Nov 2/Five investigations undergoing by the FBI on Clinton, the Clinton foundation and inner circle/Trump surpasses Clinton in the polls/Deutsche bank stock plummets again/DB’s chief economist blasts the ECB again: they must be hurting!/569,000 OZ ADDED TO THE SLV/2.67 TONNES ADDED TO THE GLD/

Gold closed at $1306.40 up $20.40

silver closed at $18.66 or up 47 cents.

Access market prices:

Gold: 1296.50

Silver: 18.47

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 Nov 2 (10:15 pm est last night): $  1294.53

NY ACCESS PRICE: $1289.70 (AT THE EXACT SAME TIME)

Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1296.08

NY ACCESS PRICE: 1291.70 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD TODAY!!  4 dollars

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Nov 2: 5:30 am est:  $1295.85   (NY: same time:  $1296.10:    5:30AM)

London Second fix Nov 2: 10 am est:  $1303.75  (NY same time: $1301.75 ,    10 AM)

Shanghai premium in silver over NY:  59 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: 

 NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH:  381 NOTICES FOR 38,100 OZ  TONES

For silver:

 NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 12 NOTICES OR 60,000 OZ

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by 4181 contracts UP to 196,912. The open interest FELL AS the silver price was UP 63 cents in yesterday’s trading .In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .985 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia &ex China).

In November, in silver, 12 notice filings: FOR 60,000 OZ

I

In gold, the total comex gold ROSE by 12,920 contracts WITH THE RISE in price of gold ($14.90 YESTERDAY) . The total gold OI stands at 521,506 contracts. The bankers supplied the necessary non backed paper trying to quell gold’s advance.

In gold for November: we had 381 notices filed for 38,100 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

TODAY WE HAD  A BIG CHANGE AT THE GLD OUT OF THE GLD/A DEPOSIT OF 2.67 TONNES OF GOLD INTO THE GLD

Total gold inventory rests tonight at: 945.26 tonnes of gold

SLV

we had ANOTHER BIG CHANGE at the SLV/

A DEPOSIT OF 569,000 OZ

THE SLV Inventory rests at: 361.242 million oz

.

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

1. Today, we had the open interest in silver ROSE by 4181 contracts UP to 196,912 as the price of silver rose by 63 cents with yesterday’s trading.The gold open interest ROSE by 12,920 contracts UP to 521,506 as the price of gold ROSE $14.90 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

3c FRBNY gold movement report

(Harvey)

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 19.7 POINTS OR 0.63%/ /Hang Sang closed DOWN 336.57  OR 1.45%. The Nikkei closed DOWN 307.72 POINTS OR 1.76% Australia’s all ordinaires  CLOSED DOWN 1.19% /Chinese yuan (ONSHORE) closed UP at 6.7611/Oil FELL to 45.96 dollars per barrel for WTI and 47.45 for Brent. Stocks in Europe: ALL IN THE RED   Offshore yuan trades  6.7652 yuan to the dollar vs 6.7611  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A  BIT 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

none today

4 EUROPEAN AFFAIRS

i)Deutsche bank stock is falling along with with rising credit default swaps

( zero hedge)

ii)Strange one!!  Deutsche bank’s chief economist Landau accuses the ECB of creating asset bubbles and most importantly expropriating savers plus other goodies as they come clean.

They must be hurting real bad…

( zero hedge/Deutsche bank/Landau)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

i)As a proxy for the upcoming election, the fall in the Peso is a good sign that Hillary is in trouble at the polls

( zero hedge)

ii) Another humourous story from the Philippines.  After Duterte used much vulgar language against the USA, the Americans decided to stop shipments to them.  He again called the Americans: “Monkeys”

( zero hedge)

7.OIL ISSUES

Last night we got a huge inventory build from API.  Today from DOE also confirms a huge buildup.  Oil retreats:

(courtesy zero hedge)

8.EMERGING MARKETS

Venezuela’s currency disintegrates by 20% in just one week. Hyperinflation rages on

( zero hedge)

9.PHYSICAL STORIES

i)The CME is to start London gold contracts in total competition with ICE and LME .. Too many folks are abandoning the manipulated USA gold forum

( Bloomberg/GATA)

ii)The story behind the huge Grasberg mine

( The Guardian from London)

 

iii) Silver’s rise is showing that there is a real flight to safety going on

(courtesy Dave Kranzler/IRD)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)We now have 5 separate FBI cases probing the Hillary-Bill Clinton inner circle:

Here is the background on those 5 cases and all of the major players that we are going to cover.

(the Daily Mail)

ii)Trump and Hillary are basically tied in latest ABC poll

( zero hedge)

iii)Citibank states what even if Hillary wins the election, it will be marked by continuous investigations and an impeachment risk.

( Citibank/zerohedge)

iv)  a.  The Dept of Justice guy, Peter Kadzik who is leading the investigation into the Clinton scandals has now been exposed with colluding with the Clinton campaign.  What a mess!! Yesterday, in my commentary I wrote that this was this biggest conflict of interest possible and it has now become reality.

( zero hedge)

 

iv  b.  The DOJ responds:  finds nothing wrong..so move on…Kadzik is nothing but a huge conflict of interest here!

( zerohedge)

v)Trump now surpasses Clinton as the rats abandon ship

vi)Unusual for these guys to report such a negative repot:  the ADP employment sinks to its weakest level for over 2 years:

( ADP/zero hedge)

vii)The New York, ISM mfg index contracts for the 3rd consecutive month:

 

( zero hedge/ISM)

viii)The Fed holds again but states that the rate hike in December “strengthens”

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 12,920 CONTRACTS to an OI level of 521,506 as the price of gold ROSE $14.90 with YESTERDAY’S trading.The bankers were on full alert supplying the necessary non backed gold paper keeping the gold price contained.In the front month of November we had 494 notices standing for a GAIN of 19 contracts.  We had 13 notices served upon yesterday so we GAINED 32 contracts or 3200 ADDITIONAL oz will  stand for delivery in November. The next contract month and the biggest of the year is December and here this month showed a increase of 8,987 contracts up to 369,645.

Today, we had 381 notice(s) filed for 38,100 oz of gold.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI rose by 4181 contracts from 192,731 up to 196,912 as the  price of silver ROSE to the tune of 63 cents  yesterday.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3:  (224,540). The front month of November had an OI of 51 and thus a gain of 42 contracts. We had 0 notices filed upon yesterday so we gained 42 contracts or an additional 210,000 oz will stand for delivery.  The next major delivery month is December and here it FELL BY 46 contracts DOWN to 139,664.

In silver had 12 notices filed for 60,000 oz

VOLUMES: for the gold comex

Today the estimated volume was 210,779  contracts which is good.

Yesterday’s confirmed volume was 229,195  which is good

today we had 20 notices filed for 2000 oz of gold:

INITIAL standings for NOVEMBER
 Nov 2.
Gold Ounces
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
26,258.193 oz
Brinks
Manfra (3 kilobars)
Scotia
Deposits to the Dealer Inventory in oz nil oz

 

Deposits to the Customer Inventory, in oz 
 6,411.28 oz
Brinks
No of oz served (contracts) today
381 notices 
38,100 oz
No of oz to be served (notices)
113 contracts
 11,300
oz
Total monthly oz gold served (contracts) so far this month
1269 contracts
126,900 oz
3.9471 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil oz
Total accumulative withdrawal of gold from the Customer inventory this month     26,451.1 oz
Today we had 1 kilobar transactions and more gold leaves the comex
Today we had 0 deposit into the dealer:
total dealer deposits:  nil  oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
.
We had 1 customer deposit;
 i) Into Brinks:  6411.28 oz
total customer deposits; 6411.28 oz
We had 3 customer withdrawal(s)
 i) out of Brinks: 1552.99 oz
ii) Out of Manfra:  96.45 oz (3 kilobars)
iii) Out of Scotia:  24,608.753 oz
total customer withdrawal:26.258.193   oz
We had 0 adjustment(s)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventor 2,258,271.504 or 70.241 tonnes
Total gold inventory (dealer and customer) =10,581,045.854. or 329.114 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 329.11 tonnes for a  gain of 26  tonnes over that period.  Since August 8 we have lost 25 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
For November:

Today, 0 notices were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 381 contract  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the NOV. contract month, we take the total number of notices filed so far for the month (1269) x 100 oz or 126,900 oz, to which we add the difference between the open interest for the front month of NOV (494 contracts) minus the number of notices served upon today (381) x 100 oz per contract equals 138,200 oz, the number of ounces standing in this non  active month of November.
 
Thus the INITIAL standings for gold for the Nov contract month:
No of notices served so far (1269) x 100 oz  or ounces + {OI for the front month (494) minus the number of  notices served upon today (381) x 100 oz which equals 138,200 oz standing in this non active delivery month of Nov  (4.1990 tonnes).
we gained 32 contracts or an additional 3200 oz will stand for delivery.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 12 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for 2016:
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov. 4.2986 tonnes.
total for the 11 months;  187,690 tonnes
average 17,062 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month. From May 2016 until Nov 2016 we have had: 164.458 tonnes per the 7 months or 23.494 tonnes per month (which includes the non delivery months of May, June and Sept).  In essence the demand for gold is skyrocketing.
Something big is going on inside the gold comex.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST TWO MONTHS  24 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
 
NOV INITIAL standings
 Nov 2. 2016
Silver Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
607,570.563 oz
Delaware
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 599,926.900 oz
Brinks
No of oz served today (contracts)
12 CONTRACT(S)
(60,000 OZ)
No of oz to be served (notices)
39 contracts
(195,000 oz)
Total monthly oz silver served (contracts) 350 contracts (1,750,000 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  1,582,554.8 oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 1 customer withdrawal:
i) Out of Delaware:  607,570.563 oz
Total customer withdrawals: 607,570.563  oz
We had 1 customer deposit(s):
i) Into Delaware:  599,926.900 oz
total customer deposits;  599,926.900 oz
 
 
 we had 0 adjustment(s)
.
Volumes: for silver comex
Today the estimated volume was 79,997 which is excellent.
YESTERDAY’S  confirmed volume was 106,133 which is HUGE
The total number of notices filed today for the Nov. contract month is represented by 12 contracts for 60,000 oz. To calculate the number of silver ounces that will stand for delivery in Nov., we take the total number of notices filed for the month so far at  350 x 5,000 oz  = 1,750,000 oz to which we add the difference between the open interest for the front month of NOV (51) and the number of notices served upon today (12) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the NOV contract month:  350(notices served so far)x 5000 oz +(51) OI for front month of NOV. ) -number of notices served upon today (12)x 5000 oz  equals  1,945,000 oz  of silver standing for the NOV contract month.
we gained 42 contracts or an additional 210,000 oz will stand for delivery in this non active month of November..
 
Total dealer silver:  30.460 million (close to record low inventory  
Total number of dealer and customer silver:   173.575 million oz
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
end
And now the Gold inventory at the GLD
NOV 2/ A DEPOSIT OF 2.67 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 945.26 TONNES
Nov 1/no change in gold inventory at the GLD/inventory rests at 942.59 tonnes
Oct 31/no changes at the GLD/Inventory rests at 942.59 tonnes
Oct 28/no changes at the GLD/Inventory remains at 942.59 tonnes
OCT 27/NO CHANGES AT THE GLD/INVENTORY REMAINS AT 942.59 TONNES
Oct 26/a massive 14.24 tonnes of gold leave the GLD and I am sure this is a paper transaction/this “paper gold” was used in the whacking of gold today/Inventory rests at 942.59 tonnes
OCT 25/A HUGE ADDITION OF 3.27 TONNES INTO THE GLD/INVENTORY RESTS AT 956.83 TONNES
OCT 24/NO CHANGES AT THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 21/A MONSTROUS CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 16.61 TONNES FROM THE GLD/INVENTORY RESTS AT 953.56 TONNES
OCT 20/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD OF 2.94 TONNES/INVENTORY RESTS AT 970.17 TONNES
OCT 19/no change in gold inventory at the GLD inventory/inventory rests at 967.21 tonnes
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Nov 2/ Inventory rests tonight at 945.26 tonnes
*IN LAST 22 DAYS: 4.93 TONNES REMOVED FROM THE GLD

end

Now the SLV Inventory
NOV 2/ A DEPOSIT OF 569,000 OZ INTO THE SLV/INVENTORY RESTS AT 361.242
Nov 1/no change in silver inventory at the SLV/inventory rests at 360.673 million oz/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 360.673 million oz/
Oct 28/NO CHANGE IN SILVER INVENTORY AT THE SLV/iNVENTORY RESTS AT 360.673 MILLION OZ
OCT 27/A MONSTROUS WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 360.673 MILLION OZ  (AND YET NO CHANGE IN THE SILVER PRICE???)
Oct 26/NO CHANGES AT THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ/
OCT 25/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 24/NO CHANGES AT THE SLV INVENTORY/INVENTORY RESTS AT 366.366 MILLION OZ
OCT 21/A HUGE CHANGES IN SILVER INVENTORY AT THE SLV/: A DEPOSIT OF 3.226 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 366.366 MILLION OZ
oCT 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 363.140 MILLION OZ
oCT 19/a good sized change at the SLV inventory: a deposit of 855,000 oz/rests at 363.140 million oz/
.
Nov 2.2016: Inventory 361.242 million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 3.5 percent to NAV usa funds and Negative 3.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.4%
Percentage of fund in silver:38.8%
cash .+0.8%( Nov 2/2016).
2. Sprott silver fund (PSLV): Premium FALLS to +0.53%!!!! NAV (Nov 2/2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO  0.40% to NAV  ( Nov 2/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0.53% /Sprott physical gold trust is back into positive territory at 0.40%/Central fund of Canada’s is still in jail.
 
