Gold $1254.40 UP  $1.30

Silver 17.43 UP 4 cents

In the access market 5:15 pm

Gold: 1255.20

Silver: 17.48



The Shanghai fix is at 10:15 pm est and 2:15 am est

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

Shanghai morning fix OCT 17 (10:15 pm est last night): $  1257.83


Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1260.31


HUGE SPREAD TODAY!!  5 dollars


London Fix: OCT 17: 5:30 am est:  $1252.70   (NY: same time:  $1253.50:    5:30AM)

London Second fix OCT 14: 10 am est:  $1254.80  (NY same time: $1255.50 ,    10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.


For comex gold: 


For silver:

for the Oct contract month:  1 notice for 5,000 oz.


Let us have a look at the data for today



In silver, the total open interest ROSE by 2,899 contracts UP to 188,990. The open interest FELL as the silver price was DOWN 2 cents in yesterday’s trading .In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .945 BILLION TO BE EXACT or 135% of annual global silver production (ex Russia &ex China).

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

In gold, the total comex gold FELL by 6,387 contracts with the FALL  in price of gold( $1.90 ON FRIDAY) . The total gold OI stands at 491,627 contracts. The bankers continue with their quest of  fleecing our comex gold longs


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



Total gold inventory rests tonight at: 965.43 tonnes of gold


we had NO CHANGES at the SLV/

THE SLV Inventory rests at: 362.285 million oz


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

1. Today, we had the open interest in silver ROSE by 2,899 contracts UP to 188,990 as the price of silver FELL by 2 cents with yesterday’s trading.The gold open interest fell by 6,387 contracts down to 491,627 as the price of gold FELL $1.90 IN FRIDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg




i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 22.64 POINTS OR 0.74%/ /Hang Sang closed DOWN 195.77 POINTS OR 0.84%. The Nikkei closed UP 43.75POINTS OR 0.26% Australia’s all ordinaires  CLOSED DOWN 0.83% /Chinese yuan (ONSHORE) closed DOWN at 6.7378/Oil FELL to 50.30 dollars per barrel for WTI and 52.19 for Brent. Stocks in Europe: ALL IN THE RED   Offshore yuan trades  6.7491 yuan to the dollar vs 6.7260 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS QUITE A BIT  AS MORE USA DOLLARS  LEAVE CHINA’S SHORES



none today


none today


Last night 3 biggies:

i) rising inflation which would stop the POBC from monetary easing

ii) a jump in the dollar (fall in CNH/CNY) which again causes inflation risks/and sends deflation scares throughout the world/

iii)Shanghai B share index crashes over 6% in last 90 minutes of trading

( zero hedge)





Rising Sibor rates causes Saudi bank stocks to tumble as its bailout of the economy fails to stem liquidity problems:

( zero hedge)



Putin describes that it is Hillary that is banging the war drums. He is very concerned that the world is rushing irreversibly towards a nuclear showdown

( zero hedge)


RT bank accounts are blocked in the UK.  I guess that puts an end to free speech

(courtesy zero hedge/RT)


Another indicator that the global economy is in trouble:  Caterpillar CEO retires immediately.   This is after 45 straight months without an uptick in global sales.

( zero hedge)


Iran disagrees with OPEC production estimates and they also state that they will increase production from 4.8 million barrels per day up to 5 million by the end of the year:

( zerohedge


This could spell trouble for Venezuela’s state owned oil company PDVSA. They need to swap a bond issue for a longer duration back into 2020.  If investors say no then this might cause a default

( Julieanne Geiger/OilPrice.com)


i)A terrific commentary from Egon Von Greyerz as he indicates that central banks if they are lucky have only 12,000 tonnes and much of this gold has been leased out (probably many times over).  Eastern nations like China and Russia have been mopping up this gold and storing the yellow stuff on their shores.

( Egon Von Greyerz/Matterhorn)

ii)Actually gold denominated in other currencies is doing quite well.

(Egon Von Greyerz/Kingworldnews)

iii)A PHD thesis starts the ball rolling on our now famous gold-silver price fixing case.

Yet this is only 1% of the fraud, they will uncover more as the banks collude to fix prices on a daily basis outside of the fix as well

( Burrell/.Austalian/Syndey/GATA)

iv)This is interesting:  Perth Mint tests out the Indian gold excise  import tax

( Garvey/Australian/GATA)

v)For the first time, the Bank of England ready to tolerate higher inflation

( London Telegraph/GATA)

vi)Ice will start gold futures trading for clearing at London’s daily auction

( Bloomberg News/Eddie VanDer Walt)


i)A huge miss for the all important NY Empire Manufacturing Fed report showing contraction at -6.8 vs 1.0 expectation.  The June dead cat bounce is officially over.

( NY Mfg Empire (NY) Fed index/zero hedge)

ii)Industrial production contracts for the 13th straight month.  This is another important indicator suggesting that the real USA economy is in turmoil

( zero hedge/Industrial production)

iii)The truth behind the true budgetary deficit and the real added national debt for Fiscal year 2016:

( Jim Quinn/Burning Platformblog)

iv)Michael Snyder: 35% of Americans have debt that is at least 1/2 year past due

( Michael Snyder/EconomicCollapse Blog)

v)the FED is now geared to steepen the yield curve and thus increase inflation beyond their magical 2%

(courtesy zero hedge)

vi)The USA tries to silence Assange:  the Brits pull the plug on Assange’s interest connection in the Ecuadorian embassy inside London.

( zero hedge)

vii)Over the last two months we have brought to you the story of fraud and pension shortfalls in the Dallas police and firefighters pension fund.  Since the police there  know full well that at the end of the tunnel there will be no money for them, they are leaving the force right now and collecting big lump sum payment:

( zero hedge)

viii) closing interview of Rob Kirby with Greg hunter/

Let us head over to the comex:

The total gold comex open interest FELL BY 6,387 CONTRACTS to an OI level of 491,627 as the price of gold FELL $1.90 with FRIDAY’S trading.

We are in the delivery month is October and here the OI GAINED 292 contracts UP to 661. We had 41 notices filed yesterday so we gained another 333 contracts or 33,300 additional oz will stand.

The next delivery month is November and here the OI ROSE by 46 contracts UP to 2986 contracts. This level is extremely elevated as generally November is a very poor delivery month.To give you an idea of size, on Oct 14 2015, we had an OI of only 240 contracts.The next contract month and the biggest of the year is December and here this month showed an decrease of 6,623  contracts down to 366,762.

Today we had  530 notices filed for 53,000 oz of gold.

And now for the wild silver comex results.  Total silver OI rose BY 2899 contracts from 186,091 up to 188,990 as the  price of silver fell  to the tune of 2 cents yesterday.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3:  (224,540).  The next non active delivery month is October and here the OI rose by 26 contracts up to 147. We had 2 notices filed yesterday so we gained 28 contracts or 140,000 additional oz will stand for delivery.The November contract month saw its OI lose 4 contracts down to 329.   The next major delivery month is December and here it ROSE BY 765 contracts UP to 150,145


Today the estimated volume was 109,702 contracts which is poor.

Yesterday, the confirmed volume was 193,787 which is also fair.


today we had 1 notice filed for 5,000 oz of silver:

INITIAL standings for OCTOBER
 Oct 17.
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
NIL oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 803.75 oz
No of oz served (contracts) today
530 notices 
530,000 oz
No of oz to be served (notices)
131 contracts
Total monthly oz gold served (contracts) so far this month
8519 contracts
851,900 oz
26.49 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month    oz
Total accumulative withdrawal of gold from the Customer inventory this month    175,209.0 oz
Today we had 1 kilobar transactions
Today we had 0 deposit into the dealer:
total dealer deposits:  nil oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposits;
i) into Manfra:  803.75 oz (25 kilobars)
total customer deposits; 803.75 oz
We had 0 customer withdrawals
total customer withdrawal: nil  oz
We had 0 adjustments
Total dealer inventor 2,304,357.888 or 71.65 tonnes
Total gold inventory (dealer and customer) =10,605,725.800. or 329.882 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 329.882 tonnes for a  gain of 27  tonnes over that period.  Since August 8 we have lost 24 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
For October:

Today, 0 notices were issued from JPMorgan dealer account and 0 notices were issued form their client or customer account. The total of all issuance by all participants equates to 530 contractS  of which 482 notices were stopped (received) by jPMorgan dealer and  1 notice(s) was (were) stopped received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the Oct contract month, we take the total number of notices filed so far for the month (8519) x 100 oz or 851,900 oz, to which we add the difference between the open interest for the front month of OCT (666 contracts) minus the number of notices served upon today (530) x 100 oz per contract equals 865,000 oz, the number of ounces standing in this  NON active month of September.
Thus the INITIAL standings for gold for the SEPT contract month:
No of notices served so far (8519) x 100 oz  or ounces + {OI for the front month (666) minus the number of  notices served upon today (530) x 100 oz which equals 835,800 oz standing in this non active delivery month of Oct  (26.905 tonnes).
we gained 33,300 additional oz standing in this active delivery month of October and I believe that this is a record standing for October. To give you an idea of size from last yr, we had only a little over 2 tonnes standing at the conclusion of Oct 2015!
The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine
And now for silver
OCT INITIAL standings
 Oct 17. 2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
856,649.226 oz
Deposits to the Dealer Inventory
nil OZ
Deposits to the Customer Inventory 
1,004,022.39 oz
No of oz served today (contracts)
(5,000 OZ)
No of oz to be served (notices)
146 contracts
(865,000 oz)
Total monthly oz silver served (contracts) 356 contracts (1,780,000 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  4.778,130.5 oz
today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 2 customer withdrawals:
i) Out of DELAWARE;; 605,504.246 oz
ii) Out SCOTIA: 250,114.980 oz
Total customer withdrawals: 856,649.226  oz
We had 3 customer deposits:
i) Into CNT;  599,367.280 oz
ii) Into HSBC: 8633.810 oz
iii) Into JPMorgan: 396,021.300 oz
total customer deposits: 1004,022.39 oz
 we had 0 adjustments 
Today the estimated volume was 34,545 which is fair.
Yesterday the confirmed volume was 58,705 which is EXCELLENT
The total number of notices filed today for the Oct contract month is represented by 1 contract(s )for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in OCT., we take the total number of notices filed for the month so far at  356 x 5,000 oz  = 1,780,000 oz to which we add the difference between the open interest for the front month of OCT (147) 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 OCT contract month:  356(notices served so far)x 5000 oz +(147) OI for front month of SEPT ) -number of notices served upon today (1)x 5000 oz  equals  2,645,000 oz  of silver standing for the OCT contract month. THIS IS STILL A HUGE SHOWING FOR SILVER AS OCTOBER IS GENERALLY A VERY WEAK DELIVERY MONTH.
We gained 730,000 additional silver ounces THAT WILL  STAND.
Total dealer silver:  29.286 million (close to record low inventory  
Total number of dealer and customer silver:   173.387 million oz
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
OCT 13/a deposit of 2.67 tonnes of gold into the GLD/inventory rests  at 961.57 tonnes
Oct 12/No changes in inventory/inventory rests at 958.90 tonnes
Oct 11/ what!!! we had a gigantic 9.76 tonnes of inventory increase today/inventory rests at 958.90 tonnes.  (this was done with gold down?)
Oct 7:  949.14 tonnes
Oct 17/ Inventory rests tonight at 965.43 tonnes


Now the SLV Inventory
OCT 13/ NO CHANGES  in inventory at the SLV/Inventory rests at 361.147 million oz
Oct 12:NO CHANGES  in inventory at the SLV/Inventory rests at 361.147 million oz
Oct 11/ a withdrawal of 1.762 million oz of inventory from the SLV/Inventory rests at 361.147 million oz/
Oct 17.2016: Inventory 362.285 million oz

NPV for Sprott and Central Fund of Canada

will not provide today.

1. Central Fund of Canada: traded at Negative 3.7 percent to NAV usa funds and Negative 3.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.8%
Percentage of fund in silver:38.1%
cash .+1.1%( Oct 17/2016).
2. Sprott silver fund (PSLV): Premium FALLS to +0.74%!!!! NAV (OCT 17/2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO  0.57% to NAV  ( OCT 17/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0.74% /Sprott physical gold trust is back into positive territory at 0.57%/Central fund of Canada’s is still in jail.


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

Trading in gold and silver overnight in Asia and Europe

Property Bubble In Ireland Developing Again

Budget 2017: “Good Work To Halt Second Property Crash Undone In A Day”

David McWilliams has pointed out in two of his most recent articles how Budget 2017 and the latest mortgage tax grant risk creating a “second property crash”:

“We are faced with similar concerns on the horizon now. Unlike 2008, when this country went bust, or in 2012, when the euro as a currency was in real danger of falling apart, there is no serious internal threat. In 2012, the world’s central bankers cutting interest rates to zero prevented the disintegration of the euro. This may have saved the currency then, but it means that today central bankers have no ammunition left if there is another downturn. Interest rates are as low as they can go.

Unfortunately, the trading economies that Ireland depends on have not responded to zero interest rates with any real gusto. They are sluggish at best. This sluggishness means that the average guy feels left behind and sees real gains going to the very rich. As a result, the mainstream political players are now being rejected in favour of populists. This is happening everywhere, particularly in the UK, the US and France.”

The stupidity of this latest populist government gimmick and tampering in the property market was further underlined in an article published today:

“I have no problem with paying civil servants well. But I do have a problem with rewarding stupidity. These mandarins are trained economists who should explain to politicians what is likely to happen in a dysfunctional housing market when you introduce tax breaks for first time buyers.

On Friday, it was widely reported that many developers automatically increased the price of starter homes in response to the budget. They didn’t even wait for the Finance Bill to be enacted, prices all over the country simply jumped overnight.

This is exactly what I would have expected a decent ordinary level Leaving Cert economics student to have replied in answer to the opening question.”

Another property bubble in Dublin is gradually forming. Prices at the high end of the market have surged in recent years and some areas are back at record levels seen in 2007/2008. Already, there have been sharp falls of 15% to 20% in the leafier suburbs of Dublin – in Dublin 4, Dublin 6 and high end Killiney and Foxrock-Carrickmines as reported in detailed analysis by the Sunday Business Post recently.

The government’s latest measure will add to the overheating that is already being seen in the lower end and the mid end of the Dublin market. There is a real risk that another generation of young people are saddled with massive debts and we see another “negative equity generation”.

