August 30/Both Russia and the USA angry at Turkey’s invasion of Syria/After today’s grab by the EU on Apple, they set their sights on Amazon and McDonald’s/ the FBI uncover emails from Hillary’ server on Benghazi and thus she lied under oath/Good sized raid on gold and silver ahead of tomorrow’s OTC/LBMA expiry/

Gold:1311.70 down $10.90

Silver 18.58  down 18 cents

In the access market 5:15 pm

Gold: 1311.30

Silver: 18.61


For the August gold contract month,  we had a good sized 59 notices served upon for 5900 ounces. The total number of notices filed so far for delivery:  14,258 for 1,425,800 oz or  tonnes or 44.348 tonnes.  The total amount of gold standing for August is  44.348 tonnes.

In silver we had 1 notice served upon for 5,000 oz. The total number of notices filed so far this month:  506 for 2,530,000 oz.  The amount standing in silver: 2,530,000 oz


As I reminded everybody last night, that tomorrow is options expiry day for the London’s OTC/LBMA contracts. Their contracts are much bigger in quantity than the comex options. So its no wonder why the crooks decided to raid today.  The good news is that it ends tomorrow afternoon.

In silver, the raids wiped out a huge number of longs.  I doubt now if we will have anything greater than 15 million oz stand.  However in gold, I expect around 8 tonnes will be left standing which would be huge.  Normally only .5 tonnes stands in an off delivery month.



Let us have a look at the data for today



In silver, the total open interest FELL BY 3,036 contracts DOWN to 190,711. The open interest again fell PRETTY HARD DESPITE THE FACT THAT THE SILVER PRICE WAS UP 11 CENTS IN YESTERDAY’S TRADING .In ounces, the OI is still represented by just LESS THAN 1 BILLION oz i.e. .953 BILLION TO BE EXACT or 136% of annual global silver production (ex Russia &ex China). the crooks are doing a great job fleecing unsuspecting longs

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

In gold, the total comex gold fell 1,387 contracts despite the fact that the price of gold ROSE BY $1.40 yesterday . The total gold OI stands at 559,043 contracts


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 had no changes at  the SLV,  / THE SLV Inventory rests at: 357.844 million oz


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

1. Today, we had the open interest in silver fell by 3036 contracts down to 190,711 despite the fact that the price of silver rose by 11 cents with YESTERDAY’S trading.The gold open interest fell 1,387 contracts down to 559,043 despite the fact that the price of gold ROSE $1.40 WITH YESTERDAY’S TRADING.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

2b) FRBNY gold report


i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 0.281 POINTS OR 0.01%/ /Hang Sang closed DOWN 88.20 points or 0.30%. The Nikkei closed UP 376.78 POINTS OR 2.30% Australia’s all ordinaires  CLOSED DOWN 0.84% Chinese yuan (ONSHORE) closed DOWN at 6.6810/Oil FELL to 47.00 dollars per barrel for WTI and 49.22 for Brent. Stocks in Europe: in the RED EXCEPT LONDON  Offshore yuan trades  6.6902 yuan to the dollar vs 6.6810 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS  MORE USA DOLLARS ATTEMPT  LEAVE CHINA’S SHORES  



This will become a huge nightmare for Japan once their economy flounders Both the Japanese BOJ and their Pension fund: GPIF are the largest shareholders in 474 of the biggest Japanese companies

( Wolf Richter/WolfStreet)


 none today


i)Italians (37%) gave up their search for a job. Italy is now becoming a huge welfare state like Greece

( zero hedge)

ii)First; Germany and now France kills the TPP:  Why? the Americans gave France nothing!! And they expected something/

( zero hedge)


i)Turkey tells the USA to mind their own business. Their comments on Turkish bombing the places that ISIS  is not located is  totally unacceptable.  One complete joke!

Believe it or not but Russia is also upset at Turkish invasion without their permission.

( zerohedge)

ii)Obama admits 10,000 Syrian refugees mostly heading to Michigan and California

( zero hedge)


Norway had to raid its sovereign wealth fund to cover government expenses.It has has problem with respect to bonds.  They are not earning anything!

May may interest you in gold?

( zero hedge)


Oil drops as the market questions whether an OPEC production freeze is even possible?  Oil also falls due to the rise in the dollar

( zero hedge)


none today


i)Hugo dreams that we must go back to the gold standard

(Hugo Salinas Price/GATA)

ii)James Turk, another brilliant individual is now stating that the Fed is preparing to monetize everything and he is beginning to see signs of hyperinflation

(James Turk/kingworldnews)

iii)Gowans is one smart cookie:  He states that there is something fundamentally wrong with the economy and he asserts that we must be cognizant of something bad is going to happen

( Gowans/Slavo/GATA)

iv)Aussie mining company Resolute Mining is now going to pay dividends in gold bullion.

( Ingram/Australian Financial Review/GATA)

v)Why isn’t gold keeping up with central bank balance sheets.  Maybe manipulation by central banks has something to do with this!

( Chris Powell/GATA)


i)Dr. Fischer!  This does not sound like a good economy to me:  Record number of college grads are working at minimum wage jobs!

( zero hedge)


ii) a This will get messy!  Apple is ordered to repay $14.5 billion in “illegal” tax benefits because Ireland’s deal gave them special treatment allowing them to pay a low amount of tax. Both Ireland and Apple will fight the ruling. The EU is basically challenging Ireland’s right to tax. Will we have Ireland leave the EU?

(zero hedge)

11b)Next on the list in Europe for a Tax Grab: Amazon and McDonald’s

The uSA is not happy: watch for reciprocal tax grabs on foreign national banks for money laundering
( zero hedge)

iii a)The clown, Fischer speaks again:

( zero hedge)

iii B) The clown Fischer gives a bizarre justification for negative rates:it is tradeoff: savers do not do well, but investors in the stock market do well!(courtesy zero hedge)

iv)The the first time since 2012, S and P ‘s 20 core city composite price index declined for 3 straight months.  The economy in the uSA does not look too good Dr Fischer!( zero hedge)

v)what a joke:  Consumer confidence jumps to an 11th month high beating the estimates by 5 standard deviations.  makes sense to me:

( zero hedge)


vi)This ought to be good.  The FBI recovers 30 emails related to the Benghazi affair from which our crook Hillary deleted. Also the FBI is going to release its findings on whether Hillary and her aids mishandled government secrets

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 559,043 for a LOSS of 1,387 contracts DESPITE THE FACT THAT the price of gold ROSE by $1.40 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. “

The big active contract month of August saw it’s OI FELL by 57 contracts DOWN to 59.  We had 54 notices filed upon on yesterday so we lost 3 contracts or 300 ounces that will not stand for delivery in August.  The next contract month of Sept saw it’s OI fall by 172 contracts down to 2727.  The September contract still remains extremely elevated and we may have another of those high deliveries rare for a non active month probably around 8 tonnes. The next active delivery month is October and here the OI FELL by 229 contracts DOWN to 44,939.  The estimated volume today (which is just comex ales during regular business hours of 8:20 until 1:30 pm est) was POOR at 139,585.  The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was POOR at 148,251 contracts. The comex is not in backwardation.

Today we had  59 notices filed for  5900 oz of gold.

And now for the wild silver comex results.  Total silver OI fell by 3,036 contracts from  193,747 DOWN to 190,711 despite the rise in price of silver to the tune of 11 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 to one contract for a loss of 4 contracts.  We had 4 notices served upon yesterday, so we neither gained nor lost any silver ounces 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 a huge 12,135 contracts down to 10,613. As usual, when we approach the first day notice of an active month we see total obliteration of the open interest.  We have 1 day left before first day notice but do not expect more than 15 million oz standing.  The volume on the comex today (just comex) came in at 50,335 which is excellent.  The confirmed volume yesterday (comex and globex) was  GIGANTIC  at  98,293 . Silver is not in backwardation.  London is in backwardation for several months.
we had 1 notice filed for 5,000 oz
INITIAL standings for AUGUST
 August 30.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
54,571.321 oz
Deposits to the Dealer Inventory in oz 1832.55 brinks

57 kilobars

Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
59 notices 
5900 oz
No of oz to be served (notices)
0 contracts
(nil oz)
now off the board
Total monthly oz gold served (contracts) so far this month
14,258 contracts (1,425,800 oz)
(44.348 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    630,107.200 oz
Today:  tiny activity at the gold comex AND 1 KILOBAR ENTRY//
Today we had 1 dealer DEPOSIT
 i) Into Brinks: 1832.55 oz
(57 kilobars)
total dealer deposit: 1832.55   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; 51,571.321 OZ
ii) Out of Brinks: 3032.53 oz
Total customer withdrawals  54.571.321 OZ
Today we had 0 adjustment:
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 59 contracts of which 1 notices was stopped (received) by JPMorgan dealer and 25 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 (14,258) x 100 oz  or 1,425,800 oz , to which we  add the difference between the open interest for the front month of AUGUST  (59 CONTRACTS) minus the number of notices served upon today (59) x 100 oz   x 100 oz per contract equals 1,425,800  oz, the number of ounces standing in this active month. 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (14,258) x 100 oz  or ounces + {OI for the front month (xxx) minus the number of  notices served upon today (59) x 100 oz which equals 1,425,800 oz standing in this non  active delivery month of AUGUST  (44.358 tonnes).
We lost 3 gold contracts or 300  ounces that will not stand for delivery in this active delivery month of August. This should close out the month of August but we could still have somebody serving notices on the last day of which I will report that to you.
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 + 44.348 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/ AUG 29 .126 TONNES/THEREFORE 91.536 tonnes still standing against 72.686 tonnes available.
 Total dealer inventor 2,336,863.754 oz or 72.686 tonnes
Total gold inventory (dealer and customer) =10,932,454.629 or 340.04 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 340.04 tonnes for a  gain of 37  tonnes over that period. 
Ladies and Gentlemen:  the comex is beginning to lose some of its gold.


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 30.2016
Inventory movements not available today from the CME/
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 661,458.050 oz
Deposits to the Dealer Inventory
Deposits to the Customer Inventoryxxx
 1,509,330.410 oz
No of oz served today (contracts)
(5,000 OZ)
No of oz to be served (notices)
0 contracts
(nil oz)
Total monthly oz silver served (contracts) 506 contracts (2,530,000 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  11,311,931.1 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:  661,458.050 oz
Total customer withdrawals: 661,458.050 oz
We had 2 customer deposits:
i) Into Brinks: 299,757.260 oz
ii) Into CNT; 1,208,590.700 oz
iii) Into Scotia: 982.45 oz
total customer deposits:  1,509,330.410   oz
 we had 0 adjustments
The total number of notices filed today for the AUGUST contract month is represented by 1 contract for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (506) x 5,000 oz  = 2,530,000 oz to which we add the difference between the open interest for the front month of AUGUST (1) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the AUGUST contract month:  506(notices served so far)x 5000 oz +(1 OI for front month of AUGUST ) -number of notices served upon today (1)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:  26.070 million (close to record low inventory  
Total number of dealer and customer silver:   162.196 million oz (close to a record low)
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
And now the Gold inventory at the GLD
august 30/no change at the GLD/Inventory rests at 956.59 tonnes
August 29/no changes at the GLD/Inventory rests at 956.59 tonnes
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 30/ Inventory rests tonight at 956.59 tonnes


Now the SLV Inventory
August 30/no change in silver inventory/inventory rests at 357.844 million oz/
August 29/we had a good sized deposit of 950,000 oz at the SLV/Inventory rests at 357.844 million oz/
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 30.2016: Inventory 357.844 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 5.2 percent to NAV usa funds and Negative 4.9% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 60.1%
Percentage of fund in silver:38.7%
cash .+1.2%( August 30/2016).
2. Sprott silver fund (PSLV): Premium falls to +0.16%!!!! NAV (august 30/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.16% to NAV  ( august 30/2016)
Note: Sprott silver trust back  into POSITIVE territory at +0.16% /Sprott physical gold trust is back into positive territory at 0.16%/Central fund of Canada’s is still in jail.


Federal Bank of New York/Earmarked gold report on how much gold leaves NY.

Reading last month:  7910.00 million dollars worth of gold at $42.22 oz

Reading this month:  7883 million dollars worth of gold at $42.22 per oz

Total amount of gold leaving the shores of NY;  27 million dollars worth at $42.22 per oz

In oz:  639,507 oz

In  tonnages:  19.89 tonnes

Last month: 30 tonnes

Since Germany is the only one official nation to ask for its gold back, you can safely say that it is this nation who is repatriating their gold to their shores.


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

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

Resolute Mining to pay dividends in gold bullion


By Tess Ingram
Australian Financial Review, Sydney
Tuesday, August 30, 2016

Shareholders in Resolute Mining will have the option of collecting dividend payments in gold bullion, under a new policy believed to be the first of its kind in the world.

The gold miner announced today that it would resume dividend payments, declaring a 1.7-cent per share final dividend for the 2016 financial year under a new gold sales-linked dividend policy.

Resolute, which has not paid consistent dividends since the late 1990s, joined a group of local gold miners reinstating or raising dividends amid the best conditions the sector has enjoyed in recent years.

But with a twist.

Shareholders who hold 5,000 or more shares in the company can elect to receive dividends in gold bullion paid into a personal account held with The Perth Mint.

It is a first for The Perth Mint and Resolute Managing Director John Welborn said he believes it is the first time a gold company has ever offered the option. …

… For the remainder of the report:…


Why isn’t gold keeping up with central bank balance sheets.  Maybe manipulation by central banks has something to do with this!

(courtesy Chris Powell/GATA)

No one can ask why gold isn’t keeping up with central bank balance sheets


8:20p ET Tuesday, August 30, 3016

Dear Friend of GATA and Gold:

A market note by two market analysts for Deutsche Bank, publicized Monday by a few news organizations, including Business Insider (see below), observed that gold’s price ordinarily correlates with central bank balance sheets but that lately it has not been keeping up with the vast expansion of those balance sheets.

Unfortunately if predictably, the analysts don’t inquire into the seeming breakdown of this correlation, perhaps because such inquiry might lead them to the largely surreptitious intervention in the gold market by central banks and particularly their underwriting the huge gold derivatives business, in which paper claims to gold that doesn’t exist take the place of ownership of real metal.

That central bank activity remains a highly prohibited subject among mainstream market analysts and mainstream financial news organizations alike.

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

* * *

Gold Is Doing Something It Has Done Only Twice in the Past Decade

By Akin Oyedele
Business Insider, New York
Monday, August 29, 2016

Gold may be worth more than what traders have decided is the spot price.

There’s a correlation between gold price changes and the rate at which central banks bought assets to expand their balance sheets, according to Deutsche Bank’s Michael Hsueh and Grant Sporre.

And the pace of balance-sheet expansion — by 300% since 2005, according to the analysts — indicates that gold could be worth more.

They wrote in a note on Friday:

“Let us be clear; we are not saying that gold will trade up to $1,700/oz in the near term, but when viewed against the aggregated balance sheet of the ‘big four’ global central banks (the Fed, European Central Bank, Bank of Japan, and People’s Bank of China), the argument can be made if we view gold as a currency, the metal is worth closer to $1,700/oz versus the spot price $1,326/oz.” …

… For the remainder of the report:…


Your early TUESDAY 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 12.13 OR 0.07% /USA: YEN RISES TO 102.28

3. Europe stocks opened  IN THE GREEN  (     /USA dollar index UP to 95.77/Euro DOWN to 1.1166

3b Japan 10 year bond yield: FALLS TO  -.075%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 102.28

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.28  and Brent: 49.46

3f Gold DOWN  /Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.087%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 6.99%/: 

3j Greek 10 year bond yield RISE to  : 8.06%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1320.50-/silver $18.78(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 21/100 in  roubles/dollar) 64.89-

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 SMALL REVALUATION 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 .9798 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0942 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  -0.087%

/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 1.571% early this morning. Thirty year rate  at 2.217% /POLICY ERROR)

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

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


Futures Flat, Global Stocks Higher As Dollar Resumes Rise

Until the announcement moments ago by the EU that Apple have been ordered to pay up to €13 billion in illegal tax benefits, the quiet overnight market had been focused on the upcoming comments by Stanley Fischer, who is set to give a Bloomberg TV interview at 6:30am ET, where he was expected to expand on his recent hawkish comments. Heading into Fischer’s appearance, the dollar strengthened, global stocks rose, oil hovered around $47, while US index futures were largely flat and Treasuries fell.

Between Fischer and this Friday’s payrolls report, there is hope on Wall Street that the Fed’s rate hike expectations will be made more definitive. “Expectations for a Fed rate increase are still driving the markets, as players await Fischer’s comments,” said Yuji Saito, head of the foreign-exchange department at Credit Agricole SA in Tokyo. While yesterday Fischer’s Friday announcement was largely forgotten, the hawkish mood has returned today and the the Bloomberg Dollar Spot Index climbed to a three-week high ahead of Fischer, who last week suggested that interest rates may rise as soon as September.

“Views on the U.S. interest-rate hike have eased a little after a day’s passed, and it’s difficult to see a clear direction ahead of the U.S. jobs data,” said Seiichi Miura, a strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “There’s a profit-taking mood in the Japanese stock market after the surge yesterday. That said, there’s not enough of a reason to keep selling.”

Speculation the U.S. will raise interest rates this year surged over the past two weeks, boosting the dollar, as Fed officials including Chair Janet Yellen said the case for tightening policy is getting stronger. As Bloomberg notes, after a report on Monday showed consumer spending rose for a fourth month, investors will be looking at data on consumer confidence on Tuesday and monthly payrolls figures later in the week to judge if the economy is strong enough to support higher rates.

European stocks rose after banks, technology shares and automakers led the Stoxx Europe 600 Index up 0.5%. Banca Popolare dell’Emilia Romagna SC and UniCredit SpA advanced more than 2.8 percent, sending Italy’s FTSE MIB Index 1.6 percent higher for the biggest gain among western-European markets. The U.K.’s FTSE 100 Index was little changed, reopening after a holiday on Monday. Futures on S&P 500 Index were down 2 points, driven largely by the Apple tax announcement, after the index rallied the most in three weeks on Monday. Mondelez International Inc. climbed 3.2 percent in early New York trading after saying it’s walking away from takeover discussions with Hershey Co. two months after its $23 billion bid was rejected by the chocolate maker. Hershey sank 12 percent in late trading on Monday. The MSCI Emerging Markets Index advanced 0.5 percent, rebounding from a three-week low. Energy shares led gains, while benchmarks in Hong Kong and India climbed more than 1 percent.

The yield on U.S. government debt due in a decade increased by three basis points to 1.59 percent, after dropping seven basis points on Monday. The rate on two-year notes increased by one basis point to 0.82 percent. The Fed is “likely to tighten in September, at least as long as the jobs number comes in OK,” Michael Pond, head of global inflation market strategy at Barclays Capital Inc. in New York, said on Bloomberg Television. “Hawkish Fed rhetoric has certainly increased recently. It’ll take a decent number, like 200,000, for them to go.”

U.K. longer-dated bonds were supported before the Bank of England’s latest purchase operation as part of its expanded quantitative-easing program. Thirty-year gilt yields fell two basis points to 1.25 percent. “There are real doubts over how many sellers will turn up,” Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris, wrote in a client note.

Market Snapshot

  • S&P 500 futures unchanged at 2179
  • Stoxx 600 up 0.5% to 345
  • FTSE 100 up less than 0.1% to 6844
  • DAX up 1% to 10646
  • German 10Yr yield up less than 1bp to -0.08%
  • Italian 10Yr yield down less than 1bp to 1.12%
  • Spanish 10Yr yield up less than 1bp to 0.94%
  • S&P GSCI Index up 0.4% to 360.6
  • MSCI Asia Pacific up 0.3% to 138
  • Nikkei 225 down less than 0.1% to 16725
  • Hang Seng up 0.9% to 23016
  • Shanghai Composite up 0.2% to 3075
  • S&P/ASX 200 up 0.2% to 5478
  • US 10-yr yield up 2bps to 1.58%
  • Dollar Index up 0.21% to 95.78
  • WTI Crude futures up 0.8% to $47.37
  • Brent Futures up 0.7% to $49.62
  • Gold spot down 0.2% to $1,321
  • Silver spot down 0.7% to $18.76

Top Global Headlines

  • Hershey’s Failed Deal Reinforces Image as a Company Not for Sale: Mondelez walks away after takeover attempt is rejected, Hershey said to demand that price talks begin at $125 a share
  • United Hires American’s No. 2 in Boost to Succession Planning: Kirby jumps after 20 years of teaming with American CEO Parker
  • Apple’s Day of Reckoning Comes With Billion-Euro Tax Risk: EU is expected to conclude Tuesday that Ireland provided Apple with illegal aid through a favorable tax arrangement
  • Apple Said to Prepare IPad Upgrades and Refreshed Mac Lineup: Deeper stylus integration, faster displays planned for iPads
  • Google and Amazon Vie for Big Inroad Into Wall Street Data Trove: Tech firms are bidding to help SEC with data storage in clouds
  • VW Diesel Owners Quick to Pick Buyback Over Emissions Fix: Almost half of plaintiffs register within month of settlement
  • Mylan Fails to Stop Firestorm Over EpiPen Price Increases: Drugmaker will introduce lower-cost generic version of shot
  • Alphabet’s Legal Chief Departs Uber Board Amid Conflicts: David Drummond has left the board amid competition between Alphabet’s Google and Uber over self-driving cars, other areas
  • Colorado Drillers Dodge $10 Billion-a-Year Threat to Output: Oil and natural gas explorers have escaped a vote in Colorado that would have limited drilling
  • Caesars Wins Short Delay to Billion-Dollar Bondholder Lawsuits: Won a temporary halt to lawsuits that could force it into bankruptcy
  • Aeropostale Lender Sycamore Joins Bidding for Bankrupt Retailer: Chain borrowed $150m from private equity firm in 2014
  • KKR Said to Buy Calabrio for $200m: WSJ: Agrees to pay $200m in all-equity deal; may be announced as soon as Tuesday, WSJ reports, citing unidentified person familiar
  • Spotify Mulling Some New Music Release for Subscribers Only: NYP

* * *

Looking at regional markets, we start in Asia where equities traded mostly higher following the positive lead from the US where financials advanced after the recent hawkish Fed commentary and encouraging US Spending and Consumption data. This saw financials underpin ASX 200 (+0.5%) while gains in metals also boosted mining names. Nikkei 225 (-0.1%) was initially lower on profit-taking and a firmer JPY, but then recovered as USD/JPY reclaimed the 102.00 handle. Elsewhere, Hang Seng (+0.9%) & Shanghai Comp (+0.2%) were also positive following encouraging earnings and as the PBoC continued with its longer dated liquidity injections. Finally, 10yr JGBs traded flat with demand dampened as Japanese stocks recovered from their lows, while today’s 2yr JGB auction was mixed with an improvement in the b/c and a narrower tail in price, although the amount sold was less and the lowest accepted price declined from prior. Japanese PM Abe adviser Hamada stated the MoF has lost credibility in intervention threats and should ‘courageously’ intervene in FX markets to cap JPY appreciation. Hamada added that allowing JPY to appreciate to damaging levels will result in a failure of Abenomics and that FX speculators must be placed under control before risky policy such as helicopter money can be discussed.

Asia Top News

  • Japan’s Household Spending, Unemployment Fall in July: joblessness at lowest since 1995, spending down for 5th month
  • Questions Linger on China Drug Safety Even as Sales Rise in U.S.: companies struggle to gain trust of patients, regulators
  • KKR’s Most Senior China Executives Exit as Firm Plans Fund: Liu, Wolhardt plan to form their own China-focused fund
  • Southeast Asia’s Most Valuable Startup Running Toward an IPO: Garena valued at close to $4 billion
  • AirAsia to Sell Leasing Arm as Early as December to Cut Debt: company had received offer valued at $1 billion for unit
  • Hanjin Shipping Creditors Reject Revamp Plans: company’s voluntary debt-restructuring program ends Sept. 4
  • Singapore’s Dual-Class Shares Move Wins Nod From Listings Group: shares will be subject to governance safeguards
  • Samsonite Sees Tumi Sales Doubling to $1 Billion on Global Push: Tumi to develop new products
  • Shenzhen-Hong Kong Link Expected to Start in November, CSRC Says: gives date in slideshow presentation
  • China’s Credit Party Winds Down in Headwind for GDP Growth: net issuance drops 39% in August

European equities are trading modestly higher (Eurostoxx +0.9%) led by financial names, with notable gains in Italian bank Unicredit (+2.8%) following reports that they could offload EUR 20bIn NPLs with state guarantee. Elsewhere, the FTSE 100 lags the region as UK participants play catch up, with losses in the index stemming from material names. While losses have also been seen in South African exposed Old Mutual and Investec amid the political uncertainty surrounding South Africa with reports suggesting that Finance Minister Gordhan could be charged in relation to a ‘rogue spy unit’. Additionally, E-mini Nasdaq futures have been pressured after the EU commission concluded that Ireland granted undue tax benefits of up to EUR 13bIn to Apple (AAPL). However, according to an Official, Ireland is preparing to appeal the EUR 13bIn Apple (AAPL) ruling. In credit markets, Bunds are slightly in the red amid the upside in the equities, underperformance has been seen in short end of the curve. While focus is on the peripheral market with participants awaiting the outcome of the Spanish confidence vote, which is expected to fall short of an absolute majority with 170 seats against the required 176.

European Top News

  • Euro-Area Economic Confidence Declines as Brexit Shock Sinks In: Euro-area economic confidence worsened more than analysts predicted in August
  • VW CEO Sees First Fruits From Turnaround Effort in Two Years: Revamp involves about 60 projects, including cultural shift
  • U.K. Mortgage Approvals Hit 18-Month Low; Consumer Credit Slows: Banks and mutually owned lenders signed off on 60,912 home loans, fewest since Jan. 2015, the Bank of England said; U.K. Salaries Weaken as Employers Start to Hesitate Post-Brexit
  • U.K. Foreign Investment Sets Record, Boosted by Emerging Markets: 11% more projects backed by overseas cash, says government
  • Denmark Cuts Economic Outlook as Brexit Fallout Leaves Mark: GDP will expand 0.9% in 2016, compared with a May forecast for 1.1%, according to government documents seen by Bloomberg
  • Bundesbank Sees Need to Re-Calibrate Basel Reform Proposals: Dombret says risky banks will see capital requirements rising
  • Merkel Ally Says Post-Brexit U.K. Must Pay for EU Market Access: CDU foreign-policy lawmaker cites Norway model of EU ties

In FX, the Bloomberg Dollar Spot Index rose 0.2% in early trading with the U.S. currency strengthening 0.2 percent against the euro and 0.4 percent versus the yen, which was trading at 102.34 per dollar. Fed funds futures ended Monday indicating a 36 percent chance that the Fed will raise rates in September, up from 24 percent a week earlier, and Fischer has said U.S. payrolls figures on Friday will be key to the central bank’s decision making. The report is projected to show employers added 180,000 jobs this month, following a gain of 255,000 in July. Prospects for higher U.S. rates has prompted options traders to turn bullish on the currency versus yen for the first time since November. One-month 25-delta risk reversals show that call options on the dollar cost seven basis points more than put options, a sign more investors expect the dollar to rally than to weaken. Put options on the dollar had traded at a premium throughout this year. The pound fell for a fourth day against the dollar as a report showed U.K. mortgage approvals slumped to an 18-month low in July and consumer borrowing slowed following Britain’s vote to leave the European Union. Sterling weakened 0.3 percent to $1.3067, and was 0.1 percent weaker versus the euro. South Korea’s won rose 0.5 percent versus the dollar, the best performance among 16 major currencies.

In commodities, West Texas Intermediate crude was up 0.7 percent at $47.30 a barrel. U.S. stockpiles probably increased by 1.5 million barrels last week, according to analysts surveyed by Bloomberg before official data due Wednesday. Oil explorers discovered just 2.7 billion barrels of new supply in 2015, the smallest amount since 1947, and this year’s tally is on track to be even smaller, according to figures from consulting firm Wood Mackenzie Ltd. “We’ve had a big rally and a bit of a dip but oil has been resilient, holding comfortably above $45 a barrel,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “We’ve seen a lot of jerky trade based on various rumors associated with the OPEC meeting and I’m sure that will continue.” Gold fell 0.2 percent to $1,320.15 an ounce, putting it on course for the seventh loss in eight sessions as a stronger dollar made the metal less attractive in countries outside the U.S. Central banks, the biggest holders of bullion, cut their purchases by 40 percent from a year earlier in the last quarter to the lowest since 2011, World Gold Council figures compiled by Bloomberg show. Copper erased earlier gains of as much as rose 0.7 percent in London. Zinc dropped 0.8 percent.

The key event highlight in the US is the August consumer confidence reading which is expected to fall modestly to 97.0 from 97.3 last month. The S&P/Case-Shiller house price index for June is also due to be released. As noted earlier, it’s worth keeping an eye on Fed Vice-Chair Fischer again when he speaks later this morning.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade modestly higher amid the upside in financials, particularly Italian banks as Unicredit may offload EUR 20bIn worth of NPLs.
  • E-mini Nasdaq futures pressured after the EU commission concluded that Ireland granted undue tax benefits of up to EUR 13bIn to Apple (AAPL).
  • Looking ahead, participants will also await US Case Shiller, CB Consumer Confidence and API crude inventory report.
  • Treasuries pare declines along with U.S. dollar, while global equities; Vice Chair Stanley Fischer said pace of rate hikes depends on data, fiscal policy changes likely but uncertain in 2017-18.
  • Euro-area economic confidence worsened more than analysts predicted in August in a sign that the reverberations of Britain’s decision to leave the EU may finally be reaching companies and households
  • An ally of German Chancellor Angela Merkel said the U.K. will have to pay into the EU’s budget if it wants the single market’s advantages, diminishing Britain’s prospects for a low-cost solution after its vote to exit the bloc
  • U.K. mortgage approvals slumped to an 18-month low in July and consumer borrowing slowed following the decision to quit the EU
  • The Czech Republic’s ambition to throw off its crisis-era currency regime is in danger of being delayed by Mario Draghi
  • The yuan’s recent stability may be coming to an end as derivative markets are pointing to renewed bets on yuan depreciation, with a three-month measure of expected price swings poised for the biggest monthly increase since January
  • Bank of China Ltd., the nation’s fourth-largest lender, reported a 3.4 percent increase in second-quarter profit even after setting aside extra provisions to boost its bad- loan buffer

DB’s Jim Reid concludes the overnight wrap

The day after the August bank holiday here in the UK always seems to mark the beginning of the end of summer frivolities and a return to more serious matters ahead with the added disadvantage of darker and colder mornings. This week will still likely be relatively quiet but it’s a big payroll report coming up on Friday in light of all the recent Fed speakers and we’ll likely see more activity in the build up and then next week given that by then most will be back from hols. As Craig discussed yesterday, Yellen’s Jackson Hole speech didn’t really give much away as to the Fed’s near-term thinking. However it seems many of the others on the FOMC have got their fingers hovering over the rate hike button and are not ashamed to broadcast it. I’m still inclined to believe they won’t hike next month but it could come down to Friday’s random number generator as to what they do.

Fed speak continues to dominate markets but with the last 24 hours or so seemingly an unwind of much of the price action which happened post-Fischer on Friday afternoon. Indeed after yields rose fairly steeply on Friday, yesterday was very much a day of retracement for bonds. The 10y yield ended up falling 7bps to 1.560% and is more or less back to pre Jackson Hole levels again. The move wasn’t quite as exaggerated at the short end although 2y yields did still fall 3.7bps to 0.807%. They closed last Thursday at 0.791%. Meanwhile the US Dollar initially climbed steadily as the US session kicked in and so added to Friday’s gains, but then pared all of that move in the final few hours to close flat on the day.

The stalling inflation data in the US (more on that shortly) was perhaps to blame for the rally in rates, while there was also some chatter of month end buying being a factor. Perhaps it’s just a reflection that there appears to be little conviction to break out of the extraordinarily tight range of late. Over the last 34 days since July 13th, the US 10y yield has traded in just an 18bps high to low range when you include intraday peaks and troughs.

So while yesterday was a good day to be long Treasuries it also ended up being a good day to be long US equities too. A financials driven rally helped the S&P 500 close the day +0.52% in what was in fact the strongest day for the index since August 5th. The confusing element was the fact that US financials actually struck a year-to-date high yesterday despite Fed rate hike expectations dipping a little bit lower. September and December probabilities actually retraced slightly to 36% and 61% respectively from 42% and 65% on Friday. It’s worth highlighting here that a Bloomberg interview with the Fed’s Vice Chair Fischer has now been scheduled for this morning at 11.30am BST (6.30am ET). Given the reaction to his comments on Friday it’s worth keeping an eye on the headlines that emerge from this one.
That stronger day for US equities yesterday also came as WTI Oil pulled back -1.39% and closed below $47/bbl for just the second time in two weeks. This morning in Asia the majority of bourses are following the lead from the US and trading slightly firmer. The Hang Seng (+0.66%), CSI 300 (+0.07%), Kospi (+0.70%) and ASX (+0.55%) in particular are all up. The Nikkei is back to flat having initially opened on the back foot. That more than likely reflects the volatile moves in the Yen which right now is -0.21% weaker. Economic data released in Japan this morning was a bit better than expected. The jobless rate fell one-tenth to 3.0% in July. Overall household spending improved to -0.5% yoy in July from -2.3%, while retail sales (+1.4% mom vs. +0.8% expected) increased more than expected last month.
Moving on. The July personal spending and income data that was released in the US yesterday was reasonably supportive. Spending rose +0.3% mom last month as expected following an upwardly revised +0.5% mom increase in June. Spending has now in fact risen for four straight months, while yesterday we also learnt that personal income rose +0.4% mom (also in-line) which was the second most in a single month this year.

The inflation data revealed a bit of a slowing in momentum however. The PCE deflator was unchanged in July as expected following a +0.1% mom increase in June. The YoY rate is now +0.8% which is slightly down from the +0.9% in the prior month. Meanwhile core PCE rose +0.1% mom last month which was enough to keep the YoY rate unchanged at +1.6%. The only other data was the Dallas Fed’s manufacturing survey which printed at -6.2 (vs. -3.9 expected), down 4.9pts from July and the 20th negative reading in a row. There was some encouragement in the components though with new orders turning positive and the production index also increasing 4pts.

Closer to home it was unsurprisingly quiet given the UK Bank Holiday. European equity markets closed modestly lower (Stoxx 600 -0.15%) albeit on much lower than average volumes. Datawise the main highlight was the ECB’s latest CSPP holdings data and once again it was impressive given the time of year. Total holdings as of August 26th are now €19.3bn following net purchases settled last week of €1.5bn. That implies an average daily run rate last week of €301m which is only slightly below the €345m average since the program started. August purchases have almost certainly been healthier than most would have expected given the holiday season.

Looking at today’s calendar, this morning in Europe we’re kicking off in Germany where we’ll first of all receive the import price index reading. Attention will then switch over to the UK with the money and credit aggregates data for July released along with last month’s mortgage approvals data. We’ll then get the August confidence indicators for the Euro area before the flash August CPI reading in Germany gets released. The highlight in the US this afternoon is the August consumer confidence reading which is expected to fall modestly to 97.0 from 97.3 last month. The S&P/Case-Shiller house price index for June is also due to be released. As noted earlier, it’s worth keeping an eye on Fed Vice-Chair Fischer again when he speaks later this morning. The other potentially interesting event is in Brazil where the Senate impeachment trial on President Rousseff continues. Our emerging market economists noted yesterday that the final Senate vote will probably take place on Wednesday morning.


i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 4.65 POINTS OR 0.15%/ /Hang Sang closed UP 194.77 points or 0.85%. The Nikkei closed DOWN 12.13 POINTS OR 0.07% Australia’s all ordinaires  CLOSED UP 0.17% Chinese yuan (ONSHORE) closed DOWN at 6.6770/Oil ROSE to 47.28 dollars per barrel for WTI and 49.46 for Brent. Stocks in Europe: in the GREEN   Offshore yuan trades  6.6890 yuan to the dollar vs 6.6810 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS  MORE USA DOLLARS   LEAVE CHINA’S SHORES  



This will become a huge nightmare for Japan once their economy flounders Both the Japanese BOJ and their Pension fund: GPIF are the largest shareholders in 474 of the biggest Japanese companies

(courtesy Wolf Richter/WolfStreet)

Japanese Government Now The Largest Shareholder Of 474 Big Companies

Submitted by Wolf Richter via,

The two biggest buyers of Japan Inc. are flying blind and don’t care.

The Bank of Japan and the Government Pension Investment Fund (GPIF) have been buying stocks to inflate the market, create some kind of “wealth effect,” and bamboozle regular Japanese into pouring once again into stocks, after many of them lost a big chunk of their savings when the prior bubble imploded without ever recovering.

In 2014, the GPIF – buckling under the pressure from the Abe administration – decided to plow about 25% (“±9%”) of its assets into Japanese stocks. With assets at the time of still about $1.4 trillion, 25% would amount to about $350 billion. So the fund has been buying a lot! And it has been a disaster![Read…  Japan Mega-Pension Fund Dives into Stocks, Foreign Assets, Loses Shirt. People Not Amused]

But even after Japanese stocks took a licking over the past year, the fund’s allocation to domestic equities is still 21%, so near its range and no longer a powerful buyer. But to make up for any holes left behind by the pension fund, the BOJ announced on July 28 that it would nearly double its annual purchases of equity ETFs to ¥6 trillion ($59 billion).

The holdings of Japanese stocks by these two entities have nearly tripled over the past five fiscal years to about ¥39 trillion ($381 billion), according to The Nikkei. During that time, the Nikkei stock index soared 70%, “demonstrating their powerful support.”

But, but, but… the index remains 57% below its bubble peak of 1989.

So what has this done to overall government ownership of Japanese stocks? We don’t really know, because it’s kept purposefully opaque, according to The Nikkei:

These major public-sector buyers do not appear on shareholder lists because of their indirect ownership via trust banks and other intermediaries.

And yet, The Nikkei figured that “the two together are the largest shareholders for 474 of about 1,970 stocks” on the Tokyo Stock Exchange’s first section (the section for large companies), “based on public information.”

And this is just the beginning.

So for example, between the GPIF and the BOJ, they own 17% of TDK, 16.5% of Advantest, 14.2% of Nitto Denko, 14.2% of Yokogawa Electric, more than 10% of entertainment company Konami Holdings and security services provider Secom.

“We hope they will hold the shares over the long term,” fretted an official of Yokogawa Electric. Because if they ever tried to sell those shares, all heck would break loose.

Overall, the BOJ and the GPIF now hold over 7% of stocks in the first section of the TSE. By contrast the largest private-sector stockholder, Nippon Life Insurance, holds only about 2% of the stocks in the first section.

So hopes are high that the BOJ’s buying binge of ¥6 trillion in equity ETFs, and whatever the GPIF might still buy – though it’s largely finished as a buyer – will inflate the market. Nomura Securities chief strategist Hisao Matsuura thinks that the ¥6 trillion a year from the BOJ alone will inflate the Nikkei index by 2,000 points per year, or about 12%… year after year… come hell or high water, one would assume, because according to this logic, nothing else but central-bank and government-pension-fund buying matters.

If companies have declining sales, losses, and nightmarish management, it wouldn’t matter. These companies would still be able to raise funds and go on as if nothing happened because there will be a relentless and dumb bid, and their stocks would soar since the BOJ and GPIF are passive shareholders, blindly buying equities mostly in form of ETFs. Owners of ETFs cannot dump individual stocks; they cannot punish companies by selling their shares – the most fundamental action of the market.

In other words, the largest most relentless buyers and owners of Japan Inc. are blind, dumb, and mute. That might suit Japan Inc. just fine. Entrenched management coddled by these big passive investors has nothing to worry about. Forget the discipline of the market, or price discovery, or pressures on corporate governance, or any other function of the market. They will all disappear – if they haven’t already.

In this scenario, companies can turn into zombies while the BOJ and the GPIF will still be loading up on ETFs that contain these shares and keep their prices high. And keeping prices artificially high is the only goal of all this buying.

Neither the BOJ nor the GPIF could ever unload these ETFs without unwinding the stock price inflation their relentless and blind buying has caused. And in turn, if the BOJ and the GPIF start selling their ETFs, even high-performing companies would see their share prices get eviscerated.

With these two public elephants in the room, nothing else matters. And this has some ironic consequences, according to Shingo Ide, chief equity strategist at NLI Research Institute: “Regular investors who focus on company analyses may hesitate to buy.” And that may have something to do with the swoon of Japanese stocks over the past 12 months.

But the BOJ is already fretting about the next crash and is building up a big pile of dry powder.Read…  Bank of Japan Prepares for Crash Triggered by Fed Tightening




Italians (37%) gave up their search for a job. Italy is now becoming a huge welfare state like Greece

(courtesy zero hedge)

When ‘Whatever It Takes’ Fails: 37% Of Italians Give Up Job Hunt As Welfare State Grows

With France calling for the EU’s budget limits to be lifted and everyone breaking every rule of fiscal responsibility – because Draghi has killed the market’s signal – the fear of ever deepening deficits is (for now) removed. Enabling governments to do “whatever it takes” to get re-elected, because reforms are vote-killers, has incentivized an ever-growing group of Europeans to simply give up the job search… with Italians at the top of the list…

Going from the final quarter of 2015 through March of this year, 37 percent of unemployed Italians gave up their job search, while only 13 percent landed new work and a full half found their status unchanged.

On the opposite end of the scale, very few Greeks — just 1 percent — gave up their job hunt while only 4 percent found new employment in the economically hard-pressed nation.

Source: Bloomberg


First; Germany and now France kills the TPP:  Why? the Americans gave France nothing!! And they expected something/

(courtesy zero hedge)

“The Americans Give Us Nothing”: France Effectively Kills TTIP, Calls For End To Negotiations

Just two days after Germany’s outspoken vice chancellor (who has over the past 48 hours slammed not just Merkel’s refugee policy but also Brexit negotiation demands), announced that Obama’s transatlantic trade treaty, the TTIP, is dead, saying negotiations have failed because “we Europeans did not want to subject ourselves to American demands”, France voiced its support to the German position when the French trade minister on Tuesday called for an end to trade negotiations between the European Union and the U.S., the firmest sign yet of opposition in Europe to what would be the most ambitious trade deal in decades.

Matthias Fekl, cited by the WSJ, said on French radio that “France no longer politically supports these negotiations,” adding that “The Americans are giving us nothing. This is not how allies should be negotiating.” Fekl said he would ask the European Commission, the EU’s executive arm, at a meeting of trade ministers late September to end negotiations over the Transatlantic Trade and Investment Partnership, generally known as TTIP. The Commission leads talks with the U.S. for the EU.

“There should be an absolute clear end so that we can restart them on good basis,” he said on RMC Radio, adding he would suggest that course to fellow ministers.

Fekl echoed the position of Germany’s econ minister Gabriel who said on Sunday that TTIP negotiations had effectively failed after Europe refused to accept some U.S. demands. Gabriel is the chairman of Germany’s Social Democrats (SPD), who share power with Chancellor Angela Merkel’s conservatives.

While many German Social Democrats have serious reservations about TTIP but Merkel backs the talks: her spokesman insisted on Monday that talks should continue, while Germany’s Foreign Minister Frank-Walter Steinmeier – also a member of the SPD – said on Tuesday that both sides were still far away from agreeing on standards and procedures.

However, with the French veto it seems that Merkel is now out of luck.

Fekl’s comments show how skepticism of trade deals is surging on both sides of the Atlantic. In the U.S., President Barack Obama faces a tough battle in Congress to pass another major trade deal, the Trans-Pacific Partnership. Donald Trump and Sen. Bernie Sanders bolstered their support during the presidential race by strongly opposing trade deals, putting pressure on Democratic nominee Hillary Clinton to adopt a more skeptical stance on trade.

In Europe, politicians in the bloc’s biggest economic powers, France and Germany, find themselves under fire for supporting negotiations with the U.S. Marine Le Pen, the head of France’s right-wing National Front party, has repeatedly attacked President François Hollande for backing the talks.

Three years of TTIP negotiations have failed to resolve multiple differences, including over food and environmental safety, but the USTR’s spokesman told German magazine Der Spiegel the negotiations “are in fact making steady progress”. The deal is expected to eliminate almost all tariffs and reduce regulatory red tape that acts to limit trade, establishing what would effectively be a vast, trans-Atlanic free-trade zone. But fears have persisted in Europe that the deal will require the region to accept U.S.-backed technologies, such as biotech crops, that the region opposes.

The White House has said this week it aims to reach a deal by the end of the year. “It’s going to require the resolution of some pretty thorny negotiations, but the president and his team are committed to doing that,” White House spokesman Josh Earnest told reporters in Washington.

Meanwhile, the European Commission also remains upbeat. Although trade talks take time, the ball is rolling right now and the Commission is making steady progress in the ongoing TTIP negotiations,” the executive’s spokesman, Margaritis Schinas, told a news conference in Brussels on Monday.

Supporters say the TTIP could deliver more than $100 billion worth of economic gains on both sides of the Atlantic, according to Reuters, but critics say the pact would hand too much power to big multinationals at the expense of consumers and workers.  It would also likely result in even more mass layoffs.



Turkey tells the USA to mind their own business. Their comments on Turkish bombing the places that ISIS  is not located is  totally unacceptable.  One complete joke!

Believe it or not but Russia is also upset at Turkish invasion without their permission.

(courtesy zerohedge)

Turkey Slams US Comments That Its Bombing Of US Allies “Is Unacceptable” Are “Unacceptable”

Yesterday, as the fallout from the latest Turkish incursion into Northern Syria was being digested and the US realized that far from an expansion in Ankara’s campaign on ISIS, Erdogan was merely using the Islamic State as a pretext to expand his war against the Kurdish militia, known as YPG – which also happens to be a part of the broader US-backed Syrian Democratic Forces (SDF) coalition – the DoD  said thatwe want to make clear that we find these clashes — in areas where [ISIS] is not located — unacceptable and a source of deep concern.”

24 hours later Turkey responded, saying that the US comments that Turkey’s clashes in areas where ISIS is not located “are unaccpetable”, are themselves unaccpetble, and that the US should just ahead and mind its own business.

BREAKING Turkish MFA: US comments on scope and targets of op in Syria are unacceptable.

Specifically, Turkey’s Foreign Ministry Spokesman Tanju Bilgic said in a written statement on Tuesday that comments on Turkey’s operation in Syria by U.S. officials including the secretary of defense, White House spokesman, and special envoy for the fight against Islamic State are “unacceptable” adding that the goal of Turkey’s “Euphrates Shield” operation in Syria is clear: to bring the scourge of terrorism to a level that it no longer disturbs Turkish citizens.

The problem for the US is that among the terrorist Turkey also now officially counts America’s “allies” the YPG.

And so, Joe Biden’s appeasament attempt last Wednesday when he arrived in Turkey to show support for Erodgan, and which as we dubbed would be quickly seen as a humiliation, is now an even greater humiliation for US foreign policy.

Obama admits 10,000 Syrian refugees mostly heading to Michigan and California

( zero hedge)

Obama Admits 10,000 Syrian Refugees: Top Destinations Are Michigan And California

Yesterday, the White House announced that the US had met President Obama’s goal of admitting 10,000 Syrian refugees into the country; it did so ahead of schedule.

One year ago Obama had sought a sixfold increase in the number of Syrian refugees provided safe haven in the United States. After a slow start, the administration was able to hit the goal about a month early and just a few weeks before Obama convenes a summit on refugees during the 71st session of the United Nations General Assembly. He would have been hard-pressed to make the case for other countries to do more with the U.S. failing to reach a goal that amounts to about 2% of the 480,000 Syrian refugees in need of resettlement. Millions more Syrians have fled to neighboring states such as Jordan, Turkey and Lebanon and to countries in Europe since the civil war broke out in 2011.

Over 1 million Syrian refugees made their way to Germany, where the resultant social shock, and surge in violent terrorist attacks, have led to a plunge in Angela Merkel’s approval rating. That, however, has not deterred the US from seeking to admit thousands of refugees.

“On behalf of the president and his administration, I extend the warmest of welcomes to each and every one of our Syrian arrivals, as well as the many other refugees resettled this year from all over the world,” National Security Adviser Susan Rice said in a statement. More from the statement:

Less than a year ago, in response to an historic global refugee crisis, involving millions of Syrians in flight from violence and conflict, President Obama directed his Administration to increase the number of Syrian refugees provided safe haven in the United States.  While refugee admissions are only a small part of our broader humanitarian efforts in Syria and the region, the President understood the important message this decision would send, not just to the Syrian people but to the broader international community. As such, he set a goal of admitting 10,000 Syrian refugees this fiscal year. Millions have been displaced by the violence in the region, but this decision still represented a six-fold increase from the prior year, and was a meaningful step that we hope to build upon.

Today, I am pleased to announce that we will meet this goal more than a month ahead of schedule.  Our 10,000th Syrian refugee will arrive this afternoon.  On behalf of the President and his Administration, I extend the warmest of welcomes to each and every one of our Syrian arrivals, as well as the many other refugees resettled this year from all over the world.  We will admit at least 85,000 refugees in total this year, including vulnerable individuals and families from Burma, Democratic Republic of the Congo, El Salvador, Iraq, Somalia, Ukraine, and many other countries.

Rice said the summit in New York City will highlight the contributions the U.S. and other nations have made to help refugees. She said the U.S. has committed to working with the international community to increase funding for humanitarian assistance and double the number of refugees afforded the opportunity to resettle.

As AP admits, the increase in Syrian refugees also comes at a time of heightened national security concerns following extremist attacks in the U.S. and abroad. The Obama administration has said that refugees fleeing war and persecution are the most scrutinized of all immigrants who come into the United States. The process typically takes 12 months to 18 months and includes in-person interviews and a review of biographical and biometric information.

With many Americans curious where these refugees will land, a map we first posted last September shows a wide dispersion. More details can be found in a document from the Refugee Processing Center.

According to NBC, the top destination for Syrian refugees arriving in the U.S. is the state of Michigan. More than a 10th of the 10,000 Syrians admitted this fiscal year at the urging of the Obama administration are headed there, according to State Department figures.

Most of the 1,036 new arrivals are likely to settle in and around Detroit, which has long been a magnet for Arab immigrants. This despite the fact that Michigan’s Republican Gov. Rick Snyder suspended efforts last November to bring more long-suffering Syrians to his state after the deadly terrorist attacks in Paris.

Snyder spokeswoman Anna Heaton told NBC News the governor “never suspended refugee resettlement” and is not opposed to more Syrian refugees settling in Michigan. “The governor suspended efforts to bring in additional refugees above and beyond the amount Michigan normally receives,” Heaton said in an email. “This increase in Syrian refugee resettlement is not surprising as our state continues to be a welcoming home for refugees who go on to contribute to our economic comeback and Michigan’s overall quality of life.”

Close on Michigan’s heels is California, which has taken in 1,030 Syrians between Oct. 1 of last year and Aug. 29, the federal figures show. Arizona and Texas, two red states led by Republican governors who have flat-out said they don’t want Syrian refugees because they supposedly pose a security risk, are next on the list having taken in 766 and 735 people, respectively, the figures show.

Those states were followed by Pennsylvania (600), Illinois (569), Florida (542) and New York (538), the figures show.

However, as Breitbart noted overnight, there is a possibility that thousands of the Syrian refugees may end up doing something else entirely: noting that in a previously little-noticed video from February at the Clinton Global Initiative, former President Bill Clinton suggested that the U.S. use Syrian refugees to rebuild Detroit. Since the decision what to do with the Syrian refugees will ultimately be made by America’s next president, who may well be Hillary Clinton, this is significant.

“The truth is that the big loser in this over the long run is going to be Syria. This is an enormous opportunity for Americans,” Bill Clinton said about the Syrian migrant crisis.

Detroit has 10,000 empty, structurally sound houses—10,000. And lot of jobs to be had repairing those houses. Detroit just came out of bankruptcy and the mayor’s trying to do an innovative sort of urban homesteading program there. But it just gives you an example of what could be done. And I think any of us who have ever had any personal experience with either Syrian Americans or Syrian refugees think it’s a pretty good deal.

As Julia Hahn notes, it is unclear from the video why Clinton seems to think it would be better to fill these Detroit jobs with imported foreign migrants rather than unemployed Americans already living there, who could perhaps benefit from good-paying jobs.

We may soon find out: Hillary Clinton has called for a 550 percent expansion to the importation of Syrian refugees. Based on the minimum figures she has put forth thus far, a President Hillary Clinton could potentially import a population of refugees (620,000) that nearly equals the population of Detroit (677,116).

Here a quick note: in the US, 91.4% of recent refugees from the Middle East are on food stamps, and 68.3% are on cash welfare, according to data from the Office of Refugee Resettlement in the Department of Health and Human Services.

This may be something else for the American public to consider in the 69 days remaining ahead of the presidential election.


Norway had to raid its sovereign wealth fund to cover government expenses.It has has problem with respect to bonds.  They are not earning anything!

May may interest you in gold?

(courtesy zero hedge)

Norway Raids Sovereign Wealth Fund To Cover Government Expenses

Saudi Arabia isn’t the only oil-dependent nation struggling to make ends meet in the wake of weak oil prices.  For the first time since its establishment in 1996, the Norwegian government is starting to withdraw money from its sovereign wealth fund to cover government expenses.  In fact, in the first half of 2016 the government has withdrawn $5.4 billion.  Moreover, withdrawals are expected to accelerate in 2H 2016 reaching nearly $20 billion, a run-rate that would have them exceeding the fiscal limits imposed on fund withdrawals of 4% of assets, or $36 billion.  To put those withdrawals into perspective, Norway’s economy is roughly $375 billion and federal spending accounts for roughly 60% or $225BN.  Therefore, a $20BN withdrawal in 2H 2016 represents roughly 18% of total government spending.

Norway Sovereign Wealth

In an interview with Bloomberg, Egil Matsen, the Deputy Governor at Norway’s Central Bank, said the withdrawals are starting to impact the manner in which the fund manages its risk profile.   

Relevant for how we think about the risk-bearing capacity of the fund.  Say you have a decline in the equity market, and these returns have been partly funding the government,do you want variations in international financial markets to have a direct impact on fiscal policy?

Matsen, among others, has also questioned whether the 4% fiscal limits on withdrawals are the right cap in the current return environment noting thatas the older bonds come to maturity and are reinvested, a big chunk of that will be reinvested in bonds with very low or even negative yields.” 

Matsen also noted that the economic landscape has “changed” since their last review in 2007.  Well, that might just be the understatement of the year.  In response to that changing economic landscape, Matsen said that fund managers are doing a lot of “internal analytical work” to figure out whether the “correlation structure between equities and bonds has changed since 2007.”  Seriously?

“We’re doing a lot of internal analytical work now to assess how the economic landscape has changed since the last review of this in 2007,” he said. “It’s a different world. It’s way too early for me to give any preview of our advice, but that’s certainly a big and important decision.”

The fund is also looking at whether the “correlation structure” between equities and bonds has changed since 2007, Matsen said. “There may be data that suggests there’s a different pattern there than in 2007.”

Well, we think you might be on to something with the “thesis” that the “correlation structure” between equities and bonds has shifted since 2007.  The fact that equities and bonds are now both trading at all-time highs is a dead give away.  In fact, we can save you some time with that “internal analytical work” because, per the chart below, everything is now perfectly correlated…so you can just buy whatever you want really…as long as you buy. 


But, certainly updating your view of the “economic landscape” once every 9 years or so is important.  Better late than never.



Oil drops as the market questions whether an OPEC production freeze is even possible?  Oil also falls due to the rise in the dollar

(courtesy zero hedge)

Oil Tumbles As Market Questions Whether An OPEC Production Freeze Is Even Remotely Possible?

Oil prices enjoyed a bump last week, thanks in part to a weakened dollar and some geopolitical tensions in the Persian Gulf. But a large factor in the recent rally has been the return of a possible OPEC production freeze, a subject that was last tossed around before the organization’s much-publicized, and ultimately unproductive, meeting in Doha last April. The likelihood of a freeze sent markets up on Thursday, though some less-than-confident comments from the Saudi oil minister sent them dropping back on Friday.

And we noted previously, the short squeeze ammo has been eviscerated in oil, disabling (for now) the ‘freeze’ headline risk…

Whether a freeze occurs or not is likely to be the trending gossip among speculators for the next month, at a time when such talk is exerting greater-than-average pull on the crude price, but as’s Gregory Brew notes, a question worth asking is whether a freeze is even possible, given the state of OPEC and the increasingly divergent interests of its fourteen members.

This new attempt at a production freeze comes as Saudi Arabia, OPEC’s largest producer and de facto leader, reaches a new production record of 10.67 million barrels, more than 400,000 more than when the last freeze was discussed, while its oil revenues continue to plummet. OPEC profits have fallen 55 percent since 2014, according to the EIA. Ecuador, Kuwait and other Gulf producers want the price to recover past $50 a barrel. If a production freeze is on the cards, it will be discussed in late September during an informal meeting of the OPEC states at the International Energy Forum in Algeria.

Iraq and Iran, OPEC’s number two and three producers, respectively, have offered tacit acceptance of a production freeze, with important caveats.

In the case of Iran, a freeze will not interfere with the country’s long campaign to re-capture market share, as oil minister Bijan Zanganeh made quite clear in a recent statement. The question of where, exactly, Iran’s production will reach before a freeze is open for debate. The widely-cited figure is Iran’s pre-sanctions production level of 4 million barrels, and the Iranian government has claimed that it will consider a freeze once production reaches this level.

If the current trend holds, Iran will reach 4 million barrels by September, in time for the Algeria meeting.Increasing production past 4 million will require new investment, which Iran is preparing to court with new contracts, and which it desperately needs in order to repair its infrastructure and expand beyond its aging fields.

But will Iran (or Zanganeh) be satisfied with 4 million? Iran’s all-time high of 6.3 million barrels per day was reached in the 1970s. It’s possible that Zanganeh will insist that Iranian production increase to its historic maximum, just as Saudi Arabia has allowed its production to sky-rocket. It may give tacit approval to a freeze, in order to bring prices up, but it’s unlikely to adhere to it in any practical sense.

In other words, Iran will agree to a production freeze…as long as it doesn’t have to participate.

Iraq, meanwhile, has been pushing as hard as it can to increase production in advance of any possible freeze. It has asked the international companies currently present in Iraq to increase investment and bring up production, which has already reached 4.78 million barrels per day. But companies are only willing to invest if they can be sure of compensation from the Iraqi state, which failed to deliver last year and had to instruct companies to bring down their level of investment.

Other OPEC members, including Nigeria and Venezuela, are facing nothing less than an economic Armageddon and are desperate for an increase in price. Nigeria however has seen its production decline to a 30-year low due to violence in the Niger Delta. Venezuela is less likely to make waves, as its economy has been hit harder than any other OPEC member by the current crisis, so any recovery in price would be worthwhile. But Nigeria probably won’t agree to freeze at current levels: like Iran, Iraq and Saudi Arabia, its leaders will want to pump more before bringing production to a halt.

So, if there is a freeze, where will production be “frozen,” exactly? Since April, Iran and Saudi Arabia together are pumping 1 million barrels more than they were the last time a freeze was contemplated. David Hufton, of the PVM Group in London, has noted that a 34 million barrel a day freeze “is not the same as one at 33 million barrels,” and that given current market conditions it could take a year for the price to stabilize at such a level.

This comes as the EIA estimates lower demand for oil in 2017, surging activity in wind and solar power, and increased interest in electric, AI-guided automobiles. Taken with the ongoing geopolitical factors tugging at OPEC’s frayed sense of coherence, including divisions among Middle Eastern states over the war in Syria and the ongoing Tehran-Riyadh rivalry, the state of oil production in OPEC’s many members makes a freeze agreement in late September look increasingly unlikely and, ultimately, impossible. What is possible, however, is that continued talk of a freeze will continue to exert influence over the market, which has see-sawed between bearish and bullish for weeks now.


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



GBP/USA 1.3102 DOWN .0004 

USA/CAN 1.3033 UP .0020

Early THIS TUESDAY morning in Europe, the Euro FELL by 23 basis points, trading now well above the important 1.08 level RISING to 1.1166; 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 4.65 POINTS OR 0.15%    / Hang Sang CLOSED UP 194.77 POINTS OR 0.85%     /AUSTRALIA IS HIGHER BY .84% / EUROPEAN BOURSES ALL  IN THE GREEN

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 12.13 POINTS OR 0.07%  

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 194.77 POINTS OR 0.85%  ,Shanghai CLOSED UP 4.85  POINTS OR 0.07%    / Australia BOURSE IN THE GREEN: /Nikkei (Japan)CLOSED IN THE RED   /INDIA’S SENSEX IN THE GREEN 

Gold very early morning trading: $1319.80


Early TUESDAY morning USA 10 year bond yield: 1.571% !!! PAR  in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield  2.217, PAR IN PASIS POINTS  from YESTERDAY night. 

USA dollar index early TUESDAY morning: 95.77 UP 21 CENTS from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING



And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.03%  PAR in basis point yield from MONDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.075% UP 1 in   basis point yield from MONDAY

SPANISH 10 YR BOND YIELD:0.950% UP 2 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.10  DOWN 2 in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 15 points HIGHER than Spain.





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

Euro/USA 1.1135 DOWN .0055 (Euro DOWN 55 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 103.09 UP 1.267(Yen DOWN 127 basis points/


USA/Canada 1.3087 UP 0.0074 (Canadian dollar DOWN 74 basis points AS OIL FELL(WTI AT $46.39). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 55 basis points to trade at 1.1135

The Yen FELL to 103.09 for a LOSS of 127 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 


The Canadian dollar FELL by 74 basis points to 1.30001, WITH WTI OIL AT:  $46.39


The USA/Yuan closed at 6.6778

the 10 yr Japanese bond yield closed at -.075% UP 1 IN BASIS POINTS / yield/

Your closing 10 yr USA bond yield:UP 1 IN basis points from MONDAY at 1.575% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.233 UP 2 in basis points on the day /


Your closing USA dollar index, 96.11  UP 54 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 TUESDAY

London:  CLOSED DOWN 17.26 POINTS OR .25%
German Dax :CLOSED UP 113/2- OR  1.07%
Paris Cac  CLOSED UP 33.14  OR 0.76%
Spain IBEX CLOSED UP 69.00 OR 0.80%
Italian MIB: CLOSED UP 236.20 POINTS OR 1.42%

The Dow was DOWN 48.69 points or 0.26%

NASDAQ DOWN  9.34 points or 0.18%
WTI Oil price; 46.39 at 4:30 pm;


Brent Oil: 48.30




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: 48.46

USA 10 YR BOND YIELD: 1.568% 

USA DOLLAR INDEX: 96.06 UP 49 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3077 down .0028 or 28 basis pts.

German 10 yr bond yield at 5 pm: -0.091%


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


Crude Carnage & A Confident Consumer Send Stocks Lower, USD Higher

Only one possible clip for today… (RIP)…


Despite crude’s collapse, Trannies managed gains on the day as big tech weighed on the rest of the indices…


Financials outperformed again… now where have we seen this decoupling before?


Standard 330ET Ramp was in evidence, pumping to VWAP on another dismal volume day…


VIX hovered between 13 and 13.5…


But from Yellen, it’s mixed with Small Caps and Trannies green…


Notably the “Good news” in this morning’s confidence data was bad news…


Oddly rate hike odds fell again today…


Treasury yields ended the day very modestly higher (though 2Y ticked lower)…


The USD Index rose for the 8th day in a row (longest streak since July 2014)… Yen was the biggest mover as calls for direct intervention were spewed…


USDJPY soared (Yen weakness) to a 103 handle – dragging Nikkei 300 points higher… but US equities gave up the Yen carry trade…


The strong USD sent commodities lower across the board…


Gold was clubbed lower into the close…


The Bloomberg commodity index fell for the 5th day in a row with all 24 major commodity futures in the red today…


Oil prices continued to plunge despite – *STORMS HAVE SHUT IN 22% OF GULF OF MEXICO OIL OUTPUT, U.S. SAYS – With API inventories due tonight…


Charts: Bloomberg


Dr. Fischer!  This does not sound like a good economy to me:  Record number of college grads are working at minimum wage jobs!

(courtesy zero hedge)

Why A Record Number Of College Grads Are Working Minimum Wage Jobs

Over the past year we have repeatedly demonstrated that the bulk of the job additions has been focused on the lowest-paying occupations. Now, according to a new study by Bank of America, we find that these lowest paying sector have also accounted for the bulk of wage growth in the past year.

As BofA’s Emanuella Enenajor notes, wage growth in low-pay sectors outpacing all others. “If you’ve tuned into CEO earnings calls recently, you’d know that a common theme is wage pressure, especially in low-pay sectors such as restaurants. CEOs cite the need to attract quality hires, a tightening labor market, and the push from higher minimum wages. Last year, companies like McDonalds and Walmart announced higher wages, raising fears of a sudden pick-up in wage pressure, which we argued against in our piece “Fast food, fast wages?” The data confirm a trend of rising wage pressure in low-pay sectors with limited pressure elsewhere: the bottom 20% of industries, by pay, is seeing wages rise at a 3.4% year-on-year pace so far this year, but the remaining 80% of the market is only seeing wage growth of 2.4%.”

A key driver for this increase is that a number of states have raised the minimum wage this year, including California and New York. BofA estimates that this has provided a modest boost to wages, year to date. The BLS does not publish detailed industry-level data by state and earnings buckets. Here is the logic behind the calculation:

We use a back-of-the envelope approach for this calculation. First, we estimate 1) the share of low-pay workers impacted by state-level minimum wage hikes. Ideally, we would look for the percentage of low-pay workers earning less than $9.38/hr, as states raising the minimum wage in 2016 have, on average, a minimum wage of $9.38/hr this year. Since this level of granularity is not available, we assume the share is somewhere between 30% (the share of low pay workers making less than $8.99/hr) and 50% (the share of low pay workers making less than $9.99). We assume the mid-point of 40% as our baseline. Then we calculate 2) the percentage of US employees that were located in states seeing a minimum wage increase in 2016 (about 30%). We assume the national distribution mirrors the distribution for low-pay workers.

We multiply 1) by 2) to estimate the share of low-pay workers affected by state-level minimum wage increases. This simplified exercise suggests that of the 3.4% yoy increase in low-pay wages so far this year (equivalent to 46 cents), roughly 8 cents (0.6 ppts) is due to the minimum wage increase. This explains about half of the outperformance of low-pay wages versus high-pay wages. Table 2 shows sensitivity around this estimate. Given the assumptions we have had to make, our baseline estimate and the sensitivities are merely illustrative.1 We can conclude that minimum wage gains have had some part in raising low-pay wages, but are not likely the full story.

Another likely reason why wages for low-pay workers are picking up is because firms have to offer a higher wage to attract workers. The supply of less-educated workers is dwindling, as seen by a shrinking labor force of 16-24 year olds and workers aged 25+ with a high school diploma or less (no college) (Chart 2).

One explanation for this is that increasinly more young Americans opt to take advantage of generous student loans (now at a record $1.3 trillion), instead of entering the work force, where the best they can hope for are jobs paying far lower wages relative to expectations. As BofA confirms, this cohort has been declining since the start of this recovery, probably reflecting the continued push towards higher education, as well as demographics which has reduced the number of younger workers willing to flip burgers for a few years while they save for college.

This trend contrasts sharply with the labor supply of workers with at least some college/bachelor’s degree. Here, supply has been growing, possibly in response to a strengthening recovery as graduates opt to enter the labor force rather than study more.

One very adverse side effect of this trend is that increasingly more low wage employees are those with a college education, in the form of a Bachelor’s Degree or higher, as they are unable to leverage their diploma credentials to get a better paying job, while the only ones hiring are those seeking minimum-paid workers.

As firms in sectors with low pay levels struggle to attract workers, they attract more educated/skilled workers with higher wages, but certainly not high enough. Today,  23% of workers in low pay sectors have a bachelor’s degree or higher, up from 18% 15 years ago (Chart 3).  

This means that the share of college grads working minimum wage jobs is now an all time high; jobs which barely cover the cost of living, let along covering interest expense on student loans.

A second adverse consequence is that there is little risk that accelerating wages in low pay sectors will spill over to faster overall wage growth in a meaningful way, according to BofA.

First, low-pay wage growth does not tend to lead wage trends in higher paid sectors, based on a Granger causality test. If we look at production and non-supervisory workers (Chart 4) for which there is a longer time series, we can see that low-page wage growth tends to peak and bottom out at about the same time as top 80% wage growth, although low-pay wages tend to exhibit more volatility. This greater “flexibility” in low-pay wage inflation contradicts findings of San Francisco Fed researcher Mary Daly, which shows evidence of pent-up wage deflation for workers with lower educational attainment.

BofA then asks the logical question: what will trigger a more meaningful increase in wages outside of the low-pay sectors? It answers that any upward pressure on the national minimum wage could have a modest impact on overall wages, but again, much of this  would be driven by gains in low-pay wages. In our view, wage growth outside of low pay sectors is likely to gradually increase as the overall labor market tightens. However, the trend will be slow, and will likely remain below that of low pay sectors, as the labor force of workers with higher educational attainment (who would presumably be competing for higher-paid work) has been expanding, pointing to a tempering force on wages.

* * *

The third, and final, adverse consequence from all of this governmental intermediation in wage allocation is something else we have covered extensively, most recently overnight in “Minimum Wage Claims Its Latest Victims – Ashley Furniture Slashes 840 Jobs In California“, and more extensively in “Something “Unexpected” Happened When Seattle Raised The Minimum Wage” where we said the following:

Despite our efforts to [convince progressives that raising minimum wages to artificially elevated levels is a bad idea] might be, we thought we would, yet again, report the latest empirical evidence proving that minimum wage results in permanent jobs losses for the same low-skilled workers they’re intended to help.  The latest research comes from the University of Washington which researched the impact of Seattle’s recent minimum wage hike on employment in that city (as background, Seattle recently passed legislation that increased it’s minimum wage to $11 per hour on April 1, 2015, $13 on January 1, 2016 and $15 on January 1, 2017).  “Shockingly”, the University of Washington found that Seattle’s higher minimum wages “lowered employment rates of low-wage workers” (the report is attached in its entirety at the end of this post).

In other words, the higher minimum wages are raised, the faster the corporate response of laying off a proportional number of workers will kick in, or as in the case of Starbucks, simply cutting the overall number of work hours across all employees, the net result of which is the same, if not lower, overall compensation.

Sadly, with long-term US productivity continuing its descent to all time lows…

… this trend will not change, and we expect even more government meddling, even greater wage gains for low-paid workers leading to less wage gains for the rest of the labor force, more layoffs and so on, until the US economy finally slides into a contraction which not even the NBER will be able to “seasonally-adjust” away.


This will get messy!  Apple is ordered to repay $14.5 billion in “illegal” tax benefits because Ireland’s deal gave them special treatment allowing them to pay a low amount of tax. Both Ireland and Apple will fight the ruling. The EU is basically challenging Ireland’s right to tax. Will we have Ireland leave the EU?

(zero hedge)

Apple Ordered To Repay $14.5 Billion In “Illegal” Tax Benefits, Stock Falls 2%

As the FT reported first yesterday, the EU has judged that the Irish government granted Apple “undue tax benefits” and moments ago the European Commission announced the size of the penalty when it ordered the tech giant repay up to €13 billion ($14.5 billion) plus interest. According to the EU, the Irish deal slashed Apple taxes from 2003 to 2014, and allowed Apple to avoid tax on almost all EU profit, lowering its effective tax rate on European profits from 0.005% to 1%.

“The commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” EU Competition Commissioner Margrethe Vestager says in e-mailed statement from Brussels. “This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid,” the commission said in a statement.

Apple and the Irish government have both vowed to fight the decision.

Ireland’s finance minister, Michael Noonan, said that he disagreed “profoundly” with the decision.  “I disagree profoundly with the Commission,” Mr Noonan said in a statement. “The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation.”

As a result of the announcement, AAPL stock was down more than 2% in European trading.

The full EU press release is below:

State aid: Ireland gave illegal tax benefits to Apple worth up to €13 billion

Brussels, 30 August 2016

The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.”

Following an in-depth state aid investigation launched in June 2014, the European Commission has concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991. The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a “head office”. The Commission’s assessment showed that these “head offices” existed only on paper and could not have generated such profits. These profits allocated to the “head offices” were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. As a result of the allocation method endorsed in the tax rulings, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International.

This selective tax treatment of Apple in Ireland is illegal under EU state aid rules, because it gives Apple a significant advantage over other businesses that are subject to the same national taxation rules. The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission’s first request for information in 2013. Ireland must now recover the unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to €13 billion, plus interest.

In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland.

Apple’s tax structure in Europe

Apple Sales International and Apple Operations Europe are two Irish incorporated companies that are fully-owned by the Apple group, ultimately controlled by the US parent, Apple Inc. They hold the rights to use Apple’s intellectual property to sell and manufacture Apple products outside North and South America under a so-called ‘cost-sharing agreement’ with Apple Inc. Under this agreement, Apple Sales International and Apple Operations Europe make yearly payments to Apple in the US to fund research and development efforts conducted on behalf of the Irish companies in the US. These payments amounted to about US$ 2 billion in 2011 and significantly increased in 2014. These expenses, mainly borne by Apple Sales International, contributed to fund more than half of all research efforts by the Apple group in the US to develop its intellectual property worldwide. These expenses are deducted from the profits recorded by Apple Sales International and Apple Operations Europe in Ireland each year, in line with applicable rules.

The taxable profits of Apple Sales International and Apple Operations Europe in Ireland are determined by a tax ruling granted by Ireland in 1991, which in 2007 was replaced by a similar second tax ruling. This tax ruling was terminated when Apple Sales International and Apple Operations Europe changed their structures in 2015.

Apple Sales International

Apple Sales International is responsible for buying Apple products from equipment manufacturers around the world and selling these products in Europe (as well as in the Middle East, Africa and India). Apple set up their sales operations in Europe in such a way that customers were contractually buying products from Apple Sales International in Ireland rather than from the shops that physically sold the products to customers. In this way Apple recorded all sales, and the profits stemming from these sales, directly in Ireland.

The two tax rulings issued by Ireland concerned the internal allocation of these profits within Apple Sales International (rather than the wider set-up of Apple’s sales operations in Europe). Specifically, they endorsed a split of the profits for tax purposes in Ireland: Under the agreed method, most profits were internally allocated away from Ireland to a “head office” within Apple Sales International. This “head office” was not based in any country and did not have any employees or own premises. Its activities consisted solely of occasional board meetings. Only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the “head office”, where they remained untaxed.

Therefore, only a small percentage of Apple Sales International’s profits were taxed in Ireland, and the rest was taxed nowhere. In 2011, for example (according to figures released at US Senate public hearings), Apple Sales International recorded profits of US$ 22 billion (c.a. €16 billion[1]) but under the terms of the tax ruling only around €50 million were considered taxable in Ireland, leaving €15.95 billion of profits untaxed. As a result, Apple Sales International paid less than €10 million of corporate tax in Ireland in 2011 – an effective tax rate of about 0.05% on its overall annual profits. In subsequent years, Apple Sales International’s recorded profits continued to increase but the profits considered taxable in Ireland under the terms of the tax ruling did not. Thus this effective tax rate decreased further to only 0.005% in 2014.

Apple Operations Europe

On the basis of the same two tax rulings from 1991 and 2007, Apple Operations Europe benefitted from a similar tax arrangement over the same period of time. The company was responsible for manufacturing certain lines of computers for the Apple group. The majority of the profits of this company were also allocated internally to its “head office” and not taxed anywhere.

Commission assessment

Tax rulings as such are perfectly legal. They are comfort letters issued by tax authorities to give a company clarity on how its corporate tax will be calculated or on the use of special tax provisions.

The role of EU state aid control is to ensure Member States do not give selected companies a better tax treatment than others, via tax rulings or otherwise. More specifically, profits must be allocated between companies in a corporate group, and between different parts of the same company, in a way that reflects economic reality. This means that the allocation should be in line with arrangements that take place under commercial conditions between independent businesses (so-called “arm’s length principle“).

In particular, the Commission’s state aid investigation concerned two consecutive tax rulings issued by Ireland, which endorsed a method tointernally allocate profits within Apple Sales International and Apple Operations Europe,two Irish incorporated companies. It assessed whether this endorsed method to calculate the taxable profits of each company in Ireland gave Apple an undue advantage that is illegal under EU state aid rules.

The Commission’s investigation has shown that the tax rulings issued by Ireland endorsed an artificial internal allocation of profits within Apple Sales International and Apple Operations Europe, which has no factual or economic justification. As a result of the tax rulings, most sales profits of Apple Sales International were allocated to its “head office” when this “head office” had no operating capacity to handle and manage the distribution business, or any other substantive business for that matter. Only the Irish branch of Apple Sales International had the capacity to generate any income from trading, i.e. from the distribution of Apple products. Therefore, the sales profits of Apple Sales International should have been recorded with the Irish branch and taxed there.

The “head office” did not have any employees or own premises. The only activities that can be associated with the “head offices” are limited decisions taken by its directors (many of which were at the same time working full-time as executives for Apple Inc.) on the distribution of dividends, administrative arrangements and cash management. These activities generated profits in terms of interest that, based on the Commission’s assessment, are the only profits which can be attributed to the “head offices”.

Similarly, only the Irish branch of Apple Operations Europe had the capacity to generate any income from trading, i.e. from the production of certain lines of computers for the Apple group. Therefore, sales profits of Apple Operation Europe should have been recorded with the Irish branch and taxed there.

On this basis, the Commission concluded that the tax rulings issued by Ireland endorsed an artificial allocation of Apple Sales International and Apple Operations Europe’s sales profits to their “head offices”, where they were not taxed. As a result, the tax rulings enabled Apple to pay substantially less tax than other companies, which is illegal under EU state aid rules.

This decision does not call into question Ireland’s general tax system or its corporate tax rate.

Furthermore, Apple’s tax structure in Europe as such, and whether profits could have been recorded in the countries where the sales effectively took place, are not issues covered by EU state aid rules. If profits were recorded in other countries this could, however, affect the amount of recovery by Ireland (see more details below).

picture EN

The infographic is available in high resolution here.


As a matter of principle, EU state aid rules require that incompatible state aid is recovered in order to remove the distortion of competition created by the aid. There are no fines under EU State aid rules and recovery does not penalise the company in question. It simply restores equal treatment with other companies.

The Commission has set out in its decision the methodology to calculate the value of the undue competitive advantage enjoyed by Apple. In particular, Ireland must allocate to each branch all profits from sales previously indirectly allocated to the “head office” of Apple Sales International and Apple Operations Europe, respectively, and apply the normal corporation tax in Ireland on these re-allocated profits. The decision does not ask for the reallocation of any interest income of the two companies that can be associated with the activities of the “head office”.

The Commission can only order recovery of illegal state aid for a ten-year period preceding the Commission’s first request for information in this matter, which dates back to 2013. Ireland must therefore recover from Apple the unpaid tax for the period since 2003, which amounts to up to €13 billion, plus interest. Around €50 million in unpaid taxes relate to the undue allocation of profits to the “head office” of Apple Operations Europe. The remainder results from the undue allocation of profits to the “head office” of Apple Sales International. The recovery period stops in 2014, as Apple changed its structure in Ireland as of 2015 and the ruling of 2007 no longer applies.

The amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period. This could be the case if they consider, in view of the information revealed through the Commission’s investigation, that Apple’s commercial risks, sales and other activities should have been recorded in their jurisdictions. This is because the taxable profits of Apple Sales International in Ireland would be reduced if profits were recorded and taxed in other countries instead of being recorded in Ireland.

The amount of unpaid taxes to be recovered by the Irish authorities would also be reduced if the US authorities were to require Apple to pay larger amounts of money to their US parent company for this period to finance research and development efforts. These are conducted by Apple in the US on behalf of Apple Sales International and Apple Operations Europe, for which the two companies already make annual payments.

Finally, all Commission decisions are subject to scrutiny by EU courts. If a Member State decides to appeal a Commission decision, it must still recover the illegal state aid but could, for example, place the recovered amount in an escrow account pending the outcome of the EU court procedures.


Since June 2013, the Commission has been investigating the tax ruling practices of Member States. It extended this information inquiry to all Member States in December 2014. In October 2015, the Commission concluded that Luxembourg and the Netherlands had granted selective tax advantages to Fiat and Starbucks, respectively. In January 2016, the Commission concluded that selective tax advantages granted by Belgium to least 35 multinationals, mainly from the EU, under its “excess profit” tax scheme are illegal under EU state aid rules. The Commission also has two ongoing in-depth investigations into concerns that tax rulings may give rise to state aid issues in Luxembourg, as regardsAmazon and McDonald’s.

This Commission has pursued a far-reaching strategy towards fair taxation and greater transparency and we have recently seen major progress. Following our proposals on tax transparency of March 2015, Member States reached a political agreementalready in October 2015 on automatic exchange of information on tax rulings. This legislation will help to bring about a much greater degree of transparency and deter from using tax rulings as an instrument for tax abuse. In June 2015, we unveiled our Action Plan for fair and effective taxation: a series of initiatives which aims to make the corporate tax environment in the EU fairer and more efficient. Key actions included a framework to ensure effective taxation where profits are generated and a strategy to re-launch the Common Consolidated Corporate Tax Base for which a fresh proposal is expected later this year. The Commission launched a further package of initiatives to combat corporate tax avoidance within the EU and throughout the world on 27 January of this year. As a direct result, Member States have already agreed to tackle the most prevalent loopholes in national laws that allow tax avoidance to take place and to extend their automatic exchange of information to country-by-country reporting of tax-related financial information of multinationals. A proposal is also on the table to make some of this information public. All of our work rests on the simple principle that all companies, big and small, must pay tax where they make their profits.

The non-confidential version of the decisions will be made available under the case number SA.38373 in the State aid register on the DG Competition website once any confidentiality issues have been resolved. The State Aid Weekly e-News lists new publications of State aid decisions on the internet and in the EU Official Journal.

Next on the list in Europe for a Tax Grab: Amazon and McDonald’s
The uSA is not happy: watch for reciprocal tax grabs on foreign national banks for money laundering
(courtesy zero hedge)

After Its “Predatory Tax Grab”, Europe Prepares Crackdown On Amazon, McDonald’s

In the aftermath of the EU’s latest escalation in its tax war with US multinational corporations, the rebuke from the US was swift, stretching from the US Treasury all the way to Congress: according to Kevin Brady, the House Ways and Means Chairman, the EU Apple decision was  “predatory and naked tax grab.” Chuck Schumer, the third-ranking Senate Democrat on the committee, said that the EU is unfairly undermining U.S. companies’ ability to compete in Europe.  Naturally, the Treasury also chimedin, and a spokesperson said that “the Commission’s actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU.”

Naturally, the US would confine itself only to heated words: after all, there was little chance Washington would do anything to truly jeopardize trade relations between the two core trading partners, and Europe knows it.

However, with Europe desperate to boost its dwindling public coffers and only beginning its anti-tax avoidance campaign, AAPL was merely the start in the European Commission’s crackdown.  As the WSJwrites, following today’s ruling that Apple got an unfair advantage over its competitors because of help it got from Ireland government’s, the EU’s antitrust regulator is likely next to turn to two other ongoing tax investigations on its docket: and McDonald’s.

The EU regulator has previously disclosed that it is looking at the arrangements both companies have with tax authorities in Luxembourg. In the case of McDonald’s, the WSJ reports that antitrust commissioner Margrethe Vestager said in 2015 that the investigation concerned a 2009 tax ruling granted to a Luxembourg unit of the restaurant chain, called McDonald’s Europe Franchising, that resulted in the fast-food chain “paying no tax on their European royalties either in Luxembourg or in the U.S.” The unit, which collects royalty fees from McDonald’s franchisees across Europe and Russia, recorded a profit of more than €250 million in 2013 alone, the commission said.

As for Amazon, the tax ruling in question dates back to 2003. It applies to an Amazon subsidiary based in Luxembourg called Amazon EU Sarl. Investigators said in 2014 that “most of Amazon’s European profits” were routed through the unit, but that the structure of the subsidiary made it so that those profits were not taxed in Luxembourg.

We expect Google, which has infamously used the “Dutch sandwich” legal tax evasion scheme for years,will eventually make its way in Europe’s crosshairs too.

Vestager on Tuesday gave no concrete timing on when the two investigations would come to a close.

Just like Ireland, Luxembourg has denied giving the companies special treatment, and both Amazon and McDonald’s have said they believe they’ve been paying their European taxes appropriately. However both multinational companies warn in their annual report that they could end up on the hook for more if the investigations don’t go their way.

In addition to US corporations’ rising tax problems at the Commission level, companies operating in Europe are also facing increased enforcement efforts at a national level. Authorities in Spain and France recently have raided offices of Google’s parent company, Alphabet, and French authorities have demanded more than €1 billion in back taxes and fines from the company. Alphabet says it’s paid all the taxes it owes.

Considering the deteriorating state of Europe’s projected financials, in big part a result of Europe’s declining tax base as millions of aging workers are set to retire and instead of contributing will become a drain of government cash, we expect today’s dramatic crackdown against Apple to be only the beginning of a long slog which will ultimately hurt Europe itself. Consider that despite its receipt of €13 billion, the biggest loser from today’s decision is Ireland itself. As Reuters comments, Dublin already faces a competitive threat from the United Kingdom, which once outside the EU may cut its own corporate tax rate. According to Ireland’s Economic and Social Research Institute, a 1 percentage point cut in the UK corporate tax rate could reduce the probability of non-EU states sending foreign direct investment into Ireland by 4 percent. Irish firms send 44 percent of their exports to the UK, so future trade barriers could mess up Ireland’s economic recovery.

The size of Apple’s potential bill puts Ireland in even more of a corner. While on one hand a 13 billion euro payment would be a windfall for the Irish people, it’s also a big blow to competitiveness if companies fear past dealings could be subject to retrospective meddling. Ireland could simply lower the corporate tax rate across the board. Other countries in the EU with less competitive rates would be among the losers.

To be sure, the full impact of the unwind of Europe’s tax policies will take many years; the bigger question is whether, as a result of the ongoing nationalist, refugee and social upheavals, there will even be a Europe in several years.

The clown, Fischer speaks again:
(courtesy zero hedge)

Fed’s Fischer Speaks, Says Rate Decision Not “One And Done” As He “Takes Markets Into Account”

The clown Fischer gives a bizarre justification for negative rates:it is tradeoff: savers do not do well, but investors in the stock market do well!

(courtesy zero hedge)

Stanley Fischer’s Bizarre Justification For Negative Rates

With over $13 trillion in global bond yields trading in negative territory as a result of central banks’ negative rates policies, leading bank profits to tumble and forcing savers in both Japan and now Germany to pull their money out banks and put into safe deposit boxes in their homes, there is little doubt that NIRP has been a failure: even such establishment financial outlets as the WSJ admit as much. Which is why when listening to today’s Stanley Fischerinterview on Bloomberg TV with Tom Keene, one particular section caught our attention, namely the Fed Vice Chairman’s atetmpt to justify negative rates and how, despite all the evidence to the contrary, “negative rates seem to work in today’s world.”

We found the following exchange fascinating:

KEENE: What did you learn about negative rates in the crucible of the markets? What have you learned in the last number of months?

FISCHER: Well, we’ve learned that the central banks which are implementing them — there were four or five of them — basically think they’re quite successful and are staying with their approach, possibly with the exception of Japan. They’re thinking it through and they have said they’ll come back to try and make negative rates work better. So we’re in a world where they seem to work. I think one of the most interesting developments I’ve seen in theory is a paper that says, yes, they work up to a certain point and then they become counterproductive.

KEENE: Precisely. Yes, that’s a critical point. I mean we have within the interviews of Bloomberg Surveillance that Francine Lacqua and I have had Olivier Blanchard calls them an outright scam.Granted, he’s not a public official anymore, I understand that. There is a raging debate about the efficacy of negative interest rates for central banks, for governments, and again for banking itself. What about the efficacy of negative rates for savers and the people of these different nations?

To which, Fischer’s answer was frankly shocking:

FISCHER: Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.

And there you have it: ignore the economy, it’s all about “decent equity prices” and whatever is “better for investors.” We point this bizarre justification for the central banks’ latest failure, just in case there was still any confusion why they keep pushing the same failed policies day after day: it’s all about keeping stocks artificially inflated.


The the first time since 2012, S and P ‘s 20 core city composite price index declined for 3 straight months.  The economy in the uSA does not look too good Dr Fischer!

(courtesy zero hedge)

For the first time since Feb 2012, S&P CoreLogic’s 20-City Composite price index declined for 3 straight months (dropping 0.07% in August, in line with expectations). The non-seasonally-adjusted annual growth rate of home prices rose just 5.13% – the slowest since since Aug 2015. San Francisco and San Diego showed the weakest growth of the 20-City composite while Portland and Seattle rose the most MoM, and Atlanta and Chicago saw the largest declines in price MoM.

All 20 cities in the index showed a year-over-year gain, led by a 12.6 percent advance in Portland, Oregon

New York and Washington posted the smallest 12-month advances

After seasonal adjustment, Portland had the biggest month-over-month increase at 0.7 percent, while Atlanta and Chicago showed the largest declines at 0.6 percent

Nine showed seasonally adjusted price decreases in June over the prior month, including New York, Detroit and Cleveland

“Home prices continued to rise across the country led by the west and the south,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.

In the strongest region, the Pacific Northwest, prices are rising at more than 10%; in the slower Northeast, prices are climbing a bit faster than inflation. Nationally, home prices have risen at a consistent 4.8% annual pace over the last two years without showing any signs of slowing.

“Overall, residential real estate and housing is in good shape. Sales of existing homes are at running at about 5.5 million units annually with inventory levels under five months, indicating a fairly tight market. Sales of new single family homes were at a 654,000 seasonally adjusted annual rate in July, the highest rate since November 2007. Housing starts in July topped an annual rate of 1.2 million units.While the real estate sector and consumer spending are contributing to economic growth, business capital spending continues to show weakness.”

Chart: Bloomberg



what a joke:  Consumer confidence jumps to an 11th month high beating the estimates by 5 standard deviations.  makes sense to me:

(courtesy zero hedge)

Consumer Confidence Soars To 11-Month Highs (With 5 Standard Deviation Beat)

Slumping economic growth and rising gas prices don’t matter. US Consumer Confidence jumped to 101.1 in August –highest since Sept 2015 – smashing expectations by almost 5 standard deviations as stocks hit record highs.

Notably ‘current expectations’ rose to their highest since Aug 2007.

Not as expected…

“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, Director of Economic Indicators at The Conference Board.

“Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.”

Consumers’ appraisal of current conditions improved in August. Those stating business conditions are “good” increased from 27.3 percent to 30.0 percent, while those saying business conditions are “bad” remained virtually unchanged at 18.4 percent. Consumers’ assessment of the labor market was also more favorable. Those claiming jobs were more “plentiful” increased from 23.0 percent to 26.0 percent, however, those claiming jobs are “hard to get” also rose, from 22.1 percent to 23.4 percent.

This ought to be good.  The FBI recovers 30 emails related to the Benghazi affair from which our crook Hillary deleted. Also the FBI is going to release its findings on whether Hillary and her aids mishandled government secrets
(courtesy zero hedge)

FBI Recovers 30 Benghazi Emails Deleted By Hillary



And we will close with this:  Hillary has until Sept 29 to answer these 25 questions under oath.  This is related to the Judicial Watch Inquiry on Benghazi

(courtesy zero hedge)

Hillary Has Until September 29 To Respond – Under Oath – To These 25 Questions

Judicial Watch announced on its website today that it has submitted a list of 25 questions to Hillary Clinton regarding her email practices while serving as Secretary of State.  Pursuant to a decision by U.S. District Court Judge Emmet G. Sullivan, Hillary has 30 days to respond, under oath, to the questions.  Per federal law, Judicial Watch was limited to a total of 25 questions.

All 25 questions are included in their entirety below (we’ve highlighted some of the particularly amusing ones):

  1. Describe the creation of the system, including who decided to create the system, the date it was decided to create the system, why it was created, who set it up, and when it became operational.
  2. Describe the creation of your email account, including who decided to create it, when it was created, why it was created, and, if you did not set up the account yourself, who set it up for you.
  3. When did you decide to use a email account to conduct official State Department business and whom did you consult in making this decision?
  4. Identify all communications in which you participated concerning or relating to your decision to use a email account to conduct official State Department business and, for each communication, identify the time, date, place, manner (e.g., in person, in writing, by telephone, or by electronic or other means), persons present or participating, and content of the communication.
  5. In a 60 Minutes interview aired on July 24, 2016, you stated that it was “recommended” you use a personal email account to conduct official State Department business. What recommendations were you given about using or not using a personal email account to conduct official State Department business, who made any such recommendations, and when were any such recommendations made?
  6. Were you ever advised, cautioned, or warned, was it ever suggested, or did you ever participate in any communication, conversation, or meeting in which it was discussed that your use of a email account to conduct official State Department business conflicted with or violated federal recordkeeping laws. For each instance in which you were so advised, cautioned or warned, in which such a suggestion was made, or in which such a discussion took place, identify the time, date, place, manner (e.g., in person, in writing, by telephone, or by electronic or other means), persons present or participating, and content of the advice, caution, warning, suggestion, or discussion.
  7. Your campaign website states, “When Clinton got to the Department, she opted to use her personal email account as a matter of convenience.” What factors other than convenience did you consider in deciding to use a personal email account to conduct official State Department business? Include in your answer whether you considered federal records management and preservation requirements and how email you used to conduct official State Department business would be searched in response to FOIA requests.
  8. After President Obama nominated you to be Secretary of State and during your tenure as secretary, did you expect the State Department to receive FOIA requests for or concerning your email?
  9. During your tenure as Secretary of State, did you understand that email you sent or received in the course of conducting official State Department business was subject to FOIA?
  10. During your tenure as Secretary of State, how did you manage and preserve emails in your email account sent or received in the course of conducting official State Department business, and what, if anything, did you do to make those emails available to the Department for conducting searches in response to FOIA requests?
  11. During your tenure as Secretary of State, what, if any, effort did you make to inform the State Department’s records management personnel (e.g., Clarence Finney or the Executive Secretariat’s Office of Correspondence and Records) about your use of a email account to conduct official State Department business?
  12. During your tenure as Secretary of State, did State Department personnel ever request access to your email account to search for email responsive to a FOIA request? If so, identify the date access to your account was requested, the person or persons requesting access, and whether access was granted or denied.
  13. At the time you decided to use your email account to conduct official State Department business, or at any time thereafter during your tenure as Secretary of State, did you consider how emails you sent to or received from persons who did not have State Department email accounts (i.e., “” accounts) would be maintained and preserved by the Department or searched by the Department in response to FOIA requests? If so, what was your understanding about how such emails would be maintained, preserved, or searched by the Department in response to FOIA requests?
  14. On March 6, 2009, Assistant Secretary of State for Diplomatic Security Eric J. Boswell wrote in an Information Memo to your Chief of Staff, Cheryl Mills, that he “cannot stress too strongly, however, that any unclassified BlackBerry is highly vulnerable in any setting to remotely and covertly monitoring conversations, retrieving email, and exploiting calendars.” A March 11, 2009 email states that, in a management meeting with the assistant secretaries, you approached Assistant Secretary Boswell and mentioned that you had read the “IM” and that you “get it.” Did you review the March 6, 2009 Information Memo, and, if so, why did you continue using an unclassified BlackBerry to access your email account to conduct official State Department business? Copies of the March 6, 2009 Information Memo and March 11, 2009 email are attached as Exhibit A for your review.
  15. In a November 13, 2010 email exchange with Huma Abedin about problems with your email account, you wrote to Ms. Abedin, in response to her suggestion that you use a State Department email account or release your email address to the Department, “Let’s get a separate address or device.” Why did you continue using your email account to conduct official State Department business after agreeing on November 13, 2010 to “get a separate address or device?” Include in your answer whether by “address” you meant an official State Department email account (i.e., a “” account) and by “device” you meant a State Department-issued BlackBerry. A copy of the November 13, 2010 email exchange with Ms. Abedin is attached as Exhibit B for your review.
  16. Email exchanges among your top aides and assistants in August 30, 2011 discuss providing you with a State Department-issued BlackBerry or State Department email address. In the course of these discussions, State Department Executive Secretary Stephen Mull wrote, “[W]e are working to provide the Secretary per her request a Department issued BlackBerry to replace her personal unit which is malfunctioning (possibly because of her personal email server is down). We will prepare two versions for her to use – one with an operating State Department email account (which would mask her identity, but which would also be subject to FOIA requests).” Similarly, John Bentel, the Director of Information and Records Management in the Executive Secretariat, wrote, “You should be aware that any email would go through the Department’s infrastructure and [be] subject to FOIA searches.” Did you request a State Department issued Blackberry or a State Department email account in or around August 2011, and, if so, why did you continue using your personal device and email account to conduct official State Department business instead of replacing your device and account with a State Department-issued BlackBerry or a State Department email account? Include in your answer whether the fact that a State Department-issued BlackBerry or a State Department email address would be subject to FOIA affected your decision. Copies of the email exchanges are attached as Exhibit C for your review.
  17. In February 2011, Assistant Secretary Boswell sent you an Information Memo noting “a dramatic increase since January 2011 in attempts . . . to compromise the private home email accounts of senior Department officials.” Assistant Secretary Boswell “urge[d] Department users to minimize the use of personal web-email for business.” Did you review Assistant Secretary Boswell’s Information Memo in or after February 2011, and, if so, why did you continue using your email account to conduct official State Department business? Include in your answer any steps you took to minimize use of your email account after reviewing the memo. A copy of Assistant Secretary Boswell’s February 2011 Information Memo is attached as Exhibit D for your review.
  18. On June 28, 2011, you sent a message to all State Department personnel about securing personal email accounts. In the message, you noted “recent targeting of personal email accounts by online adversaries” and directed all personnel to “[a]void conducting official Department business from your personal email accounts.” Why did you continue using your email account to conduct official State Department business after June 28, 2011, when you were advising all State Department Personnel to avoid doing so? A copy of the June 28, 2011 message is attached as Exhibit E for your review.
  19. Were you ever advised, cautioned, or warned about hacking or attempted hacking of your email account or the server that hosted your account and, if so, what did you do in response to the advice, caution, or warning?
  20. When you were preparing to leave office, did you consider allowing the State Department access to your email account to manage and preserve the official emails in your account and to search those emails in response to FOIA requests? If you considered allowing access to your email account, why did you decide against it? If you did not consider allowing access to your email account, why not?
  21. After you left office, did you believe you could alter, destroy, disclose, or use email you sent or received concerning official State Department business as you saw fit? If not, why not?
  22. In late 2014, the State Department asked that you make available to the Department copies of any federal records of which you were aware, “such as an email sent or received on a personal email account while serving as Secretary of State.” After you left office but before your attorneys reviewed the email in your email account in response to the State Department’s request, did you alter, destroy, disclose, or use any of the email in the account or authorize or instruct that any email in the account be altered, destroyed, disclosed, or used? If so, describe any email that was altered, destroyed, disclosed, or used, when the alteration, destruction, disclosure, or use took place, and the circumstances under which the email was altered, destroyed, disclosed, or used? A copy of a November 12, 2014 letter from Under Secretary of State for Management Patrick F. Kennedy regarding the State Department’s request is attached as Exhibit F for your review.
  23. After your lawyers completed their review of the emails in your email account in late 2014, were the electronic versions of your emails preserved, deleted, or destroyed? If they were deleted or destroyed, what tool or software was used to delete or destroy them, who deleted or destroyed them, and was the deletion or destruction done at your direction?
  24. During your October 22, 2015 appearance before the U.S. House of Representatives Select Committee on Benghazi, you testified that 90 to 95 percent of your emails “were in the State’s system” and “if they wanted to see them, they would certainly have been able to do so.” Identify the basis for this statement, including all facts on which you relied in support of the statement, how and when you became aware of these facts, and, if you were made aware of these facts by or through another person, identify the person who made you aware of these facts.
  25. Identify all communications between you and Brian Pagliano concerning or relating to the management, preservation, deletion, or destruction of any emails in your email account, including any instruction or direction to Mr. Pagliano about the management, preservation, deletion, or destruction of emails in your account when transferring the email system to any alternate or replacement server. For each communication, identify the time, date, place, manner (e.g., in person, in writing, by telephone, or by electronic or other means), persons present or participating, and content of the communication.





Well that is all for today

I will see you tomorrow night




  1. mediscience · · Reply

    harvey it is very difficult to read the blog now, due to the lack of space between words.
    what can you do for that ?


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