 
 

end

FEDERAL RESERVE BANK OF NEW YORK: EAR MARKED GOLD MOVEMENTS

LAST MONTH:  7,849 MILLION DOLLARS WORTH OF GOLD VALUED AT $42.22

THIS MONTH: 7,841 MILLION DOLLARS WORTH OF GOLD VALUED AT $42.22

THUS 8 MILLION DOLLARS WORTH OF GOLD AT 42.22 LEFT NEW YORK

OR 189,483.65 OZ (5.8937 TONNES)

Since Germany is the only official nation asking for repatriation of their gold, we can safely assume that this gold is heading for Frankfurt.

end.

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

Trading in gold and silver overnight in Asia and Europe

Diwali, Gold and India – Is Love Affair Over?

Diwali, Gold and India –  Is the Love Affair Over?

I live in Dubai where Diwali has been the focus for many this weekend. With Diwali comes not just fantastic light displays and celebrations but also huge adverts for Hindus to buy gold for their loved ones in India and throughout the world.

Buying gold at Diwali is a religious or spiritual act and it is considered auspicious and thought to bring good fortune and prosperity.

diwali_gold_2017Win Gold Coins for Shopping

Not only are there offers to buy gold jewellery, bars and coins but there are competitions to win gold.  When I went to do my weekly shop at a Carrefour I was delighted to see a gold coin on display that I could win.

‘The more you shop the more coins you can win’ the poster told me, so on I shopped convincing myself I was making a possible investment decision.

Double page spreads, billboards and radio adverts regarding gold are not uncommon here and are very much a part of day-to-day life. The gold price, UAE gold coin and reports of gold take front and centre of the daily newspaper. Back in London an FT mention of gold and at least six people forward it onto me. In Dubai, the Middle East and much of Asia, it’s no big deal.

Whilst the local Emirati population has a desire to hold gold it is the Indian population (who represent 42% of society here), their countrymen and their love for gold, that has me fascinated this week.

India is often quoted as the world’s largest gold importer, a crown that has been wrestled away by China, but both still rule the charts. This is a relatively new phenomenon for India. Until 1990 gold imports were pretty much banned, just eight years prior to that only 65 tonnes of gold had been brought in, by 2010 imports had reached over 1,000 tonnes.

We have written about India’s understanding of, spiritual affinity and love of gold in the past, usually around this time of year when everyone starts writing about it. It is festival and wedding season, and it is one of the few periods when mainstream precious metals analysts actually look at physical demand and supply – the heart of what makes gold so interesting. They look away from the hot air the West spews out about the dollar, all powerful central bank interest rate changes, presidential elections and EU traumas affecting the gold price and instead tell a real human-based story about gold demand in India, and how it provides strong underlying support for the gold price.

But this year something has changed. I am now living in among this desire to buy gold yet at the same time I am reading on Bloomberg and Reuters that the Indian gold market is on its knees.

Is this love trade really over? Was the bustling gold souk in the old part of Dubai just a mirage?

The truth is, the Indian gold market has had some tough blows in the last few years. And yet, he Indian gold market has shown incredible resilience over the years. Despite this, every single year without fail, there are renewed warnings and misleading headliens regarding a decline in Indian demand.

We are in the final quarter of the year when gold demand should be booming. Yet Bloomberg interviewed ‘five jewellers and traders’ (yes, five, an excellent sample size in a country of 1.25 billion). The findings of the survey concluded that ‘[gold] demand has just fallen off a cliff’ and predicted that just 650 tonnes would be imported this year.

Has gold demand fallen off a cliff? Why does Bloomberg think so? And why is this only important at this time of year?

Why do you only care about India during Diwali?

It is considered auspicious to buy gold during the festivals of Diwali and Dussehra, and this additional demand for gold is added to due to the final quarter of the year being wedding season, when between 35% and 40% of a wedding’s expenses is thought to be spent on gold. But, and this may come as a shock to those running the Bloomberg survey, the country does still buy gold the rest of the year.

A few years ago Jeff Nichols wrote that he believed gold bears ‘have a fairly provincial view and limited understanding of gold’s increasingly bullish long-term fundamentals.’ He defined ‘provincial’: ‘they are ignoring more than half the world.’ Because, Western mainstream analysts and commentators only consider gold demand in the East during times of celebration, because it is seen as the done thing, and it is disregarded the rest of the year.

What the mainstream forgets is that gold isn’t purchased during these special occasions because of good marketing (as we see in the West during Christmas time and present giving), but because it is a trusted form of currency and investment.

Gold demand, not dead yet.

First up it is important to note that the World Gold Council expect gold demand in India to be around 750 – 850 tonnes this year, not quite as dire as Bloomberg but still slightly off the 926 tonnes seen in the fiscal year of 2015 -2016. In 2015, gold demand climbed about 2.5% on the previous year. MMTC-PAMP (the Indian gold refiner) have reported a dramatic drop in gold imports this year, in value terms numbers dropped 76% to 60 tonnes between April and July.

Meanwhile, the jewellers who clearly weren’t speaking to Bloomberg are even more than the WGC and are reported to be expecting sales to be increasing to by 50-60 percent over last year, according to the Indian Bullion and Jewellers Association. This doesn’t necessarily mean increased imports. It may be on account of some increased stock building by jewellers earlier in the year.

This year has been tough though for gold traders in India. In the first half of the year 100 tons of demand was lost due to a strike by jewellers in protest over a tax on jewellery made and sold in the country. Jewellery has suffered. In 2014 India consumed 668.5 tonnes of jewellery, an increase of  6% from 632.2 tonnes in 2014 and 615.7 tonnes in 2013. However Q1 this year saw jewellery consumption down to 72.9 tonnes from 148.5 tonnes in Q1 2015, according to GFMS estimates, while between April and June it fell further from 56.3 percent to 69.2 tonnes from 158.2 tonnes.

Whilst numbers might be down somewhat, there is no threat to them no longer contributing to global gold demand. Many believe that China still own the gold crown, but according to a GFMS, Thomson Reuters survey, India still reigns. In fact, last year India’s gold bar demand saw an 81% increase in growth  in the second-half of the year, contributing to an overall 16% increase worldwide. China, in comparison only saw a 19% increase.

Gold is the fall-guy when it comes to black money and over spending.

The government has, without doubt, been the single most negative force on India gold demand in recent years. Given the measures that have been taken, official gold demand has been impressively resilient.

Gold controls in India are nothing new. These have come in both the form of bans, duties and gold mobilisation efforts (to get gold int the financial system). Each time the government has given in due to smuggling rates or low uptake

–          In 1947 gold bullion imports and exports were banned under the Foreign Exchange Regulation Act. Lifted in 1966.

–          In November 1962, 15 year gold bonds were issued at 6.5% in an attempt to mobilise privately held gold. This only saw an estimated 16 tonnes exchanged for bonds. A small percentage of the total holdings.

–          Further efforts at mobilising gold continued between 1962 and 1993. Each was disappointing in regard to how much gold was mobilised.

–          In 1968 the Gold Control Act was implemented which forbid the holding of gold bars and restricted families’ jewellery holdings. This was abolished in 1990.

–          In 1977 the government considered controlling the market in an attempt to stop smuggling. According to the MCX this idea was seen as an impossibility due to foreign exchange reserves. Instead, the confiscated gold was sold in small quantities through the RBI, ‘however, it did not have any major impact on smuggling.’

From 1997 gold was in free flow and demand began to climb. However from 2012 the current-account deficit was wearing the government down so they turned to gold to solve their problems, although perhaps not in a conventional sense. In 2012 an economic survey found “There is scope to discourage unproductive imports, like gold and consumer goods, to restore balance.”

The government began to place various restrictions on gold imports in the form of duties and import/export ratios. Since 2012 the import duty has gradually climbed from 2% to 12%.

When the Indian government announced gold controls it was because the level of imports had derailed the rupee and pushed the current account deficit to unprecedented levels, or so they said.

In truth zero-rated tariff structures for capital goods imports punished the current account deficit by $339 billion, more than that of gold which accounted for $161 billion. Gold however, is the barbarous relic in some western economists’ theories and books, and so it came to be in certain economic and government circles in India as well.

Government imposed controls and duties on gold are no longer just because of the current account deficit. Instead these are decisions made to clamp down on ‘black money’ (money that has not been declared). Marwan Shakarchi, chairman of MKS (Switzerland) SA, told Bloomberg the drop in gold demand “is a sign the government is serious about cracking down on black money,” he said, referring to a campaign by Prime Minister Narendra Modi “to curb undisclosed income.”

$450 billion is thought to escape the eye of the tax man in India, and as a result is hot money. As ever when a government looks to crack down on money laundering and tax evasion, gold is often blamed as a source (rather than bi-product) of the situation and suffers as a result.

Import duty on gold in India remains a source of discussion, which many believe should be cut from 12% to just 6%. However, despite the fall in the current-account deficit, there is little incentive for the government to reduce the import tax on gold. In 2015 they raised $3.3 billion.

At the beginning of the year, Finance Minister Arun Jaitley decided to keep the duty intact (much to the market’s surprise) and went further by imposing an excise duty on gold jewellery sales from March. This lead to the one-and-a-half month strike by jewellers, who have been punished plenty by recent gold duties.

The decisions by Jaitley curbed gold jewellery demand in the first quarter, sending it to its lowest level in seven years to 88.4 tonnes. Total demand slumped 39 percent from a year ago to 116.5 tonnes, according to the WGC.

Next year a general sales tax on gold jewellery will be imposed. Commentators at this year’s LBMA conference stated that they believe this tax will be around 18%. Unsurprisingly a tax at that level would normally reclassify a good as a luxury, but this is more than a ‘nice-to-have’ item for Indian gold buyers. And so we suspect this will have little impact on unofficial gold figures.

Smuggling is encouraged

For all the various figures and commentaries that point to and suggest a drop in gold demand, there is one area which speaks for itself when it comes to the country’s desire to own gold no matter what. Smuggling.

Smuggling is rife thanks to government controls and imposed duties (see below), the efforts to curb gold demand have been so relentless that it appears to just encourage more smuggling, each year.  It is the smugglers who have offered the unfaltering supply to the buyers who will continue to demand gold. Even prior to the 1990s, gold continued to be bought, thanks to smuggling.

The trouble with illegal activity is that you never know whose figures to believe and so reliable numbers are hard to come by. Recently someone told me that 70% of the gold brought into India was smuggled, and this was repeated at this year’s LBMA conference when it was reported that two-thirds of India’s gold inflows come via smuggled channels, including men with “stomachs full of gold,” as we reported in 2014.

Officially, 100 tonnes of gold is thought to have been smuggled into the country between April and September this year, according to business-standard.com. In 2014 the BBC reported that an estimated 700kg was smuggled into India each day, although the World Gold Council believes a far more conservative 175 tonnes of gold were smuggled into India in all of 2014.

