August 22/DOW RISES 196 POINTS ON TALKS OF TAX REFORM & LACK OF WAR FEARS/GOLD FALLS $5.00 AND SILVER IS DOWN 3 CENTS/CHINA IN FIRST 6 MONTHS ALREADY REACH 80% OF LOAN QUOTA/USA SLAPS MORE SANCTIONS ON CHINA AND RUSSIA WITH CHINA BEING VERY ANGRY!/TRUMP TO ADD MORE TROOPS TO AFGHANISTAN MUCH TO THE DELIGHT OF THE NEO-CONS/

GOLD: $1286.00  DOWN $5.20

Silver: $16.98  DOWN 3 CENTS

Closing access prices:

Gold $1285.50

silver: $17.00

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1294.24 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1288.95

PREMIUM FIRST FIX:  $5.29

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SECOND SHANGHAI GOLD FIX: $1293.21

NY GOLD PRICE AT THE EXACT SAME TIME: $1285.30

Premium of Shanghai 2nd fix/NY:$7.91

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LONDON FIRST GOLD FIX:  5:30 am est  $1285.10

NY PRICING AT THE EXACT SAME TIME: $1285.90

LONDON SECOND GOLD FIX  10 AM: $1284.20

NY PRICING AT THE EXACT SAME TIME. $1284.40

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 0 NOTICE(S) FOR  nil  OZ.

TOTAL NOTICES SO FAR: 4581 FOR 458,100 OZ  (14.248 TONNES)

For silver:

AUGUST

 14 NOTICES FILED TODAY FOR

70,000  OZ/

Total number of notices filed so far this month: 1089 for 5,445,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

The open interest in gold fell to 505,829 contracts despite gold being up $5.05 yesterday. Silver’s OI continues to drop (tonight:188,627) as the bankers are looking over their shoulder at London and witnessing huge shortages of physical metal plus a severe backwardation. I wrote the following yesterday:  “We are now entering options expiry week and you know that gold and silver will be whacked until August 31.2017 (a week this Thursday). The crooks will do anything to keep gold below $1300.00 and silver below $17.10”
The bankers started their whacking so our underwriting banks steal from the public at large.

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL by 204 contracts from 188,831 down to 188,627 with THE FLAT PRICE THAT SILVER UNDERTOOK WITH  YESTERDAY’S TRADING (DOWN 0 CENTS) . THE LOSS IN OI ALSO CONTRASTS COMPLETELY TO THE LOSS IN GOLD OI DESPITE GOLD’S RISE IN PRICE YESTERDAY. WE MAY BE EXPERIENCING BANKER CAPITULATION IN BOTH GOLD AND SILVER NOW. IN SILVER AGAIN, THE BANKERS ARE LOATHE TO SUPPLY NEW PAPER.  NEWBIE LONGS JUST TRADED CONTRACTS WITH OLDER SPECS.

RESULT: A SLIGHTLY LOWER OI WITH NO GAIN IN PRICE.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.944 BILLION TO BE EXACT or 135% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 14 NOTICE(S) FOR 70,000  OZ OF SILVER

In gold, the open interest FELL BY ONLY 826 CONTRACTS DESPITE THE RISE  in price of gold ($5.05 GAIN ON MONDAY .). The new OI for the gold complex rests at 505,829. THE LOSS IN OPEN INTEREST DESPITE THE GAIN IN PRICE MAY MEAN THAT THE BANKERS ARE NOW BEGINNING TO FEEL PAIN IN GOLD. WE WILL HAVE TO SEE MORE DAYS LIKE THIS TO SEE IF A PATTERN DEVELOPS. THE BANKERS DID NOT SUPPLY MUCH OF THE SHORT PAPER AND NEWBIE LONGS DROVE UP THE PRICE WITH SELLING COMING FROM OLDER LONGS. TODAY, THE BANKERS ORCHESTRATED A RAID ON GOLD AND SILVER HOPING TO SEE BOTH GOLD AND SILVER LEAVES FALL FROM THEIR RESPECTIVE TREES.

Result: A LOSS IN OI with GOOD GAIN IN PRICE IN GOLD.

we had: 0 notice(s) filed upon for nil oz of gold.

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

GLD:

Today, no changes in gold inventory:

Inventory rests tonight: 799.29 tonnes

IN THE LAST 27 TRADING DAYS: GLD SHEDS 37.68 TONNES YET GOLD IS HIGHER BY $53.15 .

SLV

Today:  WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 334.407 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FALL BY 204 contracts from 188,831 DOWN TO 188,627 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE FLAT SILVER PRICE SILVER. AGAIN WE WITNESS THE BANKERS REFUSE TO SUPPLY THE SHORT PAPER. NEWBIE LONGS TRADED CONTRACTS WITH OLDER SPECS.  RESULT: LOWER OI WITH A FLAT PRICE.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 3.32 POINTS OR 0.10%   / /Hang Sang CLOSED UP 246.99 POINTS OR 0.40% The Nikkei closed DOWN 77.28 POINTS OR 0.91%/Australia’s all ordinaires CLOSED UP 0.43%/Chinese yuan (ONSHORE) closed UP at 6.6640/Oil DOWN to 47.36 dollars per barrel for WTI and 51.56 for Brent. Stocks in Europe OPENED GREEN , Offshore yuan trades  6.6688 yuan to the dollar vs 6.6640 for onshore yuan. NOW THE OFFSHORE MOVED STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS OT HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA//USA

Kim threatens again

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

Although China is reining in its shadow banking sector, the other side of total financing debt continues to explode.  To the surprise of many, Chinese banks have already reached 80% of total loan quota given at the start of the year.  We are already seeing evidence of a slowdown in loan creation in July.

( zero hedge)

China/Russia/North Korea/USA
Treasury slaps sanctions on both Chinese and Russian entities who are helping North Korea with their nuclear ambitions.  This should anger both China and Russia and of course North Korea.
(courtesy zero hedge)

4. EUROPEAN AFFAIRS

 

ENGLAND/PROVIDENT
UK’s version of subprime, Provident crashes most on record as its CEO (aptly named peter Crook) quits amidst probes on its financing.
( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISIS

Lebanese Army finds anti aircraft missiles that were formally in the hands of ISIS.  They now seem to have the capability to hit commercial aircrafts flying from 10,000 to 15,000 feet as they are descending to an airport:

( zero hedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

i)you know that we are reaching peak shale when BP Billiton, the world’s largest miner is selling its shale assets

( zero hedge)

ii)WTI  drops after a 3rd weekly gain in gasoline inventoris

( zero hedge)

8. EMERGING MARKET

9.   PHYSICAL MARKETS

 

10. USA Stories

i)Trump’s new policy commencing in Afghanistan is that they will no longer we nation building.  Their goal is simply killing terrorists.  The problem is that they will also be going into Pakistan to get the terrorists and thus expanding the war effort which may bring on more terrorism

( zero hedge)

ii)Ron Paul not happy with the expanded war effort as he offers a huge number of tweet storms why he is angry. Also Breitbart (Bannon) agrees with Paul

a must read…

( zerohedge)

( zero hedge)

iv)This is going to be very interesting:  a Federal Judge orders the IRS to release names of specific IRS employees who were told to target various Tea Party Conservative groups.  The actions of the IRS in targeting Tea Party members are criminal in nature.  The judge ordered the iRS that they have to reasons for the targets….

 

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY A TINY 826 CONTRACTS DOWN to an OI level of 505,829 DESPITE THE RISE IN THE PRICE OF GOLD ($5.05 with YESTERDAY’S trading).This time for once, the bankers did not supply the necessary gold short paper.  Newbie longs bid up the price of gold with the supply coming from older spec longs who decided to exit at a profit.

We are now in the contract month of August and it is the 3rd best of the delivery months after December and June.

The active August contract LOST 14 contract(s) to stand at 832 contracts. We had notices filed on YESTERDAY so we LOST 14 contracts or an additional 1400 oz will NOT stand at the comex and 14 EFP’s were issued which entitles the long holder to a fiat bonus plus a futures contract and most probably that would be a London based forward.

The non active September contract month saw it’s OI GAIN 33 contracts UP to 1364.

The next active contract month is Oct and here we saw a GAIN of 66 contracts UP to 52,199.

The very big active December contract month saw it’s OI LOSE 1824 contracts DOWN to 395,481.

We had 0 notice(s) filed upon today for   NIL oz

For those keeping score: in the upcoming front delivery month of August:

LAST YEAR WE HAD A MONSTROUS 44.7 TONNES OF GOLD INITIALLY.  BY THE CONCLUSION OF THE AUGUST CONTRACT MONTH 44.358 TONNES STOOD FOR DELIVERY.

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And now for the wild silver comex results.  Total silver OI FELL BY A SLENDER 204 CONTRACTS FROM 188,831 TO 188,627 DESPITE YESTERDAY’S NO GAIN IN PRICE. THERE IS NO QUESTION THAT WE ARE HAVING CONTINUAL BANKER CAPITULATION AS THEIR HUGE SHORTS IN SILVER ARE CHOKING THEM TO DEATH. THE BANKERS ARE REFUSING TO SUPPLY NEW SHORTS. NEWBIE LONGS TRADED CONTRACTS WITH OLD LONGS .
RESULT: SLIGHT LOSS IN OI AND A NO GAIN IN PRICE.

We are now in the next big non active silver contract month of August and here the OI FELL 10 contracts DOWN TO 23. We had 24 notice(s) filed yesterday.  Thus we GAINED ANOTHER 14 contract(s) or an additional 70,000 oz will stand for delivery in this non active month of August and AGAIN zero EFP’s were issued for the August contract month. Please note that in gold we continually see EFP’s issued but not in silver!!

The next active contract month is September (and the last active month until December) saw it’s OI fall by 9431 contacts down to 80,314.  The next non active contract month for silver after September is October and here the OI gained 27 contacts up TO 478. After October, the big active contract month is December and here the OI GAINED by 8571 contracts UP to 95,146 contracts.

We had 14 notice(s) filed for  70,000 oz for the AUGUST 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 130,019 WHICH IS POOR

YESTERDAY’S confirmed volume was 270,366 which is VERY GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for AUGUST

 August 21/2017.

 inventory movements not available today because the crooks are having trouble cooking their cooks
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
6,365.74 oz
Brinks
Scotia
(incl.155 kilobars)
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
  nil oz
No of oz served (contracts) today
 
0 notice(s)
nil OZ
No of oz to be served (notices)
832 contracts
(83,200 oz)
Total monthly oz gold served (contracts) so far this month
4581 notices
458,100 oz
14.248 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   34,462.5  oz
Today we HAD  1 kilobar transaction(s)/ 
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 0 customer deposit(s):
total customer deposits; 0  oz
We had 2 customer withdrawal(s)
 i) out of Brinks: 1382.49 oz
ii) Out of Scotia:  4983,25 oz (155 kilobars)
total customer withdrawals; 6,365.74 oz
 we had 0 adjustment(s)
For AUGUST:

Today, 0 notice(s) 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 0  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the initial total number of gold ounces standing for the AUGUST. contract month, we take the total number of notices filed so far for the month (4581) x 100 oz or 458,100 oz, to which we add the difference between the open interest for the front month of AUGUST (832 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 541,300  oz, the number of ounces standing in this active month of AUGUST.
 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (4581) x 100 oz  or ounces + {(846)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 541,300 oz standing in this  active delivery month of AUGUST  (16.836 tonnes)
 we LOST 14 contracts or an additional 1400 oz will NOT stand for delivery and 14 EFP’s for August were issued.(FOR FIAT BONUS PLUS ANOTHER DELIVERABLE CONTRACT WHICH MOST LIKELY IS A LONDON BASED FORWARD)
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Total dealer inventory 753,311.027 or 23.43 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,697,722.75 or 269.91 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 269.91 tonnes for a  loss of 32  tonnes over that period.  Since August 8/2016 we have lost 83 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

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 12 MONTHS  83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
August initial standings
 August 21  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
641,459.610 oz
Scotia
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
598,917.45
oz
CNT
No of oz served today (contracts)
14 CONTRACT(S)
(70,000 OZ)
No of oz to be served (notices)
9 contracts
( 45,000 oz)
Total monthly oz silver served (contracts) 1089 contracts (5,445,000 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 3,258,681.4 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(s):
 i) Out of Scotia: 641,459.610 oz
TOTAL CUSTOMER WITHDRAWALS: 641,459.610 oz
We had 1 Customer deposit(s):
 i)  CNT:  598,917.450 oz was deposited into CNT
***deposits into JPMorgan have stopped  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 598,917.45 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the AUGUST. contract month is represented by 14 contract(s) for 70,000 oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at 1089 x 5,000 oz  = 5,445,000 oz to which we add the difference between the open interest for the front month of AUGUST (23) and the number of notices served upon today (14) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the INITIAL standings for silver for the AUGUST contract month:  1089 (notices served so far)x 5000 oz  + OI for front month of AUGUST(23 ) -number of notices served upon today (14)x 5000 oz  equals  5,515,000 oz  of silver standing for the AUGUST contract month. This is extremely high for a non active delivery month. Silver is being constantly demanded at the silver comex and we witness again the amount of silver increases daily right from the get go.
We GAINED ANOTHER 14 contracts or an additional 70,000 oz wishes to stand for delivery in this non active month of August and 0 EFP’s were issued for the silver August month.
At this point in the delivery cycle last year on August 22/2016 we had 82,277 contracts standing vs this yr at 80,590.
Last yr on the first day notice for the Sept silver contract we had 17.070 million oz stand for delivery.
By month end:  16.075 million oz/
 
Volumes: for silver comex
ESTIMATED VOLUME TODAY:  54,308 WHICH IS EXCELLENT
YESTERDAY’s  confirmed volume was 114,885 contracts which is OUT OF THIS WORLD
FRIDAY’S CONFIRMED VOLUME OF 114,885 CONTRACTS WHICH EQUATES TO 575 MILLION OZ OF SILVER OR 82% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  38.318 million (close to record low inventory  
Total number of dealer and customer silver:   215.303 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.8 percent to NAV usa funds and Negative 6.7% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.5%
cash .+0.0%( August 21/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV FALLS TO -0.57% (August 21/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.60% to NAV  (August 21/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.57%/Sprott physical gold trust is back into NEGATIVE/ territory at -0.60%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

August 22/no change in gold inventory at the GLD/Inventory rests at 799.29 tonnes/

AUGUST 21/this is good!! a huge deposit of gold into the GLD to the tune of 3.85 tonnes/Inventory rests at 799.29 tonnes

August 18/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.44 TONNES

August 17/late last night, a deposit of 4.43 tonnes of gold at the GLD/inventory rests at 795.44 tonnes/the bleeding of gold has stopped.

