Gold $1271.90 up $9.90
Silver 17.74 UP 18 cents
In the access market 5:15 pm
Gold: 1274.50
Silver: 17.77
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
.
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 25 (10:15 pm est last night): $ 1267.47
NY ACCESS PRICE: $1264.50 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1272.13
NY ACCESS PRICE: 1267.00 (AT THE EXACT SAME TIME)
HUGE SPREAD TODAY!! 5 dollars
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: OCT 25: 5:30 am est: $1269.30 (NY: same time: $1268.90: 5:30AM)
London Second fix OCT 24: 10 am est: $1267.40 (NY same time: $1267.60 , 10 AM)
Shanghai premium in silver over NY: 70 cents.
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.
end
For comex gold:
250 NOTICES FILED FOR 25,000 OZ
For silver:
for the Oct contract month: 4 notices for 20,000 oz.
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Let us have a look at the data for today
.
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In silver, the total open interest ROSE by 1,650 contracts UP to 193,979. The open interest ROSE as the silver price was UP 11 cents in yesterday’s trading .In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .969 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia &ex China).
In silver for October we had 4 notices served upon for 20,000 oz
In gold, the total comex gold ROSE by 6,185 contracts DESPITE the FALL in price of gold ($3.90 YESTERDAY) . The total gold OI stands at 506,768 contracts.
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With respect to our two criminal funds, the GLD and the SLV:
GLD
TODAY WE HAD A BIG CHANGE AT THE GLD: A DEPOSIT OF 3.27 TONNES INTO THE GLD
Total gold inventory rests tonight at: 956.83 tonnes of gold
SLV
we had NO CHANGES at the SLV/
THE SLV Inventory rests at: 366.366 million oz
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver ROSE by 1,650 contracts UP to 193,979 as the price of silver ROSE by 11 cents with yesterday’s trading.The gold open interest ROSE by 6,185 contracts UP to 506,768 as the price of gold FELL $3.90 IN YESTERDAY’S TRADING.
(report Harvey).
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 3.69 POINTS OR 0.12%/ /Hang Sang closed DOWN 308.97 OR .17%. The Nikkei closed UP 130.83 POINTS OR 0.76% Australia’s all ordinaires CLOSED UP 0.63% /Chinese yuan (ONSHORE) closed DOWN at 6.7765/Oil ROSE to 50.77 dollars per barrel for WTI and 51.56 for Brent. Stocks in Europe: ALL MIXED Offshore yuan trades 6.7822 yuan to the dollar vs 6.7765 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS AS MORE USA DOLLARS ATTEMPT TO LEAVE CHINA’S SHORES / CHINA SENDS A MESSAGE TO THE USA TO NOT RAISE RATES IN DECEMBER.
REPORT ON JAPAN SOUTH KOREA NORTH KOREA AND CHINA
3a)THAILAND/SOUTH KOREA
none today
b) REPORT ON JAPAN
none today
c) REPORT ON CHINA
4 EUROPEAN AFFAIRS
i)GERMANY
Germany conducts 13 anti terrorism raids across 5 German states citing imminent terror threat. Nobody arrested yet;
( zero hedge)
ii)ITALY
Monte de Paschi records a huge loss again but the stock declines not because of the loss but because of a proposed debt swap with existing bond holders
( zero hedge)
iii)GREAT BRITAIN
Great Britain Pound/USA dollar collapses in a flash crash ahead of Carney’s speech:
trading this morning: 1.2120
(courtesy zero hedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
none today
6.GLOBAL ISSUES
i)Today, Caterpillar warns of economic weakness throughout the globe and cuts guidance again
( zero hedge)
ii)Top University faked results and scammed huge amounts of taxpayer money
Global warming in itself is a scam
( Mish Shedlock/Mishtalk)
7.OIL ISSUES
i)There is really no chance of a deal as Russia is against production cuts. Oil falls below 50 dollars again.
( zero hedge)
ii)Suddenly at the end of the day, oil tumbles with a large inventory build:
( zero hedge)
8.EMERGING MARKETS
i)Venezuela narrowly escapes bankruptcy with a debt swap to save their national oil company but this will only last for a short while: oil production continues to plung
(courtesy Nick Cunningham /Oil Price.com)
ii)Oh OH!! this is interesting: the uSA is now said to be closing in on PDVSA seizures due to fraud
( Bloomberg/Bartenstein)
9.PHYSICAL STORIES
i)A great interview of Bill Holter
( SGT/Bill Holter)
ii)John Embry comments on the huge debt in the USA at over 106% of GDP. He also comments on Alasdair Macleod’s paper where he states that the true gold price is 8 or 9 x the current price
( John Embry/Kingworldnews)
iii)Hugo..how he became a gold bug early in his life.
( Hugo Salinas Price)
iv)Have fun with this: Gold coin worth 250,000 pounds discovered in a child’s pirate collection!
( London Daily Mirror/GATA)
v i.)Russia intends to sell some of its gold to meet its budgetary deficits. What will be very harmful is the selling of its vast hoard of diamonds. Gold did not react because it is obvious that China will purchase all gold that Russia wants to sell
( Pravda/GATA)
v ii)Lawrie Williams also comments on the story that Russia may need to sell some gold to boost their current account. He states that they have done this before and never sell gold
( Lawrie Williams/Sharp’s Pixley)
vi)The centerpiece of the gold fraud:
( Ronan Manly/)
vii)Higher prices and taxes are curbing demand in India for gold. Or maybe the Indians are just smuggling gold into the country.
( Sanderson/London’s Financial times)
ix)The following is very important: Goldman Sachs sees a rising gold demand in China as their yuan sinks in value
( Goldman Sachs/GATA)
x)Dave Kranzler and Bill Murphy discuss the East’s massive accumulation of gold and they can live with the manipulation as they acquire precious metals on the cheap. Both comment on the fact that we have a huge premium in the price of gold in Shanghai than in NY and this will lead to arbitration
( Bill Murphy/Dave Kranzler IRD)
xi)A great commentary on the huge environmental BPH spill in Brazil. The country may charge the company with homicide due to the 19 deaths due to that spill. There is also a 44 billion dollar damage lawsuit on this matter.
10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER
i)The Obama administration now confirms that premiums on Obamacare will surge 25% on average across the board
( zero hedge)
ii)Larry Lindsay former Chair of the Fed and a Gary Johnson supporter states correctly that the most dangerous candidate is the one that the media is paying the least attention to: Hillary Clinton;
( zero hedge)
iii)Home Prices in the USA are now just back to the 2006 record levels
( Case Shiller/zero hedge)
iv)Not a very good sign, the Conference Board’s Consumer Confidence index declines yar over year:
v)It sure looks like a huge coverup: the President is aware of Hillary’s private server well in advance of what he stated on air:( zero hedge)
viDilbert creator Scott Adams comments on why he is supporting Trump and he now emphasizes that he is sure that Trump will win by a landslide
( Dilbert/Scott Adams)
Let us head over to the comex:
The total gold comex open interest ROSE BY 6,185 CONTRACTS to an OI level of 506,768 as the price of gold FELL $3.90 with YESTERDAY’S trading.
We are in the delivery month is October and here the OI GAINED 26 contracts UP to 324. We had 0 notices filed YESTERDAY so we GAINED 26 contracts or 2,600 additional oz will stand for delivery.
The next delivery month is November and here the OI FELL by 258 contract(s) DOWN to 2436 contracts. This level is extremely elevated as generally November is a very poor delivery month.To give you an idea of size, on Oct 24 2015, we had an OI of only 253 contracts standing. Eventually by the end of Nov 2015, 214 notices stood for delivery for 21,400 oz (.6656 tonnes).The next contract month and the biggest of the year is December and here this month showed an increase of 3,004 contracts up to 373,092.
And now for the wild silver comex results. Total silver OI rose by 1,650 contracts from 192,329 up to 193,979 as the price of silver ROSE to the tune of 11 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 fell by 48 contracts down to 41. We had 48 notices filed yesterday so we NEITHER GAINED NOR LOST ANY SILVER contracts that will stand for delivery.The November contract month saw its OI GAIN 9 contracts UP to 333. The next major delivery month is December and here it FELL BY 564 contracts DOWN to 148,348.
we had 4 notices filed for 20,000 oz
VOLUMES:
Today the estimated volume was 66,645 contracts which is simply awful.
Yesterday’s confirmed volume was 193,755 which is fair.
today we had 1 notice filed for 5,000 oz of silver:
Gold | Ounces |
Withdrawals from Dealers Inventory in oz | NIL |
Withdrawals from Customer Inventory in oz nil |
6,660.003 oz
DELAWARE
MANFRA
INCL 1 KILOBAR
|
Deposits to the Dealer Inventory in oz | nil oz |
Deposits to the Customer Inventory, in oz |
10,933.9956 oz
BRINKS
DELAWARE
|
No of oz served (contracts) today |
250 notices
25,000 oz
|
No of oz to be served (notices) |
74 contracts
7400
oz
|
Total monthly oz gold served (contracts) so far this month |
9413 contracts
941,300 oz
29.278 tonnes
|
Total accumulative withdrawals of gold from the Dealers inventory this month | oz |
Total accumulative withdrawal of gold from the Customer inventory this month | 378,888.8 oz |
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 250 contracts of which 0 notices were stopped (received) by jPMorgan dealer and 164 notice(s) was (were) stopped/ Received) by jPMorgan customer account.
March 2015: 2.311 tonnes (March is a non delivery month)
Silver | Ounces |
Withdrawals from Dealers Inventory | NIL |
Withdrawals from Customer Inventory |
629,774.360 oz
HSBC
SCOTIA
|
Deposits to the Dealer Inventory |
NIL OZ
|
Deposits to the Customer Inventory |
495,407.400 oz
JPM
|
No of oz served today (contracts) |
4 CONTRACT(S)
(20,000 OZ)
|
No of oz to be served (notices) |
37 contracts
(185,000 oz)
|
Total monthly oz silver served (contracts) | 500contracts (2,500,000 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 | 6,508,272.3 oz |
end
NPV for Sprott and Central Fund of Canada
Central fund data not available today.
end
And now your overnight trading in gold,MONDAY MORNING and also physical stories that may interest you:
Value of Gold – Unlike Paper Currency Gold Maintained Value Throughout Ages
The Value of Gold
“Unlike paper currency, coins or other assets, gold has maintained its value throughout the ages.”
Jill Kerby, personal finance expert and Mark O’Byrne, Research Director of GoldCore were interviewed by Sinead Desmond of ‘Ireland AM’ on TV3 this morning about the “value of gold” as a store of wealth and financial insurance in our “electronic age”.
The ‘What’, ‘Why’ and ‘How’ of owning physicla gold were discussed and a range of gold bullion coins and bars displayed.
Jill Kerby made the important point that paper and electronic money today has no real value in and of itself due to separation of them from the original sources of money – gold and silver:
“Digital money now is taking the place of what we used to use, not that long ago, people actually had real silver and real gold and we have paper money that generally represented how much gold and silver we had, just hundred years ago.
But the problem now of course is the seperation between that real moneyand the paper and ink stuff that we have and the electronic money we have today and as a result what you could buy a hundreds of years ago with a dollar bill or a pound note … Mark what is it, 90%?
There has been massive depreciation and devaluation of money over time.
The depreciation has continued and the big danger now is that central banks don’t want us to have gold, they hold onto it but they do want us using real money or even holding onto real money because it undermines their desire to keep inflating or depreciating the real value or the spending value of money.
I think we are moving to a cashless society aswell. There are pros and cons with that. Lot of pros and a lot of people think it is a good idea and certainly central banks do. The problem is that what it means is that you won’t even have the paper money to be able to take it out of the bank when they start with negative interest rates which is what we are moving towards as everyone knows.
Anyone with savings are getting no return and one of the criticisms of gold for many many years, calling it a “barbarous relic” is because it had no yield didn’t give you an annual interest rate or a reward for hanging onto it but that’s kind of true except that it never really lost its intrinsic value. Now cash is not returning a yield, there is no return of the money in the bank which is why …. people at home …
To Listen to or Watch the Interview Click Here
Gold and Silver Bullion – News and Commentary
Gold subdued on likelihood of Fed rate hike (Reuters)
Gold prices fall in Asia as stronger dollar, Fed rate views weigh (Investing)
As Yuan Sinks, Goldman Flags Scope for Gold Demand in China (Bloomberg)
India’s Gold Buying Seen Falling Marginally; Still Robust (Bloomberg)
Gold coin worth €280k found in child’s pirate treasure collection (Independent)
Why gold is glittering in India this Diwali (TheHinduBusinessLine)
Finance Bill — We’re finally keeping it real – McWilliams (DavidMCWilliams)
Pre-crime returns to America with new Airbnb law (SovereignMan)
How I Became A “GoldBug” – Salinas Price (Plata)
Cult of the expert – and how it collapsed (TheGuardian)
Gold Prices (LBMA AM)
25Oct: USD 1,269.30, GBP 1,037.53 & EUR 1,165.85 per ounce
24Oct: USD 1,267.00, GBP 1,034.89 & EUR 1,163.61 per ounce
21Oct: USD 1,263.95, GBP 1,033.79 & EUR 1,160.69 per ounce
20Oct: USD 1,269.20, GBP 1,034.65 & EUR 1,156.75 per ounce
19Oct: USD 1,269.75, GBP 1,031.29 & EUR 1,154.97 per ounce
18Oct: USD 1,261.65, GBP 1,031.15 & EUR 1,145.33 per ounce
17Oct: USD 1,252.70, GBP 1,029.59 & EUR 1,139.58 per ounce
Silver Prices (LBMA)
25Oct: USD 17.73, GBP 14.49 & EUR 16.30 per ounce
24Oct: USD 17.64, GBP 14.41 & EUR 16.19 per ounce
21Oct: USD 17.51, GBP 14.34 & EUR 16.08 per ounce
20Oct: USD 17.60, GBP 14.35 & EUR 16.03 per ounce
19Oct: USD 17.69, GBP 14.38 & EUR 16.11 per ounce
18Oct: USD 17.65, GBP 14.37 & EUR 16.03 per ounce
17Oct: USD 17.40, GBP 14.30 & EUR 15.83 per ounce
Recent Market Updates
– Fed Risks Lehman Crisis As US Recession Storm Gathers
– Silver Eagle Demand ‘Returned with a Vengeance’
– Cashless Society – War On Cash to Benefit Gold?
– “Higher Gold Prices” On Global Trade Slowdown – HSBC
– Euro “Will Collapse” As Is “House of Cards” Warns Architect of Euro
– Property Bubble In Ireland Developing Again
– “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 Risk
END
A great interview of Bill Holter
(courtesy SGT/Bill Holter)
|
END
John Embry comments on the huge debt in the USA at over 106% of GDP. He also comments on Alasdair Macleod’s paper where he states that the true gold price is 8 or 9 x the current price
(courtesy John Embry/Kingworldnews)
Overindebtedness can be resolved only by hyperinflation or hyperdeflation, Embry says
Submitted by cpowell on Mon, 2016-10-24 17:02. Section: Daily Dispatches
Or maybe by Venezuela-style rationing, shortages, and totalitarianism.
* * *
12:03p CT Monday, October 24, 2016
Dear Friend of GATA and Gold:
Sprott Asset Management’s John Embry tells King World News today that the overindebtedness of the United States and indeed the entire world foretell either hyperinflation or catastrophic debt deflation even as gold and silver prices are grossly suppressed by government intervention. An excerpt from Embry’s interview is posted at KWN here:
http://kingworldnews.com/paul-volcker-surfaces-and-what-the-elites-are-t…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Hugo..how he became a gold bug early in his life.
(courtesy Hugo Salinas Price)
Hugo Salinas Price: How I became a gold bug
Submitted by cpowell on Mon, 2016-10-24 23:08. Section: Daily Dispatches
6:10p CT Monday, October 24, 2016
Dear Friend of GATA and Gold:
Hugo Salinas Price, president of the Mexican Civic Association for Silver, who has turned 84, today recounts a little family history to explain, to use his words, how he became a gold bug from childhood. It might be more accurate to say he explains how time has vindicated him. His commentary is headlined “How I Became a Gold Bug” and it’s posted at the association’s internet site, Plata.com, here:
http://plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=294
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Have fun with this: Gold coin worth 250,000 pounds discovered in a child’s pirate collection!
(courtesy London Daily Mirror/GATA)
Gold coin worth L250,000 discovered in child’s pirate treasure collection
Submitted by cpowell on Mon, 2016-10-24 23:40. Section: Daily Dispatches
By Louie Smith
Daily Mirror, London
Monday, October 24, 2016
An 18th-century gold coin worth up to L250,000 has been discovered in a child’s pirate treasure collection.
The anonymous owner had been given the rare Queen Anne Vigo five guinea piece as a youngster by his grandfather.
With no idea of its value, he kept it in his toy box for pirate games until it was packed away and forgotten about.
But when his grandad died, he rediscovered the coin and gave it to his own son to play with — before experts told him it was one of 20 made of gold seized from Spanish treasure ships in Vigo Bay, Spain, in 1702. …
… For the remainder of the report:
http://www.mirror.co.uk/news/uk-news/gold-coin-worth-250000-discovered-9…
end
Russia intends to sell some of its gold to meet its budgetary deficits. What will be very harmful is the selling of its vast hoard of diamonds. Gold did not react because it is obvious that China will purchase all gold that Russia wants to sell
(courtesy Pravda)
Russia to sell gold amid budget problems, Pravda reports on source basis
Submitted by cpowell on Mon, 2016-10-24 23:57. Section: Daily Dispatches
By Alexey Viazovsky
Pravda, Moscow
Sunday, October 23, 2016
The Russian Finance Ministry intends to reduce purchases by the state fund of precious metals and stones. At the same time, it is planned to begin selling gold and diamonds to replenish the treasury.
A source told Pravda: “The reasons for this decision are clear. In Russia, there is a problem with the budget deficit, revenues are reduced, costs do not decrease, and the Finance Ministry is looking for ways to fill the revenue part … through the sale of gold and precious stone reserves. … The Finance Ministry has decided to take profits. …
… For the remainder of the report, in Russian:
http://www.pravda.ru/news/economics/24-10-2016/1316573-vyazovsky-0/
end
Lawrie Williams also comments on the story that Russia may need to sell some gold to boost their current account. He states that they have done this before and never sell gold
(courtesy Lawrie Williams/Sharp’s Pixley)
LAWRIE WILLIAMS: Russia may have to sell gold to boost current account
OCT
25
A report in Pravda suggests that the lower oil prices and the implementation of Western sanctions in particular have been having a particularly adverse impact on Russia’s current account and it may now become necessary to sell some of its gold reserves and diamond stocks to counteract a growing deficit.
Regarding gold, Russia is vying with Australia to be the world’s second largest producer of the yellow metal – indeed some projections suggest it could become the world’s largest gold miner within the next ten to fifteen years. The Russian Central Bank has also been the world’s largest official gold buyer in recent months. It is also the world’s no. 1 producer of diamonds mining around 25% of the global total.
Now whether this reported necessity to sell gold and diamonds is going to affect the country’s foreign reserves is not certain from the report. We seem to recall a similar statement a couple of years ago, but since then Russia has continued to buy gold for its reserves – indeed it is reported to have taken 15 additional tonnes into its Central Bank holdings in September, bringing the total to around 1,540 tonnes, worth around US$63 billion at current gold prices. This is the world’s sixth largest national official gold holding.
We will need probably to wait another 3 weeks or so for any official confirmation that Russia may be starting to dip into its official gold reserves to help reduce debt, or perhaps cutting the level of its central bank’s gold buying, or finding the gold from other stockpiled sources. Russia currently mines around 22.5 tonnes of gold a month.
-END-
The centerpiece of the gold fraud:
(courtesy Ronan Manly/)
Ronan Manly: How central banks and bullion banks work together to create imaginary gold
Submitted by cpowell on Tue, 2016-10-25 12:16. Section: Daily Dispatches
8:16a ET Tuesday, October 25, 2016
Dear Friend of GATA and Gold:
Examining records of the small gold reserves held by El Salvador’s central bank, gold researcher Ronan Manly today demonstrates how central banks, the International Monetary Fund, the Bank for International Settlements, and bullion banks work together to arrange for official gold reserves to multiply themselves on paper, residing on the books of many purported owners at the same time, creating a fractional-reserve bullion banking system. Manly’s report is headlined “Bullion Banks Pass the Parcel on El Salvador’s Gold Reserves” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/bullion-banks-pass-parcel-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
Higher prices and taxes are curbing demand in India for gold. Or maybe the Indians are just smuggling gold into the country.
(courtesy Sanderson/London’s Financial times)
Indian, Chinese love affairs with gold turn financial
Submitted by cpowell on Tue, 2016-10-25 13:07. Section: Daily Dispatches
By Henry Sanderson
Financial Times, London
Monday, October 24, 2016
For Surender Kumar Jindal, one of the biggest sellers of gold and silver bars in India, this year has not been good for business.
Gold may have rallied 20 per cent in US dollar terms, putting it on course for its first annual rise in four years. For the Indian market, though, that has contributed to a fall in demand for the physical metal. …
Lacklustre demand in India marks a fundamental change for the physical gold market. After prices dropped in 2013, hefty buying from India and China saw hundreds of tonnes of metal flow eastward from vaults in London.
However, analysts say this does not mean the world’s two largest consumers of the metal have lost their love for bullion, rather that the way people buy gold there is changing.
In China, gold is becoming an increasingly popular investment product through platforms run by the country’s state-owned banks that allow investments on the Shanghai Gold Exchange via smartphones and online. New financial investment products such as gold exchange traded funds have also started to see inflows. …
… For the remainder of the report:
https://www.ft.com/content/f04ef42a-96cd-11e6-a80e-bcd69f323a8b
end
The following is very important: Goldman Sachs sees a rising gold demand in China as their yuan sinks in value
(courtesy Goldman Sachs/GATA)
As yuan sinks, Goldman sees rising gold demand in China
Submitted by cpowell on Tue, 2016-10-25 12:59. Section: Daily Dispatches
From Bloomberg News
Tuesday, October 25, 2016
Further weakness in China’s currency and investors’ concerns over the outlook for the nation’s property market may spur gold demand in Asia’s top economy, according to Goldman Sachs Group Inc., which made the forecast as the offshore yuan sank to a record.
“The potential drivers of increased Chinese physical buying include purchasing gold as a way to hedge for potential currency depreciation in the face of capital controls,” analysts including Jeffrey Currie and Max Layton, wrote in a report dated Monday. Bullion consumption in China may also rise “as a way of diversifying away from the property market,” they said. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2016-10-25/as-yuan-retreats-goldm…
end
Sharp Pixley’s Julian Phillips comments on the huge liquidation of gold from the GLD which had no effect on the price of gold. He states that the demand for gold is quite robust
(courtesy Julian Phillips/Sharp’s Pixley)
What has riveted our attention this morning is the resilience of the gold price in the face of the massive sales from the SPDR gold ETF of 16.611 tonnes. This should have placed enormous downside pressure on the gold price, but the gold price barely blinked!
What does this tell us? It tells us that support at these levels is robust, to say the least. If the gold price can hold these levels then it will take only a small amount of buying to kick it higher. We suspect that the sales were in support of short positions if not short positions themselves. These will have to be covered when such buying starts and quickly.
It also confirms that Asian investment demand is reaching the physical market strongly now.
As to the dollar’s current strength we doubt it will hit above 100 on the dollar index. Hence we see the dollar topping soon, despite efforts from Japan or the E.U. to weaken their currencies. Monetary policy via easing seems to have expended its momentum, so we expect the drive to be taken out of the ‘currency wars’, with the exception of the Yuan. Nevertheless, we do expect sporadic pockets of volatility in currency markets in 2017.
Repeat: – This will provide an excellent climate for rising gold and silver prices throughout 2017. Gold ETFs – There were no changes in the holdings of the SPDR gold ETF and the Gold Trust yesterday, leaving their respective holdings at 953.564 tonnes and 228.16 tonnes.
Since January 4th this year, the holdings of these two gold ETFs have risen by 380.745 tonnes.
***
end
Dave Kranzler and Bill Murphy discuss the East’s massive accumulation of gold and they can live with the manipulation as they acquire precious metals on the cheap. Both comment on the fact that we have a huge premium in the price of gold in Shanghai than in NY and this will lead to arbitration
(courtesy Bill Murphy/Dave Kranzler IRD)
Bill Murphy: The Fundamentals Will Push Gold & Silver To Spectacular Levels
“Some sort of Black Swan event will come out of nowhere and cause an explosive move in gold and silver” – Bill Murphy on Shadow of Truth
In the absence of intervention, gold and silver would be trading at a level that is a few multiples higher from they “trade” now. At some point, some entity will want to take possession of a big “chunk” of gold or silver and will stand for delivery of the physical with the intent to remove that gold or silver from Comex vaults.
For now the big accumulators of physical gold (China, Russia, India) are content with the current rigged market price of gold as long as the west can continue to make deliveries into these countries. But at some point the west’s “cupboard” will be bare and big buyers will see what the Comex really has in its vaults. It’s at that point when the precious metals market will become interesting.
There is always the threat that the Shanghai Gold Exchange begins arbitraging out the price difference between the physical market (eastern hemisphere) and paper market (Comex, LBMA). Currentlysilver trades in China’s physical settlement market (Shanghai Futures Exchange) at a significant premium to the price on the COMEX paper market. The week of October 17, 2016 the average difference was well above $0.80 per ounce. This represents approximately a 45% difference. How large must the difference become before the physical market naturally overwhelms the paper market? The difference in the physical gold market is not quiet as dramatic as the physical silver market, but it seems a natural progression will occur in the not too distant future. The physical market is filled with people that are not interested in paper contracts. These people are in real markets located in the eastern hemisphere – China, India and other countries. In these countries gold is either part of the culture or there is an understanding of gold’s role as a currency.
In today’s episode with GATA/LeMetropolecafe.com’s Bill “Midas” Murphy about the extreme intervention in the precious metals market and the catalysts that will eventually override the Central Bank intervention.
River & Ocean Flow Red With Death, Courtesy Of Iron Mining Conglomerate
As if it was a scene taken from the blockbuster disaster movie, 2012, rivers of death and destruction flowed red for over 400 miles before emptying into the Atlantic ocean as Brazil suffered its worst ecological catastrophe in history. The failure of a massive 300+ foot iron tailings dam at BHP Billiton and Brazil’s Vale Samarco Iron Mine, caused 50 million cubic feet of toxic iron sludge to pour into the countryside killing 19 people.
(Bento Rodrigues: photo courtesy of Felipe Dana/AP)
Even though this 30 story-tall iron mining tailings dam collapsed nearly a year ago, the broad ecological and legal issues are just now coming to the forefront. For example, an article just released yesterday titled, Brazil Charges 21 With Homicide For Failing To Avert Samarco Mine Disaster stated the following:
Brazilian prosecutors charged 21 people with qualified homicide on Thursday for their roles in the collapse of a tailings dam at the Samarco Mineração SA iron ore mine last November that killed 19 people.
The charges follow what is now considered to be the largest environmental disaster in Brazil’s history. The dam collapse released millions of tonnes of muddy mine waste, wiping out several small communities.
Prosecutor Jose Leite Sampaio told reporters at a briefing in Belo Horizonte, broadcast live by GloboNews, that executives at Samarco had clear awareness the dam could fail but ignored the risks and prioritized profit.
There were signs that the dam was unsafe for several years before its collapse, but Samarco officials, executives, employees and board members appointed by Vale and BHP failed to take proper action, Sampaio said.
This is the first time to my knowledge that a country has charged mining executives with “qualified” homicide. If convicted, those accused could face sentences up to 54 years in jail. No doubt, the penalties should be stiff if guilt or severe negligence is proven.
And that just might be the case. According to a recent article by the BBC, Samarco Dam Failure In Brazil ‘Caused By Design Flaws:
The report said that a change in the Fundao dam’s design between 2011 and 2012 led to less efficient water drainage, and ultimately to the dam’s collapse in November 2015.
There was increased weight on the tailings as the height of the dam was raised to more than 100m.
This weight pushed clay-like silt in one part of the dam outwards “like toothpaste from a tube,” ultimately causing the dam to collapse.
A small earthquake on the day of the dam burst may also have “accelerated” the failure, the report added.
While a small earthquake was an additional factor in the Samarco Tailing Dam collapse, it was likely the straw that finally broke the camel’s back. The size of the Samarco Tailings Dam can be seen in these stunning before and after pictures:
(Bento Rodrigues Before: July 2015, courtesy of ABC.net.)
(Bento Rodrigues Before: November 2015, courtesy of ABC.net.)
Furthermore, another article titled, BHP’s Deadly Dam Collapse Linked To Ramping Up Production, stated:
But Four Corners has seen evidence of a long history of problems at the BHP-owned dam dating back to the beginnings of its construction in 2007, and learned that independent testing of water samples from the river system has found levels of arsenic and lead 10 to 20 times higher than Brazilian regulations allow.
Brazilian state police now allege the disaster was partially caused by the mine ramping up production to offset the falling iron ore price. Brazilian authorities say the dam collapse has produced the biggest environmental disaster in the country’s mining history.
There seems to be a mining industry trend for increased tailings dam spills when the price of the metal falls. This is likely due to the corporate mentality of “Cost Cutting” when times are lean and mean…. LEAN if you are the corporate lackey, and MEAN if you live downhill of the dam.
I found actual evidence of this in another interesting article, Mining Dams Grow To Collasal Heights, And So Do The Risks:
A 2009 study by longtime industry engineers that examined 42 years of accident data found the frequency of tailings spills increases when commodity prices fall, “in the manner of a hangover after a good party.” This could reflect pressures to cut costs “once mines constructed on the basis of rising commodity prices are forced to operate with the reality of lower commodity prices,” said the study by engineers Todd Martin and Michael Davies.
With the price of iron ore falling 64% in three years, who could blame these fine upstanding BHP & Vale mining executives for cutting a few corners to keep bonuses forth coming and shareholders happy (sarcasm intended). While this massive tailings dam collapse has been financially challenging for these companies, at least they don’t live in the towns impacted by the 50 million tons of heavy metal toxic sludge which has now polluted over 400 miles of Brazilian rivers and streams.
This is the huge problem most in the U.S. or other western countries don’t have to experience as we drive to Starbucks to get our double-decaf latte. As the saying goes, THEY WORK….. WE EAT.
However, it would be prudent to update it to, THEY WORK, DIE & GET POLLUTED, WHILE WE EAT.
I have to say, I had no idea of this Samarco Tailings Dam disaster until I stumbled upon this weekend doing some research on my favorite Mega-Mining Company, BHP Billiton. BHP has been a favorite research project of mine because they are by far the one of the most reckless company I have seen in regards to safety and financial stupidity.
As I mentioned in a prior article, BHP has suffered $12 billion of impairment write-offs for its glorified U.S. shale oil and gas assets. Now, with Brazilian $44 billion lawsuit issued this May staring at BHP Billiton and Vale in the face, times are becoming a bit rough to make the big profits the mega-mining companies enjoyed five years ago.
If base metal prices continue to fall, watch as continued cost cutting results in an ever-increasing number of large tailings dam spills. The situation for the Brazilian people living around the now contaminated Doce River with toxic laden heavy metal mud is quite dire. The ramifications of the spill will last for decades.
The mining industry’s trend to go from big to gargantuan sized mines and tailings dams, is just a response to the Falling EROI (Energy Returned On Investment) of oil. By increasing to bigger and bigger mining projects, these companies are trying to offset overall rising costs by implementing “Economies of scale.”
Economies of scale is the ability to lower unit costs by increasing the size or volume of production. While this may work in the short-term, what happens when the highly leveraged financial system finally cracks and disintegrates? It will cause a great deal of mining company bankruptcies. As more and more mining companies going bankrupt, who will continue to monitor and take care of the hundreds or thousands of large tailings dams across the world?
Unfortunately, will be the ultimate cost of the falling EROI. By cheating the falling EROI, the benefits were brought forward, but the costs will be left behind.
Here are some more images of the aftermath of the Samarco Tailings Dam collapse, courtesy of TelesurTV: Biggest Ecolgocial Disater In Brazil’s History:
end
Your early TUESDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight
:
1 Chinese yuan vs USA dollar/yuan UP to 6.7765( DEVALUATION SOUTHBOUND /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.7822 / Shanghai bourse CLOSED UP 3.69 POINTS OR 0.12% / HANG SANG CLOSED DOWN 38.97 OR .17%
2 Nikkei closed UP 130.83 OR 0.76% /USA: YEN RISES TO 104.50
3. Europe stocks opened ALL MIXED ( /USA dollar index DOWN to 98.72/Euro UP to 1.0883
3b Japan 10 year bond yield: FALLS TO -.065%/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.00/ 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:: 50.77 and Brent:51.56
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 UP for WTI and UP for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES A BIT to +034%
3j Greek 10 year bond yield FALLS to : 8.414%
3k Gold at $1268.40/silver $17.72(7:45 am est) SILVER FINAL RESISTANCE AT $18.50 WILL BE DEFENDED
3l USA vs Russian rouble; (Russian rouble UP 19/100 in roubles/dollar) 62.04-
3m oil into the 51 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.
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.50 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9946 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0826 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.
3p BRITAIN VOTES AFFIRMATIVE BREXIT
3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to +.034%
/German 9+ year rate BASICALLY negative%!!!
3s The Greece ELA NOW at 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)
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 1.779% early this morning. Thirty year rate at 2.530% /POLICY ERROR)
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
US Futures, Global Stocks, Metals Rise On Economic Confidence, Upbeat Earnings
European, Asian stocks and S&P futures are all up again in early trading, a repeat of the Monday session, buoyed by a generally upbeat corporate earnings season, rising economic confidence and signs of improvement in the world’s biggest economies. The Bloomberg Dollar Spot Index held near its highest level since March as fed fund futures prices Monday indicated there’s a 71 percent chance of a rate increase this year, up from 68 percent last week. The dollar rose after Chicago Fed President Charles Evans said it’s likely that interest rates will be hiked three times by the end of 2017 (although one year ago we were supposed to get 4 rate hikes in 2016).
“If we look at the health of the U.S. economy, it just makes absolute sense to hike in December,” said James Woods, a strategist at Rivkin Securities in Sydney. While stocks may head higher, “it would not be a significant rally until we get the U.S. presidential election and rates out of the way,” he said.
Factory surveys in the United States and Europe had boasted the best readings of the year so far on Monday and a six-month high for Japanese stocks in Tokyo overnight had followed a record close for the tech-heavy U.S. Nasdaq. European markets started with Germany’s Dax nudging its highest level of the year as the closely-watch Ifo sentiment survey beat expectations a day after purchasing manager numbers had done the same.
“We are seeing a pick up of economic activity against the backdrop of only one central bank — the Fed — that is likely to tighten policy and that is supporting asset markets,” said CMC Markets senior analyst Michael Hewson.
German business confidence rose to a 2 year high after the German IFO business climate survey rose +1.0pt in October, rising from 109.5 to 110.5. Today’s print builds on the strong gain in the previous month and takes the level of the IFO to the highest it has been since April 2014. Yesterday’s PMI also showed robust improvement in Germany. As the following chart shows, the various German confidence indices are on a tear recently after yesterday’s stronger than expected PMI data. Now if only hard data can confirm the booming “soft” surveys.
Attention has turned to commodities, and especially the metals complex, after iron ore surged by the daily 6% limit on China’s Dalian Commodity Exchange, and rising steel prices in China spurred a rally from aluminum to zinc. This boosted the currencies of resource-exporting nations, with South Africa and Australia leading gains versus the dollar.
Industrial metals have gained steadily this year with an index of London Metal Exchange contracts poised for the first annual increase since 2012 as a pickup in manufacturing in the U.S. and euro area point to an economy that’s getting more robust. A report Tuesday showing German business sentiment rose to the highest level in more than two years in October added to the sense of optimism.
“We’ve had a whole host of better-than-expected manufacturing data,” said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Hellerup, a Copenhagen suburb. “Strong gains in China, led by steel and iron ore, are supporting the sentiment, which in turn has attracted increased speculative trading across the metals space.”
What is curious is that the recent bout of strength – compounded with a lack of market volatility – comes at a time when the Chinese currency is plunging again, and just yesterday the offshore traded Yuan tumbled to the lowest on record since it began trading in 2010. The onshore exchange rate declined in all but one of this month’s 11 trading sessions through Monday, a sign the central bank has reduced support since the currency’s inclusion in the International Monetary Fund’s Special Drawing Rights on Oct. 1. Confused traders are wondering if this time really is different or if the market will simply react to this latest sign of deterioration in China’s fund flows with its usual delayed reaction time.
The Stoxx Europe 600 Index headed for its strongest close in three weeks as earnings reports fueled optimism about the profitability of the region’s companies. Spanish and Italian bonds outperformed top-rated German bunds as the region’s improving political and economic outlook sapped demand for haven assets.
The Stoxx 600 rose 0.1 percent, with miners leading gains; 14 out of 19 Stoxx 600 sectors rise with basic resources, banks outperforming and autos, health care underperforming; 59% of Stoxx 600 members gain, 40% decline. Orange SA led the charge among telecommunications stocks, adding 4.7 percent after posting an increase in quarterly profit. Randstad Holding NV rose 1.2 percent after announcing better-than-estimated revenue and saying growth trends were resilient across regions. Luxottica Group SpA jumped 7.7 percent after the maker of Ray-Ban sunglasses said sales growth will accelerate in 2017.
S&P 500 Index futures climbed 0.2%. U.S. equities added 0.5 percent on Monday as deal activity boosted sentiment. Earnings remain in focus this week. Visa Inc. posted higher-than-expected profit after the close, and investors will be looking Tuesday to reports from Procter & Gamble Co. and General Motors Co. for indications of the health of corporate America. Caterpillar Inc. is among companies scheduled to release earnings that may provide more insight on the sustainability of the recovery in energy and mining. Apple Inc. is due to announce earnings after markets close Tuesday.
In rates, the yield on Italian 10-year bonds declined two basis points to 1.37%, while Spanish 10Y bonds fell three basis points to 1.08%. The yield on benchmark German bunds fell one basis point to 0.17%. Yields on Treasuries due in a decade were steady at 1.76%, after climbing three basis points on Monday. U.S. yields will have to rise if Evans proves to be correct in his 3 rate hikes predictions for 2017, according to Kim Youngsung, head of overseas investment at South Korea’s Government Employees Pension Service in Seoul. After one increase “for sure” in December, two more in 2017 will send the 10-year yield past 2.5 percent, Kim said. Economists predict the benchmark will end next year at 2.14 percent, according to a Bloomberg survey with the most recent forecasts given the heaviest weightings. Japan’s 20-year government bonds rose for a fourth day after demand picked up at an auction of the securities on Tuesday. The yield fell 1/2 a basis point to 0.37 percent, matching its lowest level of the past three weeks.
* * *
Bulletin Headline Summary from RanSquawk
- European equities trade higher across the board as positive earnings continue to guide sentiment
- The German IFO survey came in higher than expected on all three readings. However, the reaction from the EUR was a tame one at best
- Looking ahead, highlights include Fed’s Lockhart, BoE’s Carney and ECB’s Draghi
Market Snapshot
- S&P 500 futures up 0.2% to 2149
- Stoxx 600 up 0.3% to 345
- FTSE 100 up 0.5% to 7019
- DAX up 0.5% to 10814
- German 10Yr yield down less than 1bp to 0.02%
- Italian 10Yr yield down 2bps to 1.37%
- Spanish 10Yr yield down 3bps to 1.08%
- S&P GSCI Index up 0.7% to 377.4
- MSCI Asia Pacific up 0.4% to 141
- Nikkei 225 up 0.8% to 17365
- Hang Seng down 0.2% to 23565
- Shanghai Composite up 0.1% to 3132
- S&P/ASX 200 up 0.6% to 5443
- US 10-yr yield down less than 1bp to 1.76%
- Dollar Index down 0.09% to 98.66
- WTI Crude futures up 0.8% to $50.92
- Brent Futures up 0.7% to $51.82
- Gold spot up 0.5% to $1,270
- Silver spot up 1.1% to $17.79
Global Headline News
- Fed Inclined to Raise Rates If Next President Pumps Up Budget: Shift in policy mix could prove troublesome for markets
- Monte Paschi Jumps as CEO Pledges to Boost Profit, Cut Branches: Lender targeting annual profit of 1.1 billion euros in 2019
- Dow Chemical CEO Says DuPont Merger May Be Delayed to February: Regulators’ biggest concern is impact on farming, Liveris says
- Visa Checkout Opening Its Platform; Android Pay Will Offer: Issuers, digital wallets, payment app providers will have access to APIs to integrate with Visa Checkout open platform; can access Visa Checkout open platform in 1H 2017
- ASM International Could Be a Potential Takeover Target: Mega-mergers no longer seem feasible in the sector, with two large mergers having been blocked, Kepler says
- Syngenta Sees ChemChina Approval Delays on Deeper EU Prob
- U.S. Said to Be Closing in on Venezuelan Asset Seizures, Charges
* * *
Looking at regional markets, we start in Asia where stocks were lifted by the improved sentiment globally following the latest batch of firm earnings, which looks set to continue to dictate price action with Apple due to report later today. Nikkei 225 (+0.8%) is trading with modest gains, while the index has also supported by the weaker JPY. ASX 200 (+0.6%) follows suit with shares paring yesterday’s healthcare triggered losses while Chinese markets were indecisive with Shanghai Comp (+0.1%) and Hang Seng (+0.1%) down on mild profit taking after yesterday’s outperformance which saw the mainland index print 2-month highs. KOSPI (-0.5%) underperformed on the back of lower than prior Q3 prelim GDP figures, which comes despite beating expectations. Japanese bond yields continued to flatten across the curve, with outperformance yet again in the long end, with JGB’s tracking higher post the firm 20-yr auction.
Asian Top News
- Offshore Yuan Trades Near Record Low as PBOC Seen Allowing Drop: Authorities are delinking yuan from dollar, focusing on basket
- China Money Rate Rises to 18-Month High as Yuan Spurs Outflows: Central bank adds most funds in six months to counter drain
- JR Kyushu Shares Surge in Tokyo Debut After $4 Billion IPO: Stock climbs as much as 20% from sale price of 2,600 yen
- Lotte Revives Hotel IPO as Group Seeks to Regain Confidence: Group is also plans listings of other Lotte affiliates
- Turmoil Erupts at Tata as India’s Top Group Ousts Chairman: Ratan Tata returns as interim chairman to fill in for Mistry
- SK Hynix Profit Beats Estimates as Memory Chip Prices Rally: DRAM shipments rose on demand for mobile devices, PCs
In Europe, bourses trade in positive territory as a slew of earnings help push equities higher (EuroStoxx +0.25%) with macro newsflow otherwise relatively light. In terms of sectors, the outperformer today is telecommunications, after Orange (ORA FP) posted a beat on expectations and is currently the notable outperformer in the CAC 40 (+0.33%). Also of note, the Wind and Italia 3 merger has been approved by the EU commission which could also contribute to sector bullishness. Fixed income markets have been capped by the gains in equities and supply may also be a factor with a number or corporates entering the market notably, Danone offering a 5 part EUR-deal. PGB’s are still benefitting from the positive effects of that DBRS rating and Bono (Spanish) yields continue to perform well after Spanish PM Rajoy announced the formation of a ruling government and the Tesoro confirmed there will be EUR 5bIn less issuance this year. Furthermore, this morning has also seen UK open books on their 2065 Gilt with Austria opening books for their 7 and 70yr issuance.
European Top News
- Novartis 3Q Core EPS Beats, Net Sales in Line; Keeps FY Outlook
- German Ifo Business Confidence Increases to Highest Since 2014: Gauges for current situation, expectations both improve
- Orange Earnings Rise 1.6% on Mobile Demand in Spain, Africa: Growth outside France helps offset effects of domestic rivalry
- Julius Baer, DBS Said to Vie for ABN Amro’s Asia Wealth Arm: LGT Bank also weighing bid for Asia private-banking business
- U.K. to Show Sharpest Slowdown in Europe in Third Quarter: May see growth slow to 0.3 percent from 0.7 percent — and then to just 0.1 percent in the last three months of the year
- Swedbank Beats Estimates as Third-Quarter Profit Jumps 23%: CEO says Swedbank will speed up its digital banking push
In FX, the Bloomberg Dollar Spot Index held near its highest level since March as fed fund futures prices Monday indicated there’s a 71 percent chance of a rate increase this year, up from 68 percent last week. The gauge gained in the last session as Fed Bank of Chicago President Charles Evans said it’s likely that interest rates will be hiked three times by the end of 2017. South Africa’s rand rose 0.5 percent, followed by a 0.4 percent gain for the Australian dollar amid a pickup in commodities prices. They were among the few to advance versus the greenback, which is being supported by speculation that the economy is strong enough for the Federal Reserve to increase interest rates. Canada’s dollar weakened 0.4 percent, erasing most of the last session’s rebound from a seven-month low, after central bank Governor Stephen Poloz clarified earlier remarks that had curbed speculation interest rates will be cut. Poloz said he wasn’t referring to monetary policy when he told lawmakers that the best plan was “to wait for the next 18 months or so.” The yuan held near a six-year low in Shanghai and reached its weakest level on record in the offshore market, which began trading in 2010. The onshore exchange rate declined in all but one of this month’s 11 trading sessions through Monday, a sign the central bank has reduced support since the currency’s inclusion in the International Monetary Fund’s Special Drawing Rights on October 1.
In commodities, after three years of slumping prices as mine supply rose and Chinese growth slowed, iron ore has gained 36 percent in 2016. China steelmakers, which produce half the world’s output, have fired up plants after stronger demand boosted prices and expanded profit margins. Zinc, used to galvanize steel, jumped 2.1 percent at 10:53 a.m. in London after surging to a five-year high on the Shanghai Futures Exchange, while hot rolled steel coil climbed to levels last seen in April. Coking coal, necessary for steel production, rallied to an all-time high on tight supplies. Aluminum, copper and nickel all gained more than 2 percent on the LME. Crude oil rose 0.5 percent to $50.79 a barrel in New York, having declined 0.7 percent on Monday after Iraq said it should be exempted from planned production cuts being orchestrated by the Organization of Petroleum Exporting Countries. The head of OPEC is set to visit Baghdad on Tuesday for talks aimed at resolving the matter.
Looking at the day ahead, it’s mainly second tier data due out in the US today although the highlight will be the October consumer confidence reading. As a reminder the September print unexpectedly surged to 104.1 which is the highest since August 2007 with the improvement fairly evenly split between current conditions and future expectations. The market does expect some moderation in the October level (101.5 expected) although that will still keep it near the top end of the recent range. Also due out this afternoon in the US will be housing market data in the form of the FHFA and S&P/Case-Shiller home price indices. The Richmond Fed manufacturing survey for October is expected to show some improvement, while the IBD/TIPP economic optimism reading is other the data point today. Fedspeak wise the Fed’s Lockhart is scheduled to speak on ‘lending and investing in community development’ at 6pm BST, although the title suggests that it won’t be particularly monetary policy focused.
* * *
US Event Calendar
- 8:55am: Redbook weekly sales
- 9am: FHFA House Price Index m/m, Aug., est 0.4% (prior 0.5%)
- 9am: S&P CoreLogic CS Home Price Index m/m (prior 0.41%)
- 10am: Consumer Confidence Index, Oct., est. 101.5 (prior 104.1)
- 10am: Richmond Fed Manufacturing Index, Oct., est. -4 (prior -8)
- 10am: IBD/TIPP Economic Optimism, Oct., est. 47.5 (prior 46.7)
- 1:20pm: Fed’s Lockhart speaks in Atlanta
- 4:30pm: API weekly oil inventories
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DB’s Jim Reid concludes the overnight wrap
This week hasn’t really got going yet and to be honest there’s not a huge amount of news to report of in the last 24 hours. With the ECB meeting behind us and the bigger macro events still to come it does feel like markets are in a bit of a holding pattern right now. Earnings ramp up today though and are headlined by the Apple numbers tonight which are always a bit of a spectacle for markets. So there’s that to look forward to.
If there’s one area which has been kept busy in recent days though, it’s M&A. Indeed, hot on the heels of the AT&T/Time Warner and BAT/Reynolds American announcements last week it was very much ‘Merger Monday’ yesterday following a flurry of further deal announcements. Yesterday we saw Chinese conglomerate HNA Group agree to a deal to acquire a stake in Hilton for $6.5bn. Aircraft component maker Rockwell Collins has announced that it is to purchase B/E Aerospace for $6.4bn and in the financial sector TD Ameritrade has agreed to buy Scottrade Financial Services for $4bn.
Indeed the window of opportunity for corporates might be narrowing as we approach year-end what with the number of potential risk events on the horizon. The US election is hovering just around the corner now while we’ve also got the Italy referendum to deal with, along with all things Fed, ECB and BoJ related. Not forgetting also the Brexit High Court case which is slowly bubbling below the surface, as well as the ongoing OPEC saga. So it might still be too early to call for any resurgence in animal spirits but yesterday’s announcements still helped to lift US equities. The S&P 500 closed +0.47% with the telecoms sector leading the charge. The Nasdaq (+1.00%) was the standout however after better than expected results from T-Mobile saw the US mobile carrier’s shares rally near 10%. European equities were initially stronger but faded into the close with the Stoxx 600 closing -0.01%. However the news that Rajoy is to take office for a second term in Spain and so ending the political impasse helped the IBEX to climb +1.27% while a decent performance for Spanish Banks also helped wider European Banks (+1.38%) continue their recent strong performance.
Refreshing our screens this morning, it’s been a fairly mixed but all-in-all quiet start in Asia. The Nikkei (+0.62%) and ASX (+0.69%) are both tracking higher however the Hang Seng (-0.19%), Shanghai Comp (-0.11%) and Kospi (-0.68%) are all struggling for traction somewhat. Oil has struggled so far this week with WTI down -0.81% from Friday’s close with the focus turning to comments from Iraq’s Oil Minister who suggested that Iraq should be exempt from a production cut deal. More interesting in Asia however is the continued focus on the weakening Chinese Renminbi. The offshore Yuan is hovering around a six-year low of 6.7836 this morning and in the 17 trading days in October so far, has weakened on 14 of them now. Clearly the market and investors have become a lot more accustomed to allowing greater flexibility in China’s currency moves but the latest weakening is starting to attract more and more headlines.
Moving on. Away from all things M&A related yesterday, the focus data-wise was on the October flash PMI’s. The data was particularly positive in Europe. Indeed the composite Euro area reading rose 1.1pts to 53.7 (vs. 52.8 expected). Both manufacturing (+0.7pts to 53.3) and services (+1.3pts to 53.5) readings edged higher while by country it was the composite reading for Germany (+2.3pts to 55.1) which impressed. France (-0.5pts to 52.2) was a little more disappointing although there was some upside in the latest manufacturing data there. Our European economists also highlighted that those PMI’s and other indicators suggest some upside risks of 0.1pp to their +0.3% qoq growth forecast for Q4 in the Euro area.
Across the pond the flash manufacturing PMI in the US was also up this month after printing at 53.2 (vs. 51.5 expected) following a 51.5 reading in September. Treasuries faded a little with that data, the benchmark 10y yield finishing 3bps lower at 1.766% which is bang in line with where it was this time a week ago. The USD rally took a pause for breath although it was noted that the December Fed hike probability has now crept above 70% versus 66% this time last week. It was a similar story for core government bond markets in Europe yesterday although the periphery outperformed. 10y yields in Portugal were 3.8bps lower yesterday at 3.121% following the DBRS rating announcement we highlighted yesterday, while Spain (-1.2bps) also outperformed slightly on the weekend news. While we’re in the periphery, the latest Italian referendum poll run by EMG Acqua for TG La7 showed that 34.7% of Italians would vote to approve Renzi’s constitutional reform versus 37.8% who would reject. That leaves a sizeable 27.5% that are still undecided and underlines what we have said previously in that the number of undecided voters is still very much elevated.
Elsewhere, the Fedspeak didn’t offer a huge amount to the debate yesterday. The usually dovish Chicago Fed President Evans said that ‘I think that there is room for the economy to continue to grow before we see inflation really pick up’ while the St Louis Fed President Bullard reiterated his view that there is no urgency in the Fed’s framework but that a single rate rise, likely in December, is all that is necessary for the time being.
Meanwhile, over at the ECB the latest CSPP holdings data is in. The ECB confirmed that it held €35.886bn of bonds as of the end of last week which implies net purchases settled last week of €2.089bn. On a daily run rate basis that works out at €418m per day which is slightly above the €378m average since the start of the program. So another solid week of purchases.
Looking at the day ahead, this morning in Europe the day kicks off in France where the various October confidence indicators are due out. Shortly following that we’ll get the October IFO readings in Germany where the market is expecting little change in the headline business climate print. It’s mainly second tier data due out in the US this afternoon although the highlight will be the October consumer confidence reading. As a reminder the September print unexpectedly surged to 104.1 which is the highest since August 2007 with the improvement fairly evenly split between current conditions and future expectations. The market does expect some moderation in the October level (101.5 expected) although that will still keep it near the top end of the recent range. Also due out this afternoon in the US will be housing market data in the form of the FHFA and S&P/Case-Shiller home price indices. The Richmond Fed manufacturing survey for October is expected to show some improvement, while the IBD/TIPP economic optimism reading is other the data point today. Fedspeak wise the Fed’s Lockhart is scheduled to speak on ‘lending and investing in community development’ at 6pm BST, although the title suggests that it won’t be particularly monetary policy focused. In Europe there are a couple of important speakers however. ECB President Draghi speaks at 4.30pm BST on ‘stability, equity and monetary policy’ while BoE Governor Carney is due to appear in front of the House of Lords Economic Affairs Committee on the economic consequences of the Brexit vote. Earnings will be the other big focus today. 51 S&P companies are due to report with the ighlight being Apple after the close. Merck, Caterpillar and P&G will also be worth watching while in Europe Fiat Chrysler report.
3.REPORT ON JAPAN SOUTH KOREA NORTH KOREA AND CHINA
i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 3.69 POINTS OR 0.12%/ /Hang Sang closed DOWN 308.97 OR .17%. The Nikkei closed UP 130.83 POINTS OR 0.76% Australia’s all ordinaires CLOSED UP 0.63% /Chinese yuan (ONSHORE) closed DOWN at 6.7765/Oil ROSE to 50.77 dollars per barrel for WTI and 51.56 for Brent. Stocks in Europe: ALL MIXED Offshore yuan trades 6.7822 yuan to the dollar vs 6.7765 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS AS MORE USA DOLLARS ATTEMPT TO LEAVE CHINA’S SHORES / CHINA SENDS A MESSAGE TO THE USA TO NOT RAISE RATES IN DECEMBER.
3a)THAILAND/SOUTH KOREA/SOUTHEAST ASIA:
none today
b) REPORT ON JAPAN
none today
c) Report on CHINA
4 EUROPEAN AFFAIRS
GERMANY
Germany conducts 13 anti terrorism raids across 5 German states citing imminent terror threat. Nobody arrested yet;
(courtesy zero hedge)
German Police Conduct 13 Anti-Terrorism Raids Across 5 States Citing “Imminent Terror Threat”
German police on Tuesday conducted numerous raids across five federal states and stormed an accommodation facility for refugees and 12 homes around the country that were believed to house people suspected of financing terrorism. Police searched residences in the eastern states of Thuringia and Saxony as well as in Bavaria, the western state of North Rhine-Westphalia and in Hamburg, police in Thuringia said in a statement.
Bild magazine cited “an imminent terror threat” as a trigger for the operation. The large-scale operation reportedly targeted “Islamist-linked terror suspects,” local broadcaster MDR reported.
#BREAKING: German Police are conducting several anti-terror-operations in #Thuringia#Germany
#BREAKING: German authorities have conducted 13 counterterrorism raids in five federal states, police in the eastern state of Thuringia say.
The police have been investigating a 28-year-old Russian citizen of Chechen origin since the second half of 2015 who was suspected of preparing “a serious act of violent subversion”, the statement said. They believed he intended to fight for Islamic State in Syria. During the course of investigations, suspicion arose that that person as well as 10 other men and three women – all Russian citizens of Chechen origin – were financing terrorism.
According to Reuters, the suspects were living in Thuringia, Hamburg and Dortmund, are asylum seekers with unclear residency status, and are aged between 21 and 31, police said.
Police forces deployed sniffer dogs to detect potential explosives. At least one suspect is reported to have been placed under arrest in the central Thuringia city of Suhl, where “white powder” of unknown origin was found reported RT.
Later, Thuringia criminal police said there is no threat of a terror attack, adding that preliminary outcomes of the operation would be released “in a matter of days.” Unlike neighboring France and Belgium, Germany had seen no large-scale terrorist attacks until the summer of this year.
In late July, however, it suffered a suicide bombing attempt and three lone-wolf assaults in the space of a week. In all cases, the perpetrators either had direct links to IS or were inspired by radicalism. The suspect, identified as Jaber al-Bakr, was on the run after German police discovered “highly sensitive explosives” in his flat. Al-Bakr committed suicide while in custody. The authorities said later he had considered a “big airport in Berlin” as a “better target” than trains.
One of the most recent terrorist plots was foiled in early October in the eastern city of Chemnitz, when a 22-year-old Syrian national was captured after a two-day manhunt. Although a special operation had been launched by the authorities, the man was only detained when three fellow Syrians tied him up and alerted police.
Earlier this month a Syrian refugee who was arrested on suspicion of planning a major attack in Berlin was found dead in prison after he initially evaded police during a raid on his apartment where 1.5 kg of explosives were found. Authorities said he had committed suicide.
END
ITALY
Monte de Paschi records a huge loss again but the stock declines not because of the loss but because of a proposed debt swap with existing bond holders
(courtesy zero hedge)
Monte Paschi Plunges As Much As 39% On Debt-For-Equity Fears After Surging In Past Week
After a furious rally in the past week on hopes that Italy’s oldest, and most insolvent, bank, Siena’s Monte Paschi has turned the corner and would return to profitability while outside investors would finally help it in its seemingly endless quest to find $5 billion in outside capital, today BMPS shares plunged after first opening limit up in what can only be characterized as a roller coast market.
The bank’s new CEO Marco Morelli, on the job just 6 weeks, announced he would lay off 2,600 as he targets a profit of 978 million euros in 2018 and 1.1 billion euros in 2019. Monte Paschi is also seeking to dispose of €28 billion of bad loans and is committed to raise as much as €5 billion in capital by the end of the year, with Morelli saying he’ll start talks with potential new investors this week.
Concern over the terms of the recapitalization broke the ongoing euphoria over hopes for profitability, and Monte Paschi jumped as much as 27% before declining 23 percent to 27 cents at 11:50 a.m. in Milan. The Siena, Italy-based lender surged about 58 percent last week, helping pare losses this year to “only” 64%. The bank’s lower Tier 2 notes due in April 2020 rose 6 cents to about 80 cents, the highest level for the junior bonds since Aug. 2, according to data compiled by Bloomberg.
What catalyzed the moves was Morelli’s statement during a press conference that Monte Paschi plans to offer debt swap to all €5.1b outstanding bonds, adding that the main goal now is bringing bank back to normal and is “Absolutely open” to examine any proposal for bank. The market interpreted this as an aggressive debt-for-equity swap is imminent, one which could lead to even more massive equity dilution, and the result was show in the chart above.
Earlier, Monte Paschi announced that in Q3 the bank recorded a loss of €1.15 billion, down from a profit of €255.8 million a year earlier as it set aside another €1.3 billion in provisions for soured loans. The common equity Tier 1 ratio, a measure of financial strength, slipped to 11.5% at the end of September from 12% at the end of 2015.
As part of its cost-cutting operation, the bank plans to cut 2,600 jobs by 2019, compared with a previous goal of 2,700 remaining reductions by 2017. As of June 30, the bank counted 25,700 employees. It will shut about 500 branches out of about 1,900 outlets. Under the leadership of Fabrizio Viola, Monte Paschi struggled to reverse a slump in shares, with the bank amassing more than 6 billion euros in annual losses over the past four years.
But while the new CEO’s ambitious plan to return to profitability is admirable, mcuh more attention will be focused on the bank’s far more pressing balance sheet needs. The bank has been struggling to find €5 billion in fresh capital ever since it failed the latest ECB stress test; the lender announced today it was committed to complete the capital raising by the end of the year, possibly in several tranches, include a debt-for-equity swap and a portion reserved for potential anchor investors. Shareholders will meet Nov. 24 to approve the proposed capital increase.
Monte Paschi is still waiting for authorization for the planned voluntary debt swap, according to Morelli. The swap, whose terms are still to be defined, will involve all the 5 billion euros of outstanding institutional and retail subordinated bond holders, he added. Translation: more massive dilution for equity holders who will be crammed-down by an amount greater than the bank’s entire market cap.
Cited by Bloomberg, Miguel Hernandez and Geoffroy de Pellegars, analysts at BNP Paribas SA said that “perhaps the most important disclosure made this morning is the confirmation that retail investors will be involved in the exchange. We expect bonds to stabilize around these levels until we have firm indications of interest in the share sale from institutional investors.”
As Bloomberg notes, the timing of the rescue offering will probably coincide with a vote on constitutional reform in Italy on Dec. 4 that may spark political uncertainty and market volatility. The bank aims to collect bondholder agreements on the swap before the vote to limit the impact on the recapitalization, according to people with knowledge of the plan. Prime Minister Matteo Renzi, who has made revamping Italy’s troubled banking system a key priority, has previously said he will quit if his reform is rejected.
“With the clean-up loss charged in 2016 the key issue of this plan is that we still do not know who is going to underwrite the cash call,” said Fabrizio Bernardi, a Milan-based analyst with Fidentiis Equities. He has a sell recommendation on the shares.
In a recent trial balloon by Italy’s Il Messaggero newspaper, the sovereign funds of Qatar and Abu Dhabi, as well as the People’s Bank of China were said to be among investors that may be interested in the capital plan. Corriere della Sera, another Italian daily, reported that the sovereign fund of Kuwait may also weigh an investment. “We’re going to start entertaining talks with potential core investors today,” Morelli said, without elaborating. “We received a number of approaches from different parties.”
Monte Paschi expects a return on tangible equity, a measure of profitability, of more than 10 percent in 2018 from the 8 percent targeted under a previous plan. As part of the overhaul, the lender is disposing of its debt recovery and merchant units, with Istituto Centrale delle Banche Popolari Italiane SpA having offered to buy the latter for 520 million euros.
Monte Paschi’s pains date back a decade, when acquisitions that overstretched its finances and bets on bonds and derivatives by previous managers backfired, forcing the bank to book losses and restate accounts. In 2013, Monte Paschi became the target of national outrage when news broke that it used complex derivatives transactions fashioned by Deutsche Bank AG and Nomura Holdings Inc. to hide millions of euros in losses. In continuing the quiet sweep of the previous management team, the bank said it named Francesco Mele chief financial officer to replace Arturo Betunio who will leave the company on Nov. 25.
end
GREAT BRITAIN
Great Britain Pound/USA dollar collapses in a flash crash ahead of Carney’s speech:
trading this morning: 1.2120
(courtesy zero hedge)
Cable Collapses To Flash-Crash Lows Ahead Of Carney Speech – Live Feed
Sterling is being pounded back below 1.21 – weakest since the flash crash lows, back to 31 year lows. The drop lacks an obvious trigger (more technical levels), but as The FT reports, nerves appear to be building in the run-up to a scheduled appearance by Bank of England governor Mark Carney to a House of Lords committee at 15:35 London time.
It appears the market is not hopeful for Carney’s comments…
end
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
none today
6. GLOBAL ISSUES
Today, Caterpillar warns of economic weakness throughout the globe and cuts guidance again
(courtesy zero hedge)
Caterpillar Warns Of “Economic Weakness Throughout Much Of The World”, Cuts Guidance
As we previewed yesterday when we showed that for 46 consecutive months industrial bellwether Caterpillar has failed to post a retail sales increase…
… it should probably not come as a surprise that moments ago CAT not only badly missed revenues, reporting $9.2 billion well below the $9.80 billion expected (courtesy of the usual non-GAAP fudging, CAT managed to “boost” its EPS enough to beat estimates, reporting adjusted earnings of $0.85, above the $0.76 consensus), but it also once again slashed full year guidance, now expecting revenue of $39 billion, and EPS of $3.25 per share excluding restructuring costs, down from the guidance of $40.0 to $40.5 billion and EPS of $3.55 provided just three months ago.
But it was outgoing CEO Doug Oberhelman’s commentary in the release that was more troubling, to wit:
“Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged. In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.”
“While we are seeing early signals of improvement in some areas, we continue to face a number of challenges. We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum. Whether or not that happens, we are continuing to prepare for a better future. In addition to substantial restructuring and significant cost reduction actions, we’ve kept our focus on customers and on the future by continuing to invest in our digital capabilities, connecting assets and jobsites and developing the next generation of more productive and efficient products”… “Many of our businesses, including mining, oil and gas, rail and construction, are currently operating well below historical replacement demand levels in many parts of the world.”
That said, it was not all gloom:
“there were a few bright spots this quarter. Both the construction industry and our machine market position improved in China. Most commodity prices, while low, seem to have stabilized. Parts sales have increased sequentially in each of the last two quarters. Our machine market position and quality remain at high levels and our work on Lean and restructuring are continuing to help us lower costs.
Caterpillar’s results are closely followed by investors as the company is viewed as a bellwether of global construction and manufacturing activity.
In pre-market trading, shares of the company were down about 2%. Year-to-date, the stock is up about 25%.
END
Top University faked results and scammed huge amounts of taxpayer money
Global warming in itself is a scam
(courtesy Mish Shedlock/Mishtalk)
Global Warming Scam Exposed
Submitted by Michael Shedlock via MishTalk.com,
When you are willing to pay for global warming “research” that has a predetermined outcome, all you do is open the door for fraud.
Please consider Top University Passed Off Rivals’ Research to Bankroll Climate Change Agenda.
One of the world’s leading institutes for researching the impact of global warming has repeatedly claimed credit for work done by rivals – and used it to win millions from the taxpayer.
An investigation by The Mail on Sunday also reveals that when the Centre for Climate Change Economics and Policy (CCCEP) made a bid for more Government funds, it claimed it was responsible for work that was published before the organisation even existed. Last night, our evidence was described by one leading professor whose work was misrepresented as ‘a clear case of fraud – using deception for financial gain’. The chairman of the CCCEP since 2008 has been Nick Stern, a renowned global advocate for drastic action to combat climate change.
On Friday, the CCCEP – based jointly at the London School of Economics and the University of Leeds – will host a gala at the Royal Society in London in the peer’s honour. Attended by experts and officials from around the world, it is to mark the tenth anniversary of the blockbuster Stern Review, a 700-page report on the economic impact of climate change. The review was commissioned by Tony Blair’s Government.
Last night, CCCEP spokesman Bob Ward admitted it had ‘made mistakes’, both in claiming credit for studies which it had not funded and for papers published by rival academics. ‘This is regrettable, but mistakes can happen… We will take steps over the next week to amend these mistakes,’ he said.
The Mail on Sunday investigation reveals today that:
- The Economic and Social Research Council (ESRC), which has given the CCCEP £9 million from taxpayers since 2008, has never checked the organisation’s supposed publication lists, saying they were ‘taken on trust’;
- Some of the papers the CCCEP listed have nothing to do with climate change – such as the reasons why people buy particular items in supermarkets and why middle class people ‘respond more favourably’ to the scenery of the Peak District than their working class counterparts;
- Papers submitted in an explicit bid to secure further ESRC funding not only had nothing to do with the CCCEP, they were published before it was founded;
- The publication dates of some of these papers on the list are incorrect – giving the mistaken impression that they had been completed after the CCCEP came into existence.
Academics whose work was misrepresented reacted with fury. Professor Richard Tol, a climate change economics expert from Sussex University, said: ‘It is serious misconduct to claim credit for a paper you haven’t supported, and it’s fraud to use that in a bid to renew a grant. I’ve never come across anything like it before. It stinks.’
Prof Tol said: ‘Our paper had no relationship to the CCCEP. It came out of David Anthoff’s masters thesis. At the time, the CCCEP did not exist, and it only came into existence after the paper was published. Fraud means deception for financial gain. That is what this is.’
Fake Research
The Daily Caller reports Top University Stole Millions From Taxpayers By Faking Global Warming Research.
A global warming research center at the London School of Economics got millions of dollars from UK taxpayers by taking credit for research it didn’t perform, an investigation by The Daily Mail revealed.
The UK government gave $11 million dollars to the Centre for Climate Change Economics and Policy (CCCEP) in exchange for research that the organization reportedly never actually did.
Studies that receive financial support from the public sector don’t have to disclose it as an ethical conflict of interest, even when that support is in the millions of dollars. Recent studies in the U.S. — which the Environmental Protection Agency (EPA) uses to support the scientific case for its Clean Power Plan — saw the agency give $31.2 million, $9.5 million, and $3.65 million in public funds to lead authors, according to EPA public disclosures.
The author who received $3.65 million, Charles Driscoll, even admitted to the Pittsburgh Post-Gazette that the result of his study was predetermined, saying “in doing this study we wanted to bring attention to the additional benefits from carbon controls.”
Universities typically received about 50 percent of the money their researchers get in public funds if their investigations find positive results, making them deeply dependent upon federal funding and likely to encourage studies that will come to conclusions the government wants.
Predetermined Outcome
#GlobalWarming Short of proposing moon is made of green cheese, it’s easy to get research that supports desired viewhttps://mishtalk.com/2016/10/24/global-warming-scam-exposed/ …
.All you have to do is pay for it.
end
7. OIL ISSUES
There is really no chance of a deal as Russia is against production cuts. Oil falls below 50 dollars again.
(courtesy zero hedge)
Oil Tumbles Below $50 (Again) As Russia Reportedly “Against” Production Cuts
Just as we warned previously, it appears Russia is spoiling the oil-rally party. IFX reports that Russia’s envoy has stated that they are “against oil output cuts.” Furthermore, seemingly confirming no ‘cut’, Venezuela’s Pino says “freeze” deal may only be temporary. So freeze at best (at record levels) and no cut..
$50 defended again..
As ForexLive notes, Venezuelan and Russian oil ministers met in Moscow today and suggested non-OPEC countries remove 400-500K of supply to supplement OPEC quotas. The initial reaction from Moscow suggests the proposal didn’t get far. It’s shaping up like the best realistic deal is for some non-OPEC and OPEC countries to freeze output but expect the quotas to be routinely violated.
As we noted before, for all the confused oil bulls (and algos), here is an
attempt at laying out the odds of an OPEC production cut from the
perspective of 4 key producers.
- Nigeria National Petroleum Corp. lowered by at least $1 a barrel its official selling prices, or OSPs, for 20 out of 26 oil grades,
according to pricing lists. Qua Iboe, Nigeria’s largest export crude
under normal circumstances, was reduced by the most since 2014. The price reductions are due to a “huge cargo overhang” as the country attempts to regain market share, Mele
Kyari, group general manager for the oil-marketing division at NNPC,
the state oil company, said by phone. (Source: Bloomberg, 20 October
2016) - Iran, OPEC’s third-biggest member, plans to boost its oil output to 4 million barrels a day this year,potentially complicating the producer group’s plan to cut supply in an effort to prop up prices.
Oil
Minister Bijan Namdar Zanganeh said he hopes the Organization of
Petroleum Exporting Countries will agree next month at a meeting in
Vienna to limit output. “We should decide in November how much every
country should produce,” Zanganeh said. He didn’t comment on Iran’s
participation, if any, in the OPEC agreement. - Al-Naimi (Saudi Oil Minister until May 2016) writes in the book that one of his aides asked him in November 2014 what was the chance of leading non-OPEC countries Russia, Mexico, Kazakhstan and Norway cutting oil production. “I held up my right hand and made the sign for zero,” he writes. (Source: Bloomberg, 17 October 2016)
- In early October, Sechin told reporters that Rosneft planned this year to raise its oil production, already
the world’s largest among listed producers, above the 203 million
tonnes (4.1 million barrels per day) it produced in 2015. Sechin said he
doubted some OPEC countries, such as Iran, Saudi Arabia and Venezuela,
would cut their output either: “Try to answer this question yourself:
would Iran, Saudi Arabia or Venezuela cut their production?”
Still think an OPEC production cut deal is imminent? Then we have a few bridges in Saudi Arabia for sale to the highest bidder.
end
Suddenly at the end of the day, oil tumbles with a large inventory build:
(courtesy zero hedge)
Oil Tumbles To 3 Week Lows After Unexpectedly Large Inventory Build
Having closed below $50 for the first time in 3 weeks, WTI Crude extended its losses to 3 week lows after API reported crude inventories rose by a bigger than expected 4.8mm barrels (more than double the 2mm expectation).
API
- Crude +4.8mm (+2mm exp)
- Cushing -2.3mm (-500k exp)
- Gasoline +1.7mm (-1mm exp)
- Distillates -940k
Crude inventories have drawn down for 6 of the last 7 weeks but rose notably this last week. Cushing inventories drewdown by the most since Feb 2014 (we suspect the spillage was the driver) and distillates inventories drew down for the 5th straight week). Gasoline inventories built notably despite expectaions of a sizable draw.
“You’ve gone from a very optimistic sentiment immediately following the Algiers announcement to a sentiment that’s more skeptical of the ability of OPEC to pull off a meaningful cut,” notesPaul Crovo, Philadelphia-based oil, equities analyst at PNC Capital.
As Bloomberg notes, the Brent Dec.-June spread at -$3.76 is steepening very quickly…
“That’s very steep and that’s telling me right now that we are well-supplied. We should expect lower prices. It’s encouraging storage,” Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors, says by phone
8. EMERGING MARKETS
Venezuela narrowly escapes bankruptcy with a debt swap to save their national oil company but this will only last for a short while: oil production continues to plung
(courtesy Nick Cunningham /Oil Price.com)
Venezuela Escapes Bankruptcy… But Oil Production Continues To Plunge
Submitted by Nick Cunningham of OilPrice.com
Venezuela just dodged a bullet, pulling off a last minute bond swap with creditors. The deal only buys Venezuela a little bit of breathing room, and a default at some point next year or the year after is not out of the question. Either way, the South American OPEC nation’s oil production is falling and will only continue on a downward trajectory.
Venezuela’s state-owned PDVSA avoided default at the eleventh hour, getting enough creditors onboard for a debt swap. The oil company had repeatedly offered creditors to exchange debt set to mature this year and in 2017 for payments spread out over the rest of the decade, a proposal that would allow the company – and the sovereign government – to technically avoid default.
But after investors rebuffed at least four offers for a debt swap due to unfavorable terms, they finallyagreed to a deal on Monday to swap a portion of the $7.1 billion that PDVSA had due in the coming months. PDVSA had warned a few days ago that a default would come as soon as this week if creditors did not sign on. “Low oil prices will adversely affect the company’s ability to generate cash flow from operations, which will impair the company’s ability to make scheduled payments on its existing debt, including the existing notes,” PDVSA said in a statement last week.
With few options left, it was in both PDVSA’s and the creditors’ interest to make a deal, according to Siobhan Morden, head of Latin America Fixed Income Strategy at Nomura Securities. “It’s logical that this exchange goes forward and PdVSA accepts whatever cashflow relief the market is willing to provide so that muddling through continues.”
But even if it can avoid default this time around, the Venezuelan government only has foreign exchange reserves of $12 billion, a figure that is dwarfed by its debt load.
The fallout from a default would be terrible for Venezuela, but how the situation plays out is unknown. PDVSA’s assets overseas could run into trouble. “I wouldn’t be surprised if you see new precedents in terms of being able to seize oil assets on boats, because the U.S. government is going to be very anti-Venezuela obviously. For sure Citgo refineries get seized,” Eric Fine, bond fund manager for Van Eck Global, told Forbes in an interview. He also warned that a PDVSA default would almost certainly be followed by a sovereign default. Not only are the finances of the two entities intertwined, but once the company defaults, the government would probably lose access to financial markets as well, so paying off debt will merely be a waste of the little bit of cash it has left. For this reason the government has been intent on meeting its obligations even as people go hungry in the streets.
While PDVSA is flirting with insolvency, Venezuelans are much more focused on the country’s political crisis, which is just as bad as the economy. Last week, the government of President Nicolas Maduro cancelled a vote that threatened to remove him from office. For more than a decade, Venezuela, under the late President Hugo Chavez and then Maduro, has seen a steady erosion of its democratic system. But cancelling the recall election is “the most blatant” move yet, says Siobhan Morden of Nomura Securities.
President Maduro, meanwhile, has been undertaking some shuttle diplomacy to oil producing countriesin recent days to get them on board for the pending OPEC production cuts. But while he was in Azerbaijan and Iran, Maduro’s problems at home began to bubble over.
On Sunday, the opposition led Congress pressed to put Maduro on trial for violating democracy. The heated session even saw injuries inside the legislature as the two parties broke out into fist fights. The opposition, once fractured but now increasingly united against Maduro’s overreach, is planning a major protest on October 26. The Eurasia Group, a political risk firm, said the cancellation of the recall vote leaves no other avenue for an outraged public than to take to the streets, “increasing the near-term risk of a social eruption amid food shortages and soaring inflation.”
PDVSA may have just avoided default but its poor position likely means that things will continue to deteriorate. The battered state-owned firm is already dealing with declining production and has no cash left to conduct maintenance. Drilling is at a standstill and PDVSA is already in arrears to oilfield services companies like Halliburton and Schlumberger. Output is down 11 percent in the 12 months ending in September, and more declines are expected. In an October 23 article, The Wall Street Journalreported that PDVSA has been reduced to flaring gas and burning oil because it does not have any money left to pay for processing equipment. So not only is production declining, but PDVSA is unable to even sell all of the oil and gas that is coming out of the ground.
It is hard to imagine things getting worse than they already are. PDVSA may have kicked the can just a little bit down the road, but Venezuela’s problems are not going away.
end
Oh OH!! this is interesting: the uSA is now said to be closing in on PDVSA seizures due to fraud.
(courtesy Bloomberg/Bartenstein)
U.S. Said to Be Closing In on PDVSA-Linked Seizures, Charges
-
$11 billion may have been siphoned from Venezuela oil firm
-
20 homes, some in Florida and Texas, likely to be seized
Federal prosecutors are preparing to charge several individuals and confiscate their property over the alleged looting of Venezuela’s state oil company in what may amount to one of the biggest asset seizures in U.S. history.
Three people familiar with the case say the government has been investigating at least a dozen Venezuelans and is expected to file charges in Houston against a few of them as soon as next month. Those on the list, including former executives of Petroleos de Venezuela SA, known as PDVSA, are suspected of having taken bribes from middlemen to award contracts at inflated prices, helping to siphon more than $11 billion out of the country.
All three people spoke on condition of anonymity because the investigation is ongoing and sensitive due to its impact on U.S. foreign policy.
The government has set its sights on a number of U.S. assets, including about 20 residential properties, some in West Palm Beach and the Houston suburbs. Switzerland has seized $118 million in assets from Swiss banks related to the matter and sent $51 million to U.S. authorities, Bloomberg reported on Tuesday.
Venezuela’s Congress Accuses
Venezuela’s opposition-run congress is separately seeking to recover $11.3 billion that went missing from PDVSA between 2004 and 2014 while Rafael Ramirez, currently Venezuela’s ambassador to the United Nations, was company president. It seeks to hold him politically responsible.
Ramirez has rejected the congressional accusations as lies.
Investigators are also looking at the dealings involving PDVSA and a number of companies, including Pratt & Whitney, General Electric Co. and Rolls Royce Holdings Plc, as well as ProEnergy Services, a Missouri-based firm, two of the people said. The prosecutors have been tracking money that flowed through Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co., they added.
A Pratt & Whitney spokesperson declined to comment and noted that its power systems business, which operated in Venezuela, was divested in June 2013 and became PW Power Systems. PW Power Systems did not respond to requests for comment. The other three companies declined to comment, as did all three banks and PDVSA.
The banks handled transactions through accounts held by the individuals who transferred some of their gains out of the country, two of the people said. Money-laundering controls may not have caught transactions done through shell companies, they said.
Cocaine Trafficking
The people under investigation include current Venezuelan government officials, prominent businessmen and individuals suspected of involvement with cocaine trafficking, two of the people said.
Homeland Security Investigations, the Drug Enforcement Administration and the FBI are all involved in the investigation, which has been under way for at least three years and looks at activity going back to 2005.
The FBI declined to comment, as did the DEA, the Justice Department, Homeland Security Investigations and the U.S. Attorney’s office in Houston.
The investigation comes at a time when the cost of corruption is vividly apparent in Venezuela’s crumbling economy. A former finance minister, Jorge Giordani, has said that as much as $300 billion was embezzled from Venezuela in the last decade through high-level corruption. Meanwhile, hunger is spreading in a country that was once one of the world’s wealthiest. Struggling to avoid default, PDVSA on Monday reached an agreement with some creditors to push back bond maturities.
For a QuickTake explainer on Venezuela’s crisis, click here
Confrontation with Maduro
In response to the national crisis, the opposition has sought a voter signature drive aimed at recalling President Nicolas Maduro. Last week the National Electoral Council, which is run by Maduro loyalists, suspended that effort. On Sunday, the oppositionaccused the president of carrying out a coup and vowed to try to replace key figures on the Supreme Court and electoral council and appeal to the International Criminal Court.
The U.S. has a strong legal interest in the case because the allegedly ill-gotten money passed through its banks and was used to buy property here. The people under investigation have been linked to billions of dollars of gains, much of which was transferred to offshore accounts in Panama, the people said.
The U.S. would seize homes and properties — many of them worth tens of millions each — as well as private jets and other assets to create a fund that would eventually be returned to the Venezuelan government after a democratic election, one of the people said.
Ricardo Hausmann, a Venezuelan economist at Harvard who would like to see the current government replaced, said U.S. leadership in this area could prove important.
‘Devastating Political Effect’
“If the U.S. were to say, ‘We’ve identified billions of dollars,’ it would have a devastating political effect at home with Venezuela’s current government,” he said. Washington would also earn goodwill if it later returned any stolen funds, he added.
Javier Corrales, a political scientist at Amherst College, said that in dealing with Venezuela the U.S. has made a point of sanctioning individuals rather than the government as a whole. Some within law enforcement have nonetheless alleged that the Obama administration is dragging its feet in pursuing Venezuelan officials because of its desire to avoid a political and economic implosion there and to help negotiate a soft landing from the current crisis.Corrales said that while political interference may play a role in the sealing of some indictments, the U.S. government largely lets its justice system do its work.
PDVSA’s U.S. affiliate that handles international purchasing is in Houston, where the U.S. recently prosecuted a case which investigators say resembles this one. Roberto Rincon-Fernandez, a Venezuelan national living there, took part in a $1 billion bribery scheme to secure contracts with PDVSA. He pleaded guilty to two counts, including conspiracy to violate corruption laws.
Ever since the leftist party of Hugo Chavez was elected in 1998, Venezuela has allied itself with historic opponents of the U.S., including Cuba and Iran. The U.S. accuses Venezuela of allowing itself to be used as a route for illegal drugs and of failing to adhere to international counter-narcotics agreements.
Two nephews of President Maduro arrested in Haiti are being held in the U.S. on charges that they were involved in a drug-trafficking ring. They have denied it. A State Department official said they are cooperating with federal investigators.
end
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 7:00 am
Euro/USA 1.0883 UP .0009/REACTING TO NO DECISION IN JAPAN AND USA + huge Deutsche bank problems
USA/JAPAN YEN 104.50 UP .192(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA: HELICOPTER MONEY ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST
GBP/USA 1.2231 UP.0011 (Brexit by March 201/pound clobbered)
USA/CAN 1.3308 DOWN .0041
Early THIS TUESDAY morning in Europe, the Euro ROSE by 9 basis points, trading now JUST above the important 1.08 level RISING to 1.0883; 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 UP 3.69 OR 0.12% / Hang Sang CLOSED D0WN 38.97 OR .17% /AUSTRALIA IS HIGHER BY 0.40% / EUROPEAN BOURSES MIXED
We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;
1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.
2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)
3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.
These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>
The NIKKEI: this TUESDAY morning CLOSED UP 130.83 POINTS OR 0.76%
Trading from Europe and Asia:
1. Europe stocks ALL MIXED
2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 38.97% ,Shanghai CLOSED UP 3.69 POINTS OR 0.12% / Australia BOURSE IN THE GREEN /Nikkei (Japan)CLOSED IN THE GREEN/ INDIA’S SENSEX IN THE RED
Gold very early morning trading: $1270.00
silver:$17.78
Early TUESDAY morning USA 10 year bond yield: 1.779% !!! UP 1 in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.
The 30 yr bond yield 2.530, UP 1 IN BASIS POINTS from MONDAY night.
USA dollar index early TUESDAY morning: 98.72 DOWN 4 CENTS from MONDAY’s close.
This ends early morning numbers TUESDAY MORNING
END
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And now your closing TUESDAY NUMBERS
Portuguese 10 year bond yield: 3.19% UP 4 in basis point yield from MONDAY (does not buy the rally)
JAPANESE BOND YIELD: -.065% DOWN 2 in basis point yield from MONDAY
SPANISH 10 YR BOND YIELD:1.08% DOWN 2 IN basis point yield from MONDAY (this is totally nuts!!/
ITALIAN 10 YR BOND YIELD: 1.38 DOWN 1 in basis point yield from MONDAY
the Italian 10 yr bond yield is trading 30 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.03% UP 1 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR TUESDAY
Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/2.00 PM
Euro/USA 1.0897 UP .0023 (Euro UP 23 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 104.29 DOWN: 0.026(Yen UP 3 basis points/POLICY ERROR ON BANK OF JAPAN
Great Britain/USA 1.2171 DOWN 0.0049( POUND DOWN 49 basis points
USA/Canada 1.3335 DOWN 0.0014(Canadian dollar UP 14 basis points AS OIL FELL TO $50.11
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This afternoon, the Euro was UP by 23 basis points to trade at 1.0897
The Yen FELL to 104.27 for a GAIN of 3 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016
The POUND FELL 49 basis points, trading at 1.2171/
The Canadian dollar ROSE by 14 basis points to 1.3335, AS WTI OIL FELL TO AT: $50.11
the 10 yr Japanese bond yield closed at -.065% DOWN 2 POINTS IN BASIS POINTS / yield/ AND THIS IS BECOMING BOTHERSOME TO THE BANK OF JAPAN
Your closing 10 yr USA bond yield DOWN 1 IN basis points from MONDAY at 1.763% //trading well below the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.509 DOWN 2 in basis points on the day /
BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.
Your closing USA dollar index, 98.71 DOWN 4 CENTS ON THE DAY/3 PM
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 2:30 PM EST
London: CLOSED UP 31.24 POINTS OR 0.45%
German Dax :CLOSED DOWN 3.86 OR 0.04%
Paris Cac CLOSED DOWN 11.74 OR 0.26%
Spain IBEX CLOSED DOWN 76.50 OR 0.83%
Italian MIB: CLOSED DOWN 75.74 POINTS OR 0.44%
The Dow was DOWN 53.76 points or 0.30% 4 PM EST
NASDAQ DOWN 26.43 points or 0.50% 4 PM EST
WTI Oil price; 50.29 at 3:00 pm;
Brent Oil: 51.46 3:00 EST
USA DOLLAR VS RUSSIAN ROUBLE CROSS: 62.10(ROUBLE UP 13/100 ROUBLES PER DOLLAR FROM THURSDAY) 2:30 EST
TODAY THE GERMAN YIELD RISES TO +.0.03% FOR THE 10 YR BOND 2:30 EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today
Closing Price for Oil, 5 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 5 PM:$49.96
BRENT: $50.26
USA 10 YR BOND YIELD: 1.758%
USA DOLLAR INDEX: 98.73 down 3 cents
The British pound at 5 pm: Great Britain Pound/USA: 1.2176 down .0045 or 45 basis pts.
German 10 yr bond yield at 5 pm: +.03%
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM
Mega-Merger Monday Gains Gone As Crude Crunch Drags Stocks Lower
But everything was awesome yesterday?
China currency continued to collapse overnight but a small bid came in this afternoon…
Breadth continues to breakdown…
While Nasdaq held most of its gains, the othe rmajor indices gave up most of yesterday’s exuberance…
No end of day ramp for the 9th day of the last 10 days…
Similar pattern in futures today as yesterday…
Technically, S&P Futs were unable to break the 50DMA resistance…
Treasury yields inched lower on the day despite tepid 2Y auction…
The USD Index ended unch despite chaotic swings in GBP and JPY…
Note the machines appeared set on busting 99.00 on the day…
With the usd oscillating higher to unch, PMS were bid (and copper outperformed) as oil slumped…
This is the first close below $50 since oct 4th… (ahead of tonight’s API data)
Gold tested back above its 200DMA once again…
Charts: Bloomberg
end
The Obama administration now confirms that premiums on Obamacare will surge 25% on average across the board
(courtesy zero hedge)
Obama Administration Confirms Obamacare Premiums Will Surge By 25% In 2017
Remember when Obama toured around the country telling everyone that Obamacare was going to increase competition and lower healthcare premiums? If not, here is an example to help jog your memory (comments taken from Obama remarks delivered at Prince George’s Community College on 9/26/13):
Now, this is real simple. It’s a website where you can compare and purchase affordable health insurance plans, side-by-side, the same way you shop for a plane ticket on Kayak — (laughter) — same way you shop for a TV on Amazon. You just go on and you start looking, and here are all the options.
It’s buying insurance on the private market, but because now you’re part of a big group plan — everybody in Maryland is all logging in and taking a look at the prices — you’ve got new choices. Now you’ve got new competition, because insurers want your business. And that means you will have cheaper prices. (Applause.)
As it turns out, pretty much nothing that Obama and his healthcare “experts” predicted about Obamacare actually came true. With 2017 rates now finalized across the country, in fact, Obamacare premiums are expected to increase an average of 25% nationally according to data from theKaiser Foundation. Meanwhile, the 10 hardest hit states will see premiums increase an average of 62% while Arizona is officially the biggest loser with rates in Phoenix soaring 145%.
Of course, as we’ve pointed out before, these skyrocketing rates could inevitably toss the entire Obamacare system into a death spiral from which it may never recover. In order to function properly, Obamacare required a substantial number of young/healthy people to sign up on the exchanges…we call it the “Young & Healthy Tax.” Unfortunately, many young/healthy people decided that they would rather not pay their “Young & Healthy Tax” and decided instead to pay the penalties associated with just not having healthcare at all. These shortfalls in new participants, of course, resulted in hundreds of millions of dollars in losses for health insurers who, in hindsight, miscalculated their risk pool. These losses have now resulted in the massive premium spikes we’re currently seeing which will likely just result in even lower sign ups until the entire system eventually just collapses.
As we pointed out before, the following two maps below beautifully illustrate the epic collapse of Obamacare coverage in just 1 year. Notice that, despite Obama’s promises of increased competition, in reality, the majority of the country will go from having 3+ options for healthcare in 2016 to just 1 option in 2017 (charts per the New York Times).
2016 healthcare insurance carriers by county:
2017 healthcare insurance carriers by county:
Meanwhile, the Obama administration continues to insist that all is well with the Affordable Care Act because many people participating in the exchanges receive taxpayer-funded subsidies…which is fine unless you’re one of the 1mm+ people in the country who purchase private insurance without the benefit of subsidies (or the taxpayer who has to fund those subsidies for everyone else).
In a call with reporters on Monday, officials with the Obama administration stressed that the new numbers don’t reflect what most people will end up paying.
“We think [consumers] will ultimately be surprised by the affordability of the product,” said Kevin Griffis, assistant secretary for public affairs for the Department of Health and Human Services (HHS).
The first step is admitting you have a problem.
end
Larry Lindsay former Chair of the Fed and a Gary Johnson supporter states correctly that the most dangerous candidate is the one that the media is paying the least attention to: Hillary Clinton;
(courtesy zero hedge)
Larry Lindsey Silences CNBC: “The Most Dangerous Candidate Is The One The Media Is Paying The Least Attention To”
“Polling today isn’t the way it used to be, they are not random,” explains a calm Larry Lindsey to an ‘innocent’ CNBC anchor, before pointing out that just how biased (as we have detailed previously) the Clinton-tilted polls are.
One clever anchor retorts – seemingly proclaiming innocence (or ignorance) – “what’s the incentive for the polling organizations to try and cook the books here… pretty short-sighted I would think.”
Lindsey eloquently explains that “they are creating a bandwagon effect… it’s pretty clear what side the news media is on here and that is something that should worry markets after the election… If Mrs. Clinton becomes President, who will keep an eye on her, on the kinds of side-deals that may be happening, on the regulatory abuses…?”
Finally, Lindsey lays the hammer, after CNBC smugly notes that he is not a Trump supporter, the director of the National Economic Council exclaimed,
“I live in a state where I have the luxury of not having to pick between two evils… and vote for Gary Johnson…
but the most important thing as people are deciding between the lesser of two evils, the real question you should be asking is, which is the most dangerous of the two evils, and that one’s easy… the most dangerous evil is the one the press is not focused on…”
US Dollar Spikes To Fresh 8-Month Highs As Dec Rate Hike Odds Top 70%
The US Dollar Index is up 5 weeks in a row and has just crossed above 99 for the first time since January 2016.As December rate-hike odds have surged since the Brexit vote, so the USD Index has tracked almost perfectly,rising almost 7% in that time (the fastest rise in 18 months)…
As Bloomberg’s Richard Breslow noted, The Fed has a Plan A. Go for a December rate hike and work the low and slow mantra to keep everyone calm — and the bubbles from bursting too quickly. There’s no Plan B because that will be decided by results and events as yet unknown.
As long as equities remain in demand, the drag on financial conditions indices from a higher dollar or long-term rates will be muted. And the excuse to ignore numbers which debunk crisis pricing becomes more problematic
end
Home Prices in the USA are now just back to the 2006 record levels
(courtesy Case Shiller/zero hedge)
Case-Shiller Home Prices Rise To 2006 Record Highs
“Everything is awesome,” right? According to the non-seasonally adjusted S&P CoreLogic (Case-Shiller) Home Price index, prices have recovered all of their losses and are back at the highest since June 2006 record highs in August. All 20 cities saw home prices rises year-over-year (and 14 up MoM) but we note that this data does lag the disappointing home sales data from September.
“Supported by continued moderate economic growth, home prices extended recent gains,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month. The seasonally adjusted month-over-month data showed that home prices in 14 cities were higher in August than in July.
Other housing data including sales of existing single family homes, measures of housing affordability, and permits for new construction also point to a reasonably healthy housing market.
“With the national home price index almost surpassing the peak set 10 years ago, one question is how the housing recovery compares with the stock market recovery. Since the last recession ended in June 2009, the stock market as measured by the S&P 500 rose 136% to the end of August while home prices are up 23%. However, home prices did not reach bottom until February 2012, almost three years later. Using the 2012 date as the starting point, home prices are up 38% compared to 59% for stocks.
While the stock market recovery has been greater than the rebound in home prices, the value of Americans’ homes at about $22.3 trillion is slightly larger than the value of stocks and mutual funds at $21.2 trillion.”
end
Consumer Confidence ‘Bounce’ Dies, Plunges Most In 11 Months
For the first time since June, The Conference Board’s Consumer Confidence index declined YoY, plunging from near cycle highs at 104.1 (revised lower to 103.5) to 98.6 (missing 101.5 expectations), this is the biggest monthly plunge since Nov 2015, catching down to UMich and Bloomberg surveys. Employment and Business Conditions sentiment declined notably as did ‘plans to buy’ a home or appliance.
Confidence bounce dies…
Hope declines…
- Present situation confidence fell to 120.6 vs. 127.9 last month.
- Consumer confidence expectations fell to 83.9 vs. 87.2 last month.
“Consumer confidence retreated in October, after back-to-back monthly gains,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”
Consumers’ outlook for the labor market was also less optimistic than in September. The proportion expecting more jobs in the months ahead decreased from 15.7 percent to 13.1 percent. However, those anticipating fewer jobs declined from 18.1 percent to 17.0 percent. The percentage of consumers expecting their incomes to increase was unchanged at 17.5 percent, while the proportion expecting a decline decreased from 10.4 percent to 9.8 percent.
We assume this will all be blamed on the election and that in reality everything is awesome… except it’s not is it?
end
It sure looks like a huge coverup: the President is aware of Hillary’s private server well in advance of what he stated on air:
(courtesy zero hedge)
Wikileaks Shocker: Cheryl Mills Tells Podesta “We Need To Clean This Up – Obama Has Emails From Her”
Recall that in a March 2015 interview with CBS, just after the NYT reported of Hillary’s use of a private email server, president Obama told the American public he had only learned about Hillary’s use of a private server from the press.
As we reminded readers one month ago, CBS News senior White House correspondent Bill Plante asked Mr. Obama when he learned about her private email system after his Saturday appearance in Selma, Alabama. “The same time everybody else learned it through news reports,” the president told Plante. “The policy of my administration is to encourage transparency, which is why my emails, the BlackBerry I carry around, all those records are available and archived,” Mr. Obama said. “I’m glad that Hillary’s instructed that those emails about official business need to be disclosed.”
Unfortunately, the “transparency” of the Obama administration was severely tarnished in late September, when in the FBI’s interview notes with Huma Abedin released by the FBI it was first revealed that Obama had used a pseudonymous email account: “Once informed that the sender’s name is believed to be pseudonym used by the president, Abedin exclaimed: ‘How is this not classified?'” the report says. “Abedin then expressed her amazement at the president’s use of a pseudonym and asked if she could have a copy of the email.”
To be sure, this was not definitive evidence that Obama was aware of Hillary’s email server, nor that there may have been collusion between the president and the Clinton campaign.
That changed today, however, when in the latest Podesta dump we learn that in an email from Cheryl Mills to John Podesta, the Clinton aide upon learning what Obama had just said…
I have some questions here
… countered with something quite stunning:
we need to clean this up – he has emails from her – they do not say state.gov
So just how did Mills and Podesta “clean up” the fact that Obama lied to the American people, a tactic some could allege is evidence of an attempt to cover up a presidential lie to protect Hillary Clinton.
As a further reminder, Politico previously reported that the State Department had refused to make public that and other emails Clinton exchanged with Obama. Lawyers cited the “presidential communications privilege,” a variation of executive privilege, in order to withhold the messages under the Freedom of Information Act. It is therefore unknown what the president’s “alternative” email account was, or who hosted it.
This also explains why in a prior Wikileak, Podesta told Mills in an email titled “Special Category” that she thinks “we should hold emails to and from potus? That’s the heart of his exec privilege. We could get them to ask for that. They may not care, but I(t) seems like they will.” Mills did not respond by email.
The Clinton-Obama emails were turned over to the State Department, which later announced it would not release them.
In light of the latest revelation hinting at a potential collusive cover up, or as they dubbed it “clean up”, perhaps it is time for the State Depratment to unveil just what was said between the president and the Clinton campaign?
end
Dilbert creator Scott Adams comments on why he is supporting Trump and he now emphasizes that he is sure that Trump will win by a landslide
(courtesy Dilbert/Scott Adams)
Dilbert Creator Adams Exposes The Real Bully Party
I’ve been trying to figure out what common trait binds Clinton supporters together. As far as I can tell, the most unifying characteristic is a willingness to bully in all its forms.
- If you have a Trump sign in your lawn, they will steal it.
- If you have a Trump bumper sticker, they will deface your car.
- if you speak of Trump at work you could get fired.
- On social media, almost every message I get from a Clinton supporter is a bullying type of message. They insult. They try to shame. They label. And obviously they threaten my livelihood.
- We know from Project Veritas that Clinton supporters tried to incite violence at Trump rallies. The media downplays it.
- We also know Clinton’s side hired paid trolls to bully online. You don’t hear much about that. Yesterday, by no coincidence, Huffington Post, Salon, and Daily Kos all published similar-sounding hit pieces on me, presumably to lower my influence. (That reason, plus jealousy, are the only reasons writers write about other writers.)
- Joe Biden said he wanted to take Trump behind the bleachers and beat him up. No one on Clinton’s side disavowed that call to violence because, I assume, they consider it justified hyperbole.
Team Clinton has succeeded in perpetuating one of the greatest evils I have seen in my lifetime.Her side has branded Trump supporters (40%+ of voters) as Nazis, sexists, homophobes, racists, and a few other fighting words. Their argument is built on confirmation bias and persuasion. But facts don’t matter because facts never matter in politics. What matters is that Clinton’s framing of Trump provides moral cover for any bullying behavior online or in person. No one can be a bad person for opposing Hitler, right?
Some Trump supporters online have suggested that people who intend to vote for Trump should wear their Trump hats on election day. That is a dangerous idea, and I strongly discourage it. There would be riots in the streets because we already know the bullies would attack. But on election day, inviting those attacks is an extra-dangerous idea. Violence is bad on any day, but on election day, Republicans are far more likely to unholster in an effort to protect their voting rights. Things will get wet fast.
Yes, yes, I realize Trump supporters say bad things about Clinton supporters too. I don’t defend the bad apples on either side. I’ll just point out that Trump’s message is about uniting all Americans under one flag. The Clinton message is that some Americans are good people and the other 40% are some form of deplorables, deserving of shame, vandalism, punishing taxation, and violence. She has literally turned Americans on each other. It is hard for me to imagine a worse thing for a presidential candidate to do.
I’ll say that again.
As far as I can tell, the worst thing a presidential candidate can do is turn Americans against each other. Clinton is doing that, intentionally.
Intentionally.
As I often say, I don’t know who has the best policies. I don’t know the best way to fight ISIS and I don’t know how to fix healthcare or trade deals. I don’t know which tax policies are best to lift the economy. I don’t know the best way to handle any of that stuff. (And neither do you.) But I do have a bad reaction to bullies. And I’ve reached my limit.
I hope you have too. Therefore…
I endorse Donald Trump for President of the United States because I oppose bullying in all its forms.
I don’t defend Trump’s personal life. Neither Trump nor Clinton are role models for our children. Let’s call that a tie, at worst.
The bullies are welcome to drown in their own bile while those of us who want a better world do what we’ve been doing for hundreds of years: Work to make it better while others complain about how we’re doing it.
Today I put Trump’s odds of winning in a landslide back to 98%. Remember, I told you a few weeks ago that Trump couldn’t win unless “something changed.”
Something just changed.
end
Well that is all for today
I will see you tomorrow night
Harvey
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