The truth is, that whilst official figures suggest things are flat in the Indian gold market, smuggling remains rife and is playing an increasing role in gold import figures. Whilst big brand jewellers might not want to partake (or admit to partaking) in illegal gold activities, the demand (and therefore supply) is coming from somewhere. Otherwise smugglers wouldn’t be risking jail fines and uncomfortable plane journeys to get the gold from Dubai, Singapore, Bangladesh and Nepal into India.

India is a massive country with a massive land border and it is impossible to prevent smuggling.

Who is buying the gold, smuggled or not?

A GFMS 2016 gold survey found those households dependent on agricultural activities, in India, contribute to 35% of annual gold demand. Within rural households gold comprises 45% of their total savings.

There is no asset as liquid as gold, in India. And this is one of many reasons why it is so popular with those in rural and unbanked areas. Central banker Y. V. Reddy once said, “The real purchaser of gold is typically a peasant.” Whilst Jeffrey A. Franks, of the IMF, was once quoted as saying, “Holding gold has, in fact, often in history served, from France to India, as the only way the peasant can protect himself against inflation and the vicissitudes of politics”.

But to a government so influenced by uber-Keynesian and neo-liberal economics, it continues to treat their own people in a similar vein. “it should be noted that labour-only households adopt a high risk-high return strategy due to their over-investment in one asset, viz. gold.” stated a paper by NSE and the Institute for Financial Management and Research (IFMR) in 2015. But for those spending 45% of their wealth on gold, this is not a ‘high-risk return strategy.’

S.Gurumurthy in the Hindu Business Line writes, “Only gold, no other asset, has so consistently beaten inflation. The average inflation during 2001-02 to 2005-06 was 4.7 per cent but gold yielded 9.2 per cent — almost double. The average inflation for 2006-7 to 2010-11 was 6.7 per cent but the yield on gold was 23.7 per cent — three times plus. Average inflation for 2012 is 9 per cent but gold returned 33.5 per cent — almost four times. Traditional India intuitively seems to understand the value of gold.”

This is something that has been unappreciated, or most likely ignored, by government  trying to crack down on gold ownership. Taxes on gold have been created with the wealthier in mind. These are the people who usually operate within the financial system, pay taxes regularly and are used to and more receptive to such government and more western approaches.

However, an asset that represents 45% of a rural household’s savings is unlikely to suddenly disappear thanks to a new law passed by the government.

As an India farmer looks at it, the Indian rupee has lost over 88% of its purchasing power in relation to the US dollar, since 1978. The rising price of gold has helped to maintain purchasing power.

It is also important to question what gold is used for, in some areas. Of the 41.2 million non-farming businesses in India (employing over 100 million people) 91% are funded by families and unofficial private financing companies. Gold is frequently used as loan collateral.

Across the financial spectrum, gold remains a key feature in household expenditures

There is an argument that with the growth of the middle classes and urbanisation, the term ‘rural household’ is perhaps outdated and misconstrued. The middle class in India grew by 67% between 2001 and 2016. With this change in the demographics of India, will no doubt come changing demands and practices.

Some market commentators point to the millennials as a potential problem for the gold market, in both India and China. Whilst they have all had the need to own and hold gold drilled into them, there are now a number of other ways they’d like to spend their money.

One also has to consider how a squeezed middle-class will look at the 0.9% return in rupee terms that gold has delivered since 2013, versus the 5.6% on property and 11.9% on local equities (according to Kotak bank).

“People are less inclined to buy the traditional gold jewellery these days. They prefer to buy gold bars and coins available at banks instead. Jewellery shops in different parts of the city have also pulled a large chunk of customers away from us,” Gaurav Verma, a gold merchant at Sarafa Market, told the Times of India.

However In 2014-15, a survey carried out by the Federation of Indian Chambers of Commerce & Industry (FICCI)NSE and the Institute for Financial Management and Research (IFMR) found that more than three quarters of Indians view the precious metal as a “safe asset.”

Interestingly only 23.05%  saw this as a way of saving for the future – even though this is in many ways what a safe asset is.

A presentation by MMTC PAMP at the LBMA conference this month suggested that in India where “there may be an investment benefit, the driver for Gold is not ‘conventional’ investment.”

Can the government change how Indians buy gold?

In 2013, the Reserve Bank of India Working Group to Study the Issues Related to Gold Imports and Gold Loans stated that “demand for gold appears to be autonomous and a function of several influences and factors that may not be strictly amenable to policy changes” (i.e.it ignores Western theory).

It goes on “…gold demand is price inelastic… buyers take recourse to unauthorised channels to buy gold”.

The government, whilst actively working against gold imports has decided it would still like to benefit from the cultural desire to own gold and overcome the growing smuggling rings.

One thing that we are now seeing in India is the marketing to encourage the mental shift of gold ownership for investment rather than for savings.

Financial bods and government look down on and worry about the ‘investment strategy’ of these rural households. The discomfort with Indian’s buying and holding gold outside of the financial system has led to the Reserve Bank of India setting up a committee to consider why so much money is put into the safe haven.

They will look at “whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour.”

In a 2015 paper by NSE and the Institute for Financial Management and Research (IFMR) explains why, really they would be better getting their gold into the financial system, stating that given ‘gold ETFs outperformed physical gold by providing returns of 23.97% at a standard deviation of 10.04% compared to returns of 20.97% at a standard deviation of 13.56% for physical gold. Inclusion of a wider suite of financial assets including gold ETFs, MMMFs, and corporate bonds could lead to a Pareto improvement in the risk-return profile of households.”

However this analysis was carried out without considering those slightly important considerations such as commission, taxes, management fees etc. With ETFs there is always ‘fee drag’, something which is non existent for an Indian household who just keeps it at home, out of harm’s way.

For those families spending £20,000 -£25,000 on gold, standard deviations, corporate bonds and ‘suites of financial assets’ are unlikely to undo hundreds and thousands of years of buying physical gold.

Last November, Modhi launched the India Gold Coin, along with the World Gold Council. GFMS reports that the launch, “saw an underwhelming response, attributed to less awareness and minimal distribution network.” It is the country’s first ever sovereign gold coin and the only coin to be hallmarked by the Bureau of Indian Standards.

Jewellery sales might be down, but the government (like China) has tried to formalise gold demand by launching gold-backed sovereign bonds – effectively monetising gold. However, they have so far had little uptake, they represent less than 0.2% of the country’s total gold products.

Here, it is also important to question what gold is used for, in some areas. Of the 41.2 million non-farming businesses in India (employing over 100 million people) 91% are funded by families and unofficial private financing companies.

The government aren’t shy about persuading citizens to buy bonds instead of physical gold, this season. Money Today reportsthe launch of the ‘sixth tranche of SGB [sovereign gold bonds] the government has launched it at discount of Rs50 at Rs, 2957, which is it the lowest subscription price for 2016-2017. But at the same time the government has reduced the interest rate from 2.75% to 2.5% on these bonds.”

The news site goes onto explain that these SGB’s in paperless format are very handy and ‘save you the hassle’ of looking after it. Unlike with physical gold the owner is locked in for eight years with an exit option after five years. “By investing in these bonds you can cash in on the upside movement in gold prices as well as earn 2.5% interest at the time of exit.” Also, you don’t pay CGT on the gold if you wait the subscribed eight years, unlike with physical gold and ETFs.

Note, this is no longer about current account deficits and black-money, the kind of rhetoric now being used by government bodies is that they are mobilising gold for the good of the people. Given the levels of smuggling, it seems likely that government declarations of a war on gold for the good of the economy has fallen on deaf ears.

Conclusion: Will the Indians keep their gold?

It is clear from smuggling levels, as well as official import levels that gold demand is not going to be ‘falling off a cliff’ any time soon. But more importantly the lesson in India is that their love for gold cannot be ‘dealt with’ in a Western paradigm.

In the West gold is still peddled by the media as the asset of the wealthy and rarely owned by the common man, in India it is very much the latter. It is a cultural and indeed a spiritual phenomenon, not a financial asset.

As the Hindu Business Line, writes (quoting Aseem Chawla, Partner, MPC Legal):
‘Indians are creatures of habits; they save a third of their earning — a phenomenon probably explained by “our cultural values rooted in conservatism” and household savings which constitute large chunk of national savings are normally invested in “safe yet non-productive investments like gold.”’

Ultimately though, we do all buy and hold gold for the same reason – to protect ourselves from incompetence of governments and the central banking system. It is also a hedge against war and the occasional tyranny of our “great leaders.”

No matter which country you live in a practical paradigm must exist that ensures gold imports do not encourage crime and also benefit the citizens as well the economy.

Gold in India, as across the West, is increasingly touted as something that weakens and reduces economic power of individuals. The truth is, it is the ultimate expression of economic power and freedom. It is an asset which cannot be fiddled or debased by governments or banks. Physical gold owned in thesafest ways (allocated and segregated), in the safest vaults in the world, cannot suddenly disappear when you go to check your ‘gold balance’ one day.

In many ways, the justification for Indian’s buying gold is stronger than ever, just as we see in the West, as explained by the IBJA:

“The market sentiment looks good as gold seems to be secure investment in the current Indo-Pak political scenario and the ongoing US presidential elections. The good monsoon this year will play a key role in bringing back rural demand in an agro-based economy like India.”

However research suggests that western logic for owning gold is not at the forefront of Indian buyers’ minds, instead it is just what one does. Indians always have and they likely always will …

diwali-gold-coin

Gold and Silver Bullion – News and Commentary

Gold heading for best year in four in 2017: poll (Reuters.com)

Gold steady ahead of Fed meeting outcome (Reuters.com)

Asian Stocks Slide With Won as Election Angst Boosts Yen, Gold (Bloomberg.com)

Stocks Fall as Gold Climbs With Treasuries Amid Election Anxiety (Bloomberg.com)

CME to Start London Gold Contract in Challenge to ICE, LME (Bloomberg.com)

SWOT Analysis: The Potential Drivers for Gold Demand in China and India (Goldseek.com)

Silver Spikes To Key Resistance At One-Month Highs As Dollar Dumps (ZeroHedge.com)

Unprecedented U.S. Treasury Bond Dumping (FutureMoneyTrends.com)

Rick Santelli on Central Banks Buying Stocks (Youtube.com)

Economic stress as world runs out of dollars (Telegraph.co.uk)

7RealRisksBlogBanner

Gold Prices (LBMA AM)

02 Nov: USD 1,295.85, GBP 1,056.51 & EUR 1,169.76 per ounce
01 Nov: USD 1,284.40, GBP 1,048.58 & EUR 1,167.52 per ounce
31 Oct: USD 1,274.20, GBP 1,046.25 & EUR 1,163.22 per ounce
28 Oct: USD 1,265.90, GBP 1,042.47 & EUR 1,160.96 per ounce
27 Oct: USD 1,269.30, GBP 1,038.29 & EUR 1,162.93 per ounce
26 Oct: USD 1,273.90, GBP 1,043.45 & EUR 1,166.13 per ounce
25 Oct: USD 1,269.30, GBP 1,037.53 & EUR 1,165.85 per ounce

Silver Prices (LBMA)

02 Nov: USD 18.54, GBP 15.05 & EUR 16.70 per ounce
01 Nov: USD 18.24, GBP 14.91 & EUR 16.54 per ounce
31 Oct: USD 17.76, GBP 14.59 & EUR 16.22 per ounce
28 Oct: USD 17.61, GBP 14.51 & EUR 16.13 per ounce
27 Oct: USD 17.66, GBP 14.41 & EUR 16.16 per ounce
26 Oct: USD 17.66, GBP 14.46 & EUR 16.17 per ounce
25 Oct: USD 17.73, GBP 14.49 & EUR 16.30 per ounce


Recent Market Updates

– Silver Krugerrands By South African Mint Coming Soon – Massive Clearance Sale on Gold Krugerrands
– Trump “Will Probably Win” and Gold “May Rise $100” Overnight – Rickards
– World Is Out of Weapons
– Gold Is The “Kardashian of Commodities” – Herbert & Keiser Interview Skoyles
– Value of Gold – Unlike Paper Currency Gold Maintained Value Throughout Ages
– 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

 

 

end

 

Silver’s rise is showing that there is a real flight to safety going on

(courtesy Dave Kranzler/IRD)

 

Gold is powering higher because the dollar is dropping. The dollar index is down 1.7% in the last 3 1/2 trading sessions. It’s down 2.3% vs the euro in the last 5 1/2 days, down 2.1% vs the yen in the last 3 days and down nearly 2% vs. the Swissie since Sunday night.

This is NOT about the political chaos connected to the U.S. election. That’s a sideshow distraction to the real problems going on behind the scene.

The U.S. economy is starting to collapse. This is becoming glaringly evident from most of the data, notwithstanding the highly manipulated economic reports like auto sales.

The movement back into non-fiat assets is starting again – anything connected to debt, like housing, is a de facto fiat asset. The best indicator of this is not gold, but silver. Silver was correlating with SPX for most of October, when the investment “thesis” was “a strengthening economy is good for industrial metals.”

The graph below illustrates this. It shows silver’s movement vs. the SPX for the last 3 months:

untitled1

Silver correlated almost perfectly with the movement of the SPX for most of October (shaded area on the graph). But silver has moved up while the SPX has been selling off (including today, Nov 2nd) the past 4 trading sessions. This signals a switch from silver performing as an “industrial” metal to silver functioning as a “monetary” metal.

Certainly based on the gold-silver ratio, silver is extraordinarily cheap to gold and thus represents a prototypical “value” trade as the markets begin to accept and reflect economic reality and reject the politically-charge propaganda about a “healthy” economy coming from the Fed, the White House and the Democratic candidates.

IRD sponsor’s the Mining Stock Journal, which provides unique commentary and insight into the precious metals and mining stock market.  It also presents typically an under-followed junior mining stock investment idea and, when warranted, large-cap trade.  A few issues ago I recommended First Majestic calls.  As of today,  those calls are up over 50% from offer side at issue to bid side right now.   New subscribers also receive all of the back-issues.  You can subscribe by clicking here:  Mining Stock Journal.

 

The CME is to start London gold contracts in total competition with ICE and LME

Too many folks are abandoning the manipulated USA gold forum

(courtesy Bloomberg/GATA)

CME Group to start London gold contract in challenge to ICE, LME

Section:

Governments and central banks use CME Group exchanges for surreptitious trading of all major futures contracts in the United States:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

* * *

By Eddie Van Der Walt
Bloomberg News
Tuesday, November 1, 2016

CME Group Inc. will start London gold and silver contracts in January to offer a spread between spot prices and benchmark U.S. futures, competing with similar planned contracts from Intercontinental Exchange Inc. and the London Metal Exchange.

CME’s new contracts will be listed on Comex in New York and begin trading on Jan. 9, pending a regulatory review, the world’s largest futures exchange told reporters at a briefing in London on Tuesday. The spread will be based on the new spot contracts and active Comex futures, it said.

Exchanges are fighting for a share of London’s $5 trillion-a-year gold market as scrutiny from regulators triggers a shake up of the city’s over-the-counter trading. ICE said last month it will start a new contract for London and use it to clear its daily auction for the metal. Separately, the LME, World Gold Council, and several banks plan to introduce centrally cleared gold and silver contracts in the first half of next year. …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-11-01/cme-to-start-gold-silv…

END

 

The story behind the huge Grasberg mine

(courtesy The Guardian from London)

The $100 billion gold mine and the West Papuans who say they count the cost

Section:

By Susan Schulman
The Guardian, London
Tuesday, November 1, 2016

TIMIKA, West Papua, Indonesia — In 1936 Dutch geologist Jean Jacques Dozy climbed the world’s highest island peak: the forbidding Mount Carstensz, a snow-covered silver crag on what was then known as Dutch New Guinea. During the 4,800-metre ascent, Dozy noticed an unusual rock outcrop veined with green streaks. Samples he brought back confirmed exceptionally rich gold and copper deposits.

Today these remote, sharp-edged mountains are part of West Papua, Indonesia’s largest province, and home to the Grasberg mine, one of the biggest gold mines — and third-largest copper mine — in the world. Majority-owned by the American mining firm Freeport McMoRan, Grasberg is now Indonesia’s biggest taxpayer, with reserves worth an estimated $100 billion.

But a recent fact-finding mission by the Brisbane (Australia) Archdiocese’s Catholic Justice and Peace Commission described a “slow-motion genocide” taking place in West Papua, warning that its indigenous population is at risk of becoming “an anthropological museum exhibit of a bygone culture.”

Since the Suharto dictatorship annexed the region in a 1969 United Nations referendum largely seen as a fixed land grab, an estimated 500,000 West Papuans have been killed in their fight for self-rule. Decades of military and police oppression, kidnapping, and torture have created a longstanding culture of fear. Local and foreign journalists are routinely banned, detained, beaten and forced to face trial on trumped-up charges. Undercover police regularly trail indigenous religious, social, and political leaders. And children still in primary school have been jailed for taking part in demonstrations calling for independence from Indonesia.

“There is no justice in this country,” whispered one indigenous villager on condition of anonymity, looking over his shoulder fearfully. “It is an island without law.” …

… For the remainder of the report:

https://www.theguardian.com/global-development/2016/nov/02/100-bn-dollar…

Since the Suharto dictatorship annexed the region in a 1969 United Nations referendum largely seen as a fixed land grab, an estimated 500,000 West Papuans have been killed in their fight for self-rule. Decades of military and police oppression, kidnapping, and torture have created a longstanding culture of fear. Local and foreign journalists are routinely banned, detained, beaten and forced to face trial on trumped-up charges. Undercover police regularly trail indigenous religious, social, and political leaders. And children still in primary school have been jailed for taking part in demonstrations calling for independence from Indonesia.

“There is no justice in this country,” whispered one indigenous villager on condition of anonymity, looking over his shoulder fearfully. “It is an island without law.” …

… For the remainder of the report:

https://www.theguardian.com/global-development/2016/nov/02/100-bn-dollar…

END

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

 
 

:

1 Chinese yuan vs USA dollar/yuan DOWN to 6.7611( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.7652 / Shanghai bourse CLOSED DOWN 19.71 POINTS OR 0.63%   / HANG SANG CLOSED DOWN 336.57 OR 1.45%

2 Nikkei closed DOWN 307.72 OR 1.76%   /USA: YEN FALLS TO 103.39

3. Europe stocks opened ALL IN THE RED ( /USA dollar index DOWN to 97.42/Euro UP to 1.1090

3b Japan 10 year bond yield: FALLS TO    -.063%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 105.00/ 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::  45.96  and Brent:47.45

3f Gold UP  /Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS  A LOT to +.123%   

3j Greek 10 year bond yield FALLS to  : 8.04%   

3k Gold at $1297.70/silver $18.57(7:45 am est)   SILVER ABOVE RESISTANCE AT $18.50 WILL BE DEFENDED 

3l USA vs Russian rouble; (Russian rouble DOWN 20/100 in  roubles/dollar) 63.50-

3m oil into the 45 dollar handle for WTI and 47 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  REVALUATION UPWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 103.39 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 .9708 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0766 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  +.123%

/German 9+ year rate BASICALLY  negative%!!!

3s The Greece ELA NOW a 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 1.797% early this morning. Thirty year rate  at 2.543% /POLICY ERROR)

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE/JAPANESE STIMULUS PLAN DISAPPOINTS

Global Stocks, Peso, Oil Drop On Trump Fears; Safe Havens Rise Ahead Of Fed Announcement

Global stocks, S&P futures, the Mexican peso, the Korean Won and crude oil all fell as traders were spooked by polls suggesting a tightening race and Trump momentum ahead of next week’s American presidential election. The yen and Swiss franc gained, as did global bond markets and gold as investors flocked to safe haven assets.

The MSCI All Country World Index sank to its lowest since July Bloomberg observes, as shares slumped in Europe and Asia with futures foreshadowing a seventh day of losses for U.S. equities. The yen rose for a second day, while the Swiss franc and gold were near their highest levels in almost a month. Political upheaval weighed on South Korea’s currency, and New Zealand’s dollar strengthened after jobs data. Treasuries rose ahead of a Federal Reserve policy decision and crude oil fell after a report showed American stockpiles expanded.

The risk off catalyst was yesterday’s ABC/WaPo tracking poll which showed Republican Donald Trump with 46 percent support to Democrat Hillary Clinton’s 45 percent, putting him ahead for the first time since May. A Bank of America Corp. index tracking volatility expectations in equities, bonds, currencies and commodities rose for five days through Monday, the longest run of increases since before the British vote to quit the European Union.

The flight to safety has led to a bid for both European bonds

… and the traditional safe haven, the Swiss franc.

“Having had their fingers horribly burnt with the Brexit vote in June, financial markets appear to be starting to pare some risk in the lead up to next week’s U.S. Presidential vote, in the event that in circumstances that would probably have been unthinkable a week or so ago, that Donald Trump could win the U.S. Presidency,” Michael Hewson, chief market analyst at CMC Markets, writes in note.

Adding to today’s risk is the conclusion of the November FOMC meeting, which however is expected to reveal nothing new when the Fed presents its latest statement at 2pm. While the Fed is expected to leave interest rates unchanged when a two-day meeting concludes Wednesday, futures indicate a 68% chance of a rate hike by year-end and investors will be on the lookout for any hints the authority may give regarding the policy outlook. Bloomberg’s dollar index fell for a fourth day as some analysts said a Trump victory could spur volatility in financial markets and reduce the odds of a rate increase next month.

“The markets’ anxiety levels have moved up a gear,” adds Chris Weston, Melbourne-based chief market strategist at IG Ltd. This “suggests the bears have the upper hand, with the buying drying up and funds keeping their cash deployed for more certain times,” he said.

At 2pm all eyes will turn to the Fed where the FOMC outcome is due. Clearly this has been completely overshadowed by the election campaign and expectations of a policy move are unsurprisingly very low. The bigger question is how much of a green light signal do we get for December? The market is still pricing in a 70%ish probability for a December hike and so as DB’s Peter Hooper notes, the signal perhaps needn’t be stronger tonight than it has been already.

Looking at stocks, the Stoxx Europe 600 Index slid 0.7 percent as of 8:11 a.m. London time, falling for an eighth day ahead of the release of manufacturing data for the euro area. A.P. Moller-Maersk A/S tumbled by the most since June after the owner of the world’s largest container line reported a 43 percent drop in third-quarter profit.

The MSCI Asia Pacific Index fell by the most since September, with Japanese shares retreating from a six-month high before the nation’s financial markets shut Thursday for a holiday. Sony Corp. sank to a two-month low after the Japanese electronics maker’s quarterly profit missed estimates and Sumitomo Electric Industries Ltd. tumbled 12 percent after the company lowered its full-year earnings target. “The Trump risk is in revival,” said Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities Inc. “With Trump, there always follows an uneasiness over whether policies will be managed properly in the U.S., and given the holiday tomorrow in Japan, there’s no need to build positions at an uncertain time like this.”

Futures on the S&P 500 Index fell 0.2 percent ahead of the Fed decision and results from companies including Alibaba Group Holding Ltd. and Facebook Inc.

Safe-haven demand boosted sovereign bonds, with 10-year yields falling across most of the developed world. The yield on 10Y Treasuries fell two basis points to 1.81 percent, after touching a five-month high of 1.88 percent in the last session. It’s unlikely the rate will climb too far past 2 percent anytime soon given how the American economy is performing, according to Jim Caron at Morgan Stanley Investment Management, which oversees $406 billion.

“Nobody really believes that rates can just rise very very quickly, or that bond prices can fall off a cliff,” Caron, who is based in New York, said Tuesday on Bloomberg Television. “You’re not seeing the growth. You’re not really seeing the inflation.”

* * *

Bulletin Headline Summary from RanSquawk

  • European equities enter the US crossover as US election fears, softness in peripheral banks and lower energy prices hamper sentiment
  • USD losses have been extended, with EUR/USD testing 1.1100 and USD/CHF dipping below .9700
  • Looking ahead, highlights include the German jobs report, ADP employment change, DoE inventories and FOMC rate decision

Market Snapshot

  • S&P 500 futures down 0.2% to 2100
  • Stoxx 600 down 0.6% to 333
  • FTSE 100 down 0.4% to 6891
  • DAX down 0.8% to 10440
  • German 10Yr yield down 4bps to 0.14%
  • Italian 10Yr yield down 4bps to 1.71%
  • Spanish 10Yr yield down 6bps to 1.24%
  • S&P GSCI Index down 1% to 356.8
  • MSCI Asia Pacific down 1.1% to 138
  • Nikkei 225 down 1.8% to 17135
  • Hang Seng down 1.5% to 22811
  • Shanghai Composite down 0.6% to 3103
  • S&P/ASX 200 down 1.2% to 5229
  • US 10-yr yield down 3bps to 1.8%
  • Dollar Index down 0.13% to 97.57
  • WTI Crude futures down 1.5% to $45.98
  • Brent Futures down 1.4% to $47.46
  • Gold spot up 0.6% to $1,296
  • Silver spot up 0.6% to $18.48

Top Global Headlines

  • Top Economists Spar Over Trump as Tighter Race Sinks U.S. Stocks
  • Carney May Have Bigger U.K. Inflation Worries Than the Pound: Brexit supply shock could put a squeeze on the economy
  • CIC Group Said to Mull Bid for $6 Billion Property Owner GLP: Singapore-based industrial property owner fell below IPO price
  • Valeant Said to Be in Talks for Sale of Salix to Takeda
  • Tullow CEO Resuming African Oil Exploration Amid Debt Reduction: Net debt to be reduced by about $1 billion in next few years
  • November Fed Hike Odds Tanked on Economic and Political Events: Political risk and steady-as-she-goes data made markets doubt a hike
  • Delta, United Said to Near Avianca Bids Amid Elliott Talks: Colombian airline mulls options including sale of control
  • JPMorgan Beats Goldman With Bond-Market Maneuvering in Toronto: Barclays, Citi, Deutsche Bank also left out of some trades
  • AEP’s First Loss in a Decade Is the Latest Sign of Coal’s Demise: Follows Duke Energy, Southern in shifting away from coal
  • Lockheed’s F-35 Said to Need $500 Million More for Development: Pentagon officials says funds to be requested in next budget
  • Tesla Sees SolarCity Boost Within 3 Years as Musk Hits Critics: Acquisition target increased cash in third quarter, Tesla says

Looking at regional markets, we start in Asia where stocks saw spill-over selling from its global counterparts amid weakness in oil and political jitters after the latest ABC News/Washington Post poll showed  rump ahead for the first time since May. This pressured the ASX 200 (-1.2%) and Nikkei 225 (-1.8%) from the open with the latter also hampered by JPY strength and disappointing earnings, including an 86% drop in Sony’s net profit. Shanghai Comp. (-0.6%) and Hang Seng (-1.4%) conformed to the downbeat tone as financials suffered while the PBoC also reduced its liquidity operations. 10yr JGBs traded marginally higher as the risk averse sentiment spurred safe-haven buying, while participants also digested an enhanced liquidity auction which posted an increase in b/c from prior.

Top Asian News

  • Park Dumps Premier, Finance Chief to Stem Korea Scandal Fallout: Prosecution to seek arrest of Park’s friend in scandal
  • Tata Empire Split in Two as Mistry Stays Chairman of Units: Tata Motors, Tata Power say Mistry is still chairman
  • China’s Corn Pile Shrinks as Output Drops Most in 16 Years: Even with less from China, world supplies will be biggest ever
  • Standard Chartered’s Tough Years in India Are Over, Kanwal Says: Loan impairments in the country had dragged on profit
  • Hong Kong Election Heats Up as Candidates Await China’s Blessing: Meet the contenders vying to lead the financial hub
  • China Losing Emerging Markets Engine Complicates Exports Outlook: Commodity price rally raises hopes demand will pick up

US election jitters stemming from yesterday’s ABC national poll also weighed on Europe equities this morning. While sentiment has also been gripped by the weakness in financials, largely due to the softness seen in peripheral banks after bailout plans for the troubled Italian lender, Monti Paschi had been withdrawn and in turn this saw the banks shares temporarily halted for trade. Elsewhere oil prices remain pressured after last night’s API crude oil inventory report post a large build of 9.3mln. In credit markets, bunds are sharply higher this morning amid the risk averse sentiment with yields bull steepening across the curve, while volumes are somewhat lighter given that participants are awaiting the FOMC decision at 1800GMT.

Top European News

  • Euro-Area Manufacturing Gathers Speed as Price Pressures Build: A Purchasing Managers’ Index for factories rose to 53.5 from 52.6 in September, exceeding an Oct. 24 estimate of 53.3
  • German Unemployment Falls to Record Low as Economy Ploughs On: Joblessness fell by 13,000 in October vs estimated 1,000 drop
  • At Societe Generale, Returns From Car Leasing Dwarf Banking: Equity-derivatives leader generates best profits from autos

In FX, the most notable move was that of the Mexico’s peso which slid as much as 0.8 percent versus the greenback to its weakest level since Oct. 7. The currency loses ground when support builds for Trump, who has said he would revisit the North American Free Trade Agreement that governs commerce between the U.S. and Mexico. The Republican candidate’s prospects have improved since it was announced Friday that the Federal Bureau of Investigation had reopened a probe of Clinton’s use of private e-mail while Secretary of State. Before the FBI announcement, “the market had pretty much priced out most of the risk of Donald Trump becoming president,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Obviously, the markets had to reassess that view now.” In South Korea, the won dropped as much as 1.1 percent to its weakest level since July as South Korean President Park Geun-hye replaced her prime minister and finance chief on Wednesday to help stem the fallout from a political scandal that threatens her grip on power. The yen climbed 0.5 percent against the dollar, after surging 0.6 percent in the last session. The franc also added 0.5 percent following a 1.4 percent jump that marked its biggest gain in about five months. Against the euro, Switzerland’s currency was headed for its strongest close in more than a year.

In commodities, crude oil fell 0.7% to a one-month low in New York after API data showed American inventories increased by 9.3 million barrels last week. Organization of Petroleum Exporting Countries members Libya and Nigeria are boosting output, providing a challenge to the group’s effort to finalize an agreement to curb production and stabilize prices. Gold added 0.5 percent, after surging 0.9 percent on Tuesday. The Bloomberg Industrial Metals Subindex fell for the first time in eight days, as zinc retreated from a five-year high in London and aluminum slid from its highest close since June 2015. “We’re in a bit of a risk-off mode again as markets readjust to the chances of a Trump presidency,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “The outlook for the global economy is still fragile and hits to sentiment can have an immediate, negative effect across the markets, and that includes the base metals.”

Looking at today’s calendar, in the US the sole key data release is the October ADP employment change reading where expectations are sitting at 165k. The main event is however reserved for the FOMC meeting outcome due at 2pm ET. As a reminder, there is no post-statement press conference scheduled. There’s not much else to highlight away from the data aside from earnings. 38 S&P 500 companies are on the cards today with the highlights including Facebook MetLife and AIG, all due in the evening.

DB’s Jim Reid concludes the overnight wrap

By this time next week we may know who the next US president is going to be. However if it’s close the results may take a few more hours to decipher. For the sake of all our sanity let’s hope we don’t get a repeat of the 2000 election where the result wasn’t known until a month and four days after America went to the polls. Due to the ‘hanging chads’ the election result was in legal dispute for weeks. I remember travelling the world that month with people from all corners utterly perplexed as to how the battle to be the leader of the free world could turn out in the way it did. 16 years on there are many with similar thoughts but for maybe different reasons.

Yesterday election blues hit the market as an ABC News/Washington Post tracking poll placed Trump 1% ahead of Clinton at 46% to 45% – his first lead in this poll since May. The previous ABC News/Washington poll which came out over the weekend had Clinton ahead by the same amount. The chatter in the market yesterday was that although Clinton was still a clear favourite, the probabilities of her winning seemed to be similar to that of the UK staying in the EU just prior to June’s referendum. So once bitten twice shy for many.

The ABC News/Washington Post survey appears to be the poll which is most widely reported right now. Yesterday’s survey covered 1,128 “likely voters” over October 27-30th which means that the sample is still slightly overlapping those FBI headlines from Friday. It’s also worth noting that the current 1% separating the two candidates is well within the survey’s 3% margin of sampling error. In other words, it’s extremely close. Interestingly the same poll also showed that only 45% of Clinton supporters are now “very enthusiastic” about Clinton, compared to 52% in the last survey. It’s the reverse for Trump supporters where 53% are now “very enthusiastic” compared to 49% previously. So momentum has seemingly swung on this poll.

The chips are certainly coming off the table in markets heading into next week. Yesterday the S&P 500 fell -0.68% meaning it has now closed down for six days in a row for the first time since August 2015. Yesterday’s decline was the largest in what is a -1.84% cumulative losing streak over this period. It wasn’t much better in Europe where the Stoxx 600 plunged -1.07% and is now down seven days in a row for the first time since February this year. Disappointing results from BP and Standard Chartered didn’t help. The VIX also rose nearly 9% yesterday and is now at the highest level since June. Credit was under pressure with the FT also reporting that two of the largest HY ETF’s suffered their sixth successive day of outflows. In FX the Greenback had its worst day in nearly 2 months with the US Dollar index closing -0.76% as investors flocked to the Yen (+0.64%), Swiss Franc (+1.39%) and Gold (+0.86%). The Dollar did however have a much better day relative to a cross section of emerging market currencies. Most notable was the loss for the Mexican Peso (-1.73%) while the South African Rand, Brazilian Real and Colombian Peso were all down at least -1%.

One market where perhaps the election outcome implications are a little less clear for is US Treasuries. Yesterday the 10y yield was up as much as 5bps by the early afternoon, touching an intraday high of 1.877% before then paring all of that move into the close to finish little changed around 1.827%. The manufacturing data was supportive with the PMI revised up a little (to 53.4 from 53.2) and the ISM manufacturing print for October rising 0.4pts to 51.9 (vs. 51.7 expected). That said the details were a bit more mixed and showed new orders reversing (to 52.1 from 55.1) but employment climbing (to 52.9 from 49.7). The latter clearly a positive ahead of payrolls on Friday.

With that in mind it’s also worth keeping an eye on today’s ADP employment change report where the consensus for October is sitting at 165k versus 154k the month prior. Later this evening however all eyes turn to the Fed where the FOMC outcome is due. Clearly this has been completely overshadowed by the election campaign and expectations of a policy move are unsurprisingly very low. The bigger question is how much of a green light signal do we get for December? The market is still pricing in a 70%ish probability for a December hike and so as DB’s Peter Hooper notes, the signal perhaps needn’t be stronger tonight than it has been already. 7pm GMT for that one.

Switching now to the latest in Asia this morning where equity markets have taken their cue from the weak US session yesterday. The Nikkei (-1.66%), Hang Seng (-1.30%), Shanghai Comp (-0.49%), Kospi (-1.34%) and ASX (-1.49%) have all sold off. Credit indices in Asia, Japan and Australia are also 1-2bps wider while US equity index futures have also weakened. Gold (+0.22%) is a touch higher while Oil continues to trade weaker this morning. WTI is -0.92% as we type and a little above $46/bbl following a -0.41% decline yesterday. The exception in the energy complex though is Gasoline which rallied +4.55% yesterday following the news of a large pipeline explosion and fire in Alabama.

Moving on. It’s worth drawing attention to a piece from our Euro economists on how likely a shift from monetary to fiscal policy is in the region. A large coordinated fiscal stimulus across euro-area countries could bring lasting benefits to growth and unemployment. Will it happen? Not according to them. Based on current rules even Germany’s fiscal space is not higher than 1% of German GDP. That said, they show that there would be scope to modify tax systems and spending choices to favour potential growth in France and the peripheral country. Unfortunately, the rise of the populist parties is not conducive for those hoping for an optimisation of fiscal policy.

Before we look at the day ahead, the remaining data in the US yesterday was fairly mixed. On the positive side, total vehicle sales rose to an annualized rate of 17.90m in October from 17.65m in the month prior. Meanwhile the IBD/TIPP economic optimism reading was little changed in November at 51.4. Finally, the disappointing data was the latest construction spending report. Spending was reported as declining -0.4% mom versus expectations of a +0.5% increase. The only data in Europe was reserved for the UK where the October manufacturing PMI declined just over 1pt and a little more than expected to 54.3 (vs. 54.5 expected).

3.REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 19.7 POINTS OR 0.63%/ /Hang Sang closed DOWN 336.57  OR 1.45%. The Nikkei closed DOWN 307.72 POINTS OR 1.76% Australia’s all ordinaires  CLOSED DOWN 1.19% /Chinese yuan (ONSHORE) closed UP at 6.7611/Oil FELL to 45.96 dollars per barrel for WTI and 47.45 for Brent. Stocks in Europe: ALL IN THE RED   Offshore yuan trades  6.7652 yuan to the dollar vs 6.7611  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A  BIT 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/:

none today

b) REPORT ON JAPAN

c) Report on CHINA

4 EUROPEAN AFFAIRS

Deutsche bank stock is falling along with with rising credit default swaps

(courtesy zero hedge)

Don’t Look Now But The Most Systemically Dangerous Bank In The World Is Tumbling Again

Remember Deutsche Bank? It seems ‘hope’ for a deal – and a capital raise – are fading fast.

The last few days have seen the stock of the most systemically dangerous bank in the world tumble over 11% catching back down to the credit market’s reality…

Chart: Bloomberg

And 5Y CDS is surging back towards record highs.

“probably nothing”

end

Strange one!!  Deutsche bank’s chief economist Landau accuses the ECB of creating asset bubbles and most importantly expropriating savers plus other goodies as they come clean.

They must be hurting real bad…

(courtesy zero hedge/Deutsche bank/Landau)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6. GLOBAL ISSUES

As a proxy for the upcoming election, the fall in the Peso is a good sign that Hillary is in trouble at the polls

(courtesy zero hedge)

Peso Protection Panic – “Trump Hedge” Spikes To Highest In 5 Years

While equity ‘protection’ costs are rising (VIX over 20 yesterday), and bond risk has risen to 6-week highs, the most prescient ‘hedge’ for a Donald Trump presidency has soared to its highest since the European crisis in 2011.

USDMXN short-dated implied volality has exploded higher in the last few days…

Furthermore, as Bloomberg reports, the largest U.S.-based exchange-traded fund of Mexican equities saw its biggest withdrawals since the 2013 taper tantrum on Tuesday, as renewed FBI attention on Hillary Clinton’s e-mails boosted the odds of a Donald Trump presidency.

The iShares MSCI Mexico Capped ETF has become a popular vehicle for traders looking to bet on the U.S. election, and saw $94 million in outflows.

“This particular ETF seems to be the most connected to the polls,” said Eric Balchunas, who analyzes exchange-traded funds at Bloomberg Intelligence. “This has literally become a proxy for what you think will happen in the election.”

 

 

end

 

Another humourous story from the Philippines.  After Duterte used much vulgar language against the USA, the Americans decided to stop shipments to them.  He again called the Americans: “Monkeys”

(courtesy zero hedge)

Philippines’ Duterte Rails Against “Son Of A Bitch” American “Monkeys” After Arms Shipment Halted

Philippine President Rodrigo Duterte, who promised last week to stop cursing after a personal chat with god, once again slammed the United States on Wednesday for halting the planned sale of 26,000 rifles to his country, calling those behind the decision “fools” and “monkeys” and indicating he might turn to Russia and China instead. Duterte’s tirades against the US have become a virtiually daily event, and on Wednesday he said that he once believed in Washington, but had since lost respect for what is the Philippines’ biggest ally, Reuters reported.

Which is why the US decision to halt an arms shipment to Duterte should probably not come as a major shock: the State Department halted the sale of the assault rifles to the Philippine police after U.S. Senator Ben Cardin said he would oppose it, Senate aides told Reuters on Monday. Aides said Cardin, the top Democrat on the U.S. Senate Foreign Relations Committee, was reluctant for the United States to provide the weapons given concern about human rights violations in the Philippines during Duterte’s bloody, four-month-old war on drugs.

The news prompted the following outburst: “Look at these monkeys, the 26,000 firearms we wanted to buy, they don’t want to sell,” Duterte said during a televised speech. “Son of a bitch, we have many home-made guns here. These American fools.”

Why the renewed anger? “That’s why I was rude at them, because they were rude at me,” he said.

According to procedures in Washington, the State Department informs Congress when international weapons sales are in the works. Aides said the State Department had been informed Cardin would oppose the deal during the prenotification process, thus halting the sale. U.S. State Department officials did not comment.

Meanwhile, the local authorities appeared displeased with their leaders’ relentless verbal diarrhea: the Philippine police chief, Ronald dela Rosa, on Tuesday expressed disappointment that police would not get the M4 rifles, which he said were reliable.

Duterte reiterated that Russia and China had shown willingness to sell arms to the Philippines, but he would wait to see if his military wanted to continue using U.S. weapons.

Alternatively, it is possible that all the State Department has avhieved, is to hand over a brand new client to China and/or Russia: “Russia, they are inviting us. China also. China is open, anything you want, they sent me brochure saying we select there, we’ll give you. “But I am holding off because I was asking the military if they have any problem. Because if you have, if you want to stick to America, fine.

“But, look closely and balance the situation, they are rude to us.”

Of course, the real question is whether Duterte wants to “stick to America”, because for all his talk, the new president still appears uncertain he will succeed in cutting off all ties with Washington. Which means that the ultimate decision to sever ties may have to come from the US, which may just snap as a result of the relntless mockery.

7. OIL ISSUES

Last night we got a huge inventory build from API.  Today from DOE also confirms a huge buildup.  Oil retreats:

(courtesy zero hedge)

Oil Tanks After Biggest Inventory Build In 34-Year History

Following last night’s massive inventory build report from API (biggest in 8 months), DOE piled on by confirming a 14.42mm barrel build – the biggest in the 34 year history of EIA data. Cushing saw a small build but Gasoline and Distillates saw drawdowns. Crude and RBOB prices are tumbling on the news, not helped by the 3rd weekly rise in US Crude production.

API

  • Crude +9.3mm (+1.54mm avg. exp)
  • Cushing +1mm (-250k exp)
  • Gasoline -3.5mm (-1mm exp)
  • Distillates -3.1mm

DOE

  • Crude +14.42mm (+2mm exp)
  • Cushing  +89k (+235k exp)
  • Gasoline -2.2mm (-1mm exp)
  • Distillates -1.8mm (-1.9mm exp)

API’s biggest build in 8 months was nothing compared to the 14.4mm build from DOE – the biggest build ever. Distillates have now drawn down for 6 straight weeks. As Bloomberg’s Margot Habiby reports, most of the increase in crude inventories — 8.11 million barrels out of 14.4 million overall — was in the critical Gulf Coast region, where about half of U.S. refining capacity is located.

US Crude production rose for the 3rd week in a row…

And US Crude imports soared to the highest since 2012…

U.S. avg weekly crude imports rose 28% to ~9m b/d last week, the largest volume since September 2012,according to preliminary EIA data for week ending Oct. 28.

Total U.S. imports of crude 8995k b/d vs 7016k

  • PADD1: 1164k vs 884k
  • PADD2: 2538k vs 2212k
  • PADD3: 3814k vs 2913k, highest since July
  • PADD4: 344k vs 312k
  • PADD5: 1135k vs 696k

Imports into U.S. by country in b/d:

  • Canada imports 3282k vs 2885k
  • Saudi Arabia imports 1170k vs 983k
  • Venezuela imports 835k vs 466k
  • Mexico imports 688k vs 323k
  • Colombia imports 602k vs 333k
  • Ecuador imports 156k vs 179k
  • Nigeria imports 345k vs 71k
  • Kuwait imports 85k vs 198k
  • Iraq imports 645k vs 505k
  • Angola imports 30k vs 163k

WTI Crude had extended losses to a $45 handle overnight after the API build (and RBOB swung widely) and plunged on the print…

And finally, bear in mind that oil prices are entering a seasonally weak period…

8. EMERGING MARKETS

Venezuela’s currency disintegrates by 20% in just one week. Hyperinflation rages on

(courtesy zero hedge)

Venezuela’s Currency Disintegrates: Bolivar Plummets 20% In One Week

When we reported last week that Venezuela’s government has finally thrown in the towel on the hyperinflation plaguing the bankrupt nation…

… and would agree to print bills with a denomination as much as 200x greater than the current, most “valuable” bank note, the 100 bolivar, we speculated that “by doing so the government will tacitly admit that it has lost control over prices, [and] will also create a self-fulfilling prophecy of even higher prices, sending the country’s hyperinflation into overdrive.”

We didn’t have long to wait for this prediction to be confirmed, and as the website tracking the value of the Bolivar on the black market (recall there are three separate prices for the Venezuela currency; the only one that matters is the Dolar Today black market value), the local currency has imploded, crashing by 22% in just the past week.

The spectacular chart below – one which awaits every fiat currency at some point  – shows how many Bolivars one USD buys: as of today it is 1,567. It was 1,222 seven days ago.

Bloomberg has some additional observations on the sudden collapse in the currency:

“There are a combination of things going on, as the stability we saw for most of this year was because things last year had been so abrupt and the decline so steep,” Henkel Garcia, director of Caracas-based consulting company Econometrica, said in a telephone interview. “Public spending may be pressuring the black-market rate, in addition to the exasperation of the people and political tension. People see the decline and start to buy more” dollars.

While it may not provide joy for those whose purchasing power was just cut by a fifth in a week, Bloomberg has some soothing words: it could be worse. Last month’s 28% drop is “not unprecedented.” Some examples: the currency fell 29% in July of last year, 31% in May 2015 and a whopping 33% in November 2014. Monthly losses of more than 10 percent became frequent starting in mid-2012. Since the start of 2011, the currency has increased in value in only 15 of the past 70 months. The general trajectory has been down, and without a floor.

Again, none of this will comfort the local population, unless of course, it managed to convert some of their cash into paper dollars or, better yet, the useless pet rock known as gold.

Whenever the bolivar plunges on the black market in Caracas, Venezuelans can be heard asking the same question: Is now a good time to sell my dollars? If history is any guide, the answer is probably not. The ratio of the black market to the implicit rate hit a high of 4.28 in October of last year. It’s only 2.4 at the moment. To put it simply, dollars might actually be cheap. People have been willing to pay a much higher premium in the past.

“People are afraid of what happened last year,” Econometrica’s Garcia said, adding that the black market rate could end this year around 1,700 bolivars per dollar.

Actually, it may end the week around 1,700, if not the day.

Still, not everyone is a loser. As the WSJ reported yesterday, we now know who will be the primary beneficiary of Venezuela’s upcoming printing spree: the company which has been retained by the government to print its currency is Crane, the same one the US Treasury uses.

Venezuela’s Socialist government, a vocal critic of the dollar’s global dominance, has hired the exclusive supplier of U.S. currency paper to provide the bulk of its new bank notes. Earlier this month, Venezuela’s central bank awarded Boston-based securities printer Crane Currency the largest part of a contract for new bill denominations needed to keep up with triple-digit inflation, according to people involved in contract negotiations. “Given their antipathy towards the U.S., I’m surprised that they would even let a U.S. firm participate,” said Owen Linzmayer, a San Francisco-based banknote expert who catalogs world currencies.

Crane will produce Venezuela’s new 500 and 1,000 bolivar notes. Crane’s 500 bolivar note will have the same security features as the new $100 bill, despite being worth just 35 cents on the black market.

The best news for Crane is that many, many more orders of Venezuela banknotes are coming now that the “Zimbabwe scenario” has been officially unleashed.  Unfortunately for anyone who wishes to jump along for the ride, the only option is to LBO Crane outright, as it has no public stock outstanding.

END

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

 

Euro/USA   1.1090 UP .0035/REACTING TO NO DECISION IN JAPAN AND USA + huge Deutsche bank problems + USA election doubt

USA/JAPAN YEN 103.39  down .687(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 1.2308 UP.0073 (Brexit by March 201/pound clobbered)

USA/CAN 1.3366 DOWN .0027

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 35 basis points, trading now JUST above the important 1.08 level RISING to 1.1007; 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 + THE DOUBT IN THE USA ELECTION / Last night the Shanghai composite CLOSED DOWN 19.71 OR   0.63%   / Hang Sang  CLOSED DOWN 336.57 OR 1.45%   /AUSTRALIA IS LOWER BY 1.19% / EUROPEAN BOURSES ALL IN THE RED

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 307.72 POINTS OR 1.76%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 336.57 OR 1.45%   ,Shanghai CLOSED DOWN 19.71 POINTS OR 0.63%   / Australia BOURSE IN THE RED /Nikkei (Japan)CLOSED IN THE RED/  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1296.30

silver:$18.55

Early WEDNESDAY morning USA 10 year bond yield: 1.797% !!! DOWN 5 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.543, DOWN 5 IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 97.42 DOWN 30 CENTS from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.24% DOWN 13 in basis point yield from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: -.063% DOWN  2 in   basis point yield from  TUESDAY

SPANISH 10 YR BOND YIELD:1.21%  DOWN 10 IN basis point yield from  TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.66 DOWN 10  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 45 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.131% DOWN 5  IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3.00 PM

Euro/USA 1.1096 UP .0040 (Euro UP 40 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 103.29 DOWN: 0.790(Yen UP 79 basis points/POLICY ERROR ON BANK OF JAPAN/

Great Britain/USA 1.2289 UP 0.0053( POUND UP 53 basis points

USA/Canada 1.3390 down 0.0003(Canadian dollar UP 3 basis points AS OIL FELL TO $46.45

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 40 basis points to trade at 1.1061 

The Yen ROSE to 103.29 for a GAIN of 79 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 ROSE 53 basis points, trading at 1.2289/

The Canadian dollar ROSE by 3 basis points to 1.3390, AS WTI OIL FELL TO :  $45.45

The USA/Yuan closed at 6.7544

the 10 yr Japanese bond yield closed at -.063%  DOWN 1/5 POINTS  IN BASIS POINTS / yield/ AND THIS IS BECOMING BOTHERSOME TO THE BANK OF JAPAN

Your closing 10 yr USA bond yield down 5   IN basis points from TUESDAY at 1.797% //trading well below the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.562 down 3  in basis points on the day /

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 97.38 DOWN 36 CENTS  ON THE DAY/2;30 PM 

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

London:  CLOSED DOWN 71.72 POINTS OR 1.04%
German Dax :CLOSED DOWN 155.23 OR  1.47%
Paris Cac  CLOSED DOWN 55.64 OR 1.24%
Spain IBEX CLOSED DOWN 167.20 OR 1.85%
Italian MIB: CLOSED DOWN 423.76 POINTS OR 2.51%

The Dow was DOWN 77.46 points or 0.43%  4 PM EST

NASDAQ  DOWN 48.01 points or 0.93%  4 PM EST
WTI Oil price;  45.45 at 4:00 pm; 

Brent Oil: 47.07   4:00 EST

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.77(ROUBLE DOWN 46/100 ROUBLES PER DOLLAR FROM THURSDAY)  2:30 EST

TODAY THE GERMAN YIELD FALLS  TO +0.131%  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:$45.45

BRENT: $47.09

USA 10 YR BOND YIELD: 1.801%

USA DOLLAR INDEX: 97.42 DOWN 32  cents

The British pound at 5 pm: Great Britain Pound/USA: 1.2297 up .0062 or 62 basis pts.

German 10 yr bond yield at 5 pm: +.131%

END

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

TRADING IN GRAPH FORM

Fed Fails To Save Stocks From Worst Losing Streak In 5 Years

Stocks (4mo lows) and HY Bonds (3mo lows) down 7 days in a row… the longest losing streak since Nov 2011

 

“Fleshwound”...

 

Post-Fed, gold and bonds were sold and oil bid which dragged stocks up a smidge…

 

On the day, Trannies held on to green but all stocks ended with an ugly close with Small Caps notably weak again (highest beta to credit) – Dow closed below 18,000 and S&P below 2100…

Notice The Fed bounce failed…

 

VIX held above 19 and S&P ended below 2100…

 

As a reminder, stocks remain green for the year but are falling fast… (Small Caps down almost 10% from the year’s highs)

 

Treasury yields ended the day marginally lower (long-end better than short-end)…

 

The USD Index fell for the 3rd day of the last 4 to one month lows…

 

Although it did rally after the Fed…

 

With Swissy and Yen strength dominant but all losing ground during the US day session to the USD

 

But it was Mexican Peso vol that exploded…

 

Silver remains the week’s biggest gainer (and oil the loser)…

 

WTI Crude briefly traded with a $44 handle before bouncing on the The Fed…

 

Erasing all the Algiers OPEC “deal” hope gains…

 

Gold (back above $1300) and Silver spiked back to October plunge levels (remember that was the China Golden Week annual plunge)…

END

 

We now have 5 separate FBI cases probing the Hillary-Bill Clinton inner circle:

Here is the background on those 5 cases and all of the major players that we are going to cover.

(the Daily Mail)

5 Separate FBI Cases Are Probing Virtually Every One Of Hillary’s Inner-Circle

http://www.dailymail.co.uk/news/article-3889994/Influence-peddling-acting-Putin-s-ally-hiding-classified-secrets-sexting-FIVE-separate-FBI-cases-probing-virtually-one-Clinton-s-inner-circle-families.html

END

 

Very popular Michael Snyder talks about what would happen if Hillary is charged with obstruction of justice:

(courtesy Michael Snyder)

 

If Hillary Clinton Is Charged With Obstruction Of Justice She Could Go To Prison For 20 Years

Submitted by Michael Snyder via The Economic Collapse blog,

In the world of politics, the cover-up is often worse than the original crime.  It was his role in the Watergate cover-up that took down Richard Nixon, and now Hillary Clinton’s cover-up of her email scandal could send her to prison for a very, very long time.  When news broke that the FBI has renewed its investigation into Hillary Clinton’s emails, it sent shockwaves throughout the political world.  But this time around, we aren’t just talking about an investigation into the mishandling of classified documents.  I haven’t heard anyone talking about this, but if the FBI discovers that Hillary Clinton altered, destroyed or concealed any emails that should have been turned over to the FBI during the original investigation, she could be charged with obstruction of justice.  That would immediately end her political career, and if she was found guilty it could send her to prison for the rest of her life.

I have not seen a single news report mention the phrase “obstruction of justice” yet, but I am convinced that there is a very good chance that this is where this scandal is heading.  The following is the relevant part of the federal statute that deals with obstruction of justice

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsified, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under Title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

If Hillary Clinton is sent to prison for 20 years, that would essentially be for the rest of her life.

I have a feeling that the FBI is going to find a great deal of evidence of obstruction of justice in Huma Abedin’s emails.  But unfortunately there is not likely to be a resolution to this matter before November 8th, because according to the Wall Street Journal there are approximately 650,000 emails to search through…

As federal agents prepare to scour roughly 650,000 emails to see how many relate to a prior probe of Hillary Clinton’s email use, the surprise disclosure that investigators were pursuing the potential new evidence lays bare building tensions inside the bureau and the Justice Department over how to investigate the Democratic presidential nominee.

Metadata found on the laptop used by former Rep. Anthony Weiner and his estranged wife Huma Abedin, a close Clinton aide, suggests there may be thousands of emails sent to or from the private server that Mrs. Clinton used while she was secretary of state, according to people familiar with the matter. It will take weeks, at a minimum, to determine whether those messages are work-related from the time Ms. Abedin served with Mrs. Clinton at the State Department; how many are duplicates of emails already reviewed by the Federal Bureau of Investigation; and whether they include either classified information or important new evidence in the Clinton email probe.

Of those 650,000 emails, an inside source told Fox News that “at least 10,000” would be of interest to the investigation.

At this point, FBI officials have not even begun searching through the emails, because a search warrant has not been secured yet.  The following comes from CNN

Government lawyers haven’t yet approached Abedin’s lawyers to seek an agreement to conduct the search. Sources earlier told CNN that those discussions had begun, but the law enforcement officials now say they have not.

Either way, government lawyers plan to seek a search warrant from a judge to conduct the search of the computer, the law enforcement officials said.

But the FBI is reportedly already searching a laptop that was co-owned by Anthony Weiner and Huma Abedin, and no warrant was necessary for that search because Weiner is cooperating with the FBI.

Many have been wondering why FBI Director James Comey would choose to make such a bold move just over a week until election day.  Surely he had to know that this would have a dramatic impact on the election, and it is unlikely that he would have done so unless someone had already found something really big.  In addition, Comey was reportedly eager to find an opportunity to redeem himself in the eyes of his peers at the FBI.  The following is an excerpt from a Daily Mail article that was written by Ed Klein, the author of a recently released New York Times bestseller about the Clintons entitled “Guilty As Sin“…

‘The atmosphere at the FBI has been toxic ever since Jim announced last July that he wouldn’t recommend an indictment against Hillary,’ said the source, a close friend who has known Comey for nearly two decades, shares family outings with him, and accompanies him to Catholic mass every week.

‘Some people, including department heads, stopped talking to Jim, and even ignored his greetings when they passed him in the hall,’ said the source. ‘They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.’

According to the source, Comey fretted over the problem for months and discussed it at great length with his wife, Patrice.

He told his wife that he was depressed by the stack of resignation letters piling up on his desk from disaffected agents. The letters reminded him every day that morale in the FBI had hit rock bottom.

So what happens next?

In the most likely scenario, the FBI will not have time to complete the investigation and decide whether or not to charge Hillary Clinton before the election.  This means that we would go into November 8th with this scandal hanging over the Clinton campaign, and that would seem to be very good news for Donald Trump.

However, it is possible that once the FBI starts searching through these emails that they could come to the conclusion very rapidly that charges against Clinton are warranted, and if that happens we could still see some sort of announcement before election day.

In the unlikely event that does happen, we could actually see Hillary Clinton forced out of the race before November 8th.

Once again, this appears to be very unlikely at this point, but it is still possible.

If Clinton was forced to step aside, the Democrats would need to come up with a new nominee, and that process would take time.  In an article later today on The Most Important News I will reveal who I believe that nominee would be.

In such a scenario, the Democrats would desperately need time to get their act together, and so we could actually see Barack Obama attempt to delay or suspend the election.  The legality of such a move is highly questionable, but Barack Obama has not allowed a little thing like the U.S. Constitution to stop him in the past.

This week is going to be exceedingly interesting – that is for sure.

The craziest election in modern American history just keeps getting crazier, and I have a feeling that even more twists and turns are ahead.

It sure seems ironic that Anthony Weiner is playing such a central role this late in the story, and I can’t wait to see what is in store for the season finale.

END

 

Trump and Hillary are basically tied in latest ABC poll

(courtesy zero hedge)

Trump, Hillary Tied In Latest ABC Poll; Trump Seen As “More Honest” For The First Time

 

 

END

 

Citibank states what even if Hillary wins the election, it will be marked by continuous investigations and an impeachment risk.

(courtesy Citibank/zerohedge)

Citi: “A Clinton Presidency Will Be Marked By Near-Continuous Investigations, Impeachment Risk”

end

 

The Dept of Justice guy, Peter Kadzik who is leading the investigation into the Clinton scandals has now been exposed with colluding with the Clinton campaign.  What a mess!! Yesterday, in my commentary I wrote that this was this biggest conflict of interest possible and it has now become reality.

(courtesy zero hedge)

DOJ’s Peter Kadzik Exposed Colluding With Clinton Campaign

On Monday we were the first to note that Podesta’s friend Peter Kadzik was the DOJ representative chosen to head up a “thorough” review of the new Huma Abedin emails as revealed by a letter he wrote to Congress.  Given Kadzik’s personal relationship with Podesta, it seemed like a “convenient” choice for the Clinton campaign. 

In the letter to Congress, the DOJ writes that it “will continue to work closely with the FBI and together, dedicate all necessary resources and take appropriate steps as expeditiously as possible,” assistant attorney General Peter J. Kadzik writes in letters to House and Senate lawmakers.

“Ironically”, that is the same Peter Kadzik who has proven his “impartiality” in multiple WikiLeaks emails including this newly released bombshell in which Kadzik provides a very helpful “heads up” about Hillary’s email server investigation.

Kadzik

Sure, who needs an independent investigator…this guy will do just fine.

* * *

And for readers who missed our original report on the long-running relationship between John Podesta and his close friend Peter Kadzik, here is an excerpt from our most recent article on the topic:

In the letter to Congress, the DOJ writes that it “will continue to work closely with the FBI and together, dedicate all necessary resources and take appropriate steps as expeditiously as possible,” assistant attorney General Peter J. Kadzik writes in letters to House and Senate lawmakers.

View image on TwitterView image on Twitter

Senior DOJ official sends letter to lawmakers responding to request for more information about email review.

So far so good, even if one wonders just how active the DOJ will be in a case that has shown an unprecedented schism between the politically influenced Department of Justice and the FBI.

And yet, something felt odd about this.

Kadzik… Kadzik… where have we heard that name?

Oh yes. Recall our post from last week, “Clinton Campaign Chair Had Dinner With Top DOJ Official One Day After Hillary’s Benghazi Hearing” in which we reported that John Podesta had dinner with one of the highest ranked DOJ officials the very day after Hillary Clinton’s Benghazi testimony?

It was Peter Kadzik.

In other words, the best friend of John Podesta, Clinton’s Campaign chair, at the DOJ will be in charge of a probe that could potentially sink Hillary Clinton.

For those who missed it, this is what we reported previously:

The day after Hillary Clinton testified in front of the House Select Committee on Benghazi last October, John Podesta, Hillary’s campaign chairman met for dinner with a small group of well-connected friends, including Peter Kadzik, who is currently a top official at the US Justice Department serving as Assistant Attorney General for Legislative Affairs.

The post-Benghazi dinner was attended by Podesta, Kadzik, superlobbyist Vincent Roberti and other well-placed Beltway fixtures. The first mention of personal contact between Podesta and Kadzik in the Wikileaks dump is in an Oct. 23, 2015 email sent out by Vincent Roberti, a lobbyist who is close to Podesta and his superlobbyist brother, Tony Podesta. In it, Roberti refers to a dinner reservation at Posto, a Washington D.C. restaurant.  The dinner was set for 7:30 that evening, just one day after Clinton gave 11 hours of testimony to the Benghazi Committee.

Podesta and Kadzik met several months later for dinner at Podesta’s home, another email shows. Another email sent on May 5, 2015, Kadzik’s son asked Podesta for a job on the Clinton campaign.

As the Daily Caller noted, the dinner arrangement “is just the latest example of an apparent conflict of interest between the Clinton campaign and the federal agency charged with investigating the former secretary of state’s email practices.” As one former U.S. Attorney tells told the DC, the exchanges are another example of the Clinton campaign’s “cozy relationship” with the Obama Justice Department.

The hacked emails confirm that Podesta and Kadzik were in frequent contact. In one email from January, Kadzik and Podesta, who were classmates at Georgetown Law School in the 1970s, discussed plans to celebrate Podesta’s birthday. And in another sent last May, Kadzik’s son emailed Podesta asking for a job on the Clinton campaign.

“The political appointees in the Obama administration, especially in the Department of Justice, appear to be very partisan in nature and I don’t think had clean hands when it comes to the investigation of the private email server,” says Matthew Whitaker, the executive director of the Foundation for Accountability and Civic Trust, a government watchdog group.

“It’s the kind of thing the American people are frustrated about is that the politically powerful have insider access and have these kind of relationships that ultimately appear to always break to the benefit of Hillary Clinton,” he added, comparing the Podesta-Kadzik meetings to the revelation that Attorney General Loretta Lynch met in private with Bill Clinton at the airport in Phoenix days before the FBI and DOJ investigating Hillary Clinton.

Kadzik’s role at the DOJ, where he started in 2013, is particularly notable Kadzik, as helped spearhead the effort to nominate Lynch, who was heavily criticized for her secret meeting with the former president.

It gets better because, as we further revealed, if there is one person in the DOJ who is John Podesta’s, and thus the Clinton Foundation’s inside man, it is Peter Kadjik.

Kadzik represented Podesta during the Monica Lewinsky investigation. And in the waning days of the Bill Clinton administration, Kadzik lobbied Podesta on behalf of Marc Rich, the fugitive who Bill Clinton controversially pardoned on his last day in office. That history is cited by Podesta in another email hacked from his Gmail account. In a Sept. 2008 email, which the Washington Free Beacon flagged last week, Podesta emailed an Obama campaign official to recommend Kadzik for a supportive role in the campaign. Podesta, who would later head up the Obama White House transition effort, wrote that Kadzik was a “fantastic lawyer” who “kept me out of jail.”

screen-shot-2016-10-25-at-11-57-45-am

Podesta was caught in a sticky situation in both the Lewinsky affair and the Rich pardon scandal. As deputy chief of staff to Clinton in 1996, Podesta asked then-United Nations ambassador Bill Richardson to hire the 23-year-old Lewinsky. In April 1996, the White House transferred Lewinsky from her job as a White House intern to the Pentagon in order to keep her and Bill Clinton separate. But the Clinton team also wanted to keep Lewinsky happy so that she would not spill the beans about her sexual relationship with Clinton.

Richardson later recounted in his autobiography that he offered Lewinsky the position but that she declined it.

Podesta made false statements to a grand jury impaneled by Independent Counsel Kenneth Starr for the investigation. But he defended the falsehoods, saying later that he was merely relaying false information from Clinton that he did not know was inaccurate at the time. “He did lie to me,” Podesta said about Clinton in a National Public Radio interview in 1998. Clinton was acquitted by the Senate in Feb. 1999 of perjury and obstruction of justice charges related to the Lewinsky probe. Kadzik, then a lawyer with the firm Dickstein Shapiro Morin & Oshinsky, represented Podesta through the fiasco.

Podesta had been promoted to Clinton’s chief of staff when he and Kadzik became embroiled in another scandal.

Kadzik was then representing Marc Rich, a billionaire financier who was wanted by the U.S. government for evading a $48 million tax bill. The fugitive, who was also implicated in illegal trading activity with nations that sponsored terrorism, had been living in Switzerland for 17 years when he sought the pardon. To help Rich, Kadzik lobbied Podesta heavily in the weeks before Clinton left office on Jan. 20, 2001. A House Oversight Committee report released in May 2002 stated that “Kadzik was recruited into Marc Rich’s lobbying campaign because he was a long-time friend of White House Chief of Staff John Podesta.”

The report noted that Kadzik contacted Podesta at least seven times regarding Rich’s pardon. On top of the all-hands-on-deck lobbying effort, Rich’s ex-wife, Denise Rich, had doled out more than $1 million to the Clintons and other Democrats prior to the pardon. She gave $100,000 to Hillary Clinton’s New York Senate campaign and another $450,000 to the Clinton presidential library.

Kadzik’s current role

In his current role as head of the Office of Legislative Affairs, Kadzik handles inquiries from Congress on a variety of issues. In that role he was not in the direct chain of command on the Clinton investigation. The Justice Department and FBI have insisted that career investigators oversaw the investigation, which concluded in July with no charges filed against Clinton.

But Kadzik worked on other Clinton email issues in his dealings with Congress. Last November, he denied a request from Republican lawmakers to appoint a special counsel to lead the investigation.

In a Feb. 1, 2016 letter in response to Kadzik, Florida Rep. Ron DeSantis noted that Kadzik had explained “that special counsel may be appointed at the discretion of the Attorney General when an investigation or prosecution by the Department of Justice would create a potential conflict of interest.”

DeSantis, a Republican, suggested that Lynch’s appointment by Bill Clinton in 1999 as U.S. Attorney in New York may be considered a conflict of interest. He also asserted that Obama’s political appointees — a list which includes Kadzik — “are being asked to impartially execute their respective duties as Department of Justice officials that may involve an investigation into the activities of the forerunner for the Democratic nomination for President of the United States.”

It is unknown if Kadzik responded to DeSantis’ questions.

Kadzik’s first involvement in the Clinton email brouhaha came in a Sept. 24, 2015 response letter to Senate Judiciary Committee chairman Chuck Grassley in which he declined to confirm or deny whether the DOJ was investigating Clinton. Last month, Politico reported that Kadzik angered Republican lawmakers when, in a classified briefing, he declined to say whether Clinton aides who received DOJ immunity were required to cooperate with congressional probes.

Kadzik also testified at a House Oversight Committee hearing last month on the issue of classifications and redactions in the FBI’s files of the Clinton email investigation.

Finally, it is also worth noting that Kadzik’s wife, Amy Weiss, currently at Weiss Public Affairs worked on the 1992 Clinton/Gore Campaign as a Press Secretary, and Communications Director for the Democratic National Committee, and a White House Deputy Assistant to the President/Deputy Press Secretary to President Bill Clinton.

* * *

And now it seems that Kadzik will be in charge of the DOJ’s “probe” into Huma Abedin’s emails. Which is why we are a little skeptical the DOJ will find “anything” of note.

Amy Weiss, Peter Kadzik, with lobbyist Tony Podesta, brother of John Podesta.

 

end

 

The DOJ responds:  finds nothing wrong..so move on

Kadzik is nothing but a huge conflict of interest here!

(courtesy zerohedge)

 

DOJ Responds To Kadzik’s Email To Clinton Campaign; Finds Nothing Wrong

After the revelation that the DOJ’s assistant attorney general, Peter Kadzik, was exposed as sending information about upcoming DOJ events to his friend, Clinton Campaign Chairman John Podesta, from a private, non-government gmail account, many were confused, asking if this is i) legal and ii) grounds for termination, if not criminal proceedings.

As a reminder, on May 19, 2015, from his personal gmail account, Peter Kadzik emailed the gmail account of John Podesta (who then promptly forwarded it onward to everyone on the Clinton campaign) the following:

Heads Up

 

There is a HJC oversight hearing today where the head of our Civil Division will testify. Likely to get questions on State Department emails. Another filing in the FOIA case went in last night or will go in this am that indicates it will be awhile (2016) before the State Department posts the emails.

Kadzik

Perhaps it was the clearly laid out partisan intent to assist the Clinton campaign, coupled with the obvious dissemination of DOJ information using un-FOIAble methods, namely a private email account, that prompted Americans to demand an answer from the DOJ regarding the fate of Kadzik.

However, at least according to an initial statement from the DOJ, absolutely nothing will emerge from today’s leak.As the Daily Caller reports, a spokesman for the Justice Department who reached out to the website, downplayed the significance of the email.

He argued that Kadzik was not using his Gmail account for work-related business because, the spokesman said, he was sharing public information in a personal capacity. The congressional hearing under discussion was in the public domain for several weeks and the FOIA request was publicized in a news article the night before Kadzik’s email, the spokesman asserted.

Furthermore, the flak added that the email is also not evidence that Kadzik was back-channeling to the Clinton campaign because it did not contain any new or confidential information.

Finally, he declined to speculate on whether Kadzik used Gmail for work-related matters, or Kadzik’s personal inference that “it will be awhile before the State department posts the emails“, something which certainly not in the public domain.

In other words, nothing to see here, move along, and meanwhile Kadzik – who appears to have no intention of recusing himself – may be one of the key DOJ officials supervising the department’s probe into Huma Abedin emails, despite his extensive and ongoing relationship with John Podesta and the Clinton Campaign.

With Only Six Days Remaining, Trump Surges in the Polls as Hillary Supporters Abandon Ship

Sprott Money's picture

Unusual for these guys to report such a negative report:  the ADP employment sinks to its weakest level for over 2 years:

(courtesy ADP/zero hedge)

ADP Employment Report Sinks To Weakest Since April 2013

Following last month’s disappointing drop in ADP jobs (then confirmed by payrolls), October’s ADP employment report printed 147k (less than the expected 165k) – the weakest since April 2013. A major upward revision (from 154k to 202k) for September. Construction (as spending collapses) and education jobs declined notably as the overall trend of job gains continues to weaken.

According to ADP’s Mark Zandi, “job growth appears to be shifting from small to large companies due to the lessening impact the global economic environment had on large companies earlier in the year,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This is also true because large companies often have the resources to attract workers with better pay and benefit packages.” Zandi added that “job growth remains strong although the pace of growth appears to be slowing. Behind the slowdown is businesses’ difficulty filling open positions.  owever, there is some weakness in construction, education and mining.” 

Looking at the details shows continued job losses in manufacturing, construction and natural resources jobs, which declined by a total of 18,000 offset by strength in professional and business services and leisure and hospitality:

The trend continues to weaken:

Here is the Change in Total Nonfarm Private Employment by Company Size

The comparison to NFP: Change in Total Nonfarm Private Employment

As a reminder, The Fed’s own labor market indicator is now in contraction YoY:

Full ADP Breakdown:

<br />      ADP National Employment Report: Private Sector Employment Increased by 147,000 Jobs in October<br />

end

 

The New York, ISM mfg index contracts for the 3rd consecutive month:

 

(courtesy zero hedge/ISM)

New York ISM Contracts For 3rd Month, Worst Streak In 7 Years

 

The Fed holds again but states that the rate hike in December “strengthens”

(courtesy zero hedge)

 

Advertisements

4 comments

  1. Agnes & Fred the Timneh · · Reply

    Mess? Yes. Good word, Harvey That says it all, really. For those mathematically inclined, mess is greater turbulence moving toward chaos. I prefer mess. It’s more visually entertaining.

    Hail Caesar. Pretty bird.

    Like

Leave a Reply

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

WordPress.com Logo

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

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s

%d bloggers like this: