.S. history is set to be witnessed and this will likely lead to considerable volatility in markets and should see the dollar come under pressure. The election date is Tuesday, November 8, 2016.

The spring and summer months frequently see seasonal weakness, since gold became a traded market in 1971. Gold bullion often sees periods of weakness in the summer doldrum months of May, June and July.

August tends to be a better month for gold but not this year with gold down nearly 2% in dollar terms, 3% in euro terms and 1.8% in sterling terms.

Gold’s traditional period of strength is from August through to January and February with weakness and a correction frequently seen in October. Thus, August is generally a good time to buy after the seasonal spring and summer dip.

This year gold rose in June and July before and after the Brexit market shock and on very robust global demand. Gold has dipped this August, despite August along with September and November being some of the best months to own gold. This is seen in the charts and tables showing gold’s monthly performance over many different time frames. Gold’s weakest months since 1975 have been June and July (see table below) and buying gold in August has generally been a good trade.

Late summer, autumn and early New Year are the seasonally strong periods for the gold market due to robust physical demand in Asia in particular. This is the case especially in India for weddings and festivals including Diwali and into year end and, since the market was liberalised in China, for Chinese New Year when the voracious Chinese stock up on gold.

This has been less the case in the mini bear market of recent years when unusually gold actually performed poorly in the winter months, in particular December, and somewhat oddly tended to have its seasonal low on or very close to December 31st.

Year end book closing or painting the tape? Tape painting is the illegal trading practice by hedge funds and banks who manipulate a market by buying and selling an asset to create the illusion of strength or weakness, change sentiment and to manipulate or scare off buyers who follow the trend pushing the price higher or in this case lower.

Image result for gold seasonal 2016

Interestingly, January has been one of the best months to own gold in the last five years as prices bounce from the peculiar year end lows.

Gold’s ‘summer doldrums’ period is coming to a close. Traditionally seasonal factors and less liquid markets often result in weakness in the precious metal markets, creating an attractive buying opportunity. This appears to be the case this August again. The data is compelling but it is important to realise that the seasonal data is just another indicator. Gold’s recent weakness could continue in the coming months – it is very unlikely given the fundamentals but possible nevertheless.


Therefore, short term speculation should be avoided in favour of long term investment diversification.

Investors should, as ever, avoid attempting to time the market and considergeometrically cost averaging their gold bullion and silver bullion purchases. This way they protect themselves from market falls and also from buying again at much higher prices. They also protect themselves from not owning gold and silver bullion which is a risk in and off itself.

Gold Bullion Q&A – How To Allocate, Dollar Cost Average and Rebalance

Absolutely nothing has changed regarding the fundamentals driving the gold market. Janet Yellen and her merry band of central bankers are continuing ultra loose monetary policies. The money ‘punchbowl’ is still overflowing and there is going to be the mother of all hangovers.

Over $13 trillion of bonds are now trading negatively and now depositors are exposed to negative interest rates and deposit bail-ins.

We are confident that gold, and silver, have resumed their long term secular bull markets. This trend is likely to continue for at least 3 years and likely for a longer period given the scale of the geopolitical risks today and indeed the very real challenges facing the financial and monetary system and consequently savers, investors and pension owners.

Owning physical coins and or bars in your possession and owning bullion in allocated and most importantly in segregated accounts will continue to protect and grow wealth in the coming years.

GoldCore: 7 Key Storage Must HavesDownload Guide

Gold and Silver Bullion – News and Commentary

Gold faces selling pressure, silver tumbles (CNBC)

Gold steady above 4-week lows as dollar slips ahead of Yellen speech (CNBC)

Gold Near One-Month Low as Investors in Waiting-for-Yellen Mode (Bloomberg)

Gold Believers From Soros to UBS Lose Faith in Miners’ Gain (Bloomberg)

German business confidence falls post-Brexit, says Ifo (BBC)

Gold Wins in Three out of Four Scenarios – None of them bode well for the economy (TheEpochTimes)

Punch-Drunk Gold Investors Eye Yellen, Driving Volumes to Low (Bloomberg)

Gold Standard “Comes After War, Not Before” – Macquarie (Zerohedge)

French support for the EU project is crumbling on the Left and Right (Telegraph)

Why Athletes Bite Their Gold Medals? (Business Insider)

Gold Prices (LBMA AM)

26Aug: USD 1,324.90, GBP 1,002.95 & EUR 1,173.33 per ounce
25Aug: USD 1,324.50, GBP 1,001.06 & EUR 1,172.98 per ounce
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

Silver Prices (LBMA)

26Aug: USD 18.67, GBP 14.15 & EUR 16.54 per ounce
25Aug: USD 18.50, GBP 14.02 & EUR 16.39 per ounce
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

Recent Market Updates

– Gold Futures See Massive $1.5 Billion “Non Profit” Liquidation In “One Minute”
– Jim Grant Is “Very Bullish On Gold”
– 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”

Mark O’Byrne
Executive Director





Interesting commentary:  It seems that there is no more gold stored at the mint in Denver and the now the only three places where it is stored:


i) Fort Knox

ii West Point

and both of these are under the army

and iii)

Federal Reserve Bank of NY  (mostly foreign held gold)

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: Is any gold still stored at U.S. Mint in Denver?


11:15a ET Friday, August 26, 2016

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly reports today that the U.S. Mint has made a subtle change in its monthly reports, which now indicate that no gold is being stored at the Denver mint. Manly infers from this that all U.S. government gold now is being held at the Army installations at Fort Knox in Kentucky and West Point in New York and that, as fund manager and geopolitical analyst James G. Rickards contends, all the gold is essentially under the Army’s control. Manly’s report is headlined “Is There Any Gold Bullion Stored at the U.S. Mint in Denver?” and it’s posted at Bullion Star here:…

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


Former Fed Governor Warsh admits that central banks manipulates markets

(courtesy Chris Powell/GATA)

Former Fed Governor Warsh admits that the central bank manipulates markets


Adjudicating GATA’s freedom-of-information claim against the Federal Reserve when he was a member of the Fed’s Borad of Governors in 2009, the author revealed that the Fed has secret gold swap arrangements with foreign banks —

— a business about which New York Fed President William Dudley refused to answer questions five months ago:

* * *

The Federal Reserve Needs New Thinking

By Kevin Warsh
The Wall Street Journal
Thursday, August 24, 2016…

The conduct of monetary policy in recent years has been deeply flawed. U.S. economic growth lags prior recoveries, falling short of forecasts and deteriorating in the most recent quarters. This week in Jackson Hole, Wyoming, the Federal Reserve Bank of Kansas City hosts the world’s leading central bankers and academics to consider monetary reform. The task is timely and consequential, but the Fed needs a broader reform agenda.

Policy makers around the world neither predicted nor can adequately explain the reasons for current inflation readings below their targets. So it is puzzling that so many academics are pushing to raise the current 2% inflation target to a higher target of 3% or 4%. In the telling of the economics guild, the Fed’s leaders should descend from the Grand Tetons with supreme assurance that their latest monetary policy invention will remedy the economy’s ills.

The Fed’s leaders should not take the bait. Raising the inflation target is a bad idea being considered at the wrong time for the wrong reasons.

A new inflation target would undermine the Fed’s commitment to any policy framework. It would please the denizens of Wall Street who pine for still-looser Fed policy. And households would be understandably miffed to receive a new lecture on unconventional monetary policy — this one on the benefits of higher prices.

A change in inflation targets would also add to the growing list of excuses that rationalize the economic malaise: the persistent headwinds from the crisis of the prior decade, the high-sounding slogan of “secular stagnation,” and the convenient recent alibi of Brexit.

A numeric change in the inflation target isn’t real reform. It serves more as subterfuge to distract from monetary, regulatory, and fiscal errors. A robust reform agenda requires more rigorous review of recent policy choices and significant changes in the Fed’s tools, strategies, communications, and governance.

Two major obstacles must be overcome: groupthink within the academic economics guild, and the reluctance of central bankers to cede their new power.

First, the economics guild pushed ill-considered new dogmas into the mainstream of monetary policy. The Fed’s mantra of data-dependence causes erratic policy lurches in response to noisy data. Its medium-term policy objectives are at odds with its compulsion to keep asset prices elevated. Its inflation objectives are far more precise than the residual measurement error. Its output-gap economic models are troublingly unreliable.