Another property crash would further devastate our banks and have an attendant impact on Irish assets – from property to stocks, bonds, Irish bank deposits and government “guaranteed” savings products.

McWilliams recent articles on the latest property madness can he found here andhere

Gold and Silver Bullion – News and Commentary

Singapore makes another bid for Asia to help set gold price (Reuters)

Asian shares fall, dollar at 7-month high after Yellen comments (Reuters)

Gold to Sell Off, Then Rebound to $1,350 Next Year, TD Says (Bloomberg)

ICE Will Start Gold Futures for Clearing London’s Daily Auction (Bloomberg)

Gold drops on dollar rise as U.S. data supports rate-hike prospect (Reuters)

Video: Is It Over For Gold? No (Forbes)

US Debt Soars To $19.7 Trillion (ZeroHedge)

Standard & Poor’s warns on UK reserve currency status as Brexit hardens (Telegraph)

Tiny Startups Revamp Gold Market After Besting Big Exchanges (Bloomberg)

Tangible and intangible factors will support the gold price (MineWeb)


Gold Prices (LBMA AM)

17 Oct: USD 1,252.70, GBP 1,029.59 & EUR 1,139.58 per ounce
14 Oct: USD 1,256.15, GBP 1,028.79 & EUR 1,140.08 per ounce
13 Oct: USD 1,258.00, GBP 1,029.93 & EUR 1,141.76 per ounce
12 Oct: USD 1,255.70, GBP 1,024.53 & EUR 1,139.05 per ounce
11 Oct: USD 1,256.40, GBP 1,021.58 & EUR 1,130.76 per ounce
10 Oct: USD 1,262.10, GBP 1,016.62 & EUR 1,129.71 per ounce
07 Oct: USD 1,255.00, GBP 1,012.91 & EUR 1,127.62 per ounce

Silver Prices (LBMA)

17 Oct: USD 17.40, GBP 14.30 & EUR 15.83 per ounce
14 Oct: USD 17.47, GBP 14.28 & EUR 15.86 per ounce
13 Oct: USD 17.59, GBP 14.40 & EUR 15.95 per ounce
12 Oct: USD 17.44, GBP 14.23 & EUR 15.83 per ounce
11 Oct: USD 17.48, GBP 14.26 & EUR 15.78 per ounce
10 Oct: USD 17.78, GBP 14.31 & EUR 15.92 per ounce
07 Oct: USD 17.33, GBP 14.01 & EUR 15.55 per ounce

Recent Market Updates

– “Gold Is A Great Hedge Against Politicians” – Goldman
– Sell Gold Now – Time To Liquidate Gold ETF, Pooled and Digital Gold
– Gold In GBP Up 43% YTD – “Massive Twin Deficits” To Impact UK Assets
– Ron Paul Says “Gold Going Up” Whether Trump Or Clinton Elected
– Gold Trading COT Report “Means Lower – Then Much Higher – Prices Coming”
– Currency Shock Sees Sterling Gold Surges 5% In One Minute “Flash Crash”
– Top Gold Forecaster: “As Quickly As Gold Fell” May “Rally Back” on Global Risks
– Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
– Deutsche Bank “Is Probably Insolvent”
– GBP Gold Rises 1.3% as Sterling Slumps On ‘Hard Brexit’ Concerns, Up 36% YTD
– Why Krugman, Roubini, Rogoff And Buffett Hate Gold
– ECB Refused “To Answer Questions” – Deutsche Bank “Systemic Threat” Is “Not ECB Fault”
– Euro “Might Start To Unravel” If Collapse Of Deutsche Bank

Mark O’Byrne
Executive Director



A terrific commentary from Egon Von Greyerz as he indicates that central banks if they are lucky have only 12,000 tonnes and much of this gold has been leased out (probably many times over).  Eastern nations like China and Russia have been mopping up this gold and storing the yellow stuff on their shores.

(courtesy Egn Von Greyerz/Matterhorn)

The Gold Manipulators Will Be Punished

By Egon von Greyerz

The selling of gold we saw last week was another desperate attack by the BIS and some central banks, together with the bullion banks, to manipulate the gold market lower. We saw over 40% of annual production of gold being sold last week which is 1,000 tons. The physical market continues to be strong which I will discuss further on.

Western Central Banks hold less than 50% of official quantities

Obviously, the sellers had no physical gold to sell so they conveniently dumped all this gold in the paper market. It would have been totally impossible for them to do this trade in the real gold market which is only physical of course. Western Central banks have no physical gold of any quantity to sell. This is why they must fabricate paper gold out of thin air in order to dump it in the market. In total these banks officially have around 23,000 tons of gold. I doubt they even hold half that figure. The rest is likely to have been sold covertly.

No major central bank has had an official audit of their physical gold in modern times. Last time the US gold was audited was in the 1950s. A proper audit would not just reveal that these bank have a lot less gold than they officially declare, but it would also expose the true position of their gold lending or leasing. Most of the gold they have left has been leased to the market in order to depress the price. But this gold no longer stays within the LBMA bullion banks like in the past. No, instead the intelligent buyers of gold today like China, India and Russia take delivery. This means that the leased gold now becomes a paper claim with no chance of getting physical gold back. So what has happened in the physical market in recent years is that central banks have continuously depleted their physical stock by selling and leasing their gold with most of the buying having taken place in the East.

This transfer from West to East is the reason why Western governments and central banks are desperate to keep the gold price down. Official gold is no longer held in “safe” Western hands that are easy to control. Instead the gold has been acquired by nations and people who understand the value of gold. These new gold buyers also know that it is the best protection against the total destruction of paper money that is taking place in our debt infested world. And the countries that are now buying gold are not sellers.

Russia accumulates gold in spite of economic difficulties

The Russian government for example has been expected by the West to sell their gold every time they are under economic pressure. But if we look at the chart below, the picture looks very different. Since 2006, Russia’s gold reserves have gone up almost 4X.


And it is the same in China. Official Chinese holding have increased more than fourfold since 2006 to 1,800 tons.


China has accumulated more gold than any nation in this century

But since China has produced and imported over 11,000 tons of gold since 2009, it is assumed that the official gold holdings are substantially higher than the 1,800 tons reported, maybe as high as 8-12,000 tons which would be higher than the official 8,000 tons that the US holds.


As paper gold is dumped physical gold buying continues

So whilst the West is dumping paper gold, the East is buying physical. And this is exactly what happened last week. Gold fell almost $100 on selling of massive amounts of paper gold. But something very different happened in the physical market. Mutual Funds and ETFs bought over 30 tons of physical gold last week. In total these funds have increased their holdings this year by over 46% or 900 tons to 2,840 tons. As we can see in the chart below, the buying by these funds has been strong all year. When gold corrected by $100 in May, their gold holdings continued to increase.


As some speculative gold buyers are becoming nervous due to another manipulative attack in the paper gold market, the wealth preservationists see this as a real opportunity to add to positions in physical gold.

We are seeing the same thing in our company with continued strong buying from investors who understand that what we have just seen is another desperate attack by the BIS and some central banks together with the bullion banks. When this group dump half a year’s physical gold production in a very short time, they know they temporarily can drive the price down. Banks can of course manufacture unlimited amounts of worthless paper gold and sell it to buyers who don’t understand the massive risk they are taking. But at some point, holders of paper gold will realise that they can’t get rid of it at any price. At that time, the price of physical gold will go up by hundreds of dollars or more in a day.

Thus, last week’s takedown is absolutely nothing to worry about even if we see a bit more pressure. We have seen these manipulations time and time again in this bull market which so far has lasted 16 years and is likely to last at least another 5 years and maybe a lot longer.

Egon von Greyerz

Founder and Managing Partner
Matterhorn Asset Management AG





Actually gold denominated in other currencies is doing quite well.

(Egon Von Greyerz/Kingworldnews)

Gold is actually doing great, von Greyerz tells King World News


9p ET Sunday, October 16, 2016

Dear Friend of GATA and Gold:

Gold lately has been doing spectacularly in currencies other than the U.S. dollar, Swiss gold fund manager Egon von Greyerz tells King World News tonight, and in the long term has been doing spectacularly against the dollar too. He thinks the short term is starting to turn against the dollar as well. Von Greyerz’s remarks are posted at KWN here:


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






A PHD thesis starts the ball rolling on our now famous gold-silver price fixing case.

Yet this is only 1% of the fraud, they will uncover more as the banks collude to fix prices on a daily basis outside of the fix as well

(courtesy Burrell/.Austalian/Syndey/GATA))

PhD thesis stirs up a $1 billion gold-price trial for global banks


By Andrew Burrell
The Australian, Sydney
Friday, October 14, 2016


PERTH, Australia — An Australian academic’s discovery of global gold price collusion has sparked a looming US trial in which four of the world’s major banks are being sued for up to $1 billion over claims they rigged the price of the precious metal at the expense of investors over a decade.

Perth-based Andrew Caminschi can be revealed as the academic who unwittingly exposed a scandal during a painstaking study of tens of millions of gold transactions that took him 18 months.

“It was needle in the haystack-type stuff,” Associate Professor Caminschi said yesterday of the anomalies he discovered in the data. “But once we found it, it was pretty damning.”

In a key development, a US judge ruled last week that the four banks — Barclays, Bank of Nova Scotia, HSBC and Societe Generale — had a case to answer and that a lawsuit filed by investors would proceed to trial.

Germany’s Deutsche Bank was also accused of manipulation but settled its case in April and has agreed to help the plaintiffs in their claims against the ­remaining defendants.

Assistant Professor Caminschi, 42, said he would act as an expert consultant at the trial in New York and admitted he was surprised his otherwise obscure PhD thesis at the University of Western Australia — for which he had to build his own server — had damaged the banks and led to a shake-up of the century-old gold pricing system.

“I never thought it would get to this,” he said. “I didn’t go out cartel-busting or bank-bashing — it was more like the data was just yelling at me.”

During his research, the ­academic discovered apparent man­ipu­lation during the twice-daily meetings held by banks in London that determined the benchmark price of gold, which was then used by dealers, central banks and mining companies to trade the precious metal.

The analysis of 14 years of raw data found that during these meetings, and before the benchmark price became known, trading volumes in gold derivatives would rise substantially. This suggested the banks were trading on, and potentially profiting from, information that was not available to the wider market — a theory that had been rumoured for years but never proven.

“I went into my supervisor’s office and I had this heat map and there was a thin white line which runs through the heat map which symbolised areas of very, very intense trading,” ­Associate Professor Caminschi recalled.

“We were only expecting to see that white line when the news came out, when people would adjust their positions based on the news.

“When I showed it to my supervisor, and after I explained it, he said, ‘Oh shit’.”

The research was first published in an academic journal in 2013.

It was later picked up by industry publications and financial news provider Bloomberg, sparking attention from regu­lators and leading to scores of lawsuits.






This is interesting:  Perth Mint tests out the Indian gold excise  import tax

(courtesy Garvey/Australian/GATA)

Perth Mint ‘tests out’ Indian gold import excise abuse


By Paul Garvey
The Australian, Sydney
Saturday, October 15, 2016

The Perth Mint sent an estimated $1 billion worth of gold to India for refining without the apparent consent of its Australian customers, with the West Australian government-owned refiner being dragged into a court case examining the alleged abuse of an Indian excise rebate scheme.

The Weekend Australian can reveal that the Mint arranged for semi-refined gold — or dore — from its mining customers to be sold to a third party for export into India to “test out” an Indian excise scheme. This is despite the mint having earlier complained to the Indian and Australian governments about the “unfairness” of the excise discount.

India in 2013 introduced a scheme that saw the excise charged on gold dore cut by 2 percentage points compared to the excise charged on the refined pure gold produced by the Perth Mint and other international refiners.

The excise discount drove a surge in gold refining activity in India — the world’s second-biggest market for gold — boosting the prospects of the mint’s refining rivals there and prompting several Australian gold miners to consider exporting their dore directly to India. …

… For the remainder of the report:







Obama willing to move China off the currency manipulating list

(courtesy  London’s Financial times)

China moves closer to coming off U.S. currency watch list


By Shawn Donnan
Financial Times, London
Friday, October 15, 2016

The Obama administration has taken a step toward dropping China from a U.S. currency manipulation watchlist even as Republican candidate Donald Trump promises to declare Beijing a manipulator on Day 1 of his presidency.

Mr. Trump has accused China repeatedly of currency manipulation and using the policy to suck jobs out of the United States. He has vowed to impose punitive tariffs on its imports into the U.S. in a move economists fear could set off a trade war between the world’s two biggest economies.

But the U.S. Treasury said today that by its reckoning China now met just one of the three criteria for inclusion on a currency watch list after its current account surplus fell below 3 percent of gross domestic product in the year to June. Under Treasury’s current guidelines that means that, if nothing changes, Beijing could fall off the watch list as soon as next year.

For their twice-yearly foreign exchange report to Congress Treasury officials also monitor a country’s trade balance with the US as well as any “persistent one-sided intervention” in currency markets. …

… For the remainder of the report:





For the first time, the Bank of England ready to tolerate higher inflation

(courtesy London Telegraph/GATA)

Bank of England warns UK’s elected officials that it runs the country


Carney: Bank of England Will Tolerate Higher Inflation for the Sake of Growth

By Szu Ping Chan and Tim Wallace
The Telegraph, London
Friday, October 14, 2016

The Bank of England is prepared to tolerate higher inflation over the next few years and will keep interest rates low to support economic growth, according to Governor Mark Carney.

Mr. Carney told an audience in Nottingham that the current environment of low inflation was “going to change” with the drop in the value of the pound likely to push up prices across the economy.

He said food prices were likely to be affected first, signalling that the situation was “going to get difficult” for those on the lowest incomes as the United Kingdom moves “from no inflation to some inflation.”

Speaking later in Birmingham, Mr. Carney defended the bank’s independence, insisting that policymakers would not “take instruction” from politicians on how to do their jobs.

“The objectives are what are set by the politicians, the policies are done by technocrats,” he said. “We are not going to take instruction on our policies from the political side.” …

… For the remainder of the report:





A few questions for Sharps Pixley CEO Ross Norman and other bullion bankers


2:50p ET Saturday, October 15, 2016

Dear Friend of GATA and Gold:

Ross Norman, CEO of London bullion dealer Sharps Pixley, yesterday disputed the 2013 study by a professor at the University of Western Australia that concluded that prices in the twice-daily London gold fixings were manipulated, a study publicized this week by the Sydney-based newspaper The Australian:


Norman wrote that the study had not discovered market manipulation at all but only that gold trading volume in London increases around the fixings because of the greater liquidity at those times:


Norman concluded: “It is no surprise that U.S. courts have seized upon the academic report, prompting a flurry of lawsuits to be filed in what is clearly looking like a pre-ordained desire for a guilty verdict in search of evidence to support it.”

Not having seen the study, GATA has no position on it, but Norman’s disparagement of the lawsuits brought against the bullion banks in the London fixes is weak. For of course the plaintiffs would not have sued if they lacked a “pre-ordained desire for a guilty verdict.” Further, every lawsuit in the United States is brought “in search of evidence to support it.” That’s what the discovery and deposition processes in lawsuits are about.

Norman’s response is also weak because according to a filing in one of the lawsuits Deutsche Bank has confessed to manipulating the gold market with other banks and has agreed to supply evidence against them:


More details are needed in this regard but Deutsche Bank has a big publicity department —


— and thus has had every opportunity to dispute the filing but does not seem to have done so.

But Norman’s response is weakest because he surely knows that the biggest complaints about manipulation of the gold market long have been directed against governments and central banks, which have intimate relationships with the London bullion banks.

How clarifying it might be if Norman, other bullion bankers, and all those who dispute or at least resent complaints of gold market manipulation could answer a few simple questions:

1) Are governments and central banks surreptitiously involved in the gold market, directly or through intermediaries, or not?

2) If governments and central banks are surreptitiously involved in the gold market, is it just for fun — to see whose trading desk can outperform the others — or is it for the traditional policy objectives of government intervention, to protect government currencies and bonds and national stock markets against adverse developments in free markets?

3) Is government subversion of free markets in the public interest? Even if governments should intervene in markets, should that intervention be open and accountable instead of deceptive, or would open and accountable intervention quickly lose effectiveness?

4) Are there any forgeries among the documents of this surreptitious intervention that are compiled here?:


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






Ice will start gold futures trading for clearing at London’s daily auction

(courtesy Bloomberg News/Eddie VanDer Walt)

ICE will start gold futures for clearing London’s daily auction


By Eddie Van Der Walt and Ranjeetha Pakiam
Bloomberg News
Sunday, October 16, 2016

Intercontinental Exchange Inc., which runs the daily London gold auction, will start a futures contract for the metal in the United States in February, jumping the gun on the London Metal Exchange, which is also working on a London-focused product.

The contract, subject to regulatory approval, will be for bullion held in London and traded on ICE Futures U.S. in New York. Each contract will be for 100 troy ounces of metal and will be used to clear the London gold auction, starting in March. The London Metal Exchange is scheduled to begin its own futures contracts in the first half of next year. …

… For the remainder of the report:





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




2 Nikkei closed UP 43.75 OR 0.26%   /USA: YEN RISES TO 104.13

3. Europe stocks opened ALL IN THE RED (     /USA dollar index DOWN to 97.99/Euro UP to 1.0991

3b Japan 10 year bond yield: LOWERS TO    -.052%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 103.72/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY.

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  50.30  and Brent:52.19

3f Gold UP /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES QUITE A BIT to +078%   

3j Greek 10 year bond yield FALLS to  : 8.39%   

3k Gold at $1254.00/silver $17.46(8:45 am est)   SILVER FINAL RESISTANCE AT $18.50 WILL BE DEFENDED 

3l USA vs Russian rouble; (Russian rouble UP 8/100 in  roubles/dollar) 62.90-

3m oil into the 50 dollar handle for WTI and 52 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  DEVALUATION DOWNWARD 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 .9892 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0874 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  +.078%

/German 9+ 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 1.792% early this morning. Thirty year rate  at 2.550% /POLICY ERROR)

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

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


Global Stocks Slide, Futures Pressured As Bond Yields Jump To Highest Since June

World stocks started the week in the red Monday as the dollar touched a 7-month high and U.S. and European government bond yields climbed to their highest since June following the Friday speeches by Eric Rosengren and Janet Yellen which hinted the Fed’s next step could be to pursue a steepening of the TSY yield curve the same as the BOJ.

(Harvey; tolerating inflation)

Echoing what we said previously, Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote that “markets are reacting to the possibility that the Fed might join the Bank of Japan in conducting policy to steepen the yield curve. In the Fed’s case, this might amount to running the gauntlet of higher inflation with a very slow pace of monetary tightening.”

According to Reuters, despite the specifics, all the overnight moves came amid signs that inflation is finally starting to wake from its slumber and that top central banks may let inflation “run hot” as Janet Yellen suggested on Friday.

Among the hardest hit treasuries were U.K. gilts, with losses accentuated by the turmoil arising from ongoing concerns about a “Hard Brexit.” As a result, 10-year yields rose to the highest since the Brexit vote, amid speculation the weaker pound is already pushing up prices for consumers. Sterling continued to fall, dropping another 0.2%.

Turkey’s lira and South Korea’s won led emerging-market currencies lower. The Stoxx Europe 600 Index fell for the fourth time in five days and equity gauges declined across most of Asia as oil traded around $50 a barrel.

“We have the two month window where there will be a lot of uncertainty about what the European Central Bank will do, and we had a poor gilt opening this morning and that has spooked the market,” said Mizuho interest rate strategist Antoine Bouvet. “We expected another 20 basis point rise in Bund yields by mid-November.”

Even as the outlook for inflation picks up, central bank policy makers have reiterated commitments to keep stoking prices to spur economic growth. As Bloomberg notes, BOE Governor Mark Carney said last week that he’ll tolerate an inflation-target overshoot, with Yellen echoing that sentiment, saying there are “plausible ways” that running the economy hot for a while could repair some damage caused to growth during the recession. Fed Vice Chair Stanley Fischer is due to speak Monday, while American companies’ earnings are also being watched closely for signs of sustainable growth.

“The Fed, in allowing inflation to run above target, may be changing the game in rates,” said Peter Chatwell, head of rates strategy at Mizuho International Plc in London. “We finally have a fundamental reason for long-term yields to push higher and for inflation premia to re-rate.”

In addition to the broad global selling in rates instruments, attention turned to China’s ongoing and unexpected devaluation of the Yuan, where the USD/CNH rose above the psychological level of 6.75 before dipping back to 6.7486 as the PBOC appears to no longer care about setting a ceiling. As we showed previously, concerns about the currency and a pick up in capital outflows may have been responsible for the dramatic plunge in China B-Shares, which crashed by nearly 7% in the last 90 minutes of trading.

But the underlying catalyst was a return to concerns about global VaR shocks rising from the sharp move in the long end of the curve as we warned last night. The yield on 30-year Treasuries rose to 2.57% in early trading, set for the highest close since June 2, and following an eight basis-point jump on Friday. The two-year note yield was little changed for a second day after futures prices indicated the chance of a Fed rate hike in 2016 held steady at 66% in the last session.  Gilt yields have been climbing for the past three weeks as sterling’s 18 percent slide since the vote to leave the EU drove a market gauge of inflation expectations to the highest in 2 1/2 years. Faster inflation erodes the fixed payments on bonds, while also making it less likely the BOE will be able to cut interest rates and extend its asset purchases. The yield on the benchmark 10-year security jumped eight basis points to 1.17 percent, after touching 1.22 percent, the highest since the June 23 referendum. The yield on Germany’s 10-year bonds increased by three basis points to 0.09 percent, while that on similar-maturity notes in Australia rose by four basis points to 2.31 percent.

Looking at stocks, Europe’s Stoxx 600 slid 0.7% in early trading with energy producers falling the most as oil slipped. The equity benchmark ended last week little changed as investors weighed central bank policy and the health of the global economy following mixed data from China. Pearson Plc tumbled 9.6% as the world’s largest education company reported a sales decline. S&P 500 Index futures retreated 0.3 percent, after U.S. equities ended Friday little changed following a late-afternoon selloff. The MSCI Asia Pacific excluding Japan Index slipped 0.6 percent and the MSCI Emerging Markets Index also fell 0.6 percent.   The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong declined 0.6 percent. A report due Wednesday may show China’s economy grew 6.7 percent in China the third quarter, the same as in the previous two periods, according to a Bloomberg survey of economists. Crown Resorts tumbled 14% in Sydney after Chinese authorities detained 18 of its employees, including the head of its international high-roller operations. Gaming stocks elsewhere were also hurt, with Sands China Ltd. and Galaxy Entertainment Group Ltd. both dropping at least 3 percent in Hong Kong.

Investors will look to data Monday for further indications of the health of the world’s biggest economy in light of Yellen’s comments on inflation. Among reports scheduled for release, industrial production is forecast to have increased in September after August’s contraction.

The earnings season is also in focus, with Charles Schwab Corp., International Business Machines Corp. and Bank of America Corp. among the main companies posting quarterly results on Monday. Analysts forecast a 1.4 percent contraction in third-quarter profits for S&P 500 members.

Bulletin Headline Summary from RanSquawk

  • Heavy selling pressure in fixed income markets this with Bunds breaking below 163.00 while Gilts continue to underperform as participants become less bullish on expectations for further BoE easing
  • A quiet morning in the FX markets, but there are plenty of data/event risks through the week to keep players on the side lines until we get some clearer signals to trade off.
  • Looking ahead, highlights include US Empire State Manufacturing Index, US Industrial and Manufacturing Production

Market Snapshot

  • S&P 500 futures down 0.3% to 2121
  • Stoxx 600 down 0.7% to 338
  • FTSE 100 down 0.8% to 6959
  • DAX down 0.7% to 10506
  • German 10Yr yield up 3bps to 0.09%
  • Italian 10Yr yield up 6bps to 1.44%
  • Spanish 10Yr yield up 3bps to 1.15%
  • S&P GSCI Index down less than 0.1% to 375.4
  • MSCI Asia Pacific down 0.1% to 138
  • Nikkei 225 up 0.3% to 16900
  • Hang Seng down 0.8% to 23038
  • Shanghai Composite down 0.7% to 3041
  • S&P/ASX 200 down 0.8% to 5389
  • US 10-yr yield up less than 1bp to 1.8%
  • Dollar Index down 0.08% to 97.94
  • WTI Crude futures down 0.3% to $50.20
  • Brent Futures down 0.1% to $51.89
  • Gold spot up 0.1% to $1,253
  • Silver spot down 0.2% to $17.39

Global Top News

  • Deutsche Bank Said to Explore Shrinking U.S. Operations: Such an option being considered as part of bank’s broader strategy review, evaluating businesses in context of regulatory, capital requirements.
  • Ohio Joins California, Illinois in Suspending Wells Fargo: Gov. John Kasich barring WFC from state bond deals, contracts for a year; WFC’s New CEO Sloan Leaves Analysts Unsatisfied in Debut
  • Dynegy Unit Creditors Agree on $825m Debt Restructure: Bondholders to exchange 2018, 2020, 2032 notes for $139m in cash, $210m in new 7-year Dynegy notes.
  • Mortgage Insurers’ Pilot Program Draws Investor Scrutiny: Money managers raised concerns about Fannie Mae, Freddie Mac pilot programs to share more risk with the guarantors; are pressing trade groups to lobby against parts of plans.
  • Over 1 Million to Lose Obamacare Plans as Insurers Quit: At least 1.4m people in 32 states will lose Obamacare plan they have now: state officials.
  • ‘Accountant’ Topples ‘Girl on the Train’ at Box Office: Drama collected an estimated $24.7m at theaters in U.S., Canada: ComScore.
  • LendingClub Increases Interest Rates for Riskiest Borrowers: Co. lifted interest rates by weighted average 26 basis points, primarily for riskier transactions.
  • Apple Seeking Newer Screens to Make or Break Japan Suppliers: Co. plans to adopt OLED screen technology for next major upgrade to its flagship product.
  • Tesla Deepens Panasonic Ties With Solar Parts Deal: PV cell, module production for solar energy systems used by SolarCity will begin in 2017 at factory in Buffalo; Musk Moves Tesla Announcement to Weds.; Needs ‘Refinement’: Tesla CEO Elon Musk comments on Twitter.
  • Lululemon 3Q Comp. Sales View Cut at Goldman Amid Competition: Est. lowered to 3% from 4.5%; now below co. forecast of mid-single digits: Goldman.
  • Medtronic Recalls Some Lots of Embolization, Retrieval Devices: 84,278 units potentially affected by it had been distributed worldwide.
  • GameStop to Sell Out of PlayStation VR Goggles: COO: Co. has asked Sony to supply more of the headsets.
  • Nevada Approves Record $750m Subsidy for NFL Stadium: Lawmakers authorized a tax incentive to entice NFL’s Oakland Raiders to move to Las Vegas.
  • McDonald’s Executives King, Hess Said to Leave Co.: WSJ: Chief field officer, also senior VP for customer experience are planning to retire this year: WSJ.
  • Trump Says Polling-Place Cheating Leading to ‘Rigged’ Election: “They leave dead people on the rolls, and then they pay people to vote those dead people four, five, six, seven, eight, nine times:” Trump surrogate Rudolph Giuliani.
  • PayPal May Have Mulled Buying GoFundMe: TechCrunch: Price potentially above $1b.

Looking at regional markets, we start as usual in Asia, where stock markets began the week subdued following last Friday’s flat close on Wall St. and quiet news flow over the weekend. ASX 200 (-0.8%) was led lower by the consumer discretionary sector after 18 Crown Resorts employees were detained in China regarding the promotion of gambling on the mainland. Nikkei 225 (+0.3%) swung between gains and losses alongside choppy JPY movements in which USD/JPY fluctuated around 104.00. Chinese markets were mixed as the Hang Seng (-0.8%) conformed to the negative tone seen across Asia, while Shanghai Comp. (-0.7%) fluctuated between gains and losses with the PBoC upping its liquidity injections to the interbank market. 10yr JGBs saw muted trade with price action hampered by quiet news flow and with participants side-lined ahead of tomorrow’s enhanced liquidity auction for the long to super long end. China is to provide more policy support to boost the growth of the service sector, according to the cabinet.
PBOC injected CNY 50bIn in 7-day reverse repos and CNY 20bIn in 14-day reverse repos. The central banks set the Yuan mid-point at 6.7379 (Prey. 6.7157), the lowest in 6 years.

Top Asian News

  • China’s Currency Dilemma Deepens as Yuan Surges Versus Euro, Won: Allowing faster depreciation versus dollar could spur outflows.
  • Hedge Funds Cut Bullish Yen Bets Amid Currency’s Three-Week Drop: Dollar gains set to accelerate versus euro, yen year- end, RBS says.
  • Thai Bonds Suffer Record Outflows as King’s Death Sparks Concern: Selling is overdone, according to ING’s Tim Condon.
  • Crown Resorts Plunges After China Detains 18 Casino Employees: Detentions spark concern of clampdown on overseas marketing.
  • JR Kyushu Sets IPO Price at 2,600 Yen/Share, Top of Range: Co.’s share offering would be worth 416b yen, according to Bloomberg calculation.
  • KKR-Backed Cofco Meat Seeks Up to $333m in Hong Kong IPO: Chinese pork producer offers shares at HK$2 to HK$2.65 apiece.

In Europe, heavy selling pressure in fixed income markets this with Bunds breaking below 163.00 while Gilts continue to underperform as participants become less bullish on expectations for further BoE easing. More specifically, participants have continued to scale back expectations of further easing by the BoE as the softer GBP has continued to heighten the possibility of a firmer uptick in inflation than initially thought when the BoE acted in August (Goldman Sachs pushed back BoE easing to Feb’17 from Nov’16). Alongside this, Bunds have seen a couple of key levels breached this morning with the yield breaking back above 0.10% reaching levels last seen since the UK referendum, while USTs also remain softer as participants further price in expectations of a 25bps cut by the Fed in their Dec meeting, albeit with a potentially shallower path ahead as shown by comments from Fed chair Yellen on Friday. Price action in equities have been somewhat contained this morning with the Eurostoxx 50% (-0.3%) modestly in
the red, however EU bourses have marginally pared their opening losses amid broad based gains across financial names with reports suggesting that Deutsche Bank (+0.3%) could be considering an exit from their US operations. Elsewhere, energy names underperform in the wake of the losses seen on Friday despite prices being relatively stable this AM.

Top European News

  • Draghi Seen Embracing More Before Less QE as Inflation Edges Up: With consumer prices barely rising, recovery still fragile, majority of Bloomberg survey respondents predict that ECB president will prolong bond-buying.
  • Coty Said to Be Near >GBP400m Purchase of U.K.’s GHD: Sky: Deal for hair-care products co. may be announced as soon as this month: Sky.
  • Sonnen Considering IPO in Bid to Rival Tesla Powerwall Storage: German solar-energy-storage maker may pursue IPO as early as 2017 to develop additional services.
  • U.K. Falls Out of Top 5 Investment Sites Post Brexit: EY: British businesses rank behind investments in U.S., China, Germany, Canada, France; London Becoming U.K.’s Housing Market Laggard: London asking prices +2.5% in past year, second-weakest performance out of 9 areas surveyed by Rightmove.
  • U.S. Banks Slashed Share of U.K. Property Loans Before Brexit: U.S., Canadian banks’ market share fell to 7% vs 14% in 1H 2016: survey of 78 lenders by De Montfort University

In FX, the MSCI Emerging Markets Currency Index fell 0.3 percent, headed for its lowest close since Sept. 16. The lira weakened for a second day, dropping 0.5 percent. The won weakened 0.4 percent, while Malaysia’s ringgit retreated 0.3 percent. The yen advanced 0.1 percent to 104.03 per dollar, following declines in each of the last three weeks. Hedge funds and other large speculators cut bullish bets on the currency by the most since May in the week ended Oct. 11. Australia’s dollar slipped 0.3 percent. The yuan fell to a six-year low in Shanghai, while Taiwan’s dollar dropped to levels last seen in August.

In commodities, oil extended declines after U.S. producers ramped up drilling even as crude inventories remained at the highest seasonal level in at least three decades. Futures fell 0.3 percent to $50.19 a barrel. Aluminum dropped 1.4 percent as an Indonesian producer group said it will ask the government to lift a bauxite export ban imposed in 2014, threatening to increase supply of the raw material. Nickel slipped as much as 0.7 percent. Copper rose as much as 0.6 percent after the biggest two-week decline in four months. Gold advanced after posting a three-week slide as investors weighed the outlook for U.S. interest rates against signs of robust demand. Bullion for immediate delivery climbed 0.2 percent to $1,253.62 an ounce.

On today’s calendar, we’ll get the September industrial and manufacturing reports along with capacity utilization data and the Empire manufacturing report for October.

* * *

US Event Calendar

•    8:30am: Empire State Mfg, Oct., est. 1.00 (prior -1.99)
•    9:15am: Industrial Production, Sept., est. 0.2% (prior -0.4%)
•    12:15pm: Fed’s Fischer speaks in New York
•    5:10pm: Reserve Bank of Australia’s Lowe speaks in Sydney
•    U.S. Rates Weekly Agenda
•    FX Weekly Agenda

DB’s Jim Reid concludes the overnight wrap

It’s a varied week of highlights ahead over the next 5 days to grab our attentions. The main events being UK and US inflation and ECB lending standards tomorrow, China’s monthly main data dump and the final US presidential TV debate on Wednesday, the ECB meeting on Thursday and earnings season getting into full swing (96 US and 40 European companies) through the week. A key macro theme at the moment is potential central bank tapering/tightening what with the Fed itching to hike, the BoJ potentially tapering until the government picks up the baton and vague speculation about the ECB wanting to rein in QE. DB’s Mark Wall still expects a 9-12 month extension in December but if the ECB is thinking differently we may get some hints on Thursday. If they do extend then they need to solve the eligibility conundrum soon so that’s another thing to look out for at the meeting.

Given that the market is sensing a slight shift in emphasis from central banks, the focus on the bond market continues with UK Gilts leading the sell-off during the European session on Friday (more below) with US Treasuries adding to the losses after Yellen spoke on Friday night. The key theme seemed to be her wondering whether there was room to let the US economy ‘run hot’ and whether such a ‘high pressure’ economy could enhance things like labour force participation. While this could be potentially dovish for the front end, the perception was that it could allow inflation to be allowed to run higher which helped the long-end sell-off and steepened the curve. The Boston Fed’s Rosengren (a dissenter last month) also spoke and said that the market is pricing in an ‘appropriately’ high probability of a Fed rate hike in December however it was Yellen’s comments which got Treasuries moving. Indeed 2y yields finished the session flat at 0.835% however 5y, 10y and 30y yields were up 2.8bps, 5.7bps and 8.1bps respectively by the end of play. The 5.5bp move in the 5y 30y spread was in fact the most since March 30th and takes the spread to just below the highs of midway through last month.

In terms of Gilts there was a similar bear steepening effect across the curve on Friday. 2y yields edged less than 1bp higher however 10y and 30y yields were up 7.2bps and 6.0bps to 1.094% and 1.762% respectively. Comments from BoE Governor Carney seemed to be at the forefront of the selloff when he suggested that the Bank will ‘tolerate a bit of overshoot in inflation over the course of the next few years’ in order to cushion the blow of an anticipated increase in unemployment. Carney also added that ‘our job is not to target the exchange rate, our job is to target inflation’ but ‘that doesn’t mean we’re indifferent to the level of sterling’ however ‘it does matter ultimately to where inflation is and over the course of two or three years out, it matters to the conduct of monetary policy’. BoE MPC member Forbes added separately on Friday that the BoE might overshoot its inflation target ‘sharply’ over the next couple of years and that the days of ‘inflation bouncing around zero are gone’. Sterling fell -0.51% on Friday versus the Dollar and is down another -0.19% this morning at $1.2168. The five-day loss of -1.95% last week means Sterling has now weakened in five of the last six weeks.

Meanwhile, as we noted earlier, this week will see earnings season start to ramp up, particularly across the pond. The Banks sector will again be under the spotlight with BofA (today), Goldman Sachs (Tuesday) and Morgan Stanley (Wednesday) due. That comes after some better than expected earnings and revenue numbers from Citi, JP Morgan and Wells Fargo on Friday where decent beats in fixed income trading revenue appeared to be a big driver and consistent theme at both Citi and JPM in particular. DB’s US equity strategist David Bianco expects most companies to beat the last minute estimates this quarter but beats to be smaller than usual and Q4’16 and 2017 EPS outlooks to be tempered. He’s forecasting the S&P 500 EPS to be flat year-on-year and up 2% quarter-on-quarter (or 3% ex-energy).

Those banks earnings had initially seen US equity markets get off to a decent start on Friday with Europe (Stoxx 600 +1.29%) also finishing on a strong note for much the same reason. However as Europe closed markets in the US faded with the S&P 500 (+0.02%) eventually finishing little changed as rates spiked higher and the Dollar strengthened which weighed on utilities and REITS in particular.
As we look at our screens this morning it’s a bit of a mixed start to the week in Asia. The Nikkei (+0.29%) and Kospi (+0.47%) are currently posting modest gains however the Hang Seng (-0.42%) and ASX (-0.68%) have dipped lower. Bourses in China are generally flat although its been a fairly directionless start with indices trading between gains and losses. Sovereign bond markets are generally weaker in the region. Longer dated JGB yields are a couple of basis points higher while benchmark 10y yields in the likes of Australia, New Zealand and Korea are 5-7bps higher.

In terms of the weekend newsflow there’s some focus on Italy with the news that Banco Popolare and Banca Popolare di Milano shareholders’ have approved Italy’s biggest bank merger in nearly a decade. The tie-up will create a €171bn asset lender according to the FT and should provide a boost for PM Renzi who made a push for the deal. Away from this, the latest Brexit news is that a group of legislators including former Lib Dem PM Nick Clegg and former Labour Leader Ed Miliband have demanded PM May’s government to publish a ‘substantive outline’ of its Brexit plans and submit to a vote in Parliament prior to triggering Article 50. This of course follows that Parliament session which had Labour calling for a ‘proper scrutiny’ of PM May’s strategy last week.

Before we look at the week ahead, just a quick recap on the rest of the newsflow on Friday. In terms of the US data, retail sales were a bit mixed with the headline (+0.6% mom) and core ex auto and gas (+0.3% mom) in line with the market consensus, but the GDP input control group component (+0.1% mom vs. +0.4% expected) missing which led to the Atlanta Fed cutting its Q3 GDP forecast to 1.9% from 2.1%. As a reminder this forecast was as high as 3.8% in early August. Meanwhile, headline PPI (+0.3% mom vs. +0.2% expected) was a little higher than expected, while the core ex food, energy and trade (+0.3% mom vs. +0.1% expected) also rose more than expected. A first look at the October University of Michigan consumer sentiment survey was mixed. The sentiment reading dipped 3.3pts to 87.9 (vs. 91.8 expected) and while the current conditions component rose 1.3pts to 105.5, the expectations component was down 6.1pts to 76.6 and the lowest since September 2014. We’d imagine that the upcoming President election is weighing on the latter in particular.

Elsewhere, business inventories (+0.2% mom vs. +0.1% expected) printed a little higher than expected and the September Monthly Budget statement revealed a $33.4bn surplus. There was nothing of particular note released in Europe.

Turning over to this week’s calendar now. This morning in Europe the only notable data due out is the final revision to September CPI in the Euro area. Over in the US this afternoon we’ll get the September industrial and manufacturing reports along with capacity utilization data and the Empire manufacturing report for October. Tuesday morning should be an interesting session in Europe with the ECB bank lending survey due out along with the UK CPI/RPI/PPI data in September. Over in the US we’ll also get the September CPI report too, along with the October NAHB housing market index print. Wednesday is all about China with the September data dump released in the morning which includes Q3 GDP, industrial production, retail sales and fixed asset investment. Away from that there’s more data due in the UK in the form of the August and September employment data, while in the US we’ll get the September housing starts and building permits numbers, along with the Fed’s Beige Book in the evening. In Europe on Thursday the data includes Germany PPI and UK retail sales. That’s before we get the ECB policy meeting outcome shortly after midday. Over in the US on Thursday the data releases include initial jobless claims, Philly Fed manufacturing survey, existing home sales and Conference Board’s leading index. We end the week in China on Friday with the latest property prices data and MNI business indicator reading. In the UK there’s more data, this time the latest public sector net borrowing reading, while the Euro area consumer confidence print is due in the afternoon. There’s no data due in the US on Friday.

Away from the data the Fedspeak this week includes Fischer this evening, Williams and Kaplan on Wednesday, Dudley on Thursday and finally Tarullo and Williams on Friday. Of course the third and final Presidential Debate on Wednesday evening in Las Vegas will be closely watched. In the UK Chancellor Hammond is due to testify before the Treasury Committee on Wednesday. The ECB’s Draghi holds his usual post-ECB meeting press conference on Thursday too. The other big focus for markets this week is of course earnings. 96 S&P 500 companies are set to report including BofA, Netflix and IBM today, Goldman Sachs, Johnson & Johnson and Intel on Tuesday, eBay and Morgan Stanley on Wednesday, American Airlines, Verizon, Microsoft, Walgreens Boots and Schlumberger on Thursday and McDonald’s and GE on Friday. We’ll also get earnings from 40 Stoxx 600 companies this week.



i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 22.64 POINTS OR 0.74%/ /Hang Sang closed DOWN 195.77 POINTS OR 0.84%. The Nikkei closed UP 43.75POINTS OR 0.26% Australia’s all ordinaires  CLOSED DOWN 0.83% /Chinese yuan (ONSHORE) closed DOWN at 6.7378/Oil FELL to 50.30 dollars per barrel for WTI and 52.19 for Brent. Stocks in Europe: ALL IN THE RED   Offshore yuan trades  6.7491 yuan to the dollar vs 6.7260 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS QUITE A BIT  AS MORE USA DOLLARS  LEAVE CHINA’S SHORES



none today

c) Report on CHINA

Last night 3 biggies:

i) rising inflation which would stop the POBC from monetary easing

ii) a jump in the dollar (fall in CNH/CNY) which again causes inflation risks

iii)Shanghai B share index crashes over 6% in last 90 minutes of trading

(courtesy zero hedge)

Shanghai B-Shares Unexpectedly Crash Over 6% In Last 90 Minutes Of Trading

In recent days, China has been hit with a triple whammy of rising inflation, reducing the likelihood of more monetary easing; a jump in the dollar which has pressured the Yuan sending it to its lowest fixing since 2010 at 6.7379, while the USDCNH rising above 6.75 in early trading; and rising interest rates which have resulted in another spike in revulsion to EM stocks. Perhaps as a result of this perfect storm of catalysts, overnight China’s foreign currency shares, the Shanghai B-share index, plunged the most since January in late trading, and as Bloomberg notes, “sending traders scrambling for reasons to explain the sudden volatility in a largely moribund market.”

The Shanghai B-share index of dollar-denominated stocks suddenly crashed as much as 6.7%, the biggest drop since January 11, with virtually all the losses coming in the last 90 minutes of trading, before closing down 6.2%.

Kama Co. and Shanghai Lingyun Industries Development Co. were among companies falling by the 10% limit. Predictably, a measure of the 10-day volatility on the 52-member index jumped to its highest level in six months, after falling in September to its lowest in at least a decade.

As Bloomberg summarizes, B-share markets, where foreign institutions and Chinese individuals are allowed to trade, were set up in 1992 to give local companies a way to raise funds from global investors banned from buying securities denominated in yuan. Interest in B shares has waned as the government allowed qualified overseas investors to access the larger, more liquid A-share market and eased limits on foreign exchange. Monday’s drop came as the yuan extended a slide against the dollar to a six-year low.

“There’s no clear explanation on the sudden drop,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. “But most investors are deeply concerned about the yuan’s depreciation and capital outflows as the yuan approaches 6.8. Overall market sentiment is very poor and selling in the B-shares index is spreading.” But we thought China was fixed, or at least that’s what the “objective” media said?

Turns out the media was wrong as usual: Northeast Securities strategist Shen Zhengyang also blamed the Yuan exchange rate is one major factor for movement in B shares, adding that investors are worried yuan might depreciate further against the USD after recent weakness. It appears China’s capital outflows are also nowhere near done, refuting yet another optimistic media fable.

Investors are “probably selling dollar-denominated B shares and want to get the money out if they still have forex quota” he added.

Then there is the fact that the plunge was long overdue: the Shanghai-B market is a bubble, which trades 30x reported earnings, almost double the 18 multiple for the Shanghai Composite Index. The Shanghai Composite, comprising both yuan-denominated A and foreign-currency B shares, slid 0.7 percent, erasing an earlier 0.2 percent advance. The selloff comes amid a period of stability for Chinese equities after last year’s $5 trillion rout, with turnover on the Shanghai exchange near two-year lows and the benchmark gauge treading water. That said, the only reason for the stability is that as retail investors have fled the local stock market, the government has effectively taken over and no longer allows material swings in underlying risk.

But ultimately, today’s crash is likely a confirmation that Chinese capital outflows continue.

Mainland investors have been looking at ways to protect against a weakening yuan, with net buying of Hong Kong stocks via a Shanghai link swelling to a record last month. The Chinese currency slid 0.2 percent to 6.74 per dollar at 3:49 p.m., after sinking 0.8 percent last week.

There is market speculation that B shares can no longer be used as a tool to hedge against the yuan,” said Jackson Wong, associate director at Huarong International Securities Ltd. in Hong Kong. The State Administration of Taxation last week published rules requiring banks to perform due diligence on non-resident financial accounts from 2017.

“We saw some unknown institutions’ heavy selling around 2 p.m.,” said William Wong, Hong Kong-based head of sales trading at Shenwan Hongyuan Securities Ltd. “It is very likely that some overseas investors want to move money out” after the new rules.

One thing is certain: if this capital outflow pathway is closing, Chinese intrepid residents will just find another way to transfer more of theit $25 trillion in domestic savings abroad.





none today



Rising Sibor rates causes Saudi bank stocks to tumble as its bailout of the economy fails to stem liquidity problems:

(courtesy zero hedge)

Saudi Bank Stocks Tumble As Bailout Fails To Stem Liquidity Stress

Saudi bank stocks’ dead-cat-bounce – following the central bank’s cash injection ‘bailout – is dying once again as Bloomberg reports funding pressures remain in The Kingdom’s financial system.

The interest rate banks charge one another for loans rose by the most since August on Sunday, extending a trend that’s slowing earnings and corporate borrowing in the world’s biggest oil exporter. The increase is defying the central bank, which has sought to ease the cash crunch by relaxing lending limits, offering new borrowing facilities and injecting funds into the financial system, including 20 billion riyals ($5.3 billion) pledged Sept. 25.

Financial institutions in the Arab world’s largest economy are bearing the brunt of a halving of oil prices since 2014. Economic growth in the kingdom is slowing, curtailing bank deposits just as the government increases borrowing to help plug a budget deficit that last year was the widest since 1991.

“Rates won’t easily come down with one $5 billion injection,” said John Sfakianakis, director of economic research at the Gulf Research Center Foundation in Riyadh.

“Bringing them down would require a significant liquidity injection effort. The $5 billion is a good step forward, but given the asset size of Saudi banks it would require several additional injections.”

And it appears investors are rapidly realizing that (as the market demands more)…

Saudi Arabia will post a budget deficit of 13.5 percent of economic output this year, the highest since 1992, declining to 9.6 percent in 2017, according to forecasts from the International Monetary Fund. Amid the shortfall, direct local government debt climbed to $63 billion at the end of August from almost $38 billion at the end of 2015, according to information in the Saudi bond prospectus obtained by Bloomberg.

Rising Saibor rates reflect the “extent of the liquidity challenge in the banking system,” said Raza Agha, the London-based chief economist for the Middle East and Africa at VTB Capital Plc. “The outlook for government borrowing has risen sharply and even if next year’s deficit declines to perhaps 8 percent of gross domestic product, you’re still looking at deficit-financing needs of $56 billion.”






Putin describes that it is Hillary that is banging the war drums. He is very concerned that the world is rushing irreversibly towards a nuclear showdown

(courtesy zero hedge)

Hillary’s ‘War Drums’ Confirm Putin’s Fears Of A World “Rushing Irreversibly” Towards Nuclear Showdown

As election day looms in America, it appears the writing that Vladimir Putin drew on the wall just a few short months ago is coming to fruition. Having lost his patience with the constant spewing of anti-Russia propaganda – missing the bigger picture of vicious circle towards muclear confrontation – Putin implored the western media, for the sake of the world, to listen:

We know year by year what’s going to happen, and they know that we know. It’s only you that they tell tall tales to, and you buy it, and spread it to the citizens of your countries. You people in turn do not feel a sense of the impending danger – this is what worries me. How do you not understand that the world is being pulled in an irreversible direction? While they pretend that nothing is going on. I don’t know how to get through to you anymore.

In calm tones, not reflective of the angry allegations lobbed at Americans every day of a Russia hell-bent on the election of Trump (for whatever reason they dreamed up of this week), Putin reminded a ‘deaf’ press corps of what lies ahead and implicitly what happens if and when Americans vote for Hillary.

And, as Lawrence Murray (via Atlantic Centurion) explains why Donald Trump is the anti-war candidate…

From the Jordan to the Moskva, war drums beat. The powder keg that set off the first world war was ethno-religious conflict in the lands of the former Ottoman Empire, and in a sense it threatens to do so once more. The Balkan nations were not impressed with the botched settling of the Eastern Question, and a mix of state and non-state actors took matters into their own hands, leading to a globalized conflict. As late as 2006,  the borders of the region were still being contested, when Montenegro voted to break away from Serbia.

Today, millions of people in the Levant, especially in Syria and Iraq, reject the imposed settlement of their borders. These were drawn by imperialists and zionists nearly a century ago under the Sykes-Picot Agreement to serve the interests of Britain, France, and the overseas Israeli community—and the successors of those diplomats wish to maintain those same borders. The ethno-religious conflict I am  referring to in the former Ottoman Empire is of course the:

  1. Syrian civil war
  2. Iraqi civil war
  3. Turkish-Kurdish conflict
  4. American intervention in Iraq
  5. American intervention in Syria
  6. Iranian intervention in Iraq
  7. Iranian intervention in Syria
  8. Russian intervention in Syria
  9. Hezbollah campaign in Syria
  10. Yemeni civil war
  11. Libyan civil war
  12. NATO intervention in Libya
  13. Egyptian counter-insurgency
  14. War on Terror / global Islamic jihad
  15. US-Russian Middle Eastern proxy war
  16. Arab-Israeli conflict

Oh. Too many? This is the scope of conflicts that the Leviathan on the Potomac has gotten itself into, and just in the former Ottoman Empire. This does not include the:

  1. South China Sea territorial dispute
  2. Korean civil war
  3. War in Afghanistan
  4. Russian-Ukrainian border war
  5. Combat support in various African countries
  6. Occupation of Germany

In November, Americans will roll to the polls on their motorized scooters to elect the next Commander-in-Chief of the Armed Forces of the United States.

Hillary Clinton has a track record of following neoconservative foreign policy imperatives that favor “exporting” democracy and disrupting the enemies of Israel, such as Baathist (Arab nationalist) Iraq and Syria. Or as Republicans put it, “muh benghazi.” The Alt-Right cleverly notes that combined with America’s post-1965 immigration laws, this is a policy of “Invade the World, Invite the World.” If not for the dual policies of bombing Muslims and importing Muslims, the United States would be a radically different society. Instead of a bomb-sniffing watchdog state, we might have a night watchman state (like we used to). As late as 2000, some airline pilots would let you into the cockpit, especially if you had a small child with you who wanted to see it. Now even lingering at the front of the plane for to long means you’re a terrorist.

But it’s more than just a cultural change and anxiety about being in crowded, target-rich, or sensitive areas. The United States is required to spend billions of dollars a year now in order to prevent the next 9/11, which could have easily been prevented by not allowing immigration from Saudi Arabia, a country which practices shariah law, polygamy, and beheading of religious dissidents.Indeed, the surveillance and counterterrorism operations the United States is required to carry out against its citizens in the name of security as a result of mass immigration from outside of Europe put the state police of bygone regimes to shame. East Germany would be envious.

The other option is Donald Trump.

Donald Trump has never played a role in the shattering of nations or in conducting airstrikes against embittered medieval tribespeople. He has never been blamed for the death of an American ambassador or his staff. He has never chuckled about killing Muammar Gaddafi, whose autocratic and idiosyncratic rule of Libya raised living standards, generated oil wealth for his people, and prevented Islamist terror movements from spreading in a region where that is a problem. He has spoken favorably of Saddam Hussein, who likewise while imperfect did not preside over a millennarian civil war between two strains of jihadists and nationalist-secularists. There is something to be said for leaving these parts of the world to their own devices, even if it means they don’t get an American or parliamentary democracy. They can live without it. In fact, they literally live without it. What is happening right now in Syria and Iraq and Libya and Afghanistan and other hotspots is not life. It is death, and it is being funded with your tax dollars. By a Democratic administration that is fighting to preserve disputed borders in foreign countries while neglecting our own.

Obama and Clinton get away with warmongering because they aren’t George W. Bush. But short of committing tens of thousands of ground troops, they are doing almost the same thing he did in Iraq and Afghanistan. Perhaps worse because of the low human cost of the war to the Western side, we could potentially intervene in this conflict for, well, as long as the drone program is funded and fuel is loaded into our planes. There is no attrition. Just us turning various cities into replicas of Guernica. No bodies are sent home; no one cares.

Trump wants to end war in Syria and Iraq by working with the Russians and Iranians to defeat the number one enemy of international peace, which is ISIS. He also wants a moratorium on the importation of violent overseas ethnoreligious conflict into the United States.

Clinton wants to continue fighting the de jure Assad government, which benefits ISIS vis-a-vis just as much as it benefits the “moderate” rebels and non-ISIS jihadist groups. At the same time, she also wants to make the United States incrementally more Muslim each year. That’s how immigration works—less and more each year. Why recreate Syria in Seattle? Iraq in Idaho?

Trump wants to end the wars abroad and at home. He wants to put America First. What does Clinton want to put first?






RT bank accounts are blocked in the UK.  I guess that puts an end to free speech

(courtesy zero hedge/RT)

RT’s Bank Accounts Blocked In The UK; Russia Foreign Ministry Slams RBS’ Decision

While we have yet to get an update from Wikileaks on the status of Julian Assange’s internet connection at the Ecuadorian embassy in the UK, which as reported overnight was allegedly “severed” by an unknown “state party”, moments ago Russia’s RT (originally Russia Today), a television network and website funded by the Russian government, has allegedly seen its bank accounts blocked by the UK, according to a tweet posted moments ago by the station’s editor-in-chief, Margarita Simonyan.

“Our accounts in the UK have been closed. All Accounts. ‘The decision is not subject to revision’. Long live freedom of speech!” Simonyan said in a Twitter post, suggesting that the move stifles free speech.

Нам закрыли счета в Британии. Все счета. ‘Решение пересмотру не подлежит’. Да здравствует свобода слова!

According to RT
, its The National Westminster Bank has informed RT UK that it will no longer have the broadcaster among its clients. “The bank provided no explanation for the decision.”

“We have recently undertaken a review of your banking arrangements with us and reached the conclusion that we will no longer provide these facilities,” NatWest said in a letter to RT’s London office. The bank said that the entire Royal Bank of Scotland Group, of which NatWest is part of, would refuse to service RT.

The letter said the decision was final and that it is “not prepared to enter into any discussion in relation to it.”

Commenting on the development, Russian Foreign Ministry spokesperson Maria Zakharova said it indicated that “Britain on its way out of the EU abandoned all its commitments to protect the freedom of speech.”




Another indicator that the global economy is in trouble:  Caterpillar CEO retires immediately.   This is after 45 straight months without an uptick in global sales.

(courtesy zero hedge)

Caterpillar CEO To Retire After 45 Months Without An Uptick In Global Sales

Perhaps it is a coincidence that just hours after the WSJ posted an article on “How Caterpillar’s Big Bet Backfired: CEO Doug Oberhelman invested heavily in production of machinery and equipment. Then commodities began their slide“, focusing on the miserable business (if not stock) performance of the heavy industrial machinery maker, one which as we profile month after month hasn’t posted a single positive global retail sales print in 45 consecutive months…

… CAT just announced that CEO and Chairman Doug Oberhelman has elected to retire, effective March 31, 2017.

Here is the full press release:

Caterpillar Chairman and CEO Doug Oberhelman Elects to Retire in 2017; Jim Umpleby Elected as Caterpillar’s Next CEO; Dave Calhoun to Become Non-Executive Chairman of the Board

After more than 41 years with Caterpillar Inc. (CAT), Chairman and CEO Doug Oberhelman has elected to retire, effective March 31, 2017. During his time as Chairman and CEO, Oberhelman has reinvigorated the company’s focus on serving customers while also driving a culture of quality and safety. Oberhelman led the company to its highest sales and revenues peak in its 91-year history in 2012, and, since that time, has successfully led the company through the unprecedented downturn affecting our key industries.

During Oberhelman’s tenure:

  • Product quality levels have reached historically high levels.
  • Market position for machines has significantly increased.
  • New Lean Management processes have simplified and sped production capabilities, improving product availability for dealers and customers.
  • The company has increased its quarterly dividend by 83 percent since 2010.
  • The balance sheet is strong, and at the end of the second quarter of 2016, Caterpillar’s Machinery Energy & Transportation debt-to-capital ratio was 39.0 percent, with $6.764 billion in cash as of June 30, 2016.
  • Global safety metrics for employees have dramatically improved, with the Recordable Injury Frequency improving each year.
  • Caterpillar has been granted nearly 7,300 patents worldwide.
  • The company dramatically expanded its commitment to lower owning and operating costs for customers by connecting new and existing equipment through digital technology and data analytics.

“Our people have heard me say many times that my greatest responsibility as Chairman and CEO is to manage Caterpillar for today and position the company and its future leaders for long-term success,” Oberhelman said. “It has been an honor and a privilege to lead this company, and I am confident in the choice of my successor, Jim Umpleby.”

“During the last four years, Caterpillar has faced unprecedented global economic conditions that have significantly impacted the industries served by our customers, as those industries and economic growth in many regions around the world have slowed or severely contracted. Faced with these challenges, our employees have responded like champions. We have improved our market position and grown our field population. Our product quality is at historically high levels, and I believe we are leading the industry in digital capabilities. I am confident that Caterpillar is stronger than ever, with product quality, power, technology and innovation that is the envy of our competitors. Add to that lean and agile manufacturing capabilities and an unrivaled global distribution channel. The future is bright,” Oberhelman added.

The company’s Board of Directors has elected Jim Umpleby, currently a Caterpillar Group President with responsibility for Energy & Transportation, to succeed Oberhelman as CEO. Umpleby, a 35-year veteran of the company, will join the Caterpillar Board of Directors and become CEO effective January 1, 2017. He joined Solar Turbines Incorporated in San Diego, California, in 1980. Solar, a wholly owned subsidiary of Caterpillar Inc., is one of the world’s leading manufacturers of industrial gas turbine systems. Early in his career, he held numerous positions of increasing responsibility in engineering, manufacturing, sales, marketing and customer services. Umpleby lived in Asia from 1984 to 1990, with assignments in Singapore and Kuala Lumpur, Malaysia. The Caterpillar Board of Directors elected Umpleby a Caterpillar Vice President and President of Solar Turbines in 2010. He was named Group President and a member of Caterpillar’s Executive Office, effective January 2013.

“For more than 91 years, Caterpillar equipment has been renowned for its quality, durability, innovation and value,” Umpleby said. “I have been privileged to work with Caterpillar employees and dealers in supporting our customers as they develop the world’s infrastructure and improve standards of living and quality of life. I look forward to leading our dedicated team as we build upon the accomplishments of those that have come before us.”

Oberhelman will remain as Executive Chairman of Caterpillar until March 31, 2017, when he will retire. Upon Oberhelman’s retirement, Dave Calhoun, a current member of the Caterpillar Board, will assume the role of Non-Executive Chairman of the Board. Calhoun is Senior Managing Director and Head of Private Equity Portfolio Operations of The Blackstone Group L.P.

Ed Rust, former Chairman and Chief Executive Officer of State Farm Mutual Automobile Insurance Company, and currently Presiding Director of the Caterpillar Board, will remain on the Board, but will no longer hold the title of Presiding Director once Calhoun assumes the role of Non-Executive Chairman.

“The Board has a robust, best-in-class succession planning process for the critical roles of Chairman of the Board and Chief Executive Officer as well as other top executive positions. One of our top priorities as a Board is developing a strong pipeline of senior leaders. Discussions are held throughout each year, and today’s announcement is the result of these ongoing and deliberate Board discussions,” Rust said. “I am certain Jim will continue the superb leadership, which is the hallmark of Caterpillar, in the years to come. I especially want to thank Doug for his strong and outstanding leadership of the company throughout his tenure, particularly in the last four years, when the global economic environment has created unprecedented challenges for Caterpillar. We wish Doug all of the best for a successful retirement following a distinguished and successful 41-year career.”

Calhoun has been a member of the Caterpillar Board of Directors since 2011. In addition to his role with the Blackstone Group, he was previously Executive Chair of Nielsen Holdings N.V. (2014-2015), served as Chairman of the Executive Board and Chief Executive Officer of The Nielsen Company B.V. (2006-2013), Vice Chairman of General Electric Company and President and Chief Executive Officer of GE Infrastructure (2005-2006).

“I am honored to take on these new responsibilities with Caterpillar, an iconic and global leader,” Calhoun said. “Following a deliberate succession process, the Board confidently elected Jim as Caterpillar’s next CEO. He reflects the best attributes of Caterpillar’s culture and leadership. I also want to compliment Doug for his outstanding leadership as Chairman and CEO, as the capstone to more than four decades of service. His leadership in the last four years has been remarkable as the company has successfully navigated an incredibly difficult cycle while positioning Caterpillar to take full advantage of the next upturn.”

A replacement for Umpleby will be announced at a later date.




Iran disagrees with OPEC production estimates and they also state that they will increase production from 4.8 million barrels per day up to 5 million by the end of the year:

(courtesy zerohedge

Iran Disagree With OPEC Production Estimates As Hedge Fund Oil Longs Hit 2 Year High

As we reported last week, just as OPEC announced a new monthly production record, with total cartel output rising by 220kbpd to a record 33.4mmbpd…


… driven by a jump in production in Iraq, Nigeria and Libya, more confusion emerged regarding the recently concluded OPEC Algiers “deal”, according to which production would be cut back to 32.5-33.0 mmbpd, as opposition to OPEC’s secondary production estimates rose, as Venezuela join Iraq in disagreeing with the cartel’s third-party production estimates. To wit: Venezuela reported crude output of 2.33m b/d in Sept. to OPEC, 245k more than secondary source estimates, while Iraq reported 4.78m b/d in Sept., 320k above secondary source estimates.

Making matters worse, during last week’s Istanbul meeting, OPEC secretary general Mohammed Barkindo told reporters that “OPEC has still hasn’t decided yet whether OPEC and non-OPEC would make cuts at the same time, or OPEC would move first” while adding to the confusion, Putin said that Russia would only join OPEC if the organization agreed on a freeze, while Rosneft suggested it would only join a price freeze, not cut.’

Today, the rising OPEC discord hit a crescendo when Iran, one of the few nations exempt from the OPEC production freeze agreement, said it plans to boost its oil output from the current 3.89 mmbpd to 4 mmbpd by the end of the year, complicating the producer group’s plan to cut supply in an effort to prop up prices. Shortly thereafter Oil Minister Bijan Namdar Zanganeh added that new Iranian petroleum contracts are meant to help the country reach an even higher production plateau, somewhere in the 5 million bpd range. Iran is seeking about $200 billion of investment in its oil, natural gas and petrochemicals industries to raise production and sales, according to figures Zanganeh presented Monday at a conference in Tehran.

Needless to say, Iran’s increasingly ambitious intentions to absorb existing market, mostly from the likes of Saudi Arabia, will be a major hurdle during next month’s Vienna negotiation, when the country quotas are expected to be set.

“The difficulty in implementing the deal will be with the potential for production increases within OPEC,” Giovanni Staunovo, a commodities analyst at UBS told Bloomberg. “It may also be a bargaining chip, as what everyone wants is to get into the OPEC talks with a higher level of production from which to cut or freeze.”

But the biggest complication to emerge today, is that Iran has joined Iraq and Venezuela in questioning OPEC’s estimates of production. As can be seen in the table above, Iran’s output has been estimated by OPEC outside sources at 3.665mmpd, while Ali Kardor, managing director of National Iranian Oil Co., said at a conference in Tehran today that Iran pumped 3.89 million barrels of oil a day in September.  Naturally, Iran is looking to present as high a number as possible to be allowed to set the highest possible production quota.

As Bloomberg adds, Kardor disputed the accuracy of OPEC’s data on the country’s production, echoing the words of Iraq’s oil minister when he said that “figures based on estimates from secondary sources such as analysts and journalists are not acceptable” for use in determining the country’s output quota. The accuracy of OPEC’s secondary-source data is important because the group may use the information to set individual member quotas.

Meanwhile, as OPEC bickers over who producers what, Iran is busy creating the infrastructure that will allow it to produce even more. From Bloomberg:

Iran is ramping up efforts to woo foreign investment in an energy industry stunted by years of sanctions. NIOC on Monday began soliciting documents from international companies to pre-qualify as bidders to develop the country’s oil and natural gas fields, according to an announcement posted on its website. Interested companies will have until Nov. 19 to submit their qualifications, and the government will publish a list of eligible bidders on Dec. 7, according to Shana, the Oil Ministry’s news service.

The country may tender the first field, the South Azadegan deposit, to international companies as early as November, NIOC Managing Director Kardor said. Total SA of France had been developing a technical program for development of the field after signing a data-sharing agreement with Iran earlier this year, Kardor said. NIOC signed 10 agreements giving foreign companies access to data on its fields with the aim of bringing in partners to boost output, he said.

Total is also in the running to develop Iran’s South Pars 11 gas development, Kardor said. A first oil development agreement with an international company could be signed by March for South Azadegan, he said.

While the daily bickering is sure to get even worse until the November 30 OPEC meeting in Vienna OPEC, Reuters reports that hedge funds and other money managers have decided they no longer can afford to wait especially with year-end bonus time rapidly approaching, and raised their bullish bets on U.S. crude prices to the highest level since the slump started in the summer of 2014 as shorts throw in the the towel once again.

Hedge funds raised their net long position in the two main futures and options contracts linked to U.S. crude WTI by 39 million barrels to 292 million barrels in the week to Oct 11. The combined position was the highest since July 2014, when WTI prices were still trading above $100 per barrel and the long slide in prices was just beginning.

For those who enjoy modestly convoluted charts, here is one from Jack Kemp showing the dramatic shifts in HF short positioning in spot WTI.

While it is difficult to predict what happens next…

… usually any time HF positioning has reached an extreme in either said of the X-axis, this has been promptly followed by a “max pain” type of move in the underlying; if past is indeed prologue, expect a sharp move lower, especially now that even Morgan Stanley’s Adam Longson – one of the longest running oil bears – said in a note overnight that oil is set to trade higher until Nov. OPEC meeting: “OPEC’s intervention pushed any shorts to the sidelines for now and should keep prices in the upper part of our trading band until at least the Nov. 30 meeting in Vienna.”

The shorts may indeed be gone, but with confusion rising and the threat of the deal falling apart the closer we get to the Vienna meeting, it may be the 2+ year high in longs that is responsible for the next big move lower.




This could spell trouble for Venezuela’s state owned oil company PDVSA. They need to swap a bond issue for a longer duration back into 2020.  If investors say no then this might cause a default

(courtesy Julieanne Geiger/OilPrice.com)

A Failed Bond Swap Deal, Low Oil Prices Could Signal The End For PDVSA… And Venezuela

submitted by Julieanne Geiger via OilPrice.com,

Venezuela’s PDVSA is in the hot seat today, with only one business day left for investors to take or leave its $5.3 billion 2017 bond proposal to push new notes back into 2020.

The likelihood of investors accepting this deal depends on how flexible the floundering Venezuelan oil company is at the hypothetical negotiating table in the final hours, according to two analysts.

“If the swap doesn’t happen, they’re in big trouble for next year,” said Francisco Monaldi, Latin American energy policy fellow at the Baker Institute for Public Policy. “I think they’re really worried about that.”

Monaldi added that PDVSA was hoping that the swap—along with oil prices—would rescue it from the precarious position it is now in, but neither remedy is looking too hopeful at this point.

Raul Gallegos, Control Risks senior analyst, said of the swap deal that the initial terms were not enough to lure investors, and that the adjusted terms were not “doing much for investors” either, adding that if oil prices ticked up a bit, it might be enough to get them through next year.

Despite the hard road ahead, the analysts believe that it is possible for PDVSA to “still scrape through” next year without default.

Although yields on the Oct 28th 2016 notes are exploding as the market is increasingly worried about disappointment…

Venezuela’s crude production has been on almost a steady decline since 2014, according to secondary sourcesreported by OPEC—from an average of 2.36 million barrels per day for all of 2014, to an average of 2.09 million barrels per day in September 2016.

Venezuela has been one of the most vocal advocates for an OPEC production cut, which may be the only thing that could save PDVSA—and Venezuela as a whole—from the brink of disaster.



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


Euro/USA   1.0991 UP .0021/REACTING TO NO DECISION IN JAPAN AND USA + huge Deutsche bank problems 


GBP/USA 1.2142 DOWN .0030 (Brexit by March 201/pound clobbered)

USA/CAN 1.3141 UP .0014

Early THIS MONDAY morning in Europe, the Euro ROSE by 21 basis points, trading now well above the important 1.08 level RISING to 1.0991; 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,  THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK / Last night the Shanghai composite CLOSED DOWN 22.64 OR   0.74%   / Hang Sang  CLOSED DOWN 195.77 POINTS OR 0.84%     /AUSTRALIA IS LOWER BY 0.83% / EUROPEAN BOURSES ALL IN THE RED

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED UP 43.75 POINTS OR 0.24%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 195.77  OR  0.84%  ,Shanghai CLOSED DOWN 22.64 POINTS OR .74%   / Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED IN THE GREEN/  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1254.40


Early MONDAY morning USA 10 year bond yield: 1.792% !!! PAR in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.550, DOWN 1 IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 97.99 DOWN 14 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING



And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 3.25% DOWN  5 in basis point yield from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -.052% down 1/3 in   basis point yield from FRIDAY

SPANISH 10 YR BOND YIELD:1.11%  DOWN 1/2 IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.40 UP 2  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 29 points HIGHER than Spain.





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

Euro/USA 1.0995 UP .0026 (Euro UP 26 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 103.85 UP: 0.145(Yen UP 14 basis points/POLICY ERROR ON BANK OF JAPAN

Great Britain/USA 1.2195 UP 0.0022( POUND UP 22 basis points

USA/Canada 1.3137 UP 0.0009(Canadian dollar DOWN 9 basis points AS OIL FELL TO 49.94


This afternoon, the Euro was UP by 26 basis points to trade at 1.0996


The POUND ROSE 22 basis points, trading at 1.2195/ AND REACTING BADLY TO UPCOMING BREXIT FROM EU 

The Canadian dollar FELL by 80 basis points to 1.3122, WITH WTI OIL AT:  $50.08


the 10 yr Japanese bond yield closed at -.054%  PAR  IN BASIS POINTS / yield/ AND THIS IS BECOMING BOTHERSOME TO THE BANK OF JAPAN

Your closing 10 yr USA bond yield:DOWN 2  IN basis points from FRIDAY at 1.759% //trading well below the resistance level of 2.27-2.32%) very problematic

USA 30 yr bond yield: 2.518 DOWN 2  in basis points on the day /*very problematic as all bonds globally rose in yield (lowered in price)


Your closing USA dollar index, 97.89 DOWN 24 CENTS  ON THE DAY/4 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 2:30 PM EST

London:  CLOSED DOWN 66.00 POINTS OR 0.94%
German Dax :CLOSED DOWN 76.81 OR  0.73%
Paris Cac  CLOSED DOWN 21.69 OR 0.46%
Spain IBEX CLOSED DOWN 27.70 OR 0.31%
Italian MIB: CLOSED UP 38.97 POINTS OR 0.23%

The Dow was DOWN 51.98 points or 0.29%  4 PM EST

NASDAQ  DOWN 14.34 points or 0.27%  4 PM EST
WTI Oil price;  49.94 at 2:30 pm; 

Brent Oil: 51.50   2:30 EST




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: $51.65

USA 10 YR BOND YIELD: 1.768%

USA DOLLAR INDEX: 97.89 down 24 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.21796 up .0009 or 9 basis pts.

German 10 yr bond yield at 5 pm: +055%


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


Bonds & Bullion Bid, Stocks Skid As China Currency Collapse Continues

The storms are coming…


For the 11th day of the last 12, the Yuan has weakened to fresh 6 year lows for Offshore…


And the effects are starting to ripple through markets.

US equity futures show the desperate effort to pump stocks green around the US open… with an ugly close


Small Caps clung to unch as much as possible but major indices ended lower led by Trannie weakness…


Leaving the S&P closing near 3-month lows… (2125.77 lows on 9/14)


VIX was smashed above 17 briefly at the open but drifted lower all day… unable to spark any bounce in stocks…


Notably “Most Shorted” stocks have considerably underperformed the last 2 days (ammo for a squeeze?)


Deutsche Bank stock slipped once again after an early rally…


Treasury yields collapsed from some overnight weakness in bonds with 30Y yields dropping over 7bps high to low (and the curve flattening)…


The USD tested new cycle highs overnight before being sold all day to close lower…


Crude fell back below $50 but the weaker USD appeared to help PMs… (as copper kept sliding on China concerns)


Charts: Blooomberg

Bonus Chart: A reminder of Industrial Production weakness…



A huge miss for the all important NY Empire Manufacturing Fed report showing contraction at -6.8 vs 1.0 expectation.  The June dead cat bounce is officially over.

(courtesy NY Mfg Empire (NY) Fed index/zero hedge)

Empire Fed’s Dead-Cat-Bounce Dies As New Orders, Labor Remain Weak

Following September’s mixed bag of disappointing regional Fed surveys, October has started off poorly with a big miss for Empire Fed (-6.8 vs +1.0 exp). June’s dead cat bounce is officially over with the index sliding to 5 month lows led by continued deterioration in New Orders and workweek. Hope rose modestlywith new orders expected to pick up.

Unequivocally not great…

As the Empire Fed warns the labor market remains weak…

After reaching their lowest levels of the year last month, both labor market indexes rose, but remained negative. The employment index increased ten points to -4.7 and the average workweek index edged up one point to -10.4, indicating that employment counts and hours worked continued to decline. The prices paid index increased six points to 22.6, suggesting that input prices continued to rise at a moderate pace, and the prices received index increased three points to 4.7, pointing to a slight upturn in selling prices.





Industrial production contracts for the 13th straight month.  This is another important indicator suggesting that the real USA economy is in turmoil

(courtesy zero hedge/Industrial production)

Industrial Production Contracts For 13th Straight Month – Longest Non-Recessionary Streak In US History

For the 13th straight month US Industrial Production contracted year-over-year. The 1.00% annual drop extends the weakness to the longest non-recessionary streak in US history. Aerospace and Home Electronics saw the biggest drops in production with motor vehicles managing a modest increase as manufacturing beat expectations MoM.

Probably nothing…

Capacity Utilization also missed expectations hovering at cycles lows around 75.4%…

Time to hike rates?




The truth behind the true budgetary deficit and the real added national debt for Fiscal year 2016:

(courtesy Jim Quinn/Burning Platformblog)

Is Obama Juicing Government Spending To Get Hillary Elected?

Submitted by Jim Quinn via The Burning Platform blog,

During the last year of his reign of error, our beloved Nobel Peace Prize winner, Obama ran out of government accounting gimmicks to falsely proclaim Federal deficits have been falling. His legacy of debt accumulation will go down in history as the last dying gasps of a crumbling empire built upon Keynesian delusions, political corruption, and a Deep State establishment hellbent upon retaining power at the cost of global war and financial collapse.

The entirely fabricated government propaganda data point known as the Federal deficit skyrocketed by 34% in fiscal 2016 (Federal year is Oct. 1 to Sept. 30). The reported deficit in FY15 was a mere $438 billion. Obama and his brain dead minions had boasted about such a small deficit. The country has been in existence for 227 years and Obama had the balls to boast about “achieving” the 8th highest deficit in our history. Just for some context, the savior also led the country to the 1st, 2nd, 3rd, 4th, 5th, and 6th highest deficits in the country’s history. Bumbling Bush achieved the 7th highest in the glorious year of 2008.

The $149 billion surge in the reported deficit to $587 billion is a national disgrace and happened during a year in which we supposedly aren’t waging any real wars. Even with artificially suppressed interest rates, interest on the national debt went up by $30 billion. The Obamacare abortion has caused healthcare spending to soar, blowing a hole in the Federal budget. Remember Obama bloviating about Obamacare not adding one dime to the national debt? He was right. It’s adding trillions of dimes to the national debt. But, at least every family in America has gotten that promised $2,500 savings in their annual premiums. Right?

Another reason for the surge in the reported deficit is the little accounting trick the Obama administration has been playing for years. Fannie Mae and Freddie Mac are insolvent zombie Federal Agencies. With the suspension of mark to market accounting in March 2009, Wall Street banks and these bloated pig agencies were free to fraudulently value the mortgages on their balance sheets.

Poof!!! Wall Street bank profits miraculously recovered. Fannie and Freddie began reporting tens of billions in fake profits. They then pretended to pay these fake accounting profits to the Treasury, thereby “reducing” the reported deficits. Last year Fannie and Freddie ran out of fake profits and are now losing money again. And the establishment wonders why the peasants are revolting.

What is more fascinating is the virtual halt in Federal revenues. They grew less than 1% in FY16. How could that be? The corporate mainstream media, the government apparatchiks, and our esteemed leader Obama assure us the economy is growing, unemployment is a minuscule 5%, and everything is coming up roses. Vote Hillary to keep prosperity growing. If the economy was growing, corporate profits would be higher, leading to more taxes paid to the government.

If employment was as strong as I’m told, all those employed Americans would be filling the Federal coffers with dough. Oops!! Corporate tax receipts are plunging. The $1.55 trillion of individual income taxes extracted at gunpoint by the Feds was flat with the prior year. Someone might be lying about that growing economy and awesome jobs numbers.

Now for the best part. The $587 billion reported deficit might be a smidgen low compared to the real deficit. The sliced, diced and massaged for a happy ending, reported deficit number has no relation to the actual deficit. Interest is paid on the national debt, not fake government accounting deficits. The real question is how much did the national debt go up in FY16. The answer is: we have no fucking idea.

First, let’s dispense with the notion it went up by $1.4 trillion as many people have been reporting. It did not. Our feckless politician drones happened to have one of their regular government shutdowns that crossed the FY15 and FY16 fiscal years. They pretended the national debt stopped in its tracks during the shutdown. It did not. The government continued to take in revenue and spend like drunken sailors.

In March 2015 the government boobs pretended the country was having a budget crisis and stopped counting the national debt at $18.152 trillion. They didn’t start counting again until November 2, 2015 in the next fiscal year. Therefore, the government boobs only reported only a $328 billion increase in the national debt in FY15 and a $1.422 trillion increase in FY16. Both are false. Using basic mathematical skills, which the average Hillary voter would find racist, yields estimated increases in the national debt of $767 billion in FY15 and $982 billion in FY16.

It seems the FY16 REAL deficit was only $395 billion higher than the BULLSHIT deficit reported by Obama and his minions. Close enough for government work, I guess. Which number do you believe? It’s a damn shame the average American is mathematically challenged, willfully ignorant, and more knowledgeable about Beyonce’s fashion line than the national debt. So it goes.

To put this in perspective, our leaders didn’t think adding $2.1 billion of debt per day ($87.5 million per hour; $1.46 million per minute) on the backs of unborn future generations was quite enough. They decided to ramp it up to $2.7 billion per day in FY16, a 29% increase. At least these humongous deficits led to a booming 1.2% GDP growth and real household income at 1989 levels. Well done Obama and fellow Keynesian minions. Krugman and Summers think the politicians are pussies for not spending more.

Well it appears Obama and the establishment, in an all out effort to stop Trump, have decided to turn the spending up to 11. It seems rather odd the Federal government added $191 billion to the national debt over the last Three Months of the fiscal year, but has decided it was prudent to add $147 billionin the first Thirteen Days of October. That is an increase in the daily rate of debt accumulation from $2.1 billion per day to $11.3 billion per day. Only a 538% increase. Sounds legit. Right?

It’s almost as if Barack Obama is intentionally and desperately trying to breach the $20 trillion mark before he leaves office in January.

Let’s face the facts. The establishment is terrified of Trump and his deplorables. They are using their power of the captured corporate press to scorn, ridicule and destroy him. They are using falsified polls to convince the non-thinking masses Hillary is a mortal lock. They are throwing as much false shit at the wall as possible, hoping some of it sticks.

They know the economy is in the shitter and the average American is not better off than they were four or eight years ago. As a last ditch effort to keep this tsunami of history from rolling over them and sweeping away the last vestiges of their corrupt rule, they have ramped up the printing presses and government spending to try and make the masses believe the economy is hitting on all cylinders. It will fail, and the peasants will be coming for them.






Michael Snyder: 35% of Americans have debt that is at least 1/2 year past due

(courtesy Michael Snyder/EconomicCollapse Blog)

Drowning In Debt: 35% Of Americans Have Debt That Is At Least 180 Days Past Due



As we indicated above, the FED is now geared to steepen the yield curve and thus increase inflation beyond their magical 2%

(courtesy zero hedge)

The Fed, Like The BOJ, Is Now In The Curve Steepening Business: What That Means For Markets

Following Janet Yellen’s strange speech from Friday, titled “The Elusive ‘Great’ Recovery” in which a seemingly perturbed Yellen not only admitted that the Fed may have hit peak confusion and that 7 years after unleashing a global, multi-trillion asset reflation experiment, it has not only failed to reflate non-market assets (at least both bonds and stocks are near all time highs on central bank buying), but in which the Fed chair also admitted the Fed is not even sure it understands the phenomenon of inflation any more, and in which Yellen’s reference to stoking a “high-pressure economy” and the lack of a mention of raising interest rates (coupled with her suggestion that the Fed “may want to aim at being more accommodative” during recoveries) was initially seen as a dovish sign, the just as confused market first rose, then fell after it reintrepreted her comments not so much as dovish, but as refering “financial stability”, something that Eric Rosengren explained earlier on Friday refers to steepening the yield curve, which in effect is a tapering of long-end purchases, or – as we first dubbed it when previewing the BOJ’s similar operation – a reverse Operation Twist.

The result was a prompt jump in 10Y and 30Y TSY yields to session highs on Friday after Yellen’s speech discussing “plausible ways” to reverse adverse supply-side effects by temporarily running a “high-pressure economy”, but more importantly the 5s30s steepened. Indeed, the selloff in long end saw 30Y yields rise by more than 7bp, topping 2.55% for 1st time since June 23 Brexit vote, the 10Y yield was higher by 5bp at 1.791%, above closing levels since June 2, while the short end barely budged.

But the steepening mood started not with Yellen but with Eric Rosengren, the president of the Boston Fed President, who dissented from the FOMC’s decision to hold rates steady at its September meeting, and who said is perplexed by historically low 10-year Treasury yields, which “haven’t rebounded as in other recoveries, with investors willing to accept a vanishingly small premium over their inflation expectations to hold them.”

Perhaps the reason for that is that despite the endless rhetoric, there hasn’t actually been a, you know, “recovery.”

As Bloomberg’s Daniel Kruger observed, Rosengren cited the Fed’s extensive holdings of 10-year Treasuries as a reason, but speculated that there’s a more likely and enduring cause: safety, in the wake of the financial crisis, is more expensive than it used to be. “It’s a global phenomenon. In 2006 a 10-year Treasury buyer received 2.3 percentage points more in interest than the market’s 10-year inflation forecast. That’s fallen to 0.2 percentage points this year. Spreads have narrowed in Japan and Germany, as well. Buyers of 10-year JGBs now get 0.4 percentage point less, and in Germany it’s an 0.8 percentage point less.”

So, not surprisingly, just like the BOJ before it, Rosengren suggested to use the Fed’s balance sheet to steepen the yield curve. The gap between five- and 30-year debt has widened 0.24 percentage point from the 20-month low of 1.03 percentage points in August. And with about one-fourth of the Fed’s $2.46 trillion in Treasuries matures in 2027 or later, selling a portion would certainly widens the curve even more. However, it will most certainly backfire should investors sell risk assets in order to fund purchases of long-term Treasuries at suddenly higher yields, which as we explained just over a month ago, is the dreaded VaR shock scenario where a rapid selloff in bonds promptly migrates to other risk assets courtesy of risk-parity deleveraging, which in turn forces a scramble for “safety”, i.e., the very same long-maturity securities, whose selloff prompted the panic in the first place.

Indeed, as Kruger points out, removing stimulus from the long-end of the bond market isn’t going to boost risk appetite in broader financial markets or stimulate growth. In other words, it will lead to more selling, something which US equity futures appear to be doing right this very moment.

* * *

The Fed is not the only one suddenly expecting a notably steeper yield curve. Over the weekend, Deutsche Bank’s Dominic Konstam who until recently expected the 10Y to drop as low as 1.25%, has also changed his mind and now expects the long end to rise due to the market’s expectations of further steepening.

But it won’t all be song and games, because as Dalio and Goldman have both warned, should rates move too high, too fast, MTM losses will become so great that the move itself will provoke a scramble right back into fixed income, and other deflationary, assets.

This is what Konstam said in his Credit Weekly publication:

If we are right and yields continue to rise with the curve steeper, there will inevitably be concern for risk assets and perhaps for the economic “recovery”. For this reason we think investors should view the moves as more tactical rather than structural and, importantly, consistent with easier policy at the front end. In the extreme the BoJ and ECB can ease still further to underwrite the steeper yield curve while the Fed can delay hikes for longer. While many investors have been lulled into a sense of low long rates are desirable, we continue to think that the central banks are shifting gears whereby steeper yields curves per se are more desirable for helping to stabilize bank profits and higher long yields per se for the entitlement industry as well as to soften the hunt for yield that may be driving excessively low risk premia in risk assets.  The BoJ target for zero 10s is clearly in this framework – although as we argued two weeks ago the logic must be a dramatic decline in short rates to support 1s5s JGB curve steepening AND 5s10s JGB curve flattening so that 5y5y can fall or at least be stable relative to the US especially, despite sticky 10 year JGB yields. In turn, this will allow for a weaker yen. A weaker yen is critical to raise inflation expectations – it is about the only thing that matters for Japanese inflation. As of now note there has been a decent steepening in 1s5s (5 bps over 2 weeks vs. recent low of just 7 bps) while 5s10s has been stable to slightly flatter although overall 5y5y is slightly higher.

Rosengren’s statement that…”[I]f one were concerned about the historically low 10-year Treasury and commercial real estate capitalization rates, perhaps because of potential financial stability concerns, the balance sheet composition could be adjusted to steepen the yield curve” After the Great recession. A Not-So-Great Recovery FRB Boston, October 14, 2016, we think is an important new augmented angle from the Fed that fits well with our thesis. Below we look at options that the Fed might take in the event that it also wanted to steepen the yield curve.

As an illustration of the sorts of financial stability concerns we have been highlighting the richness of the SPX in relation to real yields and breakevens and specifically how this richness has been achieved via specific sectors that have performed increasingly well even as breakeven yields have fallen – the coefficients have effectively flipped since 2013 for sectors like healthcare, utilities, staples. This shows up as a compression of earnings yields to (falling) nominal yields via lower real yields and stable to lower breakevens. Restoring risk premia in the bond market therefore will at least forestall a further richening in risk assets but may also allow for some reversal. To the extent that breakevens recover with real yields still relatively low should at least though limit the risk asset correction – a pause that refreshes rather than a tantrum. Again the idea is that this is tactical not structural. There is an important distinction to make versus late last year when the fed was not just hiking but threatening to hike every quarter so real yields themselves had a full on tantrum as the dollar soared. This is exactly what needs to be avoided and we expect it to be avoided in the context of the current ongoing policy re-jig.

Twist Reversal?

Treasury curve steepened on Rosengren’s comments about adjusting Fed’s balance sheet to steepen the yield curve on financial stability concerns. The change in Fed’s balance sheet composition could steepen the yield curve similar to how Twist flattened the curve in 2011 and 2012. Fed portfolio extension during Twist was worth about 45-50bp in 5s-30s based on our model.

We fit 5s-30s curve to Fed funds to 2s and Fed portfolio average maturity from November 2010 to December 2012 to capture Twist effect. The original intension was to extend our ten-year bootstrap fair value model, which uses Fed funds to 2s and Fed funds target as input variables, to curve slope by adding the Fed portfolio maturity variable. As Fed funds target was unchanged during that period, that variable becomes irrelevant. Note that the Fed portfolio average maturity dominates in the regression with a -4.4 t-stats and a six-month lag. Twist contributed 50bp to the 5s-30s flattening during that period.

The coefficient on the Fed portfolio average maturity is about -0.014 per month. A one-year change Fed portfolio average maturity is worth about 17bp in 5s-30s.

To change the portfolio composition, the Fed can stop reinvestments of maturity coupon debt at 10- and 30-year auctions. Treasury then needs to borrow more from the market in the long end, steepening the curve. Alternatively, the Fed can stop reinvestments of maturity coupon debt at all auctions and use the proceeds to buy short dated coupon debt in open market operations while keeping the balance sheet stable.

One final warning: it was Rosengren’s comments, together with the hint that the BOJ would proceed will full blown curve steepening, in the week of September 5 that spooked markets which not only ultimately led to a dramatic steepening in the JGB curve, but also to the sharpest drop in the S&P since Brexit. Now, one month later, we have another set of even more vocal Rosengren comments and this time it is not the BOJ but the Fed which is suggesting the next big monetary move will be not more easing but implicit tightening via Reverse Twist. Meanwhile Libor is soaring and pressuring everyone who has floating exposure, while the rising long end is about to put an end to any housing “recovery.” As such, keep a close eye on risk assets not just overnight but in the next few days, as a “deja vu all over again” moment is increasingly likely, especially if the Ray Dalio’s of the world decide they would rather sit this one out…




The USA tries to silence Assange:  the Brits pull the plug on Assange’s interest connection in the Ecuadorian embassy inside London.

(courtesy zero hedge)

Wikileaks Activates “Contingency Plans” After Unknown “State Party” Cuts Julian Assange’s Internet Connection

In what may be the first official retaliation against Julian Assange and Wikileaks since the organization started disseminating the hacked Podesta emails, this morning WikiLeaks announced it has “activated contingency” plans after Assange’s internet link was intentionally cut off by a state party, WikiLeaks has said in a tweet.

Julian Assange’s internet link has been intentionally severed by a state party. We have activated the appropriate contingency plans.

There was little actual detail, aside from a subsequent tweet in which WikiLeaks called on the public to support it by donating.

Previously on Sunday, there was concern about Assange’s well-being when Wikileaks tweeted out what some suggested were the “dead man keys” that are allegedly the encryption codes for highly damaging secret documents to be uneviled in the case of Assange’s death.

pre-commitment 1: John Kerry 4bb96075acadc3d80b5ac872874c3037a386f4f595fe99e687439aabd0219809

pre-commitment 2: Ecuador

pre-commitment 3: UK FCO f33a6de5c627e3270ed3e02f62cd0c857467a780cf6123d2172d80d02a072f74

These may have been the “contingency plans” referred to in the subsequent Wiki tweet.

Even former outspoken Trump advisor Roger Stone got involved tweeting that “John Kerry has threatened the Ecuadorian President with “grave consequences for Equador” if Assange is not silenced” adding that “Reports the Brits storm the Ecuadorian Embassy tonite while Kerry demands the UK revoke their diplomatic status so Assange can be seized.”

John Kerry has threatened the Ecuadorian President with “grave consequences for Equador” if Assange is not silenced@StoneColdTruth

Reports the Brits storm the Ecuadorian Embassy tonite while Kerry demands the UK revoke their diplomatic status so Assange can be seized

So far this appears to be just wild speculation. The latest news in the Assange saga comes as WikiLeaks continues to release on a daily basis hacked emails from Hillary Clinton’s campaign manager John Podesta, which could ruin Clinton’s chances of becoming the next US president. Clinton’s campaign has suggested that WikiLeaks is working together with the Russian government to help defeat them in favor of Trump. The latest, 9th, batch comes amid revelations of Clinton’s cozy relationship with the mainstream media, and how they work closely to control the media landscape and set up stories that show her in a favorable light. Earlier this month, it emerged that Hillary Clinton reportedly wanted to “drone” WikiLeaks founder Julian Assange when she was the US secretary of state.

So far there had been no intervention by outside entities to attempt to silence Julian Assange, so the latest intervention “by a state party”, if confirmed would be a notable escalation in the status quo, and suggests that Wikileaks may have even more damaging revelations to come.





Over the last two months we have brought to you the story of fraud and pension shortfalls in the Dallas police and firefighters pension fund.  Since the police there  know full well that at the end of the tunnel there will be no money for them, they are leaving the force right now and collecting big lump sum payment:

(courtesy zero hedge)

Dallas Cops Retire In Droves; Take Lump Sum Pensions Fearing Money Isn’t There (And It Isn’t)

Submitted by Michael Shedlock via MishTalk.com,

The Dallas police and firefighters pension fund has just 45% of the money it needs to cover benefits. The fund rates to be out of money in 15 years at the current rate of withdrawals.

For those eligible, the sane thing to do is retire and take a lump sum payout before the money is all gone.

That’s precisely what’s happening, and it is further pressuring the system.


Please consider Dallas Police See Exodus as Doubts Rise on Pension Promises.

Dallas’s police and firefighters are quitting in droves, wagering that financial-market losses are about to render their promised pensions too good to be true.


With the city considering benefit cuts to help close a retirement-fund shortfall that grew by $1.2 billion last year, more than 200 workers have decided to retire or leave, about double the normal rate, said Mayor Pro Tem Erik Wilson, who sits on the Dallas Police and Fire Pension System’s board.


“I’ve had 40 to 50 officers in my office this week asking what they should do,” said James Parnell, 52, secretary-treasurer of the Dallas Police Association and 25-year veteran. “They’re very nervous about what is going to happen, they’re fearing a run on the money.”


In the year through June, U.S. state and local-government plans posted the smallest gains since 2009, leaving them with almost $2 trillion less than they will eventually need, according to data from the Wilshire Trust Universe Comparison Service and the Federal Reserve.


The squeeze on Dallas’s fund is even more acute because of a decision to divert money from stocks and bonds into Hawaiian villas, Uruguayan timber and undeveloped land in Arizona, among other non-traditional investments. The strategy, put in place under prior managers, backfired. The fund lost 12.6 percent in 2015 and 0.7 percent over the past three years.


On Monday, dozens of city employees and retirees packed into a meeting where officials discussed options for dealing with a possible liquidity crisis brought on by the increase in retirements.


The public-safety system has just 45 percent of the assets it needs to cover benefits, down from 64 percent at the end of 2014 and half what it was a decade ago. The pension could be out of cash in 15 years at the current rate of projected expenditures, according to a Segal Consulting report in July.


Officials don’t know if making changes to the deferred compensation plan “will be enough to keep it solvent” because the “program isn’t sustainable,” said Dallas City Councilwoman Jennifer Staubach Gates, who also is a member of the pension board.


“We’re trying to address some really alarming numbers,” said Gates.

Bankruptcy Law

Unlike Illinois whose pensions are in even worse shape, Texas specifically allows chapter 9 filings according to the Governing.Com article Municipal Bankruptcy State Laws.

Sensible Actions

  1. The sensible solution is municipal bankruptcy coupled with big pension haircuts.
  2. Before the pension fund implodes, the sensible action for Dallas police and firefighters is to retire ASAP and take a lump sum payment.
  3. Point number two ensures that a run once started is likely to be fast and furious, which is where we are at today.

This is going to get interesting in a hurry.


Let us close tonight’s commentary with an interview with one of my favourites:  Rob Kirby and Greg hunter of uSAWatchdog/


(courtesy Greg Hunter/USAWatchdog/Rob Kirby)


All Paper Will Burn-Rob KirbyBy Greg Hunter On October 16, 2016

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

Macroeconomic analyst Rob Kirby has wealthy global connections. He says forget about the recent takedown in precious metals because his sources don’t think anything paper will survive the upcoming financial meltdown. Kirby explains, “The commentary that I get from people with much higher pay grades than me is that, in the end, the only thing that will stand is physical metal gold and silver. They say all paper will burn.” Kirby goes on to confirm that “stocks, bonds and pensions” will be toast.

When is this going to happen is the trillion dollar question. HSBC just put out a “red alert” to its clients of a “severe fall” coming for stocks. How does Kirby view this type of dire warning from a big bank? Kirby thinks, “They want to try and position themselves so they can say hey, we warned you. They can say we knew it was coming because anybody with a brain could see it was coming. They can say they were trying to alert people. Basically, they are trying to sanitize their image before the inevitable occurs.”

Kirby says the battle that is going on in this election cycle is much deeper than a contest of political parties. Kirby explains, “The battle that we see being conducted in America right now is not a Republican vs. Democrat fiasco at all. It is criminality against the good guys. Maybe you call it the globalists against the nationalists or human against anti-human. This circus that is being played out in a completely bought and paid for American media is taking on comic book type references. I’ve seen more serious information being disseminated on Monty Python shows than what we are currently getting in the U.S. mainstream media (MSM). . . . It’s almost unbelievable that we are living this and watching it happen.”

Kirby is most worried about global war to cover up a seriously troubled financial system. Kirby warns, “We’ve seen an awful lot of rumblings on the war front. We recently saw Russia say there is a no-fly zone in Syria. We have also seen bellicose remarks in return from the Obama Administration about preparedness for war. I believe that the Royal Air Force (UK) has just been given permission to shoot down Russian planes. Things don’t look good on that front. In recent days, we have seen the Obama Administration say they are no longer going to talk to the Russians. When you have a very loaded ammo hut, maybe the best course of action is not to enter the ammo hut with a flamethrower.”

Join Greg Hunter as he goes One-on-One with financial expert Rob Kirby ofKirbyAnalytics.com.

(There is much more in the video interview.)

Video Link

http://usawatchdog.com/all- paper-will-burn-rob-kirby/

After the Interview:

Rob Kirby goes on to say that the 2016 election in the U.S. comes down to a simple theme. Kirby says, “If the Democrats win, we will have nuclear war. A vote for Hillary Clinton is a vote for war.”



Well that is all for today

I will see you tomorrow night



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