August 16/no change in gold inventory at the GLD. Inventory rests at 791.01 tonnes

August 15/no change in gold inventory at the GLD/inventory rests at 791.01 tonnes

August 14/this is good!!: a gain of 4.14 tonnes of gold into the GLD inventory/the removal of GLD gone to the east has now stopped probably because there is no physical to send/inventory rests at 791.01 tonnes

August 11/no change in gold inventory/Inventory rests at 786.87 tonnes

August 7/no changes in gold inventory at the GLD/Inventory rests at 787.14 tonnes

AUGUST 4/ANOTHER LOSS OF 4.48 TONNES OF GOLD FROM GLD INVENTORY/INVENTORY RESTS AT 787.14 TONNES.THIS IS A HUGE CRIME SCENE!!

August 3/no change in gold inventory at the GLD/Inventory rests at 791.88 tonnes

August 2/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

Aug 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

July 31/NO CHANGES AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

July 28/ANOTHER MASSIVE WITHDRAWAL OF 3.54 TONNES OF GOLD WITH GOLD UP $9.15/INVENTORY RESTS AT 791.88 TONNES

July 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/INVENTORY RESTS AT 795.42 TONNES

July 26/NO CHANGE IN GLD INVENTORY WITH GOLD DOWN $2.55/INVENTORY RESTS AT 800.45 TONNES

July 25/A MASSIVE 9.17 TONNES OF GOLD WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 800.45 TONNES

July 24/A massive 9.62 tonnes withdrawal and yet the price remains constant (down only 25 cents)..inventory drops to 809.62 tonnes

July 21/with gold up $8.75 again, we had no changes in gold inventory at the GLD/inventory rests at 816.13 tonnes

July 20/WITH GOLD UP AGAIN TODAY ($3.50) WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 816.13 TONNES

jULY 19/STRANGE!! AGAIN WITH GOLD UP $0.50 WE HAD ANOTHER HUGE 5.32 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 816.13 TONNES  THIS GOLD IS HEADING TO SHANGHAI

July 18/STRANGE AGAIN/WITH GOLD UP $7.50 WE HAD ANOTHER HUGE 5.62 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 821.45 TONNES

July 17/strange again! with gold up $4.20 we had another huge withdrawal of 1.77 tonnes/inventory rests at 827.07 tonnes

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August 22 /2017/ Inventory rests tonight at 799.29 tonnes
*IN LAST 217 TRADING DAYS: 150.59 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 156 TRADING DAYS: A NET  6.84 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  9.97 TONNES HAVE BEEN WITHDRAWN.

end

Now the SLV Inventory

August 22/no change in silver inventory at the SLV/inventory rests at 334.407 million oz.

AUGUST 21/no change in silver inventory/inventory rests at 334.407 million oz/

August 18/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REST AT 334.407 MILLION OZ

August 17/A WITHDRAWAL OF 1.418 MILLION OZ LEAVES THE VAULTS OF THE SLV (WITH SILVER UP 25 CENTS YESTERDAY?)/INVENTORY RESTS AT 334.407 MILLION OZ

August 16/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz/

August 15/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz.

August 14./no change in silver inventory/inventory rests at 335.825 million/

August 11/no change in silver inventory tonight.  However we lost 3,781 million oz from Tuesday through Thursday. Inventory rests at 335.825 million oz/

August 7/no change in silver inventory at the SLV/Inventory rests at 339.606 million oz

AUGUST 4/A WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 339.606 MILLION OZ

August 3/A WITHDRAWAL OF 1,181,000 OZ FROM THE SLV/INVENTOR RESTS AT 340.551 MILLION OZ/

August 2/NO CHANGES IN SILVER INVENTORY AT THE SLV

INVENTORY RESTS AT 341.732 MILLION OZ/

August 1/A HUGE WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 341.732 MILLION OZ/

July 31/no change in silver inventory at the SLV/inventory rests at 342.677 million oz

July 28/ A HUGE WITHDRAWAL OF 1.15 MILLION OZ OF SILVER LEAVES THE SLV DESPITE SILVER BEING UP 11 CENTS TODAY/INVENTORY RESTS AT  342.677 MILLION OZ

July 27/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ WITH SILVER UP 13 CENTS TODAY.

July 26/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ

July 25/A MASSIVE 3.309 MILLION OZ OF INVENTORY WITHDRAWN FROM THE SLV DESPITE SILVER’S 10 CENT RISE TODAY.

July 24/no change in silver inventory despite its 4 cent drop/inventory remains at 347.121 million oz

July 21/STRANGE! WITH SILVER UP AGAIN TODAY (11 CENTS), NO CHANGE IN SILVER INVENTORY AT THE SLV/inventory 347.121 million oz/

July 20/STRANGE! WITH SILVER UP AGAIN TODAY, THE SLV INVENTORY LOWERS BY 945,000 OZ/INVENTORY RESTS AT 347.121 MILLION OZ/

July 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.066 MILLION OZ

July 18/a huge 946,000 oz withdrawal from the SLV despite silver’s 16 cent gain!

Inventory rests at 348.066 million oz

July 17/no change in silver inventory at the SLV/Inventory rests at 349.012 million oz

August 22.2017:

Inventory 334.407  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.37%
  • 12 Month MM GOFO
    + 1.51%
  • 30 day trend

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Mnuchin: I Assume Fort Knox Gold Is Still There

  • US Treasury Secretary Steve Mnuchin visits Fort Knox Gold
  • Later tweeted ‘Glad gold is safe!’
  • Only the third Treasury Secretary to visit the fortified vault, last visit was 1948
  • Last Congressional visit was 1974
  • Speculation over existence of gold in Fort Knox is rife
  • Concerns over Federal Reserves lack of interest in carrying to an audit on gold
  • Gold was last counted in 1953, nine years before Mnuchin was born
  • Mnuchin may be looking to prevent countries and states from worrying about and repatriating their gold

US Treasury Secretary ‘assumes’ the gold is still in Fort Knox, 64 years after it was audited.

81 years after it was built Fort Knox received its third visit from a US Treasury Secretary yesterday, Steven Mnuchin.

The fortified facility is reportedly surrounded by 30,000 soldiers, tanks, armored personnel carriers, attack helicopters, and artillery. Despite this, there is still concern as to whether the gold is there.

As he headed in, Mnuchin told an audience “I assume the gold is still there…It would really be quite a movie if we walked in and there was no gold.”

With a background in Hollywood it was unsurprising that Mnuchin’s imagination appeared to be getting carried away with tales of finding the $200 billion of gold missing.

Missing gold: fact or fiction?

An empty Fort Knox is an issue far removed from the hills of Hollywood  and has far more basis in reality than many give it credit for.

For many decades campaigns have been led for the US Treasury and government to audit the gold and to testify to its existence.

The gold has not been ‘counted’ since 1953. This was less than 20 years after Fort Knox was built. Since then there has been no official count or audit.

The facility (purportedly) holds 147 million ounces of gold, worth around $186 billion. This is small compared to the amount purportedly held at the Liberty Street facility, in New York.

As with Fort Knox, the New York gold is yet to be audited.

At the moment, a tweet from a US Treasury Secretary is all we have when it comes to assurance over the gold’s existence.

Lack of Fort Knox gold audit to prevent damage, will cause damage

Congressman Ron Paul has argued previously that the US government ask Americans to trust that the Fort Knox gold is there plus gold stored elsewhere. They refuse to allow any checks and audits (whether independent or carried out by the government).

Paul stated back in 2010, “if there was no question about the gold being there, you think they would be anxious to prove gold is there.”

Mnuchin is no doubt aware of the damage that would be done to the US economy should it come to light that the gold is no longer where it’s supposed to be.

He has likely taken note of Goldfinger’s dastardly plan in the infamous Bond film. In Goldfinger the villain plans to contaminate the US gold holdings in order to boost the value of his and the Chinese’s own bullion.

Whilst the gold in Fort Knox is unlikely to have been contaminated there is a strong argument that it isn’t there at all. Instead, it has been leased out many times over.

Who has the gold?

As GATA found out between 2008 and 2009 the Fed keeps a secret of its gold-swap arrangements with foreign banks.

Unsurprisingly gold-swap arrangements potentially lead to the eventual problem that no-one’s sure whose gold is whose anymore. It can be a high-end, expensive game of pass-the-parcel.

It’s worth remembering that the gold held by the US Government is not just owned by America, they hold gold for many countries, including Germany.

There is an argument to be made over whether or not Germany, or anyone else storing gold in a central bank abroad, owns allocated gold or is merely a ‘creditor’ on a metal statement, given gold swap arrangements.

Concerns have been so great over the United State’s lack of interest in auditing the gold bullion that countries have begun to repatriate the gold and demand statements.

Venezuela and Germany are the two most high profile countries to have recently repatriated their gold. Both went to big efforts to publicise the existence of the gold as it was repatriated. Germany even published bar numbers.

Missing gold has the states in a state

The US has its own trust issues though when it comes to gold, thanks to the lack of checks in place. Two years ago the state of Texas were given the go ahead to build its own Bullion Depository, into which the state would repatriate over $1 billion worth of gold.

The move by Texas highlighted mistrust in the Federal Government’s ability to not only keep the physical gold but also to not confiscate it should the monetary system run into problems.

Gold going missing in the US is not a recent issue.

Back in the 1920s Herr Hjalmar Schacht, then head of the German Central Bank, went to New York to see Germany’s gold. Despite the importance of the visit, Fed officials could not find the palette of Germany’s gold bullion.

One would have thought this would have triggered an early start to the Second World War but instead Herr Schacht turned to the Federal Reserve Chairman, Benjamin Strong, and said ‘Never mind, I believe you when you when you say the gold is there. Even if it weren’t you are good for its replacement.’

All of this serves as a timely reminder that we should learn from the mistakes of governments and central banks. Rather than offer up a blind trust to counterparties storing gold we should ensure that we have as much control as possible over our gold bullion.

We believe that allocated and segregated gold bullion, stored in secure locations such as Singapore, Hong Kong and Zurich is the best way to store gold. When you do this with GoldCore you have control and a audit of your gold holdings so you know they are right where you want them, when you want them.

News and Commentary

Gold slips amid steady dollar; investors wary ahead of Jackson Hole meet (Reuters.com)

Metals shine as stocks struggle near 5-1/2-week low (Reuters.com)

A Cosmic Theory and 2-Inch Lump of Gold Drive Novo’s 500% Surge (Bloomberg.com)

UK Rightmove house prices down in August (Telegraph.co.uk)

Dalio Says the U.S. Is the Most Divided Since 1937 (Bloomberg.com)

Gold’s Rally Against Oil Is Just Beginning (Bloomberg.com)

Stars Are Aligning for Gold Bugs (WSJEmail.com)

US stocks may be more overvalued than they’ve ever been before (MoneyWeek.com)

UK’s biggest estate agent says Brexit negotiations are ‘biggest risk’ to housing market as growth slows (BusinessInsider.com)

Stunning Photos Capture the Solar Eclipse Across America (Smithsonian.com)

Gold Prices (LBMA AM)

22 Aug: USD 1,285.10, GBP 1,000.71 & EUR 1,091.95 per ounce
21 Aug: USD 1,287.60, GBP 999.82 & EUR 1,096.52 per ounce
18 Aug: USD 1,295.25, GBP 1,004.34 & EUR 1,102.65 per ounce
17 Aug: USD 1,285.90, GBP 998.12 & EUR 1,096.74 per ounce
16 Aug: USD 1,270.15, GBP 985.13 & EUR 1,082.29 per ounce
15 Aug: USD 1,274.60, GBP 986.92 & EUR 1,084.05 per ounce
14 Aug: USD 1,281.10, GBP 987.34 & EUR 1,085.48 per ounce

Silver Prices (LBMA)

22 Aug: USD 17.02, GBP 13.27 & EUR 14.48 per ounce
21 Aug: USD 17.02, GBP 13.20 & EUR 14.48 per ounce
18 Aug: USD 17.15, GBP 13.30 & EUR 14.60 per ounce
17 Aug: USD 17.02, GBP 13.23 & EUR 14.55 per ounce
16 Aug: USD 16.68, GBP 12.96 & EUR 14.25 per ounce
15 Aug: USD 16.89, GBP 13.12 & EUR 14.38 per ounce
14 Aug: USD 16.97, GBP 13.09 & EUR 14.39 per ounce


Recent Market Updates

– Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
– Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High
– Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard
– World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF In Q2
– Diversify Into Gold Urges Dalio on Linkedin – “Militaristic Leaders Playing Chicken Risks Hellacious War”
– Gold Has Yet Another Purpose – Help Fight Cancer
– Gold Up 2%, Silver 5% In Week – Gundlach, Gartman and Dalio Positive On Gold
– Great Disaster Looms as Technology Disrupts White Collar Workers
– Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat
– Silver Mining Production Plummets 27% At Top Four Silver Miners
– Gold Consolidates On 2.5% Gain In July After Dollar Has 5th Monthly Decline
– Gold Coins and Bars See Demand Rise of 11% in H2, 2017
– Greenspan Warns Stagflation Like 1970s “Not Good For Asset Prices”


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

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER 6.6640 (REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES MUCH STRONGER TO ONSHORE AT   6.6688/ Shanghai bourse CLOSED UP 3.32 POINTS OR 0.10%  / HANG SANG CLOSED UP 246.99 POINTS OR 0.91% 

2. Nikkei closed DOWN 9.29 POINTS OR 0.05%    /USA: YEN RISES TO 109.42

3. Europe stocks OPENED IN THE GREEN     ( /USA dollar index FALLS TO  93.51/Euro DOWN to 1.1762

3b Japan 10 year bond yield: RISES  TO  +.042%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.34/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.36 and Brent: 51.56

3f Gold DOWN/Yen DWON

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 10yr bund RISES TO  +.408%/Italian 10 yr bond yield DOWN  to 2.117%    

3j Greek 10 year bond yield FALLS to  : 5.587???  

3k Gold at $1286.30  silver at:17.02 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 7/100 in  roubles/dollar) 59.07-

3m oil into the 47 dollar handle for WTI and 51 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 109.42 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9662 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1362 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/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to  +0.408%

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 2.2061% early this morning. Thirty year rate  at 2.7808% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Stocks Rebound As Europe Ends 3-Day Losing Streak; VIX, Gold, Bonds Slide

S&P futures are modestly in the green, following gains in European and Asian shares, after the cash index climbed on Monday for the first time in three days as volatility tumbled amid abysmal trading volumes. Meanwhile, European stocks joined an Asian stock rally following three days of losses, pushed higher again by mining shares as Antofagasta rose 5.5%, hitting a 4 year high on strong H1 earnings. Safe havens such as bonds, gold, and the yen declined despite the latest warning from Bridgewater’s Ray Dalio who said yesterday he was “reducing risk”, although not even he could offset the return of the VIX clubbing.

Despite increasingly cautious rhetoric from iconic market investors, traders have again gotten over some of the sensitivity that characterized the past few days following political turmoil in Washington, fresh terrorist attacks in Europe and ongoing tension between the U.S. and North Korea. Nonetheless as discussed yesterday Dalio said he’s “tactically reducing” risk because he’s concerned about growing internal and external conflict “leading to impaired government efficiency” in the U.S., according to a LinkedIn post Monday.

Back to Europe, where the Stoxx Europe 600 Index rebounded from the lowest in more than a week as miners and chemical makers led gains across almost every sector. Even with today’s rally, the Stoxx 50 is nearly 200 points below Wall Street’s year-end consensus target just above 3,600.

The broad index of European stocks was up 0.4 percent on the day. The surge in European stocks pushed up the MSCI world equity index, which is now up 0.1 percent on the day, its second day of gains after sharp falls last week.  The performance comes on the back of strong sentiment towards Europe that saw the euro record its biggest one-day gain in a month on Monday. Though the single currency dipped slightly on Tuesday, it is still around the $1.18 mark which analysts believe might prompt policymakers to consider action.

Meanwhile over in Germany, we got another indication that Europe’s strongest economy has topped, after the 3rd ZEW decline in a row (August ZEW economic sentiment at 10.0, Exp. 15.0, Last 17.5) perhaps not surprising considering the poor DAX performance in recent weeks. The DAX pared gains to 0.5%, after earlier rising as much as 0.8%, after the Zew showed investor confidence fell more than expected. As a reminder, the DAX has dropped 1.6% so far this quarter, vs 0.2% dip for Euro Stoxx 50, 0.3% fall for CAC 40, and 5.7% rise for FTSE MIB. Is Germany getting sick again?

In Asia, equity markets were mostly higher although news flow was remarkably light amid a lack of central bank speakers and macroeconomic data. Focus was on last night’s speech by US President Trump in which he highlighted US plans to continue sending troops to Afghanistan to fight the terror threat emanating from the country. Japan’s Topix index fluctuated before ending the local session less than 0.1 percent higher while the Nikkei 225 fell -0.05%, entering the longest losing streak since April 2016, while the ASX 200 was up 0.42% after numerous earnings, including from BHP Billiton. Korea’s Kospi index gained 0.4% while the Shanghai Composite rose 0.1%.  Hong Kong’s Hang Seng Index rose 0.9 percent, outperforming other equity markets in Asia, on strong earning results.

In macro, the DXY dollar index retraced yesterday’s entire push lower as EUR, GBP and AUD all continuously grind lower against USD amid little news. Dalian iron ore futures close above 600 yuan/ton for first time since March as rally in metals markets extends further. Italian BTPs sell off aggressively, with some noting summer related carry trades being unwound; UST curve bear flattens with focus on the strength in the USD, Bloomberg notes.

The US dollar rose against most Group-of-10 peers amid profit-taking on short positions and as fresh long exposure was added before the Jackson Hole symposium later this week.  The Bloomberg Dollar Spot Index rose by 0.3 percent in early trading, following a drop of 0.6% since Friday. Some investors trimmed their short exposure in the greenback after the gauge hit a three-week low on Monday, according to traders in Europe quoted by Bloomberg, looking to add again should the rebound in place start losing steam. Leveraged accounts were also seen adding fresh long positions as they see upside risks into Federal Reserve Chair Janet Yellen’s speech at Jackson Hole, Wyoming on Friday. Even as the dollar gauge looks to erase Monday’s losses, the medium-term outlook was little changed. The downtrend this year remains firmly in place, with August’s trading pattern resembling more of a consolidation phase than a significant rebound. Bloomberg’s fear and greed indicator suggests bulls are in control this month, yet the U.S. currency trades just 0.4 percent higher.

In China, the offshore yuan closed at the highest since September 16, boosted by a stronger central bank reference rate after the dollar fell overnight. State media cited senior PBOC adviser as saying the Chinese currency’s advance may continue this year.

In commodities, London copper echoed moves in China, and rose to a three-year high while zinc held close to its highest level in a decade while nickel logged a fresh annual peak. BHP Billiton, the world’s largest miner, reported a surge in underlying full-year profits and said it would exit its underperforming U.S. shale oil and gas business.

“Commodity prices are holding firm, particularly base metals,” said Sue Trinh, FX strategist at RBC Capital Markets. She cautioned that commodities have mostly firmed “on speculative Chinese investment flow from the wealth management industry, so we question the real demand.”

In rates, European government bond yields followed Treasuries higher. The yield on 10-year Treasuries gained two basis points to 2.20 percent. Germany’s 10-year yield climbed less than one basis point to 0.40 percent. Britain’s 10-year yield increased one basis point to 1.076 percent.

Crude advanced before U.S. government data forecast to show stockpiles fell. West Texas Intermediate crude climbed 0.3 percent to $47.38 a barrel. Gold fell 0.5 percent to $1,285.18 an ounce, the largest fall in a week.

Economic data include FHFA House Price Index and Richmond Fed Manufacturing Index. Salesforce, Intuit, Coty and Toll Brothers are among companies reporting earnings.

Bulletin Headline Summary from RanSquawk

  • Soft German ZEW data sees EUR trend lower.
  • Improving risk tone has led EU Bourses higher.
  • Looking ahead, highlights include: US API data, Richmond Fed Manufacturing Data and Canadian Retail Sales

Market Snapshot

  • S&P 500 futures up 0.1% to 2,431.00
  • STOXX Europe 600 up 0.5% to 374.68
  • MSCI Asia up 0.1% to 159.52
  • MSCI Asia ex Japan up 0.5% to 526.81
  • Nikkei down 0.05% to 19,383.84
  • Topix up 0.06% to 1,596.12
  • Hang Seng Index up 0.9% to 27,401.67
  • Shanghai Composite up 0.1% to 3,290.23
  • Sensex up 0.2% to 31,305.32
  • Australia S&P/ASX 200 up 0.4% to 5,750.12
  • Kospi up 0.4% to 2,365.33
  • Brent futures up 0.8% to $52.07/bbl
  • German 10Y yield rose 1.2 bps to 0.412%
  • Euro down 0.4% to $1.1774
  • US 10Y yield rose 2 bps to 2.20%
  • Italian 10Y yield unchanged at 1.742%
  • Spanish 10Y yield rose 3.7 bps to 1.584%
  • Gold spot down 0.5% to $1,284.90
  • U.S. Dollar Index up 0.4% to 93.44

Top Overnight News

  • Donald Trump vowed as a presidential candidate to reduce America’s military involvement abroad and quickly defeat Islamic State terrorists. His announcement of an open-ended commitment to Afghanistan to battle jihadists is a concession that as president he cannot meet either promise
  • Provident Financial slumped the most on record as Chief Executive Peter Crook stepped down and the subprime lender forecast a full-year loss and scrapped its dividend
  • BHP Billiton Ltd. is in talks with potential buyers of its U.S. shale assets — acquired in a contentious $20 billion deals spree in 2011 — and will delay a move into potash after months of public skirmishes with activist investors led by Paul Singer’s Elliott Management Corp
  • OPEC will have little choice but to extend oil output cuts at current levels when they expire in March, according to Bank of America Merrill Lynch
  • Just as the world was put on notice that the end is nigh for the scandal- plagued London interbank offered rate, Janus Henderson Group Plc has started two new exchange-traded notes linked to the doomed benchmark
  • German investor confidence declined for a third month amid concern that the widening diesel scandal and the strengthening euro will weigh on Europe’s largest economy
  • North Korea Says U.S. Faces ‘Merciless Revenge’ Over Drills
  • World’s Biggest Wealth Fund Gains $26 Billion on Stock Rally
  • HSBC Currency Conspiracy May Have Involved 11 Others, U.S. Says
  • Court Square Said to Be in Talks to Buy PlayCore for $1 Billion
  • KKR Is Said to Near $3 Billion New York City Pension Pledge
  • Provident Financial Drops Most Ever After CEO Peter Crook Quits
  • Pratt’s $10 Billion Jet Engine Lags GE by 10- to-1 on New Orders
  • Japan Tobacco to Acquire Philippines No. 2 Cigarette Maker
  • Corporate Bonds Have Plenty of Fans Even After Comedown
  • Trump Adds Afghanistan to Long List of Issues That Defy Easy Fix
  • Broadcast News Misses Ratings Bonanza With Too Little Trump
  • EU Insists on Orderly Brexit as U.K. Battles for Upper Hand
  • Wanda Scraps Central London Purchase as China Toughens M&A Rules

Asian equity markets were mostly higher although news flow was remarkably light amid a lack of central bank speakers and macroeconomic data. Focus was on a speech from US President Trump where he
highlighted US plans to continue sending troops to Afghanistan to fight the terror threat emanating from the country. The Nikkei 225 fell -0.05% while the ASX 200 was up 0.42% after numerous earnings, including from BHP Billiton. 10Y JGBs were lower despite a strong 20Y JGB auction as participants move into the long-end following the well-received issuance, leading to curve flattening. The line was sold with the lowest tail of 2017 and highest cover since January 2014.

Top Asian News

  • China State Construction Seeks $813 Million in Rights Issue
  • China’s Metal Frenzy Sparks Investor Rush to Smokestack Debt
  • India Fast Food Stocks May Move as McDonald Ends Franchisee Tie
  • Booze Ban in the Home of Baijiu Sinks China’s Liquor Stocks
  • Shares of China Drug Firms Advance as Results Beat Expectations
  • Dollar Demand Drives Yen Lower as Euro, Sterling Reverse Gains

European equities have kicked off the session on the front-foot (Eurostoxx 50 +0.5%) with all ten sectors in the green. In terms of sector specifics, material names lead the way higher amid positive earnings updates for Antofagasta (+4%) and BHP Billiton (+3.2%) amid positive pre-market earnings updates, subsequently dragging the sector higher. Elsewhere, Provident Financial (-50%) are the notable underperformer amid their CEO resigning, second profit warning and scrapping of dividend. Finally, Fiat (+1.2%) remain supported by ongoing interest from Great Wall Motor. Fixed income markets trade lower amid the apparent
return of risk-sentiment to the market with today’s sovereign bond-slate once again void of supply. Bunds have somewhat ran out of steam after yesterday failing to target the Aug 11 high with fixed income markets not showing much reaction amid the soft ZEW data release this morning, now awaiting the GE 10yr supply tomorrow. Additionally, some are attributing the pressure on peripheral markets to ongoing speculation about a potential parallel currency in Italy but details are yet to emerge on this front.

Top European News

  • U.K. Sees First July Budget Surplus Since 2002 on Tax Boost
  • European Miners Climb for a Second Day; Antofagasta Leads Gains
  • Tesco Leads U.K. Supermarket Pack as Lewis’s Revival Continues
  • Millennium Credit Manager Forgash Is Said Departing Hedge Fund
  • What Ails Central Banks May Cure Russia’s Inflation Angst
  • BTP Futures Slip, Bonds Underperform as Strategists Turn Bearish
  • Euro’s Hot Streak May Survive Any Draghi Jackson Hole Jawboning
  • Bank of Cyprus Slumps After Provision Changes Produce 1H Loss

In currencies, overnight the Asian trading session saw a somewhat risk on tone, which saw JPY and CHF ease off against the greenback with the JPY also consolidating above 109. Of note, large expiries in USD/JPY are set to roll off at the NY cut with lbln at 108.50 and 798MM at 109.00. The EURUSD move above 1.18 had been brief after the currency ran into resistance at 1.1825. Again, it has been a relatively quiet morning with participants eagerly awaiting President Draghi’s speech in Frankfurt. Although EUR has extended on losses following the release of soft ZEW data from Germany, with the currency approaching 1.1750.

In commodities, WTI and Brent crude futures trade higher, paring back some of yesterday’s losses which were in part triggered by the resumption of operations at the Deere Park refinery OPEC/Non-OPEC JTC reportedly sees July production deal compliance at 94%. (Newswires) However, this appears to be very much at odds with recent numbers produced by IEA, stating a compliance level of just 74% Kuwaiti oil minister said that OPEC will discuss ending or extending cuts at its November meeting. He also noted that OPEC is still working to push oil stocks below 5-year average. Elsewhere, the risk-appetite has taken the shine modestly off gold prices while Chinese iron ore futures were seen higher by over 5% during Asia-Pac hours.

Looking at the day ahead, the FHFA house price index and Richmond Fed manufacturing index are due. Onto other events, the ECB’s Vice President Constancio speaks on inequality and the distributional impact of macroeconomic policies

US Event Calendar

  • 9am: FHFA House Price Index MoM, est. 0.5%, prior 0.4%; House Price Purchase Index QoQ, prior 1.4%
  • 10am: Richmond Fed Manufact. Index, est. 10, prior 14

Jim Reid concludes the overnight wrap

Well I hope some of you in the US saw the solar eclipse yesterday. Here in the UK we had our own solar eclipse and instead of it only lasting 3 minutes it lasted the whole day. It was a total eclipse by thick, gloomy and generally foreboding cloud! One would have to say that clouds continues to hover over financial markets at the moment without necessarily unleashing heavy precipitation. There was a lot of chatter in the market yesterday about what Jackson Hole will bring. On balance I would say investors are much more set up for a non-event than they were 1 or 2 months ago. The general feel is that recent events (softer inflation and softer sentiment in markets) will ensure that both the Fed and the ECB will tread carefully. That likely implies that a non-event (or dovish comments) will have limited impact on the market whereas evidence of tighter policy relative to expectations from either could lead to a bigger reaction. As we said yesterday don’t forget Mr Draghi’s speech at the Lindau symposium in Germany tomorrow. If he is going to  say something market moving this week it might be there rather than stateside.

Ahead of these events, US equities were mixed but little changed on light volume yesterday. Both the S&P and the Dow edged up 0.1%, while the Nasdaq dipped 0.05%. Within the S&P, the real estate sector was up +1.07%, but gains were largely offset by losses in other sectors including energy and financials. European markets broadly softened, with the Stoxx 600 down -0.40% alongside the Dax (-0.82%) and the FTSE 100 (-0.07%). Elsewhere, the Vix fell 1.1 points to 13.19.

This morning in Asia, markets have broadly strengthened. Despite North Korea warning that the US / South Korea will face “merciless revenge” for its annual military drills, the Kospi advanced +0.40%. Elsewhere, Hang Seng was up +1.04% on solid company results and the Nikkei up +0.07% as we type.

Back to yesterday and following data last week that showed Germany’s economy grew 2.5% yoy in 2Q, the Bundesbank was relatively upbeat overnight, noting “the strong economic upturn in the German economy is expected to continue in 3Q, with industrial output probably continuing to play an important role, thanks to a substantial expansion in exports…” That said, these comments seem to have little impact on bunds as bonds remain well bid. Yields fell modestly in both US and Europe. Core European bond yields were down 1-2bp across the curve, with bunds (2Y: -1bp; 10Y: -2bps), Gilts (2Y: -1bp; 10Y: -2bps), and French OATs (2Y: -1bp; 10Y: -1bp) all slightly lower in yield while UST 10Y (2Y: -0.5bp; 10Y: -1bps) yields also dipped yesterday but have largely reversed the move in Asia this morning.

Turning to currencies, the USD dollar index weakened 0.4% while the Euro/USD had a solid session, up 0.5% yesterday. The Euro is now back above last week’s level and only c0.6% away from the CY17 high of 1.1870. So we’ve cleared levels from last week before the ECB minutes noted that “concerns were expressed about the risk of the (Euro) overshooting in the future”. Elsewhere, Sterling/USD was up 0.2% and the Euro/Sterling was up 0.3%.

In commodities, WTI oil fell 2.4% following an OPEC meeting that ended yesterday with no decision on the future of supply cuts. Iron ore continued to increase for the third consecutive day (up c9% in total), following reports of stronger Chinese steel demand. Precious metals were slightly up (Gold +0.6%; Silver +0.3%) and base metals broadly strengthened with Copper (+0.6%). Aluminium (+0.6%) and Zinc (+1.4%).

Away from the markets and onto the looming US debt ceiling limit issue, both the US Treasury Secretary Mnuchin and S enate majority leader McConnell believe it will be lifted. Mnuchin noted “everybody understands, this is not a Republican or a Democrat issue, we need to be able to pay our debts”, while McConnell said “there is…no chance we won’t raise the debt ceiling….America is not going to default..”

Elsewhere, the UK government has published two more Brexit position papers (a total of five expected this week), reiterating that the country wanted the “freest and most frictionless trade possible” and would seek to preserve existing rules on confidentially.

The latest ECB CSPP holdings were released yesterday. They bought a lowly €0.8bn last week which compares to €1.1bn, €1.54bn, €0.79bn, €0.72bn, €1.43bn over the previous five weeks. These continue to be weak summer influenced numbers and this week’s equate to an average of €160mn per day (vs. €351mn/ day since CSPP started). The CSPP/PSPP ratio was 9.6% (previous weeks 11.4%,12.8%, 8.1%, 6%, 10.4%) which is below the average since the April taper begun but the average since this point of 12.7% is still higher than the pre-taper ratio of 11.6%. So the evidence is still in favour of CSPP having been trimmed less than PSPP since April even if there have been some softer weeks of late. As we’ve discussed in recent weeks the ECB probably did a little front loading ahead of the summer to account for summer credit liquidity being worse than in govt. bonds. We’ll have a better idea of where things stand in September.

Before we take a look at today’s calendar, we wrap up with the other data releases from yesterday. In the US, the Chicago Fed national activity index for July was lower than expected at -0.01 (vs. 0.10 expected), although the weakness was partly offset by an upward revision to the prior reading. The three-month average stands broadly flat, suggesting an economy growing at around its implied trend. Elsewhere, Canada’s wholesale trade sales for June was in line at -0.5% mom. In the UK the Rightmove house price index (which measures asking prices) fell 0.9% mom in August but remained up 3.1% yoy.

Looking at the day ahead, the ZEW survey on economic expectations for the Eurozone and Germany are due. Then the UK will release various data including: the July net private sector borrowing and July public finances data as well as the CBI full volume of total order book balance. Over in the US, the FHFA house price index and Richmond Fed manufacturing index are also due. Onto other events, the ECB’s Vice President Constancio speaks on inequality and the distributional impact of macroeconomic policies

 END

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 3.32 POINTS OR 0.10%   / /Hang Sang CLOSED UP 246.99 POINTS OR 0.40% The Nikkei closed DOWN 77.28 POINTS OR 0.91%/Australia’s all ordinaires CLOSED UP 0.43%/Chinese yuan (ONSHORE) closed UP at 6.6640/Oil DOWN to 47.36 dollars per barrel for WTI and 51.56 for Brent. Stocks in Europe OPENED GREEN , Offshore yuan trades  6.6688 yuan to the dollar vs 6.6640 for onshore yuan. NOW THE OFFSHORE MOVED STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS OT HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

Kim threatens again

(courtesy zero hedge)

Kim Threatens “Merciless Revenge” As US-South Korean “War Maniacs” Begin Drills

As the Ulji Freedom Guardian joint military drills begin near the Korean Peninsula, North Korea’s Kim has threatened “merciless revenge” against the “US Imperialists and South Korean war maniacs” for ignoring his warnings.

North Korea’s state-run Korean Central News Agency reports that:

The US imperialists and the South Korean war maniacs launched the Ulji Freedom Guardian joint military drills aimed at a preemptive attack on the DPRK.

 

Despite the repeated warnings of the DPRK, they have kicked off the war in the pretext of resolving “countering” the “provocation by the north.” This is aimed at igniting a nuclear war on the Korean peninsula at any cost.

 

What is more serious is the fact that on the eve of the war exercises, American troops, including US Pacific Commander and Strategic Commander, flew to the South, contributing far more US troops from overseas, as well as seven vassal states including Australia and Britain.

 

The Korean peninsula has plunged into a critical phase due to the reckless north-targeted war racket of the war maniacs.

As Bloomberg notes, KCNA further cites an unidentified military spokesman as saying it would be a misjudgment for the U.S. to think that North Korea will “sit comfortably without doing anything” during the U.S.-South Korea joint military drills.

Ongoing drills and visits of U.S. military officials to South Korea create the circumstances for a “mock war” on the Korean peninsula, KCNA says.

 

U.S. can’t avoid “merciless revenge” by North Korea.

 

U.S. should never forget North Korea is watching its moves closely with “fingers on triggers, ready to pour a fire shower of penalties at any time”

Additionally, adding further tension, Yonhap reports that three top U.S. military commanders plan to issue a strong warning message to North Korea in a rare joint press availability here later Tuesday, officials said.

Pacific Command chief Adm. Harry Harris, Strategic Command head Gen. John Hyten and Missile Defense Agency Director Lt. Gen. Samuel Greaves are scheduled to hold a press conference at a local U.S. Forces Korea (USFK) base.

 

It’s quite unusual for the U.S. commanding generals serving abroad to gather in South Korea and release public statements together.

 

It apparently reflects Washington’s alertness against North Korea’s rapid development of nuclear bombs and missiles.

Given the fact that the US Navy has had two ‘accidental collisions’ with slow-moving vessels in recent months, what are the chances this all ends without incident?

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

Although China is reining in its shadow banking sector, the other side of total financing debt continues to explode.  To the surprise of many, Chinese banks have already reached 80% of total loan quota given at the start of the year.  We are already seeing evidence of a slowdown in loan creation in July.

(courtesy zero hedge)

An Unexpected Problem Emerges: Chinese Banks Exhaust 80% Of Loan Quotas In First Half Of 2017

When we discussed the latest monthly Chinese credit data reported by the PBOC, we pointed out something which to most pundits was broadly seen as success by the Politburo in its deleveraging efforts: for the first time in 9 months, debt within China’s shadow banking system – defined as the sum of Trust Loans, Entrusted Loans and Undiscounted Bank Loans – contracted. These three key components combined, resulted in a 64BN yuan drain in credit from China’s economy, the first negative print since October 2016, and rightfully seen by analysts as evidence that Beijing’s campaign to contain shadow banking and quash risks to the financial system, is starting to bear fruit.

 

Offsetting this unexpected decline in shadow bank credit (if not Total Social Financing) was a greater than expected increase in traditional yuan bank loans. As we observed last Tuesday, both corporate loans and household loans increased greater than last year; new corporate loans advanced to CNY354bn from a decline of CNY3bn a year ago, with long-term corporate loans contributing CNY433bn (a year ago: CNY151bn) and short-term loans adding CNY63bn (a year ago: CNY-201bn). New household loans registered CNY562bn, compared with CNY458bn a year ago.

 

So far, so good: after all a transition from the largely unregulated, and speculative shadow bank issuance to conventional bank issuance is just what the PBOC, China’s regulators and most importantly, Xi Jinping want ahead of this year’s all important Congress. Furthermore, the fact that China’s economy continues to grow at a healthy pace, even if it means creating the occasional industrial metals bubble

 

…. thanks to healthy bank loan creation, is good for both China and the rest of the world, and suggests that despite the sharp drop in China’s credit impulse, there is more where it came from.

 

There is just one problem: there very well may not be much left where it came from. In fact, according to analysts, there may be almost nothing left.

Reuters reports that following 7 months of blistering credit creation in terms of both new Loans and Total Social Financing, Chinese banks are set to see a slowdown in lending growth in the second half of the year, having exhausted most of their annual credit quota, in the process raising the spectre of corporate defaults as financing costs climb further in the world’s second-largest economy. The math is disturbing: only six months into 2017, banks have already used 80% of their yearly credit quota over January to June, versus the usual 60%, amid the above mentioned regulatory push to bring shadow financing activities to the main loan book, and Beijing’s crackdown on riskier lending.

While “loan demand is strong throughout the whole year”, as the second chart from the top shows, “the core conflict in the second half is loan quotawhether banks will be able to extend more loans than they originally planned said Ma Kunpeng, chief financial industry analyst at China Merchants Securities, quoted by Reuters.

While it remains to be seen if Beijing will allow banks to breach their quotas, a sharp slowdown in new loan issuance is expected in either case: as reported last week, China saw a 12.9% growth in outstanding yuan loans as of the end of June. Nomura China economist Wendy Chen expects this to slow to 12.6% in Q3 and to 12.4% in Q4, more than 1% decline from 13.5% in 2016: a substantial hit to China’s overly credit-reliant economy.

Adverse impact on the economy aside, the sharp contraction in bank loans in Q3 and Q4 means that corporate defaults will rise if the availability of finance is further restricted. This could become a threat to economic growth … especially if defaults are concentrated in labor-intensive segments like steel and coal,” Moody’s said.

While China’s commercial banks have been seemingly impervious to China’s credit bubble, reporting higher first-half profits, while overall non-performing loans in Q2 remaining unchanged from Q1 (even if some analysts believe the real number is orders of magnitude higher), analysts cautioned that slower credit growth would eventually take a toll on banks’ profit margins. Just like in the US, net interest margins in China have fallen sharply in the past quarters following six successive benchmark interest rate cuts in 2014 to 2015.

For China’s top lender ICBC, the margin is forecast to narrow to 2.13 per cent in 2017 from 2.21 per cent last year, while China Construction Bank could report a drop of 27 basis points to 2.09 per cent in 2017, Thomson Reuters data shows.

Compounding the NIM decline and collapsing margins is Chinese banks’ move to increase deposit interest rates this year to as much as 40% above central bank benchmark rates to lure depositors, statistics compiled by Reuters showed.

Part of the higher costs has been passed on to corporate borrowers. The price of loans as measured by the weighted average of loan interest rates rebounded to 5.67 per cent in June, from 5.22 per cent in September. But that will not be sufficient to cushion the impact on near-term profits.

“The most direct impact of the regulatory crackdown is on liquidity and profitability,” said Alicia Garcia-Herrero, chief Asia Pacific economist at Natixis. “Chinese banks will find themselves in a dilemma … with more doors shut in the shadow banking, which has been a source of profits to offset the impact on net interest income.”

As a reminder, China’s economic growth has already been showed signs of fading in July when key economic indicators from retail sales, to industrial production to capital spending all declined while lending costs rose, but a hard landing is unlikely with Beijing keen to ensure stability ahead of a once-in-five-years Communist Party leadership reshuffle later this year.  What happens after, however, is very much an open question. Meanwhile, if Chinese banks only have 20% of their annual loan issuance quota left for the entire second half of the year, and if Beijing refuses to boost these quotas, the next global economic shock may be just several months ahead.

China/Russia/North Korea/USA
Treasury slaps sanctions on both Chinese and Russian entities who are helping North Korea with their nuclear ambitions.  This should anger both China and Russia and of course North Korea.
(courtesy zero hedge)

Treasury Slaps Sanctions On China, Russia Entities And Individuals Over North Korea

In a move that is certain to infuriate China further and result in another deterioration in diplomatic relations between Washington and Beijing, moments ago the United States slapped both Chinese and Russian entities and individuals with new sanctions in the Trump administration’s escalating attempts to pressure North Korea to relent and stop its nuclear program and occasional missile launches.

The Treasury Department’s Office of Foreign Assets Control said it would target 10 entities and six individuals who help already sanctioned people who aid North Korea’s missile program or “deal in the North Korean energy trade.” The U.S. also aims to sanction people and groups that allow North Korean entities to access the U.S. financial system or helps its exportation of workers, according to the Treasury:

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 entities and six individuals in response to North Korea’s ongoing development of weapons of mass destruction (WMD), violations of United Nations (UN) Security Council Resolutions, and attempted evasion of U.S. sanctions.  Today’s sanctions target third-country companies and individuals that (1) assist already-designated persons who support North Korea’s nuclear and ballistic missile programs, (2) deal in the North Korean energy trade, (3) facilitate its exportation of workers, and (4) enable sanctioned North Korean entities to access the U.S. and international financial systems.

As a result of the latest action, “any property or interests in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons are generally prohibited from dealing with them.”

Speaking on today’s sanctions, Steven Mnuchin who, or rather whose wife today is in the news for an entirely different reason, made the following statement:

“Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” said Treasury Secretary Steven T. Mnuchin.

 

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region.  We are taking actions consistent with UN sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future.”

Among the companies sanctions in regards to North Korea’s “WMD program” are the following:

OFAC designated China-based Dandong Rich Earth Trading Co., Ltd. for its support to UN- and U.S.-designated Korea Kumsan Trading Corporation, an entity OFAC previously designated for being owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, the UN- and U.S.-designated General Bureau of Atomic Energy, which is responsible for North Korea’s nuclear program.  Dandong Rich Earth Trading Co., Ltd. has purchased vanadium ore from Korea Kumsan Trading Corporation.  UNSCR 2270 prohibits North Korea’s exports of vanadium ore, and requires member states like China to prohibit the procurement of vanadium ore from North Korea.

 

OFAC designated Gefest-M LLC and its director, Russian national Ruben Kirakosyan, for support to the UN- and U.S.-designated Korea Tangun Trading Corporation, also known as Korea Kuryonggang Trading Corporation, which is subordinate to the UN- and U.S.-designated Second Academy of Natural Sciences, an entity involved in North Korea’s WMD and missile programs.  Gefest-M LLC, a company based in Moscow, has been involved in the procurement of metals for Korea Tangun Trading Corporation’s Moscow office.

 

OFAC also designated China- and Hong Kong-based Mingzheng International Trading Limited (“Mingzheng”).  Mingzheng acts as a front company for UN- and U.S.-designated Foreign Trade Bank (FTB), and it has provided financial services to FTB by, among other things, conducting U.S.-dollar denominated transactions on behalf of FTB.  FTB is North Korea’s primary foreign exchange bank; it was designated by the United Nations on August 5, 2017 as part of UNSCR 2371.  OFAC designated FTB in 2013 for facilitating transactions on behalf of North Korea’s proliferation network, including for UN- and U.S.-designated Korea Mining Development Corporation and Korea Kwangson Banking Corporation.  On June 29, 2017, OFAC designated Mingzheng’s owner, Sun Wei.

The Treasury also designated three Chinese coal companies collectively responsible for importing nearly half a billion dollars’ worth of North Korean coal between 2013 and 2016.  Dandong Zhicheng Metallic Materials Co., Ltd. (“Zhicheng”), JinHou International Holding Co., Ltd., and Dandong Tianfu Trade Co., Ltd. have sold, supplied, transferred, or purchased coal or metal, directly or indirectly, from North Korea, and the revenue may have benefitted the nuclear or ballistic missile programs of the Government of North Korea or the Workers’ Party of Korea.  JinHou International Holding Co., Ltd. and Dandong Tianfu Trade Co., Ltd. also were designated for operating in the mining industry in the North Korean economy.

Meanwhile, top U.S. officials have said they do not want to take military action against North Korea unless it is a last resort, and as a result getting China to cooperate is seen as a key part of a diplomatic solution.

Of course, what this latest round of sanctions will achieve, is to further anger Beijing and the local population, in the process making a diplomatic solution even more unlikely and “forcing” America’s ruling Generals, Kelly and McMaster to launch the first “preemptive” shot against Pyongyang.

end

 

That did not take China long to respond to the latest sanctions: China states that they should immediately correct its mistake or suffer retaliation: diplomacy re North Korea is now out of the realm of possibilities.

(courtesy zero hedge)

A Furious China Responds To Latest Sanctions: Demands “U.S. Immediately Correct Its Mistake” Or Suffer Retaliation

Less than 4 hours ago, the US Treasury announced that in the the latest set of actions targeting North Korea’s “WMD program”, among the entities sanctioned would be several Chinese and Russian companies and individuals. We said that “what this latest round of sanctions will achieve, is to further anger Beijing and the local population.” Well, we didn’t even have to wait all day for China to respond on the next morning as it traditionally does, and according to Reuters citing an embassy spokesman, Beijing was so furious with the US “provocation” it scrapped its own protocol of waiting during a “cooldown” period, and instead ripped right back, “urging” the U.S. to “immediately correct its mistake”‘ of sanctioning Chinese firms over North Korea, to avoid impact on bilateral cooperation.

Since the US will not “correct its mistake”, either “immediately” or at any time, China will have no choice but to escalate, in the process making any credible diplomacy involving North Korea impossible, forcing” America’s hand when it comes to North Korea, now that the diplomatic option is out of the picture.

And virtually assuring that there is no hope for a diplomatic resolution of the North Korean crisis, earlier today a North Korean envoy to a UN disarmament forum refused to negotiate its nuclear program, accusing the US and South Korea of using joint military drills to carry out “an aggressive war scenario” and “a secret operation” against the North’s leadership.

“The DPRK will never place its self-defense nuclear deterrence on the negotiating table or step back from the  path it took to bolster the national nuclear force,” a North Korean diplomat stated at the UN disarmament forum in Geneva, as cited by Reuters.

A North Korean envoy to a UN disarmament forum has refused to negotiate its nuclear program, accusing the US and South Korea of using joint military drills to carry out “an aggressive war scenario” and “a secret operation” against the North’s leadership.

“The DPRK will never place its self-defense nuclear deterrence on the negotiating table or step back from the  path it took to bolster the national nuclear force,” a North Korean diplomat stated at the UN disarmament forum in Geneva, as cited by Reuters.

The comment follow a statement by the state-run KCNA news agency on Monday according to which “the situation on the Korean Peninsula has plunged into a critical phase due to the reckless north-targeted war racket of the war maniacs.” Meanwhile, Pyongyang has again threatened to strike the US base in Guam, which it earlier promised to attack if “provoked” by Washington

end

4. EUROPEAN AFFAIRS

ENGLAND/PROVIDENT
UK’s version of subprime, Provident crashes most on record as its CEO (aptly named peter Crook) quits amidst probes on its financing.
(courtesy zerohedge)

“Clearly Awful News”: UK Subprime Lender Provident Crashes Most On Record, CEO Quits

UK subprime lender Provident Financial Plc crashed the most on record, its stock plunging over 73%, on what analysts called a “quadruple whammy”: a profit warning forecasting a full-year loss, scrapping its dividend, a regulator probe into its Vanquis Bank unit, and the departure of CEO, the aptly named, Peter Crook“This is without doubt a disaster,” said Shore Capital’s Gary Greenwood. “Future profit performance will depend on management’s ability to rescue the situation, which is highly uncertain. We expect that further heads will roll.”

As a result, shares of the Bradford, UK-based company dropped more than 73% to 521 pence in London morning trade. The stock is down 82% this year, wiping more than 3 billion pounds from its market value.

In what may be the beginning (of the end) of yet another subprime bubble bursting (we have lost count which one this is), in its second profit warning in two months, the subrime lender said it now expects a “pre-exceptional loss” for the home credit business of between 80 million pounds ($103 million) and 120 million pounds, after previously predicting a 60 million-pound profit. The company also cited further deterioration at its home credit business after a botched roll-out of new technology this year, when it scrapped a more-than-century-old model of self-employed door-to-door agents. Crook, who was CEO for a decade, said in June that many of its 4,500 salesmen and debt collectors quit or stopped working as hard when they were informed they would be replaced by a smaller number of iPad-toting full-time staff, according to Bloomberg.

Peter Crook

Meanwhile, the company said the U.K. Financial Conduct Authority is investigating the Vanquis Bank credit-card unit, and the regulator had previously ordered Provident to stop offering a particular repayment product, the company said Tuesday. Provident scrapped its interim dividend and said a full-year payout is also unlikely. Manjit Wolstenholme will temporarily run the firm as executive chairman. Provident said Tuesday that the FCA ordered the company to stop offering “repayment option plans” in April 2016. The products had been contributing about 70 million pounds in revenue a year.

“Given that the FCA investigation has the potential to be material to the company, investors are likely to take the view that this investigation should have been disclosed when it was known,” RBC Capital Markets analyst Peter Lenardos said in a note. “The shares are not investible until greater clarity is received, which may not be until next year,” he said, calling the probe, loss, dividend suspension and CEO’s departure a “quadruple whammy.”

As Bloomberg reports, While Provident didn’t make any mention of the broader U.K. economic environment or Brexit, its profit warning comes as the Bank of England cautions that the nation’s consumer credit market is overheating after years of low interest rates and low defaults bred complacency. Crook had previously said Provident’s business model was more resilient to an economic downturn than the big banks; he was wrong.

Meanwhile, as revenue from its old sales force continues to decline, its new technology isn’t panning out either.

The routing and scheduling software designed to help the 2,500 full-time digital-savvy staff replacing the door-to-door salesmen “has presented some early issues, primarily relating to the integrity of data,” Provident said, while “the prescriptive nature of the new operating model has not allowed sufficient local autonomy to prioritize resource allocation.”

 

Debt collection performance has fallen to 57 percent this year from 90 percent at the end of 2016, according to the statement. Likewise, weekly sales were running at about 9 million pounds lower in the same period.

Putting the company’s operations in context, Provident serves 2.4 million British customers, many of them unemployed or on welfare. Extending credit to the working class had been good to
Provident: its stock had tripled over a decade that saw other British banks collapse or get bailed out in the financial crisis; of course, it has given up most of it back now that the time has come to collect that money.

Ironically, Provident was started in 1880 by Joshua Waddilove, a philanthropist and social
reformer who saw extending door-to-door credit as a way to alleviate
poverty.

* * *

Meanwhile, one look at the sellside commentary this morning reveals that virtually everyone thinks this particular subprime lender is about to be New Centuried:

RBC (Peter K Lenardos)

  • Expect ongoing substantial losses for shares and “would not be buyers at any price”
  • Recent share correction was making RBC warm to Provident; today’s announcement means “shares are not investible until greater clarity is received, which may not be until next year at the earliest”

SHORE CAPITAL (Gary Greenwood)

  • Dividend withdrawal and CEO resignation is a “disaster,” and company’s ability to rescue the situation is “highly uncertain at present, making accurate forecasting extremely difficult”
  • Sees risk the FCA decides to review sales of Repayment Option Plan product in the period prior to that announced
  • Cannot rule out the need for equity issuance and expects “further heads will roll” after CEO departure
  • Suspends recommendation (previously buy)

JEFFERIES (Phil Dobbin)

  • “Clearly awful news” which will deeply impact the share price
  • FCA review adds more uncertainty on top of profit warning for home credit business
  • Notes that home credit is a short duration business and will need to see momentum turning soon

LIBERUM (Portia Patel)

  • Notes 2016 NAV was 541p and given the uncertainty ahead and suspension of dividends, expects a realistic trading range to be 1x-2x NAV (541p – 1082p)

Source: Bloomberg

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

ISIS

Lebanese Army finds anti aircraft missiles that were formally in the hands of ISIS.  They now seem to have the capability to hit commercial aircrafts flying from 10,000 to 15,000 feet as they are descending to an airport:

(courtesy zero hedge)

Lebanese Army Finds ISIS Anti-Aircraft Missile Cache: Could Passenger Jets Be Hit?

Tyler Durden's picture

Does ISIS have the capability of taking out a civilian passenger jet?According to an alarming new report by Reuters the answer appears to be yes.

The Islamic State has long been rumored as in possession of surface-to-air missiles, and now it appears a US ally is providing ground level confirmation of what might be a worst case nightmare scenario come true. The Lebanese Army has recently been engaged in a fierce campaign to root out ISIS terrorists from the Arsal border pocket – a northeast region of Lebanon bordering Syria which has seen fighting rage since 2014. As we previously reported, the operation is receiving some level of assistance from US special forces advisers as well as coordination from Hezbollah, while at the same time the Syrian Army is attacking from the Syrian side of the border in the Qalaman mountains.

On Monday, Reuters issued the following report based on official statements of the Lebanese Army:

Lebanon’s army found anti-aircraft missiles among with a cache of weapons in an area abandoned by Islamic State militants, it said on Monday.

 

The arms cache also included mortars, medium and heavy machine guns, assault rifles, grenades, anti-tank weapons, anti-personnel mines, improvised explosive devices and ammunition.

Not only did Lebanon’s army – which is working under the advisement of the Pentagon for the operation – confirm ISIS possession of anti-aircraft missiles, but last week it reported to have uncovered a similarly stocked Nusra (al-Qaeda in Syria) cache as well. According to the same Reuters report:

A Hezbollah offensive last month forced militants from the Nusra Front group, formerly al Qaeda’s official Syrian branch, to quit an adjacent enclave on the border for a rebel-held part of Syria.

 

On Friday, the Lebanese army said it had discovered surface-to-air missiles in a weapons cache left by the Nusra militants in an area captured by Hezbollah and then taken over by the army.

Such anti-aircraft missiles, commonly called MANPADS (“man-portable air-defense system”: heat seeking shoulder fired missiles capable of hitting targets flying at anywhere between 10,000 and 15,000 feet), have appeared on the Syrian battlefield in recent years in the hands armed opposition groups supported by the West and Gulf states, including various FSA and Islamist factions like Ansar al-Islam Front (operating in the south) and Ahrar al-Sham (operating in the north of Syria).

These groups have at various times filmed and demonstrated themselves to be in possession of externally supplied MANPADS, which are believed by analysts to have entered Syria in multiple waves via different routes and external sponsors, including old Soviet models shipped out of Libya, Chinese FN-6’s provided by Qatar, and through NATO member Turkey’s porous border with Syria. Some supplies were also likely gained through opposition takeovers of Syrian government storehouses as well as ISIS seizures of Iraqi government bases and equipment.

MANPADS are heat seeking shoulder fired missiles capable of hitting targets flying at anywhere between 10,000 and 15,000 feet. Image source: Activist Post

A 2016 report from the Syrian monitoring news site South Front entitled, MANPADS: From the FSA to ISIS and Al-Qaeda, demonstrated the elaborate steps external state sponsors of the Syrian armed opposition took in concealing their role in introducing the missile systems to the conflict:

Since the reveal of Fn-6 anti-aircraft missile in the hands of the Free Syrian Army, speculations and warnings emerged on the danger of empowering non-state forces with such advanced mobile weapons.

 

While many saw that empowering the FSA with weapons like these is of no perilous consequences, others had ample doubts and worries.

 

The theory behind the proliferation of those Chinese manufactured weapons is that Qatar purchased them from the Sudan military stockpiles and transferred them with the cooperation of Turkey into Syria, and specifically into Deir Ezzor, Aleppo, Idlib, and Lattakia in addition to Homs’s northern countryside and Qalamoun.

South Front further detailed instances of documented ISIS and al-Qaeda possession of the FN-6 system in Iraq, Syria, and Lebanon – and concluded (like innumerable other reports) that it was only a matter of time before ISIS and other terror groups would become the main beneficiaries of the bulk of advanced missile systems which were being handed out in Syria. The New York Times as early as 2013, for example, reported Qatar’s sending MANPADS into Syria and discussed the likelihood of these going straight to Al-Qaeda. The report bluntly stated, “The missiles, American officials warned, could one day be used by terrorist groups, some of them affiliated with Al Qaeda, to shoot down civilian aircraft.”

Meanwhile, hawks in Congress have at various times over the course of the 6-year long war argued for openly supplying so-called “moderate” opposition factions in Syria with US made Stinger missiles. Though it’s unknown for sure whether US sourced Stingers ever made it to Syria as part of the CIA’s covert program, sporadic reports of Stingers in the hands of anti-Assad fighters have surfaced over the years.

But the threat of such weapons taking out civilian passenger jets is very real, as history proves. The US Department of State counted that 40 civilian aircraft have been hit by MANPADS since the 1970s, which includes the complete downing of 28 civilian airliners resulting in over 800 fatalities. The State Department’s official report on MANPADS and civilian aircraft provides the following partial list of attacks on civilian aviation:

  • March 12, 1975: A Douglas C-54D-5-DC passenger airliner, operated by Air Vietnam, crashed into Vietnamese territory after being hit by a MANPADS. All six crew members and 20 passengers were killed in the crash.
  • September 3, 1978: An Air Rhodesia Vickers 782D Viscount passenger airliner crash landed after being hit by a MANPADS fired by forces from the Zimbabwe Peoples Revolution Army. Four crew members and 34 of the 56 passengers were killed in the crash.
  • December 19, 1988: Two Douglas DC-7 spray aircraft en route from Senegal to Morocco, chartered by the U.S. Agency for International Development to eradicate locusts, were struck by MANPADS fired by POLISARIO militants in the Western Sahara. One DC-7 crashed killing all 5 crew members. The other DC-7 landed safely in Morocco.
  • September 22, 1993: A Tupolev 154B aircraft operated by Transair Georgia was shot down by Abkhazian separatist forces, crashed onto the runway and caught fire, killing 108.
  • April 6, 1994: A Dassault Mystère-Falcon 50 executive jet carrying the Presidents of Rwanda and Burundi and its French flight crew was shot down over Kigali, killing all aboard and sparking massive ethnic violence and regional conflict.
  • October 10, 1998: A Boeing 727-30 Lignes Aeriennes Congolaises airliner was downed over the Democratic Republic of the Congo jungle by Tutsi militia, killing 41.
  • December 26, 1998: A United Nations-chartered Lockheed C-130 Hercules transport was shot down over Angola by UNITA forces, killing 14.
  • January 2, 1999: A United Nations Lockheed L-100-30 Hercules transport was shot down by UNITA forces in Angola, killing 9.
  • November 28, 2002: Terrorists fired two MANPADS at an Arkia Airlines Boeing 757-3E7 with 271 passengers and crew as it took off from Mombasa, Kenya. Both missiles missed.
  • November 22, 2003: A DHL Airbus A300B4-203F cargo jet transporting mail in Iraq was struck and damaged by a MANPADS. Though hit in the left fuel tank, the plane was able to return to the Baghdad airport and land safely.
  • March 23, 2007: A Transaviaexport Ilyushin 76TD cargo plane was shot down over Mogadishu, Somalia, killing the entire crew of 11.

With the Lebanese Army’s alarming announcement that it has recovered MANPADS previously in the possession of ISIS, and with such dangerous weapons systems remaining ubiquitous in rebel-held parts of Syria, we hesitate to ponder the nightmarish scenario:is it only a matter of time before ISIS downs a civilian passenger jet?

International weapons inspectors should be allowed access to the recovered ISIS stockpile and weapons should be traced to their sources and countries of origin. As has been effectively demonstrated a number of times before, it is very possible to obtain definitive answersconcerning how these missiles made it into the hands of ISIS in the first place.

6 .GLOBAL ISSUES

7. OIL ISSUES

you know that we are reaching peak shale when BP Billiton, the world’s largest miner is selling its shale assets

(courtesy zero hedge)

More Peak Shale: World’s Largest Miner Is Selling Its Shale Assets

Over the past several months, we have wondered if despite new all time high shale production, whether the US shale sector in the has peaked. Some of our recent thoughts can be found in the following articles:

The “peak shale” narrative got a boost in late July when one of the world’s most bearish hedge funds, Horseman Global, announced it was aggressively shorting shale companies on the thesis that funding is about to “run dry”, resulting in a sharp drop in production and with the lack of capex, would lead to another round of industry defaults (while sending the price of oil higher).

More evidence was revealed in the latest Baker Hughes data, which showed that both active Horizontal and Permian oil rigs had finally peaked and were now declining, while the number of oil rigs funded by Public junk bond deals had plateaued, suggesting little interest in future funding:

Fast forward to today when overnight, we got the clearest indication yet that the US shale sector may have indeed have peaked, when BHP Billiton – the world’s largest miner – said it was in talks with potential buyers of its U.S. shale assets, purchased during a frenzied $20 billion buying spree in 2011, just as the price of oil peaked.

“We’re talking to many parties and we’re hopeful” of completing a small number of trade sales to divest the onshore oil and gas division, Chief Executive Officer Andrew Mackenzie told Bloomberg Television Tuesday in an interview, adding that the moves on shale and potash aren’t the result of shareholder pressure. “We have been moving in this direction for some time” on shale.

As Bloomberg adds, BHP’s strategic pull-back by comes after new Chairman Ken MacKenzie, who starts his job next month, met more than a hundred investors in recent weeks in Australia, the U.S. and the U.K. in the wake of the campaign by some shareholders calling for reform.

BHP’s admission that there is no more upside for its shale assets, in their current form, is a victory for Elliott Singer’s ongoing activist campaign, which has been pushing for a disposition of these assets in a vocal activist campaign. According to Singer’s Elliott Management, strategic missteps by BHP’s leadership, including in the shale unit, have destroyed $40 billion in value; Elliott launched its public campaign seeking a range of reforms in April.

Admitting that Elliott is right, during a call with analysts, CEO Mackenzie said BHP’s 2011 shale deals had been too costly, poorly timed and the eighth-largest producer in U.S. shale didn’t deliver the expected returns. That said, if the company expected oil prices to rebound, or if the shale assets to become sufficient productive where they would generate positive returns, he would hardly have sold them. Which is why in the current configuration of prices and technology, at least one major player in the space has confirmed that shale’s euphoric days may be over.

This was confirmed by Macquarie Wealth Management Division Director Martin Lakos who said that BHP likely concluded the shale and Jansen assets were “not going to generate the returns that is going to make the grade,” although he added that “it’s most likely the Elliott activity has accelerated the shale sales process.”

BHP’s disposition of shale has been a long time coming:

Discussions among BHP shareholders have been dominated by concerns over shale and potash, according to Craig Evans, a portfolio manager at Tribeca Investments Partners Pty, which holds the producer’s shares. Tribeca and other investors have also pressed the case with BHP directly, he said.

 

“Elliott put the first balls in motion on this in calling them to task,” Evans said. “It’s no coincidence that we’re talking about those issues now.”

 

Investors including AMP Capital, Schroders Plc, Escala Partners and Sydney-based Tribeca have added to criticism of BHP, or offered support for some of Elliott’s proposals, in recent weeks. Elliott didn’t immediately respond to a request for comment on BHP’s decisions on shale and potash

Some believe that BHP timed its asset sale at just the right time: “BHP are going to get better value than they would have two years ago after the surge in crude oil price from last year’s 12-year low,” David Lennox, an analyst at Fat Prophets, said on Bloomberg TV. The company has “probably picked an opportune time because we’ve seen the oil price come up from a bottom,” he said.

Of course, a much bigger question is whether the potential buyer will agree, as any acquiror will be purchasing not on current or historical prices, but where they expect oil prices to go in the future. As such, the big wildcard is shale’s access to cheap funding, which for the past 3 years has been the only factor that mattered not only for the US oil industry, but also for OPEC, whose repeated attempts to push the price of oil higher has been foiled every single time thanks to record low junk debt yields and an investor base that will oversubscribe every single shale offering. Well, as we showed last month, that is now ending as bond investors have suddenly turned quite skittish, and the result is that US shale production has not only peaked but is once again declining. While it remains to be seen how the overall industry will respond, if indeed we have hit “peak shale”, OPEC’s long awaited moment of redemption may finally be here.

WTI  drops after a 3rd weekly gain in gasoline inventoris
(courtesy zero hedge)

WTI Drops After 3rd Weekly Build In Gasoline Inventories

Amid Libya headlines and contract rollover, WTI prices were wild heading into the inventory data tonight. Following two weeks of surprising builds in Gasoline inventories, API reports a surprise 3rd weekly build in gasoline inventories, and crude drawing only modestly (in line with expectations). The initial reaction was a kneejerk lower, breaking down the day’s wedge.

 

API

  • Crude -3.595mm (-3.5mm exp)
  • Cushing -462k (+300k exp)
  • Gasoline +1.402mm (-1mm exp)
  • Distillates +2.048mm

Last week confirmed the concerns about building gasoline (even though crude saw a draw) and API shows a 3rd week of builds (and crude’s draw was just in line) and Distillates also saw the biggest build since July

Price action was chaotic today heading into the API data and immediately kneejerked lower (breaking down from the wedge)…

“If we are going to get into a new era of instability with Libyan oil production, if it becomes a wild card again, that’s definitely supportive for prices,” Phil Flynn, senior market analyst at Price Futures Group, told Bloomberg, adding, with reference to today’s price action, there’s “a little bit of expiration madness. There’s a lot of positioning before the September expiration.”

8. EMERGING MARKET

VENEZUELA

 

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

Euro/USA   1.1762 DOWN .0049/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/EUROPE BOURSES GREEN

USA/JAPAN YEN 109.42 UP 0.483(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/   

GBP/USA 1.2825 DOWN .0071 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2580 UP .0021 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro FELL by 49 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1762; / Last night the Shanghai composite CLOSED  UP 3.32 POINTS OR 0.10%     / Hang Sang  CLOSED UP 246.99 POINTS OR 0.91% /AUSTRALIA  CLOSED UP 0.43% / EUROPEAN BOURSES OPENED IN THE GREEN  

 

The NIKKEI: this TUESDAY morning CLOSED DOWN 9.29 POINTS OR 0.05%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 246.11 POINTS OR 0.91%  / SHANGHAI CLOSED UP 3.32 POINTS OR 0.10%   /Australia BOURSE CLOSED UP 0.43% /Nikkei (Japan)CLOSED DOWN 9.29  POINTS OR 0.05%   / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1285.65

silver:$17.00

Early TUESDAY morning USA 10 year bond yield:  2.2061% !!! UP 1   IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

The 30 yr bond yield  2.7808, UP 1  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 93.51 UP 42  CENT(S) from MONDAY’s close.

This ends early morning numbers  TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.777% UP 3 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.0431%  UP 1   in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.572% UP 3 1   IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.103 UP 7  POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 53 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.400% DOWN 0  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1767 DOWN .0044 (Euro DOWN  44 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.38 UP 0.382(Yen DOWN 38 basis points/ 

Great Britain/USA 1.2835 DOWN  0.0061( POUND DOWN 61 BASIS POINTS)

USA/Canada 1.2564 UP .0004 (Canadian dollar DOWN  4 basis points AS OIL ROSE TO $47.64

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This afternoon, the Euro was UP  by 56 basis points to trade at 1.1813

The Yen ROSE to 108.91 for a GAIN of 23  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 BY 36  basis points, trading at 1.2901/ 

The Canadian dollar FELL by 7 basis points to 1.2583,  WITH WTI OIL RISING TO :  $47.64

The USA/Yuan closed at 6.6620/
the 10 yr Japanese bond yield closed at +.043%  UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1  IN basis points from MONDAY at 2.206% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.779 UP 1/2 in basis points on the day /

Your closing USA dollar index, 93.43  UP 34 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 1:00 PM EST

London:  CLOSED UP 62.86 POINTS OR 0.86%
German Dax :CLOSED UP 163.35 POINTS OR 1.35%
Paris Cac  CLOSED UP 44.27 POINTS OR 0.87% 
Spain IBEX CLOSED UP  49.60 POINTS OR 0.48%

Italian MIB: CLOSED DOWN 23.32 POINTS OR 0.11% 

The Dow closed UP 196.14 OR 0.90%

NASDAQ WAS closed UP 84.35  POINTS OR 1.36%  4.00 PM EST

WTI Oil price;  47.64 at 1:00 pm; 

Brent Oil: 52.01 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.01 DOWN 13/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 13 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.400%  FOR THE 10 YR BOND  4.PM EST 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 5:00 PM:$47.64

BRENT: $51.59

USA 10 YR BOND YIELD: 2.214%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.786%

EURO/USA DOLLAR CROSS:  1.1761 DOWN .0050

USA/JAPANESE YEN:109.57  UP  0.562

USA DOLLAR INDEX: 93.49  UP 40  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.2820 : DOWN 76 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2562 DOWN 2 BASIS pts 

German 10 yr bond yield at 5 pm: +0.400%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Surge To Best Day In 4 Months As Warmongery & Tax Talk Trump Debt-Ceiling Doubts

Seriously…

 

Thanks to The White House saying something de minimus about Tax Reform progress (and a little help from Boeing after Trump’s warmongery), Nasdaq was the day’s best-performer as The Dow had its best day in 4 months…

 

Futures show the driver of the actions…

 

Bonds & Bullion were sold post-tax-headline as stocks surged…

 

Most-Shorted stocks surged/squeezed to their best day in a month (after 5 straight down days)…

 

VIX was smashed down below 12 at the open amid Trump Tax chatter…

 

The S&P ramped all the way to the 50DMA (having bounced perfectly off the 100DMA yesterday)…

 

This week’s bounce has an odd sense of deja vu all over again…

 

S&P VIX dropped back to 5-day lows but Nasdaq and Russell vol remains elevated…

 

S&P traders are actively hedging with Put/Call Open Interest Ratio at its highest since July 2015…

 

And ironically, there has never been more money bet on volatility dropping (SVXY AUM at record high $1.3 billion)

 

FANG Stocks had their best day in over a month…

 

Treasury yields rose 2-3bps across the curve today with 7Y underperforming…

 

30Y Yield hs now traded in a 3bps range for the last 3 days…

 

Meanwhile, debt ceiling concerns remain high in the T-Bill market….

 

 

The Dollar Index rallied today after Trump Tax headlines…

 

Cable was weakest and Yuan modestly stronger against the greenback on the week…

 

And the 2016 analog is at an inflection point…

 

 

Industrial metals had a bad day after days of surging…

 

 

Crude pared earlier gains after Libya announced security forces reopened a valve that had been closed on the pipeline linking Libya’s Sharara oil field, the nation’s largest according to Petroleum Guard. Tonight’s API data will likely drive the next few hours…

 

Gold was down on the day, not helped by a stronger dollar, with some notable vol around the Tax headlines…

 

And finally this 1987 analog is really starting to get spooky…

end

 

Trump’s new policy commencing in Afghanistan is that they will no longer we nation building.  Their goal is simply killing terrorists.  The problem is that they will also be going into Pakistan to get the terrorists and thus expanding the war effort which may bring on more terrorism

(courtesy zero hedge)

Trump Unveils New, Dramatic Afghanistan Strategy: “We Aren’t Nation-Building Again, We Are Killing Terrorists”

In a widely anticipated national address, President Donald Trump on Monday announced that he will not pull out U.S. troops from Afghanistan, saying he’s committed to a new strategy aimed at winning the nation’s longest war, now in its 17th year. Admitting that his “original instinct was to pull out” of Afghanistan – Trump’s core campaign pledge was to reduce US intervention in offshore conflicts – Trump effectively admitted he had been wrong, and said he’s arrived at three “fundamental conclusions” about America’s core interests in Afghanistan:

  • U.S. “must seek an honorable and enduring outcome” in which American troops “deserve a plan for victory”
  • The consequences of a rapid exit would be “predictable and unacceptable adding that “a hasty withdrawal would create a vacuum that terrorists, including ISIS and al Qaeda, would instantly fill, just as happened before September 11”
  • The security threats U.S. faces “are immense”; and “we cannot repeat the mistake in Afghanistan our leaders made in Iraq.”

Trump also promised to the soldiers gathered for the speech that “One way or another, these problems will be solved. I am a problem solver. And in the end, we will win.”

In other words, Trump is unveiling a dramatic, new offensive in Afghanistan, only instead of giving details on troop deployments, specific dates, or what the definition of victory would be, Trump will keep the details of the new involvement secret, and that “conditions on the ground, not arbitrary timetables, will guide our strategy from now on.

We will not talk about numbers of troops or our plans for further military activities. Conditions on the ground, not arbitrary timetables, will guide our strategy from now on. America’s enemies must never know our plans or believe they can wait us out. I will not say when we are going to attack, but attack we will. Another fundamental pillar of our new strategy is the integration of all instruments of American power, diplomatic, economic, and military, toward a successful outcome. Someday, after an effective military effort, perhaps it will be possible to have a political settlement that includes elements of the Taliban and Afghanistan, but nobody knows if or when that will ever happen. America will continue its support for the Afghan government and the Afghan military as they confront the Taliban in the field.

Trump also defined what a victory in Afghanistan would mean:

Our troops will fight to win. We will fight to win. From now on, victory will have a clear definition — attacking our enemies, obliterating ISIS, crushing al Qaeda, preventing the Taliban from taking over Afghanistan, and stopping mass terror attacks against America before they emerge. We will ask our NATO allies and global partners to support our new strategy, with additional troop and funding increases in line with our own. We are confident they will.

President Trump: “From now on, victory will have a clear definition”

Taking a quick detour into domestic politics, Trump said that “the young men and women we sent to fight our wars abroad deserve to return to a country that is not at war with itself at home. We cannot remain a force for peace in the world if we are not at peace with each other.”

However it was all about Afghanistan:

Ultimately, it is up to the people of Afghanistan to take ownership of their future, to govern their society, and to achieve an everlasting peace. We are a partner and a friend, but we will not dictate to the Afghan people how to live or how to govern their own complex society. We are not nation building again. We are killing terrorists.

Well, that and Pakistan, which has now been thrown into the terrorist “melting pot” fray:

The next pillar of our new strategy is to change the approach in how to deal with Pakistan. We can no longer be silent about Pakistan’s safe havens for terrorist organizations, the Taliban, and other groups that pose a threat to the region and beyond.

 

Pakistan has much to gain from partnering with our effort in Afghanistan. It has much to lose by continuing to harbor criminals and terrorists. In the past, Pakistan has been a valued partner. Our militaries have worked together against common enemies. The Pakistani people have suffered greatly from terrorism and extremism.  We recognize those contributions and those sacrifices, but Pakistan has also sheltered the same organizations that try every single day to kill our people. We have been paying Pakistan billions and billions of dollars, at the same time they are housing the same terrorists that we are fighting. But that will have to change. And that will change immediately.

And, in a surprising twist, Trump also brought in India to the mix:

Another critical part of the South Asia strategy or America is to further develop its strategic partnership with India, the world’s largest democracy and a key security and economic harbor of the United States. We appreciate India’s important contributions to stability in Afghanistan, but India makes billions of dollars in trade with the United States, and we want them to help us more with Afghanistan, especially in the area of economic assistance and development. We are committed to pursuing our shared objectives for peace and security in South Asia and the broader Indo-Pacific region.

Oddly enough, zero mentions of China, almost as if Trump is telegraphing the new US “axis” in South Asia.

Finally, speaking like a polished cog of a well-greased neo-con/military-industrial wheel – note that Lindsay Graham loved every word of tonight’s speech – Trump warned “Terrorists, take heed. America will never let up until you are dealt a lasting defeat. Under my administration, many billions of dollars more is being spent on our military. And this includes vast amounts being spent on our nuclear arsenal and missile defense. In every generation we have faced down evil, and we have always prevailed.”

In conclusion, Trump may not be able to get approval from Congress to pass his domestic spending agendabut at least he is about to spend “billions” to continue a war that started 16 years ago and will surely never end, and make shareholders of defense stocks even richer.

Full transcript below (via NPR):

*   *   *

end

 

Ron Paul not happy with the expanded war effort as he offers a huge number of tweet storms why he is angry. Also Breitbart (Bannon) agrees with Paul

a must read…

(courtesy zerohedge)

 

In Angry Tweetstorm, Ron Paul Lashes Out At “Neocon” Trump

Roughly around the time Trump started his Afghanistan speech, Ron Paul tweeted out a cautiously optimistic note: “Hoping for the best in tonight’s @realDonaldTrump speech but fearful that foreign intervention is only going to get worse.  #Afghanistan.” Alas it was not meant to be, and over 20 tweets later in what proved to be the angriest tweetstorm of the night, Ron Paul had come to a conclusion: Trump is now nothing more than the latest neocon, one whom even Lindsey Graham applauded.

Below is a chronological rundown of Ron Paul’s progressively angier tweets, as he was live commenting on Trump’s speech:

  • Hoping for the best in tonight’s @realDonaldTrump speech but fearful that foreign intervention is only going to get worse.  #Afghanistan
  • Steve Bannon brakes removed. Neocons feeling their oats.
  • The military personnel are the victims of bad foreign policy.
  • Sad that these wars the politicians argue for are unconstitutional yet we are told we are over there defending the Constitution.
  • Mr. President it’s too bad you do not follow your instincts.
  • Planned in Afghanistan? What about Saudi Arabia??
  • What’s wrong with rapid exit? We just marched in we can just march out.
  • So far very discouraging. Sounds like pure neocon foreign policy.
  • The promoters of war win. The American people lose. #Afghanistan
  • Remember: there was no al-Qaeda until our foolish invasion of Iraq based on neocon lies.
  • The American people deserve to know when we are going to war and MUST give you permission through their representatives in Congress!
  • Emphasis on Pakistan just means the war going to be expanded!
  • Emphasis on military alliance with India may well lead to more vicious war between nuclear states Pakistan and India. Smart?
  • Terrorism is one thing, but what about massive collateral damage? Killing civilians creates more terrorism. Round and round we go.
  • Shorter Trump: “Afghanistan: give us your minerals!”
  • Nothing new. More of the same. Obama was wrong. This is NOT the good war. Sooner we get out the better.
  • More killing is not the road to peace.
  • The emphasis on the “grave danger” of terrorism is greatly exaggerated. But more intervention surely creates more terrorism.
  • How many Americans are really sitting around worrying about an Afghan terrorist coming over and killing them?
  • So many of our problems are self-inflicted by a deeply flawed foreign policy. US troops – and the family members – suffer the consequences.
  • Big issue of the night: US expanding the war into Pakistan. Could precipitate more conflict between nuclear India and Pakistan.
  • If Americans are tired of 16 year war, how will they feel about another decade or two? When will they wake up?
  • Our ultimately “hasty” departure from Vietnam finally ended a lot of grief. Even if it came way too late.
  • Beware! @LindseyGrahamSC loves Trump’s speech! Why are arch-neocons celebrating so much? Very telling!
  • There’s nothing hasty about ending America’s longest war. @POTUS bowed to military-industrial establishment; doubled down on perpetual war.

Based on Trump’s speech, Ron Paul’s concerns are well founded. Then again, as we await Breitbart’s response to Trump’s adress one thing is certain: Steve Bannon will not be happy with what “neocon” Trump said tonight, even if the WaPo and NYT are now on “mute” mode when it comes to NSA-sourced, anti-Trump scoops.

And while there is a distinct possibility that tomorrow night, when addressing his increasingly shaky core support base, Trump will change his mind, with two generals whispering in his ear constantly to determine US foreign policy even as two ex-Goldmanites now write domestic US policy, it is quite likely that the Trump who was unveiled tonight, is the Trump that will stay with the US population for the indefinite future. And if for some reason the “new and improved” Trump slips and fades away again… well there’s always the Mueller “Russia collusion” probe in the background keeping the president on his toes.

Update: Here’s Breitbart’s take, as expected.

(courtesy zero hedge)

Awan Plot Thickens As NY Democrat Yvette Clarke “Quietly” Wrote-Off $120,000 Of Missing Tech Equipment

When we reported last week that Imran Awan and his wife had been indicted by a grand jury on 4 counts, including bank fraud and making false statements related to some home equity loans, we also noted that those charges could simply be placeholders for further developments yet to come.  Now, according to a new report from the Daily Caller, the more interesting component of the FBI’s investigation could be tied to precisely why New York Democrat Representative Yvette Clarke quietly agreed in early 2016 to simply write-off $120,000 in missing electronics tied to the Awans.

A chief of staff for Democratic Rep. Yvette Clarkquietly agreed in early 2016 to sign away a $120,000 missing electronics problem on behalf of two former IT aides now suspected of stealing equipment from Congress, The Daily Caller News Foundation has learned.

 

Clarke’s chief of staff at the time effectively dismissed the loss and prevented it from coming up in future audits by signing a form removing the missing equipment from a House-wide tracking system after one of the Awan brothers alerted the office the equipment was gone. The Pakistani-born brothers are now at the center of an FBI investigation over their IT work with dozens of Congressional offices.

 

The $120,000 figure amounts to about a tenth of the office’s annual budget, or enough to hire four legislative assistants to handle the concerns of constituents in her New York district. Yet when one of the brothers alerted the office to the massive loss, the chief of staff signed a form that quietly reconciled the missing equipment in the office budget, the official told TheDCNF. Abid Awan remained employed by the office for months after the loss of the equipment was flagged.

Awan

 

If true, of course this new information would seem to support previously reported rumors that the Awans orchestrated a long-running fraud scheme in which their office would purchase equipment in a way that avoided tracking by central House-wide administrators and then sell that equipment for a personal gain while simultaneously defrauding taxpayers of $1,000’s of dollars.

Meanwhile, according to the Daily Caller, CDW Government could have been in on the scheme.

They’re suspected of working with an employee of CDW Government Inc. — one of the Hill’s largest technology providers — to alter invoices in order to avoid tracking. The result would be that no one outside the office would notice if the equipment disappeared, and investigators think the goal of the scheme was to remove and sell the equipment outside of Congress.

 

CDW spokeswoman Kelly Caraher told TheDCNF the company is cooperating with investigators, and has assurance from prosecutors its employees are not targets of the investigation. “CDW and its employees have cooperated fully with investigators and will continue to do so,” Caraher said. “The prosecutors directing this investigation have informed CDW and its coworkers that they are not subjects or targets of the investigation.”

Not surprisingly, Clarke’s office apparently felt no need whatsoever to report the $120,000 worth of missing IT equipment to the authorities…it’s just taxpayer money afterall…

According to the official who talked to TheDCNF, Clarke’s chief of staff did not alert authorities to the huge sum of missing money when it was brought to the attention of the office around February of 2016. A request to sign away that much lost equipment would have been “way outside any realm of normalcy,” the official said, but the office did not bring it to the attention of authorities until months later when House administrators told the office they were reviewing finances connected to the Awans.

 

The administrators informed the office that September they were independently looking into discrepancies surrounding the Awans, including a review of finances connected to the brothers in all the congressional offices that employed them. The House administrators asked Clarke’s then-chief of staff, Wendy Anderson, whether she had noticed any anomalies, and at that time she alerted them to the $120,000 write-off, the official told TheDCNF.

Of course, the missing $120,000 covers only Clarke’s office. As we’ve noted before, Imran and his relatives worked for more than 40 current House members when they were banned from the House network in February, and have together worked for dozens more in past years so who know just how deep this particular rabbit hole goes.

Also makes you wonder what else Debbie Wasserman-Schultz and the Awans might be hiding.  Certainly the decision by Wasserman-Shultz to keep Awan on her taxpayer funded payroll, right up until he was arrested by the FBI while trying to flee the country, is looking increasingly fishy with each passing day.

end

This is going to be very interesting:  a Federal Judge orders the IRS to release names of specific IRS employees who were told to target various Tea Party Conservative groups.  The actions of the IRS in targeting Tea Party members are criminal in nature.  The judge ordered the iRS that they have to reasons for the targets….

 

(courtesy zero hedge)

Federal Judge Orders IRS To Release Names Of Specific Employees That Targeted Tea Party Groups

Remember Lois Lerner?  If not, she was basically the person that Obama put in charge of weaponizing the IRS so that it could be used by the Democratic party as a political weapon of mass destruction to suppress Tea Party groups back in 2012.  Ring any bells yet?

Well, as a testament to the efficiency of our legal system, it turns out that the case is still ongoing some 5 years later.  Of course, this has to be a simple bureaucracy issue because there is no way that the Obama administration, you know, the only scandal-free White House in modern history, played any role in delaying the completely transparent transmission of information about this shocking threat to our Democracy…just ask CNN…we’re sure they’ll confirm the same.

Be that as it may, after years of litigation over what conservatives have long called “chilling” behavior by one of the government’s “most feared” agencies, a federal judge has finally ordered the IRS to release the names of specific employees involved in targeting Tea Party groups in the lead up to the 2012 presidential election. Per Fox News:

Judge Reggie B. Walton of the U.S. District Court for the District of Columbia also said the IRS must provide information about which groups were targeted and why,along with a strategy to make sure such targeting doesn’t happen again.

 

The IRS is involved in multiple lawsuits with conservative groups related to the Tea Party targeting scandal; this particular case involves True the Vote.

 

“We’re thrilled the judge has taken this step and it feels good to have it recognized that they need to be held to account,” True the Vote President Catherine Engelbrecht told Fox News on Monday. “What happened to me was very personal—my name was thrown around the IRS, and the names of the people involved need to be known. What they did was criminal.”

Lerner Obama

 

Of course, as Judicial Watch’s Chris Farrell notes, this single court decision managed to accomplish more in getting to the bottom of the IRS scandal than the Obama administration and Congress did in multiple years.

But director of investigations and research at Judicial Watch Chris Farrell, whose organization is also involved in litigation with the IRS on this issue, told Fox News that the IRS owes litigants “real accountability.

 

“This was creepy, chilling stuff,” Farrell told Fox News.  

 

“Judge Walton has accomplished more with one ruling than all of the rest of the federal government – all three branches – over the last six years.”

 

Farrell added: “The IRS is one of the most feared government agencies, and they’ve gotten a pass, in part. Walton is looking for real accountability and that’s so important.”

That said, we’re certain that if we failed to pay taxes for 6 years that the IRS would be equally understanding.

 

I will see you Wednesday  night

Harvey.

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