The Fed seeks to fix interest rates and control foreign-exchange rates simultaneously — an impossible task with the free flow of capital. Its “forward guidance,” promising low interest rates well into the future, offers ambiguity in the name of clarity. It licenses a cacophony of communications in the name of transparency. And it expresses grave concern about income inequality while refusing to acknowledge that its policies unfairly increased asset inequality.

The Fed often treats financial markets as a beast to be tamed, a cub to be coddled, or a market to be manipulated. It appears in thrall to financial markets, and financial markets are in thrall to the Fed, but only one will get the last word. A simple, troubling fact: From the beginning of 2008 to the present, more than half of the increase in the value of the S&P 500 occurred on the day of Federal Open Market Committee decisions.

The groupthink gathers adherents even as its successes become harder to find. The guild tightens its grip when it should open its mind to new data sources, new analytics, new economic models, new communication strategies, and a new paradigm for policy.

The second obstacle to real reform is no less challenging. Real reform should reverse the trend that makes the Fed a general purpose agency of government. Many guild members believe that central bankers — nonpartisan, high-minded experts — are particularly well-suited to expand their policy remit. They fail to recognize that central bank power is permissible in a democracy only when its scope is limited, its track record strong, and its accountability assured.

The Fed is suffering from a marked downturn in public support. Citizens are rightly concerned about the concentration of economic power at the central bank. Long after the financial crisis, the Fed holds trillions of dollars of assets that would otherwise be in private hands. And it appears to make monetary policy with the purpose of managing financial asset prices, including bolstering the share prices of public companies.

With the enactment of the Dodd-Frank Act, the Fed claims the mantle of reform. It now micromanages big banks and effectively caps their rate of return. The biggest banks’ growth in market share corresponds to that of their principal regulator. They are joint-venture partners with the Fed, serving as quasi-public utilities. As the dispenser of fault and favor, the Fed is contributing to the public perception of an unfair, inequitable economic system. Real reform this is not.

Most gathered in Jackson Hole will judge that the Fed’s aggressive actions are necessary and wise. Even if that were true, the Fed finds itself in an increasingly untenable position. Congress will tag the Fed for its failures, and the public will assail the Fed for favoritism for its ostensible successes.

In the best of circumstances, the U.S. economy will accelerate to “escape velocity.” In that event the Fed might get the benefit of the public doubt.

If, as is more likely, the economy is closer to recession than resurgence, the Fed is poorly positioned to respond with force, efficacy, and credibility. The Fed is vulnerable. Its recent centennial as our nation’s central bank should not be confused with its permanent acceptance in the American political system.


Mr. Warsh, a former member of the Federal Reserve board, is a distinguished visiting fellow in economics at Stanford University’s Hoover Institution.


In this latest Reuters report, China in the last two months have added, 20.2 tonnes. Actually China accumulated this gold long time again as they are now adding to the “official reserves”  on a monthly basis.  Most of their non official gold is stored with the banks. Russia added 7.3 tonnes which is below their normal 600,000 oz or 18.6 tones.

It is also interesting that Turkey has shed 14.1 tonnes o its gold.

(courtesy Reuters/Aranya/)

Russia, Kazakhstan And China Increase Gold Holdings In JulyThursday August 25, 2016 19:42

Aug 25 (Reuters) – International Monetary Fund: Russia and Kazakhstan continued to boost their gold reserves in July, data from the International Monetary Fund showed on Thursday.

  • China raised gold holdings by 5.3 tonnes to 1,828.6 tonnes in July. China raised gold holdings by 14.9 tonnes to 1,823.3 tonnes in June.
  • Kazakhstan raised gold holdings by 3.3 tonnes to 241.5 tonnes in July.
  • Russia raised gold holdings by 7.3 tonnes to 1,506.1 tonnes in July.
  • Turkey lowered gold holdings by 14.1 tonnes to 460.3 tonnes in July.

(Reporting by Harshith Aranya in Bengaluru)


Your early FRIDAY 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 DOWN 195.24 OR 1.18% /USA: YEN FALLS TO 100.42

3. Europe stocks opened  IN THE RED (     /USA dollar index DOWN to 94.66/Euro UP to 1.1288

3b Japan 10 year bond yield: RISES TO  -.07%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 100.42

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.13  and Brent: 49.32

3f Gold UP  /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 RISES to -.073%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 6.91%/: 

3j Greek 10 year bond yield FALL to  : 8.04%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1327.90-/silver $18.78(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 21/100 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 .9673 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0919 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 RISES to  -0.073%

/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 1.569% early this morning. Thirty year rate  at 2.254% /POLICY ERROR)

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

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


With Janet Yellen Just Hours Away, Directionless Markets Wait For A Signal

 With Yellen’s much anticipated speech just hours away, the already comatose market flatlined overnight in another directionless session, with European stocks and US equity futures practically unchanged, while Asian shares to a two-week low, led by Japan, as investors showed a reluctance to take on risk before Yellen’s speech. The dollar was a tad lower, along with oil which continues to move on every single OPEC-meeting headline, and is set for its first weekly drop in a month. 

The MSCI All-Country World index was down 0.1% in early trading, after slipping to its lowest level since Aug. 9, while the European STOXX 600 fell 0.2%. Cable extended a second weekly advance amid an ongoing short squeeze and optimism that the Brexit fallout may not be as severe as the doomer and gloomers had warned, after a report showed a pickup in U.K. consumer confidence and GDP of 2.2% which came in line.

That said, with volatility at generational lows, and “pent up” eagerness to break out on deck, stocks may just be waiting for the Yellen signal to break out in any direction.

As even NY hotdog vendors know by now, Yellen speaks Friday where she is expected to lay out the near-term future Fed policy, after comments by Fed officials in the past week signaled the economy is strong enough to withstand an increase in borrowing costs. Fed funds futures indicated a 57 percent chance of a rate hike this year even as evidence of uneven global growth casts doubt over the central bank’s willingness to tighten policy amid monetary easing in Asia and Europe. The probability of a September rate hike has risen to 32%, up from 22% a week ago, and the highest since Brexit.

Still, there is little hope Yellen will do or say much to clear up the prevailing confusion. Here are some last minute takes by financial analysts:

“Don’t expect Yellen to give a clear guidance in Jackson Hole,” said Ulrich Leuchtmann, the Frankfurt-based head of currency strategy at Commerzbank AG. “The Fed is data dependent at this point. Yellen’s topic is the ‘Fed’s toolkit’ and in talking about this she has to speak about expansionary instruments as well. She may say she can act in all directions. There is risk of market misinterpretation.”

“Definitely in focus today is the Jackson Hole meeting and Ms. Yellen’s speech,” said Michael Kapler, a portfolio manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “Markets have been very, very quiet over the last few days. Most market participants are a little bit uncertain about the policy of the Fed because you’ve seen that over the last couple months they’ve been talking about interest rate hikes and then stepping back.”

“It’s a wait-and-see holding pattern now,” Chris Green, of First NZ Capital Group told BBG/ “In some ways, markets may be disappointed if they are looking for clarity for the rate decision. The usual modus operandi would be not to comment explicitly.”

“Markets are a bit worried about the upcoming comments from Yellen, which is understandable given how much of the market strength is due to central bank action,” said Philippe Gijsels, head of research at BNP Paribas Fortis in Brussels. “The fact that some of her disciples have indicated that it may be time to raise rates again has not done much in terms of calming sentiment. She will probably try to strike a balance between an improving U.S. economy and risks abroad.”

Chris Scicluna, head of economic research at Daiwa Capital Markets, took a similar line. “Yellen won’t be able to ignore the current debate but she can’t make a commitment either because there’s a range of views on the FOMC,” he said.

So with the main show looming, the dollar edged down and global shares slipped to a two-week low on Friday.

Europe’s Stoxx 600 Index slipped 0.1%, paring its weekly advance to 0.5%. The gauge has been trading in a tight range for most of the month, struggling to find a direction after a rebound of as much as 12 percent following the aftermath of the U.K. secession vote. French media company Vivendi SA fell 4.2 percent after reporting quarterly earnings that missed analyst estimates. Gemalto NV climbed 5.3 percent as the software firm posted an increase in net profit and said it is interested in buying Safran SA’s Morpho. Rio Tinto Group and Glencore Plc led a gauge of commodity producers to the best performance of the 19 industry groups on the Stoxx 600 as metals prices advanced.

In the US, S&P Index futures were little changed after U.S. equities slipped 0.1 percent on Thursday.  The MSCI Emerging Markets Index has dropped 1.2 percent since Aug. 19, halting six weeks of gains, the longest winning streak in more than three years.

As well as Yellen, investors will also look to data today, including reports on wholesale inventories and consumer sentiment, for indications of the health of the world’s biggest economy.

Market Snapshot

  • S&P 500 futures up less than 0.1% to 2174
  • Stoxx 600 down less than 0.1% to 342
  • FTSE 100 down less than 0.1% to 6814
  • DAX down 0.2% to 10510
  • German 10Yr yield down less than 1bp to -0.08%
  • Italian 10Yr yield up less than 1bp to 1.13%
  • Spanish 10Yr yield up 1bp to 0.93%
  • S&P GSCI Index down 0.4% to 361.8
  • MSCI Asia Pacific down 0.5% to 138
  • Nikkei 225 down 1.2% to 16361
  • Hang Seng up 0.4% to 22910
  • Shanghai Composite up less than 0.1% to 3070
  • S&P/ASX 200 down 0.5% to 5515
  • US 10-yr yield down 1bp to 1.56%
  • Dollar Index down 0.14% to 94.64
  • WTI Crude futures down 0.5% to $47.11
  • Brent Futures down 0.9% to $49.24
  • Gold spot up 0.2% to $1,325
  • Silver spot up 0.6% to $18.66

Top Global News

  • Icahn Said to Have Discussed Selling Herbalife Stake, WSJ Says: Carl Icahn has recently discussed selling his stake in Herbalife to a group incl. William Ackman, WSJ says, citing unidentified people familiar
  • Blackstone Unleashes Cash Hoard in Texas Shale Oil Land Grab: Permian attracting most investment during crude slump. Private equity giant commits $1.5b in two deals
  • VW Dealer Accord Said to Add $1.2b to Scandal Costs: Carmaker will buy back vehicles under same terms as consumers. VW given new deadline by judge for devising plan to fix cars
  • CEO of Denmark’s $120b ATP Pension Fund Steps Down; Carsten Stendevad plans to move back to U.S.
  • BOJ’s Impact Waning Even Before Review, Shadow Gauge Shows: BOJ easing has not fed into real economy, says Bank of America
  • Alphabet’s Nest Wants to Build a ‘Citizen-Fueled’ Power Plant: Nest targets 50,000 SoCalEd utility customers for thermostats. Program part of effort to address potential energy shortages
  • Citic’s Profit Plunges on ‘Lackluster’ Share Market, Yuan: 1H net income falls 46% y/y

* * *

Looking at regional markets, Asia stocks traded mixed following the weak lead from Wall St. as participants remained tentative ahead of the Jackson Hole symposium. Nikkei 225 (-1.2%) underperformed with the index briefly declining below 16,400 on a firmer JPY and CPI data which some feel dampens the likelyhood of further BoJ action next month. Financials dragged the ASX 200 (-0.5%) lower, although a mild rebound in commodities has stemmed losses. Chinese markets bucked the downbeat trend with Hang Seng (+0.5%) buoyed by reports the HK-Shenzhen connect regulations will be announced today, while the Shanghai Comp (+0.1%) was underpinned by better than expected earnings including Big-4 China Construction Bank and the largest weekly interbank liquidity injection in nearly 3-months. 10yr JGBs tracked T-notes lower despite the cautious tone in Japanese stocks, while the BoJ’s buying operations were also for a relatively reserved amount. China’s NDRC said there is plenty of room for China to guide interest rates lower. PBoC injected CNY 95b1n via 7-day reverse repos and CNY 50bIn in 14-day reverse repo for a net injection of 310bIn vs. Prey. net injection CNY 15.5bIn; which represents the largest weekly net injection in nearly 3-months

Top Asian News

  • Hong Kong Regulator Wants a Tighter Grip on IPOs in Blow to HKEx: Plan would see balance of power over IPOs shift to city’s SFC
  • BOJ’s Impact Waning Even Before Review, Shadow Gauge Shows: BOJ easing has not fed into real economy, says Bank of America
  • China’s Postal Savings Bank Said to Win $8b IPO Approval: Postal Savings Bank has more outlets than any listed lender
  • World’s Biggest Pension Fund Loses $52b as Stocks Slump: Japan’s GPIF wipes out all gains since shift to shares
  • Hong Kong Tribunal Finds Citron’s Left Culpable of Misconduct: Andrew Left claimed Evergrande Real Estate was insolvent
  • Citic’s Profit Plunges on ‘Lackluster’ Share Market, Yuan: 1H net income falls 46% y/y
  • Top Lotte Lieutenant Found Dead Amid Probe Into Korean Group: Prosecutors probing allegations of slush funds, embezzlement
  • Duterte Courts Risk in Deadly Drug War That Echoes Thai Crusade: Popular for now, Philippine leader could suffer as list of enemies grows

In Europe, similar to the lead up to Nonfarm Payrolls, markets are tentative ahead Fed Yellen’s speech. European equities are softer this morning (DAX -0.3%) as the markets remain within their tight ranges. The FTSE 100 is the best performer only down 0.1 % after energy sector names benefit from a slight early morning uptick in oil prices. Also of note, GDP readings from France and the UK both came inline with expectation and markets subsequently failed to react. In fixed income markets, supply from Europe remains light today with no real notable price action in the sector.

Top European News

  • AB InBev Said to Plan 5,500 Job Cuts After SABMiller Deal: Brewer to eliminate 3% of combined workforce over three years. Job cuts will form part of $1.4b cost savings from deal
  • VW Dealer Accord Said to Add $1.2b to Scandal Costs: Carmaker will buy back vehicles under same terms as consumers. VW given new deadline by judge for devising plan to fix cars
  • Vivendi Profit Declines as France Pay-TV Unit Remains Pressured; Earnings missed analyst ests. as Canal Plus lost money and subscribers in France
  • CEO of Denmark’s $120b ATP Pension Fund Steps Down; Carsten Stendevad plans to move back to U.S.

In FX, the Bloomberg Dollar Spot Index slipped 0.1% in early trade, leaving it up 0.2 percent for the week. Dallas Fed chief Robert Kaplan said Thursday the pace of interest-rate increases in the U.S. should be “patient and gradual” to limit impact on the dollar, while his Kansas City counterpart said it’s already time to move. Futures put the probability of a September rate hike at 32 percent, up from 22 percent a week ago. “The outcome of the Fed’s Sept. 21 meeting will be largely determined by the tone of Janet Yellen’s speech at Jackson Hole,” said Sean Keane, an Auckland-based analyst at Triple T Consulting and a former head of Asia-Pacific rates trading at Credit Suisse Group AG. If she continues the confident tone of some of her colleagues, “market expectations for a September rate increase will likely move up closer to 60 percent to 70 percent,” he said. The pound rose 0.2 percent and was headed for a 1.1 percent weekly advance, after a report showed U.K. consumer confidence rose the most in more than three years this month as the shock from Britain’s decision to leave the European Union faded. That adds to data last week that showed the initial economic effect of the U.K.’s secession may not be as severe as some economists feared. The yen traded at 100.45 per dollar, set for a 0.2 percent weekly decline. Japanese inflation data on Friday showed a fifth straight month of consumer-price declines, underscoring the challenges facing the Bank of Japan as it uses unprecedented monetary stimulus to try and revive the economy and inflation.

In commodities, crude oil slipped 0.3% to $47.17 a barrel. Saudi Arabia’s energy minister said an output freeze would be positive for the market, ruling out a cut. Oil fell earlier this week after a government report showed that U.S. crude inventories unexpectedly rose. Gold advanced 0.3 percent, paring its biggest weekly decline in more than a month, having fallen this week as speculation built that the U.S. will boost interest rates this year.

Looking at the day ahead, the calendar will be dominated by Yellen at Jackson Hole. The second reading of Q2 GDP will also be important, as well the Core PCE data. The Advance Goods Trade Balance data for July will also be released along with wholesale inventories, while finally the last revision to the University of Michigan consumer sentiment in August is due. Over the weekend we’ll also get industrial profits data out of China.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Markets remain steady ahead of a slew of tier 1 US data points and Fed Chair Yellen’s appearance at the Jackson Hole Symposium
  • Looking ahead, highlights include US GDP, US Trade Balance, U. of Michigan Sentiment and Fed Chair Yellen (Dove, Voter) speaks at the Jackson Hole Symposium at 1500BST/0900CDT
  • Treasuries show upside bias during overnight session before Fed Chair Yellen speaks at Jackson Hole Symposium at 10am; “the most active sector overnight was the U.S. bond market and that’s not saying much,” independent strategist Marty Mitchell said in note.
  • Fed Chair Janet Yellen probably won’t offer clear signals on the near-term policy outlook in her speech 10am Friday during annual Jackson Hole symposium, analysts say.
  • Fed fund futures pricing 50/50 chance of rate hike Dec. 2016; fully pricing next rate hike June 2017, implied rate 62.5bp, midpoint of 50-75bp target range
  • Federal Reserve Bank of Dallas President Robert Kaplan said the “jury is out” on whether the Bank of Japan’s negative rate policy is working, and monetary policy alone won’t fix the key problems Japan faces
  • Japan’s Government Pension Investment Fund posted a $52 billion loss last quarter as stocks tumbled and the yen surged, wiping out all investment gains since it overhauled its strategy by boosting shares and cutting bonds
  • Consumer prices in Japan fell for a fifth straight month, underscoring the central bank’s struggle to spur inflation to its 2 percent target
  • The man in charge of managing Sweden’s state debt signaled the Riksbank may soon be reaching the limits of its government bond purchase program amid signs that liquidity is suffering.
  • The Fed and other agencies are poised to issue a long- overdue report required by the law that lays out recommendations beyond the Volcker Rule to prevent financial firms from blowing up the economy, said two people with knowledge of the matter who asked not to be named before its release
  • The EU is overhauling the way supervisors set bank-specific capital levels for current and potential risks that aren’t covered by the minimum requirements in EU law

US Event Calendar

  • 8:30am: Advance Goods Trade Balance, July, est. -$63b (prior -$63.3b, revised -$64.5b)
  • 8:30am: GDP Annualized q/q, 2Q S, est. 1.1% (prior 1.2%)
  • 10am: U. of Mich. Sentiment, Aug. F, est. 90.8 (prior 90.4)
  • Fed’s Yellen to speak at Jackson Hole conference
  • 1pm: Baker Hughes rig count

DB’s Jim Redid concludes the overnight wrap

Will Yellen shock today? Because the month has been so dull, perhaps markets are getting too excited by the prospects of a meaningful speech by Yellen today that will give us a lot more clues on immediate Fed policy. However be warned because as DB’s George Saravelos pointed out yesterday, she has not traditionally used Jackson Hole as a vehicle to focus on policy guidance. Last year she didn’t attend and the year before her speech had no real immediate policy focus. Will this year be any different? The title of the speech is ‘The Federal Reserve’s Monetary Policy Toolkit’ and scheduled for 3pm BST/10am EST. There is no Q&A which might also lessen the impact. After listening to Saravelos yesterday, this morning I had a quick think back as to whether even Bernanke used Jackson Hole as a policy shaping platform. From a quick scurry through the archives, perhaps the only time was when QE2 was hinted at in 2010. So markets have probably subconsciously elevated the importance of the symposium for FOMC clues ever since.

Even if Yellen does comment on near-term policy would she really want to pre-commit to an imminent hike before September’s payroll? Probably not and therefore we’d expect her to be more ‘data dependent’ and more dovish in her comments than some of the recent Fed speakers who have been clearly itching to raise rates with less regard for the data.

It’s worth also noting that ECB President Draghi is skipping the Jackson Hole for a second successive year. There is however a potentially interesting panel discussion taking place on Saturday which will see the ECB’s Coeure and the BoJ’s Kuroda participate alongside the Governor of the Bank of Mexico. With high expectations for further BoJ action in September it’ll be interesting to see if Kuroda in particular is any more transparent.

The last 24 hours in markets have largely summed up what we’ve been put through for much of the past few weeks. US equities chopped and changed in a tiny range (0.42%) and eventually closed in the red (S&P 500 -0.14%). European equities were down a bit more (Stoxx 600 -0.84%) and were already weak heading into a disappointing Germany IFO survey (more on that shortly).

Credit markets were fairly unchanged and all this caution came despite Oil (WTI +1.20%) rebounding after Iranian news sources reported that Iran’s Oil Minister would attend an informal discussion with fellow OPEC members next month. There was no comment on the position that Iran would take at the meeting but the jawboning had another positive effect on the Oil price. Elsewhere Treasury yields edged slightly higher (10y +1.2bps to 1.574%) in part reflecting comments from Kaplan and George who lived up to their more hawkish reputation. The latter said that ‘when I look at where we are with the job market, when I look at inflation and our forecast for that, I think it’s time to move’. Kaplan said that ‘the case is strengthening’ for tightening soon. We go into today with a September hike now priced at 32% (from 22% this time last week) and December at 57% (from 51%).

Markets also seemingly chose to ignore what was much better than expected durable and capital goods orders data. Headline durable goods orders rose +4.4% in July (vs. +3.4% expected) while ex-transportation (+1.5% mom vs. +0.4% expected) also rose more than expected. Core capex orders (+1.6% mom vs. +0.2% expected) also beat and encouragingly have risen for two consecutive months for the first time since early 2015. Core shipments did fall slightly (-0.4% mom vs. +0.3% expected) although that was somewhat blamed on timings. Meanwhile, initial jobless claims held steady last week at 261k (down 1k) with the four-week average now at 264k. The services PMI declined 0.5pts this month to 50.9 which was disappointing relative to expectations (51.8 expected) and is actually the lowest reading since February. Finally the Kansas City Fed’s manufacturing survey rose 2pts to -4 (vs. -2 expected). The Atlanta Fed Q3 GDP forecast is now down to 3.4% (from 3.6%) reflecting Wednesday’s soft existing home sales data.

Speaking of data, also important today will be the first revision to Q2 GDP in the US, released just prior to Yellen’s speech at 1.30pm BST. Neither our US economists nor the market is expecting much change from the initial +1.2% qoq reading. What could be interesting however is what corporate profits show. As our US economists highlight corporate profits in the NIPA accounts have declined in four out of the last five quarters, an extremely rare occurrence outside recession. The weakness in the energy sector and the deleterious effects of a strong dollar have been well advertised however they highlight that domestic corporate profits (before tax with inventory valuation adjustment) excluding the energy sector and Federal Reserve Banks were still down -5.2% over the four quarters ending in Q1. The risk is that this eventually weighs on employment and wage growth, something Vice-Chair Fischer touched on last week. So it’s worth keeping an eye on those numbers.

Refreshing our screens it’s been another fairly mixed session in Asia this morning. While there are gains for the Hang Seng (+0.54%) and Shanghai Comp (+0.57%), the Nikkei (-0.97%), Kospi (-0.30%) and ASX (-0.17%) are all lower. The Yen is little changed but had been trading slightly stronger following a disappointing July inflation report in Japan. Headline CPI printed at -0.4% yoy as expected which was unchanged from June. The core excluding fresh food declined one-tenth to -0.5% yoy (vs. -0.4% expected) and the core-core fell two tenths to +0.3% yoy (vs. +0.4% expected). The figures were also weak on a seasonally-adjusted MoM basis. The data will only further increase the pressure on the BoJ to take action next month.

Moving on. The weaker Germany IFO survey which we highlighted earlier saw the headline business climate reading fall 2.1pts to 106.2 (vs. 108.5 expected) which is the lowest reading since February and also the biggest monthly decline since May 2012. Both the current assessment and expectations surveys tumbled 2pts. Aside from stable construction sentiment, weakness was fairly broad based across industries and will likely weigh on GDP estimates. France confidence indicators (particularly business and

manufacturing) were also a touch softer this month, however there was better news to come out of the UK where the CBI’s Distributive Trade Survey revealed a big pickup in retail sales volume to +9 from the post-Brexit -14 reading in July.

Staying with Europe, DB’s Marco Stringa yesterday updated us on Spanish politics where next week Rajoy will try to break a nine-month-long political stalemate by attempting to win a confidence vote in parliament. The first vote, which requires an absolute majority, should take place on 30 or 31 August. If unsuccessful, a second vote, which requires a simple majority, should take place on 2 September. While the report is not optimistic of a sustainable stable political outcome immediately after September 2nd, the central case scenario is for a centre-right PP-led minority government being formed before the 1 November deadline. They also think some volatility could be seen in the near-term for Spanish assets, but that the ECB’s buying program should ensure resilience.

Looking at the day ahead, this morning in Europe we’re kicking off with the latest Germany consumer confidence reading which could be interesting in light of yesterday’s IFO survey, while France consumer confidence and Q2 GDP follows. The ECB will release its latest money and credit aggregates data while the UK will also report its second reading for Q2 GDP (expected to stay unchanged at +0.6% qoq) along with the various growth components. As noted this afternoon will be dominated by Yellen at Jackson Hole. However the aforementioned second reading of Q2 GDP will also be important, as well the Core PCE data. The Advance Goods Trade Balance data for July will also be released along with wholesale inventories, while finally the last revision to the University of Michigan consumer sentiment in August is due. Over the weekend we’ll also get industrial profits data out of China.


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 1.98 POINTS OR 0.05%/ /Hang Sang closed UP 94.59 points or 0.41%. The Nikkei closed DOWN 195.28 POINTS OR 1.18% Australia’s all ordinaires  CLOSED DOWN 0.48% Chinese yuan (ONSHORE) closed DOWN at 6.6719/Oil FELL to 47.13 dollars per barrel for WTI and 49.32 for Brent. Stocks in Europe: in the RED  Offshore yuan trades  6.6826 yuan to the dollar vs 6.6719 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  



Interesting commentary from Wolf Richter today. He has discovered that the Bank of Japan after announcing that they were going to purchase huge sums of ETF’s of the market has only bought on just 2 or 3 days. Why you ask? They are preparing for a market crash after the USA supposedly raises rates.

(courtesy Wolf Richter/WolfStreet)

Bank of Japan Prepares for Crash Triggered by Fed Tightening




Here is how long it will take for the ECB to own every single sovereign debt of Spain, Germany and France and then all of Europe:  approximately 9 years:

(courtesy zero hedge)

How Long Will It Take For The ECB To Own All Sovereign Debt Of Spain, Germany, France?

Submitted by Michael Shedlock via,

Huky Guru on Guru’s Blog posted a chart that answers the question: How Long Will it Take For the ECB to Own All Sovereign Debt of Eurozone Countries?

ECB QE How Long

At the current rate of purchase of sovereign bonds the ECB will have have purchased all sovereign debt issued by Spain in 9 years and Germany in 8.8 years.

Bond Market Distortion

Distortion in the corporate bond market has picked up since the ECB has started buying corporate bonds.

Bond Spreads Eurozone

The above chart shows a comparison between the yields of bonds eligible to be purchased by the ECB and bonds with the same rating in the same sector that are not eligible for the ECB.

Corporate bond yields have collapsed across the board since the ECB’s announcement, but even more so for eligible bonds.



Another explosion at a Belgian Sports Complex.

nobody knows how this happened:

(courtesy zero hedge)

At least 1 Dead, Multiple Injured In Major Explosion At Belgian Sports Complex

A powerful explosion went off just after midnight local time at the Plaine Chalon sports facility in Chimay, Belgium, partially destroying the building and burying an unknown number of people under the rubble, local media report. At least one person is reported dead and four were injured (two seriously) after the building collapsed, Belga News Agency reported citing emergency services spokesperson.

Photos appearing to show the aftermath of the explosion have surfaced on the social media. Half of the building has crumbled as seen on the photo posted by Vince Crate, a local resident.  Footage from the scene shows a heavy police presence.

While the cause of the explosion remains unknown, local law enforcement sources told BNO News it appears to a gas explosion. There is no indication of terrorism.

Rescuers are working at the site, and more people are believed to be trapped under the rubble.

Plaine Chalon

Plaine Chalon Sports Complex in Chimay, Belgium



Inside of Turkey firing on ISIS they are firing on Kurdish militia backed by the USA

(courtesy Reuters)

Turkey fires on U.S.-backed Kurdish militia in Syria offensive

Turkey launches fight against IS and Kurdish militia
By Humeyra Pamuk and Umit Bektas | KARKAMIS, TURKEY

Turkish troops fired on U.S.-backed Kurdish militia fighters in northern Syria on Thursday, highlighting the complications of an incursion meant to secure the border region against both Islamic State and Kurdish advances.

Syrian rebels backed by Turkish special forces, tanks and warplanes entered Jarablus, one of Islamic State’s last strongholds on the Turkish-Syrian border, on Wednesday.

But President Tayyip Erdogan and senior government officials have made clear the aim of “Operation Euphrates Shield” is as much about stopping the Kurdish YPG militia seizing territory and filling the void left by Islamic State as it is about eliminating the ultra-hardline Islamist group itself.

A Turkish security source said the army shelled the People’s Protection Units (YPG) south of Jarablus. Turkey’s state-run Anadolu agency described the action as warning shots.

Gunfire and explosions echoed around hills in the region on Thursday, a day after the incursion first began.

Some of the blasts were triggered as Turkish security forces cleared mines and booby traps left by retreating Islamic State militants, according to Nuh Kocaaslan, the mayor of Karkamis, which sits just across the border from Jarablus. He said three Turkish-backed Syrian rebels were killed but no Turkish troops.

Turkey, which has NATO’s second biggest armed forces, demanded that the YPG retreat to the east side of the Euphrates river within a week. The Kurdish militia had moved west of the river earlier this month as part of a U.S.-backed operation, now completed, to capture the city of Manbij from Islamic State.

Ankara views the YPG as a threat because of its close links to Kurdish militants waging a three-decade-old insurgency on its own soil. It has been alarmed by the YPG’s gains in northern Syria since the start of the Syrian civil war in 2011, fearing it could extend Kurdish control along Turkish borders and fuel the ambitions of Kurdish insurgents in Turkey.

Turkey’s stance has put it at odds with Washington, which sees the YPG as a rare reliable ally on the ground in Syria, where Washington is trying to defeat Islamic State while also opposing President Bashar al-Assad’s government in a complex, multi-sided, five-year-old civil war.

The Syrian Kurdish force is one of the most powerful militias in Syria and regarded as the backbone of the Syrian Democratic Forces (SDF), a U.S.-backed alliance formed last October to fight Islamic State.

Turkish Defense Minister Fikri Isik said the Kurdish PYD party, the political arm of the YPG, wanted to unite Kurdish-controlled cantons east of Jarablus with those further west. “We cannot let this happen,” he said.

Turkish army tanks make their way towards the Syrian border town of Jarablus, Syria August 24, 2016. Revolutionary Forces of Syria Media Office/Handout via REUTERS

“Islamic State should be completely cleansed, this is an absolute must. But it’s not enough for us … The PYD and the YPG militia should not replace Islamic State there,” Isik told Turkish broadcaster NTV.


U.S. Secretary of State John Kerry told Turkish Foreign Minister Mevlut Cavusoglu by phone on Thursday that YPG fighters were retreating to the east side of the Euphrates, as Turkey has demanded, foreign ministry sources in Ankara said.

A spokesman for the U.S.-led coalition against Islamic State said the SDF had withdrawn across the Euphrates, doing so “to prepare for the eventual liberation” of Raqqa, the radical group’s stronghold which lies further east.

Isik said the retreat was not yet complete and Washington had given assurances that this would happen in the next week.

“If the PYD does not retreat to east of the Euphrates, we have the right to do everything about it,” the minister said.

The offensive is Turkey’s first major military operation since a failed July 15 coup shook confidence in its ability to step up the fight against Islamic State. It came four days after a suicide bomber suspected of links to the group killed 54 people at a wedding in the southeastern city of Gaziantep.

U.S. Vice President Joe Biden, who met Erdogan during a trip to Turkey on Wednesday, said Turkey was ready to stay in Syria for as long as it takes to destroy the radical Islamist group.

“I think there has been a gradual mind shift … in Turkey, with the realization that ISIL is an existential threat to Turkey,” he told reporters during a visit to Sweden, using an acronym for the militant group.

A Turkish official said the ground incursion had been in the works for more than two years but had been delayed by U.S. reservations, resistance from some Turkish commanders, and a stand-off with Russia which had made air cover impossible.

Turkey had made the case more strongly to Washington over the past few months, had patched up relations with Russia, and had removed some of the Turkish commanders from their posts after finding they were involved in the coup attempt, paving the way for the operation to go ahead, the official said.

The incursion comes at a testing time for Turkish-U.S. relations. Erdogan wants the United States to extradite Fethullah Gulen, a Turkish cleric who has lived in self-imposed exile in Pennsylvania for 17 years and whose religious movement Turkey blames for staging last month’s failed coup.

Washington says it needs clear evidence of Gulen’s involvement and that it is a matter for the courts, a position that has sparked an outpouring of anti-Americanism from Turkey’s pro-government media. Gulen denies any role in the coup attempt.


The sound of gunfire, audible from a hill on the Turkish side of the border overlooking Jarablus, rang out on Thursday and black smoke rose over the town. War planes flew overhead.

A senior Turkish official said there were now more than 20 Turkish tanks inside Syria and that additional tanks and construction machinery would be sent in as required. A Reuters witness saw at least nine tanks enter on Thursday, and 10 more were waiting outside a military outpost on the Turkish side.

“We need construction machinery to open up roads … and we may need more in the days ahead. We also have armored personnel carriers that could be used on the Syrian side. We may put them into service as needed,” the official said.

Erdogan said on Wednesday that Islamic State had been driven out of Jarablus and that it was now controlled by Turkish-backed Syrian rebels, who are largely Arab and Turkmen.

“The myth that the YPG is the only effective force fighting Islamic State has collapsed,” Erdogan’s spokesman Ibrahim Kalin wrote on Twitter, reflecting Turkish frustration at how closely Washington has been working with the Kurdish militia.

Saleh Muslim, head of the Kurdish PYD, said on Wednesday that Turkey was entering a “quagmire” in Syria and faced defeat there like Islamic State. Redur Xelil, spokesman for the YPG, said the intervention was a “blatant aggression in Syrian internal affairs”.

After seizing Jarablus, the Turkish-backed rebels have advanced up to 10 km (6 miles) south of the border town, rebel sources and a group monitoring the war said.

But the Syrian Observatory for Human Rights also said Kurdish-backed forces opposed by Ankara had gained up to 8 km of ground northwards, apparently seeking to pre-empt advances by the rebels.

(Additional reporting by Orhan Coskun and Ece Toksabay in Ankara; Can Sezer, David Dolan, Cagan Uslu and Asli Kandemir in Istanbul, Tom Perry in Beirut, Jeff Mason in Stockholm; Writing by Nick Tattersall; Editing by Edmund Blair, Pravin Char and Peter Graff)



none today


Iran is so nice!!! We will cooperate under the joint OPEC oil production freeze as long as we are left out.  In other words, they are free to increase production.  Great deal!

(courtesy zero hedge)

Iran Sets Condition Under Which It Would Join OPEC Oil Production Freeze

In the past two weeks, Iran has rejoined the OPEC production freeze headline and jawboning fray, by making bold statements that it would be willing to work with OPEC on the recurring plan other members, mostly Venezuela, have proposed to push prices higher, namely freeze oil production (at a level which is an all time high output for OPEC’s largest member, Saudi Arabia, beyond which it can’t produce even if it wanted). So earlier today, Iran’s oil minister Bijan Zanganeh made the most explicit statement on the topic, when he laid out the conditions under which Iran would be willing to “help other oil producers stabilize the world market.”

It was a simple condition: Iran will cooperate as long as it is excluded from the freeze, or as Reuters put it, Iran will cooperate “so long as fellow OPEC members recognize its right to regain lost market share, the country’ oil minister said on Friday.”

In other words, Iran will endorse an OPEC supply freeze as long as it can keep pumping more.

Iran, OPEC’s third-largest producer, boosted output after Western sanctions were lifted in January, and had refused to join OPEC and some non-members in an accord earlier this year to freeze production levels.

“Iran will cooperate with OPEC to help the oil market recover, but expects others to respect its rights to regain its lost share of the market,” Bijan Namdar Zanganeh was quoted as saying by the oil ministry’s news agency SHANA.

More from Reuters:

Asked about an oil output freeze plan, Zanganeh said that Iran supports any effort to bring stability to the market.

Tehran insists it will be ready for joint action only once it regains pre-sanctions output of 4 million barrels per day (bpd). It pumped 3.6 million bpd in July, OPEC figures show.

Zanganeh said Iran had no role in instability of the oil market, as the crisis happened when Tehran’s exports were less than 1 million bpd.

Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria on Sept. 26-28.

It goes without saying that the argument trotted out by Iran will be the same one used by all other OPEC members, most of whom are not in the same position as Saudi Arabia, and instead have seen their oil production decline in recent months, most notably Nigeria and Venezuela. It also means that what those oil exporters who are not at capacity will say, will be identical to Iran’s statement: oil freeze is a go… as long as they are not bound to it.

Translation: no oil production freeze.

Meanwhile, headline scanning algos continue to push crude higher on every incremental, and targeted, headline meant to achieve nothing more than force headline scanning algos to trip momentum ignition circuits, hit stops and force even more short covering. Rinse. Repeat.


Discount the following story as Iran Press TV rpeorts that Yemen missiles hit Saudi Aramco facilities:

(courtesy zero hedge)

Oil Spikes On Iran Report Saudi Aramco Facilities Hit By Yemen Missiles

While oil is spiking thanks to the dollar’s kneejerk reaction lower following Yellen’s (not really) hawkish speech, another reason for the move higher appears to be an unconfirmed report by Iran’s PressTV that Yemeni forces have fired ballistic missiles at the facilities belonging to the Saudi state oil giant Aramco in the kingdom’s southwest.

From the report:

Yemeni forces have fired ballistic missiles at the facilities belonging to the Saudi state oil giant Aramco in the kingdom’s southwest.

The retaliatory attack took place on Friday, hitting targets in Saudi Arabia’s Jizan region and causing considerable damage to the Aramco facilities there, Yemen’s al-Masirah television reported.

The Saudi military has been pounding Yemen since March last year to undermine Yemen’s Houthi Ansarullah movement and to restore power to the former president, Abd Rabbuh Mansur Hadi, a staunch ally of Riyadh.

Nearly 10,000 people, most of them civilians, have been killed in Riyadh’s military aggression which lacks any international mandate.

Historically, the accuracy of PressTV reports has been spotty at best, so waiting for confirmation may be prudent, although as of this moment algos are buying first and not even bothering to ask questions.


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



GBP/USA 1.3200 UP .0008 

USA/CAN 1.2894 DOWN .0019

Early THIS FRIDAY morning in Europe, the Euro ROSE by 1 basis points, trading now well above the important 1.08 level RISING to 1.1288; 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 UP 1.98 POINTS OR 0.06%    / Hang Sang CLOSED UP 94.59 POINTS OR 0.41%     /AUSTRALIA IS LOWER BY .48% / EUROPEAN BOURSES ALL  IN THE RED 

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

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

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

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

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

The NIKKEI: this FRIDAY morning CLOSED DOWN 195.24 POINTS OR 1.18%  

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 94.59 POINTS OR 0.41%  ,Shanghai CLOSED UP 1.98  POINTS OR 0.05%    / Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED IN THE RED   /INDIA’S SENSEX IN THE RED 

Gold very early morning trading: $1326.50


Early FRIDAY morning USA 10 year bond yield: 1.569% !!! UP 1  in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS SLIGHTLY to 2.254  in basis points from TUESDAY night. 

USA dollar index early FRIDAY morning: 94.66 DOWN 6 CENTS from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING



And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.04%  UP 6 in basis point yield from THURSDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.07% UP 2 in   basis point yield from THURSDAY

SPANISH 10 YR BOND YIELD:0.944% up 2 IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.13  PAR in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 18 points HIGHER than Spain.





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

Euro/USA 1.11912 DOWN .0096 (Euro DOWN 96 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 101.82 UP 1.278(Yen DOWN 128 basis points/


USA/Canada 1.30002 UP 0.0087 (Canadian dollar DOWN 87 basis points AS OIL ROSE(WTI AT $47.42). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 96 basis points to trade at 1.11912

The Yen FELL to 101.82 for a LOSS of 128 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 


The Canadian dollar FELL by 87 basis points to 1.30001, WITH WTI OIL AT:  $47.40


The USA/Yuan closed at 6.6690

the 10 yr Japanese bond yield closed at -.07% UP 2 IN BASIS POINTS / yield/

Your closing 10 yr USA bond yield:UP 7 IN basis points from THURSDAY at 1.631% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.293 UP 3 in basis points on the day /



Your closing USA dollar index, 94.56  UP 84 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 FRIDAY

London:  CLOSED UP  21.15 OR 0.31%
German Dax :CLOSED UP 58.18 OR  0.55%
Paris Cac  CLOSED UP 35.26  OR 0.80%
Spain IBEX CLOSED UP 60.00 OR 0.70%
Italian MIB: CLOSED UP 133.21 POINTS OR 0.80%

The Dow was DOWN 53.01 points or 0.29%

NASDAQ UP  6.71 points or 0.13%
WTI Oil price; 47.37 at 4:30 pm;

Brent Oil: 49.60




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: 49.67

USA 10 YR BOND YIELD: 1.577% 

USA DOLLAR INDEX: 94.77 down 1 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3185 down .0051 or 51 basis pts.

German 10 yr bond yield at 5 pm: -0.072%


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


J-Holed: Stocks Slide After “Good” Yellen, “Bad” Powell, & “Ugly” Fischer


Yellen was hawkish but offered some dovish hope, Fischer dashed that hope, and Powell piled on… (Once again it seems VIX 14 was the target)

Post-Yellen, not pretty…

But Fischer was the big break…

Stocks tumbled on the day… but the ubiquitous late-day panic bid sent Nasdaq green

But the machines took over in the last hour – desperate to get S&P back to VWAP…

And everything but small caps ended lower on the week…Worst week in 2 months for S&P

As a major squeeze was unleashed into the last 30 mins…

The USD Index soared – after an initial nose dive – led by Swissy and Yen weakness…

But Cable seems to be the new carry trade du month…

Perhaps even more notable, China’s currency plunged most since Brexit…

Treasury yields crashed and smashed today with the short-end majorly underperforming..

But the curve collapsed (leaving 12m Libor – 10Y Treasury inverted)

And banks rallied (on hike hopes) despite the collapse in 2s30s to Dec 2007 lows…

Intraday, headline driven…

Despits the surge in the USD, commodities actually ended the day flat (with silver +0.5%) – but all notably lower on the week…

Finally some longer-term context for today’s swings…

Charts: Bloomberg

h/t @BarbarianCap for title 😉


The much anticipated Yellen speech from Jackson Hole Wy. was a dud:

(courtesy zero hedge)

A Hawkish Yellen Emerges: “The Rate Hike Case Has Strengthened In Recent Months”

the resultant trading as soon as her speech was released

(zero hedge)

“Hawkish” Yellen Speech Sparks Buying Spree In Everything (Except Dollars)

The US Dollar is being dumped after Yellen’s apparently ‘hawkish’ speech as the market appears to have latched onto one sentence…future policymakers may wish to explore the possibility of purchasing a broader range of assets.” Stocks are up, gold is up, bonds are up, oil is up…

Rate hike odds are dropping…

The USD is dumping…

Asset prices are soaring…

Some context for oil..

As VIX is crushed…

For a big round trip in Stocks, bonds, and gold…


Then this: the bond market not buying the Fed speech.

(courtesy zero hedge)

Policy Error? Treasury Curve Crashes To Dec 2007 Lows

Then the clown Stanley Fisher spoils the party:

“Bad Cop” Fischer Spoils “Good Cop” Yellen’s Party: Stocks Plunge, VIX Spikes

Despite Yellen’s hawkish tone, market participants clung to dovish hopes in her words… but Stan Fischer just clarified “Yellen’s comments are consistent with a possible September hike” and that has spoiled the party in stocks, bonds, gold, and the dollar…

Fischer explains…

  • *FISCHER: ON EMPLOYMENT, WE’RE DOING WELL (Harvey sure: 23% underemployment)
  • (harvey: the huge bond bubble and they are not concerned????)

And the market reacts…

VIX is soaring…


Best reaction:  from Macquarie:  “a whole lot of nothing”

(Macquarie/zero hedge)

Best Reaction Yet: “Yellen Speech A Whole Lot Of Nothing”

While previously we showed Goldman’s kneejerk response to the Yellen speech, according to which the central bank-spawning hedge fund saw Yellen’s speech so hawkish it raised Goldman’s odds for a September rate hike from 30% to 40%, it was also wrong at least based on the market, which in turn cut its September rate hike oddsfrom 32% to 26% after the speech.

A far better reaction comes from Macquarie’s Thierry Wizman, who brings us back to the conventional wisdom that prevailed on Wall Street for the past week, namely that Yellen’s speech is “a whole lot of nothing,” and likely didn’t change any minds on expectations for a rate increase this year, Wizman told Bloomberg in phone interview.

Wizman adds that the speech implies a rate increase is still coming this year, and Dec. is the most likely timing of that.  “There were some people in the market who expected that she would invoke Sept. and that was probably the wrong thing to expect”; Fed has moved away from calendar guidance.

Macquarie now sees a 60% chance of a rate hike in Dec., and Wizman expects two rate increases in 2017, as Yellen “seems to be downplaying risks of low growth.”

He adds that the risks to a December rate hike including “more turbulence from Europe, as Italians hold referendum in Oct. and concerns over Brexit could percolate again; U.S. election and how it could inform decision making.”

Last but not least, Macquarie points out the obvious, namely that if Republican presidential candidate Trump were to rise in polls, “could be detrimental to growth sentiment because of disorganization in Republican platform and lack of clarity on Trump’s policy positions.

Translation: the odds of a September rate hike are now in the hands of Trump.

Consumer confidence slumps even though inflation expectations crash.

Good time for a rate hike?

(courtesy zero hedge)

Consumer Confidence Slumps As Inflation Expectations Crash To All-Time Lows

The “disinflationary mindset” remains as UMIch-reported medium-term inflation expectations plunge back to record lows.

Headline consumer confidence also dropped to its lowest since 2016 lows in April driven by drop in ‘hope’ from the flash print – stuck at lowest levels since 2014.

Perfect time for rate hike then?


Inventory growth outpaces sales and that should dash all hopes for a Q3 GDP bounce


Inventory Growth Slowdown Dashes Hopes For Q3 GDP Bounce Back

Following the surge in sales (on higher petroleum costs) in June (and modest build in inventories), the sales-stock ratio fell back from cycle highs (though remained deep in recessionary territory). July’s preliminary data showed a notable slowdown in inventories (-0.02% vs a 0.1% expected gain and revised lower 0.2%) confirming recent PMI data of no pickup in growth in Q3. For 32 months straight, inventory growth has outpaced sales growth year-over-year with 18 straight months of wholesale sales declines.

Simply put – as slow as Q2 was, that was the inventory bounceback… and Q3 has slowed already, breaking the extrapolators narrative…

But none of that matters because Janet is speaking today.

Charts: Bloomberg


We now have Q2 revised lower to 1.09%.  Together with the first quarter GDP of 0.83%, together we have first half of of GDP officially at 0.96% or less than 1%

(courtesy zero hedge)


Q2 GDP Revised Lower To 1.1%, As Expected, Even As Personal Consumption Rises

Hilary used special software designed to prevent recovery and hide traces of her deleted emails

(courtesy zero hedge)

FBI Admits Clinton Used Software Designed To “Prevent Recovery” And “Hide Traces Of” Deleted Emails

South Carolina Representative Trey Gowdy appeared on Fox News today and disclosed new details about the Clinton email scandal that seem to indicate intent to destroy evidence.  Per the clip below, Gowdy reveals that Clinton used “BleachBit” to erase the “personal” emails from her private server. 

For those not familiar with the software, BleachBit is intended to help users delete files in a way to “prevent recovery” and “hide traces of files deleted.”  Per the BleachBit website:

Beyond simply deleting files, BleachBit includes advanced features such as shredding files to prevent recovery, wiping free disk space to hide traces of files deleted by other applications, and vacuuming Firefox to make it faster.

During his appearance on Fox, Gowdy clearly indicates that Clinton’s use of BleachBit undermines her claims that she only deleted innocuous “personal” emails from her private server.

“If she considered them to be personal, then she and her lawyers had those emails deleted. They didn’t just push the delete button, they had them deleted where even God can’t read them.

“They were using something called BleachBit.  You don’t use BleachBit for yoga emails.”

“When you’re using BleachBit, it is something you really do not want the world to see.”

Gowdy also questioned whether Hillary considered “Clinton Foundation” emails to be “personal” and, if not, asked why the FBI’s investigation revealed minimal emails about Foundation-related topics.

So Dear Reader, we leave it to you to decide whether – like FBI Director Comey – you see no “intent” to hide or obfuscate any of the deleted emails; or – like Rep. Gowdy – you see the facts as proving Hillary Clinton’s intent to ensure no trace was left of these harmless emails about yoga routines or wedding plans.


My goodness:  CNN cancels Dr Drew one week after he voiced his concern on Hillary’s health

(courtesy zero hedge)

CNN Cancels Dr. Drew’s Show One Week After He Voiced “Grave Concern” For Hillary’s Health

One week ago, board-certified medicine specialist, TV personality and CNN employee Dr. Drew Pinsky broke the mold of conformity, when he said that he is “gravely concerned” about presidential candidate Hillary Clinton’s health, pointing out that treatment she is receiving could be the result of her bizarre behaviors.

Appearing on KABC’s McIntyre in the Morning, Pinsky said he and his colleague Dr. Robert Huizenga became “gravely concerned….not just about her health but her health care,” after analyzing what medical records on Hillary had been released. Pinsky pointed out that after Clinton fainted and fell in late 2012, she suffered from a “transverse sinus thrombosis,” an “exceedingly rare clot” that “virtually guarantees somebody has something wrong with their coagulation system.” “What’s wrong with her coagulation system, has that been evaluated?” asked Dr. Drew.

Pinsky described the situation as “bizarre,” and said that Hillary’s medical condition was “dangerous” and “concerning”. Dr. Drew also went on to add that it was a sign of “brain damage” when Hillary had to wear prism glasses after her fall.

Just as stunning as Pinsky’s assessment which promptly went viral and led to the immediate takedown of the original interview webpage by KABC-AM radio, was that it came from an employee of HLN, which is part of the pro-Clinton CNN network.

As such it is probably not surprising that earlier today, just one week later, CNN executive vice president Ken Jautz announced Thursday that “Dr. Drew and I have mutually agreed to air the final episode of his show on September 22.”

“Dr. Drew and his team have delivered more than five years of creative shows and I want to thank them for their hard work and distinctive programming,” Jautz said in a statement. “Their audience-driven shows, in particular, were innovative and memorable TV. And Dr. Drew has been an authoritative voice on addiction and on many other topical issues facing America today.”

“It has been a privilege working at HLN,” Pinsky said in a statement of his own. “My executive producer Burt Dubrow and our outstanding staff and contributors were consistently exceptional. I am very excited to stay within the CNN Worldwide family as a contributor.”

There was no mention of the Hillary fiasco in the official parting statement; it was deemed redundant.

HLN will air reruns of “Forensic Files” and episodes of CNN originals in the “Dr. Drew” 7 p.m. ET time slot.


A good picture of what happens when you raise minimum wages towards 15 dollars per hours:  In DC restaurants slash jobs

(courtesy zero hedge)

Restaurants In D.C. Slash Jobs After Minimum Wage Hike

A few days ago we wrote about the job losses starting to pile up in Seattle in the wake of that city’s passage of a $15 minimum wage (see “Something “Unexpected” Happened When Seattle Raised The Minimum Wage“).  In that post, we noted that seemingly no amount of empirical evidence would ever be sufficient to convince certain elected officials that setting artificially high labor rates would ultimately only serve to hurt the people at the lower end of the pay spectrum due to permanent job losses.

Seemingly no amount of empirical evidence can convince progressives that raising minimum wages to artificially elevated levels is a bad idea.  Somehow the basic idea that raising the cost of a good ultimately results in lower consumption of that good just doesn’t compute.  Though it does seem odd that progressives in states like California lean heavily on higher taxes as a way to curb, for example, fuel consumption.  Could it be that the left actually does understand the basic economics of the minimum wage debate but don’t find the math behind it to be particularly “politically expedient” in certain instances?

Despite the futility of our efforts, we thought we would offer up one more example of minimum wage hikes killing jobs for low-income workers.  This example comes from Washington D.C.  For those not familiar, back in early June, the City Council of Washington D.C. passed legislation to raise the District’s minimum wage from $10.50 per hour to $15.00 by 2020.  Minimum wage in the District was already scheduled to increase to $11.50 in July 2016 and the remaining increase will be phased in over the next 4 years.

On the back of that increase, Mark Perry, of the American Enterprise Institute, decided to take a look at how the restaurant industry (often one of the hardest hit industries by minimum wage hikes given the disproportionate share of employees working for minimum wage) in Washington D.C. has responded to the minimum wage hike there.  Perry took a look at BLS labor data for restaurant jobs in Washington D.C. compared to surrounding suburbs.

The picture pretty much tells the story:

DC Food Jobs

BLS data shows that restaurant job growth in D.C. basically stopped for a period of time after the July 2015 minimum wage hike to $10.50.  Then, after a brief period of growth in early 2016, D.C.’s restaurants actually started to shed a number of jobs heading into the July 2016 increase to $11.50.  Meanwhile, restaurant jobs in suburbs surrounding Washington D.C. continued to grow in line with their recent history.  As Perry points out, “The last time DC experienced restaurant job losses in five out of six consecutive months was 25 years ago in 1991, and the last time 1,400 jobs were lost over any six-month period was 15 years ago during the 2001 recession.”  Per the American Enterprise Institute:

New BLS data for restaurant employment in July for both the District of Columbia (city only, see dark line above, data here) and the surrounding suburbs in Virginia and Maryland (full DC MSA data here, the light blue line shows the MSA minus the city of DC) are displayed above and tell the story pretty clearly. Since the DC minimum wage increased in July 2015 to $10.50 an hour, restaurant employment in the city has increased less than 1% (and by 500 jobs), while restaurant jobs in the surrounding suburbs increased 4.2% (and by 7,300 jobs). An even more dramatic effect has taken place since the start of this year – DC restaurant jobs fell by 1,400 jobs (and by 2.7%) in the first six months of 2016 between January and July – that’s the largest loss of District food jobs during a 6-month period in 15 years. Perhaps some of those job losses were related to the $1 an hour minimum wage hike on July 1, bringing the city’s new minimum wage to $11.50 an hour. In contrast, restaurant employment outside the city grew at a 1.6% rate in the suburbs (and by 2,900 jobs) during the January to July period.

If expensive cities like Washington D.C. and Seattle are already having a difficult time digesting even the initial phases of their proposed $15 minimum wage we fear how a similar federal wage hike might impact less expensive states in the Southeast and Midwest portions of the country where current minimum wages are much lower.


A great snapshot on the lower half of USA consumers: they are in dire straits.Please look at the results of the two dollar store giants and their comments:

(courtesy zero hedge)

“Things Are Worse” – Dollar Stores’ Startling Admission: Half Of US Consumers Are In Dire Straits


The high cost of Libor in the USA is creating havoc for everyone.  Foreign banks cannot hedge the higher yield on USA bonds due to libor. The higher libor may signify tightness or the shear fright in loaning to another bank as indicated in the higher TED spreads. However what is clear is that bankers are having a difficult time with two major problems:

i) negative rates in Europe, Switzerland et al, creating havoc for European/Japanese banks

ii) higher libor costs preventing the purchase of USA bonds by foreigners

iii) USA yield curve flattening making USA banks vulnerable to profitability.

(courtesy zero hedge)

“Expensive” US Banks Are Global Outlier As ‘Yield Curve’ Inverts For First Time Since Lehman


Let us close with this wrap up courtesy of Greg Hunter of USAWatchdog

(courtesy Greg Hunter)

Clinton Foundation Sinks Into Deeper Trouble, Economic Update and Gold, Iran/US Middle East War Update

By Greg Hunter’s

Hillary Clinton and her Foundation are sinking into deeper trouble. More emails were discovered, and more pay-to-play accusations are rolling in.  This all happened while Clinton was at the State Department, and it looks like there is no end to the tawdry revelations.  Now, there are accusations that the Clinton Foundation is a global charity fraud because proper paperwork has not been done, and there is no real accounting for all the money collected.  The Clintons say they are doing good charitable work and dismiss the accusations, but none the less, charges of wrongdoing keep mounting.

A U.S. destroyer had to fire warning shots at Iranian attack speed boats that were taunting the warship. This on the heels of the news that the President lied about paying ransom to Iran and that the U.S. could not wire money.  The U.S. did, in fact, wire money to the Islamic Republic along with delivering a pallet of cash in return for release of U.S. hostages.  Meanwhile, Turkey has invaded Northern Syria in a race for the city of Aleppo.  Troops, tanks and aircraft were all part of the assault on ISIS, and there are fears of Turkey, which is a NATO member, widening the war in the Middle East.

Deutsche Bank (DB) CEO is out with fresh warnings of “fatal consequences” for depositors and savers. Meanwhile, a top DB economist is adding to the warnings of “social unrest and another Great Depression.”  Those warnings might be the reason why billion dollar money managers, like Crispin Odey, are recommending people buy physical gold.  Odey contends the “price of gold against paper money will be massively revalued upwards.”

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.


After the Wrap-Up:

Well that is all for today

I will see you on Monday

Leave a Reply

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

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

Google photo

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

Twitter picture

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

Facebook photo

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

Connecting to %s

%d bloggers like this: